/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/011228.mbx C L A S S A C T I O N R E P O R T E R Friday, December 28, 2001, Vol. 3, No. 253 Headlines ACLN LTD.: Marc Henzel Commences Suit For Securities Violations in NY APROPOS TECHNOLOGY: Pomerantz Haudek Expands Class Period in IL Suit BRIGHTPOINT INC.: Marc Henzel Files Securities Suit in S.D. Indiana CAPSTONE TURBINE: Milberg Weiss Commences Securities Suit in S.D. NY ENRON CORPORATION: Plaintiffs Ask Judge To Freeze Executives' Assets EXPRESS SCRIPTS: Customers File ERISA Suit in Arizona Federal Court MARVEL TECHNOLOGY: Marc Henzel Commences Securities Suit in S.D. NY MODEM MEDIA: Marc Henzel Commences Securities Suit in S.D. New York MULTEX.COM: Marc Henzel Commences Securities Suit in S.D. New York NETCENTIVES INC.: Marc Henzel Lodges Securities Suit In S.D. New York NETEASE.COM: Marc Henzel Initiates Securities Suit in S.D. New York NEXTCARD INC.: Lead Plaintiff Deadline in Securities Suit Set NOVATEL WIRELESS: Milberg Weiss Commences Securities Suit in S.D. NY NOVEN PHARMACEUTICALS: Milberg Weiss Files Securities Suit in S.D. FL OIL COMPANIES: Appeals Court Reverses Dismissal of Wage Antitrust Suit OPTICAL CABLE: Marc Henzel Initiates Securities Suit in W.D. Virginia SAGENT TECHNOLOGY: Marc Henzel Commences Securities Suit in N.D. CA SRI SURGICAL: Marc Henzel Commences Securities Suit in M.D. Florida TAKE-TWO INTERACTIVE: Marc Henzel Commences Securities Suit in S.D. NY TALX CORPORATION: Milberg Weiss Commences Securities Suit in E.D. MO VAN WAGONER: Cauley Geller To File Suit For Securities Violations in DE ********* ACLN LTD.: Marc Henzel Commences Suit For Securities Violations in NY --------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Southern District Court of New York on behalf of all persons who acquired A.C.L.N., Ltd. (NYSE: ASW) securities between December 21, 1998 and December 20, 2001, inclusive. Named as defendants in the complaint are the Company and: (1) Joseph Bisschops, Chairman and Managing Director, (2) Aldo Labiad, Chief Executive and Operating Officer and Managing Director, and (3) Alex De Ridder, Vice President and Chief Financial Officer The suit charges defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The suit alleges, among other things, that beginning with its public offering on June 26, 1998, if not before, defendants commenced a continuing scheme, ending no earlier than December 20, 2001, to mislead the investing public and conceal the Company's true financial state and business prospects. The truth about the Company was undisclosed until the publication of an investigative report about it by thestreet.com on December 20, 2001. Upon publication of that report, Company shares, which had never traded below $19 per share since the end of 2000, fell from $26.11 per share to a low of $6.20 per share, closing at $9.40 per share. The December 20, 2001 report disclosed among other things, that: (i) from the time the Company went public, on June 26, 1998, until it filed an annual report with the SEC on June 29, 2000, as many as 2,265,221 shares held by entities controlled by Chairman Joseph Bisschops - 29% of his total holdings - vanished from the "principal and management shareholders" list in the company's SEC filings. The missing shares belong to four of Mr. Bisschops' entities, whose names also disappeared from the list: Pearlrose Holdings International, Scott Investments, Gilbert Management and Emerald Sea Marine; (ii) defendants have been claiming that the Company has assets that it does not in fact own - the Sea Atef; (iii) defendants used the purported purchase of the Sea Atef to conceal their diversion of Company funds to entities affiliated with Mr. Bisschops in undisclosed related-party \ transactions; (iv) defendants have been booking revenues as if the Sea Atef was in continuous operation, during a period when it was in fact not; (v) defendants have been understating their selling, general and administrative expenses and re-characterizing payments to related-parties after the fact to conceal those payments when they were made; (vi) they have been overstating the number of cars that they sold and, consequently, their sales revenue; (vii) the Company's revenue-recognition practices do not comply with generally accepted accounting principles or their own representations; and (viii) defendants' misrepresentations caused the price of Company securities to be artificially inflated throughout the class period. For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 APROPOS TECHNOLOGY: Pomerantz Haudek Expands Class Period in IL Suit -------------------------------------------------------------------- Pomerantz Haudek Block Grossman & Gross LLP revised their securities class action against Apropos Technology, Inc. (Nasdaq: APRS) in the United States District Court for the Northern District of Illinois to include those who purchased the Company's stock in its February 17, 2000 initial public offering or in the open market during the period between February 17, 2000 through April 10, 2001, inclusive. The initial complaint covered investors who purchased the stock through May 15, 2000. The suit charges that the registration statement and prospectus for the IPO contained material misrepresentations and omissions regarding the role that two of the Company's co-founders - Patrick K. Brady and William W. Bach - played in the Company at that time. In