/raid1/www/Hosts/bankrupt/CAR_Public/011029.mbx
C L A S S A C T I O N R E P O R T E R
Monday, October 29, 2001, Vol. 3, No. 211
Headlines
AGILE SOFTWARE: Bernstein Liebhard Commences S.D. NY Securities Suit
CARESCIENCE INC.: Cauley Geller Initiates Securities Suit in E.D. PA
CHINA: Court Awards 192 Farmers More Than $8 Million in Landmark Suit
CLARENT CORPORATION: Milberg Weiss Expands Class Period in CA Suit
CLARENT CORPORATION: Goodkind Labaton Files N.D. CA Securities Suit
CIPRO LITIGATION: Consumer Groups File Suit Over Anthrax Treatment
EBENX INC.: Bernstein Liebhard Initiates Securities Suit in S.D. NY
EGAIN COMMUNICATIONS: Bernstein Liebhard Lodges Securities Suit in NY
ENRON CORPORATION: Spector Roseman Lodges Securities Suit in S.D. TX
ENRON CORPORATION: Kaplan Fox Commences Securities Suit in S.D. TX
FARMERS INSURANCE: Company Pays Ohio $4.3 M For Redlining Practice
FLORIDA: Firefighters Face Setback As Court Dismisses Health Care Suit
FORD MOTOR: Faulty Ignitions Suit Settlement Could Reach $2.5B
GENESISINTERMEDIA INC.: Berman DeValerio Files Securities Suit in CA
INTELLI-CHECK INC.: Speziali Greenwald Reveal Developments In NJ Suit
NETEASE.COM: Kaplan Fox Commences Securities Suit In S.D. New York
NETEASE.COM: Overstated Revenue Results In S.D. NY Securities Suits
P-COM INC: Reaches MOU To Settle Securities Suit in Santa Clara CA
PAXSON COMMUNICATIONS: Faces Securities Suits Over NBC Agreement in CA
PROVIDIAN FINANCIAL: Stull Stull Initiates Securities Suit in N.D. CA
PROVIDIAN FINANCIAL: Milberg Weiss Expands Period in Securities Suit
PROVIDIAN FINANCIAL: Rabin Peckel Commences Securities Suit in N.D.CA
RALLY'S HAMBURGERS: Faces Consolidated Securities Suit in W.D. KY
SAIPAN FACTORIES: Court Orders Factory Owners To Identify Workers
TOBACCO LITIGATION: Companies Start Arguments Against Medical Program
USEC INC.: Judge Appoints Securities Suits Lead Plaintiffs, Counsel
*********
AGILE SOFTWARE: Bernstein Liebhard Commences S.D. NY Securities Suit
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Bernstein Liebhard and Lifshitz LLP initiated a securities class action
on behalf of purchasers of the securities of Agile Software Corporation
(NASDAQ: AGIL) between August 19, 1999 and December 6, 2000, inclusive.
The action is pending in the United States District Court, Southern
District of New York against the Company and:
(1) Morgan Stanley & Co., Incorporated,
(2) Deutsche Bank Securities Inc.,
(3) Hambrecht & Quist LLC,
(4) Bryan D. Stolle, and
(5) Thomas P. Shanahan
The complaint alleges violations of Sections 11, 12(a)(2) and 15 of the
Securities Act of 1933 and Section 10(b) of the Securities Exchange Act
of 1934 and Rule 10b-5 promulgated thereunder.
In August 1999, the Company commenced an initial public offering of
3,000,000 of its shares of common stock at an offering price of $21 per
share.
In connection therewith, the Company filed a registration statement,
which incorporated a prospectus with the Securities and Exchange
Commission.
The complaint further alleges that the prospectus was materially false
and misleading because it failed to disclose, among other things, that:
(i) Morgan Stanley, Deutsche Bank, and Hambrecht & Quist had
solicited and received excessive and undisclosed commissions
from certain investors in exchange for which Morgan Stanley,
Deutsche Bank, and Hambrecht & Quist allocated to those
investors material portions of the restricted number of
Company shares issued in connection with the IPO; and
(ii) Morgan Stanley, Deutsche Bank, and Hambrecht & Quist had
entered into agreements with customers whereby Morgan Stanley,
Deutsche Bank, and Hambrecht & Quist agreed to allocate
Company shares to those customers in the IPO in exchange for
which the customers agreed to purchase additional shares in
the aftermarket at pre-determined prices
For 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: AGIL@bernlieb.com or
visit the firm's Website: www.bernlieb.com
CARESCIENCE INC.: Cauley Geller Initiates Securities Suit in E.D. PA
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Cauley Geller Bowman & Coates, LLP commenced a securities class action
on behalf of purchasers of CareScience, Inc. (NASDAQ:CARE) common stock
during the period between June 29, 2000 and November 1, 2000,
inclusive. The suit was filed in the United States District Court for
the Eastern District of Pennsylvania.
The complaint alleges that the Company violated Sections 11, 12(a)(2)
and 15 of the Securities Act of 1933 by issuing a materially false and
misleading prospectus and registration statement.
The complaint also 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, and provided detailed
descriptions of their features, including an anticipated rollout date
in 2001.
These statements were allegedly materially false and misleading because
they failed to disclose that, given the environment for Internet-based
health applications, the Company's Careleader.com and Caresense.com
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 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
CHINA: Court Awards 192 Farmers More Than $8 Million in Landmark Suit
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192 Chinese farmers who developed lung disease while employed as tunnel
diggers were awarded compensation in a landmark ruling of the court in
the Zhejiang coastal city of Wenzhou.
The farmers were hired by two engineering firms in 1993 to dig a
highway tunnel in China's northeast. They claim that the firms did not
do anything to protect them from silicon dust exposure.
A total of 196 farmers became sick and ten have already died from lung
disease. All but four of these farmers filed the suit against the two
firms and a man named Chen Yixiao who is the alleged head of one firm.
