/raid1/www/Hosts/bankrupt/CAR_Public/020513.mbx
C L A S S A C T I O N R E P O R T E R
Monday, May 13, 2002, Vol. 4, No. 93
Headlines
CATHOLIC CHURCH: Merger of Sexual Abuse Suits V. Diocese Requested
COMPAQ AUSTRALIA: Offers Refunds For Unbelievable One-Cent Laptop Offer
DOUBLECLICK INC.: Privacy Groups Oppose Settlement to Privacy Suits
JOURNAL COMMUNICATIONS: Settling For $.89M Employees Suit Over Merger
MAINE: Suit Settlement Gives Mentally Impaired Children In-Home Care
PEOPLES BANK: KY Residents File Suit Over Erpenbeck Homes Controversy
PITTSBURGH STEELERS: Fans Ask Seating Arrangements Suit To Be Revived
ROCKY MOUNTAIN: Recalls 660 Mountain Bikes for Possible Accident Hazard
RYOBI TECHNOLOGIES: Recalls 6T Hammer Drills For Physical Injury Risk
SULZER MEDICA: OH Federal Judge Approves $1B Implants Suit Settlement
THIMEROSAL LITIGATION: Aventis Pasteur Faces Suit in Ontario Court
Securities Fraud
COREL CORPORATION: PA Judge Allows Expansion of Class Period in Suit
DOV PHARMACEUTICAL: Schoengold & Sporn Commences Securities Suit in NY
DYNEGY INC.: Lockridge Grindal Commences Securities Suit in S.D. TX
DYNEGY INC.: Schatz & Nobel Commences Securities Fraud Suit in S.D. TX
ENRON CORPORATION: Defendants Ask To Be Dismissed From Securities Suits
EXELON CORPORATION: Charles Piven Commences Securities Suit in N.D. IL
GEMSTAR-TV GUIDE: Berger & Montague Lodges Securities Fraud Suit in CA
GERBER SCIENTIFIC: Wechsler Harwood Commences Securities Suit in CT
GERBER SCIENTIFIC: Schatz & Nobel Commences Securities Suit in CT Court
JDS UNIPHASE: Jeffrey Neiman Commences Securities Fraud Suit in N.D. CA
L90 INC.: Bernstein Liebhard Commences Securities Fraud Suit in C.D. CA
LUMENIS LTD.: Milberg Weiss Commences Securities Fraud Suit in S.D. NY
NEXTCARD INC.: Consolidated Securities Suit To be Amended in N.D. CA
PEREGRINE SYSTEMS: Lovell & Stewart Commences Securities Suit in NY
PEREGRINE SYSTEMS: Berger & Montague Commences Securities Suit in CA
PEREGRINE SYSTEMS: Schubert & Reed Lodges Securities Suit in S.D. CA
PINNACLE HOLDINGS: Asks For Dismissal of Securities Suit in M.D. FL
SEITEL INC.: Berman DeValerio Commences Securities Suit in S.D. TX
SPECIALTY LABORATORIES: Charles Piven Ldoges Securities Suit in C.D. CA
UNIVERSAL ACCESS: Charles Piven Commences Securities Suit in E.D. TX
VERISIGN INC.: Spector Roseman Initiates Securities Suit in N.D. CA
VERISIGN INC.: Milberg Weiss Commences Securities Fraud Suit in N.D. CA
*********
CATHOLIC CHURCH: Merger of Sexual Abuse Suits V. Diocese Requested
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Lawyers for 38 people suing the Diocese of Providence are asking a
Superior Court judge to consolidate their civil lawsuits for one trial,
saying that every case pivots on the local church hierarchy's "broad,
illegal policy" of covering up sexual abuse by priests, The Providence
Journal recently reported.
The lawyers filed a motion in Superior Court, where the cases could
soon be heard, perhaps as early as this fall. The motion asks Judge
Robert D. Krause to hold a sweeping trial with one jury, not unlike
class action corporate lawsuits. The motion asks the Judge to consider
the burden of calling witnesses, including aging former bishops, again
and again, for 38 cases.
"To look at each case in a vacuum would not tell the whole story," Carl
P. DeLuca, a plaintiff's lawyer, said. "The facts might be different;
one was molested on a camping trip, one in a rectory. But what is not
different, is the cover-up by the hierarchy."
There is a precedent for large-scale civil trials against a diocese.
There was a trial for 11 victims who sued the Diocese of Dallas for
one priest's abuse. In 1997, a Dallas jury awarded the victims a total
of $119.6 million, eventually reduced to $31 million.
However, the cases against the Diocese of Providence are more complex,
said James T. Murphy, a lawyer for the Diocese of Providence, Roman
Catholic Bishop Robert E. Mulvee and the auxiliary bishops. He noted
yesterday that the lawsuits involve 11 priests, a nun and many alleged
victims. "We would have to try it in the Dunkin' Donuts Center," Mr.
Murphy said.
The lawyers for the diocese have two weeks to respond to the motion for
one trial. Mr. Murphy would not discuss specific cases. However, he
said the proposal is unreasonable because the lawsuits allege varying
scenarios and mindsets. "Some claim repressed memory. Some don't.
Some claim there was some conspiracy. Some don't.I don't think you can
try two sets of circumstances similarly," he said.
The motion seeking one trial says the plaintiffs allege a "common
scheme" of "secreting the acts of offending clerics, failing to report
or prevent felonious conduct . protecting clerics from detection and
criminal prosecution."
The plaintiffs' lawyers try to illustrate this pattern. They allege
that abuse began before Bishop Gelineau's arrival and continued during
his tenure. Court filings show that the bishop had been warned about
sexual abuse by the Rev. James M. Silva, and that Bishop Gelineau
reassigned Rev. Silva to other parishes. Rev. Silva has pleaded guilty
to assaulting an 18-year-old-male while temporarily assigned to St.
Theresa Church in Burrillville, in 1991.
There are 38 lawsuits accusing the diocese of covering up sexual abuse
by priests during the 1960s, 1970s, 1980s and early 1990s. Bishop
Mulvee say he does not believe there was a cover-up, or that his
predecessor would knowingly have put a child at risk.
As the cases head toward trial, church lawyers are seeking dismiss all
but three or four of the lawsuits, saying they were filed past the
statute of limitations. And two months ago, it appeared that the
Diocese of Providence might reach a settlement.
In March, Bishop Mulvee said he wanted to reach a reasonable
settlement. Plaintiffs' lawyers responded with a proposal - $15
million immediately and another $8 million over the next four years.
What unfolded, however, was a scenario not unlike that in Boston, where
the Boston Archdiocese's finance council last week rejected a
multimillion-dollar settlement for 86 alleged victims of defrocked
priest and convicted child molester John J. Geoghan.
The Diocese of Providence's finance council met and decided that it did
not wish to settle the cases with a lump sum.
"We are looking at the individual events, with individual decisions,"
Mr. Murphy said.
COMPAQ AUSTRALIA: Offers Refunds For Unbelievable One-Cent Laptop Offer
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Compaq Australia offered to provide refunds to customers who were
allegedly duped by an incredible offer selling Presario laptops for
only one cent on the Company's web site, ZDNet Australia reports.
Customers rushed to take advantage of the implausible price offer this
week. The Company rushed to correct the glitch, saying an
"intermittent system anomaly" had caused the pricing mistake, but the
offer had spread like wildfire on Internet news groups and chatrooms.
