/raid1/www/Hosts/bankrupt/CAR_Public/031114.mbx
C L A S S A C T I O N R E P O R T E R
Friday, November 14, 2003, Vol. 5, No. 226
Headlines
ABBOTT LABORATORIES: Faces Consumer Lawsuits Over MERIDIA Drug
ABBOTT LABORATORIES: Plaintiffs File Consolidated IL Stock Suit
ABBOTT LABORATORIES: Appeal of Lupron Suit Certification Denied
ABBOTT LABORATORIES: Consumers File Several False Pricing Suits
AKORN INC.: SEC Lodges Cease-And-Desist Proceedings V. Officers
AMERICREDIT CORPORATION: Plaintiffs File Consolidated Suit in TX
AMERICREDIT CORP: Remand of Stock Suit to TX State Court Sought
AVISTA CORPORATION: Asks WA Court To Dismiss Securities Lawsuit
BIRCH POND: Employees Lodge CA Lawsuit For Overtime Violations
CAPITAL ONE: Appeals Court Briefs Appeal of Stock Suit Dismissal
CATHOLIC CHURCH: Bishop Warns of "Painful" Study on Sexual Abuse
COMPUTER SCIENCES: Faces CA Lawsuit For Overtime Wage Violations
DAIMLERCHRYSLER AG: Foreign Purchasers Excluded From Settlement
ECHOSTAR COMMUNICATIONS: Retailers Seek Certification For Suits
ENRON CORPORATION: Ken Lay Ordered To Produce Withheld Documents
ENTERASYS NETWORKS: NH Court Orders Continuation of Discovery
ENTERASYS NETWORKS: NH Court Grants Approval to Suit Settlement
ENVOY CORPORATION: Settlement Fairness Hearing Set December 2003
FAIRBANKS CAPITAL: Reaches Settlement Over Loan Servicing Issues
FLEXTRONICS INTERNATIONAL: Court To Hear Suit Dismissal Motion
GOLDMAN SACHS: SEC Settled Insider Trading Charges V. Ex-Exec
ILLINOIS: Chicago Teachers Reaches Tentative Deal With Officials
INVERWORLD INC.: SEC Settles Civil Fraud Charges V. Ex-President
J. JILL: Plaintiffs Launch Consolidated Securities Lawsuit in MA
JANUS CAPITAL: NASD Requests Information in Trading Probe
MERCK & CO.: Launches Depression Drug Recall After Failed Trials
POLARIS INDUSTRIES: Recalls 14T ATVs Due To Serious Fire Hazard
POLYESTER STAPLE: Settlement Hearing Set For December 2003 in NC
PONZI SCHEME: SEC Files Emergency Action V. 4 Firms, 8 Persons
PROVIDENT MUTUAL LIFE: Court Grants Stay in Investor Fraud Suit
PUTNAM FUNDS: NV Retirement System Intends to Pull Out From Fund
RICHMARK CAPITAL: SEC Suspends, Fines Firm For Securities Fraud
RIVIERA HOLDINGS: NV Court Dismisses Shareholder Fraud Lawsuit
RIVIERA HOLDINGS: NV Court Dismisses Shareholder Fraud Lawsuit
SOUTHERN NATURAL: Not Named in Amended KS Gas Royalties Lawsuit
TOWER SEMICONDUCTOR: Investors File Securities Fraud Suit in NY
TRIPLE J: SEC Sustains NYSE Disciplinary Action Over Stock Fraud
WAL-MART STORES: Lawyers Seek Class Status in Upgraded RICO Suit
WILD OATS: Canadian Court Hears Motion For Lawsuit Certification
WORLDCOM INC.: Ex-SEC Officers Asked To Help With Civil Penalty
Asbestos Alert
ASBESTOS LITIGATION: Blue Asbestos Exposure may Affect Dozens
ASBESTOS LITIGATION: Reform Bill Draws Big Amounts for Lobbying
ASBESTOS LITIGATION: Lawyers Say Insurers Knew of Asbestos Risk
ASBESTOS LITIGATION: Albany Gets 28,691 Asbestos-Related Suits
ASBESTOS LITIGATION: GP Asbestos Claims on the Upside to 34,100
ASBESTOS LITIGATION: Halliburton Gets OK on $2.775 Billion Limit
ASBESTOS LITIGATION: Hercules Reports 30,600 Asbestos Claims
ASBESTOS LITIGATION: Honeywell Eyes $110M in Asbestos Payouts
ASBESTOS LITIGATION: ITT Resolved 2,000 Asbestos-Related Suits
ASBESTOS LITIGATION: Lincoln Faces 34,504 Asbestos Claimants
ASBESTOS LITIGATION: OC Creditors Ask NY Judge To Recuse Self
New Securities Fraud Cases
ALGER FUNDS: Cauley Geller Lodges Securities Lawsuit in S.D. NY
ALGER FUNDS: Schiffrin & Barroway Lodges Securities Suit in NY
BOSTON COMMUNICATIONS: Cauley Geller Commences Stock Suit in MA
BOSTON COMMUNICATIONS: Goodkind Labaton Files Stock Suit in MA
BOSTON COMMUNICATIONS: Charles Piven Files Securities Suit in MA
GEMSTAR-TV GUIDE: Finkelstein & Krinsk Files Stock Suit in CA
GOODYEAR TIRE: Wolf Haldenstein Files Securities Suit in N.D. OH
MORGAN STANLEY: Milberg Weiss Lodges Securities Suit in S.D. NY
PMA CAPITAL: Abbey Gardy Lodges Securities Fraud Suit in E.D. PA
PMA CAPITAL: Donovan Searles Lodges Securities Suit in E.D. PA
PMA CAPITAL: Berger & Montague Commences Stock Suit in E.D. PA
PMA CAPITAL: Schiffrin & Barroway Launches Securities Suit in PA
PUTNAM FUNDS: Reinhardt Wendorf Lodges Securities Lawsuit in MA
PUTNAM FUNDS: Spector Roseman Lodges Securities Suit in S.D. NY
PUTNAM FUNDS: Stull Stull Commences Securities Suit in S.D. NY
*********
ABBOTT LABORATORIES: Faces Consumer Lawsuits Over MERIDIA Drug
--------------------------------------------------------------
Abbott Laboratories faces a number of lawsuits involving the
drug sibutramine (sold under the trademark Meridia) that have
been brought either as purported class actions or on behalf of
individual plaintiffs. The lawsuits generally allege design
defects and failure to warn. Certain lawsuits also allege
consumer protection violations and/or unfair trade practices.
As of September 30, 2003, 107 lawsuits were pending in which the
Company is a party. Ninety- eight cases were pending in federal
court, and seven cases were pending in state court. One case
was pending in Canada and one case was pending in Italy. The
federal court cases are being or have been transferred to the
United States District Court for the Southern District of Ohio
and are captioned "In Re: Meridia MDL No. 1481."
On July 3, 2003, Mosbah v. Abbott, et al., was filed in the
Circuit Court of Cook County, Illinois. On July 9, 2003, the
Illinois Supreme Court ordered the consolidation of Mosbah with
two of the previously reported state court cases, Killinger and
Olinger. All three cases are now pending in the Circuit Court
of the 19 Judicial Circuit, Lake County, Illinois.
ABBOTT LABORATORIES: Plaintiffs File Consolidated IL Stock Suit
---------------------------------------------------------------
Plaintiffs filed a consolidated shareholder derivative action
against Abbott Laboratories' current directors, in the Circuit
Court of Cook County, Illinois.
The suit was filed in connection with the announcement that the
Company would take a $622 million charge in anticipation of
settling the investigation by the U.S. Attorney's Office for the
Southern District of Illinois. The suit alleges that the
directors breached their fiduciary duties in failing to stop the
alleged improper business practices in the nutritional business.
The Company and the directors deny all substantive allegations
and intend to move to dismiss the cases, it stated in a
disclosure to the Securities and Exchange Commission.
ABBOTT LABORATORIES: Appeal of Lupron Suit Certification Denied
---------------------------------------------------------------
The Illinois Fifth District Court of Appeals refused Abbott
Laboratories' appeal of the nationwide class certification
granted for several suits filed against the Company, TAP
Pharmaceutical Products, Inc., and Takeda Chemical Industries,
Ltd. in various courts that generally allege that TAP reported
false pricing information in connection with Lupron, a product
reimbursable under Medicare.
On March 12, 2003, a nationwide class was certified in the case,
which the Company appealed.
ABBOTT LABORATORIES: Consumers File Several False Pricing Suits
---------------------------------------------------------------
Abbott Laboratories faces a number of cases, brought as
purported class actions or representative actions on behalf of
individuals or entities, are pending that allege generally that
Abbott and numerous other pharmaceutical companies reported
false pricing information in connection with certain drugs that
are reimbursable under Medicare and Medicaid.
These cases, brought by private plaintiffs and State Attorneys
General, generally seek damages, treble damages, disgorgement of
profits, restitution and attorneys' fees. Cases are pending in
both state and federal court.
The federal court cases have been consolidated in the United
States District Court in Massachusetts. Two additional federal
court cases have been filed: County of Westchester, New York v.
Abbott Laboratories, Inc. et al., filed August 18, 2003, in the
United States District Court for the Southern District of New
York; and County of Rockland, New York v. Abbott Laboratories,
Inc., et al., filed September 10, 2003, in the United States
District Court for the Southern District of New York. Transfers
to MDL are pending for those cases.
One additional state court case has been filed: Commonwealth of
Kentucky v. Abbott Laboratories, filed on September 15, 2003 in
the Circuit Court of Franklin County, Kentucky.
AKORN INC.: SEC Lodges Cease-And-Desist Proceedings V. Officers
---------------------------------------------------------------
The Securities and Exchange Commission instituted cease-and-
desist proceedings against Rita J. McConville, the former chief
financial officer (CFO) of Akorn, Inc., and cease-and-desist
proceedings and administrative proceedings pursuant to Rule
102(e) of the Commission's Rules of Practice against Kevin M.
Harris, another former Akorn CFO. Mr. McConville is a resident
of Hawthorn Woods, Illinois. Mr. Harris is a resident of
Rolling Meadows, Illinois.
The Division of Enforcement alleges that Mr. McConville and Mr.
Harris made false statements concerning Akorn's financial
condition and caused Akorn to carry on its books at least $7
million in accounts receivable which were, at best,
significantly impaired or, at worst, completely uncollectable.
Had Akorn appropriately recorded a reserve for these
receivables, it would have posted a $2 million loss for its
fiscal year ended December 31, 2000, rather than the $2 million
profit it claimed in its 2000 Form 10-K. The Division alleges
that Mr. McConville engaged in accounting fraud by drafting or
reviewing statements regarding accounts receivable in Akorn's
Form 10-K for the fiscal year ended December 31, 2000, that Mr.
McConville had no reasonable basis to believe were accurate or
in accordance with generally accepted accounting principles.
Moreover, the Division alleges that Mr. McConville knowingly
failed to implement a system of internal controls, caused
Akorn's books and records to be false, lied to auditors, and
caused Akorn's reporting violations with regards to the
company's 2000 Form 10-K. The Division also alleges that Mr.
Harris lied to auditors and caused and willfully aided and
abetted Akorn's reporting violations in regard to the status of
Akorn's accounts receivable as represented in both the 2000 Form
10-K and first quarter 2001 Form 10-Q.
The Commission instituted these proceedings against Respondents
to determine whether:
(1) the allegations against Respondents are true and to
afford Respondents an opportunity to establish any
defense to such allegations;
(2) Mr. McConville should be ordered to cease and desist
from committing or causing any violations and any
future violations of the antifraud, reporting, books
and records, internal controls, and false statements to
auditors provisions of the Securities Exchange Act of
1934;
(3) Mr. Harris should be ordered to cease and desist from
committing or causing any violations and any future
violations of the reporting and lying to auditors
provisions of the Exchange Act;
(4) pursuant to Section 21C(e) of the Exchange Act,
Respondents should be ordered to pay disgorgement; and
(5) pursuant to Rule 102(e)(1)(iii) of the Commission's
Rules of Practice, Mr. Harris should be censured or
denied, temporarily or permanently, the privilege of
appearing or practicing before the Commission.
A hearing will be scheduled before an administrative law judge
to determine whether the allegations contained in the Order
Instituting Cease-and-Desist Proceedings Pursuant to Section 21C
of the Securities Exchange Act of 1934 and Rule 102(e)(1)(iii)
of the Commission's Rules of Practice (Order) are true, to
provide the Respondents an opportunity to dispute these
allegations, and to determine what sanctions, if any, are
appropriate in the public interest. The Commission directed
that an administrative law judge shall issue an initial decision
in this matter within 300 days from the date of service of the
Order.
AMERICREDIT CORPORATION: Plaintiffs File Consolidated Suit in TX
----------------------------------------------------------------
Plaintiffs filed a consolidated securities class action against
Americredit Corporation and certain of the Company's officers
and directors alleging violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and Rule 10b-5 thereunder,
in the United States District Court for the Northern District of
Texas, Fort Worth Division.
The consolidated lawsuit claims, among other allegations, that
deferments were improperly granted by the Company to avoid
delinquency triggers in securitization transactions and enhance
cash flows to incorrectly report charge-offs and delinquency
percentages, thereby causing the Company to misrepresent its
financial performance throughout the alleged class period.
The Company believes that its granting of deferments, which is a
common practice within the auto finance industry, complied with
the covenants contained in its securitization and warehouse
financing documents, and that its deferment activities were
properly disclosed to all constituents, including shareholders,
asset-backed investors, creditors and credit enhancement
providers. In the opinion of management, the consolidated
lawsuit is without merit.
AMERICREDIT CORP: Remand of Stock Suit to TX State Court Sought
---------------------------------------------------------------
Plaintiffs seek the remand of the securities class action filed
against Americredit Corporation and certain of its officers and
directors to the Judicial District Court of Tarrant County,
Texas. The suit is currently pending in the United States
District Court for the Northern District of Texas, Fort Worth
Division.
The suit alleges violations of Sections 11 and 15 of the
Securities Act of 1933 in connection with the Company's
secondary public offering of common stock on October 1, 2002.
This lawsuit, which seeks class action status on behalf of all
persons who purchased in such secondary offering, alleges that
the Company's registration statement and prospectus for the
offering contained untrue statements of material facts and
omitted to state material facts necessary to make other
statements in the registration statement not misleading.
AVISTA CORPORATION: Asks WA Court To Dismiss Securities Lawsuit
---------------------------------------------------------------
Avista Corporation asked the United States District Court for
the Eastern District of Washington to dismiss the consolidated
securities class action filed against it and:
(1) Thomas M. Matthews, former Chairman of the Board,
President and Chief Executive Officer of the Company,
(2) Gary G. Ely, the current Chairman of the Board,
President and Chief Executive Officer of the Company,
and
(3) Jon E. Eliassen, the former Senior Vice President and
Chief Financial Officer of the Company.
The suit, styled "In re Avista Corp. Securities Litigation No.
148," asserts violations of the federal securities laws in
connection with alleged misstatements and omissions of material
fact pursuant to Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934. The plaintiffs allege that the Company
did not have adequate risk management processes, procedures and
controls.
The plaintiffs further allege that the Company engaged in
unlawful energy trading practices and allegedly manipulated
western power markets. The plaintiffs assert that alleged
misstatements and omissions have occurred in the Company's
filings with the Securities and Exchange Commission and other
information made publicly available by the Company, including
press releases. The complaint asserts claims on behalf of all
persons who purchased, converted, exchanged or otherwise
acquired the Company's common stock during the period between
November 23, 1999 and August 13, 2002.
BIRCH POND: Employees Lodge CA Lawsuit For Overtime Violations
--------------------------------------------------------------
The Birch Pond Group, Inc. faces a class action filed in
California state court (Riverside) concerning alleged failure to
allow 10 minute employee rest periods, failure to allow 30
minute meal periods and violation of California laws relating to
uniforms and coerced patronage. The named plaintiffs seek to
represent a class consisting of current and former sales
associates and assistant managers employed by the Company within
the past four years in California.
On September 17, 2003, the Company filed an answer to the
complaint, denying the plaintiffs' claims and setting forth
various affirmative defenses.
CAPITAL ONE: Appeals Court Briefs Appeal of Stock Suit Dismissal
----------------------------------------------------------------
The United States Fourth Circuit Court of Appeal briefed
plaintiffs appeal of the dismissal of the consolidated
securities class action against Capital One Financial
Corporation, and several of the its executive officers.
The suit, initially filed in the United States District Court
for the Eastern District of Virginia, alleged that the
defendants violated Section 10(b) of the Exchange Act, Rule 10b-
5 promulgated thereunder, and Section 20(a) of the Exchange Act.
The amended complaint asserted a class period of January 16,
2001, through July 16, 2002, inclusive.
