/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/021113.mbx C L A S S A C T I O N R E P O R T E R Wednesday, November 13, 2002, Vol. 4, No. 225 Headlines APARTHEID LITIGATION: Former President de Klerk Criticizes Lawsuit BELLSOUTH CORPORATION: Faces Numerous Securities Fraud Suits in N.D. GA BELLSOUTH CORPORATION: Faces Lawsuits For ERISA Violations in N.D. GA CONNECTICUT: Court Monitor Reports Progress By State Child Care Agency CONNECTICUT: Medicaid Recipients File Suit Over Inaccessible Equipment EL PASO: Enters Settlement Talks With CA Regulators in Gas Prices Suit LEXMARK INTERNATIONAL: Court Dismisses Suit For Securities Violations NEW ZEALAND: Wakefield Hospital Fights Possible Securities Fraud Suit OCEAN SPRAY: Rival Commences Cranberry Antitrust Lawsuit in WA Court PROGRESSIVE CORPORATION: LA Court Grants Certification To Wage Lawsuit SYGENTA CROP: High Court Refuses Transfer of Suit Under All Writs Act TENET HEALTHCARE: Faces Suits, Charges Of Unnecessary Heart Surgery UNITRIN INC.: Court Grants Final Approval To Race Bias Suit Settlement WAMPLER FOODS: Said It Acted Responsibly in PA Listeriosis Outbreak WILLIAMS COMPANIES: Renegotiates Long-Term Energy Contracts with CA * Securities Settlements by Wall Street Firms Leaving Shareholders Out New Securities Fraud Cases BROADWING INC.: Cauley Geller Lodges Securities Fraud Suit in S.D. Ohio BROADWING INC.: Faruqi & Faruqi Launches Securities Fraud Suit in OH BROADWING INC.: Wolf Haldenstein Commences Securities Suit in W.D. OH CREDIT SUISSE: Cohen Milstein Lodges Securities Fraud Suit in MA Court H&R BLOCK: Faruqi & Faruqi Commences Securities Fraud Lawsuit in NY H&R BLOCK: Charles Piven Commences Securities Fraud Lawsuit in S.D. NY H&R BLOCK: Abbey Gardy Commences Securities Fraud Suit in S.D. New York OM GROUP: Kirby McInerney Commences Securities Fraud Suit in N.D. OH SALOMON SMITH: Rabin & Peckel Commences Securities Fraud Suit in NY SALOMON SMITH: Stull Stull Commences Securities Fraud Suit in S.D. NY SYNCOR INTERNATIONAL: Charles Piven Launches Securities Suit in C.D. CA SYNCOR INTERNATIONAL: Levy & Levy Commences Securities Fraud Suit in CA SYNCOR INTERNATIONAL: Brian Felgoise Lodges Securities Suit in W.D. CA TENET HEALTHCARE: Scott + Scott Launches Securities Fraud Suit in CA TENET HEALTHCARE: Kirby McInerney Commences Securities Suit in C.D. CA UNDERWRITERS LITIGATION: Rabin & Peckel Files Securities Suit in OH ********* APARTHEID LITIGATION: Former President de Klerk Criticizes Lawsuit ------------------------------------------------------------------ Former South African president FW de Klerk criticized the class action seeking compensation for apartheid victims from multinational companies in the US and Switzerland, saying it would cripple the ability of banks and companies to do business "anywhere," Business Day reports. Speaking at an American Chamber of Commerce gathering in Johannesburg, South Africa Friday, Mr. de Klerck said that if the New Partnership for Africa's Development (Nepad) was to succeed, then the court case should not prevail. "Cases will then be made against banks that have made loans to many countries throughout the world that had one time or another been accused of serious human rights violations," he stated, according to a Business Day report. "Although the case has little substance it has the potential to cause real harm. In particular it will make companies and international banks even more reluctant to do business with any country with a less than pristine human rights record. This will of course include most of the countries (in Africa), which need foreign investment," he added. He said the case had the potential of affecting Nepad as it asked for multinational firms to invest in some countries that had bad human rights records. "I have always said the best way to make amends for apartheid was to dismantle it and open the way for a democratic transformation of our society, to create new horizons." He said the challenge was to work for policies that would bring political, social and economic justice "for all our people." "This will be a much more realistic expectation than to wait in vain for a cheque from foreign banks, which has to be extricated by opportunistic lawyers," he said. BELLSOUTH CORPORATION: Faces Numerous Securities Fraud Suits in N.D. GA ----------------------------------------------------------------------- BellSouth Corporation faces several substantially identical securities class actions filed in the United States District Court for the Northern District of Georgia against it and three of its senior officers, alleging violations of the federal securities laws. The plaintiffs allege that during the period January 22, 2001 through July 19, 2002, the Company: (1) overstated the unbilled receivables balance of its advertising and publishing subsidiary; (2) failed to disclose that a Florida CLEC had stopped paying money owed to the Company; and (3) understated its exposure to bad debt losses. At this early stage of the litigation, the Company cannot predict the likely outcome of the case, nor can a reasonable estimate of loss, if any, be made. BELLSOUTH CORPORATION: Faces Lawsuits For ERISA Violations in N.D. GA --------------------------------------------------------------------- BellSouth Corporation faces three substantially identical class actions filed in the United States District Court for the Northern District of Georgia against it, its directors, three of its senior officers, and other individuals, alleging violations of the Employee Retirement Income Security Act (ERISA). The plaintiffs, who seek to represent a putative class of participants and beneficiaries of the Company's 401(k) plan, allege that the Company breached its fiduciary duties in violation of ERISA by, among other things: (1) failing to provide accurate information to the Plan participants and beneficiaries; (2) failing to ensure that the Plan's assets were invested properly; (3) failing to monitor the Plan's fiduciaries; and (4) failing to disregard Plan directives that the defendants knew or should have known were imprudent. At this early stage of the litigation, the likely outcome of the cases cannot be predicted, nor can a reasonable estimate of loss, if any, be made. CONNECTICUT: Court Monitor Reports Progress By State Child Care Agency ---------------------------------------------------------------------- An independent review by a court-appointed monitor of hundreds of case files at Connecticut's Department of Children and Family (DCF) indicates that the agency is making progress in protecting children, as it works to sever itself from more than a decade of federal oversight, reports Associated Press Newswires. The department has been under a consent decree for 11 years because of a 1989 class action alleging that the state had violated federal laws by not adequately protecting children in its care. The lawsuit was filed under the name of "Juan F.," who was one of nine DCF clients listed. Before the federal oversight can be lifted, the department must meet 22 goals over the next 18 months. The court-appointed monitor's report was filed in federal court in Bridgeport on Friday last. It is the first in a series of large-scale reviews of DCF's performance that are part of a plan approved by U.S. District Judge Alan H. Nevas in February. The monitor, for the purpose of compiling a comprehensive report, had reviewed about 400 files, selected in March to establish a baseline for further progress, DCF