The court awarded $27,400 for each death and $47,050 for the surviving
farmers - amounts that could greatly help the farmers. Even the
smallest award - $4,700 - is more than what the farmers could earn in
10 years.
The suit was China's first action seeking compensation for lung
disease.
The landmark ruling comes as Chinese legislators are planning to
approve a new law to stem the toll of work-related accidents and
diseases in China's often chronically unsafe factories and workplaces.
Chinese lawmakers meeting in Beijing are expected to give final
approval Saturday for a new law that will require employers to do more
to prevent industrial accidents and diseases, the China Daily said
Wednesday.
The law will require employers to provide occupational health
facilities and accident insurance for employees, the newspaper said. It
gave no details.
CLARENT CORPORATION: Milberg Weiss Expands Class Period in CA Suit
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Milberg Weiss Bershad Hynes and Lerach LLP expanded the class period in
the securities class action filed against Clarent Corporation
(NASDAQ:CLRN) in the United States District Court for the Northern
District of California.
The suit was filed on behalf of purchasers of the Company's publicly
traded securities during the period between April 26, 2000 and August
31, 2001.
The complaint charges the Company and certain of its officers with
violations of the Securities Exchange Act of 1934.
In September 2001, the Company announced in a press release that it had
discovered information suggesting that its previously reported revenues
for the first and second quarters of fiscal 2001 may have been
materially overstated.
The Company further revealed that its Board of Directors was forming a
special committee to investigate a number of transactions that placed
in question the Company's historical financial results.
The Company also stated that its first quarter 2001 revenues, as
released on April 19, 2001, and its second quarter 2001 revenues, as
released on July 19, 2001, will be reduced and the related net losses
will increase upon conclusion of the review.
In addition, the Company anticipates that its revenues for the second
half of fiscal 2001 and for fiscal 2002 will be substantially below
previously anticipated levels, and that the related losses will be
significantly larger than expected.
The Company also announced that several of its officers had been placed
on administrative leave. On this news trading halted at $5.37.
For more information, contact: Steven G. Schulman or Samuel H. Rudman
by Mail: One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 by
Phone: (800) 320-5081 by Email: Clarentcase@milbergNY.com or visit the
firm's Website: www.milberg.com
CLARENT CORPORATION: Goodkind Labaton Files N.D. CA Securities Suit
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Goodkind Labaton Rudoff and Sucharow LLP lodged a class action
complaint against Clarent Corporation (NYSE:CLRN) and certain of its
senior officers.
The lawsuit was filed in the United States District Court for the
Northern District of California on behalf of purchasers of the
Company's securities between April 19, 2001 and September 4, 2001.
The suit alleges violations of Section 10(b) and 20(a) of the
Securities Exchange Act of 1934.
The Complaint charges that, among other things, defendants issued false
and misleading statements regarding the Company's financial results.
Specifically in September 2001, the Company disclosed that it would
restate its financial results for its first two 2001 fiscal quarters
pending an investigation into a "potential overstatement of historical
revenues" and had placed three executives on administrative leave.
The NASDAQ Stock Market suspended trading of the Company's stock
pending the release of further news.
For more information, contact Emily C. Komlossy or Henry J. Young by
Mail: 100 Park Avenue New York, New York 10017 by Phone: (212) 907-0700
by E-mail: komlose@glrs.com or youngh@glrs.com or visit the firm's
Website: www.glrs.com
CIPRO LITIGATION: Consumer Groups File Suit Over Anthrax Treatment
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A consumer group coalition filed a suit against Bayer Corporation and
three generic drug makers claiming that the Companies agreed to keep a
lower cost version of anthrax drug Cipro off the market.
Boston-based Prescription Access Litigation (PAL) filed the suit on
behalf of 14 advocacy groups in the U.S. District Court for the Eastern
District New York against:
(1) Bayer Corporation;
(2) Barr Laboratories;
(3) Rugby, a division of Watson Laboratories; and
(4) Hoeschst-Marion-Roussel, a division of Aventis SA
The suit declared as "illegal" the agreement between the Companies,
where Bayer has paid $200 million to stop the Companies from bringing
generic versions of Cipro to the market.
Barr and Bayer were set to go to trial over the Cipro patent in 1997,
but reached an out-of-court settlement in which Barr receives $30
million a year from Bayer.
PAL spokeswoman Laurie Covens said that as there was "a public
emergency," Bayer should not be allowed to keep a lock on generics
entering the market.
The PAL suits join a group of class action suits filed against Bayer
and the generic firms.
Barr spokeswoman Carol Cox defended the company's agreement, saying it
allows for a generic version to be sold starting in July 2003, before
Bayer's patent expires in December 2003.
Bayer, Watson and Aventis didn't return calls for comment.
EBENX INC.: Bernstein Liebhard Initiates Securities Suit in S.D. NY
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Bernstein Liebhard and Lifshitz LLP commenced a securities class action
on behalf of purchasers of the securities of eBenX, Inc. (NASDAQ: EBNX)
between December 9, 1999 and December 6, 2000, inclusive.
The action is pending in the United States District Court, Southern
District of New York against the Company and:
(1) BancBoston Robertson Stephens, Inc.,
(2) Warburg Dillon Read LLC,
(3) Thomas Weisel Partners LLC,
(4) Mark W. Tierney,
(5) John J. Davis, and
(6) Scott P. Halstead
The complaint alleges violations of Sections 11, 12(a)(2) and 15 of the
Securities Act of 1933 and Section 10(b) of the Securities Exchange Act
of 1934 and Rule 10b-5 promulgated thereunder.
In December 1999, the Company commenced an initial public offering of
5,000,000 of its shares of common stock at an offering price of $20 per
share.
In connection therewith, the Company filed a registration statement,
which incorporated a prospectus with the Securities and Exchange
Commission.
