/raid1/www/Hosts/bankrupt/CAR_Public/011005.mbx
C L A S S A C T I O N R E P O R T E R
Friday, October 5, 2001, Vol. 3, No. 195
Headlines
2THEMART.COM: Weiss Yourman Commences Securities Suit in S.D. NY
BROCADE COMMUNICATIONS: Marc Henzel Files Securities Suit in S.D. NY
BUY.COM: Marc Henzel Commences Securities Fraud Suit in S.D. NY
CLARENT CORPORATION: Weiss Yourman Lodges Securities Suit in S.D. NY
COMDISCO INC.: Pomerantz Haudek Lodges Securities Suit in N.D. IL
COMMTOUCH SOFTWARE: Weiss Yourman Commences N.D. CA Securities Suit
CONNECTICUT: Long Waiting List Spurs Advocacy Group To File Suit
DELTATHREE INC.: Marc Henzel Commences Securities Suit in S.D. NY
FREEMARKETS INC.: Cauley Geller Commences Securities Suits in S.D. NY
i2 TECHNOLOGIES: Weiss Yourman Commences Securities Suit In S.D. NY
ICG COMMUNICATIONS: Pomerantz Haudek Lodges Colorado Securities Suit
INDIANA UNIVERSITY: Bob Knight Ouster Violated Open Meetings Law
LOS ALAMOS: Laboratory Proposes $9.5M To Settle Autopsy-Related Suit
METROMEDIA FIBER: Zwerling Schachter Initiates NY Securities Suit
NETZERO INC.: Wolf Haldenstein Initiates Securities Suit in S.D. NY
NORTEL NETWORKS: Pomerantz Haudek Commences E.D. NY Securities Suit
OPENTV CORPORATION: Cauley Geller Commences S.D. NY Securities Suit
PROTON ENERGY: Marc S. Henzel Commences Securities Suit in S.D. NY
PURCHASEPRO.COM: Wolf Haldenstein Initiates Securities Suit in Nevada
SCIQUEST.COM: Cauley Geller Commences Securities Suit in S.D. NY
SCIQUEST.COM: Schiffrin Barroway Initiates S.D. NY Securities Suit
TAP PHARMACEUTICAL: Settlement May Set Precedent For Damages in Suit
HEALTHEON WEBMD: Wolf Haldenstein Initiates S.D. NY Securities Suit
WORLWIDE EXCEED: Wolf Haldenstein Initiates S.D. NY Securities Suit
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2THEMART.COM: Weiss Yourman Commences Securities Suit in S.D. NY
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Weiss & Yourman has filed a class action lawsuit in on behalf of
purchasers of 2TheMart.Com Inc. (OTC:TMRT) common stock between January
19, 1999 and August 26, 1999. The suit, filed in the United States
District Court for the Southern District of New York, names the
Company, Steven W. Rebeil and Dominic J. Magliarditi as defendants.
The Complaint charges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934 and Rule 10-b(5). The action
arises from alleged damages incurred by the Class as a result of a
scheme and common course of conduct by defendants who operated fraud
and deceit on the class during the class period. The alleged
Defendants' scheme included rendering false and misleading statements
and/or omissions concerning the present and future financial condition
and business prospects of the Company, as well as the financial
benefits that would result to 2TheMart and its shareholders
2TheMart is an Internet based electronic commerce company, which claims
to be developing an auction web site in which parties will be brought
together to buy and sell a variety of goods. Once fully functional,
2TheMart web site users will be able to browse through all items in a
fully automated, topically arranged online service that is expected to
be available 24 hours a day, seven days a week.
BROCADE COMMUNICATIONS: Marc Henzel Files Securities Suit in S.D. NY
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The Law Firm of Marc S. Henzel lodged a class action lawsuit in the
United States District Court for the Southern District of New York, on
behalf of purchasers of Brocade Communication Systems, Inc. (NASDAQ:
BRCD) common stock between May 24, 1999 and July 17, 2001, inclusive.
The complaint alleges that defendants violated the federal securities
laws by selling Brocade common stock pursuant to the May 24, 1999 IPO
without disclosing to investors that some of the underwriters in the
offering had solicited and received excessive and undisclosed
commissions from certain investors. The complaint alleges that, in
exchange for the excessive commissions, members of the underwriting
group allocated Brocade shares to customers at the IPO price of $19 per
share.
To receive the allocations at $19, the underwriters' brokerage
customers allegedly 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 Brocade stock rocketed upward was intended to drive
Brocade's share price up to artificially high levels.
This artificial price inflation, the complaint alleges, enabled both
the underwriters and their customers to reap enormous profits by buying
stock at the $19 IPO price and then selling it later for a profit at
inflated aftermarket prices, which rose as high as $45.25.
Rather than allowing their customers to keep their profits from the
IPO, the complaint alleges, the underwriters required their customers
to ``kick back'' some of their profits in the form of secret
commissions.
These secret commission payments were sometimes calculated after the
fact based on how much profit each investor had made from his or her
IPO stock allocation.
The complaint further alleges that defendants violated the Securities
Act of 1933 because the Prospectus filed with the SEC contained
material misstatements regarding the commissions that the underwriters
would derive from the IPO transaction and failed to disclose the
additional commissions and the scheme discussed above.