The amended complaint alleged generally that, during the
asserted class period, the Company misrepresented the adequacy
of its capital levels and loan loss allowance relating to higher
risk assets. In addition, the amended complaint alleged
generally that the Company failed to disclose that it was
experiencing serious infrastructure deficiencies and systemic
computer problems as a result of its growth.
On December 4, 2002, the court granted defendants' motion to
dismiss plaintiffs' amended complaint with leave to amend.
Pursuant to that order, plaintiffs filed a second amended
complaint on December 23, 2002, which asserted the same class
period and alleged violations of the same statutes and rule.
The suit, however, added a new Individual Defendant and
asserted violations of Generally Accepted Accounting Principles
(GAAP).
Defendants moved to dismiss the second amended complaint on
January 8, 2003, and plaintiffs filed a motion on March 6, 2003,
seeking leave to amend their complaint. On April 10, 2003, the
court granted defendants' motion to dismiss plaintiffs' second
amended complaint, denied plaintiffs' motion for leave to amend,
and dismissed the consolidated action with prejudice.
Plaintiffs appealed the court's order, opinion, and judgment
to the United States Court of Appeals for the Fourth Circuit on
May 8, 2003.
CATHOLIC CHURCH: Bishop Warns of "Painful" Study on Sexual Abuse
----------------------------------------------------------------
Bishop Wilton Gregory, president of the U.S. Conference of
Catholic Bishops, warns that an unprecedented study the church
commissioned on 50 years of clergy sex abuse cases will "add to
our own sorrow" about predatory priests and hearing the results
will be unpleasant and painful, AP newswire reports.
The study will count the number of abuse claims nationwide since
the 1950s and tally the costs for legal settlements with
victims, attorneys' fees and therapy for victims and offenders.
The report is to be released February 27, during Lent.
"It will certainly add to our own sorrow" and will "add some
pain to an already painful moment in the history of the church,"
Bishop Gregory said Tuesday at the bishops' national meeting, AP
reports.
On Wednesday, the bishops are to vote on several proposals,
including approving a statement condemning same-sex unions, a
guide to popular devotional practices such as pilgrimages and a
document clarifying how Sunday services should be celebrated if
no priest is available. The conference ends Thursday. The
abuse study the bishops commissioned is being overseen by the
12-member National Review Board, a watchdog panel of laymen
selected by church leaders in response to the scandal.
Anne Burke, an Illinois appellate judge who is the board's
acting chairwoman, told the bishops Tuesday that about 80
percent of U.S. dioceses had responded to the survey by mid-
September, a response rate she called remarkable for such a
complex report. She said she expected all dioceses to answer by
the deadline later this month, AP stated.
When the survey was announced, some bishops worried that
information might be used in civil lawsuits against dioceses and
worried about confidentiality for priests included in the study.
It was feared some bishops might not participate because of
those concerns, but Ms. Burke said she expects in the end all
will complete the survey.
The board is overseeing several studies meant to find the extent
of abuse in the church and the roots of the crisis that erupted
in January 2002. A report on the causes of the scandal is
scheduled to be released along with the statistical survey,
which is being conducted by the John Jay College of Criminal
Justice in New York.
The board also is working with the bishops' newly created Office
of Child and Youth Protection on audits of all 195 U.S.
dioceses. Investigators are reviewing whether officials are
complying with the church's toughened discipline policy on
guilty priests. The audit results are scheduled to be released
January 6.
William Burleigh, a member of the review board, told church
leaders that the panel has worked to maintain its independence
from the bishops as it oversees the reviews. "In adopting this
posture, we hope we are not seen by you as hostile or
untrustworthy. Nothing could be further from the truth," Mr.
Burleigh, board chairman and former chief executive officer of
E.W. Scripps Co., told AP. "As a board, we are united by our
love for the church and a burning desire to see her wounds
healed."
The Survivors Network of those Abused by Priests suggested the
audits might not be truly independent, since investigators are
relying on information provided by dioceses. "In essence, the
bishops have drawn up the rules of the game, hired the umpires
and are now declaring they're winning," Terrie Light, a SNAP
leader from San Francisco, told AP. "Fundamentally, it's still
voluntary self-reporting, so we urge caution in interpreting any
results."
COMPUTER SCIENCES: Faces CA Lawsuit For Overtime Wage Violations
----------------------------------------------------------------
Computer Sciences Corporation faces a federal class action
lawsuit entitled Giannetto, et al. v. Computer Sciences
Corporation, No. LA CV 03-8201, in United States District Court
in Los Angeles, California, charging that global IT conglomerate
Computer Services Corporation has a common practice of refusing
to pay overtime compensation to its computer maintenance and
service workers in violation of the Fair Labor Standards Act.
CSC employs over 90,000 employees, and the proposed class
includes thousands of system administrators and technical staff
throughout America.
"CSC claims to provide its customers the most modern solutions
for their technological problems. When it comes to its own
employees, who form the backbone of the company, however, CSC
relies on practices outlawed decades ago," stated Lieff Cabraser
partner James M. Finberg, lawyer for the plaintiffs, in a
statement. "The plaintiffs, CSC computer line workers, allege
that CSC unlawfully characterizes its employees who install and
maintain computer software and equipment as 'exempt' in order to
deprive them of overtime pay."
"CSC generates nearly $12 billion in annual revenues, much of
which is attributable to the long hours worked by its technical
staff," explained Lewis & Feinberg principal Todd F. Jackson.
"Workers are entitled to overtime pay unless they fall under one
of the specified legal exemptions to paying overtime. These
workers are not managers and they do not qualify for any
exemption under wage and hour laws. Federal law requires that
CSC compensate them with overtime pay for all work over 40 hours
per work week."
"We believe that CSC's policy of depriving its computer
maintenance and installation workers overtime violates
applicable wage and hour laws. It is a well-established
principle of overtime law that you cannot avoid overtime pay
requirements by providing a fancy sounding title to workers who
are entitled to overtime pay under the law," stated Steven G.
Zieff, a partner with Rudy, Exelrod & Zieff. "The lawsuit seeks
to require CSC to affirm the principle that computer
installation and maintenance employees, including IT staff, are
entitled to protection under federal and state overtime pay
laws."
Members of the media can obtain a copy of the complaint by
contacting Monica Barsetti of Lieff Cabraser, by Phone:
415-956-1000, or by E-mail: mbarsetti@lchb.com.
Current and former systems administrators and technical staff
who wish to report their work experiences at CSC should visit
www.lieffcabraser.com/cscwagessuit.htm to learn more about the
lawsuit. The web page will allow witnesses and claimants to
contact plaintiffs' counsel.
DAIMLERCHRYSLER AG: Foreign Purchasers Excluded From Settlement
---------------------------------------------------------------
The law firm of Scott + Scott, LLC announced that although a
recent $300 million settlement in the Daimler Chrysler class
action securities litigation was reached, "foreign purchasers"
of stock are excluded from the settlement. A foreign purchaser
is "any person who acquired or purchased their shares of
Chrysler or Daimler-Chrysler on or through a securities exchange
not based in the United States unless that person is a resident
or citizen of the United States."
Foreign purchasers who held Chrysler stock prior to the merger
and were converted to Daimler Chrysler stock as a result
thereof, or those who purchased Daimler Chrysler in the open
market between November 13, 1998 and November 17,2000 are
enjoined to act by NOVEMBER 17th 2003 or risk exclusion form the
proposed settlement.
For more information, contact Neil Rothstein, of Scott + Scott,
LLC, by E-mail: nrothstein@aol.com, by Phone: 619-251-0887 or
David Scott by E-mail: drscott@scott-scott.com, or by Phone:
860-537-3818, or visit the firm's Website: http://www.scott-
scott.com.
The securities class action lawsuit against DaimlerChrysler AG
with the Policemen's Annuity & Benefit Fund of Chicago,
Municipal Employees Annuity & Benefit Fund of Chicago, Denver
Employees' Retirement Plan and Florida State Board of
Administration as lead plaintiffs reached a $300 million
settlement in the U.S. District Court for the District of
Delaware before Judge Joseph J. Farnan. Plaintiffs in this
action are represented by Barrack Rodos & Bacine, and Scott +
Scott, LLC.
ECHOSTAR COMMUNICATIONS: Retailers Seek Certification For Suits
---------------------------------------------------------------
Lawyers for the plaintiffs in two separate lawsuits against
Littleton, Colorado-based Echostar Communications, are
attempting to certify nationwide classes on behalf of certain
satellite hardware retailers. The lawsuits were filed in
October 2000, by Air Communication Satellite, Inc., and John
DeJong, et al. in the Arapahoe County District Court in the
State of Colorado and the United States District Court for the
District of Colorado, respectively, on behalf of retailer.
The plaintiffs are requesting the Courts declare certain
provisions of, and changes to, alleged agreements between
Echostar and the retailers invalid and unenforceable, and to
award damages for lost incentives and payments, charge
backs, and other compensation. The Company has asserted a
variety of counterclaims to the suit's allegations.
The United States District Court for the District of Colorado
stayed the Federal Court action to allow the parties to pursue a
comprehensive adjudication of their dispute in the Arapahoe
County State Court. John DeJong, d/b/a Nexwave, and Joseph
Kelley, d/b/a Keltronics, subsequently intervened in the
Arapahoe County Court action as plaintiffs and proposed class
representatives.
The Courts have yet to rule on a motion by Echostar for summary
judgment on all counts and against all plaintiffs.
The retailer lawsuit titled Air Communication & Satellite Inc.
v. Echostar Satellite Corp., Case No. 00CV3130 was filed on
October 6, 2000 in the U.S. District Court for Arapahoe County,
Colorado and assigned to Judge Jack F. Smith. Plaintiffs in
this action are represented by Robert F. Hill and Laura J.
Donson of Hill & Robbins P.C. and John A. Purvis and Beth
Morrison Klein of Purvis Gray & Gordon LLP, and defendant by
Thomas J. Overton of The Overton Law Firm. The retailer lawsuit
titled John DeJong et al. v. Echostar Satellite Corp. was filed
in the U.S. District Court for the District of Colorado.
ENRON CORPORATION: Ken Lay Ordered To Produce Withheld Documents
----------------------------------------------------------------
United States District Court Judge Royce C. Lamberth approved a
Stipulation and Order entered into between the Securities and
Exchange Commission and former Enron executive Kenneth L. Lay
requiring Mr. Lay to produce, within three days, all documents
subpoenaed by the Commission that have been withheld by Mr. Lay
on Fifth Amendment grounds.
The order provides that the SEC may use all documents produced
by Lay, and any leads derived therefrom, for any law-enforcement
purpose, including in any future action or proceeding the
Commission may bring against Mr. Lay. The Order further
provides that Mr. Lay shall not assert the Fifth Amendment as a
basis to exclude the admission into evidence of these documents
or the use of these documents in pre-trial proceedings or for
any other law-enforcement purpose.
Further, the Order provides that Mr. Lay shall not assert at any
time for any purpose that the Commission's use of the documents,
directly or indirectly, violated any Fifth Amendment rights Mr.
Lay may possess, and Mr. Lay shall not make such an assertion as
a basis to dismiss any future Commission action or other
proceeding against him. The Order also provides that production
of such documents by Mr. Lay does not waive any Fifth Amendment
rights he may otherwise have.
The suit is styled, "SEC v. Kenneth L. Lay, Civil Action No.
1:03 MS 01962, RCL," filed in the United States District Court
for the District of Columbia. (LR-18449)
ENTERASYS NETWORKS: NH Court Orders Continuation of Discovery
-------------------------------------------------------------
The United States District Court for the District of New
Hampshire instructed parties in the consolidated securities
calss action filed against Enterasys Networks, Inc. and certain
of its officers and directors to continue limited discovery.
The suit, captioned "In re Cabletron Systems, Inc. Securities
Litigation (C.A. No. 97-542-SD)," alleges that the Company and
several of its officers and directors disseminated materially
false and misleading information about the Company's operations
and acted in violation of Section 10(b) and Rule 10b-5 of the
Exchange Act during the period between March 3, 1997 and
December 2, 1997.
The complaint further alleges that certain officers and
directors profited from the dissemination of such misleading
information by selling shares of the Company's common stock
during this period. The complaint does not specify the amount
of damages sought on behalf of the class.
In a ruling dated May 23, 2001, the court dismissed this
complaint with prejudice. The plaintiffs appealed that ruling
to the First Circuit Court of Appeals, and, in a ruling issued
on November 12, 2002, the Court of Appeals reversed and remanded
the case to the District Court for further proceedings.
On January 17, 2003, the defendants filed an answer denying all
material allegations of the complaint. By order of the Court
dated March 18, 2003, the parties are now engaged in limited
discovery. On July 16, 2003, the defendants renewed their
motion to dismiss the complaint. At a status conference, the
court instructed the parties to continue limited discovery and,
without ruling on the merits of defendants' motion to dismiss,
indicated that defendants would be allowed to renew their motion
to dismiss upon the completion of limited discovery. If the
plaintiffs prevail on the merits of this case, the Company could
be required to pay substantial damages.
ENTERASYS NETWORKS: NH Court Grants Approval to Suit Settlement
---------------------------------------------------------------
The United States States District Court for the District of New
Hampshire granted preliminary approval to the settlement
proposed by Enterasys Networks, Inc. for the securities class
action filed against it and:
(1) Enrique Fiallo, former chairman and chief executive
officer,
(2) Robert Gagalis, former chief financial officer,
(3) Piyush Patel, former chief executive officer of
Cabletron Systems, Inc. and
(4) David Kirkpatrick, former chief financial officer of
Cabletron
The suit, styled "In re Enterasys Networks, Inc. Securities
Litigation (C.A. No. 02-CV-71)," alleges violations of Sections
10(b) and 20(a) of the Exchange Act and Rule 10b-5 thereunder.
Specifically, plaintiffs allege that during periods spanning
from June 28, 2000 and August 3, 2001 and in the period between
August 6, 2001 and February 1, 2002, defendants issued
materially false and misleading financial statements and press
releases that overstated the Company's revenues, income, and
cash, and understated the Company's net losses, because the
Company purportedly recognized revenue in violation of Generally
Accepted Accounting Principles (GAAP) and the Company's own
accounting policies in connection with various sales and/or
investment transactions.
The complaints seek unspecified compensatory damages in favor of
the plaintiffs and the other members of the purported class
against all of the defendants, jointly and severally as well as
fees, costs and interest and unspecified equitable relief.
On October 17, 2003, a stipulation of settlement signed by all
parties to the litigation was filed in the District of New
Hampshire. Although it continues to deny any liability, the
Company has agreed to pay approximately $17.0 million in cash
and to distribute shares of common stock with a value of $33.0
million, and to adopt corporate governance changes in full
settlement of all claims against it and its former officers. On
October 20, 2003, the Court gave preliminary approval for the
settlement. A hearing for final approval of the settlement has
been set for December 19, 2003 in the District of New Hampshire.
ENVOY CORPORATION: Settlement Fairness Hearing Set December 2003
----------------------------------------------------------------
The United States District Court in Nashville, Tennessee will
hold a fairness hearing on December 17, 2003 for the settlement
of the securities class action filed on behalf of shareholders
who purchased stock of Envoy Corporation during the period from
February 12, 1997 through August 18, 1998, inclusive.
A hearing will be held before the Honorable John T. Nixon in the
United States Courthouse, 801 Broadway, Rm. 745, Nashville,
Tennessee 37203, at 2:00 pm on that date.
For more information, contact Plaintiff's Co-Lead Counsel,
Richard H. Weiss, of Milberg Weiss Bershad Hynes & Lerach, LLP,
by Mail: One Pennsylvania Plaza, New York, NY 10119, by Phone:
(212) 594-5300; or Jeffrey A. Barrack, of Barrack Rodos &
Bacine, by Mail: 3300 Two Commerce Square, 2001 Market St.,
Philadelphia, PA, 19103, or by Phone: (215) 963-0600.
FAIRBANKS CAPITAL: Reaches Settlement Over Loan Servicing Issues
----------------------------------------------------------------
Fairbanks Capital Corporation reached a settlement, with the
Federal Trade Commission (FTC) and the U.S. Department of
Housing and Urban Development (HUD), which will resolve all
issues in the FTC and HUD civil investigations and will
establish industry leading requirements and procedures that
Fairbanks will follow regarding its loan servicing.
As part of the settlement, Fairbanks has agreed to make a
payment in the amount of $40 million that will be used to
establish a redress fund for the benefit of consumers. The FTC,
with input from class action representatives, will be
responsible for administering the fund and establishing the
procedures under which consumers will be eligible for payments
as well as the amounts to be paid.
"Fairbanks' settlement with the FTC and HUD is a positive
development for consumers whose loans are serviced by
Fairbanks," said Brad Shuster, President and CEO, PMI Capital
Corporation, who serves as Fairbanks' non-executive Chairman, in
a statement.
"PMI's dedication to affordable housing is the foundation of our
company. Today's settlements along with Fairbanks' new
consumer-responsive loan servicing practices will help
Fairbanks' support our corporate mission of creating and
expanding homeownership," said Mr. Shuster.
