/raid1/www/Hosts/bankrupt/CAR_Public/020617.mbx
C L A S S A C T I O N R E P O R T E R
Monday, June 17, 2002, Vol. 4, No. 118
Headlines
ADVANCED SWITCHING: Mounting Vigorous Defense V. Securities Suits in VA
ARIBA INC.: Plaintiffs Drop Several Claims in Amended Securities Suit
ART TECHNOLOGY: Asks MA Court To Dismiss Suit For Securities Violations
AT&T CORPORATION: IL Suit Filed To Stop Separation From Broadband Group
AUSTRALIA: Hepatitis C Victims Place Blame On Red Cross Blood Service
AUSTRIAN REPARATIONS: Provincial Officials, Jewish Leader Sign Accord
BRINKMANN CORPORATION: Recalls 45T Heaters Over Risk of CO Poisoning
DRUGSTORE.COM: Faces Suits For Securities Act Violations in S.D. NY
EXPEDIA INC.: Plaintiffs File Amended Securities Fraud Suit in S.D. NY
EXTENSITY INC.: Building Vigorous Defense V. Securities Suits in NY
EXXON MOBIL: Seeks Reduction of $5B Valdez Case Punitive Damages
FOUNDRY NETWORKS: CA Court Hears Argument For Securities Suit Dismissal
FOUNDRY NETWORKS: Plaintiffs File Amended Securities Suit in S.D. NY
IMANAGE INC.: Plaintiffs File Amended Securities Fraud Suit in S.D. NY
INFORMAX CORPORATION: Plaintiffs File Amended Securities Suit in NY
KANA SOFTWARE: NY Suits Stayed Pending Appointment of Lead Plaintiff
LEARN2 CORPORATION: Trial in Consumer Suit Set For October 2002 in CA
MANILA ELECTRIC: Groups File Suit Over Purchased Power Adjustments
MEXICAN BRACEROS: Workers Seek US Congress' Help To Recover Back Pay
MICROSOFT CORP.: Court Revives Antitrust Suit, Allows Consumers To Sue
NEBRASKA: Supreme Court Denies Hearing Challenge To State Phone Tax
NETRATINGS INC.: Plaintiffs File Amended Securities Suit in S.D. NY
RETEK INC.: Plaintiffs File Amended Securities Fraud Suit in S.D. NY
STAMPS.COM: Plaintiffs File Amended Securities Fraud Suit in S.D. NY
WASHINGTON: Rulings Reflect Child Care System's Troubled Condition
WEST VIRGINIA: Women Sue Over Hardships After Welfare Assistance Ended
Z-TEL TECHNOLOGIES: Securities Suits Coordinated For Pre-trial in NY
New Securities Fraud Cases
DYNEGY INC.: Glancy & Binkow Initiates Securities Fraud Suit in S.D. TX
HALLIBURTON COMPANY: Wolf Haldenstein Files Securities Suit In N.D. IL
MERRILL LYNCH: Rabin & Peckel Commences Securities Fraud Suit in NY
MERRILL LYNCH: Schatz & Nobel Commences Securities Fraud Suit in NY
MERRILL LYNCH: Innelli and Molder Commences Securities Fraud Suit in NJ
MH MEYERSON: Rosen Law Initiates Securities Fraud Suit in New Jersey
OMNICOM GROUP: Wolf Popper Commences Securities Fraud Suit in S.D. NY
OMNICOM GROUP: Charles Piven Commences Securities Fraud Suit in S.D. NY
PEREGRINE SYSTEMS: Berman DeValerio Lodges Securities Suit in S.D. CA
PEROT SYSTEMS: Charles Piven Commences Securities Fraud Suit in S.D. NY
SALOMON SMITH: Schatz & Nobel Commences Securities Fraud Suit in NY
VERISIGN INC.: Marc Henzel Commences Securities Fraud Suit in N.D. CA
WORLDCOM INC.: Lovell & Stewart Expands Class Period in Securities Suit
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ADVANCED SWITCHING: Mounting Vigorous Defense V. Securities Suits in VA
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Advanced Switching Communications, Inc. faces several securities class
actions pending in the United States District Court for the Eastern
District of Virginia on behalf of purchasers of the Company's
securities between October 5, 2000 and February 12, 2002, inclusive.
The suits charge the Company and certain of its current and former
officers and directors, with violations of the federal securities laws
in connection with its initial public offering and subsequent public
statements.
The suit alleges that defendants violated Sections 11 and 15 of the
Securities Act of 1933 by issuing a materially false and misleading
prospectus and registration statement in connection with the Company's
initial public offering (IPO). The suit further states 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 October 5, 2000
and February 12, 2002, thereby artificially inflating the price of
Company securities.
The Company believes the claims asserted in the complaints are without
merit and intends to contest these claims vigorously. However, the
outcome of the suits cannot be predicted.
ARIBA INC.: Plaintiffs Drop Several Claims in Amended Securities Suit
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Plaintiffs in the consolidated securities class action against Ariba,
Inc. amended the suit, dropping several of their claims against the
Company and its officers and directors.
Several suits were initially commenced in between March 2001 and June
2001, in the United States District Court for the Southern District of
New York against the Company, certain of its officers or former
officers and directors and three of the underwriters of its initial
public offering.
These suits, filed on behalf of purchasers of the Company's common
stock in the period from June 23, 1999, the date of the Company's
initial public offering (IPO), to December 23, 1999 (or in some cases,
to December 5 or 6, 2000), made certain claims under the federal
securities laws, including Sections 11 and 15 of the Securities Act of
1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of
1934, relating to the Company's IPO
Among other things, these actions alleged that the prospectus pursuant
to which shares of common stock were sold in the Company's IPO
incorporated in a registration statement filed with the SEC, contained
certain false and misleading statements or omissions regarding the
Company's underwriters' practices, relating to common stock allocations
to customers during the Company's IPO and commissions from those
customers related to such allocations. Such statements and omissions
caused the Company's post-IPO stock price to be artificially inflated.
In June 2001, these actions were consolidated into a single suit. In
August 2001, that consolidated action was further consolidated before a
single judge with cases brought against over three hundred additional
issuers and their underwriters that make similar allegations regarding
the initial public offerings of those issuers. The latter consolidation
was for purposes of pretrial motions and discovery only.
On February 14, 2002, the parties signed and filed a stipulation
dismissing the consolidated action without prejudice against the
Company and the individual officers and directors, which the Court
approved and entered as an order on March 1, 2002.
On April 19, 2002, the plaintiffs filed an amended complaint in which
they dropped their claims against the Company and the individual
officers and directors under Sections 11 and 15 of the Securities Act
of 1933, but elected to proceed with their claims against such
defendants under Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934.
The Company intends to defend against these claims vigorously.
Although management currently believes that the outcome of other
outstanding legal proceedings, claims and litigation involving the
Company will not have a material adverse effect on its business,
results of operations or financial condition, litigation is inherently
uncertain, and there can be no assurance that the Company will prevail
in this suit.
ART TECHNOLOGY: Asks MA Court To Dismiss Suit For Securities Violations
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Art Technology Group, Inc. asked the United States District Court for
the District of Massachusetts to dismiss the consolidated securities
class action pending against it and certain of its officers.
Seven securities suits were initially commenced, alleging that the
Company and certain of its officers violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934 and SEC Rule 10b-5, which
generally may subject issuers of securities and persons controlling
those issuers to civil liabilities for fraudulent actions or defects in
the public disclosure required by securities laws.
Four of the cases were filed on various dates in October 2001 in the US
District Court for the District of Massachusetts, while three were
initially filed in the US District Court for the Central District of
California on various dates in August and September 2001.
The California actions were consolidated and transferred to the
District of Massachusetts in November 2001. In December 2001, the
court issued an order of consolidation in which it consolidated all
actions filed against the Company and appointed certain individuals as
lead plaintiffs in the consolidated action. The plaintiffs then filed
a consolidated suit applicable to all of the consolidated actions.
On April 19, 2002, the company filed a motion to dismiss the case. The
plaintiffs have 45 days to respond to the motion. While management
believes the claims against the Company are without merit, and intends
to defend the action vigorously, the litigation is still in the
preliminary stage.
AT&T CORPORATION: IL Suit Filed To Stop Separation From Broadband Group
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The Belleville lawyers who are suing AT&T Corporation in Illinois
federal court for $10 billion, in a consumer class action, now want a
court in Edwardsville, Madison County, Illinois, to stop the Company
from unloading its most profitable division, the Belleville News-
Democrat (IL) reports.
If the Company carries out its plan to separate from its Broadband
Group, the nation's largest provider of cable television and high-speed
Internet service, the Company might not be able to pay up if it loses
the consumer fraud suit in the federal court, lawyers for the
plaintiffs assert. Broadband's US$103 billion in assets allegedly
represents two-thirds of the Company's total worth.
"We have filed this lawsuit in order to ensure that AT&T does not
dissipate its corporate assets on the eve of a trial which we
anticipate will result on one of the largest judgments ever obtained in
a consumer class action lawsuit," said attorney Stephen M. Tillery of
the Belleville law firm Carr, Korein, Tillery.
The spin-off of the Broadband Group into a separate company is part of
a merger agreement between the Company and Comcast Corporation.
Stockholders of both companies are scheduled to vote on the merger July
10. The federal consumer fraud lawsuit is now set for trial on August
5.
In the multi-state federal lawsuit, AT&T customers claim that the
Company unfairly continued to collect lease payments on older, rotary
dial telephones after a federal court in 1984 ordered the breakup of
the Bell monopoly.
AUSTRALIA: Hepatitis C Victims Place Blame On Red Cross Blood Service
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About 50 Hepatitis C sufferers who blame the Australian Red Cross Blood
Service for infecting them with the viral disease, today pledged to
back a class action, the AAP News reports.
The Uniting Church's Reverend Bill Crews organized a forum at Ashfield
in Sydney's inner west which drew people who claimed they had
contracted the disease through operations and child birth. Mr. Crews
said government sources estimated up to 20,000 Australians contracted
Hepatitis C from contaminated blood products, but sufferers, he says,
have been denied justice and continue to waste away.
The group has enlisted a barrister and QC to run the class action, and
Mr. Crews expected the action would be filed in court within a few
months, once the evidence was assembled.
Mr. Crews said, "The way it's treated at the moment where some people
are given compensation and made to sign secrecy clauses, nobody knows
if anything's safe or not." He also said that the infected people know
it's going to be a long, hard struggle, because of the constant
stonewalling from government authorities.
A recent inquiry in Canada led to information that a $1.4 billion
compensation settlement had been paid by the Canadian government and
that blood services had been taken away from the Red Cross. Mr. Crews
said an organization has been formed to push the government to provide
compensation to people who are suffering from Hepatitis C which they
acquired from transfusions and other medical procedures.
However, he said the class action was not just about a financial
payout. "It's not just compensation, it's help and it's also an
admission because somewhere along the line people have taken risks with
the blood supply," said Mr. Crews.
AUSTRIAN REPARATIONS: Provincial Officials, Jewish Leader Sign Accord
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Austrian provincial officials recently signed an agreement with the
leader of Austria's Jews to compensate his community for property
stolen and destroyed during Nazi rule, the Associated Press Newswires
reports.
Under the deal, reached after months of negotiations, Austria's nine
provinces are to pay a total of $17 million (18.2 million euros) in
five yearly installments to the Jewish community, the Austria Press
Agency reports. The leader of the Jewish community, Ariel Muzicant,
praised the deal as "historic," but said that 57 years after the war's
end "many of the victims could not live to see this."
The federal government already has come to terms with Austrian Jews and
their survivors on compensation. After signing the deal at a meeting
of governors in the Upper Austria city of Gmunden, some 110 miles west
of Vienna, Josef Puehringer, the governor of Upper Austria, said the
deal settled an obligation to the country's Jews.
We "have fulfilled our moral obligations," Mr. Puehringer said. "With
this agreement, an important chapter has been closed."
The leaders said the first installment will be paid only after two
wartime-related class actions pending in the United States against the
Austrian government are withdrawn.
BRINKMANN CORPORATION: Recalls 45T Heaters Over Risk of CO Poisoning
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The Brinkmann Corporation is cooperating with the US Consumer Product
Safety Commission (CPSC) by voluntarily recalling about 45,000 outdoor
tabletop propane heaters. The heaters can emit high levels of carbon
monoxide (CO), which poses a risk of CO poisoning to consumers. The
Company has received one report of a CO death involving the use of this
outdoor heater inside of a camper.
The recalled Outdoor Tabletop Heaters are about 33 inches tall and
operate with a disposable 1 lb. propane tank, commonly sold in outdoor
and camping stores. The base of the heater has a label that reads
"BRINKMANN OUTDOOR TABLETOP HEATER" and has the model number 883-1000-
0. The heater also has `mood lighting' around the base that is battery
operated. These heaters were manufactured in China.
Retailers, including Wal-Mart, Menards, and Galyan's, sold these
heaters from September 2001 through May 2002 at a range of prices up to
$100, depending on the retail location.
For more details, contact the Company by Phone: 800-675-5301 between
8:30 am and 5 pm CT Monday through Friday.
DRUGSTORE.COM: Faces Suits For Securities Act Violations in S.D. NY
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Drugstore.com, Inc. faces several securities class actions pending in
the United States District Court for the Southern District of New York,
in connection with its June 27,1999 initial public offering and its
March 15,2000 secondary offering. The suit also names as defendants
certain of the Company's present and former officers and directors, and
its underwriters.
The suits generally allege that the prospectuses through which the
Company conducted the initial public offering and the secondary
offering (together, the offerings) were materially false and misleading
for failure to disclose, among other things, that:
(1) the underwriters of the offerings allegedly had solicited and
received excessive and undisclosed commissions from certain
investors in exchange for which the underwriters allocated to
those investors material portions of the restricted number of
shares issued in connection with the offerings; and
(2) the underwriters allegedly entered into agreements with
customers whereby they agreed to allocate Company shares to
customers in the offerings in exchange for which customers
agreed to purchase additional Company shares in the
aftermarket at predetermined prices.
The complaints assert violations of various sections of the Securities
Act of 1933, as amended, and the Securities Exchange Act of 1934, as
amended, and seek unspecified damages and other relief.
The Company disputes the allegations of wrongdoing in these complaints
and intends to vigorously defend itself in these matters.
EXPEDIA INC.: Plaintiffs File Amended Securities Fraud Suit in S.D. NY
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Plaintiffs in the securities class actions against Expedia, Inc. filed
an amended suit in the United States District Court for the Southern
District of New York.
Between June 5 and July 26, 2001, four securities suits, alleging
violations of Sections 11 and 15 of the Securities Act of 1933 and
Sections 10(b) and 20 of the Securities Exchange Act of 1934, were
filed against the Company, certain of its officers and directors and
certain underwriters of its initial public offering (IPO).
The complaint alleges that the Company's prospectus was false or
misleading in that it failed to disclose:
(1) that the underwriters allegedly were paid excessive
commissions by certain customers in return for receiving
shares in the IPO; and
(2) that certain of the underwriters' customers allegedly agreed
to purchase additional shares of the Company in the
aftermarket in return for an allocation of shares in the IPO.
Plaintiffs contend that, as a result of those omissions from the
prospectus, the price of the Company's stock was artificially inflated
between November 9, 1999 and December 6, 2000, and that the defendants
are liable for unspecified damages to those persons who purchased stock
during that period.
On August 9, 2001, these actions were consolidated before a single
judge along with cases brought against numerous other issuers and their
underwriters that make similar allegations involving the IPOs of those
issuers. The consolidation was for purposes of pretrial motions and
discovery only.
Plaintiffs filed an amended complaint on April 20, 2002, asserting
essentially the same claims as the original complaints. The Company
intends to defend this matter vigorously. Management believes that the
resolution of all such matters will not have a material impact to the
Company's financial position, results of operations or cash flows.
EXTENSITY INC.: Building Vigorous Defense V. Securities Suits in NY
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Extensity, Inc. faces two securities class actions pending in the
United States District Court for the Southern District of New York on
behalf of purchasers of the Company's common stock from January 26,2000
to December 6,2000.
The suit alleges violations of Sections 11, 12(a)(2) and 15 of the
Securities Act of 1933 and Section 10(b) of the Securities Exchange Act
of 1934 and Rule 10b-5 promulgated thereunder.
The Company believes these charges to be without merit and is confident
that the suits will not have a material effect on its business,
financial condition or results of operations.
EXXON MOBIL: Seeks Reduction of $5B Valdez Case Punitive Damages
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Exxon Mobil Corporation recently asked a federal district court in
Anchorage, Alaska to reduce a $5 billion punitive damages award levied
against it as a consequence of the Exxon Valdez oil spill. The Company
asks that the punitive damages award be reduced to no more than $40
million, Associated Press Newswires reports.
Company spokesman Tom Cirigliano said that the Company is following up
on a decision by a panel of the Ninth US Circuit Court of Appeals,
rendered in November 2001. The appeals court panel of three judges
found that the $5 billion awarded by an Anchorage jury in 1994, to
thousands of commercial fishermen, Alaska Natives, property owners and
others harmed by the spill, was excessive. It ordered the Anchorage
court to reduce the award. The appeals court later refused to review
its decision as a full court.
The Company said that the punitive damages should be $25 million, the
amount of the fine imposed by the government for the spill. It also
said that the punitive damages should not exceed $40 million, or twice
the compensatory damages awarded to private plaintiffs.
"Pocket change," said Patience Anderson Faulkner of Cordova, when asked
about the amounts suggested by Exxon Mobil. "It is going to amount to
no money at all." Ms. Faulkner worked with lawyers on the class action
after the spill to chronicle the damage and submit claims against the
Company.
Ms. Faulkner said that the effects of the spill continue to devastate
the community of about 2,500 people at the southeastern end of Prince
William Sound. A fishing permit before the spill cost more than
US$200,000, she said. Now, one costs US$40,000. The Company has
maintained that Prince William Sound fully recovered from the massive
oil spill years ago.
The spill occurred in 1989, when the 987-foot (296-meter) oil tanker
ran aground on a reef, spilling nearly 11 million gallons (42 million
liters) of crude. It was the worst spill in US waters in history.
The Company said that it paid US$300 million to more than 11,000
Alaskans and businesses soon after the spill. It also paid US$2.2
billion on the cleanup from 1989 to 1992, when the state and the Coast
Guard declared it was complete. Exxon Mobil also paid US$1 billion in
settlements with the state of Alaska and the federal government.
FOUNDRY NETWORKS: CA Court Hears Argument For Securities Suit Dismissal
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The United States District Court for the Northern District of
California heard arguments on the dismissal of a securities class
action against Foundry Networks, Inc. in June 7,2002, although a
decision has not yet been released.
In December 2000, several similar securities suits were filed against
the Company and certain of its officers, following the Company's
announcement in December 2000 of its anticipated financial results for
the fourth quarter ended December 31, 2000. The lawsuits were
subsequently consolidated by the court.
The consolidated amended suit alleged violations of federal securities
laws on behalf of purchasers of the Company's common stock during the
period from September 7, 2000 to December 19, 2000.
The Company moved to dismiss the suit, which the Court granted in
October 2001, without prejudice to amend. In December 2001, attorneys
for lead plaintiffs filed a second amended complaint. The Company
reviewed the second amended complaint and moved to dismiss that
complaint.
Whatever the outcome of that hearing, the Company believes the lawsuit
is without merit and intends to defend itself vigorously.
FOUNDRY NETWORKS: Plaintiffs File Amended Securities Suit in S.D. NY
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Plaintiffs in the securities class action against Foundry Networks,
Inc. filed an amended suit in the United States District Court for the
Southern District of New York. The suit was initially commenced in
November 2001 on behalf of purchasers of the Company's common stock
from September 27, 1999 through December 6, 2000.
On April 19, 2002, the plaintiffs electronically served an amended
complaint, which names as defendants, the Company, three of its
officers, and investment banking firms that served as underwriters for
the Company's initial public offering in September 1999.
The amended complaint alleges violations of Sections 11 and 15 of the
Securities Act of 1933, and Section 10(b) of the Securities Exchange
Act of 1934, on the grounds that the prospectus incorporated in the
registration statement for the offering failed to disclose, among other
things, that:
(1) the underwriters had solicited and received excessive and
undisclosed commissions from certain investors in exchange for
which the underwriters allocated to those investors material
portions of the shares of the Company's stock sold in the
initial public offering; and
(2) the underwriters had entered into agreements with customers
whereby the underwriters agreed to allocate shares of the
Company's stock sold in the initial public 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 amended complaint also alleges that false analyst reports were
issued following the IPO. No specific damages are claimed.
The Company is aware that similar allegations have been made in
lawsuits relating to more than 300 other initial public offerings
conducted in 1999 and 2000. Those cases have been consolidated for
pretrial purposes before the Honorable Judge Shira A. Scheindlin.
Management believes that the allegations in the suit against the
Company and its officers are without merit and management intends to
contest them vigorously. However, these litigations are in the
preliminary stage, and their outcome cannot be predicted. The
litigation process is inherently uncertain. If the outcome of the
litigation is adverse to the Company and if, in addition, the Company
was required to pay significant monetary damages in excess of available
insurance, its business could be significantly harmed.
IMANAGE INC.: Plaintiffs File Amended Securities Fraud Suit in S.D. NY
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Plaintiffs in the consolidated securities class action against Imanage,
Inc. filed an amended suit in the United States District Court for the
Southern District of New York.
Several securities suits were commenced in July 2001, against the
Company, the underwriters of its initial public offering (IPO), and its
directors and certain officers. These suits were later consolidated.
On April 19, 2002, the plaintiffs served an amended complaint, which is
brought purportedly on behalf of all persons who purchased the
Company's common stock from November 17, 1999 through December 6, 2000.
It names as defendants the Company, five of the Company's present and
former officers and several investment banking firms that served as
underwriters of the Company's IPO. The suit alleges liability under
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
registration statement for the offering did not disclose that:
(1) the underwriters had agreed to allow certain customers to
purchase shares in the offerings in exchange for excess
commissions paid to the underwriters; and
(2) the underwriters had arranged for certain customers to
purchase additional shares in the aftermarket at predetermined
prices.
The amended complaint also alleges that false analyst reports were
issued.
The Company is aware that similar allegations have been made in
lawsuits challenging over 300 other public offerings conducted in 1999
and 2000. All of these cases have been consolidated for pretrial
purposes before a judge in the Southern District of New York. The time
to respond to the complaints has been stayed pending the court's
decisions regarding coordination of the cases.
While the Company believes that the allegations against it and its
officers/directors are without merit, and intend to contest them
vigorously, there can be no assurance that this matter will be resolved
without costly litigation or in a manner that is not adverse to its
consolidated financial position, results of operations or cash flows.
INFORMAX CORPORATION: Plaintiffs File Amended Securities Suit in NY
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Plaintiffs in the securities class action against Informax Corporation
filed an amended suit in the United States District Court for the
Southern District of New York against the Company, eight of the
underwriters of its initial public offering (IPO) and two former
executive officers of the Company.
The amended complaint alleges, among other things, that certain of the
underwriters of the Company's IPO violated the securities laws by
failing to disclose certain alleged compensation arrangements, like
commissions paid them by the underwriters' customers, 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 IPO.
The Company is 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
allegedly manipulative practices.
The Company believes that meritorious defenses to these claims are
available and intends to vigorously contest and defend against them.
However, due to the inherent uncertainties of litigation, the Company
cannot accurately predict the ultimate outcome of the litigation.
KANA SOFTWARE: NY Suits Stayed Pending Appointment of Lead Plaintiff
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The securities class actions pending in the United States District
Court against Kana Software, Inc. have been stayed pending the
appointment of a lead plaintiff.
The suits allege violations of Section 11, 12(a)(2) and Section 15 of
the Securities Act of 1933 and violations of Section 10(b) and Rule
10b-5 of the Securities Exchange Act of 1934, on behalf of purchasers
of the Company's stock between September 21, 1999 and December 6, 2000
in connection with the Company's initial public offering (IPO). The
suit also names as defendants certain of the Company's officers and
directors and the underwriters for its IPO:
(1) Goldman Sachs & Co.,
(2) Lehman Bros,
(3) Hambrecht & Quist LLC, and
(4) Wit Capital Corporation
Specifically, the complaints alleged that the underwriter defendants
engaged in a scheme concerning sales of the Company's securities in the
initial public offering and in the aftermarket.
The Company believes it has good defenses to these claims and intends
to defend the action vigorously.
LEARN2 CORPORATION: Trial in Consumer Suit Set For October 2002 in CA
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Trial in the consumer class action against Learn2 Corporation has been
set for October 2002 in the Santa Clara County, California state court.
Consumer Joseph Pavel filed the suit last year in New York, alleging
that the Company breached its contract with the plaintiff and other
customers. The plaintiff seeks unspecified damages and disgorgement of
monies received in connection with the sale of Internet postage
products.
By agreement of the parties, the plaintiff dismissed the New York
action and re-filed in California in May 2001. On February 20, 2002,
the court granted plaintiff's motion for class certification.
The Company is vigorously defending this action and proposes these
legal proceedings can be expected to result in expenses and the
diversion of management time and other resources from the Company.
MANILA ELECTRIC: Groups File Suit Over Purchased Power Adjustments
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Various cause-oriented groups in the Philippines, some aligned with the
political opposition, asked recently that a Pasig Regional Trial Court
stop the Manila Electric Co. (Meralco) from collecting the purchased
power adjustment (PPA) charge from its customers, the Business World
(Philippines) reports.
The complainants in the suit, led by former senator Juan Ponce Enrile,
also sought nullification of Section 34 of the Electric Power Industry
Reform Act (EPIRA) for violating the Constitution. Section 34 of the
Act, which authorizes Meralco and the state-owned National Power
Corporation (Napocor) to impose the PPA, violates substantive due
process, the complainants alleged.
PPA is an automatic cost recovery mechanism to cover adjustments not
included in the basic rate, such as hikes in the cost of power
purchased by either Meralco or Napocor from independent power
producers. Napocor passes on the PPA to distribution utilities like
Meralco, while the distribution utilities, in their turn, pass on the
charge to their customers.
"It (Section 34 of EPIRA) is oppressive and confiscatory in nature. By
its enactment, it has granted respondents Meralco and Napocor the
right to pass on the burden of paying for the stranded costs under IPP
(independent power producers) contracts despite (the customers) not
having used and, as it were, not having benefited therefrom," the
complainants charge in their lawsuit.
"It (Section 34 of EPIRA) is defective and not in consonance with the
pro-poor, anti-poverty and general welfare provisions of the
Constitution." they added.
By collecting the PPA from consumers, the complainants allege, Meralco
violated its legislative franchise. Napocor also breached the law
which created it. "Without a doubt, the PPA charges are
unconscionable, as the consumers were made to pay for the same even
though they did not receive any consideration therefore in the form of
consumed electricity or services rendered," the complainants said.
To protect the petitioners, all Meralco customers, from what they
describe as "oppressive rates," it is but proper to enjoin Meralco and
Napocor from further imposing PPA charges, they said.
They also said that considering the "constitutional infirmity" of the
EPIRA, from which Napocor's and Meralco's right to impose PPA charges
emanate, the petitioners and the consuming public are "legally entitled
to be free . from any and all unreasonable and oppressive power
rates."
MEXICAN BRACEROS: Workers Seek US Congress' Help To Recover Back Pay
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The last time Juventino Ortiz tried to collect the rest of his pay for
picking fruit in northern California, a government official chased him
out of the office. So, he went about making a life in the United
States, becoming an American citizen and raising a family. Now, at 81,
he and thousands of other former "guest workers" who say they were
denied a portion of their wages want their money. It's the principle,
they say. At the very least, they want their day in Court, the
Associated Press Newswires reports.
A class action was filed last year in San Francisco against the United
States and Mexican governments, along with four banks. In an unusual
agreement between the American and Mexican governments, the hundreds of
thousands of "guest workers" or braceros brought to this country in
1942, to replace the labor force that had gone to fight World War II,
had 10 percent of their wages deducted and sent, via Wells Fargo, to
Mexican banks to serve as incentive for the Mexican workers to return
to Mexico at the end of the war. The Mexicans allege that they have
never received the money deducted from their wages, AP reports.
Although the pay was as low as 30 cents an hour, advocates for the
braceros say at least $500 million is owed, including interest. The
plaintiffs' lawyers are patterning their suit after successful
Holocaust survivors' claims against Swiss banks and German companies.
However, the lawsuit is meeting opposition from the two involved
governments. The Mexican government says the United States courts have
no jurisdiction in the matter. Wells Fargo spokesman Larry Haeg said a
review of Company records indicates the bank transferred all the money
it received, according to an AP report. The Justice Department, in
court papers, is also saying the claim is too old, and attempting to
get a federal judge to dismiss the class action.
There is hope yet for the braceros through Congress, as it introduced
legislation that would prevent the Justice Department from having
the lawsuit dismissed on procedural grounds, such as the claim is too
old. The bill was co-authored by Rep. Luis Gutierrez, D.-Ill, and Rep.
Sam Farr, D.-Calif.
"We think justice would be served by having the case heard on its
merits," Bill Lann Lee, former assistant attorney general for civil
rights in the Clinton administration whose San Francisco law firm
represents the braceros, told AP. He referred to an instance in which
the Justice Department supported extending the statute of limitations
for a worthy case, like a lawsuit by black farmers alleging
discrimination by the Agriculture Department.
MICROSOFT CORP.: Court Revives Antitrust Suit, Allows Consumers To Sue
----------------------------------------------------------------------
The Iowa Supreme Court reinstated an antitrust lawsuit against
Microsoft Corporation, ruling that even those who indirectly purchase
the Company's software have standing to sue, the Associated Press
Newswires reports.
"We conclude that our antitrust law contemplates all injured consumers
are authorized to bring suit to enforce our antitrust laws," the court
said. It rejected the software giant's claim that federal antitrust
law allows only direct purchasers of goods to file suit, and state laws
should conform. "We are not required to define who may sue in our
state courts in the same way federal courts have defined who may
maintain an action in federal court," the high court said.
Dissenters warned that the court was setting state policy, and not
interpreting the law. "We do not determine the policy of our law, nor
establish trends for our Legislature," said Justice Mark Cady.
The high court ruling reversed a Polk County judge's decision
dismissing the antitrust lawsuit. Court records said the case began
when Joe Comes, owner of Comes Vending Co., purchased a Gateway Solo
Computer directly from the company. The computer was equipped with
Microsoft's Windows 98 operating system.
