(Against All Defendants For Violations of   Section 10(b) And Rule 10b-5 Promulgated Thereunder)   (Violations of Section 20(a) of the  Exchange Act Against The Individual Defendants)   18.  Harvest Natural is a petroleum exploration and production company focusing on  acquiring exploration, development and producing properties in geological basins with proven  active hydrocarbon systems.   In addition to its headquarters in Houston, Texas, the Company  also has regional/technical offices in the United Kingdom and Singapore, and field offices in  Jakarta, Republic of Indonesia; Port Gentil, Republic of Gabon; and Muscat, Sultanate of Oman  to support field operations in those areas.  Materially False and Misleading  Statements Issued During the Class Period   20.  On May 7, 2010, the Company filed a quarterly report for the period ended March  31, 2010 on Form 10-Q with the SEC, which was signed by Defendants Edmiston and Haynes,  and reiterated the Company’s previously announced quarterly financial results and financial  position.  In addition, the Form 10-Q contained signed certifications pursuant to Sarbanes-Oxley  Act of 2002 (“SOX”) by Defendants Edmiston and Haynes, stating that the financial information  contained in the Form 10-Q was accurate and disclosed any material changes to the Company’s  internal control over financial reporting.   22.  On August 9, 2010, the Company filed a quarterly report for the period ended  June 30, 2010 on Form 10-Q with the SEC, which was signed by Defendants Edmiston and  Haynes, and reiterated the Company’s previously announced quarterly financial results and  financial position.  In addition, the Form 10-Q contained signed certifications pursuant to SOX  by Defendants Edmiston and Haynes, stating that the financial information contained in the Form  10-Q was accurate and disclosed any material changes to the Company’s internal control over  financial reporting.   24.  On November 9, 2010, the Company filed a quarterly report for the period ended  September 30, 2010 on Form 10-Q with the SEC, which was signed by Defendants Edmiston  and Haynes, and reiterated the Company’s previously announced quarterly financial results and  financial position.  In addition, the Form 10-Q contained signed certifications pursuant to SOX  by Defendants Edmiston and Haynes, stating that the financial information contained in the Form  10-Q was accurate and disclosed any material changes to the Company’s internal control over  financial reporting.   26.    On March 15, 2011, the Company filed an annual report for the period ended  December 31, 2010 on Form 10-K with the SEC, which was signed by Defendants Edmiston and  Haynes, and reiterated the Company’s previously announced quarterly financial results and  financial position.  In addition, the Form 10-K contained signed certifications pursuant to SOX  by Defendants Edmiston and Haynes, stating that the financial information contained in the Form  10-K was accurate and disclosed any material changes to the Company’s internal control over  financial reporting.   28.  On May 10, 2011, the Company issued a press release announcing its financial  results for the first quarter ended March 31, 2011.  For the quarter, the Company reported net  income of $800,000, or $0.02 diluted EPS, as compared to net income of $25 million, or $0.64  diluted EPS for the same period a year ago.  The press release stated the following, in relevant  part:  The first quarter results included exploration charges of $1.2 million, or $0.04 per  diluted share.  Also during the first quarter the Company incurred costs from  discontinued operations of $2.9 million or $0.07 per diluted share from related  revenue and expenses associated with the Utah assets.  Finally, Harvest  recognized a $1.3 million gain, or $0.03 per diluted share, on the sale of its equity  investment in Fusion Geophysical, LLC (Fusion).  Adjusted for exploration  charges, proceeds from the sale of Fusion and the losses related to the  discontinued operations, first quarter 2011 earnings would have been $3.6 million  or $0.10 per diluted share.  Petrodelta reported earnings during the first quarter of $61.9 million, $19.8  million net to Harvest's 32 percent interest, under International Financial  Reporting Standards (IFRS).  After adjustments to Petrodelta's IFRS earnings,  primarily to conform to U.S. GAAP, Harvest's 32 percent share of Petrodelta's  earnings was $ 13.5 million.     29.  On May 10, 2011, the Company filed a quarterly report for the period ended  March 31, 2011 on Form 10-Q with the SEC, which was signed by Defendants Edmiston and  Haynes, and reiterated the Company’s previously announced quarterly financial results and  financial position.  