/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/011206.mbx C L A S S A C T I O N R E P O R T E R Thursday, December 6, 2001, Vol. 3, No. 238 Headlines ANTHEM INSURANCE: Medical Group Allowed To Intervene in Pending Merger ASIAINFO HOLDINGS: Lovell Stewart Initiates Securities Suit in S.D. NY COLLEGE LIFE: Settles For $10.8M Suit For Deceptive Marketing Practices DALLAS COWBOYS: Settles "Junk Faxes" Suit For $1.73 Million ENRON CORPORATION: Hagens Berman Files Suit Regarding "Vanished" ESOP FIRST NATIONAL: Agrees To Settle Suit Challenging Marketing Practices FINISAR CORPORATION: Milberg Weiss Commences Securities Suit in S.D. NY FLORIDA POWER: Supreme Court Agrees To Hear Age Discrimination Case INFORMAX INC.: Schiffrin Barroway Initiates Securities Suit in S.D. NY INSURANCE COMPANIES: Clark Bloss Initiates Insurance Fraud Suit in VA JDN REALTY: Georgia Federal Court Approves Securities Suit Settlement JUNIPER NETWORKS: Lovell Stewart Commences Securities Suit in S.D. NY MARTHA STEWART: Lovell Stewart Initiates Securities Suit in S.D. NY NESCO INC.: Berger Montague Commences Securities Suit in N.D. Oklahoma NESCO INC.: Federman Sherwood Initiates Securities Suit in N.D. OK NEXTCARD INC.: Pomerantz Haudek Commences Securities Suit in C.D. CA OMNIVISION TECHNOLOGIES: Schiffrin Barroway Files Securities Suit in NY POLYMEDICA CORPORATION: Faces SEC Probe Relating To Financial Reports PURCHASEPRO.COM: Lovell Stewart Initiates Securities Suit in S.D. NY RADWARE LTD.: Lovell Stewart Commences Securities Suit in S.D. New York SAGENT TECHNOLOGIES: Levy Levy Commences Securities Suit in N.D. CA SIRIUS SATELLITE: Schiffrin Barroway Lodges Securities Suit in S.D. NY SPACELABS MEDICAL: Federal Court Dismisses Racial Discrimination Suit SRI SURGICAL: Levy Levy Initiates Securities Suit in M.D. Florida WOMEN.COM: Lovell Stewart Commences Securities Suit in S.D. New York ********* ANTHEM INSURANCE: Medical Group Allowed To Intervene in Pending Merger ---------------------------------------------------------------------- The Kansas Insurance Commissioner granted a medical group's petition to intervene in the Anthem Insurance Company acquisition of health insurers Blue Cross and Blue Shield of Kansas. The Kansas Medical Society sought to intervene in the acquisition, saying the Company faces "serious and significant allegations about (its) actions in other states." The petition cited two lawsuits currently pending against the Company, one filed by Connecticut's Attorney General and the other commenced as a class action by a group of Connecticut physicians. The Connecticut physicians' lawsuit against Anthem Health Plans - the successor to Blue Cross and Blue Shield in Connecticut -claims the company unilaterally breached their contracts with physicians by: (1) Failing to make timely payment for services; (2) Failing to adequately communicate policy and procedures; (3) Arbitrarily denying payment; (4) Not observing consistent standards of medically necessary services; (5) Not keeping accurate records and books, resulting in such problems as improper payments to physicians; (6) Using profiling and other discriminatory practices in payment; (7) Arbitrarily amending agreements with physicians; (8) Shifting costs onto physicians; The Connecticut Attorney General's lawsuit claims Anthem and three other insurance companies: (i) Used arbitrary coverage guidelines to deny coverage and care and, when the denial of coverage is reviewed by a physician employed by the company, "the reviewing physician will routinely rubber-stamp the denial without a good faith examination of the medical necessity at issue;" (ii) Denied coverage for medically necessary prescription drugs by using a formulary to obstruct access to certain prescription medications; (iii) Maximized profits by unreasonably delaying payment to providers, in order to gain the interest that money earns during the delay; (iv) Have policies of delaying and obstructing enrollees from pursuing coverage by using tactics such as placing callers on hold for unreasonable lengths of time and not providing effective assistance to them. Documentation submitted by enrollees is routinely "lost" and written inquiries are responded to slowly or not at all; (v) Misrepresent the nature of coverage and fail to disclose essential information, including the steps they need to take in an appeal and the qualifications of the people who decide the appeals. "KMS does not assert the truth of the allegations contained in the two Connecticut lawsuits. However, these allegations, made in a case filed by the Connecticut Attorney General and in a case where a plaintiff's class has been certified, do constitute important issues that directly affect KMS and Kansas physicians," the KMS Petition to Intervene reads. ASIAINFO HOLDINGS: Lovell Stewart Initiates Securities Suit in S.D. NY ---------------------------------------------------------------------- Lovell & Stewart LLP commenced a securities class action on behalf of all persons and entities who purchased, converted, exchanged or otherwise acquired the common stock of AsiaInfo Holdings, Inc. (NasdaqNM: ASIA) between March 2, 2000 and December 6, 2000, inclusive. The suit was filed in the US District Court for the Southern District of New York against the Company, certain of its officers and directors, and underwriters: (1) Morgan Stanley Dean Witter & Co., Inc., (2) Deutsche Banc Alex. Brown Inc. and (3) Donaldson, Lufkin & Jenrette Securities Corporation The suit asserts claims under Sections 11, 12 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder. The defendants allegedly violated the federal securities laws by issuing and selling Company stock pursuant to the initial public offering without disclosing to investors that several of the underwriters of the IPO had solicited and received excessive and undisclosed commissions from certain investors. In exchange for the excessive commissions, the complaint alleges, defendants allocated Company shares to customers at the IPO price of $24.00 per share. To receive the allocations at $24.00, the defendant underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as the price of Company stock rocketed upward was intended to drive Company share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the defendant underwriters and their customers to reap enormous profits by buying stock at the $24.00 IPO price and then selling it later for a profit at inflated aftermarket prices, which rose as high as $111.19 during its first day of trading. Rather than allowing their customers to keep their profits from the IPO, the complaint alleges, the defendant underwriters required their customers to "kick back" some of their profits in the form of secret commissions. These secret commission payments were sometimes calculated after