/raid1/www/Hosts/bankrupt/CAR_Public/011107.mbx
C L A S S A C T I O N R E P O R T E R
Wednesday, November 7, 2001, Vol. 3, No. 218
Headlines
ALLOY INC.: Bernstein Liebhard Commences Securities Suit in S.D. NY
ANTIGENICS INC.: Bernstein Liebhard Files Securities Suit in S.D. NY
BLOCKBUSTER INC.: Alabama Supreme Court Authorizes Rental Tax Charges
ENGAGE INC.: Multiple Securities Suits in S.D. NY "Without Merit"
FIRST DATA: Faces Several Fraud Suits Over Undisclosed Commissions
GROUND ZERO: Workers' Respiratory Ailments May Fuel Class Actions
GT GROUP: Bernstein Liebhard Commences Securities Suit in S.D. NY
HIGH SPEED: Bernstein Liebhard Commences Securities Suit in S.D. NY
INTERSIL CORPORATION: Sued For Federal Securities Violations In S.D.NY
KOREA: KCCI President Denounces Proposed Securities Class Action Plan
KRYSTAL COMPANY: AL Restroom Access Suit Settlement Spurs Renovations
MARIMBA INC.: Securities Suit in NY Alleges Underwriter Misdeeds
MERANT PLC: CA Securities Suit Trial Finally Set For April 2003
NEXTCARD INC.: Levy Levy Initiates Securities Suit in N.D. California
NEXTCARD INC.: Schiffrin Barroway Initiates N.D. CA Securities Suit
NEXTCARD INC.: Kaplan Fox Commences N.D. California Securities Suit
NEXTCARD INC.: Rosen Law Firm Initiates Securities Suit in N.D. CA
QUINTILES INTERNATIONAL: NC Court Approves Securities Suit Settlement
SATYAM INFOWAY: Bernstein Liebhard Commences S.D. NY Securities Suit
TRANSMETA CORPORATION: Stockholders Suits Allege Securities Violations
UAXS GLOBAL: Wolf Haldenstein Commences Securities Suit in S.D. NY
VALLEY MEDIA: Bernstein Liebhard Commences Securities Suit in S.D. NY
VIA NET.WORKS: Wolf Haldenstein Initiates Securities Suit in S.D. NY
*********
ALLOY INC.: Bernstein Liebhard Commences Securities Suit in S.D. NY
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Bernstein Liebhard and Lifshitz LLP filed a securities class action on
behalf of purchasers of the securities of Alloy, Inc. (NASDAQ: ALOY)
between May 14, 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,
(2) Volpe Brown Whelan & Company,
(3) Dain Rauscher Wessels,
(4) Ladenburg Thalmann & Co., Inc.,
(5) James K. Johnson, and
(6) Matthew C. Diamond.
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 May 1999, the Company commenced an initial public offering of
3,700,000 of its shares of common stock, at an offering price of $15
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) the Company had solicited and received excessive and
undisclosed commissions from certain investors in exchange for
which its underwriters allocated to those investors material
portions of the restricted number of Company shares issued in
connection with the IPO; and
(ii) the underwriters had entered into agreements with customers
whereby they agreed to allocate 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: ALOY@bernlieb.com or
visit the firm's Website: www.bernlieb.com
ANTIGENICS INC.: Bernstein Liebhard Files Securities Suit in S.D. NY
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Bernstein Liebhard and Lifshitz LLP lodged a securities class action on
behalf of purchasers of the securities of Antigenics, Inc. (NASDAQ:
AGEN) between February 3, 2000 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) U.S. Bancorp Piper Jaffray, Inc.,
(2) FleetBoston Robertson Stephens Inc., and
(3) Garo Armen.
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 February 2000, the Company commenced an initial public offering of
3,500,000 of its shares of common stock at an offering price of $18 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) the Company had solicited and received excessive and
undisclosed commissions from certain investors in exchange for
which the underwriters allocated to those investors material
portions of the restricted number of shares issued in
connection with the IPO; and
(ii) the underwriters had entered into agreements with customers
whereby the underwriters agreed to allocate 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 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: AGEN@bernlieb.com or
visit the firm's Website: www.bernlieb.com
BLOCKBUSTER INC.: Alabama Supreme Court Authorizes Rental Tax Charges
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The Alabama Supreme Court voted 5-0 in favor of rental chain
Blockbuster, Inc. in the class action challenging whether the Company
could add the state's rental tax to its video rental charges,
effectively forcing its customers to pay it.
