Nov. 10, 2000
Lawsuit accuses uranium firm of stock fraud
http://www.courier-journal.com/localnews/2000/0011/10/001110uranium.html
By JAMES MALONE
The Courier-Journal

PADUCAH, Ky. -- A class-action securities-fraud lawsuit filed in federal court alleges that United States Enrichment Corp., its chief executive officer, and several brokerage houses and securities dealers misled investors who bought stock in the company's initial public offering in July 1998.

The suit, filed Oct. 26, seeks unspecified damages from USEC, which operates the gaseous diffusion plants at Paducah and near Portsmouth, Ohio.

The stock sale raised about $1.4 billion for the company, which was converted from government ownership to a privately held venture. Its stock has fallen from a high of about $14.25 a share to about $4.50.

The lawsuit says that the company claimed in a prospectus to have a strong financial position and that the world market for uranium-enrichment services would be stable for the next 10 to 15 years. Moreover, the lawsuit contends that U.S. Enrichment was touting the future of a potentially efficient laser-based gaseous diffusion process called AVLIS at the time of the stock offering.

But the suit says investors were misled about risks; that the company's financial fortunes plummeted because the uranium-enrichment market was in serious decline; that -AVLIS was soon abandoned as being technically unfeasible; and that a deal to buy uranium blended from Russian warheads was financially detrimental to the company. The suit also said that the company did not fully disclose its environmental liabilities.

U.S. Enrichment spokeswoman Elizabeth Stuckle said yesterday that the lawsuit was without merit and would be vigorously opposed.

The lawsuit was brought on behalf of shareholder Paul Spirgel, who is represented by two law firms currently involved in environmental lawsuits against the plant.

Claims in a lawsuit give only one side of a case.