the fact based on how much profit each investor had made from his or her IPO stock allocation. The complaint further alleges that defendants violated the Securities Act of 1933 because the prospectus distributed to investors and the registration statement filed with the SEC in order to gain regulatory approval for the offering contained material misstatements regarding the commissions that the underwriters would derive from the IPO and failed to disclose the additional commissions and "laddering" scheme discussed above. For more information, contact the firm by Phone: 212.608.1900 or visit the firm's Website: http://www.lovellstewart.com COLLEGE LIFE: Settles For $10.8M Suit For Deceptive Marketing Practices ----------------------------------------------------------------------- College Life Insurance has settled for $10.8 million a class action suit filed by seven Laredo, Texas schoolteachers on behalf of 130,000 teachers in Texas and California in the 111th Texas District Court. The suit, which also names the Company's other insurance and marketing affiliates, alleges the companies used deceptive marketing practices to sell annuities. Furthermore, the suit claimed that the annuity payments were invested in stocks or the S&P 500 Index, and that the defendants used deceptive marketing practices involving 403(b) retirement plans. Under the settlement, the class will receive: (1) general policy relief of free accidental death benefits or products transfers; (2) a claim resolution process for policyholders with complaints about the product they purchased or the manner in which it was marketed; and (3) some agreed modifications of certain marketing practices. After nearly a year of negotiations the settlement was approved by Federal Judge Mario Vasquez. San Antonio attorney G. Wade Caldwell told the Laredo Morning Times, "We are very pleased with the structure of the settlement and believe it addresses the complaints made by our clients and the other class members." College Life Counsel Edwin R. DeYoung of Dallas said his company believed the "proposed settlement provides a reasonable resolution of this dispute for College Life and others concerned." DALLAS COWBOYS: Settles "Junk Faxes" Suit For $1.73 Million ----------------------------------------------------------- The Dallas Cowboys have agreed to pay $1.73 million to settle a class-action lawsuit claiming the team violated state and federal consumer-protection laws by hiring a telemarketing company to fax unsolicited advertising to thousands of people. The plaintiff, Omnibus International, alleged that the so-called "junk faxes" hurt legitimate advertising as well as consumers and businesses. The plaintiff's lawyer, Julius Glickman of Houston, said American Blast Fax sent the fax at least once to 125,000 locations. Those recipients will be notified they are eligible for up to $500 for each unsolicited fax. "We are hopeful that junk faxers will begin to get the message that businesses and families want to be left alone and don't want advertisers tying up and using their machines," Mr. Glickman said. The settlement, which still must be approved by a Dallas judge, combines the Dallas case with a similar lawsuit filed in Fort Worth. Dallas Cowboys spokesman Rich Dalrymple said the team had no comment about the settlement. If any funds cannot be distributed to claimants, the Cowboys have agreed to contribute them to charity. In April, the Texas House overwhelmingly rejected a measure to shield the football team and some other businesses from potentially costly class action lawsuits. ENRON CORPORATION: Hagens Berman Files Suit Regarding "Vanished" ESOP --------------------------------------------------------------------- Hagens Berman LLP initiated a class action against Enron Corporation (NYSE:ENE) on behalf of employees participating in the company's employee stock ownership plan (ESOP) against the Company, and Northern Trust (NASDAQ:NTRS), the plan's trustee, claiming the organizations illegal actions caused thousands of ESOP participants to lose millions of dollars during the recent stock collapse. Filed in U.S. District Court, Southern District of Texas, the suit seeks to represent workers who lost millions of dollars in the stock plan after the company illegally locked down the ESOP plan, prohibiting employees from selling Company stock during its recent freefall, the suit claims. The suit also claims that the energy trading company and plan trustee breached their duty to the plan participants by withholding key information regarding the Company's true financial situation. Steve Berman, the attorney representing the plaintiffs, said the actions by the defendants crushed the lives of thousands of Company plan participants. "These people weren't Wall Street risk-takers," Mr. Berman said. "These were lunch-pail men and women who went to work every morning, putting a little away every month for retirement, or to finance a child's education. Suddenly, their savings vanished." Among other charges, the complaint contends that: (1) the Company issued false and misleading financial results; (2) the Company repeatedly issued false information about the company's financial condition, which ESOP participants relied upon to their financial detriment. In an attempt to inflate Company revenue, earnings and assets, it failed to disclose hundreds of millions of dollars in debt while touting the financial strength of the company; 93) Enron and its plan trustee illegally barred ESOP participants from selling stock. On Oct. 17, the Company locked down all assets in the ESOP, rendering ESOP participants powerless in selling Company shares. During that time, employees watched Company stock plunge more than 70 percent after an announcement of a $618 million third quarter loss. According to Mr. Berman, while employees watched their retirement funds evaporate, Company executives had already engaged in extensive insider trading prior to the October 16 announcement, pocketing millions of dollars in personal proceeds. "It is as if Enron took a match to these employees' future, and forced them to watch it burn in front of their eyes," Mr. Berman added. "Enron and Northern Trust's actions are nothing short of scandalous." In October 2001, the Company surprised the market when it announced that the company was taking non-recurring charges totaling $1.01 billion after-tax in the third quarter of 2001. The Company later revealed that a portion of the charge was related to the unwinding of limited-partnership investments controlled by its CFO. The Company announced that it would lose more than $1 billion in shareholder equity as a result of the unwinding of investments. As this news began to be assimilated by the market, the price of the Company's common stock dropped significantly. For more information, contact