/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/020305.mbx C L A S S A C T I O N R E P O R T E R Tuesday, March 5, 2002, Vol. 4, No. 45 Headlines AMERICAN AIRLINES: Sued For Policy on Violations of Fare Rules in CA AMERICAN AIRLINES: Faces Antitrust Charges For Dallas Airport Services BIKEE CORPORATION: Voluntarily Recalls 13T Bicycles For Injury Hazard CHATTEM INC.: Settling Two Lawsuits Over Skin Products Containing Lead DANSK INTERNATIONAL: Recalls Ice Cream Scoops For Defective Metal Cap ECHOSTAR COMMUNICATIONS: Court To Rule on Class Certification in May LESLIE'S POOLMART: Employees File Wage, Unfair Practices Suit in CA PHOENIX AMERICAN: CA State Court Approves Settlement in Fraud Suit SERVICE CORPORATION: Florida State Files New Grave Desecration Suit SOUTH CAROLINA: Over $1 Million Paid Out For Juvenile Sexual Assaults SYNTHROID LITIGATION: Drug Firms To Settle Consumer Suit For $2.25M Securities Fraud ACTRADE FINANCIAL: Weiss Yourman Lodges Securities Suit in S.D. NY ACTRADE FINANCIAL: Milberg Weiss Commences Securities Suit in S.D. NY ACTRADE FINANCIAL: Wechsler Harwood Commences Securities Suit in NY ADVANCED SWITCHING: Cauley Geller Commences Securities Suit in E.D. VA ADVANCED SWITCHING: Schiffrin Barroway Lodges Securities Suit in VA ALCOA INC.: Awaits Ruling on Dismissal of Shareholder Suit in S.D. NY ARTHUR ANDERSEN: Settling Suit Over 1999 BFA Collapse for $217 Million ASK JEEVES: Faces Suit For Federal Securities Violations in S.D. NY COMPUTER ASSOCIATES: Brodsky Smith Investing Possible Securities Fraud COMPUTER ASSOCIATES: Charles Piven Files Securities Suit in E.D. NY COREL CORPORATION: Securities Violations Suit Mediation Set For March 7 CRITICAL PATH: CA Court Sets Fairness Hearing For $17.5M Pact For May ENTERASYS NETWORKS: Schiffrin Barroway Files Securities suit in NH ENTERASYS NETWORKS: Cauley Geller Files Securities Fraud Suit in NH FLAG FINANCIAL: Directors Faces Suits Over Rejection of Tender Offer GLOBAL CROSSING: Zwerling Schachter Lodges Securities Suit in S.D. NY GTECH HOLDINGS: Sued For Federal Securities Violations in Rhode Island MEDI-HUT CO.: Says Allegations in NJ Securities Suits "Without Basis" MEDI-HUT CO.: Berger Montague Commences Securities Suit in New Jersey MEDI-HUT CO.: Cauley Geller Commences Securities Suit in New Jersey MEDI-HUT CO.: Charles Piven Commences Securities Suit in New Jersey NEWPOWER HOLDINGS: Charles Piven Commences Securities Suit in S.D. NY NEWPOWER HOLDINGS: Wechsler Harwood Files Securities Suit in S.D. NY SPECTRALINK CORPORATION: Schiffrin Barroway Lodges Suit in Colorado ********* AMERICAN AIRLINES: Sued For Policy on Violations of Fare Rules in CA -------------------------------------------------------------------- American Airlines, Inc. faces an amended class action pending in the US District Court for the Central District of California, Western Division against the Company and: (1) AMR Corporation, parent of the Company, (2) AMR Eagle Holding Corporation, (3) Airlines Reporting Corporation, and (4) the Sabre Group Holdings, Inc. The suit alleges that requiring travel agencies to pay debit memos to the Company for violations of its fare rules (by customers of the agencies): (i) breaches the Agent Reporting Agreement between the Company and American Eagle and plaintiffs; (ii) constitutes unjust enrichment; and (iii) violates the Racketeer Influenced and Corrupt Organizations Act of 1970 (RICO) The yet uncertified class includes all travel agencies who have been or will be required to pay monies to the Company for debit memos for fare rules violations from July 26, 1995 to the present. The Company intends to vigorously defend against the lawsuit. Although the Company believes that the litigation is without merit, adverse court decisions could impose restrictions on its ability to respond to competitors, and its business may be adversely impacted. AMERICAN AIRLINES: Faces Antitrust Charges For Dallas Airport Services ---------------------------------------------------------------------- American Airlines, Inc. faces seven class action suits pending in the US District Court in Wichita, Kansas after the United States, through the Antitrust Division of the Department of Justice filed, a suit in the same Court alleging that the Company unlawfully monopolized, or attempted, to monopolize airline passenger service to and from Dallas/Fort Worth International Airport (DFW). The government's suit started in May 1999 and named the Company, its parent AMR Corporation, and AMR Eagle Holding Corporation as defendants. The lawsuit alleges that the Company monopolized passenger service to and from the DFW by increasing service when new competitors began flying to DFW, and by matching these new competitors' fares. In April 2001, the Court granted the Company's motion for summary judgment, a ruling which the Department of Justice appealed. The parties are currently submitting briefs to the 10th Circuit Court of Appeals. No date has been set for oral argument. As a result, seven class action lawsuits were launched in the same Court, against the same defendants. The lawsuits seek treble damages under federal and state antitrust laws, as well as injunctive relief and attorneys' fees. Collectively, these lawsuits allege that the Company unlawfully monopolized or attempted to monopolize airline passenger service to and from DFW by increasing service when new competitors began flying to DFW, and by matching these new competitors' fares. Two of the suits also allege that the Company unlawfully monopolized or attempted to monopolize airline passenger service to and from DFW by: (1) offering discounted fares to corporate purchasers, (2) offering a frequent flyer program; (3) imposing certain conditions on the use and availability of certain fares; and (4) offering override commissions to travel agents. The suits propose to certify several classes of consumers, the broadest of which is all persons who purchased tickets for air travel on the Company into or out of DFW since 1995 to the present. On November 10, 1999, the Court stayed all of these actions pending developments in the case brought by the Department of Justice. As a result, to date no class has been certified. The Company intends to defend these lawsuits vigorously. One or more final adverse court decisions imposing restrictions on the Company's ability to respond to competitors or awarding substantial money damages would have an adverse impact on the Company. BIKEE CORPORATION: Voluntarily Recalls 13T Bicycles For Injury Hazard --------------------------------------------------------------------- BikeE Corporation is cooperating with the US Consumer Product Safety Commission, (CPSC) by voluntarily recalling about 13,500 BikeE recumbent bicycles. The recumbent seats on these bicycles can crack and break, causing the seat to come off the frame and resulting in injury to the rider. The Company has received two reports of seats on these bicycles breaking while riding, resulting in one injury that included a broken leg. The recall includes all 1999 through 2001 model BikeE bicycles with 27- inch-tall seat backs, silver-colored seat frames with black mesh seat backs. "BikeE" is written on the frame of these bicycles. Company-authorized dealers nationwide sold the recalled recumbent bicycles from February 1999 through February 2002 for between $550 and $2,150. For more information, contact the Company by Phone: 800-231-3136 between 8 am and 5 pm PT Monday through Friday, or visit the firm's Web site: http://www.bikee.com CHATTEM INC.: Settling Two Lawsuits Over Skin Products Containing Lead ---------------------------------------------------------------------- Chattem, Inc. entered into a tentative agreement to settle two lawsuits, charging the Company with selling topical skin care products, which allegedly contained zinc oxide, which in turn contains lead. The first lawsuit was brought by the Center for Environment