The complaint further alleges that the prospectus was materially false
and misleading because it failed to disclose, among other things, that:
(i) Robertson Stephens, Warburg Dillon, and Thomas Weisel had
solicited and received excessive and undisclosed commissions
from certain investors in exchange for which Robertson
Stephens, Warburg Dillon, and Thomas Weisel allocated to those
investors material portions of the restricted number of
Company shares issued in connection with the IPO; and
(ii) Robertson Stephens, Warburg Dillon, and Thomas Weisel had
entered into agreements with customers whereby Robertson
Stephens, Warburg Dillon, and Thomas Weisel agreed to allocate
Company shares to those customers in the IPO in exchange for
which the customers agreed to purchase additional shares in
the aftermarket at pre-determined prices.
Bernstein Liebhard and Lifshitz LLP is part of a Plaintiffs' Executive
Committee of In re: Initial Public Offering Securities Litigation,
appointed by the Honorable Shira A. Scheindlin.
The other members of the committee are:
(a) Milberg Weiss Bershad Hynes & Lerach LLP,
(b) Schiffrin & Barroway LLP,
(c) Sirota & Sirota LLP,
(d) Stull, Stull & Brody and
(e) Wolf Haldenstein Freeman & Herz LLP
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: EBNX@bernlieb.com or
visit the firm's Website: www.bernlieb.com
EGAIN COMMUNICATIONS: Bernstein Liebhard Lodges Securities Suit in NY
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Bernstein Liebhard and Lifshitz LLP initiated a securities class action
lawsuit on behalf of purchasers of the securities of eGain
Communications Corporation (NASDAQ: EGAN) between September 23, 1999
and December 6, 2000, inclusive.
The action is pending in the United States District Court, Southern
District of New York against the Company and defendants:
(1) BancBoston Robertson Stephens, Inc.,
(2) Donaldson, Lufkin & Jenrette Securities Corporation,
(3) Volpe Brown Whelan & Company, LLC,
(4) Ashutosh Roy,
(5) Gunjan Sinha, and
(6) Harpreet Grewal
The complaint alleges violations of Sections 11, 12(a)(2) and 15 of the
Securities Act of 1933 and Section 10(b) of the Securities Exchange Act
of 1934 and Rule 10b-5 promulgated thereunder.
In September 1999, the Company commenced an initial public offering of
5,000,000 of its shares of common stock at an offering price of $12 per
share.
In connection therewith, the Company filed a registration statement,
which incorporated a prospectus with the Securities and Exchange
Commission.
The complaint further alleges that the prospectus was materially false
and misleading because it failed to disclose, among other things, that:
(i) Robertson Stephens, DLJ, and Volpe Brown had solicited and
received excessive and undisclosed commissions from certain
investors in exchange for which Robertson Stephens, DLJ, and
Volpe Brown allocated to those investors material portions of
the restricted number of shares issued in connection with the
IPO; and
(ii) Robertson Stephens, DLJ, and Volpe Brown had entered into
agreements with customers whereby Robertson Stephens, DLJ, and
Volpe Brown agreed to allocate Company shares to those
customers in the IPO in exchange for which the customers
agreed to purchase additional shares in the aftermarket at
pre-determined prices
Bernstein Liebhard and Lifshitz LLP is part of the Plaintiffs'
Executive Committee of In re: Initial Public Offering Securities
Litigation, 21 MC 92 (SAS) appointed by the Honorable Shira A.
Scheindlin to prosecute the case.
The members of the committee are:
(1) Milberg Weiss Bershad Hynes & Lerach LLP,
(2) Schiffrin & Barroway LLP,
(3) Sirota & Sirota LLP,
(4) Stull, Stull & Brody and
(5) Wolf Haldenstein Freeman & Herz LLP
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: EGAIN@bernlieb.com or
visit the firm's Website: www.bernlieb.com
ENRON CORPORATION: Spector Roseman Lodges Securities Suit in S.D. TX
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Spector Roseman & Kodroff PC initiated a securities class action on
behalf of purchasers of Enron Corporation (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 Company
officers/directors:
(1) Kenneth L. Lay,
(2) Jeffrey K. Skilling, and
(3) Andrew Fastow
The suit alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder.
The Company allegedly issued a series of material misrepresentations to
the market between January 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
efforts 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 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, the Company revealed that a material portion of the
responsibility relating to the unwinding of investments with certain
limited partnerships was controlled by its chief financial officer.
The Company further revealed that 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. During the class period,
Company insiders disposed of over $73 million of their personally held
common stock to unsuspecting investors.
For further details, contact Robert M. Roseman by Phone: 888-844-5862
(toll-free) by E-mail: classaction@srk-law.com or visit the firm's
Website: www.spectorandroseman.com
ENRON CORPORATION: Kaplan Fox Commences Securities Suit in S.D. TX
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Kaplan Fox and Kilsheimer LLP initiated a securities class action on
behalf of purchasers of Enron Corporation (NYSE: ENE) common stock
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 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 during the class period, defendants engaged
in asset and securities sales to closely related affiliates and
interested parties, which disguised the Company's true financial
position.
Defendants used these asset sales to falsely improve the Company's
balance sheet, thereby maintaining Company shares at an artificially
inflated price.
Certain Company executives, who held positions in the affiliates that
presented clear conflicts of interest, reaped millions of dollars in
personal gains from these transactions.
The complaint further alleges that during the class period, the
defendants made misleading statements regarding the potential value of
the Company's Broadband business, in order to artificially boost its
share price.
With knowledge that the Company's Broadband business would never post a
profit and was seriously overvalued, the defendants continued to make
misleading statements about the Broadband business in order to maintain
the share price at its artificially inflated levels.
The defendants used the artificially inflated value of the Company's
Broadband business to hedge against, in order to gain millions of
dollars in financing.
