/raid1/www/Hosts/bankrupt/CAR_Public/021010.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, October 10, 2002, Vol. 4, No. 201
Headlines
ARIZONA: State Begins Notifying Residents of Tax Refund Suit Settlement
BRITISH AMERICAN: Offers To Settle Australian Tobacco Retailers Suit
CACHEFLOW INC.: Plaintiffs File Amended Securities Suit in S.D. NY
DEFENSE CONTRACTORS: Former Soldiers File Suit For Radiation Exposure
FINISAR CORPORATION: Asks NY Court To Dismiss Securities Fraud Suit
GLENWOOD CORPORATION: Faces Consumer Suit Over Graves' Misplacement
INSURANCE INDUSTRY: Firms, Except Liberty Life, Settle Race Bias Suits
MAJOR LEAGUE SOCCER: Players To Form Union After Antitrust Suit Loss
PACIFIC SUNWEAR: Employees File Overtime Wage Suit in CA State Court
PRICEWATERHOUSECOOPERS LLP: SEC Unlikely To Act In Microstrategy Suit
THRIFT PAPER: Recalls 26T Electric Fans For Shock, Fire, Injury Hazards
VALUE CITY: Voluntarily Recalls Red Devil Gas Grills For Burn Hazard
VERSANT CORPORATION: Arguments on Suit Dismissal Appeal Set For 2003
VIKING SEWING: Recalls 11,000 Viking Sewing Machines For Fire Hazard
*Automobile Firms Commence Fight Against Racial, Sexual Discrimination
New Securities Fraud Cases
ANDRX CORPORATION: Marc Henzel Commences Securities Suit in S.D. FL
ASIA GLOBAL: Schiffrin % Barroway Commences Securities Suit in C.D. CA
BAXTER INTERNATIONAL: Marc Henzel Commences Securities Suit in N.D. IL
CAPITAL ONE: Marc Henzel Commences Securities Fraud Suit in E.D. VA
CUTTER & BUCK: Lockridge Grindal Commences Securities Suit in W.D. WA
ELECTRONIC DATA: Weiss & Yourman Commences Securities Suit in S.D. NY
ELECTRONIC DATA: Stull Stull Commences Securities Fraud Suit in S.D. NY
FIRST HORIZON: Marc Henzel Commences Securities Fraud Suit in N.D. GA
HOUSEHOLD INTERNATIONAL: Marc Henzel Commences Securities Suit in IL
INTERPUBLIC GROUP: Marc Henzel Commences Securities Suit in S.D. NY
MERRILL LYNCH: Finkelstein Thompson Launches Securities Suit in S.D. NY
METRIS COMPANIES: Marc Henzel Commences Securities Suit in MN Court
MORGAN STANLEY: Marc Henzel Commences Securities Fraud Suit in S.D. NY
PEMSTAR INC.: Marc Henzel Commences Securities Fraud Suit in MN Court
SALOMON SMITH: Marc Henzel Commences Securities Fraud Suit in S.D. NY
QUADRAMED CORPORATION: Milberg Weiss Lodges Securities Suit in N.D. CA
QUADRAMED CORPORATION: Schiffrin & Barroway Files Securities Suit in CA
QUADRAMED CORPORATION: Cauley Geller Launches Securities Suit in CA
REHABCARE GROUP: Marc Henzel Commences Securities Fraud Suit in E.D. MO
VIVENDI UNIVERSAL: Marc Henzel Commences Securities Suit in S.D. NY
*********
ARIZONA: State Begins Notifying Residents of Tax Refund Suit Settlement
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The state of Arizona has started to notify more than 600,000 taxpayers
that they may be eligible for refunds from the proposed settlement of a
class action, the Associated Press Newswires reports.
The case stems from the state's former practice, now illegal, to exempt
dividends from state income tax if the corporation paying the
dividend did more than half its business within Arizona, while
requiring tax payments on dividends derived from corporations doing all
its business outside the state.
Since such distinctions were found illegal, and the law was repealed,
refunds were owed those taxpayers who paid taxes on dividends from out-
of-state corporation. Under the settlement, refunds would be due only
for four tax years in the late 1980s.
A judge, on September 23, gave preliminary approval of the proposed
settlement, which would have the state calculate refund amounts
according to a set formula, and generally pay the refunds over a four-
year period.
BRITISH AMERICAN: Offers To Settle Australian Tobacco Retailers Suit
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British American Tobacco PLC offered to settle a class action filed by
8,000 Australian retailers in Australia's New South Wales Supreme
Court, AFX news reports.
The suit was filed by the Insolvency Management Fund Ltd (IMF) earlier
this year, seeking to recover AU$250 million in license fees paid to
tobacco companies including British American Tobacco, Rothmans Inc and
WD and HO Wills during a five-week period in 1997.
The Company told the Australian Stock Exchange Tuesday the matter would
be resolved. "The solicitors and senior counsel for the retailers have
recommended acceptance of the offer and a settlement agreement has now
been concluded," a statement to the Exchange said. "BAT will pay 105%
of the claim of each retailer . In order to assist with the settlement
negotiations, IMF agreed to reduce its fee to 30% so that the retailers
will receive a net 75% of their claim." The details of the settlement
offer, however, were not revealed.
IMF said the Supreme Court litigation would be discontinued, AFX news
reports. IMF further stated that a case against Philip Morris
Companies, Inc. had already been settled.
CACHEFLOW INC.: Plaintiffs File Amended Securities Suit in S.D. NY
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Plaintiffs in the securities class actions pending against Cacheflow,
Inc. filed an amended securities class action in the United States
District Court for the Southern District of New York.
Several suits were commenced in June and July 2001 on behalf of persons
who purchased the Company's stock between November 18, 1999 and June
8, 2001. The complaints generally alleged that various investment bank
underwriters engaged in improper and undisclosed activities related to
the allocation of shares in the Company's initial public offering of
securities and maintained artificially high after-market prices.
The court has appointed a lead plaintiff for the consolidated cases.
The Company is aware that various plaintiffs have filed similar actions
asserting virtually identical allegations against over 300 other public
companies, their underwriters, and their officers and directors arising
out of each company's public offerings.
The lawsuits against our company, along with these other related
securities class actions currently pending in the Southern District of
New York, have been assigned to Judge Shira A. Scheindlin for
coordinated pretrial proceedings and are collectively captioned "In re
Initial Public Offering Securities Litigation Civil Action No. 21-MC-
92."
The Company intends to defend against the allegations in the complaints
vigorously and believes the outcome would not have a material adverse
effect on its business, results of operations, or financial condition.
DEFENSE CONTRACTORS: Former Soldiers File Suit For Radiation Exposure
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Nine former members of United States and European NATO military units,
and their surviving spouses and children, along with a veterans'
support group, filed a class action in El Paso, Texas federal court
against defense contractors:
(1) Raytheon Company,
(2) Lucent Technologies,
(3) General Electric Corporation,
(4) Honeywell International, Inc.,
(5) ITT Industries, Inc., and
(6) ITT-Gilfillan, Inc.
The suit seeks damages for injuries suffered from exposure to dangerous
x-ray radiation during the period between 1958 and 1994. The
plaintiffs were exposed to this radiation during their work on radar
devices manufactured, designed and distributed by the defendants.
These veterans all served as US and NATO soldiers and were affected by
the radar devices, which operated primarily along the front lines of
the Cold War.
The plaintiffs allege that defendants defectively designed and
manufactured the radar devices by failing to adequately shield radar
transmitter tubes that emitted dangerous amounts of x-ray radiation,
creating an unreasonable risk of harm to radar mechanics, technicians,
and operators who regularly repaired, maintained and worked in close
proximity with these devices.
In addition, the suit alleges that despite the fact that the defendants
knew, or should have known, of the dangers posed by their radar
devices, the defendants failed to warn users of the significant dangers
and health risks posed by potential exposure to ionizing radiation
through the maintenance and use of radar devices. In particular, the
suit alleges that defendants failed to advise users of the need to wear
protective clothing and to limit periods of exposure.