spokesman Gary Kleeblatt said on Friday. Goals include: (1) a reduction in the percentage of children in out-of-state care; (2) an increase in the number of social worker visits to abused and neglected children; (3) a reduction in the number of children housed in shelters for longer than 45 days; and (4) more siblings being placed together in foster or adoptive homes The report found the department has been meeting the health, medical and dental needs of children in its care. Progress was cited in placing children near their family when the goal is reunification and in keeping siblings together when they are put in state custody. The agency also has met compliance standards for limiting the number of abuse and neglect cases and repeat abuse cases in foster care, the kind of conditions "we wish (do not) exist," said Mr. Kleeblatt, but he noted that the agency was meeting its goals for keeping that number as low as it can. The report, however, was critical of some of the data handling in cases. One of the major obstacles was incomplete information in 40 to 60 percent of the treatment plans. Some of the missing information was contained in other areas of the case record, Mr. Kleeblatt said. It is important, however, that the "floating" information be gathered together and find its home in one place, the most desirable being within the boundaries of the treatment plan, according to points made by Martha Stone. An attorney for the plaintiffs said that the incomplete plans in foster care cases, for example, raise serious questions about the quality of care. The treatment plan is the fundamental component, the fundamental vehicle, the fundamental guide in the care and protection of the foster child, as explained by Martha Stone of the Center for Children's Advocacy, a co-counsel on the Juan F. class action, from which resulted the consent decree. "Children's treatment plans are an essential guide to the care and protection of foster children. They outline their goals in detail, and the services the children need and are entitled to receive," said Ms. Stone. The next major review is scheduled for the spring of 2003. Meanwhile, DCF must continue to meet all the requirements in the consent decree. During the transition from federal oversight to autonomy, court monitor D. Ray Sirry also would have oversight on a sampling of cases, officials said. CONNECTICUT: Medicaid Recipients File Suit Over Inaccessible Equipment ---------------------------------------------------------------------- The State of Connecticut and Department of Social Services Commissioner Patricia Wilson-Coker faces a class action filed in US District Court in New Haven, Connecticut by three Medicaid recipients, alleging the state denied them access to urgently needed medical equipment. The suit further alleged that hundreds of other Medicaid recipients, including many with low incomes and disabilities, also need the equipment they were denied. Their lawyers claimed that denial of equipment is illegal and results in higher costs to the state, Yale Business News reports. Lawyers for the plaintiffs further alleged the department denied Medicaid recipients the equipment based on a manual used for the Medicare program. They said Medicare, a supplemental health insurance program, is not designed for low-income people and has more limited benefits than Medicaid, the Yale Business News states. Sheldon Toubman, another lawyer for the plaintiffs, said, "It is most unfortunate that low-income elderly people and disabled folks would have to file a lawsuit just to gain access to urgently needed equipment which the federal government already instructed the department to provide, and which the department already agreed to provide in new regulations." Kevin Brophy, a lawyer for one of the plaintiffs, told the Yale Business News that if people are denied medical equipment, "they will most likely be forced into nursing homes at a far greater cost to the state's Medicaid program. Does that make any sense for the taxpayers?" Ms. Wilson-Coker did not immediately return a telephone message left at her office Wednesday night, the Yale Business News states. David Dearborn, a spokesman for the Social Services Department, said he had not seen the lawsuit and could not immediately comment Wednesday night. He said the department may comment after reviewing and researching the allegations. EL PASO: Enters Settlement Talks With CA Regulators in Gas Prices Suit ---------------------------------------------------------------------- El Paso Corporation is talking with California prosecutors and lawyers to settle several class actions charging the Company with cutting natural gas supplies to boost profits from the state's energy crisis, officials said Friday, according to a Reuters report. Prosecutors led by Attorney General Bill Lockyer are pursuing charges laid-out by the California Public Utilities Commission (CPUC) stating that the Company leased all extra space on its pipeline into Southern California to its own affiliate, restricted access to other gas shippers and operated the pipeline at less than full capacity. Also being investigated is Sempra Energy Company, which also manipulated gas prices in the State The two companies' actions allegedly led to a squeeze on gas supplies, forcing gas prices much higher at the Southern California border, a primary regional pricing point that is used as an index to calculate wholesale gas prices at other regional pipelines, Reuters states. "The settlement talks with El Paso are ongoing and they do involve lawyers of the private lawsuits," Tom Dresslar, a spokesman for Attorney General Bill Lockyer, told Reuters. However, he did not disclose the details of the talks and would not comment on whether the California Public Utilities Commission (CPUC) and Sempra Energy (SRE) wer part of the talks. Sempra spokeswoman Denise King, however, told Reuters the company was not taking part in settlement discussions with Mr. Lockyer. Lockyer told the San Francisco Chronicle on Friday he has been holding settlement talks with Houston-based El Paso for several weeks after a two-year probe. "We feel that the evidence is accumulating and persuasive that there were violations of federal and state antitrust laws and state unfair business practices," Mr. Lockyer told the paper. LEXMARK INTERNATIONAL: Court Dismisses Suit For Securities Violations --------------------------------------------------------------------- A Kentucky federal judge recently dismissed a class action by nine Lexmark shareholders who accused the Lexington-based printer maker of propping up its stock price by not writing off obsolete inventory, The Lexington Herald Leader reports. Judge Joseph M. Hood said the plaintiffs, led by shareholder Michael Campbell, had not met the requirements of the Private Securities Litigation Reform Act of 1995, which was intended to eliminate frivolous lawsuits. In the lawsuit, the plaintiffs accused Lexmark and five executives of withholding knowledge for seven months that Lexmark had up to $35 million in unsaleable printers. They alleged that the delay kept Lexmark's stock price high and gave insiders time to sell at inflated prices. In his 20-page order, Judge Hood said the 1995 act, as interpreted by the 6th US Circuit Court of Appeals in Cincinnati, requires plaintiffs to cite facts that indicate a "strong inference" of wrongdoing and leave "little room for doubt as to misconduct." Such evidence might include suspicious insider