The defendants failed to disclose the risk of these financing
arrangements and hid the true nature of the Company's earnings, its
hedging, its businesses, and the correct state of the Company's
finances from its investors and the market.
While the stock was artificially inflated for the above reasons,
Company executives engaged in extensive insider trading, gaining
personal proceeds of approximately $482 million during the class
period, before the public became aware of the above practices.
For more information, contact Frederic S. Fox or Laurence D. King by
Mail: 805 Third Avenue, 22nd Floor, New York, NY 10022 or 100 Pine
Street, 26th Floor, San Francisco, CA 94111 by Phone: 800-290-1952 or
415-336-1238 or visit the firm's Website: www.kaplanfox.com
FARMERS INSURANCE: Company Pays Ohio $4.3 M For Redlining Practice
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Farmers Insurance Group will settle for $4.3 million the class action
suit filed by the Toledo Fair Housing Center in Lucas County Common
Pleas Court.
The suit alleges that the company discriminated against Cleveland and
Toledo minority homeowners who sought mortgage insurance policies, The
Plain Dealer Cleveland recently reported. Two black women reported to
the Center that the Company would not sell them replacement insurance
policies for their homes.
The lawsuit charged the Company with "redlining," an illegal policy in
which banks and insurance companies refuse to provide services to
people living in certain neighborhoods.
The settlement was announced at a news conference yesterday by Ohio
Attorney General Betty Montgomery, the Ohio Civil Rights Commission and
members of fair housing associations in both cities.
Although the company admitted no wrongdoing in the settlement, the
payout is unprecedented in the history of the Civil Rights Commission,
said Aaron Wheeler, commission chairman.
"It's a landmark piece in the history of our state for settlements, and
this is the genesis of things to come," Wheeler said. "We want to send
a clear message businesses out there that discrimination will not be
tolerated at any level."
At least $3 million of the settlement will be issued as grants or
low-interest loans and directed to community-based programs to help
develop, build, repair, improve or remodel homes throughout the state.
The additional $1.3 million will be split between Housing Advocates
Inc. in Cleveland and the Toledo Fair Housing Center, the organizations
that filed complaints against the Company with the Civil Rights
Commission.
Mary Flynn, a Company spokeswoman promised a statement from the
company, but could not be reached later.
Andy Sandler, a Washington, D.C. lawyer representing the Company, said
agents followed underwriting rules approved by state insurance
commissioners.
"We agree with the attorney general's office that the new rules are
better and saw no reason to litigate over the old rules, but we deny
that Farmers committed any discriminatory practices," Sandler said
FLORIDA: Firefighters Face Setback As Court Dismisses Health Care Suit
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The class action suit filed by firefighters blaming the City of Orlando
for not revealing medical test results was dismissed Thursday.
13 firefighters sued the City claiming that their medical records were
withheld from them and as a result, developed life threatening
illnesses such as hepatitis, heart disorders, lung problems, high blood
pressure and hearing loss.
Attorneys for the firefighters said that the city and its officials,
including Mayor Glenda Hood, should be held responsible.
However, the case was dismissed because there was no evidence that the
city government should be named as a defendant. Instead, the judge
ruled that the lawsuit had the makings of a medical malpractice case.
The firefighter's attorney, Geoffrey Bichler said that they were
prepared to do whatever it takes to put the case in front of a jury.
Earlier, the City and the firefighters reached an agreement that would
have allowed the plaintiffs to bring their medical records to their own
doctors.
However, in the light of the case's dismissal, it is not known what the
firefighters will now do with the lawsuit.
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.
FORD MOTOR: Faulty Ignitions Suit Settlement Could Reach $2.5B
--------------------------------------------------------------
Automobile giant Ford Motor Company settled Thursday a class action
lawsuit over faulty ignitions that allegedly caused Ford cars and
trucks to be more prone to stalling.
The Company agreed to reimburse former and current owners for repairs
on an estimated 22 million cars and trucks - an act that could cost
them up to $2.5 billion according to the plaintiffs' lawyers.
Lawyer for the plaintiffs, Jeff Fazio hailed the decision, saying it
provided "real remedies for millions of consumers and businesses who
have owned the affected vehicles all over the United States."
The suit arose from the Thick Film Ignition (TFI) module that Ford
installed in cars and trucks from 1983 to 1995.
The suit alleges that the TFI, which carries electricity to the
distributor that in turn carries it to the spark plugs, was placed too
close to the engine.
The module allegedly caused vehicles to stall in dangerous situations,
such as on highways and crossing railroad tracks.
The Company has repeatedly denied that the module was defective, saying
that there was no evidence of safety problems.
The settlement is structured as a warranty extension, not a recall.
Under the agreement, the Company will replace all ignition switches in
the affected autos up to their first 100,000 miles of us or reimburse
owners if they have already paid to have the part replaced.
The Company also agreed to extend the current 50,000-mile warranty on
the part to 100,000 miles.
The settlement affects the most cars in the nation's history, including
the Bronco, Escort, Grand Marquis, Mustang, Sable, Taurus, Tempo,
Thunderbird, Topaz and Town Car models.
Fazio noted the settlement went beyond Judge Michael Ballachey's recall
order of up to two million cars and trucks with the part, because the
deal covers cars and trucks nationwide, not just in California.
The Company, however, downplayed the $2.5 billion figure presented by
the plaintiffs saying that it was too soon to say how much the total
settlement would cost.
Company attorney Richard Warmer said that a final tally would be far
less than the plaintiffs estimates and emphasized that the Company
would have won a jury trial because the ignition part worked
"satisfactorily."
Warmer further said that the settlement will not have a material effect
on the Company, saying ".It was a way to put it behind us and move
ahead."
The Company faces the stormiest period in their 98-year old history -
last year, the Company recalled 19.5 million Firestone tires linked to
accidents causing about 200 deaths and 700 injuries.