The Company initially refused to honor the orders for the offer, saying
"less than 200" people had availed of the offer, and that the Company
had not processed any of the payments for the laptops. Irate consumers
then threatened to file a class action over the debacle, according to
an earlier Class Action Reporter story.
The Company now admitted that it did in fact process the payments of
customers who bought the laptops, and promised to provide refunds.
However, the Company still refused to honor the accidental one-cent
pricing, saying in a statement, "Compaq takes very seriously all
reasonable customer complaints and enquiries. Given that the anomalous
pricing was not referenced by any supporting advertising or text, and
that it was an obvious error, it is unreasonable to assume that the
pricing was some form of promotion or in fact correct."
The statement continues, "As this was a genuine error, Compaq cancelled
all orders from the system. In instances where 1 cent was debited from
customers accounts it will be refunded."
The statement further said customers wishing to proceed with an order
for the correct price should log on to the Company's Web Store again or
call the firm on 1300 301 234 between 9:00am and 5:30pm Monday to
Friday, Eastern Standard Time.
Customers have not been mollified by the refund offer, saying that by
not honoring the pricing, whether offered unintentionally or otherwise,
Compaq is snubbing consumers and ignoring the rules and regulations
that govern "bricks-and-mortar" retail outlets, ZDNet Australia
reports.
Gale Kennedy of the Australian Consumers Association, however, is of
the opinion that traditional retail outlets are not bound to sell stock
that has been incorrectly under-priced for that inaccurate fee. Under
such circumstances a store has every right to abide by its "goodwill
policy", and sales staff can renegotiate with the consumer at the point
of sale, she told ZDNet.
Ms. Kennedy explained that as there is no human interaction involved in
online transactions the inaccuracy cannot be renegotiated prior to the
transaction. "If you've entered into a contract for that price, for
that offer, renegotiation of that contract must not be to the detriment
of the consumer," she said.
The ACCC agreed that trading laws apply equally to online traders and
companies operating out of conventional shops but differs slightly in
its interpretation of Compaq's obligation. Spokesperson for the
Commission, Lin Enright, agrees that the automatic nature of the
transactions may have reduced Compaq's control over the sale but said
that it weakens its obligation to honor it.
"It probably would depend on how quickly they rectified the mistake,"
she said. "If they realized very quickly that there was problem and
posted the correction, I'm not sure that we would push the issue with
them."
DOUBLECLICK INC.: Privacy Groups Oppose Settlement to Privacy Suits
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Two privacy groups are opposing the settlement to the privacy class
action against Doubleclick, Inc., claiming the agreement fails to
require the Web advertising giant to significantly alter its consumer
data policies, internetnews.com reports.
The privacy suits were commenced on behalf of consumers who accused the
company of wrongfully collecting and using their personal information,
and opposed the Company's since-halted plan to integrate personally
identifiable consumer information with data culled from online cookies.
Under the settlement, the Company agreed to:
(1) safeguard and routinely purge data collected online;
(2) limit cookies' lifespans;
(3) submit to reviews by independent privacy auditors;
(4) launch a consumer education campaign;
(5) continue giving "clear notice" of its data-collection
policies; and
(6) ask consumers before it undertakes any sort of (currently
theoretical) effort to combine their personally identifiable
information with previously-collected clickstream data.
Additionally, the Company will also ensure that Internet users'
information is used in accordance with the privacy policy under which
it was collected, unless the consumer has given permission to do
otherwise, internetnews.com reports. The company also said it would
begin taking steps to ensure that any acquirer would follow suit.
The Electronic Privacy Information Center and Junkbusters, Inc. filed a
formal objection to the settlement in the United States District Court
for the Southern District of New York. The settlement is due to be
reviewed by the court in a public hearing on May 21.
In their objection, the groups maintain that the settlement fails to
expand on policies of the Network Advertising Initiative, an industry
self-regulatory body of which the Company is a founding member. The NAI
guidelines, while having received endorsement by the Federal Trade
Commission in 2000, have been highly criticized by consumer advocates
because of alleged shortcomings in protecting consumer privacy, such as
through its predominantly "opt-out" policy, according to
internetnews.com.
JOURNAL COMMUNICATIONS: Settling For $.89M Employees Suit Over Merger
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Journal Communications, Inc. agreed to settle for US$8.9 million a
class action pending in the Milwaukee County Circuit Court, alleging
the Company forced employees to sell their company shares prematurely
in the 1995 merger of The Milwaukee Journal and Milwaukee Sentinel, the
Gazette Extra! reported. The Company allegedly offered hundreds of
employees were offered severance packages to consummate the merger.
In 2000, the court ruled in favor of the plaintiff's summary judgment
motion that the separation agreement permits the sell back of units at
any time during the sell-back period. A trial on the remaining issues
of breach, causation and amount of damages is not expected to begin any
earlier than June 2002, according to an earlier Class Action Reporter
story.
Under the settlement, the Company will compensate 148 former employees
and allow some former employees to retain certain stock holding rights
worth an estimated $587,036. The parties said in a joint statement
that the settlement was preferable to protracted litigation in
Milwaukee County Circuit Court.
MAINE: Suit Settlement Gives Mentally Impaired Children In-Home Care
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Hundreds of mentally impaired children who are currently on waiting
lists will receive in-home care from the state under the recently
announced settlement terms of a class-action lawsuit, according to a
report by The Associated Press.
Two Augusta-area families with mentally impaired children alleged in
the lawsuit, filed in 2000, that the state failed to meet the standards
of care for their children that are required under federal law. Both
families, who were seeking in-home care for their respective children,
claimed that the state failed to provide the "timely, adequate and
reliable" services required by state and federal law.
They did not seek money damages. Instead, they asked the Court to
mandate systemic reforms. In-home behavioral support for mentally
impaired children is required under federal Medicaid law in states that
offer children mental health benefits.
In a sweeping ruling on class-action certification for the lawsuit, in
July of last year, US District Court Judge Gene Carter ruled that all
children with mental impairment who were not getting timely in-home
services from the state, would become plaintiffs.
The settlement mandates that mentally impaired children be evaluated
more quickly than under the current system. Children will not have to
wait more than six months for approved treatment. Needed services will
continue without interruption for the 2,400 children who now receive
in-home care.
The federal government will pay for two-thirds of the state's costs in
implementing the settlement. The agreement lets the state determine
how to meet the deadlines for evaluating the children and then
implementing the required services, according to William Kanyatta, the
lawyer who negotiated the settlement on behalf of the plaintiffs.
Nonetheless, according to the settlement, state officials will be
required to file reports with Judge Carter for the next two years.
"The problem was that the system wasn't working for everybody," said
Patrick Ende, a lawyer for the Maine Equal Justice Project, which
represented the plaintiffs. "Because of where you lived, how lucky you
were or how serious your child's disability, you may or may not have
gotten the services."
Lynn Duby, commissioner of the state's Department of Behavioral and
Developental Services, said no one is sure what impact the settlement
will have on the state budget.
PEOPLES BANK: KY Residents File Suit Over Erpenbeck Homes Controversy
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The Peoples Bank of Northern Kentucky faces a class action filed in
Boone Circuit Court by prominent attorney Stan Chesley on behalf of
about 200 homeowners who bought Erpenbeck Co. homes and now find their
titles to be in question, the Kentucky Post reports. The suit alleges
the Bank allowed the Erpenbeck Co. and Erpenbeck & Kennedy Builders to
deposit checks from homebuyers made out to other lenders into accounts
held by Erpenbeck at Peoples.
Mr. Chesley, who is handling the suit along with Covington attorney
Brandon Voelker, said, "This gets to the nub of the issue.These people
had checks misappropriated. That's conversion. That's fraud.It's one
thing if it happened as a mistake and the bank makes it good. But this
is not a one-time thing. This was not a mistake. The bank had two offi
cers who had a conflict of interest."
The Bank's founder and President, John Finnan, and Vice President, Marc
Menne, have resigned in the wake of the Erpenbeck controversy. Both
had had private business dealings with Erpenbeck, according to the
Kentucky Post.
The Bank has since put respected longtime Northern Kentucky banker, Mer
Grayson, in charge. "One of the best things to happen is they brought
an outsider to the bank with no agenda but to get it fixed," Mr.
Chesley said. "He wants the bank to live. We want the bank to live."
Mr. Chesley also believes the bank is fully able to restore the money
to his clients. "We want full and fair compensation," he said. He
also wants to get the money back into the hands of the homeowners as
quickly as possible. "I'd like to see this over in months, not years."
PITTSBURGH STEELERS: Fans Ask Seating Arrangements Suit To Be Revived
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A group of Pittsburgh Steelers season ticket holders asked the
Pennsylvania Appeals Court to revive a class action filed against the
team, over the "bait and switch" tactics the team allegedly used in
assigning seats at Heinz Field, the Pittsburgh Post-Gazette reports.
The suit commenced in November last year, alleging that a brochure that
the team printed three years ago did not correspond to the location of
their seats at the Heinz Field. In 1998, the team allegedly promised
the plaintiffs good seats in rows close to the field but delivered less
desirable seat locations in 2001. These locations included areas high
in the upper regions of Heinz Field, in end-zone bleachers or in areas
where fans can't see the scoreboard and replays.
In December, the Philadelphia Commom Pleas Court refused to allow a
full trial in the suit, and granted the Steelers' motion to dismiss the
suit. Attorney for the plaintiffs William J. Helzlsouer is now asking
the three-judge panel to grant his clients a trial on their claims
against the Steelers, the Post-Gazette states.
Attorney for the Steelers Mike Manzo Manzo denied that the team had
misled or deceived any seat buyers. He told the Post-Gazette the
plaintiffs are putting too much emphasis on a brochure about the new
stadium that the team sent out in late 1998, months before construction
had begun on Heinz Field.
Supporting the Steelers' defense is the Sports & Exhibition Authority,
a city-county agency that owns Heinz Field and also is named as a
defendant. Its lawyer, Mark Hornak, said the 1998 brochure stated that
seat locations "would be made once the stadium was actually built.
"People knew that," he said.
ROCKY MOUNTAIN: Recalls 660 Mountain Bikes for Possible Accident Hazard
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Rocky Mountain Bicycles is cooperating with the United States Consumer
Product Safety Commission (CPSC) by voluntarily recalling about 660
mountain bicycles. The chainstay that holds the rear wheel in place
can fail, causing the rear wheel to separate from the bicycle. This can
cause the rider to lose control and crash. The Company has received
one report of an incident where the rear wheel separated from the
bicycle. The rider sustained minor abrasions due to the crash.
This recall involves 16.5-, 18- and 19-inch Slayer and Edge full-
suspension, mountain bicycles. The Slayer model is black metallic with
red decals on the top tube and downtube that read "Slayer" and "Rocky
Mountain." The Edge model is royal blue with yellow decals on the top
tube and downtube that read "Edge" and "Rocky Mountain." "Made in
Canada" is printed on decals on both model bicycles.
Specialty bicycle shops sold the bicycles nationwide from January
2001 through February 2002. The "Edge" model sold for about $1,750 and
the "Slayer" for about $2,150.
For more information, contact the Company by Phone: 800-663-2512
between 8 am and 4 pm PT Monday through Friday or visit the firm's Web
site: http://www.bikes.com
RYOBI TECHNOLOGIES: Recalls 6T Hammer Drills For Physical Injury Risk
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Ryobi Technologies, Inc. (RTI) is cooperating with the United States
Consumer Product Safety Commission (CPSC) by voluntarily recalling
about 6,000 RYOBI brand hammer drills. The on-off trigger can stick,
or the lock-on button can jam, posing a risk of physical injury to
consumers.
The Company has not received any reports of injuries or incidents
involving these hammer drills. This recall is being conducted to
prevent the possibility of injuries.
Only RYOBI brand hammer drills with model number HD501 are included in
the recall. Model number HD501K may appear on the packaging of this
product. "RYOBI" and the model number appear on the side of the drill.
The drills have blue plastic housings, black triggers with yellow lock-
on buttons, and yellow/orange gear-shift dials on the side. The drills
are equipped with an accessory front-end handle that includes a depth
gauge, and were sold in a gray plastic case.
Home improvement retailers sold the hammer drills nationwide from late
December 2001 through January 2002 for about $50.
For more information, contact the Company by Phone: 800-867-9624
between 8 am and 5 pm ET Monday through Friday or visit the firm's Web
site: http://www.ryobitools.com
SULZER MEDICA: OH Federal Judge Approves $1B Implants Suit Settlement
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Ohio federal judge Kathleen O'Malley approved the US$1 billion
settlement proposed by Sulzer Medica to settle over 2,000 lawsuits
relating to faulty hip and knee implants, which the Company recalled in
December 2000, FT.com reports.
The Company recalled the artificial joints due to a manufacturing
problem that had contaminated some with an oily residue. The substance
prevented the new joint from bonding with patients' bones. Soon after,
personal injury and class action lawsuits were filed in Ohio Federal
Court.
Under the settlement, the Company will compensate the plaintiffs with
US$200,000 each. Judge O'Malley said the settlement was "fair,
reasonable and appropriate." Patients have until May 15 to decide
whether to opt out of the settlement and the Company has a further five
days after that to decide whether to accept the settlement.
According to FT.com, the Company will only accept the deal if it is
assured that the vast majority of the plaintiffs agree to drop all
legal claims against the Company. If this does not happen then the
group will start bankruptcy proceedings for Sulzer Orthopaedics, its US
subsidiary.
Stephan Rietiker, the Company's new Chief Executive, is confident that
the "opt out rate will remain at a minimal level." Nevertheless, the
Company's final decision will rest heavily on not only the number of
patients opting out, but also on an assessment of the states in which
the remaining cases have been failed, and the degree of suffering of
the remaining patients.
THIMEROSAL LITIGATION: Aventis Pasteur Faces Suit in Ontario Court
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A class action lawsuit was filed against pharmaceutical firm Aventis
Pasteur in Ontario Superior Court yesterday on behalf of children who
developed autism after receiving vaccines preserved with thimerosal, a
mercury derivative.
The Company manufactured a widely used DPT (Diptheria/Pertussis/
Tuberculosis) vaccine contained thimerosal until 1994. Thimerosal is a
compound of 50% mercury, a highly toxic metal known to cause severe
neurological and behavioural damage. Infants are particularly
vulnerable to mercury poisoning due to their incomplete brain
development.
Canadian victims represented in the Lyons suit include nine-year-old
Keean East, who began life as a healthy, happy, alert and
developmentally normal infant. Soon after receiving a series of three
DPT vaccines containing thimerosal, he became withdrawn and
unresponsive, failing to develop normal language, social, and motor
skills. He has since been diagnosed with autism.
Although the medical and pharmaceutical communities knew of mercury's
dangers for almost a century, they did not advocate removal of
thimerosal from pediatric vaccines until the late 1990s. In July 1999,
the American Academy of Pediatrics issued a statement calling for
thimerosal-free vaccines. That same year, a US Food and Drug
Administration report noted that infants injected with multi-dose vials
of thimerosal-preserved vaccines can receive approximately 100 times
the level of mercury exposure considered safe by the Environmental
Protection Agency.
