/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/011025.mbx C L A S S A C T I O N R E P O R T E R Thursday, October 25, 2001, Vol. 3, No. 209 Headlines ACTION PERFORMANCE: AZ Securities Suit Dismissed Without Prejudice AKAMAI TECHNOLOGIES: Denies S.D. NY Securities Suits Allegations ART TECHNOLOGY: Wolf Haldenstein Files MA Securities Fraud Suit BIN LADEN: Family Sues For Father's Death in 1995 Saudi Arabia Attack BLIMPIE INTERNATIONAL: Shareholders Sue To Block Merger in New Jersey CALIFORNIA: Inmates Sue Over Delayed Release From Orange County Jail CANADA: Judge Accused Of Lack of Impartiality Refuses To Step Down ENRON CORPORATION: Bernard Gross Commences Securities Suit in S.D. TX ENRON CORPORATION: Cauley Geller Initiates S.D. TX Securities Suit FLORIDA: Firefighters Agree To Take Medical Record To Own Doctors GENESISINTERMEDIA INC.: Stull Stull Initiates Securities Suit in CA KEYSPAN CORPORATION: Schiffrin Barroway Lodges Securities Suit in NY KEYSPAN CORPORATION: Cauley Geller Commences E.D. NY Securities Suit KEYSPAN CORPORATION: Kirby McInerney Files Securities Suit in E.D. NY LOUDCLOUD INC.: Schiffrin Barroway Initiates N.D. CA Securities Suit LOUDCLOUD INC.: Cauley Geller Initiates Securities Suit in N.D. CA MONEY LAUNDERING: Lawsuit Proceeds As Judge Refuses To Dismiss Case NETEASE.COM: Cauley Geller Commences Securities Suit in S.D. New York ONYX SOFTWARE: Wolf Haldenstein Commences Securities Suit in W.D. WA PROVIDIAN FINANCIAL: Berman DeValerio Files Securities Suit in N.D.CA PROVIDIAN FINANCIAL: Marc Henzel Initiates Securities Suit in N.D. CA SHOPKO STORES: Berger Montague Begins Securities Suit In E.D. WI TACO BELL: California Court Approves Overtime Wages Suit Settlement TERADYNE INC.: Faruqi Faruqi Initiates Securities Suit in Massachusetts TEXTRON/LYCOMING: Aircraft Owners To Receive Sizeable Compensation TOBACCO LITIGATION: Defendants Move To Dismiss Suit For Lack of Proof WASHINGTON: Foster-Care System Sued For Neglect And Inadequate Care WESTPOINT STEVENS: Cauley Geller Initiates Securities Suit in N.D. GA WESTPOINT STEVENS: Chitwood Harley Initiates N.D. GA Securities Suit ********* ACTION PERFORMANCE: AZ Securities Suit Dismissed Without Prejudice ------------------------------------------------------------------ Action Performance Companies, Inc. prevailed as the United States District Court for the District of Arizona dismissed without prejudice the securities class action suit filed late 1999. The lawsuit alleges that the Company and other defendants violated the Securities Exchange Act of 1934 by: (1) making allegedly false statements about the state of our business and shipment of certain products to a customer, or (2) participating in a fraudulent scheme that was intended to inflate the price of common stock. The alleged class of plaintiffs consists of all persons who purchased our publicly traded securities between July 27, 1999 and December 16, 1999. Fred W. Wagenhals, director and officer of APC, and Tod J. Wagenhals and Christopher S. Besing, former directors and officers of the Company, were also named as defendants. On July 10, 2001, the court granted the Company's motion to dismiss this lawsuit, without prejudice. APC designs and markets collector-quality die-cast miniature replicas of NASCAR and other racing vehicles, sells licensed motorsports apparel and souvenirs, and manages race car drivers' fan clubs. AKAMAI TECHNOLOGIES: Denies S.D. NY Securities Suits Allegations ---------------------------------------------------------------- Akamai Technologies denied allegations in nine securities class action suits filed against them in the United States District Court for the Southern District of New York. The suits name as defendants the Company, several of its officers and directors and its underwriters involved in their October 1999 initial public offering. The suits uniformly charge defendants with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 for issuing a registration Statement and prospectus that contained materially false and misleading information and failed to disclose material information. The prospectus was issued in connection with the Company's initial public offering of 9 million shares of common stock at $26.00 per share that was completed on or about October 28, 1999. The suits allege that the prospectus was false and misleading because it failed to disclose: (i) the Underwriter Defendants' agreement with certain investors to provide them with significant amounts of restricted Akamai shares in the IPO in exchange for exorbitant and undisclosed commissions; and (ii) the agreement between the Underwriter Defendants and certain of its customers whereby the Underwriter Defendants would allocate shares in the IPO to those customers in exchange for the customers' agreement to purchase Akamai shares in the after-market at pre-determined prices. The Company has not answered the suit. ART TECHNOLOGY: Wolf Haldenstein Files MA Securities Fraud Suit --------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP commenced a securities class action on behalf of all purchasers of Art Technology Group, Inc. (NASDAQ:ARTG) securities between January 25, 2001 and April 2, 2001. The suit was filed in the United States District Court for the District of Massachusetts against the Company and defendants: (1) Jeet Singh, Chief Executive Officer, board member and a co- founder of the Company, and (2) Joseph T. Chung, co-founder of the Company, Chief Technology Officer, Treasurer and Chairman of the Board 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 materially false and misleading statements that had the effect of artificially inflating the market price of the Company's securities. Specifically, the complaint alleges that starting on January 25, 2001, the Company indicated that it was not effected by the negative trends in the software industry which were effecting the Company's competitors. The Company further asserted that its strong revenue growth was not, nor would it be, materially affected by the downturn in the technology sector. The complaint further alleges that such statements were knowingly false and misleading when made, because many clients were technology companies that were negatively impacted by the widespread decrease in technology spending which was underway before the Class Period began, and that many of these customers could not afford to pay the Company for its products. Subsequently, in April 2001, the Company issued a press release announcing that it would incur a loss of between $0.19 to $0.22 per share for the quarter ending March 30, 2001, which was well below expectations. Based on this announcement, the Company's stock price dropped to $5.3125--a 55% decrease from the prior day's close of $12 per share on extremely heavy trading volume. Prior to the Company's announcement on April 2, 2001, Company insiders sold a total of over $8.7 million of their personally-held stock. For more details, contact George Peters, Derek Behnke, Michael Miske, Gregory Nespole or Fred