According to an Associated Press report, Justice Gorman Houston wrote
"Blockbuster was authorized by Alabama law to pass along the rental tax
to its customers."
By this decision, the Supreme Court overturned the lower court ruling
of a Jefferson County judge who had refused to dismiss the lawsuit
against the Company.
The case before the judge involved a class-action lawsuit filed by
Thomas B. White against the Company, claiming that it was fraudulently
passing along the state's four percent rental tax to its customers by
adding it to the cost of a movie rental. White contended the state
intended the tax to be levied on the business not on the customer.
The Supreme Court said that when White filed his suit, the state's
rental tax law did not address whether businesses could pass along the
tax to consumers. There were, however, rulings from the State Revenue
Department that said the tax could be passed along, the court noted.
Even more determinative of White's case was the fact that while his
case was pending, the Legislature amended the rental tax law to clarify
that the tax could be passed along to consumers and made the new law
retroactive to 1988.
Gathering together the various threads of this case, Justice Houston
referred to the impact of the new law by ruling for the Company, and
said, "Courts must consider subsequent acts passed by the Legislature
to clarify previously ambiguous provisions."
ENGAGE INC.: Multiple Securities Suits in S.D. NY "Without Merit"
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Internet software provider Engage, Inc. is named in several securities
class action suits pending in the United States District Court for the
Southern District of New York.
The suits were filed in September 2001 against the Company, several of
the present and former officers and directors and the underwriters for
the Company's July 20, 1999 initial public offering.
The suits were filed on behalf of those persons who purchased the
Engage's common stock between July 19, 1999 and December 6, 2000.
The suits uniformly allege violations of the Securities Act of 1933 and
the Securities Exchange Act of 1934.
Specifically, the complaints each allege that the defendants failed to
disclose "excessive commissions" purportedly solicited by the
underwriters in exchange for allocating Company's stock to preferred
customers.
The suits also alleged agreements among the underwriters and preferred
customers tying the allocation of IPO shares to agreements to make
additional aftermarket purchases at pre-determined prices.
The suit further asserts that the Company's failure to disclose the
arrangements made its prospectus filed with the Securities and Exchange
Commission in July 1999 materially false and misleading.
The Company denies the claims, labeling the allegations "without
merit".
FIRST DATA: Faces Several Fraud Suits Over Undisclosed Commissions
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First Data Inc. faces several securities class action suits filed in
various federal and state courts for allegedly charging "undisclosed
commissions" when consumers transmit money to Mexico.
Five similar class action suits filed in 1998 in several federal and
state courts allege that the Company and its subsidiaries, notably
Western Union Financial Services, Inc.
The suits assert that First Data and its subsidiaries violated the law
by failing to disclose this "commission" in advertising and in the
transactions.
The Company or its subsidiaries also allegedly discriminated against
persons who use their services to transmit money to Mexico, as the
difference between the market exchange rate and the exchange rate used
by Western Union in the Mexico transactions is greater than the
difference between the market and exchange rates used by the Company or
its subsidiaries when transmitting funds to other countries.
First Data later reached a proposed settlement with the parties to some
of the suits, under which, the Company will establish a charitable fund
for the advancement of Mexican and Mexican-American causes in the
amount of $4 million.
Under the settlement, Western Union also will issue coupons for
discounts on future money transfer transactions to Mexico to its
customers who transferred money from the US to Mexico between January
1, 1987 and August 31, 1999.
In addition, the Company will issue coupons for discounts on future
Western Union transactions to customers who transferred money to Mexico
from January 1, 1988 to December 10, 1996 using the MoneyGram service
because MoneyGram was previously operated by a subsidiary of the
Company.
The proposed settlement also includes reasonable attorneys' fees and
costs as well as the costs of settlement notice and administration.
On December 21, 2000, the United States District Court for the Northern
District of Illinois granted final approval of the proposed settlement
and entered a final judgment.
In approving the settlement, the Court permanently enjoined the
continued prosecution of the other actions. Some of the class members
who objected to the settlement in the respective actions appealed the
judgment.
On October 4, 2001, the United States Court of Appeals for the Seventh
Circuit affirmed the judgment of the District Court.
The class members who filed the appeal subsequently petitioned for a
rehearing of this matter but the Appellate Court denied the petition.
However, First Data has not yet settled all suits against it, as
subsequent class actions making similar allegations are still pending
in two federal courts.
One class action was filed in January 2000 in California State Court
against First Data and its subsidiaries, Western Union Financial
Services, Inc. and Orlandi Valuta.
The suit was filed on behalf of those persons who used either
subsidiary's services after August 31, 1999 to transmit money from
California to Mexico.