As a result of this radiation exposure, the plaintiffs are at higher
risk for certain illnesses or have already developed various forms of
cancer and other life-threatening conditions. They seek certification
of a medical monitoring class on behalf of a class of radar operators,
mechanics and technicians exposed to ionizing radiation produced by
defendants' radar devices, but not yet affected with an illness.
They also seek relief for this class in the form of a fund, to be
administered by the court, to finance the performance of such medical
monitoring and surveillance services as are deemed reasonably and
medically necessary to protect the medical monitoring class from
increased risk of harm and disease.
Those plaintiffs who have already become ill or have died as a result
of the exposure also seek monetary damages. The illnesses affecting
the plaintiffs include, but are not limited to, leukemia, lymphomas,
bladder cancer, brain cancer, thyroid disease and late onset testicular
cancer.
For more information, contact Berger & Montague, PC Radar Litigation
Group by Mail: 1622 Locust Street, Philadelphia, PA 19103 by Phone:
800-23-RADAR (800-237-2327) or 215-875-3000 by Fax: 215-875-4604 by E-
mail: Radar@bm.net or visit the firm's Website:
http://www.bergermontague.com
FINISAR CORPORATION: Asks NY Court To Dismiss Securities Fraud Suit
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Finisar Corporation asked the United States District Court for the
Southern District of New York to dismiss the securities class action
pending on behalf of purchasers of its common stock from November 17,
1999 through December 6, 2000. The suit names as defendants the
Company and:
(1) Jerry S. Rawls, President and Chief Executive Officer,
(2) Frank H. Levinson, Chairman of the Board and Chief Technical
Officer,
(3) Stephen K. Workman, Vice President Finance and Chief Financial
Officer, and
(4) an investment banking firm that served as an underwriter for
the Company's initial public offering in November 1999 and a
secondary offering in April 2000.
In April 2002, an amended complaint was served on the defendants. The
amended complaint alleges violations of Sections 11, 12(a)(2) and 15 of
the Securities Act of 1933 and Section 10(b) of the Securities Exchange
Act of 1934, on the grounds that the prospectuses incorporated in the
registration statements for the offerings failed to disclose, among
other things, that:
(i) the underwriter had solicited and received excessive and
undisclosed commissions from certain investors in exchange for
which the underwriter allocated to those investors material
portions of the shares of Company stock sold in the offerings
and
(ii) the underwriter had entered into agreements with customers
whereby the underwriter agreed to allocate shares of Company
stock sold in the offerings to those customers in exchange for
which the customers agreed to purchase additional shares of
Company stock in the aftermarket at pre-determined prices.
The Company is aware that similar allegations have been made in
lawsuits relating to more than 300 other initial public offerings
conducted in 1999 and 2000. Those cases have been consolidated for
pretrial purposes. The issuer defendants, including Finisar, have
filed a motion to dismiss the complaints. A hearing date on the motion
has not been set.
The Company believes that the allegations against it and its officers
and directors are without merit and intends to contest them vigorously.
However, the litigation is in the preliminary stage, and the Company
cannot predict its outcome.
GLENWOOD CORPORATION: Faces Consumer Suit Over Graves' Misplacement
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Patricia Sterling, 49, a housekeeping attendant at the Mayflower Hotel,
in Washington, DC, claims that the gravesite at Glenwood Cemetery of
her murdered son was moved without her knowledge and that his body and
casket were carelessly mishandled by cemetery employees, The Washington
Post reports.
Ms. Sterling's complaint, while not a class action, has been filed on
behalf of others who might experience similar problems, according to
her attorney, Mark Steinbach. Mr. Steinbach said this procedure was
possible because of a 2000 amendment to the city's Consumer Protection
Procedures Act, which allows a private person to act for the general
public.
Ms. Sterling said the grave was marked with a small metal marker,
because the cemetery officials told her to delay placement of a
headstone until they could plant new grass. For nearly two years she
prayed over her son's grave and brought flowers to the spot. However,
in June 2001, she visited the gravesite and saw that the ground was
over-turned and the marker missing.
Ms. Sterling said the cemetery's superintendent, Terrance Adkins, told
her there had been a mix-up with another body. Mr. Adkins then cleared
away some dirt to show where her son's grave marker now was - eight
feet from where it had been before.
On November 15, 2001, at Ms. Sterling's insistence, cemetery workers
dug up her son's casket at the spot to which the marker had been moved.
She saw that the casket was badly damaged, with its top twisted nearly
completely off and the body soaked in dirt and water. The concrete box
she had originally requested and paid $650 for to keep water from the
casket was nowhere in evidence. "It was horrible," said Ms. Sterling,
near tears. "The casket was so messed up, it looked like it was broken
in half."
Mr. Steinbach said that it is unlawful for a DC cemetery to open a
grave without permission within 10 years of interment. According to
court documents, filed in DC Superior Court, Mr. Adkins said that he
"had had problems with another lady who was trying to sue him because
her son was not located where he was supposed to be." So, they dug
down and found they had placed Ms. Sterling's son in that spot, which
the second lady had procured, and then they unlawfully relocated the
casket, said Mr. Steinbach. The damage to the coffin occurred during
the clandestine disinterment and relocation of the coffin, according to
the lawsuit.
Named in the lawsuit as defendants are the Glenwood Corporation,
Terrance Adkins and Marshall's Funeral Home. Ms. Sterling is asking
for $250,000 damages. Mr. Steinbach said that while they are seeking
damages, the lawsuit is about a lot more than damages. "It's an
attempt to make sure that this kind of incident does not happen to
another family."
INSURANCE INDUSTRY: Firms, Except Liberty Life, Settle Race Bias Suits
----------------------------------------------------------------------
A number of insurance companies have settled with black policyholders,
who charged in their class actions that they paid higher premiums
because they are black. One company that is not settling is Liberty
Life in Greenville, South Carolina, the Associated Press Newswires
reports.
A Richland County, South Carolina, court recently gave approval to a
$1.1 million settlement between a Charleston insurance company,
Atlantic Coast Life Insurance Co., and about 30,000 black
policyholders, who had been paying higher premiums because of their
race, ending two years of negotiations. Only two objections were
raised to the settlement by members of the class, but one of these was
withdrawn before the recent hearing on the settlement and the second
objector did not appear in court.
As a result of the settlement, current policyholders and those who
received claims on or after July 17, 1989, will have their benefits
increased by 12 percent to 18 percent. Anyone with claims paid before
that can make a request for increased benefits of 12 percent to 18
percent, plus interest, up to $100,000.
Several other high-profile companies have reached similar settlements
with black policyholders, said English McCutchen, attorney for the
policyholders.
Life Insurance Co. of Georgia agreed earlier this year to pay $55
million to settle its cases. That amount includes a $4 fine. MetLife
Inc. has agreed to settle its class action with black policyholders
that paid the higher premiums from 1901 to 1972. Earlier this year,
the company said it was setting aside $250 million to cover costs
associated with the cases.
The settlement requires final court approval and would compensate those
affected through an increased death benefit, a cash payment or special
settlement death benefit. One company that is not settling is
Greenville-based Liberty Life Insurance Corp., which is fighting a
lawsuit and a regulatory action taken against it by the state Insurance
Department.
In August, an administrative law judge ruled against Liberty Life,
saying race-based pricing of insurance policies is illegal in South
Carolina. The company has said that it did not break the law, but
charged black customers more for insurance because blacks had shorter
life expectancies than whites when the policies were sold years ago.
Liberty life spokesman James Phillips said that the company is awaiting
final resolution of the Insurance Department's action, during which
these arguments concerning the affected 50,000 policies polices were
heard.
The department had fined the company $2 million and suspended it from
selling life insurance for one year. The request for a hearing
automatically delayed the penalties, which will be set by a judge
later.
MAJOR LEAGUE SOCCER: Players To Form Union After Antitrust Suit Loss
--------------------------------------------------------------------
Major League Soccer players plan to form a union, after the Supreme
Court declined to intervene in their antitrust class action against the
league's owners early this week, the Spokesman-Review reports.
Eight players filed the suit in Boston federal court in 1997, alleging
that the leagues owners conspired with the US Soccer Federation to
eliminate competition for the sport's top athletes, and engaged in a
conspiracy to suppress player salaries.
The federal court and a jury, however, threw out the claim, saying that
even without another Division I circuit in this country, the league
faced competition from premier leagues in Europe and Latin America, and
from minor and indoor leagues in the United States, the Spokesman-
Review states.
The players said forming the union is part of their effort to improve
their bargaining power against the owners.
PACIFIC SUNWEAR: Employees File Overtime Wage Suit in CA State Court
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Pacific Sunwear of California, Inc. faces a class action filed by its
former employee in the California Superior Court for the County of
Orange, alleging that the Company has not properly paid wages to its
California store managers and co-managers working in d.e.m.o. stores.
The complaint in the action seeks monetary and injunctive relief. The
Company has filed an answer in the action denying the allegations and
raising affirmative defenses. No class has been certified at this
time.
The Company is involved from time to time in litigation incidental to
its business. Management believes that the outcome of current
litigation will not have a material adverse effect upon the results of
operations or financial condition of the Company.
PRICEWATERHOUSECOOPERS LLP: SEC Unlikely To Act In Microstrategy Suit
---------------------------------------------------------------------
The United States Securities and Exchange Commission (SEC) is close to
settling its probe into the audits of software-maker MicroStrategy
Inc., by PricewaterhouseCoopers LLP, people familiar with the talks
said, and The Asian Wall Street Journal reports. The agreement would
close the books on one of the highest-profile cases of aggressive and
improper booking of sales during the technology-stock bubble.
Investors in MicroStrategy stock also had not remained passive as
information about the improper auditing of the company's books reached
them. In May 2001, PricewaterhouseCoopers paid $55 million to settle a
shareholder class action, charging the Company with botching some
audits of MicroStrategy's books.
Under the accord's expected terms, regulators would settle with the
lead audit partner on the MicroStrategy account, but would not bring
enforcement action against the nation's largest accounting firm, the
same people said.
Regulators found the accounting problems were related to violations by
the individual audit partner, rather than a breakdown throughout
PricewaterhouseCoopers, or approval, tacit or otherwise, of bad
accounting by senior management at the accounting firm. A final
agreement could be several weeks or months away.
Warren Martin, 50 years old, a partner in the firm's Tysons Corner,
Virginia, office who headed up the MicroStrategy audit, has agreed in
principle to a two-year suspension from practice as an auditor, one
person knowledgeable about the talks said. Mr. Martin also has
tentatively agreed to retire from PricewaterhouseCoopers.
Regulators allege Mr. Martin signed off on improper accounting at
MicroSrategy's Vienna, Virginia, location, and assured
PricewaterhouseCooper's management that the financials were fairly
stated, a second person familiar with the investigation said.
Mr. Martin, the firm and the SEC declined to comment on the SEC's
allegations or any other matters related to the settlement.
THRIFT PAPER: Recalls 26T Electric Fans For Shock, Fire, Injury Hazards
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Thrifty Paper Co., Inc. is cooperating with the United States Consumer
Product Safety Commission (CPSC) by voluntarily recalling about 26,000
electric fans. These electric fans have undersized wiring, use a power
plug that is not polarized, overheat and have an improperly sized
grill, all of which could cause electrocution, electric shock, fire,
and finger entrapment hazards to consumers. The Company has not
received any reports of incidents. This recall is being conducted to
prevent the possibility of injuries.
The recalled electric fans, which have the brand name "Top Choice"
printed on the fan blade cover, were sold under seven different model
names: SF16BU(BE), SF16BK, DF16BU(BE), DF18, FL18, and BSD-18066. The
model name can be found on the motor housing. The DF18 and FL18 models
have a label that reads, "Hi Velocity Top Choice Air Circulator," which
is also located on the fan blade cover. The three-speed, four-position
fans are either floor-mounted or table-top units. The fans were
manufactured in China.
Discount and variety stores in the metropolitan New York area sold
these electric fans from April 2000 through June 2002 for between $10
and $15.
For more information contact the Company by Mail: 110 West Graham Ave.,
Hempstead, N.Y., 11550, or by Phone: 888-281-3281 between 9 am and 5 pm
ET Monday through Friday.
VALUE CITY: Voluntarily Recalls Red Devil Gas Grills For Burn Hazard
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Value City Department Stores, Inc./Schottenstein Stores is cooperating
with the United States Consumer Product Safety Commission (CPSC) by
voluntarily recalling about 10,800 Red Devil gas grills sold at Value
City and Schottenstein stores.
The product's design allows consumers to light the grill at an air
intake tube, instead of at the burner. Though the grill appears to
function normally, gas inside the air intake tube ignites. The tube
can reach temperatures of up to 750 degrees Fahrenheit and present a
burn hazard to consumers.
In grills manufactured before August 1998, the heat produced by
lighting the grill at the air intake tube damaged the plastic support
piece, and caused the grill to fall to the ground. When it collapses,
flames from the grill can burn nearby consumers and ignite surrounding
combustibles.
There have been 44 reports of consumers suffering burns to legs, hands
and fingers, including reports of some third degree burns, after the
grills collapsed during use. More than 1,000 consumers returned their
grills to the manufacturers because the grills collapsed. There has
been one incident reported by Value City and Schottenstein Stores
customers.
These red metal gas grills have a tripod stand. They have a logo on
the label of the lid and grill base showing a devil cooking at a grill
with the writing, "Red Devil." The lid also reads "The Portable
Outdoor Kitchen." Components sold with the grill include a heat plate,
an oversized skillet with handles, a table-safe serving trivet, and
carrying totes.
About 155,000 of these grills were manufactured by e4L Inc., of Encino,
Calif., and, Quantum North America Inc., of Encino, Calif. Because the
manufacturer is out of business, CPSC issued a warning about these
grills in May 2002. Additional Red Devil gas grills were manufactured
by Cadac, of Roodepoort, South Africa, but also are included in the
recall.
CPSC sued e4L Inc. and Quantum North America Inc. to obtain a recall,
and an administrative law judge granted CPSC a default judgment when
these manufacturers failed to appear. The firms are liquidating their
assets under bankruptcy law.
The Home Shopping Network (HSN), QVC, and Wal-Mart previously notified
their customers about the hazard these grills pose, and provided a
remedy. Since Quantum and e4L have declared bankruptcy, there is no
remedy available for grills bought from retailers other than HSN, QVC,
Wal-Mart, Value City and Schottenstein stores.
Consumers who purchased their Red Devil Gas Grills from another
retailer, should contact the retailer. If that retailer does not
provide a refund, repair or replacement for the grill, consumers should
contact CPSC by Phone: (800) 638-2772 anytime. Additionally, consumers
who are aware of any incidents with these grills or who want additional
information also should contact CPSC.
About 19,300 of these grills, sold directly by e4L, were recalled
in July 1998 because the burners could disconnect from the burner pan.
The firm received 21 reports of the burners on these grills
disconnecting and one consumer suffered burns. Even if consumers
participated in this previous recall program, they should stop using
these grills since this warning addresses a different hazard.
Value City and Schottenstein stores sold these grills from about
April 2000 through July 2002 for about $60. CPSC urges consumers to
stop using these grills immediately. Consumers who purchased Red Devil
gas grills from Value City or Schottenstein stores can return it to the
store for a store credit.
For more information, call Value City Customer Service by Phone:
888-278-6370 anytime, or visit the firm's Website:
http://www.valuecity.com.
VERSANT CORPORATION: Arguments on Suit Dismissal Appeal Set For 2003
--------------------------------------------------------------------
Versant Corporation expects that oral argument on the appeal of the
dismissal of the consolidated securities class action pending against
it and certain of its present and former officers and directors will
take place in 2003.
The consolidated suit, pending in the United States District Court for
the Northern District of California, alleges violations of Sections
10(b) and 20(a) of the Securities Exchange Act, and Securities and
Exchange Commission Rule 10b-5 promulgated under the Securities
Exchange Act, in connection with public statements about the Company
and its financial performance.
In December 2001, the court dismissed, with prejudice, the consolidated
suit against the Company. The plaintiffs then filed a notice of appeal
to the Ninth Circuit Court of Appeals. On May 2, 2002, the plaintiffs,
now as appellants, filed an opening brief alleging the dismissal was in
error and should be reversed. The Company filed its answering brief on
July 12, 2002, and the appellant filed their reply brief on August 9,
2002.
The Company denies the allegations in the litigation and intends to
vigorously defend the court's judgment during appeal. Securities
litigation can be expensive to defend, consume significant amounts of
management time and result in adverse judgments or settlements that
could have a material adverse effect on the Company's results of
operations and financial condition.
VIKING SEWING: Recalls 11,000 Viking Sewing Machines For Fire Hazard
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Viking Sewing Machines, Inc. is cooperating with the United States
Consumer Product Safety Commission (CPSC) by voluntarily recalling
about 11,000 Viking "Designer 1" sewing machines. Solder connections
in the main power supply of the sewing machines can overheat, posing a
fire hazard.
The Company has received two reports of the sewing machine's power
supply smoking and one report of a sewing machine catching fire. The
fire was contained to the sewing machine. No injuries have been
reported.
The recalled sewing machines were manufactured in 1999, and are white
with the name "Designer 1" printed on the front of the machine. The
serial numbers are written on the bottom of the machine. Only serial
numbers that fall within the following ranges are included in the
recall:
(1) serial numbers beginning with "7" and ending with "2,"
(2) serial numbers beginning with "5" and ending with "3,"
(3) serial numbers beginning with "4" and ending with "2,"
(4) serial numbers beginning with "5" and ending with 0," and
(5) serial numbers beginning with "6" and ending with "4,"
Independent sewing machine dealers sold the recalled machines
nationwide from January 1999 to January 2000 for between $5,500 and
$6,000.
For more information, contact the Company by Phone: 800-446-2333
between 9 am and 4:30 pm ET Monday through Friday or visit the firm's
Website: http://www.husqvarnaviking.com.
*Automobile Firms Commence Fight Against Racial, Sexual Discrimination
----------------------------------------------------------------------
Taking a look at the accusations culled from lawsuits filed against
Detroit's automakers during the past two years, provides a glimpse into
some grim realities of factory life, The Detroit News reports.
In Ohio, autoworkers taunted African-American colleagues with hangman's
nooses. Women making luxury cars in Michigan endured obscene gestures
and demands for sexual favors. Gay-bashing escalated from name-calling
to physical threats against a forklift operator at a Georgia plant.
Such allegations remain a fact of life in the rough-and-tumble world of
car and truck assembly plants, despite a more diverse workforce and
corporate policies that preach zero tolerance for offensive behavior
and harsh discipline for offenders.
US Equal Employment Opportunity Commission (EEOC) data show a steady
rate of complaints against automakers and the parts makers that supply
them. Between 1992 and 2001, about 5,000 claims for racial or sexual
harassment or discrimination were filed - an average of 500 annually -
representing about one percent of all race and sex charges filed with
the Commission. About 20 percent of all sex-based complaints to the
Commission and 10 percent of the race claims are found to have merit,
The Detroit News reports.
Automakers say conditions have improved since they began hiring women
and minorities in greater numbers in the 1970s. However, eradicating
scurrilous conduct altogether is unrealistic because they cannot purge
the prejudices that workers bring with them.
"We are a microcosm of society in general," said Kathleen Barclay, the
top human resources executive at General Motors Corp. "As long as
there is an existence of harassment and discrimination in society
overall, it will be brought into the workplace. Regardless of what
industry you are in, or what company you are in, it will be there."
For an example, The Detroit News looked at the case of Linda Gilbert.
Ms. Gilbert says she heard whispers behind her back as soon as
Chrysler's employee Web site posted the news in early August that the
state Court of Appeals upheld a $21 million judgment against the
company in her sexual harassment case. Seeing the news item, and
knowing her co-workers had rekindled difficult emotions.
According to The Detroit News, Ms. Gilbert arrived at Chrysler in 1992,
with her own troubled history that included depression, substance abuse
and being sexually assaulted as a child. She was proud of being the
first female millwright at the automaker's Jeep Grand Cherokee plant in
Detroit. Millwrights install, maintain and repair plant machinery.
The work is dirty, sometimes dangerous. It requires both technical
knowledge and physical strength.
In Ms. Gilbert's case, however, according to the court documents,
working at the plant also meant enduring obscene epithets and demeaning
cartoons that depicted her in a sex act with a co-worker. Once,
somebody urinated on a chair she used to sit and change her work boots.
These are but illustrations of a string of abusive acts. Ms. Gilbert's
therapist testified that the harassment derailed her recovery from
alcoholism and worsened her depression.
Speaking about life with her co-workers, Ms. Gilbert said, "I thought
that it would not matter that I was a woman, that I would get fair
treatment, but that did not happen."
Chrysler, a unit of DaimlerChrysler AG, said, in a written statement,
that it had fully investigated each of Ms. Gilbert's complaints and had
"taken disciplinary action against known harassers."
There is an economic cost to be paid in the battle against sexual
harassment as well as the emotional one paid by the harassed worker.
The economic cost is borne by the company. Ms. Gilbert's award of $21
million is believed to be the largest to a single plaintiff for sexual
harassment and came in 1999, one year after women auto workers in
Illinois won a $34 million class action judgment against Mitsubishi
Motors Corp. - the most ever awarded in a sexual harassment lawsuit.
"The Mitsubishi case sort of educated people on the potential economic
costs of sexual harassment," said John Hendrickson, who represented the
EEOC in the case.
The scope of the problem is unknown - assessing the extent and severity
of maltreatment inside auto plants today, is something of a guessing
game, The Detroit News stated. Complaints to the EEOC grew after the
Civil Rights Act of 1991, paved the way for hefty monetary damages.
However, the commission's statistics reflect only a partial picture -
they do not capture lawsuits filed in state courts, accusations lodged
only with the automakers or grievances filed with the United Auto
Workers Union, which represents most US auto workers.
Chrysler and GM estimate that less than one percent of their hourly
workers file charges annually with the company or state and federal
agencies. UAW Vice President Nate Gooden said workers often go
straight to an attorney. Ford provided no information of the subject.
"What is most important," said Monica Emerson, who oversees diversity
matter for Chrysler, "is that, if any employee feels that they are
subjected to harassment and discrimination, they feel that they work in
a company where they can bring that forward and it will be addressed
properly and effectively."
However, experts contend the problem may be worse than statistics
indicate. Many workers, especially women in male-dominated factories
who need the jobs to support families, still do not report offenses.
"The harassment is more physical, more verbally abusive than you find
in other types of work environments," said James Gruber, a sociology
professor at the University of Michigan-Dearborn, who has studied
sexual harassment in auto plants. "Along with that (the more abusive
harassment), women are handicapped in their ability to respond to their
harassers. They are less likely to confront or report than they are in
other types of environments."
Sexual harassment is not the only concern. One in three complaints to
the EEOC against automakers and suppliers allege race-based abuse. In
July, two former workers at GM's truck plant in Moraine, Ohio, filed
a $4 million racial discrimination lawsuit against the automaker. The
two workers, both African-American supervisors at the plant, alleged
that they were subjected to racial slurs, including the display of
hangman's nooses, and denied advancement opportunities.
Ford recently settled an anti-gay harassment in Georgia, for an
undisclosed amount. Ruben Camp, a forklift operator at a plant near
Atlanta, claimed that co-workers called him "sissy," labeled him "AIDS-
infected" and threatened him with a weapon.
Beyond the data and court files available in the public domain, many
workers are reluctant to speak publicly about what goes on inside
plants. They respond to questions with nervous laughter. Privately,
some say harassment and discrimination complaints are overblown.
Others say conditions are as bad as ever.
George Gallant, a Chicago attorney who has monitored efforts at
Mitsubishi and Ford to reform plant culture as a result of sexual
harassment lawsuits, said that no matter what a company is doing to
thwart misconduct, conditions can always backslide.
"The natural culture of the factory floor is rough," Mr. Gallant said.
"You are making people be a lot more polite to each other; to treat
each other with more chivalry than they are inclined to do in their
heart of hearts. It is going to take many, many years to change, if it
ever does."
New Securities Fraud Cases
ANDRX CORPORATION: Marc Henzel Commences Securities Suit in S.D. FL
-------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court, Southern District of Florida on
behalf of purchasers of the securities of Andrx Corporation (NYSE:
ADRX) between February 10, 2000 and August 12, 2002, inclusive.
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 February 10, 2000 and August 12, 2002, thereby
artificially inflating the price of Company securities.
The complaint alleges that the Company:
(1) engaged in improper accounting practices which had the effect
of materially overstating its reported earnings and
understating its losses;
(2) issued materially false and misleading financial statements
not prepared in accordance with GAAP; and
(3) lacked proper accounting controls and revenue recognition
practices at its subsidiaries and which permitted its
employees to commit accounting improprieties for a period of
over three years.
On August 12, 2002, the Company announced that, as a result of its
internal audit process, management has learned that an employee at one
of its subsidiaries appears to have altered certain accounting records
pertaining to accounts receivable balances and aging relating to its
pharmaceutical and distribution operations, thereby potentially
affecting the Company's allowance for doubtful accounts.
Based upon its investigation, it appears that the Company's previously
announced net accounts receivable of $103.6 million as of June 30,
2002, may have been overstated by as much as $15 million relating to
the period from January 1, 1999 to date.
As a result of these accounting improprieties, the Company would be
required to restate earnings for prior years and/or account for these
misstatements as a charge in the current period. In the aftermarket
trading on the date of the announcement of the accounting
irregularities, the Company's stock declined by 16% or $3.57 per share,
from $23.32 to $19.75.
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 by E-Mail: mhenzel182@aol.com or visit
the firm's Website: http://members.aol.com/mhenzel182
ASIA GLOBAL: Schiffrin % Barroway Commences Securities Suit in C.D. CA
----------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Central District of California,
Western Division, Los Angeles on behalf of all purchasers of the common
stock of Asia Global Crossing Ltd. (Pink Sheets: ASGXF) from October 6,
2001 through January 28, 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 the managers of Asia Global Crossing Ltd. and Global Crossing Ltd.
hid the declining financial conditions of both of the jointly-managed
companies from Asia Global Crossing's investors.
The suit alleges that defendants falsely represented to the investing
public that Global Crossing would be able to provide its subsidiary
Asia Global Crossing with a $400 million dollar line of credit, and
that the value of Asia Global's hard assets -- primarily composed of
its cable lines and transmission equipment -- had not been
significantly affected by the worldwide glut of fiber-optic capacity.
For more details, contact Marc A. Topaz or Stuart L. Berman by Mail:
Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone:
888-299-7706 (toll free) or 610-667-7706 by E-mail: info@sbclasslaw.com
or visit the firm's Website: http://www.sbclasslaw.com
BAXTER INTERNATIONAL: Marc Henzel Commences Securities Suit in N.D. IL
----------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Northern District of
Illinois, Eastern Division, on August 7, 2002, on behalf of purchasers
of the securities of Baxter International Inc. (NYSE: BAX) between
January 24, 2002 and July 18, 2002 inclusive, against the Company and:
(1) Harry M. Jansen Kraemer, Jr. (CEO and Chairman) and
(2) Brian P. Anderson (CFO)
The complaint charges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of materially false and misleading
statements to the market between January 24, 2002 and July 18, 2002.
Among other things, the complaint alleges that throughout the class
period, the Company issued press releases representing that its
BioScience and Renal divisions would grow their earnings by percentages
in the high-teens and high-single-digits, respectively, in 2002.
The complaint further alleges that these, and other, representations
were materially false and misleading because they failed to disclose
that the Company was experiencing serious problems with its BioScience
and Renal divisions. Given these, and other undisclosed problems,
defendants' repeated class period assurances of continued growth in
2002 were lacking in any reasonable basis when made, according to the
complaint.
On July 18, 2002, the Company issued a press release regarding its
results for the second quarter of 2002, announcing disappointing sales
growth for the BioScience division and a decline in sales for the Renal
division. In addition, the Company took a $51 million charge in
connection with an acquisition and a $70 million impairment charge
reflecting a decline in the value of certain of the Company's
investments.
In response to the announcement, the price of the Company's common
stock plummeted by 36.5%, falling from a $43.41 per share close on July
17, 2002, to close at $32 per share on July 18, on extremely heavy
trading volume. During the class period, Company insiders sold a total
of 435,700 Baxter common shares, reaping gross proceeds in excess of
$23.7 million.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
CAPITAL ONE: Marc Henzel Commences Securities Fraud Suit in E.D. VA
-------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Eastern District of
Virginia on behalf of a class consisting of all persons who purchased
securities of Capital One Financial Corporation (NYSE: COF) between
January 15, 2002 and July 16, 2002, inclusive.
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 business operations and earnings caused its
stock price to become artificially inflated, inflicting damages on
investors.
The suit alleges that defendants failed to disclose that the Company
has a large percentage of "subprime" customers, borrowers with either
poor credit histories or from low-income households. The Company
failed to maintain adequate loan loss reserves, thereby artificially
inflating the Company's earnings and stock price.
When it was revealed that federal regulators told the Company to
increase its loan loss reserves and improve the technology that the
Company uses to provide loans and credit cards to subprime consumers,
the Company's stock price plummeted 39% in one day.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-
643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or visit
the firm's Website: http://members.aol.com/mhenzel182
CUTTER & BUCK: Lockridge Grindal Commences Securities Suit in W.D. WA
---------------------------------------------------------------------
Lockridge Grindal Nauen PLLP initiated a securities class action in the
United States District Court for the Western District of Washington on
behalf of purchasers of Cutter & Buck, Inc. (Nasdaq:CBUKE) publicly
traded securities during the period between June 23, 2000 and August
12, 2002, inclusive.
The complaint charges the Company and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. The
Company designs and markets upscale men's and women's sportswear and
outerwear under the Cutter & Buck brand. The Company sells its
products primarily through golf pro shops and resorts, corporate
accounts, specialty retail, and Company-owned retail stores.
The complaint alleges that during the class period, defendants caused
Company shares to trade at artificially inflated levels through the
issuance of false and misleading financial statements.
On August 12, 2002, the Company issued a press release entitled,
"Cutter & Buck Announces Discovery of Accounting Irregularities in
Fiscal Years 2000 and 2001; Reports Resignation of Chief Financial
Officer; Announces Preliminary First Quarter Fiscal Year 2003 Operating
Results." On this news, the stock dropped to below $4 per share on
volume of more than 468,000 shares.
For more details, contact Karen M. Hanson by Mail: 100 Washington
Avenue South Suite 2200 Minneapolis, MN 55401 by Phone: 612-339-6900 or
by E-mail: kmhanson@locklaw.com
ELECTRONIC DATA: Weiss & Yourman Commences Securities Suit in S.D. NY
---------------------------------------------------------------------
Weiss & Yourman initiated a securities class action against Electronic
Data Systems Corp. (NYSE:EDS), and certain of its officers and
directors was commenced in the United States District Court for the
Southern District of New York, on behalf of purchasers of the Company's
securities, between September 7, 1999 and September 24, 2002.
The complaint charges the defendants with violations of the Securities
Exchange Act of 1934. The complaint alleges that defendants issued
false and misleading statements which artificially inflated the stock.
For more details, contact Mark D. Smilow, David C. Katz, and/or James
E. Tullman by Mail: The French Building, 551 Fifth Avenue, Suite 1600,
New York NY 10176 by Phone: 888-593-4771 or 212-682-3025 by E-mail:
info@wynyc.com
ELECTRONIC DATA: Stull Stull Commences Securities Fraud Suit in S.D. NY
-----------------------------------------------------------------------
Stull Stull & Brody initiated a securities class action in the United
States District Court for the Southern District of New York, on behalf
of all purchasers of the securities of Electronic Data Systems Corp.
(NYSE:EDS) between September 7, 1999 and September 24, 2002, inclusive
against the Company and certain of its officers and directors.
The complaint 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.
Specifically, the complaint alleges that, throughout the class period,
defendants issued numerous statements which highlighted the Company's
strong financial performance and reassured investors that the Company's
"business and financial fundamentals are sound" and the Company's
balance sheet is "rock solid."
As alleged in the complaint, 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's program to "manage" its future stock
issuance under its employee stock option program was
essentially an unhedged bet on the price of Company common
stock, which was exposing the Company to substantial
liabilities which were not reflected in the Company's
financial statements;
(2) that the Company was recording and reporting as assets (e.g.,
accounts receivable) and as revenue, purported receipts from
contracts structured as percentage-of-completion payment
arrangements where the requirements of Generally Accepted
Accounting Principles (GAAP) for such recording were not met
and where sufficient evidential matter did not exist to
support the claimed positive impact on EDS's books;
(3) that the Company improperly recorded revenue on contracts for
software that did not meet GAAP requirements for such revenue
recognition;
(4) that the Company was experiencing difficulties with certain of
its European contracts such that these contracts were not
performing according to the Company's expectations; and
(5) as a result of the foregoing, defendants' statements
concerning the Company, its earnings, accounting practices and
prospects were lacking in a reasonable basis at all relevant
times.
On September 18, 2002, the Company shocked the market by announcing
that it expected "revenues and earnings for its third quarter of 2002
to be lower than company guidance." In response to this negative
announcement, the price of the Company's common stock dropped sharply,
falling from $36.46 per share to $17.20 per share, on extremely heavy
trading volume.
Then, on September 24, 2002, certain analysts downgraded their rating
on EDS stock, citing the Company's obligations on certain put contracts
and that in order to close out the position, EDS would have to pay $225
million. In response, EDS issued a press release in which it
acknowledged that it had borrowed money in the commercial paper markets
to close out the put contracts.
In later public comments, an EDS spokesperson confirmed that the
Company borrowed $225 million. In response to these announcements, the
price of EDS common stock plunged further, falling from the previous
day's close of $16.52 per share to close at $11.68 per share.
For more details, contact Tzivia Brody by Mail: 6 East 45th Street, New
Ayork NY 10017 by Phone: 800-337-4983 by Fax: 212-490-2022 or by E-
mail: SSBNY@aol.com
FIRST HORIZON: Marc Henzel Commences Securities Fraud Suit in N.D. GA
---------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
on behalf of purchasers of the securities of First Horizon
Pharmaceutical Corporation (Nasdaq: FHRX) between April 24, 2002
through July 2, 2002, inclusive.
The action, is pending in the United States District Court, Northern
District of Georgia, against the Company and:
(1) Mahendra G. Shah,
(2) John N. Kapoor,
(3) Balaji Venkataraman,
(4) Jon S. Saxe,
(5) Pierre Lapalme,
(6) Jerry N. Ellis,
(7) Banc of America Securities LLC,
(8) JP Morgan Thomas Weisel Partners LLC, and
(9) Lasalle Capital Markets
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, and sections 11, 12(a)(2) and 15 of the Securities Act of
1933, by issuing a series of materially false and misleading statements
to the market.
On April 24, 2002, the Company completed a public offering of
securities, selling 6.5 million shares of common stock at an offering
price of $21.75 per share, pursuant to a Prospectus declared effective
by the SEC on April 18, 2002.
The company failed to disclose material information in the Prospectus
relating to two products, Tanafed Suspension (a pediatric liquid and
allergy product) and Prenate GT (a prescription prenatal vitamin). The
Company touted the market for these products highly in its Prospectus.
However, the market for these products was severely declining and
defendants had flooded wholesalers with Prenate GT inventory in the
first quarter of 2002 in order to report strong sales prior to the
secondary offering. Belatedly, defendants disclosed that due to price
erosion arising from generic competition, the Company's products had
not been widely accepted by the market.
In addition, sales growth from the Company's newly acquired "Sular"
drug line had failed to yield strong results, and a promised
redeployment of its sales force similarly failed to boost the Company's
bottom line.
As a result of the Company's misrepresentations, the Company investors
have sustained tremendous losses, and stand to lose much more as the
Company's financial condition continues to decline. On July 2, 2002,
the Company shocked the market by revealing that for the second quarter
of 2002, the Company expected to report revenues of between $25 and $26
million, and earnings per share between $0.00 and $0.02, excluding a
$2.2 million debt write-off.
For the full year, the Company revised its guidance to $0.34 a share, a
far cry from its earlier guidance of $0.56 to $0.57 a share. A July 2,
2002 press release attributed the massive shortfall mainly to "greater
than expected erosion of sales in the second quarter" of Tanafed and
Prenate GT, as well as "distraction" arising out of a sales force
"realignment."
In response to the Company's devastating news concerning the lack of
acceptance of two of the Company's key products, First Horizon's stock
price plummeted by an astonishing 81% or by $14.74 to $3.51, on volumes
of 16.4 million shares, about 30 times the daily average.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
HOUSEHOLD INTERNATIONAL: Marc Henzel Commences Securities Suit in IL
--------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Northern District of
Illinois on behalf of purchasers of Household International, Inc.
(NYSE: HI) publicly traded securities during the period between October
23, 1997 and August 14, 2002.
The complaint charges the Company and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. The
Company is principally a non-operating holding company engaged in three
reportable segments: consumer, credit card services and international.
The consumer segment includes consumer lending, mortgage services,
retail services and auto finance businesses. The credit card services
include the domestic MasterCard and Visa credit card business. The
Company's international segment includes foreign operations in the
United Kingdom and Canada.
The complaint alleges that during the class period, defendants caused
the Company's shares to trade at artificially inflated levels through
the issuance of false and misleading financial statements by, among
other things, failing to properly amortize the Company's co-branding
agreements, and failing to record its expenses associated with its
marketing initiatives. In addition, the defendants improperly "re-
aged" Household's accounts, thereby concealing the Company's actual
delinquency ratios.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
INTERPUBLIC GROUP: 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, Southern District of New York on
behalf of purchasers of the securities of The Interpublic Group of
Companies, Inc. (NYSE: IPG) between October 28, 1997 and August 13,
2002, inclusive. The action is pending against the Company and:
(1) John J. Dooner, Jr.,
(2) Philip H. Geier, Jr.,
(3) Sean F. Orr,
(4) Frederick Molz,
(5) Eugene P. Beard,
(6) Richard P. Sneeder, Jr.,
(7) David I. C. Weatherseed and
(8) Joseph M. Studley
The suit alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market between October 28, 1997 and August 13, 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 increasing net income and
financial performance. As alleged in the complaint, these statements
were materially false and misleading because they failed to disclose
and/or misrepresented the following adverse facts, among others:
(i) that, throughout the class period, the Company was overstating
its net income by failing to expense certain charges which
should have been expensed;
(ii) that the Company lacked adequate internal controls and was
therefore unable to ascertain the true financial condition of
the Company; and
(iii) that as a result, the value of the Company's net income and
financial results were materially overstated at all relevant
times.
On August 5, 2002, the Company announced that it would be rescheduling
the release of its second quarter 2002 earnings "to accommodate the
Audit Committee of its Board of Directors," which was interpreted by
the market to potentially involve the Company's accounting. In
response to the uncertainty surrounding defendants' announcement,
investors sold off shares of the Company, which dropped $4.69 per
share, or 23.8%, to close at $14.99 per share.
On August 13, 2002, the last day of the class period, the nature of the
Company's delay of its second quarter 2002 earnings release became
evident when the Company announced, among other things, that it had
"identified $68.5 million of charges, principally in Europe, which had
not been properly expensed," which will cause the company to restate
its previously issued financial statements going back to 1997 and
prior.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
MERRILL LYNCH: Finkelstein Thompson Launches Securities Suit in S.D. NY
-----------------------------------------------------------------------
Finkelstein, Thompson & Loughran initiated a securities class action
against Merrill Lynch & Co., Inc. and the former head of its Internet
group, Henry Blodget, on behalf of purchasers of LookSmart, Ltd.
(Nasdaq: LOOK) securities between May 25, 2000 through April 27, 2001,
inclusive.
The suit, filed in the United States District Court for the Southern
District of New York, alleges that Merrill Lynch and its well-known
Internet stock analyst Henry Blodget violated the federal securities
laws by knowingly issuing false and misleading analyst reports
regarding LookSmart during the class period.
Based on e-mails and other internal Merrill Lynch communications, which
were made public as a result of the investigation conducted by the New
York State Attorney General, the suit alleges that the defendants
failed to disclose a significant conflict of interest between their
investment banking and research departments.
Specifically, the suit alleges that Mr. Blodget and other Merrill Lynch
analysts issued very favorable analyst reports regarding LookSmart to
the public when they allegedly knew that the positive recommendations
were unwarranted and false.
The suit further alleges that, unbeknownst to the investing public,
Merrill Lynch's buy recommendations and price targets for these
companies were driven by its efforts to attract lucrative investment
banking business rather than by the companies' fundamental merits.
For more details, contact Conor R. Crowley or Adam T. Savett by Phone:
202-337-8000 by E-mail: crc@ftllaw.com or ats@ftllaw.com or visit the
firm's Website: http://www.ftllaw.com
METRIS COMPANIES: Marc Henzel Commences Securities Suit in MN Court
-------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the District of Minnesota on
behalf of all purchasers of the common stock of Metris Companies, Inc.
(NYSE: MXT) securities between Nov. 5, 2001 and July 17, 2002,
inclusive.
Metris is in the business of providing financial products and services,
including issuing and managing credit cards through its wholly owned
subsidiary, Direct Merchants Credit Card Bank, N.A. Specifically, the
complaint alleges that the Company misled the investing community
concerning the existence of a Report of Examination (ROE) released by
the Office of the Comptroller of the Currency (OCC), the primary
federal regulator of Direct Merchants. Moreover, the Complaint charges
that defendants misled the investing community regarding the adverse
material effect the ROE would have on the Company's financial
condition.
The suit also alleges that the OCC released the ROE to defendants on
November 5, 2001, but that defendants failed to reveal the existence of
the ROE to the public until April 17, 2002, and thereafter
misrepresented the effect it would have on the Company.
As outlined in the suit, the findings of the ROE were ultimately
addressed in a consent agreement between Direct Merchants and the OCC,
and obligated Direct Merchants to restructure significant parts of its
operations including its credit policies, credit risk assessment, debt
forbearance, allowance for loan and lease losses and internal controls.
The Complaint further alleges that as a result of defendants' actions,
plaintiff and the Class were damaged.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
MORGAN STANLEY: 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 for the Southern District of New
York on behalf of all purchasers of Morgan Stanley Dean Witter
Technology Fund shares, of all four share classes (Nasdaq: TEKAX
through TEKDX) from the public offering for the Fund on September 25,
2000 through July 31, 2002, inclusive against Morgan Stanley Dean
Witter & Co., Morgan Stanley Dean Witter Technology Fund and others.
The suit alleges violations of Sections 11, 12 and 15 of the Securities
Act of 1933 and of other federal statutory law. The Morgan Stanley Dean
Witter Technology Fund recently changed its name to the Morgan Stanley
Technology Fund. The defendants were:
(1) the underwriters for the common stock of certain of the
companies in the Technology Fund's portfolio;
(2) the investment bankers and corporate finance specialists for
certain of the companies whose securities are in the Fund's
portfolio;
(3) seeking to obtain additional investment banking business from
these present and former clients and from other companies
whose shares also were/are in the Fund's portfolio;
(4) the issuers of the shares in the Fund;
(5) preparing and publicly disseminating research reports and
recommendations on many of the companies whose shares were in
the Fund's portfolio; and
(6) the broker for certain members of the Class.
This action arises as a result of the issuance by the defendants of
shares in the Fund, and concerns material misstatements and omissions
by defendants in the Prospectus, relating to defendants' conflicts of
interest, which include but are not limited to the following:
(i) defendants failed to disclose and omitted material information
that MSDW had had investment banking relationships with,
including having brought public, certain of the companies
whose securities were part of the Fund's portfolio.
Defendants disclosed neither this general fact nor the
identities of the particular companies with which it had
investment banking relationships;
(ii) defendants failed to disclose and omitted material information
concerning that MSDW was continuing to seek investment banking
relationships with many of the companies whose securities were
part of the Fund's portfolio; and
(iii) defendants failed to disclose and omitted material information
concerning that a material part of the total compensation paid
to MSDW research analysts was based upon obtaining investment
banking business for MSDW and not upon the accuracy of their
research about a given company.
Hence, MSDW and its affiliated companies including the Fund recommended
investments in and/or invested in companies in order to enhance MSDW's
opportunity to obtain investment banking business from those companies
(without regard to whether they were good investments for the investors
including plaintiffs and the Class).
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
PEMSTAR INC.: Marc Henzel Commences Securities Fraud Suit in MN Court
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the District of Minnesota on
behalf of purchasers of PEMSTAR Inc. (Nasdaq: PMTR) publicly traded
securities during the period between June 8, 2001 and May 3, 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 during the class period defendants caused the
Company's shares to trade at artificially inflated levels through the
issuance of false and misleading statements.
The Registration Statement and Prospectus for the June 8, 2001
Secondary Offering were materially false and misleading when issued as
they misrepresented and/or omitted one or more of the following adverse
facts which then existed and disclosure of which was necessary to make
the statements made not false and/or misleading. In order to attract
and maintain the appearance of a diverse customer base, the Company:
(1) executed orders from customers without industry track records
or acceptable financial conditions, in fact, several were on
the brink of bankruptcy; and
(2) had an extremely liberal policy of accepting and holding
inventory for and from existing and prospective customers
(often without ever obtaining a written contract), the result
of which was that the Company significantly increased its
costs of doing business and was forced to write down obsolete
inventory. In fact, a substantial amount of the Company's
inventory was already obsolete.
Due to a lack of internal controls, reflected, but not acknowledged in
the Company's contracts with Datasweep:
(i) the Company's "cash conversion cycle," or the amount of time
between the purchase of inventory and the collection of
payment, was dramatically lower than its competitors', which
resulted in the Company having to write down material amounts
of accounts receivables; and
(ii) the Company "days sales outstanding," the number of days the
Company had to wait payment for sales, was dramatically lower
than its competitors', which resulted in the Company having to
write down material amounts of accounts receivables.
The complaint further claims that the true facts which were known to
the defendants but concealed from the public following the Secondary
Offering were as follows:
(a) The Company was in violation of its financial loan covenants;
(b) The Company's inventory and accounts receivables valuations
were grossly overstated;
(c) Defendants needed to keep the Company's shares artificially
inflated to complete the Company's convertible offering;
(d) The Company was then experiencing lower than projected
utilization rates at the Company's higher cost locations which
performed many of the Company's higher margin services,
including engineering, New Product Introduction (NPI) and
prototyping;
(e) The Company's customers were being devastated financially in
the severe "end-market" downturn;
(f) The Company was actually selling back its inventory to
original equipment manufacturers (OEMs) because, unbeknownst
to shareholders, the Company was actually "holding" inventory
from its OEMs without any written/binding agreement to
perform.
As a result, the defendants' projections for the Company's third and
fourth quarters of F02 were materially false and misleading.
On May 3, 2002, the Company issued a press release entitled, "PEMSTAR
Revises Estimates for Fourth Fiscal Quarter 2002 Results and Announces
Private Placement of Up to $50 Million." On this news, the Company's
share price plunged more than 60% to $2.84 on May 6, 2002 on trading of
more than 4.5 million shares.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
SALOMON SMITH: Marc Henzel Commences Securities Fraud Suit in S.D. NY
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Southern District of New
York, on behalf of purchasers of AT&T Corp. common stock (NYSE: T)
between November 29, 1999 and August 22, 2002, inclusive or of the ATT
Wireless tracking stock (NYSE: AWE) from its inception until August 22,
2002, against:
(1) Salomon Smith Barney, Inc.,
(2) analyst Jack Grubman,
(3) Salomon's parent company Citigroup, Inc., and
(4) Citigroup CEO Sanford Weill
This action arises as a result of the issuance by Salomon and Mr.
Grubman of an analyst report which recommended the purchase of AT&T
common stock without regard to the factual basis and without disclosing
its conflicts of interest.
When issuing the analyst report, Salomon and Mr. Grubman failed to
disclose significant, material conflicts of interest, including that,
in an explicit or implicit quid pro quo, Salomon was granted a
lucrative role in the April 2000 issuance of an AT&T Wireless tracking
stock, after Mr. Grubman, at AT&T's request, passed to Mr. Grubman by
Mr. Weill, raised his recommendation of AT&T in November 1999 from
"neutral" to "buy."
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
QUADRAMED CORPORATION: Milberg Weiss Lodges Securities Suit in N.D. CA
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Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class
action in the United States District Court for the Northern District of
California on behalf of purchasers of QuadraMed Corporation
(NASDAQ:QMDCE) publicly traded securities during the period between May
11, 2000 and August 11, 2002.
The complaint charges the Company and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. The
Company is a healthcare information and technology company that
provides software solutions and consulting services to hospitals and
medical providers to meet their medical records, business and
compliance needs.
On August 12, 2002, the Company issued a press release entitled,
"QuadraMed to File For Extension For Form 10-Q." The press release
stated in part: "QuadraMed Corporation announced today that it will
file with the U.S. Securities and Exchange Commission (SEC) for an
automatic 5-day extension of the deadline for submitting its second
quarter 2002 Quarterly Report on Form 10-Q. The Company will use the
additional five calendar days to complete a restatement of its
consolidated financial statements for the fiscal years ended December
31, 2000, 2001, and for the interim period ended March 31, 2002."
For more details, contact William Lerach by Phone: 800/449-4900 by E-
mail: wsl@milberg.com or visit the firm's Website:
http://www.milberg.com
QUADRAMED CORPORATION: Schiffrin & Barroway Files Securities Suit in CA
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Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Northern District of California on
behalf of all purchasers of the common stock of QuadraMed Corporation
(Nasdaq: QMDCE) from May 11, 2000 through August 11, 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. The Company is a healthcare
information and technology company that provides software solutions and
consulting services to hospitals and medical providers to meet their
medical records, business and compliance needs.
Specifically the complaint alleges that on August 12, 2002, the Company
issued a press release entitled, "QuadraMed to File For Extension For
Form 10-Q." The press release stated in part: "QuadraMed Corporation
announced today that it will file with the U.S. Securities and Exchange
Commission (SEC) for an automatic 5-day extension of the deadline for
submitting its second quarter 2002 Quarterly Report on Form 10-Q. The
Company will use the additional five calendar days to complete a
restatement of its consolidated financial statements for the fiscal
years ended December 31, 2000, 2001, and for the interim period ended
March 31, 2002."
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 1-610-667-7706 by E-mail:
info@sbclasslaw.com or visit the firm's Website:
http://www.sbclasslaw.com
QUADRAMED CORPORATION: Cauley Geller Launches Securities Suit in CA
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Cauley Geller Bowman & Coates, LLP initiated a securities class action
in the United States District Court for the Northern District of
California on behalf of purchasers of QuadraMed Corporation (Nasdaq:
QMDCE) publicly traded securities during the period between May 11,
2000 and August 11, 2002, inclusive.
The complaint charges the Company and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. The
Company is a healthcare information and technology company that
provides software solutions and consulting services to hospitals and
medical providers to meet their medical records, business and
compliance needs.
On August 12, 2002, the Company issued a press release entitled,
"QuadraMed to File For Extension For Form 10- Q." The press release
stated in part: "QuadraMed Corporation announced today that it will
file with the U.S. Securities and Exchange Commission (SEC) for an
automatic 5-day extension of the deadline for submitting its second
quarter 2002 Quarterly Report on Form 10-Q.
The Company will use the additional five calendar days to complete a
restatement of its consolidated financial statements for the fiscal
years ended December 31, 2000, 2001, and for the interim period ended
March 31, 2002."
For more details, contact Jackie Addison, Sue Null or Heather Gann 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/pr/quadramed.pdf
REHABCARE GROUP: Marc Henzel Commences Securities Fraud Suit in E.D. MO
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Eastern District of
Missouri on behalf of purchasers of the securities of RehabCare Group,
Inc. (NYSE: RHB) between February 7, 2001 and January 21,2002
inclusive. The action, is pending against the Company and:
(1) H. Edwin Trusheim (Chairman of the Board) and
(2) Alan C. Henderson (CEO, President and Director)
The complaint charges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of materially false and misleading
statements to the market between February 7, 2001 and January 21, 2002.
The complaint alleges that, among other things, defendants issued a
series of materially false and misleading statements concerning the
Company's supplemental staffing division. The complaint alleges these
statements were materially false and misleading because they failed to
disclose that the supplemental staffing division was experiencing
serious operational problems with information systems critical for
matching supply with demand and poor employee training and retention
and that its revenues and earnings were declining as a result.
On January 21, 2002, the Company issued a press release announcing that
earnings for its fourth quarter 2001 would be less than half than they
had reiterated in late October and that the Company would take a charge
of $8.5 to $9.5 million, $3 million of which was for a reorganization
of the staffing division.
In reaction to the Company's disclosure, as alleged in the complaint,
the price of its common stock plummeted by 25% over one trading day on
heavy volume, falling from $25.21 per share to $18.70 per share. Prior
to the disclosure of the adverse facts described above, as alleged in
the complaint, the Company completed a secondary offering of common
stock, raising $50 million for the Company and more than $8 million for
Company insiders.
In addition, Company insiders also sold $4,568,209 worth of Company
common stock during the class period at artificially inflated prices.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
VIVENDI UNIVERSAL: Marc Henzel Commences Securities Suit in S.D. NY
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Southern District of New
York on behalf of purchasers of the securities of Vivendi Universal
(NYSE: V; Paris Bourse: EX FP) between February 11, 2002 and July 3,
2002, inclusive, against the Company and Jean-Marie Messier, the
Company's former Chairman and Chief Executive Officer.
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, prior to and during the class period, Mr. Messier took
the Company 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, the Company 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 the Company'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 the Company'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 the Company is engaged in urgent
discussions with lenders to secure financing and is both considering
and negotiating the sale of assets.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
*********
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
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Information contained herein is obtained from sources believed to be
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