Health (CEH) contending that the Company violated the California Safe Drinking Water and Toxic Enforcement Act of 1998 (Proposition 65). The suit further contends that the failure to comply with Proposition 65 requirements also constitutes a violation of the California Business & Professions Code Section 1700 et seq. The second lawsuit is a class action filed on December 1999 at the San Francisco Superior Court on behalf of the general public in California, The suit names the same defendants, and makes allegations similar to the CEH suit. The class action, however, does not assert claims directly under Proposition 65, but asserts that the alleged failure to comply with Proposition 65 gives rise to claims under California's Business and Professions Code Section 17200 et seq., 17500 et seq., and the Civil Code Section 1750 et seq. The plaintiffs in the two separate actions have filed a consolidated amended complaint that includes a claim based upon the allegation that zinc oxide allegedly also contains cadmium. As of February 22, 2002 a tentative settlement has been reached for these two cases. DANSK INTERNATIONAL: Recalls Ice Cream Scoops For Defective Metal Cap --------------------------------------------------------------------- Dansk International Designs Ltd. is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 190,000 ice cream scoops. A cap at the end of the handle of the scoop can fly off with substantial force, especially if the scoop is immersed in hot water. The metal cap poses a risk of impact injury to nearby consumers. The Company has received 10 reports of the scoop caps flying off, sometimes traveling several feet. No injuries have been reported. The recalled Dansk ice cream scoops are made of aluminum and have a 4.5-inch handle. They were sold in four styles: (1) the plain 3.5-inch spade, (2) the plain 2.5-inch scoop, (3) the Penguin-shaped 2.5-inch scoop and (4) the Snowman-shaped 2.5-inch scoop. Each of the scoops is silver in color. The plain scoop and plain spade have the word "DANSK" written on the handle. Ice cream scoops sold by the Company with a black cap at the end of the handle are not part of this recall. Dansk Factory Outlet Stores and Lenox Warehouse Clearance Centers nationwide sold these ice cream scoops between January 1988 and November 2001 for about $9. For more information, contact the Company by Phone: 866-855-9303 or 800-293-2675 between 9 am and 4:30 pm ET Monday through Friday, or visit the firm's Web site: http://www.dansk.com ECHOSTAR COMMUNICATIONS: Court To Rule on Class Certification in May -------------------------------------------------------------------- The California State Superior Court for Los Angeles has set the class certification hearing for a consumer class action against Echostar Communications, Inc. for May 2002. The suit relates to the use of terms such as "crystal clear digital video," "CD-quality audio," and "on- screen program guide," and with respect to the number of channels available in various programming packages. The suit, commenced by David Pritikin and by Consumer Advocates, a non- profit unincorporated association, alleges breach of express warranty and violation of the California Consumer Legal Remedies Act, Civil Code Sections 1750, et. seq., and the California Business & Professions Code Sections 17500, 17200. The case is currently in discovery, and the plaintiffs filed their motion for class certification in January 2002. The Company is preparing to issue a response on March 7, 2002. The Company stated in a disclosure to the Securities and Exchange Commission that it is too early in the litigation to make an assessment of the probable outcome of the litigation or to determine the extent of any potential liability or damages. Echostar denies all liability and intends to vigorously defend against the lawsuit. LESLIE'S POOLMART: Employees File Wage, Unfair Practices Suit in CA ------------------------------------------------------------------- Retail chain Leslie's Poolmart, Inc. denied the allegations in a class action filed by its employees in the California Superior Court for the County of Los Angeles, in a disclosure to the Securities and Exchange Commission. The suit was commenced on January 31, 2002, charging the Company with: (1) failure to pay overtime wages; (2) waiting time penalties and (3) unfair business practices The suit seeks monetary and injunctive relief. The Company was served with the lawsuit on February 8, 2002, and intends to vigorously defend against this lawsuit. PHOENIX AMERICAN: CA State Court Approves Settlement in Fraud Suit ------------------------------------------------------------------ The Superior Court of Marin County, California approved the settlement proposed by Phoenix American, Inc. to settle a consolidated class alleging fraud, misrepresentation and breach of fiduciary duty in connection with Phoenix Leasing Cash Distribution Funds I through V, limited partnerships organized and operated by the Defendants under California law to purchase computer and other equipment for lease to third parties. The suit, filed on behalf of approximately 40,000 persons nationwide who invested more than $449.5 million in the partnerships and who are estimated to have lost $31.5 million of their capital, names as defendants the Company and subsidiaries: (1) Phoenix Leasing Incorporated, (2) Phoenix Leasing Associates II, LP, (3) Phoenix Leasing Associates II, Inc. and (4) Phoenix Securities, Inc. The consolidated suit settled shortly before a scheduled trial in Third Quarter 2001. The settlement fund has a current value of $11,700,000, with an additional $10 million to be recovered from the insurance policy covering the defendants that was underwritten by Reliance Insurance Company, which is now in liquidation. The settlement fund comprises payments made by the defendants' primary and first excess insurance carriers, which paid in their full policy limits, and a $500,000 payment by the defendants. Additionally, the defendants assigned to the class all of their rights and entitlements under the Reliance policy, and consented to the Court's entry of judgment against them so that the class' rights to collect proceeds under the Reliance policy are triggered. On February 19, 2002, following a hearing on the fairness of the settlement, Judge M. Lynn Duryee signed the final order approving the settlement and the plan of allocation, and awarded in full the requested amount of attorneys' fees and litigation expenses. The Judge also approved incentive awards to the eight named plaintiffs who had been deposed and otherwise involved in discovery. For more information, contact Eileen Rosenau or Nicholas Chimicles of Chimicles and Tikellis by Phone: 215-735-5512 or 610-642-8500. SERVICE CORPORATION: Florida State Files New Grave Desecration Suit ------------------------------------------------------------------- The state of Florida filed a class action against Service Corporation International, Inc. and its cemetery, Menorah Gardens and Funeral Services in Palm Beach and Broward last week, for grave desecrations and illegal and unfair trade practices, the Bradenton Herald reports. Last December, relatives of people buried at the cemeteries filed a class action, after it was discovered that the Company misplaced bodies, removed them from their burial plots, and dumped them in the woods near the cemeteries. The suit seeks the assignment of an independent receiver to correct problems, and locate and identify remains, saying the cemeteries allegedly knew bodies were buried in the wrong spaces but failed to inform the families. Florida Attorney General, Bob Butterworth told the Herald, "Hopefully, our action today will lessen the burden of those impacted by practices at the Menorah Gardens cemeteries." According to Company spokesman Don Mathis, the suit did not change what the Company was working on, which was the re-mapping of the cemeteries to