/raid1/www/Hosts/bankrupt/CAR_Public/011023.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, October 23, 2001, Vol. 3, No. 207
Headlines
ADAMS LAND: Plaintiffs Withdraw Suit After Court Denies Certification
AMERICAN INDIANS:Court Asked To Strip Department Of Trust Fund Control
APPLE COMPUTER: Marc Henzel Commences Securities Suit In N.D. CA
B2B INTERNET: Bernstein Liebhard Commences Securities Suit in S.D. NY
CANADA: Judge Denies First Nations Lawsuit Class-Action Status
CARESCIENCE INC.: Levy Levy Lodges E.D. Pennsylvania Securities Suit
COMVERSE TECHNOLOGY: Stull Stull Commences Securities Suit In E.D. NY
DQE INC.: Stull Stull Commences Securities Suit In W.D. Pennsylvania
DQE INC.: Weiss Yourman Commences W.D. Pennsylvania Securities Suit
EXTREME NETWORKS: Wolf Haldenstein Commences S.D. NY Securities Suit
GENESISINTERMEDIA INC.: Schiffrin Barroway Files CA Securities Suit
GENESISINTERMEDIA INC.: Cauley Geller Lodges C.D. CA Securities Suit
GENESISINTERMEDIA INC.: Bernstein Liebhard Files CA Securities Suit
GEORGIA PACIFIC: Offers $22M To Settle Plant Explosion Suit
INTELLI-CHECK INC.: Denies Allegations in New Jersey Securities Suit
LOUDCLOUD INC.: Milberg Weiss Initiates Securities Suit in N.D. CA
NORTEL NETWORKS: Ontario Court Grants Certification To Employee Suit
PROVIDIAN FINANCIAL: Milberg Weiss Commences N.D. CA Securities Suit
SCIENTIFIC-ATLANTA INC.: Wolf Haldenstein Lodges GA Securities Suit
SHOPKO STORES: Schiffrin Barroway Lodges Securities Suit in E.D. WI
SHOPKO STORES: Cauley Geller Commences Securities Suit in E.D. WI
TELECORP PCS: Weiss Yourman Files Securities Suit in Delaware Court
TERADYNE INC.: Schiffrin Barroway Commences Securities Suit in MA
TERADYNE INC.: Cauley Geller Commences Massachusetts Securities Suit
UBS PAINEWEBBER: Court Approves Class Certification In Securities Suit
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ADAMS LAND: Plaintiffs Withdraw Suit After Court Denies Certification
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An Oklahoma Court refused to give class certification to the class
action suit filed against Adams Land & Cattle Corporation over cattle
feedlot operations in Broken Bow, Oklahoma.
Eleven area residents sued the Company in 1999, asserting that the
feedlot odors and dust affected the plaintiffs' health and quality of
life.
After the denial of class certification, the original plaintiffs
gradually dismissed themselves because of costly legal fees. The last
two plaintiffs withdrew last week.
Lawrence Adams, co-owner of the Adams Land & Cattle Co., expressed
satisfaction over the court ruling, saying in a written statement that,
"The lawsuit has been a dividing issue in the community, and we're glad
it's over."
Adams went on to say that the company "hope[s] the community will work
with us so that it may continue to enjoy the positive economic benefits
our company brings to Broken Bow." He pledged the company would work
to resolve community issues related to feedlot operations.
"We're working with the community," Adams said during a brief telephone
interview with The Independent. Adams said he is on a seven-member
local task force that was created this past June to study possible ways
to curb odors and dust from the feedlots.
The group has asked chemical companies to research treatment for
methane gas odors coming from the feedlots. The company and the city
are also considering the development of a natural barrier of trees
between the south feedlot and the city. The operation is an 85,000-
cattle feedlot about five miles south of Broken Bow.
AMERICAN INDIANS:Court Asked To Strip Department Of Trust Fund
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Attorneys in the class-action lawsuit for the 300,000 American Indians
against the government recently asked the U.S. District Court to strip
the U.S. Interior Department of control of royalties from Indian lands.
The department allegedly continues to mismanage hundreds of millions of
dollars, the Associated Press recently reported.
The court should appoint a third party receiver to fix the trust fund,
wrote plaintiffs' attorney Dennis Gingold in his motion filed in U.S.
District Court.
"Endless broken promises, chronic half-truths, outright lies to this
court and the fumbling paralysis of Interior Secretary Gale Norton and
other senior officials show the department can't correct the historical
mismanagement and is unfit to manage the money," wrote Gingold.
The plaintiffs' motion also asks the court to hold Norton, her
predecessor Bruce Babbit and 37 other current and former Interior and
Justice Department officials and attorneys in contempt of court with
the possibility of jail sentences.
Reports by two court-appointed watchdogs have spelled out Interior's
failures, noting that the Interior Department:
(1) has failed to make any progress toward the court-ordered
historical accounting;
(2) has knowingly misled the court about the status of trust
reform;
(3) destroyed and withheld evidence;
(4) failed to adequately protect whistleblowers;
(5) hindered the court's investigators; and
(6) failed to provide the necessary leadership
Interior spokeswoman Stephanie Hanna said that the Department continues
to believe that the department was the proper agency to implement trust
fund reform.
"It's a complicated situation and one that dates back a long time and
one that we're committed to carrying out carefully and to the best of
our ability," she said.
The government admits the accounts were mismanaged and much of the
money lost, stolen or never collected.
Roughly $500 million a year now flows through the trust accounts. An
estimated 1,000 of the individual trust accounts, worth about $11
million, belong to Alaska Natives.
APPLE COMPUTER: Marc Henzel Commences Securities Suit In N.D. CA
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The Law Office of Marc S. Henzel initiated a securities class action on
behalf of purchasers of Apple Computer Inc. (Nasdaq: AAPL) common stock
during the period between July 19, 2000 and Sept. 28, 2000.
The suit, filed in the United States District Court for the Northern
District of California, charges the Company and CEO Steve Jobs with
violations of the Securities Exchange Act of 1934.
The complaint alleges that on July 18-19, 2000, the Company introduced
its new Power Mac G4 Dual Processor, G4 Cube and iMac personal
computers.
The Company represented the products as exceptionally powerful, fast,
featuring exceptionally attractive designs and containing new and
revolutionary features.
At this time, the Company represented that the development of these new
products was completed, they were ready for mass production and would
be available in quantity very shortly.
The Company claimed this would result in their achieving strong revenue
and earnings per share (EPS) growth in its 4th Quarter 2000 (to end
September 30, 2000) and 2001.
As a result, the Company's stock climbed to a high of $64-1/8 in early
September 2000, when four top Company officers sold 370,000 shares of
their stock for $22 million.
Suddenly, just 20-25 trading days later, the Company shocked investors
by revealing a huge 4th Quarter 2000 revenue and EPS shortfall due to
very poor sales to its education market and poor consumer acceptance of
its new personal computer products.
These problems resulted in the accumulation of excessive inventories of
finished goods in the Company's distribution channel, the cancellation
of component part orders and incurred financial penalties.
As rumors of the Company's troubles circulated prior to and then
following their shocking disclosure, their stock collapsed from $61-
3/64 to $25-3/8, continuing to fall to as low as $17 and then to $13-
5/8, as investors absorbed the full impact of these shocking
revelations, a stock decline that wiped out over $10 billion of market
capitalization in just a few days.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: (610) 660-8000 or
(888) 643-6735 by Fax: (610) 660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182.
B2B INTERNET: Bernstein Liebhard Commences Securities Suit in S.D. NY
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Bernstein Liebhard and Lifshitz LLP initiated a securities class action
on behalf all persons who acquired the B2B Internet Holdrs Depository
Receipts (AMEX: BHH) securities between February 23, 2000 and April
9, 2001.
The case, pending in the United States District Court for the Southern
District of New York, names as defendants Merrill Lynch, Pierce, Fenner
& Smith, Inc. and Merrill Lynch & 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 B2B Holdrs's initial
public offering that was completed on or about February 23, 2000.
The complaint alleges that during the latter half of 1999 and early
2000, customers who wanted IPO shares had Merrill Lynch create a trust
that Merrill Lynch designed to raise monies from the investing public
and use such monies to purchase, as such Trust's largest holdings,
various securities that Merrill Lynch had underwritten.
Merrill Lynch named this trust "B2B Internet Holders Trust". Merrill
Lynch prepared and, on February 23, 2000, filed with the SEC a
registration statement and prospectus for B2B Internet Holders.
The names of Merrill Lynch and B2B Internet Holders Trust were on the
cover page of this prospectus and Merrill Lynch was the lead
underwriter of the B2B Holders to the public.
Defendants disclosed in their filings that the trust's plan was to use
the monies raised from the public offering of B2B Holders to purchase
shares of common stock issued by specified companies in the B2B segment
of the Internet industry as to which Merrill Lynch had been the lead
underwriter, and which comprised a material portion of the weight of
the trust's initial portfolio.
Defendants failed to disclose material facts in the registration
statement and prospectus, including:
(1) that the underwriters had committed unlawful acts in bringing
public the securities to be purchased by the Trust, and,
(2) that the prices of such securities were inflated by the
underwriters' unlawful acts.
More particularly, the complaint alleges that defendants failed to
disclose in the prospectus:
(i) that the underwriters of such securities required customers
who wanted large allocations of IPO shares to pay to the
underwriters undisclosed and excessive underwriters,
compensation in the form of dramatically increased brokerage
commissions or other brokerage compensation. A standard
amount of this excessive undisclosed underwriters'
compensation was an amount equal to one-third of the profits
made by the customer from their IPO allocations. Such
undisclosed compensation was blatantly in violation of the
federal securities laws; and
(ii) that the underwriters required customers seeking large
allocations of IPO shares of such securities to agree to buy
shares of the securities in the aftermarket at prices higher
than the IPO price as a precondition to obtaining the large
allocation of the IPO.
This practice, known among underwriters as a "tie-in purchase", was
blatantly in violation of the federal securities laws.
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: BHH@bernlieb.com or
visit the firm's Website: www.bernlieb.com
CANADA: Judge Denies First Nations Lawsuit Class-Action Status
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Ontario Superior Court Judge Roland Haines recently denied
certification of a $2.3 billion class-action lawsuit that would have
allowed First Nations people to sue a church group and the federal
government, according to a recent report appearing in Maclean's.
Justice Haines said he saw slight merit in some of the individual
claims filed on behalf of 800 children who attended the Mohawk
Residential School in Brantford, Ontario, between 1920 and 1970, and
10,000 of their relatives.
However, the judge asserted that the plaintiffs "failed to establish
there is an identifiable class and have failed to demonstrate their
claims raise common issues."
The plaintiffs were seeking to sue an Anglican missionary group and
Canada's attorney general, alleging they were subjected to a
"sustained, systematic program of physical, emotional, spiritual and
cultural abuse" at the school.
Justice Haines noted that many of the alleged common elements in the
claim are "moving targets," because attitudes, education, discipline,
nutrition and health standards have all changed over the years.
Many groups across Canada awaited the precedent-setting decision
because it could affect similar suits filed against the Anglican, Roman
Catholic, Presbyterian and United churches.
The groups have been lobbying the federal government to initiate out-
of-court compensation for residential school students who were victims
of abuse, because the court proceedings are bankrupting the churches
and haven't helped the former students much.
A lawyer for the plaintiffs said his clients are considering an appeal.
CARESCIENCE INC.: Levy And Levy Lodges E.D. PA Securities Suit
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Levy and Levy PC initiated a securities class action suit on behalf of
purchasers of the common stock of Carescience, Inc. (NASDAQ:CARE)
between June 29, 2000 and November 1, 2000, inclusive.
The suit, filed in the U.S. District Court for the Eastern District of
Pennsylvania, alleges violations of Sections 11, 12(a)(2) and 15 of the
Securities Act of 1933 against the Company and:
(1) David J. Brailer,
(2) Steven Bell, and
(3) Ronald Paulus
The defendants allegedly issued a materially false and misleading
prospectus and registration statement.
The complaint alleges that the prospectus was materially false and
misleading because, among other things, it misrepresented and omitted
to disclose material facts concerning two of the Company's products.
Specifically, the complaint alleges that the prospectus highlighted
Careleader.com and Caresense.com, which were expected to significantly
contribute to the Company's future performance. The prospectus
provided detailed descriptions of their features, including an
anticipated rollout date in 2001.
The complaint alleges that these statements were materially false and
misleading because they failed to disclose that, given the environment
for Internet-based health applications, these products, which were in
development and not complete, would no longer be economically feasible
to continue developing.
Accordingly, the further development of those products would have to be
abandoned and the sales the Company expected from those products would
not be realized.
On November 1, 2000, the Company announced that it was revising its
revenue estimates for 2001, in part, because of its decision to
discontinue its Careleader.com and Caresense.com products.
In response to this announcement, the price of the Company's common
stock dropped to $1.6875 per share.
For more information, contact Stephen G. Levy by Mail: One Stamford
Plaza, 263 Tresser Blvd., 9th Floor, Stamford, CT 06901 and 245 Park
Avenue, 39th Floor, New York, NY 10167 by Phone: 866-338-3674 (toll
free), 203-564-1920, or 212-792-4343 by E-mail: LLNYCT@aol.com or visit
the firm's Website: www.levylawfirm.com
COMVERSE TECHNOLOGY: Stull Stull Commences Securities Suit In E.D. NY
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Stull Stull and Brody initiated a securities class action on behalf of
purchase of Comverse Technology Group, Inc. (NASDAQ:CMVT) securities
between April 3, 2001 and July 10, 2001, inclusive.
The complaint was filed in the United States District Court for the
Eastern District of New York against the Company, and officers Kobi
Alexander and David Kreinberg.
The defendants allegedly violated federal securities laws by issuing
false misleading statements regarding the Company's financial condition
as well as its present and future business prospects.
More specifically, in 1998 the Company issued $250,000,000 worth of
convertible subordinated debentures at 4.5% which were due 2005 and
callable as early as July 2001.
The debentures were convertible, at the option of the holder, into
shares of Company common stock or cash.
By April 2001, the telecom industry had become severely depressed, the
federal reserve continued to drop interest rates and the Company's
stock price was steadily eroding.
Repaying the Company's outstanding debt by converting it into shares
rather than paying cash became a paramount concern for defendants.
To attain this goal, defendants artificially inflated the Company's
stock price by issuing false and misleading statements regarding the
Company's revenues and new customer wins.
Days after announcing record results for the first quarter 2001, the
Company called for the redemption of its 4.5% debentures, giving bond
holders until July 9, 2001 to convert their debt.
A day after the redemption deadline, and in stark contrast to their
prior representations, the Company shocked the market by issuing
earnings warnings on the next three quarters. The market reacted
harshly to the news with shares of the Company dropping 33% on heavy
volume, reaching its lowest trading level since March 1999.
For more details, please contact Michael D. Braun by Phone: 888-388-
4605 by E-mail: mbraun@secfraud.com or visit the firm's Website:
www.secfraud.com
DQE INC.: Stull Stull Commences Securities Suit In W.D. Pennsylvania
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Stull Stull and Brody lodged a class action lawsuit on behalf of
purchasers of the securities of DQE, Inc. (NYSE:DQE) from between
December 6, 2000 and April 30, 2001, inclusive.
The suit was filed in the United States District Court for the Western
District of Pennsylvania against the Company and their Chief Executive
Officer, David Marshall.
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 defendants allegedly issued a series of material misrepresentations
to the market between December 6, 2000 and April 30, 2001, thereby
artificially inflating the price of Company securities.
