/raid1/www/Hosts/bankrupt/CAR_Public/011210.mbx
C L A S S A C T I O N R E P O R T E R
Monday, December 10, 2001, Vol. 3, No. 240
Headlines
AETNA INC.: Milberg Weiss Initiates Securities Suit in Pennsylvania
CONSECO FINANCE: Appeals Court Reverses Dismissal of Securities Suits
DJ ORTHOPEDICS: Schiffrin Barroway Commences Securities Suit in S.D. CA
DJ ORTHOPEDICS: Savett Frutkin Commences Securities Suit in S.D. NY
DJ ORTHOPEDICS: States Multiple NY Securities Suits "Without Merit"
ENRON CORPORATION: Zwerling Schachter Files Securities Suit in S.D. TX
ENRON CORPORATION: Lovell Stewart Initiates Securities Suit in S.D. TX
HASTINGS ENTERTAINMENT: Discovery Proceeds In Texas Securities Suits
INFORTE CORPORATION: Schiffrin Barroway Files Securities Suit in NY
IVILLAGE INC.: To Vigorously Oppose Suit For Securities Act Violations
MANUFACTURERS SERVICES: Wolf Haldenstein Files Securities Suit in NY
MCK COMMUNICATIONS: Wolf Haldenstein Files Securities Suit in S.D. NY
METRICOM INC.: Schatz Nobel Commences Securities Suit in California
PACIFIC INTERNET: Wolf Haldenstein Files Securities Suit in S.D. NY
PENNSYLVANIA: Northumberland Seeks Share of $1B Tobacco Settlement
PRIMUS KNOWLEDGE: Wolf Haldenstein Commences Securities Suit in S.D. NY
SMTC CORPORATION: Schiffrin Barroway Lodges Securities Suit in S.D. NY
TRITON NETWORK: CEO Says Company Not Aware Of Underwriter Activities
WORLD WRESTLING: Vigorously Opposing "Outrageous" NY Securities Suit
VARIAGENICS INC.: Wolf Haldenstein Commences Securities Suit in S.D. NY
VIRATA CORPORATION: Finkelstein Thompson Lodges Securities Suit in NY
VIRATA CORPORATION: Essenmacher Essenmacher Files Securities Suit in NY
XO COMMUNICATIONS: Weiss Yourman Commences Securities Suit in E.D. VA
XOMA LTD.: Rosen Law Firm Commences Securities Suit in N.D. California
*********
AETNA INC.: Milberg Weiss Initiates Securities Suit in Pennsylvania
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Milberg Weiss Bershad Hynes & Lerach LLP commenced a securities class
action on behalf of purchasers of the securities of Aetna, Inc.
(NYSE:AET) between December 1, 2000 and April 9, 2001, inclusive in the
United States District Court for the District of Pennsylvania against
the Company and:
(1) William H. Donaldson, Chairman of the Board, and
(2) John W. Rowe, Chief Executive Officer, President and Director
The suit charges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market between December 1, 2000 and April 9, 2001. For example, the
suit alleges that in order to successfully spin-off New Aetna, its
domestic healthcare and large case pensions businesses, defendants
represented that New Aetna was successfully implementing operative and
strategic initiatives to improve efficiency and decrease medical costs.
These statements were allegedly false and misleading because medical
costs were in fact escalating due to, among other factors, overpaying
and double-paying claims and inadequate risk-enrollment pricing. On
April 10, 2001, the Company announced that its first quarter of 2001
financial results would be significantly lower than previous estimates
due to increased medical costs caused by a higher demand for healthcare
services in the fourth quarter of 2000 and first quarter of 2001. In
response to this announcement, the price of the Company's common stock
dropped by 20%, falling from $36.15 per share on April 9, 2001 to
$28.75 on April 10, 2001.
For more information, visit the firm's Website:
http://www.milberg.com/aetna/
CONSECO FINANCE: Appeals Court Reverses Dismissal of Securities Suits
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A three-judge panel of the U.S. Eighth Circuit Court of Appeals
reversed a Minnesota federal court order dismissing with prejudice
three securities class actions filed against Conseco Finance
Corporation. The panel also remanded the action to the federal court.