It will be several months before car owners get their money because of
several procedural issues still on the table such as finding an
administrator to review and process the claims.
GENESISINTERMEDIA INC.: Berman DeValerio Files Securities Suit in CA
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Berman DeValerio Pease Tabacco Burt and Pucillo commenced a securities
class action against GenesisIntermedia, Inc. (NASDAQ:GENI) in the U.S.
District Court for the Central District of California.
The suit was filed on behalf of all investors who bought the Company's
stock from December 21, 1999 to September 25, 2001.
It is believed to be the first class action against the Company that
names Adnan Khashoggi, the Saudi arms dealer and financier who owned or
controlled much of the company's stock.
The complaint accuses the Company, Khashoggi, former CEO Ramy El-
Batrawi and others of engaging in an elaborate two-year scheme to
manipulate the market in the company's stock and jack up its share
price, reaping millions of dollars in illegal gains.
The Company is a telemarketing company based in Van Nuys. Khashoggi
owns Ultimate Holdings, Ltd., a Bermuda investment company that held up
to 40% of the Company's stock during the class period.
The scheme allegedly began in December 1999 when Khashoggi and El-
Batrawi made a secret stock payment worth $3 million to financial
commentator Courtney Smith to tout the company's stock. Smith
recommended the stock at least 18 times during appearances on CNBC,
CNN, Bloomberg Television and other media outlets. By the time of
Smith's last appearance in March 2000, the stock had jumped from less
than $1.50 per share in December 1999 to highs of between $4 and $8 per
share.
The stocked jumped again in May 2001, soaring 42% in a single week
after a buy recommendation by Rafi Khan, an ex-stockbroker banned from
the securities industry who had spent several days meeting the
Company's executives at their offices.
According to the complaint, the defendants accentuated the stock run-up
with their own false statements and insider trading. By late summer,
the stock was selling at more than $17 per share and United Holdings,
Khashoggi's company, had reaped some $7 million in illegal "short-
swing" profits.
The final chapter in the alleged fraud began in September 2001, when
someone lent more than 7.2 million shares of the Company's stock to
Native Nations Securities, Inc., a small firm in New Jersey.
The only two people holding enough shares to make the loan were
Khashoggi and El-Batrawi, the complaint said.
Native Nations, in turn, loaned the 7.2 million shares to MJK Clearing,
Inc., which then re-loaned the shares to at least four other securities
firms.
When the Company's share price later fell and the other firms asked for
repayment, Native Nations revealed that someone had altered its books
and walked away with $60 million dollars.
The Securities Investor Protection Corporation seized MJK Clearing for
insufficient capital -- producing the largest failure of a U.S.
brokerage firm in at least 30 years.
The Nasdaq Stock Market halted trading in Company stock on September
25, 2001, but not before El-Batrawi had sold $1.7 million worth of his
stock.
The Securities and Exchange Commission has since announced a formal
investigation.
For more details, contact Sara Davis, Todd Seaver 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
INTELLI-CHECK INC.: Speziali Greenwald Reveal Developments In NJ Suit
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Speziali, Greenwald & Hawkins PC announced that a class action lawsuit
filed on behalf of short-sellers of the securities of Intelli-Check,
Inc., (AMEX:IDN) has received an allocation of assignment and docket
number.
The action has been assigned to the Hon. Joel A. Pisano, USDJ, United
States District Court for New Jersey, Camden. The docket number is 1:
01cv04860 according to the court's allocation. Service of the Summons
and Complaint upon the defendants is being delayed pending the filing
of an amendment to the complaint.
It is anticipated that an additional short-seller, Daniel Borislow
(present position 78,400 shares short) who last short-sold the
company's securities in June, 2001, will be added as a named plaintiff.
It is also expected that amendments will be added regarding non-
employee professionals of the company and failure to disclose as a
"significant event" the loss of a primary distributor.
Further delays with respect to amending and serving the complaint may
occur pending investigation of yesterday's Dow Jones Newswire story
regarding the Company's motives for a recent rights offering.
The story inaccurately reported that Borislow represents 90% of the
current short-position (755,085) and the rights offering was launched
to negatively impact his position.
Indeed, Borislow's position is 78,400 shares short and the rights
offering results in shares being sold by the company, has no effect on
short-positions and simply dilutes the position of existing
shareholders.
If it is determined that the Company provided this inaccurate and
misleading information and issued the rights offering to negatively
affect short sellers than additional securities violations and
allegations will be added to the amended complaint.
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.
In fact, sequential sales from 4th Quarter 2000 to the 1st and 2nd
Quarter 2001 have substantially decreased.
Specifically, during the class period defendants reported materially
inflated revenue for the Company by:
(1) manipulating the reporting of sales and revenue in its filings
with the Securities and Exchange Commission and in its press
releases; and
(2) failing to disclose significant competition having a material
impact on the Company and the sale of its products
In May 2001, the defendants announced significant increases in revenue
for the second consecutive quarter when in fact shipments and sales of
products had actually decreased.
The defendants later announced that revenues for the second quarter of
2001 increased nearly 15 fold from the second quarter of 2000 and 10
fold for the first six months compared with the year ago period failing
to disclose a possible change in the method of accounting for
distributor sales impact on revenue and deferred revenues reported in
its financial statements.
It is also alleged that the misleading disclosures have materially and
artificially inflated the price of Company shares thereby allowing
certain of the defendants to sell shares at substantial gains and
allowing the shares to close at or above $10.50 per share since
September 24, 2001.
If the price of Company shares closes at or above $10.50 per share each
day through October 19, 2001, the Company will be able to force the
exercise of 979,076 stock rights at a price of $8.50 per share thereby
forcing the sale of stock at an artificially inflated price.
At all times relevant defendants benefited, by virtue of substantial
ownership interests, through sales and otherwise, from the artificially
inflated stock price and rights offering, all to the detriment of the
class of short-sellers.
