(CN) - A class action claims oil company Lone Pine Resources raised $195 million in its May 2011 IPO, but did not tell investors that a forest fire severely damaged one of its main oil fields one week earlier.
     Todd Augenbaum filed a class action Lone Pine Resources, Inc., seven of its corporate officers, Forest Oil Corporation, and three financial securities companies in New York.
     According to the complaint, Lone Pine is an oil and gas exploration company with operations in Canada, and is majority-owned by an American oil company, Forest Oil, which owns 82 percent of Lone Pine's outstanding corporate stock.
     "On May 26, 2011, Lone Pine filed the Prospectus as part of the Registration Statement, and 15 million shares of Lone Pine common stock were sold to the investing public at $13.00 per share, raising $195 million, with $183.3 million going to Lone Pine and $11.7 million to the underwriters," the complaint states.
     However, according to the complaint, "the Registration Statement and Prospectus contained untrue statements of material facts, omitted to state other facts necessary to make the statements made not misleading and was not prepared in accordance with the rules and regulations governing its preparation."
     Augenbaum claims that "In the week prior to the IPO, a major pipeline disruption and forest fire had materially slowed the production of oil from one of the company's major oil fields."
     Following the company's disclosure of the damage to its infrastructure, "the price of Lone Pine common stock declined over the next several days, closing at $9.21 per share on August 11, 2011, a decline of almost 30%, or $3.79, from the Company's IPO price of $13.00 per share, on extremely heavy trading volume," Augenbaum says.
     Augenbaum is represented by Jeffrey Abraham of Abraham, Fruchter & Twersky LLP.