particular, it is alleged that the Company's prospectus misrepresented that both Mr. Brady and Mr. Bach were active members of its executive management team, and the Company's most senior technology officers, when both had stopped playing important roles within the company months before the prospectus was issued. It is further alleged that Company President and Chief Executive Officer Kevin G. Kerns had effectively pushed Brady out of the Company after a power struggle that culminated in July 1999. Similarly, Mr. Kerns demoted Mr. Bach and stripped him of his managerial responsibilities and involvement in shaping the company's core technology. At the time of the IPO, the Company's technology and development departments were in disarray. Mr. Kerns attempted to hire a replacement for Mr. Brady before the prospectus was issued, but was unsuccessful. Thereafter, both Mr. Brady and Mr. Bach were listed in the prospectus and falsely portrayed as active participants in the executive management of the Company and its senior technology officers. The Company issued nearly 4 million shares of common stock, raising more than $87 million, to thousands of investors based on offering materials that falsely stated that its founders who designed its key technological product were managing the company. For more information, contact Andrew G. Tolan by Phone: 888.476.6529 (888.4.POMLAW) by E-mail: agtolan@pomlaw.com or visit the firm's Website: http://www.pomerantzlaw.com BRIGHTPOINT INC.: Marc Henzel Files Securities Suit in S.D. Indiana ------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Southern District of Indiana, Indianapolis Division on behalf of purchasers of Brightpoint, Inc. (Nasdaq: CELL) publicly traded securities during the period between January 28, 1999 and November 14, 2001, inclusive against the Company, and certain of its officers and directors. The suit alleges the defendants issued 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. In November 2001, the Company announced that it would restate its 1998, 1999, 2000 and First and Second Quarter 2001 results (i.e. admit that they were materially false) because it expensed its insurance premium costs over an extended time period rather than accrued the date it entered into the insurance policy. The suit alleges that as a result, the Company's failure to prepare its financial statements pursuant to generally accepted accounting principles caused its 1998 to 2nd Quarter 2001 income and assets to be materially overstated. The effect of the restatement was significant. Rather than the $239.5 million of shareholders' equity the Company reported in 1998, the Company restated this number to $228 million. The restatement revealed that the Company had inflated shareholders' equity by $8.71 million in 1999, $6.5 million in 2000, $6 million in the first quarter of 2001 and $5.5 million as of June 30, 2001. 1998 net income per share fell from $0.38 in 1998 to $0.17 after the restatement. The restatement revealed that EPS was inflated by $0.02 in 1999 For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 CAPSTONE TURBINE: 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 Capstone Turbine Corp. (NASDAQ: CPST) between June 28, 2000 and December 6, 2000, inclusive. The suit is pending in the United States District Court, Southern District of New York against the Company and: (1) Ake Almgren, (2) Jeffrey Watts, (3) Goldman Sachs & Co., Inc., (4) Merrill Lynch, Pierce Fenner & Smith Incorporated, (5) Morgan Stanley & Co., Inc. and (6) Salomon Smith Barney, 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 June 2000, the Company commenced an initial public offering of 9,090,909 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 underwriter defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which they allocated to those investors material portions of the restricted number of shares issued in connection with the IPO; and (ii) the underwriter defendants had entered into agreements with customers whereby they agreed to allocate Company shares to those customers in the IPO in exchange for which the customers agreed to purchase additional shares in the aftermarket at pre-determined prices. For 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 ENRON CORPORATION: Plaintiffs Ask Judge To Freeze Executives' Assets -------------------------------------------------------------------- Lawyers for investors who filed numerous securities suits against the officers of energy giant Enron Corporation (NYSE:ENE) have asked Houston Federal Judge Lee Rosenthal to freeze the personal assets of the Company's executives and put them in a constructive trust for safekeeping. The Company's stock collapsed after it admitted it wildly inflated financial reports and after the proposed acquisition by rival Dynegy fell through. Hundreds of angry shareholders filed securities suits soon after naming the Company, 29 individuals and Arthur Andersen LLP, the Company's auditor, as defendants. The suits seek $1.1 billion that Company executives earned in insider trading proceeds from Oct. 19, 1998, to Nov. 27, 2001, a time when the company has acknowledged it filed its questionable financial reports. The Company later filed for bankruptcy last December 2, 2001. The bankruptcy filing kept the Company's assets safe from claims, and stayed around 59 securities fraud and shareholder derivative suits. With these developments, the plaintiffs' lawyers filed a motion to issue a temporary restraining order on the individual defendants' personal assets. The motion has stirred up a lively debate. Lawyers on both sides of the suit agree the motion is unusual. The motion seeks to freeze the trading proceeds of people like Ken Lay, Company Chairman, Jeff Skilling, its former CEO, and Andrew Fastow, a former chief financial officer who left the Company in October once the bad news about the company's financial position started leaking. Roger Greenberg, attorney for the plaintiffs and a partner in law firm Schwartz Junell Campbell and Oathout, says "This kind of case cries out for this kind of relief.At the end of the day, with the company in bankruptcy, what will there be for shareholders to be paid if you can't freeze those assets?" He adds, "All we're asking is to freeze and let us frisk them to see what they've got." Defense attorneys disagree, saying the request for the constructive trust is premature and unprecedented. J. Clifford Gunter Jr., lawyer for the Company's general counsel James V. Derrick said in a Law.com report, "Plaintiffs just can't come in, in a case like this, and say `Well, the company is quite bankrupt, here's some people with some money - we're not quite sure where it is - so let's freeze their assets.'" Robin Gibbs, who represents one former and seven current directors named in the suit, told Law.com that he does not believe the plaintiffs would be entitled to the freeze and constructive trust, even with a judgment. "If they get to that point, you can't go inappropriately to try to interfere with a person's property just because you file a suit against them," he says. Plaintiffs' lawyer William Lerach says that the motion simply asks for an order that would provide the plaintiffs with an equitable remedy. Paul Yetter, who does class action securities litigation but is not involved in any Enron-related suits, says a prejudgment freeze on assets is extremely difficult to get. "Absent extraordinary circumstances, this is not an order you would normally get. But [because of] the size of the alleged insider-trading profits, the magnitude of the alleged fraud and the enormous losses to investors, it is certainly something that the judge is going to look at," says Mr. Yetter, a partner in Yetter & Warden in Houston. Judge Rosenthal has taken the motion under advisement and asked for briefs to be filed by late December. EXPRESS SCRIPTS: Customers File ERISA Suit in Arizona Federal Court ------------------------------------------------------------------- Express Scripts Inc. (Nasdaq: ESRX) faces a class action in Arizona federal court, alleging the company breached its duties to some of its customers. The suit cites claims under the Employee Retirement Income Security Act (ERISA), according to information the Company filed with the Securities and Exchange Commission. The St.Louis-based company is a pharmacy benefit manager. The Company said the suit is similar to claims raised against other pharmacy benefit managers in other pending cases. In the SEC filing, the Company said its contracts have been designed to address the issues raised in the suit, and it "intends to vigorously defend itself against allegations." MARVEL TECHNOLOGY: Marc Henzel Commences Securities Suit in S.D. NY ------------------------------------------------------------------- The Law Offices of Marc S. Henzel filed 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 Marvel Technology Group, Ltd. (NASDAQ: MRVL) between June 27, 2000 and December 6, 2000, inclusive. The action is pending against defendants Goldman Sachs & Co. and Lehman Brothers, Inc. The complaint alleges violations of 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 6,000,000 of its shares of common stock at an offering price of $15 per share. In connection therewith, the Company filed a registration statement, which incorporated a prospectus with the SEC. The suit further alleges that the prospectus was materially false and misleading because it failed to disclose, among other things, that: (i) defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which defendants allocated to those investors material portions of the restricted number of shares issued in connection with the IPO; and (ii) defendants had entered into agreements with customers whereby defendants 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 S. Henzel by Mail: 273 Montgomery Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 MODEM MEDIA: Marc Henzel Commences Securities Suit in S.D. New York ------------------------------------------------------------------- The Law Office of Marc S. Henzel initiated a securities class action in the United States District Court, Southern District of New York on behalf of purchasers of the securities of Modem Media, Inc. (NASDAQ: MMPT) between February 5,1999 and December 6, 2000, inclusive, against the Company and: (1) FleetBoston Robertson Stephens Inc., (2) Bear Stearns & Co., Inc., (3) Gerald M. O'Connell and (4) Steven C. Roberts The complaint alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. In February 1999, the Company commenced an initial public offering of 2,600,000 of its shares of its 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 underwriter defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which they allocated to those investors material portions of the restricted number