Taylor Isquith 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 Art Technology. BIN LADEN: Family Sues For Father's Death in 1995 Saudi Arabia Attack --------------------------------------------------------------------- A Michigan family is suing Osama bin Laden for the death of their father in a deadly office bombing six years ago. Department of Defense engineer Jim Allen and four other Americans were killed in November 1995 after a truck bomb exploded next to military offices in Riyadh, Saudi Arabia. Osama bin Laden, the alleged mastermind behind the September 11 attacks, was identified as the chief suspect in that event. Three years ago, Allen's children filed suit against bin Laden and other groups linked to terrorism in U.S. District Court in downtown Detroit, seeking $5 billion. A federal judge put the lawsuit on hold while the family has kept silent over the suit. Their attorney, James Elsman, hoped to turn the case into a class action suit to cover everyone touched by an act of terrorism sponsored by bin Laden and his alleged terrorist network. He said the family was looking for closure, "The kids obviously aren't going to get their father back. But in some way they want to pinch Osama." Other lawyers say that it's not likely that Elsman will be able to build a class action lawsuit. BLIMPIE INTERNATIONAL: Shareholders Sue To Block Merger in New Jersey --------------------------------------------------------------------- Blimpie International faces a securities class action suit in the Superior Court of New Jersey, Chancery Division arising from its merger with Sandwich Acquisition Corporation. Sandwich Acquisition is a wholly-owned subsidiary of X2Y1, Inc., a corporation owned by an investor group assembled by Jeffrey Endervelt, one of the Company's subfranchisors. Upon the terms of the merger, Sandwich Acquisition will merge with Blimpie International, with Blimpie being the surviving corporation. Richard Johansen filed the suit on behalf of himself and other shareholders against the Company and the following Company directors: (1) Anthony P. Conza, (2) David L. Siegel, (3) Patrick J. Pompeo, (4) Charles G. Leaness, (5) Alvin Katz, (6) Harry G. Chernoff The suit alleges that the defendants engaged with Endervelt in an unlawful scheme designed to acquire the Company in a going-private transaction for grossly inadequate consideration and without full and complete disclosure of all material information. The Company labeled the suit "without merit". CALIFORNIA: Inmates Sue Over Delayed Release From Orange County Jail -------------------------------------------------------------------- Attorney Richard P. Herman took the first step towards a class action suit against Orange County California due to the delayed release of Orange County Jail inmates. Herman filed the claim with the Board of Supervisors, on behalf of inmates. The claim alleges that inmates scheduled for release from the jail routinely must wait 12 hours or more before the Sheriff's Department actually sets them free, according to a recent report in the Los Angeles Times. The claim further states that the county is guilty of false imprisonment and civil rights violations against people detained at the jail for misdemeanor offenses and traffic warrants, as well as against those arrested but never charged with a crime. Ordinarily, these inmates should be released shortly after appearing in court, Herman said. But they are often delayed for hours and sometimes a good part of the day, because of logistical and bureaucratic obstacles in the jail system. The experience of former inmate Fred Pierce, 30, illustrates what can happen: Herman said Pierce was arrested during a traffic stop because he had outstanding traffic tickets. He was booked into the jail, and after appearing in court, a judge ordered him released. But it took another 12 hours before Pierce was allowed to leave custody, according to the claim. A Sheriff Department's spokesman declined to comment because officials had not yet received a copy of the claim. CANADA: Judge Accused Of Lack of Impartiality Refuses To Step Down ------------------------------------------------------------------ Canadian justice John Brockenshire refused to withdraw from the class action suit against the government over the mishandling of war veterans' money. Lawyers for the government asked Brockenshire to step down after he reprimanded them in a meeting in his chambers, unleashing a "high volume verbal barrage" that left at least one of them "speechless." The lawyers also revealed that the judge denounced an expert report they planned to file as "trash" and complained of typical government "stupidity." His comments during the meeting allegedly revealed a lack of impartiality. Brockenshire said the tirade was a fleeting outburst sparked by the government's "egregious" conduct and that there was "no air of reality" to the notion that he had an "anti-government" bias. A conference that day was arranged to work out details for a later court hearing into the question of how much the federal government owes in damages to veterans. Last year, Brockenshire ruled that Ottawa breached its duty to mentally incompetent veterans whose finances it managed, by failing to pay interest on their accounts. The case is scheduled to resume in Windsor on Nov. 5, but there's no indication the federal government is ready to reconcile. A justice department spokesperson said the judge's decision may be appealed. ENRON CORPORATION: Bernard Gross Commences Securities Suit in S.D. TX --------------------------------------------------------------------- Bernard M. Gross initiated a securities class action on behalf of all purchasers of Enron Corporation (NYSE:ENE) common stock, between January 18, 2000 and October 17, 2001, inclusive. The action is pending in the United States District Court for the Southern District of Texas, Houston Division against the Company and: (1) Kenneth Lay, (2) Jeffrey K. Skilling and (3) Andrew Fastow 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 January 18, 2000 and October 17, 2001, thereby artificially inflating the price of the Company's common stock. Specifically, the complaint alleges that the Company issued a series of statements concerning its business, financial results and operations which failed to disclose: (i) that the Company's Broadband Services Division was experiencing declining demand for bandwidth and the Company's effort to create a trading market for bandwidth were not meeting with success as many of the market participants were not creditworthy; (ii) that the Company's operating results were materially overstated as result of the Company failing to timely write- down the value of its investments with certain limited partnerships which were managed by the Company's chief financial officer; and (iii) that the Company was failing to write-down impaired assets on a timely basis in accordance with generally accepted accounting principles. In October 2001, the Company surprised the market by announcing that the Company