For further details, contact David A. Speziali by Mail: 37 Oak Ridge
Drive, PO Box 1787, Voorhees, New Jersey 08043 by Phone: (856) 772-1006
or by E-mail: dspeziali@home.com
NETEASE.COM: Kaplan Fox Commences Securities Suit In S.D. New York
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Kaplan Fox and Kilsheimer LLP initiated a securities class action on
behalf of purchasers of the American Depositary Shares (ADSs) of
NetEase.com, Inc. (NASDAQ: NTESE) between July 3, 2000 and August 31,
2001, inclusive.
The suit was filed in the U.S. District Court for the Southern District
of New York against the Company, certain of the Company's officers and
directors, Merrill Lynch & Co., Inc. and Deutsche Bank Securities, Inc.
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 during the class period, defendants issued a
series of false and misleading statements concerning the Company's
revenue and financial results.
Specifically, in May 2001, the Company 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, 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, on August 31, 2001, the Company 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 further alleges that the prospectus and registration
statement issued in connection with the initial public offering 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 the
Company's quarterly 2000 and full year 2000 financial results which
were materially false and misleading because they overstated the
Company's financial performance.
For more information, contact S. Fox by Mail: 805 Third Avenue, 22nd
Floor New York, NY 10022 by Phone: (800)290-1952 or (212)687-1980 by
Fax: (212) 687-7714 by E-mail: mail@kaplanfox.com or visit the firm's
Website: www.kaplanfox.com
NETEASE.COM: Overstated Revenue Results In S.D. NY Securities Suits
-------------------------------------------------------------------
Embattled Chinese Web portal NetEase.com said that it would mount a
vigorous defense against the class action suits filed in the U.S.
District Court for the Southern District of New York.
In a statement, the Company said that it "has become aware of a pending
class action lawsuit against the company, Mr William Lei Ding, Mr King
F. Lai, Ms Helen Haiwen He and the underwriters of its initial public
offering of American Depositary Shares in July 2000."
The underwriters mentioned in the suit were:
(1) Merrill Lynch, Pierce, Fenner & Smith, Incorporated,
(2) Deutsche Bank Securities, Inc.,
(3) Chase Securities, Inc.,
(4) Salomon Smith Barney, Inc. and
(5) UBS Warburg LLC
The suit alleged violations of U.S. federal securities law arising in
connection with the company's restatement of its audited financial
statements for the year ended December 31, 2000.
The Company revealed in August that it had overstated at least $4.3
million of revenues during the year 2000.
The Company's share price has fallen to under $1 from a high of $14.75
shortly after it listed on the Nasdaq stock exchange in July 2000.
Several top officials also resigned from the Company this year -
including founder Willian Ding, former chief executive officer King Lai
and former chief financial officer Helen He.
The Company also awaits a decision from the Nasdaq stock exchange about
whether it would de-list the firm for failing to submit its annual
report on time.
Olive Zhou, a NetEase spokeswoman in Beijing, said the firm was "still
waiting for their response" in a telephone interview with Reuters.
P-COM INC: Reaches MOU To Settle Securities Suit in Santa Clara CA
------------------------------------------------------------------
P-Com, Inc. (NASDAQ:PCOM) reached a memorandum of understanding to
settle the consolidated securities class action filed in the Superior
Court of California, County of Santa Clara.
The suit arose from several class action complaints were filed in 1998
on behalf of all purchasers of the Company's common stock between April
1997 and September 11, 1998.
The plaintiffs allege various state securities laws violations by the
Company and certain of its officers and directors.
Under the terms of the settlement, the plaintiffs will dismiss all
claims against the Company and all of the other defendants, without
admission of liability or wrongdoing.
The settlement will be funded entirely by the Company's directors and
officers liability insurance, and the settlement payment will not have
an adverse effect on the Company's financial position or results of
operations.
The Company entered the settlement to remove the uncertainty, expense
and distraction of continuing litigation.
George Roberts, The Company's Chairman of the Board says that "We
continue to believe that the case was without merit, however, we
believe that our decision to settle the consolidated securities class
action is in the best interest of our shareholders."
PAXSON COMMUNICATIONS: Faces Securities Suits Over NBC Agreement in CA
----------------------------------------------------------------------
Paxson Communications Corporation faces several securities class
actions filed in the three state courts alleging breach of fiduciary
duty relating to an investment agreement with National Broadcasting
Company, Inc.
Shareholders commenced the suits against the Company and certain of its
officers and directors in these venues:
(1) 15th Judicial Circuit Court in Palm Beach County, Florida,
(2) the Court of Chancery of the State of Delaware, and
(3) Superior Court of the State of California.
In September 1999, the Company entered into an investment agreement
with NBC, pursuant to which NBC purchased shares of convertible
preferred stock and common stock purchase warrants from the Company for
an aggregate purchase price of $415 million.
Further, the defendants granted NBC the right to purchase all (but not
less than all) 8,311,639 shares of Class B Common Stock of the Company.
The complaints uniformly assert that that the directors rejected a
takeover offer and instead completed the NBC transactions, thereby
precluding the plaintiffs from obtaining a premium price for their
shares.
The complaints seek to rescind the NBC transactions, to require the
Company to pursue other acquisition offers and to recover damages.
The four actions in Delaware were recently dismissed by the Delaware
court. The Florida and California cases have been stayed pending
resolution of the Delaware consolidated action.
The Company labeled the suits "without merit" and vowed to vigorously
defend against these actions.
Paxson Communications Corporation Company owns and operates television
stations nationwide.
PROVIDIAN FINANCIAL: Stull Stull Initiates Securities Suit in N.D. CA
---------------------------------------------------------------------
Stull Stull and Brody commenced a securities class action on behalf of
purchasers of Providian Financial Corporation (NYSE:PVN) between June
6, 2001 and October 11, 2001, inclusive.