The class also includes persons who have used the Western Union or
Orlandi Valuta money transfer services to transmit money from
California to Mexico and have opted out of the nationwide settlements
discussed above.
In 2001, two more putative class actions based on similar factual
allegations were filed in the United States District Court for the
Eastern District of New York against the Company and its subsidiary,
Western Union Financial Services, Inc.
The suits assert claims on behalf of a putative worldwide class,
excluding members of the settlement class certified in one of the above
actions.
The plaintiffs claim that the Company and Western Union impose an
undisclosed "charge" when they transmit consumers' money by wire to
international locations, in that the exchange rate used in these
transactions is less favorable than the exchange rate that Western
Union receives when it trades currency in the international
money market.
They further assert that Western Union's failure to disclose this
"charge" in the transactions violates 18 U.S.C. section 1961 et seq.
and state deceptive trade practices statutes, and also asserts claims
for civil conspiracy.
GROUND ZERO: Workers' Respiratory Ailments May Fuel Class Actions
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Firefighters and police officers working long hours amid the toxic
smoke and dust arising from the ruins of the World Trade Center, have
developed respiratory problems. It is theorized these difficulties may
be the forerunners of a possible syndrome of illnesses that could rival
the Gulf War and Agent Orange syndromes in its medical and legal
implications.
Both these former syndromes, detected among troops in the Persian Gulf
and Vietnam wars, led to successful class-action lawsuits, reported the
Sydney Morning Herald recently.
The high incidence of persistent coughs and chest complaints among the
"heroes of ground zero" has raised concerns that the workers may
develop long-term health problems from continued exposure to the
heavily polluted air.
This warning of widespread affliction among the new breed of "war
Heroes" follows news that the Environmental Protection Agency has
detected toxic levels of benzene, PCBs, dioxins and chromium in the air
and soil around the World Trade Center site.
The warning also comes as an independent monitoring organization
reports that potentially dangerous levels of asbestos have been found
coming from the ruins of the 110-story twin towers.
New York Fire Commissioner Thomas Von Essen confirmed recently that in
the weeks since September 11, doctors have issued ground zero workers
more than 4,000 inhalers containing steroids to fight their
respiratory complaints.
Von Essen said that all the firefighters at the site will be given
medical tests in coming days because so many have complained of
"heaviness" in their chests.
However, according to the news report, there is not enough evidence at
hand for city health officials to predict whether the workers are being
placed at any heightened risk of serious health problems.
"We won't know for a long period of time whether there is any long-term
effect," Von Essen said. "Some might lead to asthma, some might lead
to lung conditions."
The high levels of asbestos emanating from destroyed building materials
at the site were first detected by HP Environmental, the same company
hired by the city to conduct a thorough environmental assessment of the
World Trade Center complex after the 1993 terrorist bombing.
Although exposure to asbestos dust has been proven to cause serious
respiratory ailments, and certain types of asbestos can cause lung
cancer, New York health authorities are divided as to whether the small
asbestos fibers found around ground zero are more or less dangerous
than larger particles.
The force of the WTC buildings' collapse crushed asbestos materials
into very fine particles, according to Hugh Granger, a company
executive with HP Environmental.
GT GROUP: Bernstein Liebhard Commences Securities Suit in S.D. NY
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Bernstein Liebhard and Lifshitz LLP initiated a securities class action
on behalf of purchasers of the securities of GT Group Telecom, Inc.
(NASDAQ: GTTLB) between March 9, 2000 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) Goldman, Sachs & Co.,
(2) Salomon Smith Barney Inc.,
(3) CIBC World Markets Corp.,
(4) Merrill Lynch, Pierce, Fenner & Smith Incorporated,
(5) Morgan Stanley & Co., Incorporated,
(6) RBC Dominion Securities Corporation,
(7) Daniel R. Milliard, and
(8) Stephen H. Shoemaker.
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 March, 2000, the Company commenced an initial public offering of
18,000,000 of its shares of Class B Non-Voting Shares at an offering
price of $14 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) the Company had solicited and received excessive and
undisclosed commissions from certain investors in exchange for
which the underwriters allocated to those investors material
portions of the restricted number of shares issued in
connection with the IPO; and
(ii) the underwriters had entered into agreements with customers
whereby they agreed to allocate 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: GTTLB@bernlieb.com or
visit the firm's Website: www.bernlieb.com
HIGH SPEED: Bernstein Liebhard Commences Securities Suit in S.D. NY
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Bernstein Liebhard and Lifshitz LLP initiated a securities class action
on behalf of purchasers of the securities of High Speed Access Corp.
(NASDAQ: HSAC) between June 4, 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) Lehman Brothers Inc.,
(2) J.P. Morgan Securities Inc.,
(3) CIBC World Markets Corp.,
(4) Banc of America Securities LLC,
(5) Ron Pitcock, and
(6) George E. Willett
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 June 1999, the Company commenced an initial public offering of
13,000,000 of its shares of common stock at an offering price of $13
per share.
In connection therewith, the Company filed a registration statement,
which incorporated a prospectus with the 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) the Company had solicited and received excessive and
undisclosed commissions from certain investors in exchange for
which its underwriters allocated to those investors material
portions of the restricted number of shares issued in
connection with the IPO; and
(ii) the underwriters had entered into agreements with customers
whereby they agreed to allocate Company shares to those
customers in the IPO in exchange for which the customers
agreed to purchase additional Company 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: HSAC@bernlieb.com or
visit the firm's Website: www.bernlieb.com.
INTERSIL CORPORATION: Sued For Federal Securities Violations In S.D.NY
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Intersil Corporation faces several securities class actions in the
United States District Court for the Southern District of New York
alleging federal securities violations.
Certain of the Company's present officers and their lead initial public
offering underwriter, Credit Suisse First Boston Corporation, were
named as defendants in the suits.
The complaints allege violations of Rule 10b-5 promulgated under the
Securities Exchange Act of 1934, as amended, or the Exchange Act.
Intersil allegedly disseminated material misstatements and/or omissions
concerning the commissions received by the underwriters of the initial
public offering.
The Company also allegedly failed to disclose the existence of
purported agreements by the underwriters with some of the purchasers in
these offerings to thereafter buy additional shares in the open market
at pre-determined prices above the offering prices.
Intersil believes that the claims against it are without merit.
KOREA: KCCI President Denounces Proposed Securities Class Action Plan
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The president of the Korea Chamber of Commerce and Industry (KCCI)
berated the government's proposed securities class action system saying
that it would seriously deter normal operations at a large number of
profitable and faithful tax-paying conglomerates.
Park Yong-sung warned that the system, to be implemented next April,
would inflict serious damage on domestic conglomerates,
regardless of their commitment to transparency and stock-market
disclosures.
Attention-getting conglomerates like Samsung Electronics could face
several class action suits, while fraudulent small businesses may go
unnoticed.
In a meeting with reporters, Park asserted that the system ".may
inadvertently entrap faithful conglomerates alone, as their daily
operations are closely watched by the market."
He further said that the government-prepared measures will not be
sufficient to prevent abuses of the class action suit legislation.
"Stock-market manipulation, window-dressing and other accounting
irregularities can still be punished under the current laws."
84 Korea Stock Exchange listed firms with assets of over 2 trillion won
($1.54 billion) along with two Kosdaq listed firms will be affected
under the class action system.
The system is designed to eradicate managerial irregularities, such as
false market disclosures, share price manipulation and doctoring of
accounting books.
A class action suit against a company permits all investors equal
compensation whenever one of them wins a legal battle against a concern
or the management for irregular actions that caused them to suffer
financial losses.
KRYSTAL COMPANY: AL Restroom Access Suit Settlement Spurs Renovations
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Restaurant operator Krystal Company settled the class action suit filed
in the United States District Court for the Northern District of
Alabama for violating the Americans With Disabilities Act (ADA)
Plaintiff Michael Jones filed the suit in September 1999 alleging that
he was denied access to the restrooms in one of the Company's
restaurants.
The suit was filed on behalf of all wheelchair-bound patrons of the
Company's restaurants who have been denied access to the restrooms.
Under the settlement, the Company will renovate all wheelchair
inaccessible restrooms in Krystal-owned restaurants over a ten-year
period beginning in 2002.
The Court approved the settlement this July.
MARIMBA INC.: Securities Suit in NY Alleges Underwriter Misdeeds
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Marimba, Inc. is denying allegations made in a consolidated securities
class action filed in the United States District Court for the Southern
District of New York. The suit alleges federal securities violations.
The consolidated suit arose from several substantially identical class
actions filed against:
(1) Marimba, Inc.,
(2) Morgan Stanley & Co. Incorporated,
(3) Credit Suisse First Boston Corporation,
(4) Bear Stearns & Co., Inc.,
(5) Kim K. Polese,
(6) Fred M. Gerson and
(7) Arthur A. Van Hoff
The suit alleges that the underwriters of the Company's initial public
offering failed to disclose certain alleged compensation arrangements
(such as undisclosed commissions or stock stabilization practices) in
the offering's registration statement.
