/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/011001.mbx C L A S S A C T I O N R E P O R T E R Monday, October 1, 2001, Vol. 3, No. 191 Headlines ANN TAYLOR: Discovery Commences In Securities Suit in S.D. NY CHRONIMED INC.: Mark McNair Commences Securities Suit In MN Court COMPAQ COMPUTERS: October Hearing Set For Final Settlement Approval CONTINENTAL CARBON: Denies Alabama Plant Carbon-Black Powder Source DRKOOP.COM: Bernstein Liebhard Commences S.D. NY Securities Suit ECI TELECOM: Pomerantz Haudek Commences Securities Suit in E.D. VA ELOQUENT INC.: Bernstein Liebhard Initiates S.D. NY Securities Suit EXODUS COMMUNICATIONS: Bernstein Liebhard Lodges Securities Suit In NY FAIRMARKET INC.: Bernstein Liebhard Lodges Securities Suit in S.D. NY GRIC COMMUNICATIONS: Bernstein Liebhard Files Securities Suit in NY HEALTHEON/ WEBMD: Bernstein Liebhard Lodges S.D. NY Securities Suit MARYLAND: Court Rules State Did Not Violate Constitutional Rights, ADA MEDIAPLEX INC.: Bernstein Liebhard Commences S.D. NY Securities Suit METROMEDIA FIBER: Goodkind Labaton Lodges Securities Suit in S.D. NY METROMEDIA FIBER: Kirby McInerney Initiates Securities Suit in S.D.NY NEULEVEL INC.: LA Court Declines To Stop ".Biz" Domain Names Roll-Out ONYX SOFTWARE: Cohen Milstein Commences Securities Suit in W.D. WA OTG SOFTWARE: Bernstein Liebhard Commences Securities Suit in S.D. NY PALM INC.: Bernstein Liebhard Commences Securities Suit in S.D. NY PRIMEDIA INC.: Rosenfeld Meyer Commences RICO Suit in Los Angeles CA PSI TECHNOLOGIES: Milberg Weiss Initiates Securities Suit In S.D. NY STRATOS LIGHTWAVE: Bernstein Liebhard Commences Securities Suit in NY TERRORIST ATTACK: Peterson Consulting to Handle WTC-Related Claims ********* ANN TAYLOR: Discovery Commences In Securities Suit in S.D. NY ------------------------------------------------------------- Discovery is finally proceeding in the securities class action suit filed against clothing retailer Ann Taylor Stores Corporation, after parties in the suit swapped motions regarding its dismissal. The suit was originally filed on August 26,1996 in the United States District Court for the Southern District of New York. The suit named as defendants, the Company, its wholly owned subsidiary AnnTaylor, Inc., certain former officers and directors of the Company and AnnTaylor, Inc., Merrill Lynch & Co. and certain affiliates of Merril Lynch & Co. The complaint alleged causes of action under Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934, as amended, asserting that the defendants made false and misleading statements about the Company and Ann Taylor during the period commencing February 3, 1994 through May 4, 1995. The District Court dismissed the suit and a subsequently filed amended complaint. The Plaintiffs then appealed the decision to the United States Court of Appeals for the Second Circuit. In June 2000, the Appellate Court vacated the dismissal of the amended complaint, and remanded the case to the District Court with instructions to allow plaintiffs to replead their complaint. The Appellate Court also ordered the District Court to reconsider whether plaintiffs' allegations are pled with sufficient particularity to satisfy the pleading standards of the Private Securities Litigation Reform Act of 1995. In response, the Company, AnnTaylor, Inc. and their former directors and officers filed a petition for a writ of certiorari in the United States Supreme Court seeking review and reversal of the decision of the Court of Appeals. However, the United States Supreme Court denied the petition in November 2000. Meanwhile, defendants Merrill Lynch & Co. and its affiliates entered into a $3 million partial settlement with the plaintiffs, which was subsequently approved by the District Court. This resulted to the dismissal of the claims against Merrill Lynch and its affiliates and the plaintiffs elected not to replead their complaint with regard to the settling defendants. Accordingly, the Company, Ann Taylor and their former directors and officers again moved to dismiss the amended complaint, arguing that it fails to plead fraud with sufficient particularity under the standard set forth by the Court of Appeals in its June 21, 2000 decision. On July 18, 2001, the District Court denied the above motion. The Company believes the amended complaint is without merit. CHRONIMED INC.: Mark McNair Commences Securities Suit In MN Court ----------------------------------------------------------------- The Law Offices of Mark McNair filed a complaint alleging violations of federal securities laws by Chronimed, Inc. (Nasdaq: CHMD) on behalf of purchasers of CHMD between October 27, 1999 and June 13, 2001. The suit was filed in the United States District Court for the District of Minnesota against the Company and: (1) former Chairman of the Board and Chief Executive Officer Maurice R. Taylor, (2) current Chairman of the Board and Chief Executive Officer Henry F. Blissenbach, (3) current Vice President Gregory H. Keane The suit alleges violations of Sections 20(a) and 10b(5) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Specifically, the complaint alleges that the Company made false and misleading financial statements during the Class Period, consistently disclosing favorable quarterly results, including several quarters of record revenues. However, on June 14, 2001, The Company announced that it intended to adjust its results for the fiscal year ended June 30, 2000 and for the three subsequent quarters because it had overstated its overall revenue, earnings, and accounts. The Company indicated that its computer accounting system at its StatScript retail pharmacy chain allowed certain prescriptions to be recorded as revenue more than once. Nasdaq quickly halted all trading in Chronimed stock following its announcement. When trading resumed 8 days later, the value of Chronimed's stock had dropped by 49% to $4.75 a share. For more information, contact the Law Office of Mark McNair by Mail: 1819 Pennsylvania Ave, N.W. Suite 550 Washington, DC 2006 by Phone: (877) 511-4717 by Fax: (202)872-4718 or visit the Website: www.justice4investors.com COMPAQ COMPUTERS: October Hearing Set For Final Settlement Approval ------------------------------------------------------------------- Texas District Court has set an October 15, 2001 date for the final approval hearing on the settlement entered by Compaq Computers with plaintiffs in the consumer class actions pending in California, Illinois, North Carolina, Texas and Washington. The suits commenced in 1999, alleging that certain models of Compaq Presario computers exhibit various defects, including modems that did not connect at their maximum speeds, freezes in the "sleep mode," Quantum "Big Foot"-type hard drives (in some models) that were inoperable, and Phone Center software (in some models) that did not work. Plaintiffs allege that, as a result, class members overpaid for certain Presarios and/or purchased upgrade or replacement parts they should not have if the computers functioned as represented. In April 2000, Compaq entered into a settlement of the class actions pending in California, Illinois, North Carolina, Texas and Washington. On July 16, 2000, the Court preliminarily ruled that the litigation may proceed, for purposes of settlement only, on behalf persons who are current residents of the States of California, Illinois, North Carolina, Texas or Washington. Under the settlement: (i) cash of up to $360 or rebates of up to $540 will be given to purchasers of Presarios who, within the first 24 months after purchasing the computer, paid to replace the modem or Bigfoot hard disk drive (ii) cash of up to $360 or rebates of up to $540 will be given to purchasers of Presarios who, within 12 months after purchasing the computer, purchased replacement telephony software, a telephone answering machine or stand-alone fax machine, because of perceived defects in the telephony software, modem or Bigfoot hard disk drive. (iii) rebates of up to $110, $70 or $50 will be provided (depending on the model) to all purchasers of Presarios who, within two years after the settlement is finally approved, purchase new Compaq computer products. (iv) the Company will provide class members with a disk that will automatically install software updates relating to the telephony software, modem and Bigfoot hard drive. The Company has also agreed to pay approximately $3.9 million as reimbursement for lawyers' fees and expenses. For more information, contact lead counsel Hagens Berman, LLP by Phone: (206) 623-7292 or (888) 381-2889 (toll-free) or by E-mail: Karl@Hagens- Berman.com. Settlement information can also be viewed at the Website: http://members.aol.com/CClass450/ CONTINENTAL CARBON: Denies Alabama Plant Carbon-Black Powder Source ------------------------------------------------------------------- Continental Carbon Co. has denied the allegations in an environmental class action suit filed against them by Phenix City, Alabama business owners and residents. Phenix City business owner John Tharpe filed the suit in August after federal environmental investigators concluded that carbon-black powder had fallen on his Action Marine boat Drive dealership in May. He contends the substance has damaged his boats and equipment for decades, forcing him to sell his stock at a discount. Other south Columbus residents and business owners also have complained for years about a black powder that has fallen on their roofs and outdoor furniture and equipment. When moistened, the powder seeps into porous surfaces and is nearly impossible to remove. The suit named as defendants: (1) Continental Carbon Co., based in Houston; (2) Barry Nicks, Phenix City plant manager; (3) Todd Miller, company director of safety, health and environmental affairs; (4) corporate owner China Synthetic Rubber Corp. and (5) corporate owner Taiwan Cement Corp. The suit accuses the defendants of negligence, wanton misconduct, breach of duty to warn, fraud, misinterpretation and deceit. Attorneys for Continental Carbon Co. said say the company's Phenix City plant is not the source of the carbon-black powder. The attorneys also argue: (i) The Phenix City plant doesn't release enough carbon black into the atmosphere to cause property damage or health concerns. (ii) The case should not be given class-action status. (iii) The U.S. District Court lacks jurisdiction over one or more of the suit's claims. (iv) The plaintiffs have not established legal or constitutional grounds to claim punitive damages. The Phenix City Continental Carbon plant produces 200 million pounds of carbon black annually as filler for tires and other rubber products. The plant suffered a spill in 1981 and paid south Columbus residents and business owners to have the black powder removed. Company officials have said no such spill has occurred since then and have said that autos and other factories could be responsible for the latest complaints. The Alabama Department of Environmental Management says the Phenix City plant has never violated federal air standards and recently removed itself from a joint agency investigation after finding the plant within its operating standards. DRKOOP.COM: Bernstein Liebhard Commences S.D. NY Securities Suit ---------------------------------------------------------------- Bernstein Liebhard and Lifshitz, LLP initiated a securities class action lawsuit on behalf all persons who acquired DrKoop.com, Inc. (NASDAQ: KOOP) securities between June 8, 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 DrKoop.com and: (1) Everett Koop, M.D., (2) John F. Zaccaro, (3) Donald W. Hackett, (4) Susan M. Georgen-Saad, (5) Jeffrey C. Ballowe, (6) Mardian I. Blair, (7) G. Carl Everett, Jr., (8) Richard D. Helppie, Jr., (9) Nancy L. Snyderman, (10) Bear, Stearns & Co., Inc. and (11) Hambrecht & Quist LLC. 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 DrKoop.com's initial public offering of 9,375,000 shares of common stock at $9.00 per share that was completed on or about June 8, 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 DrKoop.com 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 DrKoop.com shares in the after-market at pre-determined prices. For more information, contact Ms. 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 by E-mail: KOOP@bernlieb.com or visit the firm's Website: www.bernlieb.com ECI TELECOM: Pomerantz Haudek Commences Securities Suit in E.D. VA ------------------------------------------------------------------ Pomerantz Haudek Block Grossman & Gross, LLP initiated a Class action lawsuit in the United States District Court for the Eastern District of Virginia on behalf of shareholders who purchased the securities of ECI Telecom Ltd. (Nasdaq:ECIL) during the period between May 2, 2000 through February 14, 2001, inclusive. The Complaint charges ECI and three of its top officials with issuing materially false and misleading information about the Company's financial condition and prospects. In particular, it is alleged that defendants reported materially inflated financial results for the Company's three quarters of fiscal 2000 and provided materially misleading guidance concerning its results for the fourth quarter of fiscal 2000. Thereafter, defendants belatedly admitted that the Company had to restate its financial results for the first three quarters of fiscal 2000. Indeed, on February 14, 2001, the Company acknowledged that the restatement of its financials would require the moving of $38 million from 1999 to 2000, and $61 million from 2000 to 2001. Furthermore, on February 14, 2001 the Company also disclosed that losses for the fourth quarter would be significantly higher than its recent disclosure. Thereafter on February 15, 2001, ECI common stock closed at $11.38, a 71% decline from its Class Period high of $39.73 on July 17, 2000. For more information, contact Andrew G. Tolan by Phone: 888-476-6529 (or (888) 4-POMLAW), toll free by E-mail: agtolan@pomlaw.com by e-mail or visit the firm's Website: www.pomerantzlaw.com. Those who inquire by e-mail are encouraged to include their mailing address and telephone number. ELOQUENT INC.: Bernstein Liebhard Initiates S.D. NY Securities Suit ------------------------------------------------------------------- Bernstein Liebhard and Lifshitz, LLP commenced a securities class action lawsuit on behalf all persons who acquired Eloquent, Inc. (NASDAQ: ELOQ) securities between February 17, 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 Eloquent and: (1) Abraham Kleinfeld, (2) R. John Curson, (3) U.S. Bancorp Piper Jaffray Inc., (4) Banc of America Securities LLC, and (5) Thomas Weisel Partners LLC. 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 Eloquent's initial public offering of 4.5 million shares of common stock at $16.00 per share that was completed on or about February 17, 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 restricted Eloquent 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 Eloquent shares in the after-market at pre-determined prices. For more information, contact Ms. 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 by E-mail: ELOQ@bernlieb.com or visit the firm's Website: www.bernlieb.com EXODUS COMMUNICATIONS: Bernstein Liebhard Lodges Securities Suit In NY ---------------------------------------------------------------------- Bernstein Liebhard and Lifshitz, LLP commenced a securities class action lawsuit on behalf all persons who acquired Exodus Corporation (NASDAQ: EXDS) securities between March 30, 2001 and June 20, 2001. The case is pending in the United States District Court for the Northern District of California. Named as defendants in the complaint are Exodus and these executive officers of the Company: (1) Ellen M. Hancock, (2) R. Marshall Case, (3) Dick Stoltz, (4) Herbert A. Dollahite and (5) Adam W. Wegner. The complaint charges defendants with violations of sections 10(b) and 20(a) the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that during the Class Period, defendants issued to the investing public false and misleading statements and press releases concerning the Company's financial condition and prospects. Moreover, the Company failed to disclose material information necessary to make its prior statements not misleading. The Complaint alleges that throughout the Class Period, defendants made a series of positive statements about the Company's prospects and failed to disclose that Exodus' growth rate was rapidly declining. As a result, the price of Exodus stock was artificially inflated throughout the Class Period. On June 20, 2001, Exodus revealed that, its revenue would be significantly below expectations (and actually declined sequentially) due to a decrease in the rate of new customer installations, an increase in the rate of cancellations, reduction of orders from existing customers and an increase in reserves related to Internet company failures. This disclosure was contrary to defendants' prior statements regarding the Company's results for the second quarter 2001 and for the 2001 fiscal year. This revelation shocked the market, causing Exodus' stock to plummet over 30% to $1.59 per share the following trading day on record volume of more than 185 million shares. Defendants and certain Company insiders took advantage of Exodus' inflated stock price to sell more than $4.1 million of their own stock to unsuspecting investors. For more information, contact Ms. 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 by E-mail: EXDS@bernlieb.com or visit the firm's Website: www.bernlieb.com FAIRMARKET INC.: Bernstein Liebhard Lodges Securities Suit in S.D. NY --------------------------------------------------------------------- Bernstein Liebhard and Lifshitz, LLP filed a securities class action lawsuit on behalf all persons who acquired FairMarket , Inc. (NASDAQ: FAIM) securities between March 14, 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 FairMarket and: (1) Scott T. Randall, (2) John Belchers, (3) U.S. Bancorp Piper Jaffray Inc., (4) Deutsche Bank Securities Inc., and (5) FleetBoston Robertson Stephens, 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 FairMarket's initial public offering of 5 million shares of common stock at $17.00 per share that was completed on or about March 14, 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 restricted FairMarket 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 FairMarket shares in the after-market at pre-determined prices. For more information, contact Ms. 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 by E-mail: FAIM@bernlieb.com or visit the firm's Website: www.bernlieb.com GRIC COMMUNICATIONS: Bernstein Liebhard Files Securities Suit in NY ------------------------------------------------------------------- Bernstein Liebhard and Lifshitz, LLP lodged a securities class action lawsuit on behalf all persons who acquired GRIC Communications, Inc. (NASDAQ: GRIC) securities between December 15, 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 the Company and: (1) Dr. Hong Chen, (2) Joseph M. Zaelit, (3) Kim S. Silverman, (4) Roger L. Pierce, (5) CIBC World Markets Corp., (6) U.S. Bancorp Piper Jaffray Inc., and (7) Prudential Securities Incorporated 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 the Company's initial public offering of 4,600,000 shares of common stock at $14.00 per share that was completed on or about December 15, 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 GRIC 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 GRIC shares in the after- market at pre-determined prices. For more details, contact Ms. 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 by E-mail: GRIC@bernlieb.com or visit the firm's Website: www.bernlieb.com HEALTHEON/ WEBMD: Bernstein Liebhard Lodges S.D. NY Securities Suit ------------------------------------------------------------------- Bernstein Liebhard and Lifshitz, LLP filed a securities class action lawsuit on behalf all persons who acquired the securities of WebMD Corporation, formerly known as Healtheon Corporation, (NASDAQ: HLTH) between February 10, 1999 and December 6, 2000. The case is pending in the United States District Court for the Southern District of New York located at 500 Pearl Street, New York, New York 10004. Named as defendants in the complaint are WebMD and: (1) W. Michael Long, (2) John L. Westerman, III, (3) Morgan Stanley & Co. Incorporated and (4) Goldman Sachs & Co. 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 the Company's initial public offering of 5 million shares of common stock at $8.00 per share that was completed on or about February 10, 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 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 shares of the Company in the after-market at pre-determined prices. For more information, contact Ms. 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 by E-mail: HLTH@bernlieb.com or visit the firm's Website: www.bernlieb.com MARYLAND: Court Rules State Did Not Violate Constitutional Rights, ADA ---------------------------------------------------------------------- The United States District Court for Maryland finally handed down a decision in the seven-year old class action suit filed against the State of Maryland. The suit, filed in 1994, primarily alleged that the state unnecessarily confined developmentally disabled persons in state mental hospitals, thereby violating their constitutional rights and the Americans With Disabilities Act. The 12 named plaintiffs included nine people with brain injuries and three with developmental problems unrelated to mental retardation. The suit also represented a class of about five dozen people in state institutions. However, U.S. District Judge Catherine C. Blake ruled in favor of the state yesterday, saying that neither the Constitution nor the sweeping ADA required the state to treat such individuals in the community -- even when medical professionals considered that setting more appropriate. She said that while the plaintiffs pain and frustration was genuine and understandable, ".the defendants' efforts to provide a stable, safe, and caring environment also were genuine and commendable, if not always successful." "In the end," she wrote, "the plaintiffs have not shown sufficient reason for the court to order the State of Maryland to do more." Maryland officials had maintained that they had met their legal obligations by providing care in the state psychiatric hospitals while simultaneously expanding community-based treatment for these and other groups of disabled residents. Maureen Dove, chief of litigation in the attorney general's office called the decision a "complete victory for the state." Phil Fornaci, executive director of the Maryland Disability Law Center, could not hide his distress last night over the case's outcome. He said the judge had misread a fundamental aspect of the Supreme Court's 1999 Olmstead ruling, a landmark determination that the ADA prohibits the needless segregation of individuals with mental disabilities. Testimony in the suit proceeded on a stop-start schedule for four years, with closing arguments also delayed. Since 1999, the case had been in limbo, awaiting the judge's ruling, making it one of the longest-running cases on the federal docket in Baltimore. MEDIAPLEX INC.: Bernstein Liebhard Commences S.D. NY Securities Suit -------------------------------------------------------------------- Bernstein Liebhard and Lifshitz, LLP initiated a securities class action lawsuit on behalf all persons who acquired Mediaplex, Inc. (NASDAQ: MPLX) securities between November 19, 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 Mediaplex and: (1) Gregory R. Raifman, (2) Sandra L. Abbott, (3) Jon L. Edwards, (4) Lawrence D. Lenihan, (5) Peter S. Sealey, (6) James Desorrento, (7) A. Brooke Seawell, (8) Lehman Brothers Inc., (9) SG Cowen Securities Corporation, (10) U.S. Bancorp Piper Jaffray Inc., and (11) Fidelity Capital Markets, a division of National Financial Services Corporation. 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 Mediaplex's initial public offering of 6,000,000 shares of common stock at $12.00 per share that was completed on or about November 19, 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 Mediaplex 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 Mediaplex shares in the after-market at pre-determined prices. For more information, contact Ms. 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 by E-mail: MPLX@bernlieb or visit the firm's Website: www.bernlieb.com METROMEDIA FIBER: Goodkind Labaton Lodges Securities Suit in S.D. NY -------------------------------------------------------------------- Goodkind Labaton Rudoff & Sucharow LLP filed a securities class action lawsuit in the United States District Court for the Southern District of New York on behalf of a Class of purchasers of shares of common stock of Metromedia Fiber Network, Inc. (NASDAQ:MFNX) between January 8, 2001 and July 2, 2001, inclusive. The Complaint names Metromedia, Chairman and Chief Executive Officer Stephen A. Garofalo, and President and Chief Operating Officer Nicholas M. Tanzi, as Defendants. The Complaint charges the Defendants with violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder. Plaintiffs, purchasers of Metromedia stock, allege among other things that the Defendants issued multiple statements throughout the Class Period announcing Metromedia's receipt of a $350 million credit facility from Citicorp USA, Inc. that would enable Metromedia to complete the construction of an extensive fiber optic network. These statements were allegedly materially false and misleading because they failed to disclose that: (1) the Citicorp credit facility was contingent upon the receipt of additional commitments from other lenders and Metromedia was having difficulty obtaining such commitments given the distressed market for telecom companies; (2) the further development of the Company's fiber optic network would be significantly delayed without obtaining the credit facility which was dependent on obtaining the necessary additional loan commitments; and (3) based on the foregoing, Defendants' statements about Metromedia and its prospects lacked a reasonable basis at all times. For more information, contact Jonathan M. Plasse and David J. Goldsmith by Mail: 100 Park Avenue, New York, New York 10017-5563 by Phone: 212/907-0700 or by E-mail: plassej@glrs.com or goldsmd@glrs.com METROMEDIA FIBER: Kirby McInerney Initiates Securities Suit in S.D.NY --------------------------------------------------------------------- Kirby McInerney & Squire, LLP commenced a class action lawsuit in the United States District Court for the Southern District of New York on behalf of all purchasers of Metromedia Fiber Network,Inc. (NASDAQ: MFNX) common stock between January 8, 2001 and July 2, 2001. The Complaint alleges that defendants (Metromedia and members of its senior management) violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b?5 promulgated thereunder. The Company allegedly issued a series of material misrepresentations to the market between January 8, 2001 and July 2, 2001, thereby artificially inflating the price of Metromedia securities. During the Class Period, defendants announced Metromedia's receipt of a $350 million credit facility from Citicorp USA, Inc. However, defendants failed to disclose that the Citicorp credit facility was contingent on the receipt of additional commitments from other lenders, which Metromedia was experiencing difficulty in obtaining. As a result, the further development of the Company's fiber optic network was significantly delayed. On July 2, 2001, Metromedia revealed for the first time that the commitment letter from Citicorp was subject to the receipt of commitments from other lenders. For more information, contact Ira Press or Melissa Fleming by Mail: 830 Third Avenue, 10th Floor New York, New York 10022 by Phone: (212) 317-2300 or Toll Free (888) 529-4787 or by E-Mail: mfleming@kmslaw.com NEULEVEL INC.: LA Court Declines To Stop ".Biz" Domain Names Roll-Out --------------------------------------------------------------------- The Los Angeles State Court declined to block web page sponsor NeuLevel, Inc. from rolling out Internet addresses ending in ".biz", in the first face-off between the Company and plaintiffs in a class action suit against them. Disgruntled applicants for the ".biz" domain had asked the Court to block the first batch of names set to go live this October 1, alleging that the Company was running an illegal lottery by collecting money for the chance to win a desirable name such as www.show.biz. NeuLevel was chosen last fall by the Internet Corporation for Assigned Names and Numbers (ICANN) to introduce the ".biz" domain, after good names ending in ".com," ".net" and ".org" are increasingly hard to come by. Neulevel's application process encourages hopefuls to submit multiple applications, at an average cost of $5 each, in order to increase their odds of winning. ``You may have to spend thousands of dollars to get a name,'' said Derek Newman, a Seattle lawyer representing the plaintiffs. NeuLevel decided last week to roll out the new names in two batches -- one consisting of uncontested names for which only one application was filed, and one made up of names for which several applications have been filed. The Court allowed the first, uncontested batch could go live as planned, but the second batch would have to wait until Oct. 12, after a second hearing is held. Both sides claimed victory Thursday, but the decision will have no immediate practical effect as NeuLevel did not have plans to roll out the second batch of names until Oct. 12. ``It's all part of what we had proposed. As far as we're concerned, we're going to resolve those names on October 1 and we're moving on schedule to resolve the rest on October 12,'' said Jeff Neuman, director of policy and intellectual property for NeuLevel. The company, a Sterling, Virginia-based joint venture between Neustar Inc. and Melbourne IT (MLB.AX), plans to award the contested names on a randomized basis. Aside from .biz and .info, new domains include ``.name'' for individuals; ``.coop'' for cooperatives; ``.museum'' for museums; ``.aero'' for air transport organizations; and ``.pro'' for professionals such as doctors, lawyers and accountants. All except .pro are expected to be functional by the end of the year. NeuLevel also filed a separate legal motion in a federal court in August to ward off challenges from state laws and high-tech heavyweights such as Amazon.com Inc. (Nasdaq:AMZN) and Sun Microsystems Inc. (Nasdaq:SUNW) which fear trademark dilution if Neulevel gives addresses such as www.amazon.biz and www.sun.biz to other companies. ONYX SOFTWARE: Cohen Milstein Commences Securities Suit in W.D. WA ------------------------------------------------------------------ The law firm of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. filed a lawsuit in the United States District Court for the Western District of Washington on behalf of persons who purchased Onyx Software Corporation (NASDAQ:ONXS) common stock during the period between January 30, 2001 and July 24, 2001. The complaint charges defendants with violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, and Sections 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, which had the effect of artificially inflating the price of Onyx stock. In particular, the complaint alleges that during the Class Period, Onyx made misleading statements about its business and issued false and misleading financial results. Moreover, as a result of the inflated price of Onyx stock, Onyx was able to complete a secondary offering in February 2001 for 2.5 million of its shares at $13.50 per share, raising net proceeds of $31.5 million. According to the complaint, however, on July 24, 2001, Onyx announced that it had discovered an unauthorized side-letter agreement that related to a licensing transaction completed in its fourth quarter of 2000. Subsequently, on August 10, 2001, the Company acknowledged that it needed to restate its previously reported financial results for the fourth quarter and year ended December 31, 2000. In the wake of the restatement announcement, the Company's stock price dropped as low as $3.42 per share, down from a Class Period high of $16.50 per share and the secondary offering price of $13.50 per share. For more information, contact Murray T.S. Lewis or Clarence D. Williams by Mail: 1100 New York Avenue, N.W. Suite 500, West Tower, Washington, D.C. 20005 by Phone: (202) 408-4600 by Fax: (202) 408-4699 or visit the firm's Website: www.cmht.com OTG SOFTWARE: Bernstein Liebhard Commences Securities Suit in S.D. NY --------------------------------------------------------------------- Bernstein Liebhard and Lifshitz, LLP filed a securities class action lawsuit on behalf all persons who acquired OTG Software, Inc. (NASDAQ: OTGS) securities between March 10, 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 OTG and: (1) Richard A. Kay, (2) F. William Caple, (3) Ronald W. Kaiser, (4) Credit Suisse First Boston Corporation, (5) Deutsche Bank Securities Inc., (6) SG Cowen Securities Corporation and (7) Friedman, Billings, Ramsey & Co., 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 OTG's initial public offering of 5 million shares of common stock at $19.00 per share that was completed on or about March 10, 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 restricted OTG 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 OTG shares in the after- market at pre- determined prices. For more information, contact Ms. 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 by E-mail: OTGS@bernlieb.com or visit the firm's Website: www.bernlieb.com PALM INC.: Bernstein Liebhard Commences Securities Suit in S.D. NY ------------------------------------------------------------------ Bernstein Liebhard and Lifshitz, LLP filed a securities class action lawsuit on behalf all persons who acquired Palm, Inc. (NASDAQ: PALM) securities between March 1, 2000 and December 6, 2000. The case is pending in the United States District Court for the Southern District of New York and has been assigned docket number 01- CV-5923. Named as defendants in the complaint are Palm and Carl Yankowski and Judy Bruner, who are executive officers of Palm. The complaint also names as defendants these underwriters of Palm's initial public offering: (1) Morgan Stanley & Co. Incorporated, (2) Goldman Sachs & Co., (3) Merrill Lynch, Pierce, Fenner & Smith, Incorporated, (4) FleetBoston Robertson Stephens, Inc., and (5) Salomon Smith Barney, Inc. 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 March 1, 2000 Palm commenced an initial public offering of 23,000,000 of its shares of common stock at an offering price of $38.00 per share. In connection therewith, Palm filed a registration statement, which incorporated a prospectus with the SEC. The complaint further 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 shares in the Palm 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 Palm IPO to those customers in exchange for the customers' agreement to purchase Palm shares in the after-market at pre-determined prices. For more details, contact Ms. 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: PALM@bernlieb.com or visit the firm's Website: www.bernlieb.com PRIMEDIA INC.: Rosenfeld Meyer Commences RICO Suit in Los Angeles CA -------------------------------------------------------------------- Rosenfeld, Meyer and Susman, LLP filed a class action lawsuit against Primedia, Inc. and its subsidiaries in the United States Central District Court for the District of California. The suit was filed on behalf of on August 10, 2001, charging defendants with unlawfully depriving hundreds of employees of contractually promised benefits. The potential class members include past and present employees of the Company and its subsidiaries who: (1) were promised but never received stock options in Primedia and/or its subsidiaries; (2) and/or who were falsely promised that their subsidiary stock options would be converted to Primedia options; (3) and/or who did not receive full bonuses as promised. The suit alleges that the Company and its subsidiaries conducted its business enterprise through a pattern of racketeering activity and violation of section 1962(c) and 1962(d) of the Racketeer Influenced and Corrupt Organizations (RICO) act. The suit further alleges that the defendants: (i) made false representations to entice employees and prospective employees into working for the Company and its subsidiaries and remaining under their employ, (ii) breached the agreement with employees with regard to their stock options and bonuses, (iii) recklessly disregarded that they were not going to convert employees' subsidiary stock options into Primedia stock options, (iv) conspired to represent to plaintiffs that they would convert employees' subsidiary stock options into Primedia stock options, (v) breached implied covenant of good faith and fair dealing, (vi) failed to pay wages due in violation of California Labor Code Sections 200 et seq. Named as defendants in the suit are: (a) Primedia, Inc., (b) Gr8ride.com, Inc., (c) Consumerclick Corporation, (d) Industryclick Corporation, (e) Intertec Publishing Corporation, (f) Haas Publishing Companies, Inc., (g) Primedia Enthusiast Publication, Inc., (h) Tom Rogers, Primedia Chief Executive Officer, (i) Charles McCurdy, Primedia President (j) Lawrence Rutkowski, Primedia Executive Vice President. For more information, contact Rosenfeld, Meyer & Susman, LLP by Mail: 9601 Wilshire Boulevard, Fourth Floor Beverly Hills, California 90210 by Phone: (310) 246-3235 by Fax: (310) 860-2430 by E-mail: primediaclassaction@rmslaw.com or visit the class action website: www.prmlitigation.com PSI TECHNOLOGIES: Milberg Weiss Initiates Securities Suit In S.D. NY -------------------------------------------------------------------- The law firm of Milberg Weiss Bershad Hynes & Lerach LLP filed a class action lawsuit on September 26, 2001 on behalf of purchasers of the securities of PSI Technologies Holdings, Inc. (NASDAQ:PSIT) between March 15, 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 FleetBoston Robertson Stephens, Inc. and Bear Stearns & Co, 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 March 15, 2000, PSIT commenced an initial public offering of 3,500,000 of its shares of common stock at an offering price of $16 per share. In connection therewith, PSIT 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: (1) 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 PSIT shares issued in connection with the PSIT IPO; and (2) defendants had entered into agreements with customers whereby defendants agreed to allocate PSIT shares to those customers in the PSIT IPO in exchange for which the customers agreed to purchase additional PSIT 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 E-mail: PSITcase@milbergNY.com or visit the firm's Website: www.milberg.com STRATOS LIGHTWAVE: Bernstein Liebhard Commences Securities Suit in NY --------------------------------------------------------------------- Bernstein Liebhard and Lifshitz, LLP initiated a securities class action lawsuit on behalf all persons who acquired Stratos Lightwave, Inc. (NASDAQ: STLW) securities between June 27, 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 Stratos Lightwave and: (1) James W. McGinley, (2) David A. Slack, (3) Lehman Brothers Inc., (4) U.S. Bancorp Piper Jaffray Inc., (5) CIBC World Markets, Inc., and (6) Robert W. Baird & Co., 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 Stratos Lightwave's initial public offering of 8.75 million shares of common stock at $21.00 per share that was completed on or about June 27, 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 restricted Stratos Lightwave 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 Stratos Lightwave shares in the after-market at pre-determined prices. For more information, contact Ms. 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 by E-mail: STLW@bernlieb.com or visit the firm's Website: www.bernlieb.com. TERRORIST ATTACK: Peterson Consulting to Handle WTC-Related Claims ------------------------------------------------------------------ Oppenheimer Funds, a substantial leaseholder at the World Trade Center, has retained Peterson Consulting, a unit of Navigant Consulting, Inc. (NYSE: NCI), to represent and assist in the preparation of all property damage and business interruption claims that result from the World Trade Center tragedy. Peterson Consulting has assisted numerous clients over the last twenty years in the preparation and validation of claims arising from some of the nation's previous significant, catastrophic events, including the 1993 World Trade Center bombing. Doug Reichert, Executive Managing Director of Peterson, said: "Our purpose in the engagement is to bring to bear our long term professional claims experience and expertise to enable the insurance industry to understand, accept and process our clients' complex claims in as short a time as possible. A key to quick recovery for those companies directly impacted is a professional, informed and well- substantiated claims process. Peterson has those attributes." William M. Goodyear, Chairman and Chief Executive Officer of Navigant Consulting, Inc., said: "In our announcement on September 20th, we indicated that in the aftermath of the World Trade Center tragedy, the Company expected several practice areas to be impacted favorably, including its insurance and business interruption service lines. The Oppenheimer Funds engagement confirms that expectation." Navigant Consulting, Inc. ( http://www.navigantconsulting.com) is a globally-focused management consulting firm providing consulting services to Fortune 500 companies, government agencies, law firms, and regulated and network industries. ********* 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., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2001. 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. 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