Dynegy admits it is unable to certify past results

Dynegy, the struggling energy trader, told regulators yesterday that it was unable to certify its past financial results pending a restatement of its earnings, prompting fears on Wall Street that the company may be wobbling towards bankruptcy.

While a handful of other companies also hedged their past earnings statements, investors seemed generally cheered that most company chiefs asked by the government to vouch for their results had done so by the deadline.

Stocks soared in US markets on Wednesday with the Dow Jones index closing up 260 points or 3 per cent, and managed to add another 75 points yesterday. "It soothes investors' fears a little bit ­ until the next débâcle comes," said Keith Janecek, vice-president of trading at Legg Mason Wood Walker.

Sceptics wondered whether the chief executives swearing by their results would be meaningful for long. "There's so much wiggle room in the language of the certification that we may not be getting what we think we're getting," said William Lerach, a lawyer who has sued several companies on behalf of disgrun-tled shareholders.

Dynegy said it could not sign off its accounts due to a pending restatement of its 2001 numbers. The company, already under investigation by Wall Street regulators, has also been found to have been involved in a gas trade that may have been manipulated to pump earnings.

There was also fresh concern about AOL Time Warner. It said past filings may have inappropriately accounted for about $49m (£32m) in transactions at AOL.