/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/030922.mbx C L A S S A C T I O N R E P O R T E R Monday, September 22, 2003, Vol. 5, No. 187 Headlines ACADEMY PACKING: Recalls Beef Processed in Unsanitary Conditions ATALANTA CORPORATION: Recalls 500 lbs of Mislabeled Pepperoni COLORADO: Denver Residents Sue Industrial Site For Toxic Spills COVAD COMMUNICATIONS: Co-Founder Sues, Alleging Misuse Of Funds DEUTSCHE ASSET: SEC Issues Cease-And-Desist Order Due To Fraud DICOM IMAGING: SEC Files Securities Fraud Complaint in S.D. FL EMMPAK FOODS: Recalls Beef Products Due To Incorrect Labeling EXCEL CORPORATION: Recalls Beef Products For Incorrect Labeling MARK'S QUALITY: Recalls Beef Processed in Unhealthy Conditions NEWPOWER HOLDINGS: Reaches Settlement For Securities Suit in NY PENNSYLVANIA: Home Buyers' Lawsuit Denied Class Action Status PEREGRINE SYSTEMS: CA Court Enters Judgment in Securities Action PHARMACEUTICAL FIRMS: Anti-Psychotic Drugs Linked To Diabetes TAMPA ELECTRIC: Firms To Proceed With Electric Poles Suit New Securities Fraud Cases BEARINGPOINT INC.: Bernstein Liebhard Lodges Stock Suit in VA CHECK POINT: Stull Stull Lodges Securities Fraud Suit in S.D. NY CONSTAR INTERNATIONAL: Kirby McInerney Lodges Stock Suit in PA CV THERAPEUTICS: Bernstein Liebhard Lodges Securities Suit in CA DVI INC.: Schatz & Nobel Lodges Securities Fraud Suit in E.D. PA EMERSON RADIO: Glancy & Binkow Lodges Securities Lawsuit in NJ FIRSTENERGY CORPORATION: Milberg Weiss Lodges Stock Suit in OH FIRSTENERGY CORPORATION: Goodkind Labaton Files Stock Suit in OH LORAL SPACE: Bernstein Liebhard Files Securities Suit in S.D. NY POLAROID CORPORATION: Schatz & Nobel Files Stock Suit in S.D. NY SUREBEAM CORPORATION: Wolf Haldenstein Lodges Stock Suit in CA ********* ACADEMY PACKING: Recalls Beef Processed in Unsanitary Conditions ---------------------------------------------------------------- Academy Packing Company, Inc. is voluntarily recalling 47 pounds of ground beef products that were produced in unsanitary conditions, the US Department of Agriculture's Food Safety and Inspection Service announced. The products were produced on August 18, 2003, and distributed to restaurants in the Detroit metropolitan area. Each package bears the establishment number "EST. 2559" inside the USDA mark of inspection. The products subject to recall are four 10-lb. boxes of "MR. MEAT, MEAT BALL'S HAMBURGER, 14 - 1, 10 LBS," and one 7-lb. box of "MR. MEAT, GROUND BEEF/HAMBURGER." FSIS has received no reports of illnesses associated with consumption of this product. For more details, contact the Company by Phone: (313) 841-4900 or the USDA Meat and Poultry Hotline: 1-800-535-4555 from 10 a.m. to 4 p.m. (Eastern Time) Monday through Friday. ATALANTA CORPORATION: Recalls 500 lbs of Mislabeled Pepperoni ------------------------------------------------------------- Atalanta Corporation is voluntarily recalling approximately 500 pounds of sliced pepperoni products that are mislabeled as pork, the US Department of Agriculture's Food Safety and Inspection Service announced. The products have been imported from Canada. The products being recalled are 10 lb. boxes of: (1) "SILA, SLICED PEPPERONI, SMOKE FLAVOR ADDED, PCN: 33401." Each label also bears the establishment number "162" inside the Canadian mark of inspection. Each 10-lb. box contains two 5-lb. bags, which also contain the label listed above. The products were produced on July 2, 2003 and distributed to hotels, restaurants and institutions in New Jersey, New York, North Carolina, Pennsylvania, South Carolina and Virginia. In the course of conducting a species identification test of the pepperoni, FSIS laboratory results indicated the presence of beef in the product. FSIS has received no reports of illnesses associated with consumption of this product. The discovery is a technical violation of the ban on the import of beef into this country from Canada. However, a subsequent investigation, launched immediately after the lab results were made known, revealed that the Canadian manufacturing plant making the product used a combination of Australian, New Zealand and United States beef during the production of the pepperoni. No Canadian beef was used as an ingredient. For more details, contact Albert Pish by Phone: (908) 351-8000. COLORADO: Denver Residents Sue Industrial Site For Toxic Spills --------------------------------------------------------------- Residents of Denver's Cook Park neighborhood are asking for $280 million in damages from owners of an industrial site blamed for "a sea of toxic chemicals" that contaminated the air and groundwater at their homes, the Rocky Mountain News reports. A Denver District Court jury recently heard the opening statements in a class action filed against the industrial site owners, Brown Group Retail and Redfield Rifle Scopes Inc. "Brown acted without regard for the risks and safety of the plaintiffs, hiding the contamination even when the facts were put right in front of them," said plaintiffs' attorney Kevin Hannon, who represents about 2,000 residents of the southeast Denver neighborhood. The neighborhood also is home to the largest toxic gas decontamination site in the country, said Mr. Hannon. Additionally, the company knew for years that it had "unleashed a health risk on the community," but did nothing about this hazard. Meanwhile, Mr. Hannon said, people bought homes and raised their families in the neighborhood, oblivious to contamination from drums of toxic chemicals that leaked, spilled, or were intentionally dumped in fields near their homes. Brown Group Retail contends it has acted responsibly to control and remove the contamination caused by itself and others, claiming that "Brown is a company that may have contributed to contamination 20 years ago, but promptly cleaned it up," said defense attorney Thomas Johnson. However, the case was blown open on the eve of trial last April by revelations that chemical waste may have been dumped intentionally for years. Throughout the case, Brown steadfastly denied that any dumping took place and said soil tests back up the company's claim even when the evidence was placed before the company. Just before the trial was to begin, information surfaced from former employees, who had told Brown's attorneys four years ago that dumping was a common practice and may have gone on for years in the 1970s and 1980s. At that point, Denver District Judge Herbert Stern sent the jury home and heard testimony about whether he should punish Brown and its lawyers for the withholding of evidence. Judge Stern will rule on whether to impose