/raid1/www/Hosts/bankrupt/CAR_Public/030416.mbx
C L A S S A C T I O N R E P O R T E R
Wednesday, April 16, 2003, Vol. 5, No. 75
Headlines
21st CENTURY: NY Court Refuses To Dismiss Suit For Securities Violations
AOL TIME: Shareholders Charge Executives With Securities Fraud in CA
FAIRBANKS CAPITAL: Subsidiary Allegedly Milks Bogus Fees From Borrowers
FLORIDA: Residents File Suit For People With Brain, Spinal Injuries
ISRAELI SUPERMARKETS: Consumer Ask Court To Approve Fraud Class Action
MICHAELS STORES: Shareholders Lodges Securities Fraud Suits in N.D. TX
MICHAELS STORES: Employees Launch Overtime Wage Suit in Ontario Court
MICROSOFT CORPORATION: MD Judge Refuses To Certify Consumer Fraud Suit
OPENTV CORPORATION: Shareholders File Securities Suit Over ACTV Merger
OPENTV CORPORATION: NY Court Dismisses in Part Securities Fraud Lawsuit
SHOPKO STORES: WI Court Dismisses in Part Consolidated Securities Suit
TOBACCO INDUSTRY: Investors Asses Risks For Philip Morris, Other Firms
TOBACCO LITIGATION: IL Court Orders Philip Morris To Pay Half of Bond
WINK COMMUNICATIONS: NY Court Dismisses in Part Securities Fraud Suit
WINNEBAGO INDUSTRIES: Certification Hearings Set for April 2003 in Iowa
New Securities Fraud Cases
ACCREDO HEALTH: Charles Piven Commences Securities Lawsuit in W.D. TN
AFC ENTERPRISES: Hoffman & Edelson Launches Securities Suit in N.D. GA
AFC ENTERPRISES: Pomerantz Haudek Commences Securities Suit in N.D. GA
AFFYMETRIX INC.: Charles Piven Commences Securities Lawsuit in N.D. CA
CIT GROUP: Schiffrin & Barroway Lodges Securities Fraud Suit in S.D. NY
CIT GROUP: Cauley Geller Commences Securities Fraud Lawsuit in S.D. NY
HEALTHSOUTH CORPORATION: Kaplan Fox Launches Securities Suit in N.D. AL
I2 TECHNOLOGIES: Federman & Sherwood Lodges Securities Suit in N.D. TX
IMPERIAL CHEMICAL: Brodsky & Smith Commences Securities Suit in S.D. NY
IMPERIAL CHEMICAL: Chitwood & Harley Lodges Securities Suit in S.D. NY
PEC SOLUTIONS: Hoffman & Edelson Launches Securities Lawsuit in E.D. VA
PHARMACIA CORPORATION: Charles Piven Commences Securities Lawsuit in NJ
PHARMACIA CORPORATION: Scott + Scott Lodges Securities Suit in NJ Court
ROBERTSON STEPHENS: Weiss & Yourman Lodges Securities Suit in N.D. CA
SUPERGEN INC.: Milberg Weiss Commences Securities Fraud Suit in N.D. CA
UNUMPROVIDENT CORPORATION: Bernstein Liebhard Files TN Securities Suit
VAXGEN INC.: Bernstein Liebhard Commences Securities Lawsuit in N.D. CA
VAXGEN INC.: Scott + Scott Commences Securities Fraud Suit in N.D. CA
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21st CENTURY: NY Court Refuses To Dismiss Suit For Securities Violations
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The United States District Court for the Southern District of New York
refused to dismiss a class action filed against 21st Century Holding
Company, its directors and executive officers.
The suit seeks compensatory damages on the basis of allegations that the
Company's amended registration statement dated November 4, 1998 was
inaccurate and misleading concerning the manner in which the Company
recognized ceded insurance commission income, in violation of Sections
11 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934. The lawsuit was filed on behalf of
purchasers of the Company's common stock between November 5, 1998 and
August 13, 1999.
The Company believes that the lawsuit is without merit and is vigorously
defending such action. The Company has filed an answer and affirmative
defenses.
AOL TIME: Shareholders Charge Executives With Securities Fraud in CA
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AOL Time Warner, Inc. faces a lawsuit filed by two of its majority
shareholders, alleging the Company's executives issued false and
misleading statements to inflate the Company's stock value, the Atlanta
Journal Constitution reports. The suit is pending in the United States
District Court in Los Angeles, California and names as defendants the
Company and:
(1) Stephen Case, outgoing AOL chairman,
(2) Richard Parsons, chief executive officer,
(3) Robert Pittman, chief operating officer, and
(4) Chief Executive Gerald Levin and
(5) Ted Turner, outgoing Vice Chairman
The suit alleges that the two shareholders lost more than $500 million
due to the artificial inflation of the Company's stock value. The suit
says that America Online misstated its earnings by nearly $1 billion
before its January 2001 merger with Time Warner Inc. The Company's
executives also illegally earned more than $930 million from insider
sales, after the deal was complete.
The suit further charged AOL executives with misstating earnings,
subscriptions and advertising revenue and using other "tricks,
contrivances and bogus transactions" to inflate the company's stock
value prior to the merger, according to the suit.
The University of California claims in the suit that it lost more than
$450 million after its Time Warner stock plunged following the
completion of the merger two years ago. Co-plaintiff Amalgamated Bank
of New York claims losses of nearly $56 million, the Journal-
Constitution reports. A spokesman for AOL Time Warner did not return a
phone call seeking comment.
FAIRBANKS CAPITAL: Subsidiary Allegedly Milks Bogus Fees From Borrowers
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Walnut Creek, Contra Costa County, in California, sounds like a place
where life would be easy-going and possibly idyllic. Well, maybe it
is, but with one exception: The subsidiary of the Walnut Creek-based
PMI Group Inc., according to charges made by the local lawsuit, is
squeezing unnecessary payments out of mortgage borrowers who have poor
credit ratings, according to a report by the Contra Costa Times.
Daniel Mulligan, lawyer for the borrowers, said he is seeking to have
the lawsuit against the PMI subsidiary, Fairbanks Capital Corporation,
a Salt Lake City company, certified as a class action. The lawsuit
claims that Fairbanks, which is 57 percent owned by PMI Group, has been
collecting bogus late fees from the mortgage borrowers, as well as fees
for legal services, inspections and appraisals that were never done.
Fairbanks also issued homeowners' insurance policies that duplicated
coverage already in effect, pressured borrowers to use a payment system
from which Fairbanks got a majority of the fees and used foreclosure
threats to pressure homeowners to pay up, the lawsuit says.
Weak credit translates into higher default rates. Fairbanks' Web site
says that when borrowers stop making payments, it "employs a highly
consultative approach" with an emphasis on "helping the borrower retain
ownership and protect their credit ratings."
However, the lawsuit in Contra Costa County, which groups local
residents' claims with similar claims filed in Orange, Los Angeles and
San Bernardino counties, alleges that Fairbanks consistently
overcharged borrowers and responded to disputes with foreclosure
actions.
The dispute highlights changes in the world of mortgage lending since
the days of George Bailey, the hero of It's A Wonderful Life who lent
depositors' money to home buyers in his community. Such savings and
loan institutions made fewer than one in five home loans in 1997,
compared with half of all loans in 1980, according to a HUD survey.
In the new industry companies that make loans usually do not want to
stick around for 20 or 30 years to collect monthly payments from
borrowers. Instead, the lenders bundle the rights to payments from
thousands of loans and sell them to Wall Street investors. Companies
like Fairbanks Capital Corp. are hired to collect monthly payments and
deal with borrowers who stop paying.
However, more recently, financial reporting firms, regulators and
investigations by Congress, as well as investigations by the relevant
government agencies, have been looming over Franklin. Last month, for
example, Standard and Poor's, a leading credit rater, warned that
Fairbanks' ratings could be affected by regulatory reviews, which
Fairbanks has acknowledged are under way at the US Housing and Urban
Development Department and the Federal Trading Commission.
Reviews are also under way at Freddie Mac and Fannie Mae,
government-sponsored corporations that buy home mortgages and sell
securities backed by mortgage revenue, including some collected by
Fairbanks. Federal reviews followed an investigative series by a
Baltimore television station, highlighting consumers' complaints about
Fairbanks. HUD Secretary Mel Martinez said at a March Senate hearing
that the agency's inspector general was "already investigating what
appears to be a horrible situation," according to a transcript supplied
by Senator Paul Sarbanes, D-Md.
Fairbanks, a 14-year-old company with 2,400 employees, says on its Web
site that it collects payments on a portfolio of 550,000 home mortgage
loans valued at about $46 billion. It is one of the top three
servicers of loans to home buyers with poor credit, a market segment
that soared to 13 percent of all home loans in 2000, from less than 1
percent in 1993.