was taking non-recurring charges of $1.01 billion after- tax, of ($1.11) loss per diluted share, in the third quarter of 2001, the period ending September 30, 2001. Subsequently, the Company revealed that a material portion of the responsibility related to the unwinding of investments with certain limited partnerships was controlled by its chief financial officer. The Company claimed it would be eliminating more than $1 billion in shareholder equity as a result of its unwinding of the investments. As this news began to be assimilated by the market, the price of the Company's common stock dropped significantly. Company insiders disposed of over $73 million of their personally held common stock to unsuspecting investors. For more information, contact Susan Gross or Deborah Gross by Mail: 1515 Locust Street, 2nd Floor Philadelphia, PA 19102 by Phone: 215-561- 3600 by E-mail: susang@bernardmgross.com or visit the firm's Website: www.bernardmgross.com ENRON CORPORATION: Cauley Geller Initiates S.D. TX Securities Suit ------------------------------------------------------------------ Cauley Geller Bowman & Coates LLP commenced a securities class action on behalf of purchasers of Enron Corp. (NYSE:ENE) common stock during the period between January 18, 2000 and October 17, 2001, inclusive. The suit was filed in the United States District Court for the Southern District of Texas, Houston Division against the Company and certain of its officers and directors. The complaint charges the defendants of violating 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 January 18, 2000 and October 17, 2001, thereby artificially inflating the price of the Company's common stock. Specifically, the complaint alleges that Enron issued a series of statements concerning its business, financial results and operations which failed to disclose: (1) that the Company's Broadband Services Division was experiencing declining demand for bandwidth and the Company's efforts to create a trading market for bandwidth were not meeting with success as many of the market participants were not creditworthy; (2) that the Company's operating results were materially overstated as a result of the Company failing to timely write- down the value of its investments with certain limited partnerships which were managed by the Company's chief financial officer; and (3) that the Company was failing to write-down impaired assets on a timely basis in accordance with GAAP. In October 2001, the Company surprised the market by announcing that it was taking non-recurring charges of $1.01 billion after-tax, or ($1.11) loss per diluted share, in the third quarter of 2001, the period ending September 30, 2001. Subsequently, Enron revealed a material portion of the responsibility related to the unwinding of investments with certain limited partnerships was controlled by their chief financial officer. As a result of the unwinding of these investments, the Company would be eliminating more than $1 billion in shareholder equity. As this news began to be assimilated by the market, the price of the Company's common stock dropped significantly. During the class period, Company insiders disposed of over $73 million of their personally held common stock to unsuspecting investors. For more 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 FLORIDA: Firefighters Agree To Take Medical Record To Own Doctors ----------------------------------------------------------------- The City of Orlando and its firefighters agreed on a plan to allow firefighters to have their medical records reviewed by their own doctors. The firefighters filed a suit against the city last July alleging that city administrators intentionally compromised medical care to cut costs at their expense. The suit contended that the doctors in the city's employee health clinic failed to them about years of abnormal test results that showed up during physical exams. Under terms of the agreement, the city will allow the more than 300 firefighters the option to take their city medical records to private doctors to ensure that they don't have an illness they were not told about. The agreement will not affect the pending lawsuit. The firefighters union still wants a full investigation. Union president Steve Clelland said that the agreement was a step in the right direction, "..We're leaps and bounds from where we were four months ago." The firefighters contend that they were not informed about abnormal test results from exams given at city-run medical clinics for several years. The hidden symptoms were left untreated for so long, the employees developed life-threatening diseases that include hepatitis, heart disorders, lung problems, high blood pressure and hearing loss. City officials said that it has always been standard procedure for doctors at the city's clinic to notify patients of any problems found in annual physicals. They acknowledged, however, there is no written policy requiring notification. Spokeswoman Susan Blexud said that before 1999, the employees were usually notified by a phone call. The city turned over operation of the clinic to Orlando Regional Healthcare System two years ago after years of complaints from union officials about shoddy care and poor communication. GENESISINTERMEDIA INC.: Stull Stull Initiates Securities Suit in CA ------------------------------------------------------------------- Stull, Stull and Brody lodged a securities class action on behalf of all purchasers of Genesis Intermedia, Inc. (NADSAQ:GENI) securities between December 21, 1999 and September 25, 2001, inclusive. The complaint was filed in the United States District Court for the Central District of California against the Company, CEO Ramy El-Batrawi and officer Douglas E. Jacobson. The defendants allegedly issued false and misleading statements regarding the Company's financial condition as well as its present and future business prospects. More specifically, beginning in December 1999, the Company began executing a plan to artificially inflate the price of its stock by providing financial favors to financial analysts in exchange for analysts issuing false positive reports to the public. It was allegedly the defendants' intention not to reveal to the public the financial incentives they were providing the analysts. The fraudulent scheme succeeded in driving up the price of Company stock 50% in December 1999 as the public began reading glowing reports issued by the analysts. By February 2000, as more false positive reports were disseminated to the public, Company stock soared nearly 80% on high volume trading. By March 2000, the price of the Company's stock had risen more than 700% above the price the stock had traded at just months earlier. Between March 2000 and June 2001, ten additional, falsely positive reports concerning the Company were issued by the analysts. After the close of the market on September 25, 2001, trading in the Company's shares were halted by NASDAQ pending an investigation. Less than two weeks later, El-Batrawi resigned his position