of shares issued in connection with the IPO; and (ii) the underwriter defendants had entered into agreements with customers whereby they agreed to allocate Company shares to those customers in the IPO in exchange for which the customers agreed to purchase additional shares in the aftermarket at pre-determined prices. For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 MULTEX.COM: Marc Henzel Commences Securities Suit in S.D. New York ------------------------------------------------------------------ The Law Office of Marc S. Henzel filed a securities class action on behalf of all persons and entities who purchased, converted, exchanged or otherwise acquired the common stock of Multex.com, Inc. (NasdaqNM:MLTX) between March 17, 1999 and December 4, 2000 inclusive in the United States District Court for the Southern District of New York. 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 promulgated by the SEC thereunder and names as defendants the Company and: (1) Isaak Karaev, Chief Executive Officer, (2) Philip Callaghan, its former CFO, (3) I. Robert Greene, (4) Peter G. LaBonte, (5) Lennert J. Leader, (6) Milton J. Pappas, (7) Herbert L. Skeete, and (8) Philip Scheps, Controller as of its March 17, 1999 IPO, The suit alleges the defendants violated the federal securities laws by issuing and selling Company common stock pursuant to the IPO without disclosing to investors that at least one of the lead underwriters and three of the other underwriters in the offering had solicited and received excessive and undisclosed commissions from certain investors. In exchange for the excessive commissions, the complaint alleges, underwriters of their IPO allocated shares to customers at the IPO price of $14.00 per share. To receive the allocations (i.e., the ability to purchase shares) at $14.00, 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 (a practice known on Wall Street as "laddering") was intended to (and did) drive the Company's share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the underwriters and their customers to reap enormous profits by buying Company stock at the $14.00 IPO price and then selling it later for a profit at inflated aftermarket prices, which rose as high as $38.63 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 transaction and failed to disclose the additional commissions and "laddering" scheme discussed above. For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 NETCENTIVES INC.: Marc Henzel Lodges Securities Suit In S.D. New York --------------------------------------------------------------------- The Law Office of Marc S. Henzel filed a securities class action in the United States District Court for the Southern District of New York on behalf all persons who acquired Netcentives, Inc. (NASDAQ: NCNT) securities between October 14, 1999 and December 6, 2000. The suit names as defendants the Company and: (1) West Shell, III, (2) John F. Longinotti, (3) Credit Suisse First Boston Corp., (4) Hambrecht & Quist, LLC, (5) Thomas Weisel Partners, LLC The suit charges defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (and Rule 10b-5 promulgated thereunder) and Sections 11 and 15 of the Securities Act of 1933, for issuing a registration statement and prospectus that contained material misrepresentations and/or omissions. The complaint alleges that the prospectus was false and misleading because it failed to disclose: (i) the underwriter defendants agreement with certain investors to provide them with significant amounts of restricted shares in the IPO in exchange for exorbitant and undisclosed commissions; and (ii) the agreement between the underwriter defendants and certain of its customers whereby they would allocate shares in the IPO to those customers in exchange for the customers' agreement to purchase shares in the after-market at pre-determined prices. For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 NETEASE.COM: Marc Henzel Initiates Securities Suit in S.D. New York ------------------------------------------------------------------- The Law Offices of Marc S. Henzel commenced a securities class action in the United States District Court for the Southern District of New York on behalf of purchasers of the American Depositary Shares (ADSs) of NetEase.com, Inc. (NASDAQ: NTESE) between July 3, 2000 and August 31, 2001, inclusive. The suit pending against the Company and: (1) King F. Lai, (2) William Lei Ding, (3) Helen Haiwen He, (4) Merrill Lynch, Pierce, Fenner & Smith, Incorporated, (5) Deutsche Bank Securities, Inc., (6) Chase Securities, Inc., (7) Salomon Smith Barney, Inc. and (8) UBS Warburg LLC The suit alleges that defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between July 3, 2000 and August 31, 2001. In May 2001, the Company disclosed that it had discovered that $1 million in contracts had been improperly reported as revenue and as a result, it would delay announcing its financial results for the first quarter of 2001. Subsequently, in June 2001, the Company announced that the revenue overstatement appeared to affect its full year 2000 financial statements and the amount of the overstatement would be approximately $3 million. In August 2001, the Company finally revealed the full extent of the overstatement and announced that it would be restating all of its year 2000 financial statements because $4.3 million in revenue had been overstated. The complaint alleges