/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/021106.mbx C L A S S A C T I O N R E P O R T E R Wednesday, November 6, 2002, Vol. 4, No. 220 Headlines ANNABLE TURNER & CO.: SEC Ruling on Securities Fraud Declared Final CENTERPULSE: Pours $725M Into Trust to Settle Knee-Implant Suit COTTON STATES: Settlement Deal Reached in Auto Policyholders' Suit CYLINK CORP.: $6.2M Insurance Asset Covers Settlement Pact FRANK THOMAS DEVINE: SEC Backs NASD on Sanctions v. Securities Dealer GREATER NORTHWEST: SEC Revokes Registration of Common Shares GREATER NORTHWEST: SEC Sues Over Hushed Company Control by Felon H&R BLOCK: Litigation Concerns Trigger Eight Percent Share Decline JAWSH CORP.: Sale of Unregistered Securities Spurs Civil Suit MEDCOM HEALTH PRODUCTS INC.: SEC Settles Fraud Charges NEW DIRECTIONS: SEC Seeks Contempt Order Against Fined Stock Trader ORTHODONTIC CENTERS OF AMERICA: Court Throws Out Fraud Complaint ST. JAMES ASSET: SEC Bars Financial Adviser in Fund Misuse STEVIN HOOVER: Money Manager Gets 18-Month Prison Term for Fraud TERRORISM: U.S. Families Join German Trial As Co-Plaintiffs UNITED STATES LIME & MINERALS: Alleged $2.2M Embezzlement Triggers Suit VISTA 2000: SEC Obtains Injunctive Writ in Securities-Laws Breach WALL STREET RESEARCH: Settlement Talks Center on 1990s Market Abuses WILLIAM STEPHENS: Complaint Over Unrealized Greasy Deal Settled *Michigan Trade Group Urges Asbestos Lawsuit Reform New Securities Fraud Cases AGILENT TECHNOLOGIES: Glancy & Binkow Commences Securities Suit in NY CIGNA CORP.: Faruqi & Faruqi Commences Securities Suit in E.D. PA COMERICA INC.: Cauley Geller Launches Securities Fraud Suit in Michigan CONCORD EFS: Kahn & Associates Files Securities Fraud Suit in W.D. TN CREDIT SUISSE: Kaplan Fox Commences Securities Fraud Suit in S.D. NY ENDOCARE INC.: Charles J. Piven Files Securities Suit in C.D. CA NUI CORP.: Wolf Popper LLP Files Securities Fraud Suit in NJ OM GROUP INC.: Charles J. Piven Launches Securities Suit in N.D. Ohio OM GROUP: Milberg Weiss Files Securities Fraud Suit in N.D. Ohio OM GROUP: Schiffrin & Barroway Files Securities Fraud Suit in N.D. OH SCHERING PLOUGH CORP.: Cauley Geller Files Securities Suit in NJ SCHERING PLOUGH CORP.: Wechsler Harwood LLP Files Securities Suit in NJ TENET HEALTHCARE: Milberg Weiss Files Securities Fraud Suit in C.D. CA ********* ANNABLE TURNER & CO.: SEC Ruling on Securities Fraud Declared Final ------------------------------------------------------------------- The decision of an administrative law judge with respect to Annable Turner & Co. Inc. (ATCO) and Roger E. Turner has become final, the Securities and Exchange Commission reports. The judge found that ATCO and Turner willfully violated Section 17(a) of the Securities Act of 1933, 10(b) of the Exchange Act of 1934, and Exchange Act Rule 10b-5, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The law judge further found that ATCO violated section 204 of the Advisers Act and Adviser Act Rules 204-1(c) and 204-2 and that Turner aided and abetted those violations. The law judge barred Turner from associating with any investment adviser and any broker dealer, and revoked ATCO's investment adviser registration. ATCO and Turner were found to have made materially false and fraudulent representations in order to induce investors to invest. Turner misrepresented to investors that their funds would be placed in qualified individual retirement accounts, that the investments recommended were safe and financially sound, that investors would receive substantial returns on their investments, and that their monies would be used to purchase specific investments. ATCO and Turner also omitted to disclose to investors that the issuers whose securities they recommended were about to file bankruptcy and that the investors' funds were not invested but instead used to repay earlier investors and debts. ATCO provided its clients with false and misleading monthly reports, failed to keep and maintain bank statements and account statements for the required periods, and failed to file the required reports with the Commission. ATCO 's initial registration failed to disclose that the NASD had sanctioned Turner. Turner previously pled guilty to violating Securities Act Sections 17(a) and 24. CENTERPULSE: Pours $725M Into Trust to Settle Knee-Implant Suit --------------------------------------------------------------- Centerpulse (NYSE: CEP) has concluded financing for the settlement of U.S. hip and knee implant litigation. On November 4, 2002, the Swiss- based medical technology company transfers the agreed-to USD 725 million to the Settlement Trust, in Cleveland, Ohio, fulfilling its financing obligations toward class action participants in the Settlement Agreement. "This is a particularly significant day for Centerpulse," stated company Chairman and CEO, Dr. Max Link. "We can now focus our collective strengths on our current business affairs and on the further development of our company. I am pleased that the affected patients will shortly be able to receive compensation." The total amount of USD 725 million will be transferred from Centerpulse to the Settlement Trust, on November 4, within the period foreseen by the Agreement. The Settlement Trust will pay out compensation to affected patients over the coming months. The payments will be made by a claims administrator, appointed by the responsible court for this purpose. The Settlement Agreement calls for patients who underwent revision surgery to receive an average of USD 200,000. Centerpulse raised the funds through a capital increase via a tradable preemptive rights offering as well as via bank credit. This solution meant that the company could avoid issuance of the Convertible Callable Instrument previously contemplated. It also allowed Centerpulse to pay the required amount into the Settlement Trust in a single instalment. This payment will have no influence on Centerpulse's results for the current year. Corresponding provisions were charged to the company's 2001 accounts. Centerpulse's subsidiary companies develop, produce, and distribute medical implants and biological materials for cardiovascular and orthopedic markets worldwide. As par t of the company's efforts to refocus strategic emphasis on the core sectors of orthopedic, spine and dental implants, current efforts to divest the cardiovascular business continue to be pursued. Centerpulse's financial results for the third quarter of 2002 will be released on November 8. COTTON STATES: Settlement Deal Reached in Auto Policyholders' Suit ------------------------------------------------------------------ A class-action lawsuit against Cotton States Mutual Insurance Company and Shield Insurance Company (collectively "Cotton States") has been filed in the Superior Court of Muscogee County in Columbus, Georgia, and the parties have reached a proposed settlement, according to the court papers. The plaintiffs alleged, on behalf of themselves and a class of Georgia policyholders of Cotton States, that they are entitled to payment for the diminished value of their vehicles, even after their vehicles have been properly repaired, when they make physical damage claims under their collision, comprehensive or uninsured motorists coverage. The Supreme Court of Georgia entered a ruling, upon appeal, that the Georgia insurance contracts at issue provide first party coverage for any diminished value which may occur as a result of an insured loss. Following this decision, upon remand of the case to the Superior Court, the plaintiffs and Cotton States entered into a settlement agreement. The court certified a Settlement Class for injunctive, equitable and monetary relief. The class is defined as: All persons insured under a Georgia personal lines automobile insurance policy issued by Cotton States, who reported valid physical damage claims for vehicle damage under that policy's collision or comprehensive or uninsured motorist coverage. The class period during which the damage must have occured is November 12, 1995, and November 28, 2001. A fairness hearing for the hearing of objections to the proposed settlement will be heard before Judge Frank J. Jordan, on December 9. CYLINK CORP.: $6.2M Insurance Asset Covers Settlement Pact ---------------------------------------------------------- E-business security provider Cylink Corporation (Nasdaq:CYLK) announced that it has entered into an agreement to settle a class action suit, stemming from a 1998 restatement of revenues, for $6.2 million to be paid entirely from insurance proceeds. The settlement agreement is subject to approval by the United States District Court for the Northern District of California. Cylink develops, markets and supports a comprehensive portfolio of hardware and software security products for mission-critical private networks and business communications over the Internet. FRANK THOMAS DEVINE: SEC