/raid1/www/Hosts/bankrupt/CAR_Public/020610.mbx
C L A S S A C T I O N R E P O R T E R
Monday, June 10, 2002, Vol. 4, No. 113
Headlines
ABBOTT LABORATORIES: Meridia Drug Users Sue Over Alleged Side Effects
ARTHUR ANDERSEN: Pays Settlement Balance Owed To Baptist Foundation
BIG 5: CA State Court Approves Settlement in Overtime Wage Lawsuit
CALIFORNIA: Federal Judge Denies Class Status To Ex-Gang Member's Suit
CALIFORNIA: San Diego City Settles Suit By Refunding Double-Paid Fines
CATHOLIC CHURCH: Worcester Diocese Not Liable For Abuse, Says Lawyer
COLORADO: Denver's Photo Radar Program Returns To Streets on June 15
CONCORD CAMERA: Mounting Vigorous Defense V. Securities Suits in FL
E-REX INC.: Denies Charges in NV Suit, Plaintiffs Proceed To Discovery
ENRON CORPORATION: Former Employees May Get $29 Million Severance Deal
FLORIDA: Land Speculator Sells Land Back To Homeowners To Settle Suit
FORD MOTOR: Appeals Court Won't Reconsider Overturning of Class Status
INCO LTD: Seeks Denial Of Class Certification For Environmental Suit
ISLAND SOAP: Voluntarily Recalls 29,000 Candles For Fire, Burn Hazard
JAPAN: A-Bomb Survivors Group To Back Suits Seeking War Reparations
JDS UNIPHASE: Faces Securities, Derivative Suits in CA, DE, NY Courts
LESLIE'S POOLMART: Agrees To Settle For $1.2M Overtime Wage Suit in CA
PHILIP MORRIS: OR Court Reinstates US$79.5M Damages in Tobacco Suit
RENT-WAY INC.: Asks PA Court To Dismiss Consolidated Securities Suit
SPACELABS MEDICAL: Shareholders Sue To Block Instrumentarium Merger
STATE FARM: Faces Consumer Suit Over "Unfair" Credit Policy in IL Court
SYMMETRICOM INC.: Plaintiffs Appeal Summary Judgment in Securities Suit
THQ INC.: Trial in Securities Suit Set For November 2002 in C.D. CA
US CUSTOMS SERVICE: Customs Agents File Suit Over Racial Discrimination
ZONAGEN INC.: Asks Court To Dismiss Remaining Securities Claim in Suit
New Securities Fraud Cases
ALCATEL SA: Marc Henzel Commences Securities Fraud Suit in S.D. NY
ALLIED CAPITAL: Marc Henzel Commences Securities Fraud Suit in S.D. NY
CONCORD CAMERA: The Emerson Firm Commences Securities Fraud Suit in FL
CONCORD CAMERA: Rabin & Peckel Commences Securities Fraud Suit in FL
HALLIBURTON COMPANY: Cauley Geller Lodges Securities Suit in N.D. TX
HALLIBURTON COMPANY: Federman & Sherwood Lodges Securities Suit in TX
LANTRONIX INC.: Marc Henzel Commences Securities Fraud Suit in C.D. CA
MIRANT CORPORATION: Schiffrin & Barroway Lodges Securities Suit in GA
MIRANT CORPORATION: Marc Henzel Commences Securities Suit in N.D. GA
NEOPHARM INC.: Cauley Geller Launches Securities Fraud Suit in N.D. IL
PEREGRINE SYSTEMS: Weiss & Yourman Launches Securities Suit in S.D. CA
PEREGRINE SYSTEMS: Marc Henzel Lodges Securities Fraud Suit in S.D. CA
PEREGRINE SYSTEMS: Harvey Greenfield Lodges Securities Suit in S.D. TX
RAYOVAC CORPORATION: Brian Felgoise Lodges Securities Suit in W.D. WI
RAYOVAC CORPORATION: Marc Henzel Commences Securities Suit in W.D. WI
SALOMON SMITH: Neiman Law Commences Securities Fraud Suit in S.D. NY
SALOMON SMITH: Dyer & Shuman Commences Securities Fraud Suit in S.D. NY
TEXTRON INC.: Cauley Geller Commences Securities Suit in Rhode Island
TYCO INTERNATIONAL: Johnson & Perkinson Lodges Securities Suit in NH
WORLDCOM INC.: Marc Henzel Lodges Securities Fraud Suit in S.D. NY
*********
ABBOTT LABORATORIES: Meridia Drug Users Sue Over Alleged Side Effects
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Five users of the diet drug Meridia recently filed a class action
against Abbott Laboratories, in US District Court, over alleged side
effects, including heart problems. The lawsuit asks that the Company
stop selling Meridia and pay for the medical expenses and loss of
earnings brought on by the drug's alleged side effects, according to a
report by Associated Press Newswires.
The suit claims that the Company failed to warn people about the
severity of the drug's side effects when Meridia hit pharmacy shelves
in 1998. Jill Smoter, a spokeswoman for the Chicago-based Company,
said possible side effects are clearly listed for doctors and patients.
In recent statements, the Company has said that Meridia, in combination
with diet and exercise, can help patients lose weight. It also said
that the drug is safe, based on an analysis of the 12,000 people
involved in clinical trials.
The Company has noted that people taking the drug are severely
overweight, meaning they are likely to have other health problems. One
plaintiff, Connie Fitzgerald, of Lima, Ohio, said she never had any
heart problems until she started taking the drug. Doctors have since
found a blockage in an artery.
Last month, federal regulators said the Company had not properly
reported to the government the death of a Meridia user and certain
other risk information. The Company has said that the death was a
rumor it was unable to substantiate, and said, also, that it had fully
responded to the government's other findings.
ARTHUR ANDERSEN: Pays Settlement Balance Owed To Baptist Foundation
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Arthur Andersen LLP paid the balance of a US$217 million settlement to
investors in the failed Baptist Foundation of Arizona (BFA), bringing
the accounting firm close to ending several cases brought against it in
connection with its audits of the foundation, The Wall Street Journal
reports.
On July 12, in Phoenix, Superior Court Judge Edward Burke is scheduled
to hold a preliminary fairness hearing to determine whether the
settlement is fair to the BFA investors who filed a class action
against Andersen. On the same date, there will also be a bankruptcy
court hearing on the settlement. Final approval is expected in
September.
"Andersen has paid the balance, and we are proceeding forward" with
obtaining final court approval of the settlement, said attorney John
Coffey, lead attorney of the foundation's liquidation trust. Cases
brought against Andersen by the state attorney general and the
liquidation trust were among those settled in the agreement, along with
a case brought by foundation investors and a state administrative
proceeding by the Arizona Accounting Board.
The Baptist Foundation, formed in 1948 as a nonprofit to raise money
for Baptist causes, while paying returns to investors, approximately
11,000 investors, mostly elderly, lost $570 million in the foundation's
1999 collapse, one of the largest bankruptcies ever by a nonprofit.
The liquidation trust alleged that Andersen accountants in Phoenix had
failed to detect or disclose fraudulent activity at BFA, including the
hiding of real-estate losses by transferring over valued assets to
shell companies in exchange for IOUs, and engaging in a Ponzi-like
scheme of using new investor funds to make payments to old investors.
Andersen denies any wrongdoing, and said its accountants were duped by
foundation management.
When the money from Andersen is combined with proceeds from the sale of
foundation assets and about $18.33 million from a settlement with BFA
law firm Jennings, Strauss & Salmon of Phoenix, investors are expected
to recover an estimated 70 cents on the dollar.
Andersen, on May 6, made a down payment to the trust of $11.32 million
and subsequently initiated the process of transferring the
remaining $206 million on Tuesday of this week, the deadline for the
accounting firm to pay the balance of the settlement or face a possible
court-imposed payment schedule that also would have included interest
payments.
The Company's payment of this amount was made possible when it
recapitalized its Bermuda-based insurance company, Professional
Services Insurance Co., on May 30, said a person close to the
situation.
BIG 5: CA State Court Approves Settlement in Overtime Wage Lawsuit
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The California Superior Court in Los Angeles approved a settlement
proposed by Big 5 Corporation to settle a class action, alleging
violations of the California Labor Code and the Business and
Professions Code. The suit was brought on behalf of two subclasses
comprised of the Company's California store managers and its California
first assistant store managers.
The suit alleges that the Company improperly classified its store
managers and first assistant store managers as exempt employees not
entitled to overtime pay for work in excess of forty hours per week.
The suit seeks, on behalf of the class members:
(1) back pay for overtime allegedly not paid,
(2) statutory penalties in the amount of an additional thirty
days,
(3) wages for each such employee whose employment terminated in
the four years preceding the complaint, and
(4) injunctive relief to require the Company to treat its store
management as non-exempt
In February 2002, the Company filed a joint settlement with the court.
In March 2002, the court entered an order preliminarily approving the
settlement and setting a hearing for July 15, 2002 for the purpose of
granting final approval.
Under the terms of the settlement, the Company agreed to pay $32.46 per
week of active employment as store manager during August 8, 1997
through December 31, 2001, the covered period, and $25.50 per week of
active employment as first assistant store manager during the covered
period to each class member who submits a valid and timely claim form.
The Company also agreed to pay attorneys' fees, plus costs and
expenses, in the amount of $690,000, as well as up to $40,000 for the
cost of the settlement administrator. In addition, the Company agreed
to pay the class representatives an additional aggregate amount of
$32,500 for their service as named plaintiffs.
The Company admits no liability or other wrongdoing with respect to the
claims set forth in the lawsuit. Once final approval is granted, the
settlement will constitute a full and complete settlement and release
of all claims related to the lawsuit. The Company intends to defend
the case vigorously if the court does not grant final approval of the
settlement agreement.
CALIFORNIA: Federal Judge Denies Class Status To Ex-Gang Member's Suit
----------------------------------------------------------------------
U.S. District Judge Gary A. Feess has declined to grant class action
status to a former gang member's malicious-prosecution lawsuit against
Rampart police officers, the Los Angeles Times reports.
Raul Rodriguez, a former 18th Street gang member sought to represent
anyone whose civil rights allegedly had been violated by officers in
the Los Angeles Police Department's Rampart's Division since 1990. Mr.
Rodriguez contended that the division had a practice and policy of
violating suspects' rights by making unfounded arrests, using excessive
force, fabricating evidence and lying in court.
In a 22-page opinion, Judge Feess wrote that Mr. Rodriguez's case was
not sufficiently representative of the proposed class of victims.
Judge Feess pointed out that because Mr. Rodriguez was not himself a
victim of excessive force, he did not have standing to seek relief for
those who were.
In his original lawsuit in 1999, Mr. Rodriguez alleged that Rampart
officers tried to frame him for a murder he did not commit. He was
acquitted at trial.
Even if Mr. Rodriguez were representative of the broad class of Rampart
victims, Judge Feess said that a class action would be unwieldy. The
court would have to conduct hearings for each member of the class to
determine whether his or her maltreatment resulted from the police
division's alleged policy and practice of abusing crime suspects.
Judge Feess said he had no idea how many new plaintiffs might be
brought into the litigation through class action certification, but he
pointed out that more than 150 individual lawsuits have been filed in
federal court. Many of them have been settled for substantial sums, he
said, suggesting that it might be better for prospective class members
to file their own lawsuits.
Michael Kamin, one of Mr. Rodriguez's lawyers, said that he was
disappointed by the decision, but expressed hope that Judge Feess would
rule favorably on another class-action request that is pending.
CALIFORNIA: San Diego City Settles Suit By Refunding Double-Paid Fines
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The city of San Diego, California has agreed to refund parking fines
paid by 9,200 people who mistakenly double-paid their parking tickets,
The San Diego Union-Tribune reported recently.
As part of a proposed settlement, the City will pay at least $516,588
to settle a class action filed last June in San Diego federal court,
accusing the City of violating federal debt-collection laws and various
state statutes. The City will give the refunds to people who overpaid
tickets issued between April 1, 1998, and June 30, 2001.
US District Judge M. James Lorenz has signed preliminary approval of
the settlement and will decide on August 12 whether to give the
settlement final approval.
Michael Conger, one of the plaintiffs' attorneys, explained how the
parking tickets' double-payment happened. He said the City routinely
failed to notify the Department of Motor Vehicles (DMV) when people
paid overdue parking tickets. As a result, the drivers had to pay the
fines again when they tried to register their vehicles with the DMV.
The DMV automatically places a hold on vehicle registrations if parking
tickets have not been paid for two months. Since the money collected
by the DMV is sent to the City, the City received the ticket payment
made to it directly, plus the payment made to the DMV.
Mr. Conger said the City would have continued to delay repayments of
the tickets, if the lawsuit had not been filed. Mr. Conger
characterized the "mix-up" as "a combination of both incompetence and,
frankly, some corruption." The City, on the other hand, blamed the
problem on a computer glitch that they say was fixed in October 1999.
Mr. Conger estimated that most of the overpayments ranged from $50 to
$100. He said the final amount of the settlement will depend on how
many claims are filed. The plaintiffs' attorneys fees, which may be
paid out of the settlement, could amount to as much as 25 percent of
the final figure.
CATHOLIC CHURCH: Worcester Diocese Not Liable For Abuse, Says Lawyer
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The diocese is not to blame, says a lawyer representing the Catholic
Diocese of Worcester, and responding to a class action civil suit,
filed by two alleged victims of the Rev. Robert E. Kelley, according to
the Telegram & Gazette (Worcester, MA).
Damages to the plaintiffs "were caused in whole or in part or were
contributed to by the negligence, act or failure to act of the
plaintiffs," and they cannot recover damages, said Atty. Joanne L.
Goulka, in a filing with the court.
Ms. Goulka, of the Stoneham law firm of Griffin & Goulka, said the
diocese does not have enough information to admit or deny most of the
allegations made in the class action. She said she does not believe a
class action is warranted.
The diocese's position, she added, is that any injuries to the two
women were caused by someone other than the diocese, which is not
legally responsible. "Any wrongful conduct committed by the defendant,
Robert E. Kelley, was undertaken outside the course and scope of any
relationship he may have had with the defendant," according to the
diocese's response.
The suit initially was filed on May 20 in Worcester Superior Court on
behalf of Karen A. Pedersen of Fitchburg and unnamed others who may
have been sexually molested by Rev. Kelley. The lawsuit maintains Ms.
Pedersen was abused by the priest when she was eight years old and he
was assigned to a parish in Lunenburg. The suit later was amended to
include Claire Baillargeon Groccia, who said she was abused when she
was six by Rev. Kelley, who was assigned to a parish in Southbridge at
the time.
Rev. Kelley has not served as a priest since 1986, but has not been
defrocked. He currently is facing criminal charges of child rape in
connection with abuse charges by another woman.
COLORADO: Denver's Photo Radar Program Returns To Streets on June 15
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Photo radar remains a controversial subject in Denver, and even in the
state legislature, as a class action that seeks refunds of all fines
paid under the photo radar program since 1998 is still pending.
However, the program is set for re-implementation on June 15,2002.
The City of Denver suspended their photo radar system after County
Judge Mary Celeste ruled in January that it was illegal, because the
tickets for violations were not issued by police, the Associated Press
Newswires reports. A private contractor prepared and sent the summons.
The photo radar program also violates state law by appearing to
compensate the contractor based on the volume of tickets issued,
according to Judge Celeste. Mayor Wellington has said that the program
could be scrapped if it costs the city money.
State legislators have criticized such programs as revenue generators
for cities. New laws passed during the current legislative session
limit photo radar vans to neighborhood streets and school zones. The
new laws also ban Denver from booting vehicles of motorists who do not
pay photo radar tickets. The program raised $3.049 million, with $3
million going to the vendor and $49,000 to the City.
CONCORD CAMERA: Mounting Vigorous Defense V. Securities Suits in FL
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Concord Camera Corporation faces several securities class actions
commenced in April and May 2002, against the Company and certain of its
officers in the United States District Court for the Southern District
of Florida. The suits were filed on behalf of all persons who
purchased the Company's common stock during the period from January 18,
2001 through June 22, 2001, inclusive.
The suits assert, among other things, that the Company made untrue
statements of material fact and omitted to state material facts
necessary to make statements made not misleading in periodic reports it
filed with the Securities and Exchange Commission and in press releases
it made to the public regarding its operations and financial results.
The allegations are centered around claims that throughout the class
period, the Company failed to disclose that a large portion of its
accounts receivable was represented by a delinquent and uncollectible
balance due from then customer, KB Gear Interactive, Inc., and claims
that such failure artificially inflated the price of the Company's
common stock.
The Company intends vigorously to defend the lawsuits. These lawsuits
are in their earliest stage and discovery has not yet commenced.
Although the Company believes these lawsuits are without merit, their
respective outcomes cannot be predicted, nor if they are adversely
determined, can the ultimate liability of the Company, which could be
material, be ascertained.
E-REX INC.: Denies Charges in NV Suit, Plaintiffs Proceed To Discovery
----------------------------------------------------------------------
All six defendants in a civil fraud suit against E-Rex, Inc. (OTC
Bulletin Board: EREX) and its officers and against International
Investment Banking Inc. (IIBI) have answered the suit, which will move
toward the discovery process in the next few days, according to
plaintiff Chris Ford, successor trustee of the Carol Gamble Trust 86.
Mr. Ford, a major Company shareholder, said the Company has made no
formal attempt to settle the case for fraud, civil theft, failure to
repay a promissory note and breach of fiduciary duties on the part of
the Company, and Donald Mitchell, who was serving as chairman and
president of IIBI at the same time he was the Company's chairman of the
board. The suit also names as defendants:
(1) Carl Dilly, President, CEO,
(2) Joseph Pacheco, director, and
(3) Jeffrey Harvey, former Director and Treasurer
Mr. Ford also said the Company has made no formal attempt to settle a
class action lawsuit/class action pending brought by a group of Company
shareholders against the company in the United States District Court in
Nevada in February 2002. The next hearing on that case is set for July
8 in Las Vegas.
Mr. Ford said the attitude of management is clearly reflected in a
February 2 article in the South Florida Business Journal, which quoted
E-Rex president and CEO Carl Dilley, "I have no control over the
gamblers of the world that would be so foolish as to put their life
savings in any OTC stock, including ours, and actually for no one does
it make sense to invest your life savings in any stock . An investment
in our company is by any measure speculative and no one should put one
penny in this company that they are not prepared to lose." Mr. Dilley
wrote this in a February 2, 2002 e-mail, according to the Journal.
For more information, contact Andrew M. Rose or Marketing Ink, Inc. by
Phone: 954-428-2678, 954-234-5806 (cell 24/7) or by E-mail:
andy@marketingink.net.
ENRON CORPORATION: Former Employees May Get $29 Million Severance Deal
----------------------------------------------------------------------
Enron Corporation and the approximately 4,200 employees the Company
fired when it declared bankruptcy on December 2, 2001, have tentatively
agreed to a total severance payment of about US$29 million, according
to the Houston Chronicle.
The former workers and creditors committee have so far agreed to a
payment averaging about $7,000 a worker, with only a formula for
parceling out the money yet to be settled, sources close to the
negotiations, who spoke on condition of anonymity, told the newspaper.
AFL-CIO attorney Damon Silvers, who is involved in the negotiations,
sounded a note of caution, however. "We have not reached an agreement
on all the points," he said. "No one is willing to say I have agreed
on this point without agreeing on all of the points. They are
interlocking. I would not say there has been a definitive agreement
about money."
He added, "It will be my guess that we will be able to announce that we
will be able to get significant amounts of money for laid-off Enron
workers who have been waiting for it, if they decide to accept it. But
at the moment, we are not there yet."
The Chronicle reported payments will be capped at about $13,500, the
amount of payment to each employee depending on time spent with the
company, salary at time of severance, the amount already received and
other factors. Employees already have received $27 million in
severance payments, which included the $4,500 each worker received
following the December furloughs, plus another $1,100 awarded each
worker by US Bankruptcy Judge Arthur Gonzalez last month.
The Company and its creditors are not required to pay any more
severance. Under bankruptcy law, former employees are often the last
to be paid.
The payments will have no effect on the class actions filed by ex-
employees against the Company, its former executives, the Arthur
Andersen accounting firm and others potentially liable in its collapse.
FLORIDA: Land Speculator Sells Land Back To Homeowners To Settle Suit
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A Pinella County land speculator who quietly bought submerged bay front
land at a county tax sale, has agreed to sell the plots back to dozens
of frustrated homeowners, but not before one of those frustrated
homeowners filed a class action against him, Associated Press Newswires
reports.
Don Connolly made the agreement to sell the land back a week after a
Boca Ciega Bay homeowner, Geoff Apthorp, filed a lawsuit arguing that
Mr. Connolly's ownership of the land was unfair and allowed him to
restrict the use of homeowners' docks.
Mr. Connolly paid $2,000 for a stretch of submerged land behind 61
waterfront homes. He initially offered to sell the land back to
homeowners at $100,000 each, but then lowered the price to $5,000 each.
Mr. Connolly, 44, owns 50 properties in Pinellas County. In the East
Lake subdivision of Tarpon Woods, Mr. Connolly paid $848 at a November
tax deed sale for a four-acre lake and a small ring of land surrounding
it. He offered to sell the land behind each house for $30,000. When
the residents balked, he began building a fence to obstruct their
views.
FORD MOTOR: Appeals Court Won't Reconsider Overturning of Class Status
----------------------------------------------------------------------
The United States Seventh Circuit Court of Appeals refused to
reconsider the earlier ruling of a three-judge appeals court panel
overturning class certification of a lawsuit filed against Ford Motor
Company and Bridgestone/Firestone, Inc. over alleged faulty tires,
according to an Associated Press report.
The suit was filed by consumers who bought the popular Ford Explorer
SUV fitted with Firestone tires. Over the past two years, the Explorer
was involved in rollover accidents that caused hundreds of deaths and
injuries. The suit, however, asserts loss of value and consumer
protection claims, not injury or death claims, which are stated in
separate suits nationwide.
Federal Judge Sarah Evans Barker initially allowed the suit to proceed
as a class action, but the three-judge panel overturned the decision,
saying a single class would not be manageable, in part because each
plaintiff's case would be different and based on the laws in various
states.
Plaintiffs' lawyers had argued the three-judge panel wrongly applied
the law regarding class action when they overturned the class
certification, but the full appellate court rejected this.
None of the rulings apply to hundreds of personal injury and wrongful
death lawsuits filed against the companies, the Associated Press
reports.
INCO LTD: Seeks Denial Of Class Certification For Environmental Suit
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Inco Ltd. urged a judge not to certify as a class action, a lawsuit
brought by 20,000 residents of Port Colborne, Ontario, who are seeking
$750 million for pollution caused by the Company's facility in the
town's soil. Company attorneys said that this would deter other
corporations from cleaning up their pollutants voluntarily, The Globe
and Mail reported recently.
A long-term plan by the Company for removing nickel as well as other
residues from the town's soil is the "first process of its kind in
Canada and . a product of private corporate willingness to assume
responsibility for the legacy of a different industrial era," lawyer
Larry Lowenstein told the Ontario Superior Court's Mr. Justice Ian
Nordheimer.
"If the lesson of this case turns out to be that the main reward of
sponsoring (such a) process is tag-along class-action litigation, few
companies will find following the path blazed by Inco a responsible use
of shareholders' assets," Mr. Lowenstein added.
Two residents of the town in the Niagara Peninsula want to add most of
the town's population as plaintiffs in the lawsuits they have filed
over the contamination of their homes and gardens by an Company
refinery. Wilf Pearson and Gisele Bonneau say residents have suffered
numerous health problems, run a high risk of developing cancer and have
seen their property values plummet since soil testing in 2000 revealed
high levels of the carcinogen nickel oxide.
Mr. Lowenstein told Judge Nordheimer it would be impossible to resolve
the residents' claims as a class because so many individual factors are
involved:
(1) Health claims would be affected by whether a person smokes or
has occupational or family stresses;
(2) Property claims would depend on how close the homes are to the
refinery, and the level of pollutants found; and
(3) the proposed time frame for eligibility in the class - anyone
who has lived in the town since 1995 - is arbitrary and
unfair, because most of the polluting emissions were deposited
before 1960.
ISLAND SOAP: Voluntarily Recalls 29,000 Candles For Fire, Burn Hazard
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Island Soap & Candle Works is cooperating with the United States
Consumer Product Safety Commission (CPSC) by voluntarily recalling
about 29,000 candles. Pieces of the candles' wick can fall off while
burning and the wick can re-ignite after extinguishing, posing a burn
and fire hazard. The Company has received one report of a fire that
caused minor property and smoke damage. No injuries have been
reported.
The recalled candles have a single wick surrounded by wax in a brown
coconut shell. They were sold in about 20 different scents and ranged
in sizes from "Mini" to "Large." The coconut shell has a label on the
bottom that reads "Island Soap & Candle Works, Hand made in Hawaii, Do
not leave a burning candle unattended." Some of the candles have moon
and star cutouts around the upper rim of the coconut shell.
The Company exclusively sold these candles in Oahu, Maui, and Kauai,
Hawaii and Monterey, California from April 2000 through April 8, 2002
for between $8 and $15.
For more information, contact the Company by Phone: 877-535-5566
between 8 am and 5 pm Hawaii standard time and 11 am and 8 pm Pacific
standard time Monday through Friday.
JAPAN: A-Bomb Survivors Group To Back Suits Seeking War Reparations
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A nationwide organization for atomic bomb survivors decided recently to
support some survivors bringing group lawsuits to demand that Japan
recognize that they suffer from bomb-related illnesses and pay them
special medical allowances, the Kyodo News has reported.
The general assembly of the Japan Confederation of A-Bomb and H-Bomb
Sufferers Organizations (Hidankyo) also unanimously decided at its
general assembly held in Tokyo to seek official recognition for those
survivors from prefectural governments across Japan and to file group
lawsuits against the state if the applications, expected to be lodged
July 7, are rejected.
Hidankyo will hold lawyers' meetings on July 27 and another meeting on
September 3 to discuss the contents of the litigation. The potential
plaintiffs are demanding that the state nullify its earlier dismissal
of their applications to be recognized as victims of illnesses related
to the atomic bombings of Hiroshima and Nagasaki in 1945.
The potential group lawsuit, if filed, would be the first time A-bomb
survivors have filed a group lawsuit. Individuals have filed lawsuits,
with Hideko Matsuya, a woman from Nagasaki, winning a Supreme Court
verdict in July last year.
As of March last year, there were 291,824 A-bomb survivors certified by
the government of Japan. Of these, only 2,238 were recognized by the
government as suffering from symptoms of A-bomb related illnesses. The
state provides about 140,000 yen a month in medical allowances if it
recognizes a person as suffering from bomb-related illness.
Hidankyo said that although Ms. Matsuya won her case, such individual
cases do not force the state to extend the allowance to other survivors
suffering from similar bomb-related illnesses. Hidankyo said it hopes
the suit will have the power to move the government.
JDS UNIPHASE: Faces Securities, Derivative Suits in CA, DE, NY Courts
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JDS Uniphase, Inc. faces several securities and shareholder derivative
class actions in California and New York courts, relating to alleged
violations of federal securities laws.
Some suits were commenced in the United States District Court for the
Northern District of California against the Company, one of its
stockholders, and several of its current and former officers and
directors. These complaints allege violations of the federal
securities laws, specifically Section 10(b), Rule 10b-5, and Section
20(a) of the Securities Exchange Act of 1934. The suits were filed on
behalf of purchasers of the Company's common stock during the period
from July 27, 1999 through July 26, 2001.
Another securities suit was commenced in the United States District
Court for the Southern District of New York against the Company, its
independent auditors, Ernst & Young LLP, and two of the Company's
current and former officers and directors.
The NY suit alleges violations of the federal securities laws,
specifically Section 10(b), Rule 10b-5, and Section 20(a) of the
Securities Exchange Act of 1934, and also alleges state law claims for
common law fraud. The suit was filed on behalf of purchasers of the
Company's common stock during the period from September 28, 2000
through July 26, 2001.
The Company also faces several shareholder derivative suits in an
United States District Court for the Northern District of California
and in the Delaware Court of Chancery for New Castle County.
The suits, which name the Company's current and former officers and
directors as defendants, are based on the same factual allegations and
circumstances as the purported securities class actions and allege
state law claims for:
(1) breach of fiduciary duty,
(2) misappropriation of confidential information,
(3) contribution and indemnification,
(4) insider trading,
(5) abuse of control,
(6) gross mismanagement, and
(7) unjust enrichment
None of the above suits have been consolidated and no trial date has
been set. The Company believes that the factual allegations and
circumstances underlying these actions are without merit. The
litigation could prove to be costly and time consuming, however, and
there can be no assurance that the Company will prevail.
LESLIE'S POOLMART: Agrees To Settle For $1.2M Overtime Wage Suit in CA
----------------------------------------------------------------------
Leslie's Poolmart, Inc. agreed to settle for US$1.2 million a purported
class action pending in the California Superior Court for the County of
Los Angeles, alleging:
(1) failure to pay overtime wages;
(2) waiting time penalties; and
(3) unfair business practices
The parties reached the settlement during mediation. On April 2, 2002,
the court preliminarily approved the settlement as within a range of
reasonableness. On May 6, 2002, notice of the settlement was mailed to
all class members, who must submit claim forms or request for exclusion
forms to the claims administrator by July 26, 2002. The Court has
scheduled the fairness hearing for August 20, 2002.
The Company still faces two class actions, filed by a former employee
and alleging similar claims as the first suit on behalf of the same
putative class members. The Company answered the suits, indicating,
among other affirmative defenses, that class certification is
inappropriate because a class raising the same issues, in the first
class action, already has been preliminarily certified in a court order
and notice of the settlement has been mailed to class members.
PHILIP MORRIS: OR Court Reinstates US$79.5M Damages in Tobacco Suit
-------------------------------------------------------------------
The Oregon Court of Appeals reinstated a $79.5 million punitive damage
award against Philip Morris, saying the tobacco giant concealed
information about the dangers of smoking, the Associated Press reports.
The appellate court's ruling overturned Circuit Court Judge Anna J.
Brown's decision to reduce the award to US$32 million, on the grounds
that it was excessive.
The suit was filed by the family of Portland school janitor, Jesse
Williams, who died of lung cancer at age 67. The suit alleges that Mr.
Williams continued smoking because he did not believe a company would
sell something that was truly harmful. Mr. Williams died in 1997. He
smoked about three packs of Marlboros a day.
Judge Brown reduced the award, saying she based her decision on
limitations imposed by the US Supreme Court. The Associated Press
states that at the time, the jury verdict was the largest recorded
against the tobacco industry. Since then, juries have awarded even
larger damages, including a $3 billion award in California last summer
and a $150 million award in Oregon against Philip Morris last March.
Judges lowered the amounts to $100 million in both cases.
The three-judge appeals court panel unanimously decided that the damage
award, was within federal standards, adding that the Company engaged in
"particularly egregious" business practices that "justify particularly
strong judicial punishment." According to AP, the punitive damages
were awarded for fraud, on grounds that Philip Morris knew of the harm
of smoking and concealed the facts.
There was little doubt about the link between smoking and lung cancer
by the late 1950s, the appeals court said. Nevertheless, the Company
continued a public-relations campaign "asserting that smoking had not
been proven to be harmful," the court said.
The Company said it would appeal the verdict. "We are hopeful that the
Oregon Supreme Court will determine that the verdict should be
reversed, or the case sent back for a new trial," said William S.
Ohlemeyer, Philip Morris vice president and associate general counsel,
according to an Associated Press report.
Jim Coon, an attorney for the Williams family, said the award
reinstatement was reached after a careful review of existing law found
that $80 million was reasonable, given the circumstances.
The important thing about this is that, when the jury came back in
1999, the Philip Morris lawyers were shaking their heads and clucking
their tongues, saying a jury may do something like that but judges know
better," Coon told AP. "Well, the judges did know better."
RENT-WAY INC.: Asks PA Court To Dismiss Consolidated Securities Suit
--------------------------------------------------------------------
Rent-Way, Inc. asked the United States District Court for the Western
District of Pennsylvania to dismiss a consolidated class action,
charging the Company and certain of its current and former officers
with violations of federal securities laws.
The suit, filed on behalf of purchasers of the Company's stock from
December 10,1998 to October 27,2000, alleges that, among other things,
as a result of accounting irregularities, the Company's previously
issued financial statements were materially false and misleading. The
suit alleges that the defendants violated Sections 10(b) and/or Section
20(a) of the Securities Exchange Act and Rule 10b-5 promulgated
thereunder.
The Company continues to evaluate the suit and possible defenses
thereto. Pending determination of the motion to dismiss, the Company's
obligation to answer the complaint is stayed.
Certain of the Company's officers and directors and the Company, as
nominal defendant, have been sued in a shareholder derivative action in
the same court. The derivative complaint purports to assert claims on
behalf of the Company against the defendants for violation of duties
asserted to be owed by the defendants to the Company and which relate
to the events which gave rise to the purported class actions described
above.
All proceedings in the derivative case have been stayed, pending the
resolution of the class action. The Company cannot predict the outcome
of the litigation.
SPACELABS MEDICAL: Shareholders Sue To Block Instrumentarium Merger
-------------------------------------------------------------------
Spacelabs Medical, Inc. faces a class action pending in the Superior
Court of the State of Washington, King County, opposing the proposed
merger with Instrumentarium Corporation. The suit also names as
defendants the Company's chief executive officer and directors.
The suit alleges, among other things, that:
(1) the merger, as announced on March 22,2002, is unfair to the
Company's shareholders;
(2) the consideration to be paid in the merger is inadequate and
unfair to the Company's shareholders; and
(3) the Company's directors breached their fiduciary duties owed
to Company shareholders.
The Company believes that the allegations contained in the complaint
are without merit and intends to defend them vigorously.
STATE FARM: Faces Consumer Suit Over "Unfair" Credit Policy in IL Court
-----------------------------------------------------------------------
A lawsuit filed in Madison County Circuit Court, in Illinois, accuses
State Farm Insurance Co. of violating state law by denying people
coverage based solely on their credit reports. Since October 1, the
Illinois Insurance Code has prohibited companies from denying coverage
for this reason, Associated Press Newswires reports.
Cynthia L. Hoffman of Belleville, Illinois, contends the Company denied
her bid to renew a car-insurance policy despite her never having had an
accident. Her lawyer, Stephen Tillery, seeks class action status for
the lawsuit, which would then allow him to find other plaintiffs who
make the same allegation and potentially win a bigger judgment.
The suit says the Bloomington-based Company violated state law when it
declined to renew Ms. Hoffmann's car-insurance policy, "based upon an
insurance underwriting score developed from credit and automobile claim
information." The only claim the plaintiff has made on the policy was
after an incident of vandalism, in which she asked the insurer to
repair a scratch, Mr. Tillery said. "She has never had an at-fault
claim in her life."
Company spokesman Richard Ludke said the Company had not yet reviewed
the lawsuit and would not comment on it. He said the Company reviews
credit and insurance-claim histories when deciding whether to issue
policies. Certain credit characteristics are "predictive of the filing
of insurance claims," he said.
Mr. Tillery said a person's financial status "has absolutely nothing to
do with their driving ability and driving history." The Company's
rejection prompted other insurers to raise their price for insuring Ms.
Hoffmann, Mr. Tillery said. She now pays $1,722 for the same kind of
six-month policy that under the Company, cost her $528.
SYMMETRICOM INC.: Plaintiffs Appeal Summary Judgment in Securities Suit
-----------------------------------------------------------------------
Plaintiffs in the securities class action against Symmetricom, Inc.
appealed a California federal court's decision granting summary
judgment to the Company, to the United States Court of Appeals for the
Ninth Circuit.
The suit was commenced in January 1994 against the Company and certain
of our former officers and directors in the United States District
Court, Northern District of California. The suit, filed on behalf of
purchasers of the Company's stock during the period April 6, 1993
through November 10, 1993, alleges that the defendants violated federal
securities laws in connection with various public statements made
during the putative class period.
In August 2001, the court granted summary judgment to the defendants,
which was promptly appealed by the plaintiffs. The Company and its
officers believe that the complaint is entirely without merit and
intend to continue to defend the action vigorously, if necessary.
THQ INC.: Trial in Securities Suit Set For November 2002 in C.D. CA
-------------------------------------------------------------------
Trial in the third amended securities class action against THQ, Inc.
and certain of its officers and directors has been set for November
12,2002 in the United States District Court for the Central District of
California.
The suit alleges that defendants violated Rule 10b-5 and Section 20(a)
of the Securities Exchange Act of 1934, including allegations that
defendants:
(1) manipulated the Company's stock price;
(2) distributed false and misleading information concerning
revenue recognition, forecasts and earnings estimates;
(3) selectively disclosed material information; and
(4) engaged in insider trading.
The suit was filed on behalf of purchasers of the Company's common
stock from October 26, 1999 through May 24, 2000. The lawsuit is in
the discovery phase and a trial date has been set for November 12,
2002.
The Company has filed an answer denying all of the material allegations
of the third amended complaint and asserting legal and factual
defenses. The defendants have taken the position that this lawsuit is
without merit. At this early stage, however, the Company cannot
predict the likely outcome of this litigation.
US CUSTOMS SERVICE: Customs Agents File Suit Over Racial Discrimination
-----------------------------------------------------------------------
More than 400 minority employees are accusing the U.S. Customs Service
of discrimination in a $150 million lawsuit, the Associated Press
Newswires reports. The employees are seeking class action status for
the suit, which was filed recently in the United States District Court
in Washington, on behalf of Agent Miguel Contreras, who has worked for
Customs since 1988, and the other minority workers.
The plaintiffs are seeking $150 million as compensation for lost
promotion opportunities and pay for bilingual abilities. They also
want an end to the alleged discrimination. "What they want is equal
opportunity so they can compete with their white peers," said Ron
Schmidt, Mr. Contreras' attorney.
In the lawsuit Mr. Contreras claims he was denied promotions, extra pay
for bilingual skills and other benefits because he is Hispanic. He
also alleges the agency retaliated against him when he complained. His
claims are part of allegations dating back to the 1970s. Some of Mr.
Contreras' allegations are related to incidents in Yuma, while others
are based on events that allegedly occurred during his previous duty
assignments in El Centro, California, and Detroit.
The suit grew out of the 1995 discrimination charges that Mr. Contreras
filed with the Equal Employment Opportunities Commission against the
Detroit customs office. Customs has not yet filed a formal legal
response to the lawsuit. Also named as defendants are former Yuma
customs agents Rick Sandoval and Stephen Mercado.
ZONAGEN INC.: Asks Court To Dismiss Remaining Securities Claim in Suit
----------------------------------------------------------------------
Zonagen, Inc. asked the United States District Court for the Southern
District of Texas, Houston Division to dismiss the one remaining claim
in the consolidated securities class action pending against the Company
and certain of its officers and directors.
The consolidated suit alleges violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, as amended, and Rule 10b-5
thereunder on behalf of all purchasers of the Company's common stock
between February 7, 1996 and January 9, 1998.
The suit asserted that the defendants made materially false and
misleading statements and failed to disclose material facts about the
patents and patent applications of the Company relating to VASOMAXr and
Chito-ZN (formerly named ImmuMaxT) and about the Company's clinical
trials of VASOMAXr.
The Company then asked the court to dismiss the suit, which the court
granted in March 1999. The plaintiffs then filed an appeal in the US
Fifth Circuit Court of Appeals. In September 2001, the appellate court
affirmed the dismissal of all claims except one and reversed the trial
court's dismissal of a claim concerning the Company's disclosure about
a patent relating to VASOMAXr. The defendants have filed a motion to
dismiss that one remaining claim, and that motion is still pending.
The Company and the individual defendants believe that these actions
are without merit and intend to defend against them vigorously. No
estimate of loss or range of estimate of loss, if any, can be made at
this time. Management believes there will be no material adverse
effect related to this matter.
New Securities Fraud Cases
ALCATEL SA: Marc Henzel Commences Securities Fraud Suit in S.D. NY
------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court, Southern District of New York on
behalf of:
(1) all persons other than defendants who purchased the American
Depositary Shares (ADSs) of Alcatel relating to its Class O
common shares (NASDAQ: ALAO) in or traceable to the initial
public offering of the ADSs the Company conducted on October
20, 2000; and
(2) all persons other than defendants who purchased the Company's
Class A common shares (NYSE: ALA) and Class O common shares in
the form of ADSs between October 20, 2000 and May 29, 2001.
The suit is pending against the Company, Serge Tchuruk, chairman and
CEO, and Jean-Pierre Halbron, president and CFO.
The suit alleges that defendants violated Section 10 of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder and Sections
11, 12(a)(2) and 15 of the Securities Act of 1933 by issuing a false
and misleading prospectus on October 20, 2000, and by making material
misrepresentations to the market between October 20, 2000 and May 29,
2001.
The complaint alleges that on October 20, 2000, the Company issued a
prospectus for the sale of Class O stock in the form of American
Depositary Shares (ADSs) that purportedly would track the performance
of its Optronics Division.
The prospectus was materially false and misleading, as alleged in the
complaint, because it failed to disclose:
(i) that demand for the Company's optical components was weakening
as Alcatel and the Optronics Division's other customers were
experiencing severe and persistent business slowdowns;
(ii) that the purportedly increasing demand for the Optronics
Division's optical components was the result of a massive
inventory build at the Optical Division's primary customer,
Alcatel, and at the Company's external customers;
(iii) that the Company was amassing hundreds of millions of dollars
of obsolete inventory which would have to be written-off; and
(iv) that in light of the decreasing demand for optical components,
the Company was not in a position to successfully promote
sales of all product lines to outside customers.
Subsequently, on May 29, 2001, the Company issued an unexpected and
severe profit warning and separately announced that it expected to
report a second-quarter loss of approximately $2.6 billion. Following
this announcement, the price of Company Class O common shares, in the
form of ADSs, declined by 11% from a closing price of $21.26 on May 29,
2001 to a closing price of $18.92 on May 30, 2001. Similarly, Company
Class A common shares, in the form of ADSs declined by 8.8% from $27.14
to 24.74.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
ALLIED CAPITAL: Marc Henzel Commences Securities Fraud Suit in S.D. NY
----------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court, Southern District of New York on
behalf of purchasers of the securities of Allied Capital Corporation
(NYSE: ALD) between November 14, 2001 and May 16, 2002, inclusive.
The action is pending against the Company, William L. Walton and Penni
F. Roll.
The suit alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market between November 14, 2001 and May 16, 2002, thereby artificially
inflating the price of Company securities.
Throughout the class period, as alleged in the suit, defendants issued
numerous statements and filed quarterly and annual reports with the
SEC, which described the Company's investments and their valuations.
The suit alleges that these statements were materially false and
misleading because they failed to disclose and/or misrepresented the
following adverse facts, among others:
(1) that the Company was overstating the value of its investments
in companies such as Velocita, Inc. and The Loewen Group,
Inc.;
(2) that the Company was improperly delaying the write-down of its
impaired investments; and
(3) that as a result, the value of the Company's private finance
portfolio and total assets was materially overstated at all
relevant times.
On May 16, 2002, the last day of the class period, when concerns were
raised by a money manager about the Company's long-term prospects and
its accounting practices and management, shares of the Company fell
$2.79 per share, or approximately 10%, to close at $23.20 per share,
after reaching an intra-day low of $20 per share, on volume of more
than 14 million shares traded.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
CONCORD CAMERA: The Emerson Firm Commences Securities Fraud Suit in FL
----------------------------------------------------------------------
The Emerson Firm initiated a securities class action in the United
States District Court for the Southern District of Florida, Miami
Division on behalf of purchasers of Concord Camera Corp. (Nasdaq:LENS)
publicly traded securities during the period between January 18, 2001
and June 22, 2001, inclusive. The suit names as defendants the
Company, Harlan Press and Ira B. Lampert.
The complaint alleges that the defendants violated Sections 10(b) and
20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market between January 18, 2001 and June 22,
2001, thereby artificially inflating the price of Company securities.
The complaint alleges that, throughout the class period, defendants
issued a series of materially false and misleading statements which
failed to disclose that:
(1) no less than $15,777,000, more than 45% of the Company's
receivables, represented an unsecured and delinquent balance
due from one single customer -- KB Gear;
(2) this delinquent $15,777,000 receivable balance was
uncollectible; and
(3) due to KB Gear's inability to pay for merchandise, the Company
was stuck with a large quantity of customized higher-cost
specialty components which had no alternative use and were
non-salable.
On June 22, 2001, the last day of the class period, the Company issued
a press release revising its fourth quarter guidance and disclosing for
the first time that:
(i) excess inventory positions at many of the Company's customers
and the resulting changes in their purchasing patterns have
adversely affected inventory sales;
(ii) the Company will record the following one-time charges against
income in the quarter: $15.8 million accounts receivable
provision, $4.3 million inventory provision, $1.4 million
restructuring charge; and
(iii) the accounts receivable provision and $2.0 million of the
inventory provision relate to a financially troubled former
customer of the Company with respect to which management has
concluded that workout efforts are not likely to be
successful.
In response to these disclosures, the price of Concord stock plummeted
over 20% to close at $6.02.
For more details, contact Tanya R. Autry by Phone: 800-663-9817 or by
E-mail: tanya.autry@worldnet.att.net
CONCORD CAMERA: Rabin & Peckel Commences Securities Fraud Suit in FL
--------------------------------------------------------------------
Rabin & Peckel LLP initiated a securities class action in the United
States District Court for the Southern District of Florida on behalf of
all persons or entities who purchased Concord Camera Corporation common
stock (Nasdaq:LENS) between January 18, 2001 and June 22, 2001, both
dates inclusive. The suit names the Company, Harlan Press and Ira B.
Lampert as defendants.
The suit alleges that defendants violated section 10(b) of the
Securities and Exchange Act of 1934, and SEC Rule 10b-5 by issuing a
series of materially false and misleading statements concerning its
business and financial condition.
The suit alleges that, throughout the class period, defendants issued a
series of materially false and misleading statements which failed to
disclose that:
(1) no less than $15,777,000, more than 45% of the Company's
receivables, represented an unsecured and delinquent balance
due from one single customer--KB Gear;
(2) this delinquent $15,777,000 receivable balance was
uncollectible; and
(3) due to KB Gear's inability to pay for merchandise, the Company
was stuck with a large quantity of customized higher-cost
specialty components which had no alternative use and were
non-salable.
On June 22, 2001, the last day of the class period, the Company issued
a press release revising its fourth quarter guidance and disclosing for
the first time that:
(i) excess inventory positions at many of the Company's customers
and the resulting changes in their purchasing patterns have
adversely affected inventory sales;
(ii) the Company will record the following one-time charges against
income in the quarter: $15.8 million accounts receivable
provision, $4.3 million inventory provision, $1.4 million
restructuring charge; and
(iii) the accounts receivable provision and $2.0 million of the
inventory provision relate to a financially troubled former
customer of the Company with respect to which management has
concluded that workout efforts are not likely to be
successful.
In response to these disclosures, the price of Company stock plummeted
over 20% to close at $6.02.
For more details, contact Eric Belfi or Sharon Lee by Mail: 275 Madison
Avenue, New York, NY 10016 by Phone: 800-497-8076 or 212-682-1818 by
Fax: 212-682-1892 by E-mail: email@rabinlaw.com or visit the firm's
Website: http://www.rabinlaw.com
HALLIBURTON COMPANY: Cauley Geller Lodges Securities Suit in N.D. TX
--------------------------------------------------------------------
Cauley Geller Bowman & Coates, LLP initiated a securities class action
in the United States District Court for the Northern District of Texas
on behalf of purchasers of Halliburton Company (NYSE: HAL) publicly
traded securities during the period between July 22, 1999 and May 28,
2002, inclusive.
The suit charges that the Company violated Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder,
by issuing a series of materially false and misleading statements to
the market between July 22, 1999 and May 28, 2002.
As alleged in the complaint, beginning in the fourth quarter of 1998,
unbeknownst to the public, the Company materially changed its revenue
recognition policy to recognize revenue on claims and change orders
relating to cost-overruns which its clients had not approved.
Previously, the Company would only recognize revenue on approved change
orders or claims.
The suit further alleges that the alteration of the Company's
accounting policy and financial results reported as a result thereof
throughout the class period were materially false and misleading and in
violation of generally accepted accounting principles (GAAP) because,
among other things, the accounting change was not disclosed to the
public or supported as the preferred accounting treatment in the
Company's financial statements and because collection of the claims or
change orders was not probable and the amounts involved could not be
estimated reliably.
As a result of these violations of GAAP, according to the complaint,
the Company's quarterly and annual earnings press releases and
financial reports filed with the Securities and Exchange Commission
(SEC) throughout the class period were materially false and misleading
and artificially inflated the Company's reported revenues and earnings,
thereby artificially inflating the price of Company securities.
On May 28, 2002, after the close of the market, the Company issued a
press release announcing that the SEC is conducting an investigation
into its accounting for cost overruns. In reaction to the press
release, the price of Company common stock dropped by 3.3% in one day
on extremely heavy trading volume.
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
Website: http://www.classlawyer.com
HALLIBURTON COMPANY: Federman & Sherwood Lodges Securities Suit in TX
---------------------------------------------------------------------
Federman & Sherwood initiated a securities class action lawsuit on
behalf of purchasers of the securities of Halliburton Company (NYSE:
HAL) between July 22, 1999 and May 28, 2002 inclusive, in the United
States District Court for the Southern District of Texas.
The suit charges that the Company violated Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder,
by issuing a series of materially false and misleading statements to
the market between July 22, 1999 and May 28, 2002.
As alleged in the suit, beginning in the fourth quarter of 1998, the
Company materially changed its revenue recognition policy to recognize
revenue on claims and change orders relating to cost-overruns which its
clients had not approved. Previously, the Company would only recognize
revenue on approved change orders or claims.
The suit further alleges that the alteration of the Company's
accounting policy and financial results reported as a result thereof
throughout the class period were materially false and misleading and in
violation of generally accepted accounting principles (GAAP) because,
among other things, the accounting change was not disclosed to the
public or supported as the preferred accounting treatment in the
Company's financial statements and because collection of the claims or
change orders was not probable and the amounts involved could not be
estimated reliably.
For more details, contact William B. Federman by Mail: 120 N. Robinson,
Suite 2720, Oklahoma City, OK 73102 by Phone: 405-235-1560 by Fax:
405-239-2112 or by E-mail: wFederman@aol.com
LANTRONIX INC.: Marc Henzel Commences Securities Fraud Suit in C.D. CA
----------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Central District of
California on behalf of purchasers of Lantronix Inc. (NASDAQ: LTRX)
publicly traded securities during the period between April 25, 2001 and
May 15, 2002.
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. The Company
designs, develops, and markets network device servers.
The suit alleges that during the class period, defendants caused
Company shares to trade at artificially inflated levels through the
issuance of false and misleading financial statements.
As a result of this inflation, the Company was able to complete a
secondary offering of eight million shares, raising proceeds of $64
million on July 17, 2001.
The defendants' alleged wrongful course of business:
(1) artificially inflated the price of Company stock during the
class period;
(2) deceived the investing public, including plaintiff and other
class members, into acquiring Company securities at
artificially inflated prices;
(3) allowed certain of the Individual Defendants to sell more than
$13 million worth of the shares held/controlled by them and
allowed the Company to sell $50 million worth of its own
stock; and
(4) permitted the Company to grow and benefit economically from
the wrongful course of conduct.
The Company and its top officers inflated the price of the Company's
stock in order to pursue an accelerated securities sale program.
Defendants knew that concealing the Company's joint venture and the
true impact it would have on the Company provided the only way that
they could foster the perception in the business community that the
Company was a "growth company," i.e., the only way it could post the
revenue and earnings per share growth claimed by defendants.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
MIRANT CORPORATION: Schiffrin & Barroway Lodges Securities Suit in GA
---------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Northern District of Georgia on
behalf of all purchasers of the common stock of Mirant Corporation
(NYSE: MIR) between January 19, 2001 and May 6, 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 complaint alleges that the
Company reaped illegal profits in California by artificially
manipulating energy prices through a variety of improper tactics.
The suit alleges that the Company's fraudulent practices have resulted
in investigations by both the Attorney General of the State of
California, and the Federal Energy Regulatory Commission, as well as a
number of lawsuits filed by California, and consumers.
The complaint further alleges that during the class period, while the
Company announced quarter-after-quarter of outstanding growth, and
assured investors that problems in the California market had been
properly accounted for, it, in fact, failed to:
(1) provide for the return of illegally obtained revenue, through
a charge to earnings;
(2) provide for professional fees associated with the
investigations arising from the fraud through a charge to
earnings; and
(3) disclose the fact that the illegally obtained revenue was
subject to forfeiture and that investigations surrounding the
illegally obtained revenue would result in the expenditure of
material amounts for legal and professional fees.
As a result, according to the complaint, defendants' class period
financial statements were materially overstated, and failed to comply
with Generally Accepted Accounting Principles (GAAP).
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 by E-mail: info@sbclasslaw.com
or visit the firm's Website: http://www.sbclasslaw.com
MIRANT CORPORATION: Marc Henzel Commences Securities Suit in N.D. GA
--------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Northern District of
Georgia, Atlanta Division, on behalf of purchasers of the securities of
Mirant Corporation, (NYSE: MIR) between January 19, 2001 and May 6,
2002, inclusive.
The suit alleges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and SEC Rule 10b-5, by issuing
a series of materially false and misleading statements between January
19, 2001 and May 6, 2002.
The suit charges that the Company reaped illegal profits in California
by artificially manipulating energy prices through a variety of
improper tactics that resulted in investigations by both the Attorney
General of the State of California, and the Federal Energy Regulatory
Commission, as well as a number of private lawsuits.
During the class period, while the Company announced quarter-after-
quarter of outstanding growth, and assured investors that problems in
the California market had been properly accounted for, the Company, in
fact, failed to:
(1) provide for the return of illegally obtained revenue, through
a charge to earnings;
(2) provide for professional fees associated with the
investigations arising from the fraud through a charge to
earnings; and
(3) disclose the fact that the illegally obtained revenue was
subject to forfeiture and that investigations surrounding the
illegally obtained revenue would result in the expenditure of
material amounts for legal and professional fees.
As a result, defendants' class period financial statements were
materially overstated, and failed to comply with Generally Accepted
Accounting Principles (GAAP).
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
NEOPHARM INC.: Cauley Geller Launches Securities Fraud Suit in N.D. IL
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Cauley Geller Bowman & Coates, LLP initiated a securities class action
in the United States District Court for the Northern District of
Illinois on behalf of purchasers of NeoPharm, Inc. (Nasdaq: NEOL)
publicly traded securities during the period between September 25, 2000
and April 19, 2002 inclusive.
The suit charges the Company and certain of its officers and directors
with violations of the federal securities laws by issuing materially
false and misleading statements throughout the class period that had
the effect of artificially inflating the market price of the Company's
securities.
Specifically the suit alleges that the Company issued a series of
statements concerning its Liposome Encapsulated Parclitaxel (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 Pharmacia's clinical trails
failed to produce any positive benefits to patients.
In addition, certain individual defendants wrongfully sold shares of
the Company on the open market a artificially inflated prices, reaping
proceeds of over $7 million.
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
Website: http://www.classlawyer.com
PEREGRINE SYSTEMS: Weiss & Yourman Launches Securities Suit in S.D. CA
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Weiss & Yourman initiated a securities class action in the United
States District Court for the Southern District of California, on
behalf of persons who exchanged shares of Harbinger Corporation common
stock for shares of Peregrine Systems, Inc. (NASDAQ:PRGN) common stock
in connection with Peregrine's merger with Harbinger on or about June
19, 2000.
The complaint alleges that Peregrine and certain of its present and
former top officers and directors violated the Securities Act of 1933
by filing with the Securities and Exchange Commission (SEC) a
Registration Statement and Joint Proxy Statement and Prospectus in
connection with the merger which included Peregrine's financial
statements for fiscal year 2000.
Those financial statements materially overstated the Company's revenue
and earnings and thereby artificially inflated the price of Peregrine
stock at the time the registration statement and joint proxy statement
and Prospectus were filed. Peregrine's former outside auditor, Arthur
Andersen LLP, which opined on the Company's fiscal year 2000 financial
statements, is also named as a defendant.
As Peregrine disclosed on May 6, 2002, its board of directors
authorized an internal investigation of accounting inaccuracies
involving as much as $100 million in revenue recognized in transactions
with the Company's indirect channels in fiscal years 2001 and 2002. At
the same time, Peregrine disclosed that its CEO and CFO had both
resigned their positions with the Company.
As a result of its investigation, Peregrine announced on May 23, 2002
that it would restate its financial results for fiscal years 2000 and
2001 and the first three quarters of 2002, and that the restatements
would correct previous revenue recognition irregularities amounting to
as much as $100 million.
In addition, the Company disclosed that the SEC has commenced a formal
investigation of Peregrine's accounting practices. On May 24, 2002,
defendant Andersen informed Peregrine that the Company's financial
results for the fiscal years 2000 and 2001 and first three quarters of
2002 should not be relied upon.
This information was material to Harbinger shareholders in determining
whether to vote for the merger and exchange their Harbinger shares for
Peregrine shares, but was not disclosed at the time of the merger.
For more details, contact Weiss & Yourman by Phone: 800-437-7918 by E-
mail: info@wyca.com or visit the firm's Website: http://www.wyca.com
PEREGRINE SYSTEMS: Marc Henzel Lodges Securities Fraud Suit in S.D. CA
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Southern District of
California against Peregrine Systems, Inc. (Nasdaq: PRGN) and certain
of its principal officers and directors, Stephen P. Gardner, and
Matthew C. Gless, on behalf of all persons or entities who purchased or
acquired Company securities, between July 24, 2001 and May 3, 2002,
inclusive, including any person or entities who acquired Company
securities as a result of its acquisition of Remedy Corp.
The Company is a global software company that provides Infrastructure
Management Solutions which companies use to manage their assets, from
information technology equipment to fleets of vehicles.
The suit alleges that during the class period, defendants violated
Section 10(b) and 20(a) of the Securities Exchange Act of 1934, by
making materially false and misleading statements regarding the Company
and its audit activities, including its revenue recognition practices.
On May 6, 2002, the Company announced that its board of directors had
authorized its audit committee to conduct an internal investigation
into potential accounting inaccuracies, which KPMG, its newly hired
independent auditors, had brought to the committee's attention.
The transactions involved revenue recognition irregularities relating
to the Company's indirect sales channels, totaling as much as $100
million, which may have been improperly recorded in fiscal 2001 and
2002. The Company disclosed that these channel transactions and other
accounting matters to be investigated may impact financial results for
periods in fiscal 2002 and prior, and that the scope and magnitude of
the matters had not been determined.
The Company also disclosed that it has informed the SEC of the
Company's internal investigation. At the same time, the board announced
that its Chairman of the Board and CEO Stephen Gardner, and its Chief
Financial Officer Matthew Gless, had both resigned, and were being
replaced.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
PEREGRINE SYSTEMS: Harvey Greenfield Lodges Securities Suit in S.D. TX
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The Law Firm of Harvey Greenfield initiated a securities class action
on behalf of purchasers of the securities of Peregrine Systems, Inc.
(PRGN) between July 21, 1999 and May 3, 2002, inclusive. The suit is
pending in the United States District Court, Southern District of
California against the Company, the Company's former auditor Arthur
Andersen LLP, and two of the Company's former officers.
The complaint alleges violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 by, among other things, improperly
accounting for over $100 million by booking revenue from indirect sales
channels, in violation of generally accepted accounting principles
(GAAP), thereby leading to a material overstatement of the Company's
revenues.
On May 6, 2002, the Company announced that it would be forced to take a
$100 million restatement, "for periods in fiscal 2002 and prior" to
account for "certain transactions involving revenue recognition
irregularities," and that, as a result, the Company's CEO and CFO would
both resign. That day, the stock, which had traded as high as $38.25
during the class period, plunged to close at $0.89 a share. This
announcement followed the Company's replacement of its long time
auditors, Arthur Andersen LLP with KPMG.
Thereafter, on May 23, 2002, the Company announced that it would
restate financials back to fiscal 2000. It also announced that the
Securities & Exchange Commission (SEC) was conducting an investigation
into its accounting practices.
For more details, contact Harvey Greenfield by Mail: 60 East 42nd
Street, Suite 2001, New York, NY, 10165 by Phone: 212-949-5500 by Fax:
212-949-0049 or by E-mail: harvey.greenfield@verizon.net.
RAYOVAC CORPORATION: Brian Felgoise Lodges Securities Suit in W.D. WI
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The Law Offices of Brian M. Felgoise, PC initiated a securities class
action on behalf of shareholders who acquired Rayovac Corporation
(NYSE:ROV) securities between April 26, 2001 and September 19, 2001,
inclusive. The suit is pending in the United States District Court for
the Western District of Wisconsin, against the Company and certain key
officers and directors.
The action charges that defendants violated the federal securities laws
by issuing a series of materially false and misleading statements to
the market throughout the class period which statements had the effect
of artificially inflating the market price of the Company's securities.
For more details, contact Brian M. Felgoise by Mail: 230 South Broad
Street, Suite 404, Philadelphia, Pennsylvania, 19102 by Phone:
215-735-6810 or by E-mail: BrianFLaw@yahoo.com
RAYOVAC CORPORATION: Marc Henzel Commences Securities Suit in W.D. WI
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The Law Offices of Marc S. Henzel initiated a securities class action
lawsuit in the United States District Court, Western District of
Wisconsin on behalf of purchasers of the securities of Rayovac
Corporation (NYSE: ROV) between April 26, 2001 and September 19, 2001,
inclusive. The action, is pending against the Company and:
(1) Kenneth V. Biller,
(2) Kent J. Hussey,
(3) David A. Jones,
(4) Scott A. Schoen,
(5) Stephen P. Shanesy,
(6) Thomas R. Shepard,
(7) Randall J. Steward,
(8) Warren C. Smith, Jr. and
(9) Merrell M. Tomlin
The suit alleges that defendants violated Sections 11, 12(a)(2) and 15
of the Securities Act of 1933 and Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder,
by issuing a series of material misrepresentations to the market
between April 26, 2001 and September 19, 2001, thereby artificially
inflating the price of Company securities.
Throughout the class period, as alleged in the suit, defendants issued
materially false and misleading statements, including a materially
false and misleading Registration Statement and Prospectus issued in
connection with its Secondary Offering of shares to the public,
regarding the demand for the Company's products and the Company's
future prospects.
Specifically, the suit alleges that these statements were materially
false and misleading because they failed to disclose and/or
misrepresented the following adverse facts, among others:
(1) that the Company was experiencing declining demand for its
products and in order to stimulate demand and create the
impression that the Company was performing according to
analyst expectations, the Company was extending generous
credit terms to customers in order to induce them to purchase
additional products, thereby pulling sales in from the future.
As a result, the Company created the appearance of earnings
growth, when defendants knew, or recklessly disregarded that
future sales would be negatively impacted by the
aforementioned practices;
(2) that the Company's expansion in Latin America was the result
of aggressive sales practices whereby the Company extended
generous payment terms and induced customers to take
additional unneeded inventory; and
(3) based on the foregoing, defendants lacked a reasonable basis
for their statements that the Company would grow by 8-9% in
the third and fourth quarter of 2001.
On September 20, 2001, before the market opened for trading, the
Company issued a press release announcing that the Company's fiscal
fourth quarter results would be negatively impacted by a purported
slowdown in battery sales in its U.S. and Latin American markets.
As a result, contrary to defendants' bullish class period statements,
Company earnings for the quarter would be flat to down slightly from
the same period for the previous year.
The market's reaction to this announcement was immediate and punitive,
with shares of Company stock falling more than 23% to a class period
low of $12.74 per share on almost eight times the normal trading
volume.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
SALOMON SMITH: Neiman Law Commences Securities Fraud Suit in S.D. NY
--------------------------------------------------------------------
The Neiman Law Firm initiated a securities class action in the United
States District Court for the Southern District of New York against
Salomon Smith Barney Inc. and its well-known telecommunication analyst
Jack Grubman for violations of Section's 10(b) and 20(a)of the
Securities Exchange Act of 1934, on behalf of customers of Salomon
Smith Barney who purchased WorldCom, Inc. (NASDQ: WCOM) common stock
between May 15, 1999 and April 21, 2002, inclusive.
The suit alleges that defendants violated sections 10(b), and SEC Rule
10b-5 promulgated thereunder, by the issuance of analyst reports
regarding WorldCom that recommended the purchase of WorldCom common
stock and that set price targets for WorldCom common stock that were
without any reasonable factual basis.
When issuing their WorldCom reports, defendants failed to disclose
significant, material conflicts of interest that they had, in light of
their use of Mr. Grubman's reputation and his WorldCom analyst reports,
to obtain investment banking business for Salomon.
For more details, contact Jeffrey Neiman by Phone: 866-539-3788 or
718-677-1430 or by Fax: 718-258-2937
SALOMON SMITH: Dyer & Shuman Commences Securities Fraud Suit in S.D. NY
-----------------------------------------------------------------------
Dyer & Shuman, LLP initiated a securities class action in the United
States District Court for the Southern District of New York on behalf
of purchasers of WorldCom, Inc. (NASDAQ: WCOM) publicly traded
securities during the period between May 15, 1999 and April 21, 2002,
inclusive, against defendants Salomon Smith Barney, Inc. and its star
analyst Jack Grubman.
The suit alleges that defendants violated sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated
thereunder, via the issuance of WorldCom analyst reports that
recommended the purchase of WorldCom common stock and set price targets
for the company's shares without any reasonable basis in fact.
When defendants issued the WorldCom financial reports at issue, they
failed to disclose serious conflicts of interest, which were used to
obtain investment banking business for Salomon. Further, the defendants
issued WorldCom financial reports that recommended the purchase of the
stock, but failed to disclose material, non-public, adverse information
about WorldCom, as well as the defendants' true opinion about
WorldCom's business prospects and financial condition.
For more information, contact Trig R. Smith by Mail: 801 E. 17th
Avenue, Denver, CO 80218 by Phone: 303-861-3003 or by E-mail:
tsmith@dyershuman.com
TEXTRON INC.: Cauley Geller Commences Securities Suit in Rhode Island
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Cauley Geller Bowman & Coates, LLP initiated a securities class action
in the United States District Court for the District of Rhode Island on
behalf of purchasers of Textron, Inc. (NYSE: TXT) publicly traded
securities during the period between October 19, 2000 and September 26,
2001 inclusive. The suit names as defendants the Company and:
(1) Lewis B. Campbell,
(2) John A. Janitz,
(3) Theodore R. French and
(4) Terry D. Stinson
The defendants allegedly violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder,
by issuing a series of material misrepresentations to the market
between October 19, 2000 and September 26, 2001, thereby artificially
inflating the price of Company securities.
The complaint alleges that, throughout the class period, the Company
failed to disclose that the V-22 Osprey, a military aircraft that it
was manufacturing, suffered from structural defects that required that
it be substantially redesigned which would delay full-scale production
of the Osprey for years and cost hundreds of millions of dollars in
excess of the costs allocated to the project for the purpose of
calculating profit and loss.
On September 26, 2001, as alleged in the complaint, the Company issued
a press release over the Business Wire in which it reduced its guidance
for the third and fourth quarter of 2001, and announced that it
expected a third-quarter loss of $0.25 per share, compared to the
consensus forecast of earnings of $0.71 center per share.
The complaint alleges that the Company attempted to blame its poor
performance on "the slowdown in the U.S. economy" and "the impact of
events on September 11." However, as alleged in the complaint, the
Company was also forced to admit that its reduced earnings were
resulting from "a number of significant adjustments as Bell Helicopter
and other Textron businesses," including a special charge of
approximately $0.52 per share resulting from "stretched out production
schedules and additional costs to make design changes in the V-22 and
H-1 government programs."
In the same press release, the Company announced the abrupt departures
of Mr. Janitz as Chief Operating Officer, and Mr. Stinson as Chief
Executive Officer of Bell Helicopter.
On this news, Company shares dropped to a year- low price of $33.04 per
share down 23% from the previous day's closing price of $43, on
relatively heavy trading volume of 4,393,200 shares traded.
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
Website: http://www.classlawyer.com
TYCO INTERNATIONAL: Johnson & Perkinson Lodges Securities Suit in NH
--------------------------------------------------------------------
Johnson & Perkinson are initiating a securities class action in the
United States District Court for New Hampshire on behalf of purchasers
of TYCO International Ltd. (NYSE: TYCO) common stock and call options
and sellers of TYCO put options during the period from May 15, 2002
through June 3, 2002.
The complaint asserts claims against TYCO and its former CEO, Dennis
Kozlowski, for violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Plaintiffs
allege that defendants issued various affirmative statements regarding
the Company's ability to conduct an offering of stock for its
subsidiary CIT Group which were false and misleading given defendants'
failure to disclose the material adverse risk that they would not be
able to complete this offering, or, if they did, would not be able to
do so on favorable terms, once the criminal investigation of Kozlowski
became publicly known.
As a result, the Company's common stock was artificially inflated
throughout the class period, causing plaintiff and other members of the
class to purchase or sell such securities at prices skewed by
defendants' conduct.
For more details, contact Dennis J. Johnson or Jacob B. Perkinson by
Mail: 1690 Williston Road, South Burlington, Vermont 05403 by Phone:
888-459-7855 or by E-mail: JPLAW@adelphia.net.
WORLDCOM INC.: Marc Henzel Lodges Securities Fraud Suit in S.D. NY
------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Southern District of New
York, on behalf of persons who purchased, converted, exchanged or
otherwise acquired the common stock of WorldCom, Inc. (NASDAQ: WCOM)
between January 3, 2000 and April 29, 2002, inclusive against the
Company and:
(1) Bernard J. Ebbers, its President and Chief Executive Officer,
(2) James C. Allen, director,
(3) Max E. Bobbitt, director,
(4) Francisco Galesi, director, and
(4) Arthur Andersen, LLP.
The complaint asserts claims under Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC
thereunder, as well as pendant state law claims for fraud, negligent
misrepresentation, and intentional deceit and seeks to recover damages.
The complaint alleges that defendants violated the federal securities
laws by making misrepresentations and/or omissions in connection with
false and/or misleading financial statements.
The complaint specifically alleges that defendants misrepresented
Company earnings in its public filings with the SEC and elsewhere as a
result of failing to record write-downs of goodwill and other
intangible assets associated with the Company's acquisition of numerous
telecommunications companies at premium prices.
The complaint further alleges that defendants affirmatively misstated
the value of goodwill and other intangible assets associated with the
Company's acquisition of numerous telecommunications companies at
premium prices and carrying such assets on the Company's balance sheet
at the cost of acquiring them long after it had become apparent that
the Company had overpaid to acquire such assets.
Additionally, defendants failed to disclose that the Company's goodwill
and other intangible assets associated with the Comapny's acquisitions
of numerous telecommunications companies at premium prices were being
carried at unrealistically and misleadingly high values on the
Company's balance sheet.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
*********
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.
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