Klein Lyons is the first Canadian law firm to launch a class action
suit on behalf of children allegedly damaged by thimerosal, but dozens
of similar suits have already been filed in the US. Autism rates have
risen exponentially over the past 30 years, seemingly coinciding with
the use of thimerosal in infant vaccines. In 1970, approximately one
in 2,000 children experienced autistic symptoms. Today, the US Center
for Disease Control estimates that one in 150 children suffers from
autistic symptoms.
"Young Keean is just one among thousands of Canadian children whose
futures may have been destroyed by needless exposure to toxic mercury,"
said David Klein, managing partner of Klein Lyons. "This tragedy could
easily have been avoided."
For more information, contact David Klein by Phone: 604-874-7171 by E-
mail: dklein@kleinlyons.com or visit the firm's Web site:
http://www.kleinlyons.com
Securities Fraud
COREL CORPORATION: PA Judge Allows Expansion of Class Period in Suit
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The United States District Court for the Eastern District of
Pennsylvania allowed the class in the consolidated securities class
action against software Company Corel Corp. to be expanded to include
purchasers of the Company's common stock from December 7,1999 to March
20, 2000.
The consolidated suit arose from several class actions, the first of
which was commenced in March 2000. The suit, initially filed on behalf
of purchasers of the Company's stock from Dec 7,1999 to December 21,
1999, 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
Company's financial condition. Numerous other complaints were filed
thereafter, each making similar allegations and referencing the same
class period as the initial claims.
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.
Lawyers for Corel had argued that the case should be limited to a two-
week window ending on Dec. 21, 1999, the same time limits the
plaintiffs themselves had proposed when the case was first filed.
Plaintiffs in the suit countered by saying the December 20 announcement
of fourth-quarter losses was just the tip of the iceberg, and that the
Company continued to hide the true state of its financial problems for
three more months, according to a law.com report.
Federal Judge Anita Brody upheld the plaintiffs' arguments, rejecting
the Company's contention that the plaintiffs cannot establish
"commonality" for class members who purchased stock after the Company's
December 1999 announcement of an expected loss in its fourth quarter
results.
Judge Brody said the defense misconstrued the changes the plaintiffs
made in their amended complaint. "Instead of focusing on a single
incident of misrepresentation, the plaintiffs now advance the theory
that the defendants engaged in a systematic course of conduct of
misrepresenting the true financial state of the corporation," she said.
DOV PHARMACEUTICAL: Schoengold & Sporn Commences Securities Suit in NY
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Schoengold & Sporn, PC initiated a securities class action on behalf of
all persons or institutions who purchased shares of Dov Pharmaceutical,
Inc. (NASDAQ: DOVP) pursuant and/or traceable to its initial public
offering on April 25, 2002, in the United States District Court for the
Southern District of New York.
The suit alleges that defendants violated Sections 11, 12(a)(2) and 15
of the Securities Act of 1933 by issuing a materially false and
misleading prospectus in connection with the offering because the
prospectus failed to adequately and timely disclose the Company's
correct financial results.
As alleged in the complaint, just before the offering priced, the
Company made a last-minute change to its Offering documents to reflect
a revision of its 1999 financial results for a joint venture in Bermuda
with Elan Corporation. The accounting change widened the Company's net
loss in the venture, known as Dov Bermuda Ltd., to $11.9 million in
1999, from a previously reported loss of $10.2 million.
The complaint alleges that this change was deeply buried in the revised
documents where it was very difficult, if not impossible, for investors
to see and evaluate prior to the commencement of the trading. As a
result, the complaint alleges, investors were deprived of the
opportunity to rely on the Company's new financial information, causing
a steep decline in the price of the Company's shares once they began to
be publicly traded and the Company's true financial information became
known.
When Company shares finally opened for trading for the first time, the
price of Company shares began trading at $11.25 per share (after having
been priced at $13 per share) and reached an intra-day high of $12 per
share. By the end of the day, the stock had closed at $8.70 per share,
or 33% below the offering price, making it one of the worst performing
IPOs of the past two years.
For more information, contact Jay P. Saltzman or Ashley Kim by Mail: 19
Fulton Street, Suite 406, New York, New York 10038 by Phone:
212-964-0046 or 866-348-7700 by Fax: 212-267-8137 or by E-mail:
Shareholderrelations@spornlaw.com
DYNEGY INC.: Lockridge Grindal Commences Securities Suit in S.D. TX
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Lockridge Grindal Nauen PLLP initiated a securities class action in the
United States District Court for the Southern District of Texas,
Houston Division, on behalf of purchasers of Dynegy, Inc. (NYSE:DYN)
common stock during the period April 17, 2001 to April 25, 2002,
inclusive.
The suit charges the Company and certain of its officers and directors
with violations of the federal securities laws. The suit alleges,
among other things, that the defendants manipulated the market price of
the Company's common stock by artificially inflating its reported cash
flow from operations and that it failed to disclose material
information, including the details of its "Project Alpha," a
transaction involving two special purpose entities and a partnership
created by the Company for purposes of increasing cash flow and
decreasing tax costs. As a result of defendants' misleading statements
and omissions during the class period, the price of the Company's
common stock traded at artificially inflated prices.
For more information, contact Karen M. Hanson by Mail: 100 Washington
Avenue South Suite 2200 Minneapolis, MN 55401 by Phone: 612-339-6900 or
by E-mail: kmhanson@locklaw.com
DYNEGY INC.: Schatz & Nobel Commences Securities Fraud Suit in S.D. TX
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Schatz & Nobel PC initiated a securities class action status in the
United States District Court for the Southern District of Texas on
behalf of all persons who purchased or otherwise acquired the publicly
traded securities of Dynegy, Inc. (NYSE: DYN) between April 17, 2001
and April 24, 2002, inclusive.
The suit alleges that the Company, a provider of natural gas services,
and three members of its senior management, misled the investing public
during the class period by classifying a certain transaction as
operating activity rather than financing activity as required by
generally accepted accounting principles.
Specifically, the suit alleges that the Company entered into a five-
year deal to trade natural gas between a specially created entity and
DMT Supply L.P., a partnership in which the Company has an interest.
Under the terms of the deal, DMT would purchase natural gas at below
market rates from said entity for most of the first year, and then sell
natural gas back at below market rates for the remainder of the five-
year term. The two sides of the transaction were supposed to cancel
each other out.
By reporting this transaction as operating activity rather than
financing activity, the Company used this deal to report greater cash
flow from its current operations and thereby artificially inflate the
market price of its publicly traded securities.
For more information, contact Andrew M. Schatz, Patrick A. Klingman,
Wayne T. Boulton or Nancy A. Kulesa by Phone: 800-797-5499 by E-mail:
sn06106@aol.com or visit the firm's Web site: http://www.snlaw.net
ENRON CORPORATION: Defendants Ask To Be Dismissed From Securities Suits
-----------------------------------------------------------------------
Several of the defendants named in the two class actions pending in the
United States District Court for the Southern District of Texas against
collapsed energy trader Enron Corporation asked to be dismissed from
the suits, saying they are not liable under the facts or the law, the
Houston Chronicle reports.
Enron's shareholders and employees commenced dozens of class actions
after the Company filed the nation's biggest bankruptcy late last year,
alleging they lost millions on their investments in Company stocks.
The suits were later consolidated into two suits, one for the
stockholders, and another for the former employees. Last month, the
plaintiffs added as defendants to the suits nine financial
institutions, two law firms and officers and directors of Enron and its
auditor Arthur Andersen LLP.
According to the Houston Chronicle, the response from defendant Bank of
America summarized financial institutions' complaints about the suits.
The response says, "(The) allegations fail to show that Bank of America
did anything more than provide the services that commercial and
investment banks routinely provide for their clients.The fact that the
allegations against Bank of America are so weak demonstrates that the
only reason Bank of America is a party to this litigation is
plaintiffs' keen interest in a solvent defendant."
Richard Mithoff, attorney for defendant JP Morgan, told the Chronicle "
The plaintiffs are essentially claiming there is a massive conspiracy
involving every bank in America." JP Morgan contended the shareholder
plaintiffs are improperly trying to extend securities fraud law to
Enron professionals, when a US Supreme Court case disallows aiding and
abetting security cases.
In the employee lawsuit, which alleges racketeering and conspiracy, JP
Morgan, again like most defendants, argued that the law bars claims of
racketeering in securities cases, and plaintiffs are being disingenuous
by claiming the case is about mail and wire fraud.
Accused law firms Vinson & Elkins and Kirkland & Ellis also asked to be
dismissed from the suit. Lawyer Joe Jamail told the Chronicle, "The
case against Vinson & Elkins has no merit.I'm not going down easy.
Vinson & Elkins is not going down easy." He added the law firm, like
the banks, has federal case law to keep it out of the shareholder suit,
since the lawyers made no direct representations to investors.
Former Enron Chairman Kenneth Lay also asked for a dismissal from the
suit, filing a motion which said, "It is exceedingly clear that Ken Lay
did not believe for a moment that Enron was a house of cards about to
collapse and that its stock price was grossly inflated.The trading
record shows instead that he believed that the company would continue
to grow and prosper. That he turned out to be wrong is not a basis for
a securities fraud claim."
Trey Davis, spokesman for lead shareholder plaintiff University of
California, said the motions to dismiss are expected and the normal
practice. "We believe, however, that our complaint is well-pled and
should survive the motions to dismiss," Mr. Davis told the Chronicle.
"At the end of the day, the court will uphold most, if not all, of the
case," said Roger Greenberg, a Houston lawyer working for the
plaintiffs in the shareholder case. "The fraud was so extensive and so
wide, the defendants' positions ring hollow."
EXELON CORPORATION: Charles Piven Commences Securities Suit in N.D. IL
----------------------------------------------------------------------
The Law Offices Of Charles J. Piven, PA initiated a securities class
action on behalf of shareholders who acquired Exelon Corporation
(NYSE:EXC) securities between April 24, 2001 and September 27, 2001,
inclusive, in the United States District Court for the Northern
District of Illinois, against the Company and:
(1) Corbin A. McNeill, Jr.,
(2) John W. Rowe and
(3) Ruth Ann Gillis
The action 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: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
GEMSTAR-TV GUIDE: Berger & Montague Lodges Securities Fraud Suit in CA
----------------------------------------------------------------------
Berger & Montague, PC initiated a securities class action against
Gemstar-TV Guide International Inc. (Nasdaq: GMST) and certain of its
principal officers and directors in the United States District Court
for the Central District of California on behalf of all persons or
entities who purchased the Company's publicly traded securities between
August 11, 1999 and April 1, 2002.
The complaint alleges that in contravention to generally accepted
accounting principles (GAAP), defendants materially misrepresented the
Company's Fiscal 2001 financial results by failing to disclose that
$20.8 million of the Company's $101 million in Interactive group sales
came from a barter exchange of intellectual property with Fantasy
Sports and that $58.9 million of its $327 million Technology and
Licensing segment revenue for 2001 was related to accruals based on
Scientific-Atlanta Inc. (SFA) set-top box shipments that would only be
realized upon a successful ruling in a civil suit in Georgia federal
court.
Additionally, the complaint alleges that defendants violated federal
securities laws through the issuance and dissemination of a materially
false and misleading registration statement containing the Joint
Proxy/Prospectus, and amendments thereto used in connection with the
consummation of a merger between the Company and SkyMall, Inc. in July,
2002.
For more information, contact Todd S. Collins or Kimberly A. Walker by
Mail: 1622 Locust Street, Philadelphia, PA 19103 by Phone: 888-891-2289
or 215-875-3000 by Fax: 215-875-5715 by E-mail: InvestorProtect@bm.net
or visit the firm's Web site: http://www.bergermontague.com
GERBER SCIENTIFIC: Wechsler Harwood Commences Securities Suit in CT
-------------------------------------------------------------------
Wechsler Harwood Halebian & Feffer, LLP initiated a securities class
action against Gerber Scientific, Inc. (NYSE:GRB) and several of its
top officers in the United States District Court for the District of
Connecticut, on behalf of all investors who bought the Company's common
stock from May 27, 1999 through April 12, 2002.
The suit charges defendants with violations of federal securities laws
for issuing a series of false and misleading press releases concerning
the Company's financial condition and business prospects. The suit
alleges, that throughout the class period, the Company was employing
improper inventory and reserve accounting practices in violation of
generally accepted accounting principals (GAAP).
As a result, the price of the Company's common stock was artificially
inflated throughout the class period, reaching as high as $24.50 per
share. However, on April 15, 2002, the Company announced that it
expected to take a $12 million pre-tax charge in its fiscal fourth
quarter, the period ending April 30, 2002.
Moreover, the Company noted that in response to an investigation by the
SEC into its inventory and reserve accounting practices, it was
conducting an internal review of its financial reporting for the period
January 1, 1998 through April 30, 2002.
The Company further stated that its investigation is ongoing and once
it has been completed, the Company will likely restate its financial
results. In response, the Company's stock price plummeted to $6.99 per
share, a decline of more than 71% from its class period high.
For more details, 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
GERBER SCIENTIFIC: Schatz & Nobel Commences Securities Suit in CT Court
-----------------------------------------------------------------------
Schatz & Nobel, PC initiated a securities class action in the United
States District Court for the District of Connecticut on behalf of all
persons who purchased or otherwise acquired the securities, including
common stock and options, of Gerber Scientific, Inc. (NYSE: GRB)
between May 27, 1999 and April 12, 2002, inclusive.
The suit alleges that the Company, one of the world's leading makers of
automated manufacturing systems, together with six top officers,
violated federal securities laws. Specifically, the defendants are
alleged to have violated generally accepted accounting principles,
resulting in an overstatement of earnings, by failing to properly
write-down inventory or establish appropriate reserves.
On April 15, 2002, prior to the opening of the market, the Company
announced that it expected to take a $12 million pre-tax charge in its
fiscal fourth quarter, the period ending April 30, 2002. Additionally,
the Company announced that, in response to a SEC investigation into its
inventory and reserve accounting practices, it had hired a law firm and
forensic accounting firm and that an internal review of its financial
reporting for the period January 1, 1998 through April 30, 2002 was
underway.
The Company further revealed that it will likely restate its financial
results for the appropriate periods upon completion of its
investigation.
In response to these announcements, the price of the Company's common
stock declined to $6.99 per share - a decline of more than 71% from a
class period high of $24.50 per share reached on July 6, 1999.
For more information, contact Andrew M. Schatz, Patrick A. Klingman,
Wayne T. Boulton or Nancy A. Kulesa by Phone: 800-797-5499 by E-mail:
sn06106@aol.com or visit the firm's Web site: http://www.snlaw.net
JDS UNIPHASE: Jeffrey Neiman Commences Securities Fraud Suit in N.D. CA
-----------------------------------------------------------------------
The Law Firms Jeffrey Neiman, Joseph Garland and Mel Urbach initiated a
securities class action against JDS Uniphase Corporation (Nasdaq: JDSU)
and certain of its officers and directors in the United States District
Court for the Northern District of California, on behalf of all
purchasers of the Company's securities between July 27, 1999 and July
26, 2001, inclusive.
The suit charges the Company and certain of its officers and directors
with violations of the federal securities laws. It alleges, among
other things, that during the class period Defendants were motivated to
inflate the price of Company stock so the Company could make
acquisitions using inflated stock and so the individual defendants, top
officers and directors of the Company, could sell their own shares at
inflated prices.
The Company also misrepresented, the complaint asserts, the success of
its largest acquisitions, including Optical Coating Labs, Cronos
Integrated Microsystems, E-Tek Dynamics, and SDL, Inc. The individual
defendants and the Company's controlling shareholder took advantage of
the inflation by selling or disposing of 25.2 million shares of their
Company stock for proceeds of $2.1 billion.
On July 26, 2001, the Company announced a restatement of its March 31,
2001 results, the write-off of $44 billion in goodwill associated with
certain acquisitions, inventory write-downs, and earnings per share for
the 2001 fiscal year of $0.16, with an expected loss of $0.15 per share
in its fiscal 2002. On this news, Company shares dropped to $7.90 - 94%
below their class period high of $146.32.
For more information, contact Jeffrey Neiman by Phone: 866-539-3788 or
718-677-1430 by Fax: 718-258-2937 or by E-mail: JeffreyNeiman@AOL.COM
L90 INC.: Bernstein Liebhard Commences Securities Fraud Suit in C.D. CA
-----------------------------------------------------------------------
Bernstein Liebhard & Lifshitz LLP initiated a securities class action
on behalf of all persons who purchased or acquired L90, Inc. (NASDAQ:
LNTY) securities between July 26, 2001 and March 12, 2002, in the
United States District Court, Central District of California.
The complaint charges the Company and certain of its officers with
violations of the Securities Exchange Act of 1934. The Company is a
provider of marketing services. The suit alleges that as part of their
effort to boost the price of the Company's stock, defendants
misrepresented the Company's true prospects in an effort to conceal its
improper acts until they were able to conceal their fraud by selling
the Company to a third party prior to filing the Company's 10-K (due
March 31, 2002).
In order to overstate revenues and assets in its second and third
quarters of 2001, the Company violated generally accepted accounting
principles and SEC rules by engaging in improper "roundtrip"
transactions with HomeStore.com and its customers. These transactions
had the effect of dramatically overstating revenues and assets.
On February 4, 2002, the Company issued a press release entitled, "L90
Reports Regulatory Inquiries." The press release stated in part: "L90,
Inc., an online media and direct marketing company, today announced
that the Company has received notice from the Securities and Exchange
Commission that the Commission is conducting an investigation into the
Company. In connection with this investigation, the Commission has
issued the Company and one of its directors subpoenas requesting
documents related primarily to the Company's financial records." On
this news the Company's shares plummeted by more than 50% the following
trading day and continued to plummet further in the weeks that followed
and defendants revealed further incriminating facts.
On March 12, 2002, the Company issued a press release entitled, "L90
Provides Additional Information on Internal Investigation." The press
release stated in part: "L90, Inc., an online media and direct
marketing company, today provided additional information on the status
of the ongoing internal investigation by the Company and the Audit
Committee of its board of directors in response to the previously
announced Securities and Exchange Commission investigation of the
Company, and the request for information from Nasdaq Listing
Investigations."
For more details, contact Ms. Linda Flood, Director of Shareholder
Relations by Mail: 10 East 40th Street, New York, New York 10016 by
Phone: 800-217-1522 or 212-779-1414 or by E-mail: LNTY@bernlieb.com.
LUMENIS LTD.: Milberg Weiss Commences Securities Fraud Suit in S.D. NY
----------------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class
action lawsuit on behalf of purchasers of the securities of Lumenis
Ltd. (Nasdaq: LUME) between August 2, 2001 and May 7, 2002, inclusive,
in the United States District Court, Southern District of New York
against the Company and:
(1) Jacob Frenkel,
(2) Yacha Sutton,
(3) Sagi Genger and
(4) Asif Adil
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 August 2, 2001 and May 7, 2002, thereby artificially
inflating the price of the Company's securities.
Specifically, the complaint alleges that, throughout the class period,
defendants issued materially false and misleading statements regarding
the Company's financial performance and stated that the Company was
successfully executing its business plan and that demand for the
Company's products remained strong.
As alleged in the complaint, these statements were materially false and
misleading because they failed to disclose and misrepresented, among
other things:
(i) that the Company was experiencing declining demand for its
products in the European market and that it would have to
reorganize that division;
(ii) that demand for the Company's products was weakening and the
Company would not meet its revenue estimates which it had
caused and cultivated in the market; and
(iii) that the Company was experiencing price competition which was
forcing it to lower prices and causing it to experience
declining gross margins.
On May 7, 2002, the last day of the class period, the Company issued a
press release announcing that it would miss revenue estimates for the
first quarter of 2002, the period ending March 31, 2002 because of,
among other things, weakening demand for the Company's products, lower
sales in Europe, management changes and reorganization of the Company's
activities in Europe.
In response to this negative announcement, the price of the Company's
stock dropped $6.74 per share to $3.30 per share, on heavy trading
volume.
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: Lumeniscase@milbergNY.com or visit the
firm's Website: http://www.milberg.com
NEXTCARD INC.: Consolidated Securities Suit To be Amended in N.D. CA
--------------------------------------------------------------------
The consolidated securities class action filed against Nextcard, Inc.
and certain of its directors and officers in the United States District
Court for the Northern District of California is due to be amended on
May 17,2002.
The consolidated suits arose from nine substantially similar suits,
alleging violations of the federal securities laws arising out of the
Company's October 31, 2001 press release announcing that its wholly
owned banking subsidiary, NextBank, would, among other things, re-
classify as credit losses certain loan losses that were previously
classified as fraud losses as well as increase reserves, and the
fact that due to these changes in the third quarter 2001, NextBank was
considered to be significantly undercapitalized under federal banking
regulations. The suits assert class periods of March 30, 2000 through
October 30, 2001, and seek unspecified damages. The court later
ordered the suits consolidated.
The Company plans to file a motion to dismiss these actions, but do not
expect a ruling before October 2002. No discovery or other proceedings
are pending in the suit.
Meanwhile, a shareholder derivative lawsuit is pending in the Delaware
Chancery Court against all of the Company's directors, alleging breach
of fiduciary duty, misappropriation of confidential information for
personal profit, and contribution and indemnity.
No schedule is set for this matter, which arises out of the same facts
and circumstances as the federal class actions described above. The
Company anticipates that if the case is litigated, it will seek to
dismiss the claims on grounds that the plaintiff lacks standing to
pursue the claims due to his failure to make a pre-suit demand.
PEREGRINE SYSTEMS: Lovell & Stewart Commences Securities Suit in NY
-------------------------------------------------------------------
Lovell & Stewart, LLP initiated a securities class action on behalf of
all persons and entities who purchased, converted, exchanged or
otherwise acquired the common stock of Peregrine Systems, Inc.