Backs NASD on Sanctions v. Securities Dealer --------------------------------------------------------------------- The Securities and Exchange Commission has sustained disciplinary action imposed by NASD, which regulates the securities industry and virtually all U.S. stockbrokers and brokerage firms, against Frank Thomas Devine, formerly a general securities representative. The NASD found that Devine engaged in private securities transactions in violation of NASD Conduct Rules 3040 and 2110 by selling loan instruments tied to viatical settlements without prior written notice. The NASD fined Devine $34,825.42, and suspended him for 90 days from association with any NASD member in any capacity, and required him to requalify by examination as an investment company and variable contracts products representative. The Commission found that the loan instruments sold by Devine were notes and securities. The Commission further found that Devine had violated the NASD Conduct Rules by failing to provide his employer with prior notice of these securities sales or obtaining the employer's approval. The Commission upheld the sanctions imposed by the NASD, finding that they were neither excessive nor oppressive. GREATER NORTHWEST: SEC Revokes Registration of Common Shares ------------------------------------------------------------ The Securities and Exchange Commission has revoked the registration of the common stock of Greater Northwest Research & Development Group Inc., now a defunct Florida corporation. In an Order, the Commission found that Greater Northwest: 1. failed to file mandatory annual or quarterly reports for any fiscal period subsequent to its fiscal quarter ended March 31, 1996; 2. failed to file certain mandatory current reports; and 3. made false and misleading public statements in press releases, on the Internet and in a television infomercial concerning, among other things, its corporate status, control by a convicted felon, certain acquisitions, receipt of financing, financial condition, and eligibility for quotation on the OTC Bulletin Board. The Commission deemed it necessary and appropriate for the protection of investors to revoke the registration of Greater Northwest's common stock pursuant to Section 12(j) of the Securities Exchange Act of 1934. Greater Northwest consented to the order, admitting its reporting violations and its defunct status but neither admitting nor denying the remaining findings in the Order. GREATER NORTHWEST: SEC Sues Over Hushed Company Control by Felon ---------------------------------------------------------------- The Securities and Exchange Commission announced that it filed a civil injunctive action on Oct. 31 against current or former Nevada residents Homer T. Langrill and Thomas W. Becker. The Commission's complaint alleges that Langrill and Becker issued false and misleading public statements about a publicly traded but legally defunct microcap company, Greater Northwest Research & Development Group, Inc. The complaint further alleges that these statements concerned the undisclosed control of Greater Northwest by Langrill, a recidivist with multiple felony convictions, the identity of the members of its board of directors, and its legal status, financial condition, acquisition of other companies, future financial performance, and eligibility for quotation on the OTC Bulletin Board. Moreover, the complaint alleges that Langrill and Becker sold restricted Greater Northwest stock in unregistered transactions for profits of at least $24,537 and $46,400, respectively, while the false statements were disseminated through press releases, an Internet website, and a cable television infomercial. According to the complaint, Langrill and Becker failed to file mandatory periodic and current reports with the Commission on behalf of Greater Northwest since 1996, and further failed to report their beneficial ownership and disposition of Greater Northwest stock. The Commission's complaint alleges that Langrill and Becker: (1) violated Sections 5(a), and 5(c) of the Securities Act of 1933, Sections 10(b), 13(d) and 16(a) of the Securities Exchange Act of 1934 and Rules 10b-5, 13d-1, 13d-2, 16a-2, and 16a-3 thereunder; and (2) aided and abetted the violations of Greater Northwest of Sections 13(a) of the Exchange Act and Rules 13a-1, 13a-11 and 13a-13 thereunder. The complaint seeks permanent injunctions, disgorgement, prejudgment interest, penny stock bars, officer and director bars, and third-tier civil penalties against Langrill and Becker. H&R BLOCK: Litigation Concerns Trigger Eight Percent Share Decline ------------------------------------------------------------------ Shares of tax preparer H&R Block Inc. tumbled eight percent recently amid concerns over litigation involving its popular refund-anticipation loan, The Wall Street Journal reported. The selloff apparently was prompted by a report from Avalon Research Group Inc. of Boca Raton, Florida. The firm, which has a "sell" rating on Block's stock, said an important settlement agreement of a Chicago class-action lawsuit had been reversed and that two related class- action suits in Texas were seeking damages that could reach $2 billion. Block issued a statement Friday addressing these cases during a four-hour halt in trading of the company's shares. Block blamed the halt on "market rumors regarding litigation." After the resumption of trading that afternoon, the Kansas City, Missouri's company's shares finished down $3.43 at $40.95. Block spokeswoman Linda McDougall said the $2 billion amount referred to as possible damages in the class actions in Texas "has never been supported by any evidence, testimony or analysis." The program at issue in the lawsuits is known as a refund-anticipation loan. It provides loans to tax-return filers, in advance of their actual income-tax refund. It is used by about 30 percent of Block's U.S. tax customers, even though it is expensive. Annual interest rates on such loans often will exceed 100 percent. During the quarter ended April 30, Block's busy season, the company had $129.5 million in refund-anticipation loan participation fees. The loans in the Chicago case were provided by Beneficial National Bank. The bank was acquired in 1998 by Household International Inc., of Prospect Heights, Illinois. Beneficial paid a referral fee for each refund-anticipation loan to Block, which also owned part of the loan. The Chicago lawsuit alleges, among other things, that Block failed to disclose fees paid by Beneficial to Block. Block and Beneficial agreed to a settlement of that case in 1999, and each subsequently paid half of a $25 million settlement. The Chicago settlement placed a limit on the amount some members of the class could recover at just $30 apiece. Some plaintiffs in the case appealed the settlement, saying it was unfair. In April, a federal appellate court seemed to agree. A panel of the U.S. Court of Appeals for the Seventh Circuit in Chicago, said the trial judge "did not give the issue of the settlement's adequacy the care that it deserved." Citing Block's "substantial exposure" in the Texas cases, the appeals court noted that, in those cases, "the total amount sought could have reached $2 billion." The appeals court reversed the trial court's judgment approving the settlement and sent the case back to U.S. District Court for further consideration. A fairness hearing regarding the settlement is expected to continue November 15. Ms. McDougall said Block had not disclosed the reversal of the Chicago settlement in its filings with the Securities and Exchange Commission, because it did not consider the size of the settlement to be "material" to the company's results. Block said the Texas cases both involve plaintiffs who are part of the Chicago case. These cases seek disgorgement of all fees paid to Block by the banks that made refund-anticipation loans through it, as well as all other fees that Block has received in connection with each refund-anticipation-loan transaction. Block said both cases are part of the Chicago settlement class, "and therefore would be covered by that settlement." An attorney for the Chicago plaintiffs did not return a call for comment. JAWSH CORP.: Sale of Unregistered Securities Spurs Civil Suit ------------------------------------------------------------- The Securities and Exchange Commission announced that it had filed a civil action in the United States District Court for the Eastern District of Missouri against Jawsh Corporation for offering unregistered securities and acting as an unregistered investment company. The Commission's complaint alleges that in about 1984 Jawsh was formed as a Missouri corporation by William L. Bates of St. Louis, Missouri, who was, at all times, the Company's sole shareholder, officer and director. The Complaint also alleges that, from about 1987 through about September 2000, Jawsh, through