/raid1/www/Hosts/bankrupt/CAR_Public/010730.mbx
C L A S S A C T I O N R E P O R T E R
Monday, July 30 2001, Vol. 3, No. 147
Headlines
AKAMAI TECHNOLOGIES: Says Outcome of NY Suits May Have Adverse Effects
AVANEX CORPORATION: Milberg Weiss Files Securities Suit In S.D. NY
CENDANT CORPORATION: Plaintiffs' Appeal On $2.85B Settlement Undecided
COLUMBUS CITY: Suit Claims Water Turn-off Policy Unconstitutional
DIGITAL ISLAND: Milberg Weiss files Securities Suit In S.D. New York
DRKOOP.COM: Wolf Haldenstein Begins Securities Suit In S.D. New York
DUNELAND SCHOOL: ICLU Opposes Tuition Based Kindergarten Program
IBASIS INC.: Wolf Haldenstein Begins Securities Suit In S.D. New York
IMANAGE INC.: Milberg Weiss Commences Securities Suit In S.D. New York
ITXC CORPORATION: Milberg Weiss Files Securities Suit In S.D. New York
NEULEVEL: Sued For "Illegal Lottery" In Domain Name Registration
PEROT SYSTEMS: To Mount Defense Against Wave Of Securities Suits
RAZORFISH INC.: To Mount Vigorous Defense Against NY Securities Suits
SCIENTIFIC-ATLANTA: Keller Rohrback Studies Securities Suit v. Company
SMARTDISK CORPORATION: Bernstein Liebhard Begins Suit In S.D. NY
SOUTH KOREA: Defines Companies That May Be Subject To '02 Class Suits
TOBACCO LITIGATION: "Lights" Case In Arizona Denied Certification
UNITRIN INC.: Multi-District Litigation Panel Orders Proceedings In LA
VICINITY: Bernstein Liebhard Begins Securities Suit In S.D. New York
WEBVAN GROUP: Wolf Haldenstein Commences Securities Suit In S.D. NY
* United States Growing Uneasy Over Subject Of Reparation
*********
AKAMAI TECHNOLOGIES: Says Outcome of NY Suits May Have Adverse Effects
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Akamai Technologies, Inc. recently admitted that it is unsure about the
outcome of the securities class action suit currently pending in New York.
In its recent regulatory report to the Securities and Exchange Commission,
the Company said that an unfavorable ruling on the matter would have a
material adverse affect on its finances and operation.
The suits were filed against several of the Company's officers and current
and former directors.
The plaintiffs allege violations of the Securities Act of 1933 and the
Securities Exchange Act of 1934.
They purport to represent certain individuals who purchased the Company's
common stock during different time periods, all beginning on October 28,
1999 and ending on various dates, the latest of which is June 29, 2001.
Primarily they allege that there was undisclosed compensation received by
the Company's underwriters in connection with its initial public offering.
According to records obtained by the Class Action Reporter, the law firm of
Marc Henzel has filed the most recent suit against the Company.
Akamai (Hawaiian for "clever, intelligent, or cool") offers its FreeFlow
Internet content delivery service that lets companies use Akamai servers to
deliver ads, video, and other high-bandwidth content.
Through its network of more than 8,000 servers in over 50 countries,
FreeFlow analyzes Web traffic and transmits content from the server
geographically closest to the end user.
AVANEX CORPORATION: Milberg Weiss Files Securities Suit In S.D. NY
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Milberg Weiss Bershad Hynes & Lerach LLP filed last week a class action
lawsuit on behalf of purchasers of the securities of Avanex Corporation
(NASDAQ:AVNX) between February 3, 2000 and December 6, 2000, inclusive.
The action is pending in the United States District Court for the Southern
District of New York against defendants Morgan Stanley & Co., Incorporated,
Lehman Brothers, Inc. and FleetBoston Robertson Stephens, Inc.
The complaint alleges violations of Section 10(b) of the Securities Exchange
Act of 1934 and Rule 10b-5 promulgated thereunder.
On or about February 3, 2000, Avanex commenced an initial public offering of
6,000,000 of its shares of common stock at an offering price of $36 per
share.
In connection therewith, Avanex filed a registration statement, which
incorporated a prospectus, with the SEC.
The complaint further alleges that the Prospectus was materially false and
misleading because it failed to disclose, among other things, that:
(i) defendants had solicited and received excessive and
undisclosed commissions from certain investors in exchange for
which defendants allocated to those investors material
portions of the restricted number of Avanex shares issued in
connection with the Avanex IPO; and
(ii) defendants had entered into agreements with customers whereby
defendants agreed to allocate Avanex shares to those customers
in the Avanex IPO in exchange for which the customers agreed
to purchase additional Avanex shares in the aftermarket at
pre-determined prices.
As alleged in the complaint, the SEC is investigating underwriting practices
in connection with several other initial public offerings.
For more information, contact: Steven G. Schulman or Samuel H. Rudman by
Mail: One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 by Phone:
(800) 320-5081 by E-mail: Avanexcase@milbergNY.com or visit the firm's
Website: www.milberg.com
CENDANT CORPORATION: Plaintiffs' Appeal On $2.85B Settlement Undecided
----------------------------------------------------------------------
The plaintiffs' appeal of the $2.85 billion settlement deal inked last year
for various securities class actions is still undecided.
In a recent regulatory filing with the Securities and Exchange Commission,
Cendant Corporation revealed that oral arguments on the appeal was heard in
May.
The U.S. Court of Appeals for the Third Circuit reserved its decision and up
until now, such decision is still pending.
At least 70 cases were brought against the Company in 1998 over alleged
accounting irregularities in its 1995, 1996, 1997, and 1998 financial
statements.
The suits were filed by individuals claiming to have purchased or otherwise
acquired securities or options issued between May 1995 and August 1998.
The Company settled these complaints in August last year for $2.85 billion,
plus 50 percent of the recovery in a suit filed by the Company against its
auditor for the 1995 to 1998 statements.
Some plaintiffs dissatisfied with the settlement deal appealed the case,
which is now under consideration by the third circuit appellate court.
Cendant is the world's top hotel franchisor with more than 6,400 locations
under the AmeriHost Inn, Days Inn, and Super 8 brands, among others.
Cendant owns Avis Group Holdings (some 4,700 Avis car rental locations
worldwide) and timeshare resorts (Fairfield Communities, Resort Condominiums
International).
The company's Cendant Real Estate Franchise Group includes franchised
brokerages such as Century 21 and Coldwell Banker.
COLUMBUS CITY: Suit Claims Water Turn-off Policy Unconstitutional
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For turning off, without sufficient notice, the water supply of two women,
who have unpaid water bills, the City of Columbus now faces a class action
suit in federal court.
Equal Justice Foundation filed the suit against the city and its Utilities
director on contention that the move was unconstitutional since the two
women were not afforded due process, sufficient notice and a hearing.
Before this suit was filed, the foundation had threatened to sue the city
over its policy.
The city has responded so far by announcing that it would begin turning off
water at the homes or offices of landlords who allow water bills to go
unpaid for too long.
The foundation went ahead with its suit after the city did not advise the
two plaintiffs that they could ask for a hearing to appeal the shut-off.
The suit claims that the delinquent bills were run up by former tenants and
not by the two women.
DIGITAL ISLAND: Milberg Weiss files Securities Suit In S.D. New York
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Milberg Weiss Bershad Hynes & Lerach LLP filed last week a class action
lawsuit on behalf of purchasers of the securities of Digital Island
Corporation (NASDAQ:ISLD) between June 29, 1999 and December 6, 2000,
inclusive.
The action is pending in the United States District Court for the Southern
District of New York against defendants Bear Stearns & Co. Inc., Lehman
Brothers, Inc. and BancBoston Robertson Stephens, Inc.
The complaint alleges violations of Section 10(b) of the Securities Exchange
Act of 1934 and Rule 10b-5 promulgated thereunder.
On or about June 29, 1999, Digital Island commenced an initial public
offering of 6,000,000 of its shares of common stock at an offering price of
$10 per share.
In connection therewith, Digital Island filed a registration statement,
which incorporated a prospectus, with the SEC.
The complaint further alleges that the Prospectus was materially false and
misleading because it failed to disclose, among other things, that:
(i) defendants had solicited and received excessive and
undisclosed commissions from certain investors in exchange for
which defendants allocated to those investors material
portions of the restricted number of Digital Island shares
issued in connection with the Digital Island IPO; and
(ii) defendants had entered into agreements with customers whereby
defendants agreed to allocate Digital Island shares to those
customers in the Digital Island IPO in exchange for which the
customers agreed to purchase additional Digital Island shares
in the aftermarket at pre-determined prices.
As alleged in the complaint, the SEC is investigating underwriting practices
in connection with several other initial public offerings.
For more information, contact: Steven G. Schulman or Samuel H. Rudman by
Mail: One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 by Phone:
(800) 320-5081 by E-mail: Digitalislandcase@milbergNY.com or visit the
firm's Website: www.milberg.com
DRKOOP.COM: Wolf Haldenstein Begins Securities Suit In S.D. New York
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Wolf Haldenstein Adler Freeman & Herz LLP filed a class action lawsuit in
the United States District Court for the Southern District of New York, on
behalf of purchasers of drkoop.com, Inc. (Nasdaq: KOOP) between June 8, 1999
and December 6, 2000, inclusive.
The suit names as defendants: drkoop, certain of its officers and directors,
and its underwriters.
The complaint alleges that defendants violated the federal securities laws
by issuing and selling drkoop common stock pursuant to the June 8, 1999 IPO
without disclosing to investors that some of the underwriters in the
offering, including the lead underwriters, had solicited and received
excessive and undisclosed commissions from certain investors.
Specifically, the complaint alleges that in exchange for the excessive
commissions, defendants allocated drkoop shares to customers at the IPO
price.
To receive the allocations (i.e., the ability to purchase shares) at the IPO
price, the underwriters' brokerage customers had to agree to purchase
additional shares in the aftermarket at progressively higher prices.
The requirement that customers make additional purchases at progressively
higher prices as the price of drkoop stock rocketed upward (a practice known
on Wall Street as laddering) was intended to (and did) drive drkoop's share
price up to artificially high levels.
This artificial price inflation enabled both the underwriters and their
customers to reap enormous profits by buying stock at the IPO price and then
selling it later for a profit at inflated aftermarket prices.
For more details, contact: Wolf Haldenstein Adler Freeman & Herz LLP by
Mail: 270 Madison Avenue, New York, New York 10016 by Phone: 800-575-0735
(Fred Taylor Isquith, Esq., Gregory Nespole, Esq., Thomas Burt, Esq.,
Gustavo Bruckner, Esq., or George Peters) by E-mail: classmember@whafh.com
or visit the firm's Website: www.whafh.com
DUNELAND SCHOOL: ICLU Opposes Tuition Based Kindergarten Program
-----------------------------------------------------------------
A class action suit is seeking an injunction against the all-day
kindergarten school program of Duneland School Corporation, unless the
program is offered free, the Post-Tribune reported.
The suit filed by Indiana Civil Liberties Union contends that the Indiana
Constitution provides a free and open education to all
Therefore, the government cannot pass a law or allow a policy that denies
anyone the benefits of the equal privilege clause of the State Constitution.
Plaintiff Lawyer Richard Busse argues that if such a policy was adopted, the
all-day kindergarten school should be offered free of charge.
"The school system has created a policy that discriminates against people
who cannot pay for tuition," Busse said.
Busse said children eligible for kindergarten this upcoming school year, who
have parents unable to afford the full-day program, are the purported
members of the class.
Hearing on the preliminary injunction to make it a permanent one is
scheduled for August 1 in the chamber of Porter County Circuit Court Judge
Mary Harper, the report said.
IBASIS INC.: Wolf Haldenstein Begins Securities Suit In S.D. New York
---------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP filed a class action lawsuit in
the United States District Court for the Southern District of New York, on
behalf of purchasers of iBasis, Inc. (Nasdaq: IBAS) between November 10,
1999 and December 6, 2000, inclusive.
The suit names as defendants: iBasis, certain of its officers and directors,
and its underwriters.
The complaint alleges that defendants violated the federal securities laws
by issuing and selling iBasis common stock pursuant to the November 10, 1999
IPO without disclosing to investors that some of the underwriters in the
offering, including the lead underwriters, had solicited and received
excessive and undisclosed commissions from certain investors.
Specifically, the complaint alleges that in exchange for the excessive
commissions, defendants allocated iBasis shares to customers at the IPO
price.
To receive the allocations (i.e., the ability to purchase shares) at the IPO
price, the underwriters' brokerage customers had to agree to purchase
additional shares in the aftermarket at progressively higher prices.
The requirement that customers make additional purchases at progressively
higher prices as the price of iBasis stock rocketed upward (a practice known
on Wall Street as laddering) was intended to (and did) drive iBasis's share
price up to artificially high levels.
This artificial price inflation enabled both the underwriters and their
customers to reap enormous profits by buying stock at the IPO price and then
selling it later for a profit at inflated aftermarket prices.
For further details, contact: Wolf Haldenstein Adler Freeman & Herz LLP by
Mail: 270 Madison Avenue, New York, New York 10016 by Phone: (800) 575-0735
(Fred Taylor Isquith, Esq., Gregory Nespole, Esq., Thomas Burt, Esq.,
Gustavo Bruckner, Esq., or George Peters) by E-mail: classmember@whafh.com
or visit the firm's Website: www.whafh.com
IMANAGE INC.: Milberg Weiss Commences Securities Suit In S.D. New York
----------------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP filed late last week a class action
lawsuit on behalf of purchasers of the securities of iManage Inc. (NASDAQ:
IMAN - news) between November 12, 1999 and December 6, 2000, inclusive.
The action alleges the following as defendants:
(i) iManage,
(ii) FleetBoston Robertson Stephens Inc.,
(iii) Mahmood Panjwani,
(iv) Mark Culhane, and
(v) Rafiq Mohammadi
The suit is pending in the United States District Court, Southern District
of New York.
The complaint alleges violations of Sections 11, 12(a)(2) and 15 of the
Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of
1934 and Rule 10b-5 promulgated thereunder.
On or about November 12, 1999, iManage commenced an initial public offering
of 3,600,000 of its shares of its common stock at an offering price of $11
per share.
In connection therewith, iManage filed a registration statement, which
incorporated a prospectus, with the SEC.
The complaint further alleges that the Prospectus was materially false and
misleading because it failed to disclose, among other things, that:
(i) Robertson Stephens had solicited and received excessive and
undisclosed commissions from certain investors in exchange for
which Robertson Stephens allocated to those investors material
portions of the restricted number of iManage shares issued in
connection with the iManage IPO; and
(ii) Robertson Stephens had entered into agreements with customers
whereby it agreed to allocate iManage shares to those
customers in the iManage IPO in exchange for which the
customers agreed to purchase additional iManage shares in the
aftermarket at pre-determined prices.
For more details, contact: Steven G. Schulman or Samuel H. Rudman by Mail:
One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 by Phone: (800)
320-5081 by Email: imanagecase@milbergNY.com or visit the firm's Website:
www.milberg.com
ITXC CORPORATION: Milberg Weiss Files Securities Suit In S.D. New York
----------------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP filed a class action lawsuit on
behalf of purchasers of the securities of ITXC Corp. (NASDAQ: ITXC) between
September 27, 1999 and December 6, 2000, inclusive.
The action alleges the following as defendants:
(i) ITXC,
(ii) Lehman Brothers Inc.,
(iii) FleetBoston Robertson Stephens Inc.,
(iv) Merrill Lynch Pierce Fenner & Smith Incorporated,
(v) Tom I. Evslin, and
(vi) Edward B. Jordan
The suit is pending in the United States District Court, Southern District
of New York.
The complaint alleges violations of Sections 11, 12(a)(2) and 15 of the
Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of
1934 and Rule 10b-5 promulgated thereunder.
On or about September 27, 1999, ITXC commenced an initial public offering of
6,250,000 of its shares of common stock at an offering price of $12 per
share.
In connection therewith, ITXC filed a registration statement, which
incorporated a prospectus, with the SEC.
The complaint further alleges that the Prospectus was materially false and
misleading because it failed to disclose, among other things, that:
(i) the Underwriter Defendants had solicited and received
excessive and undisclosed commissions from certain investors
in exchange for which the Underwriter Defendants allocated to
those investors material portions of the restricted number of
ITXC shares issued in connection with the ITXC IPO; and
(ii) the Underwriter Defendants had entered into agreements with
customers whereby they agreed to allocate ITXC shares to those
customers in the ITXC IPO in exchange for which the customers
agreed to purchase additional ITXC shares in the aftermarket
at pre-determined prices.
For more information, contact: Steven G. Schulman or Samuel H. Rudman by
Mail: One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 by Phone:
(800) 320-5081 by Email: itxccase@milbergNY.com or visit the firm's Website:
www.milberg.com
NEULEVEL: Sued For "Illegal Lottery" In Domain Name Registration
----------------------------------------------------------------
NeuLevel, which will start operating the ".biz" domain name this October,
was sued early last week in California for running an illegal lottery by
charging subscribers for the chance to obtain the name they seek.
Interactive Network reported that there are at least two individuals who are
involved in the purported class action filed in the Los Angeles Superior
Court.
The suit claims that the practice of charging $2 for each registration and
the registrars' passing the cost as well as surcharges to the customers who
wish for a certain domain name to be registered is illegal and unfair.
The suit says NeuLevel randomizes registrations for the same name prior to
choosing only one, and there is no assurance that the customer will
eventually get the domain name desired.
Plaintiffs' lawyer Derek Newman contends that this system allows those with
high financial resources to increase their odds of getting their name by
buying multiple chances.
Also named as defendants are Internet Corporation for Assigned Names and
Numbers (ICANN), which manages the Internet's domain name system.
VeriSign and Register.com were also listed as defendants.
PEROT SYSTEMS: To Mount Defense Against Wave Of Securities Suits
----------------------------------------------------------------
In the wake of its inclusion in a series of class action lawsuits, Perot
Systems Corporation announced that it would mount a vigorous defense against
the suits, which it finds meritless.
The Company claims it is a victim of the recent waves of lawsuits involving
more than 100 companies that went public between 1998 and 2000.
"It appears that the various companies, and their officers and directors,
are being included in these lawsuits because their shares were allegedly
used by the investment banks in connection with the investigated practices
and public offerings," the Company said.
"Generally, the lawsuits filed against the various companies allege that
certain of their investment bankers, in exchange for allocation of public
offering shares to their customers, received undisclosed commissions from
their customers on the purchase of securities, and required their customers
to purchase additional shares of the respective companies in aftermarket
trading," the Company explained.
Perot Systems is a worldwide provider of information technology services and
business solutions.
Through its flexible and collaborative approach, Perot Systems integrates
expertise from across the company to deliver custom solutions that enable
clients to accelerate growth, streamline operations, and create new levels
of customer value.
RAZORFISH INC.: To Mount Vigorous Defense Against NY Securities Suits
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E-consulting firm Razorfish, Inc. recently announced it would mount a
vigorous defense against a series of purported class actions currently
pending in New York.
The complaints in these suits generally allege the underwriters of the
Company's initial public offering engaged in allegedly improper compensation
arrangements that were not disclosed in the offering's prospectus.
The cases filed beginning June 15 is pending in the United States District
Court for the Southern District of New York.
Named as defendants of the case are Razorfish and certain of its present and
former officers and directors.
Records at the Class Action Reporter show that the law firms of Stull, Stull
& Brody and Bernstein Liebhard & Lifshitz have pending cases against the
Company.
Razorfish provides a wide range of services, including strategic consulting,
Web design, and integration with enterprise resource planning and legacy
systems.
SCIENTIFIC-ATLANTA: Keller Rohrback Studies Securities Suit v. Company
----------------------------------------------------------------------
Keller Rohrback L.L.P. is currently investigating securities fraud claims on
behalf of shareholders of Scientific-Atlanta, Inc. (NYSE:SFA) who purchased
the Company's common stock between April 19, 2001 and July 19, 2001,
inclusive.
Shareholders allege that Scientific Atlanta and certain of its officers and
directors violated federal securities laws by issuing a series of material
misrepresentations to the market during the Class Period, thereby
artificially inflating the price of Scientific-Atlanta securities.
In addition, during the Class Period, Defendants Wallace G. Haislip and
James F. McDonald took advantage of their inside status to sell hundreds of
thousands of their own shares of Scientific Atlanta at artificially high
prices for proceeds of over $46 million.
Specifically, on May 11, 2001, the Company reported its financial results in
a Form 10-Q filed with the Securities and Exchange Commission, and
highlighted an increase in production capacity of set-tops.
Then, on July 19, 2001, Scientific Atlanta reported its financial results
for the fiscal fourth quarter of 2001, revealing a 21% decline in bookings
from the previous year's fourth quarter.
The decline in bookings was attributable to, among other things, a surplus
in customer inventory levels, which, shareholders purport, the defendants
knew, or should have known, at the time they filed their Form 10-Q on May
11, 2001.
Furthermore, the Company announced that it was revising its earnings
estimates for the first quarter of fiscal 2002.
As a result of these announcements, shares of Scientific Atlanta plummeted
by more than 34% to close at $23 per share, on heavy trading volume.
For more information, contact: Jennifer Tuato'o, Investor Relations
Representative or Attorneys Lynn Sarko, Juli Farris and Elizabeth Leland,
and Paralegal Jen Veitengruber by Phone: 800/776-6044 (toll free) by E-mail:
investor@kellerrohrback.com or visit the firm's Website:
www.SeattleClassAction.com
SMARTDISK CORPORATION: Bernstein Liebhard Begins Suit In S.D. NY
----------------------------------------------------------------
Bernstein Liebhard & Lifshitz, LLP filed a securities class action lawsuit
on behalf of all persons who acquired SmartDisk Corporation (NASDAQ: SMDK)
securities between October 6, 1999 and December 6, 2000.
The case is pending in the United States District Court for the Southern
District of New York.
Named as defendants in the complaint are SmartDisk and the following
executive officers and directors of SmartDisk:
(i) Addison M. Fischer,
(ii) Michael S. Battaglia, and
(iii) Michael R. Mattingly
The complaint also names as defendants the following underwriters of
SmartDisk's initial public offering: BancBoston Robertson Stephens Inc.,
Hambrecht & Quist LLC, and U.S. Bancorp Piper Jaffray, Inc.
The complaint charges defendants with violations of the Securities Act of
1933 and the Securities Exchange Act of 1934 for issuing a Registration
Statement and Prospectus that contained materially false and misleading
information and failed to disclose material information.
The Prospectus was issued in connection with SmartDisk's initial public
offering of 3,000,000 shares of common stock at $13.00 per share that was
completed on or about October 6, 1999.
The complaint alleges that the Prospectus was false and misleading because
it failed to disclose:
(i) the Underwriter Defendants' agreement with certain investors
to provide them with significant amounts of restricted
SmartDisk shares in the IPO in exchange for exorbitant and
undisclosed commissions; and
(ii) the agreement between the Underwriter Defendants and certain
of its customers whereby the Underwriter Defendants would
allocate shares in the IPO to those customers in exchange for
the customers' agreement to purchase SmartDisk shares in the
after-market at pre-determined prices.
The SEC is investigating underwriting practices in connection with several
other initial public offerings, including the offerings of VA Linux Systems,
Inc., Ariba Inc. and United Parcel Service, Inc.
Plaintiff seeks to recover damages on behalf of all those who purchased or
otherwise acquired SmartDisk securities during the Class Period.
For additional details, contact: Linda Flood, Director of Shareholder
Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone:
(800) 217-1522 or 212-779-1414 or by E-mail: SMDK@bernlieb.com
SOUTH KOREA: Defines Companies That May Be Subject To '02 Class Suits
---------------------------------------------------------------------
Vice Finance and Economy Minister Kim Jin-pyo recently announced, on a KBS
radio program, the guidelines determining which corporations may be sued in
class action lawsuits, according to an Asia Pulse report.
Kim said that class action suits may be filed next year against listed
companies with 2 trillion won (US$1.5 billion) in assets.
The government will allow class action suits to be filed for any one or all
of three crimes, allegedly committed by the defendant corporation, said Kim:
stock price manipulation, false public notices and accounting fraud.
Introduction of class action suits, said Kim, will result in the enhancement
of corporate transparency and accounting credibility.
TOBACCO LITIGATION: "Lights" Case In Arizona Denied Certification
-----------------------------------------------------------------
Tobacco makers avoided new litigation recently when an Arizona State court
refused to certify a consumer fraud suit as a proper class action on behalf
of smokers who purchased Philip Morris "light" cigarettes, the Reuters News
Agency reported recently.
The suit is seeking refunds for money spent by plaintiffs to buy the
cigarettes falsely marketed as healthier than regular cigarettes.
According to Reuters, the recent decision brings the number of "lights"
class actions that have been denied certification to two.
One case, however, in Illinois has been certified and is scheduled for trial
next year, Reuters said.
UNITRIN INC.: Multi-District Litigation Panel Orders Proceedings In LA
-----------------------------------------------------------------------
The Judicial Panel on Multi-District Litigation has ordered that all
lawsuits against Unitrin, Inc. be consolidated in a federal court in
Louisiana.
The Company's subsidiary United Insurance Company of America has been facing
a nationwide class action suit over its alleged discriminatory policy in
premium rates collected from African Americans.
The Florida Department of Insurance filed a suit against the Company's
subsidiary in October 1999.
Similar suits have also been filed against the company in other states
necessitating their consolidation in the U.S. District Court for the Eastern
District of Louisiana.
The Company has admitted that it had indeed used race as an underwriting
factor in pricing or benefits, but all such practices ceased 30 or more
years ago with regard to newly issued policies.
The Company disclosed in a recent regulatory filing with the Securities and
Exchange Commission that it is currently engaged in settlement discussions
with plaintiffs' counsel and representatives of various insurance
departments.
Unitrin is an insurance holding company with four segments:
property/casualty, life and health, direct insurance, and consumer finance.
United Insurance Company of America and subsidiaries sell traditional and
group life insurance and individual health and Medicare supplement policies.
VICINITY: Bernstein Liebhard Begins Securities Suit In S.D. New York
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Bernstein Liebhard & Lifshitz, LLP file a securities class action lawsuit on
behalf all persons who acquired Vicinity Corporation (NASDAQ: VCNT)
securities between February 9, 2000 and December 6, 2000.
The case is pending in the United States District Court for the Southern
District of New York.
Named as defendants in the complaint are Vicinity and the following
executive officers of Vicinity:
(i) Emerick M. Woods,
(ii) David Seltzer and
(iii) Herbert M. Dwight, Jr.
The complaint also names as defendants the following underwriters of
Vicinity's initial public offering: J.P. Morgan Securities, Inc., Bear
Stearns & Co., Inc. and U.S. Bancorp Piper Jaffray, Inc.
The complaint charges defendants with violations of the Securities Act of
1933 and the Securities Exchange Act of 1934 for issuing a Registration
Statement and Prospectus that contained materially false and misleading
information and failed to disclose material information.
The Prospectus was issued in connection with Vicinity's initial public
offering of 7 million shares of common stock at $17.00 per share that was
completed on or about February 9, 2000.
The complaint alleges that the Prospectus was false and misleading because
it failed to disclose:
(i) the Underwriter Defendants' agreement with certain investors
to provide them with significant amounts of Vicinity shares in
the IPO in exchange for exorbitant and undisclosed
commissions; and
(ii) the agreement between the Underwriter Defendants and certain
of its customers whereby the Underwriter Defendants would
allocate shares in the IPO to those customers in exchange for
the customers' agreement to purchase Vicinity shares in the
after-market at pre- determined prices.
The SEC and the U.S. Attorneys office are investigating underwriting
practices in connection with several other initial public offerings.
For additional details, contact: Linda Flood, Director of Shareholder
Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone:
(800) 217-1522 or 212-779-1414 or by E-mail: VCNT@bernlieb.com
WEBVAN GROUP: Wolf Haldenstein Commences Securities Suit In S.D. NY
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Wolf Haldenstein Adler Freeman & Herz LLP filed a class action lawsuit in
the United States District Court for the Southern District of New York, on
behalf of purchasers of Webvan Group, Inc. (Nasdaq: WBVN) between November
4, 1999 and December 6, 2000, inclusive.
The suit is filed against certain officers, directors and underwriters of
Webvan.
Webvan has sought protection of the federal bankruptcy laws and has
therefore not been named as a defendant in this action.
The complaint alleges that defendants violated the federal securities laws
by issuing and selling Webvan common stock pursuant to the November 4, 1999
IPO without disclosing to investors that some of the underwriters in the
offering, including the lead underwriters, had solicited and received
excessive and undisclosed commissions from certain investors.
Specifically, the complaint alleges that in exchange for the excessive
commissions, defendants allocated Webvan shares to customers at the IPO
price.
To receive the allocations (i.e., the ability to purchase shares) at the IPO
price, the underwriters' brokerage customers had to agree to purchase
additional shares in the aftermarket at progressively higher prices.
The requirement that customers make additional purchases at progressively
higher prices as the price of Webvan stock rocketed upward (a practice known
on Wall Street as laddering) was intended to (and did) drive Webvan's share
price up to artificially high levels.
This artificial price inflation enabled both the underwriters and their
customers to reap enormous profits by buying stock at the IPO price and then
selling it later for a profit at inflated aftermarket prices.
For more information, contact: Wolf Haldenstein Adler Freeman & Herz LLP by
Mail: 270 Madison Avenue, New York, New York 10016 by Phone: 800-575-0735
(Fred Taylor Isquith, Esq., Gregory Nespole, Esq., Thomas Burt, Esq.,
Gustavo Bruckner, Esq., or George Peters) by E-mail: classmember@whafh.com
or visit the firm's Website: www.whafh.com
* United States Growing Uneasy Over Subject Of Reparation
---------------------------------------------------------
Reparations for Holocaust victims, reparations for Japanese-Americans
interned during World War II, reparations for former slaves, reparations for
comfort women -- the subject of reparations for discrimination and abuses
based on race, servitude and/or gender pervades legal thought and human
rights today.
This subject takes on more drama, more controversy, more intellectual and
social "bite" as the upcoming world conference against racism prepares to
open in Durban, South Africa, August 31-September 7.
The US administration is so uneasy about reparations, among other issues on
the agenda that it has yet to decide whether it will participate, according
to Jim Lobe in a recent report written for Inter Press Service.
Human Rights Watch, a leading US human right group, under the leadership of
Kenneth Roth, its executive director, is calling for the conference against
racism (formally named the World Conference against Racism, Racial
Discrimination, Xenophobia and Related Intolerance) to approve a process by
which reparations for slavery, racial discrimination and other extreme forms
of racism can be assessed.
This proposal from Human Rights Watch is designed to overcome the discomfort
of American officials and is presented in a five-page policy statement, in
which HRW urges the establishment of national and international panels to
discuss past certain abuses of human rights and the redress of their impact
upon the victims.
HRW recommends, in its policy statement, that reparations should take the
form of enhanced enforcement of social and economic rights for victimized
groups; within various countries, as appropriate, this might include
investment in education, housing, health care, job training.
Possible remedies at the international level might include debt relief and
preferential trade.
"We're not talking about a handout or a windfall," says Kenneth Roth.
"We are calling for long-term commitments to correct the damage done to the
groups left most seriously disadvantaged," he said.
Although NGOs have urged Secretary of State Colin Powell to head the US
delegation, he has yet to reply.
In testimony before Congress last month, he hinted that Washington might be
far less inclined to make a decision to attend the conference if the subject
of reparations becomes the major focus.
HRW continues to urge a particular focus on helping groups that continue to
suffer the effects of past abuses -- like those suffering the effects of
slavery in the United States, although it was legally abolished generations
ago.
Decision by President Bush about attendance at the conference, according to
the same report, likely will be made only after a preparatory committee
meeting in Geneva has settled on the final agenda for the Durban conference.
Secretary Powell has said that Washington would want to see eliminated from
an agenda such issues as slavery and compensation, among other things.
What Washington wants, he said is a "forward-looking conference that points
the way ahead."
HRW's statement is designed to do just that, says Reed Brody, the
organization's advocacy director.
*********
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
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Washington, D.C. Enid Sterling, Larri-Nil Veloso and Lyndsey Resnick,
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Copyright 2001. All rights reserved. ISSN 1525-2272.
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