sanctions after the trial formally concludes. COVAD COMMUNICATIONS: Co-Founder Sues, Alleging Misuse Of Funds --------------------------------------------------------------- A co-founder of the high speed internet access firm Covad Communications Group Inc. (Covad) sued the Company and certain of its board members, alleging the members used company funds to prop up ailing firms in which they had investments, Reuters News reports. The transactions were designed to use Covad's funds and stock to prop up other companies in which certain directors and officers had invested their own money, according to Dhruv Khanna, who left Covad last year, but who remains a shareholder. Covad filed for Chapter 11 Bankruptcy in August 2001, and emerged four months later. Mr. Khanna filed the lawsuit in Chancery Court in Wilmington, Delaware, seeking relief in two class-action counts on behalf of shareholders entitled to vote at the 2002, 2003 shareholder meetings. Mr. Khanna also contends that the board deliberately omitted material information in several of Covad's public filings, including proxy statements. Santa Clara, California-based Covad said its board of directors had appointed a special committee to investigate the issues raised by Mr. Khanna and that the committee hired an independent law firm to assist in the investigation. The firm concluded, however, that Mr. Khanna's charges were without merit, according to a statement made by Covad's board of directors. "The special committee continues to stand by its conclusion that the contentions of Mr. Knanna are without merit," the statement said. Covad's Chief Executive Charles Hoffman and a California venture capital firm are among those named in the lawsuit. According to the complaint, some of the transactions occurred when Covad's auditors could not complete their annual audit as the company's stock was about to be de-listed from Nasdaq in 2001. DEUTSCHE ASSET: SEC Issues Cease-And-Desist Order Due To Fraud -------------------------------------------------------------- The Securities and Exchange Commission (SEC) ordered Deutsche Asset Management, Inc. (DeAM), a unit of Deutsche Bank AG, to cease and desist from violating the antifraud provisions of the Investment Advisers Act of 1940. The Commission also imposed a $750,000 civil penalty against DeAM, and censured it. The Commission's actions stem from DeAM's failure to disclose a material conflict of interest before voting its clients' proxies for the corporate merger between Hewlett-Packard Company (HP) and Compaq Computer Corporation (Compaq) in 2002. DeAM has consented to the entry of the Commission's Order without admitting or denying the findings. The administrative order (Order) filed today finds that on March 19, 2002, DeAM, an investment adviser registered with the Commission, voted proxies on behalf of advisory clients on approximately 17 million shares of HP stock in favor of the HP- Compaq merger. Before doing so, DeAM failed to disclose to its advisory clients that in January 2002 Deutsche Bank's investment banking division had been retained to advise HP on the proposed merger. Pursuant to a confidentiality agreement with HP, Deutsche Bank did not disclose publicly that HP had retained it. The Order further finds that DeAM failed to disclose to its clients before voting the proxies that senior Deutsche Bank investment bankers had intervened in DeAM's proxy-voting process by requesting that HP have an opportunity to present its strategy to a DeAM committee responsible for voting the proxies. This occurred after DeAM had voted to cast all DeAM-controlled HP proxies against the merger. Following the intervention and presentations to it by the leading dissident shareholder opposed to the merger, and HP management, the committee reversed its prior decision, this time voting for the merger. Based upon the foregoing, the Order finds that DeAM willfully violated Section 206(2) of the Investment Advisers Act by voting client proxies on the HP-Compaq merger without first disclosing its investment banking affiliate's work for HP on the proposed merger and its intervention in DeAM's proxy voting process. DICOM IMAGING: SEC Files Securities Fraud Complaint in S.D. FL -------------------------------------------------------------- The Securities and Exchange Commission filed suit in the US District Court for the Southern District of Florida against the former president of Dicom Imaging Systems, Inc. (OTCBB: DCIM), and five Florida stock promoters, alleging that they committed securities fraud through baseless financial projections and the stock promoters' "scalping." Scalping is the practice of recommending the purchase of a stock to the general public while selling the stock at or near the same time. The Commission's complaint also alleges that the promoters touted Dicom's stock but did not disclose all of the compensation they were to receive. The Commission's complaint names the following defendants: (1) David Gane, D.D.S., age 49, of White Rock, British Columbia, Canada. Mr. Gane was Dicom's president, CEO, and a member of the board of directors. Dicom was a provider of dental imaging software from 1999 to 2001 but has ceased operations. (2) Jeffrey D. Welsh, age 53, of Boca Raton, Florida. (3) Southern Financial Services, Inc. (SFS), Welsh's financial consulting firm. (4) Southern Waste, Inc., dba Strategic Investors Group (SIG), Welsh's financial public relations firm. (5) Charles T. Tamburello, age 30, of Weston, Florida. (6) Capital Research Group, Inc. (CRG), Tamburello's investor relations, which operates www.thesubway.com website. The Commission's complaint alleges that Dicom hired the promoters to tout Dicom's stock in return for compensation. Mr. Gane supplied the promoters with Dicom's financial projections for the next three years: $24.7 million in revenues and $19.7 million in earnings. Mr. Welsh and Mr. Tamburello each wrote investment opinions that described Dicom as an investment and set progressively higher targets for its stock price. Mr. Welsh issued his investment opinions through SFS and SIG, while Mr. Tamburello issued his through CRG. In January 2000, Dicom announced that it was restating its financial results for the third quarter of fiscal 1999 from a gain to a loss. Nevertheless, the stock promoters continued to repeat the projections in their investment opinions and set even higher targets for Dicom's stock price. In addition, Mr. Gane, who had approved the announcement about the restatement, publicly announced even higher three-year revenue projections in January 2000, $50 million and $60 million, during interviews broadcast on television and over the Internet. Dicom's stock price increased from $5.08 per share, when trading began in November 1999, to a high of $36 in March 2000. The Commission's complaint also alleges that the stock promoters failed to disclose all of the compensation and that they engaged in scalping, resulting in their receipt of over $1.1 million in trading proceeds. EMMPAK FOODS: Recalls Beef Products Due To Incorrect Labeling ------------------------------------------------------------- Emmpak Foods, Inc. is voluntarily recalling approximately 102,319 pounds of ready-to-eat beef products because they are incorrectly labeled, the US Department of Agriculture's Food Safety and Inspection Service announced. The products contain the ingredient hydrolyzed soy protein that is not declared on the label. Additionally, the products do not contain MSG and hydrolyzed corn gluten that are declared on the label. The products being recalled bear the establishment code "EST. 567" inside the USDA seal of inspection. The products were produced between May 24, 2003 and August 15, 2003 with freeze by dates between Aug. 7, 2003 and October 29, 2003. The products were distributed to institutions and retail stores in Colorado, Florida, Kentucky, Michigan, Minnesota and Ohio. The products subject to recall are: (1) "BRICKMAN'S, USDA CHOICE OR HIGHER, Oven Roasted Beef Top Round, Cap-Off, CARAMEL COLOR ADDED, RUBBED WITH SEASONINGS, Black Angus Beef." The products are packaged in 8 to 12 lb. boxes with two individually wrapped packages inside. The boxes contain the code "84939." (2) "PREMIUM QUALITY, EMMBER CLASSIC, DELICATESSEN MEATS, U.S.D.A. CHOICE, Oven Roasted Beef Top Round, Caramel Color Added." The products are packaged in 8 to 12 lb. boxes with two individually wrapped packages inside. The boxes contain the code "84939-999." (3) "PREMIUM QUALITY, EMMBER CLASSIC, DELICATESSEN MEATS, Cooked Beef Top Round With Juices, Caramel Color Added, Containing up to 20% solution." The products are packaged in 18 to 24 lb. boxes with two individually wrapped packages inside. The boxes bear the code "31930." (4) "PREMIUM QUALITY, EMMBER CLASSIC, DELICATESSEN MEATS, CAP-OFF, Cooked Beef Top Round, Containing up to 20% of a solution, And Caramel Color Added." The products are packaged in 11 to 16 lb. boxes with two individually wrapped packages inside. The boxes bear the code "72399" or "72399-999." (5) "PREMIUM QUALITY, EMMBER CLASSIC, DELICATESSEN MEATS, Cooked Beef Top Round, Caramel Color Added, Containing up to 10% solution." The products are packaged in 13 to 19 lb. boxes with two individually wrapped packages inside. The boxes bear the code "46909" or "46909- 999." Any of the above listed products stamped with the following freeze by dates are not included in the recall: "10 10 03," "10 17 03" and "10 24 03." The problem was discovered by the company. For more details, contact the Company by Phone: (800) 266-6084. EXCEL CORPORATION: Recalls Beef Products For Incorrect Labeling --------------------------------------------------------------- Excel Corporation, doing business as Emmpak Foods, Inc., is voluntarily recalling approximately 362,890 pounds of ready-to- eat beef products because they are incorrectly labeled, the US Department of Agriculture's Food Safety and Inspection Service announced. The products do not contain MSG or hydrolyzed corn gluten as declared on the label. Instead, the products contain an undeclared ingredient, hydrolyzed soy protein. The products being recalled bear the establishment code "EST. 86J" or "567" inside the USDA seal of inspection. The products were produced between May 24, 2003 and August 14, 2003 with freeze by dates between July 5, 2003 and November 12, 2003. The products were distributed to retail stores in Florida, Kentucky, Michigan, Ohio, Wisconsin, Tennessee and Minnesota. The products subject to recall are: (1) "GFS, gordon food service, OUR MEDIUM-RARE, OVEN PREPARED BEEF TOP ROUND, WHOLE WITH NATURAL JUICES, CARAMEL COLOR ADDED." The products are packaged in 14 to 20 lb. boxes with two individually wrapped packages inside. The boxes bear the code "7191700." (2) "GFS, gordon food service, OUR MEDIUM-RARE, OVEN PREPARED BEEF TOP ROUND, SPLIT, WITH NATURAL JUICES, CARAMEL COLOR ADDED." The products are packaged in 8 to 10 lb. boxes with three individually wrapped packages inside. The boxes bear the code "7193040." (3) "GFS, gordon food service, OUR MEDIUM-RARE SPECIAL TRIM, OVEN COOKED BEEF TOP ROUND ROAST, INSIDE ROUND SPLIT WITH NATURAL JUICES, CARAMEL COLOR ADDED." The products were packaged in 8 to 10 lb. boxes with three individually wrapped packages inside. The boxes bear the code "7414150." (4) "GFS, gordon food service, OUR MEDIUM-WELL SPECIAL TRIM, OVEN COOKED BEEF TOP ROUND, SPLIT INSIDE WITH NATURAL JUICES, CARAMEL COLOR ADDED." The products are packaged in 16 to 20 lb. boxes with two individually wrapped packages inside. The boxes bear the code "7522200." (5) "GFS, gordon food service, OUR MEDIUM, COOKED BEEF TOP ROUND ROAST, CAP-OFF WITH NATURAL JUICES, CARAMEL COLOR ADDED." The products are packaged in 12 to 13 lb. boxes with one individually wrapped package inside. The boxes bear the code "7556400." (6) "GFS, gordon food service, OUR RARE, OVEN PREPARED BEEF RIBEYE, LIP-ON WITH NATURAL JUICES, CARAMEL COLOR ADDED." The products are packaged in 26 to 36 lb. boxes with two individually wrapped packages inside. The boxes bear the code "7617950." (7) "PREMIUM QUALITY, EMMBER CLASSIC, DELICATESSEN MEATS, U.S.D.A SELECT Cooked Beef Rib Roast For Prime Rib, With Juices, Caramel Color Added." The products are packaged in 26 to 36 lb. boxes with two individually wrapped packages inside. The boxes bear the code "7631710." (8) "GFS, gordon food service, OUR RARE, OVEN ROASTED BEEF RIBEYE FOR PRIME RIB, FULLY COOKED, WITH NATURAL JUICES, CARAMEL COLOR ADDED." The products are packaged in 24 to 36 lb. boxes with four individually wrapped packages inside. The boxes bear the code "7647500." (9) "GFS, gordon food service, OUR RARE USDA CHOICE, OVEN ROASTED BEEF RIBEYE, WITH NATURAL JUICES, CARAMEL COLOR ADDED." The products are packaged in 26 to 36 lb. boxes with two individually wrapped packages inside. The boxes bear the code "7642680." Any of the above listed products stamped with the following freeze by dates are not included in the recall: "09 22 03," "09 28 03," "11 01 03" and "11 08 03." The problem was discovered by the company. For more details, contact the USDA Meat and Poultry Hotline: (888) MPHotline from l0 a.m. to 4 p.m. (Eastern Time) Monday through Friday. MARK'S QUALITY: Recalls