trading of stock, out- of-court settlements of lawsuits alleging fraud and differences between the company's internal and external reports. The plaintiffs have fallen "far short" of meeting the legal standard, Judge Hood said. He gave an example of such a failure amongst the plaintiffs' allegations - Director Marvin Mann sold about 90 percent of the 350,000 shares sold before the disclosure of obsolete inventory was made. However, Mr. Mann had to exercise stock options that would expire on August 28. Therefore, said Judge Hood, in that context, "Mr. Mann's sales seem perfectly reasonable." NEW ZEALAND: Wakefield Hospital Fights Possible Securities Fraud Suit --------------------------------------------------------------------- Wakefield Hospital is fighting shareholder Philip Kelliher's efforts to organize a class action over the company's prospectus, which the Securities Commission has characterized as misleading, according to a report by the New Zealand Herald. The Wellington Company has released a legal opinion that attacked a letter sent to shareholders to sound out support for the proposed legal action. Law firm Crengle, Shreves & Ratner said the letter, from Auckland law firm Gaze Burt, was "flawed in its analysis" and misled the shareholders about the likelihood of success and the potential costs. The Gaze Burt letter asked the shareholders if they were interested in taking part in a class action, with most of the legal fees to be contingent on success. Wakefield Hospital Chairman John Calder said the legal opinion from law firm Crengle, Shreves was being sent to shareholders with a letter from himself, expressing disappointment that "one disgruntled shareholder" kept attracting so much media attention. The Crengle, Shreves legal opinion questions whether a class action "is even possible" when each person would have to prove that he or she read and specifically relied upon the relevant portion of the profit forecasts. Wakefield Hospital is threatening to complain to the Law Society about the Gaze Burt letter. In July, the Securities Commission found that Wakefield misled investors in its public share offer documents last year, because it failed to adequately describe the risks the company faced in the subcontracting of lucrative, publicly funded cardiac surgery. The Commission also pointed to possible liabilities for the directors under section 56 of the Securities Act. OCEAN SPRAY: Rival Commences Cranberry Antitrust Lawsuit in WA Court -------------------------------------------------------------------- Ocean Spray Cranberries faces an antitrust lawsuit filed in the United States District Court in Washington, DC by rival Northland Cranberries, Inc. alleging the cooperative monopolized the cranberry products industry to the detriment of its competitors and consumers, the Associated Press reports. The suit says the Company's arrangement with foreign growers helps to tie up cranberry production and sales of cranberry concentrate. "Through their current structure, we believe they are inappropriately controlling and manipulating cranberry supplies," Kenneth Iwinski, Northland's vice president for legal matters, told AP. The Cooperative told AP, "We will defend ourselves vigorously..," said Ocean Spray spokesman Chris Phillips, who had not seen the lawsuit yet. "We compete fairly in the marketplace." PROGRESSIVE CORPORATION: LA Court Grants Certification To Wage Lawsuit ---------------------------------------------------------------------- US Magistrate Judge Joseph C. Wilkinson granted class certification to a lawsuit charging Progressive Corporation unlawfully denied overtime pay to its insurance claims representatives, Newsday Business reports. Former claims representative Kelly Marie Camp filed the suit in August 2001 in the United States District Court in Louisiana, alleging that the Company violated federal law by classifying her as an overtime- exempt employee. Specifically, the suit states that the Company classified its claims representatives as "administrative employees" that are exempt from the federal overtime law, which generally requires time-and-a-half pay for working beyond 40 hours weekly. Included in this classification were salaried workers exempt from overtime include those who supervise other employees, make policy decisions and have routine discretion in their jobs. Judge Wilkinson's ruling could allow as many as 7,000 current and former claims representatives to join in the suit, Ms. Camp's attorney, Jonathan Herman told Newsday. Judge Wilkinson gave other plaintiffs 120 days to join the suit. Leslie Colleda, a Progressive spokeswoman, said the company would not comment on pending litigation, Newsday reports. Mayfield Village, Ohio-based Progressive has said that its claims employees are properly classified. The Company did not respond to a call for comment on the magistrate's decision. SYGENTA CROP: High Court Refuses Transfer of Suit Under All Writs Act --------------------------------------------------------------------- The United States Supreme Court refused to allow Syngenta Crop Protection, Inc. to move a class action pending against them from a Louisiana state court to federal court where a settlement had been reached in a related case, law.com reports. The suit was commenced by Syngenta workers who alleged they from exposure to one of the insecticides manufactured by the company. The Company invoked the All Writs Act in seeking the transfer and the agreement of the plaintiffs to abide by the conditions of the federal settlement. The Act permits federal courts to issue "all writs necessary or appropriate in aid of their respective jurisdictions." It is a procedural tool that has helped defendant companies in some circuits protect federal court settlements from erosion or encroachment by similar state court actions, law.com reports. A six-page opinion written by Chief Justice William H. Rehnquist rejected this. Plaintiffs' lawyer David Bederman states that the court's ruling "means that class action defendants who desire to get cases into federal court now have one less avenue to do so because this case stands for the proposition that you cannot use the All Writs Act or ancillary enforcement jurisdiction to remove a case which would otherwise be unremovable." In a broader sense, he continued, the case "is about the balance of authority between state courts and federal courts. If you could easily remove cases (from state to federal court) using this All Writs Act gimmick, the cases would empty out of state court. The Supreme Court has said this is not permissible," law.com reports. TENET HEALTHCARE: Faces Suits, Charges Of Unnecessary Heart Surgery ------------------------------------------------------------------- One of the United States' biggest private hospital companies is facing FBI allegations of unnecessary heart surgery, a federal government inquiry into over-billing class actions from angry investors and the abrupt departure of two senior executives, according to the Australian Financial Review. Tenet Healthcare Corp. was boasting just last month of rising patient volume, record cash flows and soaring profits. However, developments over the past 10 days have seen its share price collapse and a national law firm file a class action on behalf of Tenet shareholders, while $20 billion was wiped from its capitalization and its chief corporate officer resigned. On October 30, 40 FBI officers raided the offices of two cardiac surgeons accused of performing