/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/020808.mbx C L A S S A C T I O N R E P O R T E R Thursday, August 8, 2002, Vol. 4, No. 156 Headlines AK STEEL: Mounting Vigorous Defense V. Racial Discrimination Suit in OH APARTHEID LITIGATION: Shell Petroleum Denies Supporting South Africa DUPONT USA: Enters Into Settlement of Suits Over Polybutylene Plastic ERPENBECK HOMES: Owners of Erpenbeck-Built Homes Avoid Foreclosure EXCEL INDUSTRIES: Recalls 1,500 Lawn Mowers Due to Fire, Burn Hazard FLEETWOOD ENTERPRISES: Vehicles Need More Braking Power To Tow Safely HOLLAND AMERICA: Passengers Sue After Contracting Flu Virus on Ship HOMESTORE.COM INC.: CALSTeRS File Securities Fraud Suit in C.D. CA MARTHA STEWART: Formulates Plan To End Company Stock's Downward Spiral MASSEY ENERGY: Shareholders File Suit V. Officials Over Insider Trading MTD PRODUCTS: Recalls 5,000 Grass Bag Attachments For Injury Hazard OXFORD HEALTH: NY Federal Court Approves Settlement of Derivative Suits WASTE MANAGEMENT: TX Court Approves $457M Securities Suit Settlement WORLDCOM INC.: Oklahoma Citizens May Sue Over Pension System Losses XEROX CORPORATION: EEOC Considers Filing Racial Discrimination Suit New Securities Fraud Cases ALCATEL SA: Marc Henzel Commences Securities Fraud Suit in S.D. NY AMDOCS LTD.: Marc Henzel Commences Securities Fraud Suit in E.D. MO AMERICAN EXPRESS: Marc Henzel Commences Securities Suit in S.D. NY CAPITAL ONE: Chitwood & Harley Commences Securities Fraud Suit in VA CHARTER COMMUNICATIONS: Pomerantz Haudek Lodges Securities Suit in CA CHARTER COMMUNICATIONS: Marc Henzel Launches Securities Suit in C.D. CA CHARTER COMMUNICATIONS: Cauley Geller Commences Securities Suit in CA CHARTER COMMUNICATIONS: Schiffrin & Barroway Lodges Securities Suit MO CITIGROUP INC.: Cauley Geller Commences Securities Suit in S.D. NY CITIGROUP INC.: Marc Henzel Commences Securities Fraud Suit in S.D. NY DYNEGY INC.: Marc Henzel Commences Securities Fraud Suit in S.D. TX INSIGHT ENTERPRISES: Brodsky & Smith Commences Securities Suit in AZ MARTHA STEWART: Wolf Popper Commences Securities Fraud Suit in S.D. NY MERCK & CO.: Marc Henzel Commences Securities Fraud Suit in New Jersey MIRANT CORPORATION: Marc Henzel Commences Securities Suit in N.D. GA PEREGRINE SYSTEMS: Marc Henzel Commences Securities Suit in S.D. CA PERKINELMER INC.: Neiman Garland Commences Securities Suit in MA Court PEROT SYSTEMS: Marc Henzel Commences Securities Fraud Suit in N.D. TX RELIANT RESOURCES: Marc Henzel Commences Securities Suit in S.D. TX SEEBEYOND TECHNOLOGY: Rabin Peckel Commences Securities Suit in C.D. CA ********* AK STEEL: Mounting Vigorous Defense V. Racial Discrimination Suit in OH ----------------------------------------------------------------------- AK Steel Holdings, Inc. faces a class action filed in the United States District Court for the Southern District of Ohio by seventeen individuals, alleging racial discrimination. The complaint alleges that the Company discriminates against African- Americans in its hiring practices and that the Company discriminates against all of its employees by preventing its employees from working in a racially integrated environment free from racial discrimination. Because the action was only recently filed, the Company has not yet responded to the suit. The Company intends to contest this matter vigorously. APARTHEID LITIGATION: Shell Petroleum Denies Supporting South Africa -------------------------------------------------------------------- Shell Petroleum Company said that it was never supportive of the South Africa apartheid regime, after US lawyers announced this week that they were considering including the Company in a multi-billion class action on behalf of apartheid victims, Ananova.com reports. "Shell South Africa vigorously denies any suggestion that the company was supportive of the apartheid regime in South Africa," Mike McGarry, spokesman for Shell, told AFX News. He said Shell was "vocal" in its opposition to apartheid and had publicly called for the lifting of all bans on political organizations, the release of political prisoners, free press and the support of the Universal Declaration of Human Rights. "Shell South Africa has also consistently over the years implemented strict policies of non-discrimination in the work place in the face of official opposition," Mr. McGarry added. American lawyer Ed Fagan filed the suit in the United States District Court in New York, already naming as defendants: (1) International Business Machines Corp, (2) Deutsche Bank AG, (3) Allianz AG's Dresdner Bank, (4) Commerzbank AG, (5) UBS AG and (6) Credit Suisse The suit makes claims under the Alien Tort Statute, under which alleged victims of human rights abuses, perpetrated in other countries by non- US citizens or corporations, can file in US courts. The court scheduled the first hearing on August 9. DUPONT USA: Enters Into Settlement of Suits Over Polybutylene Plastic --------------------------------------------------------------------- DuPont USA entered into a settlement in the class actions filed in the Canadian provinces of Ontario, Quebec, and British Columbia regarding polybutylene plastic plumbing and heating systems. The Company was named in these suits based on its sale of a raw material, acetal plastic that was previously sold to other manufacturers who molded it into fittings used to join polybutylene plastic pipes. The Company has not sold acetal plastic for this purpose since the late 1980's. Under the Canadian settlement, the Company will fund up to 30 million Canadian dollars for payments to class members (subject to certain terms) for replumbs, damages and repairs of polybutylene plastic plumbing and heating systems. For class members meeting the requirements specified in the agreement, the Company will pay 25% of the cost of a replumb of a polybutylene plumbing system and of damage caused by a leak in a polybutylene plumbing system. The Company will also pay a portion of the cost of repair of a polybutylene heating system of a class member who meets the requirements. The Company does not admit any wrongdoing or liability on its part, and the proposed settlement reflects a compromise of disputed claims against it. In June 2002, the courts approved a Canadian nationwide notice campaign on the Company's proposed Canadian settlement. The notice of the proposed settlement will be published in newspapers and magazines across Canada in August. The notice is directed at past or present owners of any real property or structures in Canada with a polybutylene plumbing and/or heating system with acetal plastic insert fittings. It informs potential class members of their eligibility for payment and of upcoming hearings where the proposed settlement will be considered. The settlement has not yet been court approved. The court in Ontario will hold a hearing to consider whether to approve the Canadian settlement on October 11. The court in Quebec will hold a hearing to consider whether to approve the Canadian settlement on November 19. The court in British Columbia will hold a hearing to consider whether to approve the Canadian settlement on November 7. During these hearings, the courts will be asked to approve the proposed settlement as being fair, adequate, reasonable, and in the best interests of the class members. At the hearings, the courts will consider any objections to the proposed settlement that were mailed by September 20 to class counsel in Ontario and British Columbia and October 18 to class counsel in Quebec. If the courts approve the settlement, class members will be bound by the terms of the agreement unless they choose to opt out after a further notice campaign. ERPENBECK HOMES: Owners of Erpenbeck-Built Homes Avoid Foreclosure ------------------------------------------------------------------ Erpenbeck-built homes financed by Firstar Bank will not be foreclosed on, under an agreement in the works between the bank and homeowners' attorneys, according to a report by The Cincinnati Post. Stan Chesley, who is representing homeowners in a class action in Boone Circuit Court, said the tentative agreement adds another layer of insurance for homeowners before a deal is finished to pay off $16.8 million in liens owed to US Bank - formerly Firstar Bank - and other Erpenbeck lenders. Under the terms of the agreement, US Bank would agree not to foreclose on homes before Peoples Bank of Northern Kentucky places $16.8 millions in an escrow account to ensure that money is available