The complaint alleges that the Company issued statements concerning the
positive impact that DQE Enterprises, Inc., the Company's investment
subsidiary, was having on their financial results.
During this time, the market for initial public offerings had
dramatically slowed down.
Accordingly, the ability of the companies in DQE Enterprises'
investment portfolio to go public was substantially impaired.
Defendants, however, issued a stream of positive statements concerning
the Company's operations and prospects, but failed to disclose the
impaired nature of DQE Enterprises' investments.
They also failed to disclose that the Company would not realize the
investment gains that defendants had caused the market to expect.
As a result, defendants' estimates, projections and opinions as to the
Company's operations, products, earnings and income were knowingly
lacking in a reasonable basis at all relevant times.
This information finally became publicly known on April 30, 2001, when
the Company reported its earnings for the first quarter of 2001 and
revised its earnings outlook for the full year, based in part, on the
weakened outlook for DQE Enterprises.
In response to this negative announcement, when trading resumed on May
1, 2001, the price of the Company's common stock dropped from $30.43
per share to $23.75 per share on extremely heavy trading volume.
For further details, contact Tzivia Brody by Mail: 6 East 45th Street,
New York, NY 10017 by Phone: (800) 337-4983 (toll-free) by Fax: (212)
490-2022 or by E-mail: SSBNY@aol.com
DQE INC.: Weiss Yourman Commences W.D. Pennsylvania Securities Suit
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Weiss and Yourman raised a securities class action on behalf of
purchasers of DQE, Inc. (NYSE:DQE) shares between December 6, 2000 and
April 30, 2001.
The suit, filed in the United States District Court for the Western
District of Pennsylvania, charges the Company and an executive
associated with the Company with violations of the Securities Exchange
Act of 1934.
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 defendants allegedly issued a series of material misrepresentations
to the market between December 6, 2000 and April 30, 2001, thereby
artificially inflating the price of Company securities.
The complaint also alleges that the Company issued statements
concerning the positive impact that DQE Enterprises, Inc., the
Company's investment subsidiary, was having on their financial results.
During this time, the market for initial public offerings had slowed
dramatically.
Accordingly, the ability of the companies in DQE Enterprises'
investment portfolio to go public was substantially impaired.
Defendants, however, issued a stream of positive statements concerning
the Company's operations and prospects, but failed to disclose the
impaired nature of DQE Enterprises' investments.
They also failed to disclose that the Company would not realize the
investment gains that defendants had caused the market to expect.
As a result, defendants' estimates, projections and opinions as to the
Company's operations, products, earnings and income were knowingly
lacking in a reasonable basis at all relevant times.
This information finally became publicly known on April 30, 2001, when
the Coppany reported its earnings for the first quarter of 2001 and
revised its earnings outlook for the full year, based in part, on the
weakened outlook for DQE Enterprises.
In response to this negative announcement, when trading resumed on May
1, 2001, the price of the Company's common stock dropped from $30.43
per share to $23.75 per share on extremely heavy trading volume.
For more information contact David C. Katz, Mark D. Smilow or James E.
Tullman by Mail: The French Building, 551 Fifth Avenue, Suite 1600, New
York, New York 10176 by Phone: (888) 593-4771 or (212) 682-3025 or by
E-mail: info@wynyc.com.
EXTREME NETWORKS: Wolf Haldenstein Commences S.D. NY Securities Suit
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Wolf Haldenstein Adler Freeman & Herz LLP filed a securities class
action on behalf of purchasers of Extreme Networks, Inc. [NASDAQ: EXTR]
between April 8, 1999 and December 6, 2000, inclusive.
The suit was filed in the United States 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
April 8, 1999 IPO, without disclosing to investors that some of the
underwriters in the offering, including the lead underwriters, had
solicited and received excessive and undisclosed commissions from
certain investors.
Specifically, the complaint alleges that in exchange for the excessive
commissions, defendants allocated Company shares to customers at the
IPO price.
To receive the allocations at the IPO price, the underwriters'
brokerage customers had to agree to purchase additional shares in the
aftermarket at progressively higher prices.
The requirement that customers make additional purchases at
progressively higher prices as the price of Extreme stock rocketed
upward was intended to drive Extreme's share price up to artificially
high levels.
This artificial price inflation enabled both the underwriters and their
customers to reap enormous profits by buying stock at the IPO price and
then selling it later for a profit at inflated aftermarket prices.
For further details, contact Fred Taylor Isquith, Gustavo Bruckner,
Thomas Burt, 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. Your e-mail should refer to
Extreme.
GENESISINTERMEDIA INC.: Schiffrin Barroway Files CA Securities Suit
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Schiffrin and Barroway LLP commenced a securities class action on
behalf of all purchasers GenesisIntermedia, Inc. (NASDAQ:GENI) common
stock from December 21, 1999 through September 25, 2001, inclusive.
The suit was filed in the U.S. District Court for the Central District
of California against the Company, CEO Ramy El-Baratwi, certain of its
officers, directors and financial commentator, Courtney Smith.
The defendants allegedly violated federal securities laws by issuing
false and misleading statements concerning its business and financial
condition.
Specifically, the defendants allegedly plotted and unleashed their
scheme to inflate the price of Company shares and gave shares worth
more than $3 million to Smith, who helped send the stock soaring after
he agreed to issue allegedly false, positive recommendations for it on
CNN, CNBC and Bloomberg Television.
However, the complaint alleges defendants concealed the payment of
216,000 shares to Smith, in order to induce the purchase of Company
shares and raise tens of millions of dollars via multiple private
securities offerings.
As a result of defendants' false statements, the Company's stock price
traded at inflated levels, increasing to as high as $25 in June 2001.
Then after the close of the market on Sept. 25, 2001, Company shares
were halted pending the resolution of an investigation.
The Company's shares remain halted and are in essence, worthless.
However, just hours before the announcement of the investigation and
"halt," defendant El-Batrawi sold over $1.7 million dollars worth of
his own shares.
For further details, 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 or by E-mail:
info@sbclasslaw.com or visit the firm's Website: www.sbclasslaw.com
GENESISINTERMEDIA INC.: Cauley Geller Lodges C.D. CA Securities Suit
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Cauley Geller Bowman & Coates LLP initiated a securities class action
on behalf of purchasers of GenesisIntermedia Inc. (NASDAQ:GENI)
publicly traded securities during the period between December 21, 1999
and September 25, 2001, inclusive.
The suit was filed in the United States District Court for the Central
District of California charges the Company, CEO Ramy El-Baratwi,
certain of its officers, directors and financial commentator Courtney
Smith with violations of the Securities Exchange Act of 1934.
The complaint alleges that in December 1999, defendants plotted and
unleashed their scheme to inflate the price of Company shares.
The defendants allegedly gave shares worth more than $3 million to a
financial commentator who helped send the stock soaring after he agreed
to issue allegedly false, positive recommendations for it on CNN, CNBC
and Bloomberg Television.
However, the complaint alleges defendants concealed the payment of
216,000 shares to Courtney Smith, in order to induce the purchase of
Company shares and raise tens of millions of dollars via multiple
private securities offerings.
As a result of defendants' false statements, the Company's stock price
traded at inflated levels during the class period, increasing to as
high as $25 in June 2001.
Then after the close of the market on September 25, 2001, the Company's
shares were halted, pending the resolution of an investigation.
Company shares remain halted and are in essence, worthless. However,
just hours before the announcement of the investigation and "halt,"
defendant El-Batrawi sold over $1.7 million dollars worth of his own
shares.
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 (toll-free) by E-mail: info@classlawyer.com or visit the
firm's Website: www.classlawyer.com
GENESISINTERMEDIA INC.: Bernstein Liebhard Files CA Securities Suit
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Bernstein Liebhard and Lifshitz LLP commenced a securities class action
on behalf all persons who acquired GenesisIntermedia, Inc. (NASDAQ:
GENI) securities between December 21, 1999 and September 25, 2001.
The case is pending in the United States District Court for the Central
District of California against defendants:
(1) the Company,
(2) Rami El-Batrawi, Chief Executive Officer,
(3) Douglas E. Jacobson, Executive Officer, and
(4) Courtney Smith, a financial commentator who touted the
Company's stock
The complaint charges defendants with violations of sections 10(b) and
20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder.
The complaint alleges that defendants issued to the investing public
false and misleading financial information that materially misstated
the Company's condition and prospects. Moreover, the Company failed to
disclose material information necessary to make its prior statements
not misleading.
Specifically, the complaint alleges that the defendants engaged in a
scheme to inflate the price of Company shares in order to induce
investors to purchase Company shares and to raise tens of millions of
dollars via multiple private securities offerings.
The scheme involved giving shares worth more than $3 million to Smith,
who agreed to issue allegedly false, positive recommendations for the
stock on CNN, CNBC and Bloomberg Television. These bogus
recommendations helped send the stock soaring.
Moreover, the complaint alleges defendants concealed the payment of
216,000 shares to Smith.
As a result of defendants' false statements, the Company's stock price
traded at inflated levels during the class period, increasing to as
high as $25 in June 2001. After the close of the market on September
25, 2001, Company shares were halted, pending the resolution of an
investigation.
The Company's shares remain halted and are, in essence, worthless.
However, just hours before the announcement of the investigation and
"halt," defendant El-Batrawi sold over $1.7 million dollars worth of
his own shares.
For further 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: GENI@bernlieb.com or
visit the firm's Website: www.bernlieb.com
GEORGIA PACIFIC: Offers $22M To Settle Plant Explosion Suit
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A county judge recently gave preliminary approval to Atlanta-based
Georgia Pacific's agreement to settle for $22 million the class action
suit against them in Columbus, Ohio, according to a recent report in
The Atlanta Journal-Constitution.
The suit was filed on behalf of individuals who at any time from 1985
to the present lived, worked, resided, owned, frequented or otherwise
occupied property located within a three-mile radius of GP's resins
manufacturing operations in Columbus, Ohio.
The lawsuit alleges that the class suffered personal injuries and/or
property damage because of:
(1) alleged "continuing and long-term releases and threats of
releases of noxious fumes, odors and harmful chemicals,
including hazardous substances" from GPR's operations and/or
(2) a September 10, 1997 explosion at the Columbus facility and
alleged release of hazardous material resulting from that
explosion.
The Company denied any liability in the matter but settled the suit in
order to end a lengthy court fight and make peace with the neighbors,
said the company's spokeswoman Robin Keegan.
"The company does not believe that we caused any long-term negative
impacts on the health or safety of the residents," Keegan commented.
Settlement of this class-action lawsuit will cover medical claims and
property damage for about 6,000 people who lived near the plant at the
time of the explosion, which killed one worker and damaged houses in
the area.
A fairness hearing on the amount is scheduled for December.
Georgia-Pacific has upgraded the plant since the explosion. The
Occupational Safety and Health Administration cited 24 safety
violations that contributed to the accident and fined the company
$432,000.
INTELLI-CHECK INC.: Denies Allegations in New Jersey Securities Suit
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Intelli-check, Inc. denied the allegations in the securities class
action suit filed against them last week in the United States District
Court for the District of New Jersey.
The law firm Speziali, Greenwald & Hawkins PC filed the suit on behalf
of short-sellers of the Company's securities between January 1, 2001
and the present.
The action names defendants:
(1) the Company,
(2) Frank Mandlebaum, Chairman of the Board and Chief Executive
Officer,
(3) Kevin Messina, Director,
(4) Paul Cohen, Director,
(5) Edward Winiarz, Director and Chief Financial Officer and
(6) W. Robert Holloway, Senior Executive Vice President
The complaint charges that defendants violated Sections 10 (b) and 20
(a) of the Securities and Exchange Act of 1934, and Rule 10b-5
promulgated thereunder.
The defendants allegedly issued a series of materially false and
misleading statements to the market during the class period concerning
its supposedly strong and growing sales thereby artificially inflating
the value of the Company's stock price.
Specifically, during the class period defendants reported materially
inflated revenue for the Company by:
(i) manipulating the reporting of sales and revenue in its filings
with the Securities and Exchange Commission and in its press
releases; and
(ii) failing to disclose significant competition having a material
impact on the Company and the sale of its products
Company CEO Frank Mandelbaum labeled the suit totally without merit,
saying "the Company has complied with all applicable securities laws."
Intelli-Check, Inc. is a developer and marketer of an advanced state-
of-the art document verification system for authenticating the validity
of driver licenses and ID cards used as proof of identity.
LOUDCLOUD INC.: Milberg Weiss Initiates Securities Suit in N.D. CA
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Milberg Weiss Bershad Hynes and Lerach LLP filed a securities class
action on behalf of all purchasers of Loudcloud, Inc. (NASDAQ:LDCL)
common stock issued pursuant to the March 8, 2001 Prospectus.
The suit was filed in the United States District Court for the Northern
District of California against the Company and certain of its directors
and underwriters alleging violations of the Securities Act of 1933.
The complaint alleges that the prospectus used by defendants to sell
$150 million worth of Company stock was false and misleading because it
failed to disclose:
(1) the Company's plan to substantially reduce its work force and
to restructure immediately following the offering;
(2) that the offering was not raising funds sufficient to enable
the Company to reach profitability and accomplish the planned
expansion described in the prospectus;
(3) that a major contract to which one of the underwriters was a
party was being terminated; and
(4) that in order to enable the offering to go forward, sales of
shares were being made to insiders and the selling price of
the offering was artificially maintained by the undisclosed
sale of part of the offering to insiders.
As the truth about the Company and its operations reached the market,
the price of Company shares fell to less than $2.00 per share.
For further details, contact William Lerach or Darren Robbins by Phone:
(800) 449-4900 by E-mail: wsl@milberg.com or visit the firm's Website:
http://www.milberg.com/loudcloud/
NORTEL NETWORKS: Ontario Court Grants Certification To Employee Suit
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Ontario Superior Court Justice Michel Charbonneau granted class action
status filed by older ex-employees of Nortel Networks over severance,
pension and other benefits.
The suit was filed on behalf of former Company employees over the age
of 50, with more than two years' experience who lost their jobs between
December 2000 and October 19,2001.
Some of the 40,000 employees who've been laid off, were not satisfied
with severance packages of as much as six months' pay they received as
bridges to pensions. They seek as much as two years' pay as severance
to increase their pension payments.
The employees assert that the packages did not take into consideration
their age, experience, rank and likely difficulties finding similar
jobs.
The Company had asserted the older employees were treated fairly and
opposed the class action certification by saying that the employees had
widely varying claims that should be treated as individual cases.
However, Charbonneau disagreed, saying "It would be naive not to
recognize that for any individual to launch and sustain an individual
action against a behemoth such as Nortel is a daunting task."
Nortel spokeswoman Tina Warren said, "We respect the decision of the
court and will review it to see how it affects our business."
Justice Charbonneau ordered Nortel to produce a list of employees who
might qualify under the class action.
The parties expect to meet in three weeks to discuss how the case will
proceed.
PROVIDIAN FINANCIAL: Milberg Weiss Commences N.D. CA Securities Suit
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Milberg Weiss Bershad Hynes and Lerach LLP initiated a securities class
action on behalf of purchasers of Providian Financial Corporation
(NYSE:PVN) publicly traded securities during the period between June 6,
2001 and October 11, 2001.
The suit was filed in the United States District Court for the Northern
District of California against the Company and certain of its officers
and directors.
The defendants allegedly violated the Securities Exchange Act of 1934
by issuing false and misleading statements concerning the Company's
operations and prospects for 2nd and 3rd Quarter of 2001.
In late June 2001, the Company changed the way it processes its
bankruptcy filings and so changed when it recognizes losses and
deferred the recognition of approximately $30 million of charge-offs
from June into July.
The Company allegedly manipulated its financial statements for 2nd
Quarter 2001 and shaved 40 basis points off its managed net charge-off
rate of 10.3% and boosted reported earnings per share by $0.06.
Without this change, the loss rate would have been 10.7% - well above
defendants' guidance of 9.5%-10%.
Defendants made no mention of this change on the conference call or in
Providian's 2nd Quarter 2001 Form 10-Q filing with the Securities and
Exchange Commission (SEC).
In fact, management only admitted this change after they came under
pressure from analysts following a flood of calls to their investor
relations department in late August 2001.
Taking advantage of the inflation in Company stock, the defendants sold
almost $22 million worth of their own Company stock at artificially
inflated prices of as much as $49.30 per share. These sales were out
of line with their prior trading history.
For more information, contact William Lerach or Darren Robbins by
Phone: (800) 449-4900 by E-mail: wsl@milberg.com or visit the firm's
Website: www.milberg.com/providian/
SCIENTIFIC-ATLANTA INC.: Wolf Haldenstein Lodges GA Securities Suit
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Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class
action on behalf of all purchasers of Scientific Atlanta, Inc. (NYSE:
SFA) securities between April 19, 2001 and July 19, 2001.
The suit was filed in the United States District Court for the Northern
District of Georgia, Atlanta Division against the Company, Chief
Executive Officer James F. McDonald and Senior Vice President Wallace
G. Haislip.
The complaint alleges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934 and SEC Rule 10b-5, promulgated
thereunder.
The defendants allegedly issued materially false and misleading
statements that had the effect of artificially inflating the market
price of the Company's securities.
For example, in May 2001, in a Form 10-Q that was filed with the SEC,
defendants reported "record" financial results with bookings, sales,
backlog and cash each setting all-time records. In the same filing,
defendants touted the Company's increase in production capacity of set-
top boxes.
The complaint alleges that during this period of artificial inflation,
Haislip and McDonald took advantage of their inside status to sell
hundreds of thousands of their own shares at artificially high prices
for proceeds of over $46 million.
In July 2001, however, defendants revealed a 21% decline in bookings
from the previous year's fourth quarter and a decrease in the Company'
s set-top box shipments, attributed to a surplus in customer inventory
levels. The complaint alleges that this contradicted defendants' class
period statements regarding production capacity.
Additionally, the Company announced that it was revising its earnings
estimates for the coming quarter. As a result of these announcements,
shares fell by more than 34% to close at $22.80 per share on heavy
trading volume.
For further details, contact Fred Taylor Isquity, Gustavo Bruckner,
Gregory 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 Scientific Atlanta.
SHOPKO STORES: Schiffrin Barroway Lodges Securities Suit in E.D. WI
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Schiffrin and Barroway LLP initiated a securities class action on
behalf of all purchasers of ShopKo Stores, Inc. (NYSE: SKO) common
stock from March 9, 2000 through November 9, 2000, inclusive.
The suit, filed in the United States District Court for the Eastern
District of Wisconsin, charges the Company and certain of its officers
and directors with issuing false and misleading statements concerning
its business and financial condition.
Specifically, the complaint alleges that defendants issued statements
concerning the integration of Pamida Holding Corp., the Company's
financial results and the Company's prospects.
The complaint further alleges that these statements were materially
false and misleading because they failed to disclose that the Company
was experiencing significant shipping and inventory control problems at
Pamida's distributions centers.
In November 2000, the Company issued a press release announcing its
earnings for the third quarter of 2000 reporting a loss of ($0.23) per
share -- far below the $.02 to $.07 per share previously represented by
the Company.
The Company also revealed that it was experiencing problems at Pamida's
distribution centers and that those problems accounted for its reduced
earnings.
For further details, 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.com or visit the firm's Website: www.sbclasslaw.com
SHOPKO STORES: Cauley Geller Commences Securities Suit in E.D. WI
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Cauley Geller Bowman & Coates LLP initiated a securities class action
on behalf of purchasers of ShopKo Stores, Inc. (NYSE:SKO) common stock
during the period between March 9, 2000 and November 9, 2000,
inclusive.
The suit was filed in the United States District Court for the Eastern
District of Wisconsin against the Company and certain of its officers
and directors.
The defendants allegedly issued false and misleading statements
concerning its business and financial condition.
Specifically, the complaint alleges that defendants issued statements
concerning the integration of Pamida Holding Corp., the Company's
financial results and prospects.
These statements were materially false and misleading because they
failed to disclose that the Company was experiencing significant
shipping and inventory control problems at Pamida's distribution
centers.
In November 2000, the Company issued a press release announcing its
earnings for the third quarter of 2000 reporting a loss of ($0.23) per
share, far below the $0.02 to $0.07 per share previously represented by
the Company.
The defendants also revealed that the Company was experiencing problems
at Pamida's distribution centers and that those problems accounted for
reduced earnings.
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
TELECORP PCS: Weiss Yourman Files Securities Suit in Delaware Court
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Weiss and Yourman initiated a securities class action lawsuit against
TeleCorp PCS, Inc. (NASDAQ:TLCP) in the Court of Chancery of the State
of Delaware in and for New Castle County.
The suit alleges that there is an unlawful scheme and plan by certain
members of the Board of Directors of the Company and AT&T Wireless,
Inc. to acquire the remaining ownership of the Company in a stock for
stock transaction.
The suit said ownership of the Company would be acquired for grossly
inadequate consideration without full and complete disclosure of all
material information, in breach of defendants' fiduciary duties.
On October 8, 2001, the Company announced that it had received an offer
from AT&T to purchase the 77% of the Company it does not already own.
The offer is valued at $2.4 billion and includes the assumption of $2.1
billion in debt. Based upon the exchange ratio of 0.9 AT&T shares for
each Company share, the offer values each common share of the Company
at $14.50.
The complaint further alleges that the terms of the offer are
particularly unfair in light of the Company's recent financial
performance and anticipated future financial performance.
The price of Company stock has traded as high as $28 per share during
the past 52 weeks, and as high as $17 per share in July 2001.
The Company stated that boards of both companies have approved the
deal, which is expected to close in the first half of next year.
For further details, contact Mark D. Smilow and David C. Katz by Mail:
The French Building, 551 Fifth Avenue, Suite 1600, New York, New York
10176 by Phone: (888) 593-4771 or (212) 682-3025 or by E-mail:
info@wynyc.com.
TERADYNE INC.: Schiffrin Barroway Commences Securities Suit in MA
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Schiffrin and Barroway LLP lodged a securities class action on behalf
of all purchasers of Teradyne, Inc. (NYSE: TER) common stock from July
14, 2000 through October 17, 2000, inclusive.
The suit was filed in the United States District Court for the District
of Massachusetts, against the Company and certain of its officers and
directors.
The complaint charges the defendants with issuing false and misleading
statements concerning its business and financial condition.
Specifically, the complaint alleges that the Company was experiencing
declining orders in its semiconductors testing systems division, which
would cause the Company's growth rate to slow from historical levels.
Defendants concealed this adverse fact from investors, so that the
Company could complete the acquisition of Herco Technology Corporation
and Perception Laminates, Inc., d/b/a/ Synthane Taylor, using
artificially inflated common stock as currency.
When the truth about the Company's business was revealed to the public,
the price of Teradyne common stock dropped precipitously.
For more details, 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.com or visit the firm's Website: www.sbclasslaw.com
TERADYNE INC.: Cauley Geller Commences Massachusetts Securities Suit
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Cauley Geller Bowman & Coates LLP lodged a securities class action on
behalf of purchasers of Teradyne, Inc. (NYSE:TER) common stock during
the period between July 14, 2000 and October 17, 2000, inclusive.
The suit was filed in the United States District Court for the District
of Massachusetts against the Company and certain of its officers and
directors.
The defendants allegedly violated the federal securities laws by
issuing a series of material misrepresentations to the market between
July 14, 2000 and October 17, 2000, thereby artificially inflating the
price of Teradyne common stock.
The complaint alleges that the Company was experiencing declining
orders in its semiconductors testing systems division, which would
cause the Company's growth rate to slow from historical levels.
Defendants concealed this adverse fact from investors, so that the
Company could complete the acquisition of Herco Technology Corporation
and Perception Laminates, Inc., d/b/a/ Synthane Taylor, using
artificially inflated common stock as currency.
When the truth about the Company's business was revealed to the public,
the price of their common stock dropped precipitously.
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 (toll-free) by E-mail: info@classlawyer.com or visit the
firm's Website: www.classlawyer.com
UBS PAINEWEBBER: Court Approves Class Certification In Securities Suit
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Tennessee State Court approved class action status for the suit against
securities firm UBS Painewebber, Inc. relating to its merger with
brokerage firm J.C. Bradford and Company.
A group of former employees filed the suit against the Company and
members of what was formerly J.C. Bradford & Co.'s executive board for
allegedly siphoning off over $55 million during the companies' merger.
As part of the merger agreement, members of J.C. Bradford's executive
committee received millions of dollars when the Company bought out
their employment contracts.
According to the complaint, James C. Bradford received $15 million for
giving the Company the use of the name "J.C Bradford," and $6 million
to extend his contract.
Two other members of the executive committee, Jeffery Powell and James
Graves, received $20 million to buy out their employment agreements.
The suit also accused Powell and Graves of inappropriately increasing
their ownership shares months before the merger.
The plaintiffs allege that if the above amounts were incorporated into
the price of the firm, employees who owned a part of the firm would
have received a more handsome compensation package when the firms
merged.
The plaintiffs allege that the Company made secret side deals that
greased the palms of the executive committee and say these deals were a
breach of fiduciary trust because they supposedly put the personal
interests of the defendants above the interest of the firm and its
partnership.
"[There's] something rotten in Denmark... the large numbers of dollars
going to these individuals at the last minute does not make sense from
the standpoint of the duties these individuals owed their partners,"
said Larry Chesin, attorney for the plaintiffs.
However, the defendants assert that these were personal assets that had
nothing to do with the price of the firm's shares. They further stress
that they were non-voting equity members of the firm, so they were
under no obligation to disclose the deal.
According to a lawyer for the defendants, "The idea that these four
executives didn't do the best job of selling the firm doesn't square
with the facts."
Susan Wentworth, spokesperson for the Company, declined to comment on
the suit.
*********
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
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