"PMI also believes it is important to preserve the homeownership
gains achieved by Americans in the past several years as we work
to expand access to mortgage credit. Fairbanks plays an
important role in this effort by establishing best practices for
servicing non-prime loans," said Mr. Shuster.
The settlement contains requirements for Fairbanks' loan
servicing practices in several areas, including the posting of
payments, lender placed insurance, the permissibility and timing
of specific fees, procedures for consumer dispute resolution,
and the provision of specified information to consumers.
FLEXTRONICS INTERNATIONAL: Court To Hear Suit Dismissal Motion
--------------------------------------------------------------
The United States District Court for the Northern District of
California will hear on November 26, 2003, Flextronic
International, Inc.'s motion to dismiss the consolidated
securities class action filed against it and certain of its
officers and directors on behalf of those who purchased, or
otherwise acquired, the Company's ordinary shares between
January 18, 2001 and June 4, 2002, and on behalf of those
purchased shares pursuant to, or traceable to, the secondary
offerings of the Company on February 1, 2001 and January 7,
2002.
The suit generally alleges that, during this period, the
defendants made misstatements to the investing public about the
financial condition and prospects of the Company. The suit also
names as defendants the underwriters involved in those
offerings.
On July 16, 2003, the Company filed a motion to dismiss on
behalf of itself and its officers and directors named as
defendants. Although the Company believes that the plaintiffs'
claims lack merit and intends to vigorously defend these
lawsuits, the Company is unable to predict the ultimate outcome
of these lawsuits. There can be no assurance the Company will
be successful in defending these lawsuits, and, if the Company
is unsuccessful, the Company may be subject to significant
damages.
GOLDMAN SACHS: SEC Settled Insider Trading Charges V. Ex-Exec
-------------------------------------------------------------
The Securities and Exchange Commission announced that John M.
Youngdahl, Jr., a former Goldman, Sachs & Co. Vice President and
Senior Economist, has agreed to settle the Commission's pending
insider trading charges against him.
The charges relate to Goldman Sachs' purchases of U.S. Treasury
30-year bonds minutes before the Treasury Department's October
31, 2001, announcement that it would no longer issue such bonds.
The Treasury Department's announcement had a dramatic market
impact, causing the largest one-day price movement in the 30-
year bond since October 1987.
If the Federal District Court in Manhattan hearing the SEC's
civil action approves the settlement, Mr. Youngdahl will be
permanently enjoined from committing securities fraud, and will
pay a civil penalty of $240,000. In separate proceedings
regarding the same conduct, Mr. Youngdahl pled guilty to
criminal securities fraud charges brought by the United States
Attorney's Office for the Southern District of New York.
The Commission's complaint, filed on September 4, 2003, alleges
that beginning in 1994 Peter J. Davis, Jr., a Washington, D.C.-
based consultant and sole proprietor of Davis Capital Investment
Ideas, attended the Treasury Department's quarterly refunding
press conferences. At these press conferences, the Treasury
Department announced the Federal Government's financing
requirements for the coming quarter. This information was
market-sensitive and thus subject to a press embargo; that is,
it could not be disseminated by those attending the conference
until a specified time.
The complaint alleges that Mr. Youngdahl, who advised Treasury
Desk traders on economic and political developments, was Mr.
Davis' primary contact at Goldman Sachs, and that Mr. Davis
conveyed confidential refunding information to Mr. Youngdahl in
May 2001. In July 2001, Mr. Davis and Mr. Youngdahl agreed in
a series of e-mails that Mr. Davis would provide Mr. Youngdahl
with embargoed information from the refunding press conferences.
Pursuant to this agreement, Mr. Davis again provided Mr.
Youngdahl with embargoed information in August 2001.
The complaint further alleges that, at the October 31, 2001,
refunding press conference, Treasury Department officials
announced three times that the information being made available
was embargoed until 10:00 a.m. The press conference ended at
approximately 9:25 a.m. Despite the officials' warnings,
beginning at 9:28 a.m., Mr. Davis placed a series of cell phone
calls to his clients, including Mr. Youngdahl, and told them
that the Treasury Department was suspending future long bond
issuances.
The complaint alleges that Mr. Youngdahl knew that Mr. Davis,
pursuant to their July agreement, was tipping him with
confidential Treasury Department information before the
information was released to the public. The complaint further
alleges that, after receiving Mr. Davis' call on the morning of
October 31, 2001, Mr. Youngdahl tipped traders on Goldman Sachs'
U.S. Treasury Desk to the news about the Treasury's decision to
cease issuance of the long bond. While the news was still
nonpublic, the traders purchased $84 million worth of 30-year
bonds for Goldman Sachs' own accounts, generating illegal
profits of over $1.5 million.
Mr. Youngdahl has consented, without admitting to or denying the
allegations of the complaint, to the entry of a permanent
injunction against future violations of Sections 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and a
court order that he pay a fine of $240,000 and be jointly and
severally liable for disgorgement of Goldman Sachs' trading
profits.
Goldman Sachs has previously settled a Commission administrative
proceeding related to this matter and made full disgorgement of
its trading profits. Mr. Davis, originally a defendant in the
civil action, has also previously settled with the Commission.
The Commission's investigation into these events is continuing.
Pending the completion of that investigation, the Commission has
filed a notice of dismissal as to defendant Stephen E. Nothern.
Mr. Nothern was the only remaining defendant in this action
other than Mr. Youngdahl. Under Federal Rule of Civil Procedure
41(a)(1), the Commission retains the right to file charges again
against Mr. Nothern based on or including the original claim.
ILLINOIS: Chicago Teachers Reaches Tentative Deal With Officials
----------------------------------------------------------------
The Chicago Teachers Union reached a tentative agreement with
school officials Wednesday, the union said, on a new contract
potentially averting a walkout that would affect nearly 440,000
students, AP newswire reports.
The agreement was reached just before 5 a.m. after a 17-hour
bargaining session, union spokesman Jay Rehak told AP. Details
of the pact will not be released until the union's members can
evaluate it. Officials in the nation's third-largest school
district did not immediately return calls seeking comment
Wednesday.
Recent negotiations were centered on contract length, health
care costs and proposed changes to the length of the school day.
Mr. Rehak told AP the union's House of Delegates will review the
proposal Friday or Saturday. The negotiating team recommends
approval, he said. If the delegates agree, a ratification vote
would be set.
The House of Delegates voted last month to authorize a strike
beginning December 4 if negotiations fail. Any walkout must
also be approved by the 30,000 rank-and-file members. Chicago's
teachers have not staged a walkout in 16 years.
INVERWORLD INC.: SEC Settles Civil Fraud Charges V. Ex-President
----------------------------------------------------------------
The Securities and Exchange Commission has settled its civil
fraud action against George F. Fahey, former president of San
Antonio-based InverWorld, Inc. and InverWorld Securities, Inc.
On August 4, 1999, the SEC charged Mr. Fahey and Jose P.
Zollino, InverWorld's former chairman, with losing in excess of
$400 million of client funds in unauthorized, highly leveraged
securities investments and practically worthless securities
issued by foreign shell companies. The SEC civil action was
stayed pending a criminal investigation into the same conduct by
the United States Attorney for the Western District of Texas
(San Antonio Division).
On December 14, 2001, Mr. Fahey pleaded guilty to two counts of
investment adviser fraud and conspiracy to launder money. In
March 2003, the court sentenced Mr. Fahey to 84 months
imprisonment and ordered him to pay criminal restitution of $139
million. On May 13, 2002, Mr. Zollino pleaded guilty to two
counts of conspiracy to commit fraud and launder money. In
October 2002, Mr. Zollino was sentenced to 144 months
imprisonment and ordered to pay $341 million in criminal
restitution.
Mr. Fahey, without admitting to or denying the allegations of
the Commission's complaint, has consented to the entry of a
final judgment that permanently enjoins him from violating the
antifraud provisions of the federal securities laws. In light
of his jail sentence and criminal restitution order, which is in
an amount greater than the Commission's disgorgement claim, the
Commission will forego its claims for disgorgement and a civil
penalty.
The judgment enjoins Mr. Fahey from violating Section 17(a) of
the Securities Act of 1933, Section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 thereunder, and aiding and
abetting violations of Sections 206(1) and 206(2) of the
Investment Advisers Act of 1940. Mr. Fahey, in a related
administrative proceeding, has agreed to consent to a Commission
order barring him from association with any broker-dealer or
investment advisor.
The suit is styled, "SEC v. InverWorld, Inc., et al., Civ. No.
SA-99-CA-0822," filed in the United States District Court in
Western District, Texas (LR-18452)
J. JILL: Plaintiffs Launch Consolidated Securities Lawsuit in MA
----------------------------------------------------------------
Plaintiffs filed a consolidated securities class action against
The J. Jill Group, Inc. and two of its executive officers,
Gordon R. Cooke, President and Chief Executive Officer, and Olga
Conley, Executive Vice President/Chief Financial Officer, in the
United States District Court for the District of Massachusetts.
The suit was filed on behalf of a class of purchasers of the
Company's Common Stock from February 12, 2003 through December
4, 2002, alleging violations of Section 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. The suit alleges that the Company failed to
disclose and misrepresented certain adverse facts and seeks
unspecified monetary damages and costs and expenses, including
attorneys' fees.
JANUS CAPITAL: NASD Requests Information in Trading Probe
---------------------------------------------------------
Janus Capital Group Inc., already under scrutiny by state and
federal regulators for improper mutual fund trading, said
Wednesday it also has been asked to submit information to the
brokerage industry's self-policing group, the National
Association of Securities Dealers (NASD), as part of a similar
investigation, AP newswire reports.
The Denver-based company said it would cooperate with the NASD,
according to a filing with the Securities and Exchange
Commission. It did not detail what information the NASD was
seeking, but the agency has been investigating improper fund
trading.
Janus was one of four mutual fund managers New York Attorney
General Eliot Spitzer named earlier this year in a complaint
accusing hedge fund operator Canary Capital LLC of after-hours
trading and market-timing mutual funds - practices that hurt
long-term shareholders by skimming profits.
Janus had previously disclosed it had 12 short-term, or market
timing, arrangements that have since been scrapped. Company
officials said the investments by market timers represented less
than 0.25 percent of its $150 billion in assets as of the end of
August. On Wednesday, Janus also said it believed there were
several discretionary frequent trading arrangements in its
offshore mutual fund business, which have been terminated.
Janus has said it plans to return about $1 million in fees it
made from short-term trading arrangements available only to
select investors. The practice isn't illegal, but it is
prohibited by many mutual funds and discouraged by others,
including Janus. Janus has allocated $9 million related to
investigations into its mutual fund trading but it also faces a
number of civil lawsuits stemming from AG Spitzer's complaint.
MERCK & CO.: Launches Depression Drug Recall After Failed Trials
----------------------------------------------------------------
Merck & Co. Inc. is set to recall one of its drugs, which could
have been a new multibillion-dollar product for the struggling
pharmaceutical company, after it proved ineffective as a
treatment for depression, Reuters news reports.
Merck, whose earnings growth has stalled in recent years as a
handful of other big-selling drugs lost patent protection, said
its Emend medication, approved as an anti-vomiting treatment for
chemotherapy patients, failed as a treatment for depression.
The medicine, whose chemical name is Aprepitant, works by
blocking a protein called Substance P that Merck had said was
also linked to depression. If approved, it would have been the
first new class of depression drugs in a decade.
"This drug had the potential to be safer than existing
depression medicines and could have had multibillion-dollar
annual sales, if it had succeeded," Hemant Shah, an independent
New Jersey-based analyst, told Reuters.
Shaojing Tong, an analyst with Mehta Partners in New York, said
he had been somewhat doubtful about prospects for the drug, but
that it might have claimed annual revenues of up to $1 billion
by 2008, if it had been approved for depression. Merck's shares
were hardly changed, falling about one-tenth of a percent late
Wednesday morning.
Mr. Tong predicted Merck shares would be "stuck" for three years
near their current range due to the setback, the weakness of the
company's pipeline of future drugs and the looming 2006 patent
expiration of the blockbuster cholesterol drug Zocor, which
could then face cheaper generics. He also said that as a result
of the depression-drug failure Merck Chief Executive Raymond
Gilmartin may have to consider merging with another drugmaker to
produce cost savings needed to fuel earnings growth.
"Lots of investors are pushing Merck toward a merger and the
company can't be so rigid against one any longer," Mr. Tong told
Reuters.
The Whitehouse Station, New Jersey-based company has failed to
launch important new medicines to bring in the revenues needed
to offset the decline of its older products. Merck has faced
serious delays, for instance, in launching a new arthritis drug
called Arcoxia in the United States, as a backup to Merck's
older blockbuster Vioxx. The delay has allowed Pfizer Inc's new
arthritis drug, Bextra, to post strong unhindered sales growth.
Shares of Merck slipped slightly to $43.83 on the New York Stock
Exchange, amid a slight upturn for the drug sector, Reuters
reports.
POLARIS INDUSTRIES: Recalls 14T ATVs Due To Serious Fire Hazard
----------------------------------------------------------------
Polaris Industries Inc., of Minneapolis, Minnesota, in
cooperation with the U.S. Consumer Product Safety Commission, is
recalling 14,000 units of the Magnum, Trail Boss and ATP model
all-terrain vehicles (ATVs) following 265 reports of fuel leaks,
including one report of a fire that damaged an ATV. No injuries
have been reported.
The recall involves the Polaris model year 2003 and 2004 Magnum
330 4x4 and Magnum 330 Mossy Oak ATVs and model year 2004 Magnum
330 2x4, Trail Boss 330, ATP 330, and ATP 500 ATVs. The
recalled ATVs have the following model numbers, which can be
found on the certification decal located on the front center
body panel: A03CD32(AA)(AC), A04CD32(AA)(AB)(AC),
A04CB32(AA)(FC), A04CA32(AA)(AB), A04JD32AA, and
A04JD50(AA)(AB)(CA). The name "Polaris" is prominently
displayed on the right and left side of the seat and/or on the
side body panels.
The ATV's, which were manufactured in the United States were
sold at Authorized Polaris dealers nationwide from February 2003
through October 2003 for between $3,500 and $6,500.
Consumers should stop using these ATVs immediately. Polaris will
notify all consumers with the recalled models and will arrange
for a free repair from their dealership or an authorized service
center.
For more details, contact Polaris by Phone: (800) POLARIS
between 8 a.m. and 12 midnight ET Monday through Sunday.
POLYESTER STAPLE: Settlement Hearing Set For December 2003 in NC
----------------------------------------------------------------
The United States District Court in Charlotte, North Carolina
set the fairness hearing for the US$17.15 million settlement of
the consumer class action filed on behalf of all individuals who
purchased Polyester Staple in the United States directly from
defendants:
(1) DuPont de Nemours and Company,
(2) DAK Americas LLC,
(3) Dak Fibers LLC,
(4) Alpek S. A. de C.V.,
(5) Nan Ya Plastics Corporation, America a/k/a Nan Ya
Plastics Corporation USA,
(6) Wellman, Inc.,
(7) Arteva Specialties, S.a.r.l. d/b/a KoSa,
(8) Arteva Specialties LLC,
(9) Arteva Service S.a.r.l.,
(10) Koch Industries, Inc.
(11) IMASAB S.A. de C.V.
The class period is from April 1, 1999 to July 31, 2001,
inclusive. The lawsuit alleged that defendants conspired to fix
prices of Polyester Staple sold in the United States and/or to
allocate markers or customers during the Class Period, in
violation of antitrust laws. Defendants deny plaintiffs
allegations and are contesting plaintiffs' claims. The Court has
not ruled on the merits of plaintiffs' claims or defendants'
defenses and no trial date has been set.
The Court will hold a hearing on December 11, 2003, at 2:00 pm,
at 250 Charles R. Jones Federal Building, 401 West Trade Street,
Charloote, North Carolina, 28202.
For more information, contact Plaintiff's Co-Counsel Michael D.
Hausfeld, Esq. of Cohen, Milstein, Hausfeld & Toll, PLLC, 1100
New York Avenue, NW, Washington, D.C. 20005-3964; Steven A.
Asher, Esq. of Fox Rotschild LLP, 2000 Market Street, 10th
Floor, Philadelphia, PA 19103; Paul F. Bennett, Esq. of Gold
Bennett Cera & Sidener LLP, 595 Market Street, Suite 2300, San
Francisco, CA 94105; or Samuel D. Heins, Esq. of Heins, Mills, &
Olson, PLC, 3550 IDS Center, 80 South Eighth Street,
Minneapolis, MN, 55402.
PONZI SCHEME: SEC Files Emergency Action V. 4 Firms, 8 Persons
--------------------------------------------------------------
The Securities and Exchange Commission filed an emergency
injunctive action in Federal District Court in Indianapolis,
Indiana against:
(1) Patrick L. Ballinger, 55,
(2) Dennis R. Weaver, 54, of Jackson, Tennessee,
(3) Kosta S. Kovachev, 51, of Lake Worth, Florida,
(4) Lee E. Larscheid, 54, of Branson, Missouri,
(5) Benny G. Morris, 46, of Palm Harbor, Florida,
(6) Darin W. Roberts, 29, of Branson, Missouri,
(7) Linda M. Sears, 50, of Seminole, Florida,
(8) Todd R. Walker, 44, of Tampa, Florida,
(9) Missouri-based Branson City Limits, Inc.,
(10) Missouri-based Ozark Ticket and Travel, Inc.,
(11) Florida-based Resort Hotels, Inc. and
(12) Nevada-based Universal Financial Leasing, Inc.
The defendants are being charged for their roles in an ongoing
$28 million Ponzi scheme. Mr. Ballinger, Mr. Larscheid and Mr.
Sears are convicted felons and Mr. Weaver has a disciplinary
history. The Commission's complaint alleged that, from at least
September 2000 to the present, the Defendants offered and sold
securities nominally structured as hotel timeshare rental
interests in unregistered transactions to approximately 600
investors in 30 states.
In connection with these offerings, the defendants made false
and misleading statements concerning, among other things, the
use of investor funds, the source of investors' promised high
returns, and the return of investors' principal. While the
issuers, promoters, and sales force represented to investors
that they would use the funds collected in the offerings to
refurbish the timeshare units and pay an 11% return from
subleasing the units, in fact, they used new investors' funds to
pay returns to old investors as well as their personal and
business expenses. The Commission Complaint seeks temporary
restraining orders, preliminary and permanent injunctions, civil
penalties, asset freezes, an order preserving evidence and
appointment of a receiver, if necessary.
The suit is styled "SEC v. Patrick Ballinger, Dennis R. Weaver,
Kosta S. Kovachev, Lee E. Larscheid, Benny G. Morris, Darin W.
Roberts, Linda M. Sears, Todd F. Walker, Branson City Limits,
Inc., Resort Hotels, Inc., Universal Financial Leasing, Inc.,
and Ozark Ticket and Travel, Inc., Civil Action No. 1:03 CV-1659
LJN-WTL," filed in the United States District Court for the
Southern District of Indiana. (LR-18450)
PROVIDENT MUTUAL LIFE: Court Grants Stay in Investor Fraud Suit
---------------------------------------------------------------
U.S. District Court Judge Michael M. Baylson granted a motion
for a 180-day stay in the class action filed on behalf of Lead
Plaintiff Robert Chartener and others in the United States
District Court for the Eastern District of Pennsylvania against
Provident Mutual Life Insurance Co., and:
(1) Robert Kloss,
(2) Bernard Anderson,
(3) Dorothy M. Brown,
(4) Robert Casale,
(5) Nicholas DeBenedictis,
(6) Philip C. Herr, II,
(7) J. Richard Jones,
(8) John Nealsey,
(9) Charles Orr,
(10) Harold Sorgenti,
(11) Mehran Assadi,
(12) Mary Finelli,
(13) Alan Hinkle,
(14) Joan Tucker, and
(15) Linda Springer
The suit alleges breach of fiduciary duty and violation of
Section 921-A of the Pennsylvania Mutual-to- Stock Conversion
Act. The lawsuit alleges that in January of 1998, Provident
developed a plan to convert from a mutual insurance company to a
stock insurance company.
In January 1999, Provident policyholders filed an action
challenging the conversion plan in the Philadelphia Court of
Common Pleas. Provident ultimately withdrew its plan for
conversion and began a "Comprehensive Review Project" to
investigate alternative courses of action, and the Butler suit
was held in abeyance.
The suit alleged that in July 2000, a second class action by
Provident policyholders was filed in regard to Provident's
attempts at conversion. In August 2000, as part of the
Comprehensive Review Project, Provident made modifications to
its change-in-control arrangements for its officers, giving
Provident's management additional payments if Provident
underrwent a successful alternative conversion transaction. As
part of these modifications, Provident also accelerated certain
payments to its directors.
Furthermore, in August of 2001, Provident signed a "sponsored
mutualization" plan, whereby Provident would convert into a
stock company and then merge with Nationwide Financial Services,
Inc. The merger between Provident and NFS was successfully
completed and compensation was paid in accordance with the
August, 2000 modifications. In July of 2002, the Butler
plaintiffs amended their complaint to address the second
conversion effort and ultimately settled with Provident in
October of 2002, with the preliminary approval of the state
court. The settlement was finally approved in April of 2003 and
is currently pending on appeal in the Pennsylvania Superior
Court.
In September of 2002, Plaintiff Chartener made a demand on
Provident's Board to revoke the change-in-control agreements
and, subsequent to the Provident Board's denial of this demand,
filed the complaint in the instant case. Upon learning of the
settlement agreement between Provident and the Butler
Plaintiffs, Plaintiff's counsel appeared before the state court
to clarify that his claims regarding compensation agreements
were excluded from the settlement, which the state court
declined to do in its final approval of the settlement.
PUTNAM FUNDS: NV Retirement System Intends to Pull Out From Fund
----------------------------------------------------------------
The Nevada Public Employees Retirement System's directors on
Wednesday voted unanimously to withdraw $400 million in
investments from Putnam Investments, following a string of
accusations of improper trading at the fund company, AP Newswire
reports.
The losses are the latest for Putnam, which has lost more than
$14 billion in assets since regulators accused the company of
turning a blind eye to trading that violated fund policy and
harmed long-term shareholders. Putnam, whose assets now stand
at about $263 billion, has denied any wrongdoing.
Dana Bilyeu, executive officer of the Nevada system, told AP she
recommended the move because of the allegations against Boston-
based Putnam and also because of poor performance. "It was a
combination of disruption to the Putnam investment team that has
happened as a result of the most recent publicity ... and
underperformance since the inception" of its Nevada dealings,
she said. "They have been on our 'watch' list for a while."
Similar pullouts had previously been announced by pension funds
in other states, including Massachusetts, Iowa, New York,
Pennsylvania, Rhode Island and Vermont, AP reports.
RICHMARK CAPITAL: SEC Suspends, Fines Firm For Securities Fraud
---------------------------------------------------------------
The Securities and Exchange Commission suspended the broker-
dealer registration of RichMark Capital Corporation of Irving,
Texas for 90 days, effective November 24, and fined the Company
$275,000. The Commission also suspended Doyle Mark White,
RichMark's 50% owner and vice president, from association with
any broker or dealer for 90 days effective November 24, and
fined him $55,000. In addition, RichMark and Mr. White were
ordered to cease and desist from further violations, and ordered
to disgorge $25,617.86 plus prejudgment interest.
The Commission found that respondents violated antifraud
provisions in that they recklessly failed to disclose to
customers to whom they recommended and sold stock of PCC Group,
Inc. (PCCG) that, at the very same time, respondents were taking
action contrary to their recommendation by selling their own
shares of PCCG. The Commission also found that respondents were
negligent in failing to disclose to PCCG customers that
respondents had a strong financial incentive to promote the sale
of PCCG because of the PCCG stock and options they received
under an investment banking agreement between PCCG and RichMark.
The Commission emphasized that, when a securities dealer
recommends stock, it must disclose any economic self interest
that could be influencing its recommendation. In assessing
sanctions, the Commission cited respondents' egregious failure
to disclose material information to investors, and faulted
respondents for exploiting the relationship of trust between
RichMark and its customers.
RIVIERA HOLDINGS: NV Court Dismisses Shareholder Fraud Lawsuit
--------------------------------------------------------------
The Clark County, Nevada District Court dismissed with prejudice
the class action filed against Riviera Holdings Corporation and
Company directors:
(1) William L. Westerman,
(2) Robert R. Barengo,
(3) Jeffrey A. Silver and
(4) Paul A. Harvey
The named plaintiff was a shareholder of the Company. In the
complaint, the plaintiff sought an order requiring the
individual defendants to cooperate with any individual who
makes a bona fide offer to acquire the Company, take steps that
are calculated to result in a buy-out or takeover of the Company
at the highest price, comply with their fiduciary duties, and
reimburse the plaintiff's class for damages, costs and
disbursements related to the lawsuit. The complaint also sought
to have all of the Company's public shareholders, excluding the
defendants, certified as a class for purposes of the class
action and sought plaintiff to be the representative of the
class.
On July 10, 2003, the defendants filed a motion to dismiss the
action on the grounds that it was filed without the
authorization of the plaintiff. Prior to this motion to
dismiss being heard, the plaintiff agreed to dismiss the lawsuit
with prejudice.
RIVIERA HOLDINGS: NV Court Dismisses Shareholder Fraud Lawsuit
--------------------------------------------------------------
The Clark County, Nevada District Court dismissed with prejudice
the class action filed in the name of Paul Rosa against Riviera
Holdings Corporation and Company directors:
(1) William L. Westerman,
(2) Robert R. Barengo,
(3) Jeffrey A. Silver,
(4) Paul A. Harvey and
(5) Vincent L. DiVito
The named plaintiff in this action was a shareholder of the
Company and sought to have all of the Company's public
shareholders, excluding defendants and related shareholders,
certified as a class for purposes of the class action.
On July 21, 2003, the defendants filed a motion to dismiss the
action on the grounds that the complaint failed to state a claim
upon which relief may be granted. Prior to this motion to
dismiss being heard, the plaintiff agreed to dismiss the lawsuit
with prejudice and on October 10, 2003, a Stipulation and Order
For Dismissal was entered dismissing the suit with prejudice.
SOUTHERN NATURAL: Not Named in Amended KS Gas Royalties Lawsuit
---------------------------------------------------------------
Southern Natural Gas Co. and a number of its affiliates were
dropped as defendants in the fourth amended class action, styled
"Quinque Operating Company, et al. v. Gas Pipelines and Their
Predecessors, et al.," pending in the District Court of Stevens
County, Kansas.
Quinque has been dropped as a plaintiff and Will Price has been
added. This complaint alleges that the defendants mismeasured
natural gas volumes and heating content of natural gas on non-
federal and non-Native American lands. The plaintiff in this
case seeks certification of a nationwide class of natural gas
working interest owners and natural gas royalty owners to
recover royalties that the plaintiff contends these owners
should have received had the volume and heating value of natural
gas produced from their properties been differently measured,
analyzed, calculated and reported, together with prejudgment and
postjudgment interest, punitive damages, treble damages,
attorneys' fees, costs and expenses, and future injunctive
relief to require the defendants to adopt allegedly appropriate
gas measurement practices. No monetary relief has been
specified in this case.
Plaintiffs' motion for class certification was denied on April
10, 2003. Plaintiffs' motion to file another amended petition
to narrow the proposed class to royalty owners in wells in
Kansas, Wyoming and Colorado was granted on July 28, 2003. The
Company was not named as a defendant in this Fourth Amended
Petition.
TOWER SEMICONDUCTOR: Investors File Securities Fraud Suit in NY
---------------------------------------------------------------
Tower Semiconductor, Ltd., certain of its directors and
shareholders face a securities class action filed in the United
States District Court for the Southern District of New York.
The lawsuit alleges violations of Section 4(a) of the Securities
Exchange Act of 1934 and Rule 14a-9 promulgated thereunder, and
also alleges that certain defendants have liability under
Section 20(a) of the Exchange Act. The lawsuit was brought by
plaintiffs on behalf of a putative class of persons who were
ordinary shareholders of Tower at the close of business on April
1, 2002, the record date for voting on certain matters proposed
in a proxy statement issued by Tower.
The Company has reviewed a copy of the complaint, believes it
has meritorious defenses, and intends to defend vigorously
against the claims asserted against it. Due to the early stage
of the litigation, the Company cannot determine what, if any,
effect resolution of this matter will have on its financial
condition.
TRIPLE J: SEC Sustains NYSE Disciplinary Action Over Stock Fraud
----------------------------------------------------------------
The Securities and Exchange Commission has sustained
disciplinary action taken by the New York Stock Exchange, Inc.
(NYSE) against David M. Levine, a former lessee member of the
NYSE, and Triple J Partners, Inc., a former member of the NYSE.
The Exchange found that:
(1) applicants executed trades for an account in which they
had an interest and with which they shared profits, and
failed to comply with record keeping requirements;
(2) applicants accepted from a specialist executions to
which they were not entitled, allowed Mr. Levine's
badge number to be used in transactions for which he
was not the executing broker, permitted applicants'
clerks to transmit to a specialist a document that was
neither a written market nor limit order, and failed
reasonably to supervise their business and employees;
(3) applicants conducted business with a public customer
without Exchange authorization; and
(4) Mr. Levine made material misstatements to the Exchange.
The Commission concluded that the sanctions imposed by the NYSE
- censures, suspensions for six months from Exchange membership,
allied membership, approved person status, and from employment
or association in any capacity with any member or member
organization, and a $100,000 joint fine - were neither excessive
nor oppressive, given these serious violations.
WAL-MART STORES: Lawyers Seek Class Status in Upgraded RICO Suit
---------------------------------------------------------------
Workers who were recently arrested in federal raids filed a
racketeering lawsuit against Wal-Mart, accusing the world's
largest retailer chain of conspiring with contractors in a
criminal enterprise that violated the civil rights and wage
protections of immigrants who cleaned its stores, AP newswire
reports.
The Federal Court lawsuit seeks class-action status for perhaps
thousands of immigrants, legal and illegal, hired by the
contractors to clean the stores of the world's largest retailer,
said a lawyer for the plaintiffs, James L. Linsey.
The scheme by Wal-Mart and the contractors violated the
Racketeering Influenced and Corrupt Organizations Act, known as
RICO, by systematically depriving the workers of labor law
protections over at least the last three years, the suit said.
"It's all designed to exploit the weakest, most vulnerable
people in the world," Mr. Linsey told AP, a day after the suit
was filed. He said the action replaces a lawsuit filed by the
same workers in state Superior Court last week that sought more
than $200,000 in back pay.
A Wal-Mart spokeswoman said the claims have no merit, AP
reports.
The racketeering lawsuit against Wal-Mart was filed on November
10, 2003 in the U.S. District Court in Newark, New Jersey.
Plaintiffs in this action are represented by James L. Linsey of
Cohen Weiss & Simon LLP and Gilberto Garcia.
WILD OATS: Canadian Court Hears Motion For Lawsuit Certification
----------------------------------------------------------------
The Supreme Court in British Columbia, Canada held a class
certification hearing for the lawsuit filed against Wild Oats
Markets Canada, Inc., as successor to Alfalfa's Canada, Inc.,
a Canadian subsidiary of the Company, styled "Helen Fakhri and
Ady Aylon, as Representative Plaintiffs v. Alfalfa's Canada,
Inc."
The suit allegedly represents two classes of plaintiffs - those
who contracted Hepatitis A allegedly through the consumption of
food purchased at a Capers Community Market in the spring of
2002, and those who were inoculated against Hepatitis A as a
result of news alerts by Capers and the Vancouver Health
Authority.
WORLDCOM INC.: Ex-SEC Officers Asked To Help With Civil Penalty
---------------------------------------------------------------
The Honorable Jed S. Rakoff, U.S. District Judge, issued an
Order appointing former Securities and Exchange Commission (SEC)
Chairman Richard C. Breeden, who is currently serving as
WorldCom's court-appointed Corporate Monitor, to be the
Distribution Agent to supervise the distribution of the SEC's
civil penalty judgment against WorldCom. The SEC obtained the
civil penalty judgment pursuant to a settlement approved by
Judge Rakoff on July 7, 2003. Judge Rakoff also appointed
former SEC Commissioner J. Carter Beese, Jr., to be the Equity
Manager to oversee the stock portion of the distribution fund.
The Court's selections of Mr. Breeden as Distribution Agent and
Mr. Beese as Equity Manager are the first steps in the Fair Fund
distribution process for the SEC's civil penalty judgment.
Future steps include WorldCom's payments into the distribution
fund and the SEC's submission of a formal distribution plan to
the District Court. These future steps are scheduled to take
place at or around the time WorldCom emerges from bankruptcy
court protection. After the District Court approves a
distribution plan, the Distribution Agent will commence the
process of identifying eligible investor claimants and
processing claims for payment from the distribution fund.
WorldCom, which is now doing business under the MCI brand name,
filed for bankruptcy court protection on July 21, 2002. On
October 31, 2003, the Bankruptcy Court approved the company's
plan of reorganization. The Commission staff anticipates that
the plan will become effective within a few months, resulting in
WorldCom's emergence from bankruptcy court protection. Because
WorldCom was in bankruptcy reorganization, the SEC's settlement
of its claims for civil penalties was reviewed and approved by
both the District Court and the Bankruptcy Court.
The SEC's civil penalty judgment against WorldCom provided that
WorldCom was liable for a civil penalty in the amount of
$2,250,000,000. It further provided that, in the event of
confirmation of a plan of reorganization of WorldCom by the
Bankruptcy Court - which occurred on October 31, 2003 -
WorldCom's obligation to the SEC shall be satisfied by the
company's payment of $500,000,000 in cash and its transfer of
common stock in the reorganized company having a value of
$250,000,000, on the effective date of its plan of
reorganization.
Under the terms of the settlement, the funds paid and the common
stock transferred by WorldCom to satisfy the SEC's judgment will
be distributed to investor victims of the company's fraud,
pursuant to Section 308 (Fair Funds for Investors) of the
Sarbanes-Oxley Act of 2002. Additional information regarding
the Fair Fund distribution of WorldCom's civil penalty is
available on the Commission's website. The Commission's
investigation into the events surrounding the WorldCom fraud is
continuing.
Asbestos Alert
ASBESTOS LITIGATION: Blue Asbestos Exposure may Affect Dozens
-------------------------------------------------------------
Australian Manufacturing Workers' Union reports that dozens of
people may have been exposed to deadly blue asbestos while
working at the Shell Refinery in suburban Newport recently,
according to an article in Dial Infolink Manufacturing.
The union's State Secretary Dave Oliver said that the fiber,
which has been out of general use for about 30 years, had been
found in an area of the oil company site in Melbourne. The
article says, six workers from Downer Engineering had discovered
the deadly fiber while doing maintenance work on some pipes at
the site six weeks ago.
"This week they walked off the job with the support of Downer
Engineering," Mr. Oliver told Dial Infolink.
However, the union is now calling on the oil giant to release a
list of employees and contractors from the past 30 years who
have may have been exposed to the deadly substance. "We had a
meeting with the six workers this morning to discuss our next
move and it came out of that meeting that the area known as the
cage contained blue asbestos, which has been out of circulation
for 30 years," Mr. Oliver told Dial Infolink.
"That means dozens, possibly more, workers have been exposed to
blue asbestos, so we have written to Shell requesting a list of
employees and contractors so that we can contact them and let
them know," he continued.
Mr. Oliver said the six members had been working with both blue
and white asbestos for six weeks while waiting for Shell to
instigate testing on the site. "These workers raised concerns
about the fiber on day one of the job which was about six weeks
ago, and it took them (Shell) weeks before they did anything,"
he said.
ASBESTOS LITIGATION: Reform Bill Draws Big Amounts for Lobbying
---------------------------------------------------------------
Business sectors and insurers have spent millions of dollars
lobbying on Capitol Hill this year for an asbestos litigation
reform bill now locked in a stalemate, lobbying disclosure forms
and spokesmen say, according to a Reuters report.
According to the Reuters report, a group of companies called the
Asbestos Study Group reported spending $5,560,000 in the first
half of 2003 on lobbying for legislation to end asbestos
lawsuits, making the group one of the top spenders, according to
disclosure forms.
The American Insurance Association meanwhile has spent about
$1.3 million on lobbying for an asbestos reform bill this year,
spokeswoman Julie Rochman recently told Reuters.
Business and insurers favor a proposal to pay asbestos claims
out of a trust fund that they would finance, rather than
continuing to pay victims' claims in court. But labor leaders
have rejected the money offered for the fund as too small,
stalling the bill before it could reach the Senate floor. The
latest of which is $114,000,000,000.
"I would think asbestos is one of the most expensive lobbying
fights this year, along with energy and Medicare-prescription
drugs," said Steve Weiss, spokesman for the Center for
Responsive Politics, which follows money in politics.
PolitcialMoneyLine.com, which tracks spending totals from
lobbying reports, said the Asbestos Study Group was the 11th
biggest lobby spender in the first half of 2003, along with
organizations like the American Medical Association and the
Pharmaceutical Research and Manufacturers of America.
Asbestos was widely used for fireproofing and insulation until
the 1970s. Scientists have concluded that inhaled fibers could
be linked to cancer and other diseases.
Asbestos injury claims have cost over $54,000,000,000 in
settlements so far and driven 69 U.S. companies into bankruptcy.
The Asbestos Study Group is a coalition of companies that
generally did not manufacture asbestos, but acquired asbestos
liabilities through acquisitions, or by using the mineral in
products such as turbines. Its members include Halliburton,
Honeywell, Viacom and General Motors.
Joel Johnson, a spokesman for the Asbestos Study Group, said
most of the $5,560,000 spent was dedicated to attorneys
analyzing proposals and how they affect various companies.
Asbestos manufacturers in the Asbestos Alliance reported
spending less -- just $180,000 -- on lobbying in the first half
of 2003, according to forms filed with the government.
On the other side of the asbestos battle are trial lawyers who
bring claims on behalf of those exposed to the mineral, and who
oppose a trust fund that would end their ability to do so.
The Association of Trial Lawyers of America spent an estimated
$250,000 on lobbying on the asbestos issue in the first half of
2003, spokesman Carlton Carl told Reuters.
Labor unions reported spending over $10,000,000 in their
lobbying efforts in the first half of 2003, according to
PoliticalMoneyLine.com, but this was on all topics, not just
asbestos.
ASBESTOS LITIGATION: Lawyers Say Insurers Knew of Asbestos Risk
---------------------------------------------------------------
Industry documents show some of the nation's largest insurance
companies knew for decades that asbestos could kill but didn't
warn workers exposed to the hazardous fibers on the job,
according to the recent report of the Star Tribune.
Way back in the 1930s, Metropolitan Life Insurance Co.
downplayed or did not make public research indicating that
asbestos could cause lung cancer and other diseases. The
newspaper also said Travelers Insurance and other carriers
measured asbestos levels in factory air samples for years and
pooled data on the growing number of claims on behalf of workers
dead or sick from asbestos illnesses, Star Tribune reports.
According to an AP report, the insurers did urge asbestos
companies to reduce dust levels. But attorneys now suing the
insurers contend the companies should have required asbestos
companies to protect their workers or to put warnings on
asbestos products long before the companies began to do so in
the mid-1960s.
In thousands of lawsuits in Ohio and Texas, dozens of insurers,
including Minnesota-based St. Paul Companies, are being accused
of concealing or negligently failing to disclose the asbestos
hazard, the Star Tribune said. Class-action lawsuits in West
Virginia and Massachusetts accuse a dozen insurers of fighting
victims' claims with deceptive defenses that asbestos companies
didn't fully know the perils of breathing the fibers.
Experts say asbestos could kill 500,000 U.S. workers and result
in 3 million injury claims from an estimated 27 million people
exposed to it. In Minnesota, workers across the state were
exposed to asbestos. State health officials say thousands of
Minnesota workers have died from it.
The Star Tribune said the lawsuits could test whether insurers
can be held accountable if they conceal or fail to disclose
knowledge that a policyholder's product is a health hazard. If
the cases were to result in major awards for victims, consumer
costs for other insurance products could soar, the newspaper
said.
Craig Berrington, general counsel of the American Insurance
Association, contended that the group's more than 400 casualty
insurers had no special knowledge about asbestos-related
diseases. He told the Star Tribune insurers had access to the
same medical studies as everybody else -- and no duty to alert
workers.
ASBESTOS LITIGATION: Albany Gets 28,691 Asbestos-Related Suits
--------------------------------------------------------------
Albany International Corp. (AIN) reports that it has around
28,691 asbestos-related lawsuits that allege lung and other
diseases based on exposure to products previously manufactured
by the company as of Oct. 24, according to its quarterly report
filed with the Securities and Exchange Commission.
According to the filing, the company had resolved 4,940 claims
by settlement or dismissal and had reached tentative agreements
to resolve 4,563 more claims reported as pending. The cost of
resolving all 9,503 claims totaled about $5,200,000. The company
said $5,140,000, or 99%, of the total was paid by its insurance
carrier.
Albany International has more than $130,000,000 in confirmed
insurance coverage that should be available with respect to
current and future asbestos claims as well as additional
insurance coverage that it should be able to access, according
to the filing.
Albany International reports that of the claims pending against
it, 24,668 are filed in Mississippi counties.
Albany International said it expects that only some of the
claimants will be able to demonstrate time spent in a paper mill
that used asbestos-containing products supplied by the company.
Albany International produces engineered fabrics used in making
paper and printing.
ASBESTOS LITIGATION: GP Asbestos Claims on the Upside to 34,100
---------------------------------------------------------------
Georgia-Pacific Corporation (GP) reports that it has 34,100
asbestos claims as of Sept. 31, up from last year's 32,200
according to the company's latest regulatory filing with the
Securities and Exchange Commission.
According to the filing, the Atlanta-based company settled,
dismissed or is in the process of settling or dismissing 35,900
asbestos claims during the first nine months of the year,
compared with 28,100 in the year-ago period. The number of
asbestos claims unresolved as of Sept. 30 is 67,000, compared to
last year's 66,300.
Georgia-Pacific also said that its wholly owned subsidiary Fort
James Corp. is defending about 810 claims regarding asbestos
premises liability.
Georgia-Pacific makes and distributes paper and building
products.
ASBESTOS LITIGATION: Halliburton Gets OK on $2.775 Billion Limit
----------------------------------------------------------------
Halliburton (NYSE: HAL) and the asbestos claimants committee
announced recently that they have reached an agreement in
principle to limit the cash required to settle pending asbestos
and silica claimants currently subject to definitive agreements
to $2,775,000,000.
The oil giant has been negotiating with the committee for a
proposed asbestos settlement for its DII Industries, Kellogg
Brown & Root and other subsidiaries
The proposed debtor entities currently are parties to such
definitive agreements with attorneys representing more than 95%
of the current asbestos and silica claimants.
The company and the representatives of current claimants have
agreed that if, at the completion of medical due diligence for
current claims, the cash amounts provided in the current
settlement agreements is greater than $2,775,000,000, the total
cash payment to each claimant would be reduced pro rata so that
the aggregate of payments would not exceed the said amount.
The terms of this revised settlement still must be approved by
75% of known present asbestos claimants. Despite reaching the
agreement in principal, there can be no assurance that such
approval will be obtained, that all members of the asbestos
claimants committee and other lawyers representing affected
claimants will support the revised settlement or that claimants
represented by members of the asbestos claimants committee and
other affected claimants will vote in favor of the revised plan
of reorganization.
The proposed debtor subsidiaries of the company will promptly
prepare and circulate a supplement to the disclosure statement
mailed in late September to known current claimants for the
purpose of soliciting acceptances of a revised plan of
reorganization that incorporates the revised terms to effect the
agreement in principle. The previous November 19, 2003 deadline
for submission of acceptances announced recently will also be
extended to allow time for receipt and review of the disclosure
statement supplement. The new deadline for acceptances will be
announced when the supplemental disclosure
statement is mailed. The additional time needed to solicit
acceptances to the revised plan of reorganization will likely
delay any Chapter 11 filing until sometime in December, assuming
that the necessary acceptances are promptly received and the
remaining product identification due diligence is timely
provided. The agreement in principle is conditioned upon a
Chapter 11 filing on or before December 31, 2003.
Halliburton reports that it has also agreed that two-thirds of
roughly $486,000,000, or $326,000,000, of the $2,775,000,000
cash amount will be paid on the earlier of 5 days prior to the
anticipated Chapter 11 filing by the affected Halliburton
subsidiaries and December 31, 2003, so long as product
identification due diligence information on those claims has
been timely provided and Halliburton believes that a
satisfactory number of claimants have provided acceptances to
the proposed plan of reorganization prior to time for payment.
The representatives of the current claimants have agreed to
accelerate their submission of remaining medical and product
identification due diligence information. Subject to the
proration, the remaining one-third of these claims will be
guaranteed by Halliburton and paid on the earlier of six months
after a Chapter 11 filing and the date on which the order
confirming the proposed plan of reorganization becomes final and
non-appealable.
In connection with reaching this agreement in principle,
Halliburton's management intends to recommend to its Board that
the company pursue this private settlement in lieu of possible
legislation, including S. 1125, the "Fairness in Asbestos Injury
Resolution Act of 2003." Because of the lack of certainty and
because of the lack of clarity of the terms of any legislation,
if it were passed, including certainty or finality in funding,
payments and litigation procedures, Halliburton believes that
such legislation could make it possible for the company to pay
more money in the future for asbestos and
silica claims.
Remaining conditions to a Chapter 11 filing by the affected
Halliburton subsidiaries include availability and effectiveness
of the definitive financing arrangements, approval of the plan
of reorganization by required creditors, including at least 75%
of known present asbestos claimants, and Halliburton board
approval.
Halliburton, founded in 1919, is one of the world's largest
providers of products and services to the petroleum and energy
industries. The Company serves its customers with a broad range
of products and services through its Energy Services and
Engineering and Construction Groups. The Company's World Wide
Web site can be accessed at http://www.halliburton.com.
ASBESTOS LITIGATION: Hercules Reports 30,600 Asbestos Claims
------------------------------------------------------------
Hercules Inc. (HPC) reports in its latest regulatory filing with
the Securities and Exchange Commission that it has around 30,600
unresolved asbestos claims pending as of Sept. 30.
The company reports that 955 claims allege exposure to asbestos
at facilities that the company formerly or presently owned or
operated.
Hercules said that the remaining cases allege exposure to
asbestos fibers from resin encapsulated pipe and tank products
that were sold by one of its former units to a limited
industrial market.
Hercules has received 16,072 new claims through the first nine
months of 2003. The company said 10,860 claims were included in
"consolidated" complaints, according to the filing.
Hercules also said that it had 1,640 unpaid claims that have
been settled or are subject to the terms of a settlement
agreement as of Sept. 30. A total of 11,900 claims have either
been dismissed without payment or are in the process of being
dismissed without payment.
As reported, the company has exhausted its primary and first-
level excess insurance policies on asbestos-related matters.
Hercules said in the filing that it "hasn't yet reached
agreement with its other insurance carriers to fund the cost of
defending and resolving asbestos-related matters."
Until the company's other carriers begin to fund the cost of
defending and resolving the matters, Hercules said, it will have
to fully fund those costs.
Other than the $19,000,000, net of insurance reimbursements,
spent as of Sept. 30, the Company estimated that its net cash
payments and cash payments, if any, from its insurers will total
about $18,000,000 for the remainder of 2003.
The company said it believes that, along with its former
subsidiary, it has sufficient additional insurance to cover the
majority of its current and estimated future asbestos-related
liabilities.
Hercules makes specialty chemicals for industries such as pulp
and paper, personal care, paints and coatings, adhesives and
pharmaceuticals.
ASBESTOS LITIGATION: Honeywell Eyes $110M in Asbestos Payouts
-------------------------------------------------------------
Honeywell International Inc. (HON) expects to pay $110 million
for asbestos-related liabilities in the fourth quarter,
according to its latest regulatory filing with Securities and
Exchange Commission.
The company made asbestos-related payments of $467,000,000,
including legal fees, in the first three quarters of 2003 basing
its estimate on its experience in the three quarters when
plaintiff firms submit required evidential data, the filing
said.
Honeywell reports that it has resolved about 62,500 asbestos-
related claims from 1981 to September 30 in connection with its
Bendix Friction Materials business, which manufactured
automotive brake pads that included asbestos in an encapsulated
form. The average indemnity cost per claim of the Bendix cases
is about $2,900, with around 71,000 claims pending, the filing
said.
Honeywell emphasized that it didn't mine or produce asbestos,
nor did it make or sell insulation products or other
construction materials that have been identified as the primary
cause of asbestos-related disease in the vast majority of the
claims but it has made several products that contained small
amounts of asbestos.
Another source of asbestos claims is refractory products sold
largely to the steel industry in the East and Midwest by North
American Refractories Co., a business Honeywell owned from 1979
to 1986. North American Refractories filed for bankruptcy in
January 2002 and is reorganizing.
Honeywell said that definitive agreements have been reached with
about 256,000 claimants, or more than 90% of the 275,000
claimants expected to file a claim as part of North American
Refractories' reorganization. According to the filing,
Honeywell received about $150 million in cash from various
insurance companies in October related to its North American
Refractories asbestos claims.
Honeywell asserts that it has $1.3 billion of insurance
remaining that can be specifically allocated to North American
Refractories-related liability. "We had hoped to meet with
Shell today (Wednesday) but they refused to do so, so we have
written to them seeking an urgent meeting . We need to know what
steps will be taken to make the area safe for workers and until
it is safe our members will not be returning to the site," the
company revealed.
"WorkSafe has been in to investigate the site and tests have
been conducted and the six workers will undergo medical checks
today," he told Dial Infolink.
ASBESTOS LITIGATION: ITT Resolved 2,000 Asbestos-Related Suits
--------------------------------------------------------------
ITT reports that the company and its Goulds Pumps Inc. unit
resolved about 2,000 asbestos-related lawsuits through
settlement or dismissal this year, according to its quarterly
report filed with the Securities and Exchange Commission.
According to the filing, the average amount of settlement per
plaintiff has been nominal and virtually all defense and
settlement costs have been covered by insurance.
Majority of the 2,000 cases was resolved during the second half
of 2003. As reported, ITT and Goulds Pumps had resolved 150
cases during the first half of 2003.
ITT Industries and Goulds Pumps have been joined as defendants
with numerous other industrial companies in product liability
lawsuits alleging injury due to asbestos.
Its historic product liability insurance carriers have managed
these actions against the company, the filing said.
These claims stem primarily from products sold before 1985 that
contained a gasket that was manufactured by a third party and
that allegedly contained asbestos. The asbestos was
encapsulated in the gasket.
In some other cases, it's alleged that ITT Industries companies
were distributors for other manufacturers' products that may
have contained asbestos, according to the filing.
ASBESTOS LITIGATION: Lincoln Faces 34,504 Asbestos Claimants
-------------------------------------------------------------
Lincoln Electric Holdings Inc. (LECO) reports in its latest
regulatory filing with the Securities and Exchange Commission
that it is a co-defendant in asbestos-related lawsuits with
roughly 34,504 plaintiffs, a decrease if 326 from last quarter.
Lincoln Electric says that it is one of a large number of
defendants in each of the lawsuits and the asbestos claimants
are seeking compensatory and punitive damages, in most cases for
unspecified sums.
According to the filing, the company has been a co-defendant in
similar cases since Jan. 1, 1995, where 12,651 claims were
dismissed, nine were tried to defense verdicts, two were tried
to plaintiff verdicts, and 202 were decided in its favor
following summary judgment motions. The company said it will
appeal the two plaintiff verdicts.
Lincoln Electric Holdings Inc. is a leading manufacturer of arc
welding and cutting products and welding supplies, its products
include arc-welding power sources, automated wire-feeding
systems, and consumable electrodes for arc welding.
ASBESTOS LITIGATION: OC Creditors Ask NY Judge To Recuse Self
-------------------------------------------------------------
Creditors of Owens Corning are pushing for the removal of the
presiding judge on the grounds that some of his advisers faced a
serious conflict of interest.
In a New York Times report, the creditors filed a request on
October 10 for Federal District Judge Alfred M. Wolin in Newark
to recuse himself from the case of Owens Corning, a company that
was driven into Chapter 11 proceedings by asbestos lawsuits. The
company has already paid $5 billion to settle some of the
claims.
Dissatisfied with the judge's response, on October 24 they went
over his head, asking the United States Court of Appeals for the
Third Circuit to order him either to step aside or speed up his
consideration of the recusal motion. Recently, a three-judge
panel of the Third Circuit, which oversees Judge Wolin's court,
ordered all interested parties in the bankruptcy case to respond
to the creditors' request by Nov. 21. In the meantime, the
judge's advisers have been ordered to provide statements
outlining their work. And on Wednesday, Judge Wolin stayed
proceedings in all five of the large bankruptcy cases he
oversees, the New York Times reports.
"That means they're taking this very seriously," Margaret A.
Berger, a professor at Brooklyn Law School, said of the move by
the appeals court. Intervening directly in a lower-court
proceeding is unusual enough, she said, and doing so to order
the lower-court judge to step out of the case is more so. "This
is very odd," she remarked.
The problem, according to the creditors, is that two of Judge
Wolin's outside advisers represent asbestos claimants in other
asbestos-related bankruptcies. The creditors are Kensington
International and Springfield Associates, two investment funds
controlled by Elliott Associates and its affiliate, Elliott
International, both private investment firms. They argue that as
a result, the advisers do not have an impartial view of the
judge's handling of the case and their presence creates at least
an appearance of impropriety.
In court filings, Kensington and Springfield assert that two
consultants appointed to advise the court in managing the Owens
Corning bankruptcy have for 22 months also represented people
holding future asbestos claims against G-I Holdings, another
company in bankruptcy proceedings as a result of asbestos. The
creditors say the dual roles create a potential conflict of
interest because the two advisers may have tried to persuade
Judge Wolin to handle issues in the Owens Corning bankruptcy in
a way that would help asbestos claimants in the G-I bankruptcy.
"Because of the numerous similarities between these cases, the
conflicted advisers have been able to advocate positions in G-I
based upon this court's decisions - decisions that were issued
while the conflicted advisers were assisting this court," the
creditors wrote in support of their recusal motion. "The
conflicted advisers have even gone so far as to tell the court
in the G-I case how this court will rule on issues in the
future, and to use that yet-to-be-issued decision as precedent
for how the G-I court should rule."
A clerk for Judge Wolin said he would not comment on the
proceedings. One of the two advisers named by the creditors, C.
Judson Hamlin, also declined to comment; the other adviser,
David R. Gross, did not return phone calls seeking comment.
But in his response to the appellate court's order calling for
briefs on the recusal motion, Judge Wolin indirectly questioned
the motives of the creditors, noting that it is his role "to
ensure that any motion before it is presented for a proper
purpose and not for purposes of delay or other, self-serving
ends." For nearly two years, he wrote elsewhere, "No party has
objected to the involvement of any of the court-appointed
advisers."
The timing of the motion may be suspect, the judge suggested. It
was filed before he issued a ruling in the bankruptcy case on
whether to consolidate all of Owens Corning's assets to satisfy
creditors - a move that would reduce the amount that would be
recovered by creditors like Kensington, Springfield and Credit
Suisse First Boston (which, as an agent for other bank
creditors, supported the motion in a separate filing). The
creditors contend that they only recently obtained the
information about the advisers' potential conflicts from their
role in other asbestos bankruptcy cases, according to a New York
Times report.
New Securities Fraud Cases
ALGER FUNDS: Cauley Geller Lodges Securities Lawsuit in S.D. NY
---------------------------------------------------------------
Cauley Geller Bowman & Rudman, LLP initiated a securities class
action in the United States District Court for the Southern
District of New York on behalf of all purchasers, redeemers and
holders of shares of the Fred Alger Family of Mutual Funds
during the period between November 1, 1998 and September 3,
2003, inclusive.
The Funds, and the symbols for the respective Funds named below,
are as follows:
(1) Alger SmallCap Portfolio (Sym: ALSAX, ALSCX, AGSCX)
(2) Alger SmallCap and MidCap Portfolio (Sym: ALMAX, ALMBX,
ALMCX)
(3) Alger MidCap Growth Portfolio (Sym: AMGAX, AMCGX,
AMGCX)
(4) Alger LargeCap Growth Portfolio (Sym: ALGAX, AFGPX,
ALGCX)
(5) Alger Capital Appreciation Portfolio (Sym: ACAAX,
ACAPX, ALCCX)
(6) Alger Health Sciences Portfolio (Sym: AHSAX, AHSBX,
AHSCX)
(7) Alger Balanced Portfolio (Sym: ALBAX, ALGBX, ALBCX)
(8) Alger Small Cap Institutional Fund (Sym: ALSRX, ASIRX)
(9) Alger MidCap Institutional Fund (Sym: ALMRX, ALGRX)
(10) Alger LargeCap Growth Institutional Fund (Sym: ALGRX,
ALGIX)
(11) Alger Capital Appreciation Institutional Fund (Sym:
ALARX, ACARX)
(12) Alger Balanced Institutional Fund (Sym: ABLRX, ABIRX)
(13) Alger Socially Responsible Growth Institutional Fund
(Sym: ASRGX, ASRRX)
(14) Spectra Fund (Sym: SPEAX, SPECX))
The complaint charges Fred Alger Management Inc., the Alger
Fund, James Patrick Connelly Jr., the Fred Alger Funds, Veras
Investment Partners, LLP, and Doe Defendants with violations of
the Securities Act of 1933, the Securities Exchange Act of 1934,
and for common law breach of fiduciary duties.
The Complaint alleges that during the Class Period the Fred
Alger Funds and the other defendants engaged in illegal and
improper trading practices, in concert with certain
institutional traders, which caused financial injury to the
shareholders of the Fred Alger Funds.
According to the Complaint, the Defendants surreptitiously
permitted certain favored investors to illegally engage in
"timing" of the Fred Alger 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 Fred Alger Funds' prospectuses.
For more information, contact Samuel H. Rudman, David A.
Rosenfeld, Jackie Addison or Heather Gann, by Mail:
P.O. Box 25438, Little Rock, AR 72221-5438, by Phone: toll free
1-888-551-9944, Fax: 1-501-312-8505, by E-mail:
info@cauleygeller.com, or visit the firm's Website:
http://www.cauleygeller.com.
ALGER FUNDS: Schiffrin & Barroway Lodges Securities Suit in NY
--------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a class action lawsuit in
the United States District Court for the Southern District of
New York on behalf of all purchasers, redeemers and holders of
shares of Alger LargeCap Growth Portfolio (Nasdaq: ALGAX)
(Nasdaq: AFGPX) (Nasdaq: ALGCX), Alger Capital Appreciation
Portfolio (Nasdaq: ACAAX) (Nasdaq: ACAPX) (Nasdaq: ALCCX), Alger
Health Sciences Portfolio (Nasdaq: AHSAX) (Nasdaq: AHSBX)
(Nasdaq: AHSCX), Alger Balanced Portfolio (Nasdaq: ALBAX)
(Nasdaq: ALGBX) (Nasdaq: ALBCX), Alger Small Cap Institutional
Fund (Nasdaq: ALSRX) (Nasdaq: ASIRX), and other Fred Alger
Family of Mutual Funds from November 1, 1998 through September
3, 2003, inclusive.
The following funds are subject to the above class action
lawsuit:
(1) Alger SmallCap Portfolio (Sym: ALSAX, ALSCX, AGSCX)
(2) Alger SmallCap and MidCap Portfolio (Sym: ALMAX, ALMBX,
ALMCX)
(3) Alger MidCap Growth Portfolio (Sym: AMGAX, AMCGX,
AMGCX)
(4) Alger LargeCap Growth Portfolio (Sym: ALGAX, AFGPX,
ALGCX)
(5) Alger Capital Appreciation Portfolio (Sym: ACAAX,
ACAPX, ALCCX)
(6) Alger Health Sciences Portfolio (Sym: AHSAX, AHSBX,
AHSCX)
(7) Alger Balanced Portfolio (Sym: ALBAX, ALGBX, ALBCX)
(8) Alger Small Cap Institutional Fund (Sym: ALSRX, ASIRX)
(9) Alger MidCap Institutional Fund (Sym: ALMRX, ALGRX)
(10) Alger LargeCap Growth Institutional Fund (Sym: ALGRX,
ALGIX)
(11) Alger Capital Appreciation Institutional Fund (Sym:
ALARX, ACARX)
(12) Alger Balanced Institutional Fund (Sym: ABLRX, ABIRX)
(13) Alger Socially Responsible Growth Institutional Fund
(Sym: ASRGX, ASRRX)
(14) Spectra Fund (Sym: SPEAX, SPECX))
The complaint charges Fred Alger Management Inc., the Alger
Fund, James Patrick Connelly Jr., the Fred Alger Funds, Veras
Investment Partners, LLP, and Doe Defendants 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 during the Class Period the Fred
Alger Funds and the other defendants engaged in illegal and
improper trading practices, in concert with certain
institutional traders, which caused financial injury to the
shareholders of the Fred Alger Funds.
According to the Complaint, the Defendants surreptitiously
permitted certain favored investors to illegally engage in
"timing" of the Fred Alger 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 Fred Alger Funds' prospectuses.
For more information, contact: Marc A. Topaz, Esq., or Stuart L.
Berman, Esq., of Schiffrin & Barroway, LLP, 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.
BOSTON COMMUNICATIONS: Cauley Geller Commences Stock Suit in MA
----------------------------------------------------------------
Cauley Geller Bowman & Rudman, LLP initiated a class action
lawsuit in the United States District Court for the District of
Massachusetts on behalf of purchasers of Boston Communications
Group, Inc. publicly traded securities during the period between
June 12, 2003 and July 16, 2003, inclusive.
The complaint alleges that Defendants violated Sections 10(b)
and 20(a) of the Securities and 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 the Defendants issued
false and misleading statements and had a duty to correct such
statements concerning Boston Communications' relationship with
Verizon Wireless.
In particular, analysts had raised concerns regarding the
Company's ability to maintain relationships with its primary
customers, which accounted for the majority of the Company's
revenue. Moreover, such concerns included the propensity for its
customers to take services outsourced to Boston Communications,
in-house. To allay investor fears concerning Boston
Communications' customer concentration, the Company attempted to
reassure investors that contract negotiations with Verizon
Wireless, and other customers, were continuing as planned,
despite a company policy not to do so.
On July 17, 2003, Verizon Wireless announced its intention to
"insource" the company's services. Announcement of the news
caused shares of Boston Communications to plummet, falling 40%
on heavy volume.
For more information, contact: Samuel H. Rudman, David A.
Rosenfeld, Jackie Addison or Heather Gann, by Mail:
P.O. Box 25438, Little Rock, AR 72221-5438, by Phone: toll free
1-888-551-9944, Fax: 1-501-312-8505, by E-mail:
info@cauleygeller.com, or visit the firm's Website:
http://www.cauleygeller.com.
BOSTON COMMUNICATIONS: Goodkind Labaton Files Stock Suit in MA
--------------------------------------------------------------
Goodkind Labaton Rudoff & Sucharow LLP initiated a class action
lawsuit in the United States District Court for the District of
Massachusetts against Boston Communications and certain
officers, on behalf of persons who purchased or otherwise
acquired publicly traded securities of Boston Communications
Group, Inc. between June 12, 2003 and July 16, 2003, inclusive.
The complaint alleges that Defendants violated Sections 10(b)
and 20(a) of the Securities and 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 the Defendants issued false and
misleading statements and had a duty to correct such statements
concerning Boston Communications' relationship with Verizon
Wireless.
In particular, analysts had raised concerns regarding the
company's ability to maintain relationships with its primary
customers, which accounted for the majority of the Company's
revenue. Moreover, such concerns included the propensity for its
customers to take services outsourced to Boston Communications,
in-house. To allay investor fears concerning Boston
Communications's customer concentration, the Company attempted
to reassure investors that contract negotiations with Verizon
Wireless, and other customers, were continuing as planned,
despite a company policy not to do so.
On July 17, 2003, Verizon Wireless announced its intention to
"insource" the Company's services. Announcement of the news
caused shares of Boston Communications to plummet, falling 40%
on heavy volume.
For more information, contact: Christopher Keller, Esq., of
Goodkind Labaton Rudoff & Sucharow LLP, by Phone: 800-321-0476.
BOSTON COMMUNICATIONS: Charles Piven Files Securities Suit in MA
----------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. initiated a securities
class action in the United States District Court for the
District of Massachusetts against defendant Boston
Communications and certain of its officers on behalf of
shareholders who purchased, converted, exchanged or otherwise
acquired the common stock of Boston Communications Group, Inc.
between June 12, 2003 and July 16, 2003, inclusive.
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 information, contact: The Law Offices Of Charles J.
Piven, P.A., 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.
GEMSTAR-TV GUIDE: Finkelstein & Krinsk Files Stock Suit in CA
-------------------------------------------------------------
Finkelstein & Krinsk LLP initiated a first amended securities
lawsuit in the United States District Court for the Central
District of California against Gemstar-TV Guide International,
Inc., and Gemstar's management (Henry C. Yueng and Elsie Ma
Leung) alleging that common stock and securities was sold at
inflated prices for at least the period of August 11, 1999 to
April 1, 2002.
The first amended complaint particularizes facts that, inter
alia, indicate that Gemstar's public statements and financial
presentations were materially false and misleading and failed to
disclose and/or misrepresented multiple accounting manipulations
pursued by defendant's including:
(1) that Gemstar improperly recognized over $113 million in
non-existent revenue during the Relevant Period by
including revenue based on an expired and unenforceable
license agreement;
(2) that Gemstar improperly recognized over $18 million in
revenues during the Relevant Period based on a non-
existent agreement and recognized another $1 million
based on non-existent advertising;
(3) that defendants improperly inflated reported
acquisition costs to fraudulently show revenue
increases for Gemstar's Interactive Section; and
(4) that Gemstar and the Individual Defendants staged over
$120 million of advertising revenue.
The Relevant Period ended on April 1, 2002 when Gemstar first
revealed to the investing public that various revenue streams
were not as had been reported. Since that time, Mr. Yuen and Mr.
Leung have refused to certify the accuracy of Gemstar's earlier
reported results, KPMG has withdrawn earlier audit opinions,
Gemstar's financial results have been restated, and the SEC has
charged Mr. Yuen and Mr. Leung with securities fraud.
For more information, contact Jeffrey R. Krinsk, by Phone:
(877) 493-5366, by Fax: (619) 238-5425, or by E-mail:
fk@classactionlaw.com.
GOODYEAR TIRE: Wolf Haldenstein Files Securities Suit in N.D. OH
----------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities
class action in the United States District Court for the
Northern District of Ohio, on behalf of all persons who
purchased securities of Goodyear Tire & Rubber Co. between
October 22, 1998 and October 22, 2003, inclusive, against
Goodyear Tire and Rubber Co. and certain officers and directors
of the Company.
The Complaint alleges that Defendants inflated the price of
Goodyear's stock, by causing the Company to falsely report its
results for 1998-2002 through improper accounting practices.
These results were included in Form 10-Q's and 10-K's filed with
the SEC as well as published in press releases. In Goodyear's
2001 Form 10-K, it represented that it recognized revenue in
accordance with GAAP.
On October 22, 2003, Goodyear announced that its 1998-2002
results would be restated to eliminate revenue that had been
improperly recorded as revenues. Specifically, the Company has
now admitted that it inappropriately recorded transactions
included in its results, and has restated those results to
remove some $100 million in improperly reported income, such
that its 1998-2002 financial statements were not a fair
presentation of Goodyear's results and were presented in
violation of Generally Accepted Accounting Principles and SEC
rules.
For more information, contact Fred Taylor Isquith, Gregory M.
Nespole, Christopher S. Hinton, George Peters, or Derek Behnke
by Mail: 270 Madison Avenue, New York, New York 10016, by Phone:
(800) 575-0735, by E-mail: classmember@whafh.com, or visit the
firm's Website: http://www.whafh.com.
MORGAN STANLEY: Milberg Weiss Lodges Securities Suit in S.D. NY
---------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities
class action in the United States District Court for the
Southern District of New York against defendants Morgan Stanley,
Morgan Stanley DW Inc., Morgan Stanley Investment Advisors,
Inc., Morgan Stanley Advisors LP, Van Kampen Investments Inc.,
Van Kampen Asset Management Inc., and each of the Funds, on
behalf of purchasers of the securities of the Morgan Stanley and
Van Kampen family of funds owned and operated by Morgan Stanley,
and certain of its subsidiaries and affiliates, between October
1, 1999 and December 31, 2002, inclusive, seeking to pursue
remedies under the Securities Exchange Act of 1934, the
Securities Act of 1933, and the Investment Advisers Act of 1940.
The Funds, and the symbols for the respective Funds named below,
are as follows:
(1) Morgan Stanley 21st Century Trend Fund (TCTAX, TCTBX,
TCTCX, TCTDX)
(2) Morgan Stanley Aggressive Equity Fund (AEQAX, AEQBX,
AEQCX, AEQDX)
(3) Morgan Stanley All Star Growth Fund (ALLAX, ALLBX,
ALLCX, ALLDX)
(4) Morgan Stanley American Opportunities Fund (AMOAX,
AMOBX, AMOCX, AMODX)
(5) Morgan Stanley Biotechnology Fund (BTKAX, BTKBX, BTKCX,
BTKDX)
(6) Morgan Stanley Capital Opportunities Trust (CPOAX,
CPOBX, CPOCX, CPODX)
(7) Morgan Stanley Developing Growth Securities (DGRAX,
DGRBX, DGRCX, DGRDX)
(8) Morgan Stanley Financial Services Trust (FSVAX, FSVBX,
FSVCX, FSVDX)
(9) Morgan Stanley Growth Fund (GRTAX, GRTBX, GRTCX, GRTDX)
(10) Morgan Stanley Health Sciences Trust (HCRAX, HCRBX,
HCRCX, HCRDX)
(11) Morgan Stanley Information Fund (IFOAX, IFOBX, IFOCX,
IFODX)
(12) Morgan Stanley KLD Social Index Fund (SIXAX, SIXBX,
SIXCX, SIXDX)
(13) Morgan Stanley Market Leader Trust (MLDAX, MLDBX,
MLDCX, MLDDX)
(14) Morgan Stanley Mid-Cap Value Fund (MDFAX, MDFBX, MDFCX,
MDFDX)
(15) Morgan Stanley Nasdaq-100 Index Fund (NSQAX, NSQBX,
NSQCX, NSQDX)
(16) Morgan Stanley Natural Resource Development Securities
(NREAX, NREBX, NRECX, NREDX)
(17) Morgan Stanley New Discoveries Fund (NDFAX, NDFBX,
NDFCX, NDFDX)
(18) Morgan Stanley Next Generation Trust (NGTAX, NGTBX,
NGTCX, NGTDX)
(19) Morgan Stanley Small-Mid Special Value Fund (JBJAX,
JBJBX, JBJCX, JBJDX)
(20) Morgan Stanley Special Growth Fund (SMPAX, SMPBX,
SMPCX, SMPD)
(21) Morgan Stanley Special Value Fund (SVFAX, SVFBX, SVFCX,
SVFDX)
(22) Morgan Stanley Tax-Managed Growth Fund (TGXAX, TGXBX,
TGXCX, TGXDX)
(23) Morgan Stanley Technology Fund (TEKAX, TEKBX, TEKCX,
TEKDX)
(24) Morgan Stanley European Growth Fund (EUGAX, EUGBX,
EUGCX, EUGDX)
(25) Morgan Stanley Fund of Funds - International Portfolio
(IOFBX, IOFCX, IOFDX)
(26) Morgan Stanley Global Advantage Fund, (GADAX, GADBX,
GADCX, GADDX)
(27) Morgan Stanley Global Dividend Growth Securities
(GLBAX, GLBBX, GLBCX, GLBDX)
(28) Morgan Stanley Global Utilities Fund (GUTAX, GUTBX,
GUTCX, GUTDX)
(29) Morgan Stanley International Fund (INLAX, INLBX, INLCX,
INLDX)
(30) Morgan Stanley International Smallcap Fund (ISMAX,
SMBX, ISMCX, ISMDX)
(31) Morgan Stanley International Value Equity Fund (IVQAX,
IVQBX, IVQCX, IVQDX)
(32) Morgan Stanley Japan Fund (JPNAX, JPNBX, JPNCX, JPNDX)
(33) Morgan Stanley Latin American Growth Fund (LATAX,
LATBX, LATCX, LATDX)
(34) Morgan Stanley Pacific Growth Fund (TGRAX, TGRBX,
TGRCX, TGRDX)
(35) Morgan Stanley Allocator Fund (ALRAX, ALRBX, ALRCX,
ALRDX)
(36) Morgan Stanley Balanced Growth Fund (BGRAX, BGRBX,
BGRCX, BGRDX)
(37) Morgan Stanley Balanced Income Fund, (BINAX, BINBX,
BINCX, BINDX)
(38) Morgan Stanley Convertible Securities Trust, (CNSAX,
CNSBX, CNSCX, CNSDX)
(39) Morgan Stanley Dividend Growth Securities, (DIVAX,
DIVBX, DIVCX, DIVDX)
(40) Morgan Stanley Equity Fund (EQFAX, EQFBX, EQFCX, EQFDX)
(41) Morgan Stanley Fund of Funds - Domestic Portfolio
(DOFAX, DOFBX, DOFCX, DOFDX)
(42) Morgan Stanley Fundamental Value Fund (FVFAX, FVFBX,
FVFCX, FVFDX)
(43) Morgan Stanley Income Builder Fund, (INBAX, INBBX,
INBCX, INBDX)
(44) Morgan Stanley Real Estate Fund (REFAX, REFBX, REFCX,
REFDX)
(45) Morgan Stanley S&P 500 Index Fund (SPIAX, SPIBX, SPICX,
SPIDX)
(46) Morgan Stanley Strategist Fund (SRTAX, SRTBX, SRTCX,
SRTDX)
(47) Morgan Stanley Total Market Index Fund (TMIAX, TMIBX,
TMICX, TMIDX)
(48) Morgan Stanley Total Return Trust (TRFAX, TRFBX, TRFCX,
TRFDX)
(49) Morgan Stanley Utilities Fund (UTLAX, UTLBX, UTLCX,
UTLDX)
(50) Morgan Stanley Value Fund (VLUAX, VLUBX, VLUCX, VLUDX)
(51) Morgan Stanley Value-Added Market Series/Equity
Portfolio (VADAX, VADBX, VADCX, VADDX)
(52) Morgan Stanley Active Assets California Tax-Free Trust
(AACXX)
(53) Morgan Stanley Active Assets Government Securities
Trust (AAGXX)
(54) Morgan Stanley Active Assets Institutional Money Trust
(AVIXX)
(55) Morgan Stanley Active Assets Money Trust (AAMXX)
(56) Morgan Stanley Active Assets Tax-Free Trust (AATXX)
(57) Morgan Stanley Flexible Income Trust (DINAX, DINBX,
DINCX, DINDX,)
(58) Morgan Stanley Federal Securities Trust (FDLAX, FDLBX,
FDLCX, FDLDX)
(59) Morgan Stanley High Yield Securities (HYLAX, HYLBX,
HYLCX, HYLDX)
(60) Morgan Stanley Quality Income Trust (IISAX, IISBX,
IISCX, IISDX)
(61) Morgan Stanley Limited Duration Fund (MSLDX)
(62) Morgan Stanley Limited Duration U.S. Treasury Trust
(LDTRX)
(63) Morgan Stanley Liquid Asset Fund (DWLXX)
(64) Morgan Stanley Prime Income Trust (XPITX)
(65) Morgan Stanley U.S. Government Money Market Trust
(DWGXX)
(66) Morgan Stanley U.S. Government Securities Trust (USGAX,
USGBX, USGCX, USGDX)
(67) Morgan Stanley California Tax-Free Daily Income Trust
(DSCXX)
(68) Morgan Stanley California Tax-Free Income Fund (CLFAX,
CLFBX, CLFCX, CLFDX)
(69) Morgan Stanley Hawaii Municipal Trust (DWHIX)
(70) Morgan Stanley Limited Term Municipal Trust (DWLTX)
(71) Morgan Stanley Multi-State Municipal Series Trust,
Arizona Series (DWAZX)
(72) Morgan Stanley Multi-State Municipal Series Trust,
Florida Series (DWFLX)
(73) Morgan Stanley Multi-State Municipal Series Trust, New
Jersey Series (DWNJX)
(74) Morgan Stanley Multi-State Municipal Series Trust,
Pennsylvania Series (DWPAX)
(75) Morgan Stanley New York Municipal Money Market Trust
(DWNXX)
(76) Morgan Stanley New York Tax-Free Income Fund (NYFAX,
NYFBX, NYFCX, NYFDX)
(77) Morgan Stanley Tax-Exempt Securities Trust (TAXAX,
TAXBX, TAXCX, TAXDX)
(78) Morgan Stanley Tax-Free Daily Income Trust (DSTXX)
(79) Van Kampen Advantage Municipal Income Trust (VKA)
(80) Van Kampen Advantage Municipal Income Trust II (VKI)
(81) Van Kampen Advantage Pennsylvania Municipal Income
Trust (VAP)
(82) Van Kampen Bond Fund (IOBIX, VBF)
(83) Van Kampen California Municipal Trust (VKC)
(84) Van Kampen California Quality Municipal Trust (VQC)
(85) Van Kampen California Value Municipal Income Trust
(VCV)
(86) Van Kampen Comstock Fund (ACSTX, ACSWX, ACSYX, ACSRX)
(87) Van Kampen Convertible Securities Fund (VXS)
(88) Van Kampen Corporate Bond Fund (ACCBX, ACCDX, ACCEX)
(89) Van Kampen Emerging Growth Fund (ACEGX, ACEMX, ACEFX,
ACEEX)
(90) Van Kampen Enterprise Fund (ACENX, ACEOX, ACEPX)
(91) Van Kampen Equity & Income Fund (ACEIX, ACEQX, ACERX,
ACESX)
(92) Van Kampen Florida Municipal Opportunity Trust (VMO)
(93) Van Kampen Florida Quality Municipal Trust (VFM)
(94) Van Kampen Government Securities Fund (ACGSX, ACGTX,
ACGVX)
(95) Van Kampen Growth & Income Fund (ACGIX, ACGJX, ACGKX,
ACGLX)
(96) Van Kampen Harbor Fund (ACHBX, ACHAX, ACHCX)
(97) Van Kampen High Income Corporate Bond Fund (ACHYX,
ACHZX, ACHWX)
(98) Van Kampen Income Trust (VIN)
(99) Van Kampen High Income Trust (VIT)
(100) Van Kampen Investment Grade Municipal Trust (VIG)
(101) Van Kampen Limited Maturity Government Fund (ACFMX,
ACFTX, ACFWX)
(102) Van Kampen High Income Trust II (VLT)
(103) Van Kampen Massachusetts Value Municipal (VMV)
(104) Van Kampen Municipal Income Trust (VMT)
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 defendants engaged in an unlawful and
deceitful course of conduct designed to improperly financially
advantage defendants to the detriment of plaintiffs and the
other members of the Class.
The complaint alleges that defendants, in clear contravention of
their disclosure obligations and fiduciary responsibilities,
failed to properly disclose that Morgan Stanley had been
aggressively pushing its sales personnel to sell Morgan Stanley
and Van Kampen funds, instead of mutual funds owned and managed
by other companies, by organizing internal contests offering
various prizes to brokers who sold the most in proprietary
funds.
In addition, according to the complaint, unbeknownst to
investors, the advisors to the Funds (Morgan Stanley Investment
Advisors, Inc., Morgan Stanley Advisors LP, and Van Kampen Asset
Management Inc.) paid excessive commissions, directly or
indirectly, to MSDW, the broker dealer, which came directly out
of the Funds' assets, as payments to MSDW for its steering
clients towards Morgan Stanley's proprietary funds, including
the Van Kampen funds. The advisors profited from this scheme by
earning increased management fees, while MSDW benefited from
increased commissions and Morgan Stanley profited as the
ultimate parent of MSDW and the advisors. The clear losers were
plaintiff and the other members of the Class, whose assets were
diverted to line defendants' pockets without any benefit to them
whatsoever.
For more information, contact Peter E. Seidman, or Andrei V.
Rado, by Mail: One Pennsylvania Plaza, 49th fl., New York, NY,
10119-0165, by Phone: (800) 320-5081, by E-mail:
morganstanleyfundscase@milberg.com, or visit the firm's Website:
http://www.milberg.com.
PMA CAPITAL: Abbey Gardy Lodges Securities Fraud Suit in E.D. PA
----------------------------------------------------------------
Abbey Gardy, LLP initiated a securities class action in the
United States District Court for the Eastern District of
Pennsylvania on behalf of a class of all persons who purchased
or acquired securities of PMA Capital Corporation between
November 13, 1998 and November 3, 2003 inclusive, against:
(1) PMA Capital Corporation,
(2) John W. Smithson,
(3) William E. Hitselberger and,
(4) Francis W. McDonnell
The Complaint alleges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market during the Class Period thereby
artificially inflating the price of PMA securities. The
Complaint alleges that defendants issued a series of public
filings, press releases and other public statements with
favorable financial results.
More specifically, during the Class Period, the Company
represented that it had established an adequate amount of funds
to pay or settle losses arising from insurance claims held by
PMA policy holders, in order to obtain positive ratings from
insurance industry rating agencies which enabled defendants to
underwrite insurance policies and negotiate reinsurance
treaties, worth millions of dollars in premiums, to purchasers
who relied on such ratings.
In addition, defendants' misrepresentations about PMA's
financial condition created favorable conditions for PMA to
complete two offerings during the Class Period, valued at $75
million and $50 million each.
The Complaint further alleges that defendants' failed to
properly account for PMA's liabilities and expenses arising from
insurance claims reported by policyholders, and PMA failed to
establish adequate reserves to cover such claims. As a result,
during the Class Period, defendants understated PMA's
liabilities and expenses, thereby artificially inflating PMA's
reported results and causing injury to plaintiff and members of
the Class.
On November 4, 2003, before the market opened, PMA disclosed
that it will record a pre-tax charge of $150 million primarily
to compensate for its inadequate loss reserves. Immediately
following this announcement, the price of PMA common stock fell
dramatically, plummeting $8.11, or 61.7 percent, from its
previous day's trading, to close at $5.03 per share.
For more details, contact Nancy Kaboolian by E-mail:
nkaboolian@abbeygardy.com or visit the firm's Website:
http://www.abbeygardy.com
PMA CAPITAL: Donovan Searles Lodges Securities Suit in E.D. PA
--------------------------------------------------------------
The law firm of Donovan Searles, LLC, initiated a class action
lawsuit in the United States District Court for the Eastern
District of Pennsylvania against the Company and certain former
officers and directors on behalf of all purchasers of the
publicly issued 8.50% Notes of PMA Capital Corporation beginning
on or about May 29, 2003 and thereafter, inclusive.
The Complaint alleges that defendants violated Sections 11 and
12 of the Securities Act of 1933. As alleged in the Complaint,
PMA's public statements during the Class Period were materially
false and misleading because:
(1) PMA maintained inadequate loss reserves for its PMA Re
subsidiary;
(2) reserve requirements for PMA Re announced in connection
with the initial public offering of the Notes were
materially insufficient; and
(3) as a consequence of the understatement of loss
reserves, PMA's earnings and assets were materially
overstated at all relevant times.
On November 4, 2003, PMA issued a press release announcing that
it would have to increase its loss reserves for PMA Re by $150
million, and would be suspending its common stock dividend. This
news caused an immediate drop in the price of PMA's common stock
and the trading values of the 8.50% Notes. On November 6, 2003,
PMA issued a press release announcing the resignations of its
president and chief executive officer and its chairman of the
board.
For more information, contact: Donovan Searles, LLC, by Mail:
1845 Walnut Street, Suite 1100, Philadelphia, PA 19103, by
Phone: 215 -732-6067, Fax: 215-732-8060, or visit the firm's
Website: http://www.donovansearles.com.
PMA CAPITAL: Berger & Montague Commences Stock Suit in E.D. PA
----------------------------------------------------------------
Berger & Montague, P.C. initiated a class action suit against
PMA Capital Corporation, its wholly owned subsidiary, Northern
States Power Co., and certain officers in the United States
District Court for the Eastern District of Pennsylvania on
behalf of all persons or entities who purchased PMA's 8.50%
Monthly Income Senior Notes issued pursuant to a Prospectus
Supplement dated May 29, 2003.
The Complaint alleges that defendants violated Section 11 of the
Securities Act of 1933. As alleged in the Complaint, PMA's
Prospectus Supplement for The Notes was materially false and
misleading because:
(1) PMA maintained inadequate loss reserves for its PMA Re
subsidiary;
(2) reserve increases for PMA Re announced during the Class
Period were materially insufficient; and
(3) as a consequence of the understatement of loss
reserves, PMA's earnings and assets were materially
overstated at all relevant times.
On November 4, 2003, PMA issued a press release announcing that
it would have to increase its loss reserves for PMA Re by $150
million, and would be suspending its common stock dividend. This
news caused an immediate 60% drop in the price of PMA's common
stock. Two days later, PMA announced that its Chief Executive
Officer, and the Chair of its Board of Directors, had resigned.
For more information, contact Sherrie R. Savett, or Arthur
Stock, Diane Werwinski, Investor Relations Manager by Mail: 1622
Locust Street, Philadelphia, PA 19103, by Phone: 888-891-2289 or
215-875-3000, by Fax: 215-875-5715, by E-mail:
InvestorProtect@bm.net, or visit the firm's Website:
http://www.bergermontague.com.
PMA CAPITAL: Schiffrin & Barroway Launches Securities Suit in PA
----------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in
the United States District Court for the Eastern District of
Pennsylvania on behalf of all purchasers of publicly traded
securities of PMA Capital Corporation from November 13, 1998
through November 3, 2003, inclusive.
The complaint alleges that defendants PMA Capital Corporation,
John W. Smithson, and William E. Hitselberger violated Sections
10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule
10b-5 promulgated thereunder, by issuing a series of material
misrepresentations to the market between November 13, 1998 and
November 3, 2003.
More specifically, the Complaint alleges that the defendants'
statements were materially false and misleading because they
failed to disclose and/or misrepresented the following adverse
facts, among others:
(1) that the Company maintained inadequate loss reserves
for its PMA Re subsidiary;
(2) that the Company insufficiently increased its loss
reserves during the Class Period; and
(3) as a result of the foregoing, the Company's earnings,
assets and equity were materially false and misleading.
On November 4, 2003, PMA Capital shocked the market when it
issued a press release announcing that it will record an
unexpected pretax charge of about $150 million to strengthen
loss reserves at PMA Re. In addition, PMA Capital announced its
intention to suspend common stock dividends and explore
strategic alternatives with respect to its reinsurance
operations. Following the charge, the Company stated it expected
to report a net loss for 2003, which would make four consecutive
years of poor operating results.
Upon this news, shares of the Company fell 62% or $8.11 per
share to close at $5.03 per share on unusually high trading
volume on November 4, 2003.
For more information, 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.
PUTNAM FUNDS: Reinhardt Wendorf Lodges Securities Lawsuit in MA
---------------------------------------------------------------
The law firm of Reinhardt Wendorf & Blanchfield initiated a
securities class action lawsuit in the United States District
Court for the District of Massachusetts against defendants Marsh
& McLennan Companies, Inc., Putnam Investments Trust, Putnam
Investment Management LLC, Putnam Investment Funds, each of the
Funds, and John Does 1-100, on behalf of all persons or entities
who purchased or otherwise acquired Putnam Capital Appreciation
Fund (Nasdaq: PCAPX - News), Putnam Growth Opportunities Fund
(Nasdaq: POGAX - News), Putnam Small Cap Growth Fund (Nasdaq:
PNSAX - News), Putnam Voyager Fund (Nasdaq: PVOYX - News)
(Nasdaq: PVOBX - News), and other Putnam Family of Funds,
between November 1, 1998 and September 3, 2003, inclusive.
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 investors (the John Doe defendants) to engage in the
"timing" of their transactions in the Funds' securities. Timing
is excessive, arbitrage trading undertaken to turn a quick
profit.
The complaint further alleges that in return for receiving extra
fees defendants allowed the John Doe defendants to engage in
timing, to the detriment of class members, who paid, dollar for
dollar, for the favored investors' improper profits. These
practices were undisclosed in the prospectuses of the Funds,
which falsely represented that the Funds actively police against
timing.
The Funds, and the Nasdaq symbols for the respective Funds
subject to this action are:
(1) Putnam American Government Income Fund
(2) Putnam Arizona Tax Exempt Income Fund
(3) Putnam Asset Allocation: Balanced Portfolio
(4) Putnam Asset Allocation: Conservative Portfolio
(5) Putnam Asset Allocation: Growth Portfolio (Sym: PAEAX)
(6) Putnam California Tax Exempt Income Fund
(7) Putnam Capital Appreciation Fund
(8) Putnam Capital Opportunities Fund
(9) Putnam Classic Equity Fund
(10) Putnam Convertible Income-Growth Trust
(11) Putnam Discovery Growth Fund
(12) Putnam Diversified Income Trust
(13) Putnam Equity Income Fund
(14) Putnam Europe Equity Fund
(15) Putnam Florida Tax Exempt Income Fund
(16) Putnam Fund for Growth and Income (Sym: PGRWX)
(17) George Putnam Fund of Boston
(18) Putnam Global Equity Fund (Sym: PEQUX)
(19) Putnam Global Income Trust
(20) Putnam Global Natural Resources Fund
(21) Putnam Growth Opportunities Fund (Sym: POGAX, POGBX,
POGCX, PGOMX)
(22) Putnam Health Sciences Trust
(23) Putnam High Yield Advantage Fund
(24) Putnam High Yield Trust
(25) Putnam Income Fund
(26) Putnam Intermediate U.S. Government Income Fund
(27) Putnam International Capital Opportunities Fund
(28) Putnam International Equity Fund
(29) Putnam International Growth and Income Fund
(30) Putnam International New Opportunities Fund (Sym:
PINOX)
(31) Putnam Investors Fund
(32) Putnam Massachusetts Tax Exempt Income Fund
(33) Putnam Michigan Tax Exempt Income Fund
(34) Putnam Mid Cap Value Fund
(35) Putnam Minnesota Tax Exempt Income Fund
(36) Putnam Money Market Fund
(37) Putnam Municipal Income Fund
(38) Putnam New Jersey Tax Exempt Income Fund
(39) Putnam New Opportunities Fund
(40) Putnam New Value Fund (Sym: PANVX)
(41) Putnam New York Tax Exempt Income Fund
(42) Putnam New York Tax Exempt Opportunities Fund
(43) Putnam OTC & Emerging Growth Fund
(44) Putnam Ohio Tax Exempt Income Fund
(45) Putnam Pennsylvania Tax Exempt Income Fund
(46) Putnam Research Fund
(47) Putnam Small Cap Growth Fund
(48) Putnam Small Cap Value Fund
(49) Putnam Tax Exempt Income Fund
(50) Putnam Tax Exempt Money Market Fund
(51) Putnam Tax Smart Equity Fund
(52) Putnam Tax-Free High Yield Fund
(53) Putnam Tax-Free Insured Fund
(54) Putnam U.S. Government Income Trust
(55) Putnam Utilities Growth and Income Fund
(56) Putnam Vista Fund
(57) Putnam Voyager Fund (Sym: PVOYX)
For more information, contact: Garrett D. Blanchfield by Phone:
800-465-1592 or 651-287-2100, by Fax: 651-287-2103, by E-mail:
g.blanchfield@rwblawfirm.com, or visit the firm's Website:
http://www.rwblawfirm.com.
PUTNAM FUNDS: Spector Roseman Lodges Securities Suit in S.D. NY
---------------------------------------------------------------
Spector, Roseman & Kodroff, P.C. initiated a securities class
action lawsuit in the United States District Court for the
Southern District of New York against Marsh & McLennan
Companies, Inc., Putnam Investments Trust, Putnam Investment
Management LLC, Putnam Investment Funds, each of the Funds, and
John Does 1-100, on behalf of all persons or entities who
purchased or otherwise acquired Putnam Family of Funds, between
November 1, 1998 and September 3, 2003, inclusive.
The Funds, and the symbols for the respective Funds named below,
are as follows:
(1) Putnam American Government Income Fund
(2) Putnam Arizona Tax Exempt Income Fund
(3) Putnam Asset Allocation: Balanced Portfolio
(4) Putnam Asset Allocation: Conservative Portfolio
(5) Putnam Asset Allocation: Growth Portfolio (Sym: PAEAX)
(6) Putnam California Tax Exempt Income Fund
(7) Putnam Capital Appreciation Fund
(8) Putnam Capital Opportunities Fund
(9) Putnam Classic Equity Fund
(10) Putnam Convertible Income-Growth Trust
(11) Putnam Discovery Growth Fund
(12) Putnam Diversified Income Trust
(13) Putnam Equity Income Fund
(14) Putnam Europe Equity Fund
(15) Putnam Florida Tax Exempt Income Fund
(16) Putnam Fund for Growth and Income (Sym: PGRWX)
(17) George Putnam Fund of Boston
(18) Putnam Global Equity Fund (Sym: PEQUX)
(19) Putnam Global Income Trust
(20) Putnam Global Natural Resources Fund
(21) Putnam Growth Opportunities Fund (Sym: POGAX, POGBX,
POGCX, PGOMX)
(22) Putnam Health Sciences Trust
(23) Putnam High Yield Advantage Fund
(24) Putnam High Yield Trust
(25) Putnam Income Fund
(26) Putnam Intermediate U.S. Government Income Fund
(27) Putnam International Capital Opportunities Fund
(28) Putnam International Equity Fund
(29) Putnam International Growth and Income Fund
(30) Putnam International New Opportunities Fund (Sym:
PINOX)
(31) Putnam Investors Fund
(32) Putnam Massachusetts Tax Exempt Income Fund
(33) Putnam Michigan Tax Exempt Income Fund
(34) Putnam Mid Cap Value Fund
(35) Putnam Minnesota Tax Exempt Income Fund
(36) Putnam Money Market Fund
(37) Putnam Municipal Income Fund
(38) Putnam New Jersey Tax Exempt Income Fund
(39) Putnam New Opportunities Fund
(40) Putnam New Value Fund (Sym: PANVX)
(41) Putnam New York Tax Exempt Income Fund
(42) Putnam New York Tax Exempt Opportunities Fund
(43) Putnam OTC & Emerging Growth Fund
(44) Putnam Ohio Tax Exempt Income Fund
(45) Putnam Pennsylvania Tax Exempt Income Fund
(46) Putnam Research Fund
(47) Putnam Small Cap Growth Fund
(48) Putnam Small Cap Value Fund
(49) Putnam Tax Exempt Income Fund
(50) Putnam Tax Exempt Money Market Fund
(51) Putnam Tax Smart Equity Fund
(52) Putnam Tax-Free High Yield Fund
(53) Putnam Tax-Free Insured Fund
(54) Putnam U.S. Government Income Trust
(55) Putnam Utilities Growth and Income Fund
(56) Putnam Vista Fund
(57) Putnam Voyager Fund (Sym: PVOYX)
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; Sections 36(a) and 36(b) of the Investment Company
Act of 1940, as well as common law fiduciary duties.
Specifically, the Complaint charges that throughout the Class
Period, defendants failed to disclose that they improperly
allowed certain investors (the John Doe defendants) to engage in
the "timing" of their transactions in the Funds' securities.
In return for receiving extra fees defendants allowed the John
Doe defendants to engage in timing, to the detriment of class
members, who paid, dollar for dollar, for the favored investors'
improper profits. These practices were undisclosed in the
prospectuses of the Funds, which falsely represented that the
Funds actively police against timing.
For more information, contact: Robert M. Roseman, Esq., of
Spector, Roseman & Kodroff, P.C., by Phone: 888-844-5862 (toll
free), by E-mail: classaction@srk-law.com, or visit the firm's
Website: http://www.srk-law.com.
PUTNAM FUNDS: Stull Stull Commences Securities Suit in S.D. NY
--------------------------------------------------------------
Stull, Stull & Brody initiated a securities class action in the
United States District Court for the Southern District of New
York, on behalf of purchasers of shares of mutual funds managed
by Putnam between November 1, 1998 and September 3, 2003,
inclusive, seeking to pursue remedies under the Securities
Exchange Act of 1934, the Securities Act of 1933 and the
Investment Advisers Act of 1940.
The Funds, and the symbols for the respective Funds named below,
are as follows:
(1) Putnam American Government Income Fund
(2) Putnam Arizona Tax Exempt Income Fund
(3) Putnam Asset Allocation: Balanced Portfolio
(4) Putnam Asset Allocation: Conservative Portfolio
(5) Putnam Asset Allocation: Growth Portfolio (Sym: PAEAX)
(6) Putnam California Tax Exempt Income Fund
(7) Putnam Capital Appreciation Fund
(8) Putnam Capital Opportunities Fund
(9) Putnam Classic Equity Fund
(10) Putnam Convertible Income-Growth Trust
(11) Putnam Discovery Growth Fund
(12) Putnam Diversified Income Trust
(13) Putnam Equity Income Fund
(14) Putnam Europe Equity Fund
(15) Putnam Florida Tax Exempt Income Fund
(16) Putnam Fund for Growth and Income (Sym: PGRWX)
(17) George Putnam Fund of Boston
(18) Putnam Global Equity Fund (Sym: PEQUX)
(19) Putnam Global Income Trust
(20) Putnam Global Natural Resources Fund
(21) Putnam Growth Opportunities Fund (Sym: POGAX, POGBX,
POGCX, PGOMX)
(22) Putnam Health Sciences Trust
(23) Putnam High Yield Advantage Fund
(24) Putnam High Yield Trust
(25) Putnam Income Fund
(26) Putnam Intermediate U.S. Government Income Fund
(27) Putnam International Capital Opportunities Fund
(28) Putnam International Equity Fund
(29) Putnam International Growth and Income Fund
(30) Putnam International New Opportunities Fund (Sym:
PINOX)
(31) Putnam Investors Fund
(32) Putnam Massachusetts Tax Exempt Income Fund
(33) Putnam Michigan Tax Exempt Income Fund
(34) Putnam Mid Cap Value Fund
(35) Putnam Minnesota Tax Exempt Income Fund
(36) Putnam Money Market Fund
(37) Putnam Municipal Income Fund
(38) Putnam New Jersey Tax Exempt Income Fund
(39) Putnam New Opportunities Fund
(40) Putnam New Value Fund (Sym: PANVX)
(41) Putnam New York Tax Exempt Income Fund
(42) Putnam New York Tax Exempt Opportunities Fund
(43) Putnam OTC & Emerging Growth Fund
(44) Putnam Ohio Tax Exempt Income Fund
(45) Putnam Pennsylvania Tax Exempt Income Fund
(46) Putnam Research Fund
(47) Putnam Small Cap Growth Fund
(48) Putnam Small Cap Value Fund
(49) Putnam Tax Exempt Income Fund
(50) Putnam Tax Exempt Money Market Fund
(51) Putnam Tax Smart Equity Fund
(52) Putnam Tax-Free High Yield Fund
(53) Putnam Tax-Free Insured Fund
(54) Putnam U.S. Government Income Trust
(55) Putnam Utilities Growth and Income Fund
(56) Putnam Vista Fund
(57) Putnam Voyager Fund (Sym: PVOYX)
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 issued false and misleading statements in Putnam's
registration statements and prospectuses and, as a result,
plaintiffs and the Class were damaged.
For more information, contact Tzivia Brody by Mail: Stull, Stull
& Brody, 6 East 45 Street, New York, NY 10017, by Phone: toll-
free 1-800-337-4983, by Fax: 212/490-2022, by E-mail:
SSBNY@aol.com, or visit the firm's Website:
http://www.ssbny.com.
*********
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via e-mail to carconf@beard.com are encouraged.
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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
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*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
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Editors.
Copyright 2003. All rights reserved. ISSN 1525-2272.
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