/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/020807.mbx C L A S S A C T I O N R E P O R T E R Wednesday, August 7, 2002, Vol. 4, No. 155 Headlines ABERDEEN ASSET: Investors Lawsuit Over Collapsed Trust Fund Likely ASARCO INC.: EPA Investigating Soil Contamination in El Paso Smelter BAE SYSTEMS: Saudi Arabian Workers File Suit For Labor Law Violations CANADA: Livent Investors May Be Compensated for 1996 Stock Purchases CANADA: Man Files Sex Abuse Suit Against British Columbia Government CATHOLIC CHURCH: Bishop Says Geoghan Settlement Considered Preliminary DONNELLY CORPORATION: Mounting Vigorous Defense V. Investor Suit in MI FEIST PUBLICATIONS: Families Sue Over Incorrect Phone Book Listings IDAHO: Coeur d'Alene Bluegrass Burning Arguments Planned This Week MCDONALD'S CORPORATION: Vegetarian, Religious Groups Want Payout Share MIRANT CORPORATION: SEC Starts Probe On Announced Accounting Mistakes SHELL OIL: Agrees To Settle For $28 Million MTBE Contamination Suit UNITED STATES: Ex-Braceros Protest While Lawsuit Moves Through Courts UNITED STATES: Haitians Stage Protests While Appealing Dismissed Suit WASHINGTON: Deputies Say Overtime Pay Routinely Late By Weeks, Months XCEL ENERGY: Shareholders Sue, Alleging False Financials Misled Them *Overtime Wage Legislation Scrutinized As Number of Suits Increases New Securities Fraud Cases AMERADA HESS: Schiffrin & Barroway Commences Securities Suit in NJ AMERADA HESS: Cauley Geller Commences Securities Suit in New Jersey CITIGROUP INC.: Schiffrin & Barroway Commences Securities Suit in NY ECLIPSYS CORPORATION: Marc Henzel Commences Securities Suit in S.D. FL EXELON CORP.: Marc Henzel Commences Securities Fraud Suit in N.D. IL GREAT ATLANTIC: Marc Henzel Commences Securities Suit in New Jersey HPL TECHNOLOGIES: Milberg Weiss Commences Securities Suit in N.D. CA JOHNSON & JOHNSON: Cauley Geller Launches Securities Suit in New Jersey MERCK & CO.: Spector Roseman Commences Securities Suit in New Jersey NICOR INC.: Marc Henzel Commences Securities Fraud Suit in N.D. IL REHABCARE GROUP: Marc Henzel Commences Securities Fraud Suit in E.D. MO RIVERSTONE NETWORKS: Bernstein Liebhard Commences Securities Suit in CA SALOMON SMITH: Finkelstein Thompson Lodges Securities Fraud Suit in DC SONUS NETWORKS: Wolf Haldenstein Commences Securities Suit in MA Court SYMBOL TECHNOLOGIES: Marc Henzel Commences Securities Suit in E.D. NY TEXTRON INC.: Marc Henzel Commences Securities Fraud Suit in RI Court XCEL ENERGY: Berger & Montague Launches Securities Fraud Suit in MN ********* ABERDEEN ASSET: Investors Lawsuit Over Collapsed Trust Fund Likely ------------------------------------------------------------------ Aberdeen Asset Management faces a potential class action to be filed by London solicitor Leon Kaye on behalf of the investors who lost money when one of its trusts called the Aberdeen High Income Trust collapsed, icWales.com reported. The Trust warned investors earlier this week that it was unlikely they would get any money back after it went into receivership. The suit will attempt to recover some of the investors' money. The solicitor claims that Aberdeen High Income Trust, a split capital investment trust, was a high-risk investment but was not marketed as such. It added that because the trust came under the umbrella of Aberdeen Asset Management, the fund manager and any other holding company could be pursued for compensation as the promoter of the fund, icWales.com reported. Leon Kaye has already set up an action group called Split to try to get compensation for people who have lost money in split capital trusts. ASARCO INC.: EPA Investigating Soil Contamination in El Paso Smelter -------------------------------------------------------------------- The Environmental Protection Agency (EPA) plans to clear away topsoil from 45 west El Paso, Texas yards due to potentially dangerous levels of lead and arsenic. The EPA is investigating whether a 100-year-old copper smelter operated by Asarco, Inc. is responsible for the contamination, the Associated Press reported. EPA Spokesman David Bary told AP that the agency plans to check another 1,000 locations for potential contamination, and hopes to determine by the end of this month how many areas are contaminated. The Texas Department of Health and the Federal Agency for Toxic Substances and Disease Registry analyzed surface soil samples taken from nearly 200 locations and concluded that lead and arsenic at some of them could be potentially hazardous to children, according to AP. However, the report said there was no immediate danger and that ingesting small amounts of the soil did not significantly increase cancer risks. The EPA asked the Company to conduct sampling, but the Company refused. It said it already was involved in a process, started in 1999 and approved by the EPA, to test for contamination and potential threats, AP reported. Asarco officials say thousands of samples taken around the plant show that there is no threat. "They're saying it's a public health threat without proving it's a public health threat," said Plant Environmental Manager Lairy Johnson. Many homeowners were expected to attend a meeting Monday night where officials were to discuss plans for the area. BAE SYSTEMS: Saudi Arabian Workers File Suit For Labor Law Violations --------------------------------------------------------------------- BAe Systems faces a class action in a Saudi Arabia labor court, alleging Britain's largest defense contractor of violating the country's labor laws, the Middle East Newsline reported. The suit was filed on behalf of 497 Saudi Arabian employees, alleging that the Company was forcing them to sign an annual contract that allows the Company the right to reduce salaries for Saudi employees in 2003. The contract further revises the other terms of their employment. The Company allegedly threatened anyone who refused to sign with dismissal. The Company is the prime contractor of the Al Yamama, the estimated $8 billion project to sell British aircraft and other systems to the kingdom, and has operated in Saudi Arabia for about 30 years, the Middle East Newsline reported. CANADA: Livent Investors May Be Compensated for 1996 Stock Purchases -------------------------------------------------------------------- Investors who bought shares in defunct Livent Inc., in a 1996 offering, finally may get back some of their money, The Globe and Mail reported. A settlement has been reached in a US class action surrounding Livent's collapse. According to published notices, the settlement involves former Livent directors contributing US$750,000, of which lawyers will receive US$250,000. The remainder will be split among shareholders. A hearing to approve the settlement is scheduled. CANADA: Man Files Sex Abuse Suit Against British Columbia Government -------------------------------------------------------------------- Lawyers for a man who said he was regularly sexually abused at Woodlands, a now-closed residential facility for the mentally handicapped, recently filed a lawsuit in British Columbia Supreme Court, The Globe and Mail reported. The suit, which names only the British Columbia government, could become a class action, said the attorney who represents the plaintiff. The plaintiff lived at the facility while a teenager from 1972 to 1975. Woodlands opened in New Westminster in 1878 as the Provincial Asylum for the Insane. It closed in 1996. CATHOLIC CHURCH: Bishop Says Geoghan Settlement Considered Preliminary ---------------------------------------------------------------------- The Archdiocese of Boston's former head of administration Bishop Robert Banks denied signing the US$30 million settlement with alleged sexual abuse victims of defrocked priest Fr. John Geoghan, the Associated Press reported. The Archdiocese initially agreed to the settlement, but later withdrew in May this year, saying that it could not afford it. Lawyers for the 86 victims are asking the court to compel the archdiocese to stick to the settlement. Earlier, Cardinal Bernard Law testified that he never considered the agreement a final deal because it required the signatures of both victims and the archdiocese's finance committee, according to an earlier Class Action Reporter story. Bishop Banks echoed this statement, saying he considered the settlement "preliminary," in a court hearing on the settlement. Bishop Banks was called by archdiocese lawyer Wilson Rogers Jr. and said he understood the agreement to be a "draft" and "very preliminary," according to an Associated Press report. "My understanding was that Mr. Rogers was going to come out to Green Bay and explain to me in greater detail any final settlement before I would sign on," he said. DONNELLY CORPORATION: Mounting Vigorous Defense V. Investor Suit in MI ---------------------------------------------------------------------- Donnelly Corporation (NYSE: DON) faces a class action filed in the Oakland County, Michigan Circuit Court against the Company, its directors, Magna International Inc. and Magna Mirrors Acquisition Corp. The suit was filed as a purported class action on behalf of holders of Donnelly common stock. The suit alleges that the Company's Board of Directors, by entering into the merger agreement, dated as of June 25, 2002, with Magna and a subsidiary of Magna, violated their fiduciary duties to Donnelly shareholders and that Magna aided and abetted such breach. The complaint also alleges that the draft prospectus/proxy statement filed with the Securities and Exchange Commission in connection with the proposed merger fails to provide all material information concerning the proposed transaction. The Company believes that plaintiffs' claims are completely without merit, and intends to defend the action vigorously. FEIST PUBLICATIONS: Families Sue Over Incorrect Phone Book Listings ------------------------------------------------------------------- Two families are suing Feist Publications Inc. after their phone numbers were incorrectly listed under the category "Abortion Provider," Associated Press Newswires reports. Attorneys say they will pursue a class action if more problems are discovered. Martha Black of Prairie Village and her son, Carl Black, filed the lawsuit in Johnson County District Court, in Kansas. In the Feist Directory, the name of Martha Black's deceased husband, who was a doctor, is listed with the address where she and her son now live. Carl Black was also listed wrongly. He is a legal consultant and child advocate, and his number was included under the "Pet Grooming" category. "Said statement is false and was false when made, because plaintiff Carl Black is not and never has done business as a pet groomer or any other related business," according to the lawsuit. The false listings have tended to expose the Blacks to "hatred, contempt and/or ridicule" and are "highly offensive to a reasonable person." The suit also alleges that the Company was negligent in its supervision of the employees responsible for the false listings. The lawsuit does not specify the amount of damages being sought. The suit was amended recently to include another couple whose number was listed in the "Abortion Provider" category, attorney Dan Ross said. Errors in the Kansas City area directory that the Company began distributing in June, also include the listing of a legal consultant as a pet groomer. These errors, among others, were discovered when the company was reviewing the work of an employee assigned the task of checking the accuracy of listing obtained from local telephone service providers, said Roger Carvalho, marketing director for Feist Publications in Wichita. IDAHO: Coeur d'Alene Bluegrass Burning Arguments Planned This Week ------------------------------------------------------------------ Arguments in favor of and opposing field burning in Northern Idaho are scheduled for August 7, 2002 in First District Court in Coeur D'Alene, Idaho. First District Judge John Mitchell has scheduled a hearing for 9 am Friday to hear arguments over a request for a restraining order and temporary injunction to prohibit field burning, the CDA Press reports. Bluegrass farmers practice field burning to enhance the next year's field crop. Opponents of the practice say it is a threat to public health, tourism and the quality of life in North Idaho. Washington already banned the practice, while some North Idaho farmers have voluntarily given it up. Steve Berman, a Seattle-based class-action attorney, filed the suit against 79 farmers, seed companies and the state of Idaho on behalf of Hope Mayor Bud Moon and others who claim to suffer breathing difficulties because of field smoke, the CDA Press reports. Linda Clovis, spokeswoman for the North Idaho Farmers Association, told the CDA Press the scheduled hearing won't put added pressure on farmers to burn before the court date. "I think we have a good case, and our attorneys are doing a good job," Ms. Clovis said. "I'm sure once the facts are presented the right side will win." MCDONALD'S CORPORATION: Vegetarian, Religious Groups Want Payout Share ---------------------------------------------------------------------- Animal rights and Muslim groups say they want a piece of the $10 million that McDonald's has agreed to pay for mislabeling its french fries as vegetarian, Associated Press Newswires report. McDonald's has apologized for telling customers for a decade that its fries were cooked in 100 percent vegetable oil, when in fact its raw potatoes were first seasoned with beef extract. However, getting McDonald's to agree to the multimillion-dollar payout may have been the easy part. The fast-food giant announced in May that it would pay the money to settle a class action brought by three vegetarians in Seattle, including two Hindus who don't eat meat for religious reasons. Amidst the furor of the groups vying for a share of the settlement monies, August 22, has been scheduled as the date for a judge in Chicago to rule on the final distribution of the money. About 2,000 objections to the settlement have been filed with the court, not unusual in a case with 16 million potential plaintiffs, the attorneys say. Under the terms of the preliminary deal, the company will pay $10 million to organizations that support vegetarianism and $2.4 million in legal fees. More than 100 organizations, from a Pennsylvania cow sanctuary to a yoga meditation center, have applied for part of the settlement. Most will not get any money because they are not mainstream vegetarian groups, attorneys said. That has many crying, "foul." Animal-rights activists say they are being excluded from the settlement because they are more outspoken than vegetarian groups in their criticism of McDonald's. "If I were McDonald's, I would give the money to the most benign, least effective organizations out there," said Matthew Ball, one of two employees at Vegan Outreach in Chicago. The more than six million Muslims in North America "must be recognized as an offended party," said Abdul Malik Mujahid, head of Sound Vision, which sells Islamic educational materials on the Internet. "Everyone has a right to know what they are eating." Thus, the Muslims want to be included along with the Hindus, Sikhs and Jews originally named in the settlement, says the Seattle Times. Harish Bharti of Seattle, the lead attorney in the case, says he agrees with the complaining groups. The four other attorneys representing vegetarians and Hindus in the class-action lawsuit are "joining hands with McDonald's" to craft a settlement that excludes deserving organizations, Mr. Bharti said. "This whole settlement is a sham," said Mr. Bharti, a Hindu and vegetarian. "In a case that is about deceiving consumers, the lawyers should not be engaging in the same deceptive practices." The other lawyers have denied the allegations. "We wanted groups that would have the most effect on the most people," said Chicago attorney James Latturner. Los Angeles attorney Kevin Roddy said the settlement agreement directs the two sides to work together to come up with a final proposal for the court, "that's how cases are settled," he said. In July, Mr. Bharti asked the Chicago judge overseeing the settlement negotiations to remove the lawyers from decisions about which groups will receive the money. Mr. Bharti charged that the plaintiffs' attorneys were representing McDonald's interests more than those of their own clients. Under the preliminary agreement, the attorneys will divide $2.5 million, no matter who receives the $10 million, the Seattle Times points out. The judge will rule on Mr. Bharti's motion on August 22, at which time he rules on final distribution of the money, as well. It was Mr. Bharti who sued McDonald's in May 2001, on behalf of US vegetarians, saying the company had deliberately misled customers who don't eat meat products by using beef tallow in its fries and hash browns long after making a widely publicized 1990 pledge to cook them in vegetable oil. McDonald's has admitted to using beef extract, not beef tallow. MIRANT CORPORATION: SEC Starts Probe On Announced Accounting Mistakes --------------------------------------------------------------------- The United States Securities and Exchange Commission (SEC) is conducting an informal inquiry into energy trader Mirant Corporation's accounting practices, the Associated Press reports. Last week, the Company stated that it might have overstated the value of certain assets and a liability in 2001. The accounting overstatement related to a debt of $100 million, $85 million in natural gas inventory and $68 million the company expected to collect. Company