Beef Processed in Unhealthy Conditions -------------------------------------------------------------- Mark's Quality Meats, Inc. is voluntarily recalling approximately 3,600 pounds of fresh beef products that were produced under unsanitary conditions, the US Department of Agriculture's Food Safety and Inspection Service announced. The products were produced on August 15 and 16 and distributed to restaurants in the Detroit metropolitan area. The products subject to recall are various sized boxes of "BEEF, FOR INDUSTRIAL USE ONLY, KEEP REFRIGERATED MARK'S QUALITY MEATS, DETROIT, MI 48209." Each box bears the production date "81503" or "81603" as well as the establishment code "EST. 8951" inside the USDA mark of inspection. The company used a multi-purpose label that indicates whether the boxes contain ground beef or various intact cuts of beef. All beef products produced on August 15 and 16 are subject to the recall. FSIS has received no reports of illnesses associated with consumption of these products. For more details, contact Mark Osten, company president, by Phone: (313) 554-2500 or contact the USDA Meat and Poultry Hotline: 1-888-MPHotline from 10 a.m. to 4 p.m. (Eastern Time), Monday through Friday. NEWPOWER HOLDINGS: Reaches Settlement For Securities Suit in NY --------------------------------------------------------------- NewPower Holdings, Inc. reached a preliminary agreement in principle has been reached to settle claims against its former directors: (1) H. Eugene Lockhart, (2) William I. Jacobs, (3) Kenneth L. Lay, (4) Lou L. Pai, (5) James V. Derrick, Jr., (6) Richard A. Causey, (7) Peter Grauer, (9) Linda Alvarado and (10) Ray J. Groves The directors face consolidated actions pending in the United States District Court for the Southern District of New York entitled In re NewPower Holdings, Inc. Securities Litigation, No. 02 Civ. 1550 (CLB) and identical purported claims against the Company (the "Proofs of Claim") filed in the jointly- administered bankruptcy cases currently pending in the United States Bankruptcy Court for the Northern District of Georgia, Newnan Division entitled In re The NewPower Company, Case No. 02-10835, In re NewPower Holdings, Inc., Case No. 02-10836, and In re TNPC Holdings, Inc., Case No. 02-10837. The Securities Litigation and the Proofs of Claim allege certain violations of the federal securities laws as a result of alleged misrepresentations and omissions made in connection with the Company's October 5, 2000 initial public offering and allegedly false and misleading statements and omissions occurring during the class period thereafter. Plaintiffs in the Securities Litigation and claimants in the Proofs of Claim have agreed to resolve all their claims against the Company and its former directors in exchange for a payment of $26 million, of which $24.5 million will be paid by insurance providers and $1.5 million will be paid by the Company. Neither the Company nor any of the former directors named as defendants in the Securities Litigation have admitted any liability or wrongdoing; rather, the parties have agreed to settle all outstanding claims to avoid the costs, burden and uncertainty of the ongoing litigation. The settlements of the Securities Litigation and the Proofs of Claim are subject to approval by the District Court and the Bankruptcy Court, respectively. For more details, contact James L. Malone III or M. Patricia Foster, Co-Presidents by Phone: 203-966-2989 or 203-966-1881 or by E-mail: jmalone@newpower.com or patty.foster@newpower.com PENNSYLVANIA: Home Buyers' Lawsuit Denied Class Action Status ------------------------------------------------------------- Eight Monroe County, Pennsylvania, home buyers who claim a developer, an appraiser and one of the nation's largest banks, Chase Manhattan Mortgage Corporation, conspired to defraud them, have lost their motion to have their civil action certified as a class action, according to a report by The Allentown Morning Call. The case is among several pending that sprang from allegations of widespread housing fraud in the Poconos. The ruling by US District Court Judge Christopher C. Conner means that hundreds of people who believe they were deceptively sold overpriced homes will not be represented in the federal lawsuit, but the case will proceed on behalf of the four couples who filed it in 2001, and sought class-action status for the lawsuit in order that the suit might represent other buyers situated similarly as themselves. Judge Connor said that while members of the proposed class allegedly were defrauded in similar ways by the same defendants, each would have a claim for different damages based on the individual circumstances of each individual plaintiff or set of couples. That kind of claim, said Judge Conner, "presents the court with the prospect of holding hundreds or thousands of individual hearings." "Lastly, the court notes that a class action appears unnecessary because persons with a viable claim should have sufficient incentive to bring their claims individually," Judge Conner wrote in a 14-page memorandum explaining his order. Separately, the office of the state attorney general has two consumer protection suits pending that identify 55 alleged victims of housing fraud. Marshall Anders, a lawyer defending developer Gene Percudani in the federal lawsuit and one of the attorney general's suits said he was pleased with Judge Conner's ruling denying class action status to the plaintiffs' lawsuit because now "it means we are fighting a limited battle; class actions can get very expensive." The other defendants in the federal suit are Chase Manhattan Mortgage Corporation, appraiser Dominick Stranieri; Chase employee William Spaner; and two Percudani companies. The lawsuit claims that Mr. Percudani's companies would lure low-income homebuyers from New York and New Jersey with a promise of affordable homes, and then sell them overpriced houses based upon intentionally inflated appraisals by the appraiser Dominick Stranieri, using mortgages that were based on altered credit applications ultimately sold to the Chase Manhattan Mortgage Corporation. Stephen Weiss, lead lawyer for the plaintiffs said he and the plaintiffs are considering an appeal from Judge Conner's ruling on the class action statue of the lawsuit. "We are more committed to protecting our clients' interests than ever, and the case will proceed (for now) on behalf of the eight plaintiffs." PEREGRINE SYSTEMS: CA Court Enters Judgment in Securities Action ---------------------------------------------------------------- The Securities and Exchange Commission announced that on July 23, 2003, the US District Court for the Southern District of California entered a final judgment in the Commission's civil action against San Diego-based software company Peregrine Systems, Inc. The final judgment-to which Peregrine consented without admitting or denying the complaint's allegations-permanently enjoined Peregrine from violating certain antifraud provisions of the federal securities laws (Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Exchange Act Rule 10b-5), and from violating certain reporting, books and records, and internal controls provisions (Exchange Act Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B), and Exchange Act Rules 12b-20, 13a-1, and 13a- 13). The final judgment also directed Peregrine to: (1) comply, on an accelerated basis, with the rules regarding management's report on internal controls, implementing Section 404 of the Sarbanes-Oxley Act of 2002, (2) retain an Internal Auditor to ensure that Peregrine's financial results are accurately reported in Peregrine's public financial statements, (3) appoint a Corporate Compliance Officer to perform an ongoing review of Peregrine's corporate governance policies and practices, (4) commence a training and education program for Peregrine's officers and employees, to prevent violations of the federal securities laws, and (5) disclose the current condition of Peregrine's internal controls and financial reporting procedure, when a reorganization plan under Chapter 11 of the Bankruptcy Code became effective. The court also approved the Commission's decision not to require Peregrine to pay a civil money penalty or disgorgement in this action. The Commission filed its complaint against Peregrine on June 30, 2003, alleging that Peregrine - through certain officers, employees, and certain others- committed a massive financial fraud that spanned 11 quarters. According to the complaint, the purpose of the fraudulent scheme was to inflate the company's revenue and stock price. To achieve that end, Peregrine filed materially incorrect financial statements with the Commission concerning the quarter ended June 30, 1999, through the quarter ended December 31, 2001. In 2003 Peregrine restated its financial results for those quarters. In its restatement, Peregrine reduced previously reported revenue of $1.34 billion by $509 million, of which at least $259 million was reversed because the underlying transactions lacked substance. Peregrine filed a voluntary petition to reorganize under Chapter 11 of the US Bankruptcy Code on September 22, 2002, approximately four months after its accounting problems were made public. Peregrine's Plan of Reorganization became effective on August 7, 2003, and on that date Peregrine disclosed the current condition of its internal controls and financial reporting procedure in a Form 8-K filed with the Commission. The Commission's case against Peregrine is the fourth civil action it has filed in this investigation. In November 2002, the Commission filed a civil injunctive action against Ilse Cappel, the former senior treasury manager at Peregrine (LR- 17859A). In April 2003, the Commission filed a civil injunctive action against Matthew C. Gless, Peregrine's former chief financial officer. PHARMACEUTICAL FIRMS: Anti-Psychotic Drugs Linked To Diabetes ------------------------------------------------------------- The United States Food and Drug Administration (FDA) has asked pharmaceutical firms who make a widely-used class of anti- psychotic drugs to include labeling language about a possible link with diabetes, Eli Lilly & Co., one of the concerned companies announced, the Associated Press reports. Eli Lilly produces Zyprexa, which accounts for about one-third of the Company's sales. The other drugs mentioned in the labeling request are: (1) Bristol-Myers Squibb's Abilify, (2) Pfizer's Geodon, (3) Novartis' Clozaril, (4) Janssen's Risperdal and (5) AstraZeneca's Seroquel The FDA issued its letter, after several recent studies undertaken explored a possible link to diabetes. The letter recommended that the patients using the so-called atypical antipsychotics be monitored for blood-sugar abnormalities, particularly if they have risk factors including obesity and a family history of diabetes. The letter clarified that there is no clear link between the drugs and diabetes yet and further study is needed. More label changes could be required depending on future findings. According to the studies, there seems to be a higher incidence of low blood sugar and diabetes among schizophrenics - regardless of whether they use antipsychotics when compared with the general population. The key question is whether the drugs aggravate the risk. Many of them carry the possible side effect of weight gain, and obesity is a risk factor in diabetes, AP states. FDA spokeswoman Susan Cruzan told AP the agency frequently makes requests for additional drug labeling. Ms. Cruzan added she was unaware of any enforcement steps the FDA might take in case a company does not comply, which she said rarely occurs. "It is in their interest to put the information in the labeling," Ms. Cruzan said. TAMPA ELECTRIC: Firms To Proceed With Electric Poles Suit --------------------------------------------------------- If enough residents sign on, two law firms said they will go forward with a lawsuit against the Tampa Electric Co. (TECO) for installing giant power poles through several residential neighborhoods, according to a report by the Tampa Tribune. The lawyers will be seeking class action status for the lawsuit. John W. Dill of Attorneys Trial Group of Orlando told residents that his firm and the firm of Prieto, Prieto & Goan are seeking to sign on as many people affected by the telephone poles as possible before going ahead with the legal action against TECO. When the lawsuit is filed, said Mr. Dill, it will allege that TECO is acting in a government function, and that installing the three-feet-wide, 125-foot tall poles constitutes a taking by TECO or devaluation of the residents' properties. Mr. Dill said there is no minimum number needed and no deadline. However, residents will want to act quickly because TECO is rushing to make a November installation deadline. New Securities Fraud Cases BEARINGPOINT INC.: Bernstein Liebhard Lodges Stock Suit in VA ------------------------------------------------------------- Bernstein Liebhard & Lifshitz LLP initiated a securities class action in the United States District Court for the Eastern District of Virginia on behalf of all persons who purchased or acquired BearingPoint, Inc. (NYSE:BE) securities between October 30, 2002 and August 13, 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 October 30, 2002 and August 13, 2003. On August 14, 2003, before the market opened, defendants shocked the public when they issued a press release and concurrently filed a Form 8-K with the SEC announcing that BearingPoint's financial results would be restated for the first three quarters of fiscal 2003 due to acquisition and accounting relating adjustments. The market's reaction to the announcement was swift and drastic. On August 14, 2003, the price per share of BearingPoint common stock fell $2.41 or 23 percent from its previous day's trading to close at $7.90, on unusually heavy trading volume. For more details, contact Ms. Linda Flood, Director of Shareholder Relations by Mail: Bernstein Liebhard & Lifshitz, LLP, 10 East 40th Street, New York, New York 10016 by Phone: (800) 217-1522 or (212) 779-1414 or by E-mail: BE@bernlieb.com. CHECK POINT: Stull Stull Lodges Securities Fraud Suit in S.D. NY ---------------------------------------------------------------- Stull Stull & Brody initiated a securities class action in the United States District Court for the Southern District of New York, on behalf of all purchasers of the common stock of Check Point Software Technologies Ltd. (NASDAQ:CHKP) between July 10, 2001 and April 4, 2002, inclusive against the Company, Gil Shwed, Jerry Underman, Eyal Desheh, Irwin Federman and Alex Vieux, senior officers and/or directors of Check Point. 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. Throughout the Class Period, as alleged in the Complaint, defendants issued numerous statements concerning Check Point's revenue growth, product and marketing initiatives, and increasing revenues and profits while failing to disclose that demand for the Company's products was materially declining. When this information was belatedly disclosed to the market on April 4, 2002, shares of Check Point fell over 24% on extremely heavy trading volume. For more details, contact Tzivia Brody by Mail: 6 East 45th Street, New York, NY 10017 by Phone: 1-800-337-4983 by E-mail: SSBNY@aol.com or visit the firm's Website: http://www.ssbny.com CONSTAR INTERNATIONAL: Kirby McInerney Lodges Stock Suit in PA -------------------------------------------------------------- Kirby McInerney & Squire, LLP initiated a securities class action in the United States District Court for the Eastern District of Pennsylvania on behalf of shareholders who purchased the common stock of Constar International, Inc. (NasdaqNM:CNST) pursuant to its November 2002 Initial Public Offering. The action charges Constar and certain of its senior officers with violations of the Securities Act of 1933. The alleged violations stem from the dissemination of false and misleading statements, which had the effect -- during the Class Period -- of artificially inflating the price of Constar's shares. For more details, contact Pamela Kulsrud or Elaine Mui by Mail: 830 Third Avenue, 10th Floor, New York, New York 10022 by Phone: (212) 317-2300 or Toll Free (888) 529-4787 or by E-Mail: emui@kmslaw.com CV THERAPEUTICS: Bernstein Liebhard Lodges Securities Suit in CA ---------------------------------------------------------------- Bernstein Liebhard & Lifshitz, LLP initiated a securities class action in the United States District Court for the Northern District of California, on behalf of all persons who purchased or acquired CV Therapeutics, Inc. (NasdaqNM:CVTX) securities between May 14, 2003 and August 1, 2003, inclusive. CV Therapeutics is a biopharmaceutical company and is a pioneer in a new biomedical discipline called molecular cardiology. The Company is focused on the discovery, development and commercialization of new small molecule drugs for the treatment of cardiovascular diseases. Throughout the Class Period, CV Therapeutics made numerous false and misleading public statements about the Company's New Drug Application ("NDA") for Ranexa, a drug for the treatment of chronic angina. During this time, Defendants sold over $100 million worth CV Therapeutics stock, and several inside Defendants sold more than $980,000 of their personal holdings of CV Therapeutics stock. When news that the Federal Drug Administration would not review the Ranexa NDA as previously announced was revealed on August 1, 2003, the price of CV Therapeutics stock dropped more than 20% from its August 1, 2003 closing price of $35.18 per share to as low as $25.82 per share on August 4, 2003, the next trading day, down from its Class Period high of $41.50 per share on June 6, 2003. For more details, contact Ms. Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone: (800) 217-1522 or (212) 779-1414 or by E-mail: CVTX@bernlieb.com. DVI INC.: Schatz & Nobel Lodges Securities Fraud Suit in E.D. PA ---------------------------------------------------------------- Schatz & Nobel PC initiated a securities class action status in the United States District Court for the Eastern District of Pennsylvania on behalf of all persons who purchased the securities of DVI, Inc. (OTC: DVIXQ) from November 7, 2001 through August 13, 2003, inclusive. The Complaint alleges that the President and Chief Executive Officer and the Vice President and Chief Financial Officer of DVI, an independent specialty finance company for healthcare providers, issued materially false and misleading statements during the Class Period. The Complaint alleges the defendants engaged in a fraudulent scheme to deceive the public as to DVI's true financial condition. On May 20, 2003, DVI revealed that its auditors, Deloitte & Touche LLP, had resigned over an accounting dispute. Then, on August 13, 2003, DVI announced it was filing for Chapter 11 bankruptcy protection and that DVI's Chief Financial Officer had been placed on administrative leave. The New York Stock Exchange suspended trading in DVI on August 14, 2003, pending delisting. For more details, contact Nancy Kulesa by Phone: (800) 797-5499, by E-mail: sn06106@aol.com or visit the website: http://www.snlaw.com EMERSON RADIO: 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 Emerson Radio Corporation (AMEX:MSN) between January 29, 2003 and August 12, 2003, inclusive. The Complaint charges Emerson and certain of the Company's executive officers with violations of federal securities laws. Among other things, plaintiff claims that defendants' dissemination of materially false and misleading statements concerning Emerson's financial performance, business operations and prospects caused the Company's stock price to become artificially inflated, inflicting damages on investors. Emerson is a consumer electronics distributor that designs, sources, imports and markets video, audio and other consumer electronic products. The complaint alleges that during the Class Period defendants' public statements omitted adverse facts, which then existed and disclosure of which was necessary to make the statements not false and misleading, including but not limited to the following: (1) that Emerson customers were deferring and foregoing purchases of product and reducing inventory levels as they shifted to just-in-time stocking; (2) that since at least March 2003, the outbreak of severe acute respiratory syndrome in Asia was dramatically reducing Emerson's product demand and supply; (3) that Emerson was planning to, and did, discontinue the Mary-Kate and Ashley and Nascar brands and business; and (4) that based on the foregoing, Emerson had no reasonable basis to project ``significant'' and ``strong'' growth and revenues for fiscal 2004. For more details, contact Lionel Z. Glancy 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. FIRSTENERGY CORPORATION: Milberg Weiss Lodges Stock Suit in OH -------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP announces that an amended class action complaint was filed on behalf of purchasers of the securities of FirstEnergy Corporation (NYSE:FE) between April 24, 2002 and August 19, 2003, inclusive, seeking to pursue remedies under the Securities Exchange Act of 1934. The action, numbered 03-CV-1684, is pending in the United States District Court for the Northern District of Ohio, against the Company, H. Peter Burg, Anthony J. Alexander, Richard H. Marsh and Harvey L. Wagner. 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 materially false and misleading representations to the market between April 24, 2002 and August 19, 2003. The Complaint alleges that FirstEnergy failed to disclose that its power generation and transmission equipment and systems had fallen into disrepair due to inadequate maintenance and failures to upgrade and modernize aging equipment and, in addition, that the Company did not have an adequate warning system to warn of plant shutdowns or the necessary systems to ensure that plant shutdowns could be quickly and effectively isolated and prevented from spreading. In addition, the complaint further alleges that First Energy's Class Period quarterly press releases and financial reports filed with the SEC deceived investors by improperly understating liabilities connected with certain of its leased generation plants and improperly accounting for deregulation costs by employing an inappropriately long amortization schedule, thereby artificially and materially inflating its reported financial results and condition. On August 5, 2003, the Company announced that it would be restating its previously reported financial results for all of 2002 and the first quarter of 2003 materially downward, reportedly "to reflect implementation of changed accounting treatments regarding the recovery of transition assets in Ohio and recognition of above-market values of certain leased generation facilities." In reaction to this announcement, the price of FirstEnergy common stock dropped materially, falling from $34.24 per share on August 4, 2003, to close at $31.33 per share on August 5, a one-day loss of 8.5%. On August 14, 2003, the United States and Canada experienced their biggest blackout in history, affecting over 50 million people and countless businesses across eight states and Canada. News organizations reported that a power failure at FirstEnergy's Eastlake, Ohio plant, coupled with the loss of a FirstEnergy transmission line that burst into flames after sagging into a tree, were likely catalysts for the blackout and that FirstEnergy's failure to disconnect its system from other networks, which should have happened automatically, allowed the blackout to cascade across the United States and into Canada, knocking out over 100 power plants in total. In reaction to reports of the Company's role in the blackout, the price of FirstEnergy common stock dropped, falling from $30.61 per share on August 15, 2003 to $27.75 per share on August 18 (the next trading day) a one day decline of 9.3%. The Company formally restated its results on August 19, 2003, marking the end of the Class Period. For more details, contact Steven G. Schulman by Mail: One Pennsylvania Plaza, 49th fl., New York, NY, 10119-0165 by Phone: (800) 320-5081 by E-mail: firstenergy@milbergNY.com or visit the firm's Website: http://www.milberg.com FIRSTENERGY CORPORATION: Goodkind Labaton Files Stock Suit in OH ---------------------------------------------------------------- Goodkind Labaton Rudoff & Sucharow LLP filed a securities class action in the United States District Court for the Northern District of Ohio, on behalf of persons who purchased or otherwise acquired publicly traded securities of FirstEnergy Corporation (NYSE:FE) between April 24, 2002 and August 5, 2003, inclusive. The lawsuit was filed against FirstEnergy Corporation and certain officers of the Company. 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, throughout the Class Period by issuing a series of material misrepresentations to the market. Specifically, the complaint alleges that the Company had been improperly accounting for certain of its leased generation plants by assigning these assets inflated values and had improperly accounted for costs incurred in connection with the deregulation of certain of its businesses by employing an inappropriate amortization schedule. The complaint alleges these accounting irregularities had the effect of materially inflating the company's assets and income. On August 5, 2003, the Company issued a press release and posted notice on its web site that it would be restating its previously reported financial results for all of 2002 and the first quarter of 2003 downward to reportedly "reflect the implementation of changed accounting treatments regarding the recovery of transition costs in Ohio and the recognition of above-market values of certain leased generation facilities." In reaction to this announcement FirstEnergy's shares fell from $34.24 to $31.33, representing a one-day loss of 8.5% on heavy volume. For more details, contact Henry Young by Phone: 800-321-0476 or by E-mail: investorrelations@glrslaw.com LORAL SPACE: Bernstein Liebhard Files Securities Suit in S.D. NY ---------------------------------------------------------------- Bernstein Liebhard & Lifshitz LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all persons who purchased or acquired Loral Space & Communications, Ltd. (OTC BB: LRLSQ) securities between June 30, 2003 and July 15, 2003, inclusive. The complaint charges defendant Bernard Schwartz with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that defendant issued materially false and misleading statements which resulted in plaintiff purchasing Loral securities during the Class Period at artificially inflated prices. On June 30, 2003, the beginning of the Class Period, Loral made two announcements that purportedly would assist in strengthening its balance sheet and its future prospects. Loral announced that "it has collected approximately $55 million from Intelsat representing an acceleration of a receivable for agreed-upon milestone performance payments" and that Loral had resolved all outstanding legal disputes with Alcatel thereby eliminating potential exposure to $350 million in liability to Alcatel. However, the complaint alleges that the Company failed to disclose that Loral was actively negotiating the sale of six of its satellites with Intelsat and that Intelsat was pressuring Loral to file for Chapter 11 bankruptcy as a condition of closing the deal. Rather than disclose such material information, the announcement and subsequent statements issued by Mr. Schwartz left potential investors in Loral with the misleading impression that Loral was "on plan" as discussed in the prior quarter's conference call, that Loral was not only current on its debt payments, but also was not in any danger of default and was focused on preparing for a recovery in its business. What the Company communicated to investors was substantially different than the reality that it was contemplating a Chapter 11 bankruptcy filing. On July 15, 2003, prior to the market open, and to the horror of recent investors who had purchased Loral securities based on the positive news from the Company, Loral announced that it was filing for Chapter 11 bankruptcy as a precondition to an agreement with Intelsat to sell its six North American satellites for approximately $1.1 billion. Once the stock resumed trading after being halted on the news, the stock lost 90% of its value. For more details, contact Ms. Linda Flood, Director of Shareholder Relations, by Mail: 10 East 40th Street, New York, New York 10016 by Phone: (800) 217-1522 or (212) 779-1414 or by E-mail: LRLSQ@bernlieb.com. POLAROID CORPORATION: Schatz & Nobel Files Stock Suit in S.D. NY ---------------------------------------------------------------- Schatz & Nobel initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all persons who purchased the common stock of Polaroid Corporation (formerly NYSE: PRD currently OTC: PRDCQ.PK) from January 26, 2000 through August 9, 2001, inclusive. The Complaint alleges that KPMG and certain of Polaroid's officers and directors issued materially false and misleading statements concerning the Company's financial condition. KPMG, Polaroid's auditor, also issued unqualified audit opinions regarding Polaroid's financial statements during the Class Period. As was belatedly disclosed in a report issued by the Examiner appointed in connection with the Polaroid bankruptcy proceeding, defendants' financial statements issued throughout the Class Period were materially false and misleading because defendants knew or should have known that Polaroid's financial condition had significantly deteriorated and was much more severe than was being represented to the public. For more details, contact Nancy A. Kulesa by Phone: (800) 797-5499 by E-mail: sn06106@aol.com or visit the firm's Website: http://www.snlaw.net SUREBEAM CORPORATION: Wolf Haldenstein Lodges Stock Suit in CA -------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class action in the United States District Court for the Southern District of California, on behalf of all persons who purchased securities of SureBeam Corporation (Nasdaq: SUREE) between March 16, 2001 and August 25, 2003, inclusive, against defendants SureBeam and certain officers of the Company. The complaint alleges that defendants issued a series of material misrepresentations to the market during the Class Period. The complaint alleges the statements were materially false and misleading because they omitted and/or misrepresented several adverse facts, such as: (1) the Company was violating GAAP through improperly recognizing revenue; (2) SureBeam recognized improper revenue when it made recognition of revenue from non-affiliated parties although the Company understood that such parties would be unable to pay; (3) SureBeam could not accurately determine its financial condition because the Company lacked adequate internal controls. As a result of the foregoing, the values of the Company's earnings, net income and earnings per share were materially overstated during the Class Period. On June 10, 2003, SureBeam filed a current report with the SEC on Form 8-K, and revealed that it was releasing KPMG LLP as its independent auditor and that it was hiring Deloitte & Touche LLP as its new auditor. The Company also issued a press release on July 30, 2003, announcing that there would be a delay of the release of its second quarter earnings from the planned date of July 31, 2003 until August 12, 2003. On August 12, 2003, SureBeam announced that its delay of the release of its second quarter earnings would continue until after the Company's Form 10-Q for the second quarter had been filed. SureBeam's accounting difficulties remained, and on August 21, 2003, the Company announced that it was terminating Deloitte & Touche relating to issues that had not been resolved to the auditor's approval. Specifically, Deloitte & Touche was unsatisfied with particular aspects of the Company's revenue recognition policies and particular contracts begun in 2000 and affecting succeeding periods. For more details, contact Fred Taylor Isquith, 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 SureBeam. ********* A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the Class Action Reporter. Submissions via e-mail to carconf@beard.com are encouraged. Each Friday's edition of the CAR includes a section featuring news on asbestos-related litigation and profiles of target asbestos defendants that, according to independent researches, collectively face billions of dollars in asbestos-related liabilities. The Asbestos Defendant Profiles is backed by an online database created to respond to custom searches. Go to http://litigationdatasource.com/asbestos_defendant_profiles.html ********* 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. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. 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