The suits were commenced in the United States District Court for the
District of Minnesota on behalf of purchasers of the Company's common
stock or options to purchase common stock during alleged class periods
that generally run from February 1995 to January 1998. The suits named
the Company, some of its current and former officers and directors as
defendants. They were later consolidated into two complaints, one
relating to an alleged class of purchasers of the Company's common
stock and the other relating to an alleged class of traders in options
for Conseco Finance's common stock.
The suits allege violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934. In each case, plaintiffs allege that
the Company and the other defendants violated federal securities laws
by making false and misleading statements about the Company's current
state and its future prospects. In particular, the allegations regarded
prepayment assumptions and performance of some of the Company's loan
portfolios, which allegedly rendered its financial statements false and
misleading.
The Company filed motions to dismiss these lawsuits, which the federal
court granted in August 1999. The plaintiffs subsequently appealed the
decision to the 8th Circuit Appellate Court. The Company has already
requested a rehearing of the appeal by the full bench of the U.S. Court
of Appeals for the 8th Circuit. It believes the actions are "without
merit" and intends to defend the lawsuits vigorously.
DJ ORTHOPEDICS: Schiffrin Barroway Commences Securities Suit in S.D. CA
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Schiffrin and Barroway LLP initiated a securities class action in the
United States District Court for the Southern District of California on
behalf of all purchasers of the common stock of DJ Orthopedics, Inc.
(NYSE:DJO) pursuant to the November 15, 2001 initial public offering
against the Company, certain of its officers and directors and its
underwriters.
The suit charges the defendants with violations of the Securities Act
of 1933. On November 15, 2001, the Company completed an IPO of 9
million shares of stock pursuant to a registration statement/
prospectus. The offering was priced at $17 per share for total proceeds
of $153 million. In the prospectus, the defendants represented that the
Company was dependent, in part, on international sales to fuel its
revenue growth and profitability.
The complaint alleges that the statements in the prospectus regarding
the Company's international sales and the accompanying risk disclosures
regarding its ability to generate such growth were false and misleading
and contained material omissions when made. In actuality, by the time
of the IPO, the Company had known that its stock price of $17 reflected
the defendants' contention that it would achieve its 4th Quarter
earnings estimates.
Prior to the IPO, defendants knew that the Company would not achieve
its 4th quarter earnings estimates. Moreover, this information was
disclosed to certain of the underwriting defendants' sales people who,
as a result of the change in the Company's 4th quarter projections,
declined to support or otherwise purchase the shares in the "after
market." Thus, contrary to the representations in the prospectus and
obligations of the defendants, the prospectus omitted to state material
facts, rendering it false and misleading.
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
DJ ORTHOPEDICS: Savett Frutkin Commences Securities Suit in S.D. NY
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Savett Frutkin Podell & Ryan PC initiated a securities class action on
behalf of persons who purchased the common stock of DJ Orthopedics,
Inc. (NYSE:DJO) pursuant to or traceable to an initial public offering
by DJO on or about November 15, 2001 in the United States District
Court for the Southern District of New York against the Company,
certain of its officers and directors and underwriters
The suit alleges that defendants violated Sections 11, 12(a)(2), and 15
of the Securities Act of 1933, by issuing a registration statement and
prospectus in connection with an initial public offering of common
stock, which contained materially false and misleading statements and
omissions. Specifically, the suit alleges that shortly after the
commencement of trading on November 15, 2001, the IPO share price
dropped precipitously from $17 per share upon news that analysts
adjusted downward Orthopedics' fourth quarter earnings forecast. Fourth
quarter earnings estimates were touted by defendants in "road shows" to
investors prior to the IPO. Defendants did not halt the IPO or trading
in the stock, even though the registration statement and prospectus
failed to disclose that the fourth quarter estimates were adjusted
downward.
The news drove the price of the Company's shares down by at least 10%,
to close at $15.25 per share, on heavy trading volume of 7.3 million
shares. By its third full day of trading, the Company's shares were
down to $13.16 per share, or over 22% off the IPO price.
For more information, contact Barbara A. Podell or Renee C. Nixon by
Phone: 800.993.3233 by E-mail: mail@savettlaw.com or visit the firm's
Website: http://www.savettlaw.com.
DJ ORTHOPEDICS: States Multiple NY Securities Suits "Without Merit"
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DJ Orthopedics (NYSE: DJO) vehemently denied allegations in several
securities class actions pending in the United States District Court
for the Southern District of New York on behalf of purchasers of the
Company's stock pursuant to or traceable to its initial public
offering.