unnecessary heart surgery on hundreds of patients inside a profitable Tenet hospital in the town of Redding, north of San Francisco. The surgeons have denied the charges, but lawyers have been swamped by patients in recent days who claim to be victims of unnecessary tests and operations. Affidavits filed by the FBI in a California district court allege concerns about the heart surgeons dating back to the mid-1990s were not taken seriously by Tenet management. The company is standing by the two cardiac surgeons, but has launched its own internal inquiry into the allegations. Redding attorney Dugan Barr said that one of his clients, a Catholic priest, Father John Corapi, was urged by one of the accused surgeons to undergo an invasive test in June and then told that he required immediate coronary by-pass surgery. Yet, after seeking a second and third opinion, the priest was assured he was healthy and did not require the test or the surgery. Then, Tenet faced further problems when the US Department of Health and Human Services announced it would conduct an audit of aspects of the hospital corporation's billing practices. In essence, the audit will inquire into whether the company has been over-billing the publicly funded Medicare program, which subsidizes the health care of the elderly. Tenet acknowledged, two days after the Department's announcement, that it had engaged in "particularly aggressive pricing strategies" and announced the removal of two key executives. Subsequently, a national law firm filed a class action for Tenet shareholders, alleging "profits were inflated by, among other things, wrongfully inducing patients into undergoing unnecessary and invasive surgeries." UNITRIN INC.: Court Grants Final Approval To Race Bias Suit Settlement ---------------------------------------------------------------------- The United States District Court for the Middle District of Florida granted final approval to the settlement proposed by Unitrin, Inc. to settle a nationwide class action filed against it and its subsidiary United Insurance Company of America. The suit was filed on behalf of "all African-American persons who have (or have had at the time of the Policy's termination), an ownership interest in one or more Industrial Life Insurance Policies issued, serviced, administered or purchased from United." Plaintiffs alleged discrimination in premium rates in violation of 42 U.S.C. 1981 and 1982 in addition to various state law claims; unspecified compensatory and punitive damages were sought together with equitable relief. At least twenty similar lawsuits were filed in other jurisdictions against the Company and/or its career agency life insurance subsidiaries, and the Judicial Panel on Multi-District Litigation ordered that substantially all of these lawsuits be consolidated for pretrial purposes. On May 2, 2002, the Company announced a settlement, subject to court approval, to resolve issues relating to the use of race as a factor in the underwriting and pricing of life insurance by United and its subsidiaries. The settlement resolved all pending class action lawsuits on this issue, as well as other issues in the litigation unrelated to race-based underwriting. At the same time, the Company announced the completion of a settlement agreement concerning these matters with the Illinois Department of Insurance on behalf of insurance regulators nationwide. On September 19, 2002, a court order was entered giving final approval to the settlement. The period during which an appeal of that court order could be filed has expired, and the Company is now in the process of implementing the terms of the settlement agreement. As of October 22, 2002, the Company has received approximately 1,800 confirmed opt-outs from the settlement, out of a class of more than 465,000 policies. Persons who opt out of the settlement have the right to bring individual lawsuits for the matters covered by the settlement. WAMPLER FOODS: Said It Acted Responsibly in PA Listeriosis Outbreak ------------------------------------------------------------------- Wampler Foods responded to the class action filed against it and its parent company Pilgrim's Pride in the Court of Common Pleas in Philadelphia relating to listeria-linked deaths and injuries, saying it has "demonstrated the utmost responsibility" in regard to the recall of its poultry products, Poultry Today reports. Pilgrim's Pride voluntarily recalled 27.4 million pounds of poultry products before the Centers for Disease Control & Prevention discovered that one of its plants was a possible source of listeria that has been attributed to numerous deaths and illnesses in the northeastern US. "We can assure you that the health and safety of our customers and the quality of our products have always been Wampler's top priorities," David Van Hoose, Pilgrim's Pride CEO, said in a statement. "The outbreak in the Northeast is of great concern to everyone in our industry, and our sympathies are with the family and friends of those who have been affected by these unfortunate events . Accordingly, we will assist the USDA in any way we can as they continue their review of the situation." Regarding the number of cases of illnesses and deaths (43 illnesses, 7 deaths), Kenneth Moll said in a statement, "We believe that the total number of cases will be much higher. Our experience in prior outbreaks is that cases of listeriosis are routinely under reported." Listeria monocytogenes can lead to the development of listeriosis, symptoms of which include nausea, diarrhea, muscle aches and fever, Poultry Today reports. Those with compromised immune systems, the elderly and very young and pregnant women are most susceptible. WILLIAMS COMPANIES: Renegotiates Long-Term Energy Contracts with CA ------------------------------------------------------------------- Energy giant Williams Companies, Inc. reached an agreement with the state of California to renegotiate the long-term energy contracts it struck with the state in the aftermath of its energy crisis, Reuters reports. The agreement is part of a settlement proposed by the Company to settle the state's outstanding litigation and civil claims against it. It expects other parties, including Washington, Oregon and private class action plaintiffs, to join the settlement. As part of the renegotiation, Williams has agreed to increase maximum power supplies through 2010 to 1,875 megawatts from 1,400 megawatts, Reuters reports. It has also been released from outstanding power refund issues with the settling parties. Under the settlement, Williams has agreed to pay $150 million in cash considerations over eight years, contribute six generating turbines and help the attorney general's office with ongoing investigations into the electric power and gas markets, Reuters stated. * Securities Settlements by Wall Street Firms Leaving Shareholders Out ---------------------------------------------------------------------- Wall Street firms are preparing to pay as much as $2 billion as penance for their sins of offering misleading stock research to unsuspecting investors, but investors who were persuaded by such research to buy or hold money-losing stocks are not expected to see a dime - and that has got some lawyers for investors fuming. "I believe that money should be returned to the victims of the analysts' fraud," said Jacob Zamansky, a New York lawyer, who last year got a $400,000 settlement for his client from Merrill Lynch over allegedly tainted research. "That should be a down payment," Mr. Zamansky said. The global settlement being negotiated between an army of regulators and 10 Wall Street firms is expected to cost Wall Street firms hundreds of millions of dollars in fines, and as much as $1 billion to fund a new source of independent research for small investors. The fines would settle charges that some researchers issued falsely rosy reports on companies their own firms were wooing for lucrative investment- banking business. However, the money is likely to go to state coffers, not investors. "In this instance it is very hard to put aside a pot of money and say, `This is for investors,'" said Christine Bruenn, president of the North American Securities Administrators Association, a group of state securities cops engaged in the negotiations. "It is very difficult to identify who the investors are," who bought based on research, rather than for other reasons. In reaching a separate $100 million settlement with Merrill Lynch last summer, New York Attorney General explained the lack of investor relief by saying that class actions are "the mechanism that our society has created to give restitution." However, investor advocates say that regulators are losing sight of the fact that when researchers issue rosy research on companies they privately call "junk" or "toast," it is an act tantamount to theft. "If you know a security is going down as you sell it, how can you possibly describe that as anything but theft?" said Richard Sacks, president of Investors Recovery Service, a Novato firm that helps investors bring claims against brokers. "You know that people are going to get hurt," said Mr. Sacks. Negotiations are still ongoing, and some say it is possible that one or more states could use their share of the proceeds to help investors. However, whatever way the funds are made available for investors, the investors seeking repayment will have to show that they "relied on the tainted research in making their investment decision. That might entail showing that their broker sent them research or showing notes they took of phone conversations." Some investment professionals say that individual investors do not deserve anything. They argue that such investors are just looking for someone to blame for poor stock choices and their own greediness. "I did not hear anyone complaining about taints in the system when stocks were going up five percent a day," said Roger McNamee, general partner with Integral Capital Partners. In response to this argument, investor lawyers have said they regularly see investors who were strongly urged to stay in declining stocks by brokers wielding bullish research reports. Investor lawyers also worry that investors who want to pursue private lawsuits will not be able to tap the valuable, and damning, documents that state regulators have uncovered. That includes such evidence as the internal Merrill Lynch e-mails from internet analysts who privately called some stocks "dogs" or "junk" even as they meanwhile rated that same stock "buy" for investors. Ms. Bruenn says that regulators would like to share such discoveries with investors. Any settlement should have "enough details in it that if an investor had invested in a stock that was the subject of one of our investigations, they could take the order into arbitration and say, `See, the regulators investigated this and they thought there was something wrong,'" Ms. Bruenn said. Ms. Bruenn's reasoning seems eminently logical. The evidence from the regulators will bear, as it were, the imprimatur of seasoned state investigators, ready to rely on it to strike a settlement with the law firms whose analysts engaged in outright acts of thievery. By sharing the evidence with the investors, at least they shall be enabled to help themselves. New Securities Fraud Cases BROADWING INC.: Cauley Geller Lodges Securities Fraud Suit in S.D. Ohio ----------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the Southern District of Ohio, on behalf of purchasers of the common stock of Broadwing, Inc. (NYSE: BRW) during the period between January 17, 2001 and May 20, 2002, inclusive. The complaint charges the Company and certain of its past and present officers and directors with issuing false and misleading statements during the class period that failed to disclose that the Company: (1) was severely undercapitalized with insufficient cash from operations to service its massive debt, (2) inflated revenue through the use of undisclosed IRU sales and purported swap transactions and (3) failed to write-down goodwill recorded in connection with the acquisition of Broadwing Communications. The full truth was not disclosed until Broadwing filed its Form 10-Q, for the quarter ended March 31, 2002 and analysts, on May 20, 2002, expressed their concern about Broadwing's financial results. As a result on May 21, 2002, Broadwing's share price plummeted 30%. For more details, contact Jackie Addison, Heather Gann or Sue Null 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 BROADWING INC.: Faruqi & Faruqi Launches Securities Fraud Suit in OH --------------------------------------------------------------------- Faruqi & Faruqi LLP initiated a securities class action in the United States District Court for the Southern District of Ohio, Western Division, on behalf of all purchasers of Broadwing, Inc. (NYSE:BRW) securities between January 17, 2001 through May 20, 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 the Company's financial results and business prospects. Specifically, the complaint alleges that the Company continuously touted strong year-over-year revenue increases as well as its unique attributes which purportedly immunized it from an industry-wide downturn and related "bandwidth glut." Moreover, it estimated goodwill assets of approximately $2.2 billion. On May 20, 2002, however, it was revealed that the Company: (1) derived at least 25% of its broadband revenue from one-time long term bandwidth leases with cash paid up-front in 2001; (2) improperly accelerated recognition of at least $32.4 million in revenue from a bankrupt entity; (3) engaged in sham sales swaps artificially increasing sales figures; and (4) overestimated goodwill between $1.2 and $1.8 billion. These revelations resulted in a share price decline of 30% in a single day, falling from $5.28 per share at close on May 20, 2002 to $3.70 per share at close on May 21, 2002 on trading of 24.7 million shares. For more details, contact Eric Crusius or Anthony Vozzolo by Mail: 320 East 39th Street, New York, NY 10016 by Phone: 877-247-4292 or 212-983-9330 by E-mail: Ecrusius@faruqilaw.com or Avozzolo@faruqilaw.com or visit the firm's Website: http://www.faruqilaw.com BROADWING INC.: Wolf Haldenstein Commences Securities Suit in W.D. OH --------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class action in the United States District Court for the Western District of Ohio, on behalf of purchasers of the common stock of Broadwing, Inc. (NYSE: BRW) between January 17, 2001, and May 20, 2002. The complaint alleges that the Company and certain of its past and present officers and directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing materially false and misleading statements during the class period that failed to disclose that the Company: (1) was severely undercapitalized with insufficient cash from operations to service its massive debt; (2) inflated revenue through the use of undisclosed IRU sales and purported swap