Omni Energy files lawsuit against investors for alleged short-swing trading

By Sheri Kasprzak

Atlanta, Jan. 25 - Omni Energy Services Corp. has filed a lawsuit against the investors of its 6.5% subordinated convertible debentures, alleging the note holders engaged in short-swing trading.

The suit was filed in the U.S. District Court for the Western District of Louisiana against Provident Premier Master Fund Ltd., Portside Growth and Opportunity Fund, Manchester Securities Corp., Elliott Management Corp., Gemini Investment Strategies LLC, Ramius Capital LLC and Gemini Master Fund Ltd.

Omni alleges that the investors engaged in a scheme to deliberately cause a decline in its trading price by increasing the number of shares they were entitled to receive upon conversion of the debentures into common shares.

The company said it plans to request an investigation into the matter by the National Association of Securities Dealers.

The investors named as defendants in the lawsuit own more than 10% of Omni's common stock after conversion.

"It is especially troublesome to see the adverse impact on our market capitalization caused by this alleged short-swing trading activity of the debenture holders," said Omni chairman and chief executive officer James Eckert in a statement. "This trading activity appears to have unjustly pressured the stock price for the potential gain of the debenture holders.

"The company's fundamentals remain strong. Seismic drilling activity is running at record levels. The environmental division continues to post impressive results. The restructuring program to improve the margins reported by the aviation division is continuing.

"We believe that the recent decline in the company's stock price is unwarranted. Improper influences on our stock price caused by third parties will not be tolerated."

Omni Energy, based in Carencro, La., provides onshore seismic data and transportation services to oil and gas companies.

On Tuesday, Omni's stock closed down $0.03 at $1.31.

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