executives said they were investigating and that any restatement related to the accounting error is not expected to affect 2002 earnings. The Company said the SEC review was not a surprise. "When companies report accounting issues, informal inquiries from the SEC usually follow, especially in this day and age," Doug Miller, senior vice president and general counsel for the Atlanta-based company, said in a statement, AP reports. For its inquiry, the SEC has requested additional information about the Company's recently disclosed shareholder litigation, any round-trip trades entered into by or on behalf of the company, and the Federal Energy and Regulatory Commission's investigation into energy-trading practices in the western United States. SHELL OIL: Agrees To Settle For $28 Million MTBE Contamination Suit ------------------------------------------------------------------- Shell Oil Co. agreed to settle for US$28 million, a landmark lawsuit relating to water contamination by gasoline additive methyl tertiary butyl ether (MTBE), Reuters reports. The case could set a precedent for dozens of similar suits around the country. "We determined this was the most appropriate action at this time to cease protracted litigation costs, future litigation and appellate costs," said Shell spokesman Cameron Smyth. The 11-month trial against MTBE producers, oil refiners and gasoline retailers started last September, with most defendants settling out-of-court before jury deliberations, Reuters reports. In April, a San Francisco jury ruled against the remaining refiners Shell and Tosco Corp., now part of Phillips Petroleum Co, ) and the Lyondell Chemical Co. The jury found MTBE-blended gasoline to be "a defective product," and that Lyondell and Shell acted maliciously by withholding information about MTBE's potential hazards, according to Reuters. Lyondell, the world's largest producer of MTBE, or methyl tertiary butyl ether, settled out of court for $4 million on July 24. UNITED STATES: Ex-Braceros Protest While Lawsuit Moves Through Courts --------------------------------------------------------------------- Former Mexican braceros and their supporters recently held a rally at US District Court and Wells Fargo Bank headquarters in San Francisco, demanding the payment of wages earned almost 60 years ago, The San Francisco Chronicle reports. During World War II, the United States and Mexico agreed to withhold 10 percent of the farm workers' wages when they were recruited to replace American workers fighting the war, until they returned to Mexico. A vast number never received the withheld wages, say the laborers, who have filed a class action against the bank and the two governments to recover an estimated $500 million in wages and interest never received by the braceros, who grew and harvested food for Americans at home so other Americans could fight the battles of World War II. UNITED STATES: Haitians Stage Protests While Appealing Dismissed Suit --------------------------------------------------------------------- A passing cabby pumped his fist, another motorist honked rhythmically as a sudden burst of music roused 200 protesters denouncing the government's treatment of Haitian asylum seekers, the South Florida Sun-Sentinel reports. The Haitians are claiming their due process rights have been violated in the asylum-seeking process. The day after federal authorities deported 25 Haitians, union activists and Haitians turned out to call for the freedom of dozens of detained Haitian asylum-seekers. Of the 25 migrants deported, 21 were among the close to 200 whose overloaded boat ran aground in Miami in December, setting off fears among government officials of a coming mass Haitian exodus. These fears inspired a new policy toward Haitian asylum-seekers; expedite the initial review and appeal processes and deport quickly. Generally, upon arrival in the United States, the Haitians had been released after an initial interview establishing that they have a credible fear of persecution should they be returned to Haiti. Usually, there were attorneys appointed to represent them during their hearings and to help them fill out asylum applications that require detailed responses to the questions in English. Instead, members of the group of 200 were being processed and removed quickly, according to Cheryl Little, executive director of the Florida Immigrant Advocacy Center. Ms. Little said that the advocacy center has filed appeals from the May ruling dismissing the class action, which the center filed in March, claiming the asylum-seekers due process is being denied. The government has admitted that the change in policy toward Haitian immigration was designed to stem a mass Haitian exodus from their island home in the Caribbean Sea. WASHINGTON: Deputies Say Overtime Pay Routinely Late By Weeks, Months --------------------------------------------------------------------- King County, Washington, is defending itself against a lawsuit by sheriff's deputies who allege that their overtime pay routinely shows up on paychecks weeks, even months, late, The News Tribune (Tacoma, WA) reported. Chris Vick, a lawyer for the deputies, filed the lawsuit, on behalf of four deputies, and the lawsuit asks the court to authorize a class action. Under a class action, a victory for the four plaintiffs would result in compensation for all affected King County deputies - as many as 688. The Sheriff's spokesman Sgt. Cameron Webster said that the sheriff's office does not comment on lawsuits. In court filings, the county made this official response, "King County only admits that the four named plaintiffs receive a paycheck on the 5th and 20th of each month. As no specific facts are alleged in the Complaint, defendant King County lacks information sufficient to form a belief as to the truth of the statement that `wage payments have been and remain unpaid' and therefore denies the same." Mr. Vick said that they were having some difficulty getting payroll records out of the county that will help them determine what the county might owe if the case becomes a class action. Delayed overtime pay was a hot and recurring issue at union meetings even before the lawsuit was filed. Minutes from the March 13, 2002, meeting of the King County Police Officers Guild board of directors refer to the "large volume of complaints received in regard to the continual delayed payment of overtime." XCEL ENERGY: Shareholders Sue, Alleging False Financials Misled Them -------------------------------------------------------------------- Two Xcel Energy shareholders have sued the Company, alleging they were misled about its financial problems, the Rocky Mountain News reports. The Company is the parent company of Public Service Co. of Colorado, which serves about 70 percent of the state's power and natural gas customers. Shareholders Max Bruckner and Stephen Herod charge that the Company's top officers issued "false and misleading" statements about the Minneapolis-based Company's business practices and financial condition from January 3, 2001, to July 26, 2002. Several law firms, including Milberg, Weiss Bershad Hynes & Lerach of New York, lead counsel in the class action against Enron and Arthur Andersen, filed the lawsuit and are seeking court approval to make the claim a class action. "We are seeking to represent a whole class and we think we have a valid case," said lead attorney Garrett Blanchfield of Reinhardt and Anderson of St. Paul, Minnesota. "But it is very early on in the litigation - it could take a year for a judge's decision." Gary R. Johnson, general counsel for the Company, said the Company was not surprised by the lawsuit, "since suits like this are fairly typical in situations when a company's stock price declines significantly." If deemed a class action, the decision or settlement in the case could affect "hundreds or thousands" of people, plaintiff lawyers claim. Some of the misrepresentations which the lawsuit allege were made about the Company for the past 18 months, causing the Company's stock price to be "artificially inflated" during the class period are: (1) Public Service Co.'s round-trip energy trades with Reliant Energy in 1999 and 2000; (2) the NRG Energy-Xcel "cross-default" provisions with lenders that dictate if subsidiary NRG goes into default, the Company loses credit lines worth $800 million; (3) failure to disclose NRG's grave liquidity and credit problems; and (4) the Company's lack of necessary internal controls to adequately monitor its power trading activities. *Overtime Wage Legislation Scrutinized As Number of Suits Increases ------------------------------------------------------------------- The case of Radio Shack store manager Omar Belazi describes the plight of workers who are categorized as having professional jobs, not subject to overtime pay. Mr. Belazi logged 65-hour weeks, vacuuming the floor, cleaning the bathroom, surrendering his Sundays to hit sales targets. A growing number of workers like Mr. Belazi are demanding more from their employers. The result is a flood of employees' lawsuits, many in arguably only "professional" jobs, who accuse their companies of cheating them out of overtime pay, the Deseret News reports. This surge in claims, some resulting in multimillion-dollar settlements, reflects the maturation of a long-simmering debate over overtime pay and who is entitled to it. In part, that debate reflects the fact that Americans are working more hours, longer than their counterparts in every other industrialized country, and that employers are trying stretch productivity. There have been many changes in job titles and their associated responsibilities. With manufacturing jobs dwindling, more workers now work for service- industry employers who pay salaries and bestowed with hard-to-define titles like "analyst," "manager" and "administrator." Federal law says employers do not have to pay overtime to salaried workers in executive, administrative or professional jobs. However, the law, the Fair Labor Standards Act, which has undergone only limited revision since the 1970s, relies on some outdated salary figures and terminology that leaves room for broad interpretation. California, which has become a hotbed of overtime battles, has a law that grants overtime pay to a broader group of workers. Radio Shack agreed in July to pay $29.9 million to settle a lawsuit led by Mr. Belazi on behalf of 1,300 current and former store managers. The workers contended they were owed overtime because the company made virtually all managerial decisions at higher levels and mandated that they spend most of their hours as salesmen. Radio Shack is the most recent in a series of large settlements in California. This spring, Starbucks agreed to pay a group of California store managers $18 million to settle an overtime suit. SBC Pacific Bell agreed last December to pay a group of engineers $35 million. While this is "the cause of action du jour" in California, it takes other forms in other places. Elsewhere, drug-store chain Eckerd Corp. paid $8 million last year to settle a lawsuit brought by a pair of former pharmacists at a store in Moss Bluff, Louisiana, on behalf of 1,100 others. The lawsuit accused Eckerd of docking the druggists' supposedly fixed salary if they worked less than 40 hours, but the company would not pay them more when they worked beyond their scheduled shifts, the workers said. "How can you tell me I am a salaried employee if I have to sign a timesheet?" asked Kevin Soileau, one of the pharmacists who filed the lawsuit. Eckerd denied liability, saying it settled merely to avoid the expense of a lengthier court battle. Other pharmacy operators, including Long's and Wal-Mart, have been similarly sued in recent years. More recently, a federal judge in Minnesota, ruled that more than 2,000 "loan originators" for Conseco Finance Corporation, who sell financing by telephone, were entitled to overtime pay, even though federal law exempts retailers from having to pay some workers overtime, as for example, largely unsupervised "outside sales" workers. The Minnesota court ruled that the Conseco workers, who earned a base salary plus commissions, fell outside the exemption. Other lawsuits accuse companies of deliberately depriving hourly workers of overtime pay by forcing them to work off the clock. For example, a pair of sales assistants at Credit Suisse Boston in Miami, secretaries to the firm's stockbrokers, sued last year. The workers accuse the company of having an "unwritten rule" against overtime pay, exemplified by managers who told workers long hours were "the nature of the business." Credit Suisse declined to comment on the lawsuit. Wal-Mart Stores Inc. is fighting 38 different state and federal lawsuits filed by hourly workers in 30 states, accusing the company of systematically forcing them to work long hours off the clock. Wal-Mart settled another such suit in Colorado two years ago, reportedly for $50 million. The terms of the settlement were confidential, and the company will only say that the actual amount is far less than has been reported. "The instances alleged are isolated and infrequent and we have a policy that allows us to pay hundreds of thousands of associates properly every day," Wal-Mart spokesman Bill Wertz said. However, those suits are hardly the only ones out there. Last year, workers filed 79 federal collective-action lawsuits seeking overtime pay, surpassing for the first time class actions against employers for job discrimination, according to a recent report to the American Bar Association. Labor advocates and lawyers for workers say the lawsuit show that the Fair Labor Standards Act and the state labor laws remain vital in protecting workers. Employers argue that outdated labor laws have become a weapon for attorneys to win undeserved overtime pay for already highly paid employees. The law "was put in place to make sure that workers at the low-end of the pay scale are paid a fair day's wage for a fair day's pay (work), and it has gotten away from that," said Timothy Bartl, assistant general counsel for the Labor Policy Association, which lobbies on behalf of corporate personnel officers. Employers may soon get part of what they are after. The Department of Labor (DOL) is pledging to update regulations to clarify which workers are covered by the law and focus its protection on those in low-wage jobs. The DOL said it wants to work more closely with employers to help them understand the law, including giving them copies of the Field Operations handbook the DOL's Wage & Hour Division uses to investigate companies. The Department rejects criticism that the government is easing up on employers who don't pay overtime. "It is important to take good faith employers and make sure they know what the law is and what they need to do to comply with it," said Tammy McCutcheon, administrator of the department's wage and hour division. "We have not backed off enforcement a single step." She points to actions like DOL's lawsuit in May against Tyson Foods Inc. for refusing to pay workers for time spent putting on and taking off work clothing and protective gear. New Securities Fraud Cases AMERADA HESS: Schiffrin & Barroway Commences Securities Suit in NJ ------------------------------------------------------------------ Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the District of New Jersey on behalf of all purchasers of the common stock of Amerada Hess Corp. (NYSE: AHC) common stock during the period between February 9, 2001 and July 11, 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 beginning in early 2001, the Company began secret discussions to acquire Triton Energy Limited (Triton), in order to obtain needed additional oil reserves and to significantly boost the Company's crude oil production. However, it immediately became clear to Amerada Hess' top insiders that due to the demands of Triton's CEO and Triton's controlling shareholder that if Amerada Hess was to acquire Triton, Amerada Hess would have to pay an extremely high price of over $3 billion for Triton, a price in excess of what standard valuation approaches would justify for Triton. Moreover, this price would represent a very substantial premium over Triton's stock trading price and a price that would require Amerada Hess to borrow billions of dollars to finance the purchase of Triton. Without disclosing these discussions and negotiations or Amerada Hess' decision to offer to pay over $3 billion to acquire Triton, the top insiders at Amerada Hess who were involved in, or aware of, the details concerning the proposed acquisition of Triton, sold off huge amounts of their Amerada Hess stock to avoid the losses they knew they would suffer from the sharp decline in Amerada Hess' stock which they knew would occur when the Triton acquisition was disclosed. Consequently, these insiders profited from the artificial inflation in the price of Amerada Hess' stock that persisted while they failed to disclose material information about the proposed Triton acquisition. By not disclosing that defendants were actively negotiating for the acquisition of Triton, the individual defendants violated their duty to "abstain" or "disclose" under the 1934 Act and pursued a scheme to defraud and course of business that operated as a fraud or deceit on purchasers of Amerada Hess stock by selling off over 1.3 million of their Amerada Hess shares at as high as $90 per share for proceeds of $119 million. On July 10, 2001, after the individual defendants had completed their stock sales, Amerada Hess disclosed it was acquiring Triton for $3.2 billion ($45 per share), which represented a 50% premium over Triton's July 9,2001, closing price of $29-29/32. Amerada Hess stock fell from $81-11/16 on July 9, 2001 to $77 on July 10,2001, to $74 per share on July 12, 2001, and to $70-19/32 per share on July 18, 2001, a cumulative decline of well over 13% in just seven trading sessions. By September 26, 2001, just weeks after Amerada Hess completed the Triton deal and disclosed it had to borrow $2.5 billion to finance the transaction, Amerada Hess' stock fell to $59-3/32 compared to its class period high of $90-13/32 in 5/01, a 34% decline. For more details, contact Marc A. Topaz or Stuart L. Berman by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 888-299-7706 (toll free) or 610-667-7706 or by E-mail: info@sbclasslaw.com AMERADA HESS: Cauley Geller Commences Securities Suit in New Jersey ------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the District of New Jersey on behalf of purchasers of Amerada Hess Corp. (NYSE: AHC) common stock during the period between February 9, 2001 and July 11, 2001, inclusive. The complaint charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that beginning in early 2001, the Company began secret discussions to acquire Triton Energy Limited, in order to obtain needed additional oil reserves and to significantly boost the Company's crude oil production. However, it immediately became clear to the Company's top insiders that due to the demands of Triton's CEO and Triton's controlling shareholder that if Amerada Hess was to acquire Triton, Amerada Hess would have to pay an extremely high price of over $3 billion for Triton, a price in excess of what standard valuation approaches would justify for Triton, a price that would represent a very substantial premium over Triton's stock trading price and a price that would require Amerada Hess to borrow billions of dollars to finance the purchase of Triton. Without disclosing these discussions and negotiations or Amerada Hess' decision to offer to pay over $3 billion to acquire Triton, the top insiders at Amerada Hess who were involved in, or aware of, the details concerning the proposed acquisition of Triton, sold off huge amounts of their Amerada Hess stock to avoid the losses they knew they would suffer from the sharp decline in Amerada Hess' stock which they knew would occur when the Triton acquisition was disclosed, and thus profit from the artificial inflation in the price of Amerada Hess' stock that persisted while they failed to disclose material information about the proposed Triton acquisition. By not disclosing that defendants were actively negotiating for the acquisition of Triton, the Individual Defendants violated their duty to "abstain" or "disclose" under the 1934 Act and pursued a scheme to defraud and course of business that operated as a fraud or deceit on purchasers of Amerada Hess stock by selling off over 1.3 million of their Amerada Hess shares at as high as $90 per share for proceeds of $119 million. On July 10, 2001, after the individual defendants had completed their stock sales, Amerada Hess disclosed it was acquiring Triton for $3.2 billion, $45 per share, a very large, over 50%, premium over Triton's July 9, 2001 closing price of $29-29/32. Amerada Hess stock fell from $81-11/16 on July 9,2001 to $77 on July 10,2001; to $74 per share on July 12, 2001; and to $70-19/32 per share on July 18, 2001, a cumulative decline of well over 13% in just seven trading sessions. By September 26, 2001, just weeks after Amerada Hess completed the Triton deal and disclosed it had had to borrow $2.5 billion to finance the transaction, Amerada Hess' stock fell to $59-3/32 compared to its class period high of $90-13/32 in 5/01, a 34% decline. For more details, contact Jackie Addison, Sue Null or Ellie Baker by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 888-551-9944 by E-mail: info@classlawyer.com or visit the firm's Website: http://www.classlawyer.com CITIGROUP INC.: Schiffrin & Barroway Commences Securities Suit in NY -------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all purchasers of the common stock of Citigroup Inc. (NYSE: C) securities between July 24, 1999 and July 23, 2002, 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 during the class period, the Company, Sanford I. Weill, its Chairman and Chief Executive Officer, and Todd Thomson, its Chief Financial Officer, made misrepresentations and/or omissions of material fact, including failing to disclose that the Company misrepresented a 1999 transaction with Enron that was structured as commodity trade but served the same purpose as a loan to help Enron keep $125 million in debt off of its books, affirmatively misrepresenting the Company's potential Enron-related exposure in its 2001 Annual Report and elsewhere, and failing to disclose the true extent of its potential legal liability arising out of its "structured finance" dealings with Enron. The complaint alleges that when Wall Street learned about the foregoing on July 23, 2002 after executives of the Company and JP Morgan Chase testified before the US Senate regarding the transactions at issue, Citigroup stock plummeted $5.04 or 15.73% to close at $27.00, less than half its class period high. For more details, contact Marc A. Topaz or Stuart L. Berman by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 888-299-7706 (toll free) or 610-667-7706 or by E-mail: info@sbclasslaw.com ECLIPSYS CORPORATION: Marc Henzel Commences Securities Suit in S.D. FL ---------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court, Southern District of Florida on behalf of purchasers of the securities of Eclipsys Corporation (Nasdaq: ECLP) between July 23, 2001 and June 27, 2002, inclusive. The suit names as defendants the Company and: (1) Robert Joseph Colletti, (2) Harvey J. Wilson and (3) John T. Patton The suit alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between July 23, 2001 and June 27, 2002, thereby artificially inflating the price of Company securities. As alleged in the complaint, defendants issued highly positive press releases regarding the Company's addition of new contracts for its information technology, in an effort to create the impression that Eclipsys' revenues were growing and the Company was well positioned to generate strong profitability. However: (i) during a six-week period in July to August 2001, insiders sold more than $9.5 million worth of Eclipsys stock at or near the stock's two year highs; and (ii) unbeknownst to the investing public, although the defendants were aware that new-sales bookings had slowed considerably and expenditures in research and development and marketing and distribution had accelerated, the Company failed to timely disclose these facts to the public in any of Eclipsys' public filings with the Securities and Exchange Commission or press releases. On June 27, 2002, defendants issued a press release announcing that results for the second quarter of 2002 would fall short of the Company's previous statements. The Company announced it would report a net loss in the range of $0.07 to $0.10 per share. Trading price of Company stock dropped nearly 50% in response to this. For more information, contact Marc 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 or by E-mail: mhenzel182@aol.com EXELON CORP.: Marc Henzel Commences Securities Fraud Suit in N.D. IL -------------------------------------------------------------------- The Law Offices of Marc S. Henzel 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 securities of Exelon Corporation, (NYSE: EXC) between April 24, 2001 and September 27, 2001 inclusive. The suit is pending against: (1) Corbin A. McNeill, Jr. (Co-CEO and Chairman), (2) John W. Rowe (Co-CEO and President) and (3) Ruth Ann Gillis (CFO) 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 April 24, 2001 and September 27, 2001. The complaint alleges that the Company repeatedly issued statements concerning the strength of its operations and repeatedly assured the market that it would meet or beat its $4.50 per share earnings figure for 2001. The complaint alleges that these statements were materially false and misleading because they failed to disclose, among other things: (i) that the investments in telecommunications companies held by the Company's Enterprises segment were plummeting in value at a rapid pace. Accordingly, Enterprises could not and would not meaningfully contribute to the Company's results and, in fact, the Company was carrying tens of millions of dollars of impaired investments on its financial statements; and (ii) that InfraSource, the Company's infrastructure subsidiary, was experiencing declining demand for its products as its primary customers, telecommunications companies, were facing severe industry-wide problems, such as mounting debt