Bates, publicly offered and sold $16 million in unregistered securities to 250 investors in at least 11 states through the means and instruments of interstate commerce and the mails. The Commission's complaint also alleges that Jawsh pooled money obtained from investors and invested it, reinvested it and traded in securities without a registration statement being in effect with the Commission as to Jawsh. The Commission's complaint also alleges that Jawsh thereby violated Sections 5(a) and 5(c) of the Securities Act of 1933 (Securities Act) and Section 7(a) of the Investment Company Act of 1940 (Investment Company Act). Simultaneously with the filing of the Civil action, Jawsh consented to an order, without admitting or denying The Commission's allegations, except as to jurisdiction, which is admitted: (1) enjoining Jawsh from further violations of the registration provisions of the Securities Act of 1933 and the Investment Company Act; (2) for the Court to immediately take exclusive jurisdiction and possession of Jawsh and its books, records and assets, and to appoint a trustee, pursuant to Section 42(d) of the Investment Company Act, to operate Jawsh and dispose of any or all of Jawsh's assets in the best interests of investors, in compliance with the federal securities laws and subject to such terms and conditions as the Court may prescribe; and (3) freezing the Company's assets and preserving its books and records, until the trustee has been appointed. The Commission also instituted public administrative and cease-and- desist proceedings against Bates based on findings that: from about 1987 through about September 2000, Bates publicly offered and sold $16 million in unregistered securities to 250 investors in at least 11 states to invest and trade in securities, solely at Bates' discretion, and caused and willfully aided and abetted Jawsh to act as an unregistered investment company in violation of the registration provisions of the federal securities laws. Simultaneously with the institution of administrative and cease-and- desist proceedings, Bates consented, without admitting or denying the Commission's findings, except as to jurisdiction, which is admitted, to issuance of a Commission order (Order) ordering Bates to: (1) cease and desist from committing or causing any violation, and any future violation, of Sections 5(a) and 5(c) of the Securities Act and Section 7(a) of the Investment Company Act; and (2) comply with his undertakings to: (a) pay the costs of the trustee appointed in the civil action up to $20,000; and (b) cooperate fully, truthfully and without compensation, with the Commission and the trustee, by: transferring Jawsh's assets, producing any documents in his possession, custody or control, providing truthful testimony in any depositions and hearings in which his testimony may be relevant, and providing whatever other assistance is requested of him. MEDCOM HEALTH PRODUCTS INC.: SEC Settles Fraud Charges ------------------------------------------------------ The Securities and Exchange Commission announced that, on August 20, 2002, the Honorable J. Garvan Murtha, United States District Judge for the District of Vermont, entered final judgments against Sidney A. Johnson of Newfane, Vermont, and Brooklyn, New York, Leslie H. Fleishman of Long Beach, California, and MedCom Health Products Inc., a California corporation based in Long Beach. In its complaint, filed on December 15, 2000, the Commission alleged that, between August 1997 and February 2000, Johnson and Fleishman solicited and sold unregistered shares of stock in Kultivar, a Plainfield, Vermont corporation, by falsely claiming, among other things, that Kultivar's stock would soon be publicly traded and that the value of its stock would rise because of its purported valuable medicinal products. The Commission's complaint further alleged that, during 2000, Johnson and Fleishman solicited investments in MedCom, a purported Internet business portal for the medical industry, by falsely claiming, among other things, that MedCom had significant business relationships with several Fortune 500 companies and that its stock would soon begin trading publicly. Without admitting or denying the Commission's allegations against them, Johnson, Fleishman and MedCom consented to the entry of the final judgments, which permanently enjoin: (1) Johnson, Fleishman and MedCom from future violations of the antifraud provisions of the Securities Act and the Exchange Act, (2) Johnson and Fleishman from future violations of the provisions of the Securities Act prohibiting offers and sales of unregistered securities, and (3) Fleishman from future violations of provisions of the Exchange Act that prohibit acting as an unlicensed broker-dealer. Johnson's judgment orders that he is liable for disgorgement of $80,000 plus prejudgment interest, but waives payment of all but $17,000 of that amount and does not impose a civil monetary penalty based on the sworn representations in his statement of financial condition and other documents submitted to the Commission. Fleishman's judgment orders that he is liable for disgorgement of $70,000 plus prejudgment interest, but waives payment of that amount and does not impose a civil monetary penalty based on the sworn representations in his statement of financial condition and other documents submitted to the Commission. MedCom's judgment orders that it is liable for disgorgement of $175,000 plus prejudgment interest, but waives payment of all but $5,300 of that amount and does not impose a civil monetary penalty based on the sworn representations in its statement of financial condition and other documents submitted to the Commission. The Commission withdrew its charges against the remaining defendant, Southport S.D.G., Inc., which is defunct, and previously withdrew charges against Kultivar, Inc., which is also defunct. On Oct. 30, based on the entry of the court's injunctions, the Commission also instituted settled administrative proceedings against Johnson and Fleishman. Without admitting or denying the Commission's findings, Johnson and Fleishman consented to the entry of the Commission's order, which bars them from participating in any offering of penny stock and, in addition, bars Fleishman from association with any broker or dealer. NEW DIRECTIONS: SEC Seeks Contempt Order Against Fined Stock Trader ------------------------------------------------------------------- The Securities and Exchange Commission announced that it filed on October 25, 2002 with the United States District Court for the Southern District of Florida an application for an order to show cause why defendant Rajiv Vohra should not be held in civil contempt for his failure to pay disgorgement and civil penalties, as directed by the Court's January 15, 2002 default judgment order. That order enjoined Vohra from violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Court ordered Vohra to pay disgorgement in the amount of $598,911.55, prejudgment interest of $134,394.01, and a civil penalty of $110,000. On September 5, 2000, the Commission alleged in its Complaint that Vohra, Sean T. Healey, and three Bahamian companies, Lantern Investments Ltd., Lipton Holdings Ltd., and Beaufort Holdings Ltd., used "wash sales" to create the appearance of active trading in the stock of New Directions Manufacturing Inc., a small furniture manufacturing company. The Complaint alleged that Vohra and Healey also arranged to have a false and misleading research report published on a stock-picker web site, on their own web site, and through unsolicited mass e-mails (spam). The research report falsely claimed that New Directions had significantly expanded, that the author of the report was an independent analyst, and that the purported analyst had issued a buy recommendation. Vohra and Healey attempted to conceal their scheme by conducting much of their activity through Canadian brokerage accounts and the Bahamian companies. ORTHODONTIC CENTERS OF AMERICA: Court Throws Out Fraud Complaint ---------------------------------------------------------------- The United States District Court for the Eastern District of Louisiana granted defendants, Bartholomew F. Palmisano and other's motion to dismiss plaintiffs, Joanne Bay and others' securities fraud putative class action complaint. Louisiana granted defendants, Bartholomew F. Palmisano and others' motion to dismiss plaintiffs, Joanne Bay and others' securities fraud putative class action alleging that defendants overstated Orthodontic Centers of America Inc.'s financial conditions, misrepresented that OCA's accounting and reporting policies conformed with Generally Accepted Accounting Principles and omitted material facts about OCA's upcoming merger with its competitor, OrthAlliance, Inc., in violation of Securities Exchange Act of 1934, Secs. 10(b), 20(a) and R. 10b-5. The court found that