The Company believes that it is part of the rash of securities suits
filed against over 180 other issuers that have had initial public
offerings since 1998.
The Company also said it cannot accurately predict the ultimate outcome
of the litigation, but an unfavorable outcome could have an adverse
impact on its business, financial condition and results of operations.
MERANT PLC: CA Securities Suit Trial Finally Set For April 2003
---------------------------------------------------------------
Trial in the consolidated securities class action against computer
software company, Merant PLC, will commence in April 2003, after a
federal court granted class action status to the suit
The suit is currently pending in the U.S. District Court for the
Northern District of California against the Company and certain of its
officers and directors.
The suit was filed on behalf of purchasers of the American depositary
shares of the Company during the period from June 17, 1998 to November
12, 1998.
The class includes the former shareholders of Intersolv, Inc. who
acquired American Depositary Shares (ADS) of the Company in connection
with the merger involving the two companies.
The suit was originally filed as seven class action suits in December
1998 and January 1999 in the U.S. District Court for the Southern
District of New York.
The Court later ordered the seven cases consolidated and a consolidated
amended complaint was filed in June 1999.
The consolidated complaint alleged various violations of the U.S.
Securities Act of 1933 and the U.S. Securities Exchange Act of 1934 and
charges the defendants with failure to disclose material nonpublic
information concerning the Company's business condition and prospects.
In May 1999, the Company filed a motion to transfer the matter to the
Northern District of California, which the court granted.
After the action was transferred to California, plaintiffs again
amended their complaint alleging the same claims as described in the
prior amended complaint but without the 1934 Act claims or the class
period.
The defendants filed a motion to dismiss the newly-amended complaint in
June 2000 and in December of that year, the Court issued a ruling
granting in part and denying in part the defendant's motion to dismiss.
The Court dismissed all of plaintiffs' allegations, with the exception
of certain allegations that defendants misled the market regarding the
Company's plans for its Y2K business.
In June 2001, the Court certified the suit, allowing it to proceed as a
class action while preserving the defendants' rights to challenge, at a
later date:
(1) the propriety of this action proceeding as a class action,
(2) the definition of the class, and
(3) the class representatives.
The Court established a pre-trial schedule and announced the trial date
last month at a joint case management conference.
NEXTCARD INC.: Levy Levy Initiates Securities Suit in N.D. California
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Levy and Levy PC commenced a securities class action on behalf of
purchasers of NextCard Inc. (NASDAQ:NXCD) securities during the period
between March 30, 2000 and Oct. 30, 2001.
The suit, filed in the United States District Court for the Northern
District of California, 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 2000
and 2001.
The defendants allegedly knew the Company's reserves were materially
under-funded causing its 2000 and 2001 projections and/or results to be
false.
During the class period, taking advantage of the inflation in the
Company's stock, the defendants sold almost $9 million worth of their
own stock at artificially inflated prices of as much as $10.89 per
share.
On Oct. 31, 2001, it was revealed that, among other things, defendants
had concealed that during the class period:
(1) due to the deteriorating quality of the Company's portfolio,
the Company would need to dramatically increase its reserves
for loan losses in fiscal 2000 and first three quarters of
2001 and as a result its reported value of its loans for the
said period was overstated;
(2) the Company had improperly recorded "credit losses" as "fraud
losses" and as a result the Company's "securitization
activities" during the class period did not qualify for "low
level recourse treatment." Defendants knew that as a result,
such would dramatically increase the Company bank division's
risk weighted assets, and would decrease the Company's "risk
based capital ratio" below federal banking guidelines -
rendering the Company "significantly under capitalized";
(3) because the Company's risk-based capital ratio had plummeted
below acceptable levels, it had been technically subject to a
Prompt Correction Action Order and thereby restricted from
accepting or reviewing any brokened deposits;
(4) as a result of the above, the Company's 2000 and 2001 results
and projections were materially false and misleading.
These disclosures shocked the market, causing Company stock to decline
to $0.84 per share before closing at $0.87 per share on Oct. 31, 2001
on volume of more than 43 million shares.
For more information, contact Stephen G. Levy by Mail: One Stamford
Plaza, 263 Tresser Blvd., 9th Floor, Stamford, CT 06901 by Phone: 866-
338-3674 (toll free) or 203-564-1920 by E-mail: LLNYCT@aol.com or visit
the firm's Website: www.levylawfirm.com
NEXTCARD INC.: Schiffrin Barroway Initiates N.D. CA Securities Suit
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Schiffrin and Barroway LLP initiated a securities class action on
behalf of all purchasers of NextCard, Inc. (NASDAQ:NXCD) common stock
from March 30, 2000 through October 30, 2001, inclusive.