that the prospectus and registration statement issued in connection with the initial public offering of NetEase.com ADSs were materially false and misleading because they contained artificially inflated financial results for the first quarter of 2000. Following the IPO, defendants issued press releases announcing the Company's quarterly 2000 and full year 2000 financial results which were materially false and misleading because they overstated the Company's financial performance For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 NEXTCARD INC.: Lead Plaintiff Deadline in Securities Suit Set ------------------------------------------------------------- Pomerantz Haudek Block Grossman & Gross LLP announces that the deadline for application for lead plaintiff in the securities class action against NextCard, Inc. (Nasdaq: NXCD) and its Chief Executive Officer, is on December 31,2001. The suit was filed on behalf of all those persons or entities who purchased the common stock of NextCard during the period between April 2, 2001 and October 30, 2001, inclusive, charging that the Company made materially false and misleading statements concerning severe problems it was facing for 2000 and 2001. It is alleged that on April 2, 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 shocked the market, causing the Company's 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 (888.4.POMLAW) by E-mail: agtolan@pomlaw.com or visit the firm's Website: http://www.pomerantzlaw.com NOVATEL WIRELESS: 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 Novatel Wireless Inc. (NASDAQ: NVTL) between November 15, 2000 and December 6, 2000, inclusive. The suit is pending in the United States District Court, Southern District of New York against the Company and: (1) John Major, CEO and Chairman, (2) Ambrose Tam, President, COO, CTO, (3) Melvin Flowers, CFO, (4) Credit Suisse First Boston Corp., (5) Bear, Stearns & Co. Inc., (6) FleetBoston Robertson Stephens Inc. and (7) Salomon Smith Barney 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 2000, the Company commenced an initial public offering of 7,000,000 of its shares of common stock at an offering price of $8 per share. In connection with the IPO, 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 underwriter defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which they allocated to those investors material portions of the restricted number of Company shares issued in connection with the IPO; and (ii) the underwriter defendants had entered into agreements with customers whereby they agreed to allocate Company shares to those customers in the IPO in exchange for which the customers agreed to purchase additional shares in the aftermarket at pre-determined prices. For 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 NOVEN PHARMACEUTICALS: Milberg Weiss Files Securities Suit in S.D. FL --------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class action on behalf of purchasers of the securities of Noven Pharmaceuticals Inc. (NASDAQ: NOVN) between March 27, 2001 and November 1, 2001 inclusive. The suit is pending in the United States District Court for the Southern District of Florida, Miami Division, against the Company and: (1) Robert C. Strauss, President, Co-Chairman and Chief Executive Officer, (2) James B. Messiry, Chief Financial Officer and (3) Steven Sablotsky, Co-Chairman 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 materially false and misleading statements to the market between March 27, 2001 and November 1, 2001. Throughout the class period, the Company publicly touted two of its women's hormone replacement products and represented that sales of these agents would be substantial. These statements, as alleged in the complaint, were materially false and misleading because by November 13, 2000, defendants knew that Novartis Pharma AG, its exclusive marketing agent in Europe, was not aggressively marketing the Company's two hormone drugs, and that it was instead marketing its own competing medications. On August 2, 2001, the Company issued a press release that only partially revealed the truth, stating that sales to Novartis were weaker than its analysts and investors had been led to believe. In response, Company stock price plunged by 43%, to close at $18.98 on August 3, 2001. Subsequently, on November 1, 2001, the Company issued a press release which revealed, for the first time, that: (i) Novartis had its own hormone-replacement system and would not be converting to its product; (ii) Novartis had excess-inventories of its products and (iii) as a result, the Company's European sales would decline substantially in the fourth quarter of 2001 and 2002. In response to this announcement, Company stock price fell by 33% to $14.89. 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 Kenneth J. Vianale or Maya Saxena by Mail: 5355 Town Center Road, Suite 900 Boca Raton, FL 33486 by Phone: 561.361.5000 by E-mail: novencase@milbergNY.com or visit the firm's Website: http://www.milberg.com OIL COMPANIES: Appeals Court Reverses Dismissal of Wage Antitrust Suit ---------------------------------------------------------------------- The US 2nd Circuit Court of Appeals reinstated a class action suit against several oil companies, charging them with violating the Sherman Antitrust Act by sharing information on salaries for managerial, professional and technical workers. Plaintiff Roberta Todd originally filed the suit in the United States District Court for the Southern District of New York, alleging that Exxon Mobil, Texaco and 12 other oil companies exchanged salary information for managerial, professional and technical (MPT) workers. By doing so, these Firms violated Section 1 of the Sherman Act because it had the effect of keeping salaries artificially low. New York Federal Judge John E. Sprizzo dismissed the suit, ruling that Ms. Todd failed to plead a "plausible product market," and in so doing, hurt her claim that the oil producers controlled 80 percent to 90 percent of the relevant market. He further added that Todd had failed to allege a market structure capable of being manipulated by collusive activity, according to a Law.com report. The Judge also found that Todd had failed to allege facts supporting an agreement by producers to fix salary levels and had also failed to show a detrimental effect on competition. However, the Appeals court reversed the decision, finding that the plaintiffs had alleged a workable case on the anti-competitive effects of a "Job Match Survey," assembled by a third-party consultant for use by the industry. The court also ruled that while information sharing by competitors is not per se anti-competitive, it was troubling that information on the survey was not disclosed to the public. In the decision, Judge Sonia Sotomayor writes, "In the instant case, dissemination of the information to the employees could have helped mitigate any anti-competitive effects of the exchange and possibly enhanced market efficiency by making employees more sensitive to salary increases.No such dissemination occurred, however. The information was not disclosed to the public nor to the employees whose salaries were the subject of the exchange." Judge Sotomayor added that Ms. Todd's allegation "about the industry- specific expertise of MPT employees supports a plausible product market." However, the Judge said the court was not indicating whether Todd would succeed in proving the "alleged market." "It remains to be seen whether every category of MPT employee in the plaintiff class can demonstrate the required degree of inelasticity," she said. "We find only that the allegation of a market limited to employers in the oil and petrochemical industry is plausible on its face." The Court said Judge Sprizzo, for purposes of the motion to dismiss, should have credited the plaintiff's allegation that the oil industry's own conduct and apparent perceptions "recognize the relatively low- level of cross-elasticity of demand for the services of MPT employees with experience in the oil and petrochemical companies.because they rely primarily on integrated oil and petrochemical industry salary information in setting salaries and wages." OPTICAL CABLE: Marc Henzel Initiates Securities Suit in W.D. Virginia --------------------------------------------------------------------- The Law Offices of Marc S. Henzel commenced a securities class action in the United States District Court for the Western District of Virginia on behalf all persons who acquired Optical Cable, Corporation (NASDAQ: OCCF) securities during the period from July 31, 2000 to October 8, 2001, inclusive. The case is pending against the Company and Robert Kopstein, the Company's president, chief executive officer and controlling shareholder. The suit alleges that defendants violated Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that during the class period, defendants issued to the investing public false and misleading information that materially misstated the Company's condition and prospects. Moreover, the Company failed to disclose material information necessary to make its prior statements not misleading. The complaint alleges that defendants violated the federal securities law by engaging in a conspiracy and/or course of conduct pursuant to which they made a series of materially false and misleading statements and failed to make and/or omitted necessary, required, accurate, and material statements concerning the Company's business and financial operations, common stock, and Mr. Kopstein's holdings, with the intent and having the effect of substantially inflating the price of the Company's common stock. Specifically, the defendants made numerous positive statements as to the Company's business and financial health prior to and during the class period yet failed to disclose to the investing public Mr. Kopstein's use of his stock as collateral for margin loans with various brokerage accounts he maintained to speculate in technology stocks. Given his control of 96% of the Company's common stock, his use of his stock as collateral created a significant risk that large numbers of these shares could be seized and sold on the open market by brokerage firms to cover Mr. Kopstein's trading losses. According to the complaint, Mr. Kopstein had been cautioned by at least one brokerage firm to not speculate by borrowing money against his Optical Cable stock to invest in other technology company securities. His speculation in other technology companies securities led to the margin calls which then resulted in significant losses to the plaintiffs when the brokerage firms seized his stock and dumped millions of shares on the market at the same time, resulting in the severe depression of the Company's stock price. For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 SAGENT TECHNOLOGY: Marc Henzel Commences Securities Suit in N.D. CA ------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Northern District of California on behalf of purchasers of Sagent Technology, Inc. (Nasdaq: SGNTE) publicly traded securities during the period between May 11, 2001 and November 28, 2001, against the Company and certain of its officers and directors. The suit accuses the Company with violating the Securities Exchange Act of 1934. During the class period, defendants caused Company 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. In November 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 to 3rd Quarter results had been materially misstated and would have to be restated For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 SRI SURGICAL: Marc Henzel Commences Securities Suit in M.D. Florida ------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Middle District of Florida, Tampa Division, on behalf of purchasers of the securities of SRI Surgical Express Inc. (Nasdaq: STRC) between July 23, 2001 and November 27, 2001 inclusive. The suit is pending against the Company and: (1) Richard Isel, Chief Executive Officer, and (2) James T. Boosales, Chief Financial Officer 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 July 23, 2001 and November 27, 2001. Specifically, in July 2001, the Company issued a press release announcing financial results for the second quarter of 2001, which reflected an increase in earnings and revenues from the second quarter of 2000. The press release attributed the seemingly positive results to processing and delivery efficiencies and a supposedly lucrative contract with Health Trust Purchasing Group (HGP). These results were incorporated into the Company's financial statements on Form 10-Q, filed with the Securities and Exchange Commission on July 26, 2001. In October 2001, the Company issued a press release announcing record revenues for its third quarter of 2001, which it attributed, in part, to the HGP contract. These statements are alleged to be materially false and misleading because the Company's business was being negatively impacted by the HGP contract and the Company's seemingly impressive growth was achieved, in part, through improper revenue recognition. In November 2001, the Company issued a press release announcing that: (i) it would restate its earnings and revenues for the third quarter of 2001 because certain revenues should not properly have been recognized in that quarter; (ii) the Company's financial performance, as restated, does not meet analysts' expectations for the third quarter and (iii) the Company will not meet analysts' expectations for the fourth quarter of 2001 due to increased sales and administrative expenses and startup costs associated with new businesses. In response to the announcement, the price of the Company's common stock plummeted by 40%, to close at $14.63 per share on November 28, 2001. For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 TAKE-TWO INTERACTIVE: Marc Henzel Commences Securities Suit in S.D. NY ---------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated 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 Take-Two Interactive Software Inc., (NASDAQ: TTWO) between February 24, 2000 and December 17, 2001 inclusive. The suit is pending against the Company and: (1) Ryan A. Brant, CEO until February 26, 2001, thereafter Chairman, (2) Kelly G. Sumner, director until February 26, 2001, thereafter CEO, (3) James H. David Jr., CFO from the Company's third quarter of fiscal year 2000, (4) Paul Eibeler, President and director and (5) Larry Muller, CFO until the third quarter of the Company's fiscal year 2000 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 materially false and misleading statements to the market between February 24, 2000 and December 17, 2001, concerning its financial performance for the Company's fiscal year 2000 and the first three quarters of its fiscal year 2001. Throughout the class period, defendants issued press releases reporting the Company's quarterly and year-end financial performance, and filed reports confirming such performance with the United States Securities and Exchange Commission. These reports positively portrayed the Company's performance during the class period and discussed several quarters of supposedly "record" results. These statements, as alleged in the complaint, were materially false and misleading because the Company had, throughout the class period, improperly recognized revenues, thereby inflating its reported sales and earnings. On December 14, 2001, the price of the Company's stock plunged 31%, falling from $15.05 to $10.33, as news leaked that the Company will likely restate previously filed financial reports. On December 17, 2001 the Company issued a press release announcing that it will restate its financial results for its fiscal year 2000 and the first three quarters of its fiscal year 2001. According to the press release, the Company had improperly recognized revenue on products that were subsequently returned to it. For fiscal year 2000, the restatement will have the effect of decreasing net sales by $12-$15 million and decreasing net income by $3.1-$3.7 million. For the three quarters of 2001, the restatement will have the effect of decreasing net sales by approximately $9.5 million and increasing net income by $0.3 million. For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 TALX CORPORATION: Milberg Weiss Commences Securities Suit in E.D. MO -------------------------------------------------------------------- Milberg Weiss Bershad Hynes and Lerach LLP initiated a securities class class action in the United States District Court for the Eastern District of Missouri on behalf of purchasers of TALX Corporation (NASDAQ:TALX) common stock during the period between July 18, 2001 and October 1, 2001. The complaint charges the Company, certain of its officers and directors and its underwriters with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. In August 2001, the Company completed a secondary offering of 3.245 million shares of its stock (including over-allotments, and also including the sale of 253,000 shares by the Company's CEO), raising gross proceeds of approximately $100 million for the Company, pursuant to a registration statement and prospectus dated August 2, 2001. The suit alleges that the registration statement/prospectus was false and materially misleading because: (1) Defendants had failed to disclose that the Company had improperly capitalized significant amounts of software related to the Company's customer premised systems line of business, which assets were already substantially impaired and which would have to be written off in the near term; (2) Defendants failed to properly account for the true value of the Company's inventory, such that the overstated value of the Company's impaired inventory would have to be written down in the near term; (3) Defendants misrepresented that the Company's business was expanding, when it was not, and at which time defendants were already planning on reducing staff and closing offices; (4) Defendants were already planning to take at least $2.8 million in write-offs; and (5) the outsourced benefits enrollment business was not operating according to the expectations that had been promoted by defendants, and this line of business was not a significant growth-driver as represented by the Company. The suit further alleges that, throughout the class period, the same factors that were not properly disclosed in the Company's secondary offering registration statement/prospectus were also hidden by defendants from the Company's public shareholders. Defendants misled investors and analysts by issuing a series of false and materially misleading public statements, which were designed to, and which did artificially inflate the value of Company shares. This inflation allowed the Company and its CEO to reap almost $100 million from the sale of stock. Then, on October 1, 2001, weeks after defendants had sold almost $100 million worth of Company stock and used over $11 million in Company stock to acquire Ti3, that defendants issued a press release which revealed that the Company's fiscal 2002 earnings would be only $0.58- $0.62, excluding charges, on revenues of less than $50 million and that second quarter fiscal 2002 revenues would be less than $12 million. The Company also announced it would recognize charges of $2.8 million to write off capitalized software costs, inventory and to close offices. As a result of defendants' shocking disclosures, the Company stock declined to less than $17 per share, compared to the class period high of $34.28 per share, representing a loss to investors of over 50% of the value of their Company investment by the end of the class period. For more information, contact William Lerach or Darren Robbins by Phone: 800.449.4900 by E-mail: wsl@milberg.com or visit the firm's Website: http://www.milberg.com/talx VAN WAGONER: Cauley Geller To File Suit For Securities Violations in DE ----------------------------------------------------------------------- Cauley Geller Bowman and Coates have been retained by investors in Van Wagoner Emerging Growth Fund (Nasdaq:VWEGX) to file a lawsuit on behalf of all persons who purchased or otherwise acquired shares of the Fund between April 20, 2000 and December 11, 2001. The suit, which is being filed in Federal District Court in Delaware, will allege violations of the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940 and the Investment Company Act of 1940. Specifically, the suit will allege that the Fund and its investment advisor and investment managers disseminated a series of prospectuses/registration statements during the class period which reflected a materially inflated net asset value (NAV)- the price at which Fund shares are purchased and sold). The NAV was materially inflated because the Fund had overvalued a material portion of holdings in certain privately held companies. In addition, the Fund's performance was materially overstated since those figures were based on the materially overstated NAV of the Fund. The lawsuit will also allege that the risk disclosures contained in the prospectuses/registration statements disseminated during the class period were not meaningful, and were themselves misleading, because they failed to disclose that the Fund was materially overstating its NAV. For more information, contact Jackie Addison, Sue Null or Shelly Nicholson by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 1.888.551.9944 by E-mail: info@classlawyer.com or visit the firm's Website: http://www.classlawyer.com ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2001. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re- mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *