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/raid1/www/Hosts/bankrupt/CAR_Public/031013.mbx C L A S S A C T I O N R E P O R T E R Monday, October 13, 2003, Vol. 5, No. 201 Headlines ARTHUR ANDERSEN: Denied Fair Trial in Enron Suit, Lawyer States BALI BOMBING: NZ Families To Join Suit Against Bali Masterminds BINGHAM HILL: Recalls Blue Cheese Due To Listeria Contamination BORDEN CHEMICAL: Agrees To Halt Shipments Past NY Grade School COMPUTER ASSOCIATES: Execs Resign Over Internal Accounting Probe CONTINENTAL CARBON: AL Court To Decide on Certification For Suit CREDIT SUISSE: Quattrone Defends Himself in NY Securities Trial CYBEX INTERNATIONAL: Recalls 33T Treadmills Due To Fire Hazard ENRON N.A.: SEC Launches TX Securities Fraud Suit V. Former Exec HOLOCAUST LITIGATION: Bankers Group Denies Special Report Claims JANUS CAPITAL: Investors Withdraw $4.4 Bil Due To AG, SEC Probe KING IMPORT: NY Agriculture Head Warns V. Thelma Mayonnaise MICROSOFT CORPORATION: FL Companies Urged To Take Part in Pact NCI BUILDING: SEC Files Settled Civil Enforcement Lawsuit in DC NEW HAMPSHIRE: Seabrook Plant's Leak Not Dangerous, NRC States PREMIER MARKETING: CA Court Enters Judgment in SEC Stock Suit QWEST COMMUNICATIONS: Agrees To Settle "IPO Spinning" Charges SUPREME COURT: Debates States' Capacity To Break Approved Pacts TENNCARE: Judge Signs Third Elderly Care Pact, Expects Another TOBACCO FIRMS: Australian Watchdog Analyzing "Light" Cigarettes New Securities Fraud Cases BANK ONE: Rabin Murray Lodges Securities Fraud Suit in S.D. OH BANK ONE: Schiffrin & Barroway Lodges Securities Suit in N.D. IL CHECK POINT: Lasky & Rifkind Lodges Securities Suit in S.D. NY CHECK POINT: Wolf Haldenstein Lodges Securities Suit in S.D. NY CONSTAR INTERNATIONAL: Marc Henzel Lodges Securities Suit in PA CONSTAR INTERNATIONAL: Charles Piven Lodges Stock Lawsuit in PA CONSTAR INTERNATIONAL: Federman & Sherwood Files Securities Suit FIRSTENERGY CORPORATION: Marc Henzel Files Securities Suit in OH HEALTHTRONICS SURGICAL: Marc Henzel Lodges Securities Suit in GA JANUS CAPITAL: Schiffrin & Barroway Files Securities Suit in CO READ-RITE CORPORATION: Marc Henzel Lodges Securities Suit in CA SPORTSLINE.COM: Marc Henzel Lodges Securities Lawsuit in S.D. FL STRONG CAPITAL: Weiss & Yourman Files Securities Suit in S.D. NY SUREBEAM CORPORATION: Rabin Murray Lodges Securities Suit in NY SUREBEAM INC.: Weiss & Yourman Lodges Securities Suit in N.D. CA ********* ARTHUR ANDERSEN: Denied Fair Trial in Enron Suit, Lawyer States --------------------------------------------------------------- Arthur Andersen's lead appellate lawyer told a three-judge panel of the United States Fifth Circuit Court of Appeals that the investment firm was denied a fair trial over charges of destroying documents related to Enron Corporation, the Associated Press reports. In June 2002, the former Big Five investment firm was convicted of obstructing justice for shredding and doctoring Enron-related documents. Lawyer Maureen Mahoney told the appeals court United States District Court in Houston, Texas Judge Melinda Harmon refused to allow the firm to show jurors that many more documents were preserved than destroyed. She added that Andersen partners didn't have fair warning that an investigation was coming, and prosecutors were allowed to present prejudicial evidence of previous run-ins with the Securities and Exchange Commission. Government appellate lawyer Elizabeth Collery countered that the firm knew of the SEC probe and began shredding documents to "beat the subpoena they knew was coming from the SEC." One of the appeals judges, Patrick Higginbotham, noted that when a felon dies while a criminal appeal is in progress, the case dies too, AP stated. "In a practical sense, that's happened here," Mr. Higginbotham said of the withered accounting firm, left with just 250 of 28,000 U.S. employees on the payroll and little more than a shattered reputation to save. BALI BOMBING: NZ Families To Join Suit Against Bali Masterminds --------------------------------------------------------------- New Zealand families of victims and survivors of the October 12, 2003 Bali bombing are thinking of joining the class action filed in the United States District Court for the District of Columbia against the financiers of terrorism, the NZCity reports. Sixty-two New Zealand victims and family members will visit Bali this weekend for the first anniversary of the attack, which killed 202 people, 88 or which were Australians, Newstalk ZB reports. Lawyer Michael Hourigan, who is representing the Australians involved, has spoken to interested New Zealanders and plans to visit them shortly, NZCity states. Mr. Hourigan says the families are not seeking damages for Bali, but want to help fight terrorism by holding those behind the attack accountable. Mr. Hourigan further asserted that there is strong evidence of a link between Al Qaeda and Jemah Islamiyah, which was believed to be behind the Bali attack. BINGHAM HILL: Recalls Blue Cheese Due To Listeria Contamination --------------------------------------------------------------- In an expansion of an earlier recall of September 12, 2003, Bingham Hill Cheese Company of Fort Collins, Colorado is voluntarily recalling approximately 2,000 lbs their cow's milk Rustic Blue Cheese purchased since August 1, 2003. The cheese is being recalled because it has the potential to be contaminated with Listeria monocytogenes, an organism that can cause serious and sometimes fatal infections in young children, frail or elderly people, and others with weakened immune systems. Although healthy individuals may suffer only short- term symptoms such as high fever, severe headache, stiffness, nausea, abdominal pain and diarrhea, L. monocytogenes infection can cause miscarriages and stillbirths among pregnant women. The cheese is being recalled hours after the USFDA alerted the company to test results from two wheels that tested positive for the microorganism. The wheels that tested positive were from batches marked BL04-055 and BL04-069. This is an expansion of an earlier recall of batch BL04-063. Other batches sold after August 1, 2003 include BL04-041, BLO4-055, BL04-62, BL04-69, BL04-090. There have been no reported illnesses to date. All batches of Bingham Hill Rustic Blue cheese purchased since August 1, 2003 are being recalled as a measure of safety. The company is urging consumers to throw out the cheese (for added safety) or return it to the place of purchase for a refund. The cheese was distributed in Colorado, Manhattan (NY), San Francisco Bay area (CA), Chicago (IL), Houston (TX), Minneapolis (MN), Portland (OR), Santa Fe (NM), Miami (FL), Palm Springs (CA), Iowa City (IA), Laramie (WY), Cheyenne (WY) and Atlanta (GA). The cheese was sold as: whole 5 pound wheels in gold wrap; cut pieces in gold wrap; and cut pieces in plastic wrap. The company name appears on gold wrapped wheels and gold wrapped pieces and "Colorado Blue", "Bingham Blue" or "Rustic Blue" would appear on plastic-wrapped pieces. In Colorado, the cheese was distributed to farmers' markets in Boulder, Fort Collins, Minturn, Dillon, Breckenridge and Colorado Springs. In Wyoming, the cheese was distributed to farmers' markets in Laramie and Cheyenne. Bingham Hill Cheese Company is working closely with the FDA and the Colorado Department of Public Health and Environment to assure that the cheese in question is accounted for and destroyed. It is important to the company that public health remains the primary concern, and Bingham Hill Cheese Company will continue to put customers' health as the top priority. The 4-year old artisan cheese company voluntarily conducts random batch sampling of Rustic Blue as part of its ongoing quality assurance program. Over 100 batches of Rustic Blue have been tested previously by an independent Wisconsin cheese laboratory, Silliker Laboratories, and never found to contain harmful bacteria. For more details, contact cheesemakers/owners Kristi and Tom Johnson by Phone: 1-970-227-8008. BORDEN CHEMICAL: Agrees To Halt Shipments Past NY Grade School -------------------------------------------------------------- New York Attorney General Eliot Spitzer reached an agreement with Borden Chemical, Inc. that will halt truck shipments of chemicals past Moreau Elementary School in Saratoga County, New York, in order to reduce the risk to children. Attorney General Spitzer also announced that the Town of Moreau has adopted a local law explicitly restricting chemical trucks from driving past the school, thus resolving a lawsuit he filed against Borden and the town. "The town and the company have taken steps that put the health and safety of school children first, as it should be," said Attorney General Spitzer in a statement. "From now on, trucks loaded with toxic chemicals will no longer drive by the school." The agreement was finalized October 8 when it was signed by Saratoga County State Supreme Court Judge Frank Williams. AG Spitzer had asked the town to enact such a law, and the company to abide by such a traffic restriction, which was a condition of the siting approval for the Borden plant in 1997. Unfortunately, the company and town did not respond. The Attorney General's office then sued the company and the town on July 28, 2003. The lawsuit alleged that 15 to 20 trucks carrying toxic chemicals pass by the school each day, creating an environmental and public health hazard and violating state law. Borden Chemical has agreed to inform its truckers about their obligation to comply with the town's new traffic restriction. AG Spitzer's office was alerted to the traffic problem by concerned local residents. State investigators found that trucks that regularly drive past the school contain hazardous chemicals such as sulfuric acid, caustic soda, phenol, triethanolamine and methanol. In 1997, the Town of Moreau approved the siting of the Borden chemical plant with the condition that trucks driving to and from the facility avoid the section of Bluebird Road west of Fort Edward Road, where the school is located. As a condition of the environmental review and approval under the state Environmental Quality Review Act, this prohibition was binding on the town and the company. The case was handled by Assistant Attorneys General Lisa Feiner and Norman Spiegel of the Attorney General's Environmental Protection Bureau. COMPUTER ASSOCIATES: Execs Resign Over Internal Accounting Probe ---------------------------------------------------------------- Three senior executives at Computer Associates (CA) tendered their resignations, after an internal probe suggested they were responsible for recording revenues in 2000, which should have been deferred to a later period, infoconomy reports. Chief Financial Officer Ira Zar, Senior Vice President for Finance Lloyd Silverstein and David Rivard, vice president for finance resigned as a result of the probe, which is being led by former SEC Chief Accountant Walter Schuetze. The United States Department of Justice and the Securities and Exchange Commission (SEC) are also conducting a separate probe. Mr. Zar was the one who was responsible for changing the Company's revenue recognition policies in 2000. Instead of reporting all the revenue from a multi-year contract up-front, it would recognize it year-on-year in a manner more consistent with the way in which customers actually pay, infoconomy reports. Several securities class actions are also pending against the Company, charging it with artificially inflating financial figures by persuading companies to renew their contracts halfway through their commitments. CONTINENTAL CARBON: AL Court To Decide on Certification For Suit ---------------------------------------------------------------- The United States District Court in Montgomery, Alabama will decide whether the lawsuit filed against Continental Carbon will receive class action status, the Ledger-Inquirer reports. Action Marine, Inc. owner John Tharpe filed the suit in August 2001, alleging that the carbon black fall-out from the Company's Phenix City facility fell on areas on south Columbus and damaged residents' property. Mr. Tharpe alleges that the fallout damaged his boats and equipment for years, forcing him to sell products at a discount. The city of Columbus joined the suit in December 2001, after soot accumulating on top of the Columbus Civic Center caused the city additional expense, and exposed residents to health problems. South Columbus Concerned Citizens joined the lawsuit in February 2002. "We stated to the court Monday that the most important thing to us is the same thing (former) Mayor Peters testified to, and that is stopping the continued problem and repairing the plant so that the problem doesn't continue," Jeff Friedman, a Birmingham attorney who is spearheading the effort to broaden the lawsuit to class-action status, told the Ledger-Enquirer. "The people at Continental Carbon know what the problem is," Mr. Friedman continued. "They know how much it's going to cost to fix it, but they've been reluctant to make the repairs because they can't get a quick enough return on their investment." Continental Carbon, declined comment on the hearing Thursday, saying its corporate office had not had time to review material from Monday's proceeding, the Ledger Enquirer stated. Spokesman Blake Lewis told the Ledger-Enquirer Continental Carbon still denies its Phenix City plant is causing the black pollution. "I would say that's a safe statement," Mr. Lewis said. "I don't know that this is anything new. But until we see the actual litigation, it's pretty difficult for us to talk about it. I think the problem right now is there's all sorts of people who want to speculate on things, and we've always tried to deal in pure fact. Until we see what the allegations are it's pretty tough for us to know whether this is old news or new news or some combination thereof." CREDIT SUISSE: Quattrone Defends Himself in NY Securities Trial --------------------------------------------------------------- Credit Suisse First Boston's former star investment banker Frank Quattrone took the witness stand in the trial for charges of obstruction of justice and witness tampering against him, Reuters reports. Mr. Quattrone is accused of obstructing a federal and Securities and Exchange Commission probe of hot stock allocations in late 2000. At the center of the charges is the controversial e-mail he wrote to a subordinate urging employees to get rid of some documents, an earlier Class Action Reporter story states. Mr. Quattrone denied the charges when he took the stand, answering defense attorney John Keker with a simple "No," when Mr. Keker asked him two questions - "Were you intending to obstruct justice on an SEC investigation?" and "Were you intending to obstruct a grand jury investigation?" Mr. Keker asked Mr. Quattrone about his background, CSFB's organizational structure and the bank's e-mail system. He also asked Mr. Quattrone whether he believed it was his duty to comply with CSFB's document destruction policy, and whether he had ever seen SEC and grand jury subpoenas, Reuters reports. Two witnesses also testified to Mr. Quattrone's character, before Mr. Quattrone took the stand. Rosario Lamberto, who had known him since they were both six years old, told the court that Mr. Quattrone was ". as honest, ethical, straightforward as any human being I know." "I would literally place my life and the life of my wife and children in his hands." the friend told the court, according to a Reuters report. CYBEX INTERNATIONAL: Recalls 33T Treadmills Due To Fire Hazard -------------------------------------------------------------- Cybex International, Inc. is cooperating with the United States Consumer Product Safety Commission by voluntarily recalling 33,719 units Cybex or Trotter Treadmill. The treadmill is a fire hazard because of overheating and ignition of dust inside the treadmill's hood. The dust accumulates because of lack of regular maintenance. The Company and the CPSC have received five reports of fire resulting in property damage to the treadmill and in some instances smoke- related damage to the surrounding area. No injuries were reported. Treadmill is black with gray coloring and has rectangular uprights. It is 69" in length and 30" in width. It has a small display panel that is almost as wide as the treadmill. The brands and models "Cybex 400T," "Cybex 410T," "Trotter 510," "Trotter 525," or "Trotter 535" are written on the display panel. "CXT+" is another recalled model but does not bear the brand Cybex or Trotter. Cybex dealers and direct from Cybex International sold the treadmill between September 1993 and October 2001, for about $4,000. For more details, contact the Company by Phone: (888) 678-3846 between 8 am and 5 pm ET Monday through Friday, or visit the firm's Website: http://www.cybexintl.com. ENRON N.A.: SEC Launches TX Securities Fraud Suit V. Former Exec ---------------------------------------------------------------- The Securities and Exchange Commission charged Wesley H. Colwell, the former Chief Accounting Officer of Enron North America, with violating the antifraud provisions of the federal securities laws. Without admitting or denying the allegations of the complaint, Mr. Colwell has agreed to be enjoined permanently from violating Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 and Exchange Act Rules 10b-5 and 13b2-1, and aiding and abetting the violation of Sections 13(a), and 13(b)(2)(A) and (B) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1 and 13a-13. In addition, Mr. Colwell has agreed to be barred from acting as an officer or director of a public company, and will pay $300,000 in disgorgement and prejudgment interest and a civil penalty of $200,000. As part of this settlement, Mr. Colwell will continue to cooperate with on-going investigations into Enron Corporation by the Securities and Exchange Commission and the U.S. Department of Justice Enron Task Force. As alleged in the complaint, Mr. Colwell, along with others at Enron, engaged in a wide ranging scheme to defraud by manipulating Enron's publicly reported earnings through a variety of devices designed to produce materially false and misleading financial results. This scheme included the misuse of reserve accounts, concealment of losses, inflation of asset values, and deliberate use of improper accounting treatment for transactions. For example, for year 2000, Mr. Colwell and others are alleged to have deferred over $400 million in earnings into reserve accounts within Enron North America (ENA). Subsequently, during first and second quarter 2001, it is alleged that Mr. Colwell and others used reserve accounts within ENA to mask over $1 billion in losses associated with Enron's retail energy business, Enron Energy Services (EES). It is further alleged that when Enron needed earnings in third quarter 2001, Mr. Colwell and others released from ENA reserve accounts over $200 million of previously deferred trading profits. The complaint also alleges that Mr. Colwell and others manipulated the value of Enron's largest private merchant asset, Mariner Energy Inc., and improperly avoided a write-down associated with the disposition of its subsidiary, Houston Pipeline Co. Specifically, the Commission's Complaint alleges the improper use of reserves to manage earnings. Mr. Colwell and others deliberately manipulated Enron reserve accounts to smooth the volatility of earnings of its wholesale energy trading business; to conceal losses of its retail energy business; and generally to enable Enron to announce that it had met or exceeded performance expectations. For example, when ENA generated trading profits in the third and fourth quarters of 2000 that greatly exceeded Enron's internal targets, Enron placed earnings into a previously established reserve known as "Schedule C." In these quarters and others, Mr. Colwell and others improperly used amounts placed into Schedule C as necessary to fulfill internal targets and satisfy external earnings expectations. Earnings improperly reserved and improperly released by Mr. Colwell and others significantly affected Enron's financial reporting and related public disclosures. By the end of 2000, over $400 million in earnings were improperly withheld from Enron's reported earnings. When Enron later needed earnings in the third quarter of 2001, it released over $200 million from Schedule C. Mr. Colwell and others knew that Enron's use of Schedule C to manipulate reported earnings was improper and did not comply with applicable accounting standards. The suit further alleges Mr. Colwell and the Company hid losses Of Enron's retail business. Enron used reserve accounts within ENA to hide hundreds of millions of losses associated with EES, Enron's heavily touted retail energy trading business. By various means, Mr. Colwell and others concealed within ENA a significant portion of EES losses, which materially affected the first and second quarter 2001 operating results of EES and of Enron's largest business segment, Enron Wholesale Services (Wholesale). These means included transferring uncollectible EES receivables to ENA, which then would establish the necessary reserves, and by moving EES' "risk management activities" into ENA so that significant EES contract write-downs and other EES related losses would be charged against Enron's Wholesale business segment. In first quarter 2001, EES losses hidden in ENA exceeded $700 million. In second quarter 2001, additional EES losses of over $300 million were hidden in ENA. The defendants also fraudulently inflated Mariner Energy, Inc. Enron, through Mr. Colwell and others, fraudulently inflated the value of its largest private "merchant" asset, Mariner Energy, Inc., an oil and gas exploration company. In the fourth quarter of 2000, Enron needed an additional $100 million of earnings to achieve budget targets that formed the basis of its earnings- per-share objective for that quarter. To meet this need, Mr. Colwell and others fraudulently increased the recorded value of Mariner by approximately $100 million. Mr. Colwell and others knew that Mariner's fourth quarter 2000 valuation was an amount arbitrarily selected to generate fictitious mark-to-market earnings sufficient to meet Enron's targets. The suit also alleges improper avoidance of write-down of Houston pipeline asset. In the second quarter of 2001, Enron failed to recognize a material loss relating to the impairment of assets of its subsidiary, Houston Pipeline Company (HPL). As early as the summer of 2000, Enron knew that HPL's assets were significantly impaired, i.e., their market value was significantly below their recorded value in Enron's financial statements. In these circumstances, a conventional sale of HPL by Enron would result in a significant loss. To avoid recognizing such a loss, Enron structured a transaction with a third party buyer such that certain HPL assets would be leased rather than sold. However, before executing the lease, Enron agreed to accept a single up-front prepayment rather than annual payments for the initial lease term. This change lowered the total amount of the cash payments due under the lease, reducing the lease's future cash flows to a level insufficient to allow Enron to recover the recorded value of the HPL assets. Needing to justify not recognizing an impairment loss caused by the change in the lease payments, Mr. Colwell and others employed an impairment test using a series of future "deemed" cash flows that were, in fact, never to be received. If the actual cash flows as specified in the lease had been used in the impairment test, Enron would have recorded an impairment loss of approximately $1.4 billion. In agreeing to this settlement, the Commission took into account Mr. Colwell's continuing cooperation in the ongoing investigations being conducted by the Commission and the US Department of Justice Enron Task Force. The suit is styled "SEC v. Wesley H. Colwell, Civil Action No. H-03-4308," pending in the United States District Court for the Southern District of Texas. (LR-18403; AAE Rel. 1894) HOLOCAUST LITIGATION: Bankers Group Denies Special Report Claims ---------------------------------------------------------------- The Swiss Bankers Association (SBA) refuted claims that Swiss banking secrecy laws are blocking the distribution of a $1.25 billion fund intended for victims of the Holocaust and their heirs, swissinfo.com reports. Holocaust victims and their relatives filed the class action, styled "In re Holocaust Victim Assets Litigation, case number CV-96-4849," in the US District Court of the Eastern District of New York. The suit sought to recover the money deposited in banks for safekeeping before or during World War II. The plaintiffs alleged that the banks refused to release the money after the war, saying they needed to provide detailed account information or death certificates from Nazi concentration camps, which were impossible to obtain. In 1998, Swiss banks Credit Suisse and UBS signed a global accord between Jewish plaintiff groups and Swiss banks Credit Suisse and UBS. Under the settlement, $800 million will go to those who made the deposits or their heirs. The remaining funds were to compensate Holocaust survivors who had other claims, not related to personal deposits. A report by the fund's court-appointed Special Master Judah Gribetz, submitted to Judge Edward Korman, stated that Swiss bank secrecy could deprive victims and their heirs of their fair share in the fund. The report said that $485 million has been distributed so far, but only $131.5 million has gone to those who had deposited the money in Swiss banks or their relatives. "Lack of full access to existing documentation and the unavailability of other data has interfered with the claims process," Mr. Gribetz wrote in the report, according to an earlier Class Action Reporter story (October 10, 2003). The SBA said a committee under former Federal Reserve Board chairman Paul Volcker had carried out a comprehensive audit of all dormant Holocaust-era accounts. "Paul Volcker and his committee conducted a very thorough investigation and had full access to the bank accounts," SBA spokesman Thomas Sutter told swissinfo. Lead counsel for Jewish groups and Holocaust victims Burt Neuborne also charged the Swiss banks and the government with obstructing distribution of the money, swissinfo.com reports. He said the Swiss authorities had placed "every conceivable obstacle" in the way since the beginning of the class action. "Swiss banking laws are hindering the examination of 4.1 million accounts, which could contribute to a speedy distribution of the money," he said. Mr. Sutter denied the charges, saying that the vast majority of Nazi-era accounts were totally unrelated to the Holocaust, and it was never part of the settlement to provide access to all accounts. "In our opinion, it makes no sense to centralise all bank accounts that were active during the Second World War," Mr. Sutter told swissinfo.com. "The Volcker committee has already had access and it makes no sense to repeat the procedure." Hans B�r, a member of Volcker's team and a former bank chairman, told swissinfo that Mr. Gribetz's comments were out of place. "I think the most surprising thing (in the report) is the acrimonious tone, for which there is absolutely no reason," he said. "Gribetz complains in one part of his statement that the documents aren't available. I would like to remind you that this is material dating back 60 or 70 years . The law requires documents to be retained for ten years. It is a miracle that any documents are available at all. To complain that they are not all there is ridiculous." In re Holocaust Victim Assets Litigation, case number CV-96-4849 was initiated in October 1996 in the U.S. District Court of the Eastern District of New York before Judge Edward R. Korman. It consists of four separate amended and consolidated class actions: Sonabend et al. v. Union Bank of Switzerland et al., Trilling-Grotch et al. v. Union Bank of Switzerland et al., Weisshaus et al. v. Union Bank of Switzerland et al. and World Council of Orthodox Jewish Communities Inc. et al. v. Union Bank of Switzerland et al. The settlement approval order was released on July 26, 2000. Claimants are represented by Burt Neuborne as senior counsel for the settlement class. JANUS CAPITAL: Investors Withdraw $4.4 Bil Due To AG, SEC Probe --------------------------------------------------------------- Investors in funds managed by the Janus Capital Group withdrew US$4.4 billion, after the Company was included in an investment fraud probe led by New York Attorney General Eliot Spitzer, the Financial Times reports. The withdrawal was the biggest withdrawal from any US fund group in the past year. The probe implicates eight companies and spawned more than 20 lawsuits, over late-trading and market-timing transactions in fund shares. Mr. Spitzer and the Securities and Exchange Commission have widened the probe to big mutual fund groups, brokerages, hedge funds and other institutions. This week, the Securities and Exchange Commission said its staff was preparing to draw up rules to combat trading abuses. Janus' net assets fell by 3.6 per cent during September, to $146.5 billion at September 30, FT.com reports. It reported a a net outflow of $1 billion from institutional money-market funds, which often see sizeable swings, and an outflow of $3.4 billion from non-money-market funds. FT.com reports that about $314 million of the outflows was the result of ending its arrangements with so-called "market timers", mainly hedge funds, with whom it had struck a deal to allow arbitraging of its mutual funds in exchange for fees and business, despite publicly stating it discouraged such arbitrage. The SEC is investigating charges that the investors illegally bought mutual fund shares after 4 pm but at the 4 pm price. The SEC said "it is clear that there are additional regulatory actions that the Commission should consider in seeking to eliminate or significantly curb late trading and market timing abuses in the future." Janus Capital also faces several class actions filed in the United States District Court in New York. In a bid to put damaging revelations behind it, it is engaging in settlement talks with Mr. Spitzer. KING IMPORT: NY Agriculture Head Warns V. Thelma Mayonnaise ----------------------------------------------------------- New York Agriculture Commissioner Nathan L. Rudgers issued an alert to consumers, who are sensitive to eggs, to not consume "Thelma Mayonnaise" distributed by King Import, Inc., 98 12th Street, Brooklyn, New York 11215 due to the presence of undeclared eggs. People who have allergies to eggs run the risk of serious or life threatening allergic reactions if they consume these products. "Thelma Mayonnaise" is packaged in a 500-gram plastic jar with a plastic cap. The numbers 09/06/03 07:39 above 06/11/03 are printed on the side of the container. All writing is in Hebrew. The problem was discovered by New York State food inspectors during a routine inspection of a retail store in Brooklyn. The product was sold in the New York City area. No illnesses have been reported to date. Consumers who have allergies to eggs and purchased "Thelma Mayonnaise" are urged to return it to the place of purchase. MICROSOFT CORPORATION: FL Companies Urged To Take Part in Pact -------------------------------------------------------------- Lawyers in a Florida class action filed against software giant Microsoft Corporation urged business to take part in the suit settlement, saying the businesses may not realize how much they might lose if they don't file a claims, news-press.com reports. Florida is one of nine states that did not sign off on a federal antitrust settlement against Microsoft last year, allowing the 1999 suit, styled "In Re Florida Microsoft Antitrust Litigation," to proceed in the 11th Judicial District Court of Miami, Dade County, Florida. The suit alleges that the Company unlawfully used anticompetitive means to maintain a monopoly in markets for certain software, and that as a result, it overcharged Florida consumers who licensed its MS-DOS, Windows, Word, Excel and Office software. On April 15, 2003, the parties settled the case, and the court conditionally certified a settlement class and approved a preliminary settlement agreement. Under the settlement, home consumers and businesses can collect $12 per operating system - Windows 95, Windows 98, Windows Millennium Edition - and $5 for other Microsoft software applications purchased between November 16, 1995, and December 31, 2002. Other applications include older versions of Windows as well as Word and Excel. The amount may be small to the average home computer user, but it can add up quickly for businesses, Robin Graves, an attorney with Lightfoot, Franklin & White, the lead plaintiff law firm based in Birmingham, Alabama, told news-press.com. That's because the settlement cost is per software license and companies must license each version they use. "If you have 1,000 employees who use a computer and, since the class period is 7 years, you have probably upgraded at least once. It really adds up," Ms. Graves told news-press.com. "That's a good chunk of money that you can use to upgrade your computer systems." People have until December 24 to file a claim, but the attorneys want to have as many claims on file as possible when a judge gives final consideration on the settlement, now set for November 24. "We want to be able to show the judge that people are making claims in this case," Ms. Graves told news-press.com. For more information on the Microsoft class-action settlement in Florida, contact the Settlement Administrator by Mail: Settlement Administrator, Microsoft Florida Settlement, P.O. Box 3019, Portland OR 97208-3019 or visit the Website: http://www.microsoftproductssettlement.com/florida/home.htm NCI BUILDING: SEC Files Settled Civil Enforcement Lawsuit in DC --------------------------------------------------------------- The US Securities and Exchange Commission filed a settled civil enforcement action in the United States District Court for the District of Columbia against Gregory L. English, former corporate controller of NCI Building Systems, Inc. (NCI), a Houston-based manufacturer of metal products for the non- residential building industry. The complaint alleges: (1) On June 8, 2001, NCI filed with the Commission a Form 10-K/A, restating its financial statements for fiscal 1999 and 2000 and a Form 10-Q/A, restating its financial statements for the first quarter of fiscal year 2001. According to these filings, NCI overstated net earnings by $1.3 million during the third and fourth quarters of fiscal 1999, $7.5 million for fiscal 2000 and $1.2 million for the first quarter of fiscal 2001. (2) A number of accounting errors at NCI's Components Division had resulted in material misstatement of NCI's financial statements. The errors resulted primarily from NCI's failure to update standard costs and scrap metal factors following NCI's migration to a new management information system in May 1999, and failed attempts by NCI accounting personnel to manually correct (via unsupported journal entries) for MIS problems in a key inventory liability account. The complaint further alleges that, in July 2000, following an annual physical inventory at the company's components division, an accounting employee informed Mr. English that a probable "pick-up" of approximately $2.6 million would be made on the books, resulting in an increase in recorded book inventory. Soon after, the employee retracted this initial conclusion and informed Mr. English that book inventory exceeded the physical counts by more than $2 million, requiring that Mr. English decrease the book inventory number. Despite this information, in August 2000, Mr. English proceeded to authorize the erroneous $2.6 million entry. As NCI's corporate controller, Mr. English knew, or was reckless in not knowing, that the inventory overstatement would have a material effect on NCI's financial statements. In addition, Mr. English knew or should have known of errors with NCI's new MIS system and failed to correct them. Without admitting or denying the allegations in the complaint, Mr. English consented to the entry of a Final Judgment permanently enjoining him from future violations of (or aiding and abetting violations of) Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B) and 13(b)(5) of the Securities Exchange Act of 1934 and Exchange Act Rules 10b-5, 12b-20, 13a-1, 13a-13 and 13b2-1. The Final Judgment also imposes a $25,000 civil penalty and prohibits English from serving as an officer or director of a public company for five years. The Commission also issued a settled cease-and-desist order today (Order) against NCI. The findings in the Order involved a number of accounting errors at the company, many of which were caused by the implementation of the MIS system in May 1999. The Order notes that the Commission took into account remedial acts promptly undertaken by the respondent and cooperation afforded the Commission staff. NCI neither admitted nor denied the findings in the Order. In the Order, the Commission Ordered that NCI cease and desist from committing or causing any violations and any future violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder. NCI common stock trades on the New York Stock Exchange under the symbol NCS. The suit is styled "SEC v. Gregory L. English, No. 1:03-CV- 02061, USDC, D.D.C., COLLYER] (LR-18402; AAE Rel. 1893)." NEW HAMPSHIRE: Seabrook Plant's Leak Not Dangerous, NRC States -------------------------------------------------------------- The Seabrook Station nuclear plant in New Hampshire is sporting a coolant leak, similar to a leak that caused an expensive and lengthy shutdown of an Ohio plant, the Associated Press reports. Inspectors discovered the leak early this week, in a weld on a pipe that surrounds a mechanism that moves fuel rods in and out of the reactor. This will allow coolant, which contains corrosive particles, to escape from the pipe. If allowed to accumulate for months or years, the coolant can eat through steel. Inspectors promptly reported it to the Nuclear Regulatory Commission (NRC). However, a spokesman for the plant and NRC downplayed the dangers of the leak, saying it was caught in time to prevent costly damage and poses no danger. "It's a very small and recent leak," plant spokesman Alan Griffith told AP. He added that plant technicians think the leak started in the last two to three weeks. A leak at Ohio's Davis-Besse plant was undetected for years, causing the coolant to nearly eat through a 6-inch steel cap protecting the reactor. The leak cost the plant's operator more than $500 million for repairs and the purchase of power from other sources. PREMIER MARKETING: CA Court Enters Judgment in SEC Stock Suit ------------------------------------------------------------- United States District Court for the Central District of California R. Gary Klausner granted the Securities and Exchange Commission's motion for entry of default judgment and entered a Final Judgment Of Permanent Injunction And Other Relief Against Premier Marketing and Investments, Inc. Premier is enjoined from violating the registration and antifraud provisions of the federal securities laws, specifically Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Under the terms of the Final Judgment, Premier is also required to pay disgorgement in the amount of $4,497,451, plus prejudgment interest. In January 2003, the Commission charged Los Angeles-based Premier and its president, Nicholas Roblee, a/k/a Nicholas Richmond, 34, of Encino, California, with fraudulently raising at least $4.5 million from dozens of investors nationwide, purportedly for the purpose of investing in a variety of "high- yield" investment programs. The defendants represented that investors could earn returns of up to 200% per month through various programs, including high-yield promissory notes, bridge loans and the purchase and sale of precious metals. In fact, Mr. Richmond and Premier operated a "prime-bank" scheme and misappropriated investor funds between November 2000 and January 2003. On January 15, 2003, the court granted the Commission's request for a temporary restraining order against Mr. Richmond and Premier, which, among other things, imposed a freeze on defendants' assets and halted the ongoing fraud. In April 2003, Mr. Richmond was indicted in a criminal proceeding before the US District Court for the Central District of California, arising out of the same facts as the Commission's case. He is currently in custody and awaiting trial, which is currently set for January 13, 2004 . The federal suit is titled "U.S. v. Nicholas Roblee, Case No. 03cr00322," filed in the United States District Court for the Central District of California, while the SEC complaint is styled, "SEC v. Premier Marketing and Investments and Nicholas Roblee a/k/a Nicholas Richmond, Civil Action No. 03-342 RGK (JTLx)," filed in the United States District Court for the Central District of California. (LR-18399) QWEST COMMUNICATIONS: Agrees To Settle "IPO Spinning" Charges ------------------------------------------------------------- New York Attorney General Eliot Spitzer reached an agreement which resolves allegations that a leading telecommunications executive improperly received lucrative shares of Initial Public Offerings (IPOs). Under the agreement, Joseph P. Nacchio, former Chief Executive Officer of Qwest Communications International, Inc., will disgorge $400,000 in profits from the controversial practice know as "IPO spinning." "IPO spinning is no longer permitted under the accord negotiated with Wall Street investment firms," AG Spitzer said in a statement. "But we continue to pursue appropriate remedies against individuals who were enriched unjustly by the practices revealed in the course of our investigation." AG Spitzer sued Mr. Nacchio, and four other telecom executives in September 2002, alleging that each had received millions of dollars in hot IPO offerings from the Salomon Smith Barney (SSB) division of Citigroup. According to the complaint, SSB doled out lucrative IPO shares as an inducement and reward for investment banking business from Denver-based Qwest and other telecom companies. The complaint also alleged that Mr. Nacchio, and the other named officials, failed to disclose receipt of such shares from SSB. Without admitting or denying liability, Mr. Nacchio has agreed to contribute $400,000 to two New York law schools. The clinics, to be established at New York Law School and St. John's School of Law, will help qualified small investors bring claims before securities arbitration panels. AG Spitzer commended Mr. Nacchio for working with his office to resolve the matter. Earlier this year, AG Spitzer announced a settlement with Phillip F. Anschutz, the former Chairman of Qwest. The case against the three other executives named in the original suit - Bernard Ebbers of WorldCom, Stephen Garafolo of Metromedia and Clark McLeod of McLeodUSA - is pending. The agreement was negotiated by Assistant Attorney General, Harriet Rosen, and Assistant Deputy Attorney General, Gary Connor. SUPREME COURT: Debates States' Capacity To Break Approved Pacts --------------------------------------------------------------- The Supreme Court heard the arguments this week as to whether Texas made an unbreakable promise to provide better health care to poor children - an issue that asks a critical and fundamental question: what can federal judges do to states that don't live up to deals to end "mass" lawsuits, The Bradenton Herald reports. The case immediately affects about 1.5 million Texas children who rely on the state government for health and dental care. More broadly, it has implications for states that settle class- action lawsuits over such matters as health care, education and prison conditions, and then are charged with violating the agreements, the Herald asserts. The issues are technical ones that give the Supreme Court a chance to further develop its recent line of states' rights rulings that have increased state powers at the expense of individuals and the federal government. During arguments in the Texas case, the justices - even usual states' rights advocates - repeatedly expressed concern about allowing states to break agreements when they agree to federal court orders. The 1996 court-approved settlement, or consent decree, ended a class action over Texas's services for children in the Medicaid program. The state, while not admitting to any wrongdoing, agreed to make improvements in the program as it was executed. Two years later, a group of poor children returned to federal court to complain that the state had violated the agreement. The Texas attorney general claimed the state was immune from the challenges under the Constitution. The case titled Linda Frew on Behalf of Her Daughter Carla Frew et al. v. Albert Hawkins, Commissioner, Texas Health and Human Services Commission et al., Case No. 02-628 is pending in the U.S. Supreme Court. Petitioner is represented by attorney Susan Finkelstein Zinn and respondent by Solicitor General Rafael Edward Cruz. TENNCARE: Judge Signs Third Elderly Care Pact, Expects Another -------------------------------------------------------------- US District Court Judge Robert Echols recently approved the settlement of a class-action lawsuit against TennCare that challenged the way the state provides home- and community-based health care for the poor, the disabled and elderly, the Associated Press Newswires reports. The signing of this third settlement, arising out of four major class actions, leaves only one of the suits pending. The fourth lawsuit, called "Rosen," concerns the eligibility of the enrollees dropped from TennCare. In December, US District Judge William Haynes ordered that TennCare reinstate 160,000 people who were purged from the public-funded health insurance program. The state appealed that order, but under an agreement negotiated by state attorneys and lawyers with the Tennessee Justice Center, which represented the enrollees, the dropped enrollees will have one year to reapply for TennCare and show they are eligible. Judge Haynes already has promised approval of the proposed settlement of the fourth class action, the Rosen case, when he gets it back from the 6th US Circuit Court of Appeals. The third agreement, already approved by Judge Echols, calls for Tennessee's government to pursue a "budget neutral" stay-at-home program for the elderly. The settlement also requires the state to ensure that TennCare pay more home health costs. Advocates for the elderly and disabled have tried for years to institute a system that offered care options besides becoming an undue burden on the family or going into a nursing home. Tennessee is near the bottom among states in its expenditures for home- and community-based services for the elderly and disabled, AP reports. The four settlements are expected to save tens of millions of dollars a year for the $7.1 billion TennCare health care program for the poor, uninsured and uninsurable. These settlements give the governor flexibility and time to make changes in TennCare that will save money and keep the programs viable. Michele Johnson, an attorney with the Tennessee Justice Center, told AP the settlements are "very promising that we may be able to fix problems before they reach the crisis point. That does not mean there will be no problems, but that this administration (referring to the administration of Governor Philip Bredesen) recognizes problems as an opportunity to serve people on TennCare better and fulfill its mission." CAR readers desiring to learn more about details of the settlements put forward to save the TennCare program can refer to an earlier story in CAR of October 9, 2003. The settlement for the health care lawsuit titled Newberry v. Menke a/k/a Newberry v. Goetz, Civil Action No. 3-98-1127 filed on December 7, 1998 was approved in the U.S. District Court for the Middle District of Tennessee by Judge Robert Echols. State defendants in this action are represented by Deputy Attorney General Linda A. Ross, defendant-intervenor by attorney Christopher Puri, and Reed Smith Shaw & McClay LLP. Rosen v. Commissioner of Finance and Administration, case number 3:98-cv-00627 dated July 8, 1998 is pending in the U.S. District Court for the Middle District of Tennessee before Judge William Haynes. Grier v. Wadley a/k/a Grier v. Goetz, case number 79- 3107 and John B. v. Menke a/k/a John B. v. Goetz, case number 3:98-0168 were settled in the U.S. District Court for the Middle District of Tennessee before Judge John T. Nixon. Plaintiffs in all four lawsuits are represented by the Tennessee Justice Center with Gordon Bonnyman as lead attorney. TOBACCO FIRMS: Australian Watchdog Analyzing "Light" Cigarettes --------------------------------------------------------------- The Australian Competition and Consumer Commission (ACCC) is investigating three multinational tobacco companies for deceptive and misleading conduct over the sale of cigarettes labeled "light" and "mild," The Australian reports. Included in the investigation are: (1) Philip Morris, (2) British America Tobacco, and (3) WD&HO Wills The consumer group charges the firms with violating the Trade Practices Act by duping smokers into believing the products were safer than other cigarettes. The investigation was conducted after federal Democrats senator Lyn Allison complained about the inadequacy of a prior ACCC report on the issue in June last year. The ACCC confirmed the investigation to The Australian yesterday but refused to provide any information. Newly appointed ACCC head Graeme Samuel has told Sen. Allison that he would be releasing a report on a further investigation soon, Sen. Allison stated. "There is plenty of evidence the industry has acted outside the Trade Practices Act," Senator Allison told the Australian. "We have already heard evidence from a whistleblower (former BAT in- house lawyer Fred Gulson) about the destruction of documents, so it is important the ACCC is tough on them." A prosecution from the ACCC could cause the companies to pay multimillion-dollar penalties and cause the filing of legal action by smokers, claiming to have been deceived by cigarettes promoted as "light" or "mild." The news of the ACCC investigation is a boost for anti-tobacco activists and tobacco litigation lawyers. "We welcome any investigation which draws attention to the way these companies do business," Anne Jones, from Action on Smoking and Health, told the Australian. New Securities Fraud Cases BANK ONE: Rabin Murray Lodges Securities Fraud Suit in S.D. OH -------------------------------------------------------------- Rabin Murray & Frank LLP initiated a securities class action in United States District Court for the Southern District of Ohio, case number 03-CV-916, on behalf of all persons or entities who purchased or otherwise acquired One Group Balanced (Nasdaq:OAMAX) (Nasdaq:OAMBX) (Nasdaq:OGAFX), One Group Diversified Equity (Nasdaq:OVBGX) (Nasdaq:ODECX) (Nasdaq:OGVFX), One Group Diversified International (Nasdaq:ONIBX) (Nasdaq:OGDCX) (Nasdaq:WOIEX), One Group Diversified Mid Cap (Nasdaq:ODMBX) (Nasdaq:ODMCX) (Nasdaq:WOOPX), and the One Group family of funds owned and operated by Banc One. (NYSE:ONE), and its subsidiaries and affiliates, between October 1, 1998 and July 3, 2003, inclusive. The complaint names Bank One Corp.; Banc One Investment Advisers; One Group (r) Mutual Funds; Canary Capital Partners, LLC; Canary Investment Management, LLC; Canary Capital Partners, Ltd; each of the Funds; and John Does 1-100. The Funds, and the symbols for the respective Funds named below, are as follows: (1) One Group Technology Fund (Nasdaq:OGTAX), (Nasdaq:OGTBX), (Nasdaq:OGTCX), (Nasdaq:OGTIX); (2) One Group Health Sciences Fund (Nasdaq:OHSAX), (Nasdaq:OHSBX), (Nasdaq:OHSCX), (Nasdaq:OHSIX); (3) One Group Diversified International Fund (Nasdaq:PGIEX), (Nasdaq:ONIBX), (Nasdaq:OGDCX), (Nasdaq:WOIEX); (4) One Group International Equity Index Fund (Nasdaq:OEIAX), (Nasdaq:OGEBX), (Nasdaq:OIICX), (Nasdaq:OIEAX); (5) One Group Small Cap Growth Fund (Nasdaq:PGSCX), (Nasdaq:OGFBX), (Nasdaq:OSGCX), (Nasdaq:OGGFX); (6) One Group Small Cap Value Fund (Nasdaq:PSOAX), (Nasdaq:PSOBX), (Nasdaq:OSVCX), (Nasdaq:PSOPX); (7) One Group Market Expansion Index Fund (Nasdaq:OMEAX), (Nasdaq:OMEBX), (Nasdaq:OMECX), (Nasdaq:PGMIX); (8) One Group Mid Cap Growth Fund (Nasdaq:OSGIX), (Nasdaq:OGOBX), (Nasdaq:OMGCX), (Nasdaq:HLGEX); (9) One Group Mid Cap Value Fund (Nasdaq:OGDIX), (Nasdaq:OGDBX), (Nasdaq:OMVCX), (Nasdaq:HLDEX); (10) One Group Diversified Mid Cap Fund (Nasdaq:PECAX), (Nasdaq:ODMBX), (Nasdaq:ODMCX), (Nasdaq:WOOPX); (11) One Group Large Cap Growth Fund (Nasdaq:OLGAX), (Nasdaq:OGLGX), (Nasdaq:OLGCX); (12) One Group Large Cap Value Fund (Nasdaq:OLVAX), (Nasdaq:OLVBX), (Nasdaq:OLVCX), (Nasdaq:HLQVX); (13) One Group Diversified Equity Fund (Nasdaq:PAVGX), (Nasdaq:OVBGX), (Nasdaq:ODECX), (Nasdaq:OGVFX); (14) One Group Equity Index Fund (Nasdaq:OGEAX), (Nasdaq:OGEIX), (Nasdaq:OEICX), (Nasdaq:HLEIX); (15) One Group Equity Income Fund (Nasdaq:OIEIX), (Nasdaq:OGIBX), (Nasdaq:OINCX), (Nasdaq:HLIEX); (16) One Group Balanced Fund (Nasdaq:OGASX), (Nasdaq:OAMAX), (Nasdaq:OAMBX), (Nasdaq:OGAFX); (17) One Group Investor Growth Fund (Nasdaq:ONGAX), (Nasdaq:OGIGX), (Nasdaq:OGGCX), (Nasdaq:ONIFX); (18) One Group Investor Growth & Income Fund (Nasdaq:ONGIX), (Nasdaq:ONEBX), (Nasdaq:ONECX), (Nasdaq:ONGFX); (19) One Group Investor Balanced Fund (Nasdaq:OGIAX), (Nasdaq:OGBBX), (Nasdaq:OGBCX), (Nasdaq:OIBFX); (20) One Group Investor Conservative Growth Fund (Nasdaq:OICAX), (Nasdaq:OICGX), (Nasdaq:OCGCX), (Nasdaq:ONCFX); (21) One Group Tax-Free Bond Fund (Nasdaq:PMBAX), (Nasdaq:PUBBX), (Nasdaq:PRBIX); (22) One Group Arizona Municipal Bond Fund (Nasdaq:OAMAX), (Nasdaq:OAMBX), (Nasdaq:OGAFX); (23) One Group Kentucky Municipal Bond Fund (Nasdaq:OKYAX), (Nasdaq:ONKBX), (Nasdaq:TRKMX); (24) One Group Louisiana Municipal Bond Fund (Nasdaq:PGLAX), (Nasdaq:ONLBX), (Nasdaq:OGLFX); (25) One Group Michigan Municipal Bond Fund (Nasdaq:PEIAX), (Nasdaq:OMIBX), (Nasdaq:WOMBX); (26) One Group Ohio Municipal Bond Fund (Nasdaq:ONOHX), (Nasdaq:OOHBX), (Nasdaq:HLOMX); (27) One Group West Virginia Municipal Bond Fund (Nasdaq:OQWAX), (Nasdaq:OGWBX), (Nasdaq:OGWFX); (28) One Group Municipal Income Fund (Nasdaq:OTBAX), (Nasdaq:OTBBX), (Nasdaq:OMICX), (Nasdaq:HLTAX); (29) One Group Intermediate Tax-Free Bond Fund (Nasdaq:ONTAX), (Nasdaq:ONFBX), (Nasdaq:HLTIX); (30) One Group Short-term Municipal Bond Fund (Nasdaq:OGLUX), (OVBXB), (Nasdaq:OSTCX), (Nasdaq:HLLVX); (31) One Group High Yield Bond Fund (Nasdaq:OHYAX), (Nasdaq:OGHBX), (Nasdaq:OGHGX), (Nasdaq:OHYFX); (32) One Group Income Bond Fund (Nasdaq:ONIAX), (Nasdaq:OINBX), (Nasdaq:OBDCX), (Nasdaq:HLIPX); (33) One Group Bond Fund (Nasdaq:PGBOX), (Nasdaq:OBOBX), (Nasdaq:OBOCX), (Nasdaq:WOBDX); (34) One Group Government Bond Fund (Nasdaq:OGGAX), (Nasdaq:OGGBX), (Nasdaq:OGVCX), (Nasdaq:HLGAX); (35) One Group Mortgage Backed Securities Fund (Nasdaq:OMBAX), (Nasdaq:OMBIX); (36) One Group Intermediate Bond Fund (Nasdaq:OGBAX), (Nasdaq:OBDBX), (Nasdaq:OIMCX), (Nasdaq:SEIFX); (37) One Group Treasury & Agency Fund (Nasdaq:OTABX), (Nasdaq:ONTBX), (Nasdaq:OGTFX); (38) One Group Short-Term Bond Fund (Nasdaq:OGLVX), (OVBXB), (Nasdaq:OSTCX), (Nasdaq:HLLVX); (39) One Group Ultra Short-Term Bond Fund (Nasdaq:ONUAX), (Nasdaq:ONUBX), (Nasdaq:OGUCX), (Nasdaq:HLGFX); (40) One Group Market Neutral Fund (Nasdaq:OGNAX); (41) One Group Ohio Municipal Money Market Fund (Nasdaq:HLOMX), (Nasdaq:ONOHX), (Nasdaq:OOHBX); (42) One Group Michigan Municipal Money Market Fund (Nasdaq:WMIXX), (Nasdaq:PEMXX); (43) One Group Municipal Money Market Fund (Nasdaq:HTOXX), (Nasdaq:OGIXX); (44) One Group Prime Money Market Fund (Nasdaq:HLPXX), (Nasdaq:HPIXX), (Nasdaq:OPBXX), (Nasdaq:OPCXX); (45) One Group U.S. Government Securities Money Market Fund (Nasdaq:OMAXX), (Nasdaq:OMIXX); and (46) One Group U.S. Treasury Securities Money Market Fund (Nasdaq:HGOXX), (Nasdaq:HTIXX), (Nasdaq:OTBXX), (Nasdaq:OTCXX). The Complaint alleges that defendants violated Sections 11 and 15 of the Securities Act of 1933; Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder; and Section 206 of the Investment Advisers Act of 1940. The Complaint charges that, throughout the Class Period, defendants failed to disclose that they improperly allowed certain hedge funds, such as Canary, to engage in ``late trading'' and ``timing'' of the Funds' securities. Late trades are trades received after 4:00 p.m. EST that are filled based on that day's net asset value, as opposed to being filled based on the next day's net asset value, which is the proper procedure under SEC regulations. Late trading allows favored investors to make use of market-moving information that only becomes available after 4:00 p.m. and has been compared to betting on a horse race that already has been run. Timing is excessive, arbitrage trading undertaken to turn a quick profit and which ordinary investors are told that the funds police. Late trading and timing injure ordinary mutual fund investors -- who are not allowed to engage in such practices -- and are acknowledged as improper practices by the Funds. In return for receiving extra fees from Canary and other favored investors, Bank One Corporation and its subsidiaries allowed and facilitated Canary's timing and late trading activities, to the detriment of class members, who paid, dollar for dollar, for Canary's improper profits. These practices were undisclosed in the prospectuses of the Funds, which falsely represented that the Funds actively police against timing and represented that post-4:00 p.m. EST trades will be priced based on the next day's net asset value and that premature redemptions will be assessed a charge. For more details, contact Eric J. Belfi or Gregory Linkh by Phone: (800) 497-8076, (212) 682-1818 or (212) 682-1892 or by E- mail: info@rabinlaw.com BANK ONE: Schiffrin & Barroway Lodges Securities Suit in N.D. IL ---------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Northern District of Illinois on behalf of all purchasers, redeemers and holders of shares of the One Group Funds managed by wholly-owned subsidiaries of Bank One Corporation (NYSE: ONE) collectively, between October 1, 1998 and July 3, 2003. The following One Group Funds are subject to the above class action lawsuit: (1) One Group Technology Fund (Nasdaq:OGTAX), (Nasdaq:OGTBX), (Nasdaq:OGTCX), (Nasdaq:OGTIX); (2) One Group Health Sciences Fund (Nasdaq:OHSAX), (Nasdaq:OHSBX), (Nasdaq:OHSCX), (Nasdaq:OHSIX); (3) One Group Diversified International Fund (Nasdaq:PGIEX), (Nasdaq:ONIBX), (Nasdaq:OGDCX), (Nasdaq:WOIEX); (4) One Group International Equity Index Fund (Nasdaq:OEIAX), (Nasdaq:OGEBX), (Nasdaq:OIICX), (Nasdaq:OIEAX); (5) One Group Small Cap Growth Fund (Nasdaq:PGSCX), (Nasdaq:OGFBX), (Nasdaq:OSGCX), (Nasdaq:OGGFX); (6) One Group Small Cap Value Fund (Nasdaq:PSOAX), (Nasdaq:PSOBX), (Nasdaq:OSVCX), (Nasdaq:PSOPX); (7) One Group Market Expansion Index Fund (Nasdaq:OMEAX), (Nasdaq:OMEBX), (Nasdaq:OMECX), (Nasdaq:PGMIX); (8) One Group Mid Cap Growth Fund (Nasdaq:OSGIX), (Nasdaq:OGOBX), (Nasdaq:OMGCX), (Nasdaq:HLGEX); (9) One Group Mid Cap Value Fund (Nasdaq:OGDIX), (Nasdaq:OGDBX), (Nasdaq:OMVCX), (Nasdaq:HLDEX); (10) One Group Diversified Mid Cap Fund (Nasdaq:PECAX), (Nasdaq:ODMBX), (Nasdaq:ODMCX), (Nasdaq:WOOPX); (11) One Group Large Cap Growth Fund (Nasdaq:OLGAX), (Nasdaq:OGLGX), (Nasdaq:OLGCX); (12) One Group Large Cap Value Fund (Nasdaq:OLVAX), (Nasdaq:OLVBX), (Nasdaq:OLVCX), (Nasdaq:HLQVX); (13) One Group Diversified Equity Fund (Nasdaq:PAVGX), (Nasdaq:OVBGX), (Nasdaq:ODECX), (Nasdaq:OGVFX); (14) One Group Equity Index Fund (Nasdaq:OGEAX), (Nasdaq:OGEIX), (Nasdaq:OEICX), (Nasdaq:HLEIX); (15) One Group Equity Income Fund (Nasdaq:OIEIX), (Nasdaq:OGIBX), (Nasdaq:OINCX), (Nasdaq:HLIEX); (16) One Group Balanced Fund (Nasdaq:OGASX), (Nasdaq:OAMAX), (Nasdaq:OAMBX), (Nasdaq:OGAFX); (17) One Group Investor Growth Fund (Nasdaq:ONGAX), (Nasdaq:OGIGX), (Nasdaq:OGGCX), (Nasdaq:ONIFX); (18) One Group Investor Growth & Income Fund (Nasdaq:ONGIX), (Nasdaq:ONEBX), (Nasdaq:ONECX), (Nasdaq:ONGFX); (19) One Group Investor Balanced Fund (Nasdaq:OGIAX), (Nasdaq:OGBBX), (Nasdaq:OGBCX), (Nasdaq:OIBFX); (20) One Group Investor Conservative Growth Fund (Nasdaq:OICAX), (Nasdaq:OICGX), (Nasdaq:OCGCX), (Nasdaq:ONCFX); (21) One Group Tax-Free Bond Fund (Nasdaq:PMBAX), (Nasdaq:PUBBX), (Nasdaq:PRBIX); (22) One Group Arizona Municipal Bond Fund (Nasdaq:OAMAX), (Nasdaq:OAMBX), (Nasdaq:OGAFX); (23) One Group Kentucky Municipal Bond Fund (Nasdaq:OKYAX), (Nasdaq:ONKBX), (Nasdaq:TRKMX); (24) One Group Louisiana Municipal Bond Fund (Nasdaq:PGLAX), (Nasdaq:ONLBX), (Nasdaq:OGLFX); (25) One Group Michigan Municipal Bond Fund (Nasdaq:PEIAX), (Nasdaq:OMIBX), (Nasdaq:WOMBX); (26) One Group Ohio Municipal Bond Fund (Nasdaq:ONOHX), (Nasdaq:OOHBX), (Nasdaq:HLOMX); (27) One Group West Virginia Municipal Bond Fund (Nasdaq:OQWAX), (Nasdaq:OGWBX), (Nasdaq:OGWFX); (28) One Group Municipal Income Fund (Nasdaq:OTBAX), (Nasdaq:OTBBX), (Nasdaq:OMICX), (Nasdaq:HLTAX); (29) One Group Intermediate Tax-Free Bond Fund (Nasdaq:ONTAX), (Nasdaq:ONFBX), (Nasdaq:HLTIX); (30) One Group Short-term Municipal Bond Fund (Nasdaq:OGLUX), (OVBXB), (Nasdaq:OSTCX), (Nasdaq:HLLVX); (31) One Group High Yield Bond Fund (Nasdaq:OHYAX), (Nasdaq:OGHBX), (Nasdaq:OGHGX), (Nasdaq:OHYFX); (32) One Group Income Bond Fund (Nasdaq:ONIAX), (Nasdaq:OINBX), (Nasdaq:OBDCX), (Nasdaq:HLIPX); (33) One Group Bond Fund (Nasdaq:PGBOX), (Nasdaq:OBOBX), (Nasdaq:OBOCX), (Nasdaq:WOBDX); (34) One Group Government Bond Fund (Nasdaq:OGGAX), (Nasdaq:OGGBX), (Nasdaq:OGVCX), (Nasdaq:HLGAX); (35) One Group Mortgage Backed Securities Fund (Nasdaq:OMBAX), (Nasdaq:OMBIX); (36) One Group Intermediate Bond Fund (Nasdaq:OGBAX), (Nasdaq:OBDBX), (Nasdaq:OIMCX), (Nasdaq:SEIFX); (37) One Group Treasury & Agency Fund (Nasdaq:OTABX), (Nasdaq:ONTBX), (Nasdaq:OGTFX); (38) One Group Short-Term Bond Fund (Nasdaq:OGLVX), (OVBXB), (Nasdaq:OSTCX), (Nasdaq:HLLVX); (39) One Group Ultra Short-Term Bond Fund (Nasdaq:ONUAX), (Nasdaq:ONUBX), (Nasdaq:OGUCX), (Nasdaq:HLGFX); (40) One Group Market Neutral Fund (Nasdaq:OGNAX); (41) One Group Ohio Municipal Money Market Fund (Nasdaq:HLOMX), (Nasdaq:ONOHX), (Nasdaq:OOHBX); (42) One Group Michigan Municipal Money Market Fund (Nasdaq:WMIXX), (Nasdaq:PEMXX); (43) One Group Municipal Money Market Fund (Nasdaq:HTOXX), (Nasdaq:OGIXX); (44) One Group Prime Money Market Fund (Nasdaq:HLPXX), (Nasdaq:HPIXX), (Nasdaq:OPBXX), (Nasdaq:OPCXX); (45) One Group U.S. Government Securities Money Market Fund (Nasdaq:OMAXX), (Nasdaq:OMIXX); and (46) One Group U.S. Treasury Securities Money Market Fund (Nasdaq:HGOXX), (Nasdaq:HTIXX), (Nasdaq:OTBXX), (Nasdaq:OTCXX). The complaint charges Bank One Corporation, One Groupr Mutual Funds, the One Group Funds, Mark Beeson, Richard R. Jandrain III, Clyde L. Carter, Karen Johnson-Grunst, Edward J. Stern, Canary Investment Management, LLC, Canary Capital Partners, LLC, and Canary Capital Partners, LTD. with violations of the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, and for common law breach of fiduciary duties. The Complaint alleges that the One Group Funds and the other defendants engaged in a fraudulent scheme to defraud and cause financial injury to the shareholders of the One Group Funds. According to the Complaint, the One Group Funds, Defendants Canary Capital Partners, LLC and Canary Investment Management, LLC (collectively, the "Canary Defendants"), and other defendants engaged in illegal and improper trading practices, in concert with certain institutional traders, which caused financial injury to all shareholders of the One Group Funds. In particular, the Defendants surreptitiously permitted certain favored investors, including the Canary Defendants to illegally receive the prior day's price for orders placed after 4 p.m. This allowed Canary and other mutual fund investors who engaged in the same wrongful course of conduct to capitalize on post- 4:00 p.m. information, while those who bought their mutual fund shares lawfully could not. The complaint further alleges that defendants permitted the Canary Defendants and other favored investors to engage in "timing" of the One Group Funds whereby these favored investors were permitted to conduct short-term, "in and out" trading of mutual fund shares, despite explicit restrictions on such activity in the One Group Funds' prospectuses. For more details, contact Marc A. Topaz or Stuart L. Berman by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 1-888-299-7706 (toll free) or 1-610-667-7706 or by E- mail: info@sbclasslaw.com CHECK POINT: Lasky & Rifkind Lodges Securities Suit in S.D. NY -------------------------------------------------------------- Lasky & Rifkind, Ltd. initiated a securities class action filed in the United States District Court for the Southern District of New York, on behalf of persons who purchased or otherwise acquired publicly traded securities of Check Point Software Technologies Ltd. (NASDAQ:CHKP) between July 10, 2001 and April 4, 2002, inclusive. The lawsuit was filed against Check Point 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, by issuing false and misleading statements concerning the Company's business. Specifically, the complaint alleges that 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. According to the complaint, when this information was belatedly disclosed to the market on April 4, 2002, shares of Check Point fell more than 24% on extremely heavy trading volume. For more details, contact Leigh Lasky by Phone: 800-321-0476 CHECK POINT: Wolf Haldenstein Lodges Securities Suit in S.D. NY --------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class action in the United States District Court for the Southern District of New York, on behalf of all persons who purchased securities of Check Point Software Technologies, Ltd. (Nasdaq: CHKP) between July 10, 2001 and April 4, 2002, inclusive, against Check Point Software and certain officers and directors of the Company. During the Class Period, Defendants made public statements regarding Check Point's increasing profits and revenue growth, and various product marketing initiatives. The complaint alleges that these statements were issued despite the fact that demand for Check Point's products was in sharp decline. Several Individual Defendants engaged in significant insider selling during the Class Period, selling approximately 228,000 shares and realizing $8.8 million in illegal proceeds. On April 4, 2002, the truth was revealed. Check Point announced a revenue shortfall of approximately $15 million for the first quarter 2002, and lowered its revenue and earnings guidance by approximately 10% for fiscal year 2002. The Company further disclosed that a number of its customers had delayed purchase decisions and/or reduced the dollar amount of their purchases. Market reaction to Check Point's announcement was swift and severe. Check Point shares dropped over 19% in heavy trading, closing at $22.07 on April 4, 2002. For more details, contact Fred Taylor Isquith, Michael J. Miske, George Peters, or Derek Behnke by Mail: 270 Madison Avenue, New York, New York 10016, by Phone: (800) 575-0735 or by E-mail: classmember@whafh.com or visit the firm's Website: http://www.whafh.com. All e-mail correspondence should make reference to Check Point. CONSTAR INTERNATIONAL: Marc Henzel Lodges Securities Suit in PA --------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Eastern District of Pennsylvania on behalf of all purchasers of Constar International, Inc. (Nasdaq: CNST) stock issued in connection with or traceable to its November 2002 Initial Public Offering (IPO). The complaint charges Constar and certain of its officers and directors with violations of the Securities Act of 1933. Constar is a wholly owned subsidiary of Crown Cork & Seal Co. Crown is a leading supplier of packaging products to consumer marketing companies around the world. In November 2002, Constar completed an IPO of 10.5 million shares of stock pursuant to a Prospectus/Registration Statement. The IPO, which was solely comprised of shares sold by Crown, was priced at $12 per share for total proceeds of $117 million after underwriting discounts and commissions. The complaint alleges that the Prospectus/Registration Statement was materially false and misleading and failed to disclose, among other things, that (1) the Company was then experiencing an unseasonably low demand in its carbonated soft drink bottle business; (2) the Company was then experiencing an adverse impact in the Company's revenue stream due to the ``pass- through'' of lower resin costs; (3) the Company was then experiencing an adverse trend in the Company's conventional PET container shipments; (4) the Company's management had changed its focus just prior to the IPO and purposely reduced its higher volume preforms, causing a fourth quarter revenue shortfall; and (5) the Company's goodwill was impaired, and defendants failed to timely take an impairment charge. As this adverse information was disclosed, the Company's shares eventually plummeted to $5.00 per share. Public investors who purchased shares traceable to the IPO based on Constar's representations, paying $12 per share for Constar stock, have suffered tens of millions of dollars in damages. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-Mail: mhenzel182@aol.com CONSTAR INTERNATIONAL: Federman & Sherwood Files Securities Suit ---------------------------------------------------------------- Federman & Sherwood initiated a securities class action on behalf of shareholders of Constar International, Inc. (Nasdaq: CNST) pursuant to Contar's November 2002 Initial Public Offering. The lawsuit alleges that Constar's Prospectus/ Registration Statement was materially false and misleading in that the Company failed to disclose unseasonably low demand for its soft drink bottle products and managements' changed focus just prior to the IPO purposely reduced the Company's higher volume preforms, causing a Q-4 revenue shortfall. For more details, contact William B. Federman by Mail: 120 N. Robinson, Suite 2720, Oklahoma City, OK 73102 by Phone: (405) 235-1560 by Fax: (405) 239-2112 or by E-mail: wfederman@aol.com CONSTAR INTERNATIONAL: Charles Piven Lodges Stock Lawsuit in PA --------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who purchased the common stock of Constar International, Inc. (NasdaqNM:CNST) traceable to its November 2002 Initial Public Offering. The case is pending in the United States District Court for the Eastern District of Pennsylvania against Constar and certain of its officers and directors. The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the Class Period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Charles J. Piven by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202, by Phone: 410-986-0036 or by E-mail: hoffman@pivenlaw.com FIRSTENERGY CORPORATION: Marc Henzel Files Securities Suit in OH ---------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Northern District of Ohio on behalf of purchasers of the common stock of FirstEnergy, Corporation (NYSE: FE) between April 24, 2002 and August 5, 2003, inclusive. The complaint charges FirstEnergy and certain of its officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. More specifically, the complaint alleges that defendants issued a series of material misrepresentations to the market during the Class Period, thereby artificially inflating the price of FirstEnergy's common stock. The Complaint alleges that these statements were materially false and misleading because they failed to disclose and misrepresented the following adverse facts, among others: (1) that the Company materially overstated its earnings, revenues, net income, and earnings per share; (2) that the Company had improperly accounted for costs incurred in connection with the deregulation of certain of its businesses by employing an inappropriately long amortization schedule, thereby understating costs and materially and artificially inflating earnings during the Class Period; (3) that the Company had materially overvalued certain leased power generation facilities that were carried as assets on the Company's balance sheet; (4) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (5) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times. On August 5, 2003, the Company reported that it would have to restate its financial results for fiscal year 2002 and the first quarter of 2003 due to its improper accounting for its annual amortization expenses and for above- market leases. News of this shocked the market. Shares of FirstEnergy fell 8.5 percent to close at $31.33 per share on extremely heaving trading volume. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-Mail: mhenzel182@aol.com HEALTHTRONICS SURGICAL: Marc Henzel Lodges Securities Suit in GA ---------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Northern District of Georgia on behalf of all persons who purchased or otherwise acquired the securities of HealthTronics Surgical Services, Inc., (NASDAQ: HTRN) HealthTronics Surgical Services, Inc., between January 4, 2000 and July 25, 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 materially false and misleading statements to the market, and by failing to disclose material information that plaintiffs contend defendants had a duty to disclose, between January 4, 2000 and July 25, 2003. More specifically, the complaint alleges that defendants made material misrepresentations and/or omitted to make material disclosures during the Class Period concerning the efficacy, testing and market acceptance of OssaTronr, its leading product for the treatment of heel pain. Among other things, the complaint charges, defendants failed to disclose that some of the Company's own tests failed to support defendants' statements that OssaTronr was more effective, safer and less costly than alternative, non-surgical treatments for heel pain. In addition, the complaint alleges that defendants misrepresented the market acceptance of OssaTronr because Defendants knew, or were severely reckless in disregarding at the time these statements were made, that serious questions existed among the medical community concerning the effectiveness of extracorporeal shock wave treatment (ESWT) for heel pain, which in turn raised serious issues as to whether insurance carriers and other third party payors would cover OssaTronr procedures. As a result, and because the Company was experiencing difficulty in its billing and collection department, which further made insurance reimbursement difficult to obtain, the complaint claims, the company's January 28, 2003 earnings projections lacked any reasonable basis in fact when made. When defendants finally acknowledged that the OssaTronr product was not being absorbed by the market as they had previously claimed, the market's reaction to the disclosures was swift and severe. On July 28, 2003, the market price of HealthTronics common stock tumbled over 26% in unusually heavy trading. Indeed, the price of HealthTronics common stock dropped from a high of $17.60 per share during the Class Period to as low as $7.76 per share on July 28, 2003. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-Mail: mhenzel182@aol.com JANUS CAPITAL: Schiffrin & Barroway Files Securities Suit in CO --------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the District of Colorado on behalf of all purchasers, redeemers and holders of shares of the Janus Funds listed below, which are managed by wholly owned subsidiaries of Janus Capital Group Inc. (NYSE: JNS) between October 1, 1998 and July 3, 2003. The following Janus Funds are subject to the above class action lawsuit: (1) Janus Fund (Nasdaq:JANSX) (2) Janus Enterprise Fund (Nasdaq:JAENX) (3) Janus Olympus Fund (Nasdaq:JAOLX) (4) Janus Global Technology Fund (Nasdaq:JAGTX) (5) Janus Orion Fund (Nasdaq:JORNX) (6) Janus Twenty Fund (Nasdaq:JAVLX) (7) Janus Venture Fund (Nasdaq:JAVTX) (8) Janus Global Life Sciences Fund (Nasdaq:JAGLX) (9) Janus Global Value Fund (Nasdaq:JGVAX) (10) Janus Overseas Fund (Nasdaq:JAOSX) (11) Janus Worldwide Fund (Nasdaq:JAWWX) (12) Janus Balanced Fund (Nasdaq:JABAX) (13) Janus Core Equity Fund (Nasdaq:JAEIX) (14) Janus Growth and Income Fund (JAGIX) (15) Janus Special Equity Fund (Nasdaq:JSVAX) (16) Janus Risk-Managed Stock Fund (Nasdaq:JRMSX) (17) Janus Mid Cap Value Fund (NASDAQ: JMCVX, JMIVX) (18) Janus Small CapValue Fund (NASDAQ: JSCVX, JSIVX) (19) Janus Federal Tax-Exempt Fund (Nasdaq:JATEX) (20) Janus Flexible Income Fund (Nasdaq:JAFIX) (21) Janus Short-Term Bond Fund (Nasdaq:JASBX) (22) Janus Money Market Fund (Nasdaq:JAMXX) (23) Janus Government Money Market Fund (Nasdaq:JAGXX) (24) Janus Tax-Exempt Money Market Fund (JATXX) The Complaint charges the Janus Mutual Funds, Janus Capital Group, Janus Capital Corporation, Janus Capital Management, LLC, Janus Investment Fund, Edward J. Stern, Canary Investment Management, LLC, Canary Capital Partners, LLC, and Canary Capital Partners, LTD. with violations of the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, and for common law breach of fiduciary duties. The Complaint alleges that the Janus Funds and the other defendants engaged in a fraudulent scheme to defraud and cause financial injury to the shareholders of the Janus Funds. According to the Complaint, the Janus Funds, Defendants Canary Capital Partners, LLC and Canary Investment Management, LLC and other defendants engaged in illegal and improper trading practices, in concert with certain institutional traders, which caused financial injury to all shareholders of the Janus Funds. In particular, the Defendants surreptitiously permitted certain favored investors, including the Canary Defendants to engage in "timing" of the Janus Mutual Funds whereby these favored investors were permitted to conduct short-term, "in and out" trading of mutual fund shares, despite explicit restrictions on such activity in the Janus Mutual Funds' prospectuses. For more details, contact Marc A. Topaz or Stuart L. Berman by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 1-888-299-7706 (toll free) or 1-610-667-7706 or by E- mail: info@sbclasslaw.com READ-RITE CORPORATION: Marc Henzel Lodges Securities Suit in CA --------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Northern District of California on behalf of purchasers of Read-Rite Corporation (OTC Bulletin Board: RDRTQ; formerly Nasdaq: RDRT) publicly traded securities during the period between October 30, 2001 and June 6, 2003, inclusive. The complaint charges certain of Read-Rite's officers and directors with violations of the Securities Exchange Act of 1934. Read-Rite is an independent supplier of magnetic recording heads for the hard disk drive (HDD) and tape drive markets. The Company designs, manufactures and markets magnetic recording heads as head gimbal assemblies ("HGAs") and incorporates multiple HGAs into head stack assemblies. Read-Rite's products are sold primarily for use in 3.5-inch HDDs for desktop computer devices, for high-performance enterprise HDDs used in network and mainframe applications, as well as for consumer electronic devices such as game stations or personal video recorders. The complaint alleges that during the Class Period defendants issued a series of false and misleading statements about the Company, and as a result Read-Rite's stock traded at inflated prices during the Class Period, increasing to as high as $39 on January 9, 2002, before the Company announced it would file for bankruptcy. The true facts which were known to each of the defendants, but concealed from the investing public during the Class Period, were as follows: (1) the Company's 40 GB/platter inventory was overstated by $16.7 million; (2) the Company's Philippine real estate holdings were overstated by approximately $6.8 million; (3) the Company needed to restructure its operations and the associated charges would cost the Company in excess of $20 million and would cause an earnings shortfall in coming quarters; (4) the Company's Q2 FY03 loss was grossly understated; (5) the Company was experiencing massive technical problems associated with its 40GB/per platter programs. Moreover, the Company was experiencing these problems well before January 2002 and beyond April 2002 when defendants claimed such problems were fixed; and (6) the Company was underfunded and could not complete the production of its 80GB programs. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-Mail: mhenzel182@aol.com SPORTSLINE.COM: Marc Henzel Lodges Securities Lawsuit in S.D. FL ---------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action against Sportsline.com Inc., Kenneth W. Sanders and Michael Levy in the United States District Court for the Southern District of Florida, on behalf of purchasers of Sportsline.Com Incorporated (NASDAQNM:SPLN) common stock during the period between May 15, 2001 and September 25, 2003. The complaint charges Sportsline and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that defendants issued a series of false and misleading statements regarding Sportsline's: (1) advertising base and its ability to mitigate overall diminished media spending; (2) ability to reach positive EBITDA in the fourth quarter of 2002; (3) successful integration of its fantasy products and their positive impact on the Company's overall growth and presence in the Internet sports media industry; and (4) ability to increase the Company's value through the acquisition of the MVP.com store. In fact, according to the complaint, defendants knew and failed to disclose: (i) the Company's fantasy sports business was not as significant a revenue source as the Company portrayed it to be; (ii) revenue derived from advertising sales was diminishing and CBS was contributing significantly less advertising revenue than disclosed; (iv) a positive EBITDA could only be achieved by hiding expenses and improperly classifying discontinued operations; and (v) MVP.com's assets did not yield promised value. As a result of the defendants' false and misleading statements, Sportsline's stock traded at inflated prices during the Class Period, increasing to as high as $3.85 on November 27, 2001. On September 26, 2003, Sportsline shocked the market by revealing that the Company was reducing its previous revenue and earnings forecasts for the third quarter and full year 2003 and that it is restating its reported financial results for the past two and a half years. In response to the Company's devastating news concerning the financial restatements, Sportsline's stock price plummeted by more than 30% on volumes of about eight times the daily average. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-Mail: mhenzel182@aol.com STRONG CAPITAL: Weiss & Yourman Files Securities Suit in S.D. NY ---------------------------------------------------------------- Weiss & Yourman initiated a securities class action in the United States District Court for the Southern District of New York against Strong Capital Management, Inc. (NASDAQ:SGROX), (NASDAQ:STRFX), (NASDAQ:SMDCX), (NASDAQ:SDVIX) on behalf of purchasers of shares of mutual funds managed by Strong from October 16, 2002 through September 3, 2003, including the following: (1) Strong Advisor Bond Fund (SVBDX, SADBX, SABCX, SIBNX, F008W1, SBDIX) (2) Strong Advisor Municipal Bond Fund (SAMAX, SMBBX, F00BH8) (3) Strong Advisor Municipal Select Fund (SMUIX, STAEX, F005LZ, F005M9) (4) Strong Advisor Short Duration Bond A Fund (STSDX, SSDKX, SSHCX, STGBX) (5) Strong Advisor Common Stock Fund (SCSAX, SCSKX, STSAX, STCSX) (6) Strong Advisor Endeavor Large Cap Fund (STALX, F008GO) (7) Strong Advisor Focus Fund (F005MO, F005M7, F005LT) (8) Strong Advisor International Core Fund (F008GQ, F008GR, F008GS) (9) Strong Advisor Large Company Core Fund (SLGAX, F00AO2, F00AO3, SLCKX) (10) Strong Advisor Mid-Cap Growth Fund (F005LQ, F005M1, F005LO, SMDCX) (11) Strong Advisor Small Cap Value Fund (SMVAX, SMVBX, SMVCX, SSMVX) (12) Strong Advisor Strategic Income Fund (SASAX, F005L7, SASCX) (13) Strong Advisor Technology Fund (SASCX, F005LM, F005LM) (14) Strong Advisor U.S. Small/Mid Cap Growth Fund (F009D0, F009D1) (15) Strong Advisor U.S. Value (F005M2, F005M5, F005MA, SEQKX, SEQIX) (16) Strong Advisor Utilities and Energy Fund (SUEAX, F00AED, F00AEE, F009D5) (17) Strong All Cap Value Fund (F009D5) (18) Strong Asia Pacific Fund (SASPX) (19) Strong Balanced Fund (STAAX) (20) Strong Blue Chip Fund (SBCHX) (21) Strong Discovery Fund (STDIX) (22) Strong Dividend Income Fund (SDVIX, F008VY) (23) Strong Dow 30 Value Fund (SDOWX) (24) Strong Endeavor Fund (SENDX) (25) Strong Energy Fund (SENGX) (26) Strong Enterprise Fund (SENAX, F04ANX, SENTX, SEPKX) (27) Strong Growth & Income Fund (SGNAX, SGNIX, SGRIX, SGIKX) (28) Strong Growth 20 Fund (SGTWX, SGRTX, SGRAX, F00B67, SGRNX) (29) Strong Growth Fund (SGROX, SGRKX) (30) Strong Index 500 Fund (SINEX) (31) Strong Large Cap Core Fund (SLCRX) (32) Strong Large Cap Growth Fund (STRFX) (33) Strong Large Company Growth Fund (SLGIX, F04ANY) (34) Strong Mid Cap Disciplined Fund (SMCDX) (35) Strong Multi-Cap Value Fund (SMTVX) (36) Strong Opportunity Fund (SOPVX, SOPFX, F00AH2) (37) Strong Overseas Fund (F00B4I, SOVRX) (38) Strong Small Company Value Fund (F009D3) (39) Strong Technology 100 Fund (STEKX) (40) Strong U.S. Emerging Growth Fund (SEMRX) (41) Strong Value Fund (STVAX) (42) Strong Life Stages - Aggressive Portfolio Fund (SAGGX) (43) Strong Life Stages - Conservative Portfolio Fund (SCONX) (44) Strong Life Stages - Moderate Portfolio Fund (SMDPX) (45) Strong Corporate Bond Fund (SCBDX, SCBNX, STCBX) (46) Strong Corporate Income Fund (SCORX) (47) Strong High-Yield Bond Fund (SHBAX, SHYYX, STHYX) (48) Strong Government Securities Fund (SGVDX, F00B66, SGVIX, STVSX) (49) Strong High-Yield Municipal Bond Fund (SHYLX) (50) Strong Intermediate Municipal Bond Fund (SIMBX) (51) Strong Municipal Bond Fund (SXFIX) (52) Strong Minnesota Tax-Free Fund (F00B64, F00B65, F00B63) (53) Strong Wisconsin Tax-Free Fund (F0068K) (54) Strong Short-Term High-Yield Municipal Bond Fund (SSHMX, SSTHX, STHBX) (55) Strong Short-Term Municipal Bond Fund (F00B62, STSMX) (56) Strong Short-Term Income Fund (F00B1K) (57) Strong Short-Term Bond Fund (SSTVX, SSHIX, SSTBX) (58) Strong Ultra Short-Term Income Fund (SADAX, SADIX, STADX) (59) Strong Ultra Short-Term Municipal Income Fund (SMAVX, SMAIX, SMUAX) (60) Strong Florida Municipal Money Market Fund (SLFXX) (61) Strong Heritage Money Fund (SHMXX) (62) Strong Money Market Fund (SMNXX) (63) Strong Municipal Money Market Fund (SXFXX) (64) Strong Tax-Free Money Fund (STMXX) The complaint charges defendants with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. It alleges that defendants issued false and misleading statements in Strong's registration statements and prospectuses and, as a result, plaintiff and the Class were damaged. For more details, contact David C. Katz, Mark D. Smilow, or James E. Tullman by Mail: Weiss & Yourman, 551 Fifth Avenue, New York, New York 10176 by Phone: 888-593-4771 or 212-682-3025 or by E-mail: info@wynyc.com SUREBEAM CORPORATION: Rabin Murray Lodges Securities Suit in NY --------------------------------------------------------------- Rabin Murray & Frank LLP initiated a securities class action in the United States District Court for the Southern District of California, on behalf of all persons or entities who purchased or otherwise acquired SureBeam Corporation securities (NasdaqNM:SUREE) during the period between March 16, 2001 and August 25, 2003, both dates inclusive. The complaint names as defendants the Company, Lawrence A. Oberkfell, and David A. Rane. The complaint alleges the statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Company was improperly recognizing revenue in violation of GAAP; (2) that the Company's improper revenue recognition was done through its recognition of revenue from non- affiliated parties when the Company knew that such parties could not pay and for which SureBeam would forgive those receivables; (3) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (4) that as a result, the values of the Company's earnings, net income and earnings per share were materially overstated at all relevant times. SureBeam's accounting difficulties continued, and on August 21, 2003, the Company announced that it was dismissing Deloitte & Touche due to issues that had not been resolved to the auditor's satisfaction. Specifically, Deloitte & Touche was not satisfied with certain aspects of the Company's revenue recognition policies and certain contracts entered into in 2000 and affecting subsequent periods. For more details, contact Eric J. Belfi or Gregory Linkh by Phone: (800) 497-8076, (212) 682-1818 by Fax: (212) 682-1892 or by E-mail: email@rabinlaw.com SUREBEAM INC.: Weiss & Yourman Lodges Securities Suit in N.D. CA ---------------------------------------------------------------- Weiss & Yourman initiated a securities class action in the United States District Court for the Northern District of California on behalf of purchasers of SureBeam, Inc. (Nasdaq:SUREE) stock between March 16, 2001 and August 20, 2003. The complaint charges that the Company and certain of its officers violated federal securities laws by issuing a series of false and misleading statements to the investing public which materially misstated the Company's financials, thereby artificially inflating the price of SureBeam's stock. Specifically, the Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing press releases and SEC filings which failed to disclose that the Company's reported earnings and profits were materially overstated because they were in violation of Generally Accepted Accounting Procedures (GAAP). The Company launched a successful IPO on March 16, 2001, based on a prospectus containing alleged misrepresentations. Throughout the class period, defendants continued to disseminate false and misleading statements to the public, thereby keeping the stock trading at artificially high levels. However, on June 10, 2003, SureBeam announced that it was terminating KPMG LLP as its auditor and replacing it with Deloitte & Touche LLP. On August 21, 2003, the Company announced that it was then dismissing Deloitte & Touche due to issues Deloitte had with the Company's revenue recognition policy. As a result, SureBeam twice delayed filing its 10-Q and eventually missed the deadline. For more details, contact Jennifer Williams by Phone: 800-437-7918 by E-mail: info@wyca.com or visit the firm's Website: http://www.wyca.com ********* 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, Roberto Amor, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2003. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. 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