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 complaint charges the defendants with issuing false and misleading
statements concerning its business and financial condition.
Specifically, the complaint alleges that defendants disseminated false
and misleading statements concerning the Company's operations and
prospects for 2000 and 2001.
In fact, defendants knew Company reserves were materially underfunded
and that as a result, its 2000 and 2001 projections and/or results were
false.
During the class period, taking advantage of the inflation in the
Company's stock, several of the Company's officers sold almost $9
million worth of their own stock at artificially inflated prices of as
much as $10.89 per share.
Then, on Oct. 31, 2001, it was revealed that, among other things,
defendants had concealed that:
(1) due to the deteriorating quality of its' portfolio, the
Company would need to dramatically increase its reserves for
loan losses in fiscal year 2000 and 1st, 2nd and 3rd Quarter
2001 and as a result its reported value of its loans for the
said periods was overstated;
(2) the Company had improperly recorded "credit losses" as "fraud
losses" and as a result the Company's "securitization
activities" during the class period did not qualify for "low
level recourse treatment." Defendants knew that as a result,
such would dramatically increase the Company bank division's
risk weighted assets, and would decrease the Company's "risk
based capital ratio" below federal banking guidelines -
rendering the Company "significantly under capitalized";
(3) because the Company's risk-based capital ratio had plummeted
below acceptable levels, it had been technically subject to a
Prompt Correction Action Order and thereby restricted from
accepting or reviewing any broken deposits;
(4) as a result of the above, the Company's 2000 and 2001 results
and projections were materially false and misleading.
These disclosures shocked the market, causing Company stock to decline
to $0.84 per share before closing at $0.87 per share on Oct. 31, 2001
on volume of more than 43 million shares.
For more information, contact Marc A. Topaz or Stuart L. Berman by
Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone:
1-888-299-7706 (toll free) or 1-610-667-7706 by E-mail:
info@sbclasslaw.com or visit the firm's Website: www.sbclasslaw.com
NEXTCARD INC.: Kaplan Fox Commences N.D. California Securities Suit
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Kaplan Fox and Kilsheimer LLP initiated a securities class action
against Nextcard, Inc. (NASDAQ; NXCD) and certain of the Company's
officers and directors in the United States District Court for the
Northern District of California.
The suit is brought on behalf of all persons or entities who purchased
the common stock of Nextcard, Inc. between March 30, 2000 and October
30, 2001, inclusive.
The suit 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 knew but
failed to disclose that the Company's financial statements were
materially false and misleading and violated GAAP because the
defendants:
(1) failed to adequately record provisions for the
Company's loan loss reserves;
(2) overstated the gains recorded on the securitization of the
Company's credit card receivables; and
(3) improperly classified certain losses on loans as "fraud
losses" rather than as "credit losses."
Because of this improper accounting, the Company's reported earnings
for fiscal 1999, 2000, and the first two quarters of fiscal 2001 were
materially misstated.
Truth was revealed before the market opened on October 31, 2001, when
the Company disclosed for the first time that federal bank regulators
from the Office of The Comptroller of the Currency and Federal Deposit
Insurance Corp. had ordered the Company to:
(i) amend its accounting practices,
(ii) increase its protection against bad loans,
(iii) exit certain business lines, and
(iv) cease certain marketing practices
As a result of the required changes, the Company disclosed that bank
examiners had declared it "significantly undercapitalized," according
to FDIC guidelines, which means that it will not be able to make most
business decisions without the approval of bank regulators and will be
restricted in its ability to open new accounts.
This news caused the price of the Company's stock to plummet
drastically from $5.35 per share to $0.87 per share, a one-day decline
of 84%.
As a result of defendants' false and misleading statements during the
class period, the price of Company stock traded at artificially
inflated levels.
For further details, contact Jonathan K. Levine or Christine 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.
You can also contact Laurence D. King by Mail: 100 Pine Street, 26th
Floor, San Francisco, CA 94111 by Phone: (415) 336-1238 by Fax: (415)
677-1233 by E-mail: mail@kaplanfox.com or visit the firm's Website:
www.kaplanfox.com
NEXTCARD INC.: Rosen Law Firm Initiates Securities Suit in N.D. CA
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The Rosen Law Firm filed a securities class action been filed on behalf
of purchasers of NextCard, Inc. (Nasdaq: NXCD) publicly traded
securities during the period between March 30, 2000 and October 30,
2001, inclusive.
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 complaint charges that the defendants violated Sections 10(b) and
20(a) of the Securities and Exchange Act of 1934, and Rule 10b-5
promulgated thereunder by the Securities and Exchange Commission by
making a series of materially false and misleading statements.
Specifically, the Complaint alleges that beginning in March 30, 2000,
the Company claimed that its wholly owned banking division was "well-
capitalized" as that term is understood under regulations of the
Federal Deposit Insurance Corporation.
The Company also purposely mischaracterized its true loan loss levels,
in order to qualify for the most beneficial insurance treatment and
cost of funds, when in fact the company was experiencing ever
increasing loan defaults.
The complaint further alleges that as a result of these false and
misleading statements the price of Company securities was artificially
inflated throughout the class period.
Additionally, the complaint alleges that certain officers and directors
sold over $10 million worth of artificially inflated Company securities
during the class period.
When the Company revealed in October 2001, that:
(1) it's banking division was in fact "significantly
undercapitalized";
(2) that it had failed to provide sufficient reserves for
delinquent loans; and
(3) that it had inadequately characterized its true credit losses,
the stock collapsed--dropping 84% of its market value in just one day.
For more information, contact The Rosen Law Firm PA PC by Phone: (212)
532-7299 or 1-866-767-3653 (toll-free) by Fax: (425) 962-6616 or visit
the firm's Website: www.rosenlegal.com
QUINTILES INTERNATIONAL: NC Court Approves Securities Suit Settlement
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The U.S. District Court for the Middle District of North Carolina
approved the settlement agreement in the securities class action
against Quintiles Transnational Corporation.
The suit arose from several class actions commenced in September 1999
against the Company and several of its executive officers and directors
on behalf of all persons who purchased or otherwise acquired shares of
common stock between July 16, 1999, and September 15, 1999.
These actions were subsequently consolidated and plaintiffs filed an
amended complaint purporting to represent a class of purchasers of the
stock or call options, and sellers of put options, during the period
between April 21, 1999, and September 15, 1999.
The amended complaint alleged violations of Section 10(b) of the
Securities Exchange Act of 1934 and SEC Rule 10b-5 and sought
unspecified damages, plus costs and expenses, including attorneys' fees
and experts' fees.
In February 2001, both parties agreed to settle the suit for an
undisclosed amount and the court gave its approval in October.
SATYAM INFOWAY: 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 Satyam Infoway, Ltd.
(NASDAQ: SIFY) between October 20, 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) Merrill Lynch, Pierce, Fenner & Smith, Inc.,
(2) Salomon Smith Barney, Inc.,
(3) R. Ramaraj, and
(4) T.R. Santhanakrishnan.
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.
Last October 20, 1999, the Company commenced an initial public offering
of 4,175,000 of its shares of common stock at an offering price of $18
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) the Company had solicited and received excessive and
undisclosed commissions from certain investors in exchange for
which allocated to those investors material portions of the
restricted number of shares issued in connection with the IPO;
and
(ii) the underwriters had entered into agreements with customers
whereby they agreed to allocate 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: SIFY@bernlieb.com or
visit the firm's Website: www.bernlieb.com
TRANSMETA CORPORATION: Stockholders Suits Allege Securities Violations
----------------------------------------------------------------------
Transmeta Corporation faces a consolidated securities class action suit
in California for various violations of federal securities laws. A
similar suit filed in New York was dismissed without prejudice, leaving
the plaintiff the option to join the California suit.
Eleven of the suits were filed in the U.S. District Court for the
Northern District of California. The other was filed in the U.S.
District Court for the Southern District of New York. All complaints
were filed from June to August 2001.
These complaints purport to be class actions filed on behalf of
purchasers of the Company's common stock, from November 7, 2000, to
July 19, 2001.
The complaints uniformly allege that:
(1) the defendants made materially misleading statements or
material omissions in various contexts, including the
prospectus and registration statement for the initial public
offering of the Company's common stock on November 7, 2000.
(2) certain individual defendants intentionally engaged in this
alleged conduct in order to inflate the value of the Company's
common stock and thereby obtain alleged illegal insider
trading proceeds.
These complaints allege various violations of federal securities law,
including violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and
Sections 11, 12(a)(2), and 15 of the Securities Act of 1933.
The court in the Northern District of California has not selected class
counsel, and no consolidated amended complaint has been filed. The
Company has not yet made any responsive filings, and discovery has not
commenced.
Then, during June and July 2001, the directors and certain officers of
the Company were served with two more purported shareholder derivative
complaints filed in California Superior Court for Santa Clara County.
In October 2001, the directors and certain officers of the Company were
served with a third purported shareholder derivative complaint, filed
in California Superior Court for San Mateo County.
The Company is named as a nominal defendant in these three complaints,
which are based upon the same general allegations made in the purported
shareholder class actions described above.
These three complaints allege that:
(i) certain of the individual defendants sold shares of Company
stock while in possession of material inside information,
purportedly in breach of their fiduciary duties to the
Company, and
(ii) those so-called "selling defendants" were aided and abetted by
the other individual defendants.
The complaints also allege corporate waste, mismanagement, and abuse of
control, all based upon the same general allegations.
The two suits in the California Superior Court for Santa Clara County
complaints were consolidated into a single action on October 10, 2001.
The Company has not yet responded to any of these complaints, and no
discovery has been made. The Company believes that the allegations in
these purported derivative actions are without merit.
Based upon information presently known to management, the Company does
not believe that the ultimate resolution of these lawsuits will have a
material adverse effect on its business.
UAXS GLOBAL: Wolf Haldenstein Commences Securities Suit in S.D. NY
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Wolf Haldenstein Adler Freeman and Herz LLP initiated a securities
class action on behalf of purchasers of Uaxs Global Holdings, Inc.
(NASDAQ:UAXS) securities between March 16, 2000 and December 6, 2000,
inclusive.
The action is pending in the United States District Court, Southern
District of New York against the Company and certain of its officers
and its underwriters.
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 March 2000, the Company commenced an initial public offering of 11
million of its shares of common stock at an offering price of $14 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:
(1) the underwriters on the offering had solicited and received
excessive and undisclosed commissions from certain investors
in exchange for which those underwriters allocated to those
investors material portions of the restricted number of IPO
shares issued in connection with the IPO; and
(2) the underwriters had entered into agreements with customers
whereby the underwriters agreed to allocate 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 Fred Taylor Isquith, Thomas Burt, Gustavo
Bruckner, Michael Miske, George Peters or Derek Behnke 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 UAXS GLOBAL.
VALLEY MEDIA: Bernstein Liebhard Commences Securities Suit in S.D. NY
---------------------------------------------------------------------
Bernstein Liebhard and Lifshitz LLP initiated a securities class action
lawsuit on behalf of purchasers of Valley Media, Inc. (NASDAQ: VMIX)
securities between March 26, 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) J.P. Morgan Securities, Inc.,
(2) BancBoston Robertson Stephens Inc.,
(3) Robert R. Cain,
(4) Barnet J. Cohen, and
(5) J. Randolph Cerf.
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.
Last March 1999, the Company commenced an initial public offering of
3,500,000 of its shares of common stock at an offering price of $16 per
share.
In connection therewith, 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) the Company had solicited and received excessive and
undisclosed commissions from certain investors in exchange for
which J.P. Morgan and Robertson Stephens allocated to those
investors material portions of the restricted number of
Company shares issued in connection with the IPO; and
(ii) J.P. Morgan and Robertson Stephens had entered into agreements
with customers whereby they agreed to allocate Company shares
to those customers in the IPO in exchange for which the
customers agreed to purchase additional shares in the
aftermarket at pre-determined prices.
For further details, contact 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: VMIX@bernlieb.com or
visit the firm's Website: www.bernlieb.com.
VIA NET.WORKS: Wolf Haldenstein Initiates Securities Suit in S.D. NY
--------------------------------------------------------------------
Wolf Haldenstein Adler Freeman and Herz LLP commenced a securities
class action on behalf of purchasers of the securities of Via
Net.works, Inc. (NASDAQ:VNWI) between February 11, 2000 and December 6,
2000, inclusive.
The action is pending in the United States District Court, Southern
District of New York against the Company, certain of its officers and
its underwriters.
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.
Last February 11, 2000, the Company commenced an initial public
offering of 14.3 million 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:
(1) the underwriters on the offering had solicited and received
excessive and undisclosed commissions from certain investors
in exchange for which those underwriters allocated to those
investors material portions of the restricted number of IPO
shares issued in connection with the IPO; and
(2) the underwriters had entered into agreements with customers
whereby the underwriters agreed to allocate 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 Fred Taylor Isquity, Thomas Burt, Gustavo
Bruckner, Michael Miske, George Peters or Derek Behnke 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 Via Net.works.
*********
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.
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