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C L A S S A C T I O N R E P O R T E R
Thursday, May 22, 2003, Vol. 5, No. 100
Headlines
3M CORPORATION: Rival Welcomes Antitrust Suit in CA State Court
ACCELERATED NETWORKS: CA Court Refuses To Dismiss 1934 Act Claim
ACCELERATED NETWORKS: NY Court Dismisses in Part Securities Suit
ACCELERATED NETWORKS: Named As Defendant in FL Securities Suit
ALLIANCE CAPITAL: IL Court Dismisses in Part Securities Lawsuit
ALLIANCE CAPITAL: Asks NJ Court To Dismiss Securities Fraud Suit
ALLIANCE CAPITAL: TX Court Refuses To Dismiss Securities Lawsuit
ALYON TECHNOLOGIES: CA Atty. General Files Consumer Fraud Suit
APARTHEID LITIGATION: Reparations Suit Proceeds Amidst Dissent
ASTRAZENECA: New York Court Dismisses Tamoxifen Antitrust Suits
AT ROAD: Named as Defendant in CSFB Securities Suit in FL Court
BRIDGESTONE CORPORATION: Institutes Recall of 42 Steeltex Tires
BRISTOL-MYERS SQUIBB: Plaintiffs Launch Consolidated Suit in NY
BRISTOL-MYERS SQUIBB: Faces Lawsuits For ERISA Violations in NY
CLICK COMMERCE: Court Dismisses Securities Suit With Prejudice
DUN & BRADSTREET: Employees Commence ERISA Violations Suit in CT
FROSTBITE BRANDS: Recalls Ice Cream Sandwiches For Wrong Labels
HUNTSMAN PETROCHEMICAL: to Pay Fine For Clean Air Act Violations
LANTRONIX INC.: Asks CA Court To Dismiss Claims in Stock Lawsuit
LANTRONIX INC.: CA Court Refuses Demurrer in Derivative Lawsuit
LANTRONIX INC.: Synergetic Investors Lodge Securities Suit in CA
LUCENT TECHNOLOGIES: Reaches Settlement in NJ Securities Lawsuit
MASTERCARD INTERNATIONAL: Card Processor Launches Antitrust Suit
MASTERCARD INTERNATIONAL: Court Dismisses Claims in Fraud Suit
MPOWER HOLDING: Fairness Hearing For Settlement Set October 2003
MQ ASSOCIATES: GA Suit Filed Questioning Purchase Service Pact
MULTILINK TECHNOLOGY: Named as Defendant in CSFB Securities Suit
OKLAHOMA: Seeger Weiss Commences Lawsuit For Tar Creek Residents
POST PROPERTIES: Officials Face Securities Derivative Lawsuit
SARS PREVENTION: Authorities Start Crackdown on Fake SARS Cures
SWIMWAYS CORPORATION: Recalls 25T Dive Sticks for Injury Hazard
* Companies Attempt Tentative Steps Toward Universal Health Care
New Securities Fraud Cases
ACCREDO HEALTH: Spector Roseman Files Securities Suit in W.D. TN
ACCREDO HEALTH: Wolf Haldenstein Launches Securities Suit in TN
ALLOU HEALTHCARE: Faruqi & Faruqi Lodges Securities Suit in NY
CORE LABORATORIES: Weiss & Yourman Lodges Securities Suit in NY
ELECTRO SCIENTIFIC: Faruqi & Faruqi Lodges Securities Suit in OR
J. JILL GROUP: Schiffrin & Barroway Lodges Securities Suit in MA
PHARMACIA CORPORATION: Weiss & Yourman Files NY Securities Suit
ROBERTSON STEPHENS: Chitwood & Harley Files Stock Lawsuit in CA
SARA LEE: Wechsler Harwood Lodges Securities Lawsuit in N.D. IL
*********
3M CORPORATION: Rival Welcomes Antitrust Suit in CA State Court
---------------------------------------------------------------
LePage's, a leading tape manufacturer based in Taylor, Michigan,
applauded the class action filed against 3M Corporation for
antitrust violations in California State Court.
Navin Chandaria, President of LePage's remarked, "We applaud the
informed consumers and retailers standing up to 3M and its anti-
competitive agenda. This lawsuit will be watched closely, and
will send a clear message: American consumers and retailers want
freedom of choice and fair competition. After LePage's
successes in Federal Court and the marketplace, it is
interesting to note that all the ethical retailers have also
endorsed the fight against monopolistic giants. The days are
now over where monopolistic manufacturers could hold retailers
at ransom with these pressure tactics and schemes. One can
simply look at the new range of products on the shelves to see
where retailers have embraced consumer choice."
The suit is likely to include hundreds of thousands of claimants
and follows closely on the heels of a $65 million award, plus
interest, to LePage's on similar grounds. It is alleged that
the Company abused its monopolistic position and used a bundled
rebate scheme with cash payments to retailers to limit
competitor access to retail shelves. The recent claims for
damages are likely to focus on the higher prices and outdated
technologies resulting from the lack of fair competition.
In the statement, Mr. Chandaria noted that "Even after court
sanctions, companies are finding legal ways of doing the same
thing to violate the spirit of the law. These practices may not
be limited to the tape category, and the global scope may not be
limited to California or the United States. In other products,
such as the sticky note category, a simple investigation will
uncover many potential competitors that have been put out of the
business with costly, spurious lawsuits, as well as bundled
rebates and other schemes."
Mr. Chandaria continued, that, in the light of the recent wave
of corporate scandals in the U.S., "regulators and consumer
advocates should take a close look at the unethical practices
exposed by court challenges against 3M, and to investigate the
wide range of abuses that may continue to be perpetrated.
Complete disclosure by 3M of its ethics program, or lack
thereof, and how it is implemented in its marketing strategies,
would be a welcome start to rebuilding the trust that consumers
and shareholders once had for the company."
Drawing attention to the successes of LePage's outside the
courtroom, Mr. Chandaria noted that "Many retailers have
congratulated and thanked us for being a viable alternative, and
have found that LePage's outperforms 3M on the basis of consumer
choice wherever a level-playing field has been created. This
clearly demonstrates that consumers and retailers want better
alternatives and fair play. The few remaining retailers and
warehouse clubs mired in their old ways should open their doors
to consumer choice and follow both the letter and the spirit of
the law."
ACCELERATED NETWORKS: CA Court Refuses To Dismiss 1934 Act Claim
----------------------------------------------------------------
The United States District Court for the Central District of
California refused to dismiss a claim in the consolidated
securities class action filed against Accelerated Networks, Inc.
following its April 17, 2001 announcement that it would restate
its financial results. The suit also names certain of the
Company's current and former officers and directors as
defendants
The complaint generally alleges that the defendants made
materially false and/or misleading statements regarding the
Company's financial condition and prospects during the period of
June 22, 2000 through April 17, 2001 in violation of Sections
10(b) and 20(a) and Rule 10b-5 of the Securities Exchange Act of
1934 and that the registration statement and prospectus issued
by defendants in connection with the Company's June 23, 2000
initial public offering contained untrue statements of material
fact and omitted to state material facts in violation of
Sections 11, 12(a)(2) and 15 of the Securities Act of 1933.
The Company previously filed two motions to dismiss the
plaintiffs' amended complaints. The plaintiffs opposed the
motions and a hearing on each motion took place. At both
hearings, the court granted the motion as to the plaintiffs'
1934 Act claims, and denied the motion as to plaintiffs' 1933
Act claims. In each instance the plaintiffs were given 30 days
leave to amend their 1934 Act claims. The plaintiffs filed
their third amended complaint and the Company filed a motion to
dismiss the third amended complaint. The plaintiffs opposed the
motion and a hearing took place on February 3, 2003. At that
hearing, the Court denied the motion to dismiss the 1934 Act
claims. The Company has filed an answer and intends to defend
the litigation vigorously.
ACCELERATED NETWORKS: NY Court Dismisses in Part Securities Suit
----------------------------------------------------------------
The United States District Court for the Southern District of
New York dismissed in part the consolidated securities class
action filed against Accelerated Networks, Inc. certain of its
then officers and directors and several investment banks that
were underwriters of the Company's initial public offering.
The suit was filed on behalf of investors who purchased the
Company's stock between June 22, 2000 and December 6, 2000 and
alleges violations of Sections 11 and 15 of the 1933 Act and
Sections 10(b) and 20(a) and Rule 10b-5 of the 1934 Act against
the Company and/or the individual defendants. The claims are
based on allegations that the underwriter defendants agreed to
allocate stock in the Company's initial public offering to
certain investors in exchange for excessive and undisclosed
commissions and agreements by those investors to make additional
purchases in the aftermarket at pre-determined prices.
Plaintiffs allege that the prospectus for the Company's initial
public offering was false and misleading in violation of the
securities laws because it did not disclose these arrangements.
These lawsuits are part of the massive "IPO allocation"
litigation involving the conduct of underwriters in allocating
shares of successful initial public offerings.
The Company believes that over three hundred other companies
have been named in more than one thousand similar lawsuits that
have been filed by some of the same plaintiffs' law firms.
In October 2002 the plaintiffs voluntarily dismissed the
individual defendants without prejudice. On February 19, 2003 a
motion to dismiss filed by the issuer defendants was heard and
the court dismissed the 10(b), 20(a) and Rule 10b-5 claims
against the Company.
Settlement discussions are ongoing and a memorandum of
understanding has been circulated. No date has been set for the
Company to respond to the complaint. The Company intends to
defend the litigation vigorously.
ACCELERATED NETWORKS: Named As Defendant in FL Securities Suit
--------------------------------------------------------------
Accelerated Networks, Inc. was named as a defendant in the
securities class action in the United States District Court for
the Southern District of Florida. The suit also names as
defendants certain of the Company's officers and directors and
several investment banks that were underwriters of the Company's
initial public offering.
The complaint was filed on behalf of investors who purchased
Company stock between June 22, 2000 and January 8, 2001 and
alleges violations of Section 12(a)(2) and Section 15 of the
1933 Act of Section 10(b) and Section 20(a) and Rule 10b-5 of
the 1934 Act and of the Florida Blue Sky Law. The claims are
based on allegations that the underwriter defendants and the
Company effectuated an IPO offering price that was inaccurate
based on false expectations about the Company's prospective
financial performance, including expected revenues and earnings
and make selective inaccurate disclosures of same to the
investing public. Plaintiffs allege that these fraudulent
disclosures are in violation of the securities laws.
There are fifty issuers defendants named in the lawsuit. No
date has been set for the Company to respond. The Company
intends to vigorously defend the litigation.
ALLIANCE CAPITAL: IL Court Dismisses in Part Securities Lawsuit
---------------------------------------------------------------
The United States District Court for the Southern District of
Illinois dismissed in part the consolidated class action filed
against Alliance Capital Management LP and Alliance Fund
Distributors, Inc. (now known as Alliance Bernstein Investment
Research and Management, Inc. or ABIRM and other defendants
alleging violations of the federal Investment Company Act of
1940, as amended (ICA) and breaches of common law fiduciary
duty. The allegations concern six mutual funds with which
Alliance Capital has investment advisory agreements, including:
(1) Alliance Premier Growth Fund (Premier Growth Fund),
(2) Alliance Health Care Fund,
(3) Alliance Growth Fund,
(4) Alliance Quasar Fund,
(5) Alliance Fund, and
(6) Alliance Disciplined Value Fund
The principal allegations of the complaint are that:
(i) certain advisory agreements concerning these funds were
negotiated, approved, and executed in violation of the
ICA, in particular because certain directors of these
funds should be deemed interested under the ICA;
(ii) the distribution plans for these funds were negotiated,
approved, and executed in violation of the ICA; and
(iii) the advisory fees and distribution fees paid to Alliance
Capital and ABIRM, respectively, are excessive and,
therefore, constitute a breach of fiduciary duty.
Plaintiffs seek a recovery of certain fees paid by these funds
to Alliance Capital. On March 12, 2002, the court issued an
order granting defendants' joint motion to dismiss the suit.
The court allowed plaintiffs up to and including April 1, 2002
to file an amended complaint comporting with its order.
On May 1, 2002, defendants filed a motion to dismiss the amended
complaint. In an order dated March 6, 2003, the court denied in
part, and granted in part, defendants' motion to dismiss. The
court declined to dismiss plaintiffs' claims that certain
advisory and distribution fees paid to Alliance Capital and
ABIRM, respectively, were excessive in violation of section 36
(b) of the ICA. The court dismissed plaintiffs' claims that
certain distribution plans were adopted in violation of the ICA.
The Company and ABIRM believe that plaintiffs' allegations in
the amended complaint are without merit and intend to vigorously
defend against these allegations. At the present time,
management of the Company and ABIRM are unable to estimate the
impact, if any, that the outcome of this action may have on the
Company's results of operations or financial condition.
ALLIANCE CAPITAL: Asks NJ Court To Dismiss Securities Fraud Suit
----------------------------------------------------------------
Alliance Capital Management LP asked the United States District
Court in the District of New Jersey to dismiss the class action
filed against it and the Alliance Premier Growth Fund alleging
violation of the Investment Company Act (ICA).
The principal allegations of the suit are that the Company
breached its duty of loyalty to Premier Growth Fund because one
of the directors of the General Partner of the Company served as
a director of Enron Corporation when Premier Growth Fund
purchased shares of Enron and as a consequence thereof the
investment advisory fees paid to Alliance Capital by Premier
Growth Fund should be returned as a means of recovering for
Premier Growth Fund the losses plaintiff alleges were caused by
the alleged breach of the duty of loyalty. Plaintiff seeks
recovery of certain fees paid by Premier Growth Fund to Alliance
Capital.
On February 7, 2003, the Company moved to dismiss the suit and
that motion is pending. The Company believes the plaintiffs'
allegations in the consolidated suit are without merit and
intends to vigorously defend against these allegations. Company
management is unable to estimate the impact, if any, that the
outcome of these actions may have on the Company's results of
operations or financial condition.
ALLIANCE CAPITAL: TX Court Refuses To Dismiss Securities Lawsuit
----------------------------------------------------------------
The United States District Court for the Southern District of
Texas, Houston Division refused to dismiss Alliance Capital
Management LP as a defendant in the securities class action
filed relating to fallen energy trader Enron Corporation.
The suit charges the Company with violating Sections 11 and 15
of the Securities Act of 1933, as amended with respect to a
registration statement filed by Enron and effective with the SEC
on July 18, 2001, which was used to sell $1.9 billion Enron
Corp. Zero Coupon Convertible Notes due 2021.
Plaintiffs allege that Frank Savage, who was at that time an
employee of Alliance Capital and who was and remains a director
of the General Partner of Alliance Capital, signed the
registration statement at issue. Plaintiffs allege that the
registration statement was materially misleading.
Plaintiffs further allege that Alliance Capital was a
controlling person of Frank Savage. Plaintiffs therefore assert
that Alliance Capital is itself liable for the allegedly
misleading registration statement. Plaintiffs seek rescission
or a rescissionary measure of damages. The suit specifically
states that "(n)o allegations of fraud are made against or
directed at Alliance Capital."
On June 3, 2002, the Company moved to dismiss the complaint as
the allegations therein pertain to it. On March 12, 2003, that
motion was denied.
The Company believes the allegations of the complaint as to it
are without merit and intends to mount a vigorous defense
against these allegations. Company management is unable to
estimate the impact, if any, that the outcome of this action may
have on the Company's results of operations or financial
condition.
ALYON TECHNOLOGIES: CA Atty. General Files Consumer Fraud Suit
--------------------------------------------------------------
California's Attorney General Bill Lockyer filed a consumer
protection lawsuit against Alyon Technologies Inc. and its chief
executive officer over software the company provides that
installs, via pop-up ads and other methods, a program that
automatically dials expensive adult sites without the computer
owner's knowledge, and makes adult material easily accessible to
children.
"We've received dozens of complaints from consumers who couldn't
understand why their phone bills exploded just because they
tried to close a pop-up ad," Atty. Gen. Lockyer said. "Now we
know why. Alyon used deception and technology to bilk consumers
and deprive parents of the ability to protect their children
from harmful matter on the Internet."
The Attorney General's complaint seeks an injunction to
permanently halt the improper use of Alyon's Internet dialing
software, refunds for consumers who paid bills based on Alyon's
improper use of their Internet dialing software and civil
penalties of $2 million.
In addition to Atty. Gen. Lockyer's lawsuit, filed in San Diego
Superior Court, the Federal Trade Commission and 18 other states
also are taking legal action against the New Jersey-based
Internet billing company.
Alyon sells its software mostly to adult content sites that
often advertise with pop-up ads on chat rooms and other sites
that are popular with teenagers. When the viewer clicks on an
ad, he or she is linked to the adult site and given the option
to view the adult content without having to use a credit card
to access the site.
If a consumer chooses that option, Alyon's Internet dialing
program loads a dialing software program onto the computer,
which disconnects the computer from its usual Internet Service
Provider (ISP) and connects the consumer's computer to the
Internet through a long distance call to a New Jersey 201 area
code number. The software charges the consumer $4.99 a minute
for each minute that the consumer's computer is attached to the
Internet. The dialer software captures the telephone number
of the computer from which the call is placed and charges the
line subscriber for the number of minutes that the computer is
connected to the Internet. In some cases, the automatic dialing
program is downloaded - without the consumer's consent or
knowledge - when a consumer tries to close the pop-up ad.
The program allows minors to gain access to adult material in
two ways. Because Alyon's software program bills the owner of a
phone line and a credit card is not needed, minors are able to
access adult content sites without age verification. Once the
program is on the computer, parents also are unable to use
systems that block calls to 900 and 976 pay-per-call telephone
numbers because the consumer's computers are dialing a 201 area
code number, not a 900 or 976 area code.
The Attorney General's complaint alleges that consumers report
that they have unintentionally downloaded Alyon's dialing
software, are receiving bills for computer calls made when no
one was home to use the computer and are receiving bills for
calls charged to a phone number that is not theirs. Some
consumers also have complained that they cannot remove the
program once it is loaded on their computer.
The complaint further charges that Alyon has engaged in unfair
business practices when attempting to collect amounts supposedly
owed by consumers. The company and its chief executive officer,
Stephane Touboul, also are charged with making false and
misleading statements to consumers.
The Attorney General said he wants Alyon to provide more
effective instructions on how consumer can remove the dialer
program without damaging their computers. Numerous consumers
said they were unsuccessful in removing the dialer program even
after following instructions posted on Alyon's website. Because
the program is downloaded into the computer's registry, it
becomes part of the computer's booting process and returns when
the computer is rebooted even when a consumer deletes the
shortcut icon from their desktop. Consumers must clean or edit
their computer's registry to completely remove the program.
APARTHEID LITIGATION: Reparations Suit Proceeds Amidst Dissent
--------------------------------------------------------------
One of the two class actions brought against global companies
charged with having supported and profited from South Africa's
apartheid regime, has begun in New York City, where it was filed
by noted attorney Ed Fagan, who has won reparations for
Holocaust victims, the Financial Times reports.
In addition to the closing of ranks among the global companies
and banks named as defendants, who are seeking to have the class
action dismissed, the class action is also opposed by South
Africa's black-led government, which believes the litigation
will have a chilling effect on business. The present South
African government is engaged in delicate talks with companies
and banks on mineral rights and black-equity control of white-
owned companies and is trying to promote investment in South
Africa, the creation of jobs being only one of the benefits that
could accrue for South Africans as a consequence of investment,
the government believes.
Another source of opposition to the reparations class action
comes from the country's $100 billion pension fund industry,
which worries that the suits could depress share prices. This
would harm the retirement accounts of their mostly black
customers. "The implications are not favorable for the market
or for stability, economic or political," said an executive at
one of the companies.
Whatever their legal merits, the Financial Times asserts, the
class action, like the Holocaust litigation is likely to reopen
emotional wounds in South Africa and abroad. As in the case of
the Holocaust suits, these emotions and the negative publicity
they bring the company defendants are likely to serve the
lawyers' case. This is because many victims of apartheid nurse
a sense that justice against the builders and promoters of
apartheid has never been served. Some of the regime's
perpetrators have been granted official amnesty under the Truth
and Reconciliation Commission (TRC), but apartheid's victims
have yet to receive any direct compensation from government or
business.
Ed Fagan and John Ngcebetsha, a South African lawyer involved in
the case, are confident companies eventually will be shamed into
settling out of court, as the Swiss banks and German companies
did in the Holocaust suits. If not, they will push for a jury
trial, buttressing their case with harrowing testimony from
victims of apartheid.
"The defendants know it is not going to be as easy as they
originally thought," said Mr. Ngcebetsha. "They know they
cannot afford to attract all this negative publicity for the
next five or seven years." The lawsuit, admits an executive at
one of the companies named, will be "messy and difficult."
Michael Hausfeld from the United States and Charles Abrahams
from South Africa are leading a second class action suit. The
two lawyers are representing Khulumani, an apartheid victims'
group, and Jubilee South Africa, the anti-debt campaigners. The
two cases differ on tactics, but many of the defendants are the
same. The US Multidistrict Litigation Panel may decide, in a
ruling expected this month, to consolidate them.
The defendant banks include, among others, UBS, Credit Suisse
and Citigroup. The companies include, among others, carmaker
DaimlerChrysler and mining companies such as Anglo American and
De Beers.
ASTRAZENECA: New York Court Dismisses Tamoxifen Antitrust Suits
---------------------------------------------------------------
The United States District Court for the Eastern District of New
York dismissed numerous class actions against AstraZeneca and
Barr Laboratories and upheld a 1993 distribution agreement that
gave Barr non-exclusive rights to distribute a non-branded,
lower cost version of Nolvadexr (tamoxifen citrate).
Judge I. Leo Glasser granted AstraZeneca and Barr's motion to
dismiss all counts of the plaintiffs' consolidated complaint.
Judge Glasser specifically held that AstraZeneca and Barr had
not engaged in any anti-competitive conduct or that the
settlement was executed in bad faith. The judge further noted
that the actions complained of by the plaintiffs were simply the
right of the patent holder to enforce its legal rights. In
addition, the Judge recognized that no generic manufacturer ever
obtained FDA approval to bring a generic form of Nolvadex to
market since the three generic manufacturers who challenged the
patent failed to prove in court that the patent was invalid.
AT ROAD: Named as Defendant in CSFB Securities Suit in FL Court
---------------------------------------------------------------
At Road, Inc. and two of its officers were named as defendants
in a securities class action entitled Liu v. Credit Suisse First
Boston Corporation et al, filed in the United States District
Court for the Southern District of Florida. The suit includes
166 other defendants such as Credit Suisse First Boston
Corporation and related entities and persons, certain companies
that conducted an initial public offering of securities
underwritten by CSFB.
The lawsuit was filed by an individual who purchased stock in
Commerce One, Inc. and was brought on behalf of all persons and
entities who acquired stock in the defendant companies after an
initial public offering of securities underwritten by CSFB.
The complaint alleges that defendants violated various federal
securities laws and state laws by disseminating fraudulent
information regarding the expected financial performance and
revenue growth of the defendant companies with the objective of
inflating those companies' stock prices. The complaint seeks
unspecified damages and rescission on behalf of the purported
class.
The Company believes it has meritorious defenses to these claims
and plans to defend the action vigorously; however, litigation
is inherently uncertain and it may not prevail in this matter.
BRIDGESTONE CORPORATION: Institutes Recall of 42 Steeltex Tires
---------------------------------------------------------------
Bridgestone Corporation recalled 42 Steeltex radial tires for
the same type of defect that led to a massive recall of its
Wilderness tires, according to the National Highway Traffic
Safety Administration (NHTSA), Reuters English News Service
reports.
The NHTSA announced the recall of Steeltex tires manufactured
between March 9 and March 15, 2003, because of potential tread
separation defects that "can possibly lead to a vehicle crash,
resulting in serious injury or death," it said on its Web site.
Bridgestone Firestone has advised NHTSA that all of the tires
affected by the recall have been removed from the field, the Web
site said.
The voluntary recall came in the midst of a NHTSA review of
whether 27.5 million Steeltex R4S, R4SII and A/T tires should be
recalled tread separation defects. The agency is considering
whether to reopen its investigation of the tires at the behest
of Los Angeles attorney Joseph Lisoni, who filed a $3 billion
proposed class action last year accusing Bridgestone of
concealing defects in the heavy-duty tire.
The lawsuit claims the tire (R4S, R4S II, A/T), installed on 43
types of vehicles such as pickups, vans and mobile homes, caused
thousands of serious accidents including fatalities. NHTSA's
decision on whether to reopen its investigation of Steeltex
tires is expected by May 27.
Bridgestone is still fighting rollover lawsuits in courts across
the United States stemming from tread separation in its
Wilderness tires, which were standard equipment on the Ford
Motor Co. Explorer and other sport utility vehicles. About 20
million Wilderness tires were recalled, 14 million by Ford and
6.5 million by Firestone.
An attorney for Bridgestone said the current recall of 42
Steeltex tires was unrelated to the lawsuit, brought by Mr.
Lisoni, over defects in the heavy-duty tire, and would not
affect it.
BRISTOL-MYERS SQUIBB: Plaintiffs Launch Consolidated Suit in NY
---------------------------------------------------------------
Plaintiffs in the securities class actions filed against
Bristol-Myers Squibb Co., and a number of its current and former
officers filed a consolidated suit in the United States District
Court for the Southern District of New York.
The plaintiffs variously alleged that the defendants
disseminated materially false and misleading statements and
failed to disclose material information concerning three
different matters:
(1) safety, efficacy and commercial viability of VANLEV,
(2) the Company's sales incentives to certain wholesalers
and the inventory levels of those wholesalers, and
(3) the Company's investment in and relations with ImClone,
and ImClone's product, ERBITUX
The consolidated suit alleges a class period of October 19, 1999
through March 10, 2003. The consolidated suit additionally
alleges violations of federal securities laws in connection
with, among other things, certain accounting issues, including
issues related to the establishment of reserves, and accounting
for certain asset and other sales. The plaintiffs seek
compensatory damages, costs and expenses.
BRISTOL-MYERS SQUIBB: Faces Lawsuits For ERISA Violations in NY
---------------------------------------------------------------
Bristol-Myers Squibb Co. was named as a defendant in a number of
class actions brought under the federal Employee Retirement
Income Security Act (ERISA) in the United States District Court
for the Southern District of New York.
Plaintiffs variously allege that defendants breached various
fiduciary duties imposed by ERISA and owed to participants in
the Bristol-Myers Squibb Company Savings and Investment Program
(Program), including a duty to disseminate material information
concerning:
(1) safety data of the Company's product VANLEV,
(2) the Company's sales incentives to certain wholesalers
and the inventory levels of those wholesalers, and
(3) the Company's investment in and relations with ImClone,
and ImClone's product, ERBITUX
In connection with the above allegations, plaintiffs further
assert that defendants breached fiduciary duties to diversify
Program assets, to monitor investment alternatives, to avoid
conflicts of interest, and to remedy alleged fiduciary breaches
by co-fiduciaries. Plaintiffs additionally allege violation by
defendants of a duty to disseminate material information
concerning alleged anti-competitive activities related to the
Company's products BUSPAR, and PRAVACHOL.
It is not possible at this time to assess the final outcome of
these matters or estimate possible loss or range of loss with
respect to these lawsuits. A consolidated suit is expected soon.
CLICK COMMERCE: Court Dismisses Securities Suit With Prejudice
--------------------------------------------------------------
The United States District Court for the Southern District of
New York dismissed in its entirety the consolidated securities
class action pending against Click Commerce,Inc., two of its
executive officers and the underwriters of its initial public
offering:
(1) Morgan Stanley & Co.,
(2) Dain Rauscher Incorporated,
(3) Lehman Brothers,Inc.,
(4) Deutsche Bank Securities, Inc., and
(5) US Bancorp Piper Jaffray, Inc.
The complaint, alleged violations of Section 11 of the
Securities Act of 1933 against all defendants, a violation of
Section15 of the Securities Act against two of its executive
officers and violations of Section 12(a)(2) of the Securities
Act and Section 10(b) of the Securities Exchange Act of 1934,
including Rule 10b-5 promulgated thereunder, against the
underwriters. The complaint sought unspecified damages on
behalf of a purported class of purchasers of common stock
between June 26, 2000 and December 6, 2000.
On February 19, 2003, an Opinion and Order to dismiss the
complaint was issued dismissing with prejudice. The claims
against the Company's executive officers were dismissed.
DUN & BRADSTREET: Employees Commence ERISA Violations Suit in CT
----------------------------------------------------------------
The Dun & Bradstreet Corporation faces a class action filed in
the United States District Court in Connecticut on behalf of 46
specified former employees, as well as:
(1) current D&B employees who are participants in the Dun &
Bradstreet Retirement Account and were previously
participants in its predecessor plan, The Dun &
Bradstreet Master Retirement Plan,
(2) current employees of Receivable Management Services
Corporation (RMSC) who are participants in The Dun &
Bradstreet Retirement Account and were previously
participants in its predecessor plan, The Dun &
Bradstreet Master Retirement Plan, and
(3) former D&B or RMSC employees who received a deferred
vested retirement benefit under either the Dun &
Bradstreet Retirement Account or The Dun & Bradstreet
Master Retirement Plan
The complaint estimates that the proposed class covers over
5,000 individuals. There are three counts in the complaint:
(i) Count 1 claims a violation of Employee Retirement
Income Securities Act (ERISA) in that our sale of the
Receivable Management Services business to RMSC and the
resulting termination of the Company's employees
involved constituted a prohibited discharge of the
plaintiffs and/or discrimination against the plaintiffs
for the "intentional purpose of interfering with their
employment and/or attainment of employee benefit rights
which they might otherwise have attained."
(ii) Count 2 claims that the plaintiffs were materially
harmed by the Company's alleged violation of ERISA's
requirements that a summary plan description reasonably
apprise participants and beneficiaries of their rights
and obligations under the plans and that, therefore,
undisclosed plan provisions (in this case, the
actuarial deduction beneficiaries incur when they leave
D&B before age 55) cannot be enforced against them.
(iii) Count 3 claims that the 6 3/5% interest rate used to
actuarially reduce early retirement benefits is
unreasonable and, therefore, results in a prohibited
forfeiture of benefits under ERISA.
The plaintiffs seek equitable relief in the form of either
reinstatement of employment with D&B or restoration of employee
benefits (including stock options); invalidation of the plan
rate of 6 3/5% used to actuarially reduce former employees'
early retirement benefits; attorneys' fees and such other
relief as the court may deem just.
The Company is unable to predict at this time the final outcome
of this matter or whether the resolution of this matter could
materially affect its results of operations, cash flows or
financial position. No amount in respect of this matter has
been accrued in the Company's consolidated financial statements.
FROSTBITE BRANDS: Recalls Ice Cream Sandwiches For Wrong Labels
---------------------------------------------------------------
Frostbite Brands is voluntarily recalling certain containers of
Weight Watchersr SmartOnesr vanilla low-fat ice cream sandwiches
due to a labeling error. This product may contain undeclared
peanuts or pieces of peanuts. Individuals with allergies to
peanuts run the risk of a serious or life threatening reaction
if they consume this product.
The product is sold to consumers in clear plastic cylindrical
containers with a "clam shell" opening. Each package contains
six sandwiches. The ice cream in the mislabeled sandwiches is
light brown in color, rather than the usual vanilla white. The
mislabeled containers bear the following two-line manufacturing
code:
1053 RD SAND
3990 HHMM
with the "HHMM" on the second line being the time of day in
military time. Containers not bearing the above code are not
affected by this recall.
Frostbite initiated the recall after it discovered that certain
containers of "peanut butter 'n fudge" ice cream sandwiches had
been mislabeled as vanilla. No illnesses or allergic reactions
have been reported.
The ice cream sandwiches were manufactured under license by
Frostbite Brands at its plant located in Toledo, Ohio. The
product was distributed by Frostbite to a retailer's warehouse
in Atlanta, Georgia, and to a distributor's warehouse in Searcy,
Arkansas. From these warehouses, the product may have been
distributed to retail stores in Alabama, Florida, Georgia,
Illinois, Indiana, Kentucky, Michigan, Missouri, Ohio, South
Carolina and Tennessee. Stores have been alerted of this
voluntary recall and recovery of the product is underway.
For more details, contact Frostbite's Customer Service Hotline:
1-877-234-0022.
HUNTSMAN PETROCHEMICAL: to Pay Fine For Clean Air Act Violations
----------------------------------------------------------------
Texas Attorney General Greg Abbott secured a major civil court
judgment that includes the largest penalty ever levied against a
company for violations of the Texas Clean Air Act. A key
component of the judgment requires Huntsman Petrochemical
Corporation to monitor and record air contaminant levels at its
Port Arthur plant and make this data publicly available.
The judgment, to which Huntsman officials agreed, requires the
company to pay just over $9 million in civil penalties for 18
categories of air quality violations spanning several years. The
company will also pay $375,000 in attorneys' fees to the state.
The judgment was signed by Travis County District Judge Suzanne
Covington.
The numerous violations were documented by the former Texas
Natural Resource Conservation Commission, now the Texas
Commission on Environmental Quality, from 1994-98. The agency
referred this case to the Attorney General's Office in October
1998. A month later the company's plant manager and
environmental manager were criminally indicted by the
federal government. After a lengthy trial in December 1999, the
two were convicted of conspiracy to mislead regulators and for
violating federal benzene limits.
"We believe a company that puts a community at risk should be
held liable for its actions and pay a heavy price for its
misdeeds," said Attorney General Abbott in a statement. "If a
company breaks its covenant with a community to operate legally,
then the state must take action to reverse that situation. I
believe we have sent that message by aggressively pursuing these
penalties."
The state violations involved unpermitted and unreported
emissions of harmful air pollutants such as benzene, a known
human carcinogen, and other volatile organic compounds, as well
as nitrogen oxide and carbon monoxide.
Many of these air contaminant releases by Huntsman were
avoidable, according to the state's investigation. The TCEQ
estimates that from 1994-97, the company released more than 16
million pounds of volatile organic compounds, including benzene,
from its cooling tower alone.
Several categories of violations involved Huntsman's failure to
operate, inspect and properly maintain pollution control
equipment, which resulted in several releases of hazardous air
contaminants.
The penalty will be paid over four years, according to the
judgment, with $850,000 payable to the state within 30 days, and
$1 million paid within one year. The balance of the payout
schedule is as follows: $1.65 million within two years;
$2 million within three years; $2 million within four years; and
$1.57 million deferred, provided the company successfully
completes a "supplemental environmental project" (SEP).
The SEP requires the company to install and operate air quality
monitors at two sites along the plant's outer fence line. The
TCEQ-approved monitors and testing facilities must analyze air
samples to detect the presence of seven pollutants emitted from
the plant: benzene, ethylene, propylene, 1-3 butadiene,
cyclohexane, isobutane and n-butane. The company must record
this information.
Validation of the air sampling data will be conducted by an
independent third party approved by the TCEQ, but paid for by
Huntsman. The company must complete 11 calendar quarters of air
monitoring within five years, and this data must be
electronically transmitted to the TCEQ, which will make it
publicly available.
LANTRONIX INC.: Asks CA Court To Dismiss Claims in Stock Lawsuit
----------------------------------------------------------------
Lantronix, Inc. asked the United States District Court for the
Central District of California to dismiss additional claims in
the class action filed against it and certain of its current and
former officers and directors alleging violations of the
Securities Exchange Act of 1934 and seeking unspecified damages.
The suit, filed on behalf of persons who purchased or otherwise
acquired the Company's common stock during the period of April
25, 2001 through May 30, 2002, alleges that the defendants
caused the Company to improperly recognize revenue and make
false and misleading statements about the Company's business.
Plaintiffs further allege that the Company materially overstated
its reported financial results, thereby inflating the Company's
stock price during its securities offering in July 2001, as well
as facilitating the use of the Company's stock as consideration
in acquisitions.
The suit was later amended to continue to assert that the
Company and the individual officer and director defendants
violated the 1934 Act, and to include alleged claims that the
Company and these officers and directors violated the Securities
Act of 1933 arising out of the Company's Initial Public Offering
in August 2000.
The court has taken the Company's motion to dismiss under
submission. The Company has not yet answered the complaint,
discovery has not commenced, and no trial date has been
established.
LANTRONIX INC.: CA Court Refuses Demurrer in Derivative Lawsuit
---------------------------------------------------------------
The Superior Court of the State of California, County of Orange
overruled Lantronix, Inc.'s demurrer for the shareholder
derivative complaint filed against certain of the Company's
current and former officers and directors.
The complaint alleges causes of action for breach of fiduciary
duty, abuse of control, gross mismanagement, unjust enrichment,
and improper insider stock sales. The complaint seeks
unspecified damages against the individual defendants on behalf
of the Company, equitable relief, and attorneys' fees.
The Company filed a demurrer/motion to dismiss to the amended
complaint on February 13, 2003. The basis of the demurrer is
that the plaintiff does not have standing to bring this lawsuit
since plaintiff has never served a demand on the Company's Board
that the Board take certain actions on behalf of the Company.
On April 17, 2003, the court overruled the Company's demurrer.
Discovery has not yet commenced and no trial date has been
established.
LANTRONIX INC.: Synergetic Investors Lodge Securities Suit in CA
----------------------------------------------------------------
Lantronix, Inc. faces a lawsuit filed by Richard Goldstein and
several other former shareholders of Synergetic in the Superior
Court of the State of California, County of Orange. The
complaint alleges:
(1) fraud,
(2) negligent misrepresentation,
(3) breach of warranties and covenants,
(4) breach of contract and negligence
These claims all stem from the Company's acquisition of
Synergetic. The complaint seeks an unspecified amount of
damages, interest, attorneys' fees, costs, expenses, and an
unspecified amount of punitive damages.
On May 5, 2003, the Company answered the complaint, and
generally denied the allegations in the complaint. Discovery
has not yet commenced and no trial date has been established.
LUCENT TECHNOLOGIES: Reaches Settlement in NJ Securities Lawsuit
----------------------------------------------------------------
Lucent Technologies, Inc. agreed to settle the consolidated
securities class action filed in the United States District
Court for the District of New Jersey alleging violations
of the federal securities laws as a result of the facts
disclosed in the Company's announcement on November 21, 2000
that it had identified a revenue recognition issue affecting its
financial results for the fourth quarter of fiscal 2000.
The suit purports to be on behalf of stockholders of Lucent who
bought the Company's common stock between October 26, 1999 and
November 21, 2000. A class has not yet been certified in the
suit. The plaintiffs in all these stockholder class actions
seek compensatory damages plus interest and attorneys' fees.
In March 2003, the Company announced that it had entered into a
$420 million settlement of all pending shareholder and related
litigation. Certain cases, which are the subject to the
settlement, are shared contingent liabilities under the
Contribution and Distribution Agreement and accordingly, the
Company is responsible for 10% of the liabilities attributable
to those cases. The amount of the Company's portion of this
liability has not yet been finally determined, however, in the
second quarter of fiscal 2003, the Company recorded a charge of
$25 million, representing the Company's estimate of its
liability in this matter. Upon settlement, the amount of this
liability will be adjusted to reflect the Company's actual
obligation in this matter. The liability may be settled, at the
Company's option, in any combination of cash and the Company's
equity securities.
MASTERCARD INTERNATIONAL: Card Processor Launches Antitrust Suit
----------------------------------------------------------------
Paycom Billing Services, a company that processes credit card
and check transactions for online merchants, has sued MasterCard
International Inc., contending in its lawsuit that MasterCard
took advantage of its market power to charge the Internet
vendors excessive fees, thereby violating the antitrust laws,
the International Herald reports.
Under MasterCard's rules, online merchants pay more than
traditional retailers to accept credit card transactions, as
much as three or four times more, according to the Nilson
Report, which tracks payment systems. Higher fees are applied
whenever a customer cannot physically present a card to make a
purchase. MasterCard has said the higher rate is based on the
frequency of fraud.
The lawsuit was filed in US District Court in Los Angeles,
California and signals that Internet vendors may pursue
antitrust accusations against the card network.
Last month, MasterCard settled a class action brought by US
retailers by agreeing to pay $1 billion and reduce its debit
card fees. Visa USA Inc., a co-defendant in the case, also
reached a settlement with the retailers.
MASTERCARD INTERNATIONAL: Court Dismisses Claims in Fraud Suit
--------------------------------------------------------------
The United States District Court for the Northern District of
California dismissed several of the claims in the class action
against MasterCard International, Visa U.S.A., Inc., Visa
International Corporation and several member banks in
California, alleging, among other things, that MasterCard's and
Visa's interchange fees contravene the Sherman Antitrust Act.
The suit seeks treble damages in an unspecified amount,
attorney's fees and injunctive relief, including the divestiture
of bank ownership of MasterCard and Visa, and the elimination of
MasterCard and Visa marketing activities. Defendants filed a
motion to dismiss the complaint on September 10, 2002. The case
was recently reassigned to a new judge.
An oral argument date on the motion was held on April 18, 2003.
On April 21, 2003, the judge issued a decision that dismissed
several of plaintiffs' claims and significantly narrowed the
scope of the remaining claims in the case. No trial date has
been set in this matter.
MPOWER HOLDING: Fairness Hearing For Settlement Set October 2003
----------------------------------------------------------------
Fairness hearing for the settlement of the securities class
action against MPower Holding Corporation is set for October
1,2003 in the United States District Court for the Western
District of New York.
The suit alleges violations of the Securities Exchange Act of
1934 and rule 10b-5 thereunder and Section 11 of the Securities
Act of 1933. On February 11, 2002, the court dismissed the
suit. This decision and order has been appealed to the United
States Court of Appeals for the Second Circuit.
On April 8, 2002, the Company filed a petition for a relief
under Chapter 11 of the Bankruptcy Code, and as of the effective
date of the Company's First Amended Joint Plan of Reorganization
(July 30, 2002), the Company was discharged and released from
any "Claim, Debt and Interest," except as otherwise stated in
the Plan, as set forth in the final Confirmation Order entered
by the United States Bankruptcy Court for the District of
Delaware on July 17, 2002.
Although the Company is no longer a defendant in the class
action and can have no direct liability to the plaintiffs, the
Company nevertheless remains obligated to indemnify the
remaining individual defendants in the event of an adverse
decision against them in the lawsuit.
The plaintiffs and the remaining individual defendants have
entered into a tentative settlement of the class action lawsuit,
and have submitted a preliminary approval order to the court,
seeking approval of the settlement in accordance with a
Stipulation of Settlement dated February 6, 2003. If approved,
the settlement would dismiss the action with prejudice. All
settlement payments and remaining attorneys fees and other legal
expenses incurred by the defendants are expected to be paid by
the Company's insurance carrier.
A hearing is scheduled for October 1, 2003 to determine whether
the proposed settlement of the action on the terms and
conditions provided for in the stipulation is fair, reasonable
and adequate and should be approved by the court. The Company
believes the remaining individual defendants anticipate that
the proposed settlement will be approved and that they will
continue to deny any wrongdoing and will vigorously contest the
suit if not settled. The Company cannot predict the final
outcome of this lawsuit.
MQ ASSOCIATES: GA Suit Filed Questioning Purchase Service Pact
--------------------------------------------------------------
MQ Associates, Inc. faces a class action filed in the State
Court of Fulton County in the State of Georgia. The suit also
names as defendants the Company's subsidiaries and its officers
and directors, as well as various physician groups with whom we
conduct business.
The suit raises questions concerning the legality of the
purchase service agreements, which were otherwise the subject of
the request for a declaratory statement from Georgia's Composite
State Board of Medical Examiners (CME).
Due to the preliminary state of the suit and the fact that the
complaint does not allege damages with any specificity, the
Company is unable at this time to assess the probable outcome of
the suit or the materiality of the risk of loss. However, the
Company believes that these agreements neither violate the
Georgia Act nor are improper under Georgia law and the Company
will vigorously defend the suit.
MULTILINK TECHNOLOGY: Named as Defendant in CSFB Securities Suit
----------------------------------------------------------------
Multilink Technology Corporation, its chief executive officer
and its former chief financial officer were named as one of the
issuer defendants in a securities class action filed in the
United States District Court for the Southern District of
Florida, captioned Liu v. Credit Suisse First Boston Corporation
(CSFB), et al.
In the complaint, the plaintiffs allege that CSFB knowingly
conspired with dozens of issuers, including the Company, to
conduct initial public offerings based on misinformation about
the issuers' future prospects and the proper pricing of their
shares, in violation of the anti-fraud provisions of section
10(b) of the Securities Exchange Act of 1934. The plaintiffs
seek unspecified monetary damages and other relief.
Neither the Company nor the named individuals have yet been
served with the complaint. The Company believes that this
lawsuit is without merit.
OKLAHOMA: Seeger Weiss Commences Lawsuit For Tar Creek Residents
----------------------------------------------------------------
Seeger Weiss, LLP filed a lawsuit on behalf of residents and
property owners living within one of the nation's most notorious
hazardous waste sites. Tar Creek, which resides within the
former Picher Mining Field in Oklahoma, has ranked consistently
near the top of the EPA's National Priorities List for
Uncontrolled Hazardous Waste Sites for over a decade.
The complaint charges the defendant mining companies with
contaminating the area with lead mining waste. Approximately 50
million tons of lead wastes have been left over from mining
operations. Many of these lead "chat" piles approach 200 feet
in height and lie within populated areas. The complaint names
as defendants:
(1) Asarco Inc.,
(2) Blue Tee Corporation,
(3) Goldfield's Mining Corporation,
(4) NL Industries Inc.,
(5) Childress Royalty Company and
(6) The Doe Run Corporation
The defendants allegedly disposed lead mining wastes in a
dangerous manner, thus creating a continuing nuisance for the
surrounding properties. As a result of these lead wastes,
properties within the Picher-Cardin area have virtually no value
and the residents within the area suffer dangerous exposure to
toxic substances. In particular, the children in this area are
affected by the toxic exposure. At least 25% of the children in
the area have elevated lead blood levels, in comparison to the
Oklahoma statewide figure for elevated blood levels in children,
which is only 2%.
For more details, contact Christopher A. Seeger or Christopher
J. Murray by Mail: One William Street, New York, New York 10004
by Phone: 1-212-584-0700 or by E-Mail: cmurray@seegerweiss.com
POST PROPERTIES: Officials Face Securities Derivative Lawsuit
-------------------------------------------------------------
John A. Williams, George R. Puskar, independent director nominee
and proposed non-executive Chairman, and Edward Lowenthal,
President and Chief Executive Officer designate of Post
Properties, Inc. (NYSE: PPS) commented on a new shareholder
derivative and class action filed on May 12, 2003 against the
company's incumbent directors - with the exception of Arthur
Blank and John Williams. The lawsuit charges the incumbent
directors with breaching their fiduciary duties to Post
shareholders and other violations of law.
"Many shareholders that we have spoken with, as well as some of
the independent analysts who have commented on this proxy
contest, have echoed one of the main themes expressed in this
complaint -- that the incumbent board made a poor decision when
it turned its back on the fully funded cash offer from General
Investment & Development (GID), and refused even to discuss with
GID whether a higher price could be obtained," the Company said
in the statement.
"We believe the best way Post shareholders can express their
dissatisfaction with the incumbent board's decision is to vote
the GOLD proxy card for our slate of independent directors. Our
nominees are committed to immediately setting up a special
committee of independent directors to actively pursue a possible
sale of the Company and to consider all other ways to maximize
shareholder value.
Post shareholders need and deserve a board of directors they can
trust to carry out this program. To elect such a board, vote
the GOLD proxy card today. There are only six days left until
the Annual Meeting. If you have already mailed your white proxy
card and want to change your vote, you have every legal right to
do so. Just sign, date and mail the GOLD proxy card NOW."
For more details, contact MacKenzie Partners, Inc. by Phone:
(800) 322-2885 or (212) 929-5500 or by E-mail:
proxy@mackenziepartners.com.
SARS PREVENTION: Authorities Start Crackdown on Fake SARS Cures
---------------------------------------------------------------
The Federal Trade Commission and the Food and Drug
Administration (FDA) are warning Web site operators,
manufacturers and distributors who suggest that their products
will protect against, treat, or even cure Severe Acute
Respiratory Syndrome (SARS), that they are aware of no
scientific proof for such claims and that the Web site operators
must remove any misleading or deceptive claims from the
Internet.
A coordinated Internet "surf" found 48 sites touting a wide
variety of SARS treatment or prevention products. The FTC also
retrieved seven promotions for SARS products from its spam
database. The two agencies sent warnings to Web site operators,
and e-mail solicitors, cautioning that it is against the law to
make claims about SARS protection or treatment, or any other
health benefit, without rigorous scientific support. The FDA
has sent 8 warning letters to manufacturers and distributors who
are making misleading claims. The FTC and FDA staff will follow
up by revisiting the targeted sites to determine whether the Web
site operators have deleted or revised unproven claims.
The warning campaign is based on information gathered through an
Internet surf that the FTC coordinated with the help of the FDA
and the Ontario Ministry of Consumer and Business Services.
Included in the review were Web sites that promised consumers
would be protected from SARS if they purchased such items as
personal air purifiers, disinfectant sprays and wipes,
respirator masks, latex gloves, dietary supplements like
colloidal silver and oregano oil, and SARS "prevention kits"
that package various items together, such as gloves, masks and
wipes. Web sites may be subject to state or federal
investigation or prosecution for making deceptive or misleading
marketing claims that their products can treat, prevent, or cure
SARS.
Firms or individuals who violate the FTC Act could be subject to
a federal district court injunction, enforceable through civil
or criminal contempt proceedings, or an administrative cease and
desist order, enforceable through civil penalties of up to
$11,000 per violation. Sellers also could be ordered to make
consumer refunds. Operators who violate the Federal Food, Drug
and Cosmetic Act by marketing unapproved drugs are liable to
injunction and seizure of the illegal products.
"Scam artists follow the headlines, trying to make a fast buck
with products that play off the news," said Howard Beales,
Director of the FTC's Bureau of Consumer Protection. "Our
message to e marketers making deceptive claims is `change your
site to comply with the law.' At the same time, our message to
consumers is `hold on to your money.' No products have been
found effective in preventing, treating or curing SARS."
"Doctors and health care experts around the world are working
hard to find treatments for SARS. Until they succeed, there are
common sense actions people can take to protect themselves from
SARS and other respiratory infections," said Mark B. McClellan,
M.D., Ph.D., Commissioner of Food and Drugs. "Bogus products
from questionable Web sites do no good, and can actually make
matters worse by providing a false sense of protection. FDA
will continue to work with the FTC and other consumer protection
agencies to protect the public from SARS related scams."
"It is truly unfortunate that at a time when people were feeling
vulnerable, due to a major public health issue, that scam
artists would prey on people's fears," said Tim Hudak, Minister
of Consumer and Business Services in Ontario, Canada. "Seven
members of our investigations and services staff worked on a
surf-and-sweep, and within 48 hours 44 misleading sites were
identified worldwide."
The Minister added that this effort was yet another
demonstration of the success of the Strategic Partnership on
Cross-Border Telemarketing and Fraud in reducing scams and fraud
in Canada and the United States.
In addition to the efforts of the FTC, FDA and other authorities
to crack down on SARS related fraud, a broad coalition of trade
associations representing the dietary supplement industry has
issued a joint advisory recommending that marketers and
retailers refrain from promoting dietary supplements as a
preventive, cure, or treatment for SARS. According to that
advisory, there are no dietary supplements that have been shown
to prevent or treat SARS.
The joint statement of the American Herbal Products Association,
Consumer Healthcare Products Association, Council for
Responsible Nutrition, National Nutritional Foods Association,
and Utah Natural Products Alliance is available through those
organizations web sites. "Consumers, government and responsible
marketers and retailers share common ground. They all know
there's no room for misleading claims about preventing, treating
or curing SARS," Mr. Beales said.
SWIMWAYS CORPORATION: Recalls 25T Dive Sticks for Injury Hazard
---------------------------------------------------------------
Swimways Corporation is cooperating with the US Consumer Product
Safety Commission (CPSC) by voluntarily recalling about 25,000
packages of dive sticks (each package contains four dive
sticks), which fail to meet the commission's safety
requirements. Children can fall or land on these dive sticks in
shallow water and may suffer impalement injuries.
The Company has not received any reports of incidents or
injuries with these dive sticks. This recall is being conducted
to prevent injuries.
These are "Swim Ways Deluxe Dive Buddies" weighted dive sticks.
The dive sticks are soft plastic tubes that have character heads
and feet. The characters are a yellow seahorse, a green and
purple walrus, a red and blue underwater diver, and a blue
shark. The dive sticks are about 7.5 inches long and an inch in
diameter. When dropped into water, they sink to the bottom of a
pool and stand upright so children can swim or dive down and
retrieve them. There is no writing on the products except
numbers located on the backs that represent the dive stick's
point value. The cardboard-backed packaging shows a photo of
fish and coral in an underwater scene. Writing on the packaging
includes "Swim Ways," "Deluxe Dive Buddies" and "Made in China."
Specialty pool stores nationwide sold these dive sticks from
December 2002 through May 2003 for about $6. Consumers should
take these dive sticks away from children immediately and
contact Swimways for information on receiving a refund or free
replacement product.
For more information, contact the Company by Mail: Swimways
Corporation 5816 Ward Court, Virginia Beach VA 23455 by Phone:
(800) 889-7946 between 8:30 a.m. and 5 p.m. ET Monday through
Friday, or visit the firm's Website: http://www.Swimways.com
* Companies Attempt Tentative Steps Toward Universal Health Care
----------------------------------------------------------------
Some insurance executives across the country are worried that
the growing number of uninsured patients will undermine the
nation's health care system, according to a report by The New
York Times.
To ward off a crisis, some insurance executives are pressing for
developing or offering insurance with lower premiums and slimmer
coverage to attract customers who cannot afford more
comprehensive policies. Some executives at Blue Cross Blue
Shield of Montana have suggested raising the cigarette tax to
subsidize basic coverage. Another insurer, Blue Shield of
California, proposed a plan for all state residents. Dr.
William McGuire, chief executive of UnitedHealth Group, has
written Congress calling for "essential health care for all
Americans."
Health insurers are framing these proposals in public policy
terms, but they also have strong business reasons for becoming
involved in the debate over helping the uninsured. They want to
add young, healthy members to their insurance pools in order to
spread the cost of caring for the sick. They are also looking
to add members whose premiums would be paid with tax money or
government subsidies.
Some insurance executives also perceive pressures generated by
the uninsured that raise a threat to the basic system that could
lead to government intervention if insurers do not develop a
plan first.
Chuck Butler, a vice president of Blue Cross Blue Shield of
Montana cautioned that if something is not done in a hurry about
the uninsured, "the whole health care system in this country is
going to collapse and the government will step in," The New York
Times reports.
Dr. Jay Crosson, executive director of physician groups at
Kaiser Permanente, the largest nonprofit insurer, said, "As
insurance becomes less affordable, more and more people will be
upset and frightened, and the industry will find itself drawn
into the political process."
However, most health insurers are keeping ahead of rising
hospital charges and doctor fees by raising premiums as much as
30 to 40 percent a year for small companies, and 17 percent and
higher even for large employers. These increases, when combined
with disappearing jobs, are leading many people to drop health
insurance. Such a combination of circumstances adds to the
unpopularity of insurance and managed care companies.
Each one percent increase in costs adds 300,000 to the 41
million uninsured, according to the Lewin Group, a health care
research organization. Many of the uninsured are young and
healthy workers in small companies. When they go without health
insurance, costs per person soar for the sicker people who
remain. This happens because people who need care keep the
coverage, like "people buying fire insurance when the house is
on fire, " said Randy Kammer, a vice president of Blue Cross and
Blue Shield of Florida.
Some health insurers in the Southeast find that as many as one
in 10 small-business customers are not renewing their coverage,
according to Brian Klepper, executive director of the Florida-
based Center for Practical Health Reform, a group of insurers,
hospitals and employers.
However, the uninsured still have to go to hospitals when
emergencies occur, which then results in the pass-along of the
cost of unpaid bills in the form of higher charges to the health
plans. "The tragedy of our nation's health care system," said
Dr. McGuire of UnitedHealth, "is that in spite of its many
impressive features, it ultimately has failed to make even basic
care consistently available to all of our citizens."
Dr. McGuire is calling for building universal coverage around an
agreed national definition of what constitutes basic acceptable
coverage, "based on firm evidence" of the effectiveness and cost
efficiency of the care. He plans to be promoting his ideas in
Congress and in many of the states.
Bruce G. Bodaken, chief executive of Blue Shield of California,
one of the largest health plans in the state, called for a
statewide universal health care system, to be financed by
employers, individuals and a new tax, designed so as to be a
model for the nation. More than six million California
residents do not have health insurance.
Blue Shield has commissioned an independent study of taxing
alternatives, including raising the state income tax, sales tax,
a tax on health insurance premiums or hospital and doctors' fees
and the tobacco tax.
"We absolutely have to solve this problem," said Helen Darling,
president of the Washington Business Group on Health, a group of
large self-insured companies. "The number of uninsured will
inevitably grow because of the rapid rise in health care costs.
We know it is going to get much worse."
Only 2.9 million New Yorkers are uninsured, reflecting the
state's extensive public assistance programs. Howard Berman,
chief executive of Excellus, a Blue Cross holding company in
Rochester, New York, said that with projected budget shortfalls
in the billions, the state will be hard put to help if more
residents lose their coverage.
Mr. Berman said, "We need new products for middle-class people
who have been priced out," and we need more efficiency in the
system to reduce costs."
New Securities Fraud Cases
ACCREDO HEALTH: Spector Roseman Files Securities Suit in W.D. TN
----------------------------------------------------------------
Spector, Roseman & Kodroff, PC initiated a securities class
action in the United States District Court for the Western
District of Tennessee, on behalf of purchasers of the common
stock of Accredo Health, Inc. (Nasdaq:ACDO) between June 16,
2002 through April 7, 2003, inclusive.
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 material
misrepresentations to the market during the class period thereby
artificially inflating the price of Accredo Health securities.
It is specifically alleged that throughout the class period the
Company failed to timely record an impairment in the value of
certain receivables that it had acquired in a recent
acquisition, and 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 (GAAP).
Additionally, during the class period, Accredo insiders sold
more than $12 million worth of their Accredo stock while in
possession of the true facts about the Company.
On April 8, 2003, prior to the opening of the market, Accredo
announced 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.
On this news, the price of Accredo common stock dropped over
43%, to close at $14.29, down from $25.40.
For more details, contact Robert M. Roseman by Phone:
888/844-5862
ACCREDO HEALTH: Wolf Haldenstein Launches Securities Suit in TN
---------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities
class action in the United States District Court for the Western
District of Tennessee, Memphis Division, on behalf of all
persons who purchased the securities of Accredo Health, Inc.
(Nasdaq: ACDO) between June 16, 2002 and April 7, 2003,
inclusive, against the Company and certain officers of the
Company.
The complaint alleges that Accredo and certain of its officers
and/or directors made material misrepresentations and/or omitted
to make material disclosures throughout the class period due to
their publication of financial statements that were not prepared
in accordance with Generally Accepted Accounting Principles
(GAAP). Defendants failed during the class period to record
timely for impairment of certain assets and failed to properly
reserve for accounts receivable.
In addition, because defendants' practices did not comply with
GAAP and as set forth herein, defendants' bold earnings
projections during the class period lacked any reasonable basis
when made and were thus materially false and misleading.
On April 8, 2003, Accredo issued a press release reducing its
previously issued, and often increased, earnings guidance and
admitted that it was examining the adequacy of its reserves for
account receivable that it acquired in a recent acquisition.
Even the revised estimates the Company gave on April 8, 2003,
the Company was forced to concede, did not yet take into account
any potential results of the review over the adequacy of its
reserves which review was ongoing with the Company's management
and external auditors.
For more details, contact Fred Taylor Isquith, Gregory Nespole,
Michael Miske, George Peters or Derek Behnke by Mail: 270
Madison Avenue, New York, New York 10016, by Phone:
(800) 575-0735 by E-mail: classmember@whafh.com or visit the
firm's Website: http://www.whafh.com. All e-mail correspondence
should make reference to Accredo.
ALLOU HEALTHCARE: Faruqi & Faruqi Lodges Securities Suit in NY
--------------------------------------------------------------
Faruqi & Faruqi LLP initiated a securities class action in the
United States District Court for the Eastern District of New
York on behalf of all purchasers of Allou Healthcare Inc.
(AMEX:ALU) securities between July 3, 2002 and April 9, 2003,
inclusive.
The complaint charges defendants with violations of federal
securities laws by, among other things, issuing a series of
materially false and misleading press releases concerning
Allou's financial results and business prospects and/or omitting
to disclose material facts necessary to correct these
statements. Specifically, the complaint alleges that Allou
failed to disclose, among other facts, that:
(1) the Company was materially overstating its accounts
receivables, resulting in an overstatement of revenues
and earnings;
(2) that Allou was materially overstating its inventory,
thus inflating its net worth; and
(3) the Company's financial statements were not prepared in
conformity with Generally Accepted Accounting
Principles (GAAP).
As a result, the price of the Company's securities were
artificially inflated during the class period. On April 24,
2003, however, the Company filed with the SEC a Form 8-K which
admitted that Allou had overstated it inventory by approximately
$35 million and its accounts receivable by approximately $75-$80
million.
For more details, contact Anthony Vozzolo by Mail: 320 East 39th
Street, New York, NY 10016 by Phone: (877) 247-4292 or
(212) 983-9330 by E-mail: Avozzolo@faruqilaw.com
CORE LABORATORIES: Weiss & Yourman Lodges Securities Suit in NY
---------------------------------------------------------------
Weiss & Yourman initiated a securities class action against Core
Laboratories, N.V. (NYSE:CLB) and certain of its officers in the
United States District Court for the Southern District of New
York, on behalf of purchasers of Core securities between May 6,
2002 and March 31, 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 Core
securities at artificially inflated prices.
For more details, contact Mark D. Smilow, David C. Katz, or
James E. Tullman, by Mail: The French Building, 551 Fifth
Avenue, Suite 1600, New York NY 10176 by Phone: (888) 593-4771
or (212) 682-3025 or by E-mail: info@wynyc.com
ELECTRO SCIENTIFIC: Faruqi & Faruqi Lodges Securities Suit in OR
----------------------------------------------------------------
Faruqi & Faruqi LLP initiated a securities class action in the
United States District Court for the District of Oregon on
behalf of all purchasers of Electro Scientific Industries, Inc.
(NasdaqNM:ESIOE) securities between September 17, 2002 and April
15, 2003, inclusive.
The complaint charges defendants with violations of federal
securities laws by, among other things, issuing a series of
materially false and misleading press releases concerning
Electro Scientific's financial results and business prospects.
Specifically, the complaint alleges that Electro Scientific
failed to disclose that the Company inflated its operating
results by utilizing improper accounting methods when accounting
for, amongst other things, the Company's sales.
Besides overstating its sales figures, the Company was
understating the cost of sales, in violation of Generally
Accepted Accounting Principles (GAAP) and its own revenue
recognition policies. As a result, the price of the Company's
securities were artificially inflated during the class period,
allowing certain Electro Scientific insiders to sell significant
amounts of personally held Electro Scientific stock.
On March 20, 2003, however, the Company shocked the market when
it announced it would be restating certain quarterly financial
statements. The again on April 15, 2003, Electro Scientific
announced a second restatement of certain quarterly amounts.
For more details, contact Anthony Vozzolo by Mail: 320 East 39th
Street, New York, NY 10016 by Phone: (877) 247-4292 or
(212) 983-9330 or by E-mail: Avozzolo@faruqilaw.com
J. JILL GROUP: Schiffrin & Barroway Lodges Securities Suit in MA
----------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in
the United States District Court for the District of
Massachusetts on behalf of all purchasers of the common stock of
J. Jill Group, Inc. (NasdaqNM:JILL) from February 12, 2002
through December 4, 2002, 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 February 12, 2002 and
December 4, 2002, thereby artificially inflating the price of J.
Jill Group securities.
The complaint alleges that defendants issued a series of
materially false and misleading statements concerning the
Company's operations and financial results. In particular, the
complaint alleges that defendants' statements were materially
false and misleading because defendants failed to disclose and
misrepresented:
(1) that the Company's same-store sales growth -- a
operating metric that is important to investors in
retailing stocks but which was not highlighted by the
Company during the class period -- was declining as
demand for the Company's products weakened;
(2) that the Company was amassing a material amount of
product which was of diminishing value and would have
to be discounted in promotional campaigns, thereby
causing the Company to experience declining financial
results;
(3) that the Company was not collecting taxes in certain
States where it made Internet sales and also had a
retail store. As a result, the Company was exposed to
the heightened risk that it would be subject to
regulatory scrutiny; and
(4) as a result of the foregoing, defendants' earnings
projections and positive statements about the Company
were lacking in a reasonable basis and were therefore
materially false and misleading.
On December 5, 2002, prior to the open of the market, J. Jill
Group shocked the market by announcing that it was revising its
earnings for the fourth quarter of 2002. The Company reported
that it expects fourth quarter diluted earnings per share to
range between $0.25 and $0.30. In response to this
announcement, the price of J. Jill common stock declined from
$23.01 per share to $16.52 per share, a decline of 28%, on
extremely heavy volume. Prior to the end of the class period,
J. Jill insiders sold more than $17 million of their personally-
held stock to the unsuspecting public.
For more details, contact Marc A. Topaz or Stuart L. Berman by
Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by
Phone: (888) 299-7706 or (610) 667-7706 or by E-mail:
info@sbclasslaw.com
PHARMACIA CORPORATION: Weiss & Yourman Files NY Securities Suit
---------------------------------------------------------------
Weiss & Yourman initiated a securities class action against
Pharmacia Corporation (NYSE:PHA) and certain of its officers was
commenced in the United States District Court, District of New
Jersey, on behalf of purchasers of Company securities between
April 17, 2000 and August 21, 2001.
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 Pharmacia
securities at artificially inflated prices.
For more details, contact James E. Tullman, Mark D. Smilow, or
David C. Katz, by Mail: The French Building, 551 Fifth Avenue,
Suite 1600 New York, NY 10176 by Phone: (888) 593-4771 or
(212) 682-3025 by E-mail: info@wynyc.com
ROBERTSON STEPHENS: Chitwood & Harley Files Stock Lawsuit in CA
---------------------------------------------------------------
Chitwood & Harley initiated a securities class action in the
United States District Court for the Northern District of
California, on behalf of investors who purchased or acquired the
securities of Sycamore Networks, Inc., (NasdaqNM:SCMR), between
January 10, 2000 and September 7, 2000, inclusive. The suit is
brought against Robertson Stephens, Inc., and Paul Johnson.
The complaint alleges that defendants violated section 10(b) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder by the Securities and Exchange Commission. In
particular, the complaint alleges that Robertson Stephens and
its analyst Paul Johnson issued materially false and misleading
statements, analyst reports, and "Buy" recommendations on
Sycamore.
For example, the complaint alleges that the defendants praised
Sycamore's acquisition of Sirocco Networks, Inc. while failing
to disclose that Mr. Johnson owned Sirroco stock and that he
stood to reap approximately $1.9 million from the acquisition.
Moreover, the complaint alleges that as a result of defendants'
biased analyst reports and ratings on Sycamore, and their
failure to disclose Johnson's conflicts of interest, the price
of Sycamore securities were artificially inflated during the
class period, thereby causing plaintiff and members of the Class
to suffer damages.
For more details, contact Jennifer Morris by Mail: 1230
Peachtree Street, Suite 2300, Atlanta, Georgia 30309 by Phone:
(888) 873-3999 or (404) 873-3900 or by E-mail: jlm@classlaw.com
SARA LEE: Wechsler Harwood Lodges Securities Lawsuit in N.D. IL
---------------------------------------------------------------
Wechsler Harwood LLP initiated a securities class action on
behalf of all purchasers of the common stock of Sara Lee
Corporation (NYSE:SLE) from August 1, 2002 through April 24,
2003, inclusive, in the United States District Court for the
Northern District of Illinois, against defendants and certain of
its officers and directors alleging violations of the federal
securities laws.
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 August 1, 2002 and
April 24, 2003, thereby artificially inflating the price of Sara
Lee securities.
In particular, the complaint alleges that the statements were
materially false and misleading because they failed to disclose:
(1) that, despite the Company Reshaping program, the
Company was still burdened with numerous poorly
performing businesses and would have to reevaluate its
various businesses. Accordingly, Sara Lee did not have
"the right mix of businesses" in that several material
businesses were ``not growing'' or were ``in
significant decline;''
(2) that the Company's underperforming businesses were
causing the Company to experience declining results,
and as a result, the Company would not be growing at
the rates represented to the market;
(3) due to a lack of proper internal or financial controls,
Sara Lee failed to identify or recognize those
businesses or brands among its portfolio of companies
that would need to be ``run dramatically differently in
the future;'' and
(4) based on the foregoing, Sara Lee lacked any reasonable
basis upon which to project that it would experience
``double-digit operating income increase'' for fiscal
2003 among its ``five lines of business'' or have
diluted EPS for fiscal year 2003 in the range of $1.54
to $1.60.
On April 24, 2003, Sara Lee shocked the market when it issued a
press release announcing its financial results for the third
quarter, the period ending March 31, 2003. The Company
announced that it was reducing earnings for fiscal 2003 to $1.50
to $1.52 per share, significantly below consensus expectations
of $1.59.
In response to this announcement, the price of Sara Lee common
stock dropped by 10%. During the class period, Sara Lee
insiders sold more than $23 million of their personally-held
Sara Lee common stock to the unsuspecting public.
For more details, contact Wechsler Harwood LLP by Mail: 488
Madison Avenue, 8th Floor New York, New York 10022 by Phone:
(877) 935-7400 by E-mail: dleifer@whesq.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.
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