In addition, the Form 10-Q contained signed certifications pursuant to SOX  by Defendants Edmiston and Haynes, stating that the financial information contained in the Form  10-Q was accurate and disclosed any material changes to the Company’s internal control over  financial reporting.    31.  On August 9, 2011, the Company filed a quarterly report for the period ended  June 30, 2011 on Form 10-Q with the SEC, which was signed by Defendants Edmiston and  Haynes, and reiterated the Company’s previously announced quarterly financial results and  financial position.  In addition, the Form 10-Q contained signed certifications pursuant to SOX  by Defendants Edmiston and Haynes, stating that the financial information contained in the Form  10-Q was accurate and disclosed any material changes to the Company’s internal control over  financial reporting.   33.  On November 9, 2011, the Company filed a quarterly report for the period ended  September 30, 2011 on Form 10-Q with the SEC, which was signed by Defendants Edmiston  and Haynes, and reiterated the Company’s previously announced quarterly financial results and  financial position.  In addition, the Form 10-Q contained signed certifications pursuant to SOX  by Defendants Edmiston and Haynes, stating that the financial information contained in the Form  10-Q was accurate and disclosed any material changes to the Company’s internal control over  financial reporting.   35.  On March 15, 2012, the Company filed an annual report for the period ended  December 31, 2011 on Form 10-K with the SEC, which was signed by Defendants Edmiston and  Haynes, and reiterated the Company’s previously announced quarterly financial results and  financial position.  In addition, the Form 10-K contained signed certifications pursuant to SOX  by Defendants Edmiston and Haynes, stating that the financial information contained in the Form  10-K was accurate and disclosed any material changes to the Company’s internal control over  financial reporting.   38.  On May 10, 2012, the Company filed a quarterly report for the period ended  March 31, 2012 on Form 10-Q with the SEC, which was signed by Defendants Edmiston and  Haynes, and reiterated the Company’s previously announced quarterly financial results and  financial position.  In addition, the Form 10-Q contained signed certifications pursuant to SOX  by Defendants Edmiston and Haynes, stating that the financial information contained in the Form  10-Q was accurate and disclosed any material changes to the Company’s internal control over  financial reporting.   40.  On August 9, 2012, the Company issued a press release announcing its financial  results for the second quarter ended June 30, 2012.  For the quarter, the Company reported net  income of $8.2 million, or $0.20 diluted EPS, as compared to net income of $90 million, or  $2.23 diluted EPS for the same period a year ago.  The press release stated the following, in  relevant part:  The second quarter 2012 results included exploration charges of $1.3 million, or  $0.03 per diluted share, and $1.5 million, or $0.04 per diluted share, for  transaction costs incurred related to the pending sale of our 32 percent interest in  Petrodelta.  Additionally during the second quarter, Harvest incurred $1.6 million,  or $0.04 per diluted share, in discontinued operations related to the settlement of  all outstanding claims with a private third-party related to the Antelope project.   Excluding the exploration charges, transaction costs and settlement charges in  discontinued operations, and net of the related tax benefits of $0.8 million, or  $0.02 per diluted share, second quarter 2012 earnings would have been $11.8  million, or $0.29 per diluted share.    The second quarter 2011 results included the sale of our Utah properties for a net  gain of $98.7 million.    Petrodelta reported net income during the second quarter of $72.0 million, as  reported under International Financial Report Standards (IFRS), compared to  $47.3 million for the same period in 2011.  Harvest's 32 percent share of  Petrodelta's net income for the second quarter as reported under U.S. GAAP was  $18.1 million, compared to $14.6 million, for the same period one year ago.    42.  On November 9, 2012, the Company issued a press release announcing its  financial results for the second quarter ended September 30, 2012.  For the quarter, the Company  reported net income of $5.8 million, or $0.15 diluted EPS, as compared to net income of $7.7  million, or $0.20 diluted EPS, for the same period a year ago.  The press release stated the  following in relevant part:  The third quarter 2012 results included exploration charges of $1.5 million, or  $0.04 per diluted share, and $1.1 million, or $0.03 per diluted share, for  transaction costs incurred related to the pending sale of our 32 percent interest in  Petrodelta.  Additionally, during the third quarter, Harvest incurred $1.0 million,  or $0.02 per diluted share, in debt conversion expense and $0.6 million, or $0.02  per diluted share, in discontinued operations related to income taxes.  Excluding  the exploration charges, transaction costs, debt conversion expense, and  discontinued operations charges, third quarter 2012 earnings would have been  $10.0 million, or $0.26 per diluted share.   Petrodelta reported net income during the third quarter of $45.7 million, as  reported under International Financial Report Standards (IFRS), compared to  $57.0 million for the same period in 2011.  Petrodelta's decrease in net income for  the quarter was primarily due to higher operational costs of $14.2 million  resulting from a 30 percent increase in salaries and related benefits retroactive to  October 2011.  Harvest's 32 percent share of Petrodelta's net income for the third  quarter as reported under U.S. GAAP was $16.2 million, compared to $14.8  million, for the same period one year ago.   44.  The statements referenced in ¶¶ 19 - 43 above were materially false and/or  misleading because they misrepresented and failed to disclose the following adverse facts, which  were known to defendants or recklessly disregarded by them, including that: (1) the Company  incorrectly capitalized certain lease maintenance costs and certain internal selling, general and  administrative costs; (2) the Company improperly presented certain cash flow items and caused  certain long-lived assets to be impaired;  (3) the Company was unable to sell its interests in  Petrodelta S.A. to PT Pertamina (Persero); (4) the Company lacked adequate internal and  financial controls; and (5) as a result of the foregoing, the Company’s statements were materially  false and misleading at all relevant times.  49.  Plaintiff brings this action as a class action pursuant to Federal Rule of Civil  Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased or  otherwise acquired Harvest Natural securities during the Class Period (the “Class”); and were  damaged thereby.  Excluded from the Class are defendants herein, the officers and directors of  the Company, at all relevant times, members of their immediate families and their legal  representatives, heirs, successors or assigns and any entity in which defendants have or had a  controlling interest.   50.  The members of the Class are so numerous that joinder of all members is  impracticable.  Throughout the Class Period, Harvest Natural securities were actively traded on  the NYSE.  While the exact number of Class members is unknown to Plaintiff at this time and  can be ascertained only through appropriate discovery, Plaintiff believes that there are hundreds  or thousands of members in the proposed Class.  Record owners and other members of the Class  may be identified from records maintained by Harvest Natural or its transfer agent and may be  notified of the pendency of this action by mail, using the form of notice similar to that  customarily used in securities class actions.   52.  Plaintiff will fairly and adequately protect the interests of the members of the  Class and has retained counsel competent and experienced in class and securities litigation.   Plaintiff has no interests antagonistic to or in conflict with those of the Class.   53.  Common questions of law and fact exist as to all members of the Class and  predominate over any questions solely affecting individual members of the Class.  Among the  questions of law and fact common to the Class are:  • whether the federal securities laws were violated by defendants’ acts as  alleged herein;  • whether statements made by defendants to the investing public during the  Class Period misrepresented material facts about the business, operations and  management of Harvest Natural;  • whether the Individual Defendants caused Harvest Natural to issue false and  misleading financial statements during the Class Period;  • whether defendants acted knowingly or recklessly in issuing false and  misleading financial statements;  • whether the prices of Harvest Natural securities during the Class Period were  artificially inflated because of the defendants’ conduct complained of herein;  and  • whether the members of the Class have sustained damages and, if so, what is  the proper measure of damages.   54.  A class action is superior to all other available methods for the fair and efficient  adjudication of this controversy since joinder of all members is impracticable.  Furthermore, as  the damages suffered by individual Class members may be relatively small, the expense and  burden of individual litigation make it impossible for members of the Class to individually  redress the wrongs done to them.  There will be no difficulty in the management of this action as  a class action.   56.  Based upon the foregoing, Plaintiff and the members of the Class are entitled to a  presumption of reliance upon the integrity of the market.   57.  Plaintiff repeats and realleges each and every allegation contained above as if  fully set forth herein.   58.  This Count is asserted against defendants and is based upon Section 10(b) of the  Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder by the SEC.   60.  Pursuant to the above plan, scheme, conspiracy and course of conduct, each of the  defendants participated directly or indirectly in the preparation and/or issuance of the quarterly  and annual reports, SEC filings, press releases and other statements and documents described  above, including statements made to securities analysts and the media that were designed to  influence the market for Harvest Natural securities.  Such reports, filings, releases and statements  were materially false and misleading in that they failed to disclose material adverse information  and misrepresented the truth about Harvest Natural’s finances and business prospects.   62.  Defendants were personally motivated to make false statements and omit material  information necessary to make the statements not misleading in order to personally benefit from  the sale of Harvest Natural securities from their personal portfolios.   62.4 percent increase over 2009.   63.  Information showing that defendants acted knowingly or with reckless disregard  for the truth is peculiarly within defendants’ knowledge and control.  As the senior managers  and/or directors of Harvest Natural, the Individual Defendants had knowledge of the details of  Harvest Natural internal affairs.   65.  During the Class Period, Harvest Natural securities were traded on an active and  efficient market.  Plaintiff and the other members of the Class, relying on the materially false and  misleading statements described herein, which the defendants made, issued or caused to be  disseminated, or relying upon the integrity of the market, purchased shares of Harvest Natural  securities at prices artificially inflated by defendants’ wrongful conduct.  Had Plaintiff and the  other members of the Class known the truth, they would not have purchased said securities, or  would not have purchased them at the inflated prices that were paid.  At the time of the  purchases by Plaintiff and the Class, the true value of Harvest Natural securities were  substantially lower than the prices paid by Plaintiff and the other members of the Class.  The  market price of Harvest Natural securities declined sharply upon public disclosure of the facts  alleged herein to the injury of Plaintiff and Class members.   66.  By reason of the conduct alleged herein, defendants knowingly or recklessly,  directly or indirectly, have violated Section 10(b) of the Exchange Act and Rule 10b-5  promulgated thereunder.   67.  As a direct and proximate result of defendants’ wrongful conduct, Plaintiff and  the other members of the Class suffered damages in connection with their respective purchases  and sales of the Company’s securities during the Class Period, upon the disclosure that the  Company had been disseminating misrepresented financial statements to the investing public.  69.  During the Class Period, the Individual Defendants participated in the operation  and management of Harvest Natural, and conducted and participated, directly and indirectly, in  the conduct of Harvest Natural’s business affairs.  Because of their senior positions, they knew  the adverse non-public information about Harvest Natural’s misstatement of income and  expenses and false financial statements.   70.  As officers and/or directors of a publicly owned company, the Individual  Defendants had a duty to disseminate accurate and truthful information with respect to Harvest  Natural’s financial condition and results of operations, and to correct promptly any public  statements issued by Harvest Natural which had become materially false or misleading.   71.  Because of their positions of control and authority as senior officers, the  Individual Defendants were able to, and did, control the contents of the various reports, press  releases and public filings which Harvest Natural disseminated in the marketplace during the  Class Period concerning Harvest Natural’s results of operations.  Throughout the Class Period,  the Individual Defendants exercised their power and authority to cause Harvest Natural to  engage in the wrongful acts complained of herein. The Individual Defendants therefore, were  “controlling persons” of Harvest Natural within the meaning of Section 20(a) of the Exchange  Act.  In this capacity, they participated in the unlawful conduct alleged which artificially inflated  the market price of Harvest Natural securities.   73.  By reason of the above conduct, the Individual Defendants are liable pursuant to  Section 20(a) of the Exchange Act for the violations committed by Harvest Natural.  Background  