plaintiffs' complaint failed to satisfy the heightened pleading requirements of the Private Securities Litigation Reform Act of 1995, as they failed to allege sufficient facts to support a reasonable belief that OCA's financial statements were false and misleading. The court determined that OCA repeatedly and precisely disclosed to investors its methods for recognizing revenue, including aspects that, according to plaintiffs, violated GAAP. Additionally, the court indicated that plaintiffs failed to allege that statements relating to OCA's merger were false and misleading when made. The court also found that plaintiffs failed to allege sufficient facts to support a reasonable inference of scienter. Plaintiffs did not allege facts supporting a strong inference that defendants either knew that it was publishing materially false information or was severely reckless in publishing such information. The court stated that plaintiffs relied on "motive and opportunity" allegations. Finally, the court dismissed plaintiff's complaint with prejudice, as "another pleading attempt would be an inefficient use if the parties' and the court's resources, would cause unnecessary and undue delay, and would be futile." ST. JAMES ASSET: SEC Bars Financial Adviser in Fund Misuse ---------------------------------------------------------- On Oct. 30, the Commission issued an Order Making Findings and Imposing Remedial Sanctions barring John Raymond Linney Clain from associating with an investment adviser. Clain previously owned St. James Asset Management, Inc. (Saint James), an investment adviser located in Alpharetta, Georgia and licensed with the State of Georgia. The Order finds that the Commission filed a civil injunctive action entitled U.S. Securities and Exchange Commission v. Saint James Asset Management, Inc. and John Raymond Linney Clain, et al., Civil Action Number 1:02-CV-0426- RLV (N.D. Ga.), alleging violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The complaint in that matter alleged, among other things, that: (1) Clain misappropriated approximately $965,400 from 16 clients of Saint James; (2) Clain procured the funds by representing that he would use the funds to purchase securities for the clients; (3) Clain used $110,000 to buy two cars and a diamond ring and the remaining funds to pay business and personal expenses, including monthly mortgage payments on his house; and (4) Clain concealed his conduct by giving his clients account statements, stock certificates and other documents which falsely indicated that Saint James had purchased securities on their behalf. The Order further finds that Clain was permanently enjoined by consent from future violations by a court order issued in March 2002. STEVIN HOOVER: Money Manager Gets 18-Month Prison Term for Fraud ---------------------------------------------------------------- Former money manager Stevin R. Hoover was sentenced to 18 months in prison on charges that he defrauded investment advisory clients out of nearly $200,000. Hoover, age 54, was sentenced by Judge Douglas P. Woodlock of the U.S. District Court for the District of Massachusetts to 18 months imprisonment, followed by 3 years of supervised release during which Hoover will be barred from providing any financial services or acting as the custodian for funds belonging to other people. Hoover is the sole owner of Hoover Capital Management Inc., a registered investment adviser, and Chestnut Management LLC, an unregistered investment adviser. On August 7, 2002, Hoover pleaded guilty to one count of securities fraud in violation of Section 206 of the Investment Advisors Act of 1940 charging that Hoover engaged in a scheme to defraud his investment advisory clients by diverting nearly $200,000 from client accounts to his own account. Hoover spent the misappropriated money on such things as a luxury automobile for his wife and paying off personal credit card debt. The Securities and Exchange Commission's civil enforcement action against Hoover, HCM and Chestnut Management remains pending. TERRORISM: U.S. Families Join German Trial As Co-Plaintiffs ----------------------------------------------------------- Families of Sept. 11 victims plan to join the trial in Germany of a man charged with planning last year's terrorist attacks in the United States, The Wall Street Journal reported recently. A provision of German law allows a victim's next of kin to sit in court and be represented by counsel as "co-plaintiff" in a murder trial. In this case, the relatives would gain the right to file motions, question witnesses and review evidence in the Hamburg trial of Mounir el Motassadeq, a 28-year-old student charged with belonging to a terrorist group and being an accessory to more than 3,000 counts of murder. It is unclear how many of the more than 3,000 eligible families will join the trial. The law sets no limit on the number of co-plaintiffs, but there is strong interest in doing so, family representatives said. Stephen Push, spokesman for the support group "Families of September 11," is interviewing lawyers licensed to practice law in Hamburg on behalf of his wife, who was killed when hijackers steered American Airlines Flight 77 into the Pentagon. Because the law does not permit participation by a group, Mr. Push would serve as a conduit for the roughly 1,200 members of his organization. Mr. Push says he decided to become a co-plaintiff after an article in The Wall Street Journal last week described the German law. In a separate effort, a conference call is scheduled for today between prosecutors in the Hamburg trial and a legal team representing about 3,000 plaintiffs in a U.S. class-action lawsuit against members of Saudi Arabia's royal family and others who allegedly donated money used by the al Qaeda network to fund terrorist acts. The goal of the conference call is to set up a meeting in Germany and discuss forms of cooperation, including filing for co-plaintiff status for the plaintiffs, many of whom belong to Mr. Push's group. Ronald Motley, lead attorney in the class action, is coordinating the effort to collect evidence world-wide. "We have been getting excellent cooperation from authorities in Spain, where we have received more than 40,000 pages of documents. Italy, Bosnia, India, even Russia, have been helpful. And the German prosecutors have promised to cooperate with us fully," Mr. Motley said. He and his co-counsel have not yet decided when they will apply for co-plaintiff status, which would entitle them to obtain trial documents, including at least 87 binders of investigative materials collected by police and intelligence agencies. Berlin prosecutor Detlef Mehlis, who has handled a number of major terrorism trials, says co-plaintiffs have the same rights as the prosecution and defense teams in a murder trial, but they should not get their hopes up on influencing the trial. "My experience is that about two-thirds of the motions filed by co-plaintiffs in a murder trial are denied by the court," said Mr. Mehlis. Presiding Judge Albrecht Mentz has refused to comment on any aspect of the case. UNITED STATES LIME & MINERALS: Alleged $2.2M Embezzlement Triggers Suit ----------------------------------------------------------------------- On Oct. 29, the Securities and Exchange Commission filed a complaint in the U.S. District Court for the Northern District of Texas (Dallas Division) against Larry Ohms, the former treasurer of Dallas-based United States Lime & Minerals Inc. (Nasdaq: USLM). According to the complaint, Ohms embezzled nearly $2.2 million from the company between January 1998 and December 2001 by forging the signatures of other company officers on checks, and falsifying the company's check register to create the appearance that these checks were for the company's legitimate business expenses. The SEC further alleges that Ohms supervised U.S. Lime's internal accounting controls and financial reporting, and used his position to escape detection by falsifying the company's books and records, lying to its outside auditors, and preparing false financial statements that he then caused the company to file with the SEC. The complaint charges Ohms with fraud, circumventing internal controls, falsifying books and records, and lying to auditors, in violation of, or aiding and abetting violations of, the Securities Exchange Act of 1934 and Rules thereunder, and requests that Ohms be enjoined from future securities violations, barred from serving in the future as an officer or director of a public company, and ordered to disgorge the full amount that he stole from U.S. Lime, with prejudgment interest. VISTA 2000: SEC Obtains Injunctive Writ in Securities-Laws Breach ----------------------------------------------------------------- The Securities and Exchange Commission announced that on Oct. 31 the Honorable Clarence Cooper of the United States District Court for the Northern