Cohen, Milstein, Hausfeld & Toll Files Class Action Securities Fraud Suit on Behalf of Investors Who Purchased Allegheny Energy, Inc., Securities.

Business Editors/Legal Writers

WASHINGTON--(BUSINESS WIRE)--Nov. 13, 2002

Please take notice that an investor represented by the law firm of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (www.cmht.com) filed a securities fraud class action lawsuit in the U.S. District Court for the District of Maryland, Northern Division, on behalf of persons who purchased or otherwise acquired the securities of Allegheny Energy, Inc. (NYSE:AYE) during the period from April 23, 2001 through and including October 8, 2002 (the "Class Period").

The suit names Allegheny as a defendant, along with Alan J. Noia, the company's President, Chairman and CEO; Michael P. Morrell, a Senior Vice President of Allegheny Energy and the president of subsidiary Allegheny Energy Supply; Bruce E. Walenczyk, a Senior Vice President and Chief Financial Officer of Allegheny Energy; and Daniel L. Gordon, the president of Allegheny Energy Supply's energy trading division, Allegheny Energy Global Markets. The complaint asserts securities fraud claims under sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder.

The complaint alleges that the Defendants violated the federal securities law. Specifically, the complaint alleges that during the Class Period, Defendants made false and misleading statements and failed to disclose materially adverse information regarding the company's financial prospects, as the company's revenue and revenue growth was falsely inflated by the use of round-trip or "wash" energy trades, with partners such as Enron.

In March, 2001, Allegheny announced to the investing public that it had acquired an energy trading unit, Global Energy Markets, from Merrill Lynch & Co. However, throughout the class period, Allegheny allegedly did not disclose that it knew, or was reckless in not knowing, that a substantial portion of its energy trading revenues were falsely inflated by the use of wash transactions. On September 25, 2002, Allegheny filed a complaint against Merrill Lynch, alleging that Allegheny overpaid for the Global Energy Markets unit because its revenues were falsely inflated by wash transactions with Enron, in which Allegheny admitted that such sham transactions inflated Global Energy Markets' revenues and growth rates. These revelations caused Allegheny's stock price to collapse -- from the stock's high of $12.85 on September 25, 2002, the stock plummeted 70% to $3.80 on October 8, 2002, when the company revealed that it was in default on its credit agreements.

As a result of Defendants' allegedly deceptive acts, the market price of Allegheny securities was allegedly artificially inflated during the Class Period. A copy of the complaint can be obtained from the clerk's office of the court or from Cohen, Milstein, Hausfeld & Toll, P.L.L.C.

The law firm of Cohen, Milstein, Hausfeld & Toll, P.L.L.C., has significant experience in prosecuting investor class actions and actions involving financial fraud. The firm has offices in Washington, D.C., Seattle and New York, and is active in major litigation pending in federal and state courts throughout the nation. Please visit our website at www.cmht.com.

The firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm to lead positions in complex multi-district or consolidated litigation. Cohen, Milstein, Hausfeld & Toll, P.L.L.C. has taken a lead role in numerous important cases on behalf of defrauded investors, and has been responsible for a number of outstanding recoveries which, in the aggregate, total over a billion dollars.

If you are a member of the Class, you may request to serve as a lead plaintiff. The deadline for making such a request is December 20, 2002. If you have questions with regard to this case, your rights or serving as a lead plaintiff, you may contact one of the following:

Steven J. Toll, Esq. ([e-mail])

or

Mary Ann Fink ([e-mail])

Telephone: [phone] or 202/408-4600

Cohen, Milstein, Hausfeld & Toll, P.L.L.C.

1100 New York Avenue, NW

West Tower, Suite 500

Washington, DC 20005