/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/030424.mbx C L A S S A C T I O N R E P O R T E R Thursday, April 24, 2003, Vol. 5, No. 80 Headlines ALASKA: Economist For Defense In Sockeye Salmon Case Refutes Processor AT&T WIRELESS: Begins Mediation In Suit Over Out-of-State Phone Calls CALIFORNIA: Los Angeles Board Agrees To Settle Illegal Search Lawsuit CHARMING SHOPPES: Fashion Bug Employees Commence Overtime Wage Suit DENTAL ASSOCIATIONS: MD Court Dismisses Consumer Law Violations Lawsuit FIRE-LITE ALARMS: Recalls Power Supplies For Alarm Systems Malfunction HASTINGS ENTERTAINMENT: TX Court Approves Securities Suits Settlement ILLINOIS: Disappointed Fans Sue Creed Over Unsatisfactory Live Concert KAWASAKI MOTORS: Voluntarily Recalls 45 Engines For Fire, Burn Hazard LANDS' END: Voluntarily Recalls 6T Children's Parkas For Choking Hazard OWT INDUSTRIES: Voluntarily Recalls Electric Routers for Injury Hazard POLARIS INDUSTRIES: Recalls 56T Polaris ATVS For Accident, Fire Hazard RAYMOND OAK: Voluntarily Recalls Wooden Toy Chests for Injury Hazard UNISYS CORPORATION: Retired Workers To Stage Protest Over Lost Benefits WAL-MART STORES: IN Court Grants Certification To Overtime Wage Lawsuit *Reduction of Bond in Light Tobacco Suit Leads to Other Complications New Securities Fraud Cases ACCLAIM ENTERTAINMENT: Holzer Holzer Lodges Securities Suit in E.D. NY ACCREDO HEALTH: Marc Henzel Commences Securities Fraud Suit in W.D. TN ATMEL CORPORATION: Marc Henzel Lodges Securities Fraud Suit in N.D. CA CREDIT SUISSE: Shapiro Haber Launches Securities Fraud Suit in MA Court INTERCEPT INC.: Marc Henzel Commences Securities Fraud Suit in N.D. GA KING PHARMACEUTICALS: Marc Henzel Commences Securities Suit in E.D. TN NORTHWESTERN CORPORATION: Schiffrin & Barroway Lodges Stock Suit in SD NORTHWESTERN CORPORATION: Scott + Scott Files Securities Lawsuit in SD ORTHODONTIC CENTERS: Schiffrin & Barroway Lodges Securities Suit in LA PEC SOLUTIONS: Marc Henzel Commences Securities Fraud Suit in E.D. VA PHARMACIA CORPORATION: Glancy & Binkow Lodges Securities Lawsuit in NJ SOLECTRON CORPORATION: Marc Henzel Launches Securities Fraud Suit in CA VAXGEN INC.: Marc Henzel Commences Securities Fraud Lawsuit in N.D. CA VITALWORKS INC.: Marc Henzel Commences Securities Fraud Lawsuit in CT VOICEFLASH NETWORKS: Marc Henzel Commences Securities Suit in S.D. FL ********* ALASKA: Economist For Defense In Sockeye Salmon Case Refutes Processor ---------------------------------------------------------------------- An economist, who recently testified for the defense in the sockeye salmon antitrust case, said that the dramatic increase of farmed salmon imported to Japan posed serious price competition for the Bristol Bay commercial fishermen who held permits to fish the sockeye salmon during the period 1989 to 1985, Associated Press Newswires reports. Economist Yuko Kusakabe, testifying for the processors charged in the price-fixing case, disagreed with comments given in a deposition for Icicle Seafoods, that the impact of farmed salmon did not become a serious competitive factor until 1994 or 1995. "One person's view in one company that farmed salmon did not offset the price of his product, does not talk about the overall Japanese salmon market," said Ms. Kusakabe. Her comments, given under cross-examination in a class action trial being conducted in Superior Court in Anchorage, contradicted those of defendant processor Icicle Seafood. Larry Hill, a senior executive vice president for Icicle, had said in a deposition that the impact of farmed salmon probably did not become a factor until 1994 or 1995. Ms. Kusakabe showed jurors photographs and videos of Japanese food markets where Alaskan sockeye salmon competed with many other species, including farmed salmon. Ms. Kusakabe said even though the photos and videos were taken in 2003, they reflect a similar situation in place during the period of the alleged conspiracy between the Seattle processors and the Japanese importers to set the sockeye salmon prices in Bristol Bay. Ms. Kusakabe previously testified for the oil companies in two separate lawsuits stemming from spills in Glacier Bay and the Exxon Valdez oil spill in Prince William Sound. Fishermen also filed those lawsuits. The lawsuit in the instant case, filed on behalf of some 4,500 Bristol Bay sockeye salmon permit holders, alleges that major Japanese importers and Seattle-based processors conspired to lower prices paid to the commercial Bristol Bay fishermen. Plaintiffs are asking for hundreds of millions of dollars in damages. AT&T WIRELESS: Begins Mediation In Suit Over Out-of-State Phone Calls --------------------------------------------------------------------- Mediation begins in the class action filed against AT&T Wireless in Denver District Court in Colorado, over penalties customers incurred due to billing policies for out-of-state cell phone calls, the Denver Rocky Mountain News reports. The suit was filed due to a delay in the billing of out-of-state phone calls, which occurred because a third party - the out-of-state cell phone company - became involved. The suit alleges that billing delays caused customers to exceed their designated monthly "bucket" of minutes, resulting in penalties. For example, a customer with a subscription package of 1,100 minutes a month received a bill that included all the minutes the customer logged for out-of-state activity the previous month. Those minutes counted against the customer's 1,100-minute limit in the current month, the Rocky Mountain News reports. The plaintiffs assert that out-of-state minutes should be billed in the month that calls occurred. When a customer exceeds the monthly limit, AT&T Wireless applies a penalty, anywhere from 25 cents to 45 cents a minute. AT&T Wireless calls the next-month billing a "common industry practice born of necessity." The mediation commences three years after William K. Lester Jr. and Anthony Vastano filed the suit, arguing that customers shouldn't have to pay those penalties. Ron Wilcox, lead counsel for the plaintiffs, said a settlement among the attorneys meeting Wednesday is no sure thing. No arbitrator is involved, the Rocky Mountain News reports. He estimates that 635,000 people could participate in the suit, which includes anyone who signed up for AT&T cellular service from May 1998 to March 1999 and still had service as of December 23, 1999. "We make clear to our customers when they roam on another carrier's network, they may be billed for the call the subsequent month," said AT&T Wireless spokeswoman Rochelle Cohen. Ms. Cohen declined to comment on the mediation, the Rocky Mountain News reports. Mr. Wilcox declined to speculate on the likelihood of a settlement Wednesday. But, he said, "Both parties have an interest in reaching some resolution in the matter." CALIFORNIA: Los Angeles Board Agrees To Settle Illegal Search Lawsuit --------------------------------------------------------------------- The Los Angeles County Board of Supervisors agreed to settle for US$2.75 million a class action filed by protesters who were arrested at the 2000 Democratic National Convention, including women subjected to strip and body cavity searches, Reuters reports. The board voted 4-0, with one supervisor absent to settle the suit, charging the county with subjecting 23 women in the 71-member group to illegal searches. The men in the group said they were not strip- searched, but were denied phone calls and access to medication. Under California law suspects arrested on misdemeanor charges cannot be strip-searched unless the charge involves weapons, drugs or violence, Reuters states. The Los Angeles County Sheriff's Department revised its search policies after the lawsuit was filed in California Superior Court. CHARMING SHOPPES: Fashion Bug Employees Commence Overtime Wage Suit ---------------------------------------------------------------------- Charming Shoppes faces a new class action filed in the Los Angeles County Superior court, California by a former Fashion Bug employee, alleging the Company misclassified as exempt employees all Fashion Bug store sales managers in California. The suit also names as defendant Fashion Bug of California, Inc. The suit further asserts that the plaintiffs are actually nonexempt employees and entitled to be paid overtime which they had not received. The plaintiff alleges violations of Labor Code Sections 1194 and 515 and related claims, and seeks back pay and injunctive relief for the misclassification, and reimbursement and disgorgement of profits. As of March 28, 2003, the case has not yet been served on Charming Shoppes or Fashion Bug, and an answer has not yet been prepared. The Company intends to vigorously and aggressively oppose class certification and the merits of the class cases should either be certified, or the individual case should a class not be certified. Although the ultimate outcome of these matters cannot be predicted with any certainty at this stage, the Company does not believe that the cases will have a material impact on its financial condition or results of operations. DENTAL ASSOCIATIONS: MD Court Dismisses Consumer Law Violations Lawsuit ----------------------------------------------------------------------- A Baltimore County Circuit Court judge has thrown out a class-action lawsuit against the American Dental Association (ADA) and the Maryland State Dental Association (MSDA), finding that the court has no jurisdiction over the ADA and that the plaintiffs failed to state a claim of fraud or Consumer Protection Act violations against the professional associations. Judge Lawrence Daniels dismissed "with prejudice" the complaints in the case of Lisa Hogan and Victoria Bolton and on behalf of an unnamed class of plaintiffs v. The American Dental Association, et al. Judge Daniels issued his ruling in Baltimore on April 18. The lawsuit was filed in February 2002. The lawsuit alleged the defendants engaged in unfair and deceptive trade practices in violation of the Maryland Consumer Protection Act, contending that amalgam fillings are dangerous and that the defendants purposely concealed that information from consumers. Dental amalgam, the silver-colored filling material that dentists have used to restore hundreds of millions of decayed teeth, is made from silver, copper and tin, in addition to mercury, which chemically binds these components into a hard, stable and safe alloy. "We are very pleased with this ruling," said ADA President T. Howard Jones, D.M.D. "We hope the courts will continue to put these lawsuits behind us so that we may go unhindered in devoting our time and efforts to promoting the nation's oral health and working on solutions to help improve access to oral health service." Courts in New York and Georgia dismissed similar lawsuits earlier this year. FIRE-LITE ALARMS: Recalls Power Supplies For Alarm Systems Malfunction ---------------------------------------------------------------------- Fire-Lite Alarms, Inc. is voluntarily recalling about 2600 power supplies used with building alarm systems. They are used with notification appliance circuits that provide an audible, visual, or audio-visual combination notification to building occupants in the event of a fire. The recalled power supplies were sold nationwide from September 2001 through November 2002 under the Fire-Lite and Notifier brand names for $480 to $530. Only power supplies with a date code of 4602 or lower are included in this recall. Fire-Lite models FCPS-24FS6 and FCPS-24FS8, and Notifier models FCPS- 24S6 and FCPS-24S8 can have incomplete solder connections. The Notifier model ACPS-2406 can have an improper circuit response with low input voltage. Both of these conditions may result in a building alarm system not functioning properly. No incidents have been reported. For more details, contact the Company's Customer Service and Technical Support Center by Phone: (203) 484-7161 between 8 am and 5 pm ET Monday through Friday. HASTINGS ENTERTAINMENT: TX Court Approves Securities Suits Settlement --------------------------------------------------------------------- The United States District Court for the Northern District of Texas granted final approval to the settlement proposed by Hastings Entertainment, Inc. to settle the consolidated securities class action filed against it and certain of its current and former officers and directors. Following the Company's March 2000 restatements of its financial information, nine purported class actions were filed, asserting various claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Although four of the lawsuits were originally filed in the Dallas Division of the Northern District of Texas, all of the five pending actions were transferred to the Amarillo Division of the Northern District and were consolidated. One of the Section 10(b) and 20(a) lawsuits filed in the Dallas Division was voluntarily dismissed. In May 2000, a lawsuit was filed in the United States District Court for the Northern District of Texas against the Company, its current and former directors and officers at the time of its June 1998 initial public offering and three underwriters, Salomon Smith Barney, A.G. Edwards & Sons, Inc. and Furman Selz, LLC asserting various claims under Sections 11, 12(2) and 15 of the Securities Act of 1933. Motions to dismiss these actions were filed by the Company and, on September 25, 2001, were denied by the Court. On September 12, 2002, the Company announced that an agreement in principle to settle the actions had been reached. The settlement received final approval by the court on March 10, 2003. The settlement required a payment of $5.75 million on behalf of the defendants in the lawsuits and the assignment to the plaintiff settlement class of any claims the Company may have had against KPMG Peat Marwick, LLP, its outside auditors at the time of the March 7, 2000 announcement. The settlement resolves all claims against the Company, its current and former defendant officers and directors and the defendant underwriters. The plaintiff settlement class separately settled all claims against KPMG. ILLINOIS: Disappointed Fans Sue Creed Over Unsatisfactory Live Concert ---------------------------------------------------------------------- Rock group Creed faces a class action filed in the Cook County Circuit Court in Illinois, Chancery division by disappointed fans who watched their December 29 concert at the Allstate Arena in Rosemont, WBAL.com reports. Plaintiffs Philip Berenz and his wife, Linda, Chad Costino and Wendy Costino allege that lead singer Scott Stapp was too "drug-addled" to remember his own songs. The suit, filed on behalf of everyone who attended the concert, states Mr. Stapp was "so intoxicated and/or medicated that he was unable to sing the lyrics of a single Creed song." The plaintiffs further alleged that ". during the Creed concert, Stapp left the stage on several occasions during several songs for long periods of time, rolled around on the floor of the stage in apparent pain or distress, and appeared to pass out on stage during the performance." The Berenzs and Costinos said they spent a combined $227 for concert tickets, service fees, and related expenses including parking, and were entitled to hear all facets of the band's songs, including the vocals, WBAL.com reports. Mr. Stapp's inability to perform was "tantamount to a cancellation," in the words of the suit. The suit also names as defendants Creed guitarist Mark Tremonti, drummer Scott Phillips, and Jeff Hanson Management and Promotions Inc. The suit estimates that the potential damages that could be awarded to the approximately 15,000 concertgoers will be around $2 million. According to the suit and news reports, the band's management issued an apology to Chicago area fans for the quality of the performance. The apology, they said, read, in part, "We apologize if you don't feel that the show was up to the very high standards set by our previous shows in Chicago ... We hope that you can take some solace in the fact that you definitely experienced the most unique of all Creed shows and may have become part of the unusual world of rock and roll history!" KAWASAKI MOTORS: Voluntarily Recalls 45 Engines For Fire, Burn Hazard --------------------------------------------------------------------- Kawasaki Motors Corporation, U.S.A. is voluntarily recalling about 45 engines that have been incorporated into Ventrac compact articulated tractors manufactured by Venture Products Inc. The recalled engines are 27 horsepower, liquid-cooled, overhead-valve (OHV), V-twin models with electric start and horizontal output shafts. The engine model and serial numbers are on a label at the top of the engines and next to the radiator cap: Engine Model: FD750D Application: AS02 Serial No.: 000001 through 020851 Vibration during operation can result in abrasion wear to the fuel tube, leading to a fuel leak. If the fuel leak comes in contact with a spark or flame, it can cause a fire and burn hazard. Kawasaki has received one report of fuel leakage, which resulted in a fire and burn injury to the operator. For more information, contact a Ventrac authorized dealer, or contact the Company by Phone: (866) 902-9381 between 8:30 am and 4:45 pm PT Monday through Friday, or visit the firm's Website: http://www.kawpower.com. LANDS' END: Voluntarily Recalls 6T Children's Parkas For Choking Hazard ----------------------------------------------------------------------- Lands' End Inc. is voluntarily recalling approximately 6,000 children's parkas. The recalled parkas are style numbers 79725 and 79721. Style numbers can be found on the top line of a small label that is immediately behind the larger garment care label. The parkas were sold through the Lands' End catalog, web site and certain Sears, Roebuck and Co. retail stores from November 2002 through mid-January 2003 for $79.50 or below. The zipper box may detach, allowing the zipper slide to detach. The small parts, if detached, could pose a risk of choking. The Company has received reports of the zipper detaching, but no injuries have been reported. For more details, contact the Company by Phone: (800) 200-6212 or visit the firm's Website: http://www.landsend.com. OWT INDUSTRIES: Voluntarily Recalls Electric Routers for Injury Hazard ---------------------------------------------------------------------- OWT Industries, Inc. is cooperating with the United States Consumer Product Safety Commission (CPSC) by voluntarily recalling about 5,200 electric routers used in woodworking. The on-off switch on the routers could stick in the "on" position, posing a risk of serious lacerations to the operator and bystanders. The Company has not received any reports of injuries or incidents. This recall is being conducted to prevent the possibility of injury. This recall involves Craftsmanr routers, model number 315.17510 with date codes of A0304 or lower. The model numbers and date codes are printed on a black data label located on the electric motor's housing. The routers have an aluminum base with black handles and a black motor. All affected routers were packaged with a cloth carry bag under the stock number 17518. Routers sold without the bag are not involved in the recall. Sears sold these routers nationwide from November 2002 through January 2003 for about $60. For more details, contact the Company by Phone: (800) 932-3188 between 8 am and 5 pm ET Monday through Friday, or visit the firm's Website: http://www.sears.com. POLARIS INDUSTRIES: Recalls 56T Polaris ATVS For Accident, Fire Hazard ---------------------------------------------------------------------- Polaris Industries Inc. is recalling about 56,000 2000 and 2001 Polaris Xpedition 325, Trail Boss 325, and Magnum 325 all terrain vehicles (ATVs). These products are 4-wheeled vehicles intended for use in off- road areas. Polaris dealers nationwide sold these vehicles from January 1999 through August 2000 for approximately $6,000. The ATVs may have loose or leaking oil cooler line clamps, that can release hot, pressurized oil. This may lead to thermal burns, to engine failure due to oil pressure loss and, in rare circumstances, could cause a vehicle fire. Polaris Industries Inc. has received 1,290 warranty claims or service calls pertaining to the loose or leaking oil cooler line clamps. There have been 20 minor injuries associated with oil line failures; these injuries have been first or second degree burns, bruises and skin rashes resulting from the leaking oil. For more information, contact the Company by Phone: (800)-POLARIS. RAYMOND OAK: Voluntarily Recalls Wooden Toy Chests for Injury Hazard -------------------------------------------------------------------- Raymond Oak Inc., of Fountain Valley, Calif., is voluntarily recalling about 200 toy chests. The toy chests are wooden and were manufactured with a natural birch or oak finish. The chests measure 36-inches in length, 20-inches in width and 21-inches in height. A sticker on the toy chests reads "MADE IN CHINA" and "SC51CT-MP." Furniture stores nationwide sold the recalled toy chests from May 2000 through January 2002 for about $99. The toy chest's lid support hinges can fail, allowing the lid to fall onto a child's head, neck, fingers or hands. In addition, spaces at the end of the hinge on the lid can cause pinch, crush or laceration injuries to children's fingers. The Company has received one report of a 7-year-old girl whose finger was bruised after the toy chest lid slammed down on her left index finger. For more details, contact the Company by Phone: (866) 614-1281 between 9 am and 5 pm PT Monday through Friday. UNISYS CORPORATION: Retired Workers To Stage Protest Over Lost Benefits ----------------------------------------------------------------------- Retired employees of Unisys Corporation (UIS) began a campaign of national protests and informational picketing to focus attention on the company's fraudulent promises of "lifetime" medical benefits and its tactics in fighting the long-running class action they filed in late 1992, days after the Company announced that it was terminating their benefits. The protests support the legal claims of approximately 9,000 retirees and spouses around the country who charge that the Company (and its predecessor Burroughs) broke federal law by systematically misrepresenting that they would receive valuable "lifetime" medical coverage paid by the company as part of their retirement benefits. The company cited these benefits to justify its pay rates, fight unionization, and induce early retirements by older workers. Court rulings in the lawsuit repeatedly have found that the Company systematically misrepresented to employees that they and their spouses would receive lifetime, company-paid medical benefits after they retired. For example, in March 2001 the US Court of Appeals in Philadelphia summarized rulings that "Unisys representatives 'affirmatively represented to [employees] that their medical benefits were guaranteed once they retired, when the company knew in fact this was not true.'" In January 2002, the trial court likewise ruled that there was evidence that the company made "numerous oral and written misrepresentations" about the medical benefits. The protests also will draw attention to the company's delaying tactics in the lawsuit. Despite previous settlements covering other parts of the case, the company continues to resist a fair resolution for the remaining 9,000 retirees, many of whom dedicated 20 to 30 or more years to the company and were pioneers of the United States computer industry. According to 1988 retiree Ken Perrin of Highland, Michigan, who worked for Burroughs and then Unisys for 32 years, "The courts have repeatedly said that the company lied to us about our benefits. I'm shocked that Unisys continues to drag out the court case. It's not how an honorable employer should treat people who dedicated their lives to the company. It looks like they're just waiting for us to die." The retirees' lead attorney, Alan Sandals of Philadelphia, summarized the situation now confronting the retirees: "If the company had done this to its customers or suppliers, its executives would have gone to jail or the company would have been forced out of business. But with thousands of retired employees as its victims, Unisys seems to believe that it should fight in court forever in order to avoid a fair resolution. The headline is 'Unisys to Retirees - Drop Dead.'" The initial protest activities will occur on April 23 at the company's world headquarters in Blue Bell, Pennsylvania (a Philadelphia suburb) and at one of its main manufacturing plants in Plymouth, Michigan (a suburb of Detroit). Retirees and their legal representatives will make statements and be available for interviews. These activities will take place the day before Unisys' annual meeting of shareholders. Additional activities will occur throughout the spring. WAL-MART STORES: IN Court Grants Certification To Overtime Wage Lawsuit ----------------------------------------------------------------------- Marion County Judge Gary Miller allowed up to 113,000 current and former Wal-Mart and Sam's Club employees to join a class action against the retail giant, alleging that it forced Hoosier workers to work "off- the-clock," the Indystar.com reports. The suit alleges the plaintiffs worked unpaid overtime and were forced to skip meals and breaks. The suit also seeks back pay for the time the workers were forced to do "off the clock" work. Jim Knauer, an attorney for one of the plaintiffs named in the suit, told the Indystar Wal-Mart's corporate motto "Do what ever it takes," means employees work more hours than they are paid. "That means you get your work done without working overtime," Mr. Knauer continued. "The only way they could get their work done was to clock out and go back on their shift." Wal-Mart spokeswoman Cynthia Illick said the company disagrees with the judges ruling, the Indystar.com reports. "We believe the class certification is improper and we're exploring options, including appeal," she said. She the workers claims and said Wal-Mart has a strict policy that prohibits employees from working off the clock. *Reduction of Bond in Light Tobacco Suit Leads to Other Complications --------------------------------------------------------------------- For Altria, Philip Morris's parent company, the short-term risk has passed. Judge Nicholas Brody, of Madison County, Illinois, last week reduced the $12 billion appeal bond he had ordered Altria's tobacco arm, Philip Morris USA, to post if it wanted to appeal against a $10.1 billion damages award to $1.1 Illinois smokers. These smokers, the plaintiffs in the Illinois class-action lawsuit, alleged they were deceived by the cigarette company's misleading claims about its "light" cigarettes, into believing the "lights" were safer than the company's regular cigarettes. The reduced bond requirement of around $7 billion defuses the threat, or challenge, Philip Morris made to a listening world: if the appeal bond is not reduced, the company may have to file for the protection of bankruptcy and certainly it would not be able to pay its share of the annual installment, due April 15, to the 46 states who are parties with the major tobacco companies to the 1998 Master Settlement Agreement (MSA). Philip Morris, the largest of the tobacco companies, pays annually an amount greater by a little more than one-half, of the total annual installment paid by the companies. The Philadelphia Inquirer reports that therefore, the state governments and the investors in the state' tobacco-settlement bonds all breathed easier when Judge Brody reduced the amount of the appeal bond and averted the crisis - or bargaining ploy - of bankruptcy, and Philip Morris made its $2.6 billion payment to the multi-state Tobacco Settlement Fund. Most of the 46 states now depend upon tobacco money's annual arrival to resolve their budgetary woes. Plans for the use of the money are included in their annual budgets. You might say, and many of the media came forward with the expression, that the states are "hooked" on tobacco money. What of the longer term effects? For the cigarette companies, the impression that the tobacco litigation threat has waned, has been punctured. Big Tobacco now faces a new breed of "lights" class action suits, the Financial Times reports. These lawsuits do not seek personal injury damages, but claim, instead, damages based on deceptive, misleading statements made by the companies about their product; the kind of statements that create liability under the consumer fraud laws of many states. These are the copycat cases that already have been brought under the standard that was the plaintiffs' battle cry in the Illinois case. Two have been certified as class actions; eight others have been filed. Another loss in a state with no cap on appeal bonds could see a replay of the Illinois calamity. The offset against the legal risk used to be Altria's reliable earnings growth. That, too, has been punctured. Heavy discounting has reversed Philip Morris's market share losses to deep-discount cigarettes. But, as last week's fall in quarterly earnings showed, that has come at a huge cost to the bottom line. Another round of state excise taxes, the Financial Times reports, could again push Marlboro prices up to levels at which smokers finally balk. Further, the possibilities that the legal risk will recede do not seem hearty. Since the 1998 agreement between the states and US tobacco companies, analysts have questioned whether the cigarette industry is still the same, The San Diego Union-Tribune reports. On March 26, Standard & Poor placed the tobacco bond ratings on Credit Watch with negative implications, but has not downgraded any of the debt. Also, on March 26, the date on which Judge Brody announced both his verdict and the amount of the appeal bond, Moody's Investors Service and Fitch Ratings cut their ratings on almost $19 billion of the debt, which remains on negative watch. Philip Morris's warning of possible bankruptcy and a potential inability to pay the $2.6 billion to the states stunned the market for bonds backed by tobacco settlement dollars, sending prices sharply lower and all but killing off demand for new bond issues from Virginia and California. California put on hold the $2.3 billion bond issue it needs to pay bills, but in light of the ruling reducing the bond, state Controller Steven Westly said the bond issue could be in the market soon. Whether or not the prices will rise in the bond market backed by tobacco money is arguable, since investors seem to be unconvinced, the San Diego Union-Tribune reports that tobacco bonds make a safe purchase. "There is plenty more bad news that could come from Philip Morris or the other tobacco companies," said Josh Gonze, an assistant portfolio manager at Thornburg Investment Management in Santa Fe. Some of the states, not many, have sold the whole of their anticipated tobacco money settlement to investors -- including mutual funds, big Wall Street firms, as well as small investors who responded to radio ads -- in exchange for up-front cash. New Jersey, for example, sold its $7.5 billion tobacco settlement to investors in exchange for $3.5 billion in cash. Those investors, not the state, could lose money if the Tobacco Settlement Fund falls apart, The Philadelphia Inquirer reports. On Friday, last week, Standard & Poor's Ratings Service lowered its ratings on various tobacco-settlement bonds, maturing after April 15, 2004 -- a long-term negative statement, in itself, of the legal risks abounding in the tobacco companies' future. However, the credit analysis firm cited the "adverse litigation environment" as one of several reasons for the rating reductions. Even good news threatens the settlements: Americans are smoking less. Altria has told investors that Philip Morris USA cigarette shipments slipped 16 percent during the first quarter, compared with last year, while operating profit dropped 40 percent. The company supplies almost half of all U.S. cigarettes. Smoking may have a better future overseas, according to The Philadelphia Inquirer. Philip Morris International said foreign shipments, which account for three-quarters of its sales, rose nearly four percent during the quarter. However, Marlboro sales were down in Western Europe and also slumped in Saudi Arabia and other Arab countries, reflecting "anti-American sentiment," Altria said. New Securities Fraud Cases ACCLAIM ENTERTAINMENT: Holzer Holzer Lodges Securities Suit in E.D. NY ---------------------------------------------------------------------- Holzer Holzer & Cannon, LLC initiated a securities class action in the United States District Court for the Eastern District of New York on behalf of purchasers of Acclaim Entertainment, Inc. (Nasdaq:AKLM) publicly traded securities during the period between January 11, 2002 and September 19, 2002, inclusive. The complaint alleges that throughout the class period, Defendants issued various false and misleading statements regarding the Company's financial performance. These statements were materially false and misleading, according to the complaint, because they failed to disclose and/or misrepresented that the Company: (1) was engaging in channel stuffing, whereby it induced customers to take products that they neither wanted, needed or could sell in the short-term; (2) was experiencing severe operating problems related to the development, content, cost, market testing, distribution and sales of the Company's products; (3) was experiencing decreased demand for products, including Turoc: Evolution and Aggressive In-Line, among others, resulting in the Company's inability to meet revenue and earnings guidance; (4) had distribution and retail sales tracking information systems which caused the Company to materially underestimate allowances for sales returns and price concessions; (5) developed computer games with mature themes which materially impeded the Company's ability to access broad-based retail channels; and (6) based on the foregoing, Defendants' opinions, projections and forecasts concerning the Company and its operations were lacking in a reasonable basis at all times. The class period ended on September 19, 2002, when Acclaim shocked the market by issuing a press release announcing it now expected to report an operating loss for the fourth quarter of 2002, primarily because of sharply lower revenues. In addition, the Company lowered its guidance for the first and second quarters of its 2003 fiscal year, as well as for the 2003 fiscal year. Upon release of this news, the market for Acclaim common shares collapsed, losing over 29% of their value in a single day's trading to close at $1.56 per share on September 19, 2002. For more details, contact Michael I. Fistel, Jr. by Phone: (888) 508-6832 by E-mail: mfistel@holzerlaw.com ACCREDO HEALTH: Marc Henzel Commences Securities Fraud Suit in W.D. TN ---------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Western District of Tennessee on behalf of all purchasers of the common stock of Accredo Health, Inc. (NasdaqNM: ACDO) from June 16, 2002 through April 7, 2003, inclusive. 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 June 16, 2002 and April 7, 2003, thereby artificially inflating the price of Accredo common stock. The complaint alleges that these statements were materially false and misleading because they failed to disclose and misrepresented these adverse facts, among others: (1) that the Company was failing to timely record an impairment in the value of certain receivables that it had acquired in a recent acquisition. As a result, the Company's reported financial results were artificially inflated throughout the class period; (2) as a result of the foregoing, the Company's financial statements published during the class period were not prepared in accordance with Generally Accepted Accounting Principles and were therefore materially false and misleading; (3) that the Company would not have been able to meet its stated earnings guidance had it properly reserved for its accounts receivables; and (4) based on the above, defendants' earnings guidance and positive statements concerning the Company was lacking in a reasonable and therefore materially false and misleading. On April 8, 2002, prior to the opening of the market, Accredo shocked the market by announcing that it was reducing its previously issued earning guidance and that it was examining the adequacy of reserves for accounts receivables that it acquired in a recent acquisition. In response to this announcement, the price of Accredo Health common stock declined precipitously falling from $25.40 per share to as low as $13.76 per share, on extremely heavy volume. During the Class Period, Accredo insiders sold more than $12 million worth of their personally- held Accredo stock while in possession of the true facts about the Company. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-Mail: mhenzel182@aol.com ATMEL CORPORATION: Marc Henzel Lodges Securities Fraud Suit in N.D. CA ---------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Northern District of California on behalf of all persons who acquired securities of Atmel Corporation (NasdaqNM: ATML) From January 20, 2000 to July 31, 2002. The case is pending against the Company, George Perlegos, and Donald Colvin. The complaint charges that during the class period, 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, thereby artificially inflating the price of Atmel securities. Specifically, the Complaint alleges that, Defendants inflated the Company's revenues and earnings by concealing that Atmel was selling defective chips to its customers, which would lead to product recalls, repairs, and loss of customer relationships. The complaint further alleges that while Atmel's stock price was artificially inflated, Defendants sold more than $500 million in notes in a private placement offering. This scheme was revealed on July 31, 2002, when news reports disclosed that Seagate Technology, Inc. had filed a lawsuit alleging that Atmel chips caused flaws in millions of disk drives which Seagate manufactured from 1999 to 2001. On this news, the Company's stock price declined to $2.96. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-Mail: mhenzel182@aol.com CREDIT SUISSE: Shapiro Haber Launches Securities Fraud Suit in MA Court ----------------------------------------------------------------------- Shapiro Haber & Urmy LLP initiated a securities class action against Credit Suisse First Boston and financial analyst Tim Mahon on behalf of persons who purchased Atmel Corporation (NASDAQ: ATML) common stock from July 22, 1999 through August 6, 2001, inclusive in the United States District Court for the District of Massachusetts. The complaint alleges that the defendants violated section 10(b) of the Securities Exchange Act, and Rule 10b-5 promulgated thereunder, by issuing favorable research reports on Atmel that were materially false or misleading by failing to disclose conflicts of interest of Credit Suisse, and in particular the practice of Credit Suisse to gain lucrative investment banking business by providing coverage and issuing favorable research reports on existing or prospective investment banking customers. According to an administrative complaint filed by the Secretary of the Commonwealth of Massachusetts, CSFB purposely misled investors by disseminating into the marketplace fraudulent material misstatements of fact in analyst reports. For more details, contact Thomas G. Shapiro, Ted Hess-Mahan or Liz Hutton by Mail: 75 State Street, Boston, MA 02109 by Phone: 800-287-8119 or by E-mail: cases@shulaw.com INTERCEPT INC.: Marc Henzel Commences Securities Fraud Suit in N.D. GA ---------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action the United States District Court for the Northern District of Georgia, on behalf of all persons who purchased securities of Intercept Inc. (Nasdaq: ICPT) between September 16, 2002 and January 9, 2003, inclusive, and who were injured thereby. The action, is pending against the Company and: (1) John W. Collins (Chief Executive Officer), (2) G. Lynn Boggs (President and Chief Operating Officer), (3) Scott Meyerhoff (Chief Financial Officer), and (4) Garrett M. Bender (President and Chief Executive Officer of Internet Billing Co. Ltd. (iBill) a wholly owned subsidiary of the Company) The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between September 16, 2002 and January 9, 2003. The complaint charges Intercept and certain of its executive officers with violations of federal securities laws. Among other things, plaintiff claims that defendants' material omissions and the dissemination of materially false and misleading statements concerning Intercept's business operations and financial performance caused Intercept's stock price to become artificially inflated, inflicting damages on investors. InterCept and the Individual Defendants made material misrepresentations and/or omitted to make material disclosures throughout the class period due to their false assurances that the adult pornography internet portion of their merchant processing business was insignificant and their failure to disclose that VISA regulations implemented on November 1, 2002, which were targeted specifically to address risks of internet pornography card processing, had caused a material loss of business. When defendants belatedly acknowledged the impact on InterCept's business, the market's reaction to the disclosures was swift and severe. Following these disclosures, the market price of InterCept common stock dropped nearly 50% from a $18.51 to slightly over $8 per share at the close of trading on January 10, 2003, after the disclosures were made. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-Mail: mhenzel182@aol.com KING PHARMACEUTICALS: Marc Henzel Commences Securities Suit in E.D. TN ---------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Eastern District of Tennessee, Northeastern Division at Greeneville, on behalf of purchasers of King Pharmaceuticals (NYSE: KG) publicly traded securities during the period between February 16, 2000 and March 10, 2003, inclusive. The complaint alleges that defendants 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 and violated sections 11 and 15 of the Securities Act of 1933 by issuing a materially false and misleading Registration Statement and Prospectus in connection with the Company's acquisition of Jones Pharma, Inc. Specifically, the complaint alleges that defendants issued statements regarding the Company's financial performance and future prospects and the strong demand for its branded pharmaceutical products, notably Altace and Levoxyl. Moreover, the complaint alleges that the Company failed to disclose that certain of its rebate and pricing practices subjected it to heightened governmental scrutiny. As alleged in the complaint, these statements were each materially false and misleading when made as they misrepresented and/or omitted the following adverse facts which then existed and disclosure of which was necessary to make the statements made not false and/or misleading, including: (1) that the Company's rebate practices and "best price" lists subjected it to heightened regulatory scrutiny as governmental agencies increased their activity in this area; (2) that the Company had understated the level of generic competition for Levoxyl; and (3) that the Company had engaged in questionable sales to VitaRx and Prison Health Services during 1999 and 2000. On March 11, 2003, King Pharmaceuticals shocked the market when it revealed that it was subject to an SEC investigation for, among other things: (i) the sales of its products to VitaRx and Prison Health Services during 1999 and 2000; (ii) its "bestprice" lists; (iii) all documents related to the pricing of its pharmaceutical products to any governmental Medicaid agency during 1999; and (iv) the accrual and payment of rebates on Altace from 2000 to the present In response to this announcement, the price of King Pharmaceuticals common stock declined precipitously, falling from $15.90 per share to $12.17 per share. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-Mail: mhenzel182@aol.com NORTHWESTERN CORPORATION: Schiffrin & Barroway Lodges Stock Suit in SD ---------------------------------------------------------------------- Schiffrin & Barroway LLP initiated a securities class action in the United States District Court for the District of South Dakota on behalf of all purchasers of the common stock of NorthWestern Corporation (NYSE:NOR) from August 2, 2000 through March 31, 2003, inclusive. The complaint charges NorthWestern and certain of its executive officers and directors with issuing false and misleading statement concerning its business and financial condition. Specifically the Company failed to disclose that: (1) the Company had not maintained adequate reserves for accounts receivable in its subsidiary, Expanets; (2) massive amounts of the Company's goodwill was impaired and would require significant write-downs; (3) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (4) that as a result, the value of the Company's net income and financial results were materially overstated. Subsequently, on April 16, 2003, before the market opened, NorthWestern announced that it would take significant charges for fiscal year 2002 totaling $878.5 million. The breakdown of the charges included: (i) an impairment of goodwill and other long-lived assets related to one of the Company's subsidiaries Blue Dot Services, Inc. for $301.7 million, (ii) an additional impairment of goodwill and other long-lived assets related to another Company subsidiary Expanets, Inc. for $288.7 million, (iii) a charge for discontinued operations for a third subsidiary CornerStone Propane Partners L.P. for a net of tax benefit of $101.7 million, (iv) a valuation allowance of a deferred tax asset for $71.5 million, (v) billing adjustments and accounts receivable write-offs related to Expanets equaling $65.8 million, (vi) an impairment of the Montana First Megawatts project for $35.7 million, and (vii) the retirement of an acquisition term loan, equaling a net of tax benefit of $13.4 million. By the close of trading on April 16, 2003, the share price plummeted to $1.95 per share, 92% down from its class period high of $23.53 per share. For more details, contact Marc A. Topaz or Stuart L. Berman by Phone: (888) 299-7706 (toll free) or (610) 667-7706 by E-mail: info@sbclasslaw.com NORTHWESTERN CORPORATION: Scott + Scott Files Securities Lawsuit in SD ---------------------------------------------------------------------- Scott + Scott, LLC initiated a securities class action on behalf of institutional investors in the United States District Court for the District of South Dakota on behalf of purchasers of NorthWestern Corporation (NYSE: NOR) publicly traded securities during the period between February 7, 2002 and March 31, 2003. The complaint charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Throughout the class period, defendants issued a series of materially false and misleading statements concerning the financial and operational condition of the Company. In fact, throughout the class period, while many of the Company's competitors were announcing revised guidance, NorthWestern consistently stated that the Company's proprietary business model was allowing NorthWestern to continue to achieve "improved performance" and earnings of between $2.30 to $2.55 per share by the end of 2002. Both prior to and throughout the class period, management of the Company consistently represented that its subsidiaries, including Expanets and Blue Dot, were achieving and would continue to achieve these results. In fact, however, investors would ultimately learn at the close of the class period, which defendants had managed to conceal throughout the class period, that: (1) The Company's non- utility subsidiaries were not performing according to plan, with at least 20% of Blue Dot's locations performing so poorly that they would be sold or closed within the foreseeable future, and with Expanets running its reserves about $66 million short of its rapidly escalating delinquencies; (2) defendants had artificially inflated the Company's balance sheet as well as its reported earnings and EPS figures, by failing to write down the impairment of, and take necessary reserves for, its failing Blue Dot and Expanets businesses, which impairments and reserve adjustments ultimately resulted in a massive $880 million charge; (3) through a complicated scheme of questionable accounting and subsidiaries owned partially by senior management, losses at both Blue Dot and Expanets were subverted and reallocated to owners of minority interests or shareholders in the Company's subsidiary, which allowed the Company to keep these losses off its balance sheet, and to artificially inflate earnings and income and mask the poor performance of NorthWestern throughout the class period; and (4) defendants had materially misstated the conditions of both Blue Dot and Expanets, which were not poised for nor experiencing "long-term growth" nor "value creation," but were rather in poor financial and operational condition, with at least 20% of Blue Dot's locations terminal and with an unknown amount of other locations also in poor condition, and with almost $302 million in charges and reserves required to be taken by Expanets, in addition to an approximate $289 million charge required for Blue Dot. As a result of the foregoing, at no time during the class period did defendants have a good faith basis to project earnings anywhere near $2.55 per share for fiscal year 2002. 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. ORTHODONTIC CENTERS: Schiffrin & Barroway Lodges Securities Suit in LA ---------------------------------------------------------------------- Schiffrin & Barroway LLP initiated a securities class action in the United States District Court for the Eastern District of Louisiana on behalf of all purchasers of the common stock of Orthodontic Centers of America, Inc. (NYSE:OCA) from November 14, 2002 through March 18, 2003, inclusive. The complaint charges OCA and certain of its officers and directors with violations of the Securities and Exchange Act of 1934. More specifically, the complaint alleges that on May 17, 2001, OCA and OrthAlliance, Inc. announced that the parties had entered into a definitive merger agreement, whereby a wholly owned subsidiary of OCA would merge into OrthAlliance in a stock-for-stock transaction, with OrthAlliance becoming a wholly owned subsidiary of OCA. Following the May 17, 2001 announcement, a number of OrthAlliance's affiliated practices filed lawsuits against OrthAlliance and/or notified OrthAlliance that it was in default under their service, management service, and consulting agreements, in response to which OrthAlliance engaged outside counsel to represent its interests. The complaint also alleges that after the announcement of the completed merger on November 9, 2001, OCA set forth an integration plan with respect to OrthAlliance affiliated practices. The integration plan, however, was not proceeding "very, very well" as articulated by defendants. In fact, several other OrthAlliance affiliated practices, in addition to the practices that filed lawsuits, discontinued paying their services fees under their service, management service, and consulting agreements; while at the same time, OCA continued to recognize revenue it allegedly received from such fees. The complaint further alleges that the statements disseminated by defendants during the class period and with respect to the financial well-being of the Company were each materially false and misleading because OCA failed to disclose and indicate that the integration of OrthAlliance practices was not proceeding as had indicated by the defendants, which, in turn, caused the Company to experience less profit generation because: (1) not only had some OrthAlliance practices sued but other OrthAlliance practices had discontinued paying their services fees; (2) because the Company continued to recognize revenue from the services from OrthAlliance practices that were in litigation and from those that had stopped paying their service fees; (3) because the defendants mischaracterized that only "some doctors" had stopped paying their service fees, which only created "a little noise" for the Company when in fact the magnitude of the problem, which OCA was required to report, was greater than reported; (4) because the Company was recognizing revenue in violation of the Generally Accepted Accounting Principles (GAAP); and (5) because the defendants were actively concealing these facts in order to manipulate the Company's earnings outlooks in order to maintain its favorable stock prices. The complaint additionally alleges that following the close of the markets on March 18, 2003, OCA issued a press release announcing its year-end earnings for 2002 wherein the Company reported that earnings and fee revenue were down from the previous year. The decline in fee revenue resulted from numerous OrthAlliance affiliated practices that discontinued paying fees required under their service, management service, and consulting agreements in 2002. Market reaction to these revelations was swift. Immediately following the announcement on March 19, 2003, shares of the Company fell $3.93, or 41 percent, to close at $5.64, from a closing price of $9.57 per share on March 18, 2003. For more details, contact Marc A. Topaz or Stuart L. Berman by Phone: (888) 299-7706 (toll free) or (610) 667-7706 by E-mail: info@sbclasslaw.com PEC SOLUTIONS: Marc Henzel Commences Securities Fraud Suit in E.D. VA --------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Eastern District of Virginia on behalf of all purchasers of the common stock of PEC Solutions Inc. (NasdaqNM: PECS) from October 22, 2002 through March 14, 2003, inclusive. Throughout the class period, as alleged in the complaint, defendants issued a series of materially false and misleading statements concerning the Company's business, operations and prospects. The complaint alleges that these statements were materially false and misleading when made as they failed to disclose and misrepresented the following adverse facts, among others: (1) that the Company was experiencing declining demand for its products and services as the failure of Congress to approve a budget for 2003 was causing governmental agencies to delay projects; (2) that the Company was experiencing material problems with certain of its biometric identification contracts and would not be generating the revenue that it had anticipated from those contracts; and (3) as a result of the foregoing, the Company was materially overstating the strength of its pipeline of projects and its prospects. On March 14, 2003, after the close of the market, as alleged in the complaint, PEC Solutions shocked the market when it issued a press release announcing that it was revising its guidance for the first quarter 2003 and for the year ending December 31, 2003. In response to this announcement, the price of PEC Solutions common stock declined precipitously falling from $15.80 per share to $9.81 per share, a decline of more than 37%, on extremely heavy trading volume. During the class period, prior to the disclosure of the true facts, the Individual Defendants and other PEC Solutions insiders sold their personally-held shares of PEC Solutions common stock to the unsuspecting public reaping proceeds of more than $13 million For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-Mail: mhenzel182@aol.com PHARMACIA CORPORATION: Glancy & Binkow Lodges Securities Lawsuit in NJ ---------------------------------------------------------------------- Glancy & Binkow LLP initiated a securities class action in the United States District Court for the District of New Jersey on behalf of all persons who purchased securities of Pharmacia Corporation (NYSE: PHA) between April 17, 2000 and August 22, 2001, inclusive. The complaint charges Pharmacia and certain of its executive officers with violations of federal securities laws. Among other things, plaintiff claims that defendants' material omissions and the dissemination of materially false and misleading statements concerning Pharmacia's business operations and prospects caused the price of Pharmacia's securities to become artificially inflated, inflicting damages on investors. Pharmacia is primarily involved in the development, manufacturing and sale of pharmaceutical products sold throughout the world to a wide range of customers, including pharmacies, hospitals, chain warehouses, governments, physicians, wholesalers and other distributors. The complaint alleges that during the class period defendants marketed Celebrex -- a once-daily prescription medication that provides powerful, 24-hour relief from arthritis -- as a new type of drug that, unlike aspirin or ibuprofen, retarded pain and inflammation without the adverse side effects of ulcers or gastrointestinal bleeding. Along with Pfizer, Inc., which funded the clinical study, Pharmacia trumpeted the results of the "Celecoxib Long-term Arthritis Safety Study," which compared the gastrointestinal problems of patients who used Celebrex with patients who used other nonsteroidal anti- inflammatory drugs and found that Celebrex caused fewer gastrointestinal problems than traditional drugs, such as ibuprofen. Subsequently, the Journal of the American Medical Association (JAMA) published the study's results, purportedly showing that Celebrex caused fewer gastrointestinal problems than traditional drugs. The complaint alleges that, unbeknownst to JAMA, the study was flawed because the Company manipulated the results -- by not including in the final analysis all of the data collected through the entire duration of the study -- to show that Celebrex was safer for the stomach and digestive tract than conventional drugs. During the class period, the Company failed to make adequate disclosures concerning this study and used this study in their continuing efforts to have the Food and Drug Administration remove the warning label from Celebrex. However, on August 22, 2001, The Wall Street Journal reported that researchers from the Cleveland Clinic reviewed clinical trials of Celebrex which indicated that the medication might carry an increased risk for cardiovascular events. They concluded that heart-attack rates with Celebrex were high enough to be a concern, stating: "Given the remarkable exposure and popularity of this new class of medications, we believe that it is mandatory to conduct a trial specifically assessing cardiovascular risk and benefit of these agents. Until then, we urge caution in prescribing these agents to patients at risk for cardiovascular morbidity." Study author Dr. Eric Topol commented in the article that the results are a "cautionary flag that seems to say something is going on that needs further exploration." On this news, Pharmacia's stock dropped below $40 per share. For more details, contact Michael Goldberg by Mail: 1801 Avenue of the Stars, Suite 311, Los Angeles, California 90067, by Phone: (310) 201-9161 or (888) 773-9224 or by E-mail: info@glancylaw.com. SOLECTRON CORPORATION: Marc Henzel Launches Securities Fraud Suit in CA ----------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Northern District of California on behalf of all purchasers of the common stock of Solectron Corporation (NYSE: SLR) publicly traded securities during the period between September 17, 2001 and September 26, 2002, inclusive. The complaint charges Solectron Corporation 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 statements reporting artificially inflated financial results. The complaint alleges that these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Company was carrying tens of millions of dollars of obsolete and unsaleable inventory in its Technology Solutions division which was required to be written down. As a result of the foregoing, Solectron's reported financial results were artificially inflated at all times during the Class Period; (2) as a result of the Company's failure to writedown its inventory in a timely manner, the financial statements published by the Company during the Class Period were not prepared in accordance with Generally Accepted Accounting Principles and were materially false and misleading; and (3) that it was materially false and misleading to characterize the Company's earnings during the Class Period, as ``in line'' with Company guidance, when had the Company properly accounted for its inventory it would have drastically missed its guidance. On September 26, 2002, after the market closed, Solectron issued a press release announcing its financial results for the fourth quarter of 2002 and fiscal year 2002. The Company also reported that it was booking a pre-tax charge of $97 million to reserve for inventory revaluation and write-off. Solectron attributed the bulk of the charge to ``inventory risk assumed by Solectron's product-oriented Technology Solutions business unit ...'' Following this announcement, and other revelations, shares of Solectron common stock fell from their previous close. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-Mail: mhenzel182@aol.com VAXGEN INC.: Marc Henzel Commences Securities Fraud Lawsuit in N.D. CA ---------------------------------------------------------------------- The Law Offices of Marc S. Henzel 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) securities during the period between August 6, 2002 and February 26, 2003. The complaint charges VaxGen and certain of its officers and directors with violations of the Securities Exchange Act of 1934. 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 23, 2003, VaxGen shocked the market by reporting the long- anticipated results of the US trials, disclosing that the "study did not show a statistically significant reduction of HIV infection within the study population as a whole, which was the primary endpoint of the trial." The partial disclosure of the overall failure of the US clinical trial caused VaxGen's shares to plummet, declining over 50% to approximately $3 per share on February 24, 2003. However, even when defendants released the results on February 24, 2003, they claimed that while the vaccine failed to demonstrate efficacy on U.S. caucasians, the trials had demonstrated 30%-84% efficacy rates in U.S. blacks and Asians. That analysis, the company said, had less than a 1% chance of being due to random chance, making it highly statistically significant. VaxGen President Donald P. Francis touted the results as evidence that AIDSVAX could protect against HIV infection. As reported by The Wall Street Journal on February 24, 2003, the "results overall won't lead the Food and Drug Administration to approve the vaccine for use in the wider public, but the company hopes that further analysis, as well as results from another trial being conducted in Thailand on injection drug users, may prompt the agency to approve the vaccine for some ethnic minorities." These corrective statements had their intended effect and VaxGen's stock closed at close to $7 per share on February 24, 2003. However, on February 26, 2003, 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 Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-Mail: mhenzel182@aol.com VITALWORKS INC.: Marc Henzel Commences Securities Fraud Lawsuit in CT --------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the District of Connecticut on behalf of all purchasers of the common stock of VitalWorks, Inc. (NasdaqNM: VWKS) publicly traded securities during the period between April 24, 2002 and October 23, 2002, inclusive. The complaint charges VitalWorks, Inc. and certain of its officers and directors with issuing false misleading statements concerning its business and financial condition. Specifically, the complaint alleges that the defendants issued false and misleading statements concerning the Company's increasing revenues and future prospects. On October 23, 2002, VitalWorks announced that it had failed to achieve pre- announced third quarter 2002 revenues and was lowering revenue guidance for the remainder of fiscal year 2002; additionally, the Company reported that it was lowering revenue guidance for fiscal year 2003 by over 10%. Market reaction to defendants' belated disclosures was swift and severe. On October 24, 2002, the first day of trading following VitalWorks announcements, the price of VitalWorks common shares fell over 56% in value to close at $3.13 per share on record trading volume of over 14 million shares. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-Mail: mhenzel182@aol.com VOICEFLASH NETWORKS: Marc Henzel Commences Securities Suit in S.D. FL --------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action against VoiceFlash Networks, Inc. (OTC: VFNX.PK) and certain of its officers in the United States District Court for the Southern District of Florida, on behalf of purchasers of VoiceFlash shares between March 15, 2002 and January 24, 2003. The complaint charges defendants with violations of the Securities Exchange Act of 1934. It alleges that defendants issued a series of material misrepresentations that caused plaintiff and other members of the class to purchase VoiceFlash common stock at artificially inflated prices. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-Mail: mhenzel182@aol.com ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2003. 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. 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