District of Georgia, entered an order of permanent injunction and other relief against Arnold E. Johns, Jr. of Atlanta, Georgia for engaging in a wide-range of securities laws violations, including that misstatements were made by Vista 2000 Inc. in its regulatory filings. Johns was a director and president of Vista, a now defunct consumer products company formerly headquartered in Roswell, Georgia. Judge Cooper's recent order permanently enjoined Johns from further violating the antifraud provisions, books and records provisions, internal accounting control and reporting provisions of the Securities Act of 1933 [Section 17(a)] and the Securities Exchange Act of 1934 [Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B), 13(b)(5) and Rules 10b-5, 12b-20, 13-11, 13a-13 and 13b2-1 thereunder]. Johns consented to the entry of the order without admitting or denying the allegations of the Commission's amended complaint. Johns was ordered to pay disgorgement and prejudgment interest in amounts to be resolved upon motion of the Commission at a later date. The Commission previously sued Johns and three other men for various violations of the federal securities laws. The other defendants are Richard P. Smyth of Fernandina Beach, Florida, Alan T. Davis of Gainesville, Georgia and Michael J. Becker of Marietta, Georgia, all of whom have been previously enjoined by the Court. The Commission's amended complaint alleged a wide-range of securities law violations committed by Johns during 1995 and 1996. The allegations included Johns': (1) failure to conform with generally accepted accounting principles resulting in the overstatement in various filings made with the Commission of Vista's revenues, income, earnings per share, and assets during 1995 and 1996 (the misstated amounts ranged up to 83,592% and in most periods, resulted in Vista reporting income when it was, in fact, experiencing losses), (2) failure to disclose the misappropriation of $481,000 in 1996 by Vista's chairman of the board, and (3) engaging in illegal insider selling of Vista common stock during 1996. The Commission alleged in its amended complaint that the misstatements contained in Vista's financial statements, during Johns' tenure, were material and caused numerous reports on Forms 10-QSB and 8-K to be false and misleading. WALL STREET RESEARCH: Settlement Talks Center on 1990s Market Abuses -------------------------------------------------------------------- Wall Street firms may find a silver lining in talks concerning a planned global settlement with federal and state regulators over alleged market abuses of the late 1990s. Most of the focus of the regulatory settlement, expected to be completed soon, has been on ways to resolve conflict-of-interest allegations that Wall Street research was tainted by pressure to boost investment-banking fees, The Wall Street Journal recently reported. The pact emerging from these talks about research practices could cost securities firms as much as $2 billion for overhauling research practices, and for fines as well. The pact could also create a dilemma for European banks. But a less-noticed aspect of the effort is that any settlement also may include the resolution of class-action cases involving alleged misconduct in allocating shares of hot initial public offerings, according to people familiar with the talks. Regulators have been investigating whether securities firms scratched the backs of favored clients by directing coveted IPOs to them in return for investment- banking business or for other improper forms of payback. The move by the federal and state regulators to reach a pact on these issues could allow Wall Street firms to resolve some aspects of alleged misconduct without disclosing significant specifics, critics say. Ordinarily, regulatory settlements include an accompanying detailed bill of particulars about the alleged wrongdoing. But in this case, because of the expedited nature of the settlement, it is possible that the charges could be described only in broad general form. If that happens, any broad settlement could make it more difficult for investors to win private claims alleging IPO abuses, in suits filed against Wall Street. The issue is likely to be addressed very soon, at a meeting of Wall Street lawyers and regulators. Among the topics will be an estimate of how much securities firms would owe government agencies to resolve the many different class-action cases against them, according to people familiar with the matter. The securities firms have been reluctant to comment publicly on the talks because they are supposed to be confidential. At issue are two types of IPO cases. One involves IPO "spinning," the practice by which securities firms are alleged to have doled out hot IPOs to the personal brokerage accounts of corporate executives in return for their firms' business. The other involves IPO "laddering," which involves allegations that securities firms gave out shares in additional hot IPOs to clients who agreed to buy more shares at higher prices after the stocks began trading. Regulators could benefit by settling the IPO cases as part of a broad pact. Though many people on Wall Street and elsewhere believe spinning and laddering are not proper practices, the regulators say such cases are not easy to bring because they require evidence of a clear quid pro quo, a high bar in such matters. Linking hot IPO allocations to such after-market orders is the subject of a massive class-action lawsuit charging market manipulation. Lawsuits filed by holders of hundreds of "dot-com" stocks that soared in price and then crashed were consolidated in federal court, alleging in part that securities firms stimulated their first-day price run-ups by awarding IPO shares to investors who indicated they would buy additional shares in the after-market. A quick settlement of a pending regulatory probe of laddering by the Securities and Exchange Commission could greatly reduce the legal exposure of the firms being probed by limiting the amount of source material about the cases that gets into the public record. The four firms being probed most closely by the SEC in the laddering case are Goldman Sachs Group Inc., Morgan Stanley, J.P. Morgan Chase & Co., and the former Robert Stephens unit of FleetBoston Financial Corp. The firms have denied the laddering allegations in court. Melvin Weiss, whose firm, Milberg Weiss Bershad Hynes & Lerach LLP, is one of the lead law firms representing investors in the civil class action claims in the laddering case, said he was not aware that the laddering regulatory probes might be settled in the global research pact. Mr. Weiss said that rolling up the laddering cases in the research settlement would not necessarily hurt his clients' case; although, "on the other hand, the more information that comes out into the public domain, the more pressure there is on the defendant securities firms to settle with us." And quickly rolling up the IPO-allocation class-action cases in the research settlement and getting these cases behind them is what the four securities firms seem to want. They, therefore, have an incentive to support the settlement of the research-conflicts cases, despite the expensive terms proposed by the state regulators, led by New York State Attorney General Eliot Spitzer. Mr. Spitzer is amenable to including the IPO cases in the settlement, according to people familiar with the talks; Mr. Spitzer, however, has declined to comment. The original joint announcement by Mr. Spitzer, the SEC and other regulators said the global settlement effort would include both "analyst research and IPO allocations." However, more attention has been focused on the possible research settlements because of the regulators' proposals for the top securities firms to pay up to $1 billion over five years to fund independent research. The SEC has taken the lead on regulatory probes of laddering; the National Association of Securities Dealers is probing some of the spinning allegations. WILLIAM STEPHENS: Complaint Over Unrealized Greasy Deal Settled --------------------------------------------------------------- The Securities and Exchange Commission announced that on November 4, 2002, it settled an administrative proceeding against William M. Stephens. Stephens, without admitting or denying the Commission's findings, consented to an Order that: (a) requires Stephens to cease and desist from committing or causing any violation and any future violations of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; (b) requires Stephens to pay a $25,000 civil penalty; and (c) bars Stephens from association with an investment adviser, with the right to reapply for association after two years. Pursuant to the Order and Offer of Settlement, the Commission found that in March 2000, Stephens was associated with a registered investment adviser. At that time, Stephens met with certain persons who offered to introduce him to the trustees of certain union pension funds so that he and his firm could become financial advisers to the Union Funds. Stephens agreed that after he and his firm became financial advisers to the Union Funds, he would arrange to divert a portion of the Union Funds into investments controlled by the persons who introduced him to the Union Funds and those persons would pay kickbacks to the pension fund trustees who hired Stephens and his firm. Neither Stephens nor his firm became advisers to the Union Funds. As a result, no payments were ever made to any trustees of the Union Funds. The Commission's action was the result of an investigation with the United States Attorney's Office for the Southern District of New York and the Federal Bureau of Investigation. *Michigan Trade Group Urges Asbestos Lawsuit Reform --------------------------------------------------- The trade group representing more than 90 percent of Michigan's manufacturing workforce is campaigning to reduce the number of asbestos lawsuits against companies, reports The Detroit News. The newspaper reports that experts say asbestos claims could increase more than 200 percent and cost U.S. business as much as $210 billion in the years ahead. Because these figures portend grave difficulties for businesses and victims alike, the Lansing-based Michigan Manufacturers Association (MMA) is working with the Washington, D.C.-based National Association of Manufacturers' coalition called The Asbestos Alliance to persuade Congress of the need for reform in asbestos litigation. Chuck Hadden, vice president of government affairs for the manufacturers, said the Big Three is defending some 15,000 asbestos cases, an increase of 1,634 percent from two years ago. There are some 200,000 asbestos claims pending nationwide, Mr. Hadden said. "Companies have to file for bankruptcy to separate themselves from the lawsuits," Mr. Hadden said. "The problem is not the people who have impairments now, but the prospective impairments, the people in the future who will be receiving money." In the newspaper and radio ad campaign, which is costing between $100,000 and $200,000. MMA contends that legitimate asbestos lawsuits are being held up in the court system, because of cases filed by people who have been exposed to asbestos but are not sick. The lawsuits, the MMA claims, are hurting companies and even sending some into bankruptcy, as reported by The Detroit News. A study released in September by the RAND Institute for Civil Justice said 65 percent of asbestos compensation in the last 10 years was paid to people claiming non-cancerous conditions. The study reports that asbestos claims cost U.S. businesses $54 billion by the end of 2000. Asbestos claims are expected to cost as much as $210 billion in years ahead. A leading trial lawyer has said that the ad campaign is full of untruths. Michael Serling, a Birmingham-based attorney who filed the state's first asbestos-related, wrongful-death suit in 1981, said that just because people exposed to don't have cancer does not mean they do not deserve compensation. Mr. Serling said they often later develop mesothelioma, cancer of the chest or abdomen; or asbestosis, a scarring of the lungs that leads to breathing problems. "I have never seen a media blitz like this [one], discrediting victims and what we do -- exercising our rights by bringing cases into the courts." Chuck Hadden says the campaign, which urges people to contact their congressman or senator for asbestos reform, is not intended to be an election issue. The group started running the newspaper and radio ads two weeks ago, but plans to stop them before Tuesday's election. The group wants Congress, through legislative changes, to: 1. Establish objective medical criteria for asbestos-related health issues. 2. Relax statutes of limitations and other rules in order to reduce premature filings. 3. Eliminate the consolidations, or class actions, that "lead to shotgun settlements with thousands of people who are not sick." 4. Allow claims only to be made in the state where the plaintiff resides or was exposed. New Securities Fraud Cases AGILENT TECHNOLOGIES: Glancy & Binkow Commences Securities Suit in NY ---------------------------------------------------------------------- The law firm of Glancy & Binkow LLP commenced a Class Action lawsuit in the United States District Court for the Southern District of New York on behalf of a class consisting of all persons who purchased securities of Agilent Technologies Inc. (NYSE:A) between December 13, 1999 and September 9, 2002, inclusive. The Complaint charges defendant Credit Suisse First Boston Corp. with violations of federal securities laws. Among other things, plaintiff claims that defendant's material omissions and the dissemination of materially misleading analyst reports that recommended the purchase of Agilent common stock, and which set price targets for Agilent common stock without any reasonable factual basis, caused Agilent's stock price to become artificially inflated, inflicting damages on investors. The complaint alleges that defendant, in order to obtain investment banking business for CSFB, failed to disclose material, non-public, adverse information which it possessed concerning Agilent and significant, material conflicts of interest which it had concerning the Agilent reports. Defendant's positive reports concerning Agilent significantly and artificially inflated the price of Agilent common stock throughout the Class Period. Plaintiff seeks to recover damages on behalf of Class members. For more details, contact Lionel Z. Glancy and Michael Goldberg by Mail: Glancy & Binkow LLP, 1801 Avenue of the Stars, Suite 311, Los Angeles, California 90067, by Phone: 310-201-9161, Toll Free: 888-773-9224, or by E-mail: info@glancylaw.com . CIGNA CORP.: Faruqi & Faruqi Commences Securities Suit in E.D. PA ----------------------------------------------------------------- A class action lawsuit was commenced in the United States District Court for the Eastern District of Pennsylvania by the law firm of Faruqi & Faruqi LLP on behalf of all purchasers of Cigna Corp. (NYSE:CI) securities between May 2, 2001 through October 24, 2002, inclusive. The complaint charges defendants with violations of federal securities laws by, among other things, issuing a series of materially false and misleading press releases concerning Cigna's financial results and business prospects. Specifically, the complaint alleges that Cigna continuously touted its seemingly impressive earnings growth and represented that operating income in 2002 was expected to be $1.1 billion. These representation were materially false and misleading because the Company neglected to disclose that Cigna failed to adequately reserve for its reinsurance obligations, particularly for its reinsurance of guaranteed minimum death benefits, by hundreds of millions of dollars, if not more. As a result, the Company's securities prices were artificially inflated throughout the Class Period. On October 24, 2002, however, the Company revealed that it would not meet its third quarter and year 2002 guidance resulting in a share price decline of nearly 42% in a single day, falling from $63.60 per share close on October 24, 2002 to trade as low as $36.81 per share on October 25, 2002. For more details, contact Eric Crusius, Esq., and Anthony Vozzolo, Esq., by Mail: Faruqi & Faruqi, LLP, 320 East 39th Street, New York, NY 10016, by Phone: 877-247-4292 or 212-983-9330, or by E-mail: Ecrusius@faruqilaw.com or Avozzolo@faruqilaw.com . COMERICA INC.: Cauley Geller Launches Securities Fraud Suit in Michigan ----------------------------------------------------------------------- The Law Firm of Cauley Geller Bowman & Coates, LLP announced that a class action has been filed in the United States District Court for the Eastern District of Michigan, on behalf of purchasers of common stock of Comerica Inc. (NYSE: CMA) between January 30, 2000 and October 1, 2002, inclusive, as well as all persons who received shares of Comerica Inc. as a result of Comerica's acquisition of Imperial Bancorp and who sold those shares as a loss or retained their Comerica holdings through October 1, 2002. The complaint charges Comerica and certain of its executive officers with issuing false and misleading statements concerning the Company's business and financial condition. Specifically, the complaint alleges that Defendants artificially inflated Comerica's revenue by overstating the value of its Munder Capital Management subsidiary and under- accruing Comerica's loan loss reserves. Defendants' material misrepresentations and omissions were revealed on October 2, 2002, when the Company disclosed that Comerica would reduce its second- and third- quarter 2002 earnings, reflecting a $213 million after-tax charge for additional loan loss reserves and the decline in the Munder subsidiary's value. For more details, contact Cauley Geller Bowman & Coates, LLP by Mail: Client Relations Department, Jackie Addison, Heather Gann or Sue Null, P.O. Box 25438, Little Rock, AR 72221-5438, by Phone: Toll Free: 888-551-994, or by E-mail: info@cauleygeller.com . CONCORD EFS: Kahn & Associates Files Securities Fraud Suit in W.D. TN --------------------------------------------------------------------- Kahn & Associates Ltd. announced that it is filing a class action lawsuit in United States District Court for the Western District of Tennessee on behalf of purchasers of the publicly traded securities of Concord EFS, Inc. (NASDAQ: CEFT) during the period October 30, 2001 to September 4, 2002. The complaint charges that Concord and the other defendants issued false and misleading statements about the Company's earnings and ability to sustain earnings-per-share growth of 30-35% in order to allow Concord stock to trade at artificially high levels. During the Class Period, the defendants used Concord stock to acquire other companies and the individual defendants collectively sold over 5 million shares of their own Concord holdings for over $160 million in proceeds. The complaint further alleges that the earnings defendants touted were only achieved by improperly reporting non-operating gains as operating income and by reporting substantial operating expenses as "one-time" charges. In fact, the complaint charges that Concord's business was not growing but suffering from increased costs and declining margins. On September 5, 2002, Concord revealed the truth about its financial and business problems and the price of Concord's stock responded predictably. On that day, the stock price fell to $12.60 per share, a drop of more than 60% from its Class Period high of over $35 per share. For more details, contact plaintiff's counsel, David B. Kahn or Mark E. King by Phone: 800-536-0499, or by E-mail: dbklaw@flash.net. CREDIT SUISSE: Kaplan Fox Commences Securities Fraud Suit in S.D. NY -------------------------------------------------------------------- Kaplan Fox & Kilsheimer LLP filed a class action suit on October 28, 2002 against Credit Suisse First Boston Corp., in the United States District Court for the Southern District of New York on behalf of all persons or entities who purchased the common stock of AOL Time Warner, Inc, formerly America Online, Inc. (NYSE:AOL) between January 16, 2001 and September 3, 2002, inclusive. The complaint alleges that defendant CSFB violated the federal securities laws by issuing analyst reports regarding AOL that recommended the purchase of AOL common stock and which set price targets for AOL common stock, without any reasonable factual basis. The complaint further alleges, among other things, that when issuing its AOL analyst reports, defendant CSFB failed to disclose material, non- public, adverse information it possessed about AOL. Throughout the Class Period, CSFB maintained positive recommendation on AOL in order to obtain and support lucrative financial deals for CSFB. The Class Period begins on January 16, 2001 at which time CSFB maintained a "BUY" rating for AOL common stock. The Class Period ends on September 3, 2002, the date CSFB belatedly downgraded AOL to a "RESTRICTIVE" rating. As a result of CSFB's false and misleading analyst reports, AOL common stock traded at artificially inflated levels during the class period. Plaintiff seeks to recover damages on behalf of the proposed Class. For more details, contact Joel B. Strauss, Esq., and Donald R. Hall, Esq., by Mail: Kaplan Fox & Kilsheimer LLP, 805 Third Avenue, 22nd Floor, New York, NY 10022, by Phone: 800-290-1952, 212-687-1980, by Fax: 212-687-7714, or by E-mail: mail@kaplanfox.com , or Laurence D. King, Esq., by Mail: Kaplan Fox & Kilsheimer LLP, 601 Montgomery Street, San Francisco, CA 94111, by Phone: (415) 772-4700, by Fax: (415) 772-4707, or by E-mail: mail@kaplanfox.com . ENDOCARE INC.: Charles J. Piven Files Securities Suit in C.D. CA ---------------------------------------------------------------- The Law Offices Of Charles J. Piven, P.A. announced that a securities class action has been commenced on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of Endocare, Inc. (Nasdaq: ENDO) between October 23, 2001 and October 30, 2002, inclusive. The case is pending in the United States District Court for the Central District of California, against defendants Endocare, Paul Mikus and John V. Cracchiolo. The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the Class Period which statements had the effect of artificially inflating the market price of the Company's securities. No class has been certified in the above action. For more details, contact the Law Offices Of Charles J. Piven P.A. by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202, by Email: hoffman@pivenlaw.com or by Phone: 410-986-0036. NUI CORP.: Wolf Popper LLP Files Securities Fraud Suit in NJ ------------------------------------------------------------ Wolf Popper LLP has filed a securities fraud class action complaint against NUI Corporation (NYSE:NUI) and its President and Chief Executive Officer John Kean, Jr., on behalf of purchasers of NUI common stock between July 26, 2001 and October 17, 2002. The plaintiff alleges that during the Class Period, defendants made materially false and misleading statements and failed to disclose that NUI was incurring significantly greater costs and generating reduced revenues. These costs included: (i) increases in fixed costs for NUI's telecommunications business; (ii) increased costs of self-insuring for employee medical benefits; (iii) a material decline in the value of its pension plan assets which would cause NUI to accrue substantial pension expense; and (iv) a sharp rise in bad debts. As a result of the adverse economic conditions facing the Company, NUI was unable to generate the necessary cash flow from operations to reduce its very high debt levels. Moreover, defendants knew that as a result of these adverse conditions, the Company's ability to conduct a secondary offering of common stock would be impaired. On October 18, 2002, defendants finally disclosed to investors that NUI's earnings for FY 2002 would be far below their prior guidance. Following this announcement, NUI's shares fell $9.27 per share, or approximately 49%, to close at $10.90 per share. For more details, contact Michael A. Schwartz, Esq., by Mail: Wolf Popper LLP, 845 Third Avenue, New York, NY 10022-6689; by Phone: 212-451-9668, Toll Free: 877-370-7703; By Fax: 212-486-2093, Toll Free: 877-370-7704; by E-mail: irrep@wolfpopper.com ; mschwartz@wolfpopper.com . OM GROUP INC.: Charles J. Piven Launches Securities Suit in N.D. Ohio --------------------------------------------------------------------- Law Offices Of Charles J. Piven, P.A. announced that a securities class action has been commenced on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of OM Group, Inc. (NYSE:OMG) between July 30, 2002 and October 30, 2002, inclusive. The case is pending in the United States District Court for the Northern District of Ohio against defendants OM Group, Inc., James P. Mooney and Thomas Miklich. The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the Class Period which statements had the effect of artificially inflating the market price of the Company's securities. No class has been certified in the above action. For more details, contact the Law Offices Of Charles J. Piven P.A. by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202, by Email: hoffman@pivenlaw.com or by Phone: 410-986-0036. OM GROUP: Milberg Weiss Files Securities Fraud Suit in N.D. Ohio ---------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP announced that a class action has been commenced in the United States District Court for the Northern District of Ohio on behalf of purchasers of OM Group Inc. (NYSE:OMG) publicly traded securities during the period between July 30, 2002 and Oct. 30, 2002. The complaint charges OM Group and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that during the Class Period, defendants made false statements about the Company's business and prospects. After reporting somewhat disappointing 2ndQ 02 results, defendants told investors that its business was strong and all the indicators were for a good second half. As a result, OM Group stock continued to trade above $50 per share. On September 19, 2002, OM Group warned the 3rdQ 02 results would be slightly lower than prior statements, but that results would still be significantly higher than in the prior year. Then, on October 29, 2002, OM Group announced a huge loss, an inventory write-down and a future restructuring. OM Group stock dropped to as low as $8.60 per share on volume of $22 million shares. Later, on October 31, 2002, it was disclosed that OM Group's Chief Executive Officer had sold all his holdings to cover a margin call on some 710,000 shares on OM Group stock which he had used as collateral for a huge loan. On this news, the stock dropped even further to as low as $6.12 per share. Plaintiff seeks to recover damages on behalf of all purchasers of OM Group publicly traded securities during the Class Period. The plaintiff is represented by Milberg Weiss Bershad Hynes & Lerach LLP, who has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud. For more details, contact plaintiff's counsel, William Lerach or Darren Robbins of Milberg Weiss by Phone: 800-449-4900, or by E-mail: wsl@milberg.com . OM GROUP: Schiffrin & Barroway Files Securities Fraud Suit in N.D. OH --------------------------------------------------------------------- The law firm of Schiffrin & Barroway LLP announced that a class action lawsuit was filed in the United States District Court for the Northern District of Ohio on behalf of all purchasers of the common stock of OM Group Inc. (NYSE: OMG) from July 30, 2002 through Oct. 30, 2002, inclusive. The complaint charges OM Group, Inc. and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that after reporting somewhat disappointing 2nd quarter 2002 results, defendants told investors that its business was strong and all the indicators were for a good second half. As a result, OM Group stock continued to trade above $50 per share. On September 19, 2002, OM Group warned the 3rd quarter 2002 results would be slightly lower than prior statements, but that results would still be significantly higher than in the prior year. Then, on October 29, 2002, OM Group announced a huge loss, an inventory write-down and a future restructuring. OM Group stock dropped to as low as $8.60 per share on volume of $22 million shares. Later, on October 31, 2002, it was disclosed that OM Group's Chief Executive Officer had sold all his holdings to cover a margin call on some 710,000 shares on OM Group stock which he had used as collateral for a huge loan. On this news, the stock dropped even further to as low as $6.12 per share. Plaintiff seeks to recover damages on behalf of class members. For more details, contact Marc A. Topaz, Esq., or Stuart L. Berman, Esq., by Phone (toll free): 1-888-299-7706 or 1-610-667-7706, or by E- mail: info@sbclasslaw.com . SCHERING PLOUGH CORP.: Cauley Geller Files Securities Suit in NJ ---------------------------------------------------------------- The Law Firm of Cauley Geller Bowman & Coates, LLP announced that a class action has been filed in the United States District Court for the District of New Jersey on behalf of purchasers of Schering Plough Corp. (NYSE: SGP) publicly traded securities during the period between October 1, 2002 and October 3, 2002, inclusive. The complaint charges Schering, Richard Jay Kogan, its Chairman, Chief Executive Officer and President, and Putnam Investment Management, LLC violated the antifraud provisions of the Securities Exchange Act of 1934. Specifically, the complaint alleges that defendants' wrongdoing is alleged to be the result of Kogan selectively providing non-public material information about Schering's adverse projected earnings to management of Putnam at a luncheon meeting on October 1, 2002. It was not until approximately 11:00 p.m. on October 3, 2002 that Schering publicly announced that its 2003 and 2004 earnings would be far below analysts' expectations. As a result of the selective disclosure by defendant Kogan of this adverse, material, non-public information to defendant Putnam and others, defendant Putnam and the other defendants were able to sell enormous amounts of Schering shares before the general public received such information, thereby enabling these tippees to benefit from the receipt of their inside information to the detriment of plaintiff and the Class. From the time defendant Putnam first learned of the material inside information through the close of the market on October 4, 2002, Schering stock plunged from $21.80 per share to as low as $16.10 per share, a drop of over 25%. For more details, contact Cauley Geller Bowman & Coates, LLP by Mail: Client Relations Department, Jackie Addison, Heather Gann or Sue Null, P.O. Box 25438, Little Rock, AR 72221-5438, by Phone: Toll Free: 888-551-994, or by E-mail: info@cauleygeller.com . SCHERING PLOUGH CORP.: Wechsler Harwood LLP Files Securities Suit in NJ ----------------------------------------------------------------------- The law firm of Wechsler Harwood LLP announces that a class action has been commenced in the United States District Court for the District of New Jersey on behalf of purchasers of Schering Plough Corp. (NYSE:SGP) common stock for the period between October 1, 2002 and October 3, 2002. The complaint alleges that Schering, Richard Jay Kogan, its Chairman, Chief Executive Officer, and President, and Putnam Investment Management, LLC violated the Securities Exchange Act of 1934. Schering and its subsidiaries are engaged in the discovery, development, manufacturing, and marketing of pharmaceutical products worldwide. Defendants violated the Act as a result of Kogan, on behalf of Schering, selectively provided non-public material, adverse information about Schering's projected earnings to management of Putnam at a luncheon meeting on October 1, 2002. Kogan made further selective disclosures of this non-public information to analysts at mid-day on October 3, 2002. It was not until approximately 11:00 p.m. on October 3, 2002 that Schering publicly announced that its 2003 and 2004 earnings would be far below analysts expectations. As a result of the selective disclosure by defendant Kogan of this adverse, material, non- public information to defendant Putnam and others, defendant Putnam and the others were able to sell enormous amounts of Schering shares before the general public received such information, thereby enabling the tippees to benefit from the receipt of their inside information to the detriment of plaintiff and the Class. From the time defendant Putnam first learned of the material inside information through the close of the market on October 4, 2002, Schering stock plunged from $21.80 per share to as low as $16.10 per share, a drop of over 25%. For more details, contact Wechsler Harwood LLP by Mail: 488 Madison Avenue, 8th Floor New York, New York 10022, by Phone: Toll Free Telephone: 877-935-7400, or by E-mail: Ramon Pinon at rpinon@whesq.com TENET HEALTHCARE: Milberg Weiss Files Securities Fraud Suit in C.D. CA ---------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP announced that a class action has been commenced in the United States District Court for the Central District of California on behalf of purchasers of Tenet Healthcare Corp. (NYSE:THC) publicly traded securities during the period between October 3, 2001 and October 31, 2002. The complaint charges Tenet 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 represented that Tenet's favorable financial results were due to its commitment to quality and cost-effective care. Throughout the Class Period, defendants repeatedly stated that Tenet's financials were strong, the Company's stellar bottom line was attributed to its state-of-the-art facilities and high-quality patient care, and that Tenet was consistently achieving record results. Defendants actually knew that Tenet's profit quality was inflated by, among other things, wrongfully inducing patients into undergoing unnecessary and invasive surgeries. Defendants knowingly or in conscious disregard for the truth engaged in a scheme to cause patients to undergo unnecessary invasive coronary procedures. The scheme included unnecessary heart catheterizaton, including angiogram and intravascular ultrasound, stent placement, angioplasty, coronary artery bypass surgery and heart valve replacement surgery. On October 31, 2002, The Associated Press issued a press release entitled, "Tenet Healthcare Stock Plunges After Report of Investigation." The press release stated in part: "Shares of Tenet Healthcare Corp. plunged more than 26 percent Thursday after federal prosecutors in Sacramento filed an affidavit regarding alleged false billing by two doctors at the company's hospital in Redding, Calif. The stock was also hurt by a rumor, denied by the company, that the FBI had searched its corporate headquarters in Santa Barbara, Calif." These disclosures shocked the market, causing Tenet's stock to decline to less than $29 per share before closing at $28.75 per share on October 31, 2002, on volume of more than 50 million shares. Plaintiff seeks to recover damages on behalf of all purchasers of Tenet publicly traded securities during the Class Period. For more details, contact plaintiff's counsel, William Lerach or Darren Robbins of Milberg Weiss by Phone: 800-449-4900, or by E-mail: wsl@milberg.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. 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