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               C L A S S   A C T I O N   R E P O R T E R
  
                 Tuesday, May 14, 2002, Vol. 4, No. 94

                            Headlines

AMERICA ONLINE: Settles FL 5.0 Software Suit For $15.5 Million
CANADA: Ottawa Asks High Court To Strike Ruling Over Disabled Veterans
CAR DEALERSHIPS: Sued Over "Fraudulent" Extended Warranty Payments
CATHOLIC CHURCH: Suit Against Diocese of Manchester, NH Gains Ground
CELLCO PARTNERSHIP: Sued For Injuries Allegedly Due To Cell Phone Use

HOMEGOLD FINANCIAL: Faces Three Suits Over Mortgage Loans in NC Courts
MEATPACKING INDUSTRY: Cattle Ranchers Allege Firms Manipulated Market
MICHIGAN: Asks High Court To Stay Decision On Inmate Visitation Rules
MICROSOFT CORPORATION: CO Court Rejects Windows 98 Overcharge Claims
NEWPOWER HOLDINGS: Sued For Violations of California Consumer Laws

NORTH CAROLINA: Appeals Court Refuses To Dismiss State Medicaid Lawsuit
NOVUS INTERNATIONAL: Agrees To Settle For $34M Food Supplement Suit
RESTAURANT INDUSTRY: Boston Service Crew File Suit Over "Pooling" Tips
RITE AID: Reaches $3.3M "Preliminary" Accord Over Employees 401(k) Suit
UNITED MEDICAL: Doctors Plan Suit Over Statements Prior To Collapse

XEROX CORPORATION: Plaintiffs in ERISA Suit Claim $284M in Damages

                          Securities Fraud

ADELPHIA BUSINESS: Bernard Gross Commences Securities Suit in E.D. PA
ART TECHNOLOGY GROUP: Plaintiffs File Consolidated Amended Suit in MA
BRISTOL-MYERS SQUIBB: Emerson Firm Lodges Securities Suit in S.D. NY
ENRON CORPORATION: Creditors Seek Examination of Andersen Asset Sales
FIRST ALLIANCE: CA Securities Suit Proceeds Despite Bankruptcy Filing

HANOVER COMPRESSOR: Faces Suits For Securities Violations in S.D. TX
iXL ENTERPRISES: Georgia Court Dismisses Consolidated Securities Suit
iXL ENTERPRISES: Appeals Court Affirms Dismissal of GA Securities Suit
iXL ENTERPRISES: Vigorously Opposing Securities Fraud Suit in S.D. NY
L90 INC.: Scott + Scott Commences Securities Suit in C.D. California

L90 INC.: Bernstein Liebhard Lodges Securities Fraud Suit in C.D. CA
MEDICALOGIC INC.: Facing Commission, Laddering Accusations in NY
MERRILL LYNCH: Attorney General Drops Demand For Restitution Fund
MERRILL LYNCH: Spector Roseman Commences Securities Suit in S.D. NY
MERRILL LYNCH: Wolf Popper Commences Securities Fraud Suit in S.D. NY

NEOPHARM INC.: Schoengold & Sporn Lodges Securities Fraud Suit in IL
NEWPOWER HOLDINGS: Faces Suits For Securities Act Violations in S.D. NY
NTL INC.: Schiffrin & Barroway Launches Securities Fraud Suit in NY
PEREGRINE SYSTEMS: Scott + Scott Launches Securities Suit in S.D. CA
SAF T LOK: Faces Multiple Suits For Securities Violations in S.D. FL

SEAVIEW VIDEO: Asks FL Court To Dismiss Consolidated Securities Suit
SEITEL INC.: Cauley Geller Commences Securities Fraud Suit in S.D. TX
UNIVERSAL ACCESS: Mounting Vigorous Defense V. Securities Suit in TX
VERISIGN INC.: Cauley Geller Commences Securities Fraud Suit in N.D. CA
VERISIGN INC.: Schiffrin & Barroway Commences Securities Suit in CA

WEBLINK WIRELESS: Court Stays Securities Suits After Bankruptcy Filing
XEROX CORPORATION: Discovery Proceeds in Securities Suit in CT Court
XEROX CORPORATION: Faces Consolidated Shareholder Derivative Suit in NY
XEROX CORPORATION: Denies Allegations in Securities Suit in CT Court
                             
                           *********

AMERICA ONLINE: Settles FL 5.0 Software Suit For $15.5 Million
---------------------------------------------------------------
America Online has settled a class action filed in United States
District Court in Miami, Florida, by users of its 5.0 software in
Florida, who claimed they experienced problems with their Computers
after downloading the program, The Associated Press reported recently.  
While agreeing to settle the lawsuit for $15.5 million, the Company
denied any wrongdoing.

The Company also said users making a claim will have to certify under
oath that they experienced difficulties after installing the software,
Company spokesman Jim Whitney said.  "AOL believes these lawsuits are
totally without merit," Mr. Whitney said.  "We have agreed to resolve
these cases in order to avoid protracted litigation."

The suit arose after users of the 5.0 software reported problems
connecting to another Internet Service Provider while using AOL and
formulating default settings on their computers after installing the
software.  Many users also complained the program had done damage to
their hard drives.

The 5.0 software is free and can be downloaded from the Dulles,
Virginia-based Company's Web site.  Mr. Whitney said AOL has no plans
to pull the software from its site.


CANADA: Ottawa Asks High Court To Strike Ruling Over Disabled Veterans
----------------------------------------------------------------------
Lawyers for Ottawa's Department of Justice recently filed a motion
requesting leave to appeal to the Supreme Court of Canada a lower court
ruling in a class action. According to the attorneys, the province
breached its fiduciary obligations when it failed to pay hundreds of
millions of dollars in interest to mentally and physically disabled
veterans from 1919 to 1990, The Globe and Mail reported recently.

The government is not appealing the finding that it failed to invest or
pay interest on the pensions it administered for thousands of dollars.  
Instead, it wants a hearing on a section of the Veterans Affairs Act
that the Ontario Court of Appeal struck down in March.  Three appeal
judges unanimously upheld a ruling by an Ontario Superior Court judge
that the government failed to give veterans prior notification when it
amended the act in 1990 to bar them from seeking interest owed them
before that date.

The government's actions, the judges said, deprived the veterans of
their property rights without due process as guaranteed by the Canadian
Bill of Rights, legislation enacted in 1960.

Federal lawyers say that if the Ontario ruling is allowed to stand,
Parliament will have to notify every person who might be affected every
time it wants to enact legislation that might affect physical or
economic rights.  "It is too important an issue to leave unchallenged,"
said Dale Yurka, a Department of Justice lawyer.  "It is contrary to
long-standing law.It represents a fundamental shift in the
law, and it raises such issues of importance that we felt it was
important for us to with this leave to appeal."  Ms. Yurka said that
Parliament provides Canadians with due process by vetting proposed
legislation through government committees open to the public.

Lawyers for the veterans say the government owes the former soldiers
from $1.6 billion to $3.6 billion.  The debt mounts weekly by an
estimated $2 million dollars in interest.  David Greenaway, a lawyer
representing the plaintiffs, said the government is misstating the
Court of Appeal ruling.  He said that the appeal judges focused only on
the veterans' class action, and concluded that there had been no due
process as required under the Bill of Rights.  "The Court of Appeal
never said Parliament had to notify everyone," only that laws passed
must not violate the Bill of Rights, he said.

Peter Sengbusch, another lawyer for the plaintiffs, said if the Supreme
Court grants leave, the move will delay resolution of the case in which
time is of the essence.  Currently, the government is administering the
finances of only about 400 veterans, in 1990, when the act was amended,
there were about 10,000 veterans alive.  "I want veterans still living
to be alive when the final decision is made."

If leave for appeal is not granted, the lawsuit will proceed to the
Ontario Supreme Court to determine how much Ottawa owes the veterans.


CAR DEALERSHIPS: Sued Over "Fraudulent" Extended Warranty Payments
------------------------------------------------------------------
Lawsuits seeking class action status were filed recently against two of
the largest new-car dealership chains in the United States, The Tampa
Tribune reports.  The suits were brought on behalf of car buyers
who may have overpaid certain car dealers for extended warranties.

In a lawsuit against Auto Way Honda and its corporate parent, Auto
Nation Inc., attorney Christa Collins said a Largo, Florida man,
Charles Gibson, was tricked into paying an extra $270 for a maintenance
program when he agreed to pay $1,610 for an extended service contract.  
Both amounts were combined on the purchase order for a total of $1,880,
which is a violation of state law, Ms. Collins said.  Mr. Gibson did
not notice because the monthly payment fit his budget, she added.  
"They focus the buyer on the monthly payment and just get people
spinning and confused," Ms. Collins said.

However, Mr. Gibson agreed to purchase both the extended warranty and
the maintenance policy, said Ron Salhany, senior district vice
president for Auto Nation.  Mr. Salhany said Mr. Gibson ".signed it.  
It was disclosed to him and it was disclosed to the financial
institutions, and they approved it."

Mr. Salhany also said that Mr. Gibson is entitled to a refund if he
wants to cancel the warranty and maintenance policies.  He added that
Mr. Gibson never called to complain.  "If somebody is not happy with
what they got, we'll give them a refund," said Mr. Salhany.

Ms. Collins also filed an amended complaint against Clearwater Toyota
and its parent, Sonic Automotive Inc., alleging that L.C. "Pete"
Kimbrell was cheated out of $537 when the dealer inflated the cost of
his extended warranty.

As with the Gibson lawsuit, Ms. Collins is alleging that Mr. Kimbrell
was one of many customers who may have been the victim of inflated and
misstated extended warranty sales.  The amounts of the alleged losses
may seem small, but the issue - and the amount of money - becomes
significant when multiplied by the number of potential class action
victims, Ms. Collins said.

Sonic attorney Steven Burton said his firm does not respond to specific
allegations.  He did say the Kimbrell lawsuit was the subject of a
dispute between different plaintiffs' attorneys prior to the recent
involvement of Collins' firm, James, Hoyer, Newcomer & Smiljanich.

Mr. Burton also said that Clearwater Toyota is proud of its customer
service record and "takes seriously any allegation made concerning its
business."


CATHOLIC CHURCH: Suit Against Diocese of Manchester, NH Gains Ground
--------------------------------------------------------------------
A lawyer preparing a class action against the Roman Catholic Diocese of
Manchester, New Hampshire today said that dozens of alleged victims of
sexual abuse by priests are ready to join the lawsuit, The Associated
Press reported recently.

Attorney Peter Hutchins would not specify the number of people who have
contacted his firm, but said they have more than tripled since he first
filed the lawsuit on April 10 in Hillsborough County Superior Court,
New Hampshire.  The lawsuit, which still must be certified as a class
action by a judge, charges the Diocese of Manchester and its employees
of conspiring to conceal the names of priests who abused children.

Mr. Hutchins said his clients, who range in age from 21 to 65,
represent victims of more than 20 New Hampshire priests from all over
the state.  Mr. Hutchins said a class action not only benefits his
clients but also benefits the diocese.

"For the diocese, the concept of a class action provides an opportunity
to reach out to all victims of sexual abuse in New Hampshire to
hopefully avoid the legal morass currently taking place in
Massachusetts," Mr. Hutchins said in a written statement.  

The Archdiocese of Boston last week backed out of a settlement with the
victims of former priest John Geoghan.  That settlement would have been
worth up to $30 million.

In New Hampshire, mounting controversy is developing over the fitness
of Bishop John B. McCormack to remain the Diocese's bishop.  Some New
Hampshire Catholics say Bishop McCormack has not been forthcoming
enough about accusations that he ignored warnings about
abusive priests and helped shuffle them to new parishes when he was a
top church official in Boston.  

The Bishop says, however, that he will not step down.  In a written
statement, he asserts, "Pope John Paul II appointed me to be your
shepherd.  I will remain your servant and toil ceaselessly on your
behalf as Bishop of Manchester."

A petition drive calling for the Bishop's resignation has been
circulating through some of the state's churches, and The Union Leader
published a front page editorial calling for his resignation, "The
Diocese of Manchester now needs leadership that has not been tarnished
by this scandal.  In the best interest of all, he should step aside as
bishop," the newspaper said.  

Bishop McCormack acknowledged he made mistakes in the past, but said he
has learned from them and will meet the challenge of keeping the church
safe for everyone.  The Bishop, now 66, was secretary of ministerial
personnel for the Boston diocese from 1984-1994 and handled sexual
abuse complaints against priests for Cardinal Bernard Law for several
years.  In interviews last week, he said poor record keeping, a lack of
understanding of the nature of sexual abuse, and simply being left out
of the loop kept him from doing more to prevent Massachusetts priests
from abusing children.  

Bishop McCormack became bishop of the Diocese of Manchester in 1998.  
He has apologized for the harm done by abusive priest and has asked
forgiveness, saying he wishes he had done more to keep children safe.


CELLCO PARTNERSHIP: Sued For Injuries Allegedly Due To Cell Phone Use
---------------------------------------------------------------------
Cellco Partnership, along with various other wireless communications
carriers and phone manufacturers, faces several class actions in
various federal and state courts alleging personal injuries, including
brain cancer, from wireless phone use.  

All of these class actions have been removed to federal court, ordered
for coordinated pre-trial proceedings by the Judicial Panel for Multi-
district Litigation, and transferred to the United States District
Court in Maryland.

Plaintiffs in these suits claim that wireless phones were defective and
unreasonably dangerous because the defendants:

     (1) failed to include a proper warning about alleged adverse
         health effects;

     (2) failed to encourage the use of a headset, and

     (3) failed to include a headset with the phone

The Company believes it is entitled to indemnification by handset
manufacturers in connection with these claims and intends to pursue
those rights.  In each of these actions arising out of personal injury
claims, the Company believes that it has strong defenses that it has
asserted or will assert in these proceedings.  


HOMEGOLD FINANCIAL: Faces Three Suits Over Mortgage Loans in NC Courts
----------------------------------------------------------------------
Homegold Financial, Inc. faces three class actions pending in two North
Carolina state courts relating to the mortgage loans the Company
obtained through Chase Mortgage Brokers.

The first suit was commenced in August 1999 by Janice Tomlin, Isaiah
Tomlin and Constance Wiggins in New Hanover County, North Carolina
Superior Court.  The suit has since been transferred to North Carolina
Business Court, and includes the Company's affiliate, Homegold, Inc.
(HGI) and other loan companies as defendants.  The suit alleges a
variety of statutory and common law claims arising out of the loans.  

A similar suit was also commenced in February 2000 by Michael and
Kimberly Chasten Duplin County, North Carolina Superior Court, and the
last suit was commenced in April 2000 by Reginald Troy in New Hanover
County, North Carolina Superior Court.  

The plaintiffs in all of these cases are seeking unspecified monetary
damages, which fall into three basic categories:  

     (1) refund of all fees charged by Chase in connection with the
         mortgage loans;  

     (2) forfeiture of all profits realized from the sale of the
         mortgage loans in the secondary market; and

     (3) refund of two times the past interest paid on the mortgage  
         loans, and forfeiture of future interest.

The complaints in all of these cases allege participation by HGI in an
arrangement with Chase under which Chase allegedly failed to make  
necessary disclosures to the borrowers, and charged excessive and
duplicative fees to the borrowers, and under which Chase allegedly
received undisclosed premiums.  

On February 1, 2002, the Tomlin suit was granted class certification.

The Company intends to vigorously contest these cases.  Because these
matters are in their early stages, it is not possible to evaluate the
likelihood of an unfavorable outcome or estimate the amount of
potential loss.  


MEATPACKING INDUSTRY: Cattle Ranchers Allege Firms Manipulated Market
---------------------------------------------------------------------
Cattle ranchers filed purported class actions in the United States
District Court in Lincoln, Nebraska, against two meatpacking industry
giants, accuse the companies of depressing the cash cattle market, The
Associated Press reported recently.

The lawsuits were filed against the meatpacking divisions of ConAgra
Foods Inc. and Cargill Inc.  They allege that the two companies have
used contracts and ownership of livestock to depress the market.  And
they further claim that the companies violate the Packers and
Stockyards Act of 1921 by engaging in monopolistic practices.   

Gordon Reisinger of Red Oak, Iowa, said he is a plaintiff in the
lawsuit against ConAgra and the lawsuit against Excel, a division of
Cargill.  He said that the two companies have unfairly manipulated the
market.

Some sellers contend that as packers control more of the slaughter
supply, they bid less aggressively on the remaining cattle.  The US
Department of Agriculture studies have concluded the impact captive
supplies have on market prices is not enough to warrant government
intervention.

If accepted by the court, the class involved in the two lawsuits would
include only cattlemen who sell by taking bids from buyers on a weekly
or daily basis.  The cattlemen also asked for an injunction to stop the
packing companies from owning cattle or contracting for them in
advance.


MICHIGAN: Asks High Court To Stay Decision On Inmate Visitation Rules
---------------------------------------------------------------------
The state of Michigan has asked the United States Supreme Court to
block a federal appeals court ruling that overturned inmate visitation
rules, according to a report by the Associated Press.  The state wants
a stay while the Supreme Court considers whether to review the case.

The class action, filed by prisoners and their prospective visitors,
challenged the 1995 rules limiting who can visit Michigan inmates.  The
Federal District Court ruled for the inmates, saying the regulations
infringed on prisoners' rights and were not reasonably related to
prison control.  

The Sixth United States Circuit Court of Appeals in Cincinnati agreed
with Federal Judge Nancy Edmunds' ruling, finding the 1995 rules
limiting who could visit prison inmates were unconstitutional.  The
Appeals Court said in its ruling that the Michigan Department of
Corrections "has implemented a series of haphazard policies that
violated these rights and did real harm to inmates in its care."

The Appeals Court also wrote, "In the present case, the regulations
fall below the minimum standards of decency owed by a civilized society
to those it has incarcerated."

Corrections spokesman, Matt Davis, said that the Department disagrees
with the Appeals Court ruling and hopes the Supreme Court will allow it
to keep its current policy in place.  "We implemented these rules out
of the concern we have for the safety of corrections staff and
prisoners," he said.  "If they are not in place, then consequences are
sure to follow."

The current rules ban visits from prisoners' minor relatives and former
prisoners who are not immediate family.  They also ban visitors, except
attorneys and clergy, for prisoners who have twice violated the
Department's drug abuse policies.  The Department said that an increase
in visitors was making it difficult to control smuggling of drugs and
weapons.  The rules also ban children because they are more difficult
to supervise.

The Department, which already took $71 million in cuts this fiscal
year, would have to set up more non-contact visitation areas and hire
more staff if the Court of Appeals ruling is not stayed, Mr. Davis
said.  The Department is working toward putting a new visitation policy
in place, even though it hopes it will not need it.


MICROSOFT CORPORATION: CO Court Rejects Windows 98 Overcharge Claims
--------------------------------------------------------------------
The Colorado Court of Appeals recently rejected claims that Microsoft
Corporation overcharged for its Windows 98 operating system, Associated
Press reported.  The appeal was brought by Denver physician Richard
Pomerantz, who was appealing a lower court ruling rendered in a class
action.

The lawsuit, in which Mr. Pomerantz was a plaintiff, claimed that the
Company had monopolized the market for Intel-based operating systems
and overcharged for Windows after he was forced to buy it with his new
computer.  The suit sought damages based on the difference between the
monopoly price of Windows 98 and the price for which Windows 98 could
have been sold in a competitive market.  The suit also asked for a
refund and triple damages.

Mr. Pomerantz appealed the lower court decision, which dismissed the
suit's complaint against the Company for violation of the Colorado
Antitrust Act, because the plaintiffs were indirect purchasers from the
manufacturer.

The Appeals Court cited a Supreme Court ruling that said allowing
recovery by an indirect purchaser would create a risk of double
liability for antitrust violators.  That is because the direct
purchaser would still be able to recover the full amount of the
overcharge from an antitrust violator.


NEWPOWER HOLDINGS: Sued For Violations of California Consumer Laws
------------------------------------------------------------------
NewPower Holdings, Inc. faces a purported class action lawsuit filed
against the Company and other California power suppliers in the
Superior Court of the State of California, City and County of San
Francisco.

The suit, filed on behalf of California residents solicited as
customers by The New Power Company, alleges violations of the
California Business and Professions Code, California Civil Code and
common law as a result of:

     (1) alleged deceptive advertising and marketing to induce new
         customers to sign up and maintain service; and

     (2) alleged intentional delay of customer billing to prevent
         customers from canceling service.

The Company intends to vigorously defend against the suit.


NORTH CAROLINA: Appeals Court Refuses To Dismiss State Medicaid Lawsuit
-----------------------------------------------------------------------
A three-judge panel of the Fourth US Circuit Court of Appeals refused
to dismiss a class action that claims dental care under North
Carolina's Medicaid program is inadequate, The Associated Press
reported recently.  The Appeals Court upheld a decision by Federal
Judge Malcolm J. Howard of Raleigh allowing the lawsuit to proceed.

The Appeals Court also rejected North Carolina officials' claims that
they are immune from liability for actions taken in their official
capacity.  According to the Appeals Court, private citizens in some
cases can petition a federal court to enjoin state officials from
violating the Constitution or a federal statute.  The Medicaid lawsuit
falls under this exception to the doctrine of sovereign immunity, the
court said.

Six children filed the lawsuit, claiming they and other Medicaid
beneficiaries in North Carolina must conduct extensive searches and
travel long distances to find dentists who will accept Medicaid
reimbursement.

About 16 percent of the state's dentists participate in Medicaid, one
of the lowest rates in the country.  North Carolina reimburses only an
average of about 62 percent of a dentist's regular charges, and ranks
44th in Medicaid participation by dentists, and in 40 counties no
private dentists take Medicare patients, according to a study released
in December by the University of North Carolina - Chapel Hill.


NOVUS INTERNATIONAL: Agrees To Settle For $34M Food Supplement Suit
-------------------------------------------------------------------
Trading house Mitsui & Company said recently that its animal feed
subsidiary in the United States Novus International, Inc. has agreed to
settle a class action filed by American pig and poultry farmers over
the sale of feed supplement with the Federal District Court in San
Francisco, according to a report by the Kyodo News.

The farmers' lawsuit claimed that the Company violated the United
States antitrust laws by selling methionine, a nutritive additive, for
use in pig and poultry feed.

Under the terms of the settlement, Novus International Inc. will pay
$35 million to the farmers, Mitsui said in a press release.  Mitsui
said that the US subsidiary's settlement will not affect its group
earnings forecast for the fiscal year that ended March 31.


RESTAURANT INDUSTRY: Boston Service Crew File Suit Over "Pooling" Tips
----------------------------------------------------------------------
Scores of waiters and waitresses have filed lawsuits, four at the time
of this writing, against several of Boston's fanciest dining
establishments over the practice of "pooling" tips, that is, the
practice by management of taking up to 60 percent off the "pooled" cash
and credit-card tips to distribute to other staff, such as maitre d's
and managers, according to The Washington Post

The accusations target such local culinary institutions as the
legendary Locke-Ober, where John F. Kennedy Jr. was known to order
lobster stew, drink the broth and give the meat to the waiter, and
L'Espalier, which serves New England-French cuisine in the intimate
setting of a 19th century Back Bay townhouse.

Samantha Smith, among the first women to be hired at Locke-Ober, said
she would never work in a "pooled" house again even though she would
collect as much as $400 per night in tips.  She characterized the
nature of the "pooling" practice as a "way to take advantage of the
customer and the employee.  It doesn't ensure better service.  It pits
employees against each other, and it allows management to control you
through your wages rather than through your work performance."

A class action suit on behalf of 150 former banquet staff members of
the Bay Tower in the city's financial district also is pending.  Some
servers are planning to file a separate lawsuit against the Boston
branch of Morton's Restaurant Group, said attorneys for plaintiffs in
the four separate legal actions.

At the heart of the disputes, tip pooling, a practice that is fairly
common and commonly complained about, throughout the restaurant
industry.  It has come to the fore at this time in Boston because of
the unusual confluence of lawsuits, and because those lawsuits involve
high-end restaurants.  

Traditionally, waiters and waitresses give a small percentage of their
tips to bartenders and busboys, and leave with most of their earnings.  
However, servers involved in these lawsuits say they have been forced
to hand over all their cash tips to management at the end of each
night.  Then, without their input, the money was pooled and divided
among servers, busboys, food runners and some managers, including
maitre d's, floor supervisors and others.

"These restaurants are clearly violating Massachusetts wage laws," said
Shannon Liss-Riordan, a lawyer representing plaintiffs in three of the
lawsuits.  "The money that servers receive in tips under the law is
their own money, and they can decide what to do with it.  It is
entirely improper for the restaurants to be making that decision for
the wait staff."

Karl Titz, assistant professor of the Conrad N. Hilton College of Hotel
and Restaurant Management at the University of Houston, said the
allegations are disturbing.  "When I saw they were using it to
subsidize managers' wages, if that in fact is what they were doing,
that would be a new twist on tip pooling," he said.

L'Espalier proprietor, Chef Frank McClelland said there is "no merit
absolutely at all" in the lawsuit filed against his restaurant.  
Waiters and waitresses agree when they are hired to pool tips, he said,
and they vote on tip distribution and percentages as a staff.  He said
that bartenders and sommeliers currently receive five percent of the
pooled tips and that servers recently voted to suspend distribution to
maitre d's.  Waiters, he said, typically leave with a net take of up to
$400 per night.

The problems inherent in tipping are not unique to Boston, said Linda
Shea, associate professor of marketing and graduate program director at
the University of Massachusetts at Amherst's Department of Hotel,
Restaurant and Travel Administration.  "There always has been dirty
play," she said.  "It is something more important at the higher level
of food service because you tend to get professional wait staff.  If
tipping were not allowed, and they were just paid a higher salary, you
would not get those individuals.  They know their business, and they do
it well."

Peter Christie, president of the Massachusetts Restaurant Association,
on the other hand, said that if any violations of the state's wage laws
had occurred at these restaurants, they would not be intentional.  
"That front-end employee is what makes or breaks the restaurant.  These
servers are treasured commodities," Mr. Christie said.  "These are
high-end places.  Nobody would expose themselves to a fine or penalty
or the bad press unless they did not realize they were doing it.  
Unfortunately, ignorance is no excuse when it comes to laws."

Mr. Christie said the association believes that mandatory tip pooling
is legal and that tips should be redistributed among those people
"directly involved in the service of the meal."  The attorney general's
office and attorneys for the plaintiffs in the lawsuits, however,
interpret the Massachusetts statute as both prohibiting employers from
retaining tips and prohibiting mandatory tip pooling.


RITE AID: Reaches $3.3M "Preliminary" Accord Over Employees 401(k) Suit
-----------------------------------------------------------------------
Rite Aid Corporation said it has reached a "preliminary understanding"
that would settle claims against the Company for allowing employees to
invest their 401(k) retirement plan in Company stock, The Associated
Press reports

To settle the lawsuit, the Company would pay $3.3 million and maintain
the current level of benefits, it said.  The disclosure was in the
Company's annual report, filed this week with the U.S. Securities and
Exchange Commission.

The Company said it has been negotiating with a company-appointed
pension trustee and lawyers for the plans and their participants in a
class action relating to its administration of the 401(k) plans.  The
suit contends that the Company breached its fiduciary responsibility by
allowing employees to purchase company stock as a 401 (k) investment
option.  

Purchases of the common stock under the plan were suspended in
October 1999, after the former chief executive and chairman, Martin L.
Grass, was forced out and accused of collaborating with other top
executives to manipulate earnings figures as early as 1997.

The settlement must be approved by the federal Department of Labor and
a federal judge overseeing the case.  The Department of Labor also has
begun an investigation into the Company's practice of allowing company
stock purchases through employees' 401 (k) plans, the company said.

The nation's third largest drugstore chain, with stores across West
Virginia, has been trying to recover after revelations of accounting
irregularities sent its stock tumbling from more than $50 at the
beginning of 1999 to $3.20 this week.

The Company's new management switched auditing firms in 2000 and
revised earnings statements downward by more than $1 billion for fiscal
1998 and 1999.  The Company said it is "cooperating fully" with the SEC
and the US Attorney's office as they conduct their investigations into
the Company's financial reporting and other matters.  Settlement
discussions have begun with federal prosecutors to avoid criminal
prosecution.


UNITED MEDICAL: Doctors Plan Suit Over Statements Prior To Collapse
-------------------------------------------------------------------
Several groups of doctors are planning legal action against the Board
of failed insurer United Medical Protection on the grounds the Company
may have made false and misleading statements, the Australian Financial
Review reports.  Most of the aggrieved doctors are in New South Wales,
and several law firms have been sounded out about the possibility of a
class action against the medical indemnity provider.

The action could hinge on correspondence sent to doctors in the months
before the Company failed.  The Sydney-based firm sent a letter dated
March 28, four weeks before it collapsed which said, "United has never
functioned better."  The two-page letter urged members to stay with the
group and not jump ship to other insurers.

When the Company announced it would appoint a provisional liquidator
last week because it could not meet its liabilities, it left without
any insurance 32,000 doctors who had stayed with the group.  "We have
had a range of inquiries from doctors,' one Sydney lawyer said.  "For
some time, United Medical has been telling its members it is
financially sound."

Any legal action taken would look at how the Company was run.  
Assistant Treasurer Helen Coonan already has conceded there are
questions about management competency.  "This is an issue where there's
been a medical indemnity insurer, which has not been very effectively
run," said Senator Coonan.

The Company's Board members have declined to speak out since the
collapse.  The provisional liquidator, David Lombe from Deloitte Touche
Tohmatsu was unavailable for comment, the Australian Financial Review
reports.

Unlike many other medical insurers, the Company did not account for
incurred but not reported claims (IBNRs).  This method of operation
left it facing an unfunded liability of up to $500 million.  From June
30 of this year, medical defense organizations will be required to show
the value of their IBNRs in their balance sheets.  According to a
report by Trowbridge Consulting, if such organizations had been
required to report IBNRs at June 30 last year, the industry's
liabilities would have exceeded assets by $330 million.


XEROX CORPORATION: Plaintiffs in ERISA Suit Claim $284M in Damages
------------------------------------------------------------------
Participants in Xerox Corporation's Retirement Income Guarantee Plan
(RIGP) filed papers in the United States District Court for the
Southern District of Illinois, claiming US$284 million in damages in a
class action charging the Company with violations of the Employee
Retirement Income Security Act (ERISA).

The suit was filed on behalf of over 25,000 persons who received lump
sum distributions from RIGP, the primary US pension plan for the
Company's salaried employees, after January 1, 1990.  The suit asserts
violations of ERISA, claiming that the lump sum distributions were
improperly calculated.

On July 3, 2001 the Court granted the plaintiffs' motion for summary
judgment, finding the lump sum calculations violated ERISA.  RIGP
denies any wrongdoing and intends to appeal the district court's
ruling.  

                          Securities Fraud

ADELPHIA BUSINESS: Bernard Gross Commences Securities Suit in E.D. PA
---------------------------------------------------------------------
Bernard M. Gross, PC initiated a securities class action in the United
States District Court for the Eastern District of Pennsylvania, on
behalf of all purchasers of the securities of Adelphia Business
Solutions, Inc. (Pink Sheets:ABIZQ) between January 6, 2000 and March
27, 2002, inclusive.  The suit names as defendants Michael J. Rigas,
James P. Rigas, Timothy Rigas and John J. Rigas.

The suit 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.  Specifically, the complaint alleges that the Rigas
Defendants issued materially false and misleading statements regarding
the financial condition and results of the Company during the class
period.  They failed to disclose that because of deceptive sales
practices the Company reported artificially inflated levels of line
counts (lines that the Company sold).

The Rigases also obligated the Company to pay overhead expenses to
Adelphia Communications Corp. (also controlled by the Rigases) without
maintaining adequate or accurate accounting records of such expenses.
Additionally, throughout the class period, the Rigases failed to
disclose in excess of $2 billion of off-balance sheet liabilities for
Adelphia Communications Corp.  Because of the Company's heavy
dependence on the Rigases and Adelphia, these off-balance sheet
liabilities should have been disclosed to Adelphia Solutions
shareholder during the class period.

On March 1, 2002, the Company announced that it would not make an
interest payment of $15.3 million on certain secured notes of the
Company and would be in default.  On March 27, 2002, Adelphia
Communications Corporation announced its financial results and that it
had entered into these off-balance sheet financing arrangements which
obligated Adelphia Communications for approximately $2.3 billion in
debts, together with an entity controlled by the Rigas family, Highland
Holdings. On that same day, March 27, the Company announced that it had
filed for Chapter 11 Bankruptcy protection.

For more details, contact Deborah R. Gross or Susan Gross by Mail: 1515
Locust Street, Second Floor, Philadelphia, PA 19102 by Phone:
800-849-3120(toll-free) 866-561-3600 (toll-free) or 215-561-3600 by E-
mail:  susang@bernardmgross.com or debbie@bernardmgross.com or visit
the firm's Website: http://www.bernardmgross.com   


ART TECHNOLOGY GROUP: Plaintiffs File Consolidated Amended Suit in MA
---------------------------------------------------------------------
Plaintiffs in the securities class actions pending against Art
Technology Group, Inc. filed a consolidated amended suit in the United
States District Court for the District of Massachusetts.  The suit
names as defendants the Company and certain of its officers.

The consolidated suit alleges that the defendants violated Sections
10(b) and 20(a) of the Securities Exchange Act and SEC Rule 10b-5,
which generally may subject issuers of securities and persons
controlling those issuers to civil liabilities for fraudulent actions
or defects in the public disclosure required by securities laws.

The suit arose from seven original suits, four of which were filed in
the United States District Court for the District of Massachusetts, and
three of which were initially filed in the Central District of
California.  These three California actions were consolidated and
transferred to the District of Massachusetts in November 2001.

In December 2001, the Court issued an order of consolidation in which
it consolidated all actions filed against the Company and appointed
certain individuals as lead plaintiffs in the consolidated action.  It
also appointed two law firms as co-lead counsel, and a third law firm
as liaison counsel.

While management believes the claims against the Company are without
merit and intends to defend the action vigorously, the litigation is in
the preliminary stage.


BRISTOL-MYERS SQUIBB: Emerson Firm Lodges Securities Suit in S.D. NY
--------------------------------------------------------------------
The Emerson Firm initiated a securities class action in the United
States District Court for the Southern District of New York on behalf
of those who purchased, converted, exchanged or otherwise acquired
Bristol-Myers Squibb Company (NYSE:BMY) securities during the period
between May 16, 2001 and April 3, 2002, inclusive.  This case expands
the class period for investors who acquired Company securities as the
initial cases made allegations concerning a class period from September
19, 2001 and January 4, 2002.

The suit charges the Company and certain of its officers and directors
with violating the federal securities laws by making itself, and
allowing its drug development partner to make, without correction,
materially false and misleading statements about the progress of its
Erbitux cancer treatment drug's application for FDA approval even as
the Company knew that the application and data were false.

Specifically, the complaint alleges that on December 28, 2001, a press
release disclosed that the FDA had rejected the filing of a Biologics
License Application for Erbitux. On January 4, 2002, The Cancer Letter
reported that the FDA repeatedly informed defendants about problems
with the Erbitux clinical trials during the class period. These
shocking revelations caused the stock to plummet from a class period
high of $56 to below $50.

For more information, contact Tanya Autry by Mail: Investor Relations
Department, P. O. Box 25336, Little Rock, AR 72221-5336 by Phone:
800-663-9817 or by E-Mail: tanya.autry@worldnet.att.net


ENRON CORPORATION: Creditors Seek Examination of Andersen Asset Sales
---------------------------------------------------------------------
Enron Corporation's creditors have asked a bankruptcy judge to allow
them to query Arthur Andersen LLP about its restructuring or
liquidating plans, the Dow Jones Business News has reported

The Official Committee of Unsecured Creditors, in its recent filing
with Judge Arthur Gonzalez, stressed the importance of a prompt
investigation by the committee at a time when Andersen, Enron's former
auditor, is seeking to sell its non-auditing assets in a bid to survive
its botched auditing of Enron's books.  However, "Andersen's efforts to
reorganize are in significant jeopardy," the 15-member panel said in
its court papers, citing the latest batch of press accounts.

"Because the (Enron) estates hold significant claims against Andersen,
the committee must be allowed to investigate Andersen's current
financial condition, as well as its strategy and attempts to
restructure, dispose of assets or, indeed, liquidate," said the
OCUC. The group leads the financial recovery efforts for Enron's
creditors.

Enron's creditors, along with its shareholders and employees, have been
seeking to preserve Andersen's shrinking assets in order to maximize
the potential payouts by the embattled accounting firm for its role in
Enron's collapse.  The operations of Andersen, once the fourth-largest
accounting firm, continued to dwindle as more companies have dropped
the firm as their auditor.

Andersen approved Enron's accounts from 1995 through 2000, while late
last year, Enron was required by securities regulators to restate its
annual reports starting from 1997.  In addition, Andersen earned tens
of millions of dollars in fees from its consulting work for Enron,
according to the creditors' filing.  The committee further noted that
Andersen received about $14 million in fees from Enron within 90 days
prior to its bankruptcy filing on December 2 of last year.  "These
payments may represent additional claims of the estates."

In the filing, the OCUC asked for access to all the documents provided
by Andersen to its restructuring consultant Alvarez & Marsal Inc., and
to its investment banker Gleacher & Co.  It also
required any documents concerning "a potential filing under Chapter 11"
by Andersen.  Many legal experts have said it is inevitable for
Andersen to go the way of Enron as its future revenue dries up.

Andersen, currently the defendant in a criminal trial in Houston,
brought by the Department of Justice on charges of obstruction of
justice, is also targeted in a sweeping class action filed by Enron
shareholders, which includes as defendants, among others, investment
banks and law firms suspected of aiding Enron executives' efforts to
conceal debts and inflate profits.

Andersen offered up to $300 million to settle the class action, but the
talks foundered last month over a host of issues.  Among them, Enron
creditors had been demanding as much as $150 million of the settlement
offer, while shareholders in the case had countered that creditors
should get no more than $50 million.

Another complicating issue was that several creditors, namely Wall
Street banks, are also defendants in the class actions.  A disagreement
has ensued as to whether Andersen's $300 million offer would have
capped the size of any future settlements by these banks.


FIRST ALLIANCE: CA Securities Suit Proceeds Despite Bankruptcy Filing
---------------------------------------------------------------------
The suit against First Alliance Corporation and its officers and
directors is proceeding against the individual defendants in the
Superior Court of California, County of Orange.  The individual
defendants in the suit are Brian Chisick, Sarah Chisick and Mark Mason.

The suit was commenced in June 1998 on behalf of all purchasers of the
Company's common stock between April 24, 1997 through May 15, 1998 and
alleges that the Company conspired against those who purchased the
stock during the stated class period by failing to disclose known
material adverse conditions in making certain public statements
about the Company's growth prospects.

The suit was in the discovery stage prior to the Company's bankruptcy
filing.  This action is stayed as to the Company due to the filing, but
since October 4, 2001, the action has been proceeding as to the
individual defendants.  The Company intends to continue vigorously
opposing the suit.


HANOVER COMPRESSOR: Faces Suits For Securities Violations in S.D. TX
--------------------------------------------------------------------
Hanover Compressor Company faces 14 securities class actions, commenced
in February 2002 against the Company and certain of its officers and
directors in the United States District Court for the Southern District
of Texas, on behalf of purchasers of the Company's common stock during
various periods ranging from May 15, 2000 through January 28, 2002.

The suits assert various claims under Section 10(b) and 20(a) of the
Securities Exchange Act of 1934.  The suit alleges violations of the
federal securities laws arising out of defendants' issuance of false
financial statements and other false and misleading statements about
the Company's operating performance.

In addition, commencing in February 2002, three derivative lawsuits
were filed in various state and federal courts.

The Company believes that the allegations in these cases are without
merit and intends to defend against them vigorously.  The lawsuits are
at a very early stage, so it is not possible at this time to predict
whether the Company will incur any liability or to estimate the
damages, or the range of damages, if any, that the Company might incur
in connection with such actions.


iXL ENTERPRISES: Georgia Court Dismisses Consolidated Securities Suit
---------------------------------------------------------------------
The United States District Court for the Northern District of Georgia
dismissed with prejudice the consolidated securities class action
pending against iXL Enterprises, Inc. and certain of its present and
former directors and officers.

The consolidated suit, filed on behalf of all those who purchased or
otherwise acquired the Company's securities between November 30, 1999
and September 1, 2000, sought damages based on general allegations of
false and misleading press releases and SEC filings concerning the
Company's business prospects and financial statements. The suit
asserted claims under Section 10(b) of the Securities Exchange Act of
1934 and Rule 10b-5.


iXL ENTERPRISES: Appeals Court Affirms Dismissal of GA Securities Suit
----------------------------------------------------------------------
The United States Court of Appeals for the Eleventh Circuit affirmed a
Georgia federal court's decision dismissing a securities class action
against iXL Enterprises, Inc. styled Redwing Ltd. v. iXL Enterprises,
Inc., et al. (Case No. 1:00-CV-2979-CC).

The suit was commenced in the United States District Court for the
Northern District of Georgia against the Company and certain of its
present and former directors and officers, alleging causes of action
under Sections 10(b), 18, and 20, and Rule 10b-5 of the Securities
Exchange Act of 1934, Sections 12 and 15 of the Securities Act of 1933,
the Georgia Blue Sky laws, as well as common law claims for breach of
contract and negligent misrepresentation.

In August 2001, the Court granted the defendants' motion to dismiss the
suit on venue grounds and entered judgment for the defendants.  In
September 2001, the plaintiffs appealed the judgment to the Appellate
Court, which affirmed the dismissal on February 4, 2002.


iXL ENTERPRISES: Vigorously Opposing Securities Fraud Suit in S.D. NY
---------------------------------------------------------------------
iXL Enterprises, Inc. faces a securities class action filed in the
United States District Court for the Southern District of New York on
behalf of purchasers of the Company's stock between June 2, 1999 and
December 6, 2000.  The suit names as defendants the Company and:

     (1) Merrill Lynch Pierce Fenner & Smith,

     (2) FleetBoston Robertson Stephens,

     (3) Bear Stearns & Co.,

     (4) Morgan Stanley & Co.,

     (5) U. Bertram Ellis, Jr., and

     (6) M. Wayne Boylston

The suit seeks damages based on general allegations of false and
misleading statements in the prospectus and registration statement for
the Company's initial public offering related to the fees and
commissions charged by the underwriters.  The suit asserts claims under
Section 11 of the Securities Act of 1933 against the Company, Mr. Ellis
and Mr. Boylston and under Section 15 of the Securities Act against Mr.
Ellis and Mr. Boylston.

The Company believes it has meritorious defenses to the allegations in
the suit and intends to defend against the suit vigorously.  In light
of the nature of the litigation process, there can be no assurance that
the Company will not be motivated to consider reasonable settlement
opportunities or suffer an adverse result, either of which could have a
material adverse impact on the Company.


L90 INC.: Scott + Scott Commences Securities Suit in C.D. California
--------------------------------------------------------------------
Scott + Scott LLC initiated a securities class action in the United
States District Court for the Central District of California on behalf
of purchasers of L90 Inc. (Nasdaq: LNTY) common stock during the period
between Oct. 26, 2000 and March 12, 2002.

The suit 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 complaint alleges that as part of
their effort to boost the price of Company stock, defendants
misrepresented the Company's true prospects in an effort to conceal the
Company's 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 Feb. 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 Neil Rothstein or David R. Scott by Phone:
800-404-7770 by E-mail: nrothstein@scott-scott.com or
drscott@scott-scott.com or visit the firm's Web site: http://www.scott-
scott.com


L90 INC.: Bernstein Liebhard Lodges 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. securities
between July 26, 2001 and March 12, 2002.  The suit is pending in the
United States District Court, Central District of California.

The suit 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 Company 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 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 by E-mail: LNTY@bernlieb.com or
visit the firm's Web site: http://www.bernlieb.com


MEDICALOGIC INC.: Facing Commission, Laddering Accusations in NY
------------------------------------------------------------------
Medicalogic, Inc. faces a securities class action pending in the United
States District Court for the Southern District of New York on behalf
of purchasers of the Company's common stock between December 13,1999
and December 6, 2000.  The suit names as defendants the Company and:

     (1) Mark Leavitt, current Chairman,

     (2) Frank Spina, a prior officer and

     (3) four underwriters of the Company's initial public offering

The suit alleges that the prospectus filed by the Company was
materially false and misleading because it failed to disclose, among
other things, that the lead underwriter:

     (i) required several investors who wanted large allocations of
         initial public offering securities to pay undisclosed and
         excessive underwriters' compensation in the form of increased
         brokerage commissions; and

    (ii) required investors to agree to buy shares after the initial
         public offering was completed at predetermined prices as a
         precondition to obtaining initial public offering allocations.

The suit further alleges that because of these purchases, the Company's
post-initial public offering stock price was artificially inflated.  As
a result of the alleged omissions and the purported inflation of the
Company's stock price, the plaintiffs claim violations of Sections 11
and 15 of the Securities Act of 1933 and Section 10(b) of the
Securities Exchange Act of 1934.

The Company intends to vigorously defend against the suit.  The Company
cannot predict the outcome of the suit or the extent to which the costs
of defense and any settlement or award will be covered by its insurance
policies.  An adverse determination on one or more of these matters
could result in a material adverse effect on the Company's financial
condition and results of operations.


MERRILL LYNCH: Attorney General Drops Demand For Restitution Fund
-----------------------------------------------------------------
Talks between Merrill Lynch and New York continued yesterday with State
Attorney General, Eliot Spitzer, backing down on one of his key demands
that the brokerage create a restitution fund to repay investors injured
by the Company's alleged misdeeds, the New York Daily News has
reported.  A source close to the talks has indicated a settlement is
likely before a May 16 deadline for court action.

Mr. Spitzer said investors would have better luck through individual
arbitrations and class actions against the brokers.  "It is my view
that restitution is best accomplished through private actions that
individual investors will bring based on the particular facts of his or
her or their investments," Mr. Spitzer told the Associated Press in
Albany.

Attorney General Spitzer already has done much of the work in
uncovering material that could be of enormous value to private and
class actions. Embarrassing e-mails from the analysts, which contain
negative evaluations of stocks have come to light, which were later
sugar-coated for the investment bankers' use when making sales to
potential investors.

Investor attorneys have said that the e-mail messages that Mr.
Spitzer's probe uncovered, allegedly outlining some of the analyst
hype, are now part of the public record and will form the backbone for
countless arbitration and class actions.

The Attorney General has alleged that Merrill Lynch, Wall Street's
largest brokerage, misled investors by pumping up stocks to please
lucrative investment-banking clients.  Mr. Spitzer also wants Merrill
Lynch to pay a fine.  Merrill Lynch wants to pay around $50 million,
but the Attorney General is aiming for $100 million, and a change of
the way its analysts interact with the firm's investment bankers.

The Attorney General's investigation has been expanded to many of Wall
Street's top firms, including For example, Morgan Stanley, Goldman
Sachs, Salomon Smith Barney and Credit Suisse First Boston.

Meanwhile, Merrill Lynch CEO David Komansky told his workers that the
Company has been "tarnished" by the attorney general's allegation of
conflicts of interest between its stock analysts and its investment-
banking arm.  According to an internal employee statement that was
later made public, Mr. Komansky and President Stanley O'Neal said they
would do whatever was necessary to strengthen the "firewalls" between
analyst and investment-banking functions.


MERRILL LYNCH: Spector Roseman Commences Securities Suit in S.D. NY
------------------------------------------------------------------
Spector, Roseman & Kodroff, PC initiated a securities class action on
behalf of purchasers of the securities of the common stock of
Excite@Home (OTC Bulletin Board: ATHQE) between August 18, 1999 through
September 28, 2001, inclusive.  The action is pending in the United
States District Court, Southern District of New York against defendants
Merrill Lynch and Henry Blodget, and certain of its officers and
directors.

The suit alleges that to maintain and enhance Merrill Lynch's
investment banking relationships with Excite, defendants issued analyst
reports with positive ratings on Excite which were materially
misleading as they were inconsistent with their own contemporaneous,
private adverse assessments of Excite.

For example, defendants were repeatedly issuing a short-term
accumulate, long-term buy rating on Excite despite their internal e-
mails that Excite stock had a "flat" outlook, was without any "real
catalysts" for improvement and described the company using profane
language.

For more information, 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  
                  

MERRILL LYNCH: Wolf Popper Commences Securities Fraud Suit in S.D. NY
---------------------------------------------------------------------
Wolf Popper LLP initiated a securities class action against Merrill
Lynch & Co., Inc. and certain of its officers in the United States
District Court for the Southern District of New York, on on behalf of
all persons who purchased the firm's Internet Architecture HOLDRS Trust
(AMEX: IAH) during the period February 10, 2000 through April 8, 2002,
inclusive.

The complaint alleges that the 20 companies comprising the IAH Trust
were dependent on their continuing ability to sell products to the
internet companies that went public during 1999 and 2000, and that the
registration statement for the IAH Trust failed to disclose that:

     (1) the valuation of internet companies in the securities markets
         had been inflated by Merrill's internet research analysts'
         biased research coverage; and

     (2) the internet companies' lacked a long-term ability to raise
         capital in the financial markets necessary to buy products and
         services from the companies comprising the IAH Trust.

The allegations in the complaint are based in part on published reports
of the New York State Attorney General's investigation of Merrill's
internet research practices.  On May 10, 2002, the New York Attorney
General was quoted in the Washington Post as stating that, "It is my
view that restitution is best accomplished through private actions that
individual investors will bring based on the particular facts of his or
her or their investments."

For more details, contact Robert C. Finkel by Mail: 845 Third Avenue,
New York, NY 10022-6689 by Phone: 212-451-9620 or 877-370-7703 by Fax:
212-486-2093 or 877-370-7704 by E-mail: irrep@wolfpopper.com or visit
the firm's Web site: http://www.wolfpopper.com


NEOPHARM INC.: Schoengold & Sporn Lodges Securities Fraud Suit in IL
--------------------------------------------------------------------
Schoengold & Sporn, PC initiated a securities class action on behalf of
all persons or institutions who acquired the securities of NeoPharm,
Inc. (Nasdaq: NEOL) between September 25, 2000 and April 19, 2002,
inclusive at artificially inflated prices due to the defendants'
materially false and misleading statements concerning its net income
and inventories.  The suit is pending in the United States District
Court for the Northern District of Illinois.

The suit alleges that the company and certain of its directors and
officers 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 common stock
Hospital Bonds.

Specifically, the suit alleges that the Company issued a series of
statements concerning its Liposome Encapsulated Praclitaxel (LEP)
product, and that the defendants:

     (1) made materially false positive statements to Pharmacia in
         order to induce their participation in clinical trials of LEP;

     (2) failed to disclose that Pharmacia was studying a different
         formulation of LEP that would not necessarily support the
         approval of the Company's LEP product; and

     (3) failed to disclose that all of the Company's clinical trials
         failed to produce any positive benefits to patients.

In addition, certain individual defendants wrongfully sold shares of
the Company on the open market at artificially inflated prices, reaping
proceeds of over $7 million.

When, on April 19, 2002, the Company announced that it filed for
arbitration to resolve a dispute with Pharmacia, and, in response,
Pharmacia counter- claimed for breach of its agreement with the Company
concerning the nature of its initial disclosures, the market reacted
accordingly.  The Company's stock price dropped from $20.41 per share
on April 19, 2002 to $15.43 on April 22, 2002 on volume of 2,863,000,
over seventeen times the prior day's volume.

For more details, 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


NEWPOWER HOLDINGS: Faces Suits For Securities Act Violations in S.D. NY
-----------------------------------------------------------------------
NewPower Holdings, Inc. faces nine purported securities class actions
pending in the United States District Court for the Southern District
of New York alleging federal securities violations on behalf of
purchasers of the Company's stock from October 5, 2000 to December
5,2001.

The suit charges the Company and other defendants, including its
officers and directors with violations of the federal securities laws
as a result of:

     (1) alleged misrepresentations and omissions made in connection
         with its October 5, 2001 initial public offering; and

     (2) allegedly false and misleading statements and omissions
         occurring during the class period.

Only three of the suits have been served with the Company and as a
result, the Company has not responded to the allegations in the suits.


NTL INC.: Schiffrin & Barroway Launches Securities Fraud Suit in NY
-------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Southern District of New York on
behalf of all purchasers of the common stock of NTL, Inc. (OTC Bulletin
Board: NTLD) from August 9, 2000 through November 29, 2001, inclusive.

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,
throughout the class period, defendants issued a series of materially
false and misleading statements, which failed to disclose, among other
things:

     (1) that the Company was unable to effectively integrate its
         acquisitions and, as a result was experiencing substantial
         difficulties in operating its business;

     (2) that the Company was not fully funded until 2003, and as a
         result of its massive debt burden would necessarily have to
         restructure its debt;

     (3) that the Company was under reporting churn rates by failing to
         report terminations and by continuing to bill customers for
         accounts which they had terminated, thereby creating the false
         impression that the Company was retaining customers longer and
         that migrations were decreasing; and

     (4) that the Company was improperly delaying the write down of
         billions of dollars of impaired assets, thereby artificially
         inflating the Company's operating results.

Indeed, after the end of the class period, the Company announced that
it would write off over $11 billion of goodwill and other asset
impairments prior to reporting fourth quarter results, which would
result in an astounding loss per share for the fourth quarter 2001 of
$46.46 per share.

For more details, 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 or by E-mail:
info@sbclasslaw.com


PEREGRINE SYSTEMS: Scott + Scott Launches Securities Suit in S.D. CA
--------------------------------------------------------------------
Scott + Scott LLC initiated a securities class action lawsuit on behalf
of purchasers of the securities of Peregrine Systems, Inc. (Nasdaq:
PRGN) from July 19, 2000 through April 30, 2002, inclusive, in the
United States District Court, Southern District of California.

The complaint charges the Company and certain of its officers and
directors with issuing false and misleading statements concerning the
Company's business and financial condition thereby artificially
inflating the price of Company securities.  The Company's former
outside auditor, Arthur Andersen LLP, is also named as a defendant.

Specifically, as alleged in the complaint, the plaintiff and the class
were injured as a result of defendants' misrepresentations, omissions
and other fraudulent conduct alleged.  Company stock began its decline
on May 1, 2002 following the Company's April 30, 2002 announcement that
the release of the its fiscal fourth quarter and year end financial
results would be delayed pending the completion of an audit by new
outside auditor KPMG.  Upon this announcement Company stock fell nearly
50% to close at $3.45.

On May 6, 2002 the facts regarding the Company's actual financial
condition, which were previously concealed or hidden, were revealed to
the public.  On this date, the Company shocked the market by announcing
that its board of directors had authorized an internal investigation
into accounting inaccuracies, totaling as much as $100 million, which
KPMG had brought to the attention of the audit committee.  
Simultaneously, the Board of Directors announced that the Company's
Chairman of the Board and Chief Executive Officer and its Chief
Financial Officer had both resigned all of their positions with the
Company.  Following this announcement Company stock fell an additional
61% to close at $1.01. As a result of defendants' misconduct, alleged,
plaintiff and the class have suffered substantial damages.

For more information, contact Neil Rothstein or David R. Scott by
Phone: 800-404-7770 by E-mail: nrothstein@scott-scott.com or
drscott@scott-scott.com or visit the firm's Web site: http://www.scott-
scott.com


SAF T LOK: Faces Multiple Suits For Securities Violations in S.D. FL
--------------------------------------------------------------------
Saf T Lok, Inc. faces several securities class actions filed in the
United States District Court for The Southern District of Florida, on
behalf of himself and all others similarly situated against the Company
and:

     (1) Franklin W. Brooks,

     (2) Jeffery W. Brooks,

     (3) William Schmidt,

     (4) James E. Winner, Jr.,

     (5) John F. Hornbostel, Jr. and

     (6) Goldberg Wagner Stump and Jacobs LLP

The suit, filed on behalf of all purchasers of the Company's common
stock between April 14, 2000 and April 16, 2001, seeks to pursue
remedies under the Securities Exchange Act of 1934.  The suit alleges
that the Company, which designs, manufactures, and sells its own
patented safety locks for handguns, together with five members of its
senior management and its auditor, violated the federal securities laws
during the class period.  

The suit alleges that, as a result of a previous SEC enforcement
action, the Company was subject to a cease and desist order prohibiting
it from violating the federal securities laws.  Nonetheless, it is
alleged that because the Company's financial statements that were filed
with the SEC during the class period were false and misleading, the
Company not only violated the federal securities laws, but also the
SEC's cease and desist order.

Specifically, among the allegations asserted against the Company and
the other defendants is the failure to disclose and properly account
for the fact that a catalog retailer had previously obtained twenty
years worth of Company products from a former distributor at sharply
reduced prices and was now selling these products at extremely low
prices, thereby limiting the market opportunity for the Company.

The Company denies the allegations and plans to defend itself
vigorously.


SEAVIEW VIDEO: Asks FL Court To Dismiss Consolidated Securities Suit
--------------------------------------------------------------------
Seaview Video Technology, Inc. asked the United States District Court
for the Middle District of Florida to dismiss a consolidated class
action pending against it, Richard L. McBride, its former chief
executive officer, and James Cox on behalf of all purchasers of the
Company's stock from March 30,2000 to March 19,2001.

The consolidated suit arose from five nearly identical suits commenced
in May 2001, asserting violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.  
In the five initial complaints, the plaintiffs to those actions
alleged, among other things, that during the class period, the
defendants:

     (1) misstated the Company's sales and revenue figures;

     (2) improperly recognized revenues;

     (3) misrepresented the nature and extent of the Company's dealer
         network;

     (4) falsely touted purported sales contracts and agreements with
         large retailers;

     (5) misrepresented the Company's ability to manufacture, or to
         have manufactured, its products; and

     (6) misrepresented the Company's likelihood of achieving certain
         publicly announced sales targets.

In February 2002, the Company filed its motion to dismiss.  The effect
of this action on the Company's financial position cannot be assessed
with any degree of accuracy.


SEITEL INC.: Cauley Geller Commences Securities Fraud Suit in S.D. TX
---------------------------------------------------------------------
Cauley Geller Bowman & Coates, LLP initiated a securities class action
in the United States District Court for the Southern District of Texas
on behalf of purchasers of Seitel, Inc. (NYSE: SEI) common stock during
the period between July 13, 2000 and April 1, 2002, inclusive.

The suit charges that the Company and certain of its senior officers
improperly recognized revenue and net income during fiscal years 2000
and 2001 by recording revenue on data licensing contracts, prior to
specific data being selected by and delivered to its customers.

The complaint further alleges that top insiders profited illegally from
insider trading in the Company's common stock and earned exorbitant
commissions and bonuses that were tied to reported revenue and
earnings.

During the class period and as a result of defendants'
misrepresentations, shares of Company common stock traded as high as
$23.03 per share.  The Company currently trades, after having restated
its false financial statements, at approximately $8.00 per share.

On May 3, 2002, the Company issued a press release acknowledging that
the financial statements it issued during the class period were not
prepared in conformity with generally accepted accounting principles.  
The Company also acknowledged that the May 3, 2002 disclosures were a
result of its conversations with the SEC.

For more details, 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


UNIVERSAL ACCESS: Mounting Vigorous Defense V. Securities Suit in TX
--------------------------------------------------------------------
Universal Access Global Holdings Inc. (Nasdaq: UAXS) labeled "without
merit" the securities class actions pending against it, certain of its
officers and directors, and certain other persons in the United States
District Court for the Eastern District of Texas, on behalf of
shareholders who acquired Company securities between May 10, 2001 and
April 24, 2002, inclusive.

The suits allege violations of the Securities Act of 1934. The suits
charge 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 Company expects these complaints, and any similarly filed actions,
to be consolidated into a single case.  The Company has not been served
with the complaints, but has reviewed copies of the filings.  The
Company intends to defend the actions vigorously.


VERISIGN INC.: Cauley Geller Commences Securities Fraud Suit in N.D. CA
-----------------------------------------------------------------------
Cauley Geller Bowman & Coates, 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 January 25, 2001 and April 25,
2002, inclusive.

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 laces 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 Company stock, defendants
misrepresented the Company's true prospects in an effort to conceal its
improper acts until they were able to sell at least $26 million worth
of their own stock and use the Company's 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 Jackie Addison, Sue Null or Shelly Nicholson
by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone:
888-551-9944 or by E-mail: info@classlawyer.com


VERISIGN INC.: Schiffrin & Barroway Commences Securities Suit in CA
--------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Northern District of California on
behalf of all purchasers of the common stock of VeriSign Inc.
(Nasdaq:VRSN) from January 25, 2001 through April 25, 2002, inclusive.

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 suit 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 the Company 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 the Company's 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 Company stock, defendants
misrepresented the Company's true prospects in an effort to conceal the
Company's improper acts until they were able to sell at least $26
million worth of their own stock and use Company 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 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 or by E-mail:
info@sbclasslaw.com


WEBLINK WIRELESS: Court Stays Securities Suits After Bankruptcy Filing
----------------------------------------------------------------------
The five class actions pending in the United States District Court for
the Northern District of Texas against Weblink Wireless, Inc. and its
Chairman John D. Beletic have been stayed, after the Company filed for
Chapter 11 Bankruptcy.

The suits seek to recover an unspecified amount of monetary damages
allegedly caused by the Company's alleged fraudulent scheme to
artificially inflate the price of its common stock through a series of
alleged false and misleading statements to the market and alleged
material omissions in violation of federal and state securities laws.  
The suits were filed on behalf of persons who purchased the
Company's common stock on the open market, during the period from
December 29, 2000, through February 20, 2001.

No discovery has yet occurred, and the Company believes the lawsuits
have no merit.  In management's opinion, the ultimate outcome of the
suit will not have a material adverse effect on the results of
operations or financial condition of the Company.


XEROX CORPORATION: Discovery Proceeds in Securities Suit in CT Court
--------------------------------------------------------------------
Discovery is proceeding in the consolidated securities class action
pending against Xerox Corporation in the United States District Court
for the District of Connecticut on behalf of purchasers of the
Company's common stock from October 22,1998 to October 7, 1999.  The
suit also names as defendants:

     (1) Barry Romeril,

     (2) Paul Allaire, and

     (3) G. Richard Thomas.

The amended consolidated complaint in the action alleges that in
violation of Section 10(b) and/or 20(a) of the Securities Exchange Act
of 1934, as amended (34 Act), and Securities and Exchange Commission
Rule 10b-5 thereunder, each of the defendants is liable as a
participant in a fraudulent scheme and course of business that operated
as a fraud or deceit on purchasers of the Company's common stock during
the class period by disseminating materially false and misleading
statements and/or concealing material facts.

The amended complaint further alleges that the alleged scheme:

     (i) deceived the investing public regarding the economic
         capabilities, sales proficiencies, growth, operations and the
         intrinsic value of the Company's common stock;

    (ii) allowed several corporate insiders, such as the named
         individual defendants, to sell shares of privately held common
         stock of the Company while in possession of materially
         adverse, non-public information; and

   (iii) caused the individual plaintiffs and the other members of the
         purported class to purchase common stock of the Company at
         inflated prices.

In September 2001, the Company asked the Court to dismiss the suit, but
the Court refused to do so.  The parties are now engaged in discovery.
The Company denies the allegations in the suit and intends to
vigorously defend the action.


XEROX CORPORATION: Faces Consolidated Shareholder Derivative Suit in NY
-----------------------------------------------------------------------
Xerox Corporation and several current and former members of its board
of directors face a consolidated putative shareholder derivative action
pending in the Supreme Court of the State of New York, County of New
York.  The suit names the Company as a nominal defendant. The suit also
names as defendants:

     (1) William F. Buehler,

     (2) B.R. Inman,

     (3) Antonia Axson Johnson,

     (4) Vernon E. Jordon, Jr.,

     (5) Yotaro Kobayashi,

     (6) Hilmar Kopper,

     (7) Ralph Larsen,

     (8) George J. Mitchell,

     (9) N.J. Nicolas, Jr.,

    (10) John E. Pepper,

    (11) Patricia Russo,

    (12) Martha Seger,

    (13) Thomas C. Theobald,

    (14) Paul Allaire,

    (15) G. Richard Thoman,

    (16) Anne Mulcahy and

    (17) Barry Romeril

Previously, two separate derivative actions had been filed in that
court and another had been pending in the United States District Court
for the District of Connecticut.  The defendants filed a motion to
dismiss in one of the New York actions.  Subsequently, the parties to
the federal action in Connecticut agreed to dismiss that action,
without prejudice, in favor of the earlier-filed New York
action.  The parties also agreed, subject to Court approval, to seek
consolidation of the New York actions and a withdrawal, without
prejudice, of the motion to dismiss.

In May 2001, the Court entered an order, which, among other things,
approved that agreement.  The plaintiffs in the two prior New York
actions and the federal action in Connecticut, along with one
additional plaintiff, then filed an amended consolidated complaint.

The amended complaint alleges that each of the individual defendants
breached their fiduciary duties to the Company and its shareholders by,
among other things:

     (i) ignoring indications of a lack of oversight at the Company and
         the existence of flawed business and accounting practices
         within the Company's Mexican and other operations which
         allegedly caused serious harm to the Company;

    (ii) failing to have in place sufficient controls and procedures to
         monitor the Company's accounting practices;

   (iii) knowingly and recklessly disseminating and permitting to be
         disseminated, misleading information to shareholders and the
         investing public; and

    (iv) permitting the Company to engage in improper accounting
         practices.

The amended complaint further alleges that each of the individual
defendants breached their duties of due care and diligence in the
management and administration of the Company's affairs and grossly
mismanaged or aided and abetted the gross mismanagement of the Company
and its assets.  Further, the plaintiffs allege that the defendant
members of the Audit Committee failed to adequately inform themselves
about the Company's accounting practices and breached their fiduciary
duties.

The individual defendants deny the wrongdoing alleged and intend to
vigorously defend the litigation.


XEROX CORPORATION: Denies Allegations in Securities Suit in CT Court
--------------------------------------------------------------------
Xerox Corporation, Inc. intends to vigorously oppose a consolidated
securities class action pending in the United States District Court for
the District of Connecticut on behalf of purchasers of the Company's
securities and bonds from February 17,1998 to February 6,2001.  The
suit names as defendants the Company and:

     (1) KPMG LLP (KPMG),

     (2) Paul A. Allaire,

     (3) G. Richard Thoman,

     (4) Anne M. Mulcahy,

     (5) Barry D. Romeril,

     (6) Gregory Tayler and

     (7) Philip Fishbach

Among other things, the second consolidated amended complaint, filed on
February 11, 2002, generally alleges that each of the Company, KPMG,
and the individual defendants violated Section 10(b) of the 34 Act and
Securities and Exchange Commission Rule 10b-5 thereunder.  The
individual defendants are also allegedly liable as "controlling
persons" of the Company pursuant to Section 20(a) of the 34 Act.

The suit claims that the defendants participated in a fraudulent scheme
that operated as a fraud and deceit on purchasers of the Company's
common stock by disseminating materially false and misleading
statements and/or concealing material adverse facts relating to the
Company's Mexican operations and other matters relating to the
Company's accounting practices and financial condition.

The plaintiffs further allege that this scheme deceived the investing
public regarding the true state of the Company's financial condition
and caused the plaintiffs and other members of the alleged class to
purchase the Company's common stock and bonds at artificially inflated
prices.

The defendants denied the allegations in the suit and are confident
that the suit will not have a material adverse effect on the Company's
finances and operations.


                              *********

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-
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Information contained herein is obtained from sources believed to be
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