(Nasdaq:PRGN) between May 10, 2000, and May 3, 2002, inclusive.
The suit is pending in the United States District Court for the
Southern District of New York against the Company and:
(1) Stephen P. Gardner, Chairman of the Board and Chief Executive
Officer,
(2) Matthew C. Gless, Chief Financial Officer, and
(3) Arthur Andersen, LLP
The lawsuit asserts claims under Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC
thereunder, as well as pendant New York State law claims for fraud,
negligent misrepresentation, and intentional deceit and seeks to
recover damages.
The suit alleges the defendants violated the federal securities laws by
making misrepresentations and/or omissions in connection with false
and/or misleading financial statements. Particularly, the defendants
filed materially misleading financial results with the Securities and
Exchange Commission in that such filings failed to reflect the true
amount of the Company's revenues during fiscal 2001 and fiscal 2002.
The defendants further failed to disclose Andersen's accounting
irregularities in reporting inflated revenues for fiscal 2001 and
fiscal 2002. When the Company's new auditors, KPMG, required
additional time to prepare its fiscal 2002 fourth quarter earnings,
the defendants failed to disclose the suspected overstatement of $100
million of income for fiscal 2001 and fiscal 2002.
Finally, the defendants shocked the market on the morning of May 6,
2002, by announcing the resignation of Mr. Gardner and Mr. Gless and
the commencement of an internal investigation regarding as much as $100
million in revenues previously reported for fiscal 2001 and fiscal
2002.
For more details, contact Christopher Lovell or Victor E. Stewart by
Phone: 212-608-1900 by E-mail: sklovell@aol.com or visit the firm's Web
site: http://www.lovellstewart.com
PEREGRINE SYSTEMS: Berger & Montague Commences Securities Suit in CA
--------------------------------------------------------------------
Berger & Montague, PC initiated a securities class action against
Peregrine Systems, Inc. (Nasdaq: PRGN), and principal officers Stephen
P. Gardner, and Matthew C. Gless, in the United States District Court
for the Southern District of California on behalf of all persons or
entities who purchased or acquired the Company's securities, between
July 24, 2001 and May 3, 2002, inclusive including any person or
entities who acquired securities as a result of the Company's
acquisition of Remedy Corp.
The Company is a global software company that provides Infrastructure
Management Solutions which companies use to manage their assets, from
information technology equipment to fleets of vehicles. The suit
alleges that during the Class Period, defendants violated Section 10(b)
and 20(a) of the Securities Exchange Act of 1934, by making materially
false and misleading statements regarding Peregrine and its audit
activities, including its revenue recognition practices.
On May 6, 2002, the Company announced that its Board of Directors had
authorized its audit committee to conduct an internal investigation
into potential accounting inaccuracies, which KPMG, its newly hired
independent auditors, had brought to the committee's attention.
The transactions involved revenue recognition irregularities relating
to the Company's indirect sales channels, totaling as much as $100
million, which may have been improperly recorded in fiscal 2001 and
2002. The Company disclosed that these channel transactions and other
accounting matters to be investigated may impact financial results for
periods in fiscal 2002 and prior, and that the scope and magnitude of
the matters had not been determined.
The Company also disclosed that it has informed the SEC of its internal
investigation. At the same time, the board announced that its Chairman
of the Board and CEO Stephen Gardner, and its Chief Financial Officer
Matthew Gless, had both resigned, and were being replaced.
For more details, contact Todd S. Collins, Phyllis M. Parker or
Kimberly A. Walker by Mail: 1622 Locust Street, Philadelphia, PA 19103
by Phone: 888-891-2289 or 215-875-3000 by Fax: 215-875-5715 by E-mail:
InvestorProtect@bm.net or visit the firm's Web site:
www.bergermontague.com
PEREGRINE SYSTEMS: Schubert & Reed Lodges Securities Suit in S.D. CA
---------------------------------------------------------------------
Schubert & Reed LLP initiated a securities class action in the United
States District Court for the Southern District of California against
Peregrine Systems Inc. (Nasdaq:PRGN) and certain of its officers, on
behalf of all persons who purchased the Company's common stock during
the period July 19, 2000 through May 6, 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 materially false and misleading
statements concerning the Company's financial results that had the
effect of artificially inflating the price of the Company's common
stock during the class period.
Specifically, on May 6, 2002, the Company announced that it was
investigating revenue recognition irregularities discovered by its
auditor affecting an estimated $100 million in revenue recognized in
fiscal 2001, ended March 31, 2001, and fiscal 2002, ended March 31,
2002. KPMG, who discovered the irregularities, took over the company's
audit in April, replacing Arthur Andersen. The same press release
announced the "resignation" of Steve Gardner, Chairman of the Board and
CEO, and Matt Gless, CFO, EVP - Finance and also a Director.
The Company disclosed that "these transactions were recorded initially
as revenue from the company's indirect channels and may have been
written off in later quarters. These channel transactions and other
accounting matters to be investigated may impact financial results for
periods in fiscal 2002 and prior. Peregrine has informed the staff of
the SEC of its audit committee's internal investigation and will keep
the SEC informed of its progress."
On news of the financial irregularities, the Company's stock fell 65%
with half of all outstanding shares trading hands in a single day. The
stock closed at $0.89, down from prices approaching $9 in the prior
week and down from a class period high of $33.
For more details, contact Robert C. Schubert or Juden Justice Reed by
Mail: Two Embarcadero Center, Suite 1660, San Francisco, CA 94111 by
Phone: 415-788-4220 by Fax: 415-788-0161 or by E-mail: mail@schubert-
reed.com.
PINNACLE HOLDINGS: Asks For Dismissal of Securities Suit in M.D. FL
-------------------------------------------------------------------
Pinnacle Holdings, Inc. asked the United States District Court for the
Middle District of Florida, in Tampa to dismiss a consolidated
securities class action filed on behalf of all persons who purchased
the Company's common stock during the period between June 29, 1999 and
March 17, 2001. The suit names as defendants the Company and:
(1) Steven R. Day, Chief Executive Officer,
(2) Jeffrey J. Card, former Chief Financial Officer,
(3) Robert J. Wolsey, former Chief Executive Officer,
(4) PricewaterhouseCoopers LLP,
(5) several of the Company's current and former directors, and
(6) the underwriters of the Company's January 18, 2000 secondary
offering
The consolidated suit alleges that the defendants violated Section 11
of the Securities Act of 1933, by permitting the publication and
dissemination of the prospectus for the January 18, 2000 public
offering. The suits further allege that the prospectus contained
various misrepresentations concerning, among other things, the value of
the Company's towers, its due diligence investigation and financial
statements relating to the Motorola Antenna Site Acquisition.
The suits also contend that the directors, Mr. Day and Mr. Wolsey are
vicariously liable pursuant to Section 15 of the Securities Act for
Pinnacle's alleged violation of Section 11. Section 15 of the
Securities Act makes those persons who control a "primary violator"
vicariously liable for the primary violator's violation of Section 11.
The suit further alleges that the defendants violated Section 10(b) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder, by making various allegedly misleading statements in
various press releases and filings with SEC relating to:
(1) certain of the Company's financial statements,
(2) the Motorola Antenna Site Acquisition,
(3) the nature of the SEC's investigation concerning its
accounting practices and
(4) the Company's relationship with its former accountants
The plaintiffs have also alleged that Mr. Day, Mr. Card and Mr. Wolsey
violated Section 20 of the Securities Exchange Act, which imposes
vicarious liability on those persons who control a primary violator of
Section 10(b) and Rule 10b-5.
The defendants moved to dismiss the suit in October 2001. An effect of
this motion filing is to postpone any discovery in this case until
after the court rules on the motions.
The Company intends to respond appropriately and in its best interests
to the consolidated action. However, it cannot give any assurance that
it will prevail in such litigation.
SEITEL INC.: Berman DeValerio Commences Securities Suit in S.D. TX
------------------------------------------------------------------
Berman DeValerio Pease Tabacco Burt & Pucillo initiated a securities
class action against Seitel, Inc. (NYSE:SEI) and several of its top
officers, accusing them of pumping up the company's stock price by
improperly recording revenue. The suit was commenced in the United
States District Court for the Southern District of Texas, on behalf of
all investors who bought Seitel common stock from May 5, 2000 through
May 3, 2002.
According to the complaint, the Company and the individual defendants
materially misrepresented the Company's financial results for 2000 and
2001 by improperly recognizing revenues. Most of the improper revenue,
the complaint says, was attributable to the Company's undisclosed
practice of recording revenue for the licensing of its seismic data and
other geophysical information before delivering data to customers. The
practice ran afoul of generally accepted accounting principles and
artificially inflated the Company's stock price during the class
period, the complaint says.
The suit alleges that the defendants were motivated to commit the
accounting fraud in order to earn commissions and bonuses, which were
tied to the Company's revenues and earnings. The suit claims the
defendants had nearly $10 million of insider stock sales during the
class period.
On April 1, the Company announced that it was restating its financial
results for the year 2000 and the first three quarters of 2001. The
restatement reduced reported revenue by 15% in 2000 and 30% during the
first three quarters of 2001. It also turned what had purportedly been
profits during those periods into losses, the lawsuit states.
By the time the Company further detailed the restatements on May 3,
2002, its stock price had plunged to $5.65 per share, more than 75%
below the class period high of $22.72 per share, the complaint says.
For more details, contact Julie Richmond or Michael G. Lange by Mail:
One Liberty Square, Boston, MA 02109 by Phone: 800-516-9926 by E-mail:
law@bermanesq.com or visit the firm's Web site:
http://www.bermanesq.com.
SPECIALTY LABORATORIES: Charles Piven Ldoges Securities Suit in C.D. CA
-----------------------------------------------------------------------
The Law Offices Of Charles J. Piven, PA initiated a securities class
action on behalf of shareholders who acquired Specialty Laboratories,
Inc. (NYSE:SP) publicly traded securities pursuant to the Company's
registration statement/prospectus together with those who purchased
their shares in the open market during the period between December 8,
2000 and April 10, 2002, inclusive.
The suit is pending in the United States District Court for the Central
District of California, against the Company and certain of its officers
and directors.
The action charges that defendants violated the federal securities laws
by engaging in conduct throughout the class period that had the effect
of artificially inflating the market price of the Company's securities.
For more information, contact Charles J. Piven, PA by Mail: The World
Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
UNIVERSAL ACCESS: Charles Piven Commences Securities Suit in E.D. TX
--------------------------------------------------------------------
The Law Offices Of Charles J. Piven, PA launched a securities class
action on behalf of shareholders who acquired Universal Access Global
Holdings, Inc. (Nasdaq:UAXS) securities between May 10, 2001 and April
24, 2002, inclusive, in the United States District Court for the
Eastern District of Texas, Lufkin Division, against the Company and:
(1) Patrick C. Shutt,
(2) Robert M. Brown,
(3) Robert E. Rainone, Jr.,
(4) George A. King,
(5) Robert J. Pommer,
(6) Scott D. Fehlan and
(7) Paolo Guidi
The action 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 Company's revenue and the market price of
the Company's securities.
The suit alleges that the Company violated generally accepted
accounting principles and engaged in "capacity swaps" for the purpose
of inflating revenues.
For more details, contact Charles J. Piven by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
VERISIGN INC.: Spector Roseman Initiates Securities Suit in N.D. CA
-------------------------------------------------------------------
Spector, Roseman & Kodroff, PC launched a securities class action on
behalf of purchasers of the securities of VeriSign, Inc. (Nasdaq: VRSN)
between January 25, 2001 and April 25, 2002, inclusive, in the United
States District Court, Northern District of California against
defendants the Company, and certain of its officers and directors.
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 January 25, 2001 and April 25, 2002, thereby
artificially inflating the price of Company securities.
As alleged in the complaint, the Company provides digital trust
services to businesses engaged in securing digital commerce and
communications. Plaintiff alleges that during the class period,
defendants artificially increased the Company's revenue and margins
thereby created the false perception that its deferred revenue growth
was derived organically.
As part of their effort to boost the Company's stock price, defendants
misrepresented its true prospects and concealed improper accounting
activities until they could effect the sale of at least $26 million
worth of their own Company stock and use Company shares to acquire
other companies in stock-for-stock transactions.
The truth began to materialize on April 25, 2002, as the Company
reported substantial employee layoffs and revenue well below previously
represented forecasts. By market closing the following day, Company
stock had fallen $8.35 to close at $9.89, wiping out roughly $2 billion
of the Company's market value. As a result of defendant's alleged
misconduct, plaintiff and the class have suffered substantial damages.
For more details, contact Robert M. Roseman by Phone: 888-844-5862 by
E-mail: classaction@srk-law.com or visit the firm's Web site:
http://www.srk-law.com/recentsecuritiesfilings.asp
VERISIGN INC.: Milberg Weiss Commences Securities Fraud Suit in N.D. CA
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Milberg Weiss Bershad Hynes and Lerach LLP initiated a securities class
action in the United States District Court for the Northern District of
California on behalf of purchasers of VeriSign Inc. (Nasdaq:VRSN)
common stock during the period between Jan. 25, 2001 and April 25,
2002.
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. The Company
provides digital trust services that enable Web site owners,
enterprises, communications service providers, e-commerce service
providers and individuals to engage in secure digital commerce and
communications.
The complaint alleges that during the class period, defendants sought
to artificially increase the Company's revenue and margins and to
create the perception that its deferred revenue growth was derived
organically. In fact, approximately 10% of the Company's revenue was
derived from sales to small companies in which it had invested and from
dubious "barter transactions."
The Company's revenues and earnings derived from related parties were
dubious at best. Specifically, whenever a two-way set of transactions
occurs in which a Company acts as both the lender and service provider,
an investor lacks assurance as to whether the related parties would
have made similar decisions regarding purchases in the absence of
financing from that company.
Accordingly, despite the Company's claims that such transactions were
separately negotiated and recorded at terms the Company considered to
be at arm's length and fair value, the revenue and earnings that the
Company recognized from its relationship with these customers was not
an accurate measure of the "real" demand for its products. Equally
dubious was the quality of the non-monetary portion of revenue recorded
from reciprocal agreements.
As part of their effort to boost the price of the Company's stock,
defendants misrepresented its true prospects in an effort to conceal
its improper acts until they were able to sell at least $26 million
worth of their own Company stock and use its shares to acquire
companies in stock-for-stock transactions.
In order to overstate revenues and assets, the Company violated
generally accepted accounting principles and SEC rules by, among other
things, engaging in improper barter transactions and affiliate sales.
These transactions had the effect of dramatically overstating the
Company's margins and financial statements. On the Company's partial
disclosures on April 25, 2002, the Company's shares plummeted by more
than 50%.
For more details, contact William Lerach by Phone: 800-449-4900 by E-
mail: wsl@milberg.com or visit the firm's Web site:
http://www.milberg.com
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