/raid1/www/Hosts/bankrupt/CAR_Public/020613.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, June 13, 2002, Vol. 4, No. 116
Headlines
ARIZONA: Notices To Claimants Delayed As Talks Continue in Tax Suit
BEVERLY ENTERPRISES: Appeals Court Yet To Decide On AK Suit Dismissal
BROADCOM CORPORATION: Asks CA Court To Dismiss Securities Fraud Suit
BROOKDALE INTERNATIONAL: Recalls 27T Smoke Hoods For Injury Hazard
CANADA: Chinese Immigrants Appeal Dismissal of Discriminatory Tax Suit
CATHOLIC CHURCH: Lawyers Depose Bishop Regarding Contact With Geoghan
CHORDIANT SOFTWARE: Mounting Vigorous Defense V. Securities Suits in NY
CONNECTICUT: DCF Gives Social Workers New Visitation Standards
CREDIT CARDS: Antitrust Suit Trial Likely After High Court Ruling
GSV INC.: Plaintiffs Fail To Appeal Dismissal of Securities Fraud Suit
ILLINOIS: Chicago Trade Board Presents Options in Restructuring Plan
IMMERSION CORP.: Expects Amended Securities Suit To Be Filed in S.D. NY
INTEGRATED INFORMATION: Plaintiffs File Amended Securities Suit in NY
JUNIPER NETWORKS: Building Defense V. Securities Fraud Suits in NY, CA
LIONBRIDGE TECHNOLOGIES: Plaintiffs File Amended Securities Suit in NY
NEW YORK: Sikh Man Files Federal Discrimination Suit V. Police Dep't
OVERTURE SERVICES: Mounting Vigorous Defense V. Securities Suit in NY
PDI INC.: Constructing Vigorous Defense V. Securities Fraud Suits in NJ
PHILIPS INTERNATIONAL: Plaintiffs' Certification Denial Appeal Likely
STILLWATER MINING: Responds to SEC's Interest in Ore Reserves Estimates
TENFOLD CORPORATION: UT Court Dismisses Consolidated Securities Suit
TENFOLD CORPORATION: Plaintiffs File Amended Securities Suit in S.D. NY
TERAYON COMMUNICATIONS: CA Court Refuses to Dismiss Securities Suit
TOBACCO LITIGATION: FL Court Orders Payment of $37.5M To Dying Smoker
VERTICALNET INC.: Plaintiffs File Amended Securities Suit in S.D. NY
New Securities Fraud Cases
ACTRADE FINANCIAL: Marc Henzel Commences Securities Suit in S.D. NY
ANDRX CORPORATION: Marc Henzel Lodges Securities Fraud Suit in S.D. FL
APPLIED DIGITAL: Weiss & Yourman Commences Securities Suit in S.D. FL
APPLIED DIGITAL: Milberg Weiss Lodges Securities Fraud Suit in S.D. FL
AQUILA INC.: Marc Henzel Initiates Securities Fraud Suit in W.D. MO
MERRILL LYNCH: Stull Stull Commences Securities Fraud Suit in S.D. NY
MERRILL LYNCH: Cohen Milstein Lodges Securities Fraud Suit in S.D. NY
MERRILL LYNCH: Cohen Milstein Lodges Securities Fraud Suit in S.D. NY
MIRANT CORPORATION: Weiss & Yourman Lodges Securities Suit in N.D. CA
PEROT SYSTEMS: Lovell & Stewart Commences Securities Suit in S.D. NY
RAYOVAC CORPORATION: Schiffrin & Barroway Files Securities Suit in WI
SALOMON SMITH: Wolf Haldenstein Lodges Securities Fraud Suit in S.D. NY
SEITEL INC.: Marc Henzel Commences Securities Fraud Suit in S.D. TX
SPECIALTY LABORATORIES: Marc Henzel Commences Securities Suit in CA
TRITON NETWORK: Milberg Weiss Lodges Securities Fraud Suit in M.D. FL
*********
ARIZONA: Notices To Claimants Delayed As Talks Continue in Tax Suit
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Taxpayers will not be receiving notices right away regarding their
potential eligibility for refunds in a case worth hundreds of millions
of dollars, but a judge says he will not delay the notices much longer,
the Associated Press Newswires reports.
Arizona's State Tax Court Judge Paul Katz recently urged lawyers for
the state and the suit's plaintiffs to try to reach a settlement in the
case centering on income taxes paid in the late 1980s on corporate
dividends. Lawyers said they were close to a settlement but still had
issues to work out.
Judge Katz said he would like to avoid forcing the state to bear the
expense of sending initial claims notices to hundreds of thousands of
taxpayers if another notice would have to go out within weeks once
there is an actual settlement. Estimates of the amount owed taxpayers
range from $300 million to $600 million, including interest.
The Arizona Supreme Court ruled last year that taxpayers could file a
class action for refunds of taxes paid on dividends from companies
doing most of their business outside Arizona. The plaintiffs won a
ruling years earlier that those dividends could not be taxed on less
favorable terms than those from companies doing most of their business
inside Arizona.
BEVERLY ENTERPRISES: Appeals Court Yet To Decide On AK Suit Dismissal
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The Eighth Circuit Court of Appeals has heard arguments in the appeal
of an Arkansas federal court's dismissal of a securities class action
against Beverly Enterprises, Inc. The appeals court, however, has not
yet released a decision.
The suit was commenced in July 1999, against the Company and certain of
its officers in the United States District Court for the Eastern
District of Arkansas. The suit asserted claims under Section 10(b)
(including Rule 10b-5 promulgated thereunder) and under Section 20 of
the Securities Exchange Act of 1934 arising from practices that were
the subject of the IPO allocation investigations.
The defendants filed a motion to dismiss the suit in October 1999, and
oral agreement on this motion was held in April 2000. By order and
judgment dated October 17, 2001, defendants' motion to dismiss was
granted, and the complaint was dismissed with prejudice. The
plaintiffs then appealed this decision.
Due to the preliminary state of the suit and the fact that it does not
allege damages with any specificity, the Company is unable at this time
to assess the probable outcome of the suit or the materiality of the
risk of loss. The Company believes that it acted lawfully with respect
to plaintiff investors and will vigorously defend the suit.
BROADCOM CORPORATION: Asks CA Court To Dismiss Securities Fraud Suit
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Broadcom Corporation asked the United States District Court for the
Central District of California to dismiss the consolidated securities
class action, charging the Company, its Chief Executive Officer, Chief
Technical Officer and Chief Financial Officer of violations of the
Securities Exchange Act of 1934, as amended.
The Company filed a motion to dismiss the suit under the Private
Securities Litigation Reform Act of 1995 and Rules 9(b) and 12(b)(6) of
the Federal Rules of Civil Procedure, and that motion was granted by
the district court in March 2002.
The court granted plaintiffs leave to file a second amended complaint
within twenty days of the court's order, and plaintiffs filed a second
amended complaint in April 2002. The second amended complaint contains
essentially the same allegations as the first, and in May 2002 the
Company filed a second motion to dismiss, which it anticipates will be
heard by the court in late July 2002.
The Company believes the allegations in the suit are without merit and
is defending the action vigorously.
The Company, along with its directors, Chief Financial Officer and
other officers of the Company, was also sued in five purported
shareholder derivative actions based upon the same general set of
alleged facts and circumstances as in the purported shareholder class
action.
Four of these actions were filed in the Superior Court of the State of
California for the County of Orange, and by order of the court these
four actions were consolidated into a single action. One purported
derivative action was filed in the United States District Court for the
Central District of California.
The parties have stipulated that the federal derivative suit will be
stayed while the consolidated derivative lawsuit proceeds in the
California Superior Court. In March 2002 the plaintiffs filed their
consolidated amended complaint in the state action. The Company filed
a demurrer to the state derivative suit in April 2002, which was
scheduled for late May 2002. The Company has not yet answered the
federal derivative suit.
The Company believes the allegations in these purported derivative
actions are also without merit and is defending the actions vigorously.
BROOKDALE INTERNATIONAL: Recalls 27T Smoke Hoods For Injury Hazard
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Brookdale International Systems, Inc. is cooperating with the US
Consumer Product Safety Commission (CPSC) by voluntarily recalling
about 27,400 emergency escape smoke hoods that may have been purchased
for use against tear gas or chemical warfare agents.
The smoke hood is a one-time emergency use, personal safety device that
provides quick, temporary protection from smoke in the event of a fire.
In some instances, consumers purchased the smoke hoods for protection
from tear gas or chemical warfare agents, but the smoke hoods should be
used only to provide protection from smoke caused by fires.
The Company is not aware of any incidents involving these emergency
escape smoke hoods. The recall is being conducted to prevent the
possibility of injuries.
This recall involves the EVAC-U8 emergency escape smoke hoods. The
smoke hood is a bright green plastic cylinder with a clear red top.
The cylinder is about 5- inches tall. The words "EVAC-U8 Emergency
Escape Smoke Hood" are printed on the cylinder along with the serial
number and expiration date. Recalled smoke hoods have a serial number
of A97,921 or higher, and an expiration date of May 1, 2002 or later.
Web-based distributors, catalogues, and travel stores sold these
smoke hoods from May 1997 through April 2002 for about $70.
For more details, contact the Company by Mail: 1-8755 Ash Street,
Vancouver, British Columbia, Canada V6T 6P3 or by Phone: 800-459-3822
between 7:00 am and 4:00 pm PT Monday through Friday.
CANADA: Chinese Immigrants Appeal Dismissal of Discriminatory Tax Suit
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Canada's Chinese immigrants appealed an Ontario Superior Court ruling
that dismissed a class action relating to a discriminatory $500 head
tax the immigrants had to pay to enter Canada from 1885 to 1923.
During that period, the federal government collected $23 million, equal
to about $1.2 billion in today's dollars, from about 81,000 Chinese
immigrants under the Chinese Exclusion Act. The approximately 400
survivors and 4,000 of their descendants were asking for $1.2 billion
in compensation and a formal apology, thestar.com reports.
The Ontario court dismissed the suit last year, saying modern ethics
can't be applied to historical laws. Mary Eberts, the lawyer
representing the survivors, argued in court today that the Canadian
head tax flew in the face of the international norms of the day. "This
kind of racial discrimination was contradictory to customary
international law," Eberts said.
The appellate court, however, said the country's laws take precedence
over international laws. May Cheng, president of the Chinese Canadian
National Council, told thestar.com that the Nazis also passed laws to
justify their crimes during the Second World War. "It's the duty of
the court to determine whether these laws were a violation of our
fundamental freedoms," Ms. Cheng said.
Ms. Cheng said regardless of the outcome of the case, her organization
will continue to lobby the government for an apology. She said the
appeal was launched partly to keep the issue on the public agenda. "We
are not going to go away . If Canada wants to promote a good human
rights record, it first has to atone for the past and reconcile with
the communities it wronged."
CATHOLIC CHURCH: Lawyers Depose Bishop Regarding Contact With Geoghan
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Bishop Thomas Daily of Brooklyn was questioned about his dealings with
a defrocked priest whose case sparked the sex abuse scandal within the
Catholic Church, the Associated Press Newswires reports. The Bishop
leads the Brooklyn Diocese that serves 1.6 million Catholics in
Brooklyn and Queens.
Bishop Daily recently gave a closed-door deposition to lawyers
representing alleged victims of John J. Geoghan, who has been accused
of molesting more than 130 children in the Boston archdiocese. Bishop
Daily served there from 1971 to 1984, beginning as secretary to
Cardinal Humberto Medeiros. In March, he said he regretted some of the
decisions he made during that time.
The Bishop was asked how he handled complaints against Mr. Geoghan and
about the tentative settlement under which the church was to pay $15
million to $30 million to victims, according to Mitchell Garabedian, a
lawyer for Mr. Geoghan's alleged victims.
Plaintiffs in the class action against Mr. Geoghan say the church
reneged on the agreement while the church says it withdrew because the
settlement would have been too costly.
Bishop Daily gave prosecutors information on more than 30 of the
diocese's priests accused of sexual misconduct with minors over the
past 20 years, and he agreed to provide information on all future cases
without prior screening by the church.
A panel of US bishops has called for a zero-tolerance policy toward sex
abuse and defrocking of any priest with more than one such incident in
his past. The proposal will be taken up at the United States
Conference of Catholic Bishops' meeting that begins Thursday in Dallas.
CHORDIANT SOFTWARE: Mounting Vigorous Defense V. Securities Suits in NY
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Chordiant Software, Inc. faces several securities class actions pending
in the the United States District Court for the Southern District of
New York on behalf of all purchasers of the Company's common stock
between February 14, 2000, the date of its initial public offering
(IPO), and December 6, 2000. The suit also names as defendants several
of the Company's officers and directors, and certain underwriters of
the Company's IPO.
These suits are essentially identical and allege that the Company's
prospectus, incorporated in the Registration Statement on Form S-1
filed with the Securities and Exchange Commission, was materially false
and misleading because it failed to disclose, among other things, that
certain underwriters:
(1) 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
(2) required investors to agree to buy shares of our securities
after the initial public offering was completed at
predetermined prices as a precondition to obtaining initial
public offering allocations.
As a result of the alleged omissions in the Company's prospectus, the
plaintiffs claim violations of Sections 11 and 15 of the Securities Act
and Section 10 (b) of the Securities Exchange Act occurred.
The Company anticipates these cases will be consolidated into a single
class action, and believes that it has meritorious defenses against
these allegations. The Company intends to vigorously defend against
this litigation.
CONNECTICUT: DCF Gives Social Workers New Visitation Standards
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The state Department of Children and Families (DCF) has given its
social workers a set of standards recently approved by a federal judge
which tells them how often they must visit the children and families in
their care, Associated Press Newswires reported recently.
The new rules are part of plan that would allow DCF to be released from
federal oversight. The department has been under a consent decree for
11 years because of a 1989 class action alleging the state did not
adequately protected the children in its care.
DCF Commissioner Kristine Ragaglia said the new standards are
demanding, but a shift toward keeping the children closer to their
homes and families should reduce some of the burden for social workers.
The rules will decrease caseloads for social workers, giving them
between 15 and 20 cases. They currently have a maximum of 23 cases.
Under the agreement, negotiated by DCF and the plaintiffs in the
consent decree case, social workers must make weekly visits to children
still in their homes for the first 30 days and then every other week
thereafter. Parents must be visited every other week.
For cases where children are taken out of their homes, social workers
will visit the child every week for the first 30 days, then every other
week until the case goes for review. After the review, the workers are
required to visit once a month. If reunification is planned, the
social workers must visit the parents every other week, then once a
month when the administrative casework is done.
Last month, nearly 150 DCF supervisors signed a petition telling Ms.
Ragaglia that social workers were so overwhelmed by their caseloads
that they no longer can meet standards for protecting children. The new
rules are intended to relieve some pressure on the social workers and
enable them to obtain certain standards and better meet the children's
needs.
CREDIT CARDS: Antitrust Suit Trial Likely After High Court Ruling
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The Supreme Court opened the way for a massive antitrust lawsuit
against credit card companies Visa USA Inc. and MasterCard
International Inc. to proceed to trial as a class action lawsuit, The
Wall Street Journal recently reported.
In a big setback for Visa and MasterCard, the high court rejected
without comment their petition to review a lower-court decision that
could allow as many as four million merchants to share in any damages
award. The nation's largest retailers sued in 1996, alleging the two
credit-card companies use their credit-card market dominance to force
stores to accept their debit cards.
The retailers are seeking damages of $13.1 billion to $15.8 billion,
reflecting a decade of alleged debit-card overcharges by the two
companies. Under federal antitrust law, any damages awarded by the
court would be trebled if the merchants prevail in court.
David Balto, a former federal antitrust enforcer, and now an attorney
at the law firm of White & Case in New York City, said any eventual
award probably would be far less than the retailers are seeking. Even
so, Mr. Balto said, "this case could have a much bigger pocketbook
effect than any antitrust action in decades, including the government's
case against Microsoft Corporation."
The court's action sends the case back to US District Judge John
Gleeson in Brooklyn, New York. The lawsuit pits the nation's largest
retailers, including Wal-Mart Stores Inc., Sears Roebuck & Co. and
Safeway Inc., against the biggest banks, which jointly own Visa and
MasterCard. At issue is whether Visa and MasterCard can force
retailers to accept their branded debit cards, which carry processing
fees that are far higher than those of conventional debit cards that
are linked to customers' checking accounts.
The merchants say these illegal overcharges ultimately cost consumers
billions of dollars a year and force the market to use an inferior
product that is slower, less secure and more costly.
Despite problems with the Visa and MasterCard debit cards, banks have
promoted them widely, ringing up nearly $400 billion in retail sales
through them last year. Visa and MasterCard said the Supreme Court
action had no bearing on the merits of the case, and both have said
they expect to prevail in court.
However, a more significant ruling than the high court's may prove to
be the Justice Department's victory in a parallel case last year, in
which a New York federal court found that Visa and MasterCard acted
illegally to protect their market power in credit cards. That ruling
could give the retailers a big legal advantage even before the trial
begins.
Mr. Constantine, the merchants' lawyer, said the next step in the case
is notifying the millions of merchants who could share in any damages,
and summary-judgment motions. He said the discovery phase of the case
was completed two years ago, and that both sides had told the court
they are ready to go to trial.
Both Visa and MasterCard are expected to argue that the honor-all-cards
rule fosters competition and allows consumers, not retailers, to decide
what form of payment to use. Visa has quietly taken its case to
Congress, however, hiring a high-priced lobbying firm and former
Wyoming Senator Alan Simpson to head off possible hearings.
GSV INC.: Plaintiffs Fail To Appeal Dismissal of Securities Fraud Suit
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Plaintiffs in the consolidated securities suit against GSV Inc. failed
to file an appeal of the United States District Court for the District
of New Jersey's dismissal of the suit, making its decision final.
The suit arose from twelve suits commenced in March and April 2000
against the Company and certain of its current and former officers and
directors. The consolidated suit alleges that defendants violated
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by
making or causing the Company to make materially false and misleading
statements about the Company.
In May 2001, a motion to dismiss was filed on behalf of the Company
and all other defendants. The court granted this motion on March 18,
2002, but gave the plaintiffs 30 days to appeal the decision. The time
to appeal has expired.
ILLINOIS: Chicago Trade Board Presents Options in Restructuring Plan
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The Chicago Board of Trade (CBOT) has a number of options, possibly
including the creation of a brand new restructuring plan, to add to
seatholder value, no matter what happens with pending securities suit,
CBOT Chairman Nickolas Neubauer said recently, according to Associated
Press Newswires.
Mr. Neubauer, speaking at a members' meeting in the CBOT's visitors
center, informed full CBOT members of their rights after being
designated as defendants in the suit.
The suit emerged in 2000, when several associate members and membership
interest holders at the CBOT filed a lawsuit challenging the proposed
allocation of equity that would be voted on by CBOT members in
connection with the its plan to become a more corporate-like entity.
The Circuit Court of Cook County, Illinois, last week mailed official
notices of the suit to each of the exchange's full members. The next
court date is August 5. If the case, in its current incarnation, goes
to trial, the trial would begin October 8.
Mr. Neubauer explained, and had made this explanation earlier by
letter as well, that when the court certified the defendant class in a
March 7 hearing, it recognized that although all 1,402 full members
were designated as defendants in the suit, not all of them may think
that their individual interests in connection with restructuring are
the same as the interests of the exchange. Therefore, exchange members
have the right to be excluded from the case.
Attorney fees for full members who remain part of the defendant class
will be paid by the CBOT. However, Mr. Neubauer added that members who
choose to be excluded from the class may end up being named
individually as defendants in the case. He also added that he does not
believe that full members will lose the lawsuit.
IMMERSION CORP.: Expects Amended Securities Suit To Be Filed in S.D. NY
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Plaintiffs in the securities class action against Immersion Corporation
plan to file an amended suit in the United States District Court for
the Southern District of New York on behalf of purchasers of the
Company's common stock from November 12, 1999 through December 6,2000.
The suit was initially commenced in November 9,2001 against the Company
and:
(1) Louis Rosenberg, former CEO, President and Chairman,
(2) Victor Viegas, CFO,
(3) Bruce Schena, former Chief Technology Officer, and Director,
and
(4) certain underwriters of the Company's November 12, 1999
initial public offering
The lawsuit was later consolidated for pretrial purposes with similar
lawsuits relating to more than 300 other initial public offerings
conducted in 1999 and 2000 to more than 300 other initial public
offerings conducted in 1999 and 2000 before the Honorable Judge Shira
A. Scheindlin. The defendants' time to respond to the complaints has
been stayed pending a plan for further coordination.
In April 2002, the plaintiffs electronically served amended suits in
most of the cases. The plaintiffs in the suit indicated that they
would file amended complaints in the cases against the Company and
certain other issuers after their pending motions for appointment of
lead plaintiffs were granted.
The Company expects that the amended complaint will allege violations
of Sections 11 and 15 of the Securities Act of 1933 and Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, on the grounds that
the prospectus incorporated in the registration statement for the
Company's initial public offering failed to disclose, among other
things, that:
(i) the underwriter had solicited and received excessive and
undisclosed commissions from certain investors in exchange for
which the underwriter allocated to those investors material
portions of the shares of the Company's stock sold in the
offering; and
(ii) the underwriter had entered into agreements with customers
whereby the underwriter agreed to allocate shares of the
Company's stock sold in the offering to those customers in
exchange for which the customers agreed to purchase additional
shares of the Company's stock in the aftermarket at pre-
determined prices.
The Company also expects that the amended complaint will allege that
false analyst reports were issued. The Company does not expect the
amended complaint to claim any specific amount of damages.
Management believes that this litigation is without merit and intends
to vigorously defend against it.
INTEGRATED INFORMATION: Plaintiffs File Amended Securities Suit in NY
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Plaintiffs in the securities class actions against Integrated
Information Systems, Inc. filed an amended suit in the United States
District Court for the Southern District of New York.
During July and August 2001, four suits were filed against the Company,
certain of its current and former officers and directors and the
members of the underwriting syndicate involved in its initial public
offering (IPO). The suits generally allege that:
(1) the underwriter defendants allocated shares of the Company's
IPO to their customers in exchange for higher than standard
commissions on transactions in other securities;
(2) the underwriter defendants allocated shares of the Company IPO
to their customers in exchange for the customers' agreement to
purchase additional shares of the Company's common stock in
the after-market at pre-determined prices;
(3) the Company and the individual defendants violated section
10(b) of the Securities Exchange Act of 1934 and/or section 11
of the Securities Act of 1933; and
(4) the individual defendants violated section 20 of the
Securities Exchange Act of 1934 and/or section 15 of the
Securities Act of 1933.
All four lawsuits were transferred to Judge Shira Scheindlin for
coordination with more than 300 similar cases. The plaintiffs then
filed a consolidated suit in April 2002.
The Company believes that the claims against it are unfounded and
without merit and intends to vigorously defend this matter.
JUNIPER NETWORKS: Building Defense V. Securities Fraud Suits in NY, CA
----------------------------------------------------------------------
Juniper Networks, Inc. intends to vigorously oppose several class
actions pending in New York and California federal courts alleging
violations of federal securities laws relating to the Company's initial
and secondary public offerings.
Some of the suits were commenced in the United States District Court
for the Southern District of New York behalf of purchasers of the
Company's common stock in its June 1999 initial public offering and its
September 1999 secondary offering. The suit names as defendants the
Company, certain of its officers and:
(1) the Goldman Sachs Group, Inc.,
(2) Credit Suisse First Boston Corporation,
(3) Fleetboston Robertson Stephens, Inc.,
(4) Royal Bank of Canada (Dain Rauscher Wessels),
(5) SG Cowen Securities Corporation,
(6) UBS Warburg LLC (Warburg Dillon Read LLC),
(7) Chase (Hambrecht & Quist LLC),
(8) JP Morgan Chase & Co.,
(9) Lehman Brothers, Inc.,
(10) Salomon Smith Barney, Inc., and
(11) Merrill Lynch, Pierce, Fenner & Smith, Incorporated
This suit alleges that the prospectus pursuant to which shares of
common stock were sold in the Company's initial public offering and its
subsequent secondary offering contained certain false and misleading
statements or omissions regarding the practices of the Company's
underwriters with respect to their allocation of shares of common stock
in these offerings and their receipt of commissions from customers
related to such allocations.
A number of securities class actions were also filed in the United
States District Court for the Northern District of California against
the Company and certain of its officers and former officers. The suits
are essentially identical and purport to be on behalf of those who
purchased the Company's publicly traded securities between April 12,
2001 and June 7, 2001.
The plaintiffs allege that the defendants made false and misleading
statements, assert claims for violations of the federal securities laws
and seek unspecified compensatory damages and other relief.
The Company believes the suits are without merit and intends to defend
the actions vigorously.
LIONBRIDGE TECHNOLOGIES: Plaintiffs File Amended Securities Suit in NY
----------------------------------------------------------------------
Plaintiffs in the securities class action against Lionbridge
Technologies, Inc. filed an amended suit in the United States District
Court for the Southern District of New York, naming the Company,
certain of its officers and directors, and the underwriters of its
initial public offering (IPO) as defendants.
The suit was originally commenced in July 2001, asserting, among other
things, that the Company's IPO registration statement contained
misstatements and/or omissions regarding the underwriters' alleged
conduct in allocating shares in the Company's initial public offering
to the underwriters' customers.
In March 2002, the court entered an order dismissing without prejudice
the claims against the Company and its officers and directors (the case
remained pending against the underwriter defendants). On April 19,
2002, the plaintiffs filed an amended complaint naming as defendants
not only the underwriter defendants but also the Company and certain of
its officers and directors.
The amended complaint asserts claims under both the registration and
antifraud provisions of the federal securities laws relating to, among
other allegations, the underwriters' alleged conduct in allocating
shares in the Company's IPO and the disclosures contained in the
Company's registration statement.
The Company understands that various plaintiffs have filed
approximately 1000 lawsuits making substantially similar allegations
against approximately 300 other publicly traded companies in connection
with the underwriting of their public offerings. The Company and its
officers and directors believe that the allegations in the lawsuit
against them are without merit and intend to contest them vigorously.
NEW YORK: Sikh Man Files Federal Discrimination Suit V. Police Dep't
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The New York Police Department faces a federal discrimination suit
filed with the Equal Employment Opportunity Commission (EEOC), alleging
the department fired a Sikh man during his training period because he
would not shave his beard or remove his turban, signs of his religious
faith, Associated Press reports.
Amric Singh Rathour, 25, filed the suit, saying he applied to be a
traffic enforcement agent with the NYPD last year, and was sworn in as
a new officer on June 18. During his eight-week training period, he
and his supervisors clashed over his turban and facial hair, according
to the complaint.
Officer Guy Braun, a police spokesman, told Associated Press the
department does not comment on pending legal complaints. A call to the
EEOC office in New York was not immediately returned.
OVERTURE SERVICES: Mounting Vigorous Defense V. Securities Suit in NY
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The consolidated securities class action against Overture Services,
Inc. has been coordinated for pretrial purposes in the United States
District Court for the Southern District of New York, along with
hundreds of virtually identical suits against more than 300 companies
who made their initial public offerings in the past two years.
The suits against the Company were commenced in July 2001, against the
Company, certain of its current and former officers and directors and
certain underwriters involved in the Company's IPO. The court later
ordered the suits consolidated.
The plaintiffs allege, among other things, violations of the Securities
Act of 1933 and the Securities Exchange Act of 1934 involving
undisclosed compensation to the underwriters, and improper practices by
the underwriters and seek unspecified damages.
The IPO Allocation suits are now under Judge Shira Scheindlin of the
Southern District of New York. Judge Scheindlin has ordered that the
time for all defendants to respond to any complaint be postponed until
further order of the Court. Thus, the Company has not been required to
answer the complaint, and no discovery has been served.
The Company denies the allegations against it, believes that it has
meritorious defenses to the complaint, and intends to contest the
allegations vigorously.
PDI INC.: Constructing Vigorous Defense V. Securities Fraud Suits in NJ
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PDI Inc. faces several securities class actions pending in the United
States District Court for the District of New Jersey on behalf of
purchasers of the Company's stock from May 22,2001 to November 12,2001.
The suits name as defendants the Company, its chief its chief executive
officer and its chief financial officer.
The suits allege violations of the Securities Act of 1934, specifically
Sections 10(b) and 20(a) of the 1934 Act and Rule 10b-5 promulgated
thereunder. The suits allege that that the defendants intentionally or
recklessly made false or misleading public statements and omissions
concerning the Company's financial condition and prospects with respect
to its marketing of Ceftin in connection with the October 2000
distribution agreement with GlaxoSmithKline, as well as its marketing
of Lotensin and Lotrel in connection with the May 2001 distribution
agreement with Novartis Pharmaceuticals Corporation.
The Company believes that each of these three complaints will
ultimately be consolidated into one action. As of this filing, it has
not yet answered any of the complaints, and discovery has not yet
commenced. The Company believes that the allegations in these
complaints are without merit and it intends to defend these actions
vigorously.
PHILIPS INTERNATIONAL: Plaintiffs' Certification Denial Appeal Likely
---------------------------------------------------------------------
Plaintiffs in the class action against Philips International Realty
Corporation asked the United States Second Circuit Court of Appeals for
leave to appeal the denial of class certification for the suit.
The suit was commenced in October 2000 in the United States District
Court for the Southern District of New York against the Company and its
Directors, alleging a number of improprieties concerning the pending
plan of liquidation of the Company. The plaintiff also has asserted
derivative claims for alleged breaches of fiduciary duty by the
directors of the Company.
In November 2000, the Court, ruling from the bench, denied the
plaintiff's motion for a preliminary injunction. This bench ruling was
followed by a written order dated November 30, 2000 wherein the court
concluded that the plaintiff had failed to demonstrate either that it
was likely to succeed on the merits of its case or that there were
sufficiently serious questions going to the merits of its case to make
it fair ground for litigation.
On February 5, 2002, the Court denied the plaintiff's motion for class
action certification. On February 28, 2002, the Company announced that
the plaintiff has sought permission from the appellate court to appeal
the denial of class certification discussed above. In order for
plaintiff to obtain permission to appeal, it must demonstrate that the
denial of class certification effectively terminates the litigation and
that the district court's decision was an abuse of its discretion. The
Company has opposed plaintiff's application.
The Company believes that all of the asserted claims are without merit,
and will defend such action vigorously.
STILLWATER MINING: Responds to SEC's Interest in Ore Reserves Estimates
-----------------------------------------------------------------------
Stillwater Mining Company has resolved concerns with the United States
Securities and Exchange Commission (SEC) over estimates of the mine's
probable ore reserves, the Montana Forum reports.
Several securities class actions were commenced against the Company
when it acknowledged last April that it was in discussions with the SEC
over how the Company estimated their revenues from ore reserves. The
suits were filed on behalf of shareholders who feel the Company's
accounting practices hurt its stock value.
The Company said it has agreed to modify certain parameters used in
determining its probable ore reserve. Based on these revised
parameters, total ore reserves for the from both the Company's Nye and
East Boulder mines will decrease from 27.7 million ounces of palladium
and platinum to 25 million ounces, a 10 percent decrease, the Montana
Forum reports.
"We are pleased to have reached this resolution with the SEC," Francis
McAllister, the Company's chairman and CEO told the Forum. "While the
Company's ore reserve methodology has stood the test of 16 years mining
experience, the scrutiny of independent experts and now this review by
the SEC, it is important to put this matter behind us with a manner
which we believe fair to our shareholders."
TENFOLD CORPORATION: UT Court Dismisses Consolidated Securities Suit
--------------------------------------------------------------------
The United States District Court of Utah dismissed without prejudice
the consolidated securities class action against Tenfold Corporation
and certain of its officers, alleging violations of federal securities
laws. The suit specifically alleges that:
(1) the Company improperly recognized revenues on some of its
projects;
(2) the Company failed to maintain sufficient accounting reserves
to cover the risk of contract disputes or cancellations;
(3) the Company issued falsely optimistic statements that did not
disclose these accounting issues; and
(4) Company insiders sold stock in early calendar year 2000 while
knowing about these issues.
The Company filed a motion to dismiss the amended complaint, which the
court granted on March 19, 2002. The court, however, allowed the
plaintiffs leave to make a motion to amend their complaint.
The Company intends to vigorously oppose the suit or any amended suit
that the plaintiffs might file.
TENFOLD CORPORATION: Plaintiffs File Amended Securities Suit in S.D. NY
-----------------------------------------------------------------------
Plaintiffs in the securities class action against Tenfold Corporation
filed an amended suit in the United States District Court for the
Southern District of New York, charging the Company, certain of its
officers and directors, and certain underwriters of its initial public
offering, with violations of federal securities laws.
The amended suit alleges that the underwriters of the Company's initial
public offering violated the securities laws by failing to disclose
certain alleged compensation arrangements (such as undisclosed
commissions or stock stabilization practices) in the offering's
registration statement and by engaging in manipulative practices to
artificially inflate the price of the Company's stock in the after-
market subsequent to the initial public offering.
The Company defendants are named in the amended complaint pursuant to
Section 11 of the Securities Act of 1933, and Section 10(b) and Rule
10b-5 of the Securities Exchange Act of 1934 on the basis of an alleged
failure to disclose the underwriters' alleged compensation arrangements
and manipulative practices.
Similar complaints have been filed against over 300 other issuers that
have had initial public offerings since 1998. The Company intends to
defend this action vigorously. Although no assurance can be given that
this matter will be resolved in the Company's favor, the Company
believes that the resolution of this lawsuit will not have a material
adverse effect on its financial position, results of operations or cash
flows.
TERAYON COMMUNICATIONS: CA Court Refuses to Dismiss Securities Suit
-------------------------------------------------------------------
The United States District Court for the Northern District of
California refused to dismiss a consolidated amended securities class
action pending against Terayon Communications Systems, Inc. and certain
of its officers and directors. The suit was filed on behalf of
purchasers of the Company's s securities between November 15,1999 and
April 11, 2000.
The suit alleges that the defendants had violated the federal
securities laws by issuing materially false and misleading statements
and failing to disclose material information regarding the Company's
technology.
In October 2000, the defendants moved to dismiss the first consolidated
suit. In March 2001, after defendants' motion had been fully briefed
and argued, the court issued an order granting in part defendants'
motion and giving plaintiffs leave to file an amended complaint.
The plaintiffs then filed an amended suit in April 2001, which the
defendants again moved to dismiss. On March 29, 2002, the court
denied the motion. The parties are now beginning the discovery
process.
The Company considers the lawsuits to be without merit and intends to
defend vigorously against these allegations. However, the litigation
could prove to be costly and time-consuming to defend, and there can be
no assurances about the eventual outcome.
TOBACCO LITIGATION: FL Court Orders Payment of $37.5M To Dying Smoker
---------------------------------------------------------------------
A jury for the 11th Judicial Circuit Court for Miami-Dade County ruled
in favor of John Lukacs, a former smoker, who asked for his portion of
a landmark Florida settlement with the nation's top tobacco companies
earlier. Mr. Lukacs is afflicted with cancer that could cause him to
die before the appeal of the suit is over, Reuters reports.
Brown & Williamson Tobacco Corporation and Philip Morris Companies,
Inc. were ordered to pay US$37.5 million to Mr. Lukacs. In July 2000,
a Florida jury, in what has become known as the Engle case, stunned
tobacco companies by ordering them to pay $145 billion to sick smokers,
the highest punitive damages award in US history. The case is on
appeal in the Florida Third District Court of Appeals and the Lukacs
verdict will be subject to the outcome of the Engle appeal.
Both companies told Reuters they intend to appeal the verdict. A ruling
on the appeal from Florida's Third District Court of Appeals in Miami
is not expected before late 2002. "We remain confident that the
appeals courts will reverse both this verdict and Engle," said Jeff
Raborn, attorney for Brown & Williamson, in a written statement.
VERTICALNET INC.: Plaintiffs File Amended Securities Suit in S.D. NY
--------------------------------------------------------------------
Plaintiffs in the securities class actions against VerticalNet, Inc.
filed an amended consolidated suit in the United States District Court
for the Southern District of New York.
The first of these suits were commenced in June 2001 against the
Company and several of its officers and directors. Also named as
defendants were four underwriters involved in the issuance and initial
public offering (IPO) of 3,500,000 shares of the Company's common stock
in February 1999:
(1) Lehman Brothers Inc.,
(2) Hambrecht & Quist LLC,
(3) Volpe Brown Whelan & Company LLC and
(4) WIT Capital Corporation.
The suit alleged violations of Sections 11 and 15 of the Securities Act
of 1933 and Section 20(a) of the Securities Exchange Act of 1934 and
Rule 10b-5 promulgated thereunder, based on, among other things, claims
that the four underwriters awarded material portions of the initial
shares to certain favored customers in exchange for excessive
commissions.
The plaintiff also asserts that the underwriters engaged in a practice
known as "laddering," whereby the clients or customers agreed that in
exchange for IPO shares they would purchase additional shares at
progressively higher prices after the IPO.
With respect to the Company, the complaint alleges that the Company and
its officers and directors failed to disclose in the prospectus and the
registration statement the existence of these purported excessive
commissions and laddering agreements.
After the suit was filed, several "copycat" complaints were filed in
the same court. None of the complaints state the amount of any damages
being sought, but do ask the court to award "rescissory damages."
All of the foregoing suits were amended and consolidated into a single
complaint that was filed with the federal court on April 19, 2002. The
amended complaint contains additional factual allegations concerning
the events discussed in the original complaints, and asserts that, in
addition to Sections 11 and 15 of the Securities Act, the Company and
its officers and directors also violated Sections 10(b), 20(a) and Rule
10b-5 of the Exchange Act in connection with the IPO.
In addition to this amended and consolidated complaint, the plaintiffs
in this lawsuit and in the hundreds of other similar suits filed
against other companies in connection with IPOs that occurred in the
late 1990s have filed "master allegations" that primarily focus on the
conduct of the underwriters of the IPOs, including the Company's IPO.
The Company has retained counsel and intends to vigorously defend
itself in connection with the allegations raised in the amended and
consolidated complaint. In addition, the Company intends to enforce
its indemnity rights with respect to the underwriters who are also
named as defendants in the amended and consolidated complaint.
New Securities Fraud Cases
ACTRADE FINANCIAL: Marc Henzel Commences Securities Suit in S.D. NY
-------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Southern District of New
York against Actrade Financial Technologies, Inc. (NASDAQ: ACRT) and
certain of its officers and directors. The case was filed on behalf of
all persons who purchased the Company's common stock during the period
March 11, 1999 through February 8, 2002, inclusive.
The suit alleges that the defendants violated section 10(b) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder,
and Section 20(a) of the Exchange Act, by issuing a series of press
releases and public filings containing materially false or misleading
statements representing that the Company provided short-term loans to
businesses to finance commercial transactions.
The complaint alleges that these statements were false and misleading
because defendants knew, or recklessly disregarded, that the Company
had also loaned millions of dollars to individuals for non-commercial
purposes, defrauded its sureties into providing coverage for these
loans, and had overstated its financial results based on these
fraudulent lending practices.
The complaint further alleges that defendants' actions artificially
inflated the price of Company common stock during the class period.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
ANDRX CORPORATION: Marc Henzel Lodges Securities Fraud Suit in S.D. FL
----------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Southern District of
Florida on behalf of all purchasers of the common stock of Andrx
Corporation (Nasdaq: ADRX) from April 30, 2001 through February 21,
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. The complaint charges that the Company and
certain of its officers and directors violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market during the class period, thereby artificially inflating the
price of Company stock.
Specifically, the suit alleges that the Company issued a series of
statements concerning its generic version of the drug Tiazacr that the
only thing holding up the drug from reaching the market was continuing
patent litigation with Biovail Corp. in connection with Tiazacr.
The defendants failed to disclose that in fact, the Company had
difficulty making a stable version of generic Tiazacr, including that
it had amended its original application to the FDA thirteen times.
When the Company announced on February 21, 2002 that the FDA had raised
"certain issues" concerning the generic Tiazacr, its stock price
dropped from $42.61 per share on February 21, 2002 to $34.96 per share
on February 22, 2002, on volume of 15,767,100, over seven times the
prior day's 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
APPLIED DIGITAL: Weiss & Yourman Commences Securities Suit in S.D. FL
---------------------------------------------------------------------
Weiss & Yourman initiated a securities class action in the United
States District Court for the Southern District of Florida on behalf of
persons who acquired the securities of Applied Digital Solutions, Inc.
(Nasdaq: ADSX) between February 11, 2000 and May 10, 2002.
The complaint alleges that the Company and its Chief Executive Officer
violated the federal securities laws by issuing false and misleading
statements during the class period. Contrary to their positive
statements, defendants were in possession of materially adverse
information regarding the Company's lack of proper accounting controls
and improper revenue recognition at certain subsidiaries, but failed to
disclose this information to investors for more than two years.
On April 18, 2002, the Company disclosed that during the fiscal year
ended December 31, 2001, one of its subsidiaries had been recognizing
revenue without "evidence of customer acceptance prior to the
recognition of certain revenue."
The Company also disclosed that during the fiscal year ended December
31, 2000, a second subsidiary of the Company "lacked monitoring
controls over its accounts receivable and was unable to provide certain
detailed inventory listings for certain general ledger balances." The
April 18, 2002 disclosure of the Company's accounting irregularities
caused the price of Company stock to plummet 40%.
Approximately three weeks later, on May 9, 2002, defendants claimed
that nearly every major hospital in the West Palm Beach, Florida area
would be equipped with VeriChip scanners, an indispensable component of
the Company's VeriChip technology. However, one day later on May 10,
2002, the truth was disclosed that no hospital had accepted a scanner,
an essential device for retrieving the VeriChip's information.
Following the May 10, 2002 disclosure, the price of Company stock again
fell sharply, dropping nearly 30% in a single day.
For more details, Leigh Parker by Phone: 800-437-7918 by E-mail:
info@wyca.com or visit the firm's Website: http://www.wyca.com
APPLIED DIGITAL: Milberg Weiss Lodges Securities Fraud Suit in S.D. FL
----------------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class
action on behalf of purchasers of the securities of Applied Digital
Solutions, Inc. (NASDAQ: ADSXE) between February 11, 2000, and May 10,
2002, inclusive. The suit is pending in the United States District
Court for the Southern District of Florida against the Company and
Richard J. Sullivan, its Chief Executive Officer.
The complaint charges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of materially false and misleading
statements to the market between February 11, 2000 and May 10, 2002.
According to the complaint, defendants were in possession of materially
adverse information concerning the lack of proper accounting controls
and improper revenue recognition practices at certain of the Company's
subsidiaries, but failed to disclose the information to investors for
more than two years.
On April 18, 2002, the Company disclosed that during the year ending
December 31, 2001, one of its subsidiaries had been booking revenue
without "evidence of customer acceptance prior to the recognition of
certain revenue." The Company also disclosed that the subsidiary "did
not have proper restrictions to vendor access within its accounts
payable system."
Additionally, the Company disclosed that during the year ended December
31, 2000, a second subsidiary of the Company "lacked monitoring
controls over its accounts receivable and was unable to provide certain
detailed inventory listings for certain general ledger balances." The
disclosure of improper accounting practices at Company subsidiaries
drove the Company's stock down 40%.
Approximately three weeks later, on May 9, 2002, defendants claimed
that nearly every major hospital in the West Palm Beach, Florida, area
would be equipped with VeriChip scanners - an indispensable component
of the Company's Verichip technology. However, not one hospital in
West Palm Beach or anywhere else had accepted or agreed to use a
scanner, an essential device for retrieving the VeriChip's information.
One day later, on May 10, 2002, when the truth was disclosed that no
hospital had accepted a scanner, Company stock fell sharply, dropping
nearly 30% in one day.
For more details, contact Steven G. Schulman or Samuel H. Rudman by
Mail: One Pennsylvania Plaza, 49th fl. New York, NY 10119-0165 by Phone
number: 800-320-5081 or Kenneth J. Vianale or Tara Isaacson by Mail:
The Plaza 5355 Town Center Road Suite 900 Boca Raton, FL 33486 by
Phone: 561-361-5000 by E-mail: AppliedDigitalcase@milbergNY.com or
visit the firm's Website: http://www.milberg.com
AQUILA INC.: Marc Henzel Initiates Securities Fraud Suit in W.D. MO
-------------------------------------------------------------------
The Law Offices of Marc S. Henzel commenced a securities class action
in the United States District Court, Western District of Missouri on
behalf of all persons who purchased or acquired Aquila, Inc. (NYSE:
ILA) securities between April 25, 2001 and December 3, 2001.
The complaint charges the Company, certain of its officers and
directors, and UtiliCorp United Inc., the Company's controlling
shareholder, with making material misstatements and omissions
concerning the Company's planned formation of an Audit Committee
consisting of independent directors to monitor transactions between
UtiliCorp and the Company.
Defendants' failure to timely appoint an independent Audit Committee
ultimately permitted UtiliCorp to commence a tender offer pursuant to
which it bought back all of the outstanding Company Class A common
stock at a non-negotiated and less than optimum price per share.
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
MERRILL LYNCH: Stull Stull Commences Securities Fraud Suit in S.D. NY
---------------------------------------------------------------------
Stull, Stull & Brody initiated a securities class action in the United
States District Court for the Southern District of New York, on behalf
of purchasers of the common stock of Pets.com, Inc.
(OTCBB:IPET)(OTC:IPETZ.PK) between March 7, 2000 and November 7, 2000,
inclusive against defendants Merrill Lynch & Co., Inc. and its former
star Internet research analyst, First Vice President Henry M. Blodget,
who are charged with issuing misleading analyst reports about Pets.com.
The suit alleges that defendants violated the federal securities laws
by issuing analyst reports regarding Pets.com that recommended the
purchase of Pets.com common stock and which set price targets for
Pets.com common stock, which were materially false and misleading and
lacked any reasonable factual basis.
The complaint further alleges that, when issuing their Pets.com analyst
reports, the defendants failed to disclose significant, material
conflicts of interest, which resulted from their use of Mr. Blodget's
reputation and his ability to issue favorable analyst reports, to
obtain investment banking business for Merrill Lynch.
Furthermore, in issuing their Pets.com analyst reports, in which they
recommended the purchase of Pets.com stock, the defendants failed to
disclose material, non-public, adverse information, which they
possessed about Pets.com.
Throughout the class period, the defendants maintained
"ACCUMULATE/ACCUMULATE" or "BUY/BUY" recommendations on Pets.com in
order to obtain and support lucrative financial deal for Merrill Lynch.
As a result of defendants' false and misleading analyst reports,
Pets.com's common stock traded at artificially inflated levels during
the class period.
For more information, contact Tzivia Brody by Mail: 6 East 45th Street,
New York NY 10017 by Phone: 800-337-4983 by Fax: 212-490-2022 or by E-
mail: SSBNY@aol.com
MERRILL LYNCH: Cohen Milstein Lodges Securities Fraud Suit in S.D. NY
---------------------------------------------------------------------
Cohen Milstein Hausfeld & Toll PLLC initiated a securities class action
in the United States. District Court for the Southern District of New
York on behalf of purchasers of any class of trust shares of the
Merrill Lynch Internet Strategies Fund, Inc., during the period of
March 14, 2000, through October 15, 2001. On October 15, 2001, the
Internet Strategies Fund merged with The Merrill Lynch Global
Technology Fund (NASDAQ: MAGTX). The suit names as defendants:
(1) Merrill Lynch & Co., Inc. (NYSE: MER),
(2) Merrill Lynch Funds Distributor,
(3) Henry Blodget,
(4) Paul G. Meeks and
(5) several directors of the Internet Strategies Fund
Cohen Milstein is also involved in several other similar cases against
Merrill Lynch and others on behalf of purchasers of the stocks of the
following companies: InfoSpace, Inc., Internet Capital Group, Aether
Systems, Excite@Home, 24/7 Real Media, Inc., GoTo.com and Interliant,
Inc. The companies themselves are not named as defendants in these
suits.
The suit alleges that defendants issued analyst reports with positive
ratings on the Internet Strategies Funds, which failed to disclose that
this positive research was issued in order to attract and maintain
investment banking business.
For more details, contact Steven J. Toll or Diana Steele by Mail: 1100
New York Avenue, NW, West Tower, Suite 500, Washington, DC 20005 by
Phone: 888-240-0775 or 202-408-4600 by E-mail: stoll@cmht.com or visit
the firm's Website: http://www.cmht.com
MERRILL LYNCH: Cohen Milstein Lodges Securities Fraud Suit in S.D. NY
---------------------------------------------------------------------
Cohen, Milstein, Hausfeld & Toll, PLLC filed a securities class action
in the United States District Court for the Southern District of New
York on behalf of purchasers of the common stock of Interliant, Inc.
(Nasdaq:INIT) between the period of Aug. 4, 1999, through Feb. 21,
2001, against Merrill Lynch & Co., Inc. and its internet analyst Henry
Blodget.
Cohen, Milstein, Hausfeld & Toll, PLLC is also involved in other cases
against Merrill Lynch and Mr. Blodget on behalf of purchasers of
Infospace, Internet Capital Group, Aether Systems, Excite@Home, 24/7
RealMedia and GoTo.com stock.
The suit alleges that defendants issued analyst reports with positive
ratings on Interliant, which failed to disclose that this positive
research was issued in order to attract and maintain investment banking
business.
For more details, contact Steven J. Toll or Katrina Jurgill by Mail:
1100 New York Avenue, NW, West Tower, Suite 500, Washington, DC 20005
by Phone: 888-240-0775 or 202-408-4600 by E-mail: stoll@cmht.com or
kjurgill@cmht.com or visit the firm's Website: http://www.cmht.com
MIRANT CORPORATION: Weiss & Yourman Lodges Securities Suit in N.D. CA
---------------------------------------------------------------------
Weiss & Yourman LLP initiated a securities class action in the United
States District Court for the Northern District of California on behalf
of persons who acquired securities of Mirant Corporation (NYSE: MIR)
(formerly known as "Southern Energy Company") between January 19, 2001
and May 6, 2002, inclusive.
The complaint alleges that the Company and certain of its officers
violated the federal securities laws by artificially inflating the
price of the Company's stock through their actions and statements.
Plaintiffs allege that defendants schemed to manipulate the supply and
price of electricity in the wholesale electricity market, as alleged in
a lawsuit filed against the Company by the State of California and
other legal actions. As a result of defendants' manipulation, the
Company reported quarter after quarter of outstanding growth and
positive financial results during the class period.
Defendants also made materially false and misleading statements
regarding the Company's financial condition and business, including
assuring investors that financial issues related to the California
energy market had been properly accounted for.
The complaint alleges that defendants' manipulation allowed the Company
to complete a lucrative secondary stock offering in December 2001 and a
$750 million convertible debenture offering in May 2001. In addition,
defendants reaped over $8 million by selling Company stock at
artificially inflated prices during the class period.
Since its class period high of $47, the price of Company stock has lost
over 80% of its value.
The complaint alleges that as a result of the defendants' conduct,
plaintiff and other members of the class who purchased Company stock at
artificially inflated prices during the class period have suffered
damages.
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
PEROT SYSTEMS: Lovell & Stewart Commences Securities Suit in S.D. NY
--------------------------------------------------------------------
Lovell & Stewart, LLP launched a securities class action on behalf of
all persons who acquired the common stock of Perot Systems Corp.
(NYSE:PER) between February 2, 1999 and June 7, 2002, inclusive. The
suit is pending in the US District Court for the Southern District of
New York against the Company and:
(1) Ross Perot, Chairman, and
(2) Ross Perot, Jr., its President and Chief Executive Officer.
The defendants allegedly violated the federal securities laws by making
misstatements and/or omissions of material facts in the Company's
public filings with the Securities and Exchange Commission (SEC) and
otherwise. The suit 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 and the common law and seeks to recover damages.
Specifically, the complaint alleges that defendants omitted to disclose
crucial facts regarding risky business practices that the Company was
engaging in order to try to obtain new consulting business and generate
additional revenues, including that:
(i) the Company had disclosed crucial proprietary information
regarding the architecture of California's power grid that
could be used to cause artificial congestion on such grid to
power trader Reliant;
(ii) the Company faces substantial potential legal liability by
virtue of the possibility that its improper disclosures of
proprietary information enabled power traders to exploit such
weaknesses for their own profit; and
(iii) that the Company did not have in place sufficient management
controls to prevent its personnel from using confidential
information obtained in the course of its consulting work as a
selling point in trying to obtain lucrative consulting
business.
The complaint further alleges that when Wall Street learned about the
foregoing after California State Sen. Joseph Dunn unearthed a Company
sales presentation mapping out strategies to exploit weaknesses and
loopholes in the California power grid, Company stock tumbled 19% on
June 5, 2002 and an additional 11.3% to close at $12.90 on June 6,
2002, down from its class period high of $85.75.
For more details, contact Christopher Lovell, Victor E. Stewart,
Christopher J. Gray by Phone: 212-608-1900 or visit the firm's Website:
http://www.lovellstewart.com
RAYOVAC CORPORATION: Schiffrin & Barroway Files Securities Suit in WI
---------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Western District of Wisconsin on
behalf of all purchasers of the common stock of Rayovac Corporation
(NYSE: ROV) between April 26, 2001 and September 19, 2001, inclusive.
The complaint 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 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, Rayovac 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.
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
SALOMON SMITH: Wolf Haldenstein Lodges Securities Fraud Suit in S.D. NY
-----------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class
action in the United States District Court for the Southern District of
New York on behalf of purchasers of Global Crossing Ltd. (NYSE: GX)
common stock between June 15, 1999 and November 10, 2001, inclusive,
against Salomon Smith Barney, Inc. and its star telecommunication
analyst Jack Grubman for violations of Sections 10(b) of the Securities
Exchange Act of 1934, and SEC Rule 10b-5 promulgated thereunder.
The suit alleges that defendants violated sections 10(b) of the
Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated
thereunder, by the issuance of analyst reports regarding Global
Crossing which recommended the purchase of Global Crossing common stock
and which set price targets for Global Crossing common stock without
any reasonable factual basis.
Furthermore, when issuing their Global Crossing reports, defendants
failed to disclose significant, material conflicts of interest, which
they had, in light of their use of Mr. Grubman's reputation and his
Global Crossing analyst reports, to obtain investment banking business
for Salomon.
Furthermore, in issuing their Global Crossing reports, in which they
were recommending the purchase of Global Crossing stock, defendants
failed to disclose material, non-public, adverse information which they
possessed about Global Crossing as well as their true opinion about
Global Crossing.
Defendants also failed to disclose that Mr. Grubman, while issuing
reports on Global Crossing recommending that investors purchase Global
Crossing common stock, had been intimately involved in the management
of Global Crossing.
For more details, contact Fred T. Isquith, Robert Abrams, Michael
Miske, George Peters or Derek Behnke by Mail: 270 Madison Avenue, New
York, New York 10016 by Phone: 800-575-0735 by E-mail:
classmember@whafh.com or visit the firm's Website:
http://www.whafh.com. E-mail should refer to Global Crossing.
SEITEL INC.: Marc Henzel Commences Securities Fraud Suit in S.D. TX
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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 Texas
against Seitel, Inc. (NYSE: SEI) and certain of its senior officers
with violations of the federal securities laws on behalf of all persons
who purchased the Company's common stock on the open market during the
period May 5, 2000 through May 3, 2002, inclusive.
The suit alleges that defendants 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 suit 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 the Company's 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 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
SPECIALTY LABORATORIES: Marc Henzel Commences Securities Suit in 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 Central District of
California on behalf of purchasers of Specialty Laboratories, Inc.
(NYSE: SP) publicly traded securities pursuant to the Company's
Registration Statement/Prospectus together with those who purchased
their shares in the open market during the period between December 8,
2000 and April 10, 2002.
The suit charges Specialty Labs and certain of its officers and
directors with violations of the Securities Exchange Act of 1934 and
the Securities Act of 1933. Specialty Labs, a research-based clinical
laboratory, develops and performs esoteric clinical laboratory tests.
The Company went public in 12/00 selling five million shares at $16.00
per share.
The complaint alleges that in June and October of 2001, California
Department of Health Services representing the State of California and
acting as agent of the Centers for Medicare and Medical Services (CMS)
inspected Specialty Labs. The inspectors were mortified by their
findings.
As a result of the inspections, Specialty Labs was initially cited by
the State of California with 20 deficiencies, and then in a separate
statement in February 2002 for 12 overlapping deficiencies by CMS.
Specialty Labs was notified that if it failed to correct 6 of the
issues, relating primarily to personnel licensing and the enforcement
of regulatory requirements, the Company would face monetary and other
penalties, including the possible revocation of its license.
Specialty Labs' deficiencies in question relate to two broad areas,
both of which focus on the number of licensed personnel in the lab.
First, historically there have been required ratios for labs in terms
of the number of licensed supervisors per the number of testing
personnel. Second, California implemented a requirement for labs
performing testing in the areas of cytogenetics and molecular genetics.
Specifically, directors of such operations must now be at least at the
M.D. or Ph.D. level and must also be Board certified in their area of
focus. However, defendants sought to avoid compliance with California's
laboratory requirements in order to inflate the Company's revenue and
EPS.
On April 11, 2002, before the market opened, the Company issued a press
release, which provided a more comprehensive explanation and discussion
of the compliance problems. On this news, the Company's shares plunged
to an all time low of $10-1/4, more than an 80% drop from the Class
Period high.
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
TRITON NETWORK: Milberg Weiss Lodges Securities Fraud Suit in M.D. FL
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Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class
action on June 11, 2002, on behalf of purchasers of the securities of
Triton Network Systems, Inc. (NASDAQ: TNSIE.OB) between July 13, 2000
through August 14, 2001, inclusive. The suit is pending in the United
States District Court for the Middle District of Florida, Tampa
Division against:
(1) Kenneth R. Vines,
(2) Howard "Skip" Speaks,
(3) Brian J. Andrew,
(4) Joseph Antinucci,
(5) Stanley R Arthur,
(6) Bandel L. Carano,
(7) James F. Gibbons,
(8) Robert P. Goodman,
(9) Arjun Gupta,
(10) James Wei,
(11) Credit Suisse First Boston Corporation,
(12) Deutsche Banc Alex Brown,
(13) US Bancorp Piper Jaffray Inc.,
(14) Ernst & Young, LLP,
(15) US Telesource, Inc. and
(16) Oak Investment Partners
The complaint charges that defendants violated Sections 11 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 materially false and misleading statements to
the market between July 13, 2000 and August 14, 2001.
According to the suit, the Company's July 13, 2000 Prospectus contained
false and misleading statements regarding its sales and revenue. The
Prospectus also touted a three year supply agreement with a customer
called Advanced Radio Telecom (ART) representing that this agreement
would account for a significant amount of revenue.
However, defendants revealed on November 14, 2000, that "a key
customer" that had previously been represented in the offering as
having a issued "firm purchase orders," had requested that the Company
"postpone delivery" of the orders until after it (ART) obtains
additional financing. ART filed for bankruptcy on March 30, 2001.
Additionally, the complaint alleges that defendants disseminated
materially false financial statements for each of the Company's interim
quarters during the class period and for the year ended December 31,
2000, which materially overstated the Company's revenues and its net
income.
Defendants also made a series of other materially false and misleading
statements about the Company and its financial condition and
performance. The complaint further alleges that during the class
period, defendants:
(i) failed to include in its financial statements, all
adjustments, necessary for a "fair presentation" of the
financial results in violation of GAAP;
(ii) applied a non-GAAP accounting method which resulted in a
material $2.7 million under-provision for bad debts;
(iii) failed to write off worthless intangible assets; and
(iv) failed to recognize a provision for loss and inventory
purchase commitments.
During the class period Company stock experienced a free fall--
plummeting from a high of over $40 per share in July of 2000 to less
than $0.60 per share on August 14, 2001. On August 21, 2001, it was
reported that the Company decided to close the company and sell its
assets, pending shareholder approval.
For more details, contact Steven G. Schulman or Samuel H. Rudman by
Mail: One Pennsylvania Plaza, 49th fl., New York, NY 10119-0165 by
Phone: 800-320-5081 or contact Kenneth J. Vianale or Tara Isaacson by
Mail: The Plaza, 5355 Town Center Road, Suite 900 Boca Raton, FL 33486
by Phone: 561-361-5000 by E-mail: TritonNetworkcase@milbergNY.com or
visit the firm's Website: http://www.milberg.com
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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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