The suit was filed in the United States District Court for the Northern
District of California against the Company and Company officers:
(1) David Alvarez,
(2) James Rowe and
(3) Shailesh J. Mehta
The defendants allegedly violated federal securities laws by issuing
false and misleading statements regarding the Company's financial
condition as well as its present and future business prospects.
More specifically, at the beginning of the class period, defendants
represented that the Company would have sequential earnings growth as
it had represented in each quarter since its inception as a public
company.
However, defendants actually knew that the Company's financial
condition was eroding.
The defendants also had the motive and the opportunity to perpetrate
the fraudulent scheme and course of business described herein.
During the class period, the defendants sold nearly $22 million worth
of their own shares at prices.
In October 2001, the Company revealed that it would post no EPS growth
and that its EPS would be only a small fraction of what defendants had
led the market to believe.
This was contrary to prior assurances by defendants of its continuing
revenue and EPS growth, including defendants' assurances weeks earlier
that the Company would post another quarter of sequential EPS growth.
This threw the Company's shares into a free fall.
For further details, contact Marc L. Godino by Phone: 888-388-4605 or
by E-mail: mgodino@secfraud.com or visit the firm's Website:
www.secfraud.com
PROVIDIAN FINANCIAL: Milberg Weiss Expands Period in Securities Suit
--------------------------------------------------------------------
Milberg Weiss Bershad Hynes and Lerach LLP expanded the class period in
the securities suit against Providian Financial Corporation (NYSE:PVN)
in the U.S. District Court for the Northern District of California.
The suit was filed on behalf of purchasers of the Company's publicly
traded securities during the period between June 6, 2001 and October
18, 2001.
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 defendants disseminated false and misleading
statements concerning the Company's operations and prospects for 2nd
and 3rd Quarters 2001.
In late June 2001, the Company changed the way it processes its
bankruptcy filings and therefore changed when it recognizes losses and
deferred the recognition of approximately $30 million of charge-offs
from June (and 2nd Quarter 2001) 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 EPS by $0.06.
Without this change, the loss rate would have been 10.7%. This is 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 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 insiders sold almost $22 million worth of their own
Providian 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/
PROVIDIAN FINANCIAL: Rabin Peckel Commences Securities Suit in N.D.CA
---------------------------------------------------------------------
Rabin and Peckel LLP initiated a securities class action on behalf of
purchasers of Providian Financial Corporation (NYSE:PVN) common stock
from June 6, 2001 to October 11, 2001.
The suit, filed in the United States District Court for the Northern
District of California, alleges that the Company and certain of its
officers violated Section 10(b) of the Securities and Exchange Act of
1934.
The defendants allegedly issued false and misleading statements
concerning the Company's operations and prospects for its second and
third quarters of 2001.
Specifically, the suit alleges that in late June 2001, the Company
changed the way it processes its bankruptcy filings and thus changed
when it recognizes losses and deferred the recognition of approximately
$30 million of charge-offs from June (and second quarter 2001) into
July (third quarter 2001).
The Company manipulated its financial statements for the second quarter
2001 and shaved 40 basis points off its second quarter 2001 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%. This was well
above defendants' guidance of 9.5%-10%.
Defendants made no mention of this change on the conference call or in
its second quarter 10-Q 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 insiders dumped 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 further details, contact Maurice Pesso or Eric Belfi by Mail: 275
Madison Avenue, New York, NY 10016 by Phone: (800) 497-8076 or (212)
682-1818 by Fax: (212) 682-1892 by E-mail: email@rabinlaw.com or visit
the firm's Website: www.rabinlaw.com
RALLY'S HAMBURGERS: Faces Consolidated Securities Suit in W.D. KY
-----------------------------------------------------------------
Rally's Hamburgers, Inc. faces a consolidated securities class action
filed in the United States District Court for the Western District of
Kentucky, Louisville Division.
The suit was filed on behalf of Company stockholders against:
(1) the Company,
(2) Burt Sugarman,
(3) Giant Group, Ltd.,
(4) certain of the Company's former officers and directors, and
(5) the Company's auditors
The consolidated suit arose from two suits that similarly charge the
defendants with violations of the Securities Exchange Act of 1934.
The defendants allegedly issued inaccurate public statements about the
Company in order to arbitrarily inflate the price of its common stock.
The plaintiffs seek unspecified damages.
In April 1994, the Company filed a motion to dismiss and a motion to
strike.
The court struck certain provisions of the complaint but otherwise
denied the Company's motion to dismiss. In addition, the Court denied
plaintiffs' motion for class certification.
However, the plaintiffs renewed this motion, and despite opposition by
the defendants, the Court granted such motion for class certification,
certifying a class from July 20, 1992 to September 29, 1993.
The parties filed motions for summary judgment in September 2000, which
are currently awaiting the court's decision.
The defendants deny all allegations.
SAIPAN FACTORIES: Court Orders Factory Owners To Identify Workers
-----------------------------------------------------------------
Saipan factory owners and American retailers face a class action
lawsuit in the U.S. District Court in Saipan alleging widespread
sweatshop abuses in the island's garment trade.
Federal Court Judge Alex R. Munson recently ordered a number of factory
owners in Saipan to provide within 30 days the identities of current
and past workers, according to a Los Angeles Times report. The
information will help in the sending of notices to potential class
members. These notices will be translated and distributed locally and
abroad.
Workers will have up to four months to join the class-action lawsuit,
which alleges widespread sweatshop abuses in the island's garment
trade.
Attorneys for the plaintiffs believe the order opens the door to a
great many potential plaintiffs. Michael Rubin, a San Francisco-based
attorney representing 972 Saipan workers from China, Vietnam and other
low-wage nations, commented, "It's unbelievable. This adds up to
20,000 additional plaintiffs."
The ruling is the latest development in the lawsuits alleging work rule
violations and charging US retailers with knowingly buying and
marketing products made under substandard conditions.
Saipan is the capital of the Commonwealth of Northern Mariana Islands,
an archipelago of 14 islands near Guam in the Pacific. Saipan is an
attractive location for foreign garment manufacturers because, under a
1976 covenant that made it part of US territory, the island falls
inside the US customs zone but outside US immigration rules.
This unique configuration of circumstances has encouraged entrepreneurs
from mainland China, Hong Kong and elsewhere to set up more than 30
factories in Saipan and ship several hundred million dollars' worth of
garments to the United States annually without falling under the
country's import quotas. It also allows the factory owners to label
their products "Made in the USA" and yet pay lower wages. Saipan's
hourly minimum wage is $3.05 compared with $5.15 in the United States.
Plaintiffs claim, further, that factory owners routinely violate US
labor law by, for instance, imposing work quotas that in effect
indenture laborers.
"We view Saipan as America's sweatshop," said Al Meyerhoff, an attorney
for the plaintiff workers.
The case is being watched closely on a number of fronts. US labor
unions and domestic garment makers view Saipan as a giant loophole that
undermines their organizational and commercial interests and opens the
door for worker exploitation as well.
The legal community is watching because the plaintiffs' attorneys are
using some novel arguments that, if successful, might establish a
precedent for a wide range of other industries.
These include use of federal racketeering statutes and a little-used
18th century human rights law as part of an effort to hold retailers
responsible for the labor practices of their contractors.
Attorneys for the factories say violations should be considered case by
case, that all factory owners should not be lumped together. They say
there is no evidence of a quota system in the factories or that workers
are pressured to work off the clock, although there may be individual
violations, as in any US state.
A separate, but related, plaintiff suit names several major U.S.
retailers that buy clothes made in Saipan.
Eighteen of the retailers, including Calvin Klein Inc. and Tommy
Hilfiger USA Inc., have settled for $8.5 million and agreed to adhere
to an independent monitoring system. Those still fighting the
allegations include J.C. Penney Co., Levi Strauss & Co., Target Corp.,
The Limited Inc. and Gap Inc.
TOBACCO LITIGATION: Companies Start Arguments Against Medical Program
---------------------------------------------------------------------
Tobacco companies start their defense in the class action suit filed
against them by healthy West Virginia smokers asking them to pay for a
medical monitoring program.
250,000 healthy smokers filed the suit against national tobacco
companies R.J. Reynolds, Philip Morris, Brown and Williamson and
Lorillard.
The class, which includes people who have smoked the equivalent of a
pack a day for at least five years but are not yet sick, accused the
defendants of marketing a defective product.
Smokers' attorney Scott Segal argues that tobacco companies acted with
"willful and wanton" disregard for public health when evidence emerged
that cigarettes can cause disease.
The suit asks the companies to pay for spirometry, a lung-function
test, for all healthy smokers at age 40, with a second test at age 45
and tests every two years after that.
The suit also seeks free spiral computed tomography scans, which
generate three-dimensional images of organs and potentially reveal
disease earlier than other tests.
The smokers believe that the medical monitoring program could lead to
early detection of serious diseases such as lung cancer, emphysema and
chronic obstructive lung diseases.
The defendants will present medical experts who are expected to testify
that the tests could only detect growths and that these growths can be
diagnosed using other procedures not included in the proposed program.
Duke University radiologist Dr. Phillip Goodman is set to take the
stand first to reinforce the Companies' claim that the program could
have little benefit and could trigger invasive, unnecessary follow-up
tests. Goodman will also talk about how follow-up tests such as
additional scans or a needle biopsy would expose healthy people to an
unreasonable risk of injury or death.
The companies plan to call current and former industry researchers to
testify about efforts to design a safer cigarette.
The lawsuit is the first class-action medical monitoring case against
the major tobacco companies to be tried in the United States.
USEC INC.: Judge Appoints Securities Suits Lead Plaintiffs, Counsel
-------------------------------------------------------------------
Senior U.S. District Judge Alexander Harvey II refused to dismiss
several securities class actions against USEC, Inc., the country's only
supplier of enriched uranium for commercial power plants.
The suit was initially filed last October in federal court for the
Western District of Kentucky, where the Company processes the uranium,
and was transferred to Maryland district court this year.
The suits claim that the Company, its officers and underwriters painted
a false and misleading, albeit positive picture in the prospectus for
the July 1998 IPO.
The suits specifically allege that:
(1) the Company failed to disclose that the market for enriched
uranium was in severe decline as the supply was increasing;
(2) the company was locked into a contract to buy uranium from
Russia at a fixed price, which soon would be higher than the
resale price; and
(3) a new process mentioned in the prospectus, which theoretically
would slash its production costs, was not technologically
feasible
Over the Company's objections, Harvey appointed investors Howard Cohen
and Myles Wren as class representatives, partly because their claims
are the largest filed in the 10 consolidated suits pending against the
Company.
According to The Daily Record, Cohen and Wren reportedly lost more than
$925,000 and $863,400, respectively when the Company's shares dropped
from $14.25 to $4.5625 last October.
The Company opposed the above appointment, saying that Cohen and Wren
had not followed the procedures required by the Private Securities
Litigation Reform Act of 1995 (PSLRA) in seeking lead spot.
However, while the defendants made some typographical and clerical
errors in the steps they had taken, the court noted that these were
remedied in a timely manner.
Harvey also appointed as lead counsel Milberg Weiss Bershad Hynes and
Lerach and Savett Frutkin Podell & Ryan, saying, "dual lead counsel is
particularly appropriate here since there are two groups of defendants,
with each group being represented by separate law firms."
*********
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-
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Information contained herein is obtained from sources believed to be
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Additional e-mail subscriptions for members of the same firm for the
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