Represented by Des Moines attorney Roxanne Conlin, Mr. Comes filed a
class action charging the Company had used its market position to
control prices, thereby violating state antitrust law. He sought to
represent those who had indirectly purchased Microsoft products by
purchasing computers already equipped with the Windows operating
system.
The Company argued that federal law allows only those who make direct
purchases to file antitrust lawsuits. The state's high court argued
that the Company's position would mean "that real victims - those who
purchase goods and pay the overcharge - cannot recover."
"This result would overwhelmingly defeat the purpose of the Iowa
Competition Law," the court said. "Consumers in this state are best
protected by permitting all injured purchasers to bring suit against
those who violate our antitrust laws." The court said 36 states allow
similar lawsuits.
NEBRASKA: Supreme Court Denies Hearing Challenge To State Phone Tax
-------------------------------------------------------------------
The Nebraska Supreme Court will not hear a challenge to the legality of
a monthly fee charged to the state of Nebraska's telephone customers,
Associated Press Newswire reports. The court did not offer a reason
for its denial to hear the case.
David Domina, the Omaha attorney who brought the class action for three
Nebraska citizens, said he will file the lawsuit in Lancaster County
District Court. He said he had attempted to file it first with the
Supreme Court because it dealt with the state's collection of revenue.
However, the high court may have wanted some of the issues to be
presented at trial before it considered the case.
The lawsuit alleges that a seven percent surcharge on telephone
service, set by the Public Service Commission in 1999, is
unconstitutional because it was not approved by the Legislature. The
lawsuit also alleges that telephone companies are using the fees
wrongly, building and upgrading their systems.
The fees paid into the Universal Service Fund have totaled more than
$105 million, including $56 million in the last fiscal year. The fees
were brought about by the Federal Telecommunications Act of 1996, and
are meant to help subsidize rural telephone service.
The Universal Service Fund fee is listed on customers' monthly bills.
The surcharge applies to basic telephone rates and any additional
services, such as call waiting, pagers and wireless phones. It also
applies to all in-state long-distance calls, but not to Internet
service or long distance calls outside the state.
The group that filed the lawsuit was led by Terry Cannon, a Lincoln
lawyer, Paul Schumacher, a Columbus lawyer, and Linda Aerni, owner of a
Columbus internet company.
NETRATINGS INC.: Plaintiffs File Amended Securities Suit in S.D. NY
-------------------------------------------------------------------
Plaintiffs in the securities class action against Netratings, Inc.
filed an amended suit in the United States District Court for the
Southern District of New York.
The suit was initially commenced in November 2001 on behalf of
purchasers of the Company's from December 8,1999 through December
6,2000, and names as defendants the Company, two of its current or
former officers or directors and investment banking firms that served
as underwriters for its initial public offering (IPO) in December 1999.
The amended suit alleges violations of Section 11 and 15 of the
Securities Act of 1933, and Section 10(b) of the Securities Exchange
Act of 1934 on the grounds that the prospectus incorporated in the
registration statement for the offering failed to disclose, among
other things, that:
(1) the underwriters had solicited and received excessive and
undisclosed commissions from certain investors in exchange for
which the underwriters allocated to those investors material
portions of the shares of the Company's stock sold in the IPO;
and
(2) the underwriters had entered into agreements with customers
whereby the underwriters agreed to allocate shares of the
Company's stock sold in the initial public 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 amended complaint also alleges that false analyst reports were
issued following the IPO. No specific damages are claimed.
The Company is aware that similar allegations have been made in
lawsuits relating to more than 300 other initial public offerings
conducted in 1999 and 2000. Those cases have been consolidated for
pretrial purposes only before the Honorable Judge Shira A. Scheindlin.
Defendants' time to respond to the complaints has been stayed pending a
plan for further coordination.
The Company believes that the claims against it and its officers and
directors are without merit and intends to defend them vigorously.
Company management currently believes that the resolution of this
matter will not have a material adverse impact on the Company's
financial position.
RETEK INC.: Plaintiffs File Amended Securities Fraud Suit in S.D. NY
--------------------------------------------------------------------
Plaintiffs in the securities class action against Retek, Inc. filed an
amended suit in the United States District Court for the Southern
District of New York.
In June 2001, three class actions alleging 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 were filed against the Company,
certain of its officers and directors and certain underwriters of the
Company's initial public offering (IPO).
The suits alleged that the prospectus was false or misleading in that
it failed to disclose:
(1) that the underwriters allegedly were paid excessive
commissions by certain customers in return for receiving
shares in the initial public offering; and
(2) that certain of the underwriters' customers allegedly agreed
to purchase additional shares of the Company's common stock in
the aftermarket in return for an allocation of shares in the
IPO.
Plaintiffs contend that, as a result of these omissions from the
prospectus, the price of the Company's common stock was artificially
inflated between November 18, 1999 and December 6, 2000 and that the
defendants are liable for unspecified damages to those persons who
purchased the Company's common stock during that period.
In August 2001, these actions were consolidated for pre-trial purposes
before a single judge along with similar actions involving the initial
public offerings of numerous other issuers.
On February 14, 2002, the parties signed and filed a stipulation
dismissing the consolidated action without prejudice against the
Company and the individual officers and directors, which the court
approved.
On April 20, 2002, the plaintiffs filed an amended complaint in which
they elected to proceed with their claims against the Company and the
individual officers and directors only under Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934.
The Company intends to defend against these claims vigorously. The
Company is confident that the resolution of such matters will not have
a material impact on its financial position, results of operations or
cash flows.
STAMPS.COM: Plaintiffs File Amended Securities Fraud Suit in S.D. NY
--------------------------------------------------------------------
Plaintiffs in the securities class actions against Stamps.com, Inc.
filed an amended consolidated suit in the United States District Court
for the Southern District of New York.
The suits were initially commenced in May and June 2001 against the
Company and certain of its current or former board members and/or
officers. The suits allege violations of the Securities Act of 1933
and the Securities Exchange Act of 1934 in connection with the
Company's initial public offering (IPO) and secondary offering of its
common stock. The suits also name as defendants the principal
underwriters in connection with the Company's offerings, including
Goldman, Sachs & Co. (in some of the lawsuits sued as The Goldman Sachs
Group Inc.) and BancBoston Robertson Stephens, Inc.
The lawsuits allege that the underwriters engaged in allegedly improper
commission practices and stock price manipulations in connection with
the sale of the Company's common stock. The lawsuits also allege that
the Company and/or certain of its officers or directors knew of or
recklessly disregarded these practices by the underwriter defendants,
and failed to disclose them in our public filings.
The Company stated the suits are similar to over 1,000 lawsuits brought
against over 250 companies, which issued stock to the public in 1998,
1999, and 2000, and their underwriters. These lawsuits (including
those naming the Company) followed publicized reports that the SEC
was investigating the practice of certain underwriters in connection
with initial public offerings. All of these lawsuits have been
consolidated for pretrial purposes before Judge Scheindlin of the
Southern District of New York.
The Company believes that the claims against it and its officers and
directors are without merit, and intends to defend the lawsuits
vigorously.
WASHINGTON: Rulings Reflect Child Care System's Troubled Condition
------------------------------------------------------------------
A recent court decision to end "unsafe" housing practices for foster
children is a good start, says a children's advocate, but the state of
Washington must address the underlying reasons why those options were
used in the first place, Associated Press Newswires reports.
Linda Stone, interim executive director of the Children's Alliance,
said a Washington Court of Appeals order to stop using state offices as
emergency housing for children does not solve or even address the
deeper problems plaguing the state's foster care system.
The ruling is but the latest in a class action against the state's
Department of Social Health Services (DSHS) first filed by Bellingham
attorney Timothy Farris more than four years ago. Six months ago a
Whatcom County jury found that the state was violating the
constitutional rights of 3,500 foster children by moving them
repeatedly and failing to meet their basic needs.
Mr. Farris, who first filed the lawsuit on behalf of 13 foster children
in April 1998, alleged they had been damaged by the repeated moves.
The state agreed to a settlement of $1.3 million in those cases. The
case was certified as a class action a year ago, and therefore includes
all foster children who were moved at least three times during a single
placement.
The state Court of Appeals, in its recent ruling, also ordered that the
state stop keeping foster children in juvenile detention facilities
because other housing is unavailable and stop placing them in homes
where there are children or adults with a histories of violence or
sexual aggression.
Statements by Rosie Oreskovich, assistant secretary for the DSHS
Children's Administration point up the problem inherent in these court
rulings. The children in need of emergency housing are, in most
cases, adolescents who have been in multiple homes, have emotional or
developmental problems or violent behavior, and often these children
have run away from the foster homes in which they have been placed.
"We just don't have people who can take that child because of the
previous situations (that have occurred with that child, and the others
like that child)". From November to April, four children were housed
in DSHS offices because no other options were available," she said.
Ms. Stone said these examples demonstrate the needs to support foster
parents better, and that "the system itself needs to be set up to
support [parents] in a crisis."
The Court of Appeals decision came a week after the state appealed the
Whatcom County Superior Court order that required a list of costly
reforms aimed at fixing the chronic problems in the foster care system.
As part of its appeal, the state asked that the reforms ordered by
Judge David Nichols be put on hold pending the final outcome of the
case. The state argued that the reforms would cost $60 million and
would undercut current efforts to improve foster care. Ms. Oreskovich
enumerated that some of these efforts include:
(1) trying to actively recruit foster parents for adolescents. A
foster care recruitment effort launched a year ago by DSHS has
boosted the number of foster homes statewide by about 50;
(2) social service agencies are developing emergency-assessment
centers that will be able soon to take in foster children.
DSHS is awaiting the Court of Appeals decision on its plea that the
Superior Court reforms be delayed.
WEST VIRGINIA: Women Sue Over Hardships After Welfare Assistance Ended
----------------------------------------------------------------------
West Virginia Women whose families lost welfare assistance after
reaching the 60-month limit say they were forced to curtail their
children's after-school activities and seek help from relatives, The
Associated Press reports. The testimony this week before a special
commissioner for the state Supreme Court came in a class action by a
Jackson County attorney challenging the limits on the state's welfare
program.
Attorney Larry Harless filed the lawsuit on behalf of families who
recently were cut off under the federal Temporary Assistance for Needy
Families program. The 60-month limit was mandated when Congress
authorized the program in 1996.
Caroletta Whittaker, 40, of Princeton, West Virginia, said she worries
the state might take her children if her family's electricity and water
are shut off and someone tells the state Office of Child Protective
Services. Since her cash assistance was stopped in February, Ms.
Whittaker has been unable to afford the $34 annual football uniform
rental for her son or the $54 band instrument rental for her daughter.
Z-TEL TECHNOLOGIES: Securities Suits Coordinated For Pre-trial in NY
--------------------------------------------------------------------
The securities class actions against Z-Tel Technologies, Inc. have been
coordinated for pre-trial purposes in the United States District Court
for the Southern District of New York under Judge Shira Scheindlin.
The suits were initially commenced in June and July 2001, against the
Company, certain of the Company's current and former directors and
officers and the underwriters of the Company's initial public offering.
Each of the lawsuits is based on the allegations that the Company's
registration statement on Form S-1, filed with the Securities and
Exchange Commission (SEC) in connection with the IPO, contained untrue
statements of material fact and omitted to state facts necessary to
make the statements made not misleading by failing to disclose that the
underwriters had received additional, excessive and undisclosed
commissions from, and had entered into unlawful tie-in and other
arrangements with, certain customers to whom they allocated shares in
the IPO.
Plaintiffs have asserted claims against the Company and its officers
and directors pursuant to 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 by the SEC thereunder.
A consolidated complaint has not been filed or designated, and the
Company is not required to file an answer or other responsive pleadings
at this time. The Company intends to vigorously oppose the suit.
New Securities Fraud Cases
DYNEGY INC.: Glancy & Binkow Initiates Securities Fraud Suit in S.D. TX
-----------------------------------------------------------------------
Glancy & Binkow LLP commenced a securities class action in the United
States District Court for the Southern District of Texas on behalf of
all persons who purchased securities of Dynegy, Inc. (NYSE:DYN) between
April 17, 2001 and May 15, 2002, inclusive.
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. Among other
things, plaintiff claims that defendants inflated the price of the
Company's stock in order to sell almost $500 million in stock to the
investing public.
The complaint alleges that defendants knew that the Company's true
vehicle for creating cash flow from operations, Project Alpha, provided
the only way to post the revenue and earnings-per-share growth claimed
by defendants. Defendants knew that the Company's stock price would
collapse if investors discovered the truth about the Company's cash
flow.
The complaint charges that defendants concealed the true nature of the
Company's cash flow, and disseminated materially false and misleading
statements regarding the Company's business operations, revenues and
earnings to artificially inflate the price of its stock, inflicting
damages on investors.
For more details, contact Lionel Z. Glancy or Michael Goldberg by Mail:
1801 Avenue of the Stars, Suite 311, Los Angeles, California 90067 by
Phone: 310-201-9150 or 888-773-9224 or by E-mail: info@glancylaw.com.
HALLIBURTON COMPANY: Wolf Haldenstein Files Securities Suit In N.D. IL
----------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class
action in the United States District Court for the Northern District of
Illinois, Eastern Division, on behalf of purchasers of the common stock
of Halliburton Company (NYSE: HAL) between July 22, 1999 and May 28,
2002, inclusive, against the Company, certain of its officers and
directors, and Arthur Andersen, LLP, the Company's accountant and
auditor.
The complaint alleges that defendants violated the federal securities
laws by issuing materially false and misleading statements throughout
the class period that had the effect of artificially inflating the
market price of the Company's securities.
Throughout the class period, the Company improperly recognized revenues
in connection with its long-term construction projects in violation of
Generally Accepted Accounting Principles (GAAP). Beginning in the
fourth quarter of 1998 and without disclosing the change to the market,
the Company altered its accounting policies to report revenues to cover
disputed cost overruns on long-term construction projects, making the
tacit assumption that its customers would pay the disputed amounts. The
Company made this change during a very difficult year, with lower oil
prices adversely impacting its business and reported a net loss of
$14.7 million for the year ended December 31, 1998 (down dramatically
from net income of $722.4 million the year before).
In addition, in the third quarter of 1998, shortly before the
accounting change was made, the Company had just completed its
acquisition of Dresser Industries, Inc., which had been suffering from
an onslaught of hundreds of thousands of asbestos-related lawsuits.
For the change, the Company would have reported a loss in excess of
$100 million in 1998.
Arthur Andersen LLP was complicit in the fraud, and issued unqualified
audit opinions attached to each of the Company's annual SEC Reports on
Form 10-K during the class period. Andersen did this, despite knowing
of the accounting change and knowing, or being reckless as to, the fact
that this change resulted in the Company's financial results being
false and misleading.
For more details, contact Fred Taylor Isquith, Thomas H. Burt, Gustavo
Bruckner, 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. All e-mail correspondence should make reference
to Halliburton.
MERRILL LYNCH: Rabin & Peckel Commences Securities Fraud Suit in NY
-------------------------------------------------------------------
Rabin & Peckel LLP initiated a securities class action in the United
States District Court for the Southern District of New York on behalf
of all persons or entities who purchased At Home Corp. common stock
(OTCBB:ATHQE) between April 23, 1999 and April 26, 2001, both dates
inclusive. Merrill Lynch & Co., Inc. and Henry Blodget are named as
defendants in the action.
The suit alleges that defendants violated section 10(b) of the
Securities and Exchange Act of 1934 and SEC Rule 10b-5 promulgated
thereunder by issuing a series of materially false and misleading
statements in analyst reports concerning At Home during the class
period.
The suit alleges that to maintain and enhance Merrill Lynch's
investment banking relationships with At Home, defendants issued
analyst reports with positive ratings on At Home which were materially
misleading as they were inconsistent with their own contemporaneous,
private, adverse assessments of At Home.
For example, defendants were repeatedly issuing a short-term
accumulate, long-term buy rating on At Home despite their internal e-
mails that At Home stock had a "flat" outlook, was without any "real
catalysts" for improvement and was a "piece of crap."
In particular, it is alleged that defendants:
(1) recommended the purchase of and set price targets for At Home
common stock without any reasonable factual basis therefore;
(2) failed to disclose significant material conflicts of interest
to obtain investment banking business for Merrill Lynch; and
(3) failed to disclose material, non-public, adverse information
which they possessed about At Home, as well as their true
opinion about the Company.
The suit alleges that as a result of these false and misleading
statements the price of At Home common stock was artificially inflated
throughout the class period, causing plaintiff and the other members of
the class to suffer damages.
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
MERRILL LYNCH: Schatz & Nobel Commences Securities Fraud Suit in NY
-------------------------------------------------------------------
Schatz & Nobel PC initiated a securities class action in the United
States District Court for the Southern District of New York against
Merrill Lynch & Co., Inc. on behalf of all persons who purchased the
common stock of Interliant, Inc. (Nasdaq: INIT) from August 4, 1999
through April 8, 2002, inclusive.
The suit alleges that Merrill Lynch and its well-known Internet stock
analyst Henry Blodget violated the federal securities laws by knowingly
issuing false and misleading analyst reports regarding Interliant
during the class period.
Based on e-mails and other internal Merrill Lynch communications, which
were made public as a result of the investigation conducted by the New
York State Attorney General, Eliot L. Spitzer, the suit alleges that
defendants' failed to disclose a significant conflict of interest
between their investment banking and research departments.
Specifically, Henry Blodget and other Merrill Lynch analysts issued
very favorable analyst reports regarding Interliant to the public when
they allegedly knew that the positive recommendations were unwarranted.
Unbeknownst to the investing public, Merrill Lynch's buy
recommendations and price targets for Interliant were influenced by its
efforts to attract lucrative investment banking business from
Interliant and other internet companies.
For more details, contact Nancy A. Kulesa by Phone: 800-797-5499 by E-
mail: sn06106@aol.com or visit the firm's Website: http://www.snlaw.net
MERRILL LYNCH: Innelli and Molder Commences Securities Fraud Suit in NJ
-----------------------------------------------------------------------
Innelli and Molder filed a securities class action in the United States
District Court for the District of New Jersey, against Merrill Lynch &
Co., Inc., Merrill Lynch Pierce Fenner & Smith and Henry Blodget for
violations of the federal securities laws with regard to B2B Internet
HOLDRS/SM/Trust and Internet Infrastructure HOLDRS/SM/Trust.
The suit alleges that Merrill Lynch sold investments in the Trusts,
which were "basket" securities, consisting of interests in specified
Internet industry companies. Merrill Lynch investment analysts,
including Mr. Blodget, issued investment reports on many of the
companies included in the Trusts.
These investment reports falsely presented the subject companies in a
favorable light, while the Merrill Lynch analysts, internally,
understood the investments lacked value. The Merrill Lynch analysts
also had serious conflicts of interest in issuing these reports in that
while claiming independence from other Merrill Lynch operations,
Merrill Lynch and the analysts understood that Merrill Lynch investment
bankers used promises of coverage, and particularly favorable coverage,
as an inducement to solicit investment banking business with covered
companies.
As a result of these false and misleading analyst reports, the market
price of covered Internet securities, including securities held by the
Trusts, were inflated above their true value, and accordingly, the
price of investments in the Trusts were inflated. Further, the
offering materials through which Merrill Lynch sold investments in the
Trusts contained materially false and misleading representations.
The offering materials falsely stated that, among other things, Merrill
Lynch had not evaluated or analyzed any of the securities in which the
Trusts invested, when, in fact, its stock analysts had evaluated many
of the companies in which the Trusts invested and determined, though
failed to disclose that the market prices of these companies were
substantially inflated and did not represent the true value of the
investments.
For more details, contact John Innelli or Michael Molder by Phone:
215-627-3394 by E-mail: admin@innellilaw.com or visit the firm's
Website: http://innellilaw.com
MH MEYERSON: Rosen Law Initiates Securities Fraud Suit in New Jersey
--------------------------------------------------------------------
The Rosen Law Firm commenced a securities class action in the United
States District Court for District of New Jersey on behalf of
purchasers of M.H. Meyerson & Co., Inc. (Nasdaq: MHMY) publicly traded
securities during the period from February 28, 2000 through April 9,
2002, inclusive.
The complaint charges that the Company and certain of its officers and
directors 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
February 28, 2000 and April 9, 2002. The Company is a NASD registered
broker/dealer and investment banking firm.
The complaint alleges that the Company failed to disclose in its
required Securities & Exchange Commission (SEC) filings material facts
regarding pending litigation, including among other cases, that the
Company neglected to disclose that it was the subject of a pending
arbitration claim that ultimately resulted in a $5.0 million award
against the Company.
The complaint further alleges that the Company misrepresented in its
SEC filings that it was the 50.0% owner of a financial software
company, TradinGear.com, Inc. In fact, neither the Company, nor
Emeyerson, ever held more than 5.0% of TradinGear's stock.
Moreover, the complaint alleges that the Company concealed from
investors the fact that it was significantly behind in its plans to
launch the Emeyerson online business, which was ultimately folded into
another failing ecommerce venture.
As a result of these misstatements and non-disclosures, according to
the complaint, the Company's financial reports filed with the SEC
throughout the class period were materially false and misleading,
thereby artificially inflating the price of Company securities.
For more details, contact Laurence Rosen by Mail: 236 Tillou Road,
South Orange, NJ 07079 by Phone: 866-767-3653 by E-mail:
lrosen@rosenlaw.com or visit the firm's Website:
http://www.rosenlaw.com
OMNICOM GROUP: Wolf Popper Commences Securities Fraud Suit in S.D. NY
---------------------------------------------------------------------
Wolf Popper LLP initiated a securities class action against Omnicom
Group Inc. (NYSE:OMC) and certain of its senior officers in the United
States District Court for the Southern District of New York, on behalf
of all persons who purchased the Company's common stock on the open
market during the period April 25, 2000 through June 11, 2002,
inclusive.
The complaint alleges that defendants materially misrepresented the
Company's financial results through improper accounting methods in
connection with certain acquisitions. More specifically, plaintiff
alleges that the Company fraudulently and misleadingly:
(1) reported growth in "organic" revenue that included revenue
generated by newly acquired companies; and
(2) failed to disclose the Company's future obligations relating
to its prior acquisitions.
The complaint further alleges that the Company transferred its minority
investments in various internet companies to a newly formed entity
(Seneca), enabling it to avoid writing down the value of its
investments in those companies, and that it failed to disclose its
contingent obligations to make additional investments in certain
partially acquired companies.
For more details, contact Robert C. Finkel by Mail: 845 Third Avenue,
New York, NY 10022-6662 by Phone: 212-451-9620 or 877-370-7703 by Fax:
212-486-2093 or 877-370-7704 by E-mail: irrep@wolfpopper.com or visit
the firm's Website: http://www.wolfpopper.com
OMNICOM GROUP: Charles Piven Commences Securities Fraud Suit in S.D. NY
-----------------------------------------------------------------------
Charles J. Piven, PA initiated a securities class action on behalf of
shareholders who acquired Omnicom Group, Inc. (NYSE:OMC) securities
between April 25, 2000 through June 11, 2002, inclusive, in the United
States District Court for the Southern District of New York against the
Company and certain of its senior officers.
The action charges that defendants violated federal securities laws by
issuing a series of materially false and misleading statements to the
market throughout the class period which statements had the effect of
artificially inflating the market price of the Company's securities.
For more details, contact Charles Piven by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
PEREGRINE SYSTEMS: Berman DeValerio Lodges Securities Suit in S.D. CA
---------------------------------------------------------------------
Berman DeValerio Pease Tabacco Burt & Pucillo initiated a securities
class action against Peregrine Systems, Inc. (Nasdaq: PRGN), claiming
the Company misled the public about its finances by improperly
recording revenue. The suit is pending in the US District Court for
the Southern District of California, on behalf of all investors who
bought the Company's common stock from July 19, 2000 through May 3,
2002.
The suit accuses the Company, a San Diego-based software company, of
misleading investors about its business and finances by improperly
recording revenue it later wrote off.
The suit states that news of the problems came to light May 6, 2002,
when the Company disclosed an internal investigation into potential
accounting inaccuracies in fiscal 2001 and 2002 - revenue recognition
irregularities that could total up to $100 million. In the same
statement, the Company announced the resignations of Stephen Gardner,
its chief executive officer, and Matthew Gless, its executive vice
president of finance. The complaint names Mr. Gardner and Mr. Gless as
individual defendants.
Following the May 6 announcement, Company stock plummeted 65% to a
52-week low of $0.89.
For more details, contact Julie Richmond or Michael G. Lange by Mail:
One Liberty Square, Boston, MA 02109 by Phone: 800-516-9926 by E-mail:
law@bermanesq.com or visit the firm's Website:
http://www.bermanesq.com.
PEROT SYSTEMS: Charles Piven Commences Securities Fraud Suit in S.D. NY
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The Law Offices Of Charles J. Piven, PA initiated a securities class
action on behalf of shareholders who acquired Perot Systems Corp.
(NYSE:PER) securities between February 2, 1999 and June 7, 2002,
inclusive, in the United States District Court for the Southern
District of New York, against the Company, Ross Perot, its Chairman and
Ross Perot, Jr., its President and Chief Executive Officer.
The action charges that defendants violated federal securities laws by
issuing a series of materially false and misleading statements that had
the effect of artificially inflating the market price of the Company's
securities throughout the class period.
For more details, contact Charles J. Piven by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by Phone: 410-986-0036 by E-mail: hoffman@pivenlaw.com
or visit the firm's Website: http://www.pivenlaw.com
SALOMON SMITH: Schatz & Nobel Commences Securities Fraud Suit in NY
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Schatz & Nobel PC initiated a securities class action in the United
States District Court for the Southern District of New York on behalf
of all persons who purchased the publicly traded securities of Global
Crossing, Ltd. (formerly NYSE: GX; currently OTC: GBLXQ) from May 24,
1999 through October 4, 2001, inclusive.
The suit alleges that Salomon Smith Barney and its well-known
telecommunications stock analyst Jack Grubman violated the federal
securities laws by knowingly issuing false and misleading analyst
reports regarding Global Crossing during the Class Period.
The suit alleges that Salomon failed to disclose a significant conflict
of interest between its investment banking and research departments.
Specifically, Jack Grubman and other Salomon Smith Barney analysts
issued very favorable analyst reports regarding Global Crossing to the
public when they allegedly knew that the positive recommendations were
unwarranted.
Unbeknownst to the investing public, Salomon Smith Barney's buy
recommendations and price targets for Global Crossing were influenced
by its efforts to be retained as a financial advisor for Global
Crossing and other telecommunications companies. Such lucrative
investment banking engagements were worth millions of dollars in fees
to Salomon.
For moredetails, contact Nancy A. Kulesa by Phone: 800-797-5499 by E-
mail: sn06106@aol.com or visit the firm's Website: http://www.snlaw.net
VERISIGN INC.: Marc Henzel Commences Securities Fraud Suit in N.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 Northern District of
California on behalf of purchasers of VeriSign Inc. (Nasdaq: VRSN)
common stock during the period between Jan. 25, 2001 and April 25,
2002.
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. The Company
provides digital trust services that enable Web site owners,
enterprises, communications service providers, e-commerce service
providers and individuals to engage in secure digital commerce and
communications.
The complaint alleges that during the class period, defendants sought
to artificially increase the Company's revenue and margins and to
create the perception that its deferred revenue growth was derived
organically. In fact, approximately 10% of the Company's revenue was
derived from sales to small companies in which VeriSign had invested
and from dubious "barter transactions."
The Company's revenues and earnings derived from related parties were
dubious at best. Specifically, whenever a two-way set of transactions
occurs in which a company acts as both the lender and service provider,
an investor lacks assurance as to whether the related parties would
have made similar decisions regarding purchases in the absence of
financing from that company.
Accordingly, despite the Company's claims that such transactions were
separately negotiated and recorded at terms the Company considered to
be at arm's length and fair value, the revenue and earnings that the
Company recognized from its relationship with these customers was not
an accurate measure of the "real" demand for its products. Equally
dubious was the quality of the non-monetary portion of revenue recorded
from reciprocal agreements.
As part of their effort to boost the price of Company stock, defendants
misrepresented the Company's true prospects in an effort to conceal the
Company's improper acts until they were able to sell at least $26
million worth of their own stock and use Company shares to acquire
companies in stock-for-stock transactions.
In order to overstate revenues and assets, the Company violated
Generally Accepted Accounting Principles and SEC rules by, among other
things, engaging in improper barter transactions and affiliate sales.
These transactions had the effect of dramatically overstating the
Company's margins and financial statements.
On the Company's partial disclosures on April 25, 2002, the Company's
shares plummeted by more than 50%.
For more details, contact Marc 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
WORLDCOM INC.: Lovell & Stewart Expands Class Period in Securities Suit
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Lovell & Stewart, LLP filed an amended securities class action against
WorldCom, Inc., which extends the class period to include all persons
and entities who purchased, converted, exchanged or otherwise acquired
the Company's common stock between April 30, 1999 and April 29, 2002,
inclusive.
The lawsuit asserts claims under Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC
thereunder and the common law, against the Company and:
(1) Bernard J. Ebbers, President and Chief Executive Officer,
(2) James C. Allen,
(3) Max E. Bobbitt,
(4) Francesco Galesi, and
(5) Arthur Andersen, LLP
The defendants allegedly violated the federal securities laws by making
misrepresentations and/or omissions in connection with false and/or
misleading financial statements. The suit alleges that the Company
misrepresented its 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 the Company affirmatively misstated
the value of goodwill and other intangible assets associated with its
acquisition of numerous telecommunications companies at premium prices
and carried such assets on its balance sheet at the cost of acquiring
them long after it had become apparent that the Company had overpaid to
acquire such assets.
The complaint alleges that defendant Arthur Andersen, LLP violated the
federal securities laws by certifying the Company's financial
statements as incorporated in the Company's Annual Report for the year
2000 filed with the SEC on March 30, 2001, and by allowing its
unqualified opinion to be incorporated by reference into the Company's
quarterly filings with the SEC after it was readily apparent that the
goodwill and other intangible assets on its balance sheet were being
carried at unrealistically and misleadingly high values.
For more details, contact Christopher Lovell, Victor E. Stewart,
Christopher J. Gray by Phone: 212-608-1900 by E-mail:
classaction@lovellstewart.com or visit the firm's Website:
http://www.lovellstewart.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
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Copyright 2002. All rights reserved. ISSN 1525-2272.
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