/raid1/www/Hosts/bankrupt/CAR_Public/020821.mbx
C L A S S A C T I O N R E P O R T E R
Wednesday, August 21, 2002, Vol. 4, No. 165
Headlines
ANSWERTHINK INC.: NY Court Sets Fairness Hearing For September 2002
APARTHEID LITIGATION: New Suit Names Computer Companies As Defendants
AVICI SYSTEMS: Asks NY Court To Dismiss Consolidated Securities Suits
BOEING COMPANY: Faces Gender Bias, Harassment Cases in Various Courts
BOEING COMPANY: WA Court Approves $97.5M Securities Suit Settlement
CITIGROUP INC.: Meeting Eliot Spitzer Following Grubman's Resignation
DALEEN TECHNOLOGIES: Asks NY Court To Dismiss Securities Fraud Suit
FLUKE CORPORATION: Recalls 40,000 Multimeters Due To Burn, Shock Hazard
GENESIS ENERGY: Plaintiffs Refile Original Suit in DE Chancery Court
HOMESTORE.COM: CALSTeRS File Consolidated Securities Suit in C.D. CA
HOUSEHOLD INTERNATIONAL: Denies Allegations in Predatory Lending Suits
KANSAS CITY: MO Court Dismisses With Prejudice Race Discrimination Suit
METABOLIFE INTERNATIONAL: Faces Suit Over Metabolife 356 Supplement
OCCAM NETWORKS: Asks CA Court To Dismiss Amended Securities Fraud Suit
OCCAM NETWORKS: Faces Consolidated Securities Fraud Suit in S.D. NY
ON SEMICONDUCTOR: Asks NY Court To Dismiss Consolidated Securities Suit
PERKINELMER INC.: Mounting Vigorous Defense V. Securities Suits in MA
PUGET SOUND: Named in Two Cross-Complaints in Energy Suits in CA Court
SYKES ENTERPRISES: Building Vigorous Defense V. Securities Suit in FL
TEXTRON INC.: Plaintiffs Seek Securities Suits' Consolidation in RI
TEXTRON INC.: Sued For ERISA Violations in Suit in Rhode Island Court
*Black Farmers Lose Hope Despite Landmark Class-Action Settlement
New Securities Fraud Cases
ANDRX CORPORATION: Howard Smith Commences Securities Suit in S.D. FL
AON CORPORATION: Leo Desmond Commences Securities Fraud Suit in N.D. IL
AON CORPORATION: Schoengold & Sporn Commences Securities Suit in IL
BEVERLY ENTERPRISES: Cauley Geller Commences Securities Suit in W.D. AK
CHARTER COMMUNICATIONS: Carey & Danis Commences Securities Suit in IL
EL PASO: Cohen Milstein Commences Securities Fraud Suit in S.D. TX
INSIGHT ENTERPRISES: Wechsler Harwood Launches Securities Suit in AZ
MERRILL LYNCH: Kaplan Fox Commences Securities Fraud Suit in S.D. NY
PERKINELMER INC.: Schoengold & Sporn Launches Securities Suit in MA
RIVERSTONE NETWORKS: Schatz & Nobel Commences Securities Suit in CA
VIVENDI UNIVERSAL: Milberg Weiss Commences Securities Suit in C.D. CA
VIVENDI UNIVERSAL: Wolf Haldenstein Commences Securities Suit in NY
WALT DISNEY: Kirby McInerney Commences Securities Fraud Suit in C.D. CA
XCEL ENERGY: Stull Stull Commences Securities Fraud Suit in MN Court
*********
ANSWERTHINK INC.: NY Court Sets Fairness Hearing For September 2002
-------------------------------------------------------------------
The United States District Court for the Southern District of New York
set for September 13,2002 the fairness hearing for the settlement
proposed by Answerthink, Inc. for the securities class action pending
against it and three of its former officers.
The suit was filed on behalf of all individuals who purchased the
Company's common stock from November 5, 1997 through September 21,
1998, and alleges violations of federal securities laws.
On April 18, 2002, the parties reached an agreement in principle to
settle this action for an amount that is within the limits of
applicable insurance coverage. On June 14, 2002, the court entered an
order granting preliminary approval to the settlement and certifying
provisionally, for purposes of settlement only, the lawsuit as a class
action.
The hearing will determine whether the settlement is fair, reasonable
and adequate, and whether it should receive final approval from the
court. In a disclosure to the Securities and Exchange Commission, the
Company expressed confidence that the final disposition of the matter
will not have a material adverse effect on its financial position or
results of operations.
APARTHEID LITIGATION: New Suit Names Computer Companies As Defendants
---------------------------------------------------------------------
Computer companies Unisys Corporation and Fujitsu were named as
defendants in a class action alleging the two companies supported South
Africa's former apartheid regime by selling computer equipment to the
white-dominated government, the Houston Chronicle reports. The suit
seeks class action status and unspecified damages, and asks for the
appointment of an independent historic commission, creation of a trust
and repayment of illicit profits.
The suit was filed in federal court in Newark and claims that the
regime oppressed millions of blacks between 1948 and 1993, with help
from Fujitsu units, Amdahl Corp. and ICL, as well as Sperry Corp. and
Burroughs Corp., which merged to form Unisys.
This lawsuit is one of three filed in New York or New Jersey in the
past month that seek damages on behalf of South African residents or
emigres. Other defendants include Citigroup, UBS, Credit Suisse,
Deutsche Bank and International Business Machines Corp.
"US and European computer companies knew full well that their
equipment, technology and systems were being used by the apartheid
system to violate the basic human rights of South Africa's inhabitants
and to commit atrocities against the population," the lawsuit contends.
Frank and Sylvia Brown, a married couple from South Africa, who now
live in North Carolina, claim in the lawsuit that Amdahl, ICL Burroughs
and Sperry "notoriously violated" United Nations sanctions from 1985 to
1993 by providing South Africa with military equipment and hardware.
One of the plaintiffs' attorneys, Bruce Nagel, said his firm has
applied to consolidate the cases before a US district judge in
Manhattan. Another attorney for the Browns, Ed Fagan, has said he may
sue as many as 60 companies, including miners, carmakers, drugmakers,
weapons companies, banks, insurers, computer makers and oil companies.
AVICI SYSTEMS: Asks NY Court To Dismiss Consolidated Securities Suits
---------------------------------------------------------------------
Avici Systems, Inc. asked the United States District Court for the
Southern District of New York to dismiss the consolidated securities
class actions currently pending against it, one or more of its
underwriters in its initial public offering, and certain of its
officers and directors.
The suits allege violations of the federal securities laws. The suits
specifically allege, among other things, that the underwriters of the
Company's initial public offering (IPO) improperly required their
customers to pay the underwriters excessive commissions and to agree to
buy additional shares of the Company's stock in the aftermarket as
conditions of receiving shares in the Company's IPO. The lawsuits
further claim that these supposed practices of the underwriters should
have been disclosed in the Company's IPO prospectus and registration
statement.
The Company understands that various other plaintiffs have filed
substantially similar class action cases against approximately 300
other publicly traded companies and their IPO underwriters in New York
City which, along with the cases against the Company, have all been
transferred to a single federal district judge for purposes of
coordinated case management.
The Company, together with the other issuers named as defendants in
these coordinated proceedings, filed a collective motion to dismiss the
consolidated amended complaints against them on various legal grounds
common to all or most of the issuer defendants. This motion is
currently pending.
The Company and its officers and directors believe that the claims
against the Company lack merit, and intends to defend the litigation
vigorously. While the Company can make no promises or guarantees as to
the outcome of these actions, the Company believes that the final
result of these actions will have no material effect on its
consolidated financial condition or results of operations.
BOEING COMPANY: Faces Gender Bias, Harassment Cases in Various Courts
----------------------------------------------------------------------
The Boeing Company faces several gender discrimination and harassment
class actions in various courts, naming as defendants the Company and:
(1) Boeing North American, Inc., and
(2) McDonnell Douglas Corporation
The first suit was filed in February 2000 in the United States District
Court in Seattle, Washington, alleging that the Company has engaged in
a pattern and practice of unlawful discrimination, harassment and
retaliation against females over the course of many years. The
complaint, titled Beck v. Boeing, names 28 women who have worked for
the Company in the Puget Sound area, Wichita, Kansas, St. Louis,
Missouri and Tulsa, Oklahoma.
On March 15, 2000, an amended complaint was filed naming an additional
10 plaintiffs, including the first from California. The lawsuit
attempts to represent all women who currently work for the Company, or
who have worked for the Company in the past several years.
The Company has denied the allegation that it has engaged in any
unlawful "pattern and practice." Plaintiffs' motion for class
certification was filed in May 2001. The class they sought included
salaried employees in Puget Sound, Wichita, St. Louis, and Long Beach,
and hourly employees in Puget Sound, Wichita, and St. Louis.
The court later granted class certification to a segment of the
population sought by the plaintiffs, and ruled that the action could
proceed on the basis of two limited subclasses:
(i) all non-executive salaried women (including engineers) in
the Puget Sound area, and
(ii) all hourly women covered by the Machinists' Bargaining
Agreement in the Puget Sound area.
The claims to be litigated are alleged gender discrimination in
compensation and promotion. The court also held that the plaintiffs
could not seek back pay. Rather, should liability be found, the
potential remedies include some form of injunctive relief as well as
punitive damages.
The US Ninth Circuit Court of Appeals has accepted the Company's
interlocutory appeal of the class certification decision, particularly
the ruling that leaves open the possibility of punitive damages.
In January 2002 and March 2002, four other gender discrimination class
actions were filed in locations that were originally part of the Beck
case but subsequently excluded from the class certified by the district
court. The four new cases cover females employed in California,
Missouri, Kansas, and Oklahoma. Many of the named plaintiffs in these
new cases were also named plaintiffs in Beck. Like Beck, these new
cases focus on compensation and promotion decisions.
The Company intends to continue its aggressive defense of these cases.
It is not possible to predict what impact, if any, these cases could
have on the financial statements.
BOEING COMPANY: WA Court Approves $97.5M Securities Suit Settlement
-------------------------------------------------------------------
The United States District Court for the Western District of
Washington, in Seattle approved the US$97.5 million settlement proposed
by the Boeing Company to settle a securities class action pending
against it and three of its then executive officers.
The lawsuit generally alleged that the defendants desired to keep the
Company's share price as high as possible in order to ensure that the
McDonnell Douglas shareholders would approve the merger of Boeing and
McDonnell Douglas and, in the case of the individual defendants, to
benefit directly from the sale of Boeing stock.
In September 2001, the Company reached agreement with class counsel to
settle the lawsuit for $92.5 million. The settlement, which will have
no effect on the Company's earnings, cash flow or financial position,
as it is within insurance limits, was approved by the court in February
2002.
CITIGROUP INC.: Meeting Eliot Spitzer Following Grubman's Resignation
---------------------------------------------------------------------
Lawyers for Salomon Smith Barney, the investment banking arm of
Citigroup, are this week expected to meet representatives of Eliot
Spitzer, the New York State attorney general, who is investigating
conflicts of interest on Wall Street, the Financial Times reports.
The meeting follows the resignation last week of Jack Grubman,
Salomon's former star telecoms analyst, who has been accused of
drumming up investment banking business for the firm through his
bullish recommendations. Mr. Grubman cited as reasons for his
resignation "the current climate of criticism" which "has made it
impossible to perform my work to the standards I believe the clients of
Salomon Smith Barney deserve;" as well as the "relentless series of
negative statements about my work, all of which I believe unfairly
single me out," and which have "begun to undermine my efforts to
analyze telecommunications companies."
This week's meetings are expected to be of a fact-finding nature,
rather than negotiations on a possible settlement with Mr. Spitzer,
according to people familiar with the process.
Mr. Spitzer dispelled speculation on Friday that the resignation of Mr.
Grubman would bring an end to the matter. An aide to the attorney
general said the agreement - under which Mr. Grubman receives a $32
million separation package - would not have an impact on the continuing
investigation. Salomon already has said it is cooperating with Mr.
Spitzer's probe.
Merrill Lynch agreed in May to pay a $100 million fine and make
procedural changes after Mr. Spitzer released a series of e-mails in
which analysts for Merrill Lynch privately disparaged the companies
which they were publicly recommending to investors.
The settlement meant that Merrill Lynch did not have to admit liability
and create a restitution fund, which might have helped investors
seeking civil damages from the firm.
Mr. Grubman and Salomon also face civil lawsuits, based on his bullish
recommendations of big telecoms companies, a number of which -
including WorldCom and Global Crossing - have since become bankrupt.
Class action lawyers say Mr. Grubman's resignation may offer additional
ammunition to disgruntled shareholders in the companies that Mr.
Grubman recommended. One element that is likely to come under scrutiny
is the size of the separation package ($32 million) already the focus
of criticism at a time when many investors in the companies he
recommended are nursing huge losses.
The package included $19 million for a forgiven loan plus interest,
which was part of a contract negotiated in September 1998, at the
height of Mr. Grubman's fame. Citigroup also has said it will cash out
Mr. Grubman's stock options, worth $12 million.
Investigators have long alleged that Mr. Grubman's positive reports
were the bait for clients who would then pay Salomon for investment
banking advice on mergers and intitial public offerings. The Salomon
analyst has not disputed that he was close to some of his clients -
notably Bernie Ebbers, the former chief executive of WorldCom, which
was advised by Salomon on its $43 billion merger with MCI in 1997.
Mr. Grubman told Congress last month that he had attended three
WorldCom board meetings at which the group's directors were discussing
mergers and other transactions. However, Mr. Grubman also stands by
his work, and argues that the way he carried out his job in the late
1990s was in line with Wall Street's practices at the time. The
National Association of Securities Dealers, the watchdog for Nasdaq, is
also looking into Mr. Grubman's actions.
Investigators, however, are also pursuing allegations of "spinning" by
Salomon, a practice in which key clients of the firm, and Mr. Grubman,
allegedly received preferential treatment in the allocation of hot IPO
stocks at the peak of the bull market.
DALEEN TECHNOLOGIES: Asks NY Court To Dismiss Securities Fraud Suit
-------------------------------------------------------------------
Daleen Technologies, Inc. asked the United States District Court for
the Southern District of New York to dismiss the consolidated
securities class action filed against it on behalf of persons
purchasing the Company's common stock between September 20, 1999 and
December 6, 2000. The suit also names as defendants:
(1) BancBoston Robertson Stephens, Inc.,
(2) Hambrecht & Quist LLC,
(3) Salomon Smith Barney, Inc.,
(4) James Daleen,
(5) David B. Corey, and
(6) Richard A. Schell
The complaint alleges violations of Section 11 of the Securities Act of
1933 by all named defendants, Section 15 of the Securities Act of 1933
by the individual defendants and Section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the
underwriter defendants.
Specifically, the plaintiffs allege in the complaint that, in
connection with the Company's IPO, the defendants failed to disclose
"excessive commissions" purportedly solicited by and paid to the
underwriter defendants in exchange for allocating shares of the
Company's common stock in the IPO to the underwriter defendants'
preferred customers.
Plaintiffs further allege that the underwriter defendants had
agreements with preferred customers tying the allocation of shares sold
in the Company's IPO to the preferred customers' agreements to make
additional aftermarket purchases at pre-determined prices. Plaintiffs
further allege that the underwriters used their analysts to issue
favorable reports about the Company to further inflate the Company's
share price following the IPO.
Plaintiffs claim that the defendants knew or should have known of the
underwriters actions and that the failure to disclose these alleged
arrangements rendered the Company's prospectus included in its
registration statement on Form S-1 filed with the SEC in September 1999
materially false and misleading.
The Company intends to defend vigorously against the plaintiffs'
claims. Currently a loss cannot be determined because the lawsuit is
in its initial stages. The Company is currently in mediation with the
plaintiffs in an attempt to facilitate a resolution of this matter
against the issuer defendants. The plaintiffs have initiated
discussions related to a possible stipulated dismissal of certain of
the individual defendants.
FLUKE CORPORATION: Recalls 40,000 Multimeters Due To Burn, Shock Hazard
-----------------------------------------------------------------------
Fluke Corporation is cooperating with the United States. Consumer
Product Safety Commission (CPSC) by voluntarily recalling about 40,000
digital multimeters. About 17,200 were sold in the US Multimeters are
used to measure voltage, resistance and current.
The recalled units can take longer than normal, up to 18 seconds, to
display readings of AC voltages above 500 volts. Users can
misinterpret the delayed reading to mean that high voltage is not
present. If high voltage is present, users could be exposed to a risk
of shock, electrocution, and thermal burns.
The Company has received four reports from Canada and Australia, in
which users experienced a delayed response while measuring high
voltage, though no injuries were reported.
The recalled Fluke digital multimeters measure up to 1,000 volts
alternating current (VAC) and direct current (VDC). "Fluke" and "175",
"177" or "179" are written on the front of the unit. The tester body
is yellow and black, and measures about 7.25-inches long by 3.5-inches
wide. Recalled units have a serial number below 79000000. The serial
number is written on the back of the instrument under the hinged stand.
Home and hardware stores and industrial distributors nationwide sold
these testers from January 2001 through October 2001 for between
$170 and $215.
For more details, contact the Company by Phone: 800-260-4819 between 8
am and 7 pm ET Monday through Friday, or visit the Company's Website:
http://www.fluke.com/170recall.
GENESIS ENERGY: Plaintiffs Refile Original Suit in DE Chancery Court
--------------------------------------------------------------------
The plaintiffs in the class action against Genesis Energy LP refiled
the original complaint in the Delaware Court of Chancery. The suit
also names as defendants:
(1) Genesis Energy LLC,
(2) members of the board of directors of Genesis Energy LLC, and
(3) Salomon Smith Barney Holdings, Inc.
The suit alleges numerous breaches of fiduciary duty loyalty owed by
the defendants to the purported class in connection with making a
proposal for restructuring.
In November 2000, the plaintiff amended its complaint. In response,
the defendants removed the amended complaint to federal court. On
March 27, 2002, the federal court dismissed the suit, however, the
plaintiff filed a motion to alter or amend the judgment.
On May 15, 2002, the federal court denied the motion to alter or amend.
The time for an appeal to be taken expired without an appeal being
filed. On June 11, 2002, the plaintiff refiled the original complaint
in the Delaware Court of Chancery.
The Company believes that the complaint is without merit and intends to
vigorously defend the action.
HOMESTORE.COM: CALSTeRS File Consolidated Securities Suit in C.D. CA
--------------------------------------------------------------------
The California State Teacher's Retirement System (CALSTeRS) filed a
consolidated amended securities class action against Homestore.com,
Inc. in the United States District Court for the Central District of
California.
Several suits were commenced in December 2001, alleging that the
Company and certain of its officers and directors violated certain
provisions of the Securities Exchange Act of 1934. The complaints
contained varying allegations, including that the Company made
materially false and misleading statements with respect to the
Company's 2000 and 2001 financial results included in its filings with
the SEC, analysts reports, press releases and media reports.
In March 2002, CALSTeRS was named lead plaintiff and the complaints
were ordered consolidated. On July 31, 2002, CALSTeRS filed a
consolidated amended class action complaint naming the Company along
with L90, Inc., PricewaterhouseCoopers LLP and certain former officer
and employees of the Company and making various allegations, including
that the Company violated federal securities laws.
The case is still in the preliminary stages, and it is not possible for
the Company to quantify the extent of its potential liability, if any.
An unfavorable outcome in this case could have a material adverse
effect on the Company's business, financial condition, results of
operations and cash flow.
HOUSEHOLD INTERNATIONAL: Denies Allegations in Predatory Lending Suits
----------------------------------------------------------------------
Household International denies the Association of Community
Organizations for Reform Now (ACORN)'s allegations in different states
against the Company. ACORN is claiming Household used predatory lending
practices in connection with people who have taken out mortgages with
Beneficial Massachusetts, and who are now living in fear of losing
their homes because of the Company's abusive practices, according to a
recent report by the Boston Herald.
ACORN further claims that the Company, the parent of several loaning
subsidiaries, and Beneficial Massachusetts have violated state banking
regulations by overcharging customers points and fees on home loans,
according to The Boston Globe.
ACORN is not the actual plaintiff in the lawsuits - its members are.
For example, Brian Sullivan, a factory machine operator, joined four
other Massachusetts residents, all ACORN members, in a class action
filed in Suffolk Superior Court against Beneficial Massachusetts and
its parent, Household International.
The plaintiffs all want a way out of their troubling loans with the
Company, as well as some payback for excess fees they were charged.
For Brian Sullivan, it all started when he and Heidi Sullivan, his
wife, thought they had a great deal when Beneficial Massachusetts
offered to consolidate their debts last summer. They say they expected
a big drop in their monthly bills, but wound up paying considerably
more, and now worry that they will lose their West Brookfield house.
The class action claims the Company violates state regulations
concerning high-cost loans. Mr. Sullivan's lawyer, Gary Klein, said
the state of Massachusetts set strict disclosure rules in 2001, that
The Company has disregarded.
The Sullivans allegedly misunderstood the long-term costs of their
decision. Mrs. Sullivan says Beneficial had promised they would save
between $400 and $500 a month with the Beneficial consolidation.
However, the payments shot up from $954 to $1,240 for the mortgage
payment, and hardly a dent was made in their credit card debts.
Mr. Klein says Household agents use confusing terms to convince
borrowers to engage in the loan. He said at least 500 customers could
benefit in Massachusetts if the lawsuit succeeds.
Company spokeswoman Megan Hayden said the Company strives to be
upfront. "We pride ourselves on the level of disclosure that we offer
our customers that goes above state and federal laws," Ms. Hayden said.
"It's a little disconcerting that Acorn is behind all these lawsuits,"
she added.
KANSAS CITY: MO Court Dismisses With Prejudice Race Discrimination Suit
-----------------------------------------------------------------------
The United States District Court for the Western District of Missouri
dismissed with prejudice the racial discrimination class action filed
against Kansas City Power & Light Company.
The complaint, filed by lead plaintiff Patricia Lang on behalf of all
current and former African American employees of the Company, alleged
that plaintiff and the members of the proposed class were:
(1) subjected to a hostile and offensive working environment,
(2) denied promotional opportunities,
(3) compensated less than similarly or less qualified Caucasian
employees, and
(4) disciplined and/or terminated for complaining about allegedly
racially discriminatory practices by the Company.
The complaint sought a monetary award for alleged lost wages and fringe
benefits, alleged wage differentials, as well as punitive damages,
attorneys fees and costs of the action together with an injunction to
prohibit the Company from retaliating against the litigants and to
continue court monitoring of the Company's compliance with anti-
discrimination laws.
On March 1, 2001, the court denied the plaintiff's motion to certify a
class action of African-American employees in the race discrimination
case. The plaintiff appealed this decision and on April 10, 2001, the
United States Court of Appeals for the 8th Circuit denied the appeal.
On January 11, 2002, the court dismissed Ms. Lang's individual case on
summary judgment. On February 8, 2002, Ms. Lang appealed both the
decision dismissing her individual case on summary judgment and the
order denying her motion for class certification to the 8th Circuit
Court of Appeals. On April 5, 2002, the Eighth Circuit dismissed the
appeal.
METABOLIFE INTERNATIONAL: Faces Suit Over Metabolife 356 Supplement
-------------------------------------------------------------------
Metabolife International, manufacturer and distributor of the diet
supplement "Metabolife 356," faces a class action, filed in Jefferson
County Alabama Circuit Court, on behalf of thousands of people injured
by this dangerous substance.
The suit filed on behalf of Larry W. Langston, Jr. and his wife, seeks
to establish a fund for testing and treatment of users of the product
as well as compensation for those injured by the heavily marketed
supplement.
"The suit filed today is an effort to seek justice for the many people
injured and killed by this dangerous and unmonitored supplement," noted
Birmingham, Alabama attorney, Archie Lamb, attorney for the plaintiffs.
"This suit is an important step in our efforts to force the
manufacturer and marketer of this substance to be accountable for their
actions. It is important that we keep our focus on those that have been
injured and killed by this product in the name of corporate greed. We
will do everything within our power to protect the public from this
product and achieve justice for those injured and the families of those
killed," Mr. Lamb concluded.
The United States Justice Department has also confirmed that there is a
current investigation into the manufacturer and distributor of
Metabolife 356. The New York Times has reported that the Justice
Department was conducting a criminal investigation into the Company, a
leading manufacturer of the herbal stimulant ephedra, to determine
whether executives lied about what they knew about the safety of the
substance.
Lester M. Crawford, the deputy commissioner of the Food and Drug
Administration, noted in a statement that the agency had requested the
Justice Department to pursue the investigation after years of seeking
company reports on consumer complaints, "we are greatly disturbed that
Metabolife has repeatedly refused to cooperate with the F.D.A." he
concluded.
Since early 1990, the FDA has issued numerous warnings to consumers of
diet products such as Metabolife. Metabolife and similar supplements
contain Ephedrine, Ephedra or Ma Huang that have proven to be extremely
harmful to some users of the products. Problems experienced include
heart attacks, seizures and strokes, which, in some situations, have
resulted in death. There are a number of lawsuits currently filed
against Metabolife in jurisdictions throughout the United States.
For more details, contact Archie C. Lamb, Allan Armstrong or David
Fawal by Phone: 205-324-4644 or by E-mail: alamb@archielamb.com,
aarmstrong@archielamb.com and dfawal@archielamb.com.
OCCAM NETWORKS: Asks CA Court To Dismiss Amended Securities Fraud Suit
----------------------------------------------------------------------
Occam Networks, Inc. asked the United States District Court for the
Central District of California to dismiss the second consolidated
securities class action pending against it and certain of its current
and former officers and directors.
The consolidated amended complaint generally alleges that:
(1) the defendants made materially false and/or misleading
statements regarding the Company's financial condition and
prospects during the period of June 22, 2000 through April 17,
2001 in violation of Sections 10(b) and 20(a) and Rule 10b-5
of the Securities Exchange Act of 1934; and
(2) the registration statement and prospectus issued by defendants
in connection with the Company's June 23, 2000 initial public
offering contained untrue statements of material fact and
omitted to state material facts in violation of Sections 11,
12(a)(2) and 15 of the 1933 Act.
The Company filed a motion to dismiss the amended complaint on January
10, 2002, which the plaintiffs opposed. A hearing on the motion took
place on April 22, 2002. At the hearing, the court granted the motion
as to plaintiffs' 1934 Act claims, and denied the motion as to
plaintiffs' 1933 Act claims. The plaintiffs were given 30 days' leave
to amend their 1934 Act claims. The plaintiffs then filed their second
amended complaint and the Company filed a motion to dismiss the second
amended complaint.
The Company intends to defend the litigation vigorously.
OCCAM NETWORKS: Faces Consolidated Securities Fraud Suit in S.D. NY
-------------------------------------------------------------------
Occam Networks, Inc. faces a consolidated securities class action
pending against it, certain of its then officers and directors and
several investment banks that were underwriters of the Company's
initial public offering, in the United States District Court for the
Southern District of New York.
The suit was purportedly filed on behalf of investors who purchased the
Company's stock between June 22, 2000 and December 6, 2000 and alleges
violations of Sections 11 and 15 of the 1933 Act and Sections 10(b) and
20(a) and Rule 10b-5 of the 1934 Act against one or both of the Company
and the individual defendants.
The claims are based on allegations that the underwriter defendants
agreed to allocate stock in the Company's initial public offering to
certain investors in exchange for excessive and undisclosed commissions
and agreements by those investors to make additional purchases in the
aftermarket at pre-determined prices.
The plaintiffs allege that the prospectus for the Company's initial
public offering was false and misleading in violation of the securities
laws because it did not disclose these arrangements.
These lawsuits are part of the massive "IPO allocation" litigation
involving the conduct of underwriters in allocating shares of
successful initial public offerings. The Company believes that over
three hundred other companies have been named in more than one thousand
similar lawsuits that have been filed by some of the same plaintiffs
law firms. No date has been set for the Company to respond to the
suit.
The Company intends to defend the litigation vigorously.
ON SEMICONDUCTOR: Asks NY Court To Dismiss Consolidated Securities Suit
-----------------------------------------------------------------------
On Semiconductor Corporation asked the United States District Court for
the Southern District of New York to dismiss the consolidated
securities class action pending against it, certain of its current and
former officers, current directors and the underwriters for its initial
public offering (IPO).
The lawsuit alleges violations of the federal securities laws.
Specifically, the suit alleges that the underwriters of the Company's
IPO improperly required their customers to pay the underwriters
excessive commissions and agree to buy additional shares of the
Company's common stock in the aftermarket as conditions of receiving
shares in the Company's IPO.
The amended suit further states that these alleged practices of the
underwriters should have been disclosed in the Company's IPO prospectus
and registration statement. The amended complaint alleges violations
of both the registration and antifraud provisions of the federal
securities laws.
The Company understands that various other plaintiffs have filed
substantially similar class action cases against over 300 other
publicly traded companies and their IPO underwriters in New York City,
which along with the cases against the Company have all been
transferred to a single federal district judge for purposes of
coordinated case management.
In July 2002, the Company, together with the other issuers named as
defendants in these coordinated proceedings, filed a collective motion
to dismiss the consolidated amended complaints against them on various
legal grounds common to all or most of the issuer defendants. This
motion is currently pending.
The Company believes that the claims against it are without merit, and
intends to defend the litigation vigorously. While the Company can
make no promises or guarantees as to the outcome of these actions, the
Company believes that the final result of these actions will have no
material effect on its consolidated financial condition or results of
operations.
PERKINELMER INC.: Mounting Vigorous Defense V. Securities Suits in MA
---------------------------------------------------------------------
PerkinElmer, Inc. faces several securities class actions pending in the
United States District Court for the District of Massachusetts, against
on behalf of purchasers of the Company's common stock between July 15,
2001 and April 11, 2002. The suit names as defendants the Company and:
(1) Gregory L. Summe and
(2) Robert F. Friel
The lawsuit seeks an unspecified amount of damages and claims
violations of Sections 10(b), 10b-5 and 20(a) of the Securities
Exchange Act of 1934, alleging various statements made during the
putative class period by the Company and its management were misleading
with respect to the Company's prospects and future operating results.
The Company believes it has meritorious defenses to the lawsuits and
intends to contest the actions vigorously. The Company is currently
unable, however, to determine whether resolution of these matters will
have a material adverse impact on its financial position or results of
operations, or reasonably estimate the amount of the loss, if any, that
may result from resolution of these matters.
PUGET SOUND: Named in Two Cross-Complaints in Energy Suits in CA Court
----------------------------------------------------------------------
Puget Sound Energy, Inc. faces two cross-complaints, filed by Reliant
Energy Services and Duke Energy Trading & Marketing, respectively, in
six consolidated class actions pending in Superior Court in San Diego,
California.
The original complaints in the actions allege violations by the
original (approximately 40) defendants of various California Business
Practices Act or Cartwright Act (antitrust) provisions. The cross-
complaints assert essentially that the cross-defendants, including the
Company, were also participants in the energy market in California at
the relevant times, and that any remedies ordered against some market
participants should be ordered against all.
Reliant Energy Services and Duke Energy Trading & Marketing also seek
indemnity and conditional relief as a buyer on transactions involving
cross-defendants should the plaintiffs prevail. Those cross-complaints
added over 30 new defendants, including the Company, to litigation that
had been pending for well over a year and had been set for trial in
state court. Some of the newly added defendants removed that
litigation to federal court.
The Company and numerous other defendants added by the cross-complaints
have moved to dismiss these claims, and those motions are scheduled to
be heard in September 2002, together with motions to remand the case
back to state court filed by the original plaintiffs. As a result of
the various motions, no trial date is set at this time.
The Company cannot predict the outcome of this proceeding, nor can it
evaluate any of the claims at this time.
SYKES ENTERPRISES: Building Vigorous Defense V. Securities Suit in FL
---------------------------------------------------------------------
Sykes Enterprises, Inc. faces a consolidated securities class action
filed in the United States District Court for the Middle District of
Florida, Tampa Division, on behalf of purchasers of the Company's
common stock during the period from July 27, 1998 through September 18,
2000.
The consolidated suit claims violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. Among other things, the consolidated action alleges that
during 2000, 1999 and 1998, the Company and certain of its officers
made materially false statements concerning the Company's financial
condition and its future prospects.
The consolidated complaint also claims that certain of the Company's
quarterly financial statements during 1999 and 1998 were not prepared
in accordance with generally accepted accounting principles.
Although the Company denies the plaintiff's allegations and intends to
defend the action vigorously, it cannot predict the outcome or the
impact this action may have on the Company. The outcome of this
lawsuit or any future lawsuits, claims, or investigations relating to
the same subject matter may have a material adverse impact on the
Company's financial condition and results of operations.
TEXTRON INC.: Plaintiffs Seek Securities Suits' Consolidation in RI
-------------------------------------------------------------------
Plaintiffs in the securities class actions against Textron, Inc. filed
motions seeking to consolidate the lawsuits in the United States
District Court in Rhode Island.
The suits were filed on behalf of a proposed class of Company
shareholders, and name as defendants the Company, certain present and
former officers of the Company and Bell Helicopter.
The lawsuit alleges that the defendants violated antifraud provisions
of the federal securities laws by making material misrepresentations or
omissions between October 19, 2000, and September 26, 2001, in
connection with Bell Helicopter's V 22 and H 45;1 programs.
The Company believes these lawsuits are without merit and intends to
defend them vigorously.
TEXTRON INC.: Sued For ERISA Violations in Suit in Rhode Island Court
---------------------------------------------------------------------
Textron, Inc. faces a class action pending in the United States
District Court in Rhode Island, naming the Company, the Textron Savings
Plan and the Plan's trustee as defendants.
The suit alleges breach of certain fiduciary duties under the Employee
Retirement Income Security Act (ERISA), based on the amount of Plan
assets invested in Company stock during 2000 and 2001. The plaintiff,
Linda Lalonde, alleges that she participated in the Company's employee
benefit plans during the applicable period - she claims to sue on her
own behalf and on behalf of the employee benefit plans and their
participants and beneficiaries during 2000 and 2001.
The Company believes this lawsuit is without merit and intends to
defend it vigorously.
*Black Farmers Lose Hope Despite Landmark Class-Action Settlement
-----------------------------------------------------------------
In 1999, the class action filed by thousands of black farmers against
the US Department of Agriculture (USDA) was seen as one of the most
successful civil rights lawsuits in American history. It was successful
in that USDA had offered a landmark settlement, which meant a new deal
for the treatment of black farmers, who had been suing the agency for
decades over accusations of discriminatory loan practices, according to
a report by The Washington Post.
The lawsuit's "colossal settlement" was designed to erase farmers'
debts to government creditors, put $50,000 in their pockets and give
black applicants priorities for new loans. The agriculture secretary
at the time, Daniel Glickman, said it was the government's greatest
effort to compensate rural black Americans since they were given the
hope of 40 acres and a mule after the Civil War. However, like that
broken promise, the settlement has become a bitter disappointment to
the people it was supposed to help.
Under the settlement, more 12,800 black farmers were paid a total of
$623 million, and more than $17.2 million in outstanding loans have
been forgiven. Yet, many thousand other farmers have had their claims
rejected. The totals of payouts and forgiven loans, The Washington
Post reports, are far short of what was projected in the settlement's
terms. The USDA, which under Secretary Glickman had acknowledged
racial bias against the black farmers going back for decades, today is
battling almost every claim filed.
As if the prejudices of the agency were not enough, the farmers'
attorneys have made such monumental errors that a three-judge panel of
the US Court of Appeals in Washington has blasted them for incompetence
bordering on malpractice, saying their actions (and errors) have
amounted to a "double betrayal" of the farmers.
The lead plaintiff in the class action, a North Carolina farmer named
Timothy Pigford, withdrew from the case in frustration, 60,000 farmers
missed a filing deadline because of the lawyers' incompetence, so their
claims cannot even be considered. The nation's largest black farmers'
organization is still staging protests across the country against the
way the terms of the settlement are being played out.
"What was promised and what has been delivered have been two different
things," said William H. Miller, who is appealing the rejection of his
$50,000 claim. Mr. Miller, 68, a southern Georgia farmer, remembers
1999, as a time of hope as USDA acknowledged the decades of
discrimination against the black farmers and offered a settlement
package to right the wrongs and put relations with the farmers on a
track that recognized their special needs as farmers.
Instead, the nation's black farmers are saying that discrimination is
still entrenched in the USDA and mars the terms of the class action
settlement. The nation's black farmers are saying that little or
nothing has improved for them as a group and that billions of dollars
in government subsidies continue to be directed to larger, wealthier
farming operations, according to The Washington Post report.
Blacks now make up less than one percent of the nation's 1.9 million
farmers, and their numbers are dropping faster than those of white
farmers. The USDA is a major source of farm loans and subsidies -
loans that farmers need to get their crops in the ground on time and
subsidies that help shore up their operations. Access to timely loans
is vital, particularly to those who run small farms, as most black
farmers do.
John Zippert, director of program operations for the Federation of
Southern Cooperatives in Epps, Alabama, said, "I have been this field
for 37 years. I have never seen a black farmer who was not
discriminated against by the USDA; their claims are rejected almost as
often as they are accepted."
In the Bush administration, problems have continued with the USDA, said
Calvin R. King Sr., president of the Arkansas Land and Farm Development
Corporation and a MacArthur "genius" grant recipient for his work with
black farmers. "African-American farmers continue to be foreclosed on
by the USDA; they continue to not have timely access to loans," Mr.
King said. "Even with this lawsuit (and its settlement), it's almost a
hill you can't climb."
The landmark case began, in 1997, when lead plaintiff Timothy Pigford
and a few other farmers filed suit in US District Court in Washington,
D.C. Their claim, which Judge Paul L. Friedman certified as a class
action, was that USDA officials in counties across the country for
years had violated the Equal Opportunity Credit Act by systematically
denying or delaying loan applications filed by black farmers.
The settlement, or consent decree, that was reached in 1999, was a
complicated affair. There was no settlement with a pot of cash for the
plaintiffs to divide, as is the norm in class-action cases. Each
farmer still had to prove he had been personally discriminated against.
Track A was the fast-track process for such claims. It required
farmers to prove they had tried and failed to borrow money from the
USDA between 1981 and 1996 and had filed some sort of complaint about
that denial. They also had to prove that similarly situated white
farmers had been approved at the same time they were denied. Those who
could so prove would get $50,000 tax free and their USDA debts would be
forgiven.
More than 98 percent of the eventual 22,891 class members chose this
option, largely because their lead counsel Alexander J. Pires Jr., a
Washington lawyer with experience in USDA assured the judge that
practically every farmer could meet those standards.
However, everything began to go wrong. Mr. Pires and his fellow
lawyers had thought initially that no more than 5,000 farmers would
file claims - instead, more than 80,000 full or part-time farmers
filed, swamping the lawyers.
Further, proving anything was a "joke." Because the farmers' lawyers
decided to skip the discovery phase of the lawsuit, farmers had little
access to USDA records, not to mention the financial dealings and
records of their white neighbors. Once before an adjudicator, their
claims did not go unchallenged, despite USDA officials' earlier
admissions of decades of discrimination. The USDA, despite such
earlier admissions, filed objections to almost every case for which it
had some kind of records.
USDA statistics show that although 12, 8490 farmers won their claims,
8,476 did not. Farmers were so angry that more than 6,000 have filed
appeals. For the 184 farmers who chose a different avenue under the
settlement to try to prove a more serious level of discrimination,
there was Track B, a one-day mini-trial before a court adjudicator. On
this track, things got even worse. Although 54 cases settled out of
court, the USDA won 15 of the 25 cases tried, and is appealing nine of
the ten lost.
"I understand how they might feel concerned, but there were no
guarantees of prevailing under the terms of the consent decree," said
Michael Kelly, the USDA deputy general counsel. "Maybe the paucity of
victories says something favorable about USDA's treatment of black
farmers to begin with."
Several thoughts and questions were probably in the mind of Stephen
Bowens, director of the Land Loss Prevention Project, a North
Carolina-based agency that represents financially troubled black
farmers. Why, in 1999 did USDA admit to years of discrimination, and
what was the intention of the consent decree but to provide a vehicle
for redress? He rejected Mr. Kelly's analysis. The problem, he says,
is the structure of the consent decree.
"One would think that if you could prove you are an African-American
and farming from 1981 to 1996, that as a class, and based on admissions
made by USDA that black farmers were discriminated against, there
should never have been any secondary phase to further prove
discrimination," Mr. Bowens said.
The sheer logic of Mr. Bowens' statement, and given the background of
redress motivating USDA at the time the consent decree was formulated,
causes one to believe that USDA thought the mechanics of the usual
modern legal action governing the finding of discrimination would be
fueled and guided by the intentions moving USDA.
Perhaps this is what veteran Alabama civil rights lawyer J.L. Chestnut
meant when he said in a recent interview that the sprawling nature of
the case, couple with poor records and frequently inadequate education
of the black farmers, made the case difficult to fit into the neat
confines of modern legal action. Mr. Bowens' apt remarks seem to echo
in this drama of thwarted intentions and frustrated hopes.
The Washington Post gives the reader the remarks of the present
Agriculture Secretary Ann M. Veneman when she met with a group of
irate, frustrated farmers in mid-July. She said in a statement that
she would try to mend relations with the farmers.
"If something is wrong, we need to fix it," she said. "If our
employees need more training, we intend to give it to them. If we need
to help cut the red tape and bureaucracy to better serve our
constituents, then we intend to do it." One can hope the needs of the
farmers can be better served by these pledges than they were by the
implementation of USDA's intentions through a poorly formulated consent
decree moving through the rigidities of the court system.
New Securities Fraud Cases
ANDRX CORPORATION: Howard Smith Commences Securities Suit in S.D. FL
--------------------------------------------------------------------
The Law Offices of Howard G. Smith initiated a securities class action
on behalf of shareholders who acquired Andrx Corporation (NYSE:ADRX)
between February 10, 2000 and August 12, 2002, inclusive, in the United
States District Court for the Southern District of Florida against the
Company and certain of its officers and directors.
The suit charges that defendants violated federal securities laws by
issuing a series of materially false and misleading statements to the
market throughout the class period. These false and misleading
statements had the effect of artificially inflating the market price of
the Company's securities, inflicting damages on investors.
For more details, contact Howard G. Smith by Phone: 215-638-4847 or
888-638-4847 or by E-mail: LEGUL2000@aol.com
AON CORPORATION: Leo Desmond Commences Securities Fraud Suit in N.D. IL
-----------------------------------------------------------------------
The Law Offices of Leo W. Desmond initiated a securities class action
on behalf of shareholders who acquired Aon Corporation (NYSE:AOC)
securities between May 4, 1999 and August 6, 2002, inclusive, in the
United States District Court for the Northern District of Illinois
against the Company and:
(1) Patrick G. Ryan and
(2) Harvey N. Medvin
It is alleged that defendants violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10(b)(5) promulgated
thereunder, 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 Leo W. Desmond by Phone: 888-337-6663,
561-712-8000 by E-Mail: Info@SecuritiesAttorney.com or visit the
firm's Website: http://www.SecuritiesAttorney.com
AON CORPORATION: Schoengold & Sporn Commences Securities Suit in IL
--------------------------------------------------------------------
Schoengold & Sporn, on behalf of The New York City Police Detectives
Endowment Annuity Fund, commenced a class action against Aon
Corporation (NYSE: AOC) and certain key officers and directors in the
United States District Court for the Northern District of Illinois. The
suit was filed on behalf of all purchasers of Company securities during
the period between May 4, 1999 and August 6, 2002.
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 May 4, 1999 and August 6, 2002, thereby artificially
inflating the price of Company securities.
Throughout the class period, as alleged in the complaint, defendants
issued numerous statements and filed quarterly and annual reports with
the SEC which described the Company's earnings and financial
performance. The complaint alleges that these statements were
materially false and misleading because they failed to disclose and/or
misrepresented the following adverse facts, among others:
(1) that the Company had materially overstated its net income by
$27 million in 1999, by $24 million in 2000 and by $5 million
in the first quarter of 2002;
(2) that the Company lacked adequate internal controls and was
therefore unable to ascertain the true financial condition of
the Company; and
(3) that as a result, the value of the Company's net income and
financial results were materially overstated at all relevant
times.
On August 7, 2002, before the market opened for trading, the Company
shocked the market when it announced, among other things, that:
(i) it had failed to meet analysts' expectations on its earnings
for the second quarter by a wide margin;
(ii) because of the slumping financial markets, it had canceled a
spinoff of its insurance underwriting businesses to
shareholders; and
(iii) the SEC began an investigation of its accounting and was
questioning several items in the Company's accounts, including
the reporting of investment write-downs, the timing of some
costs and a reinsurance recoverable item and the decision not
to consolidate certain special purpose vehicles.
The Company also stated that, if the SEC says it is necessary, it will
have to restate its earnings for the past three years, and reduce its
net income by $27 million in 1999, by $24 million in 2000 and by $5
million in the first quarter of 2002. Following this report, shares of
the Company fell $6.43 per share to close at $14.77 per share, a one-
day decline of 30.3%, on volume of more than 20 million shares traded,
or more than twenty times the average daily volume.
For more details, contact Jay P. Saltzman or Ashley Kim of Schoengold &
Sporn PC by Mail: 19 Fulton Street, Suite 406, New York, New York 10038
by Phone: 866-348-7700 or by E-mail: shareholderrelations@spornlaw.com
BEVERLY ENTERPRISES: Cauley Geller Commences Securities Suit in W.D. AK
-----------------------------------------------------------------------
Cauley Geller Bowman & Coates, LLP initiated a securities class action
in the United States District Court for the Western District of
Arkansas on behalf of purchasers of Beverly Enterprises, Inc. (NYSE:
BEV) publicly traded securities during the period between October 16,
2000 and July 19, 2002, inclusive.
The complaint alleges violations of Sections 10(b) and 20(a), of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
Specifically, the suit alleges that the Company overstated its assets
and earnings and that its loss provision and expenses were understated
throughout the class period.
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@cauleygeller.com or visit the firm's Website:
http://www.cauleygeller.com
CHARTER COMMUNICATIONS: Carey & Danis Commences Securities Suit in IL
---------------------------------------------------------------------
Carey & Danis, LLC initiated a securities class action on behalf of
purchasers of the securities of Charter Communications, Inc.
(Nasdaq:CHTR) between November 9, 1999 and July 18, 2002 inclusive.
The action is pending in the United States District Court for the
Southern District of Illinois against the Company and:
(1) Paul G. Allen, Chairman,
(2) Jerald L. Kent, CEO and President until September 28, 2001,
and
(3) Carl Vogel, CEO and President since November 9, 2001
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 November 9, 1999 and July 18, 2002.
Among other things, the suit alleges that throughout the class period,
the Company issued quarterly press releases touting its rapidly
increasing sales and steadily growing customer base. These
representations, along with quarterly and annual financial reports,
were also included in reports filed with the Securities Exchange
Commission throughout the class period.
The suit further alleges that the quarterly reports were materially
false and misleading because, among other things, the Company was
inappropriately boosting earnings by improperly capitalizing its labor
costs, engaging in questionable transactions with its equipment vendors
that lacked economic substance but appeared to increase the Company's
revenues and artificially inflated its subscriber counts by counting
customers who subscribed only to the Company's Internet services as
subscribers to its mainstay cable services.
On July 18, 2002, Merrill Lynch issued a research note in connection
with its downgrade of the Company's stock to "hold" from "strong buy."
In the note, Merrill Lynch revealed that the Company was aggressively
capitalizing its labor costs, over-counting its subscriber base and
engaging in marketing deals with some of its equipment vendors, among
other things. In reaction to the news, the price of the Company's
common stock plummeted by 13% on July 18 and fell another 15% on July
23.
For more details, contact Michael J. Flannery by Mail: 8235 Forsyth
Blvd., Suite 1100, St. Louis, MO 63105 by Phone: 800-721-2519 by Fax:
314-721-0905 or visit the firm's Website: http://www.careydanis.com
EL PASO: Cohen Milstein Commences Securities Fraud Suit in S.D. TX
------------------------------------------------------------------
Cohen, Milstein, Hausfeld & Toll, PLLC initiated a securities class
action in the United States District Court for the Southern District of
Texas against El Paso Corporation (NYSE:EP) on behalf of all persons
who purchased Company securities between July 25, 2001 and May 29,
2002.
The suit charges the Company 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 trading practices and revenues caused the
Company's stock price to become artificially inflated, inflicting
damages on investors.
For more details, contact Andrew N. Friedman or Mary Ann Fink by Phone:
888-240-0775 or 202-408-4600 by E-mail: afriedman@cmht.com or
mfink@cmht.com or visit the firm's Website: http://www.cmht.com
INSIGHT ENTERPRISES: Wechsler Harwood Launches Securities Suit in AZ
--------------------------------------------------------------------
Wechsler Harwood Halebian & Feffer LLP initiated a securities class
action on behalf of purchasers of the securities of Insight
Enterprises, Inc. (Nasdaq:NSIT) between April 26, 2002 and July 17,
2002, inclusive, in the United States District Court for the District
of Arizona against the Company and:
(1) Eric J. Crown, Company founder and Chairman,
(2) Timothy A. Crown, Company CEO and director, and
(3) Stanley Laybourne, Company CFO, Secretary and Treasurer
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.
The complaint charges that defendants violated federal securities laws
by issuing a series of materially false and misleading statements to
the market during the class period. During the class period, the
individual defendants sold 379,516 shares of Insight common stock,
reaping gross proceeds in excess of $10.8 million.
According to the complaint, on April 25, 2002, after the close of the
market, defendants issued Insight's First Quarter 2002 earnings press
release for the three months ended March 31, 2002 and also held a
conference call with analysts. The press release touted the company's
accomplishments.
During the conference call on April 25, 2002, defendants stated that
Insight expected to see substantial growth in sales in the Second
Quarter of 2002, the three months which began April 1, 2002, to between
$720 million and $760 million with Second Quarter earnings growing to
between $0.31 and $0.35 per share.
The response from the market to defendants' statements was dramatic.
The per share price of Insight common stock jumped 26% from a close of
$21.30 on April 25, 2002 to a close of $26.46 on April 26, 2002.
Unbeknownst to investors, however, the Company, already one month into
the Second Quarter of 2002, was suffering from known, but undisclosed
adverse facts which were negatively impacting its revenues and profits
and which would cause it to reverse it sequential growth pattern and
report earnings per share for the Second Quarter that, at best, would
be flat compared to the First Quarter reported in 2002 earnings per
share and significantly below the $0.31 to $0.35 cents defendants told
the market they were expecting for the Second Quarter of 2002, thereby
rendering defendants statements false and misleading.
The truth regarding the Company was not fully disclosed until July 17,
2002, when defendants finally revealed that the Company anticipated
Second Quarter earnings per share in the range of only $0.26 and $0.29,
flat with the prior year's quarter and the First Quarter of 2002. The
press release blamed the lower results on operating losses in its UK
operations caused by reduced sales and a lower gross profit percentage.
The press release also stated that the president and chief operating
officer of the UK operations had resigned.
In response to the surprise negative announcement on July 17, 2002,
after the close of the market, the price of Insight common stock
dropped precipitously, falling from $23.74 per share on July 17, 2001
to close at $13.36 per share on July 18, 2002, a decline of almost 44%,
on volume of 12 million Insight shares.
During the class period, as alleged in the complaint, Insight insiders
profited by selling a total of over $10.8 million in Capital One common
stock at artificially inflated prices. The complaint also specifically
alleges the nature of defendants access and review of information that
specifcally reveled to them to sharp decline in Insight's UK business
in the Second Quarter of 2002. In addition, the complaint also alleges
that defendants used Insight's artificially inflated stock as
"currency" in order to facilitiate the acquisition of Insight
competitor Comark, Inc. in April 2002.
For more details, contact Ramon Pinon, by Mail: 488 Madison Avenue, 8th
Floor, New York, New York 10022 by Phone: 877-935-7400 by E-mail:
rpinoniv@whhf.com or visit the firm's Website: http://www.whhf.com
MERRILL LYNCH: Kaplan Fox Commences Securities Fraud Suit in S.D. NY
--------------------------------------------------------------------
Kaplan Fox & Kilsheimer LLP initiated a securities class action against
Merrill Lynch & Co., Inc., (NYSE: MER) and Henry Blodget, the First
Vice President of Merrill Lynch, in the United States District Court
for the Southern District of New York on behalf of all persons or
entities who purchased or otherwise acquired the common stock of
Merrill Lynch between July 3, 1999 and July 30, 2002, inclusive.
The complaint alleges that defendants violated the federal securities
laws by misrepresenting Merrill Lynch's research analyst business.
Merrill Lynch touted its research analysts business as being, among
other things, "insightful, objective and decisive." However, instead of
issuing analyst reports based on legitimate research and analysis of
public companies, the Company issued false analyst reports regarding
various companies and failed to disclose significant, material
information.
The complaint alleges, among other things, that Merrill Lynch's
Internet group issued false analyst reports to obtain investment-
banking business for the Company.
Furthermore, the complaint alleges that during the class period Merrill
Lynch made statements regarding Enron and recommended the purchase of
Enron shares while failing to disclose that Merrill Lynch engaged in
bogus transactions with Enron. Merrill issued positive reports about
Enron and entered into these bogus transactions to secure investment-
banking business. Although these transactions may have resulted in huge
profits for Merrill Lynch, the Company was also exposed to substantial
risks for legal liability and faced governmental scrutiny because such
transactions were specifically designed to permit Enron to defraud its
investors by artificially inflating its profits.
As a result of defendants' improper conduct with respect to its analyst
business, Merrill Lynch's common stock traded at artificially inflated
prices throughout the class period. The truth began to be revealed on
April 8, 2002, Merrill Lynch's stock declined materially in value.
For more details, contact Frederic S. Fox, Donald R. Hall by Mail: 805
Third Avenue, 22nd Floor, New York, NY 10022 by Phone: 800-290-1952 or
212-687-1980 by Fax: 212-687-7714 or by E-mail: mail@kaplanfox.com
PERKINELMER INC.: Schoengold & Sporn Launches Securities Suit in MA
-------------------------------------------------------------------
Schoengold & Sporn, PC initiated a securities class action against
PerkinElmer, Inc. (NYSE:PKI) and certain key officers and directors in
the United States District Court for the District of Massachusetts on
behalf of all purchasers of Company securities during the period
between July 15, 2001 and April 11, 2002.
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 during the class period, thereby artificially inflating the
price of Company securities.
Throughout the class period, as alleged in the complaint, defendants
issued numerous statements and filed quarterly and annual reports with
the SEC which described the Company's earnings and financial
performance. The complaint alleges that these statements were
materially false and misleading because they failed to disclose and/or
misrepresented the following adverse facts, among others:
(1) that their Optoelectronics sector was undergoing a serious
decrease in its business, hindering it from creating revenues
aligned with defendants' expectations;
(2) that the Company had not written down tens of millions of
dollars of inventory possessed by that division, in effect,
misrepresenting and overstating the operating results of the
Company; and
(3) that as a result, the value of the Company's financial results
were materially overstated at all relevant times.
On April 11, 2002, the full truth regarding the Company's business was
fully disclosed when the Company issued a press release revealing that
its reported earnings will be breakeven, instead of the figure of
$0.16-$0.17 per share that the Company had stated earlier that it
expects to earn, and that its revenues will decline in the first
quarter of 2002.
In reaction to the announcement, Company stock plummeted by 28%,
falling from $16.70 per share on April 10, 2002 to $12.04 by the close
of April 11, 2002. Furthermore, the individual defendants and other
Company insiders sold a total of 595,000 Company common stock during
the class period, reaping gross proceeds in excess of $18.4 million and
the Company completed a significant acquisition using its common stock
as currency.
For more details, contact Jay P. Saltzman or Ashley Kim by Mail: 19
Fulton Street, Suite 406, New York, New York 10038 or by Phone:
866-348-7700
RIVERSTONE NETWORKS: Schatz & Nobel Commences Securities Suit in CA
-------------------------------------------------------------------
Schatz & Nobel PC initiated a securities class action in the United
States District Court for the Northern District of California on behalf
of all those who purchased or otherwise acquired the publicly traded
securities of Riverstone Networks, Inc. (Nasdaq: RSTN) between August
20, 2001 and June 5, 2002, inclusive.
The suit alleges that the Company and five top corporate officers made
materially false and misleading statements concerning demand for the
Company's products. During the class period, defendants overstated the
future business arising out of an agreement with Hong Kong based
Hutchinson Global Crossing.
In addition to representations concerning that agreement, defendants
also made materially false and misleading statements concerning its
projected revenue and earnings per share (EPS), indicating the Company
was relatively unaffected by the downturn in the rest of the telecom
industry.
Following a February 28, 2002 disclosure that the Company would not
meet projected revenue and EPS, the price of Company stock dropped 49%.
When the Company again failed to meet projections, following a June 5,
2002 announcement the price of its stock fell another 21%.
For more details, contact Nancy A. Kulesa by Phone: 800-797-5499 by E-
mail: sn06106@aol.com or visit the firm's Website: http://www.snlaw.net
VIVENDI UNIVERSAL: Milberg Weiss Commences Securities Suit in C.D. CA
---------------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP is adding new allegations to a
pending securities class action in the United States District Court for
the Central District of California filed on behalf of purchasers of
Vivendi Universal common stock and American Depository Receipts (ADRs)
during the period between April 23, 2001 and July 2, 2002.
The new allegations state that the Company's recently announced loss of
12.3 billion Euros, or 11.34 Euros per basic share for the first half
of 2002 and the Company's announcement that it would dispose of assets
are a result of the Company's prior improper practices alleged in the
complaint.
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' false
statements artificially inflated Vivendi ADRs to as high as $68.80 per
ADR. Defendants reported favorable, but misleading, financial results
to the market and represented that Vivendi was not as susceptible to
economic problems as competitors and that the Company had the "highest
resiliency and lowest sensitivity to recessionary environment."
The defendants also represented that the Company was successfully
implementing recent mergers which were being reorganized quickly to
generate synergies. These positive but false statements allowed the
Company to complete additional acquisitions in its $100 billion buying
spree between 1998 and 2001.
In late June 2002, news leaked from the Company that its debt was at
alarming levels, causing the Company's ADRs to decline in price from
$28 to $20. The Company's ordinary shares declined in similar fashion.
Nonetheless, the Company's CEO reassured the market that liquidity was
not a problem and the ADRs did not totally collapse. However, as
ratings agencies continued to downgrade the Company's debt, the ADRs
continued to decline.
On July 2, 2002, Vivendi's debt was downgraded again and the Company
was in danger of default. On July 3, 2002, Vivendi's CEO was forced to
resign. Vivendi ADRs collapsed upon these revelations, falling to $15-
21/32 on July 3, 2002 on huge volume of 8 million shares.
The new allegations state that Vivendi's loss of 12.3 billion Euros in
the first half 2002, as the Company wrote down 11 billion Euros in
goodwill is a result of the Company's prior improper accounting
practices. This additional news has caused Vivendi's ADRs to drop to as
low as $10.00.
For more details, contact William Lerach or Darren Robbins by Phone:
800-449-4900 or visit the firm's Website: http://www.milberg.com
VIVENDI UNIVERSAL: Wolf Haldenstein Commences Securities Suit in NY
-------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP expanded the securities class
action lawsuit pending in the United States District Court for the
Southern District of New York on behalf of purchasers of the securities
of Vivendi Universal (NYSE: V; Paris Bourse: EX FP) between February
11, 2002 and August 13, 2002, inclusive, against the Company and Jean-
Marie Messier, the Company's former Chairman and Chief Executive
Officer.
The complaint alleges that Mr. Messier and Vivendi 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, prior to and during the class period, Mr. Messier took
Vivendi on an acquisition binge that, according to published reports,
resulted in the Company amassing approximately $18 billion in debt as
he turned the Company from a water concern into an entertainment
powerhouse.
Under Mr. Messier's leadership, Vivendi completed a $30 billion buyout
of Canada's Seagram and a $10.3 billion purchase of USA Networks Inc.,
the cable and entertainment company owned by Hollywood mogul Barry
Diller. Concomitantly, Mr. Messier orchestrated a scheme to conceal
the severity of Vivendi's liquidity problems stemming from the massive
debt load incurred as a result of these, and other, transactions. In
fact, only days before his ouster by Vivendi's Board, Mr. Messier
caused the Company to issue several press releases that falsely stated
that Vivendi did not face an immediate and severe cash shortage that
threatened the Company's viability going forward absent an asset fire
sale. It was only after Vivendi's Board dislodged Mr. Messier that the
Company's new management disclosed the severity of the crisis and that
the Company would have to secure immediately both bridge and long-term
financing or default on its largest credit obligations.
As detailed in the suit, Mr. Messier failed to disclose the true
contours of Vivendi's cash crisis and his affirmative
misrepresentations to the contrary have given rise to an investigation
by French authorities concerning whether Mr. Messier disclosed in a
timely fashion that the Company was in dire financial straits.
Published reports also indicate that Vivendi is engaged in urgent
discussions with lenders to secure financing and is both considering
and negotiating the sale of assets.
On August 14, 2002, the Company's new management disclosed that Vivendi
suffered a $12 billion net loss for the first half of 2002, would take
an $11 billion goodwill write-down of depreciated assets, and put aside
$3.4 billion in reserves.
As a consequence of these revelations, the Company's common stock
declined nearly 24%. By midday trading on August 16, 2002, the
Company's stock had fallen further and was trading below $10 per share.
The Company's stock had traded as high as $42.92 per share during the
class period.
For more information, contact Gregory Mark Nespole by Mail: 270 Madison
Avenue, New York, New York 10016, by Phone: 800-575-0735 by E-mail:
Nespole@whafh.com, classmember@whafh.com or visit the firm's Website:
http://www.whafh.com.All e-mail correspondence should make reference
to Vivendi.
WALT DISNEY: Kirby McInerney Commences Securities Fraud Suit in C.D. CA
-----------------------------------------------------------------------
Kirby McInerney & Squire, LLP initiated a securities class action in
the United States District Court for the Central District of California
on behalf of all purchasers of securities of the Walt Disney Co. during
the period from August 15, 1997 through May 15, 2002.
The complaint asserts claims for violation of Section 10(b) of the
Securities and Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder against the Walt Disney Company and certain senior
executives, and asserts claims for violation of Section 20(a) against
certain management executives.
The alleged violations, according to the complaint, stem from
defendants' concealment of the existence, details, and potential
effects of a pending lawsuit over merchandising rights.
For more details, contact Ira M. Press or Ian Washburn by Mail: 830
Third Avenue, 10th Floor, New York, New York 10022 by Phone:
212-317-2300 or 888-529-4787 by E-Mail: obraun@kmslaw.com or visit the
firm's Website: http://www.kmslaw.com
XCEL ENERGY: Stull Stull Commences Securities Fraud Suit in MN Court
--------------------------------------------------------------------
Stull Stull & Brody initiated a securities class action in the United
States District Court for the District of Minnesota, on behalf of
purchasers of the securities of Xcel Energy, Inc. (NYSE:XEL) between
January 31, 2001 and July 26, 2002, inclusive.
The complaint alleges that the Company issued false and misleading
statements which artificially inflated its stock, in violation of the
Securities Exchange Act of 1934.
For more details, contact Tzivia Brody by Mail: 6 East 45th Street, New
York, NY 10017 by Phone: 1-800-337-4983 by Fax: 212-490-2022 or by E-
mail: SSBNY@aol.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 * * *