/raid1/www/Hosts/bankrupt/CAR_Public/000320.MBX
C L A S S A C T I O N R E P O R T E R
Monday, March 20, 2000, Vol. 2, No. 55
Headlines
ANDERSON, GUIDE: IN Law Firm Plans Lawsuit over White River Fish Kill
CHINOOK FERRY: Supreme Ct Gives Green Light to High Speed Foot Ferry
CINAR CORPORATION: Schiffrin & Barroway Files Securities Lawsuit in NY
CINAR CORPORATION: Shepherd & Geller Plans to Expand Securities Suit
CUMULUS MEDIA: Berger & Montague Files Securities Lawsuit in Wisconsin
CYBERSHOP.COM INC: Stull, Stull Files Securities Suit in New Jersey
DAIRY DEREGULATION: Australian Association Prepares to Sue State Govt.
FIRST ALLIANCE: DOJ and AGs Investigate Lending Practices
FIRST ALLIANCE: MA Sues over Lending Practices; Case in Discovery Stage
FIRST ALLIANCE: May Settle Retirees' Suit in CA Re Business Practices
FIRST ALLIANCE: May Settle with IL over Trade Practices & Alleged Fraud
FIRST ALLIANCE: Securities Suit in CA in Discovery Stage
FLIR SYSTEMS: Schubert & Reed Files Securities Lawsuit in Oregon
GUN MANUFACTURERS: Smith & Wesson Agrees to Measures Re Sale & Use
HMOs: Health Insurance Assn. of America Is Campaigning to Fight Suits
LAIDLAW INC: Sued in SC in Wake Of Safety-Kleen Share Price Drop
METLIFE: Pays FL $7.5M for Sale of Additional Life Insurance Policies
NEW YORK: Lawsuit Filed for Homeless Children Suffering from Asthma
NORTHERN TELECOM: Securities Suit Dismissed in NY under Post-Reform Act
PUBLISHERS CLEARING: Idaho Sues over Sweepstakes Mailings
RICH PASSAGE: Supreme Ct Remands WA Ferry Case to Super. Ct for Finding
SAFETY-KLEEN CORP: Donovan Miller Files Securities Suit in SC
SAFETY-KLEEN CORP: Stull, Stull Files Securities Complaint in SC
SOTHEBY'S, CHRISTIE'S: Auction Firms Said to Share Client Lists
STIFEL, NICOLAUS: Former Clients Sue Brokerage for Hard Selling REITs
SUNTERRA CORP.: Lockridge Grindal Files Securities Suit in Florida
SYKES ENTERPRISES: Wolf Haldenstein Files Securities Suit in Florida
TELEPHONE COMPANIES: Phone Bills Could Inspire Action
TOBACCO LITIGATION: Liggett to Pay 5 States $2B over the Next 25 Years
*********
ANDERSON, GUIDE: IN Law Firm Plans Lawsuit over White River Fish Kill
---------------------------------------------------------------------
An Indianapolis law firm says it plans to file a class-action lawsuit
seeking damages from the city of Anderson and Guide Corp. for a massive
fish kill in the White River last year.
The firm of Price, Potter, Jackson and Mellowitz sent letters to the
city and the company Feb. 28 saying it intends to sue on behalf of
several central Indiana residents living along the river, said
Indianapolis television station WISH.
The lawyers claim Guide violated state, federal and local laws by
releasing a toxic chemical into the sewage system and that city
officials were negligent in allowing the chemical to enter the river.
"The key thing is for the people that live along the river and use the
river to be protected, and that is what our firm is trying to do," Bill
Potter said.
State and federal authorities are trying to find the source of what
killed at least 115 tons of fish in the river from Anderson to
Indianapolis beginning in mid-December. Investigators suspect Guide, an
auto parts maker in Anderson, discharged a chemical into the city's
treatment plant. (Chicago Tribune, March 17, 2000)
CHINOOK FERRY: Supreme Ct Gives Green Light to High Speed Foot Ferry
--------------------------------------------------------------------
The state Supreme Court gave the green light to a return to high-speed
foot-ferry service between Bremerton and Seattle, lifting an injunction
that had slowed the vessels to a relative crawl to protect waterfront
property.
Faster service could resume in about three weeks. The number of
crossings probably won't increase, but commuters will save a lot of
time, said a jubilant ferry spokeswoman Pat Patterson.
But the service still faces legal and budgetary challenges. The high
court sent the case back to Superior Court for further proceedings on
the environmental challenges brought by property owners. The state
itself has begun environmental reviews.
And lawmakers are scrambling to find money to continue subsidizing the
expensive service following voter approval of tax-cut Initiative 695.
The ferry system was among the hardest hit services, losing more than
$50 million from its budget.
The system has announced termination of passenger-only service between
Bremerton and Seattle and Vashon Island and downtown Seattle, effective
July 1, but lawmakers are hoping to keep it going at least another year,
for weekday commuters.
The unanimous Supreme Court decision, written by Justice Richard
Sanders, allows the Chinook and Snohomish catamarans to resume traveling
at speeds as high as 34 knots. The ruling lifts the temporary injunction
by King County Superior Court Judge Glenna Hall that had slowed the
boats down to 12 knots, adding 30 minutes to the round trip.
The Supreme Court said the lower court must rule on the claims by
waterfront property owners that the ferry wake is wrecking their
beaches.
The justices didn't rule on whether state environmental laws apply to
the fast ferries and whether the boats are doing damage. But the
justices said the lower court needs to figure out those basic facts
before slowing the boats down.
The court said Hall got the judicial cart before the horse. "Because the
trial court did not consider whether the property owners have an
adequate remedy at law, failed to find the high-speed operation of the
Chinook causes actual and substantial injury and refused to balance the
relative interests of the parties and the public, the issuance of the
injunction constitutes an abuse of discretion," Sanders wrote.
Property owners have long complained that ferry wake is harming their
beachfronts. The ferry system previously had slowed older-generation
foot ferries down to 11 knots from the start of Rich Passage all the way
to Bremerton, six miles away. The Chinook and its sister vessel
Snohomish were designed to allow 34-knot service without harming the
shoreline.
The high speed allows a crossing in about 30 minutes, or half the time
it takes on the car ferry. The Chinook began operating in May 1998, and
in less than a year, property owners went to court. Hall granted an
injunction last summer, slowing the speed. The ferry system and city of
Bremerton strenously objected, saying that adding the fast-ferry service
to an existing ferry run did not trigger the State Environmental Policy
Act.
The state also said the court didn't balance the competing needs before
granting the restraining order.
Hall concluded that SEPA does apply, but declined to find that the
Chinook caused the erosion that property owners had cited along Rich
Passage. The state should have done an environmental review before
beginning the fast service, she held.
But the Supreme Court disagreed. The environmental-impact law doesn't
hinge on "purely economic interests," Sanders wrote. "While the property
owners are undoubtedly motiviated by a desire to protect the economic
value of their properties, their SEPA claim is based on the state's
alleged failure to consider the environmental effects of the Chinook,
not its economic effects," the court said.
The lower court hasn't drawn a direct link between the Chinook and
shoreline damage, Sanders wrote. "If neither the deployment nor
operation of the Chinook significantly and adversely impacts the
environment, there is clearly no threatened harm to enjoin," the court
said.
During a hearing in January, the court was shown a video of a ferry's
wake crashing onto a shore. "A picture is worth a thousand words,"
Justice Gerry Alexander said then. "That looked like Hawaii there."
Property owners still expect a trial on a separate claim that the state
should reimburse them for damages, said Steve Berman, a lawyer
representing about 60 landowners in a class-action lawsuit.
A deputy prosecutor from Kitsap County told the Supreme Court that
hundreds, if not thousands, of people were affected by the court-ordered
slowdown.
Jacquelyn Aufderheide offered affidavits from commuters and businesses,
and noted that the 30-minute delay each day would amount to 167 hours a
year for the average worker.
Vic Kucera, one of the property owners who challenged the government,
did not immediately return telephone calls seeking comment. His wife,
Linda, said in an earlier interview that "My case is not about money.
It's about protecting the environment." The case is Kucera vs. State of
Washington, 68428-6. (The Associated Press, March 16, 2000)
CINAR CORPORATION: Schiffrin & Barroway Files Securities Lawsuit in NY
----------------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP gives notice that a class
action lawsuit was filed in the United States District Court for the
Eastern District of New York on behalf of all purchasers of the common
stock of Cinar Corporation (Nasdaq: CINR ) from February 4, 1999 through
March 6, 2000, inclusive (the "Class Period").
The complaint charges Cinar and certain of its officers and directors
with issuing false and misleading statements concerning the Company's
revenues, income and earnings.
Contact: Schiffrin & Barroway, LLP Marc A. Topaz, Esq. Robert B. Weiser,
Esq. 888/299-7706 (toll free) or 610/667-7706 e-mail:
info@sbclasslaw.com
CINAR CORPORATION: Shepherd & Geller Plans to Expand Securities Suit
--------------------------------------------------------------------
The Law Firm of Shepherd & Geller, LLC, plaintiff's counsel in the
securities class action litigation involving CINAR Corporation
(Nasdaq:CINR) filed in February 2000, intends to file an amended
complaint to include the recent announcement by CINAR that it expected
to restate its financial results from 1997, 1998 and the first three
quarters of 1999. The proposed extended class period will be between
April 8, 1997 and March 10, 2000, inclusive. The amended complaint will
allege, among other things, that the Company had improperly claimed
Canadian government subsidies in the form of tax credits, the Company's
financial statements failed to disclose certain related party
transactions and that certain of the Company's officers were involved in
unauthorized investments.
In February 2000, plaintiff filed a class action complaint in the United
States District Court for the Eastern District of New York on behalf of
all individuals and institutional investors that purchased the common
stock of CINAR between February 4, 1999 and February 18, 2000, inclusive
(the "Class Period"), charging that the Company and certain of its
officers and directors violated the federal securities laws by failing
to disclose that the Company was falsely representing that scripts for
television productions written by United States citizens were written by
Canadian citizens in order to obtain favorable tax credits and that, as
a result, the Company's financial results were inflated.
Contact: Shepherd & Geller, LLC, Boca Raton Jonathan M. Stein,
561/750-3000 Toll Free: 1-888-262-3131 E-mail:
jstein@classactioncounsel.com
CUMULUS MEDIA: Berger & Montague Files Securities Lawsuit in Wisconsin
----------------------------------------------------------------------
The law firm of Berger & Montague, P.C. on March 17, 2000, filed a
lawsuit in the United States District Court for the Eastern District of
Wisconsin on behalf of all persons who purchased the common stock of
Cumulus Media, Inc. (Nasdaq: CMLS) during the period of May 17, 1999
through March 16, 2000 inclusive (the "Class Period").
The Complaint alleges that Cumulus and certain of its officers and
directors violated the Securities Exchange Act of 1934. According to the
Complaint, defendants engaged in a scheme to artificially inflate the
revenues and profits of Cumulus by improperly recording revenues on
contract sales in violation of generally accepted accounting principles
in order to accomplish the Company's various stock offerings at the
maximum price per share, and to then create the expectation in the
market that Cumulus was an increasingly profitable company.
On March 16, 2000, after the market closed, defendants announced that
certain revenues and expenses for the first, second, and third quarters
of the year 1999 were misallocated. The misallocation relates
principally to revenue associated with contract sales spanning more than
one accounting period. As a result, the Company restated results for the
first three quarters of 1999, resulting in a decrease in net revenues,
and an increase in net losses. In response to this announcement,
Cumulus' stock price dropped from $16-15/16 on March 16, 2000, to open
at $11 on March 17, a loss of over 30%. Plaintiffs seek to recover
damages on behalf of all purchasers of Cumulus common stock during the
Class Period (the "Class").
Contact: Berger & Montague, P.C., Philadelphia, Sherrie R. Savett,
Esquire or Michael T. Fantini, Esquire, or Kimberly A. Walker, Investor
Relations Manager, 215-875-3000 or 888-891-2289, Fax: 215-875-4604,
Website: http://home.bm.netE-mail: InvestorProtect@bm.net
You may also contact Beth Kushner, Esq. of von Briesen, Purtell & Roper,
s.c., at 414-287-1373, 735 N. Water Street, Suite 1000, Milwaukee,
Wisconsin 53202-4184. If you prefer, you can contact the firm by
facsimile at 414-273-7897 or by e-mail at DWadleig@vonbriesen.com
CYBERSHOP.COM INC: Stull, Stull Files Securities Suit in New Jersey
-------------------------------------------------------------------
The law firm Stull, Stull & Brody announces that a class action lawsuit
was filed on March 15, 2000, in the United States District Court for the
District of New Jersey on behalf of all persons who purchased the common
stock of CyberShop.com Inc., (NASDAQ:CYSP) between October 26, 1999,
through February 24, 2000 (the "Class Period").
The complaint charges CyberShop.com and certain of its officers and
directors with violation of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The
complaint alleges that defendants issued materially false and misleading
statements concerning sales at the Company's e-tailing web sites. In
particular, the complaint alleges that defendants represented that
revenues at the Company's web sites for the third quarter of 1999 had
increased 458% when, in fact, sales at the web sites had decreased 28%.
Before the disclosure of the true facts, CyberShop.com insiders sold
more than $7 million of their personally-held CyberShop.com common stock
to the unsuspecting public at artificially inflated prices.
Contact: Stull, Stull & Brody, New York Tzivia Brody, Esq.,
1-800-337-4983 Fax: 212/490-2022 E-mail: SSBNY@aol.com
DAIRY DEREGULATION: Australian Association Prepares to Sue State Govt.