Steven Berman by Phone: 206.623.7292 or visit the firm's Website: http://www.hagens-berman.com. FIRST NATIONAL: Agrees To Settle Suit Challenging Marketing Practices --------------------------------------------------------------------- The First National Bank of Marin has reached a settlement with the Office of the Comptroller of the Currency (OCC) relating to the class action challenging some of the company's solicitation and marketing materials. Under terms of the settlement agreement and without admitting any wrongdoing, the Company agreed to reimburse certain customers who applied for its credit card between July 27, 1996 and May 31, 2001 and who incurred specific charges, including enrollment fees and certain finance charges. Bank officials have agreed to set aside a reserve of not less than $4 million to cover consumer claims from both the class- action settlement and the OCC agreement. The settlement results in the dismissal with prejudice of all pending class-action litigation against the Company relating in any way to the Bank's issuance of credit cards and credit-related products. The settlement is subject to court approval. In announcing the settlement, First National Bank of Marin President and CEO Robert DeJong said, "This settlement enables First National to continue moving forward with providing quality credit products and services to our customers, which is our top priority." The Company also reached a similar agreement with the OCC regarding an inquiry into its solicitation and marketing materials. In entering into the consent decree, the Bank did not admit to any wrongdoing. "First National believes that its marketing materials and disclosures are complete and accurate and comply with all applicable requirements. We pride ourselves on our open and honest communications with our customers," Mr. DeJong said. He added, "We have always made every effort to comply in good faith with all government regulations and have always had a cooperative relationship with the OCC. We believe that the OCC lacks legal authority to enforce the FTC Act, and we believe that the OCC's interpretations of the FTC Act are incorrect and contrary to the interests of both financial institutions and consumers. Nevertheless, we have entered into this consent decree in order to be able to move forward and put these issues behind us." FINISAR CORPORATION: Milberg Weiss Commences Securities Suit in S.D. NY ----------------------------------------------------------------------- Milberg Weiss Bershad Hynes and Lerach LLP initiated a securities class action on behalf of purchasers of the securities of Finisar Corp. (NASDAQ:FNSR) between November 17, 1999 and December 6, 2000, inclusive in the United States District Court, Southern District of New York, located at 500 Pearl Street, New York, NY against the Company and: (1) Jerry S. Rawls, CEO and President, (2) Frank H. Levinson, Chairman and Chief Technical Officer, (3) Stephen K. Workman, CFO and (4) Merrill Lynch, Pierce, Fenner & Smith Inc. The suit 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 November 1999, the Company commenced an initial public offering of 8,150,000 of its shares of common stock, at an offering price of $19 per share. In April 2000, the Company commenced a secondary offering for the sale of 7,700,000 shares of common stock for $100 per share. In connection with the offerings, the Company filed registration statements, which incorporated prospectuses with the SEC. The complaint further alleges that the prospectuses were materially false and misleading because they failed to disclose that: (i) Merrill Lynch had solicited and received excessive and undisclosed commissions from certain investors in exchange for which Merrill Lynch allocated to those investors material portions of the restricted number of shares issued in connection with the IPO; (ii) Merrill Lynch had entered into agreements with customers whereby Merrill Lynch 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; and (iii) the secondary prospectus failed to disclose the aforementioned practices and the resulting inflation of the price of common stock which continued throughout the class period, including the time of the secondary offering. 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 or visit the firm's Website: http://www.milberg.com FLORIDA POWER: Supreme Court Agrees To Hear Age Discrimination Case ------------------------------------------------------------------- The Supreme Court accepted an appeal from former employees of Florida Power Corporation, saying it will decide whether an employer can be sued for age discrimination when corporate layoffs disproportionately impact older workers, The Wall Street Journal reported recently. The Florida Power employees, who lost their jobs in a series of reorganizations in the mid-1990s, sued under the Age Discrimination in Employment Act (ADEA), claiming that more than 70 percent of the people laid off were over the age of 40. The ADEA prohibits employers from making hiring, firing and other workplace decisions based on age. The former Florida Power employees said the statute also should apply when a company's action falls more harshly on one group than another. Specifically, they wanted to make their case by showing that the reorganizations, by targeting older employees in much greater numbers for layoffs than other workers, hit the older workers much harder than they hit those other workers. So-called disparate-impact claims are recognized in some civil-rights cases involving racial, sexual or religious discrimination, but federal courts have long been divided over whether the analysis can be used for age-discrimination claims. The issue is important because it can be difficult for plaintiffs to prove intentional age discrimination. The history of the Florida Power case reflects the courts' reluctance to use the claim of disparate impact as evidence of age-bias: A federal judge ruled in 1999 that the former Florida Power workers' class-action lawsuit could not proceed to trial, in part because the ADEA doesn't allow disparate-impact claims, and a federal appeals court in Atlanta agreed this year. The statute includes an exception for layoffs or other actions based on "reasonable factors other than age." Florida Power, a unit of Progress Energy Corporation, Raleigh, North Carolina, said the layoffs were nondiscriminatory and necessary to remain competitive in a newly deregulated market. (Adams v. Florida Power) INFORMAX INC.: Schiffrin Barroway Initiates Securities Suit in S.D. NY ---------------------------------------------------------------------- Schiffrin and Barroway LLP commenced a securities class action on behalf of purchasers of the common stock of InforMax, Inc. (NASDAQ:INMX) between October 2, 2000 and December 6, 2000, inclusive in the United States District Court, Southern District of New York, against the Company, certain of its officers and its underwriters. The suit 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 October 2000, the Company commenced an initial public offering of 5,000,000 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 SEC. The complaint further alleges that the prospectus was materially false and misleading because it failed to disclose, among other things, that: (i) the underwriters had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the 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 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 or by E-mail: info@sbclasslaw.com INSURANCE COMPANIES: Clark Bloss Initiates Insurance Fraud Suit in VA --------------------------------------------------------------------- Clark Bloss and McIver PLLC commenced a putative class action in the United States District Court for the Western District of Virginia against insurance companies: (1) CNA Financial Corporation, (2) Continental Corporation, a CNA subsidiary, (3) Continental Insurance Company, a CNA subsidiary, (4) Retirement Accounts, Inc., (RAI) and (5) FISERV, Inc., parent corporation of Retirement Accounts, Inc. The named plaintiff, Reverend Allen E. Smith alleges that the sale of "bogus "Senior Capital Notes" by The Charterhouse Group, Ltd., was aided and abetted by the use of false or misleading statements indicating that payment of the notes was assured by virtue of insurance policies issued by CNA. The suit also claims that CNA knew or should have known of the misleading statements and did nothing to stop them. It is further alleged that RAI aided and abetted fraud practiced by two Florida corporations, First Capital Services, Inc., and U.S. Capital Funding, Inc., because it continued to place tax exempt assets belonging to class members in those corporations when it knew, or should have known, that the investments were shams. For more information, contact David M. Clark or John Bloss by Mail: PO Box 1349 Greensboro, NC 27402-1349 by Phone: 336.275.7275 by Fax: 336.275.1401 or by E-mail: cbm@cbm-law.com JDN REALTY: Georgia Federal Court Approves Securities Suit Settlement --------------------------------------------------------------------- JDN Realty announced that it had received federal-court approval of a settlement to a class-action securities lawsuit, related to the company's failure to disclose compensation for executives, The Wall Street Journal recently reported. The U.S. District Court for the Northern District of Georgia called the settlement "fair, reasonable and adequate and in the best interests of JDN shareholders." The court also approved the settlement terms of a related lawsuit. Under the terms of the class-action settlement, JDN Realty, a real-estate investment trust based in Atlanta, will pay $16.8 million in cash and 1.68 million shares of common stock to the plaintiff shareholders. The Company recorded a $46 million after-tax charge related to the settlement in the second quarter. The class action was prompted by the Company's discovery in early 2000 that certain real-estate transactions included undisclosed compensation arrangements involving company officers who have since resigned. The value of the unreported compensation was about $5.5 million, a JDN spokesman said. JUNIPER NETWORKS: Lovell Stewart Commences Securities Suit in S.D. NY --------------------------------------------------------------------- Lovell & Stewart LLP initiated a securities class action on behalf of all persons and entities who purchased, converted, exchanged or otherwise acquired the common stock of Juniper Networks, Inc. (NasdaqNM: JNPR) between June 24, 1999 and December 6, 2000, inclusive in the US District Court for the Southern District of New York against the Company, certain of its officers and underwriters: (1) The Goldman Sachs Group, Inc., (2) Credit Suisse First Boston Corporation, (3) FleetBoston Robertson Stephens, Inc., (4) Royal Bank of Canada (Dain Rauscher Wessels), (5) SG Cowen Securities Corporation, (6) UBS Warburg LLC (Warburg Dillon Read LLC), (7) Chase H&Q (formerly Hambrecht & Quist LLC), (8) JP Morgan Chase & Co., Inc., (9) Lehman Brothers, Inc. and (10) Salomon Smith Barney, Inc. The suit asserts claims under Section 12 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder. The suit also alleges that the defendants violated the federal securities laws by issuing and selling Company stock pursuant to the initial public offering and secondary offering without disclosing to investors that several of the underwriters of the IPO had solicited and received excessive and undisclosed commissions from certain investors. In exchange for the excessive commissions, the defendant underwriters allegedly allocated shares of Company stock to certain investors at the IPO price of $5.67 per share. (All stock and price data herein reflect both Juniper Networks's 3:1 and 2:1 stock splits for shareholders of record as of December 31, 1999 and May 15, 2000, respectively.) To receive the allocations (i.e., the ability to purchase shares) at $5.67, the defendant underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as Company stock price rocketed upward was intended to drive Company share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the defendant IPO underwriters and their customers to reap enormous profits by buying stock at the $5.67 IPO price and then selling it later for a profit at inflated aftermarket prices, which rose as high as $17.67 during its first day of trading. Rather than allowing their customers to keep their profits from the IPO, the complaint alleges, the defendant underwriters required their customers to "kick back" some of their profits in the form of secret commissions. These secret commission payments were sometimes calculated after the fact based on how much profit each investor had made from his or her IPO stock allocation. The complaint also alleges that the defendants were able to price the secondary offering at an artificially high $31.67 per share due to the continued effects of the foregoing violations. The complaint further alleges that defendants violated the Securities Act of 1933 because the prospectuses distributed to investors and the registration statements filed with the SEC in order to gain regulatory approval for the offerings contained material misstatements regarding the commissions that the underwriters would derive from the IPO and failed to disclose the additional commissions and "laddering" scheme discussed above. For more information, contact Lovell and Stewart by Phone: 212.608.1900 or visit the firm's Website: http://www.lovellstewart.com MARTHA STEWART: Lovell Stewart Initiates Securities Suit in S.D. NY ------------------------------------------------------------------- Lovell & Stewart LLP commenced a securities class action on behalf of all persons and entities who purchased, converted, exchanged or otherwise acquired the common stock of Martha Stewart Living Omnimedia, Inc. (NYSE:MSO) between October 18, 1999 and December 6, 2000, inclusive in the United States District Court for the Southern District of New York against the Company, certain of its officers and directors, and underwriters: (1) Morgan Stanley Dean Witter, Inc., (2) Merrill Lynch, Pierce, Fenner & Smith, Incorporated, (3) Bear, Stearns & Co., Inc., (4) Donaldson, Lufkin & Jenrette Securities Corporation, (5) Banc of America Securities LLC, (6) The Goldman Sachs Group, Inc. and (7) Salomon Smith Barney, Inc. The suit asserts claims under Section 11, 12 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder. The suit alleges that the defendants violated the federal securities laws by issuing and selling Company stock pursuant to the initial public offering without disclosing to investors that several of the underwriters of the IPO had solicited and received excessive and undisclosed commissions from certain investors. In exchange for the excessive commissions, the complaint alleges, the underwriters allocated Company shares to customers at the IPO price of $18.00 per share. To receive the allocations at $18.00, the defendant underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as stock price rocketed upward was intended to) drive share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the defendant underwriters and their customers to reap enormous profits by buying stock at the $18.00 IPO price and then selling it later for a profit at inflated aftermarket prices, which rose as high as $50.00 during its first day of trading. Rather than allowing their customers to keep their profits from the IPO, the complaint alleges, the defendant underwriters required their customers to "kick back" some of their profits in the form of secret commissions. These secret commission payments were sometimes calculated after the fact based on how much profit each investor had made from his or her IPO stock allocation. The complaint further alleges that defendants violated the Securities Act of 1933 because the prospectus distributed to investors and the registration statement filed with the SEC in order to gain regulatory approval for the offering contained material misstatements regarding the commissions that the underwriters would derive from the IPO and failed to disclose the additional commissions and "laddering" scheme discussed above. For more information, contact Lovell and Stewart by Phone: 212.608.1900 or visit the firm's Website: http://www.lovellstewart.com NESCO INC.: Berger Montague Commences Securities Suit in N.D. Oklahoma ---------------------------------------------------------------------- Berger & Montague PC filed a class action suit against certain principal officers and directors of Nesco, Inc. (NASDAQ:NESCQ) in the United States District Court for the Northern District of Oklahoma on behalf of all persons or entities who purchased Nesco stock between April 26, 2000 and August 16, 2001 inclusive. The suit alleges that defendants violated Section 10(b) and 20(a) of the Securities and Exchange Act of l934 by issuing a series of materially false and misleading statements about the Company's quarterly and annual financial results for 2000 and its quarterly financial results for the first quarter of 2001. At the close of the class period, the Company restated its revenues for 2000 and the first quarter of 2001 to adjust for $3.65 million in overbooked sales. The overbooked sales, which were the result of accounting irregularities, forced the Company to reduce its earnings for 2000 to $588,000, or 6 cents a share, from the previously reported $2.85 million, or 31 cents per share. The suit also alleges that, as a result of these false and misleading statements, the price of Company stock was artificially inflated throughout the class period. For more information, contact Sherrie R. Savett, Michael T. Fantini or Kimberly A. Walker by Mail: 1622 Locust Street, Philadelphia, PA 19103 by Phone: 888-891-2289 or 215-875-3000 by Fax: 215-875-5715 by E-mail: InvestorProtect@bm.net or visit the firm's Website: http://www.bm.net NESCO INC.: Federman Sherwood Initiates Securities Suit in N.D. OK ------------------------------------------------------------------ Federman & Sherwood commenced a securities class action in the United States District Court for the Northern District of Oklahoma on behalf of all persons or entities who purchased the common stock of Nesco, Inc. (NASDAQ:NESCQ) between April 26, 2000 and August 16, 2001, inclusive against the Company and certain former officers and directors. The suit alleges that defendants violated Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934 by issuing a series of materially false and misleading statements about the Company's quarterly and annual financial results for 2000 and its quarterly financial results for the first quarter of 2001. At the close of the class period, the Company restated its revenues for 2000 and the first quarter of 2001 to adjust for $3.65 million in overbooked sales. The overbooked sales, which were the result of accounting irregularities, forced the company to reduce its earnings for 2000 to $588,000, or 6 cents a share, from the previously reported $2.85 million, or 31 cents per share. The suit alleges that as a result of these false and misleading statements the price of common stock was artificially inflated throughout the class period. For more information, contact William B. Federman by Phone: 405.235.1560 or by E-mail: wfederman@aol.com. NEXTCARD INC.: Pomerantz Haudek Commences Securities Suit in C.D. CA -------------------------------------------------------------------- Pomerantz Haudek Block Grossman & Gross LLP initiated a securities class action against NextCard, Inc. (Nasdaq: NXCD) and the Company's Chief Executive Officer John V. Hashman, on behalf of all those persons or entities who purchased the Company's common stock during the period between April 2, 2001 and October 30, 2001, inclusive in the United States District Court for the Central District of California. The Complaint alleges that the Company, which is a leading issuer of credit cards on the Internet, and Mr. Hashman violated Sections 10(b) and 20(a) of the Securities Act of 1934. In particular, it is alleged that the Company made material omissions and materially false and misleading statements concerning severe problems it was facing for 2000 and 2001. In April 2001, defendants reported year ended December 31, 2000 results on SEC form 10-K which failed to disclose the severe business problems that the Company was experiencing. Thereafter, on October 31, 2001, the Company announced results for the Third Quarter 2001, the retaining of Goldman Sachs & Company to pursue the sale of the Company, and disclosing the extreme regulatory problems that it was encountering. The material omissions and false and misleading statements made by the Company shocked the market, causing its stock price to decline from a class period high of $11.54 per share on April 24, 2001 to $0.87 per share on October 31, 2001. For more information, contact Andrew G. Tolan by Phone: 888.476.6529 or 888.4.POMLAW (toll free) by E-mail: agtolan@pomlaw.com or visit the firm's Website: http://www.pomerantzlaw.com.Those who inquire by e- mail are encouraged to include their mailing address and telephone number. OMNIVISION TECHNOLOGIES: Schiffrin Barroway Files Securities Suit in NY ----------------------------------------------------------------------- Schiffrin and Barroway LLP initiated a securities class action on behalf of purchasers of the common stock of OmniVision Technologies, Inc. (NASDAQ:OVTI) between July 14, 2000 and December 6, 2000, inclusive in the United States District Court, Southern District of New York against the Company, certain of its officers and its underwriters. The suit 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 July 2000, the Company commenced an initial public offering of 5,000,000 of its shares of common stock at an offering price of $13 per share. In connection therewith, the Company filed a registration statement, which incorporated a prospectus with the SEC. The complaint further alleges that the prospectus was materially false and misleading because it failed to disclose that: (i) the underwriters had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the underwriters allocated to those investors material portions of the restricted number of Company shares issued in connection with the IPO; and (ii) the underwriters had entered into agreements with customers whereby the underwriters agreed to allocate Company shares to those customers in the IPO in exchange for which the customers agreed to purchase additional shares in the aftermarket at pre-determined prices. For 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 or by E-mail: info@sbclasslaw.com POLYMEDICA CORPORATION: Faces SEC Probe Relating To Financial Reports --------------------------------------------------------------------- The Securities and Exchange Commission is conducting an investigation of medical supplies maker Polymedica Corporation (NASDAQNM: PLMD) relating to "accounting matters, financial reports, other public disclosures and sales of the company's securities." The Company is the target of a related securities class action in Boston. Subsidiary Liberty Medical Supply also faces a federal probe. The Company has acknowledged that federal prosecutors in South Florida had an ongoing criminal investigation at Liberty, which has 1,100 employees. In August, 85 FBI agents raided the four offices of Liberty Medical Supply and Liberty Home Pharmacy in Florida and the homes of two employees, according to an Associated Press report. Company officials have stated that they believe that Liberty has not broken any laws. According to Associated Press, Company spokesman Eric G. Walters has not commented on the suit. In a press statement, Herbert Denton, Chairman of the Oversight Committee of the Company's Board of Directors, said "We have been cooperating with the SEC." Shares of the company fell $1.16, or 5 percent, to close at $24.36 in trading on the Nasdaq Stock Market. In after-hours trading, shares fell 15 percent, or $3.66. PURCHASEPRO.COM: Lovell Stewart Initiates Securities Suit in S.D. NY -------------------------------------------------------------------- Lovell & Stewart LLP lodged a securities class action on behalf of all persons and entities who purchased, converted, exchanged or otherwise acquired the common stock of PurchasePro.com, Inc. (NasdaqNM:PPRO) between September 13, 1999 and December 6, 2000, inclusive in the US District Court for the Southern District of New York against the Company, certain of its officers, and underwriters: (1) Prudential Securities Incorporated, (2) Jefferies & Company, Inc., (3) Donaldson, Lufkin & Jenrette Securities Corporation, (4) Chase H&Q (formerly known as Hambrecht & Quist LLC) and (5) Salomon Smith Barney, Inc. The suit asserts claims under Section 11, 12 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder. The suit alleges that the defendants violated the federal securities laws by issuing and selling Company stock pursuant to the initial public offering and secondary offering without disclosing to investors that several of the underwriters of the IPO had solicited and received excessive and undisclosed commissions from certain investors. In exchange for the excessive commissions, the complaint alleges, defendant underwriters allocated shares of Company stock to certain investors at the IPO price of $4.00 per share. (All stock and price data herein reflect both the Company's 3:2 and 2:1 stock splits to stockholders of record as of December 1, 1999 and September 29, 2000, respectively.) To receive the allocations at $4.00, the defendant IPO underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as the price of Company stock rocketed upward was intended to drive share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the defendant IPO underwriters and their customers to reap enormous profits by buying stock at the $4.00 IPO price and then selling it later for a profit at inflated aftermarket prices, which rose as high as $10.17 during its first day of trading. Rather than allowing their customers to keep their profits from the IPO, the complaint alleges, the defendant underwriters required their customers to "kick back" some of their profits in the form of secret commissions. These secret commission payments were sometimes calculated after the fact based on how much profit each investor had made from his or her IPO stock allocation. The complaint also alleges that the Company and the defendant underwriters of the secondary offering were able to price the secondary offering at an artificially high $40.00 per share due to the continued effects of the foregoing violations. The complaint further alleges that defendants violated the Securities Act of 1933 because the prospectuses distributed to investors and the registration statements filed with the SEC in order to gain regulatory approval for the offerings contained material misstatements regarding the commissions that the underwriters would derive from the IPO and failed to disclose the additional commissions and "laddering" scheme discussed above. For more information, contact Christopher Lovell, Victor E. Stewart, Ian T. Stoll by Phone: 212.608.1900 by E-mail: sklovell@aol.com or visit the firm's Website: http://www.lovellstewart.com RADWARE LTD.: Lovell Stewart Commences Securities Suit in S.D. New York ----------------------------------------------------------------------- Lovell & Stewart LLP filed a securities class action on behalf of all persons and entities who purchased, converted, exchanged or otherwise acquired the common stock of Radware Ltd. (NasdaqNM: RDWR) between September 29, 1999 and December 6, 2000, inclusive. The suit was filed in the United States District Court for the Southern District of New York against the Company, certain of its officers, and underwriters: (1) Salomon Smith Barney, Inc., (2) US Bancorp Piper Jaffray, Inc., (3) Bank of America Corporation (Banc of America Securities LLC), (4) FleetBoston Robertson Stephens, Inc., (5) The Goldman Sachs Group, Inc. and (6) SunTrust Capital Markets, Inc. (SunTrust Robinson Humphrey Capital Markets), The suit asserts claims under Section 11, 12 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder. The suit also alleges that the defendants violated the federal securities laws by issuing and selling Company stock pursuant to the initial public offering and secondary offering without disclosing to investors that several of the underwriters of the IPO had solicited and received excessive and undisclosed commissions from certain investors. In exchange for the excessive commissions, the complaint alleges, defendants underwriters of Company's IPO, allocated shares of stock to certain investors at the IPO price of $18.00 per share. To receive the allocations at $18.00, the defendant IPO underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as Company stock price rocketed upward was intended to drive Company share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the defendant IPO underwriters and their customers to reap enormous profits by buying stock at the $18.00 IPO price and then selling it later for a profit at inflated aftermarket prices, which rose as high as $49.00 during its first day of trading. Rather than allowing their customers to keep their profits from the IPO, the complaint alleges, the defendant underwriters required their customers to "kick back" some of their profits in the form of secret commissions. These secret commission payments were sometimes calculated after the fact based on how much profit each investor had made from his or her IPO stock allocation. The complaint also alleges that the defendants and Canadian Imperial Bank of Commerce (CIBC World Markets Corp.), were able to price the secondary offering at an artificially high $51.75 per share due to the continued effects of the foregoing violations. The suit further alleges that defendants violated the Securities Act of 1933 because the prospectuses distributed to investors and the registration statements filed with the SEC in order to gain regulatory approval for the offerings contained material misstatements regarding the commissions that the underwriters would derive from the IPO and failed to disclose the additional commissions and "laddering" scheme discussed above. For more information, contact Lovell and Stewart by Phone: 212.608.1900 or visit the firm's Website: http://www.lovellstewart.com SAGENT TECHNOLOGIES: Levy Levy Commences Securities Suit in N.D. CA ------------------------------------------------------------------- Levy and Levy PC initiated a securities class action in the United States District Court for the Northern District of California on behalf of all purchasers of the common stock of Sagent Technology, Inc. (NASDAQ:SGNTE) from May 11, 2001 through November 28, 2001, inclusive. The complaint charges the Company and certain of its officers and directors with issuing false and misleading statements concerning the company's business and financial condition. The suit alleges that during the class period, defendants caused the Company's shares to trade at artificially inflated levels through the issuance of false and misleading financial statements. As a result of this inflation, the Company was able to complete a private placement offering of 9.1 million shares, raising net proceeds of $16.8 million on August 1, 2001. On November 15, 2001, just months after this offering was completed, the Company revealed that its 3rd Quarter results, and possibly other quarters, were false when issued. The stock dropped below $.70 per share on this news. Then, on November 28, 2001, after the market closed, defendants revealed that the Company's 1st, 2nd and 3rd quarter results had been materially misstated and would have to be restated. For more information, visit the firm's Website: http://www.levylawfirm.com SIRIUS SATELLITE: Schiffrin Barroway Lodges Securities Suit in S.D. NY ---------------------------------------------------------------------- Schiffrin and Barroway LLP initiated a securities class action in the United States District Court for the Southern District of New York, on behalf of all purchasers of the common stock of Sirius Satellite Radio, Inc. (NASDAQ:SIRI) from February 17, 2000 through April 2, 2001, inclusive against the Company and certain of its officers and directors. The suit charges that the defendants violated sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, promulgated thereunder, by failing to disclose facts known to them, or recklessly disregarded by them, which demonstrated that the announced commercial launch dates for the Company's satellites required for the Company's service, published throughout the class period, were impossibly ambitious and unattainable. Defendants knew, or recklessly disregarded, that it would be impossible for the Company to offer its service commercially by the end of 2000, as initially disclosed, or early in 2001, as subsequently disclosed. The suit alleges that at all times during the class period, defendants issued materially false and misleading statements and press releases concerning when the Company's service would be commercially available, which caused the market price of Company stock to be artificially inflated. When the truth about the Company's ability to bring its service to consumers in the time frame it was claiming was revealed to the public, the price of its common stock dropped dramatically. 