account for every burial and the contacting family members. Mr. Mathis acknowledged, according to the Herald, some of the spacing errors alleged in the lawsuits, such as graves encroaching into another space. He said those who bought a plot no longer available were buried elsewhere, but the names on the markers match the bodies below. SOUTH CAROLINA: Over $1 Million Paid Out For Juvenile Sexual Assaults ---------------------------------------------------------------------- More than $1 million has been paid out in the past two years to settle allegations that nine children were sexually assaulted at detention centers, The Greenville News reported recently. The State Insurance Reserve Fund paid about $1.1 million to families of children who alleged they were raped or sexually assaulted by other juveniles, according to records. In five claims and four lawsuits, families accused the Juvenile Justice Department of negligence. All of the settlements involved allegations of sexual assaults on juveniles by juveniles. Columbia lawyer Gaston Fairey, who represented most of the youths in the settlements, said he is preparing another lawsuit in connection with sexual misconduct allegations that will allege "a pattern and practice of reckless and grossly negligent supervision, and administrators ignoring the pattern over an extended period of time." The Agency has been under federal court oversight since 1995, after six juveniles sued in 1990 in what became a class action alleging overcrowding, physical abuse and inadequate medical care. Mr. Fairey represents the juveniles in the federal suit. Last December, a panel appointed by US District Judge Joseph Anderson Jr. reported that while conditions have improved, "many juveniles do not live in a safe environment." The Juvenile Justice Department officials have disputed the conclusions and asked Judge Anderson not to accept the report. Judge Anderson, however, ruled recently that allegations of sexual misconduct at the juvenile detention facilities were one of the reasons he decided to resume monitoring the Agency, using the youths' lawyers in the class action suit. A court-appointed monitor also watches the Agency. The settlements were not an admission of wrongdoing, according to Agency spokeswoman Kim Chen-Wiseman. Ms. Chen-Wiseman asserts the Agency adequately handles allegations of sexual misconduct. "We have a system in place which allows us to act quickly to address any problems when they happen," she says. "We continue to work toward minimizing aggressive behavior through security oversight and social work, as well as psychological treatment." Department records show 47 allegations of sexual misconduct between juveniles were made in two of the State's five juvenile prisons between 1999 and April 2001, according to documents obtained by The Greenville News. About 600 teen-agers between the ages of 12 and 18 are housed in Juvenile Justice institutions, most for assaults, burglary or probation violations. SYNTHROID LITIGATION: Drug Firms To Settle Consumer Suit For $2.25M ------------------------------------------------------------------- Drug manufacturers have entered a tentative $2.25 million settlement of the class action filed against them by consumers of the drug Synthroid, accusing them of suppressing a study in their attempt to control the market for thyroid drugs, CBC News Online reports. The suit, involves about half a million people across Canada, except in Quebec and British Columbia, where there are separate legal actions. The money gained from the settlement will be used for research into the study of hypothyroidism, a condition caused by an underactive thyroid gland. It's estimated that two out of 100 people suffer from hypothyroidism. These organizations were designated as beneficiaries: (1) the University Health Network, (2) Toronto's Hospital for Sick Children, (3) Dalhousie University, (4) the University of Alberta, (5) the Centre for Research into Women's Health, (6) the Thyroid Foundation of Canada. The $2.25-million settlement must be approved by the Ontario Superior Court of Justice, which will hold a fairness hearing on April 3. Securities Fraud ACTRADE FINANCIAL: Weiss Yourman Lodges Securities Suit in S.D. NY ------------------------------------------------------------------ Weiss and Yourman LLP initiated a securities class action against Actrade Financial Technologies, Ltd. (NASDAQ:ACRT) and certain of its officers and directors in the United States District Court for the Southern District of New York, on behalf of purchasers of Company securities between March 11, 1999 and February 8, 2002. The suit charges the defendants with violations of the Securities Exchange Act of 1934. The complaint alleges that defendants issued false and misleading statements, which artificially inflated the stock. For more information, contact Mark D. Smilow, James E. Tullman, and/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 ACTRADE FINANCIAL: Milberg Weiss Commences Securities Suit in S.D. NY --------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class action on behalf of purchasers of the securities of Actrade Financial Technologies Ltd. (NASDAQ: ACRT) between March 11, 1999 and February 11, 2002 inclusive, in the United States District Court for the Southern District of New York against the Company and: (1) Amos Aharoni, President, CEO and Chairman until January 3, 2001, thereafter Chairman, (2) Alexander Stonkus, President, CEO and Director since January 3, 2001, (3) Joseph P. D'Alessandris, CFO and (4) David J. Askin, President of External Affairs since January 3, 2001 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 11, 1999 and February 11, 2002. Throughout the class period, Actrade issued press releases announcing record quarterly results and describing its business as providing trade financing and business-to-business financing solutions. In addition, the Company, in its fiscal year 2000 and 2001 Annual Reports filed with the SEC on Form 10-K405, represented that its loans were covered by insurance and surety bonds, which minimized the Company's risk on the loans. The representations in the press releases and annual reports were, according to the complaint's allegations, materially false and misleading because the Company had loaned over $10 million to individuals, not businesses, who used the proceeds personally. In addition, according to the complaint, defendants are alleged to have failed to disclose to their insurers and sureties the nature of the personal-loans and, as a result, the Company was jeopardizing its ability to collect under the policies and surety bonds in the case of default. On February 11, 2002, Barron's published an article detailing the Company's questionable lending practices and its alleged misrepresentations and omissions to insurers and sureties. For example, the article recounts a $6.3 million loan-default by an individual that the Company was attempting to recruit as a broker, and which an insurer and surety refused to cover on his default because they allegedly were led to believe by the Company that the loan was for a business purpose when in fact the individual pocketed the funds. In reaction to the Barron's article, the Company's stock price plummeted by 45%, falling to $13.75 per share on February 11, 2002, from a $24.89 per share close on February 8, 2002. For more details, contact Steven G. Schulman or Samuel H. Rudman by Mail: One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 by Phone: 800-320-5081 by E-mail: actradecase@milbergNY.com or visit the firm's Website: http://www.milberg.com ACTRADE FINANCIAL: Wechsler Harwood Commences Securities Suit in NY ------------------------------------------------------------------- Wechsler Harwood Halebian & Feffer LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of purchasers of Actrade Financial Technologies, Ltd. (Nasdaq: ACRT) between March 11, 1999 and February 