to pay off the liens on more than 160 homes purchases with a mortgage. All those homes are still saddled with builder's mortgages that were never paid off because Erpenbeck Co., or its affiliates, misdirected payoff checks into a company account at Peoples Bank, according to bank records. "At this point, we are exploring all options for all concerned, which includes the homeowners and the bank. We have said from day one, that we want to do what's good for the homeowners, and we will continue to do that," said Steven Dale, US Bank spokesman. The $16.8 million escrow account will not be established until Bank of Kentucky closes its deal to buy most of the assets of Peoples Bank of Northern Kentucky. The Bank of Kentucky signed a letter of intent to buy Peoples eight banking centers, all of its deposits and nearly all the bank's loans. Responsibility for $9 million in Erpenbeck loans and any other loans Bank of Kentucky deems unsound will be left with Peoples Bank. Peoples will dissolve after its legal issues are resolved. The banks hope to complete the deal within three months. Peoples Bank and Chesley are negotiating with title agents, title insurers and Erpenbeck lenders for those entities to pay a share of the $16.8 million. Allison Grever, a Peoples Bank spokeswoman, said details of the deal are being worked out. The bank sale must be approved by the Federal Deposit Insurance Corporation. Firstar was Erpenbeck's largest unpaid creditor, according to records compiled by Peoples Bank. Firstar was the first bank whose payoff check was misdirected into the Erpenbeck account at Peoples on January 28, 2000, when a closing took place for a home in the Wetherington development in West Chester, Ohio. A check for $181,298 made out to Firstar was deposited at Peoples by Erpenbeck. Firstar Bank had nearly $16 million in payoff checks misdirected into other accounts. Mr. Chesley hopes to complete the `standstill' agreement with US Bank and to use it as a model for similar agreements with the other banks, including Bank One, Provident and Peoples Community Bancorp of West Chester. EXCEL INDUSTRIES: Recalls 1,500 Lawn Mowers Due to Fire, Burn Hazard -------------------------------------------------------------------- Excel Industries, Inc. is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 1,500 Hustler "FasTrak" riding lawn mowers. Excessive heat, vibrations and wear causes the fuel line to droop over time and rub against the transmission fan, causing the fuel line to be cut. This poses a fire hazard and a risk of burn injuries to consumers. The Company has received two reports of incidents where gasoline leaks were discovered. No injuries or property damage have been reported. This recall involves Hustler "FasTrak" riding mowers with 44- and 52- inch decks. The riding mowers are yellow and black with the "FasTrak" logo printed on both sides. The model and serial number of the mower can be found on an identification plate on the left side of the frame in front of the fuel tank, below the operator's platform. The model and serial numbers are: (1) Model Number: 926501, Serial Number: P01107001 to P01107003 and 01127001 to 02057338; (2) Model Number: 926519, Serial Number: 01127008 to 02057218; (3) Model Number: 926527, Serial Number: 02027112 to 02027112; (4) Model Number: 926592, Serial Number: 01117001 to 02057263; (5) Model Number: 926600, Serial Number: 02027111 to 02057243; (6) Model Number: 926774, Serial Number: 02047277 to 02057128 Authorized Hustler dealers sold these riding mowers nationwide from November 2001 through May 2002 for between $4,700 and $5,500. For more details, contact the Company by Phone: 800-395-4757 between 7:30 am and 4:30 pm CT Monday through Friday, or visit the firm's Website: http://www.excelhustler.com. FLEETWOOD ENTERPRISES: Vehicles Need More Braking Power To Tow Safely --------------------------------------------------------------------- A lawsuit filed against Fleetwood Enterprises Inc. accuses the recreational vehicle (RV) manufacturer of not informing buyers they need more braking power to tow vehicles safely, The Press Enterprise reports. The lawsuit was filed as a class action and could affect as many as 70,000 consumers nationwide. The consumer fraud suit was filed in Los Angeles County Superior Court by Donald Fairley of Long Beach, who said he bought a Class C motor home made by Riverside-based Fleetwood from a dealer in Santa Fe Springs. The Company maintains the RV can safely tow a 3,500-pound load. However, Mr. Fairley's lawsuit alleges the maximum load the Fleetwood RV can tow and brake safely is only 1,000 pounds. The lawsuit further alleges that consumers have to purchase a supplemental braking system to safely stop Class A and Class C motor homes, a fact the Company does not tell its customers. Mr. Fairley's lawsuit wants the Company to give up any profits or revenues they have made from sale of the RVs. The suit has asked for punitive damages and an injunction on its sales practices. Jonathan Selbin, Mr. Fairley's New York-based attorney, said this case does not claim Mr. Fairley or anyone else suffered an injury. Mr. Selbin, the plaintiff attorney, said many Fleetwood customers know how RVs work and buy the supplemental braking package on their own. "Fleetwood sent letters telling them to get the supplemental brakes, but did not offer to pay for them," Mr. Selbin said. "They knew at the time of purchase that people could not stop safely while towing a 3,500-pound load, and they lied to people." Many RV owners tow large, off-road vehicles, and boats on trips. Almost all these vehicles are more than 1,000 pounds. However, people who work on motor homes are split on whether the extra braking power is necessary. Carl Wuersch, service manager at Richardson's RV Center in Riverside, California, says one of the problems about installing the supplemental brakes is that "the newer vehicles have antilock brakes, and when you put (more) weight behind it, does it know what to do?" HOLLAND AMERICA: Passengers Sue After Contracting Flu Virus on Ship ------------------------------------------------------------------- Holland America faces a class action filed on behalf of several hundred passengers of the Ryndam, one of its cruise ships, after they contracted the Norwalk flu virus, on a return trip from Alaska to Vancouver, Canada.com reports. The suit, filed in British Columbia Supreme Courts, alleges that the Company showed "a callous disregard" for passengers who experienced severe flu-like symptoms. The suit further states that the Company failed to warn passengers about an outbreak of the virus aboard the ship a week earlier, preventing them from canceling their cruise and avoiding the illness. The Norwalk virus, which causes stomach problems, typically spreads on ships or trains when passengers already affected by it come on board, the BC Centre for Disease Control told Canada.com. HOMESTORE.COM INC.: CALSTeRS File Securities Fraud Suit in C.D. CA ----------------------------------------------------------------- The California State Teachers' Retirement System (CALSTeRS) commenced a class action against Homestore.com, Inc., charging it with engaging in revenue-boosting schemes with third parties, in the United States District Court for the Central District of California, the Miami Herald reports. The suit further alleges that the Company engaged in these schemes with third parties, including America Online. The suit does not name AOL as a defendant but alleges the Internet giant was part of the types of deals that caused Homestore, a once high-flying dot-com, to restate results for much of 2000 and 2001 after determining revenue for those two years had been overstated by more than $500 million, the Miami Herald reports. The suit was filed on behalf of purchasers of the Company's shares from early 2000 through Dec. 21, 2001, a period when the California Teachers' Retirement System bought 400,000 Homestore shares. The suit seeks unspecified damages. MARTHA STEWART: Formulates Plan To End Company Stock's Downward Spiral ---------------------------------------------------------------------- Stock in Martha Stewart Living Omnimedia rose a bit recently amid word that Ms. Stewart is considering a plan to end the downward spiral of the stock, the New York Daily News reports. People close to Ms. Stewart say she is talking to financial experts about taking the company private through a leveraged buyout, according to a report in Business Week magazine. Experts say it would make sense for Ms. Stewart to buy all of the company, then take it public again if and when the ImClone insider-trading scandal blows over. This strategy got a good preliminary review on Wall Street as shares in the Company rose a bit simply on the forecast of the plan, a rise of 59 cents to close at $8.51. Ms. Stewart took another hit last Thursday when a Florida retiree filed a class action, claiming her entanglement in the ImClone insider- trading scandal wrecked her own Company's stock. Conrad Hahn, 64, uses Ms. Stewart's own words to prove the point, saying she is responsible for the Company's stock market losses. He notes that the Company's prospectus calls Ms. Stewart the "personification" of the brand, and even warns that if her image were tarnished, it would hurt the Company's bottom line. By getting mixed up in the ImClone scandal, Ms. Stewart put "personal gain and self- interest" above her shareholders, says the lawsuit, the first of its kind. Mr. Hahn also argues that as an ex-stockbroker and board member of the New York Stock Exchange, Ms. Stewart should have known she was in a danger zone when she dumped her ImClone stock last December. Having developed the imaging of her company, she should have known the effect on the Company of any tarnish to the image. "The company exists and the shareholders were asked to invest for the sole purpose of marketing, branding and promoting Martha Stewart and her image," said lawyer Guy Burns. MASSEY ENERGY: Shareholders File Suit V. Officials Over Insider Trading ----------------------------------------------------------------------- A class action has been filed recently against Massey Energy by shareholders who charge the company's official with insider trading, among other things, the Associated Press Newswires reports. The lawsuit, filed in Boone County Circuit Court in West Virginia, accuses chairman, chief executive and president Donald Blankenship and three other Company officials of insider trading. The lawsuit, which did not specify damages, said that the Company's top official sold 107,750 shares of company stock just before its value plummeted. During an eight-day period in March 2001, the officials sold their shares before the Company's stock plummeted to $10 per share upon release of that quarter's financial results, the lawsuit said. Last December, more stock was sold just before Massey disclosed its losses in November and December would be between $22.3 million and $27.5 million, instead of the $3.7 million to $7.4 million previously projected. The total value of the stock sold was $5.6 million, the lawsuit said. The lawsuit also alleges that during 2001, the Company twice reported false financial results or projections, causing its stock price to be artificially inflated. "The lawsuit charges that the executives acted in their own personal interests rather than in the best interest of the company," said Darren Robbins, an attorney for the plaintiffs. The lawsuit also said that Company officials have failed to comply with state and federal environmental laws, resulting in millions of dollars being paid in fines, penalties and compensatory damage judgments. The actions in the environmental arena "are having a ruinous effect on the company and its shareholders," the lawsuit says. Last month, a Company subsidiary was ordered by the state of Kentucky to pay $3.25 million in penalties and damages for one of the nation's largest sludge spills. In October 2000, more than 300 million gallons of water and sludge broke through the bottom of an impoundment on a montaintop outside Inez, Kentucky. The material gushed into underground coal mine portals, out into two creeks and into the Big Sandy River. The US Environmental Protection Agency called the spill one of the worst environmental disasters ever in the Southeast. The US Office of Surface Mining has concluded that Martin County Coal could have prevented the spill. Investigators said the Company failed to follow recommendations to make the pond safe after a smaller leak in 1994. Last month, the state of West Virginia ordered Massey to close a Mingo County mine after 20,000 gallons of polluted mine water was discharged into a nearby creek and lake. The state suspects the release was intentional. "Not only have these spills destroyed surrounding wildlife and subjected thousands people of people to dangerous toxins, they have caused the Company to incur millions in expenses to remediate these environmental tragedies and to defend and-or settle claims as a result," the plaintiffs' lawsuit contends. Last week, nonunion Massey was hit with a $50 million verdict after a Boone County jury ruled it defrauded a coal firm and interfered with the firm's ability to conduct business. "These are issues we have been highlighting for years to citizens and activists throughout Appalachia as part of the UMWA's campaign to expose Massey Energy as a bad corporate neighbor," said Cecil Roberts, president of the union, the United Mine Workers of America. "It is highly apparent to the UMWA and many Appalachian citizens that there is a cancer infecting Massey Energy," Mr. Roberts said. MTD PRODUCTS: Recalls 5,000 Grass Bag Attachments For Injury Hazard -------------------------------------------------------------------- MTD Products, Inc. is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 5,000 grass bag attachments for its 19-inch electric walk-behind lawn mowers. The lawn mowers have a rear-mounted grass bag that does not seal properly to the rear door of the mower, allowing grass and other debris to be thrown out at the top of the bag. This could result in injury to the operator or bystanders. The Company has not received any reports of injuries. This recall is being conducted to prevent the possibility of injuries. The recalled grass bags are attachments for MTD electric walk-behind lawn mowers with model numbers 18A-407-000 (red body) and 18A-407-062 (green body). The model numbers can be found on a model plate label on the rear discharge door of the mower. "Yard Machines" is printed on top of the motor shroud. Home improvement and mass retailers nationwide, including Lowe's, sold the recalled lawn mowers from January 2002 through July 2002 for under $200. For more details, contact the Company by Phone: 888-848-6038 between 8:30 am and 5 pm ET Monday through Friday, or visit the firm's Website: http://www.yardmachines.com. OXFORD HEALTH: NY Federal Court Approves Settlement of Derivative Suits ----------------------------------------------------------------------- Judge Charles Brieant of the United States District Court for the Southern District of New York approved the settlement proposed by Oxford Health Plans, Inc. to settle the shareholder derivative suits pending against it and certain of its officers and directors. More than fifty purported securities class actions were filed against the Company, following the October 27, 1997 decline in the price per share of the Company's common stock. These suits were filed in the United States District Courts for the Southern and Eastern Districts of New York, the District of Connecticut and the District of Arkansas. In addition, purported shareholder derivative actions were filed against the Company, its directors and certain of its officers in the United States District Courts for the Southern District of New York and the District of Connecticut and the Connecticut Superior Court. The purported securities suits and the purported federal derivative actions were later consolidated in the United States District Court for the Southern District of New York. On February 14, 2002, Judge Brieant approved a settlement of the purported derivative actions. On April 25, 2002, the Connecticut Superior Court derivative actions were withdrawn with prejudice as part of the settlement. The State Board of Administration of Florida has filed an individual action against the Company and certain of its former officers and current and former directors, which is also now pending in the United States District Court for the Southern District of New York, asserting claims arising from the October 27 decline in the price per share of the Company's common stock. WASTE MANAGEMENT: TX Court Approves $457M Securities Suit Settlement -------------------------------------------------------------------- The United States District Court for the Southern District of Texas preliminarily approved the US$457 million settlement proposed by Waste Management, Inc. to settle a consolidated securities class action pending against it and certain of its former and current officers and directors. More than 30 similar lawsuits were filed after the Company announced on July 6 and July 29, 1999, that it had lowered its expected earnings per share for the three months ended June 30, 1999. On August 3, 1999, the Company provided additional information regarding its expected earnings for that period, including that its reported operating income for the three months ended March 31, 1999 might have included certain unusual pre-tax income items. These lawsuits were later consolidated into a single action. On May 8, 2000, the court entered an order appointing the Connecticut Retirement Plan and Trust Funds as lead plaintiff and appointing the law firm of Goodkind Labaton Rudoff & Suchrow LLP as lead plaintiff's counsel. The lead plaintiff filed its amended consolidated suit, filed on behalf of all purchasers and acquirers of Company securities (including common stock, debentures and call options), and all sellers of put options, from June 11, 1998 through November 9, 1999. The suit also pleads additional claims on behalf of two putative subclasses: (1) the "Merger Subclass," consisting of all WM Holdings stockholders who received Company common stock pursuant to the WM Holdings Merger; and (2) the "Eastern Merger Subclass," consisting of all Eastern Environmental Services, Inc. stockholders who received Company common stock pursuant to the Company's acquisition of Eastern on December 31, 1998. Among other things, the plaintiff alleges that the Company and certain of its current and former officers and directors: (i) made misrepresentations in the registration statement and prospectus filed with the SEC in connection with the WM Holdings Merger; (ii) made knowingly false earnings projections for the three months ended June 30, 1999; (iii) failed to adequately disclose facts relating to its earnings projections that the plaintiff claims would have been material to purchasers of the Company's common stock; and (iv) made separate and distinct misrepresentations about the Company's operations and finances on and after July 29, 1999, culminating in the Company's pre-tax charge of $1.76 billion in the third quarter of 1999. The plaintiff also alleges that certain of the Company's current and former officers and directors sold common stock between May 10, 1999 and June 9, 1999 at prices known to have been inflated by material misstatements and omissions. The defendants filed a motion to dismiss on October 3, 2000. On August 16, 2001, the court granted the motion in part and denied it in part, allowing the plaintiff to replead its claims. On November 7, 2001, the Company announced that it had reached a settlement agreement with the plaintiff in this case, resolving all claims against it as well as claims against its current and former officers and directors. The agreement provides for a payment of $457 million to members of the class and for the Company to consent to the certification of a class for the settlement of purchasers or acquirers of the Company's securities from June 11, 1998 through November 9, 1999. Additionally, as part of the settlement agreement, the Company presented, and its stockholders approved at the 2002 annual meeting of stockholders, a binding proposal to amend the Company's certificate of incorporation so that all directors are elected annually. A hearing was held April 29, 2002 at which the settlement was approved. The settlement approval is still subject to any appeals that may be filed within thirty days of the approval becoming final. There is currently a motion to vacate pending before the court, and the appeal period will begin to run once that motion has been decided. WORLDCOM INC.: Oklahoma Citizens May Sue Over Pension System Losses ------------------------------------------------------------------- The state of Oklahoma may bring a class-action lawsuit over pension system and agency losses of more than $66 million in WorldCom-related investments, said Attorney General Drew Edmondson recently, according to a report by the Associated Press Newswires. The Oklahoma Public Employees Retirement System lost $25.3 million, and the Teachers' Retirement system lost more than $16 million, Mr. Edmonson's office said. "Lawsuits have been filed in state courts in West Virginia and Illinois against WorldCom," said the Attorney General. "We are also talking with other states about other lawsuits, including class action lawsuits, that may be filed in the future." Thomas C. Beavers, executive secretary for the Teachers' Retirement System, said the nearly $17 million the system lost represents less than three-tenths of one percent of the total fund. "Fortunately, it does not really impact our retirees at all," he said. However, Mr. Edmonson reported that the state's losses in WorldCom are more than six times the net losses in the Enron debacle, the Attorney General said. "I can say with virtual certainty that we will be involved in a class action against Enron. And I am almost certain that we will be doing the same in WorldCom," he said. While many states, like Oklahoma, have reported losses that will not seriously impact their retirees, the state governments still believe it to be their responsibility to carry the message of wrongdoing recognized by outraged investors, for which the corporations must pay. Other agencies losing money in WorldCom include the Oklahoma Police Pension and Retirement System, $6 million and the Oklahoma Firefighters Pension and Retirement System, $10 million. XEROX CORPORATION: EEOC Considers Filing Racial Discrimination Suit ------------------------------------------------------------------- A race discrimination class action is set to be filed against Xerox Corporation by four of its employees, after the US Equal Employment Opportunity Commission (EEOC) found that African-American employees in Xerox's Cincinnati facilities were subjected to a racially hostile environment, the Wall Street Journal reports. The EEOC found that African-American employees in the Cincinnati facilities endured racial slurs, displays of black dolls with nooses around their necks, swastikas and other neo-Nazi paraphernalia, and more frequent disciplining than white co-workers, AFX reports. The federal agency upheld complaints by four individual Xerox workers covering the period from the late 1990s to the present, and lawyers say they expect to file a class action suit against Xerox in the US District Court in Cincinnati within the next few weeks, the report said. The EEOC made its findings in late June, but they had not become public because the agency doesn't release information about its handling of individual complaints. A Xerox spokesman, Bill McKee, told the Wall Street Journal an internal investigation did not turn up any evidence supporting the allegations. Although Xerox disagrees with the EEOC's conclusion, he added, it would welcome the opportunity to work with the agency to resolve the issue. New Securities Fraud Cases ALCATEL SA: Marc Henzel Commences Securities Fraud Suit in S.D. NY ------------------------------------------------------------------ The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court, Southern District of New York on behalf of: (1) all persons other than defendants who purchased the American Depositary Shares (ADSs) of Alcatel relating to its Class O common shares (NASDAQ: ALAO) in or traceable to the initial public offering of the ADSs conducted by Alcatel on or about October 20, 2000; and (2) all persons other than defendants who purchased Alcatel's Class A common shares (NYSE: ALA) and Class O common shares in the form of ADSs between October 20, 2000 and May 29, 2001. The action is pending against the Company, Serge Tchuruk (chairman and CEO) and Jean-Pierre Halbron (president and CFO). The suit alleges that defendants violated Section 10 of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder and Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 by issuing a false and misleading prospectus on October 20, 2000, and by making material misrepresentations to the market between October 20, 2000 and May 29, 2001. The complaint alleges that on October 20, 2000, the Company issued a prospectus for the sale of Class O stock in the form of American Depositary Shares (ADSs) that purportedly would track the performance of Alcatel's Optronics Division. The prospectus was materially false and misleading, as alleged in the complaint, because it failed to disclose: (i) that demand for the Company's optical components was weakening as Alcatel and the Optronics Division's other customers were experiencing severe and persistent business slowdowns; (ii) that the purportedly increasing demand for the Optronics Division's optical components was the result of a massive inventory build at the Optical Division's primary customer, Alcatel, and at the Company's external customers; (iii) that the Company was amassing hundreds of millions of dollars of obsolete inventory which would have to be written-off; and (iv) that in light of the decreasing demand for optical components, the Company was not in a position to successfully promote sales of all product lines to outside customers. Subsequently, on May 29, 2001, the Company issued an unexpected and severe profit warning and separately announced that it expected to report a second-quarter loss of approximately $2.6 billion. Following this announcement, the price of Alcatel Class O common shares, in the form of ADSs, declined by 11% from a closing price of $21.26 on May 29, 2001 to a closing price of $18.92 on May 30, 2001. Similarly, Alcatel Class A common shares, in the form of ADSs declined by 8.8% from $27.14 to 24.74. For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com AMDOCS LTD.: 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, Eastern District of Missouri, on behalf of purchasers of the securities of Amdocs Limited (NYSE: DOX) between July 24, 2001 and June 20, 2002, inclusive. The suit is pending against the Company and: (1) Bruce K. Anderson, (2) Robert A. Minucci, (3) Avinoam Naor, and (4) Dov Baharav 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 24, 2001 and June 20, 2002, thereby artificially inflating the price of Company securities. As alleged in the complaint, these statements were materially false and misleading because they failed to disclose, among other things, that the Company's business and operations were being negatively affected by a host of adverse factors, including, but not limited to, the following: (i) that the Company was experiencing declining sales as its business began to be affected by adverse market forces. Throughout the class period, defendants repeatedly emphasized that the Company was not being affected by the slowdown in the communications industry when, in fact, that was not true; (ii) throughout the class period, the Company artificially inflated its financial statements by maintaining inadequate reserves for doubtful accounts and failing to disclose that the Company's revenue growth improperly included revenues from a recent acquisition; and (iii) defendants lacked a reasonable basis upon which to publish and/or affirm the revenue guidance they provided to analysts and investors. On June 4, 2002, the last day of the class period, defendants shocked the market when they finally revealed that the revenue for the third quarter and yearend 2002 would be significantly lower than investors had been led to believe. The Company announced that pro forma earnings per share for the third quarter of 2002 would likely be only $0.20, a far cry from the previous guidance of $0.33. The Company also announced a massive lay-off and the resignation of the Company's Chief Executive Officer. As a result of the news, the stock plunged over 40% in one day on unusually large trading volumes. For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com AMERICAN EXPRESS: Marc Henzel Commences Securities Suit in S.D. NY ------------------------------------------------------------------ The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all persons who purchased or acquired the common stock of American Express Company (NYSE: AXP) between July 18, 1999 and July 17, 2001, 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 seeks to recover damages. Specifically, the complaint alleges that the Company and certain of its officers and directors made misstatements and omissions of material fact, including failing to disclose that the Company was investing in a risky portfolio of high-yield or "junk" bonds with ratings as low as "single-B" that carried the potential for substantial losses if default rates in the junk bond market increased, failing to disclose the true extent of the Company's total exposure as a result of the foregoing after the Company wrote down $182 million of its junk bond portfolio in April 2001, and failing to disclose that American Express was taking a substantial and unnecessary risk by investing in high-yield securities involving complex risk factors that American Express management and personnel did not fully comprehend. The complaint further alleges that after the full truth regarding the Company's unnecessarily risky and imprudent investment strategy began to become known to the market on July 18, 2001 when the Company announced a surprise charge against earnings of $826 million, its third consecutive write-down of high-yield or "junk" bonds, Company stock traded as low as $37.17, down from a class period high of over $62.00. For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com CAPITAL ONE: Chitwood & Harley Commences Securities Fraud Suit in VA -------------------------------------------------------------------- Chitwood & Harley initiated a securities class action in the United States District Court for the Eastern District of Virginia, on behalf of purchasers of the securities of Capital One Financial Corporation (NYSE: COF) between January 15, 2002 and July 16, 2002, inclusive. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and SEC Rule 10b-5, by issuing a series of materially false and misleading statements relating to the nature of the Company's business operations, which caused the Company's stock price to become artificially inflated. During the class period, the Company announced that each quarter resulted in record revenues and earnings and that the Company was well capitalized and had attained an excellent credit performance. However, the complaint alleges that these reports were materially false and misleading because the Company omitted that, in breach of regulatory guidelines released on January 31, 2001, it had been under-reserving for subprime loans and was undergoing severe infrastructure inadequacies, with respect to its credit-risk assessment and the Company's information system. When it was revealed that federal regulators had instructed the Company to increase its loan loss reserves and improve the technology that the Company uses to provide loans and credit cards to sub-prime consumers, the price of the Company's common stock plunged, declining 39% from a close of $50.60 per share on July 16, 2002, to close at $30.48 per share on July 17, 2002. For more details, contact Nikole Davenport by Mail: 2900 Promenade II 1230 Peachtree Street, NE, Atlanta, Georgia 30309 by Phone: 888-873-3999 by E-mail: nmd@classlaw.com or visit the firm's Website: http://www.classlaw.com. CHARTER COMMUNICATIONS: Pomerantz Haudek Lodges Securities Suit in CA --------------------------------------------------------------------- Pomerantz Haudek Block Grossman & Gross LLP initiated a securities class action in the United States District Court for the Central District of California against Charter Communications, Inc. (Nasdaq:CHTR) and two of the Company's senior officers on behalf of all persons or entities who purchased or otherwise acquired the Company's securities during the period between November 9, 1999 and July 17, 2002. The lawsuit charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by engaging in misleading accounting practices and issuing materially false and misleading financial statements regarding the nature of the Company's revenue and earnings, all of which served to artificially inflate the Company's stock price. The suit alleges that throughout the class period, the Company portrayed itself as a company growing revenues. To continue to portray itself as a growing company, defendants used misleading accounting practices to artificially inflate the Company's revenue and the number of subscribers for the Company's basic cable services, as well as failed to appropriately account for installation costs. On July 18, 2002, when Merrill Lynch analyst Jessica Reif Cohen expressed concerns about potentially misleading accounting practices by the Company, Company stock price fell dramatically. On that day, Company stock dropped more than thirteen percent (13%), falling from the previous day's close of $4.06 per share to $3.50 per share in one day. A subsequent article in the August 12, 2002 issue of Forbes discussed a Credit Suisse First Boston report described how the Company handles the impact of "churn" (cable's costs for labor and advertising) on the Company's balance sheet by improperly capitalizing a significant amount of its installation labor costs over an extended time period. For more details, contact Andrew G. Tolan by Phone: 888-476-6529, 888-4-POMLAW or by E-mail: agtolan@pomlaw.com CHARTER COMMUNICATIONS: Marc Henzel Launches Securities Suit in C.D. CA ----------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Central District of California on behalf of a class consisting of all persons who purchased securities of Charter Communications, Inc. (Nasdaq: CHTR) between November 9, 1999 and July 17, 2002, inclusive. The suit charges the Company's and certain of its officers and directors with violations of federal securities laws. Among other things, plaintiff claims that defendants' material omissions and the dissemination of materially false and misleading statements regarding the nature of the Company's revenue and earnings caused its stock price to become artificially inflated, inflicting damages on investors. The suit alleges that defendants overstated the Company's revenue, failed to appropriately account for installation costs and artificially inflated the number of subscribers for the Company's basic cable services. On July 18, 2002, when a Merrill Lynch analyst expressed concerns about potentially misleading accounting practices, Company stock fell more than 13%. Additionally, a subsequent article in Forbes discusses a Credit Suisse First Boston report that further amplifies these concerns and describes how Charter handles the impact of "churn" -- labor and advertising costs -- on the Company's balance sheet, by improperly capitalizing approximately 30% of its installation labor costs over an extended time period. For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com CHARTER COMMUNICATIONS: Cauley Geller Commences Securities Suit in CA --------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the Central District of California on behalf of purchasers of Charter Communications, Inc. (Nasdaq: CHTR) publicly traded securities during the period between November 9, 1999 and July 17, 2002, inclusive. The complaint charges the Company and certain of its officers and directors with violations of federal securities laws. Specifically, the complaint alleges that defendants' material omissions and the dissemination of materially false and misleading statements regarding the nature of the Company's revenue and earnings caused Company stock price to become artificially inflated, inflicting damages on investors. The suit alleges that defendants overstated the Company's revenue, failed to appropriately account for installation costs and artificially inflated the number of subscribers for the Company's basic cable services. On July 18, 2002, when a Merrill Lynch analyst expressed concerns about potentially misleading accounting practices, the Company's stock fell more than 13%. Additionally, a subsequent article in Forbes discusses a Credit Suisse First Boston report that further amplifies these concerns and describes how the Company handles the impact of "churn" -- labor and advertising costs -- on the Company's balance sheet, by improperly capitalizing approximately 30% of its installation labor costs over an extended time period. For more details, contact Jackie Addison, Sue Null or Ellie Baker by Phone: 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 CHARTER COMMUNICATIONS: Schiffrin & Barroway Lodges Securities Suit MO ---------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Eastern District of Missouri on behalf of all purchasers of the common stock of Charter Communications, Inc. (Nasdaq: CHTR) between November 9, 1999 and July 17, 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 defendants' material omissions and the dissemination of materially false and misleading statements regarding the nature of the Company's revenue and earnings caused the Company's stock price to become artificially inflated, inflicting damages on investors. The suit alleges that defendants overstated the Company's revenue, failed to appropriately account for installation costs and artificially inflated the number of subscribers for the Company's basic cable services. On July 18, 2002, when a Merrill Lynch, Co. analyst expressed concerns about potentially misleading accounting practices, the Company's stock fell more than 13%. Additionally, a subsequent article in Forbes discusses a Credit Suisse First Boston report that further amplifies these concerns and describes how the Company handles the impact of "churn" -- labor and advertising costs -- on the Company's balance sheet, by improperly capitalizing approximately 30% of its installation labor costs over an extended time period. 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 CITIGROUP INC.: Cauley Geller Commences Securities Suit in S.D. NY ------------------------------------------------------------------ Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of purchasers of Citigroup Inc. (NYSE: C) common stock during the period 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 its 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, Company stock plummeted $5.04 or 15.73% to close at $27.00, less than half its class period high. 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.: Marc Henzel Commences Securities Fraud Suit in S.D. NY ---------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the U.S. District Court for the Southern District of New York on behalf of all persons who purchased, converted, exchanged or otherwise acquired the common stock of Citigroup Inc. (NYSE: C) between July 24, 1999 and July 23, 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 and seeks to recover damages. 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 the Company's 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 Citigroup and J.P. Morgan Chase testified before the U.S. 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 information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com DYNEGY INC.: Marc Henzel Commences Securities Fraud Suit in S.D. TX ------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action on behalf of an institutional investor in the United States District Court for the Southern District of Texas on behalf of purchasers of Dynegy, Inc. (NYSE: DYN) publicly traded securities during the period between April 17, 2001 and April 24, 2002. 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 the Company and its top officers inflated the price of the Company's stock in order to pursue an accelerated securities sale program. Defendants knew that concealing the Company's true vehicle, Project Alpha, for creating cash flow from operations and the true impact it would have on the Company provided the only way that they could foster the perception in the business community that Dynegy was not "Enron Corp.," i.e., the only way Dynegy could post the revenue and earnings per share growth claimed by defendants. Prior to the class period, the individual defendants realized that many of their complicated deals to generate reported net income did not generate cash flows. The defendants knew that investors would eventually discover this discrepancy and the Company's stock price would collapse. To prevent this, Dynegy classified what was essentially a loan from CitiGroup Inc. as an operating activity rather than as a financing activity as required by Generally Accepted Accounting Principles. The defendants' wrongful course of business: (1) artificially inflated the price of Dynegy's stock during the class period; (2) deceived the investing public, including plaintiff and other class members, into acquiring Dynegy's securities at artificially inflated prices; (3) allowed the individual defendants to extract millions of dollars in bonuses for creating the appearance of the Company's phenomenal cash flow from operations growth; and (4) allowed the Company to sell nearly half a billion dollars of its own securities to the unsuspecting public. For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com INSIGHT ENTERPRISES: Brodsky & Smith Commences Securities Suit in AZ -------------------------------------------------------------------- The Law Offices of Brodsky & Smith, LLC initiated a securities class action on behalf of shareholders who acquired Insight Enterprises, Inc. (Nasdaq:NSIT) securities between April 26, 2002 through July 17, 2002, inclusive, in the United States District Court for the District of Arizona, against the Company, and members of the Board of Directors. The action charges that defendants violated the federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Jason L. Brodsky or Evan J. Smith by Mail: 11 Bala Avenue, Bala Cynwyd, PA 19004 by Phone: 877-LEGAL-90 or by E-mail: esmith@Brodsky-Smith.com MARTHA STEWART: Wolf Popper Commences Securities Fraud Suit in S.D. NY ---------------------------------------------------------------------- Wolf Popper LLP initiated a securities class action against Martha Stewart Living Omnimedia, Inc. (NYSE:MSO) and Martha Stewart on behalf of purchasers of the company's common stock from June 7, 2002 through August 5, 2002, inclusive, in the US District Court for the Southern District of New York. The plaintiff alleges in the suit that during the class period (June 7, 2002 through August 5, 2002) Martha Stewart, both directly and through representatives, speaking for herself and in her capacity as the CEO of the Company, made materially false and misleading statements about the circumstances surrounding her sales of approximately 4000 shares of ImClone Systems, Inc. common stock on December 27, 2001. Those shares were sold immediately prior to ImClone's announcement on December 28, 2001 of an adverse FDA ruling, which threw ImClone's common stock into a free-fall. Specifically, Ms. Stewart misrepresented that notwithstanding her close personal relationship with Sam Waksal, the Chairman and CEO of ImClone, her sales of ImClone common share on December 27, 2001 were not based on material non-public information, but rather on a pre-existing agreement with her broker to sell her ImClone shares if they fell below $60 per share. Ms. Stewart's statements were made in an effort to escape legal scrutiny and to assure Company investors that neither Ms. Stewart nor the Company would be embroiled in the burgeoning ImClone insider trading scandal. Once Ms. Stewart chose to speak on the subject of her sales of ImClone shares, she had a legal duty to the Company's public shareholders to speak the whole truth. Ms. Stewart failed to speak the truth. Rather, it was revealed on August 6, 2002, at the end of the class period, that she sold her ImClone common shares only after being informed by her stockbroker on December 27, 2001 of material non-public information that Sam Waksal and members of his family had sold or were seeking to sell large holdings of ImClone common stock, which was causing a significant decline in the trading price of ImClone common shares on December 27, 2001. It was further revealed at the end of the class period that Ms. Stewart and her broker had concocted the story that the sales were based on a pre-existing agreement in an effort to avoid legal scrutiny of those sales. Contrary to Ms. Stewart's assurances to Company investors, Ms. Stewart's conduct, both before and during the class period, has exposed her to insider trading and obstruction of justice charges, with ruinous consequences to her company. For more details, contact Robert C. Finkel by Mail: 845 Third Avenue, New York, NY 10022-6689 by Phone: 212-451-9620 or 877-370-7703 by Fax: 212-486-2093 or 877-370-7704 by E-mail: irrep@wolfpopper.com or visit the firm's Website: http://www.wolfpopper.com MERCK & CO.: Marc Henzel Commences Securities Fraud Suit in New Jersey ---------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the US District Court for the District of New Jersey on behalf of shareholders who purchased stock in Merck & Co., Inc. (NYSE: MRK) and several top officers today, claiming the company improperly inflated revenues by billions of dollars. The complaint seeks damages for violations of federal securities laws on behalf of all investors who bought the Company's common stock from July 1, 1999 through June 21, 2002. According to the complaint, Merck overstated revenues by billions of dollars from its subsidiary Merck-Medco Managed Care, LLC by including consumer co-payments for prescription drugs in its revenues. During the class period, Merk-Medco's revenues made up over 50% of Merck's total revenues. The lawsuit claims that Merck violated Generally Accepted Accounting Practices because neither company bills for the co-payments, gets billed for them, or otherwise comes into contact with co-payment money. Patients make co-payments directly to pharmacies when they purchase medicine. On June 21, 2002, The Wall Street Journal reported on Merck's accounting practices and estimated that Merck and Merck-Medco may have pumped up their 2001 revenues by as much as $4.6 billion. Similar overstatements may have occurred for 1999 and 2000, the complaint says. That same day, according to the complaint, a Merck spokesman admitted that the company had been recording prescription drug co-payments as revenue since it acquired Merk-Medco in 1993. In the wake of these revelations, Merck's stock immediately dropped 4.25% from its closing price of $52.20 on June 20, 2002 to a closing price of $49.98 on June 21, 2002, its lowest closing price since late 1997. For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com MIRANT CORPORATION: Marc Henzel Commences Securities Suit in N.D. GA -------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Northern District of Georgia, Atlanta Division, on behalf of purchasers of the securities of Mirant Corporation, (NYSE: MIR) between January 19, 2001 and May 6, 2002, inclusive. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and SEC Rule 10b-5, by issuing a series of materially false and misleading statements between January 19, 2001 and May 6, 2002. The complaint charges that the Company reaped illegal profits in California by artificially manipulating energy prices through a variety of improper tactics that resulted in investigations by both the Attorney General of the State of California, and the Federal Energy Regulatory Commission, as well as a number of private lawsuits. During the class period, while the Company announced quarter-after- quarter of outstanding growth, and assured investors that problems in the California market had been properly accounted for, the Company, in fact, failed to: (1) provide for the return of illegally obtained revenue, through a charge to earnings; (2) provide for professional fees associated with the investigations arising from the fraud through a charge to earnings; and (3) disclose the fact that the illegally obtained revenue was subject to forfeiture and that investigations surrounding the illegally obtained revenue would result in the expenditure of material amounts for legal and professional fees. As a result, defendants' class period financial statements were materially overstated, and failed to comply with Generally Accepted Accounting Principles (GAAP). For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com PEREGRINE SYSTEMS: Marc Henzel Commences Securities Suit in S.D. CA ------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Southern District of California against Peregrine Systems, Inc. (Nasdaq: PRGN) and certain of its principal officers and directors, Stephen P. Gardner, and Matthew C. Gless, on behalf of all persons or entities who purchased or acquired PRGN securities, between July 24, 2001 and May 3, 2002, inclusive including any person or entities who acquired Company securities as a result of Peregrine's acquisition of Remedy Corp. The suit alleges that during the class period, defendants violated Section 10(b) and 20(a) of the Securities Exchange Act of 1934, by making materially false and misleading statements regarding the Company and its audit activities, including its revenue recognition practices. On May 6, 2002, the Company announced that its board of directors had authorized its audit committee to conduct an internal investigation into potential accounting inaccuracies, which KPMG, the Company's newly hired independent auditors, had brought to the committee's attention. The transactions involved revenue recognition irregularities relating to the Company's indirect sales channels, totaling as much as $100 million, which may have been improperly recorded in fiscal 2001 and 2002. The Company disclosed that these channel transactions and other accounting matters to be investigated may impact financial results for periods in fiscal 2002 and prior, and that the scope and magnitude of the matters had not been determined. The Company also disclosed that it has informed the SEC of the Company's internal investigation. At the same time, the board announced that Peregrine's Chairman of the Board and CEO Stephen Gardner, and its Chief Financial Officer Matthew Gless, had both resigned, and were being replaced. For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com PERKINELMER INC.: Neiman Garland Commences Securities Suit in MA Court ---------------------------------------------------------------------- Jeffrey Neiman, Joseph Garland and Mel Urbach initiated a securities class action on behalf of purchasers of the securities of PerkinElmer, Inc. (NYSE:PKI) between July 15, 2001 and April 11, 2002, inclusive, in the United States District Court for the District of Massachusetts. The complaint charges that the defendants violated Section 10(b) of the Securities Exchange Act of 1934 by issuing a series of materially false and misleading statements to the market during the class period, a period during which the individual defendants and other Company insiders sold 595,000 shares of the Company common stock, reaping gross proceeds in excess of $18.4 million. According to the suit, the Company issued press releases during the class period that represented that: (1) the Company's revenues and earnings would continue to increase; (2) the Company's transformation into a provider of health-related products and services was proceeding successfully; and (3) the Company would meet its financial performance targets for 2002. The suit alleges, however, that these and other representations were materially false and misleading because they failed to disclose that: (i) the Company was experiencing a decline in the demand for its products, especially at its Optoeletronics division; (ii) the Company was carrying tens of millions of dollars of obsolete inventory on its books; and (iii) the Company's expenses were soaring due to numerous acquisitions and divestitures it had undertaken. On March 1, 2002, the Company issued a press release revealing that 2002 first quarter revenues and earnings would be materially less than what the Company had represented only three weeks earlier. In reaction to the announcement, the price of the Company's common stock plummeted by 31%. The full truth regarding the Company's business was not fully disclosed until April 11, 2002, when the Company issued a press release revealing that its reported earnings would break even, instead of meeting the previously projected target of $.16-$.17 earnings per share that the Company reported on March 1, 2002. In reaction to this announcement, Company stock plummeted by another 28%, falling from $16.70 per share on April 10, 2002 to $12.04. For more details, contact Jeffrey Neiman by Phone: 866-539-3788 or 718- 677-1430 by Fax: 718-258-2937 or by E-mail: JeffreyNeiman@AOL.COM PEROT SYSTEMS: Marc Henzel Commences Securities Fraud Suit in N.D. TX --------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Northern District of Texas, on behalf of purchasers of the securities of Perot Systems Corporation (NYSE: PER) between February 2, 1999 and June 7, 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 failed to disclose critical facts concerning some of the Company's hazardous business practices. Pursuant to attempting to generate new consulting business and additional revenues, the Company had made use of proprietary information regarding the architecture of California's power grid and weaknesses and loopholes that could be used to cause artificial congestion on such grid and enable power traders to reap supracompetive profits to power trader Reliant. The complaint further alleges that the Company faces considerable potential legal liability regarding its improper disclosures of proprietary information and the possibility that power traders utilized the information to abuse such flaws for their own profit. It is also alleged that the Company did not have adequate management controls in place to avoid its personnel from using private information acquired in the course of its consulting work as a selling point in attempting to attain beneficial consulting business. Company stock fell 19% on June 5, 2002 and dropped an additional 11.3% to close at $12.90 on June 6, 2002, down from its class period high of $85.75. For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com RELIANT RESOURCES: Marc Henzel Commences Securities Suit in S.D. TX ------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the US District Court for the Southern District of Texas, Houston Division against Reliant Resources, Inc. (NYSE: RRI) alleging they misled shareholders about its business and financial condition. The suit seeks damages for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (and/or the Securities Act of 1933) on behalf of all investors who bought the Company's securities between May 14, 1999 and May 10, 2002. The complaint alleges that the Texas-based Reliant Resources, Inc. issued statements regarding Reliant Resources' 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: (1) the Company's stated and represented revenues in 1999 and 2000 were materially overstated because 10% of such revenues represented purchases and sales with the same counter-party at the same price, or so-called "round trip trades;" and (2) the Company improperly accounted for certain transactions in its conventional accrual accounts as cash flow hedges. On May 10, 2002, the last day of the class period, Reliant Resources announced that it was canceling a $500 million private placement debt offering that had been priced on May 9, 2002, due in part, to having engaged in "round trip" trades. Following this announcement, Company common stock fell from a high of $15.10 on May 9, 2002 to a low of $11.10 on May 10, 2002, or a single- day decline of more than 25% on high trading volume and a decline of more than 55% from the class period high. For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com SEEBEYOND TECHNOLOGY: Rabin Peckel Commences Securities Suit in C.D. CA ----------------------------------------------------------------------- Rabin & Peckel LLP initiated a securities class action in the United States District Court for the Central District of California on behalf of all persons or entities who purchased securities of SeeBeyond Technology Corporation (Nasdaq:SBYN) between December 10, 2001 and April 22, 2002, both dates inclusive. The suit names as defendants the Company and: (1) James T. Demetriades, (2) Barry J. Plaga, (3) Paul J. Hoffman, (4) Raymond J. Lane, and (5)Kathleen M. Mitchell 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 during the class period, defendants made false statements about the Company's results and business, and concealed material adverse information about customers pushing out orders. As a result, Company stock traded at artificially inflated levels, permitting defendants to complete a secondary public offering of 8.5 million shares for proceeds of $82 million, including 2 million shares sold by the Company's CEO Mr. Demetriades. Immediately before the offering, the Company announced its fourth quarter 2001 results, which met analyst expectations. Defendants represented that the Company had met the numbers without pulling in sales from the first quarter 2002 such that first quarter 2002 results would be favorable as well. The Company indicated it had good visibility into first quarter 2002 results and forecast revenues of more than $44 million for that quarter. On April 1, 2002, the Company pre-announced its first quarter 2002 results in a press release and conference call indicating it had revenues of $42.0 to $42.5 million in the first quarter 2002. The stock declined somewhat on what was termed a "slight miss" from earnings estimates. Within hours of this release, the Company's auditors called the Company objecting to its revenue recognition on at least $2.2 million in transactions. The Company concealed this problem over the following weeks. Then, on April 22, 2002, after the market closed, the Company admitted the first quarter 2002 revenues were actually only $40.3 million. On this news, the Company's stock dropped by 50% to $3.15 per share. For more details, contact Eric J. Belfi or Sharon Lee 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 ********* 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. 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