and over- capacity, and were significantly cutting back on their capital expenditures. On September 27, 2001, the Company issued a press release announcing that it would not meet its earnings commitment of $4.50 for 2001, blaming the economy, poor weather and write-downs for failed investments made by the Enterprises unit. In reaction to the announcement, the Company's common stock price plunged by 22%, falling to a low of $38.85 per share on September 27, 2001, after closing at $50.45 the previous day, on extremely heavy trading volume. For more information, contact Marc 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 or by E-mail: mhenzel182@aol.com GREAT ATLANTIC: Marc Henzel Commences Securities Suit in New Jersey ------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court, District of New Jersey, on behalf of purchasers of the securities of Great Atlantic & Pacific Tea Company, Inc. (NYSE: GAP) between November 15, 2001 and May 28, 2002, inclusive. The suit is pending against the Company and: (1) Christian W.E. Haub, (2) Elizabeth Culligan, (3) Fred Corrado, (4) Mitchell Goldstein and (5) Kenneth A. Uhl The suit alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between November 15, 2001 and May 28, 2002, thereby artificially inflating the price of Company securities. Throughout the class period, as alleged in the complaint, defendants issued statements regarding the Company's quarterly and annual financial performance and filed reports confirming such performance with the United States Securities and Exchange Commission (SEC). The complaint alleges that these statements were materially false and misleading because, among other things: (i) the Company was employing improper accounting practices regarding the recognition of vendor allowances and the accounting of inventory in certain of its regions for fiscal year 2001 in violation of Generally Accepted Accounting Principles. As a result, the Company's operating results were materially misrepresented and overstated; and (ii) based on the foregoing, defendants' statements concerning the prospects of the Company were lacking in a reasonable basis at all times. On May 28, 2002, the last day of the class period, the Company announced that it would delay the filing of its annual report with the SEC while it conducted an accounting review which will most likely result in a charge to earnings. The accounting review will focus on the appropriate timing for the recognition of vendor allowances and the accounting of inventory in certain of the Company's regions for fiscal year 2001. The Company further noted that a substantial portion of any charge the Company will take will reverse credits which were recognized prematurely as reductions of cost of merchandise sold, and that portion will therefore be recognized in periods subsequent to fiscal 2001 as reductions of cost of merchandise sold. Following this disclosure, Company stock fell $4.03 per share, or approximately 16%, to close on May 28, 2002 at $21.070 per share. For more information, contact Marc 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 or by E-mail: mhenzel182@aol.com HPL TECHNOLOGIES: Milberg Weiss Commences Securities Suit in N.D. CA -------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class action in the United States District Court for the Northern District of California on behalf of purchasers of HPL Technologies, Inc. (Nasdaq: HPLAE) common stock during the period between July 31, 2001 and July 18, 2002. The complaint charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Company is a provider of yield optimization software solutions to enable semiconductor companies to enhance efficiency in the production process. On July 31, 2001, the Company completed its initial public offering (IPO) of 6.9 million shares (including the overallotment) at $11.00 per share, raising net proceeds of $69.1 million. The IPO was accomplished pursuant to a prospectus and registration Statement filed with the SEC. These documents represented that the Company recognized revenue on sales to distributors only when the distributors sold the software license or services to their customers. Later, the Company reported favorable financial results for the 1stQ, 2ndQ, 3rdQ and 4thQ of F02. The complaint alleges that as a result of the Company's favorable but false financials and false and misleading statements, its stock traded as high as $17.85 per share. Defendants took advantage of this inflation, selling 85,500 shares of their individual holdings. Then, on July 19, 2002, before the markets opened, the Company shocked the market with news that it was investigating accounting irregularities with respect to revenue recognition on shipments to distributors in prior quarters that its CEO had been fired and its CFO had been reassigned. On this news, the Company's stock collapsed 72% to as low as $4 per share, before trading was halted. For more details, contact William Lerach or Darren Robbins by Phone: 800-449-4900 by E-mail: wsl@milberg.com or visit the firm's Website: http://www.milberg.com/cases/hpl JOHNSON & JOHNSON: Cauley Geller Launches Securities Suit in New Jersey ----------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the District of New Jersey on behalf of purchasers of Johnson & Johnson (NYSE: JNJ) common stock during the period between April 16, 2002 and July 18, 2002, 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 in the Company's press release and during the earnings conference call held that day, defendants repeatedly attributed the Company's financial performance to the success of EPREX, stating, for example, that, "This amazing product has delivered consistent double-digit growth over the past five years. And in the first quarter of this year, we hit a record sales level of a billion dollars." Moreover, defendants discussed the reported incidences of PRCA and assured investors that EPREX "continues to be a trusted brand that people are using," and that Johnson & Johnson was "working very closely with . the experts, as well as health authorities in understanding (PRCA), why it occurs. And we're doing whatever we can to understand the risk and mitigate it." Defendants' statements during the class period, however, were materially false and misleading because defendants knew but failed to disclose that by April 2002, the US Food and Drug Administration's Office of Criminal Investigation, spurred on by the increasing number of cases of PRCA in EPREX patients, sought a stay of a qui tam (whistleblower) action in order to investigate the allegations regarding the Company's EPREX manufacturing facility located in Puerto Rico. The whistleblower action was filed in March 2000 by Hector Arce, a former employee at the Company's EPREX factory. Mr. Arce contends in the lawsuit that he was pressured to falsify data to cover up manufacturing lapses at the EPREX manufacturing facility, and then was suspended a few days before an expected interview with FDA inspectors. This information, which defendants failed to disclose, was information a reasonable investor would have wanted to know - especially as the reported incidences of PRCA continued to climb during the class period - considering EPREX, and its U.S. version, PROCRIT, accounted for over 10% of the Company's revenues in 2001 and was projected to account for 11% of revenues in 2002. The true facts concerning the existence of the criminal investigation of the Company and the allegations of the qui tam action were first revealed in The New York Times on July 19, 2002. That same day, the Company admitted that it was aware of the criminal investigation since April 2002. Once the foregoing information was revealed, Company shares fell $7.88 per share to close on July 19, 2002, at $41.85, a fall of 16%. For more details, contact Jackie Addison, Sue Null or Ellie Baker by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 888-551-9944 or by E-mail: info@classlawyer.com or visit the firm's Website: http://www.classlawyer.com MERCK & CO.: Spector Roseman Commences Securities Suit in New Jersey -------------------------------------------------------------------- Spector, Roseman & Kodroff, PC initiated a securities class action in the United States District Court for the New Jersey on behalf of purchasers of the stock Merck & Company, Inc. (NYSE:MRK) securities during the period from July 1, 1999 through and including June 21, 2002. The complaint alleges that Merck and certain of its officers and directors violated the federal securities laws. The complaint alleges, among other things, that during the class period defendants overstated Merck's revenues. The Company's operations are comprised of two reportable segments: Merck Pharmaceutical and Merck's wholly owned subsidiary, Merck-Medco Managed Care, LLC (Merck-Medco). Since Merck acquired Merck-Medco in 1993 and throughout the class period, Merck and Merck-Medco have falsely inflated their reported revenues by billions of dollars, in violation of Generally Accepted Accounting Principles (GAAP). During the class period, Merck-Medco's revenues have made up over 50% of Merck's total revenues. Merck-Medco revenues are purportedly derived from the filling and managing prescriptions and health management programs. Consumers who are members of pharmacy benefits plans and purchase prescriptions must make a co-payment directly to the pharmacy. To artificially boost Merck-Medco's apparent sales, defendants included consumer co-payments for prescription drugs in its revenues, contrary to the revenue recognition practices of two of Merck-Medco's biggest competitors and in violation of GAAP. As a result, Merck-Medco and Merck overstated the companies' total economic activity, making it look more successful than it was in reality. According to a June 21, 2002 article in The Wall Street Journal, neither company bills for the co-payments, gets billed for them, or otherwise comes into contact with them. The Wall Street Journal reported that Merck has not disclosed the actual co-payments charged and estimated that Merck and Merck-Medco may have artificially inflated their 2001 revenues by as much as $4.6 billion. As a result of defendants' false and misleading statements, investors were damaged by purchasing Merck's common stock at artificially inflated levels during the class period. For more details, contact Robert M. Roseman by Phone: 888-844-5862 by E-mail: classaction@srk-law.com or visit the firm's Website: http://www.spectorandroseman.com NICOR INC.: Marc Henzel Commences Securities Fraud Suit in N.D. IL ------------------------------------------------------------------ The Law Offices of Marc Henzel initiated a securities class action in the United States District Court for the Northern District of Illinois against Nicor Inc. (NYSE: GAS) and two of the Company's senior officers on behalf of investors who purchased or otherwise acquired the Company's securities during the period from January 24, 2002 through July 18, 2002, inclusive. The lawsuit charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing false and misleading financial statements and press releases concerning the Company's publicly reported earnings. After the market closed on July 18, 2002, the Company issued a press release announcing it may restate prior results in response to improprieties at its gas business. The Company indicated that the Illinois Commerce Commission and other governmental agencies are investigating allegations that the gas distribution business acted improperly in connection with a performance-based rate program. Also according to the press release, reported results for the six months ended June 30, 2002 were negatively impacted by accounting irregularities at a retail energy marketing joint venture which is 50% owned by the Company and 50% owned by Dynegy Inc. For more information, contact Marc 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 or by E-mail: mhenzel182@aol.com REHABCARE GROUP: Marc Henzel Commences Securities Fraud Suit in E.D. MO ----------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Eastern District of Missouri on behalf of purchasers of the securities of RehabCare Group, Inc. (NYSE: RHB) between February 7, 2001 and January 21,2002 inclusive. The suit names as defendants the Company and: (1) H. Edwin Trusheim (Chairman of the Board) and (2) Alan C. Henderson (CEO, President and Director) 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 7, 2001 and January 21, 2002. The complaint alleges that, among other things, defendants issued a series of materially false and misleading statements concerning the Company's supplemental staffing division. The complaint alleges these statements were materially false and misleading because they failed to disclose that the supplemental staffing division was experiencing serious operational problems with information systems critical for matching supply with demand and poor employee training and retention and that its revenues and earnings were declining as a result. On January 21, 2002, the Company issued a press release announcing that earnings for its fourth quarter 2001 would be less than half than they had reiterated in late October and that the Company would take a charge of $8.5 to $9.5 million, $3 million of which was for a reorganization of the staffing division. In reaction to the Company's disclosure, as alleged in the complaint, the price of the Company's common stock plummeted by 25% over one trading day on heavy volume, falling from $25.21 per share to $18.70 per share. Prior to the disclosure of the adverse facts described above, as alleged in the complaint, the Company completed a secondary offering of common stock, raising $50 million for the Company and more than $8 million for Company insiders. In addition, Company insiders also sold $4,568,209 worth of the Company's common stock during the class period at artificially inflated prices. For more information, contact Marc 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 or by E-mail: mhenzel182@aol.com RIVERSTONE NETWORKS: Bernstein Liebhard Commences Securities Suit in CA ----------------------------------------------------------------------- Bernstein Liebhard & Lifshitz LLP initiated a securities class action on behalf of all persons who purchased or acquired Riverstone Networks, Inc. (NASDAQ: RSTN) securities between August 20, 2001 and June 5, 2002. The action, pending in the United States District Court for the Northern District of California, charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10-b(5). The action alleges that defendants issued a series of false and misleading statements concerning the Company's financial condition and sales. Specifically, defendants misled the investing community concerning the true effect that the downturn in telecom spending had upon the Company. For more details, contact Ms. Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone: 800-217-1522 or 212-779-1414 by E-mail: RSTN@bernlieb.com or visit the firm's Website: http://www.bernlieb.com. SALOMON SMITH: Finkelstein Thompson Lodges Securities Fraud Suit in DC ---------------------------------------------------------------------- Finkelstein, Thompson & Loughran initiated a securities class action against Salomon Smith Barney, Inc. and its telecommunications analyst Jack Grubman, on behalf of purchasers of Winstar Communications, Inc. securities between August 1, 1999 and April 17, 2001, inclusive. The suit, filed in the United States District Court for the District of Columbia, alleges that Salomon and Mr. Grubman violated the federal securities laws by knowingly issuing false and misleading analyst reports regarding Winstar during the class period. The suit alleges that the defendants failed to disclose a significant conflict of interest between their investment banking and research departments. Specifically, the suit alleges that Salomon and Mr. Grubman issued very favorable analyst reports regarding Winstar to the public when they allegedly knew that the positive recommendations were unwarranted and false. The suit further alleges that, unbeknownst to the investing public, Salomon's buy recommendations and price targets for Winstar were driven by its efforts to attract lucrative investment banking business rather than by Winstar's fundamental merits. For more details, contact Conor R. Crowley or Donald J. Enright by Phone: 202-337-8000 by E-mail: crc@ftllaw.com or dje@ftllaw.com. SONUS NETWORKS: Wolf Haldenstein Commences Securities Suit in MA Court ---------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class action in the United States District Court for the District of Massachusetts, on behalf of purchasers of the securities of Sonus Networks, Inc. (Nasdaq: SONS) between December 11, 2000 and January 16, 2002, inclusive, against the Company and certain of its officers and directors. 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. During the class period, defendants made numerous announcements, which touted the Company's financial successes and illustrated the Company's achievement in obtaining and expanding new products, which would be presented to existing and potential clients. The suit alleges that these reports were materially false and misleading because they omitted and/or distorted several unfavorable facts, such as some products that the Company asserted being sold to Qwest Communications International, Inc. (Qwest) would not be operational in Qwest's timeframe and as a result Qwest would need to acquire products from competitor Nortel. It is further alleged that the Company's highlighted transaction with Qwest, a client that supplied over 10% of the Company's first quarter 2001 revenues, was in fact an agreement whereby it was necessary that the Company had to consent to purchase a $20 million Irrevocable Right of Use (IRUs) from Qwest in a trade for a $20 million order from Qwest. Another problem was that the Company's products were not carrier class since they lacked 99.999% availability, were deficient in voice quality compared to circuit-switched networks and did not have advanced network management and configuration capacities, though defendants claimed the opposite. As a result of these, and other problems, the Company would not report revenues of $195 million in 2001. On January 16, 2002, the Company announced its true fourth quarter and year-end 2001 results and disclosed that revenues for the year were only $173 million, as opposed to class period assessments exceeding $200 million. For more details, contact Fred Taylor Isquith, Gregory M. Nespole, 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 Sonus. SYMBOL TECHNOLOGIES: Marc Henzel Commences Securities Suit in E.D. NY --------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Eastern District of New York, on behalf of purchasers of the common stock of Symbol Technologies, Inc. (NYSE: SBL) between October 19, 2000 and February 13, 2002, inclusive, against the Company and certain of its officers. 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. Specifically, the complaint alleges that defendants engaged in conduct which effectively increased the Company's reported revenue and profits, by: (1) SBL booked as profit in the third quarter 2000 a one-time royalty payment in excess of $10 million, enabling the Company to make its third quarter projections; (2) SBL used expenses associated with its acquisition of Telxon to mask the fact that its sales were declining; and (3) SBL booked as having shipped in the first quarter of 2001 more than $40 million in inventory that included side provisions allowing customers to delay payments or return merchandise, or included products that "never left the warehouse." The Company subsequently had a second-quarter 2001 inventory write-down of $67.1 million after tax. On February 13, 2002, Newsday, Inc. reported that the Company had engaged in the above-described accounting practices, received an inquiry letter from the Securities and Exchange Commission, and had hired accounting and consulting firm KPMG to review its sales process. The next day, the Company announced it was lowering its outlook for 2002 earnings and that its Chief Executive Officer would retire in May 2002. In response to the Newsday article and the Company's announcements, the price of Company stock plunged more than 53% from an opening price of $14.15 on February 14, 2002 to a low of $6.60 on February 15, 2002 on unusually heavy trading volume. For more information, contact Marc 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 or by E-mail: mhenzel182@aol.com TEXTRON INC.: Marc Henzel Commences Securities Fraud Suit in RI Court --------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court, District of Rhode Island, on behalf of purchasers of the securities of Textron, Inc. (NYSE: TXT) between October 19, 2000 and September 26, 2001, inclusive. The action, is pending against the Company and: (1) Lewis B. Campbell, (2) John A. Janitz, (3) Theodore R. French and (4) Terry D. Stinson The suit alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between October 19, 2000 and September 26, 2001, thereby artificially inflating the price of Company securities. The complaint alleges that, throughout the class period, the Company failed to disclose that the V-22 Osprey, a military aircraft that it was manufacturing, suffered from structural defects that required that it be substantially redesigned which would delay full-scale production of the Osprey for years and cost hundreds of millions of dollars in excess of the costs allocated to the project for the purpose of calculating profit and loss. On September 26, 2001, as alleged in the complaint, the Company issued a press release over the Business Wire in which it reduced its guidance for the third and fourth quarters of 2001, and announced that it expected a third-quarter loss of $0.25 per share, compared to the consensus forecast of earnings of $0.71 cents per share. The complaint alleges that the Company attempted to blame its poor performance on "the slowdown in the U.S. economy" and "the impact of events on September 11." However, as alleged in the complaint, the Company was also forced to admit that its reduced earnings were resulting from "a number of significant adjustments at Bell Helicopter and other Textron businesses," including a special charge of approximately $0.52 per share resulting from "stretched out production schedules and additional costs to make design changes in the V-22 and H-1 government programs." In the same press release, the Company announced the abrupt departures of Mr. Janitz as Textron Chief Operating Officer, and Mr. Stinson as Chief Executive Officer of Bell Helicopter. On this news, Company shares dropped to a year-low price of $33.04 per share, down 23% from the previous day's closing price of $43, on relatively heavy trading volume of 4,393,200 shares traded. For more information, contact Marc 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 or by E-mail: mhenzel182@aol.com XCEL ENERGY: Berger & Montague Launches Securities Fraud Suit in MN ------------------------------------------------------------------- Berger & Montague, PC initiated a securities class action against Xcel Energy, Inc. (NYSE: XEL) and certain of its principal officers and directors in the United States District Court for the District of Minnesota on behalf of all persons or entities who purchased the Company's securities between January 31, 2001 and July 26, 2002, inclusive. The suit alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between January 31, 2001 and July 26, 2002, thereby artificially inflating the price of the Company's securities. Throughout the class period, as alleged in the suit, defendants issued numerous statements and filed quarterly and annual reports with the Securities & Exchange Commission (SEC) which described the Company's financial performance and the financial performance of NRG Energy, Inc. (NRG), the Company's majority-owned subsidiary. As alleged in the suit, 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 had engaged in "round-trip" energy trades that provided no economic benefit for the Company; (2) that the Company's and NRG's credit agreements with lenders contained cross-default provisions and covenants, the result of which was that in the event of a default by NRG, among other adverse effects, the Company would lose access to $800 million in credit; (3) that the Company lacked the necessary internal controls to adequately monitor the trading of its power; and (4) that as a result, the value of the Company's revenues and financial results were materially overstated at all relevant times. After the close of the market on July 25, 2002, the Company issued a press release announcing its financial results for the second quarter, the period ended June 30, 2002, and disclosed that its earnings had declined and that it was revising its earnings expectations for fiscal 2002. In a conference call the very next day, defendants finally disclosed the true extent of the Company's liquidity and credit difficulties and its management's inability to effectively remedy such difficulties stemming from the operations of NRG. As reported in several business articles dated July 26, 2002, analysts were horrified to learn that the liquidity and credit difficulties extended to the Company itself under the "cross-collateral default" provisions the Company and NRG had entered into with lenders. Market reaction to these revelations was swift and brutal. On July 26, 2002, Company stock closed at $7.55, a more than 36% one-day decline, on extremely heavy trading volume. Subsequently, on July 28, 2002, defendants disclosed that the Company had received subpoenas from the SEC and CFTC regarding Xcel's engaging in "round-trip" or "wash" transactions, which involve the simultaneous buying and trading of power at the same price and same amount and provide no economic benefit to the Company. For more details, contact Sherrie R. Savett, Stuart J. Guber or Kimberly A. Walker by Mail: 1622 Locust Street, Philadelphia, PA 19103 by Phone: 888-891-2289 or 215-875-3000 by Fax: 215-875-5715 by E-mail: InvestorProtect@bm.net or visit the firm's Website: http://www.bergermontague.com ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2002. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re- mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *