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C L A S S A C T I O N R E P O R T E R
Thursday, November 20, 2003, Vol. 5, No. 230
Headlines
ACCEPTANCE INSURANCE: Seeks De-certification, Summary Judgment
ADAM INC.: Plaintiffs in GA Securities Suit Commence Discovery
AK STEEL: Reaches Agreement To Settle Shareholder Antitrust Suit
ANADARKO PETROLEUM: Plaintiffs Launch New Gas Royalty Suit in TX
ASCENDANT SOLUTIONS: Discovery Commences in Stock Lawsuit in GA
AUSTRALIA: Anglican Church Blocks Sexual Abuse Victims' Lawsuit
BLACK BOX: Plaintiffs Launch Consolidated Securities Suit in PA
CALIFORNIA: Los Angeles Mechanics Reach Deal in Transit Strike
CANADA: Second Toronto Hospital Admits Using Unsterilized Tools
CANADA: Dozens Contact Ontario Hospital In Latest Hygiene Scare
CALIFORNIA: San Francisco Inmates Allege Unjust Strip-Search
CAPERS COMMUNITY MARKETS: Judge Certifies Hepatitis A Law Suit
CAPSTONE TURBINE: Reaches Settlement For Securities Fraud Suit
CINTAS GROUP: Two Labor Unions To Charge Discrimination in Suit
CLARUS CORPORATION: Discovery Proceeds in Securities Suit in GA
CONCORD CAMERA: FL Court Hears Motion For Stock Suit Dismissal
CONSTELLATION POWER: Court To Hear Arguments on Show Cause Order
CORE LABORATORIES: Stock Lawsuits Consolidated, Moved To S.D. TX
FINOVA CAPITAL: Shareholders Launch Securities Fraud Suit in SC
FIRST UNION: Appeals Court Vacates Plea, Remands Suit To M.D. FL
FPL GROUP: Seeks Summary Judgment For Florida Right-of-Way Suit
HARLEY DAVIDSON: WI Court Reviewing Consumer Suit Reinstatement
IMCLONE SYSTEMS: Nov. 21, 2003 Deadline To Oppose Certification
INVESTORS FINANCIAL: Reaches Settlement For Overtime Wage Suit
MAIN STREET: Employees Launches CA Suit For Missed Meal Breaks
MINNESOTA CORN: MN Court Refuses To Dismiss Suit V. ADM Merger
MORGAN STANLEY: Agrees to Pay $50M Fine In Widening Funds Probe
OLD FASHIONED FOODS: Recalls Cheese For Listeria Contamination
OLD REPUBLIC: GA Court Grants Final Approval To Suit Settlement
PEETS COFFEE: Reaches Agreement To Settle Employee Suits in CA
PEROT SYSTEMS: Reaches Agreement To Settle Securities Suit in NY
PORTLAND GENERAL: Plaintiffs to Withdraw Consumer Fraud Lawsuits
PRAXAIR INC.: Faces 141 Personal Injury Suits Over Welding Fumes
PUTNAM FUNDS: SEC Chief Defends Mutual Fund Scandal Settlement
QUICKLOGIC CORPORATION: Reaches Settlement For Stock Suit in NY
REGENERON PHARMACEUTICALS: Investors File Securities Suit in NY
REHABCARE GROUP: Plaintiffs File Amended Securities Suit in MO
RHODE ISLAND: Plane Collision Kills Two In 'Untowered' Airport
SEOUL SHIK: Recalls Jong-Hap Cookie Biscuits For Undeclared Eggs
TERAZOSIN LITIGATION: Antitrust Lawsuit Sent Back To FL Court
UST INC.: Continues Defense V. Smokeless Tobacco Product Suits
VALEANT PHARMACEUTICALS: Reaches Settlement For Stock Suit in DE
WEST FRONT: Recalls Nova Salmon Due to Listeria Contamination
WILD BLUEBERRIES: Jury Awards $56M Verdict in Price-Fixing Suit
WORLDCOM INC.: Employees Opt For Arbitration Instead of Lawsuit
WORLDCOM INC.: Court Grants Certification To Securities Lawsuit
ZAPATA INDUSTRIES: Former Workers File Suit For WARN Violations
ZONAGEN INC.: Plaintiffs Appeal TX Securities Suit's Dismissal
New Securities Fraud Cases
AMERICAN PHARMACEUTICALS: Marc Henzel Launches Stock Suit in IL
BIOVAIL CORPORATION: Alfred Yates Lodges Securities Suit in NY
BIOVAIL CORPORATION: Schatz & Nobel Files Stock Suit in S.D. NY
BOSTON COMMUNICATIONS: Schiffrin & Barroway Files Lawsuit in MA
CLEAN HARBORS: Cauley Geller Lodges Securities Fraud Suit in MA
FRIEDMAN'S INC: Milberg Weiss Lodges Securities Suit in N.D. GA
FRIEDMAN'S INC: Abbey Gardy Commences Securities Suit in N.D. GA
GILEAD SCIENCES: Charles Piven Files Securities Fraud Suit in CA
GILEAD SCIENCES: Cauley Geller Launches Securities Lawsuit in CA
NYSE SPECIALISTS: Lovell Stewart Files Securities Suit S.D. NY
PRICEMART INC.: Lasky & Rifkind Files Securities Suit in S.D. CA
PRICEMART INC.: Charles Piven Lodges Securities Suit in S.D. CA
*********
ACCEPTANCE INSURANCE: Seeks De-certification, Summary Judgment
--------------------------------------------------------------
Acceptance Insurance Companies, Inc. asked the United States
District Court for the District of Nebraska to grant summary
judgment and decertify the class for the lawsuit filed against
it, alleging that the Company knowingly and intentionally
understated its liabilities in order to maintain the market
price of the Company's common stock at artificially high levels
and made untrue statements of material fact. The suit seeks
compensatory damages, interest, costs and attorney fees.
Plaintiffs sought to represent a class consisting of all persons
who purchased either Company common stock between March 10, 1998
and November 16, 1999, or AICI Capital Trust Preferred
Securities between the July 29, 1997 public offering and
November 25, 1999.
Plaintiffs alleged violation of Section 11 of the Securities Act
of 1933 through misrepresentation or omission of a material fact
in the registration statement for the Trust Preferred
Securities, and violation of Section 10b of the Securities
Exchange Act of 1934 and Rule 10b5 of the U.S. Securities and
Exchange Commission through failure to disclose material
information between March 10, 1998 and November 16, 1999.
The Company, three of its former officers, the Company's
Directors and independent accountants and other individuals, as
well as the financial underwriters for the Company's Trust
Preferred Securities, were defendants in the consolidated
action.
On March 2, 2001, the court entered an order dismissing all
claims alleging violations of Section 11 of the Securities Act,
and dismissing the Company's Directors, financial underwriters,
independent accountants and others as defendants in this
action. The court also ruled that certain of Plaintiffs'
allegations regarding the remaining defendants' alleged failure
to properly report contingent losses attributable to the
Montrose decision did not state a claim under Section
10b and Rule 10b-5.
In two subsequent rulings, the Court and Magistrate Judge
clarified the March 2 ruling to specify which of Plaintiffs'
Montrose-related allegations failed to state a Section 10b and
Rule 10b-5 claim. These three rulings reduced the litigation to
a claim that the Company and three of its former officers,
during the period from August 14, 1997 to November 16, 1999,
failed to disclose adequately information about various aspects
of the Company's operations, including information relating to
the Company's exposure after January 1, 1997 to losses resulting
from the Montrose decision. Nevertheless, Plaintiffs continue
to seek compensatory damages, reasonable costs and expenses
incurred in this action and such other and such further relief
as the Court may deem proper.
On August 6, 2001, the Magistrate Judge granted Plaintiffs'
Motion for Class Certification. Plaintiffs' fact discovery was
concluded July 31, 2002 in accordance with a schedule
established by the court. On September 16, 2002, plaintiffs
sought the court's permission to reinstate certain previously
dismissed claims under Section 11 and 15 of the Securities Act.
The court denied Plaintiffs' request in its entirety on February
27, 2003; plaintiffs asked the Court to reconsider this decision
and the Court has not ruled on that request.
No hearings have been scheduled with respect to the Company's
latest motions. The Company intends to continue fighting this
action and believes plaintiffs' allegations are without merit.
ADAM INC.: Plaintiffs in GA Securities Suit Commence Discovery
--------------------------------------------------------------
Parties in the securities class action filed against Adam, Inc.
and certain of the Company's then officers and directors are
exchanging information for discovery in the suit.
The complaint alleges violations of Sections 11, 12(2) and 15 of
the Securities Act of 1933 and violations of the Georgia
Securities Act arising out of alleged disclosure deficiencies in
connection with the company's initial public offering of common
stock, which was completed on November 10, 1995. The complaint
seeks compensatory damages in an unspecified amount.
Plaintiffs filed a written motion requesting class
certification. A hearing on the motion was held on January 30,
2003, but the Court has not yet ruled.
AK STEEL: Reaches Agreement To Settle Shareholder Antitrust Suit
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Ohio-based AK Steel Corporation reached an oral agreement to
settle a lawsuit filed by shareholders, the company reported in
the third quarter 10Q statement Friday, Knight-Ridder / Tribune
Business News reports.
The suit was filed in April 2000 in US District Court in
Cincinnati by Bernard Fidel and other plaintiffs, over
allegations that AK officials offered "material misstatements
and omissions" about business and operations. Richard Wardrop,
the former AK chairman and chief executive who resigned in
September, was among the defendants.
Mr. Fidel exchanged his Armco stock in October 1999 for 50,446
shares of shares of AK after the boards of directors of both
companies approved AK's acquisition of Armco that year. Around
that time, AK's stock was trading at more than $18 a share.
"The parties recently entered into an oral agreement by which
they agreed to settle all of the claims at issue in the case,"
Middletown-based AK reported in its 10Q document, filed with the
U.S. Securities and Exchange Commission. Settlement depends on
receiving final judicial approval from the court, the filing
said.
"Upon approval of the settlement, all claims pending in the
action will be dismissed with prejudice," the filing said. The
Company does not consider the amount of the settlement to be
material and, in any event, the settlement amount is well within
the limits of the company's applicable insurance.
Alan McCoy, AK vice president of public affairs, declined to
comment. The suit sought class action status for AK
stockholders between July 15, 1999 and Jan. 25, 2000. In October
2000, AK filed a motion to dismiss the action, but the court
rejected the motion in September 2002.
The anti-trust lawsuit titled Bernard Fidel et al. v. AK Steel
Holding Corp. et al., No. 00-CV-320 was commenced on April 28,
2000 in the U.S. District Court for the Southern District of
Ohio in Cincinnati and was assigned to Judge Herman J. Weber.
Plaintiffs in this action are represented by Milberg Weiss
Bershad Hynes & Lerach LLP and Richard Stuart Wayne and William
Kendall Flynn of Strauss & Troy.
ANADARKO PETROLEUM: Plaintiffs Launch New Gas Royalty Suit in TX
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Plaintiffs filed a new class action against Anadarko Petroleum
Corporation, after the Houston, Texas Court of Appeals
decertified an earlier lawsuit, purporting to represent the
Company's gas royalty owners in Texas.
The suit, styled Neinast, Russell, et al. v. Union Pacific
Resources Company, et al., was filed in the 21st Judicial
District Court of Washington County, Texas, in connection with a
gas royalty underpayment case against the Company. This
certification did not constitute a review by the Court of the
merits of the claims being asserted. The royalty owners'
pleadings did not specify the damages being claimed, although a
demand for damages in the amount of $100 million was asserted.
The court granted class certification for the suit, which the
Company appealed. A favorable decision from the Houston Court
of Appeals decertified the class. The royalty owners did not
appeal this matter to the Texas Supreme Court and the decision
from the Houston Court of Appeals became final in the second
quarter of 2002.
The royalty owners filed a new petition alleging that the class
may properly be brought so long as "sub-class" groups are broken
out. The Company is contesting this new petition.
ASCENDANT SOLUTIONS: Discovery Commences in Stock Lawsuit in GA
---------------------------------------------------------------
Parties in the securities class action filed against Ascendant
Solutions, Inc. and certain of its officers and directors are
engaged in discovery in the Fulton County Superior Court in
Atlanta, Georgia.
The complaint alleges violations of Sections 11, 12(2) and 15 of
the Securities Act of 1933 and violations of the Georgia
Securities Act arising out of alleged disclosure deficiencies in
connection with Ascendant's initial public offering of common
stock, which was completed on November 10, 1995.
The complaint seeks compensatory damages in an unspecified
amount. Plaintiffs filed a written motion for class
certification, and a hearing on the motion was held on January
30, 2003. The Court has not yet ruled on that motion.
AUSTRALIA: Anglican Church Blocks Sexual Abuse Victims' Lawsuit
---------------------------------------------------------------
In Adelaide District Court, the Anglican Church has frustrated
alleged victims of sexual abuse in its Adelaide diocese by
challenging their right to pursue it through a class action, the
Australian reports.
The Anglican Diocese of Adelaide claimed that the 27 alleged
victims of former church camp leader Robert Brandenburg should
not be allowed to group their cases together. The church's move
delays the case until early next year. The lawyer for the
alleged victims, Peter Humphries, said the delay would frustrate
his clients.
"Some of these people have been living with memories of serious
sexual abuse for more than 30 years and are keen for the case to
be concluded," Mr. Humphries told The Australian.
Argument on the matter was scheduled for March 1, 2004.
Mr. Brandenburg was chief commissioner of the Church of England
Boys Society from 1965 to 1981 and it is alleged the church knew
of the allegations of sexual abuse against him 33 years ago.
Mr. Brandenburg allegedly committed the abuse at his Anglicare
office, at his home in Adelaide's leafy eastern suburbs, in his
car and while on CEBS camps. The men allege the Anglican Church
failed in its duty to protect them. The action comes as sexual
abuse claims in other dioceses and denominations have been
directed to transparent processes outside the often costly and
lengthy court system.
In a statement, the Synod of Adelaide's Anglican diocese said it
preferred the matters to be dealt with by the courts. "The
Anglican Church is keen to progress the matter, however, it is a
difficult and complex question," the statement said. "The
church does not believe it is appropriate to debate the case in
the media. We believe the court is the appropriate place for
arguments to be made and debated."
The statements of claim by two men, which will form the basis of
any class action, say that another alleged victim sent a letter
reporting Mr. Brandenburg's abuse to the then bishop of
Adelaide, Thomas Reid, in 1970.
One plaintiff, 26, alleges he was a member of CEBS when Mr.
Brandenburg abused him between 1989 and 1991. The other
plaintiff, 37, alleges Mr. Brandenburg abused him from 1979, for
a period of nine years. Mr. Brandenburg was arrested in
February 1999 on sex charges but committed suicide in June that
year.
Mr. Humphries said that among the men who had come forward to
join the class action were drug abusers, tertiary-educated
professionals, the unemployed and the psychologically disturbed.
BLACK BOX: Plaintiffs Launch Consolidated Securities Suit in PA
---------------------------------------------------------------
Plaintiffs filed a consolidated securities class action against
Black Box Corporation in the United States District Court for
the Western District of Pennsylvania on behalf of all persons
who purchased or acquired the Company's securities between
October 15, 2002 and March 11, 2003, inclusive.
The complaint, styled "In Re Black Box Corporation Securities
Litigation (Civil Action No. 03-CV-412)," alleges that
defendants violated Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by
issuing a series of material misrepresentations to the market
between October 15, 2002 and March 11, 2003, thereby
artificially inflating the price of Black Box securities, an
earlier Class Action Reporter story (May 5,2003) states.
The Company believes that the claims are without merit, it
stated in a filing with the Securities and Exchange Commission.