8, 2002, inclusive, against the Company and certain of its officers. The complaint alleges that defendants violated the federal securities laws by issuing materially false and misleading statements throughout the class period that had the effect of artificially inflating the market price of the Company's securities. The suit further alleges that throughout the class period, defendants stated that the Company provided short-term loans to businesses to finance commercial transactions, and that these statements were false and misleading because defendants knew, or recklessly disregarded, that Actrade had also loaned millions of dollars to individuals for non- commercial purposes, defrauded its sureties into providing coverage for these loans, and had overstated its financial results based on these fraudulent lending practices. For more information, contact Craig Lowther by Mail: 488 Madison Avenue, 8th Floor New York, New York 10022 by Phone: 877-935-7400 by E- mail: clowther@whhf.com or visit the firm's Web site: http://www.whhf.com ADVANCED SWITCHING: Cauley Geller Commences Securities Suit in E.D. VA ---------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the Eastern District of Virginia on behalf of purchasers of Advanced Switching Communications, Inc. (Nasdaq: ASCX) publicly traded securities during the period between October 5, 2000 and February 12, 2002, inclusive. The suit names as defendants the Company and: (1) Asghar D. Mostafa, (2) Harry J. D'Andrea, (3) Robert Ted Enloe, III, (4) Betsy S. Atkins, (5) Ronald S. Westernik, and (6) Morgan Stanley Dean Witter The suit alleges that the defendants violated Sections 11 and 15 of the Securities Act of 1933 by issuing a materially false and misleading prospectus and registration statement in connection with the Company's initial public offering (IPO), and 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 during the class period, thereby artificially inflating the price of ASC's securities. On October 5, 2000, the Company completed its IPO pursuant to a Prospectus in which it represented that it had signed a $24 million contract with Qwest Communications, Inc., that its A-4000 product was being shipped and that its A-4500 product would be available in 2001. In fact, as alleged in the complaint, at the time of the IPO, the prospectus concealed that ASC's largest customer was having significant problems with products, another significant customer had informed the Company it was over-inventoried and that the agreement with Qwest was contingent on the Company complying with terms it could not complete. Moreover, the Company had not even started on the A-4500 such that it was impossible that this product would be available in 2001. Later, subsequent to the IPO, defendants issued statements which asserted that customers were deploying the A-4000, which, as alleged in the complaint, did not occur, and that the Company offered DS-O to OC- 192 capability which, in fact, it had not been able to offer. On February 5, 2002, ASC issued a press release announcing that it would be liquidated, which as alleged in the complaint, was essentially an admission that it had been a complete failure as a public company because the A-4500 had not been made available in 2001 and the Qwest contract had failed due to its inability to meet the terms of the contract. Finally, on February 12, 2002, the Company announced that a major customer had asked for a $17 million refund due to a defective product being shipped. For more information, contact Jackie Addison, Sue Null or Shelly Nicholson by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 888-551-9944 by E-mail: info@classlawyer.com or visit the firm's Web site: http://www.classlawyer.com ADVANCED SWITCHING: Schiffrin Barroway Lodges Securities Suit in VA ------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Eastern District of Virginia on behalf of all purchasers of the common stock of Advanced Switching Communications, Inc. (Nasdaq:ASCX) from October 5, 2000 through February 12, 2002, inclusive. The suit alleges that defendants violated Sections 11 and 15 of the Securities Act of 1933 by issuing a materially false and misleading prospectus and registration statement in connection with the Company's initial public offering (IPO), and 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 during the class period, thereby artificially inflating the price of Company securities. On October 5, 2000, ASC completed its IPO pursuant to a prospectus in which it represented that it had signed a $24 million contract with Qwest Communications, Inc., that it's a-4000 product was being shipped and that its A-4500 product would be available in 2001. In fact, as alleged in the complaint, at the time of the IPO, the prospectus concealed that the Company's largest customer was having significant problems with its products, another significant customer had informed the Company it was over-inventoried and that the agreement with Qwest was contingent on its complying with terms the Company could not complete. Moreover, the Company had not even started on the A-4500 such that it was impossible that this product would be available in 2001. Later, subsequent to the IPO, defendants issued statements which asserted that customers were deploying the A-4000, which, as alleged in the complaint, did not occur, and that the Company offered DS-O to OC- 192 capability which, in fact, it had not been able to offer. On February 5, 2001, ASC issued a press release announcing that it would be liquidated, which as alleged in the complaint, was essentially an admission that it had been a complete failure as a public company because the A-4500 had not been made available in 2001 and the Qwest contract had failed due to its inability to meet the terms of the contract. Finally, on February 12, 2002, the Company announced that a major customer had asked for a $17 million refund due to a defective product being shipped. For further details, contact Marc A. Topaz or Stuart L. Berman by Phone: 888-299-7706 (toll free) or 610-667-7706 by E-mail: info@sbclasslaw.com or visit the firm's Web site: http://www.sbclasslaw.com ALCOA INC.: Awaits Ruling on Dismissal of Shareholder Suit in S.D. NY --------------------------------------------------------------------- Alcoa, Inc. asked the US District Court for the Southern District of New York to dismiss the amended securities class action pending against it, its Board of Directors, certain of its officers and its independent accountant PriceWaterhouseCoopers, LLP. The suit was initially commenced as a derivative action on behalf of the Company by stockholder Victoria Shaev, alleging that the Company's proxy statement dated March 8, 1999 contained materially false and misleading representations and omissions concerning its proposed Stock Incentive Plan and that the shareholder approval of the plan, based upon these alleged representations and omissions, was defective. The plaintiff sought to invalidate the shareholder approval of the plan and enjoin its implementation. She also requested that Alcoa pay the costs and disbursements of the action, including the fees of her accountants, counsel and experts. On March 19, 2001, the Court granted without prejudice the defendants' motion to dismiss the suit. In May 2001, Ms. Shaev amended the complaint, making the same allegations as in the previous complaint but styling the complaint as a class action on behalf of shareholders. The Company served a motion to dismiss on June 25, 2001. The issues have been briefed and argued, and the parties are awaiting the Court's decision. ARTHUR ANDERSEN: Settling Suit Over 1999 BFA Collapse for $217 Million ---------------------------------------------------------------------- Controversial accounting firm Arthur Andersen LLP will settle, for $217 million, several lawsuits relating to its role in the collapse of Arizona investment group Baptist Foundation of America (BFA) in 1999, the Associated Press reports. The BFA collapse, regarded as the largest non-profit bankruptcy in U.S. history, caused more than 10,000 mostly elderly investors to lose $570 million. The bankruptcy spurred several lawsuits against the accounting firm. One suit was brought by a bankruptcy trust for investors and another a class action on behalf of former foundation investors. The firm also faces a civil suit by State regulators and disciplinary proceedings brought by the Arizona Board of Accountancy. According to the State's lawsuit, Andersen issued misleading financial statements that concealed the Foundation's big losses. This allowed the Foundation's senior managers to mislead the Board of Directors and to engage in fraud at the expense of investors by drawing in money from new investors to pay inflated returns to past investors, AP reports. Under the settlement, an oversight board of outside experts will be set up to monitor the accounting firm's office. The firm has emphasized that it is not admitting wrongdoing by entering the settlement. In a statement, it asserts, "This settlement is an important step in building confidence in our firm." State Attorney General Janet Napolitano told AP, "These investors, many of whom are elderly, trusted the misleading financial statements audited by Andersen.This agreement will allow Baptist Foundation victims to at least recover most of their investment." Arthur Andersen still faces other legal challenges, most notably its role in the collapse of energy giant Enron Corporation. The firm was recently accused of mishandling the Company's finances and shredding of incriminating documents relating to its collapse. The settlement still has to be approved by a state court judge and agreement by investors represented through the class-action suit, but Ms. Napolitano and others are confident that the settlement will pass these hearings. ASK JEEVES: Faces Suit For Federal Securities Violations in S.D. NY ------------------------------------------------------------------- Ask Jeeves, Inc. faces an amended securities class action pending in the United States District Court for the Southern District of New York against the Company, two of its officers and directors and underwriters: (1) Morgan Stanley & Co., (2) FleetBoston Robertson Stephens, (3) Goldman Sachs & Co., (4) US Bancorp Piper Jaffray, and (5) Dain Rauscher, Inc. The suit was commenced in October 2001, on behalf of purchasers of the Company's stock between June 30,1999 and December 6,2000. The suit alleges violations of Section 11 of the Securities Act of 1933 against all defendants, and violations of Section 15 of the Securities Act against the individual defendants in connection with the Company's initial public offering. An amended complaint was filed in December 2001, which includes the same allegations in connection with the Company's secondary offering in March 2000. The Company believes the claims are without merit and intends to defend the suit vigorously. However, this type of litigation could result in substantial costs and a diversion of management's attention and resources, and could have a material adverse effect on the Company's operating results and financial position. COMPUTER ASSOCIATES: Brodsky Smith Investing Possible Securities Fraud ---------------------------------------------------------------------- Brodsky & Smith, LLC is investigating possible securities violations committed by Computer Associates, Inc. from the period starting May 28,1999 to February 25,2002, after several securities class actions were commenced in the United States District Court for the Eastern District of New York. The suits uniformly charged the Company and certain of its officers with violations of the federal securities laws, specifically Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder. For more information, contact Evan J. Smith or Jason L. Brodsky by Mail: 11 Bala Avenue, Suite 39, Bala Cynwyd PA 19004 by Phone: 877-534-2590 or by E-mail: esmith@brodsky-smith.com. COMPUTER ASSOCIATES: Charles Piven Files Securities Suit in E.D. NY ------------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who acquired Computer Associates International, Inc. (NYSE:CA) securities between May 28, 1999 and February 25, 2002, inclusive, in the United States District Court for the Eastern District of New York against the Company and: (1) Charles B. Wang, (2) Sanjay Kumar and (3) Ira H. Zar The suit charges that defendants violated the federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Charles J. Piven, PA by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202 by Phone: 410-332-0030 or by E-mail: hoffman@pivenlaw.com COREL CORPORATION: Securities Violations Suit Mediation Set For March 7 ----------------------------------------------------------------------- The US District Court for the Eastern District of Pennsylvania granted class certification to a consolidated amended class action pending against Corel Corporaton and former President and CEO, Dr. Michael CJ Cowpland, on behalf of all purchasers of the Company's common stock between December 7,1999 and December 21, 1999. The consolidated suit arose from several class actions, the first of which was commenced in March 2000. The suit alleged that the defendants violated various provisions of US federal securities laws, including Section 10(b), Section 20(a) and Rule 10b-5 of the Securities Exchange Act of 1934, as amended, by misrepresenting or failing to disclose material information about the Corel's financial condition. Numerous other complaints were filed thereafter, each making similar allegations and referencing the same class period as the initial claims. The Court appointed Fred Spagnola, Michael Perron and David Chavez as lead plaintiffs, and the law firms of Weinstein, Kitchenoff Scarlato & Goldman Ltd., and Savett Frutkin Podell & Ryan, P.C. as co-lead counsel. The Court consolidated all pending cases, and an amended consolidated suit was served in August, 2000, which expanded the class period, from December 7, 1999 to March 20, 2000 (inclusive), and contained several new allegations. The Company moved to dismiss the consolidated suit, on the grounds of forum non conveniens and failure to state a claim, which was dismissed by the Court in May 2001. In July 2001, the Company and Mr. Cowpland filed their answers to the amended suit, denying all liability to plaintiffs and asserting various affirmative defenses. The Company has deposed four lead plaintiffs, and discovery requests have been served by both sides. In February 1, 2002, the Court certified the class but withheld judgment, until a later date, as to whether the class period could be expanded to March 20, 2000, from the initial class period claimed. A non-binding mediation is scheduled for March 7, 2002. CRITICAL PATH: CA Court Sets Fairness Hearing For $17.5M Pact For May --------------------------------------------------------------------- The United States District Court for the Northern District of California will hold a fairness hearing on May 23,2002 on the package proposed by Critical Path, Inc. to settle a class action suit filed on behalf of all persons who exchanged their shares of Peerlogic, Inc. for Company shares in September 26, 2000 pursuant to the merger between the two companies. Judge William H. Alsup will hold the hearing to determine: (1) whether the settlement of the suits for $17,500,000 in cash plus accrued interest, together with warrants to acquire 850,000 shares of Company stock at a price of $10 per share, should be approved by the court as fair, just, reasonable and adequate; (2) whether the proposed plan to distribute the settlement proceeds is fair, just, reasonable, and adequate; (3) whether the application by plaintiffs' counsel for an award of attorneys' fees and reimbursement of expenses should be approved; and (4) whether the suits should be dismissed with prejudice. Two classes have been preliminarily certified for purposes of this settlement composed of: (i) all purchasers of the Company's publicly-traded securities during the period September 26, 2000 through February 1, 2001 and (ii) all persons who exchanged their shares of PeerLogic, Inc. for Company shares on September 26, 2000 pursuant to the merger of PeerLogic and Critical Path. For more information, contact Joseph J. Tabacco, Jr. of Berman Pease DeValerio Tabacco Burt and Pucillo by Mail: 425 California St., Suite 2025 San Francisco CA 94104-2205 or Jeffrey A. Klafter, of Bernstein Litowitz, Berger and Grossmann LLP by Mail: 1285 Ave. of the Americas, New York, NY 10019. ENTERASYS NETWORKS: Schiffrin Barroway Files Securities suit in NH ------------------------------------------------------------------ Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the District of New Hampshire on behalf of all purchasers of the common stock of Enterasys Networks, Inc. (NYSE: ETS) from September 26, 2001 through February 1, 2002, 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 to the market during the class period, thereby artificially inflating the price of Company securities. Throughout the class period, as alleged in the complaint, defendants issued statements regarding the Enterasys' quarterly financial performance and filed reports confirming such performance with the United States Securities and Exchange Commission (SEC). The suit alleges that these statements were materially false and misleading because, among other things: (1) the Company's Asia Pacific region operations, which represented a material portion of the Company's revenues, was improperly recognizing revenues in violation of the Company's accounting policies and generally accepted accounting principles. As a result, the Company's operating results were materially misrepresented and overstated; (ii) the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (iii) based on the foregoing, defendants' statements concerning the prospects of the Company were lacking in a reasonable basis at all times. On February 1, 2002, after the close of the market, the Company shocked the market when it announced that it would be delaying the release of its fourth quarter and fiscal year financial results because it was reviewing the revenue recognition practices of its Asia Pacific operations. The Company also announced the SEC was investigating it. In response to these disclosures, on February 4, 2002, the first day of trading following the Company's announcement, its shares closed at $4.20 per share, a loss of more than 61% since its previous close of $10.80 on February 1, 2002, on volume of more than 35 million shares traded. 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: 888-299-7706 (toll free) or 610-667-7706 by E-mail: info@sbclasslaw.com or visit the firm's Web site: http://www.sbclasslaw.com ENTERASYS NETWORKS: Cauley Geller Files Securities Fraud Suit in NH ------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the District of New Hampshire on behalf of purchasers of Enterasys Networks, Inc. (NYSE: ETS) common stock during the period between September 26, 2001 and February 1, 2002, 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 to the market between September 26, 2001 and February 1, 2002, thereby artificially inflating the price of Company securities. Throughout the class period, as alleged in the complaint, defendants issued statements regarding the Company's quarterly financial performance and filed reports confirming such performance with the United States Securities and Exchange Commission (SEC). The complaint alleges that these statements were materially false and misleading because, among other things: (1) the Company's Asia Pacific region operations, which represented a material portion of the Company's revenues, was improperly recognizing revenues in violation of the Company's accounting policies and generally accepted accounting principles. As a result, the Company's operating results were materially misrepresented and overstated; (2) the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the company; and (3) based on the foregoing, defendants' statements concerning the prospects of the Company were lacking in a reasonable basis at all times. On February 1, 2002, after the close of the market, the Company shocked the market when it announced that it would be delaying the release of its fourth quarter and fiscal year financial results because it was reviewing the revenue recognition practices of its Asia Pacific operations. Enterasys also announced that the SEC was investigating it. In response to these disclosures, on February 4, 2002, the first day of trading following the Company's announcement, shares closed at $4.20 per share, a loss of more than 61% since its previous close of $10.80 on February 1, 2002, on volume of more than 35 million shares traded. For more information, contact Jackie Addison, Sue Null or Shelly Nicholson by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 888-551-9944 by E-mail: info@classlawyer.com or visit the firm's Web site: http://www.classlawyer.com FLAG FINANCIAL: Directors Faces Suits Over Rejection of Tender Offer -------------------------------------------------------------------- The directors of FLAG Financial Corporation (Nasdaq: FLAG) faces a class action and a shareholder derivative suit, in the Superior Court of Troup County, Georgia, arising out of the decision to remain independent and the rejection of an unsolicited offer for the Company's shares. In accordance with Georgia law and by resolution, the independent directors on the Board of Directors have appointed a special committee to review the allegations made in the complaint, and to make a recommendation as to whether the maintenance of such a lawsuit by FLAG is in the best interests of the corporation and its shareholders. In a statement, the Company said it is not in a position to comment on the allegations contained in the complaint in light of the duties of the independent special committee and pendency of the litigation. Joseph W. Evans, the Company's Chief Executive Officer, stated, "We have great confidence in the members of the special committee and believe that they will be able to resolve this litigation in the best interests of the Company and its shareholders." GLOBAL CROSSING: Zwerling Schachter Lodges Securities Suit in S.D. NY --------------------------------------------------------------------- Zwerling, Schachter & Zwerling, LLP initiated a securities class action in the United States District Court for the Southern District of New York, on behalf of all persons and entities who purchased the common stock of Global Crossing, Ltd. (OTC Bulletin Board: GBLXQ; formerly NYSE: GX) between April 28, 1999 and January 28, 2002, inclusive. The suit alleges that certain of the Company's officers and directors 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 Global common stock. The suit alleges, among other things, that defendants misled investors: (1) by issuing false and misleading financial statements in violation of generally accepted accounting principles; (2) improperly recorded revenue on the Company's bandwidth trading contracts; (3) substantially overstated reported earnings and (4) failed to disclose the nature of certain swap transactions entered into during the class period. This misconduct caused the market prices of the Company's common stock to be artificially inflated during the class period. Furthermore, while the Company's shares were artificially inflated, the individual defendants and other Company insiders engaged in insider selling of common stock for proceeds in excess of $144 million. On January 28, 2002, the Company filed for Chapter 11 Bankruptcy protection after becoming unable to service its debt. For more details, contact Shaye J. Fuchs or Jayne Nykolyn by Phone: 800-721-3900 or 800-263-7337 by E-mail: sfuchs@zsz.com or visit the firm's Web site: http://www.zsz.com GTECH HOLDINGS: Sued For Federal Securities Violations in Rhode Island ---------------------------------------------------------------------- GTECH Holdings Corporation faces an amended class action pending in the US District Court of Rhode Island alleging federal securities violations relating to various Company announcements made between July 13, 1998 and August 29, 2000. The suit was filed on behalf of purchasers of the Company's securities during the period and names as defendants the Company and: (1) William Y. O'Connor, former Chairman and Chief Executive Officer, (2) W. Bruce Turner, current Chairman, (3) Steven P. Nowick, former presidents and Chief Operating Officer The suit generally alleges that the defendants violated federal securities laws (including Section 10(b) of the Securities Exchange Act of 1934) by making allegedly false and misleading statements (including statements alleged to be overly optimistic respecting certain lottery contract awards to the Company and respecting GTECH's prospects in certain non-lottery business lines and investments), while failing to disclose in a timely manner certain allegedly material adverse information that it purportedly had a duty to disclose (including an alleged inability to close certain contract awards and as to certain alleged cost overruns). The Company believes that it has good defenses to the claims made in this lawsuit and intends to file a motion to dismiss the amended complaint as to all of the defendants. At the present time, however, GTECH is unable to predict the outcome, or the financial statement impact, if any, of this lawsuit. MEDI-HUT CO.: Says Allegations in NJ Securities Suits "Without Basis" --------------------------------------------------------------------- Medi-Hut Co., Inc. (NASDAQ:MHUT) denied the allegations in several securities class actions pending against the Company and certain of its officers in the US District Court for the District of New Jersey. The suit, filed on behalf of the Company's common stock during the period from April 4, 2000 through February 4, 2002, charges the defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The Company allegedly failed to disclose that Company Vice President, Lawrence Marasco controlled Larval Corporation, one of its major customers. In a statement, Medi-Hut says it believes no basis exists for the claims alleged in the suits. It also says it will not comment on the matter until the Company and its counsel has received and reviewed the actual complaints. MEDI-HUT CO.: Berger Montague Commences Securities Suit in New Jersey --------------------------------------------------------------------- Berger & Montague, PC initiated a securities class action against Medi- Hut Co. (Nasdaq:MHUT) and certain of its officers and directors in the United States District Court for the District of New Jersey, on behalf of all persons or entities who purchased the Company's common stock during the period from April 4, 2000 through February 4, 2002. The complaint seeks damages for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, against the Company and: (1) Joseph A. Sanpietro, President and Chief Executive Officer, (2) Laurence M. Simon, Chief Financial Officer, (3) Robert Russo, Treasurer, (4) Vincent Sanpietro, Secretary, (5) James G. Aaron, director, and (6) James S. Vacarro, director. The suit alleges that the defendants knowingly and recklessly disseminated materially false and misleading statements and omissions that misrepresented the Company's business, operations and financial performance. As stated in the suit, the Company misled the investing public by failing to disclose that Vice President Lawrence Marasco had a controlling interest in Larval Corporation, the Company's largest customer. During fiscal year 2001, sales to Larval accounted for 62% of the Company's revenues. Because Mr. Marasco had a controlling interest in one of the Company's customers, generally accepted accounting principles (GAAP) dictated that the Company identify sales to that customer as related party transactions. The Company, however, failed to disclose the true nature of its sales to Larval. Indeed, each report the Company filed with the Securities and Exchange Commission during the class period, including quarterly and annual reports, was devoid of any reference to the fact that a Company employee controlled one of its largest customers. These reports were disseminated to shareholders and/or were publicly available to potential investors. The suit alleges that the misrepresentations and omissions by defendants influenced the views of stock market analysts and the investing public and brought about an unrealistic assessment of the Company's performance and prospects. As a result, the Company's stock traded at artificially inflated prices throughout the class period. On February 4, 2002, the nature of the relationship between the Company, Mr. Marasco and Larval Corp. was revealed to the market. The investing public, recognizing that a majority of the Company's revenues in fiscal year 2001 were generated via sales to a related party, reacted swiftly and severely. By the close of business on February 4, shares of the Company had lost 51% of their value, falling $3.41 per share to $3.29 in unusually heavy trading. Four days later, Grant Thornton LLP resigned its position as the Company's independent auditor after only two weeks. Grant Thornton served as the Company's auditors from January 24, 2002 through February 8, 2002. For more information, contact Darin R. Morgan or Kimberly A. Walker by Phone: 888-891-2289 or 215-875-3000 by Fax: 215-875-5715 by E-mail: InvestorProtect@bm.net or visit the firm's Web site: http://www.InvestorProtect.com MEDI-HUT CO.: Cauley Geller Commences Securities Suit in New Jersey ------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the District of New Jersey on behalf of purchasers of Medi-Hut Co., Inc. (Nasdaq: MHUT) common stock during the period between April 4, 2000 and February 4, 2002, inclusive. The suit seeks damages for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, against the Company and: (1) Joseph A. Sanpietro, President and Chief Executive Officer, (2) Laurence M. Simon, Chief Financial Officer, (3) Robert Russo, Treasurer, (4) Vincent Sanpietro, Secretary, (5) James G. Aaron, director, and (6) James S. Vacarro, director The suit has alleged that defendants knowingly and recklessly disseminated materially false and misleading statements and omissions that misrepresented the Company's business, operations and financial performance. As stated in the suit, the Company misled the investing public by failing to disclose that a Company vice president had a controlling interest in Larval Corporation, its largest customer. Specifically, the Company failed to disclose that Lawrence Marasco, its Vice President for Sales and Marketing, had a controlling interest in Larval. During fiscal year 2001, sales to Larval accounted for 62% of the Company's revenues. Because Mr. Marasco had a controlling interest in one of its customers, generally accepted accounting principles dictated that the Company identify sales to that customer as related party transactions. The Company, however, failed to disclose the true nature of its sales to Larval. Indeed, each report the Company filed with the Securities and Exchange Commission during the class period, including quarterly and annual reports contained no reference to the fact that a Company employee controlled one of its largest customers. These reports were disseminated to shareholders and/or were publicly available to potential investors. The suit alleges that the misrepresentations and omissions by defendants influenced the views of stock market analysts and the investing public and brought about an unrealistic assessment of the Company's performance and prospects. As a result, the Company's stock traded at artificially inflated prices throughout the class period. On February 4, 2002, the nature of the relationship between the Company, Mr. Marasco and Larval was revealed. The market, recognizing that a majority of the Company's revenues in fiscal year 2001 were generated via sales to a related party, reacted swiftly and severely. By the close of business on February 4, Company shares had lost 51% of their value, falling $3.41 to $3.29 in unusually heavy trading. Four days later, Grant Thorton LLP resigned its position as Medi-Hut's independent auditor after only two weeks. Grant Thorton served as the Company's auditors from January 24, 2002 through February 8, 2002. For more information, contact Jackie Addison, Sue Null or Shelly Nicholson by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 888-551-9944 by E-mail: info@classlawyer.com or visit the firm's Web site: http://www.classlawyer.com MEDI-HUT CO.: Charles Piven Commences Securities Suit in New Jersey ------------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who acquired Medi-Hut Co., Inc. (Nasdaq:MHUT) securities between April 4, 2000 and February 4, 2002, inclusive, in the United States District Court for the District of New Jersey, against the Company and: (1) Joseph A. Sanpietro, President and Chief Executive Officer, (2) Laurence M. Simon, Chief Financial Officer, (3) Robert Russo, Treasurer, (4) Vincent Sanpietro, Secretary, (5) James G. Aaron, director, and (6) James S. Vacarro, director The suit charges that defendants violated the federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more information, contact Charles J. Piven by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202, by Phone: 410-332-0030 by E-mail: hoffman@pivenlaw.com NEWPOWER HOLDINGS: Charles Piven Commences Securities Suit in S.D. NY --------------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who acquired NewPower Holdings, Inc. (NYSE:NPW) securities between October 5, 2000 and December 5, 2001, inclusive, in the United States District Court for the Southern District of New York, against the Company and certain of its officers and/or directors. The suit charges that defendants violated the federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For further details, contact Charles J. Piven by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202 by Phone: 410-332-0030 or by E-mail: hoffman@pivenlaw.com NEWPOWER HOLDINGS: Wechsler Harwood Files Securities Suit in S.D. NY -------------------------------------------------------------------- Wechsler Harwood Halebian & Feffer LLP lodged a securities class action in the United States District Court for the Southern District of New York on behalf of all persons and entities who acquired the common stock of NewPower Holdings (NYSE: NPW) during the period from October 5, 2000 through and including December 5, 2001. The suit alleges that the registration statement and prospectus for the Company's public offering on October 5, 2000 was false and misleading in several ways, including misrepresentations and omissions concerning the adequacy of risk management systems put in place in conjunction with Company affiliate, Enron Energy Services, Inc. (EES), and the true nature and purpose of certain related party transactions, including transactions pursuant to which Enron attempted to hedge its investment in the Company through use of a partnership known as "Raptor III," which was conceived and designed by Enron CFO Andrew Fastow. Claims regarding these misrepresentations and omissions have been asserted under Section 11 of the Securities Act against the underwriters of the October 5, 2000 initial public offering and against those persons who were directors (or about to become directors) of the Company at the time of that offering, including top executives, CEO H. Eugene Lockhart, Chairman Lou L. Pai and CFO William I. Jacobs. The Complaint also alleges claims against certain of these same defendants for violations of 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 October 5, 2000 and December 5, 2001. The complaint alleges in this regard that the Company and certain of its officers and directors misrepresented or failed to disclose: (1) that the Company had not adopted effective and appropriate hedging strategies against volatility of commodity prices; (2) that the Company was on course to achieve its financial goals and had sufficient liquidity to do so; and (3) that certain forward contracts with EES posed little risk of loss when in truth and in fact they were driving the Company toward insolvency, and were largely structured to protect and enrich Enron, the Company's controlling shareholder. For further details, contact Ramon Pinon IV or John Halebian by Mail: 488 Madison Avenue, 8th Floor New York, NY 10022 by Phone: 877-935-7400 by E-mail: jhalebian@whhf.com or rpinoniv@whhf.com or visit the firm's Web site: http://www.whhf.com SPECTRALINK CORPORATION: Schiffrin Barroway Lodges Suit in Colorado ------------------------------------------------------------------- Schiffrin and Barroway LLP initiated a securities class action against Spectralink Corporation (Nasdaq:SLNK) claiming that the company misled investors about its business and financial condition, in the US District Court for the District of Colorado on behalf of all investors who bought Company securities between July 19, 2001 and January 11, 2002. The suit charges the Company and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that defendants issued statements which represented that the Company was experiencing continued growth and increasing its market share and would continue to do so in the future. Unbeknownst to investors, however, Spectralink was suffering from a host of undisclosed adverse factors which were negatively impacting its business and which would cause it to report declining financial results, materially less than the market expectations defendants had caused and cultivated. Specifically, defendants misrepresented or failed to disclose that: (1) the Company was experiencing declining sales as its business began to be affected by general market forces. Throughout the class period, defendants repeatedly emphasized that the Company was not being affected by the slowdown in the US economy, when, in fact, that was not true; (2) the Company was becoming increasingly reliant on end-of-the- quarter sales to meet its sales forecasts. This sales pattern necessarily subjected the Company to the increased risk that it would not meet its sales expectations should it not successfully complete certain anticipated sales; and (3) certain of the Company's customers were experiencing financial difficulty such that it was highly unlikely that they would be able to complete anticipated sales, thereby causing the Company to suffer a decline in its revenues. On January 14, 2002, before the open of the Nasdaq stock market, the Company issued a press release announcing preliminary financial results for its fourth quarter of 2001, and disclosed, for the first time, that its revenue and earnings would in fact be affected by the slowdown in the overall economy. In response to this announcement, the price of its common stock dropped precipitously, falling from $16.02 per share to $10.16 per share, a decline of more than 36%. While the Company was being adversely affected by the aforementioned factors, but prior to any disclosure to the market, the individual defendants and other Company senior executives sold more than $13.7 million worth of their personally-held common stock to the unsuspecting public. For more information, contact the Shareholder Relations Manager by Phone: 888-299-7706 (toll free) or 610-822-2221 by E-mail: info@sbclasslaw.com or visit the firm's Web site: http://www.sbclasslaw.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 2002. 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 * * *