The suits name as defendants the Company, certain of its officers and
directors and its underwriters and allege violations of Sections 11,
12(a)(2), and 15 of the Securities Act of 1933, based on allegedly
materially false and misleading statements and omissions in the
offering's registration statement and prospectus.
The Company said that it has not yet been served with the complaint.
In a regulatory filing, the Company dismissed the suits, labeling it
"without merit" and said that it would defend against the actions
vigorously.
ENRON CORPORATION: Zwerling Schachter Files Securities Suit in S.D. TX
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Zwerling Schachter & Zwerling LLP commenced a securities class action
in the United States District Court for the Southern District of Texas,
on behalf of all persons who purchased the common stock of Enron
Corporation (NYSE:ENE) between January 18, 2000 and October 17, 2001,
inclusive.
The suit alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations during
the class period, thereby artificially inflating the price of Enron
securities. The suit alleges, among other things, that defendants
misled investors:
(1) by reporting assets on the Company's balance sheet that were
overvalued by more than $1 billion;
(2) by concealing facts regarding related party transactions that
led to a more than $1 billion reduction of shareholders'
equity and other charges;
(3) by issuing false and misleading financial statements in
violation of generally accepted accounting principles; and
(4) by failing to disclose significant off-balance sheet
transactions which created enormous risks to the Company's
financial condition and business.
This misconduct caused the market prices of Company securities to be
artificially inflated during the class period. The market price of the
Company's common stock has since fallen from a high of $90 per share
during the class period to a low of 27(cents) per share.
For further details, contact Shaye Fuchs or Jaune Nykolyn by Phone:
1.800.721.3900 by E-mail: sfuchs@zsz.com or jnykolyn@zsz.com or visit
the firm's Website: http://www.zsz.com.
ENRON CORPORATION: Lovell Stewart Initiates Securities Suit in S.D. TX
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Lovell & Stewart LLP filed an amended complaint on behalf of all
persons who purchased or otherwise acquired the common stock of Enron
Corporation (NYSE:ENE), between October 19, 1998 and November 30, 2001,
inclusive in the US District Court for the Southern District of Texas.
The amended complaint alleges that certain of the Company's top
officers and directors with the deliberate and extensive help of its
auditors, Arthur Andersen, LLP, violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
markets between October 19, 1998 and November 30, 2001, thereby
artificially inflating the price of its common stock.
Specifically, the complaint alleges that the Company issued a series of
statements concerning its business, financial results and operations
that failed to disclose:
(i) that the Company's Broadband Services Division was
experiencing declining demand for bandwidth and the Company's
effort to create a trading market for bandwidth were not
meeting with success as many of the market participants were
not creditworthy;
(ii) that the Company's operating results were materially
overstated as result of the Company failing to timely write-
down the value of its investments with certain limited
partnerships which were managed by the Company's chief
financial officer; and
(iii) that the Company was failing to write-down impaired assets on
a timely basis in accordance with United States accounting
rules.
On October 16, 2001, the Company surprised the market by announcing
that it was taking non-recurring charges of $1.01 billion after-tax, of
($1.11) loss per diluted share, in the third quarter of 2001, the
period ending September 30, 2001. Subsequently, the Company revealed
that a material portion of the charge related to the unwinding of
investments with certain limited partnerships were controlled by the
Company's Chief Financial Officer. Consequently, the Company would be
eliminating more than $1 billion in shareholder equity as a result of
its unwinding of the investments.
As this news began to be assimilated by the market, the price of
Company common stock dropped significantly. Since October 16, 2001, the
price of common stock has plummeted from $33.84 per share to close at
the end of the class period on November 30, 2001 at $0.26 per share.
During the class period, Company insiders disposed of over $430 million
of their personally held common stock to unsuspecting investors.
For more information, contact Christopher Lovell by Mail: 500 Fifth
Avenue, New York, New York 10110 by Phone: 212.608.1900 by Fax:
212.719.4677 by E-mail: SKLovell@aol.com or visit the firm's Website:
http://www.lovellstewart.com
HASTINGS ENTERTAINMENT: Discovery Proceeds In Texas Securities Suits
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Discovery and class certification proceedings have finally begun in
several securities class actions pending against Hastings
Entertainment, Inc. due to its restatement in 2000 of its financial
results for the first three quarters of fiscal 1999 and the prior four
fiscal years.
Following the Company's initial announcement of the restatements, six
purported class action lawsuits were filed in the United States
District Court for the Northern District of Texas against the Company
and certain of its current and former directors and officers asserting
various claims under Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934. Five of the lawsuits were later consolidated and
transferred to the Amarillo Division of the Northern District. The
remaining suit, filed in the Dallas Division, was later voluntarily
dismissed.
In May 2000, a suit was commenced in the United States District Court
for the Northern District of Texas asserting various claims under
Sections 11, 12(2) and 15 of the Securities Act of 1933. The suit named
as defendants the Company, its current and former directors and
officers, and three underwriters:
(1) Salomon Smith Barney,
(2) A.G. Edwards & Sons, Inc. and
(3) Furman Selz, LLC
The Company filed motions to dismiss the two suits, but the Court
denied these motions in September 2001. In a disclosure to the SEC, the
Company expressed confidence that the pending litigation or its outcome
will not have a material effect on the Company's financial position or
business operations.
INFORTE CORPORATION: Schiffrin Barroway Files Securities Suit in NY
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Schiffrin and Barroway LLP initiated a securities class action on
behalf of purchasers of the common stock of Inforte Corp. (NASDAQ:INFT)
between February 17, 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 February 2000, the
Company commenced an initial public offering of 2,000,000 of its shares
of common stock, at an offering price of $32 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 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, Esq.
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
IVILLAGE INC.: To Vigorously Oppose Suit For Securities Act Violations
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iVillage Inc. (Nasdaq: IVIL) labeled a pending class action lawsuit
against its subsidiary Women.com Networks, Inc. as "without merit". The
suit names certain former officers and directors of Women.com, and
certain underwriters of Women.com's initial public offering of common
stock in October 1999, alleging violations of federal securities law
surrounding the initial public offering.
The suit was filed in the U.S. District Court for the Southern District
of New York on behalf of all persons and entities who purchased,
converted, exchanged or otherwise acquired the common stock of
Women.com Networks, Inc. between October 14, 1999 and June 18, 2000
inclusive. The lawsuit 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 thereunder and seeks to
recover an unspecified amount of damages.
Women.com has yet to be served with a copy of the complaint. The
Company said it in a press statement that it intends to vigorously
defend against these claims. iVillage acquired Women.com in June 2001.
The Company is a women's media company and a source for women's
information online.
MANUFACTURERS SERVICES: Wolf Haldenstein Files Securities Suit in NY
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Wolf Haldenstein Adler Freeman and Herz LLP initiated a securities
class action on behalf of purchasers of the securities of Manufacturers
Services Ltd. (NYSE:MSV) between June 22, 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:
(1) Banc of America Securities,
(2) Bear Stearns Companies,
(3) CIBC World Markets,
(4) Credit Suisse First Boston,
(5) Dain Rauscher,
(6) FleetBoston Robertson Stephens,
(7) JP Morgan Securities,
(8) Lehman Brothers,
(9) Merrill Lynch, Pierce, Fenner & Smith,
(10) Morgan Stanley Dean Witter & Co.,
(11) Prudential Securities,
(12) Salomon Smith Barney, and
(13) Thomas Weisel Partners
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 June 2000, the
Company commenced an initial public offering of 11 million of its
shares of common stock at an offering price of $16.00 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 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
(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 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:
http://www.whafh.com.All e-mail correspondence should make reference
to MSV
MCK COMMUNICATIONS: Wolf Haldenstein Files 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 the securities of MCK
Communications, Inc. (NASDAQ: MCKC), between October 22, 1999 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 1999, the
Company commenced an initial public offering of 3.4 million 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 suit 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 those underwriters allocated to those investors material
portions of the restricted number of IPO 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 Fred Taylor Isquith, Thomas H. 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:
http://www.whafh.com.All e-mail correspondence should make reference
to MCKC.
METRICOM INC.: Schatz Nobel Commences Securities Suit in California
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Schatz and Nobel PC initiated a securities class action in the United
States District Court for the Northern District of California on behalf
of all persons who purchased common stock of Metricom, Inc. formerly
(NASDAQ:MCOM) currently (OTC:MCOMQ) between June 21, 1999 and July 2,
2001, inclusive.