transactions; and (3) failed to write-down goodwill recorded in connection with the acquisition of Broadwing Communications. The full truth was not disclosed until Broadwing filed its Form 10-Q, for the quarter ended March 31, 2002 and analysts, on May 20, 2002, expressed their concern about Broadwing's financial results. As a result on May 21, 2002, Broadwing's share price plummeted 30%. For more details, contact Fred Taylor Isquith, Gregory M. Nespole, Gustavo Bruckner, Michael Miske, George Peters or Derek Behnke by Mail: 270 Madison Avenue, New York, New York 10016 by Phone: 800-575-0735 by E-mail: classmember@whafh.com or visit the firm's Website: http://www.whafh.com. All e-mail correspondence should make reference to Broadwing, Inc. CREDIT SUISSE: Cohen Milstein Lodges Securities Fraud Suit in MA Court ---------------------------------------------------------------------- Cohen Milstein Hausfeld & Toll, PLLC initiated a securities class action in the United States District Court for the District of Massachusetts against Credit Suisse First Boston Corporation, a subsidiary of Credit Suisse Group (NYSE:CSR), and one of its technology analysts. The case was filed on behalf of all persons who purchased common stock of AOL Time Warner Inc. (NYSE:AOL) during the period from Jan. 12, 2001 through Sept. 3, 2002. The complaint alleges that the defendants violated section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange Act, by issuing a series of favorable research reports on AOL that were materially false or misleading in that they did not reflect Credit Suisse's true opinion of AOL and they did not disclose conflicts of interest of Credit Suisse. In particular, the reports did not disclose the practice of Credit Suisse to use its research coverage as part of its marketing efforts to gain lucrative investment banking business. According to an administrative complaint filed by the Secretary of the Commonwealth of Massachusetts, on one occasion Credit Suisse issued an analyst report stating Credit Suisse believed AOL could achieve the earnings guidance AOL had given the market, when Credit Suisse in fact believed (as expressed in internal communications) that AOL could not make its numbers. The Massachusetts complaint alleges that Credit Suisse "purposely misled investors" with its analyst reports. For more details, contact Steven J. Toll or Mary Ann Fink by Mail: 1100 New York Avenue, NW, West Tower, Suite 500 Washington DC 20005 by Phone: 888-240-0775 or 202-408-4600 or by E-mail: mfink@cmht.com or stoll@cmht.com or visit the firm's Website: http://www.cmht.com. H&R BLOCK: Faruqi & Faruqi Commences Securities Fraud Lawsuit in NY -------------------------------------------------------------------- Faruqi & Faruqi LLP initiated a securities class action filed in the United States District Court for the Southern District of New York, on behalf of all purchasers of H & R Block, Inc. (NYSE:HRB) securities between November 8, 1997 and November 1, 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 H & R Block's financial results and business prospects. Specifically, the complaint alleges that H & R Block failed to disclose that it faced over 20 class action lawsuits in which it was accused of charging excessive interest rates which amounted to a potential $2 billion liability which at times exceed the Company's total net worth. As a result of this revelation on November 1, 2002, the stock declined to $40.95 per share from $44.38 per share the prior day. In total, the Company lost $973 million in market capitalization and its stock tumbled 8% in one day. For more details, contact Eric Crusius or Anthony Vozzolo by Mail: 320 East 39th Street, New York, NY 10016 by Phone: 877-247-4292 or 212-983-9330 by E-mail: Ecrusius@faruqilaw.com or Avozzolo@faruqilaw.com or visit the firm's Website: http://www.faruqilaw.com H&R BLOCK: Charles Piven Commences Securities Fraud Lawsuit in S.D. NY ---------------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of H&R Block, Inc. (NYSE:HRB) between November 8, 1997 and November 1, 2002, inclusive, in the United States District Court for the Southern District of New York against the Company and: (1) Mark A. Ernst, (2) Frank J. Cotroneo, (3) Frank L. Salizzoni, (4) Matthew A. Engel, (5) Cheryl L. Givens, (6) Ozzie Wenich and (7) Patrick D. Petrie 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. For more details, contact Charles J. Piven, PA by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202 by Phone: 410-986-0036 or by e-mail: hoffman@pivenlaw.com H&R BLOCK: Abbey Gardy Commences Securities Fraud Suit in S.D. New York ----------------------------------------------------------------------- Abbey Gardy, LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all persons who purchased securities of H&R Block, Inc. (NYSE: HRB) between November 8, 1997 and November 1, 2002, inclusive, against the Company and: (1) Mark A. Ernst, (2) Frank J. Cotroneo, (3) Frank L. Salizzoni, (4) Matthew A. Engel, (5) Cheryl L. Givens, (6) Ozzie Wenich, and (7) Partick D. Petrie The suit alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market during the class period thereby artificially inflating the price of H&R Block's securities. For more details, contact Nancy Kaboolian by Phone: 1-800-889-3701 or by E-mail: Nkaboolian@abbeygardy.com or visit the firm's Website: http://www.abbeygardy.com OM GROUP: Kirby McInerney Commences Securities Fraud Suit in N.D. OH -------------------------------------------------------------------- Kirby McInerney & Squire, LLP initiated a securities class action in the United States District Court for the Northern District of Ohio on behalf of all purchasers of OM Group, Inc. (NYSE:OMG) publicly traded securities during the period from April 25, 2002 to October 30, 2002. The suit charges the Company, as well as its Chief Executive and Chief Financial Officers, with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The violations, as the complaint alleges, stem from the issuance of allegedly false statements during the class period, which had the effect, during the class period, of artificially inflating the price of Company securities. On October 29, 2002, Company shares lost 70% of their value, falling $22 per share to close at $9 per share, after announcing: (1) a large loss (due to a massive inventory write-down); (2) plans for a thoroughgoing operational restructuring; and (3) a review of its financial reporting. OM Group shares fell further to $6 per share when the company admitted that OM Group's CEO had sold all his holdings to cover a margin call on 710,000 OMG shares which he had used as collateral for a loan. The complaint alleges that OM Group during the class period falsely represented its financial results and operational state by failing to take needed inventory writedowns and by failing to inform investors that it was considering significantly altering certain of its (non- performing) operations. As is alleged in the complaint, OM Group makes metal-based chemicals used in the aerospace, auto, and electronics industries. On July 30, 2002, the OM Group in announcing slightly worse-than-expected 2nd quarter 2002 financial results said that results for the 2nd half of 2002 would be adversely affected by low cobalt prices, and guided profit estimates downwards ($0.92 EPS for the third quarter; $3.64 EPS for the full year). During the conference call discussing the 2nd quarter results and the 3rd quarter projections, management repeatedly emphasized that OM Group was operationally excellent, and that its slightly-reduced financial guidance for the rest of the year was merely a function of management's prudent and "conservative picture on cobalt". On September 19, 2002, OM Group warned that 3rdQ 02 results would be slightly lower than previously issued financial guidance. On October 29, 2002, OM Group announced a third quarter loss of $2.52 per share, due to a $108 million write-down of its cobalt inventory (absent the writedown and certain non-recurring earnings, OM Group would have earnings approximately 40% below original guidance). For more details, contact Ira M. Press or Orie Braun by Mail: 830 Third Avenue, 10th Floor, New York, New York 10022 by Phone: 212-317-2300 or 888-529-4787 by E-Mail: obraun@kmslaw.com or visit the firm's Website: http://www.kmslaw.com SALOMON SMITH: Rabin & Peckel Commences Securities Fraud Suit in NY ------------------------------------------------------------------- Rabin & Peckel LLP initiated a securities class action in the United States District Court for the Southern District of New York, on behalf of all persons or entities who purchased or otherwise acquired securities of Metromedia Fiber Network, Inc. (Nasdaq:MFNX) between November 25, 1997 and July 25, 2001, both dates inclusive. Jack Grubman and Salomon Smith Barney, Inc. are named as defendants in the complaint. The complaint charges that Jack Grubman and Salomon Smith Barney, Inc. with violations of the Securities Exchange Act of 1934. Specifically, the complaint alleges that defendants Salomon and Mr. Grubman urged investors to purchase Metromedia Fiber stock when defendants knew or should have known that such purchases were not a good investment. The complaint alleges that defendants: (1) issued "Buy" recommendations about Metromedia Fiber without any rational economic basis; (2) failed to disclose that they were issuing "Buy" recommendations to obtain investment banking business; and (3) concealed significant, material conflicts of interests that prevented them from providing independent objective analysis. For more details, contact Eric J. Belfi or Sharon Lee by Phone: 800-497-8076 or 212-682-1818 by Fax: 212-682-1892 by E-mail: email@rabinlaw.com or visit the firm's Website: http://www.rabinlaw.com SALOMON SMITH: 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 purchasers of the common stock of Williams Communications Group, Inc., (OTCBB:WCGQ, formerly NASDAQ:WCGRQ) between October 27, 1997 and November 2, 2001, inclusive against defendants Salomon Smith Barney, Inc., its star telecommunication research analyst, Jack Grubman, and Salomon's parent company Citigroup, Inc. The complaint alleges that the defendants violated the federal securities laws by issuing analyst reports regarding WCG that recommended the purchase of WCG common stock and which set price targets for WCG common stock, without any reasonable factual basis. The complaint further alleges, among other things, that when issuing its WCG analyst reports, defendants failed to disclose significant, material conflicts of interest which it had concerning the WCG reports, because of Salomon's desire to obtain investment banking business from WCG. Throughout the class period, defendants maintained a "BUY" recommendation on WCG in order to obtain and support lucrative financial deals for Salomon. The class period begins on October 27, 1997, at which time Salomon initiated coverage of WCG common stocks as a "BUY." The class period ends on November 2, 2001, the date Defendants belatedly downgraded WCG from a "BUY" to a "NEUTRAL." As a result of defendants' false and misleading analyst reports, WCG common stock traded at artificially inflated levels during the class period. For more details, contact Tzivia Brody by Mail: 6 East 45th Street, New york NY 10017 by Phone: 1-800-337-4983, by Fax: 212-490-2022 or by E- mail: SSBNY@aol.com SYNCOR INTERNATIONAL: Charles Piven Launches Securities Suit in C.D. CA ----------------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of Syncor International Corp. (Nasdaq:SCOR) between April 25, 2001 and November 5, 2002, inclusive, in the United States District Court for the Central District of California, against the Company and: (1) Monty Fu, (2) Robert G. Funari, (3) Moses Fu and (4) William Forester 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. For more details, contact Charles J. Piven by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202 by Phone: 410-986-0036 or by E-mail: hoffman@pivenlaw.com SYNCOR INTERNATIONAL: Levy & Levy Commences Securities Fraud Suit in CA ----------------------------------------------------------------------- Levy & Levy PC initiated a securities class action in the United States District Court for the Central District of California on behalf of all persons who purchased securities of the Syncor International Corp. (Nasdaq: SCOR) between April 25, 2001 and November 5, 2002 inclusive, against the Company and: (1) Monty Fu, Chairman of the Board, (2) Robert G. Funari, President and Chief Executive Officer, (3) Moses Fu, Director of Syncor Overseas Ltd. and (4) William Forester, Chief Financial Officer and Sr. Vice President of the Company The suit alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market during the class period thereby artificially inflating the price of Company securities. The suit alleges that, among others, the following press releases and SEC filings were materially false and misleading: April 25, 2001, press release, the March 31, 2001 Form 10-Q, July 24, 2001 press release, June 30, 2001 Form 10-Q, October 24, 2001 press release, September 30, 2001 Form 10-Q, February 20, 2002 press release, 2001 10-K, April 24, 2002 press release, March 31, 2002 Form 10-Q, July 30, 2002, press release, October 11, 2002 press release. These press releases and public filings were materially false and misleading in that they failed to disclose that throughout the class period, the Company's Chairman of the Board and the director of its Asian division were making illegal payments to the Company's overseas customers. Before the market opened on November 6, 2002, the Company shocked the market by announcing that it was conducting an internal investigation into illegal payments to its overseas customers and had contacted the Justice Department and the Securities Exchange Commission, and that its previously announced acquisition by Cardinal Health, Inc. was in doubt. As a result of this news, Syncor's stock price dropped sharply in pre- market trading to $22.50 per share, down $13.42 per share from its previous closing price of $35.92, and Nasdaq halted trading of Syncor's stock pending a satisfactory response to its request for additional information from the Company. When trading resumed the price of Syncor's stock dropped $8.52 to $27. For more details, contact Stephen G. Levy by Mail: One Stamford Plaza, 263 Tresser Blvd., 9th Floor, Stamford, CT 06901 by Phone: 800-601-4743 (toll-free), or 203-564-1920 by E-mail: LLNYCT@aol.com or visit the firm's Website: http://www.levylawfirm.com SYNCOR INTERNATIONAL: Brian Felgoise Lodges Securities Suit in W.D. CA ---------------------------------------------------------------------- The Law Offices of Brian M. Felgoise, PC initiated a securities class action on behalf of shareholders who acquired Syncor International Corp. (Nasdaq:SCOR) securities between March 30, 2000 and November 5, 2002, inclusive, in the United States