with the Company. The Company's stock has not resumed trading. For more details, contact Marc L. Godino by Phone: 888-388-4605 by E- mail: mgodino@secfraud.com or visit the firm's Website: www.secfraud.com. KEYSPAN CORPORATION: Schiffrin Barroway Lodges Securities Suit in NY -------------------------------------------------------------------- Schiffrin & Barroway LLP initiated a securities class action on behalf of all purchasers of the common stock of KeySpan Corporation (NYSE: KSE) from April 26, 2000 through July 17, 2001, inclusive. The suit was filed in the United States District Court for the Eastern District of New York 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 are liable as participants in a fraudulent scheme and course of business that operated as a fraud or deceit by disseminating materially false and misleading statements and/or concealing material adverse facts. The scheme allegedly: (1) deceived the investing public regarding the Company's business, operations, management and the intrinsic value of the Company's common stock; (2) enabled the individual defendants to sell their personally- held shares of common stock reaping proceeds of more than $29 million; and (3) caused plaintiff and other members of the Class to purchase the Company's common stock at artificially inflated prices. For more information, contact Marc A. Topaz or Stuart 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 KEYSPAN CORPORATION: Cauley Geller Commences E.D. NY Securities Suit -------------------------------------------------------------------- Cauley Geller Bowman & Coates LLP initiated a securities class action on behalf of purchasers of KeySpan Corp. (NYSE:KSE) common stock during the period between April 26, 2000 and July 17, 2001, inclusive. The suit was filed in the United States District Court for the Eastern District of New York against the Company and certain of its officers and directors. The complaint charges the defendants with violations of the Securities Exchange Act of 1934. The complaint alleges that defendants are liable as participants in a fraudulent scheme and course of business that operated as a fraud or deceit on purchasers of the Company's common stock by disseminating materially false and misleading statements and/or concealing material adverse facts. Allegedly, the scheme: (1) deceived the investing public regarding the Company's business, operations, management and the intrinsic value of the Company's common stock; (2) enabled the individual defendants to sell their personally- held shares of common stock reaping proceeds of more than $29 million; and (3) caused plaintiff and other members of the class to purchase the Company's common stock at artificially inflated prices For more 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 KEYSPAN CORPORATION: Kirby McInerney Files Securities Suit in E.D. NY --------------------------------------------------------------------- Kirby McInerney & Squire LLP commenced a securities class action on behalf of all purchasers of KeySpan Corp. (NYSE: KSE) stock during the period from April 26, 2001 through July 17, 2001, inclusive. The suit, filed in the United States District Court for the Eastern District of New York, charges the Company and certain of its senior officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. As the complaint alleges, the violations stem from defendants' failure to disclose what they in fact knew during the class period: (1) that serious and material "accounting inaccuracies" had been discovered at a Company subsidiary; and (2) that as a result of the need to correct the inaccuracies, the Company would need to incur a substantial charge against Earnings In July 2001, the defendants revealed to the public that "accounting inaccuracies" existed and that they were of such a magnitude that, in order to correct them, the Company would incur a $30 million charge, turning what would have been a second quarter profit into a second quarter loss. The Company's stock, which during the class period had traded at over $40 per share, fell in response to this news to close at $32 per share. Shortly prior to making this public revelation, however, numerous Company officers and directors named as defendants in the complaint received millions of dollars from the insider selling of their shares at prices allegedly artificially inflated by their failure to disclose material information. For further details, contact Ira M. Press or Orie Braun by Mail: 830 Third Avenue, 10th Floor New York, New York 10022 by Phone: (212) 317- 2300 or (888) 529-4787 (toll-free) or visit the firm's Website: www.kmslaw.com LOUDCLOUD INC.: Schiffrin Barroway Initiates N.D. CA Securities Suit -------------------------------------------------------------------- Schiffrin and Barroway LLP commenced a securities class action lawsuit on behalf of all purchasers of the common stock of Loudcloud, Inc. (NASDAQ:LDCL) issued pursuant to the March 8, 2001 prospectus. The complaint 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 suit charges the defendants with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that the prospectus used by defendants to sell $150 million worth of stock was false and misleading because, among other things, 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 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 LOUDCLOUD INC.: Cauley Geller Initiates Securities Suit in N.D. CA ------------------------------------------------------------------ Cauley Geller Bowman & Coates LLP commenced a securities class action on behalf of 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 officers and directors. The suit charges the defendants with violations of the Securities Exchange 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, among other things, 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 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 MONEY LAUNDERING: Lawsuit Proceeds As Judge Refuses To Dismiss Case ------------------------------------------------------------------- A state court judge refused to dismiss a class action suit against major Swiss and Mexican banks and several individuals for their role in laundering funds from property thefts perpetrated by drug addicts. Los Angeles Superior Court Judge John Mohr also allowed plaintiffs to include additional facts directly linking drug money launderers and the international banks holding their accounts to thefts of personal property in Los Angeles. The plaintiffs have until January 4,2002 to file an amended complaint. The plaintiffs are individuals who have had their personal property stolen by crack addicts to purchase cocaine in South Central Los Angeles. The defendants include major Swiss and Mexican banks that have previously been convicted of money laundering in federal criminal cases. Several individual international money launderers -- along with individual cocaine cartel members -- are named in the suit. The suit based its allegations on "Operation Casablanca," the U.S. Customs undercover criminal investigation of banks involved with drug money laundering. "Operation Casablanca" resulted in guilty pleas by three of the defendants in this suit. This case closely patterns a class action suit filed by Holocaust victims against Swiss Banks for their role in handling funds that were attained as a result of the theft of Jewish personal property by the Nazis. In the aftermath of the Sept. 11 terror attacks on the U.S., the prominent role played by drug trafficking and money laundering in funding terrorism has gained significant attention. The plaintiffs' lead attorney Dermot D. Givens says that this case "can help stop the money flow from drugs to terrorist." He further emphasized that it was time for the defendant banks to take responsibility for the dirty money that keeps turning up in their vaults. The defendants now face a potential lengthy legal process that may result in a sizeable legal judgment. The ruling also places the Swiss banks in the rare position of having to be subjected to American legal discovery rules which can result in their having to reveal their handling of "secret" Swiss bank accounts. NETEASE.COM: Cauley Geller Commences Securities Suit in S.D. New York --------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action on behalf of purchasers of the American Depositary Shares (ADS) of NetEase.com, Inc. (NASDAQ:NTESE) during the period between July 3, 2000 and August 31, 2001, inclusive. The suit was filed in the United States District Court for the Southern District of New York against the Company and: (1) King F. Lai, (2) William Lei Ding, (3) Helen Haiwen He, (4) Merrill Lynch, Pierce, Fenner & Smith, Incorporated, (5) Deutsche Bank Securities, Inc., (6) Chase Securities, Inc., (7) Salomon Smith Barney, Inc. and (8) UBS Warburg LLC The defendants allegedly violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The defendants reportedly issued a series of material misrepresentations to the market between July 3, 2000 and August 31, 2001. In May 2001, NetEase disclosed that it had discovered that $1 million in contracts had been improperly reported as revenue and as a result, it would delay announcing its financial results for the first quarter of 2001. Subsequently, in June 2001, the Company announced that the revenue overstatement appeared to affect its full year 2000 financial statements and the amount of the overstatement would be approximately $3 million. Then, in August 2001, NetEase finally revealed the full extent of the overstatement. The Company announced that it would be restating all of its year 2000 financial statements because $4.3 million in revenue had been overstated. The complaint alleges that the prospectus and registration statement issued in connection with the initial public offering (IPO) of the Company's ADSs were materially false and misleading because they contained artificially inflated financial results for the first quarter of 2000. Following the IPO, defendants issued press releases announcing NetEase's quarterly 2000 and full year 2000 financial results which were materially false and misleading because they overstated the Company's financial performance. 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 ONYX SOFTWARE: Wolf Haldenstein Commences Securities Suit in W.D. WA -------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class action on behalf of all purchasers of Onyx Software Corp. (NASDAQ: ONXS) securities between January 10, 2001 and August 10, 2001, including those who purchased stock pursuant to Onyx's secondary stock offering in February 2001. The suit was filed in the United States District Court for the Western District of Washington, against the Company, CEO Brent R. Frei and Interim Chief Financial Officer Amy E. Kelleran. 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 materially false and misleading statements during the class period that had the effect of artificially inflating the market price of the Company's securities. Specifically, the complaint alleges that on January 9, 2001, Onyx issued a press release announcing the acquisition of RevenueLab and hosted a conference call to discuss the acquisition and its business and prospects. As a result, the Company's stock increased from $9.8 per share to over $14 per share. The complaint further alleges the Company continued to publicly disseminate favorable, but false, financial results during the class period, causing its stock to be artificially inflated. In February 2001, the Company announced a firm underwritten offering of 2.5 million shares at $13.50 per share. As a result of the alleged artificial inflation, the Company successfully completed the secondary offering, raising net proceeds of $31.5 million. In April 2001, the Company revealed that its 1st Quarter 2001 results would be significantly lower than previously calculated with revenues of only $26 to $27 million and a large loss. As a result of this disappointing news, the stock dropped to below $3 per share. Despite the drop, however, the stock continued to trade at artificially high prices because the defendants concealed the fact that the Company's 4th Quarter 2000 results had been materially misstated. Finally, after the close of the market on August 10, 2001, defendants revealed that the Company's 4th Quarter 2000 results had been materially misstated and would have to be corrected. For more details, contact George Peters, Derek Behnke, Michael Miske, Gregory M. Nespole or Fred Taylor Isquith 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 ONYX. PROVIDIAN FINANCIAL: Berman DeValerio Files Securities Suit in N.D.CA --------------------------------------------------------------------- Berman DeValerio Pease Tabacco Burt & Pucillo LLP commenced a securities class action against Providian Financial Corporation (NYSE:PVN), charging the company with deceiving investors. The class action was filed in the U.S. District Court for the Northern District of California on behalf of all investors who bought Company stock from June 6, 2001 to October 18, 2001. The San Francisco-based company is one of the largest issuers of Visa and MasterCard credit cards in the United States. The complaint says Providian failed to tell investors that it had changed from a policy and practice of immediately writing-off receivables upon receipt of electronic notification that customers had filed for bankruptcy, to a policy and practice of accumulating or "batching" bankruptcy notifications and then writing off those receivables once per month. That change, which occurred in late June, allowed the Company to defer recognition of some $30 million in charge-offs from the second to the third quarter of 2001. As a result, the Providian's reported earnings for the second quarter were inflated by six cents per share, and its managed charge-off rate was understated by 40 basis points. The complaint also alleges that three top officers of the Company sold roughly $22 million worth of stock at artificially inflated prices. When the Company announced on October 18, 2001 that its financial results were far lower than what the defendants had previously led investors to believe, the price of its stock dropped to $5.15 per share - more than 90% below the class period high of $59.80. For more information, contact Chauncey D. Steele IV or Michael G. Lange by Mail: One Liberty Square, Boston, MA 02109 by Phone: (800) 516-9926 by E-mail: law@bermanesq.com or visit the firm's Website: www.bermanesq.com. PROVIDIAN FINANCIAL: Marc Henzel Initiates Securities Suit in N.D. CA --------------------------------------------------------------------- The Law Office of Marc S. Henzel commenced 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 suit alleges the defendants violated the Securities Exchange Act of 1934. The complaint alleges that defendants disseminated false and misleading statements concerning Providian's operations and prospects for 2nd and 3rd Quarter 2001. In late June 2001, the Company changed the way it processes its bankruptcy filings and also changed when it recognizes losses, deferring 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 2nd Quarter 2001 managed net charge-off rate of 10.3% and boosted reported earning per share (EPS) by $0.06. Without this change, the loss rate would have been 10.7%. This is well above defendants' indications of 9.5%-10%. Defendants made no mention of this change on the conference call or in the Company's 2nd Quarter 2001 10-Q Form filed with the Securities and Exchange Commission. 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. During the Class Period, taking advantage of the inflation in Providian stock, Company insider defendants sold almost $22 million worth of their own 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 details, 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 SHOPKO STORES: Berger Montague Begins Securities Suit In E.D. WI ---------------------------------------------------------------- Berger & Montague PC lodged a class action on behalf of all persons or entities who purchased securities of ShopKo Stores, Inc. (NYSE:SKO) from March 9, 2000 through November 9, 2000, inclusive. The suit was filed in the United States District Court for the Eastern District of Wisconsin this week. 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 March 9, 2000 and November 9, 2000, thereby artificially inflating the price of ShopKo securities. Throughout the class period, defendants issued statements concerning the integration of its acquisition of Pamida Holding Corp. (the owner and operator of Pamida discount stores), the Company's financial results and prospects. The suit alleges that these statements were materially false and misleading because they failed to disclose, among other things, 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 $.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 the Company's reduced earnings. For further details, contact Sherrie R. Savett, Robin Switzenbaum, Kimberly A. Walker by Mail: 1622 Locust Street Philadelphia, PA 19103 by Phone: 888-891-2289 or 215-875-3000 by Fax: 215-875-5715 by E-mail: InvestorProtector@bm.net or visit the firm's Website: www.investorprotect.com TACO BELL: California Court Approves Overtime Wages Suit Settlement ------------------------------------------------------------------- A California State Court approved the settlement in the class action suit filed by former employees of fast-food company Taco Bell Corporation. The suit, entitled Mynaf, et al. v. Taco Bell Corporation, was filed in the Superior Court of the State of California of the County of Santa Clara. Two former restaurant general managers and two former assistant restaurant general managers filed the suit on behalf of all current and former Taco Bell restaurant general managers and assistant restaurant general managers in California. The lawsuit alleged: (1) violations of California wage and hour laws involving unpaid overtime wages; (2) violations of the State Labor Code's record-keeping requirements; and (3) unfair business practices In September 1998, the Court certified a class of approximately 3,000 current and former assistant restaurant general managers and restaurant general managers. The Company petitioned the Appellate Court to review the trial Court's certification order, which the court denied. Taco Bell then filed a petition for review with the California Supreme Court, and the petition was subsequently denied. Class notices were mailed on August 31, 1999 to over 3,400 class members and in January 2001, trial in the suit commenced. However, before the conclusion of the trial, the parties reached an agreement to settle the suit for an undisclosed amount, and entered into a stipulation of discontinuance of the case. TERADYNE INC.: Faruqi Faruqi Initiates Securities Suit in Massachusetts ----------------------------------------------------------------------- Faruqi and Faruqi LLP lodged a securities class action on behalf of all purchasers of Teradyne, Inc. (NYSE:TER) common stock 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 executive officers. The complaint charges defendants with violations of the federal securities laws, including Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The defendants allegedly concealed the fact that the Company was experiencing declining orders in its semiconductors testing systems division, which would cause the Company's growth rate to slow from historic levels. Moreover, the decision to conceal this adverse information from investors was carried out to facilitate 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 common stock dropped precipitously. For more information, contact Anthony Vozzolo by Mail: 320 East 39th Street, New York, NY 10016 by Phone: (877) 247-4292 or (212) 983-9330 by E-mail: Avozz@faruqilaw.com or visit the firm's Website: www.faruqilaw.com TEXTRON/LYCOMING: Aircraft Owners To Receive Sizeable Compensation ------------------------------------------------------------------ Current and former owners of Piper Malibu Mirage aircraft could receive significant compensation for the loss in market value of their aircraft if a settlement proposed in a class action lawsuit is accepted by Textron/Lycoming and New Piper and approved by the U.S. District Court. "The evidence shows clearly that both Textron/Lycoming and New Piper knew of bearing problems with the engine installed in these aircraft since at least 1996, yet both companies stringently resisted taking steps to correct it," said Fred Misko, Jr., the Dallas attorney representing the plaintiffs. "Finally, on August 31, 2000, in the face of undeniable evidence and mounting adverse publicity, the two companies admitted that a safety of flight risk exists with the AE2A engine." He further added "This settlement proposal is not about fixing the problem, which the manufacturers allege to be resolved by bearing replacements, but about ensuring that owners and former owners of these aircraft are compensated for the significant loss in market value of their aircraft." The class action lawsuit was filed on September 19, 2000 against New Piper and Textron/Lycoming on behalf of some 1,200-1,500 current and former owners of Malibu Mirage aircraft. Filed in the U.S. District Court, Southern District of Florida, the lawsuit alleges claims under the Florida Deceptive and Unfair Trade Practices Act for misrepresentations and wrongdoings by Textron/Lycoming and New Piper related to the TIO-540-AE2A engine. The engine's manufacturer, Textron/Lycoming, touted the TIO-540-AE2A engine as the "strongest, most reliable six cylinder engine in General Aviation." Both New Piper and Textron/Lycoming specifically represented that the engine had a 2,000-hour TBO (Time Between Overhaul). In actual use, however, Mirage owners have experienced consistently premature failures that have required engine overhaul or replacement at one-third or less than the service life published by the manufacturers. "Clearly, Malibu Mirage owners have suffered diminished market value for their aircraft as a result of the engine failures, the premature overhauls required as a result and the general inability of the aircraft to meet published performance specifications," said Misko. After twelve years of production, Textron/Lycoming admitted in a Mandatory Service Advisory issued over a year ago that a safety of flight risk exists with these aircraft. The lawsuit contends that all of the owners in this class have been damaged by Textron/Lycoming's and New Piper's concealing information and making serious misrepresentations regarding the engine's 2000-hour time between overhaul service life and reliability. For purposes of the proposed settlement, class members are divided into two groups: (1) Current Owners, who are eligible for both General Relief and Individualized Relief, and (2) Former Owners who are eligible only for Individualized Relief. General Relief is designed to provide current owners with extended warranty protection for the Malibu Mirage engine, as well as revised operating procedures that will help ensure safer, more reliable engine performance. Individualized Relief is designed to reimburse current and former owners for the diminished value of their aircraft due to the aircraft's inability to meet TBO and the aircraft's damaged product reputation. Diminished value is determined by a number of factors, including the year model of the aircraft, proof of ownership and the period of ownership. If the settlement is accepted and approved, class members who are former owners could accept relief in cash or in the form of a credit for use in purchasing a new New Piper aircraft. Class members who are current owners could accept relief in cash or in the form of a credit for use in purchasing a new New Piper aircraft, a Textron/Lycoming engine/overhaul credit, an Enhanced Flight Group upgrade credit, or a JetPROP conversion credit. The settlement has been proposed to Textron/Lycoming and New Piper corporate management. No firm response has been received from the companies. Full details about the proposed settlement and settlement documents can be accessed at the Website: www.TextronPiperLitigation.com. For more information, also contact: Fred Misko, Jr. P.C. by Mail: Turtle Creek Centre 3811 Turtle Creek Boulevard, Suite 1000 Dallas, Texas 75219 by Phone: (214) 443-8000, (800) 443-8088 by Fax: (214) 443-8010 by E-mail: misko@misko.com or visit the firm's Website: www.misko.com TOBACCO LITIGATION: Defendants Move To Dismiss Suit For Lack of Proof --------------------------------------------------------------------- The four national tobacco companies in the West Virginia smokers class action suit asked Circuit Court Judge Arthur Recht to dismiss the case after the plaintiffs finished presenting evidence Tuesday. The defense motions contend the smokers have failed to prove their case and ask the court to rule in favor of tobacco giants R.J. Reynolds, Philip Morris, Brown & Williamson and Lorillard. The suit was filed on behalf of 250,000 West Virginians who want the companies to provide a medical monitoring program for smokers who yet to exhibit symptoms of smoking-related diseases. The class includes people who have smoked the equivalent of a pack a day for at least five years, but who are not sick. The class members contend cigarette smoke is proven to cause lung cancer, emphysema and other lung diseases. They also argue cigarettes have been produced for decades with "wanton and willful" disregard for public health. The tobacco companies have countered that smoking was an "inherently risky" practice and that the best way to prevent disease was to quit smoking. The prosecution presented a series of witnesses to strengthen their case, the last being a videotaped deposition of Bennett LeBow, a Miami financier who bought Liggett Group in 1986. A decade later, he broke ranks with the industry and released documents that showed cigarette makers had long known their products caused cancer. LeBow said he handed over the documents because he wanted to have no part in a "cover up" and that he wanted a "clean break." Under further questioning, LeBow admitted Liggett was in dire financial straits when it decided to cooperate with 46 state attorneys general suing the industry to recoup health care costs. Under the deal Liggett made with the attorneys general, it was relieved of paying into a huge cash settlement with the states as long as its market share remains below 1.67 percent. Jurors were told to return Thursday, when the defense is scheduled to call its first witness. It is the first medical monitoring case of its kind to go to trial in the United States, forcing the tobacco companies to defend what is essentially a product liability claim. WASHINGTON: Foster-Care System Sued For Neglect And Inadequate Care ------------------------------------------------------------------- Washington's Department of Social and Health Services (DSHS) faces a class action suit filed in Whatcom County Superior Court accusing it of neglecting the needs of foster children in its foster-care system. The suit says the system ignored a 20-year pattern of neglect by frequently moving its most physically and emotionally troubled foster children from place to place, often to the youngsters' detriment. The suit also said the department denied stable homes and education to about 30% of the 10,000 foster children in its custody at any given time. Tim Farris, attorney for the plaintiffs said that the foster-care system was not in a crisis, but the "children are in a crisis." He showed the jury several cases that had them wrinkling brows and shaking their heads. Kelly Corr, attorney representing the DSHS, said that state social workers exercised good professional judgment, particularly while the department remains understaffed and overworked. Many times, caseworkers face a dilemma when they must take children away from an abusive foster-care arrangement, and when many children enter the system emotionally damaged by abusive parents. Corr will try to convince the jury that new management at the department's upper levels has begun to correct the problems, and that the number of children being moved around is now decreasing. The jury trial ultimately will decide whether the foster-care portion of DSHS should be placed under court supervision. Last month, the state agreed to pay $1.3 million to settle the original claim by the 13 children. Half the children are still in foster care. Each child will receive $100,000 placed into a trust until he or she is 30 years old. The class-action lawsuit grew out of the original claim. WESTPOINT STEVENS: Cauley Geller Initiates Securities Suit in N.D. GA --------------------------------------------------------------------- Cauley Geller Bowman & Coates LLP filed a securities suit on behalf of purchasers of WestPoint Stevens Inc. (NYSE:WXS) common stock during the period between February 10, 1999 and October 10, 2000, inclusive. The suit was filed in the United States District Court for the Northern District of Georgia. The complaint charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that to boost Company stock on February 10, 1999 and again on April 15, 1999, defendants caused the Company to report better-than-expected 4th Quarter 1998 and 1st Quarter 1999 results. The Company also assured investors and analysts that: (1) its business remained extremely strong, (2) demand for all of its products was good, (3) its inventories were under control, and (4) it remained postured to achieve revenue and EPS growth of 5% and 20%, respectively, going forward and was increasing its 1999 and 2000 EPS forecasts to $1.82-$1.85 and $2.10-$2.20, respectively. Based on these better-than-expected 1st Quarter 1999 results and defendants' positive commentary on the Company's business, Company stock advanced to its class period high of $37-9/16 in late April 1999 from $25-3/8 at the beginning of the period. When the Company reported its 2nd Quarter and 3rd Quarter 1999 results, it again assured investors that its business was very strong. It also told investors that while its inventories had increased, especially towels, the increased towel inventory did not pose any significant risk of loss to the Company because it was basic solid colored goods with core value. The Company continued to forecast strong revenue and EPS growth for the balance of 1999 and 2000, including 2000 EPS of $2.10-$2.20. On June 28, 2000, defendants announced that: (i) the Company's Eight-Point Program would ensure strong performance in the future; (ii) momentum was building for strong prospects throughout 2000; (iii) inventory was now on target to below $400 million by year-end; (iv) the Company was still on track to report EPS of $2.08+ and $2.40 in 2000 and 2001, respectively. As a result, Company stock stabilized in the $10-$15 range through the remainder of the class period. However, by late September 2000, defendants knew that it would be impossible for them to continue to conceal the severe deterioration in the Company's business any longer. They also knew that once the Company reported its 3rdQ 00 results, it would be apparent to the market how horrible business was actually performing and the stock would collapse. In an attempt to cause the stock to make a "soft landing" for what they knew would be horrible 2000 results, defendants on September 27, 2000 announced that 3rd Quarter 2000 results would be flat with 3rd Quarter 1999 results, in the same press release in which the Company also announced a new licensing agreement with Disney. The Company's stock declined only slightly on this news to $11-9/16 due to defendants' positive statements. Then, the Company revealed that 3rd Quarter 2000 sales would actually decline 3% from the prior year, with earnings of only $0.55-$0.60 per share, lower than prior guidance. On this news, the Company's stock declined to below $9 per share. 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 WESTPOINT STEVENS: Chitwood Harley Initiates N.D. GA Securities Suit -------------------------------------------------------------------- Chitwood and Harley commenced a securities class action on behalf of purchasers of Westpoint Stevens Inc. (NYSE:WXS) common stock between February 10, 1999 and October 10,2000. The case, pending in the United States District Court for the Northern District of Georgia, names the Company and defendants: (1) Holcombe T. Green, Jr., Chairman and Chief Executive Officer, (2) Morgan M. Schuessler, former Executive Vice President and Chief Financial Officer, (3) William F. Crumley, former Executive Vice President (4) Thomas J. Ward, former President and Chief Operating Officer, (5) Gerald B. Mitchell, director, (6) Dale C. Williams, vice president, and (7) Charles W. McCall, director The lawsuit alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder. The Company describes itself as a manufacturer and marketer of bed and bath products (sheets, pillowcases, comforters, towels, blankets, and related products) for distribution to chain and department stores. The complaint alleges that the defendants issued materially false and misleading statements that had the effect of artificially inflating the market price of the Company's common stock. For example, the complaint alleges that the defendants routinely hid the Company's sagging business prospects and overstated its sales by improperly shipping merchandise before it was requested. The complaint further alleges that the defendants repeatedly misled investors concerning the extent of the Company's inventory problems and how those problems would ultimately affect the Company's business. As a result of misrepresentations like these, the investors who purchased the Company's common stock during the class period were tricked into paying more for the stock than it was actually worth. During this period of artificial inflation, defendants Crumley, McCall, Mitchell, Schuessler, and Williams allegedly took advantage of their insider status to sell hundreds of thousands of their own shares at artificially high prices for millions in proceeds. At the end of the class period, after having sold their own stock, the defendants revealed that the Company's sales had declined from prior periods, and earnings per share were far short of expectations. As a result of these announcements, Company shares fell to less than $9 per share (after having traded at more than $34 per share during the Class Period). The complaint asserts claims for securities fraud against each of the defendants, alleging that each is responsible for the artificial inflation of Company stock prices during the class period. For more details, contact Jeff Konis or David Bain by Mail: 2900 Promenade II, 1230 Peachtree Street, N.E., Atlanta, Georgia 30309 by Phone: (888) 873-3999 (toll free) by E-mail: jhk@classlaw.com or visit the firm's Website: www.classlaw.com. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2001. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re- mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. 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