The suit alleges that, unknown to the investing public, beginning in
June 1999, the Company, a mobile wireless provider, entered into three
significant transactions with MCI WorldCom, the result of which was,
among other things, the creation of a contingent liability in excess of
$300 million for the Company. However, in connection with a secondary
public offering of 5 million shares of Company stock, at $87 per share,
which closed on February 7, 2000, only one of these transactions was
partially disclosed. Investors never knew that the Company's ability to
implement its business plan and marketing strategy was severely
hampered.
The suit also alleges that three of the Company's senior management, in
a series of statements made during the class period, caused the price
of Company stock to be artificially inflated. The price rose from
$11.06 per share near the beginning of the class period to as high as
$109.50 on January 28, 2000, right before the offering. The corporate
officers continued to misrepresent the true state of the Company's
financial condition. The last reported Company share price on July 2,
2001, was $1.82 per share, a decline of more than 93% over the prior 12
months.
For more information, contact Andrew M. Schatz, Patrick A. Klingman or
Wayne T. Boulton by Phone: 800.797.5499 by E-mail: sn06106@aol.com or
visit the firm's Website: www.snlaw.net.
PACIFIC INTERNET: Wolf Haldenstein Files 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 the securities of Pacific
Internet Limited (NASDAQ:PCNTF) between February 5, 1999 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:
(1) the Bear Stearns Companies,
(2) CIBC World Markets,
(3) FleetBoston Robertson Stephens,
(4) JP Morgan Securities,
(5) Lehman Brothers, and
(6) SG Cowen Securities
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 February 1999, the
Company commenced an initial public offering of 3 million of its shares
of common stock at an offering price of $17.00 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 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 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 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:
http://www.whafh.com.All e-mail correspondence should make reference
to PCNTF.
PENNSYLVANIA: Northumberland Seeks Share of $1B Tobacco Settlement
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Northumberland County joined a class action suit seeking a share in
Pennsylvania's $11 billion tobacco litigation settlement. County
commissioners filed the resolution this week. They say the settlement
money could be used to subsidize health-care costs at Mountain View
Manor Nursing and Rehabilitation Center, or, because the county is
required to provide health care to prisoners for which it cannot be
reimbursed, it could go to offset those costs, according to a
NewsItem.com report.
The suit was commenced in May by the Lackawanna County council, arguing
that counties have a legal obligation under both state and federal law
to provide medical health care to indigent, non-paying patients.
Specifically, counties are to provide services to patients who have
suffered and continue to suffer from tobacco-related diseases.
The suit states, "The plaintiffs and class members bring this complaint
to recover their unreimbursed costs for health care provided in the
past, health care currently being provided and future health care to be
provided to Medicaid, medically indigent and non-paying patients
suffering from tobacco related illnesses."
Pennsylvania received the settlement in November 1998, when the state
joined 45 other states in a Master Settlement Agreement (MSA) with:
(1) Associated Wholesalers Inc.,
(2) Klein Candy Co.,
(3) Phillip Morris Inc.,
(4) R.J. Reynolds Tobacco Co.,
(5) American Tobacco Co. Inc.,
(6) Brown and Williamson Tobacco Corp.,
(7) Liggett and Meyers Inc.,
(8) Lorillard Tobacco Company and
(9) British American Tobacco, Industries
Solicitor James Zurick told NewsItem.com that the state already
received $1 billion of that settlement, but has not allocated it. Act
77 of 2001, signed by former Gov. Tom Ridge, allocates funds from the
MSA. Pennsylvania's entire share of tobacco settlement funds is being
used for health-related initiatives. The Pennsylvania Department of
Health is responsible for administering four components of Act 77 while
various state agencies will administer other components of the act.
PRIMUS KNOWLEDGE: 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 the securities of Primus
Knowledge Solutions, Inc. (NASDAQ: PKSI), between June 30, 1999 and
December 6, 2000, inclusive in the United States District Court,
Southern District of New York. The complaint names as defendants 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 June 1999, the
Company commenced an initial public offering of 4.15 million of its
shares of common stock at an offering price of $11 per share. In
connection therewith, the Company filed a registration statement, which
incorporated a prospectus with the SEC. The suit 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 those underwriters allocated to those investors material
portions of the restricted number of IPO 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 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:
http://www.whafh.com.All e-mail correspondence should make reference
to Primus
SMTC CORPORATION: Schiffrin Barroway Lodges Securities Suit in S.D. NY
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Schiffrin and Barroway LLP commenced a securities class action on
behalf of purchasers of the common stock of SMTC Corporation
(NASDAQ:SMTX) between July 20, 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 6,625,000 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 Company 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
TRITON NETWORK: CEO Says Company Not Aware Of Underwriter Activities
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Triton Network Systems' executives say they were not focused on how
underwriters handled stock sales and had no knowledge of any illegal
activity that led to the filing of a securities class action in the US
District Court for the Southern District of New York.
The suit alleges that the Company failed to reveal that underwriters
required certain investors to make after-market purchases of the stock
at escalating prices, a common allegation in numerous securities suits
pending in federal courts. The suit also alleges investors wound up
returning part of their profits to the underwriter in the form of
excessive commissions on other trades.
Company CEO Ken Vines said in an interview with the Orlando Business
Journal, that they they were focused on their own business and not how
the underwriters were handling the business of stock sales. "They are
claiming all these companies and all these managers should have known
the investment bankers were doing this.How the investment banking firm
ran its business or sold its shares is something that the company had
no knowledge of." He added that the Company was unaware of any
underwriter activity beyond what the underwriters included in the
prospectus. "Triton management and the company had no knowledge and no
way of knowing whether the investment firms were doing what the lawsuit
alleges or not."
The Company was once a rising star in Florida's high-tech community,
with a stellar initial public offering in July 2000. According to the
Orlando Business Journal, the Company's science was developed by
Orlando-based Lockheed Martin operations, and its business plan was
cultivated at military-to-commercial business creator Milcom
Technologies. In August, however, the Company's assets were liquidated
and its operations were stopped.
WORLD WRESTLING: Vigorously Opposing "Outrageous" NY Securities Suit
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The World Wrestling Federation Entertainment, Inc. (NasdaqNM: WWF)
categorically denied the allegations in a securities class action filed
by the law firm of Lovell & Stewart on behalf of all persons and
entities who purchased, converted, exchanged or otherwise acquired the
Company's common stock between October 18, 1999 and December 6, 2000,
inclusive in the United States District Court for the Southern District
of New York. In a press release, the Company called the suit filed
against the Company, certain of its officers and directors at the time
of its IPO, and its underwriters, "outrageous".
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 suit
primarily 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.
VARIAGENICS INC.: Wolf Haldenstein Commences Securities Suit in S.D. NY
----------------------------------------------------------------------
Wolf Haldenstein Adler Freeman and Herz LLP initiated a securities
class action on behalf of purchasers of the securities of Variagenics,
Inc. (NASDAQ:VGNX), between July 21, 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 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 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 those underwriters allocated to those investors material
portions of the restricted number of IPO shares issued in
connection with the IPO; and
(ii) the underwriters had entered into agreements with customers
whereby the uagreed 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 Fred Taylor Isquith, Thomas H. 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:
http://www.whafh.com.All e-mail correspondence should make reference
to Variagenics.
VIRATA CORPORATION: Finkelstein Thompson Lodges Securities Suit in NY
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Finkelstein Thompson & Loughran commenced a securities class action in
the United States District Court for the Southern District of New York
on behalf of purchasers of the securities of Virata Corporation
(NASDAQ:VRTA) between November 16,1999 and December 6, 2000 against:
(1) Credit Suisse First Boston Corporation,
(2) Warburg Dillon Read LLC,
(3) Thomas Weisel Partners LLC,
(4) Banc of America Securities LLC,
(5) FleetBoston Robertson Stephens Inc.,
(6) Dain Rauscher Wessels,
(7) Morgan Stanley & Co. Incorporated, and
(8) US Bancorp Piper Jaffray
The suit charges the defendants with violations of Sections 11 of the
Securities Act of 1933 and alleges that the prospectus was materially
false and misleading because it contained material misrepresentations
and omissions about:
(i) the agreements with customers whereby defendants had solicited
and received excessive and undisclosed commissions in exchange
for an allocation of the shares issued in connection with the
initial public offering; and
(ii) defendants had entered into agreements with customers whereby
defendants would allocate shares issued in connection with the
initial public offering in exchange for which the customers
agreed to purchase additional shares in the aftermarket at
pre-determined prices.
For more information, contact Andrew J. Morganti by Mail: 1055 Thomas
Jefferson St. NW, Suite 601 Washington DC 2007 by Phone: 202.337.8000
or 888.333.4409 (toll free) by Fax: 202.337.8090 by E-mail:
ajm@ftllaw.com or visit the firm's Website: http://www.ftllaw.com
VIRATA CORPORATION: Essenmacher Essenmacher Files Securities Suit in NY
-----------------------------------------------------------------------
Essenmacher & Essenmacher filed a class action lawsuit in the United
States District Court for the Southern District of New York on behalf
of purchasers of the securities of Virata Corporation (NASDAQ:VRTA)
between November 16,1999 and December 6,2000 inclusive against:
(1) Credit Suisse First Boston Corporation,
(2) Warburg Dillon Read LLC,
(3) Thomas Weisel Partners LLC,
(4) Banc of America Securities LLC,
(5) FleetBoston Robertson Stephens Inc.,
(6) Dain Rauscher Wessels,
(7) Morgan Stanley & Co. Incorporated, and
(8) U.S. Bancorp Piper Jaffray
The suit charges the defendants with violations of Sections 11 of the
Securities Act of 1933. The suit alleges that the prospectus was
materially false and misleading because it contained material
misrepresentations and omissions about:
(i) the agreements with customers whereby defendants had solicited
and received excessive and undisclosed commissions in exchange
for an allocation of the shares issued in connection with the
initial public offering; and
(ii) defendants had entered into agreements with customers whereby
defendants would allocate shares issued in connection with the
initial public offering in exchange for which the customers
agreed to purchase additional shares in the aftermarket at
pre-determined prices.
For more information contact Keith Essenmacher by Phone: 248.960.2325.
XO COMMUNICATIONS: Weiss Yourman Commences Securities Suit in E.D. VA
---------------------------------------------------------------------
Weiss and Yourman initiated a securities class action against XO
Communications, Inc. (NASDAQ:XOXO) and certain of its officers and
directors in the United States District Court for the Eastern District
of Virginia, on behalf of purchasers of XO securities between April 4,
2001 and November 29, 2001.
The suit charges the defendants with violations of the Securities
Exchange Act of 1934, alleging the defendants:
(1) failed to disclose material adverse information;
(2) misrepresented the truth about the Company; and
(3) caused plaintiff and other class members to purchase stock at
artificially inflated prices.
For more information, contact James E. Tullman, Mark D. Smilow or David
C. Katz by Mail: The French Building, 551 Fifth Avenue, Suite 1600,
New York NY 10176 by Phone: 888.593.4771 or 212.682.3025 or by E-mail:
info@wynyc.com
XOMA LTD.: Rosen Law Firm Commences Securities Suit in N.D. California
----------------------------------------------------------------------
The Rosen Law Firm initiated a securities class action in the U.S.
District Court for the Northern District of California, on behalf of
all investors who bought XOMA Limited (NASDAQ: XOMA) stock between May
24, 2001 and October 4, 2001, including those persons who purchased
shares in or traceable to the Company's June 26 offering of 3 million
shares.
The complaint says that the Company issued false and misleading
statements about its plans to file a Food and Drug Administration (FDA)
application for Xanelim, an experimental psoriasis drug it was co-
developing with Genentech Inc. For investors in the Company, successful
development of Xanelim was pivotal. In 20 years, the Company had never
turned a profit or brought a drug to market.
Filing the application, known as a Biologics Licensing Application
(BLA), was an important step in gaining FDA approval for the drug. The
Company repeatedly said it planned to file the BLA with the agency by
the end of 2001 or the first quarter of 2002. That timetable would
have put it and Genentech in a neck-and-neck race with Biogen, Inc. to
be the first manufacturer to market an effective treatment for
psoriasis. The winner would gain a significant advantage in a lucrative
market that is expected to reach $2 billion by the year 2005. In fact,
the Company and Genetech were nearly a year behind Biogen. At the time
the Company told investors it planned to file its BLA by the end of
2001, it knew but failed to disclose that a change in its manufacturing
process would necessarily delay filing until after that date.
In October 2001, the Company admitted that it would not file the BLA
until the summer of 2002 at the earliest. The next day the price of
XOMA stock fell as low as $6.40 from a closing price of $9.76 per share
a day earlier.
For more details, contact Laurence Rosen by Phone: 866.767.3653 or by
E-mail: lrosen@rosenlegal.com or visit the firm's Website:
http://www.rosenlegal.com
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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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