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 or by E-mail: info@sbclasslaw.com SPACELABS MEDICAL: Federal Court Dismisses Racial Discrimination Suit --------------------------------------------------------------------- The United States District Court for the Western District of Washington dismissed the class action against Spacelabs Medical, Inc. (NASDAQ:SLMD) brought by Godofredo Hernandez and other named plaintiffs, alleging national origin discrimination. The Federal Court ordered the class allegations dismissed after the plaintiff's attorney conceded that the class action allegations could not be sustained based on the facts and the law. The Company had provided extensive discovery to the plaintiff's attorney, including unopposed statistical evidence demonstrating that there was no class wide disparate impact adverse to Hispanic employees at the company. Gene DeFelice, Corporate Vice President, Secretary and general counsel, stated in a company press release, "I am very pleased that the company has been vindicated in this matter, although it is a shame that such frivolous claims are permitted to be brought in the first place. Spacelabs has appropriate equal opportunity policies and procedures in place. I would like to thank our team for all their hard work and for presenting the facts, evidence, and law in such a compelling manner." Additionally, a case management conference has been scheduled by the court to assess which of the remaining named plaintiffs will be dismissed and which may be permitted to proceed with their claims on an individual basis. The Company is a leading provider of integrated medical information systems and instrumentation with a strategic focus on wireless, telemedicine and Internet solutions for healthcare. SRI SURGICAL: Levy Levy Initiates Securities Suit in M.D. Florida ----------------------------------------------------------------- Levy and Levy PC commenced a securities class action in the United States District Court for the Middle District Court of Florida, Tampa Division on behalf of all purchasers of the common stock of SRI Surgical Express Incorporated (NASDAQ:STRC) from July 23, 2001 through November 27, 2001, inclusive (the "Class Period"). The complaint charges the Company and certain of its officers and directors with issuing a series of material misrepresentations to the market before and during the class period, thereby artificially inflating the price of the Company's common stock. Specifically, the complaint alleges that defendants issued a series of press releases touting the Company's new customer contracts such as the HealthTrust Purchasing Group contract announced on May 1, 2001, as well as "record" financial results for the third quarter of fiscal year 2001. In response, the price of Company stock soared to over $41 per share in September 2001, and the Company was named to the Forbes magazine list of the best small companies in the country. The complaint also states that, unbeknownst to the investing public who purchased Company stock during the class period at artificially inflated prices, the Company's business and financial conditions were rapidly deteriorating. On November 27, 2001, defendants revealed that the Company's previously issued financial statements for the third quarter of 2001 were false and that the Company's revenues and earnings were actually $1,034,000 and $262,000 less, respectively, than previously reported, and $.04 less per diluted share. As alleged in the complaint, these "newly" issued results did not meet analysts' estimates. In addition, the Company revealed that the outlook for the fourth quarter was far worse than investors had been led to believe. Defendants reported for the first time that the "pricing impact of new group purchasing organization arrangements on existing hospital customers," among other previously undisclosed problems detailed in the complaint, contributed to the third quarter shortfall and expected fourth quarter 2001 shortfall. According to the complaint, in response to the news that the Company would not meet third or fourth quarter analyst estimates and had improperly recognized revenue in the third quarter of 2001, stock plunged over 40%, closing at $14.63 on November 28, 2001, on unusually high volume of 2.7 million shares. For more information, visit the firm's Website: http://www.levylawfirm.com WOMEN.COM: Lovell Stewart Commences Securities Suit in S.D. New York -------------------------------------------------------------------- Lovell & Stewart LLP initiated a securities class action on behalf of all persons and entities who purchased, converted, exchanged or otherwise acquired the common stock of Women.com Networks, Inc. (NasdaqNM:WOMN) between October 14, 1999 and June 18, 2000, inclusive in the United States District Court for the Southern District of New York against the Company, certain of its officers and directors, underwriters: (1) Morgan Stanley Dean Witter & Co., Incorporated, (2) Deutsche Banc Alex. Brown Inc., (3) Salomon Smith Barney, Inc., (4) FleetBoston Robertson Stephens, Inc., (5) Bear, Stearns & Co., Inc., (6) Donaldson, Lufkin & Jenrette Securities Corporation and (7) Merrill Lynch, Pierce, Fenner & Smith, Incorporated The lawsuit asserts claims under Section 11, 12 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder. The suit alleges that the defendants violated the federal securities laws by issuing and selling Company stock pursuant to the initial public offering without disclosing to investors that several of the underwriters of the IPO had solicited and received excessive and undisclosed commissions from certain investors. In exchange for the excessive commissions, the complaint alleges, the underwriters allocated Company shares to customers at the IPO price of $10.00 per share. To receive the allocations at $10.00, the defendant underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as the price of Company stock rocketed upward was intended to drive Company share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the defendant underwriters and their customers to reap enormous profits by buying Company stock at the $10.00 IPO price and then selling it later for a profit at inflated aftermarket prices, which rose as high as $23.38 during its first day of trading. Rather than allowing their customers to keep their profits from the IPO, the complaint alleges, the defendant underwriters required their customers to "kick back" some of their profits in the form of secret commissions. These secret commission payments were sometimes calculated after the fact based on how much profit each investor had made from his or her IPO stock allocation. The complaint further alleges that defendants violated the Securities Act of 1933 because the prospectus distributed to investors and the registration statement filed with the SEC in order to gain regulatory approval for the Company offering contained material misstatements regarding the commissions that the underwriters would derive from the IPO and failed to disclose the additional commissions and "laddering" scheme discussed above. For more information, contact Lovell and Stewart LLP by Phone: 212.608.1900 or visit the firm's Website: http://www.lovellstewart.com ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2001. All rights reserved. ISSN 1525-2272. 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