For further information, contact Marc S. Henzel by Mail: 210 West
Washington Square, Philadelphia, PA 19106 by Phone: 215.625.9999 or
888.643.6735 by Fax: 215.440.9475 or by E-Mail: mhenzel182@aol.com
BUY.COM: Marc Henzel Commences Securities Fraud Suit in S.D. NY
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The Law Firm of Marc S. Henzel filed a class action in the United
States District Court, Southern District of New York on behalf of
purchasers of the securities of Buy.com, Inc. (NASDAQ: BUYX) between
February 7, 2000 and December 6, 2000, inclusive.
The action is against defendants:
(1) Buy.com, Inc.;
(2) Merrill Lynch, Pierce, Fenner & Smith Incorporated;
(3) Bear Stearns & Co., Inc.;
(4) FleetBoston Robertson Stephens, Inc.;
(5) Goldman Sachs & Co.;
(6) Salomon Smith Barney, Inc.;
(7) Gregory J. Hawkins; and
(8) Mitch C. Will.
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 February 7, 2000, the Company commenced an initial public offering
of 14,000,000 of its shares of common stock, at an offering price of
$13 per share.
In connection therewith, the Company 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 that:
(i) the underwriters had solicited and received excessive and
undisclosed commissions from certain investors in exchange for
which the underwriters allocated to those investors material
portions of the restricted number of Company shares issued in
connection with the IPO; and
(ii) the underwriters had entered into agreements with customers
whereby the underwriters agreed to allocate Company shares to
those customers in the IPO in exchange for which the customers
agreed to purchase additional shares in the aftermarket at
pre-determined prices.
For further information, contact Marc S. Henzel by Mail: 210 West
Washington Square, Philadelphia, PA 19106 by Phone: 215.625.9999 or
888.643.6735 by Fax: 215.440.9475 or by E-Mail: mhenzel182@aol.com
CLARENT CORPORATION: Weiss Yourman Lodges Securities Suit in S.D. NY
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Weiss & Yourman raised a class action complaint on behalf of all
persons who acquired Clarent Corporation (NASDAQ:CLRN) securities
between April 19, 2001 and September 4, 2001, inclusive.
The suit was filed in the United States District Court for the Southern
District of New York against the Company and:
(1) Credit Suisse First Boston Corporation,
(2) BancBoston Robertson Stephens, Inc.,
(3) Jerry Shaw-Yau Chang,
(4) Richard J. Heaps and
(5) Michael F. Vargo.
The complaint alleges that the defendants violated the Securities
Exchange Act of 1934 by filing with, and reporting to the SEC,
materially false and misleading financial statements concerning the
Company's financial accounting for the first half of 2001.
On September 4, 2001, the Company issued a press release stating that
they have discovered information suggesting that the Company's
previously reported revenues for the first and second quarters of
fiscal 2001 may have been materially overstated. In addition, the
Company now believes its revenues for the second half of fiscal 2001
and for fiscal 2002 will be substantially below previously anticipated
levels, and that the related losses will be significantly larger than
expected. In response to that announcement, Company stock trading was
halted.
For more information, contact Weiss & Yourman by Mail: 10940 Wilshire
Blvd, 24th flr, Los Angeles CA 90024 by Phone: (310) 209-2348 or 1-800-
437-7918 (toll-free) by Fax: (310)209-2348 or by E-mail:
wyinfo@wyca.com
COMDISCO INC.: Pomerantz Haudek Lodges Securities Suit in N.D. IL
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Pomerantz Haudek Block Grossman & Gross LLP filed a class action
lawsuit against Comdisco, Inc. (NYSE: CDO) on behalf of all persons or
entities who purchased the common stock of Comdisco during the period
between January 25, 2000 through October 3, 2000, inclusive.
The case was filed in the United States District Court for the Northern
District of Illinois, Eastern Division and names as defendants:
(1) The Company;
(2) Nicholas K. Pontikes, President/Chief Executive Officer;
(3) John J. Vosicky, Chief Financial Officer/Executive Vice
President
The Complaint alleges that Comdisco violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934. The Company allegedly issued
materially false and misleading statements with regard to Prism
Communications Services Subsidiary, which caused the Company's stock
price to be artificially inflated. The Company repeatedly issued
positive statements with respect to Prism's ability to expand into new
markets and broaden its customer base.
However, it is alleged that the Company did not disclose:
(i) that Prism suffered from a multitude of negative factors,
including information that Prism was experiencing significant
difficulties in dealing with incumbent local exchange carriers
which were slow to provide Prism access to their networks,
(ii) that Prism was experiencing intense competition from
established telecommunications companies who were lowering
prices in order to garner market share, and
(iii) that Prism had not been successful in its expansion into new
geographic markets nor in its attempts at an increased
presence within existing markets.
On October 3, 2000, the Company shocked the market when it announced
that it would cease funding Prism and write down its Prism investment,
which amounted to $350 million.
As a result of this announcement, the price of the Company's common
stock dropped 23% in one day, from $17.56 per share to $13.37 per
share. This constituted a 66% drop from $53 per share, reached on March
9, 2000. In addition, the principal debt-rating agencies for corporate
debentures all lowered their ratings on the Company's debt securities.
The Complaint further alleges that prior to the disclosure about
Comdisco, Company insiders sold $10 million of their personally held
stock.
The Company also launched an initial public offering for a tracking
stock for another business unit, and completed a $500 million 9.5%
Senior Note offering on favorable terms.
Thereafter, on December 21, 2000, Comdisco announced the resignation of
Nicholas K. Pontikes as President and Chief Executive Officer of the
Company.
For more information, contact Andrew G. Tolan by Phone: 1-888-4-POMLAW
(1-888-476-6529) by E-mail: agtolan@pomlaw.com or visit the firm's
Website: www.pomerantlaw.com. Those who inquire by e-mail are
encouraged to include their mailing address and voice telephonic
number.