FLORIDA: Residents File Suit For People With Brain, Spinal Injuries
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Sixteen years ago, Michael Dubois, 35, developed quadriplegia as a
result of a diving accident. Today, he does award-winning volunteer
work with elementary school children and holds a part-time job at
Target Department Store, but is still living in a nursing home.
"For years, I have wanted to get out of the nursing home and be a fully
active member of the community. I applied for community-based care
services from the State in August 2000, and was put on a waiting list
because there was no money," Mr. Dubois reports. "It's over two years
later and I'm still waiting. No one from the State of Florida has ever
told me anything about when I might receive the services that I need to
live independently."
On behalf of Dubois and two other named Plaintiffs, Southern Legal
Counsel filed a class action on April 11, 2003, aimed at obtaining
Medicaid-funded, long-term community-based health care services for
hundreds of persons in Florida who have suffered traumatic brain or
spinal cord injuries.
The lawsuit, filed in the United States Northern District of Florida,
Tallahassee Division, alleges that the segregation, or risk of
segregation, of people with traumatic brain or spinal cord injuries in
nursing homes in order to receive Medicaid long-term care services,
violates the Americans with Disabilities Act (ADA), the Rehabilitation
Act of 1973, federal Medicaid laws and the US Constitution. In the
landmark 1999 Supreme Court case, Olmstead v. L.C., the Court
established that the unnecessary segregation and institutionalization
of persons with disabilities is a form of discrimination under the ADA.
Andrea Costello, Attorney with Southern Legal Counsel (SLC), is
representing the named Plaintiffs and noted, "There are hundreds of
persons in the State that are eligible for these services, but have
been sitting on a waiting list for years with no end in sight. While
they wait, their health and well-being are deteriorating, and soon they
will be forced to live in nursing homes, if they aren't having to
already. The State is failing to meet its obligation to ensure that
people with disabilities can live in the community, rather than having
no choice but to live in a nursing home to get the care that they
need."
The State of Florida's Brain and Spinal Cord Injury Medicaid Waiver
Program was enacted in 1999. Although it is designed to provide home
and community based services for eligible persons, due to under funding
and poor administration, the State has accumulated a lengthy waiting
list of over 226 individuals which continues to grow. The lawsuit
alleges that persons are either forced to live in a nursing home, or
placed at risk of having to do so, in order to receive the medical care
that they need. The suit also alleges that individuals on the waiting
list are not informed of their rights as required by the federal
Medicaid laws and the U.S. Constitution.
Although the government claims that a lack of funding is to blame, the
State admits that home- and community-based care costs significantly
less than institutional care. For example, Florida's Agency for Health
Care Administration reported that in 2002 the yearly per-client cost of
non-institutional care was an average of only $21,500. Institutional
care was estimated at $36,400 per year. The State would actually save
money by providing care to these individuals in the community, rather
than in institutions.
In addition to Ms. Costello, Peter P. Sleasman, also an attorney with
SLC, is co-counsel in the case. SLC is a public interest law firm
founded in 1977. SLC is committed to the ideal of equal justice for
all and litigates cases to achieve systemic reform in the areas of
disability rights, civil rights and poverty law.
For more details, contact Lynn Schultz-Writsel of Equal Justice Works
by Phone: 202-466-3686, x112 by E-mail: lwritsel@equaljusticeworks.org
ISRAELI SUPERMARKETS: Consumer Ask Court To Approve Fraud Class Action
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Blue Square-Israel Ltd. (NYSE: BSI) was named as a defendant in a class
action alleging violations of section 35a of the Israeli Consumer
Protection Act of 1982. Plaintiffs filed a petition to approve the
class action, which also names as defendants:
(1) Supersol Ltd,
(2) Club Market Marketing Chain Ltd. and
(3) Kol Bo Half Price Ltd.
The petitioners claim that these companies charge for the weight of
packaging materials as part of the total weight of goods sold in bulk.
The portion of the petition that is directed against Blue Square is in
the sum of NIS 108,290,000. Blue Square is now in the process of
examining the petition.
MICHAELS STORES: Shareholders Lodges Securities Fraud Suits in N.D. TX
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Michaels Stores, Inc. faces ten securities class actions filed in the
United States District Court for the Northern District of Texas, Dallas
Division. The suit also names as defendants certain of the Company's
current and former directors and officers.
The suits assert various claims under Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 related to actions prior to the
Company's announcement on November 7, 2002, that, among other things,
it had revised its outlook for the fourth fiscal quarter of 2002,
adjusting downward its guidance for annual earnings per diluted share.
The complaints charge that, prior to that announcement, the Company and
certain of the other defendants made misrepresentations and omitted to
disclose negative information about the financial condition of the
Company while the individual defendants were selling shares of the
Company's common stock.
The Company believes these claims are without merit and will vigorously
contest them.
MICHAELS STORES: Employees Launch Overtime Wage Suit in Ontario Court
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Michaels Stores, Inc. and Michaels of Canada, ULC faces a class action
filed byJames Cotton, a former store manager of Michaels of Canada and
Suzette Kennedy, a former assistant manager of Michaels of Canada. The
suit was filed on behalf of themselves and current and former employees
employed in Canada.
The suit was filed in the Ontario Superior Court of Justice and alleges
that the defendants violated employment standards legislation in
Ontario and other provinces and territories of Canada by failing to pay
overtime compensation as required by that legislation. The suit also
alleges that this conduct was in breach of the contracts of employment
of those individuals.
The suit seeks a declaration that the defendants have acted in breach
of applicable legislation, payment to current and former employees for
overtime, damages for breach of contract, punitive, aggravated and
exemplary damages, interest and costs.
Although the Company believes it has certain meritorious defenses and
intends to defend this lawsuit vigorously, given the early stage of the
proceedings, it is premature at this time for the Company to comment on
issues of liability and damages.
MICROSOFT CORPORATION: MD Judge Refuses To Certify Consumer Fraud Suit
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Maryland federal judge J. Frederick Motz refused to certify as class
actions 60 consumer suits filed against software giant Microsoft
Corporation, alleging the Company abused its monopoly and overpriced
its software, Reuters reports. Judge Motz ruled the Company would not
have to face a class action, because it was difficult to identify a
group of plaintiffs that could be considered typical buyers of the
Company's software.
The ruling would make it difficult for plaintiffs' lawyers to extract
multimillion-dollar settlements from the Company. "This is a
significant step in resolving a number of the legal issues facing the
company," Microsoft spokeswoman Stacy Drake told Reuters.
Judge Motz, however, allowed a smaller group of consumers who had
brought Microsoft products from the Company's web site to proceed with
a class action. Lawyers for the plaintiffs had been seeking to gain
class-action status to make it easier to obtain a judgment against
Microsoft or reach a settlement.
Microsoft is still being pursued in court for billions of dollars in
damages from consumers and competitors such as Sun Microsystems.
Redmond, Washington-based Microsoft has built up a cash hoard of more
than $43 billion, in part, because of the threat of litigation.
OPENTV CORPORATION: Shareholders File Securities Suit Over ACTV Merger
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OpenTV Corporation faces a class action filed in the Court of Chancery
of the State of Delaware in and for the County of New Castle, over its
merger with ACTV, Inc. The suit also names as defendants ACTV and its
directors.
The complaint generally alleges that the directors of ACTV breached
their fiduciary duties to the ACTV shareholders in approving the merger
agreement and that, in approving the merger agreement, ACTV's directors
failed to take steps to maximize the value of ACTV to its shareholders.
The complaint further alleges that the Company aided and abetted the
purported breaches of fiduciary duties committed by ACTV's directors on
the theory that the potential merger could not occur without the
Company's participation. The complaint seeks certain forms of
equitable relief, including enjoining the consummation of the merger.
The Company believes that the allegations are without merit and intends
to defend against the complaint vigorously. The Company is unable to
predict the likelihood of a favorable outcome or estimate our potential
liability, if any.
OPENTV CORPORATION: NY Court Dismisses in Part Securities Fraud Lawsuit
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The United States District Court for the Southern District of New York
dismissed in part a consolidated securities class action filed against
OpenTV Corporation, certain investment banks which acted as
underwriters for the Company's initial public offering, and various of
its officers and directors.
The suit alleges undisclosed and improper practices concerning the
allocation of the Company's initial public offering shares, in
violation of the federal securities laws, and seek unspecified damages
on behalf of persons who purchased the Company's Class A ordinary
shares during the period from November 23, 1999 through December 6,
2000.
On April 19, 2002, the plaintiffs filed an amended complaint. Other
actions have been filed making similar allegations regarding the
initial public offerings of more than 300 other companies. All of
these lawsuits have been coordinated for pretrial purposes as "In re
Initial Public Offering Securities Litigation." Defendants in these
cases have filed omnibus motions to dismiss on common pleading issues.
Oral arguments on these omnibus motions to dismiss were held on
November 1, 2002. All claims against the Company's officers and
directors have been dismissed without prejudice in this litigation.
On February 19, 2003, the Court denied in part and granted in part the
motion to dismiss filed on behalf of defendants, including the Company.
The court's order dismissed all claims against the Company except for a
claim brought under Section 11 of the Securities Act of 1933. However,
the court has given plaintiffs an opportunity to amend their claims in
order to state a claim.
The Company believes that it has meritorious defenses to the claims
brought against it and will defend these claims vigorously.
SHOPKO STORES: WI Court Dismisses in Part Consolidated Securities Suit
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The United States District Court for the Eastern District of Wisconsin
dismissed in part the consolidated securities class action filed
against Shopko Stores, Inc.
The first suit was filed initially in May 2000 in the Circuit Court of
the State of Wisconsin for Waukesha County, naming Company subsidiary
ProVantage Health Services, Inc. and the directors of ProVantage as
defendants. The suit alleged, among other things, that ProVantage's
directors breached their fiduciary duties in connection with the sale
of ProVantage to Merck & Co., Inc. and the proposed price for
ProVantage's common stock did not represent the true value of
ProVantage.
The suit was later amended to include the Company as a defendant. The
complaint alleges, among other things, that the Company aided and
abetted the original defendants in breaching their fiduciary duties.
The amended complaint requests that the court, among other things,
declare that the ProVantage Action is a proper suit, rescind the tender
offer/merger pursuant to which ProVantage was purchased by Merck, and
award compensatory monetary damages, including reasonable attorneys'
and experts' fees.
Second, during fiscal 2001, alleged shareholders of the Company filed
purported class action securities lawsuits against the Company and its
then chief executive officer containing substantially identical claims
in the United States District Court for the Eastern District of
Wisconsin. The suits were consolidated into one action.
The action alleges that the Company and its former chief executive
officer, William Podany, made various misrepresentations and omissions
in public disclosures concerning the Company between March 9, 2000 and
November 9, 2000. Specifically, it is alleged that the Company failed
to disclose that the Company was experiencing significant shipping and
inventory control problems at the Pamida distribution facility in
Lebanon, Indiana. The complaints request, among other things, that the
court declare the action is a proper class action and award
compensatory monetary damages, including reasonable attorneys' fees and
experts' fees.
On February 5, 2003, the court granted, in part, the Company's motion
to dismiss the action, ruling that all allegations are dismissed except
those based on statements made in connection with an earnings warning
on October 5, 2000. As a result of the court's ruling, the class
period and potential class is significantly narrowed.
The Company believes the above-described actions to be without merit
and the Company intends to contest all allegations set forth. There
can be no assurances, however, with regard to the outcome of the
actions.
TOBACCO INDUSTRY: Investors Asses Risks For Philip Morris, Other Firms
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Philip Morris USA continues to consult behind closed doors with Judge
Nicholas Brody about the $12 billion appeal bond it still requires in
order to appeal the $10.1 billion verdict rendered against it by Judge
Brody in the Illinois case holding the company liable for deceiving
smokers about the risks of low-tar cigarettes. Philip Morris continues
to say it may have to seek bankruptcy-court protection and suspend
payments to state governments under the 1998 tobacco settlement if
Judge Brody will not reduce the $12 billion appeal bond.
In this climate of uncertainty, investors appear to have decided that
no matter how the case is decided eventually, it is time to reassess
the dangers tobacco companies face in courtrooms across the country,
according to a report by The Wall Street Journal. The premium credit
rating of Altria, the parent company of Philip Morris USA, has been
slashed by the rating agencies. The stock is down 47 percent from its
52-week high and closed last Friday at $30.59, up 49 cents, in
composite trading on the New York Stock Exchange.
It would seem that the Illinois verdict may trigger a new wave of
challenges for major tobacco companies, seeking to hold them liable for
deceptive advertising that shapes the thinking of the smokers about the
cigarettes regardless of warnings on the package. This cause of action
seems to be the new call to battle rather than a suit for any personal
injuries the smokers may have suffered. Similar cases involving light
cigarettes have been certified as class actions in Massachusetts and
Florida, for example.
"If anti-tobacco lawyers are successful in Illinois, these suits will
take place all over the country," says Marvin Roffman, president of
Roffman Miller Associates, which owns 19,000 Altria shares.
The documents which the tobacco companies agreed to make public as part
of the $246 billion settlement with the states, constitute reams of
damaging internal documents. These documents have fueled a steady
stream of lawsuits against the industry ever since. Tobacco companies
were able to fend off the first wave of legal claims brought by
insurers and labor unions -- largely copycat claims which were
dismissed by the federal courts. However, the documents also have
afforded plaintiffs lawyers, who have studied and are still studying
them carefully, new grounds for litigation, such as the light-cigarette
class actions.
Individual smokers also pose a stronger legal risk than previously. In
the decades before the state settlements, only three individual smokers
ever won cases against tobacco companies, and two of those were
overturned on appeal. In the four years since the settlement, the
industry has lost nine cases brought by individuals, according to
Martin Feldman, an analyst at Merrill Lynch. "Those numbers tell a
story," he said. Four losses occurred in California; two, in Oregon.
All are on appeal.
William S. Ohlemeyer, associate general counsel for Philip Morris USA,
said that lawsuits brought by individual smokers are manageable and
less threatening in light of a recent US Supreme Court decision
imposing new limits on punitive-damage awards in civil litigation.
Some of the investors have praise for Louis C. Camilleri, who took over
as chief executive officer of Philip Morris Cos. in April 2002, when
the tobacco and food giant was on a roll, and profit was growing and
the threats from lawsuits seemed to be receding. A year later, the
company, recently renamed Altria Group Inc. is playing defense.
However, even Mr. Camilleri's critics don't blame him for Altria's
legal woes. Nor do investors appear to blame him for the rise of deep-
discount cigarettes, which have been making inroads on Philip Morris's
profits.
Some shareholders, for example, praise Altria's willingness to play
hardball both with plaintiffs' lawyers and the state governments by
threatening the bankruptcy of Philip Morris USA., which would imperil
the billions of dollars most of the states party to the 1998 settlement
rely on to close their budget gaps.
One way to help shield, but not entirely absolve, Philip Morris from
further legal problems would be for cigarettes to be regulated by the
Food and Drug Administration. Philip Morris is the only major tobacco
company urging regulation, and Mr. Camilleri personally has lobbied
members of Congress to adopt such a measure. FDA regulation, according
to Mr. Camilleri, could establish manufacturing standards and set
limits on cigarette toxins, all of which could make juries less likely
to hit tobacco with huge damages as a form of protest.
A side benefit of FDA regulation is that complying with it would be
costly for makers of bargain-basement cigarettes, the nemesis of major
tobacco companies. Skyrocketing prices of major brand cigarettes --
the result of the 1998 multi-state tobacco settlement, an unprecedented
spate of state excise-tax increases, as well as the tobacco companies'
own desire for fat profits -- has meant more smokers quitting or
trading down to cheaper smokes. However, trading down by consumers
has resulted in a price war, with Philip Morris stepping up discounts
on its cigarettes, expanding its sales force and launching an extension
of its flagship Marlboro brand.
The company also is trying to take away some of the pricing advantages
of smaller, deep-discount cigarette specialists, through its efforts to
get the states to enforce laws requiring its smaller competitors to
make payments into tobacco-settlement-related escrow accounts.
Altria is scheduled to report first-quarter results on Wednesday. Mr.
Camiller has said Altria will look to its other businesses for profit
and growth. When a series of rolling financial crises moved across the
developing world in the late 1990s, profit suffered at Philip Morris
International, and domestic sales cushioned the blow. Now, Altria is
looking to international cigarette sales and its Kraft food business to
"take up the slack," Mr. Camilleri said.
Once matters get settled in the Illinois lawsuit and other legal cases
still pending, investors hope, according to The Wall Street Journal
report, that Mr. Camilleri will bring even more radical change to
Altria by spinning off its 84 percent stake in Kraft. The idea is that
the food company might be worth more to shareholders as a standalone
entity.
Mr. Camilleri's predecessor, Geoffrey Bible, "was a good executive in
the traditional way, he ran a good company, but he just did not get the
shareholder value out," said David Dreman of Dreman Value Management,
which owns roughly 12.7 million Altria shares. "Mr. Camilleri, if he
is allowed to, would go for the spinoff of Kraft. That would be an
enormous enhancement for shareholder value."
TOBACCO LITIGATIONS: IL Court Orders Philip Morris To Pay Half of Bond
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Madison County, Illinois judge Nicholas Byron gave Philip Morris USA a
break, as he ordered it to pay only half of a $12 billion bond in the
light cigarette class action pending against it, the Associated Press
reports.
Earlier, the judge ordered the tobacco giant to pay $10.1 billion as a
bond for the suit charging it with misleading smokers that "light"
cigarettes are less harmful than regular brands. Philip Morris had
earlier said the bond would drive it to bankruptcy and cause it to
default on its payments for a 1998 settlement with several states.
Under the 1998 deal, several tobacco companies, including Philip
Morris, agreed to pay 46 states $206 billion over 25 years. Officials
from 33 states signed a friend-of-the-court brief asking Judge Byron to
reduce the bond, as the non-payment would affect their respective state
budgets. Several states had threatened to sue the company if it missed
this week's payment.
The decision also clears the way for the company to pay $2.6 billion
that is due Tuesday under the 1998 national settlement, Philip Morris
spokesman David Tovar told AP.
Judge Byron told Philip Morris to put $6 billion into an escrow account
to partially cover last month's judgment in his court. The $6 billion
will come as a loan from Philip Morris' corporate parent, Altria Group,
according to the court order, AP reports. Philip Morris will then pay
an additional $800 million through September 2004 toward the appeal
bond, plus $420 million per year for however long the appeals in the
case take, the order said. Philip Morris will still have to pay the
full $10.1 billion judgment plus costs and interest if it loses its
appeal.
The reduced bond -- which plaintiffs attorney Stephen Tillery estimated
will total about $9 billion over the course of a three or four-year
appeal -- takes the place of the $12 billion bond Byron originally
ordered. That amount was for the judgment, plus costs and interest
accrued during the appeal, as required by state law. Mr. Tillery told
AP he will appeal Byron's order, contending that the company can afford
to post the full bond.
Philip Morris expressed satisfaction with the ruling, saying it was "an
onerous but viable solution to this issue." The reduced bond was also
cheered by states awaiting their share of Philip Morris' $2.6 billion
payment. "We're very pleased," Charles Price, spokesman for Oklahoma
Attorney General Drew Edmondson, president of the National Association
of Attorneys General told AP. "This is good news for the states."
WINK COMMUNICATIONS: NY Court Dismisses in Part Securities Fraud Suit
---------------------------------------------------------------------
The United States District Court for the Southern District of New York
dismissed in part the consolidated securities class action filed
against Wink Communications, Inc., certain investment banks
which acted as underwriters for its initial public offering, and two of
its officers and directors.
The suit alleges undisclosed and improper practices concerning the
allocation of the Company's initial public offering shares, in
violation of the federal securities laws, and seeks unspecified damages
on behalf of persons who purchased the Company's common stock during
the period from August 19, 1999 through December 6, 2000.
On April 19, 2002, the plaintiffs filed an amended complaint. This
action is among the over 300 lawsuits that have been consolidated for
pretrial purposes as "In re Initial Public Offering Securities
Litigation," Civil Action No. 21-MC-92. Defendants in these cases have
filed motions to dismiss on common pleading issues. Oral arguments on
these omnibus motions to dismiss were held on November 1, 2002.
On February 19, 2003, the court ruled on the motions to dismiss. The
court denied the motions to dismiss claims against the company and the
individual defendants under Sections 11 and 15 of the Securities Act of
1933.
The court granted the motion to dismiss the claims under Section 10(b)
of the Securities Exchange Act of 1934 against the company and one
individual defendant, and denied that motion against the other
individual defendant and 59 individual defendants in the related cases,
on the basis that the respective amended complaints alleged that the
individuals sold stock. The court granted the motion to dismiss the
claims under Section 20(a) of the Securities Exchange Act of 1934.
The Company believes it has meritorious defenses to the claims brought
against it and intends to defend itself vigorously. However, it is
unable to predict the likelihood of a favorable outcome or estimate our
potential liability, if any.
WINNEBAGO INDUSTRIES: Certification Hearings Set for April 2003 in Iowa
-----------------------------------------------------------------------
Oral arguments on class certification for the lawsuit filed against
Winnebago Industries, Inc and its employee compensation plans is set
for April 22,2003 in the United States District Court for the Northern
District of Iowa, Central Division. The plans named as defendants in
the suit are:
(1) Winnebago Industries, Inc. Deferred Compensation Plan,
(2) Winnebago Industries, Inc. Deferred Incentive Formula Bonus
Plan and
(3) Winnebago Industries, Inc. Deferred Compensation Plan and
Deferred Bonus Plan Trust
The suit alleges a class consisting of participants in the Winnebago
Industries, Inc. Deferred Compensation Plan and the Winnebago
Industries, Inc. Deferred Incentive Formula Bonus Plan and alleges
23 separate causes of action including declaratory and injunctive
relief, federal common law unjust enrichment, breach of fiduciary duty
and violation of Employee Retirement Income Security Act (ERISA)
vesting provisions and ERISA funding requirements, according to an
earlier Class Action Reporter story. The suit seeks to negate certain
amendments made to the Plans in 1994 which reduced the benefits which
some participants would receive under the Plans.
The Company anticipates a ruling on the motion for class certification
within a few weeks thereafter. The Company believes that the
defendants have meritorious defenses to class certification and as to
the plaintiff's substantive claims. The Company is vigorously
defending the lawsuit and will oppose any attempt by the plaintiffs to
have the case certified as a class action.
Meetings, Conferences & Seminars
* Scheduled Events for Class Action Professionals
-------------------------------------------------
April 28-29, 2003
EPHEDRA LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Huntington Hotel & Spa, Pasadena, CA
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
April 28-29, 2003
BAD FAITH AND PUNITIVE DAMAGES
American Conference Institute
Hotel Nikko, San Francisco
Contact: 1-888-224-2480; http://www.americanconference.com
May 1, 2003
TOXIC TORT IN CALIFORNIA
Bridgeport Continuing Education
Los Angeles
Contact: 818-505-1490
May 1-2, 2003
ASBESTOS LITIGATION 2003
Andrews Publication
New Orleans Grande Hotel, New Orleans
Contact: seminar@andrewspub.com
May 3, 2003
2003 CRITICAL ISSUES IN EMPLOYMENT LITIGATION
Continuing Education of the Bar
Coast Anaheim Hotel, Anaheim
Contact: 1-800-232-3444; http://www.ceb.com
May 5-6, 2003
THE CURRENT STATE OF MEDICAL MALPRACTICE IN PA & NJ
Mealey Publications
The Ritz-Carlton Hotel, Philadelphia
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
May 7-8, 2003
MANAGING MOLD LIABILITIES
Bridgeport Continuing Education
San Francisco
Contact: 818-505-1490
May 10, 2003
2003 CRITICAL ISSUES IN EMPLOYMENT LITIGATION
Continuing Education of the Bar
Wilshire Grand Hotel & Centre, Los Angeles, CA
Contact: 1-800-232-3444; http://www.ceb.com
May 14-15, 2003
CALIFORNIA ENVIRONMENTAL UPDATE
Bridgeport Continuing Education
San Jose
Contact: 818-505-1490
May 15-16, 2003
D&O LIABILITY INSURANCE
American Conference Institute
TriBeCa Grand Hotel, New York
Contact: 1-888-224-2480; http://www.americanconference.com
May 17, 2003
2003 CRITICAL ISSUES IN EMPLOYMENT LITIGATION
Continuing Education of the Bar
Red Lion Hotel, Sacramento, CA
Contact: 1-800-232-3444; http://www.ceb.com
May 20, 2003
FEN-PHEN LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel, Philadelphia
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
May 31, 2003
2003 CRITICAL ISSUES IN EMPLOYMENT LITIGATION
Continuing Education of the Bar
Crowne Plaza Hotel, San Francisco, CA
Contact: 1-800-232-3444; http://www.ceb.com
June 2-3, 2003
BAYCOL LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel Amelia Island, FL
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
June 2-3, 2003
ASBESTOS BANKRUPTCY CONFERENCE
Mealey Publications
The Westin Hotel Philadelphia
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
June 9, 2003
ANTI-SLAPP STATUTE CONFERENCE
Mealey Publications
The Ritz-Carlton Huntington Hotel & Spa
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
June 12-13, 2003
ARSENIC AND CCA-TREATED WOOD LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel Amelia Island, FL
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
June 12-13, 2003
ENVIRONMENTAL INSURANCE: PAST, PRESENT AND FUTURE
American Law Institute
Boston
Contact: 215-243-1614; 800-CLE-NEWS x1614
June 16-17, 2003
LITIGATING EMPLOYMENT DISCRIMINATION & SEXUAL HARASSMENT CLAIMS
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
June 16-17, 2003
ASBESTOS LITIGATION 101 CONFERENCE
Mealey Publications
The Fairmont Hotel, Dallas
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
June 16-17, 2003
MANAGING MOLD LIABILITIES
Bridgeport Continuing Education
San Francisco
Contact: 818-505-1490
June 19-20, 2003
SECURITIES, DRUGS & ENVIRONMENTAL LITIGATION
MassTortsMadePerfect.Com
Chicago
Contact: 1-800-320-2227; register@masstortsmadeperfect.com
June 24-25, 2003
SECURITIES CLASS ACTIONS
American Conference Institute
Crowne Plaza Times Square, New York
Contact: 1-888-224-2480; http://www.americanconference.com
June 26-27, 2003
THE CLASS ACTION LITIGATION SUMMIT
Northstar Conferences
The Westin Embassy Row, Washington, DC
Contact: 866-265-1975; 212-596-6006; cservice@northstarconferences.com
July 15, 2003
LEXISNEXIS PRESENTS: WALL STREET FORUM: MASS TORT LITIGATION
Mealey Publications
The Ritz-Carlton Hotel, Battery Park, New York
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
July 31-August 1, 2003
CLASS ACTION LITIGATION 2003: PROSECUTION AND DEFENSE STRATEGIES
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
August 1, 2003
CLASS ACTION LITIGATION 2003: PROSECUTION AND DEFENSE STRATEGIES
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
September 8-9, 2003
CORPORATE GOVERNANCE: LIABILITY OF CORPORATE
OFFICERS AND DIRECTORS
Mealey Publications
The Ritz-Carlton Hotel Amelia Island, FL
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
September 8-9, 2003
NATIONAL ASBESTOS LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel Chicago
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
September 15-16, 2003
SECURITIES LITIGATION & ENFORCEMENT 2003
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
September 19-21, 2003
THE 20TH TOBACCO PRODUCTS LIABILITY PROJECT CONFERENCE
Northeastern University School of Law
Contact: scuri@tplp.org
September 22-23, 2003
BAD FAITH CONFERENCE
Mealey Publications
The Westin Hotel, Philadelphia
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
October 2-3, 2003
SECURITIES LITIGATION & ENFORCEMENT 2003
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
November 6-7, 2003
SECURITIES, DRUGS & ENVIRONMENTAL LITIGATION
MassTortsMadePerfect.Com
Ritz Carlton, New Orleans, Louisiana
Contact: 1-800-320-2227; register@masstortsmadeperfect.com
November 13-14, 2003
ASBESTOS LITIGATION IN THE 21ST CENTURY
ALI-ABA
New Orleans
Contact: 215-243-1614; 800-CLE-NEWS x1614
November 17, 2003
Water Contamination Litigation Conference
Mealey Publications
Pasadena
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
March 18-19, 2004
SECURITIES, DRUGS & ENVIRONMENTAL LITIGATION
MassTortsMadePerfect.Com
The Fairmont, San Francisco, California
Contact: 1-800-320-2227; register@masstortsmadeperfect.com
June 10 & 11, 2004
SECURITIES, DRUGS & ENVIRONMENTAL LITIGATION
MassTortsMadePerfect.Com
Atlantis, Paradise Island, Bahamas
Contact: 1-800-320-2227; register@masstortsmadeperfect.com
TBA
Fair Labor Standards Conference
Mealey Publications
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
* Online Teleconferences
------------------------
April 06-30, 2003
ETHICAL CONSIDERATIONS IN MASS TORT AND CLASS
ACTION LITIGATION IN TEXAS
CLE Online Seminar
Contact: 512-778-5665; info@cleonline.com
April 06-30, 2003
NBI PRESENTS "LITIGATING THE CLASS ACTION LAWSUIT IN FLORIDA
CLE Online Seminar
Contact: 512-778-5665; info@cleonline.com
April 09-10, 2003
LITIGATION MEMBER BENEFIT
ABA-CLE
Contact: 800-285-2221; abacle@abanet.org
April 15, 2003
LITIGATING POSTTRAUMATIC STRESS DISORDER
ABA-CLE
Contact: 800-285-2221; abacle@abanet.org
May 08-10, 2003
EMPLOYMENT DISCRIMINATION & CIVIL RIGHTS ACTIONS IN
FEDERAL AND STATE COURTS
ABA-CLE
Contact: 800-285-2221; abacle@abanet.org
May 14, 2003
CLASS ACTION BASICS
ABA-CLE
Contact: 800-285-2221; abacle@abanet.org
ADVERSARIAL PROCEEDINGS IN ASBESTOS BANKRUPTCIES
LawCommerce.Com/Mealey's
Online Streaming Video
Contact: customerservice@lawcommerce.com
ASBESTOS BANKRUPTCY - PANEL OF CREDITORS COMMITTEE MEMBERS
LawCommerce.Com/Mealey's
Online Streaming Video
Contact: customerservice@lawcommerce.com
EXPERT WITNESS ADMISSIBILITY IN MOLD CASES
LawCommerce.Com/Mealey's
Online Streaming Video
Contact: customerservice@lawcommerce.com
INTRODUCTION TO CLASS ACTIONS AND LARGE RECOVERIES
Big Class Action
Contact: seminars@bigclassaction.com
NON-TRADITIONAL DEFENDANTS IN ASBESTOS LITIGATION
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
PAXIL LITIGATION
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
RECENT DEVELOPMENTS INVOLVING BAYCOL
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
RECOVERIES
Big Class Action
Contact: seminars@bigclassaction.com
SELECTION OF MOLD LITIGATION EXPERTS: WHO YOU NEED ON YOUR TEAM
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
SHOULD I FILE A CLASS ACTION?
LawCommerce.Com / Law Education Institute
Contact: customerservice@lawcommerce.com
THE EFFECTS OF ASBESTOS ON THE PULMONARY SYSTEM
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
THE STATE OF ASBESTOS LITIGATION: JUDICIAL PANEL DISCUSSION
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
TRYING AN ASBESTOS CASE
LawCommerce.Com
Contact: customerservice@lawcommerce.com
______________________________________________________________________
The Meetings, Conferences and Seminars column appears in the Class
Action Reporter each Wednesday. Submissions via e-mail to
carconf@beard.com are encouraged.
New Securities Fraud Cases
ACCREDO HEALTH: Charles Piven Commences Securities Lawsuit in W.D. TN
---------------------------------------------------------------------
The Law Offices Of Charles J. Piven initiated a securities class action
on behalf of shareholders who purchased, converted, exchanged or
otherwise acquired the common stock of Accredo Health, Inc. (NASDAQ:
ACDO) between June 16, 2002 and April 7, 2003, inclusive, in the United
States District Court for the Western District of Tennessee.
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
AFC ENTERPRISES: Hoffman & Edelson Launches Securities Suit in N.D. GA
----------------------------------------------------------------------
Hoffman & Edelson, LLC initiated a securities class action in the
United States District Court for the Northern District of Georgia on
behalf of purchasers of the securities of AFC Enterprises, Inc.
(Nasdaq:AFCE) during the period from March 2, 2001 through March 24,
2003, inclusive and who suffered damages thereby, against the Company
and certain of its officers.
The complaint alleges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market between March 2, 2001 and March 24, 2003, thereby artificially
inflating the price of AFC securities.
According to the complaint, the Company's Class Period statements were
materially false and misleading because the press releases and SEC
filings issued during the Class Period failed to reveal that AFC
inflated its operating results by:
(1) improperly accounting for the sale of corporate-owned stores
to franchisees;
(2) improperly accounting for the value of certain long-lived
assets;
(3) understating advertising costs; and
(4) improperly accounting for inventory at the Company's Seattle
Coffee Company division.
As a result of the Company's fraudulent accounting, AFC's financial
statements published during the Class Period were not prepared in
accordance with Generally Accepted Accounting Principles and,
therefore, it was not true that the Company's financial statements were
a "fair presentation" of the Company's financial position. Indeed, by
announcing its intention to restate its financial statements, AFC has
admitted that its prior financial statements were materially false and
misleading when issued.
On March 24, 2003, after the market closed, AFC shocked the market by
announcing that it would be restating its financial statements for
fiscal year 2001 and the first three quarters of 2002. The Company
also reported that it was examining whether or not its financial
statements for fiscal year 2000 should be restated. In response to
this negative announcement the price of AFC common stock dropped by
over 20% on extremely heavy trading volume.
AFC insiders privy to the Company's fraudulent accounting practices did
not share investors' losses. In a December 2001 public offering, AFC
insiders unloaded 7,000,000 shares of their holdings at $23 per share.
Indeed, during the Class Period, defendants and other Company insiders
cashed out at prices as high as $34 per share, reaping profits of over
$30 million.
For more details, contact Jerold B. Hoffman by Mail: 45 W. Court
Street, Doylestown, PA 18901 by Phone: 877-537-6532 (toll free) by Fax:
215-230-8735 or by E-mail: jhoffman@hofedlaw.com.
AFC ENTERPRISES: Pomerantz Haudek Commences Securities Suit in N.D. GA
----------------------------------------------------------------------
Pomerantz Haudek Block Grossman & Gross LLP initiated a securities
class action in the United States District Court for the Northern
District of Georgia, on behalf of purchasers of the securities of AFC
Enterprises, Inc. (Nasdaq:AFCE) between March 2, 2001 and March 24,
2003, inclusive, against the Company and certain of its officials.
It has been alleged that AFC violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 by issuing false and misleading
statements during the class period which had the effect of artificially
inflating the market price of AFC's securities. The Company has
essentially admitted that it had reported inflated financial results
during the class period. On March 24, 2003, AFC announced that it will
restate earnings for 2001 and the first three quarters of 2002. As
part of the restatement, AFC will record about $4.5 to $5.5 million
pre-tax at year end 2001 and about $11 to $12 million pre-tax at year-
end 2002 to write down the value of impaired assets.
The Company has further acknowledged that the restatement is required
because it had previously improperly recorded certain gains on asset
sales to franchises, understated advertising expenses and improperly
accounted for inventory at its Seattle Coffee Company unit.
The Company began to reveal the true state of its affairs on March 24,
2003, after the market's close. In reaction, its stock plunged to as
low as $11.30 per share on March 25, 2003, after closing at $17.10 per
share the previous day. It has been alleged that the individual
defendants and other Company officials engaged in insider selling and
reaped millions in profits before disclosure of the fraud.
For more details, contact Andrew G. Tolan by Phone: 888-476-6529 ((888)
4-POMLAW) by E-mail: agtolan@pomlaw.com or visit the firm's Website:
http://www.pomerantzlaw.com
AFFYMETRIX INC.: Charles Piven Commences Securities Lawsuit in N.D. CA
----------------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. initiated a securities class
action on behalf of shareholders who purchased, converted, exchanged or
otherwise acquired the common stock of Affymetrix, Inc. (NASDAQ: AFFX)
between January 29, 2003 and April 3, 2003, inclusive. The case is
pending in the United States District Court for the Northern District
of California against the Company and certain of its officers and
directors.
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
CIT GROUP: Schiffrin & Barroway Lodges Securities Fraud Suit in S.D. NY
-----------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Southern District of New York on
behalf of all who purchased the common stock of CIT Group Inc.
(NYSE:CIT) on or traceable to the Company's initial public offering
commenced on or about July 1, 2002, and who have been damaged thereby.
The complaint alleges that defendants violated Sections 11, 12(a)(2)
and 15 of the Securities Act of 1933 by issuing a materially false and
misleading Registration Statement and Prospectus in connection with
CIT's Initial Public Offering. As alleged in the complaint, the
Prospectus falsely represented that CIT's reserves for losses in its
telecommunications finance portfolio were "adequate" despite recent
declines in the sector, which were expected to continue. In addition,
the Prospectus further characterized as adequate its reserves for
credit losses in general.
The complaint alleges that these statements were materially false and
misleading when made because, among other reasons:
(1) the Company's loan loss reserves for its finance portfolio in
the telecommunications industry were materially deficient in
light of material credit losses that had already been incurred
and/or in light of loans in that portfolio which had already
been materially impaired;
(2) the Company's representation that its reserves were "adequate"
was lacking in any reasonable basis when made because the
reserves did not reflect material credit losses in CIT's
telecommunications portfolio that had already occurred and/or
loans which were already substantially impaired, and had such
factors been taken into account, the reserves could not
adequately protect against the risk of material future losses;
(3) there was no meaningful disclosure in the Prospectus of CIT's
exposure to the declining telecommunications sector and the
true risks facing the Company with respect to its risk for
credit losses in general were not adequately cautioned
against; and
(4) contrary to the representation in the Prospectus, the
Company's overall reserves for credit losses, of $554.9
million, were not adequate and were materially understated.
On July 23, 2002, CIT announced that it took a $200 million charge to
strengthen the telecommunications loan reserves that it represented
were adequate only three weeks previously. On April 8, 2003, the price
of CIT common stock closed at $17.40 per share, which is 24% lower than
the IPO price of $23 per share.
For more details, contact Marc A. Topaz or Stuart L. Berman by Mail:
Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 1-
888-299-7706 (toll free) or 1-610-667-7706 or by E-mail:
info@sbclasslaw.com
CIT GROUP: Cauley Geller Commences Securities Fraud Lawsuit in S.D. NY
----------------------------------------------------------------------
Cauley Geller Bowman Coates & Rudman, LLP initiated a securities class
action in the United States District Court for the Southern District of
New York on behalf of persons who purchased the common stock of CIT
Group Inc. (NYSE: CIT) in or traceable to the Company's initial public
offering (IPO) commenced on or about July 1, 2002, and who have been
damaged thereby.
The complaint alleges that defendants violated Sections 11, 12(a)(2)
and 15 of the Securities Act of 1933 by issuing a materially false and
misleading Registration Statement and Prospectus in connection with
CIT's Initial Public Offering. As alleged in the complaint, the
Prospectus falsely represented that CIT's reserves for losses in its
telecommunications finance portfolio were "adequate" despite recent
declines in the sector, which were expected to continue.
In addition, the Prospectus further characterized as adequate its
reserves for credit losses in general. The complaint alleges that
these statements were materially false and misleading when made
because, among other reasons:
(1) the Company's loan loss reserves for its finance portfolio in
the telecommunications industry were materially deficient in
light of material credit losses that had already been incurred
and/or in light of loans in that portfolio which had already
been materially impaired;
(2) the Company's representation that its reserves were "adequate"
was lacking in any reasonable basis when made because the
reserves did not reflect material credit losses in CIT's
telecommunications portfolio that had already occurred and/or
loans which were already substantially impaired, and had such
factors been taken into account, the reserves could not
adequately protect against the risk of material future losses;
(3) there was no meaningful disclosure in the Prospectus of CIT's
exposure to the declining telecommunications sector and the
true risks facing the Company with respect to its risk for
credit losses in general were not adequately cautioned
against; and
(4) contrary to the representation in the Prospectus, the
Company's overall reserves for credit losses, of $554.9
million, were not adequate and were materially understated.
On July 23, 2002, CIT announced that it took a $200 million charge to
strengthen the telecommunications loan reserves that it represented
were adequate only three weeks previously. On April 8, 2003, the price
of CIT common stock closed at $17.40 per share, which is 24% lower than
the IPO price of $23 per share.
For more details, contact Samuel H. Rudman, David A. Rosenfeld, Jackie
Addison, Heather Gann or Sue Null by Mail: P.O. Box 25438, Little Rock,
AR 72221-5438 by Phone: 1-888-551-9944 by Fax: 1-501-312-8505 by E-
mail: info@cauleygeller.com or visit the firm's Website:
http://www.cauleygeller.com
HEALTHSOUTH CORPORATION: Kaplan Fox Launches Securities Suit in N.D. AL
-----------------------------------------------------------------------
Kaplan Fox & Kilsheimer LLP filed a securities class action against
HealthSouth Corporation (NYSE: HRC) and certain of its officers and
directors, in the United States District Court for the Northern
District of Alabama. This suit is brought on behalf of all persons or
entities, other than defendants, who purchased HealthSouth securities
between March 31, 1998 and March 18, 2003, inclusive.
The complaint alleges that HealthSouth and certain of its officers and
directors violated the federal securities laws by issuing false and
misleading financial statements during the class period. The complaint
alleges that shortly after HealthSouth's initial public offering in
1986, the Company began to artificially inflate its earnings to match
Wall Street analysts' expectations and maintain the market price of
HealthSouth's common stock. Between 1999 and the second quarter of
2002, HealthSouth intentionally overstated its earnings by at least
$1.4 billion.
For more details, contact Frederic S. Fox or Hae Sung Nam by Mail: 805
Third Avenue, 22nd Floor, New York, NY 10022 by Phone: (800) 290-1952
by Fax: (212) 687-7714 or by E-mail: mail@kaplanfox.com
I2 TECHNOLOGIES: Federman & Sherwood Lodges Securities Suit in N.D. TX
----------------------------------------------------------------------
Federman & Sherwood filed a securities class action lawsuit in the
United States District Court for the Northern District of Texas (Dallas
Division) on behalf of purchasers of the common stock of i2
Technologies, Inc. (Nasdaq: ITWOE) between April 18, 2000 and January
24, 2003, inclusive.
On January 27, 2003, i2 announced it would re-audit its financial
statements for the years ended December 31, 2000 and 2001 because
"recent information developed during the audit committee's ongoing
investigation of certain allegations regarding the company's revenue
recognition with respect to certain customer contracts and its
financial reporting for those years." Market reaction was negative,
with i2 common stock falling from a close of $1.26 on January 24, 2003
to a close of $0.92 on January 27, 2003, for a single day decline of
more than 26%.
For more details, contact William B. Federman by Mail: 120 N. Robinson,
Suite 2720, Oklahoma City, OK 73102 by Phone: (405) 235-1560 by Fax:
(405) 239-2112 or by E-mail: wfederman@aol.com
IMPERIAL CHEMICAL: Brodsky & Smith Commences Securities Suit in S.D. NY
-----------------------------------------------------------------------
Brodsky & Smith, LLC initiated a securities class action on behalf of
shareholders who purchased the common stock and other securities of
Imperial Chemical Industries PLC (NYSE:ICI) between August 1, 2002 and
March 24, 2003, inclusive, in the United States District Court for the
Southern District of New York against the company and certain of its
officers and directors.
The complaint alleges that between August 1, 2002 and March 24, 2003,
ICI issued a series of materially false and misleading statements to
the market regarding its business and financial condition. The
complaint further alleges that defendants issued a number of press
releases in which they stated that they had resolved ICI's distribution
and software problems it had experienced at its Quest division's
Fragrance & Food businesses, that ICI was on track to report strong
financial results, that ICI had cleared its backlog of customer orders
and that ICI had not lost any customers as a result of its production
problems.
The complaint alleges that these statements were materially false and
misleading because they failed to disclose and/or misrepresented
certain adverse facts.
On March 25, 2003, before the open of trading, ICI shocked investors
when it issued a profit warning that its first quarter profit would
drop approximately 24%. Following this announcement, shares of ICI
fell from a close of $9.60 per share on March 24, 2003 to a close of
$5.60 per share on March 25, 2003.
For more details, contact Marc L. Ackerman or Evan J. Smith by Mail:
Two Bala Plaza, Suite 602, Bala Cynwyd, PA 19004, by Phone: 877-LEGAL-
90 or by E-mail: clients@brodsky-smith.com
IMPERIAL CHEMICAL: Chitwood & Harley Lodges Securities Suit in S.D. NY
----------------------------------------------------------------------
Chitwood & Harley LLP initiated a securities class action in the United
States District Court for the Southern District of New York, against
Imperial Chemical Industries PLC, (NYSE:ICI), and certain of its
officers and directors. The suit was filed on behalf of purchasers of
the publicly traded securities of Imperial Chemical Industries between
August 1, 2002 and March 24, 2003, inclusive.
The complaint charges Imperial Chemical Industries PLC and certain of
its officers and directors with issuing false and misleading statements
concerning its business and financial condition. Specifically, the
complaint alleges that defendants issued numerous press releases in
which they stated that they had resolved the Company's distribution and
software problems that the Company had experienced at its Quest
division's Fragrance & Food businesses.
Defendants further stated that the Company was on track to report
strong financial results, that the Company had cleared its backlog of
customer orders and that the Company had not lost any customers as a
result of its production problems.
The complaint alleges that these statements were materially false and
misleading because they failed to disclose and/or misrepresented the
following adverse facts, among others:
(1) that ICI's software, distribution and production problems at
its Quest division were not ``temporary' problems or ``unique'
to the Naarden, The Netherlands location, but impacted
company-wide operations and profitability;
(2) that ICI's software, distribution and production problems at
its Quest division had not been ``essentially' or ``largely'
``resolved' or ``rectified'; and
(3) that contrary to ICI's representations that it had cleared its
backlog of orders and not lost any customers as a result of
the software, distribution and production problems at Quest,
ICI's customers were, in fact, obtaining new sources of supply
and discontinuing their relationships with ICI.
On March 25, 2003, before the open of trading, ICI shocked investors
when it issued a profit warning with respect to its fiscal 2003 first
quarter. Defendants announced that its first quarter profit would drop
approximately 24%, as a result of, among other things, ``business lost
following the customer service problems in 2002.'
Following this announcement, shares of ICI fell from a close of $9.60
per share on March 24, 2003 to $6.05 per share on March 25, 2003, or a
single-day decline of more than 36%, on nearly ten times normal trading
volume.
For more details, contact Jennifer Morris by Mail: 1230 Peachtree
Street, Suite 2300, Atlanta Georgia by Phone: 1-888-873-3999 (toll-
free) by E-mail: jlm@classlaw.com or visit the firm's Website:
http://www.classlaw.com
PEC SOLUTIONS: Hoffman & Edelson Launches Securities Lawsuit in E.D. VA
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Hoffman & Edelson, LLC initiated a securities class action in the
United States District Court for the Eastern District of Virginia on
behalf of purchasers of the securities of PEC Solutions, Inc.
(Nasdaq:PECS) during the period from October 23, 2002 through March 14,
2003, inclusive and who suffered damages thereby, against the Company
and certain of its officers.
The complaint alleges that defendants violated the federal securities
laws by issuing a series of materially false and misleading statements
and/or by omitting to make material disclosures throughout the class
period thereby artificially inflating the market price of the Company's
securities.
For more details, contact Jerold B. Hoffman by Mail: 45 W. Court
Street, Doylestown, PA 18901 by Phone: 877-537-6532 (toll free) by Fax:
215-230-8735 or by E-mail: jhoffman@hofedlaw.com.
PHARMACIA CORPORATION: Charles Piven Commences Securities Lawsuit in NJ
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The Law Offices Of Charles J. Piven, P.A. initiated a securities class
action on behalf of shareholders who purchased, converted, exchanged or
otherwise acquired the common stock of Pharmacia Corporation (NYSE:
PHA) between April 17, 2000 and August 21, 2001, inclusive. The case
is pending in the United States District Court for the District of New
Jersey against defendant Pharmacia Corporation and certain of its
officers and directors.
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 by E-mail: hoffman@pivenlaw.com
PHARMACIA CORPORATION: Scott + Scott Lodges Securities Suit in NJ Court
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Scott + Scott, LLC initiated a securities class action in the United
States District Court for the District of New Jersey on behalf of
purchasers of Pharmacia Corporation (NYSE: PHA) publicly traded
securities during the period between April 17, 2000 and August 21,
2001.
The complaint charges Pharmacia and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. The
complaint alleges that according to Pharmacia, the unique feature of
Celebrex was that, unlike aspirin or ibuprofen, it allowed Celebrex to
retard pain and inflammation without the adverse side effects of
stomach malaise or gastrointestinal bleeding.
As defendants consistently stated, this critical feature of Celebrex,
provided a tremendous market advantage because the use of traditional
Nonsteroidal Anti-inflammatory Drug (NSAIDs) resulted in as many as
100,000 hospitalizations each year and more than 15,000 deaths, related
to gastrointestinal problems such as ulcers and bleeding.
In order to remove the FDA's warning label, Pharmacia was required to
demonstrate that Celebrex provided an advantage over traditional
NSAIDs. Pharmacia then commissioned the "Celecoxib Long-term Arthritis
Safety Study" (the "CLASS" study) -- a clinical study to compare the
gastrointestinal problems of patients who used Celebrex to those of
patients who used other NSAIDs. Pharmacia, together with its partner
Pfizer, not only funded this study, but every one of the sixteen
physicians who performed the study were either employees of or paid
consultants for Pharmacia.
Because of its purportedly unique safety profile and its ready use by
patients, Celebrex was perceived both by the medical and investment
community as a very important product. The CLASS data was widely
circulated and reviewed. One such review appeared in the prestigious
Journal of the American Medical Association ("JAMA"), on September 13,
2000. Based on a review of the data supplied by Pharmacia, the authors
of the JAMA article also reported that patients who took Celebrex had
fewer symptomatic ulcers than those who took diclofenac or ibuprofen,
two traditional NSAIDs.
However, on August 22, 2001, The Wall Street Journal reported that
Celebrex caused higher incidence of cardiovascular problems. The
Journal reported that noted cardiologists Eric J. Topol and Steven E.
Nissen, chairman and vice chairman, respectively, of cardiovascular
medicine at the Cleveland Clinic, issued a study on Celebrex which
concluded that "'(c)urrent data would suggest that use of these so-
called "COX-02 inhibitors" might lead to increased cardiovascular
events.'" Further, the Cleveland Clinic doctors concluded that
Celebrex was associated with a relatively high rate of heart attacks.
This report was also published in the less widely circulated Journal of
American Medicine at or about the same time.
On this news, Pharmacia's stock declined to below $40 by August 30,
2001, from the 45 range the stock traded at in mid-August.
For more details, contact David R. Scott or Neil Rothstein by Mail: 108
Norwich Avenue, Colchester, Connecticut 06415 by Phone: 800-404-7770 by
Fax: 860-537-4432 by E-mail: drscott@scott-scott.com or
nrothstein@aol.com
ROBERTSON STEPHENS: Weiss & Yourman Lodges Securities Suit in N.D. CA
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Weiss & Yourman initiated a securities class action in the United
States District Court for the Northern District of California against
Robertson Stephens, Inc. on behalf of purchasers of Redback Networks,
Inc. (Nasdaq: RBAK) securities between June 14, 1999 through March 8,
2000, inclusive.
The Complaint charges that Robertson Stephens and its analyst Paul
Johnson issued materially false and misleading public statements,
research reports and "Buy" recommendations on Redback and praised the
acquisition of Siara Systems, Inc. ("Siara") by Redback while failing
to disclose that Johnson owned Siara stock and that the acquisition
would result in a multimillion windfall for Johnson.
The Complaint alleges that, based on defendants' recommendations and
failure to disclose defendant Johnson's conflicts of interest, Redback
securities sold at artificially inflated prices during the Class
Period. As a result, Plaintiff and the rest of the Class purchased
their Redback shares at prices that were artificially inflated and were
damaged thereby.
For more details, contact Weiss & Yourman - Los Angeles by Phone: (800)
437-7918 by E-mail: info@wyca.com or visit the firm's Website: http://
www.wyca.com
SUPERGEN INC.: Milberg Weiss Commences Securities Fraud Suit in N.D. CA
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Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class
action has been commenced in the United States District Court for the
Northern District of California on behalf of purchasers of SuperGen
Inc. (NASDAQ:SUPG) common stock during the period between April 18,
2000 and March 13, 2003.
The complaint charges SuperGen and its chairman, president and chief
executive officer with violations of the Securities Exchange Act of
1934. SuperGen is a pharmaceutical company dedicated to the
development and commercialization of products intended to treat life-
threatening diseases, particularly cancer and blood cell disorders, as
well as other serious conditions such as obesity and diabetes.
The complaint alleges that during the Class Period, one of the
Company's leading drug candidates was Mitozytrex, a proprietary
reformulation of the approved anticancer drug Mitomycin C, which is
used primarily to treat gastric and pancreatic cancers. SuperGen's
reformulation is based on technology designed to improve the handling
characteristics and safety profile of mitomycin and other anticancer
drugs by enhancing the drug's stability in solution form and
"shielding" it at the injection site. SuperGen sold millions of shares
and notes for $25 million in proceeds so as to provide it with ample
monies to fund its operations.
However, this all took place prior to revelations concerning the
veracity of the Company's statements regarding Mitozytrex. The Federal
Food, Drug and Cosmetic Act gives the FDA authority to disseminate
information to the public regarding drugs and other products within the
FDA's jurisdiction to address imminent health dangers or gross
deception. To protect the public health due to the improper statements
by the Company, the FDA notified the public that SuperGen's product,
Mitozytrex, has not been found by the agency to have benefits that the
Company claimed.
The true facts which were actually known by each defendant were as
follows:
(1) That Mitozytrex caused adverse reactions such as fever,
anorexia, nausea and vomiting, together with myelosuppression
and hemolytic uremic syndrome;
(2) That Mitozytrex was merely a bioequivalent to the innovator
mitomycin. It differed from the innovator formulation only in
that the Company's product contained hydroxypropyl-beta-
cyclodextrin (HPCD). No evidence exists to support the
Company's claims that Mitoyztrex is superior to the existing
formulations of mitomycin;
(3) That there is no existing evidence that the addition of HPCD
yields any clinical advantage over the original formulation of
mitomycin;
(4) That SuperGen's "Extra" technology did not shield the drug at
the injection site; and
(5) That the so-called "advantages" of the Company's product,
including increased solubility, stability and shelf-life, were
non-existent.
For more details, visit the firm's Website: http://www.milberg.com
UNUMPROVIDENT CORPORATION: Bernstein Liebhard Files TN Securities Suit
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Bernstein Liebhard & Lifshitz LLP initiated a securities class action
in the United States District Court for the District of Tennessee, on
behalf of all persons who purchased or acquired UnumProvident
Corporation (NYSE: UNM) securities (the "Class") between May 7, 2001
and February 4, 2003, inclusive.
UnumProvident provides group disability and special risk insurance, as
well as group life insurance, long-term care insurance, and payroll-
deducted voluntary benefits offered to employees at their worksites.
Plaintiff alleges that during the class period, Defendants caused
UnumProvident's shares to trade at artificially inflated levels through
the issuance of false and misleading financial statements.
Plaintiff charges the Company with failing to properly record the
impairment to its investments and operating "long-term denial
factories," causing the Company's financial results to be inflated. As
a result, the Company's shares traded at inflated prices enabling
UnumProvident to raise proceeds of $250 million on June 13, 2002 in its
bond offering.
Plaintiff further alleges that UnumProvident and its top officers
inflated the prices of the Company's securities in order to pursue an
accelerated securities sale program. Defendants knew that only by
concealing UnumProvident's true financial results could they post the
revenue and earnings per share growth claimed by Defendants and foster
the perception in the business community that UnumProvident was a
"growth company."
On February 5, 2003, the price of UnumProvident securities fell when
UnumProvident was forced to announce that it had recorded investment
losses of $93 million and that it was responding to Securities and
Exchange Commission requests for information relating to its investment
disclosures.
For more details, contact Ms. Linda Flood, Director of Shareholder
Relations by Mail: 10 East 40th Street, New York, New York 10016 by
Phone: (800) 217-1522 or (212) 779-1414 by E-mail: UNM@bernlieb.com or
visit the firm's Website: http://www.bernlieb.com.
VAXGEN INC.: Bernstein Liebhard Commences Securities Lawsuit in N.D. CA
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Bernstein Liebhard & Lifshitz LLP initiated a securities class action
in the United States District Court for the Northern District of
California, on behalf of all persons who purchased or acquired VaxGen,
Inc. (NASDAQ: VXGN) securities between August 6, 2002 and February 26,
2003, inclusive.
VaxGen is seeking to develop and commercialize AIDSVAX, a vaccine
designed to prevent infection or disease caused by the Human
Immunodeficiency Virus (HIV), the virus that causes AIDS. During the
class period, Defendants were finishing the final stages of Phase III
clinical trials of AIDSVAX, required to obtain approval by the Food and
Drug Administration ("FDA") to market AIDSVAX as a vaccine for AIDS.
Clinical trials were proceeding simultaneously in the United States and
Thailand, and the United States trial results were to be released in
early 2003; results from the Thailand trial were scheduled to be
released late in 2003.
Throughout the class period, Defendants caused VaxGen to make a number
of positive statements about the status of the trials and their
eventual plans to manufacture and market AIDSVAX.
In fact, AIDSVAX was proving ineffective in the clinical trials, and at
the beginning of the class period when the clinical trials in the
United States were over 80% complete, Defendants knew that the trials
showed the HIV infection rate indicated an efficacy rate that was
statistically irrelevant as compared to the infection rate being
experienced in the general population. Thus, the efficacy rate
experienced in the clinical trials would not meet FDA approval
standards, and AIDSVAX would not be commercially viable.
When this news was finally revealed on February 26, 2003, the price of
VaxGen stock dropped the next day to close at $4.25 per share, down
from a class period high of $23.25 per share on November 18, 2002.
For more details, contact Ms. Linda Flood, Director of Shareholder
Relations, by Mail: 10 East 40th Street, New York, New York 10016 by
Phone: (800) 217-1522 or (212) 779-1414 or by E-mail:
VXGN@bernlieb.com.
VAXGEN INC.: Scott + Scott Commences Securities Fraud Suit in N.D. CA
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Scott + Scott, LLC initiated a securities class action in the United
States District Court for the Northern District of California on behalf
of purchasers of VaxGen, Inc. (Nasdaq: VXGN)publicly traded securities
during the period between August 6, 2002 and February 26, 2003,
inclusive.
The complaint charges VaxGen and certain of its officers and directors
with issuing materially false and misleading statements concerning its
business and financial condition. VaxGen is engaged in the development
and commercialization of AIDSVAX, a vaccine designed to prevent
infection or disease caused by HIV (Human Immunodeficiency Virus), the
virus that causes AIDS. During the class period, defendants were
completing the final stages of AIDSVAX's Phase III clinical trials
required to obtain Food and Drug Administration approval to market
AIDSVAX as an AIDS vaccine.
Throughout the class period, defendants caused VaxGen to make a number
of positive statements about the status of the trial and describing
their eventual plans to manufacture and market AIDSVAX, causing
VaxGen's stock to trade at artificially inflated prices.
On February 26, 2003, however, defendants were forced to admit that the
reliability of their earlier reports of higher efficacy rates for non-
caucasians were impaired because they had not taken the requisite
"penalties" to account for the fact that less than 500 of the 5000
clinical trial participants were non-caucasians, resulting in an
extremely small subset of data being analyzed for non-caucasians. As
the news that earlier promises that AIDSVAX could prove useful for non-
caucasians fell apart, the stock declined further, resulting in a total
loss in market cap since November 18, 2002 of approximately 85%.
For more details, contact David R. Scott or Neil Rothstein by Mail: 108
Norwich Avenue, Colchester Connecticut 06415 by Phone: 800-404-7770 by
Fax: 860-537-4432 or by E-mail: drscott@scott-scott.com or
nrothstein@scott-scott.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
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Copyright 2002. All rights reserved. ISSN 1525-2272.
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