----------------------------------------------------------------------
DAIRY farmers across Australia have united to block nationwide
deregulation despite a Government promise to add a further $45 million
to its restructure package. Lobbying from Labor and the Australian
Democrats secured the extra money which would be used for counselling
services, retraining and community infrastructure when the industry
deregulated.
The Australian Milk Producers Association (AMPA), which was formed in
New South Wales last week, is collecting $100 a member which will go
towards class actions against any State Government which removed
protective legislation.
Branches have already been set up in Western Australia, Queensland,
Victoria and Tasmania and an Internet web site has been established
where farmers can lodge protests against deregulation and receive
updates on AMPA's lobbying efforts.
The WA branch is also rallying for farmers to vote no in next week's
deregulation ballot. WA branch president and Greenbushes farmer Tony
Pratico said the deregulation plan was grossly unfair if farmers' quotas
were removed and farm values decreased, without proper compensation. "We
must reject deregulation by voting no - WA can stop deregulation and
will likely be supported by other market milk States," he said.
Mr Pratico said AMPA would lodge a claim against the WA Government for
$750 million compensation in addition to the Federal package. He said
deregulation would cost the average WA dairy farmer $2 million in lost
quota, income and property value - while the Federal Government's
industry restructure package would only deliver an average of $200,000 a
farm, if taken up-front.
AMPA national president John Cartwright said farm values had already
fallen in Victoria and New South Wales by much more than the package was
worth. He said several billion dollars of farm value had been taken off
farmers' assets. (West Australian Newspapers Limited, March 16, 2000)
FIRST ALLIANCE: DOJ and AGs Investigate Lending Practices
---------------------------------------------------------
In September 1998, First Alliance Corporation was informed by the United
States Department of Justice that it and the Attorneys General of
Arizona, Florida, Illinois, Massachusetts, Minnesota, New York and
Washington have initiated a joint investigation into the lending
practices of the Company. The Company believes that the joint
investigation and any negative findings that may result from it could
have a significant adverse effect on the Company's ability to obtain new
and renew state lending licenses, which, in turn, could have a
significant adverse effect on the Company's ability to maintain or
expand its retail branch network of offices and on the Company's results
of operations and financial condition. The DOJ has agreed to limit its
initial inquiry to pricing disparities, and is currently reviewing data
provided by the Company. First Alliance says it is cooperating with the
investigation.
First Alliance Corporation, together with its subsidiaries, is a
financial services organization principally engaged in mortgage loan
origination, purchases, sales and servicing. Loans originated by the
Company primarily consist of fixed and adjustable rate loans secured by
first mortgages on single family residences. The majority of the
Company's loans are made to borrowers who use the loan proceeds for such
purposes as debt consolidation and financing of home improvements. The
Company says its borrowers typically are individuals who do not qualify
for conventional loans because of impaired or unsubstantiated credit
characteristics and/or unverifiable income, and whose borrowing needs
are not met by conventional lending institutions. The Company says there
are also borrowers who may qualify for a conventional loan but find the
Company's loans attractive due to the Company's personalized service and
rapid funding capability.
FIRST ALLIANCE: MA Sues over Lending Practices; Case in Discovery Stage
-----------------------------------------------------------------------
In October 1998, the Attorney General of Massachusetts filed an action
on behalf of the Commonwealth against the Company in the Superior Court
of Massachusetts, in the County of Suffolk, seeking an injunction
against the Company from charging rates, points and other terms which
significantly deviate from industry-wide standards or which are
otherwise unconscionable or unlawful. The remedies sought by the
Attorney General include injunctive relief; restitution for all
consumers; civil penalties; and the costs of investigating and
prosecuting the action, including attorneys' fees. A preliminary
injunction was granted, limiting the points the Company can charge to a
total of five. In addition, the Company must advise the Attorney General
before any foreclosure actions are filed in the Commonwealth. The
Company filed a motion to vacate the injunction, which was denied
without prejudice. The case is currently in the discovery stage.
FIRST ALLIANCE: May Settle Retirees' Suit in CA Re Business Practices
--------------------------------------------------------------------- In
December 1998, the American Association of Retired Persons ("AARP")
filed an action against the Company and against Brian and Sarah Chisick
in the Superior Court of California, in the County of Santa Clara. The
suit alleges unfair, unlawful, fraudulent and deceptive business
practices and conspiracy. The AARP is seeking injunctive relief,
restitution, revocation of licenses, attorneys' fees and costs. The case
is currently in its discovery stage, and the parties are discussing
settlement.
FIRST ALLIANCE: May Settle with IL over Trade Practices & Alleged Fraud
-----------------------------------------------------------------------
In December 1998, the Attorney General of the State of Illinois filed an
action on behalf of the State against the Company in the Cook County
Circuit Court. The suit alleges violations of the Illinois Consumer
Fraud Act, Deceptive Trade Practices Act and Illinois Interest Act. The
Attorney General seeks injunctive relief, restitution, civil penalties,
rescission, revocation of business licenses, attorneys' fees and costs.
The Company's motion to dismiss the complaint was granted as to three of
the four claims. The Company and the State are currently discussing
settlement.
FIRST ALLIANCE: Securities Suit in CA in Discovery Stage
--------------------------------------------------------
In June 1998, Leon Rasachack and Philip A. Ettedgui filed a class action
suit on behalf of all purchasers of the Class A Common Stock of First
Alliance Corp. between April 24, 1997 through May 15, 1998. The suit was
filed in the Superior Court of California in the County of Orange
against the Company, Brian Chisick, Sarah Chisick and Mark Mason. The
complaint alleges that First Alliance conspired against those who
purchased the stock during the stated class period by failing to
disclose known material adverse conditions in making certain public
statements about the Company's growth prospects. The state action is
currently in the discovery stage.
FLIR SYSTEMS: Schubert & Reed Files Securities Lawsuit in Oregon
----------------------------------------------------------------
Schubert & Reed LLP has filed a class action suit against FLIR Systems
Inc. (Nasdaq: FLIR) and certain of its officers and directors alleging
violations of federal securities laws on behalf of a class of purchasers
of FLIR common stock between March 3, 1999 and March 6, 2000, inclusive
(the "Class Period"). The complaint was filed March 16 in the United
States District Court for the District of Oregon and alleges violations
of Section 10 and 20 of the Securities Exchange Act of 1934 and Rule
10b-5 promulgated thereunder.
On March 6, 2000, FLIR Systems, Inc. announced that it expected revenue
and net earnings for the fourth quarter to be "materially below" the
Company's previous expectations of $0.57-$ 0.59 for the fourth quarter,
announced just weeks earlier, and that a loss for the quarter was
"possible." FLIR also announced that its Vice President of Finance and
CFO "resigned" following the discovery of "several errors" in its
accounting records, including errors in consolidating entries made for
its subsidiaries in both the U.S. and Europe, and that correcting these
errors would have the effect of reducing revenue and net earnings
relative to the Company's previously announced expectations. FLIR said
that it would delay announcement of its financial results for the fourth
quarter and 1999 until after the completion of the year-end audit of its
financial statements, which it expected no later than the end of March.
On news of the irregularities, FLIR lost more than 40% of its value in a
single day's trading, closing at $10.
Contact: Robert C. Schubert, Esq. or Juden Justice Reed, Esq., Schubert
& Reed LLP, Two Embarcadero Center, Suite 1050, San Francisco, CA 94111,
415-788-4220, fax at 415-788-0161, or e-mail at mail@schubert-reed.com
GUN MANUFACTURERS: Smith & Wesson Agrees to Measures Re Sale & Use
------------------------------------------------------------------
Facing the threat of a costly federal lawsuit, the nation's largest
handgun manufacturer agreed on March 17 to sweeping safety measures
intended to control both the sale and use of their weapons.
Springfield-based Smith & Wesson, which is among a group of gun
manufacturers being sued by localities across the country including
Boston, said it would put safety locks on its handguns, add "smart gun"
technology to new guns to prevent unauthorized usage, and would refuse
to peddle weapons at gun shows where background checks of buyers are not
done.
"This agreement is a major victory for America's families," President
Clinton said in an Oval Office address. "It means gun makers can and
will share in the responsibility to keep their products out of the wrong
hands. And it says that gunmakers can and will make their guns much
safer without infringing on anyone's rights."
Though it is not clear whether other gun makers will follow, the deal is
a major political victory for Clinton, who has been the personal target
of recent TV ads by the National Rifle Association. In an unusually
blistering attack on the president, NRA Executive Vice President Wayne
LaPierre last weekend accused Clinton of being "willing to accept a
certain level of killing to further his political agenda."
Smith & Wesson was being sued by more than 20 cities and counties, which
were seeking new safety measures and monetary damages to cover the cost
of gun violence.
Boston was not mentioned at March 17's announcement of the agreement,
but Mayor Thomas M. Menino said the city would go along with the deal,
even though it meant Boston could be forgoing any cash windfall from
Smith & Wesson if the city won its pending lawsuit. "It's not about
money. It's about making guns safe. That's the bottom line," Menino said
in an interview. Boston will proceed with its suit against 19 other gun
manufacturers, Menino said, although federal and local officials hope
smaller gun manufacturers will follow Smith & Wesson's example and make
similar settlements.
The agreement came after the federal Department of Housing and Urban
Development threatened to file a class-action suit by the nation's 3,200
public housing authorities against the gun manufacturers.
The agency never filed suit and did not join the municipalities already
suing the weapons makers. But the specter of what was likely to be a
lengthy, expensive lawsuit helped convince Smith & Wesson that a
settlement was in their best interest, agency officials said.
The deal "will not be popular with everyone," said L.E. "Ed" Shultz,
president and chief executive officer of Smith & Wesson, after signing
the agreement in a video simulcast ceremony with government officials.
"But to us, it makes sense and is the right thing to do."
Gun-control opponents were stunned. The National Shooting Sports
Foundation, based in Connecticut, said Smith & Wesson had "violated a
trust with their consumers and with the entire domestic firearms
industry" by inking the deal. "Unfortunately, President Clinton's
heavy-handed approach is a major victory for gun-control proponents at
the expense of the Second Amendment to the Constitution," said
Representative Bob Barr, Republican of Georgia.
The targeting of the gun makers, which developed after legislative
attempts to limit gun sales stalled, "has gotten very irritating," said
Gary Mehalik, spokesman for Taurus International Firearms, based in
Hialeah, Fla. The company is among those being sued by municipalities.
Mehalik said Taurus installs safety latches on its guns, and "everyone
we sell to is licensed by the federal government," he said. "How much
more regulated can you be?" Mehalik said he did not believe other gun
makers would agree to a deal like the one Smith & Wesson signed.
Under the rules of the agreement, Smith & Wesson will put external
locking devices on its guns within 60 days, and install child-proof
safety locks within one year. Within two years, internal locking devices
will be installed on all guns. By the end of three years, "smart gun"
technology, meant to prevent anyone except the owner from operating the
gun, will be included on new firearms.
Smith & Wesson also agreed to unprecedented restrictions on its
marketing and sales practices. The company will not market to children
or criminals. For example, it will not advertise a gun as
"fingerprint-proof," a HUD official explained, and it will not sell
weapons at gun shows unless all weapons sold there, even those not made
by Smith & Wesson, are restricted to buyers who have undergone
background checks.
The company agreed not to sell large-capacity magazines, which might be
attractive to criminals, and it agreed to force buyers to wait 14 days
for multiple gun purchases, allowing law enforcement to track suspicious
activity.
Further, the company will work toward developing a ballistics imaging
system, under which the company would fire the gun before purchase and
enter the digital image into a special computer system. The technology
would help the Bureau of Alcohol, Tobacco and Firearms trace guns.
The entire deal will be overseen and enforced by a government
commission. HUD Secretary Andrew Cuomo said the tragic gun violence of
the past few weeks -- especially the fatal shooting of a Michigan
first-grader by a classmate -- put added pressure on Smith & Wesson. As
for the other gun companies, "Yes, we are prepared to litigate. Yes, we
are prepared to negotiate," Cuomo said. Emboldened by the win,
gun-control advocates are planning an added push. New York's attorney
general, Eliot Spitzer, said he was gathering support in his state for a
plan to refuse government contracts to any gun maker that does not
adhere to the Smith & Wesson restrictions. Whether the federal
government would issue such a provocative rule is still under
discussion. "We're thinking about it," said Bruce Reed, Clinton's
domestic policy adviser. "It's an interesting idea," said Cuomo. But "I
don't think we can do it legally."
Democrats on Capitol Hill are also planning to introduce legislation
next week to fund added enforcement of existing gun laws. The move,
shepherded by Senators Charles Schumer of New York and Edward M.
Kennedy, is meant to test Republican resolve on guns. Capitol Hill
Republicans have long argued that new gun-control measures are not
needed, and that police need only enforce current laws. "Momentum for
additional action is building," Kennedy said. (Deseret News, Saturday,
March 18, 2000)
HMOs: Health Insurance Assn. of America Is Campaigning to Fight Suits
---------------------------------------------------------------------
The Health Insurance Assn. of America is initiating a public information
campaign to fight class-action lawsuits. The association is forming
"America's Health Insurers" with the American Assn. of Health Plans and
the Blue Cross Blue Shield Assn. to publicize the costs and consequences
of lawsuits. (Managed Care Week, March 6, 2000)
LAIDLAW INC: SueD in SC In Wake Of Safety-Kleen Share Price Drop
----------------------------------------------------------------
A federal lawsuit seeking class-action status was filed Friday, March
17, 2000 against Laidlaw Inc. on behalf of shareholders who purchased
Laidlaw's common shares between Oct. 15, 1997 and March 13, 2000, Dow
Jones News says, March 17, 2000.
The lawsuit, filed in U.S. District Court of South Carolina alleges
Laidlaw and certain officers and directors issued "materially false and
misleading financial statements" that overstated assets, income and
earnings per share.
The report says the lawsuit is related to Laidlaw's (LDW) 44% stake in
Safety-Kleen Inc. (SK). The Columbia, S.C.-based trash hauler said the
preliminary findings of an internal investgation shows accounting
irregularities in its financial results since fiscal 1998.
Safety-Kleen's shares tumbled after the company said it placed its chief
executive officer and two other top executives on leave and launched an
investigation of its accounting practices which may force the the
company to restate financial results.
METLIFE: Pays FL $7.5M for Sale of Additional Life Insurance Policies
---------------------------------------------------------------------
MetLife has been ordered by state Attorney General Bob Butterworth and
Insurance Commissioner Bill Nelson to pay the state of Florida $7.5
million. The carrier reached a settlement agreement with the state of
Florida, ending a three-year investigation into what state authorities
described as "churning" in the sale of life insurance policies in the
state. (Feb. 10, 2000).
The investigation centered on the sale of additional life insurance
policies to policyholders, which were financed with existing policies,
draining the cash values of the existing policies allegedly without the
policyholders' knowledge. MetLife sold more than 433,000 additional
policies during a 16-year period beginning in 1982, which was the
subject of the investigation. Three MetLife companies are involved:
Metropolitan Life Insurance Co., Metropolitan Insurance and Annuity Co.
and Metropolitan Tower Life Insurance Co.
MetLife is the fourth large insurance company to be caught in the
Florida Attorney General's net. Prudential, John Hancock and American
General earlier reached similar settlement agreements with "mandatory
payments" to the state totaling more than $26 million. In addition to
the so-called "mandatory payment," MetLife's agreement also calls for
enhancements to the insurance or annuity policies of most of the
affected policyholders. Greater relief also will be afforded to those
who file claims and make a showing of being misled or deceived in the
sales transaction.
MetLife, which fully cooperated with state agencies during the
investigation, also agreed to cooperate with the Florida Department of
Insurance program aimed at assisting and providing restitution to those
who were victimized by the sales practices. The program is conducted in
conjunction with the settlement of a class action lawsuit, under which
MetLife will pay $1.7 billion to policyholders through cash refunds or
policy enhancements. The proceeds of MetLife's mandatory payment will
likely be directed to a college scholarship fund administered by the
state which was created after the Prudential settlement in 1997 and
increased over time by other settlements. This requires approval by the
state legislature and Governor Jeb Bush. (Insurance Coverage Litigation
Reporter, February 18, 2000)
NEW YORK: Lawsuit Filed for Homeless Children Suffering from Asthma
-------------------------------------------------------------------
A federal lawsuit on behalf of homeless children suffering from asthma
has been filed against New York City and New York State alleging the
governments have failed to give essential medical treatment to indigent
youngsters.
The lawsuit, which seeks class action status, alleged the city and state
failed to provide poor children with outreach, early and periodic
screening, diagnosis and corrective treatment in violation of federal
Medicaid requirements. The lawsuit was filed on March 16.
The lawsuit alleged that a recent study showed nearly 40 per cent of
children living in the city's shelters suffer from asthma and 90 per
cent of these children suffering from persistent asthma are not
receiving adequate medical treatment.
"Asthma has reached epidemic proportions particularly in this city's
poorest neighbourhoods," said Gretchen Buchenholz, executive-director of
the Association to Benefit Children, the non-profit group that is
architect of the lawsuit. "Children are allowed to get sicker and sicker
because there is no program in place that ensures early diagnosis and
supervised treatment," she said. (The Toronto Star, March 18, 2000)
NORTHERN TELECOM: Securities Suit Dismissed in NY under Post-Reform Act
-----------------------------------------------------------------------
A federal judge in New York City dismissed a merger-related class action
securities fraud suit against two corporate officers and their
telecommunications company after finding that it did not have enough
factual support to pass muster under the heightened pleading standards
of the post-Reform Act world. Scibelli v. Roth et al., No. 98 Civ. 7228
(SD NY, Jan. 31, 2000).
In 1998, Northern Telecom Ltd. (Nortel), a Canadian manufacturer,
designer, and marketer of digital telecommunications systems, and Bay
Networks, a California-based provider of inter-networking solutions,
merged in a stock-for-stock transaction.
Former Bay shareholders, who acquired Nortel stock, filed three
securities complaints that were consolidated in the Southern District of
New York. The defendants were Nortel, its vice chairman/chief executive
officer, and its chief financial. The two officers signed the prospectus
and were controlling persons.
The complaint alleged violations of the Securities Act of 1933 for
failure to disclose material facts in the merger-related prospectus and
registration statement. The prospectus became effective and was
disseminated in July 1998, a month before the merger was approved and
completed. Share prices later dropped.
The complaint alleged that material information was omitted. It focused
on two paragraphs in the prospectus, one involving an alleged failure to
disclose a significant decline in Nortel's business, the other
concerning sales from the economically unstable Asia-Pacific region.
Nearly identical statements appeared in Nortel's Form 10-Q for two
quarters.
In his decision, the judge said a reasonable investor would not have
been misled by the defendants' representations taken together and in the
context of the entire prospectus.
He noted that approximately eight weeks had passed from the time the
prospectus became effective to Nortel's announcements and said it is
unreasonable to infer that Nortel possessed the adverse international
sales demand data when the prospectus became effective.
He also said the prospectus and relevant 10-Q provided a mixed forecast
with respect to Asia and were replete with warnings about the usual
market risks, with special reference to the volatile nature of Asian
markets due to currency fluctuations. (Corporate Officers and Directors
Liability Litigation Reporter, February 22, 2000)
PUBLISHERS CLEARING: Idaho Sues over Sweepstakes Mailings
---------------------------------------------------------
Idaho Attorney General Al Lance has sued Publishers Clearing House,
accusing the New York company of mailing thousands of deceptive
sweepstakes promotions to Idaho residents in violation of state law.
"Publishers Clearing House for years has targeted unsuspecting citizens
with a blizzard of mailers that are nothing more than deceptive sales
pitches," Lance said. "Idahoans are being lured into purchasing
magazines, collectibles and other goods, with the mistaken belief that
they are improving their chances of becoming a millionaire."
He accused the company of inducing recipients to believe they actually
won or to make purchases in order to enhance their chances, a report in
Idaho (AP) says. Its mailings use bold graphics, colors and print sizes
to emphasize phrases such as "guaranteed winners" and "specially
selected" and then bury the disclaimers in small print, he said. The
actual odds of winning the sweepstakes are generally no better than one
in 50 million, says the AP report.
Lance alleges Publishers uses envelopes with official-looking emblems
and large statements to disguise millions of bulk-rate mailings. They
require consumers to provide information or authorizations which would
only be necessary if they had actually won. Lance's Consumer Protection
Unit also seeks to recover its costs and set penalties for violating
state law.
The report mentions that a federal judge in February approved a $30
million settlement of a class-action suit against the company, as has
been reported in previous editions of the CAR.
RICH PASSAGE: Supreme Ct Remands WA Ferry Case to Super. Ct for Finding
-----------------------------------------------------------------------
Steve Berman, the Seattle attorney who has spent the last two years
working with Rich Passage homeowners fighting the Washington State Ferry
system over the use of high-speed ferries, reacted to the ruling by the
state Supreme Court.
Berman issued the following statement:
We were certainly disappointed with the ruling of the court, but
were buoyed with many of the findings.
In effect, the state Supreme Court said that Superior Court Judge
Glenda Hall erred when she issued the injunction without a legal
finding that the fast ferries were to blame for the damage to the
shoreline and habitat.
While Judge Hall did not make that finding a part of her ruling, we
hold that the homeowners did prove conclusively that the ferries
were the cause of the damage.
The Supreme Court ruled that we need to return to the Superior Court
and ask the court to make a finding that the damages are a direct
result of the ferries, something we are very confident the court
will do.
We have evidence and experts who will show that the wave action from
high speed ferries literally scrubbed Rich Passage of sea-life.
Since the ferries slowed, large stretches of shoreline have
returned, but until we can get in front of the Superior Court, it
could be a short stay of execution if the Ferry system has its way.
This is a fight we don't intend to lose.
I have been in touch with the Rich Passage residents as well as a
number of environmental activists who have recognized the importance
of this issue. We are very confident that the Superior Court will
reissue the injunction in a way that is acceptable to the Supreme
Court.
Contact: Hagens Berman Steve Berman, 206/623-7292
steve@hagens-berman.com or Firmani & Associates (media only) Mark
Firmani, 206/443-9357 mark@firmani.com
SAFETY-KLEEN CORP: Donovan Miller Files Securities Suit in SC
-------------------------------------------------------------
The law firm of Donovan Miller, LLC, announced that a class action
lawsuit was filed in the United States District Court for the District
of South Carolina, Columbia Division against Safety Kleen Corp.
(NYSE:SK), and certain of its Officers and Directors, on behalf of all
persons who purchased Safety Kleen securities between July 7, 1998 and
March 6, 2000, inclusive (the "Class Period"). The plaintiff in the case
is a stock purchaser who is alleged to have sustained losses as a result
of defendants' alleged violations.
The Complaint alleges that, during the Class Period, JDN and the five
officer defendants (collectively, the "Defendants") violated Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 by, among other
things, issuing materially false and misleading statements to the
investing public that materially overstated the Company's revenues,
income and earnings during the Class Period.
On March 6, 2000 Safety Kleen shocked the market by announcing that it
had initiated an internal investigation of its prior reported financial
results and accounting practices following receipt by the Company's
Board of information concerning certain alleged irregularities in its
accounting practices that may have affected the previously reported
financial results of the Company since fiscal year 1998.
Contact: Ann Miller at Donovan Miller, LLC, 1608 Walnut Street, Suite
1400, Philadelphia, PA 19103; phone: 800/619-1677 or 215/732-6020;
e-mail: mdonovan@dmlaw.com or dmlaw@erols.com Fax: 215/732-8060 Website
http://www.dmlaw.commdonovan@dmlaw.com
SAFETY-KLEEN CORP: Stull, Stull Files Securities Complaint in SC
----------------------------------------------------------------
The law firm of Stull, Stull & Brody gives notice that an amended class
action lawsuit was filed on March 15, 2000, in the United States
District Court for the District of South Carolina on behalf all persons
who purchased the securities of Safety-Kleen Corp., (NYSE:SK) between
July 7, 1998, and March 3, 2000, inclusive (the "Class Period").
The complaint charges Safety-Kleen and certain of its senior officers
with violations of Section 10(b) and 20(a) of the Securities Exchange
Act of 1934. The complaint alleges that defendants issued a series of
materially false and misleading statements concerning the Company's
revenues, income and earnings which resulted in artificially inflated
stock prices during the Class Period. The action further alleges that on
March 6, 2000, Safety-Kleen announced it had begun an investigation of
its financial results back to 1998 and had put its top executives on
administrative leave pending the outcome of the investigation. Following
defendants' belated disclosure of possible accounting irregularities the
price of Safety-Kleen common stock fell to $2.00 per share, and has
declined over 89% from the Class Period high of $19.25 per share on or
about July 1, 1999.
Contact: Tzivia Brody, Esq. at Stull, Stull and Brody by calling
toll-free 1-800-337-4983, or by e-mail at SSBNY@aol.com or by fax at
212/490-2022, or by writing to Stull, Stull and Brody, 6 East 45th
Street, New York, NY 10017.
SOTHEBY'S, CHRISTIE'S: Auction Firms Said to Share Client Lists
---------------------------------------------------------------
Sotheby's and Christie's, the world's two most powerful auction houses,
swapped confidential lists of superrich clients who were spared from
paying fees charged to other sellers, people close to the companies and
to a federal antitrust investigation of them said.
The shared and overlapping lists of about 50 names which include some of
the world's wealthiest families were described as a crucial tool for
auction houses to use in enforcing a form of price control in which
certain customers were charged lower commissions, down to zero, that
both houses honored. At the same time, both houses charged identical
rates, up to 20 percent, to other sellers who had little chance of
negotiation.
The unusual collaboration by the two longtime archrivals, lawyers said,
could figure into a prosecution for possible price-fixing and other
collusive practices under study by the Justice Department.
The so-called grandfathered lists, as they were known at Christie's and
Sotheby's, were compiled separately by the two companies and closely
held by top executives. But in 1995, with the art market in the
doldrums, the two hard-pressed houses set new sellers' commissions,
which were higher and identical, generating more income and leaving
customers little room for bargaining. According to the closely matching
accounts, they then shared the lists of preferred customers so that they
would each respect the other's special deals and not cut new ones with
people who were not named. Because well-heeled sellers often converse
with both houses and many dealers, a low rate that was not recorded on
the list could easily be tracked through art world gossip, providing the
houses with a check on each other. Yet the two still sometimes breached
their agreements and betrayed each other, people close to the companies
said.
At least five people with different links to both auction houses and the
investigation confirmed the list-sharing arrangement but, citing the
investigation, spoke only on condition of anonymity.
The identities of those on the lists were not disclosed, but generally,
those familiar with the lists said, the bigger the seller, the lower the
commission, down in many cases to zero.
One former auction house official said that just before the higher new
sellers' commission went into effect, the company asked top experts to
compile a list of preferred clients to be "grandfathered" with lower
fees.
In some cases, the same former executive said, the beneficiaries were
then pressed to sell their goods through that auction house, as a way of
guaranteeing their presence on the preferred list.
Whether the lists were physically traded or just the names exchanged was
not spelled out.
One person involved in a civil lawsuit against Christie's and Sotheby's
cited the account of a seller who told of approaching one house or the
other seeking, in vain, to negotiate a lower fee.
The customer then threatened to go to the rival house, only to be told,
"You can go but you won't get anything better."
Asked about the lists, spokesmen for Christie's and Sotheby's said that
they would have no comment during the investigation.
The existence and sharing of customer lists was not mentioned in an
expanded complaint filed in Federal District Court in Manhattan on
behalf of a large group of buyers and sellers who are suing Sotheby's
and Christie's contending that collusive practices going back to at
least 1993 cheated customers of untold sums.
The companies have not yet responded in court but are expected to do so
in coming weeks.
The amended complaint, adding new details to previous allegations,
contended that in 1995, after both companies had already fixed buyers'
premiums, Sotheby's chairman and major stockholder, A. Alfred Taubman,
sought to extend the collusion to sellers' fees in secret meetings with
Christie's chairman, Sir Anthony Tennant, and its chief executive,
Christopher M. Davidge.
The complaint also contended that Sotheby's president, Diana D. Brooks,
held secret meetings in New York with a Christie's counterpart, whom
others have identified as Mr. Davidge. Ms. Brooks, others have said,
also traveled to London to meet with Christie's officials.
Joseph Linklater, a Chicago lawyer representing Mr. Davidge, and Stephen
E. Kaufman, a Manhattan lawyer retained by Ms. Brooks, said they would
have no comment.
For three years Federal antitrust prosecutors have been questioning a
wide array of art world figures about possible price-fixing and
collusion in the famously secretive multibillion- dollar art world.
People close to the investigation said the Justice Department had been
given notes of phone conversations between Mr. Taubman of Sotheby's and
Mr. Tennant of Christie's.
Some of the prosecutors' questions, those who have been contacted also
say, involve regular meetings that took place betweeen the two auction
giants and whether any matters discussed raised antitrust issues.
At least once, sometimes twice a year, employees from Sotheby's and
Christie's met to coordinate their sales schedules. Top-level officials
also met to discuss the possibility of holding auctions in Paris, a
market that has been closed to non-French auctioneers for hundreds of
years.
The preferred customer lists were compiled in 1995 when Christie's
announced it was changing the fee it charged sellers from a flat
commission of 10 percent to a more complex, nonnegotiable sliding scale
ranging from 2 to 20 percent depending on the size of the sale. Weeks
later, Sotheby's did the same.
Three years before the seller's fees were changed, Sotheby's announced
an increase in the buyer's commission, up from a flat fee of 10 percent.
Seven weeks later, Christie's followed suit.
Collusion in setting either or both of these commissions would consitute
an illegal restraint of trade under the Sherman Antitrust Act. Penalites
for violations can include substantial fines and imprisonment of up to
three years.
The companies -- which control about 95 percent of the $4 billion
worldwide auction market -- are facing more than 40 class-action
lawsuits filed against them by buyers and sellers who charge they were
victimized by collusion. And because Sotheby's is a public company,
unlike Christie's, it has been hit with several shareholder lawsuits.
On Dec. 24, Mr. Davidge abruptly resigned from Christie's and Mr.
Taubman resigned as chairman and Ms. Brooks as president of Sotheby's on
Feb. 21. All three have turned away repeated requests for interviews.
(The New York Times, March 17, 2000)
STIFEL, NICOLAUS: Former Clients Sue Brokerage for Hard Selling REITs
---------------------------------------------------------------------
A group of former clients has sued St. Louis-based Stifel, Nicolaus &
Co. alleging that they lost money as a result of the brokerage's push to
sell them risky real estate investment trusts.
In the two suits, filed Jan. 28 and Jan. 31 in St. Louis' circuit court,
the former investors said Stifel pushed the REITs since it would likely
earn millions of dollars in underwriting fees from the sales. The suits
also contend the REITs did not mix with the conservative investment
philosophies of the clients, who trusted the brokers to provide proper
investment guidance.
In one suit, the sole plaintiff is Douglas Draper, the chairman of
Hillsboro Title Co. who said he lost more than $1 million after a Stifel
broker invested 50 percent of his portfolio in Stifel-underwritten
REITs. "This was a case of very severe overconcentration," said Steven
Koslovsky, the attorney for Draper and the more than three dozen other
plaintiffs in the second suit.
Ron Kruszewski, Stifel's president and chief executive, denied the claim
that the company pushed REITs. "While I normally would not respond to
questions about pending litigation, I feel compelled to respond in this
case," he said. "The allegations in Mr. Draper's complaint are contrary
to the facts as we know them. We believe that this suit is without merit
and is the result of aggressive tactics by the plaintiff's law firm."
Draper, 70, said: "I told my broker up front that I didn't have the time
to do the research necessary to make these decisions, and he said he
would take that responsibility and if I placed myself in his hands,
everything would work." When the broker began adding more mortgage REITs
to the portfolio, "I told him he was weighting the portfolio too heavy
in one area and he insisted ... it would be profitable," Draper said.
Draper, who has a multimillion-dollar net worth and earns more than $1
million annually, had previous experience with non-REIT real estate
investments.
Charles Hartman, Stifel's general counsel, said that Draper signed a
subscription agreement and an investor questionnaire that contained
dozens of binding policies, including a requirement that he must be
aware of and agree with his broker's investment suggestions before
purchases were made. Draper also agreed in the documents that he
understood the risks involved.
"We made no investment without his specific prior approval," Hartman
said. 'At the time, we felt that these were appropriate investments."
During his time with Stifel, Draper earned more than $1 million on
investments in two other accounts with the firm, Hartman said. "While we
never like to see our clients lose money on investments, it is important
to look at the overall situation," Hartman said. "People should
understand that markets go up and the markets go down."
The second lawsuit that lists 37 plaintiffs states the former Stifel
clients suffered individual losses of $3,500 to $200,000.
For the past two years, REITs have fallen 21.3 percent, according to a
recent article in The Wall Street Journal. "No one's denying that things
haven't performed well," Hartman said.
Koslovsky said Stifel underwrote REITs worth more than $1.2 billion,
adding that he had not been able to calculate how much money the company
had earned from the investments. "There are good REITs, there's no
question about that," Koslovsky said. "The REITs that we're talking
about here oftentimes involved... things that weren't even related to
real estate used car loans, highly risky loans that were packaged
together - but nevertheless, they were passed off as REITs by Stifel."
In the second suit, plaintiffs Gary and Linda, Hansen claimed that they
lost $30,000. They contend that Stifel's agents were encouraged to sell
that type of investment. "I don't want to bad mouth the agent in this
case," said Gary Hansen, 50. "I believe our agent was also given bad
information about these products."
Koslovsky said his firm, Clayton-based Ziercher & Hocker, began work on
the case after another law firm referred clients. To find other clients
who believed they were similarly affected by Stifel, the firm publicized
the issue in two advertisements last fall in the St. Louis
Post-Dispatch. "The decision was not made without serious
consideration," Koslovsky said. "We came to the conclusion that it was
the only way to reach out to clients." Most of them, including Draper
and the Hansens, employed Koslovsky after reading the ads.
Hartman said it is "highly unusual" for a law firm to gain clients
through newspaper ads. "Draper did not look at his account and say,
'Gee, I've been wronged, 'Hartman said. "He saw an ad and said, 'Maybe I
can get some money back.'" (St. Louis Business Journal, February 21,
2000)
SUNTERRA CORP.: Lockridge Grindal Files Securities Suit in Florida
------------------------------------------------------------------
Lockridge Grindal Nauen P.L.L.P. announced that a class action has been
commenced in the United States District Court for the Middle District of
Florida on behalf of purchasers of Sunterra Corp. (NYSE: OWN) common
stock during the period between October 6, 1998 and January 19, 2000
(the "Class Period").
The Complaint filed in the litigation charges that Sunterra and certain
of its senior officers and directors made material, fraudulent
misrepresentations concerning the quality and amount of the Company's
receivables, and consequently overstated its net income and revenues.
Throughout the Class Period the defendants issued press releases and
made statements in SEC filings representing that these receivables had a
very low default rate, that Sunterra had been able to securitize the
receivables, and that the high quality of Sunterra's receivables was a
significant factor in the Company's purported financial strength. On
January 20, 1999, Sunterra issued a press release disclosing that it was
going to take a non-cash charge totaling $38 to $45 million, largely
relating to receivables that had become delinquent. As alleged in the
Complaint, the Individual Defendants, Sunterra's senior officers and
directors, profited from their fraud by selling over $7 million worth of
Sunterra stock during the Class Period at prices artificially inflated
by their illegal actions.
Contact: Gregory J. Myers Lockridge Grindal Nauen P.L.L.P. 100
Washington Avenue South Suite 2200 Minneapolis, MN 55401, (612) 339-6900
gjmyers@locklaw.com
SYKES ENTERPRISES: Wolf Haldenstein Files Securities Suit in Florida
--------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP announces that it filed a
securities class action lawsuit in the United States District Court for
the Middle District of Florida on behalf of investors who bought Sykes
Enterprises, Inc. (NASDAQ:SYKE) stock between October 25, 1999 and
January 31, 2000 (the "Class Period").
The lawsuit charges Sykes and certain officers of the Company, with
violations of the securities laws and regulations of the United States.
The lawsuit alleges that defendants issued a series of false and
misleading statements during the Class Period concerning the Company's
financial condition, revenues and earnings. The complaint alleges that
defendants' false and misleading statements artificially inflated the
price of the Company's stock during the Class Period. The complaint
alleges that on February 1, 2000, the Company announced that it would
delay the release of its fourth quarter earnings because its audit was
"incomplete." The market reacted to this shocking news by slashing the
Company's stock price by nearly 33%.
Contact: Wolf Haldenstein Adler Freeman & Herz LLP at 270 Madison
Avenue, New York, New York 10016, by telephone at (800) 575-0735
(Michael Miske, George Peters, Gregory Nespole, Esq., Fred Taylor
Isquith, Esq. or Shane T. Rowley, Esq.), via e-mail at
classmember@whafh.com with reference made to Sykes, or visit website at
http://www.whafh.com
TELEPHONE COMPANIES: Phone Bills Could Inspire Action
-----------------------------------------------------
Melvyn Weiss, a partner in Milberg Weiss Bershad Hynes & Lerach, last
week told members of the Exchequer Club, a gaggle of financial-industry
lobbyists and lawyers who meet once a month for lunch, that he's
considering a class action against telephone companies because their
billing statements harm consumers by confusing them about charges. He
admits it won't be an easy suit to win, because courts usually defer to
federal and state regulators to adjudicate such complaints. Weiss says
his own phone bills are so complicated "there's no way to check them."
The remark elicited a sympathetic refrain from an audience who otherwise
has little sympathy for members of the class-action bar.
When he and his firm filed a class action against Sprint last year to
recover millions of dollars in charges to cell-phone users for the times
they were cut off in mid-call, they came up empty handed. Nonetheless,
phone companies should not relax; the firm has more wins than losses.
TOBACCO LITIGATION: Liggett to Pay 5 States $2B over the Next 25 Years
----------------------------------------------------------------------
In a second precedent-setting settlement of tobacco litigation, the
Liggett Group has agreed to pay a huge sum to resolve a lawsuit
involving tobacco-related illnesses among residents of five states.
Under the terms, Liggett agrees to paying potentially as much as $2
billion over the next 25 years and pledges to make cigarette advertising
reforms that include abandoning the use of cartoon characters that
appeal to teen-agers.
The settlement was announced by the attorneys general of Mississippi,
Florida, Massachusetts, West Virginia and Louisiana.
Those states had filed lawsuits seeking compensation from the tobacco
industry for costs incurred by taxpayers in treating smoking- related
diseases contracted by indigent citizens. These Medicaid- related costs
have ranged from $60 million a year in West Virginia to $400 million in
Florida.
Liggett's settlement with the state follows by two days its agreement to
resolve a large class-action lawsuit in New Orleans that alleged
cigarette makers manipulate nicotine levels to keep smokers addicted.
In both cases, there was no admission of guilt or liability by Liggett,
a unit of Brooke Group Ltd. and the nation's fifth-largest cigarette
maker.
Each case involves a commitment by Liggett to begin complying with
certain proposed Food and Drug Administration regulations governing
smoking by teen-agers. The company will abandoned the use of cartoon
characters like RJR Nabisco Holdings Corp.'s popular "Joe Camel" in
tobacco advertising.
Mississippi Attorney General Mike Moore, who led months of negotiations
that resulted in the settlement, said the most important goal was
"protection of the public health of this country, primarily the
children." (The Courier-Journal Louisville, March 15, 2000)
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by Bankruptcy
Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc.,
Washington, DC. Theresa Cheuk, Managing Editor.
Copyright 1999. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.
Information contained herein is obtained from sources believed to be
reliable, but is not guaranteed.
The CAR subscription rate is $575 for six months delivered via e-mail.
Additional e-mail subscriptions for members of the same firm for the
term of the initial subscription or balance thereof are $25 each. For
subscription information, contact Christopher Beard at 301/951-6400.
* * * End of Transmission * * *