COMMTOUCH SOFTWARE: Weiss Yourman Commences N.D. CA Securities Suit
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Weiss and Yourman initiated a class action lawsuit against Commtouch
Software Ltd. (NASDAQ:CTCH) and certain officers in United States
District Court for the Northern District of California. The suit was
filed on behalf of shareholders of the Company who acquired their
shares between April 19, 2000 and February 13, 2001.
The Complaint charges that defendants violated federal securities laws
by misstating its financials for the first three quarters of 2000. On
February 14, 2001, Commtouch admitted that these financial statements
contained accounting irregularities and that Commtouch expects to
restate its revenues and net loss for these three quarters and adjust
revenues downwards by $4.4 million. This news caused Commtouch's shares
to fall roughly 45%, resulting in substantial damage to the Class.
For more information, contact Weiss & Yourman by Mail: 10940 Wilshire
Blvd, 24th flr, Los Angeles CA 90024 by Phone: (310) 209-2348 or 1-800-
437-7918 (toll-free) by Fax: (310)209-2348 or by E-mail:
wyinfo@wyca.com
CONNECTICUT: Long Waiting List Spurs Advocacy Group To File Suit
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The state of Connecticut faces a class action lawsuit claiming
violations of Medicaid and Americans With Disabilities laws by leaving
people in need of residential placement and services on a long waiting
list.
Arc/CT, an advocacy group for the mentally retarded and their families,
filed the suit which also names as defendants:
(1) Peter H. O'Meara, state commissioner of Mental Retardation,
and
(2) Patricia A. Wilson-Coker, commissioner of Social Services.
Arc/CT director Peg Dignotti asserts almost 16,000 mentally retarded
people are on the state's waiting list.
Some of those individuals are living in institutions and waiting for
community placement; others are living with parents or other caregivers
waiting for an open spot.
"These people are going to be in crisis any day now," Dignoti said.
"Having a parent go to a nursing home or drop dead on the kitchen floor
is not the way plans should be made."
Arc/CT and the families of 10 individuals on the waiting lists filed
the class-action lawsuit in U.S. The lawsuit alleges that keeping
individuals on a waiting list for years denies them their rights under
federal law for the services that integrate people with disabilities
into communities. Arc/CT has lobbied the state General Assembly for
more funding to expand services and estimates the money allocated this
year to mental retardation won't be enough to cover the 200 emergency
placements that happen each year.
Both the Department of Mental Retardation and the Department of Social
Services said they received the complaint but had not had a chance to
review the lawsuit. The Department of Mental Retardation has not had a
chance to consult with the attorney general, said DMR chief of staff
Martin Zito.
Numerous other states, including Virginia, West Virginia, Florida, New
Mexico and Washington, face similar lawsuits over lengthy waiting
lists.
DELTATHREE INC.: Marc Henzel Commences Securities Suit in S.D. NY
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The Law Firm of Marc S. Henzel initiated a class action lawsuit in the
United States District Court for the Southern District of New York, on
behalf of purchasers of deltathree, Inc. (NASDAQ: DDDC) common stock
between November 22, 1999 and June 12, 2001, inclusive.
The complaint names as defendants:
(1) The Company,
(2) Amos Sela,
(3) Mark J. Hirschhorn,
(4) Elie C. Wurtman,
(5) Jacob A. Davidson,
(6) Itzhak Fisher,
(7) Nir Tarlovsky,
(8) Donald R. Shassian,
(9) Jacob Z. Schuster,
(10) Avery S. Fischer,
(11) Lehman Brothers Inc.,
(12) Merrill Lynch, Pierce, Fenner & Smith Incorporated,
(13) U.S. Bancorp Piper Jaffray Inc.,
(14) Lazard Freres & Co. LLC,
(15) Fidelity Capital Markets, a Division of National Financial
Services Corporation
The suit alleges the defendants violated the federal securities laws by
selling the Company's common stock pursuant to the November 22, 1999
IPO without disclosing to investors that the underwriters in the
offering had received excessive and undisclosed commissions from
certain investors. The complaint alleges that, in exchange for the
excessive commissions, the underwriters allocated Company shares to
customers at the IPO price of $15.00 per share.
To receive the allocations at $15.00, the underwriters' brokerage
customers allegedly 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 Company stock rocketed upward was intended to drive
Company's shares price up to artificially high levels.
This artificial price inflation enabled both the underwriters and their
customers to buy stock at the $15.00 IPO price and then sell it later
for a profit at inflated aftermarket prices. Stock prices rose as high
as $32 during its first day of trading and subsequently reached a peak
of $62 3/8 on February 7, 2000. Rather than allowing their customers to
keep their profits from the IPO, the complaint alleges, the
underwriters required their customers to ``kick back'' some of their
profits in the form of secret commissions. These secret commission
payments were sometimes calculated after the fact, based on how much
profit each investor had made from his or her IPO stock allocation.
The complaint further alleges that defendants violated the Securities
Act of 1933 because the Prospectus filed with the SEC contained
material misstatements regarding the commissions that the underwriters
would derive from the IPO transaction and failed to disclose the
additional commissions and the scheme discussed above.
For further information, contact Marc S. Henzel by Mail: 210 West
Washington Square, Philadelphia, PA 19106 by Phone: 215.625.9999 or
888.643.6735 by Fax: 215.440.9475 or by E-Mail: mhenzel182@aol.com
FREEMARKETS INC.: Cauley Geller Commences Securities Suits in S.D. NY
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Cauley Geller Bowman & Coates, LLP initiated a class action on behalf
of purchasers of FreeMarkets, Inc. (NASDAQ:FMKT) securities during the
period between December 9, 1999 and December 6, 2000, inclusive. The
suit was filed in the U.S. District Court for the Southern District of
New York and charges the Company and underwriters Goldman Sachs & Co.
and Morgan Stanley & Co., Incorporated with violations of Section 10(b)
of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder.
In 1999, the Company commenced an initial public offering of 3.6
million of its shares of common stock at an offering price of $48 per
share.
In connection therewith, the Company 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 Company shares issued in
connection with the IPO; and
(ii) defendants had entered into agreements with customers whereby
defendants agreed to allocate Company shares to those
customers in the IPO in exchange for which the customers
agreed to purchase additional shares in the aftermarket at
pre-determined prices.
For further details, contact Jackie Addison, Sue Null or Charlie
Gastineau by Mail: P.O. Box 25438, Little Rock AR 72221-5438 by Phone:
1-888-551-9944 by E-mail: info@classlawyer.com or visit the firm's
Website: www.classlawyer.com
i2 TECHNOLOGIES: Weiss Yourman Commences Securities Suit In S.D. NY
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Weiss & Yourman filed a class action complaint on behalf of all persons
who acquired i2 Technologies, Inc. (NASDAQ: ITWO) securities between
January 9, 2001 and February 26, 2001, inclusive. The complaint, filed
in the U.S. District Court for the Southern District of New York,
charges the Company and certain officers and directors with violations
of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
The Company is a provider of supply chain management software used to
plan and schedule manufacturing and related logistics, from raw
materials procurement to customer delivery.
According to the complaint, Nike, Inc., which was a large customer of
i2, was riddled with problems due to the Company's software, putting
Nike's relationship with the Company, at risk. The complaint alleges
that defendants, who knew of these problems, did not disclose them to
the investing public, because the Company's business would have
suffered had the problems with Nike been revealed. Therefore, during
the class period, investors overpaid for shares of i2 stock that were
artificially inflated.
On February 26, 2001, after the close of the market, Nike issued a
press release revising its third quarter and fiscal 2001 earnings
because of "complications arising from the impact of implementing [its]
new demand and supply planning systems" which were developed by the
Company. Specifically, Nike was forced to reduce its shoe sales by $80-
$100 million because of problems that it had implementing a new i2
supply-chain management system which caused shortages of some products
and overstocking of others.
On June 1, 2001, the Court appointed Philip Anthony, Milson Lopes dos
Reis, Jack Chehebar, G.O. Morphew and Frederick W. Bradley as Lead
Plaintiffs in this action, and also appointed the law firms of Milberg,
Weiss, Bershad, Hynes & Lerach LLP and Johnson and Perkinson as Lead
Counsel.
On August 3, 2001, plaintiffs filed their Amended and Consolidated
Class Action Complaint against defendants i2 Technologies, Inc., Sanjiv
S. Sidhu, Gregory A. Brady and William M. Beeche
For more information, contact Weiss & Yourman by Mail: 10940 Wilshire
Blvd, 24th flr, Los Angeles CA 90024 by Phone: (310) 209-2348 or 1-800-
437-7918 (toll-free) by Fax: (310)209-2348 or by E-mail:
wyinfo@wyca.com
ICG COMMUNICATIONS: Pomerantz Haudek Lodges Colorado Securities Suit
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Pomerantz Haudek Block Grossman & Gross LLP initiated a class action
suit against ICG Communications, Inc. (Nasdaq: ICGX) and three of the
Company's senior executives. The case was filed in the United States
District Court for the District of Colorado on behalf of purchasers of
the common stock of ICG during the period between December 20, 1999 and
September 18, 2000, inclusive.
The Complaint charges that the Company and its executives violated
Sections 10(b) and 20 of the Securities Exchange Act of 1934 by
allegedly issuing a series of false and misleading statements.
These statements relate to information concerning, among other things,
the Company's revenue growth, equipment failures and technical
problems. It is further alleged that the Company falsely portrayed
itself as a rapidly growing provider of communications services which
had developed a stable and substantial customer base on the basis of
its purportedly superior customer service.
On September 18, 2000, the Company revealed to the market it's true
financial condition. The Company announced that it had experienced
serious customer service deficiencies, and that several customers had
dramatically scaled back on their commitments with the Company and some
were threatening to terminate their ties altogether. The Company
further revealed that the Company expected to report EBITDA of $17
million for 2000, as compared to its own estimate of $105 million made
a few weeks earlier. The following day, the Company further shocked the
market when it announced the resignations of its Chief Executive
Officer and two of its directors.
Following these announcements, the price of the Company's common stock
fell 96% from its Class Period high of $39.00.
For more details, contact Andrew G. Tolan by Phone: 1-888-4-POMLAW (1-
888-476-6529) by E-mail: agtolan@pomlaw.com or visit the firm's
Website: www.pomlaw.com. Those who inquire by e-mail are encouraged to
include their mailing address and voice telephonic number.
INDIANA UNIVERSITY: Bob Knight Ouster Violated Open Meetings Law
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Former Indiana University coach Bob Knight said in an affidavit filed
Wednesday that he was interested in knowing more about the discussions
that led to his firing as basketball coach last year.
"I am as interested as anyone in discovering the exact conversations
held between (university president) Myles Brand and the trustees of
Indiana University," Knight said in the affidavit.
The overall theme of Knight's affidavit is that the allegations of
inappropriate behavior leveled against him by the university were false
and that Brand wanted the coach to leave. The affidavit is part of a
class action lawsuit filed against the university by a group of alumni
and fans claiming that the university violated open meetings law when
it fired the Hall of Fame Coach. Brand met with trustees in small
groups on Sept. 9, 2000, and announced Knight's firing the next day,
saying Knight had violated a "zero-tolerance" behavior policy.
Though a judge in the case has ruled that it was Brand's right as
president to fire Knight, the coach said his contract never gave the
president that authority, and if it had, he never would have agreed.
University spokeswoman Susan Dillman, said the school found nothing new
in Knight's affidavit.
"We do disagree with his allegation and his conclusions with regard to
his dismissal. However, this is before the courts and so there's not a
lot more we can say," Dillman said.
The university contends the Sept. 9 meetings did not trigger the open
meetings law because fewer than half of the nine trustees attended any
one meeting with Brand.
Knight, who now coaches at Texas Tech, was not available for comment
Wednesday. The Texas Tech athletic department said Knight was traveling
Wednesday. Knight rejects claims that he verbally abused a female
university official and failed to meet a number of required speaking
engagements. He said two high-ranking IU officials were unable to
explain the concept of the "zero tolerance" policy.
LOS ALAMOS: Laboratory Proposes $9.5M To Settle Autopsy-Related Suit
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The Los Alamos National Laboratory proposed a $9.5 million settlement
to more than 400 families who sued the laboratory for conducting secret
experiments on their relatives' cadavers.
Katie Kelley Mareau filed the suit in 1996 after her father, Cecil
Kelley, died in 1959 after being exposed to a plutonium mixture at the
laboratory. The lawsuit alleged that neither Mareau nor her mother knew
when her father's body was buried that it was missing eight pounds of
organs, tissues and bones.
Lawyers for the lab and the plaintiffs agree that between 1959 and 1980
doctors at the Los Alamos hospital provided lab scientists with tissue
samples from locally autopsied bodies for study. Scientists were to
determine how much radiation lab workers and area residents had
absorbed, and how their bodies processed it.
Families who signed autopsy release forms were not told of the study,
nor were they told snippets of their relatives would end up in the
hands of government scientists, the plaintiffs allege. Mareau said in a
statement, "I am very glad that our efforts have been successful and
justice has been achieved."
The University of California, which runs the laboratory, has agreed to
pay $8 million and Banner Health System, which owns Los Alamos Medical
Center, has offered to pay $1.5 million, said lawyer John Bienvenu.
The settlement awaits court approval and a hearing is scheduled for
Jan. 11, 2002.
The laboratory issued a statement Wednesday saying "express consent to
use the autopsy tissue may not have been obtained from next of kin."
"While the program was conducted with the best of intentions, and
within the legal and ethical standards of the time, if initiated today
it would be conducted under current informed consent practices that are
more formal and highly detailed," the laboratory said.
METROMEDIA FIBER: Zwerling Schachter Initiates NY Securities Suit
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Zwerling, Schachter & Zwerling, LLP commenced a class action lawsuit
in the United States District Court for the Southern District of New
York. The suit was filed on behalf of all persons who purchased the
common stock of Metromedia Fiber Network, Inc. (NASDAQ:MFNX) between
January 8, 2001 and July 2, 2001, inclusive.
The complaint alleges that defendants 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.
Specifically, defendants issued press releases and made statements
highlighting Metromedia's receipt of a $350 million credit facility
from Citicorp USA, Inc. which would enable Metromedia to complete the
construction of an extensive fiber optic network. These statements were
materially false and misleading because defendants failed to disclose
that:
(1) the Citicorp credit facility was contingent on the receipt of
additional commitments from other lenders;
(2) that Metromedia was experiencing difficulty obtaining such
commitments given the distressed market for telecom companies;
(3) the further development of the Company's fiber optic network
would be significantly delayed without obtaining the credit
facility; and
(4) based on the foregoing, defendants' statements about the
Company and its prospects were lacking in a reasonable basis.
Finally, on July 2, 2001, Metromedia revealed that the commitment
letter from Citicorp was subject to the receipt of commitments from
other lenders in the amount of $287.5 million. In response to this
announcement, shares of Metromedia's stock closed at $1.95 per share on
July 2, 2001, significantly below the class period high of $19.06
reached on January 19, 2001.
For more details, contact Jason Grant or Don Lanier by Phone: 800-721-
3900 by E-mail: dlanier@zsz.com or visit the firm's Website:
www.zsz.com
NETZERO INC.: Wolf Haldenstein Initiates Securities Suit in S.D. NY
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Wolf Haldenstein Adler Freeman & Herz LLP commenced a class action on
behalf of all purchasers of NetZero, Inc. (NASDAQ: NZRO) securities
pursuant to a prospectus dated September 23, 1999 during the period
from September 24, 1999 through and including September 28, 2000.
The suit was filed in the U.S. District Court for the Southern District
of New York against:
(1) NetZero, Inc;
(2) Mark R. Goldston, Chairman, Chief Executive Officer and a
director;
(3) Charles S. Hilliard, Senior Vice President and Chief Financial
Officer;
(4) Ronald T. Burr, President and a director;
(5) The Goldman Sachs Group, Inc.;
(6) Salomon Smith Barney, Inc.; and
(7) BancBoston Robertson Stephens, Inc.
The complaint alleges that defendants violated Sections 11, 12(a) and
15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
On September 24, 1999 the Company commenced an initial public offering
of 10 million of its shares of common stock at an offering price of
$16.00 per share.
In connection with the IPO, NetZero filed a registration statement,
which incorporated a prospectus with the SEC. The complaint charges
that the Prospectus was materially false and misleading because it
failed to disclose, among other things, that:
(i) Goldman Sachs, Robertson Stephens and Salomon had solicited
and received excessive and undisclosed commissions from
certain investors in exchange for which Goldman Sachs,
Robertson Stephens and Salomon allocated to those investors
material portions of the restricted number of Company shares
issued in connection with the IPO;
(ii) Goldman Sachs, Robertson Stephens and Salomon had entered into
agreements with customers whereby Goldman Sachs, Robertson
Stephens and Salomon agreed to allocate Company shares to
certain customers in the IPO in exchange for which the
customers agreed to purchase additional shares in the
aftermarket at pre-determined prices.
For more information, contact Fred Taylor Isquith, Gregory M. Nespole,
Michael Miske or George Peters by Mail: 270 Madison Avenue, New York,
New York 10016 by Phone: (800) 575-0735 by E-mail:
classmember@whafh.com or visit the firm's website at www.whafh.com. All
e-mail correspondence should make reference to NetZero.
NORTEL NETWORKS: Pomerantz Haudek Commences E.D. NY Securities Suit
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Pomerantz Haudek Block Grossman & Gross LLP has filed a class action
lawsuit against Nortel Networks Corporation (NYSE: NT) on behalf of all
purchasers of the common stock of Nortel during the period between
November 1, 2000 through February 15, 2001, inclusive.
The suit also names as defendants:
(1) John A. Roth, President/CEO and Director,
(2) William F. Connor, President of eBusiness Solutions,
(3) Chahram Bolouri, President of Global Operations,
(4) Frank Dunn, Chief Executive Officer,
The case was filed in the United States District Court for the Eastern
District of New York. The Complaint alleges that the Company violated
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
The Company allegedly issued materially false and misleading financial
information concerning the Company's publicly reported revenues and
earnings. As a result of these false and misleading statements, the
Company's common stock traded at artificially inflated prices during
the Class Period.
As alleged in the Complaint, the Company touted strong revenue and
earnings guidance for first quarter and fiscal year 2001. However,
Nortel executives knew that it was experiencing a substantial shortfall
in sales and earnings due to decreased orders from its customers. In
particular, on November 1, 2000, Nortel announced guidance on the
Company's revenues and earnings for 2000 and 2001. Nortel stated at
that time that it would experience strong growth in revenues and
earnings, and sought to increase its market share. The Company
reiterated these claims in a statement issued on December 14, 2000.
On January 18, 2001, Nortel issued a further announcement reporting
record results for the fourth quarter and fiscal year 2000. The Company
projected strong market demand in their target industry segments and
that they would gain further market share. In particular, Frank Dunn
predicted that the Company would achieve 30% growth in revenues and
earnings per share in 2001.
Thereafter, on February 15, 2001, after the close of trading, the
Company stunned the market when it issued new earnings and revenue
guidance, drastically lowering first quarter and fiscal year 2001 sales
forecasts by 22% and slashing revenue growth by 50%. As a direct
result, the price of Nortel's stock plummeted as much as 36% to close
at $22.02 on February 16, 2001, erasing nearly $33 billion in market
capitalization.
For more details, contact Andrew G. Tolan by Phone: 888-4-POMLAW (888-
476-6529) by E-mail: agtolan@pomlaw.com or visit the firm's Website:
www.pomerantzlaw.com
OPENTV CORPORATION: Cauley Geller Commences S.D. NY Securities Suit
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The Law Firm of Cauley Geller Bowman & Coates, LLP lodged a class
action in the United States District Court for the Southern District of
New York on behalf of purchasers of OpenTV Corporation (NASDAQ:OPTV-
news) securities during the period between November 22, 1999 and
December 6, 2000, inclusive.
The complaint names as defendants:
(1) The Company,
(2) Merrill Lynch, Pierce Fenner & Smith Inc.,
(3) Goldman Sachs & Co.,
(4) Jan Steenkamp and
(5) Randall S. Livingston
The suit alleges the defendants violated 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 22, 1999, the Company commenced an initial public offering of
7.5 million of its shares of common stock at an offering price of
$20.00 per share.
In connection therewith, the Company 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 (Merrill Lynch and Goldman Sachs)
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 Company shares issued in
connection with the IPO; and
(ii) the Underwriter Defendants had entered into agreements with
customers whereby the Underwriter Defendants agreed to
allocate Company shares to those customers in the IPO in
exchange for which the customers agreed to purchase additional
shares in the aftermarket at pre-determined prices.
For further details, contact Jackie Addison, Sue Null or Charlie
Gastineau by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone:
1-888-551-9944 by E-mail: info@classlawyer.com or visit the firm's
Website: www.classlawyer.com
PROTON ENERGY: Marc S. Henzel Commences Securities Suit in S.D. NY
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The Law Firm of Marc S. Henzel filed a class action lawsuit in the U.S.
District Court, Southern District of New York, on behalf of purchasers
of the securities of Proton Energy Systems Inc. (NASDAQ: PRTN) between
September 28, 2000 and December 6, 2000, inclusive.
The action cites as defendants:
(1) Proton Energy Systems, Inc;
(2) Morgan Stanley & Co. Inc.;
(3) Credit Suisse First Boston Corp.;
(4) Salomon Smith Barney Inc.;
(5) Walter W. Schroeder;
(6) John A. Glidden;
(7) Trent M. Molter; and
(8) Robert W. Shaw, Jr.;
(9) Morgan Stanley;
(10) Credit Suisse First Boston; and
(11) Salomon Smith Barney
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 September 28, 2000,
the Company commenced an initial public offering of 7,000,000 of its
shares of common stock, at an offering price of $17 per share.
In connection therewith, Proton Energy 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 underwriters 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 Company shares
issued in connection with the IPO; and
(ii) the Underwriter Defendants had entered into agreements with
customers whereby the Underwriter Defendants agreed to
allocate Company shares to those customers in the IPO in
exchange for which the customers agreed to purchase additional
shares in the aftermarket at pre-determined prices.
For further information, contact Marc S. Henzel by Mail: 210 West
Washington Square, Philadelphia, PA 19106 by Phone: 215.625.9999 or
888.643.6735 by Fax: 215.440.9475 or by E-Mail: mhenzel182@aol.com
PURCHASEPRO.COM: Wolf Haldenstein Initiates Securities Suit in Nevada
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Wolf Haldenstein Adler Freeman & Herz LLP commenced a class action
lawsuit on behalf of all purchasers of PurchasePro.com, Inc. (NASDAQ:
PPRO) securities during the period between July 19, 2000 and April 25,
2001 inclusive.
The suit was filed in the United States District Court for the District
of Nevada against these defendants:
(1) the Company;
(2) Charles E. Johnson, Jr., founder, Chairman, and Chief
Executive Officer;
(3) James P. Clough, Senior Executive Vice President Corporate
Operations and Development and Chief Financial Officer;
(4) John G. Chiles, member of the Board of Directors of the
Company;
(5) Christopher Carton, acting President and Chief Operating
Officer
The complaint alleges that defendants violated sections 10(b) and 20(a)
of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. Specifically, the complaint alleges:
(i) that the defendants made numerous positive representations
regarding the Company, while knowing and withholding that the
Company was improperly recognizing revenue in order to
artificially inflate the value of Company securities for their
own personal benefit.
(ii) that since the disclosure of these adverse facts would have
caused a severe collapse in the price of the Company's
securities, defendants set out on a scheme to artificially
inflate Company's stock price so that they could maintain
their lucrative positions and earn ill-gotten gains through
their insider trading practices.
As a result of defendants' false statements, misrepresentations, and
omissions, the price of the Company's securities was artificially
inflated.
In fact, the Company's securities closed as high as $44.95 on September
22, 2000, and were maintained at an artificially inflated level until
the Company disclosed its dismal financial condition on or about April
25, 2001. These disclosures caused the stock price of the Company to
plummet approximately 35% in one day from $6.22 to $4.05 on April 25,
2001, on volume of over 11 million shares.
Additional cases were filed on behalf of investors. On June 25, 2001,
motions were made for the appointment of Lead Plaintiff and Counsel.
The court has yet to rule on these motions.
For more information, contact Fred Taylor Isquith, Gregory M. Nespole,
Michael Miske or George Peters by Mail: 270 Madison Avenue, New York,
New York 10016 by Phone: (800) 575-0735 by E-mail:
classmember@whafh.com or visit the firm's Website: www.whafh.com. All
e-mail correspondence should make reference to PurchasePro.
SCIQUEST.COM: Cauley Geller Commences Securities Suit in S.D. NY
----------------------------------------------------------------
The Law Firm of Cauley Geller Bowman & Coates, LLP raised a class
action in the United States District Court for the Southern District of
New York on behalf of purchasers of SciQuest.com, Inc. (NASDAQ:SQST)
securities during the period between November 19, 1999 and December 6,
2000, inclusive.
The complaint names as defendants:
(1) the Company,
(2) BancBoston Robertson Stephens,
(3) Credit Suisse First Boston Corporation,
(4) Goldman Sachs & Co. and
(5) Merrill Lynch, Pierce, Fenner & Smith Incorporated
The suit alleges violations of Section 10(b) of the Securities Exchange
Act of 1934 and Rule 10b-5 promulgated thereunder. On or about November
19, 1999, SciQuest.com commenced an initial public offering of 7.5
million of its shares of common stock at an offering price of $16 per
share.
In connection therewith, SciQuest.com 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 SciQuest.com shares
issued in connection with the SciQuest.com IPO; and
(ii) defendants had entered into agreements with customers whereby
defendants agreed to allocate SciQuest.com shares to those
customers in the SciQuest.com IPO in exchange for which the
customers agreed to purchase additional SciQuest.com shares in
the aftermarket at pre-determined prices.
For more information, contact Jackie Addison, Sue Null or Charlie
Gastineau by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone:
1-888-551-9944 by E-mail: info@classlawyer.com or visit the firm's
Website: www.classlawyer.com
SCIQUEST.COM: Schiffrin Barroway Initiates S.D. NY Securities Suit
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Schiffrin & Barroway, LLP commenced a class action lawsuit in the
United States District Court for the Southern District of New York.
The suit was filed on behalf of all purchasers of the common stock of
SciQuest.com, Inc. (Nasdaq: SQST) from November 19, 1999 through
December 6, 2000, inclusive.
The suit names as defendants:
(1) BancBoston Robertson Stephens, Inc.,
(2) Credit Suisse First Boston Corp.,
(3) Goldman Sachs & Co., Inc. and
(4) Merrill Lynch, Pierce, Fenner & Smith Incorporated.
On or about November 19, 1999 the Company commenced an initial public
offering of 7,500,000 of its shares of common stock at an offering
price of $16 per share.
In connection therewith, SciQuest.com filed a registration statement,
which incorporated a prospectus with the SEC. The complaint 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 SciQuest.com shares
issued in connection with the SciQuest.com IPO; and
(ii) defendants had entered into agreements with customers whereby
defendants agreed to allocate SciQuest.com shares to those
customers in the SciQuest.com IPO in exchange for which the
customers agreed to purchase additional SciQuest.com 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 Marc A. Topaz or Stuart L. Berman by
Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone:
1-888-299-7706 (toll free) or 1-610-667-7706 by E-mail: info@sbclasslaw
or visit the firm's Website: www.sbclasslaw.com
TAP PHARMACEUTICAL: Settlement May Set Precedent For Damages in Suit
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The $875 million settlement TAP Pharmaceuticals Products Inc. struck
with the government on Wednesday may set a precedent in class action
suits.
The suit accused the company of fraudulent pricing and marketing of its
prostate cancer drug Lupron. The suit makes claims under the Racketeer
Influenced and Corrupt Organizations Act in connection with the
marketing of Lupron. The suit purports to be a class action on behalf
of all Medicare and Medicaid who paid the twenty percent co-payment
cost of Lupron.
The Illinois-based company agreed to plead guilty to a conspiracy to
violate the Prescription Drug Marketing Act and to pay a $290 million
criminal fine, after a four-year government investigation. The focus of
the government's investigation was whether the Company set an average
wholesale price for Lupron that exceeded the average price paid by
doctors, which would effectively inflate government drug
reimbursements.
The settlement agreement resolves both criminal and civil charges
against the company and may damage awards in the class action suit
filed in Boston last May.
Philadelphia attorney Jeffrey Kodroff says, "This settlement helps.
(the Company) plead guilty and the government recovered money based on
the fact that Medicare and Medicaid overpaid for Lupron. In the same
way the government overpaid, the patients overpaid." He further said
that the settlement opens the door to ".what I hope will be
discussions."
The Company was not available to comment on the class action suit.
HEALTHEON WEBMD: Wolf Haldenstein Initiates S.D. NY Securities Suit
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Wolf Haldenstein Adler Freeman & Herz LLP commenced a class action
lawsuit on behalf of purchasers of WebMD Corp. [NASDAQ: HLTH], formerly
known as Healtheon Corp., securities between February 10, 1999 and
December 6, 2000, inclusive. The suit was filed in the U.S. District
Court for the Southern District of New York against the Company certain
of its officers and directors, and its underwriters.
The complaint alleges that defendants violated the federal securities
laws by issuing and selling the Company's common stock pursuant to the
February 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 the Company's
shares to customers at the IPO price.
To receive the allocations at the IPO price, the underwriters'
brokerage customers allegedly 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 Company stock rocketed upward was
intended to drive the Company'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 Fred Taylor Isquith, Gustavo Bruckner,
Michael Miske or George Peters by MailL: 270 Madison Avenue, New York,
New York 10016 by Phone: (800) 575-0735 by E-mail:
classmember@whafh.com or visit the firm's Website: www.whafh.com. All
e-mail correspondence should make reference to WebMD.
WORLWIDE EXCEED: Wolf Haldenstein Initiates S.D. NY Securities Suit
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Wolf Haldenstein Adler Freeman & Herz LLP commenced a class action
lawsuit on behalf of all purchasers of Worldwide Xceed Group, Inc.
(NASDAQ: XCED) securities during the period between November 29, 1999
and November 15, 2000.
The suit was filed in the United States District Court for the Southern
District of New York against:
(1) the Company;
(2) Scott A. Mednick, co-Chairman of the Board of Directors, until
his resignation in December 15, 2000;
(3) Werner G. Haase, co-Chairman of the Board of Directors and
Chief Executive Officer from March 2000, until his resignation
in August 2000;
(4) Nurit K. Haase, Senior Vice President and Secretary, until her
resignation in July 31, 2000;
(5) John Gandolfo, Senior Vice President and Chief Financial
Officer, until his resignation on September 29, 2000; and
(6) William Zabit, President, until March 2000
The complaint alleges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5
promulgated thereunder. The Company allegedly issued a series of
material misrepresentations to the market during the Class Period,
thereby artificially inflating the price of the Company's securities.
Specifically, the Complaint alleges that defendants filed quarterly and
annual reports with the Securities and Exchange Commission that
contained financial statements which were materially false and
misleading.
In its filings, the Company repeatedly overstated its revenues and
understated its losses by, among other things:
(i) underreporting its allowance for uncollectible accounts
receivable;
(ii) underreporting and miscomputing the amortization of intangible
assets relating to workforce, customer base, technical know-
how and industry contacts in connection with its acquisition
of Zabit & Associates, Inc.;
(iii) failing to review, identify and/or take the appropriate charge
for the impairment of its long-lived assets; and
(iv) using the "percentage of completion" method of accounting for
reporting revenues for "fixed-price contracts" in violation of
GAAP;
As a result of this undisclosed conduct, the Company's stock was
trading at artificially inflated prices throughout the Class Period.
Additional cases were filed on behalf of shareholders. On April 30,
2001, motions were made for the appointment of Lead Plaintiff and
Counsel. The court has not yet ruled on these motions.
For more information, contact Fred Taylor Isquith, Gregory M. Nespole,
Michael Miske or George Peters by Mail: 270 Madison Avenue, New York,
New York 10016 by Phone: (800) 575-0735 by E-mail:
classmember@whafh.com or visit the firm's Website: www.whafh.com. All
e-mail correspondence should make reference to Xceed.
*********
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
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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
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