District Court for the Central District of California, Western Division, against the Company and certain key officers and directors. The action charges that defendants violated the federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Brian M. Felgoise by Mail: 230 South Broad Street, Suite 404, Philadelphia, Pennsylvania, 19102 by Phone: 215-735- 6810 or by E-mail: goise@comcast.net TENET HEALTHCARE: Scott + Scott Launches Securities Fraud Suit in CA --------------------------------------------------------------------- Scott + Scott LLC initiated a securities class action in the United States District Court for the Central District of California against Tenet Healthcare Corporation on behalf of all persons who purchased or otherwise acquired the securities of Tenet Healthcare Corporation (NYSE:THC) from October 3, 2001 through October 31, 2002, inclusive. The suit alleges that the Company and certain of its officers violated the Securities Exchange Act of 1934 due to defendants' issuance of false and misleading statements about the Company's operations and performance, and because of the Company's violations of Generally Accepted Accounting Principles (GAAP). The lawsuit claims that during the class period, defendants misrepresented that THC's financial results were due to the Company's commitment to quality and cost-effective care. Throughout the class [eriod, defendants repeatedly stated that Tenet's financials were strong, that the Company's bottom line was attributed to its state-of- the-art facilities and high-quality patient care, and that Tenet was consistently achieving record results. In reality, however, the complaint claims that defendants actually knew that the quality of Tenet's profits were inflated by, among other things, a scheme to wrongfully induce patients to undergo unnecessary and invasive surgeries and coronary procedures. The scheme included unnecessary heart catheterization, including angiogram and intravascular ultrasound, stent placement, angioplasty, coronary artery bypass surgery and heart valve replacement surgery. The price of THC stock plunged more than 26 percent last Thursday after federal prosecutors in Sacramento filed an affidavit regarding alleged false billing by two doctors at the company's hospital in Redding, Calif. Numerous reports concerning the FBI investigation followed. 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. Late Thursday, the company said Chief Operating Officer Thomas Mackey, 54, retired after 17 years, and that David Dennis, 53, chief corporate officer and chief financial officer since 2000, had resigned. Today, the stock price dropped another 48%. For more details, contact Neil Rothstein or David R. Scott by Phone: 800-404-7770 by E-mail: nrothstein@scott-scott.com or drscott@scott- scott.com or visit the firm's Website: http://www.scott-scott.com TENET HEALTHCARE: Kirby McInerney Commences Securities Suit in C.D. CA ----------------------------------------------------------------------- Kirby McInerney & Squire, LLP initiated a securities class action in the United States District Court for the Central District of California on behalf of all purchasers of Tenet Healthcare Inc. (NYSE:THC) publicly traded securities during the period from October 3, 2001 to October 31, 2002. The action charges the Company, as well as its Chief Executive and Chief Financial Officers, with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The violations, as the complaint alleges, stem from the issuance during the class period of financial results inflated by improper billing and operational practices, which results, thus inflated, had the effect -- during the class period -- of artificially inflating the price of the Company's publicly traded securities. When details of such improper practices began to emerge during the end of October 2002, Tenet Healthcare shares quickly lost nearly 60% of their value, falling from $39 to $15 per share. On October 31, 2002, Tenet Healthcare shares fell 26% after Tenet disclosed that the US Attorney's office in Sacramento, California was examining whether doctors at a Tenet hospital performed unnecessary procedures, including open-heart surgeries and angioplasties, in order to generate higher Medicare reimbursements (known as "outlier payments"). The complaint alleges that Tenet Healthcare inflated its revenues and financial results through such practices. On November 7, 2002, Tenet shares lost approximately 50% of their remaining value after announcing: (1) the resignation of Tenet's COO and CFO; and (2) that it would withdraw previously issued financial guidance pending a review of its billing practices. Tenet Healthcare has hired an outside medical auditor to review the allegations against its doctors, and has said it will review all of its hospitals that generate high levels of "outlier" payments (which are designed to defray losses suffered by hospitals whose patients' care exceeds fixed reimbursements). The U.S. Department of Health and Human Services said last month that it would review such payments next year as part of its routine work. On average, for-profit hospitals derive 5% of their Medicare reimbursement payments from outlier payments. 23% of Tenet Healthcare's Medicare payments during fiscal 2003 were to be in the form of outlier payments. For more details, contact Ira M. Press or Orie Braun by Mail: 830 Third Avenue, 10th Floor, New York, New York 10022 by Phone: 212-317-2300 or Toll Free 888-529-4787 by E-Mail: obraun@kmslaw.com or visit the firm's Website: http://www.kmslaw.com UNDERWRITERS LITIGATION: Rabin & Peckel Files Securities Suit in OH -------------------------------------------------------------------- Rabin & Peckel LLP initiated a securities class action in the United States District Court for the Southern District of Ohio, Eastern Division, civil action number C2-02-1104, on behalf of all persons or entities who purchased or otherwise acquired Equity Units of American Electric Power Company, Inc. (NYSE:AEP) on or traceable to AEP's pubic offering between June 6, 2002 and October 9, 2002, both dates inclusive. The suit alleges that the Coampny, certain AEP officers and directors, Goldman Sachs & Co., JP Morgan Securities Inc., and Salomon Smith Barney Inc. violated section 11 of the Securities Act of 1933. Specifically, it is alleged that defendants made material misrepresentations in AEP's Registration Statement, Prospectus and Prospectus Supplement (Offering Documents) for the offering of 6 million 9.25% AEP Equity Units at $50 per Unit, and which resulted in artificially inflating the price of the Equity Units. Defendants allegedly materially overstated AEP's revenues and financial results in the Offering Documents, and failed to disclose that five AEP traders had been dismissed for reporting false and misleading energy pricing information for the use in indexes compiled by trade publications, and that AEP had engaged in "round trip" or "wash" energy transactions. On October 9, 2002, when defendants finally revealed this information, AEP Equity Units closed at $27.75, a drop of almost 45% from the Offering price. For more details, contact Eric J. Belfi or Sharon Lee by Phone: 800-497-8076 or 212-682-1818 by Fax: 212-682-1892 by E-mail: email@rabinlaw.com or visit the firm's Website: http://www.rabinlaw.com ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2002. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re- mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *