A former Dynegy executive alleges in a lawsuit that he was fired for refusing to take steps to artificially manipulate profits and
The suit filed Friday was brought by Bradley Farnsworth, a former senior
vice president who served as controller for the Houston energy company.
The Securities and Exchange Commission ( news – web sites) and the U.S.
Attorney’s Office in Houston are investigating Dynegy’s accounting.
Farnsworth claims he was asked by Steve Bergstrom, Dynegy’s president and
chief operating officer, to engage in illegal practices involving accounting
of natural gas trading in the United Kingdom.
Dynegy spokesman John Sousa said Dynegy is reviewing the lawsuit and intends
“to vigorously contest Mr. Farnsworth’s claims.” Because litigation is
pending, Sousa said, company policy prevented further comment.
After refusing to take part in the alleged illegal practices, Farnsworth was
kept out of routine meetings on earnings and eventually fired because “he
wouldn’t play ball,” lawyer Philip Hilder told the Houston Chronicle in
The suit doesn’t allege Dynegy went through with the manipulation that
Farnsworth, 49, said he was asked to engage in.
The SEC and the U.S. Attorney’s Office are investigating Dynegy’s accounting
for “Project Alpha,” a complex accounting vehicle that boosted reported cash
flow and cut taxes with no other obvious purpose.
Asked if his client had talked to the SEC or prosecutors, Hilder said he
The lawsuit contends that Bergstrom asked Farnsworth to “`shave’ or reduce
for accounting purposes,” the model used to project gas prices.
Doing so would let Dynegy reduce losses, the suit says. The amount involved,
Hilder said, would have been “significant.”