CALIFORNIA: Los Angeles Mechanics Reach Deal in Transit Strike
--------------------------------------------------------------
A tentative deal ending a transit strike that idled the nation's
third-largest transportation system for more than a month could
see buses and trains rumbling across the city at full strength
again by the end of the week, AP news reports.
Officials said a few scattered bus lines resumed service Monday
night, but full bus and train service was not expected until
Thursday at the earliest.
"It's going to be hit and miss," Metropolitan Transportation
Authority Chief Executive Roger Snoble told the Associated
Press. "By the weekend, by next week, we'll be in top shape."
Transit mechanics and the MTA, the agency in charge of most bus
and rail service in Los Angeles, brokered a deal over the
weekend that settled all outstanding contract issues except the
major source of the labor dispute - health care benefits. Both
sides have agreed to resolve their differences on that issue
through non-binding arbitration.
"We were able to come to an agreement. An agreement we can all
live with," Neil Silver, president of the Amalgamated Transit
Union, which represents the mechanics, told AP. "I'm asking my
membership to bring down the picket signs. They can return to
work."
Union members will vote on the settlement agreement Wednesday.
About a half-million people use the county's public
transportation system every day. While the MTA managed to keep
some routes running with privately run buses, the 35-day strike
inconvenienced thousands, added to traffic gridlock and hurt the
regional economy. Bus riders were relieved Monday evening when
given the news on the strike's end. Stories of long walks and
endless waits were the common refrain.
"I had to pay taxis four to five times," Ann Avareau, 46, a
veterinary student, told AP. "It was a struggle."
The MTA board voted unanimously Monday morning to accept the
terms of the 3-year, 9-month labor contract, which includes a 6
percent raise over three years, Los Angeles County Supervisor
Yvonne Burke, told AP.
Rides on the city's public transit system will be free through
Saturday and those holding bus passes for October and November
will be allowed to ride free until the end of December. By some
estimates, the strike has cost $4 million a day in lost wages
and business for the MTA. Mechanics, meanwhile, missed out on
about $1,000 a week in pay, Zev Yaroslavsky, another county
supervisor, told AP.
CANADA: Second Toronto Hospital Admits Using Unsterilized Tools
---------------------------------------------------------------
Sunnybrook and Women's College Health Sciences Centre is the
second Toronto-area hospital within a month to admit the use of
improperly sterilized equipment in patient testing, forcing more
people to be tested for HIV and hepatitis, Canadian Press
reports.
Letters were sent Monday to male patients at Sunnybrook after
equipment used for prostate biopsies was improperly sterilized
and then used in their assessments, a hospital spokeswoman said
Monday. The spokeswoman, who didn't want her name used, said
the hygiene breach is similar to an incident last month
involving Lakeridge Health Centre in Oshawa just east of
Toronto. At that hospital, 118 patients were exposed to
unsterilized medical equipment in two separate incidents. The
spokeswoman wouldn't say how many men were involved in
Sunnybrook's testing.
The spokeswoman told the Canadian Press the men in the
Sunnybrook incident were urged in letters sent out early Monday
to return to the hospital for testing for hepatitis B and C as
well as HIV. Leo Steven, the hospital's president and CEO, and
two medical experts were expected to address the media at an
afternoon news conference.
The hygiene breach comes nearly a month after 118 patients at
Lakeridge were tested with improperly sterilized equipment in
two separate incidents. In the most far-reaching breach there,
114 patients were examined between October 27 and 30 with
endoscopes that were cleaned but not disinfected. On October
27, an empty bottle of disinfectant in a cleaner was replaced
with a bottle of soap, Lakeridge has said. The mistake wasn't
discovered until October 30 when the bottle ran dry. The second
incident involved a dental mirror that may have been used on one
patient October 27 and 28. Three other patients were also
contacted. The patients were urged to get tested for hepatitis
and HIV, although officials stressed it's "exceedingly unlikely"
they've been infected.
Two class action suits have been filed against Lakeridge. The
hospital apologized last week to the patients, admitting "human
error."
CANADA: Dozens Contact Ontario Hospital In Latest Hygiene Scare
---------------------------------------------------------------
Ontario's Sunnybrook Hospital was flooded with calls and visits
Tuesday from patients who have been asked to get blood tests for
hepatitis and HIV in the latest equipment hygiene scare that has
raised the ire of Ontario Premier Dalton McGuinty, the Canadian
Press reports.
More than 200 of the 861 men who received ultrasound prostate
biopsies at Sunnybrook's urology clinic over a four-year period
had contacted the facility after receiving letters the day
before notifying them of a hygiene breach, and about 60 arrived
at the hospital Tuesday for testing.
"Most of the men were very appreciative of the fact they've been
notified, they're very thankful of the arrangements that had
been made," Dr. Bob Lester, Sunnybrook's chief medical
executive, said in an interview with the Canadian Press.
However, the latest scare has spurred the Ontario government to
order a review of infection-control procedures in all hospitals
in the province. Mr. McGuinty also said Sunnybrook itself has
some important questions to answer about its procedures and "why
they took so long to inform the public."
"We've got a responsibility to make sure that our hospitals are
taking the necessary steps to protect public safety," Mr.
McGuinty said at the Ontario legislature.
Health Minister George Smitherman said that while Sunnybrook
didn't meet infection-control standards, "it would be
inappropriate to speculate how widespread" the problem is.
"That's why we've asked for a review by all Ontario hospitals to
see about their compliance", he told the Canadian Press.
On Tuesday, Sunnybrook opened a special clinic for the men, who
underwent biopsies using an ultrasound wand inserted into the
rectum between December 1999 and August 2003, to give blood for
analysis. The day before, Sunnybrook announced it had sent
letters to the men after the hospital's own routine audit in
August of its equipment discovered that sterilization of the
instruments used in their biopsies did not meet current
infection-control standards.
It was the second major equipment-hygiene breach in a month,
with the first occurring at Lakeridge hospital in Oshawa just
east of Toronto in October, when nearly 120 patients received
colon and throat tests with improperly sterilized equipment.
Mr. Lester said he's worried "there might be a short-term
shaking of faith" in hospitals, and expressed concern that many
people may put off getting tested as a result of the Sunnybrook
scare. However, he said the recent hygiene scares have only
made hospitals more vigilant about following proper
sterilization steps.
"People in the short term will be concerned, however, in the
long term, hospitals like ours, the (health) ministry and the
federal government will have a renewed commitment to improving
patient safety," he stated.
While Mr. Lester said the risk of getting infected from the
equipment is "less than one in 100,000," the men have been asked
to undergo blood testing for hepatitis and HIV. Although
Sunnybrook has set up a special clinic at the mid-Toronto
hospital for the testing, the men can also call the hospital to
have a technician come to their home to give a blood sample, he
said. They can also contact their family doctor for testing,
Lester said, adding that men who received their biopsies most
recently may have to undergo another blood test down the road.
Mr. Smitherman, who learned about the situation Friday, promptly
asked all hospitals to conduct audits of their sterilization
procedures and hand them in to the ministry by January 9.
Lakeridge patients were also called back for blood tests for
hepatitis and HIV, and their health has to be monitored over the
next six months. Two class-action suits have been filed against
Lakeridge, which apologized last week to the patients, admitting
"human error."
CALIFORNIA: San Francisco Inmates Allege Unjust Strip-Search
------------------------------------------------------------
Prisoners held at the San Francisco County Jail on minor charges
alleged unjust strip searches, where they were stripped,
ridiculed and often left almost naked without food or water for
as long as 12 hours, a new investigation by the San Francisco
Chronicle revealed.
These prisoners were held on minor charges such as public
intoxication or disturbing the peace. Among them were a woman
celebrating her engagement, a 46-year-old father of three who
was never charged with a crime and a 70-year-old nun arrested
during a peace protest, AP newswire reports.
In an interview last month, San Francisco Sheriff Michael
Hennessey told the Chronicle "there are things we can and will
do better in the future." The investigation by the Chronicle
includes accounts from 14 men and women who say they were
inappropriately jailed in "safety cells" - isolation cells
designed for violent, suicidal or self-mutilating prisoners, and
subjected to humiliating strip searches during the past 10
years.
According to their accounts, the prisoners were strip-searched
and left in the safety cells even while being held on minor
charges. A 70-year-old Roman Catholic nun reported being strip-
searched after she was arrested at a peace demonstration. "I
had no weapons or contraband," said Sister Bernie Galvin, a nun
for 50 years who was arrested earlier this year at a San
Francisco demonstration. "I'm completely nonviolent . It was
clearly unwarranted."
The father of three said he was strip-searched after being
arrested for alleged public intoxication, although no charges
were ever filed. The woman who had celebrated her engagement
said that after a strip search, she was put in a cell with only
a blanket, and saw male deputies looking at her and laughing,
The Chronicle reported. A mother arrested for public
intoxication by a police officer when she went to pick up her
daughter from a gym reported being body-slammed and choked to
the point of coughing up blood after being strip-searched by
four female jailers.
More than a year ago, a report from a unit of Mr. Hennessey's
office found that some jail practices were "out of compliance
with state law" and in violation of "Eighth Amendment
protections against cruel and unusual punishment" of prisoners.
When the Chronicle first reported on some of the strip-searches
in September, however, the sheriff insisted "our policies
conform to state law."
In his recent interview with the newspaper, however, Mr.
Hennessey said, "I think this area of the law is changing, and
we're trying to adjust with it."
At least four lawsuits, including one possible class action
case, have been filed against San Francisco since April as a
result of the strip-searches and safety cell use.
Reports of inappropriate strip-searches and isolation have
occurred elsewhere too. Los Angeles County altered its policy
earlier this year after settling a $2.7 million lawsuit by 21
bike activists who said they were strip-searched after a
protest. In 2001, New York City paid up to $50 million for
illegally strip-searching prisoners in its Queens and Manhattan
jails. In 1999, San Francisco paid nearly $500,000 to settle a
lawsuit in which a transsexual women reported being
inappropriately strip-searched.
CAPERS COMMUNITY MARKETS: Judge Certifies Hepatitis A Law Suit
--------------------------------------------------------------
Madam Justice L.B. Gerow of the Supreme Court of British
Columbia certified a class action lawsuit against Capers
Community Markets, which operates 3 upscale food markets in
Vancouver and West Vancouver, stemming from the March 2002
Hepatitis A outbreak that was linked to food sold at Capers
markets.
In her decision certifying the class action, Madam Justice Gerow
states: "In this case, the claims of the individual plaintiffs
are not economically feasible on their own. The issues are
complicated and it is not practical for an individual to
litigate a case without the assistance of counsel. The costs of
retaining experts will easily outstrip any one class member's
claim. The gains from a class action are self-evident with
respect to judicial economy and efficiency. The duty, standard
of care, breach of standard of care, breach of contract and Sale
of Goods Act issues will only be heard once by this court . Food
producers who distribute products which fall below acceptable
standards should, if they are negligent, account to their
customers for resulting damage."
The public health risk came to light when the Vancouver Health
Authority became aware of a Capers commissary worker who was
infected with Hepatitis A virus and "had not consistently worn
gloves during all food preparation activities." Further
investigation revealed that there was a second infected Capers
employee who handled baked goods and, as a result, had infected
several patrons.
After the outbreak, Capers vaccinated all of its staff members.
The Vancouver Health Authority administered the vaccinations "as
a courtesy to Capers' staff in keeping with the recommendation
made by Medical Health Officers in BC in 1999 that all food
handlers in the province should be vaccinated against hepatitis
A in order to protect the public from potential exposure to the
virus through food products."
Hepatitis A is a viral illness that infects the liver, resulting
in fatigue, malaise, gastrointestinal symptoms and jaundice. The
virus is transmitted by the fecal-oral route and is commonly
spread in the preparation of food by persons with poor personal
hygiene.
Capers Markets are owned by Wild Oats Markets Canada Inc., a
subsidiary of Wild Oats Markets, Inc., which is a publicly
traded company with 102 natural and organic food markets in the
United States and Canada. Wild Oats shares trade on the Nasdaq
exchange under the symbol OATS.
The lawsuit was filed on behalf of those exposed to the virus by
class action lawyer David Klein of Klein Lyons. According to
Mr. Klein "it is satisfying to see our Courts recognize the
class action process as an effective means for providing
ordinary citizens with access to the legal system."
At least 8 Capers patrons were infected and 6,447 Capers
customers received anti- Hepatitis A injections to prevent
infection.
The hepatitis A suit titled Fakhri et al. v. Alfalfa's Canada
Inc. cba Capers, No. L023298 was filed in the Supreme Court of
British Columbia and was assigned to Madam Justice L.B. Gerow,
who certified it as a class action on November 17, 2003.
Plaintiffs in this action are represented by David A. Klein of
Klein Lyons, and defendant by Elaine J. Adair, Warren B. Milman
and Michelle S. Lawrence of McCarthy Tetrault LLP.
CAPSTONE TURBINE: Reaches Settlement For Securities Fraud Suit
--------------------------------------------------------------
A committee of Capstone Turbine Corporation's Board of Directors
conditionally approved a proposed partial settlement with
shareholders in a class action brought against the Company, two
of its officers, and the underwriters of the Company's initial
public offering, on behalf of purchasers of the Company's common
stock during the period from June 28, 2000 to December 6, 2000.
An amended complaint was filed in April 19, 2002.
Plaintiffs allege that the underwriter defendants agreed to
allocate stock in the Company's June 28, 2000 initial public
offering and November 16, 2000 secondary offering to certain
investors in exchange for excessive and undisclosed commissions
and agreements by those investors to make additional purchases
of stock in the aftermarket at pre-determined prices.
Plaintiffs allege that the prospectuses for these two public
offerings were false and misleading in violation of the
securities laws because they did not disclose these
arrangements.
The settlement would provide, among other things, a release of
the Company and of the individual defendants for the conduct
alleged in the action to be wrongful in the Amended Complaint.
The Company would agree to undertake other responsibilities
under the partial settlement, including agreeing to assign away,
not assert, or release certain potential claims the Company may
have against its underwriters.
The committee agreed to approve the settlement subject to a
number of conditions, including the participation of a
substantial number of other defendants in the proposed
settlement, the consent of the Company's insurers to the
settlement, and the completion of acceptable final settlement
documentation. Furthermore, the settlement is subject to a
hearing on fairness and approval by the Court.
CINTAS GROUP: Two Labor Unions To Charge Discrimination in Suit
----------------------------------------------------------------
The Union of Needletrades, Industrial, and Textile Employees
(UNITE) and the Teamsters, waging a campaign to represent
workers at Cintas Corp, said they will file charges against the
company with the U.S. Equal Employment Opportunity Commission
over allegations of discrimination against women and minorities,
the Cincinnati Post reports.
A spokesperson for the two national labor unions said they will
hold a related press conference Tuesday afternoon in Washington,
D.C., with representatives of the National Association for the
Advancement of Colored People, the National Organization for
Women, and members of the black and Hispanic congressional
caucuses.
UNITE spokesman Ahmer Qadeer told the Post six or more current
and former Cintas employees will file charges of discrimination
against the Cincinnati-based uniform supplier. The charges will
be filed on behalf of a class of Cintas employees, he said.
The unions contend that Cintas has denied promotions to
qualified women and minorities, placed them in lower paying and
less desirable positions, and encouraged hostile and
discriminatory workplace practices. Cintas officials could not
be reached this morning for comment, The Post states.
Filing charges with the Equal Employment Opportunity Commission
is required before individuals or groups can file a class-action
lawsuit in federal court. UNITE and the Teamsters are seeking to
pressure Cintas into an agreement that would bypass elections
and, instead, have union representation decided by collecting
workers' signatures on authorization cards. Cintas officials
have said they will not agree to any deal that takes away
employees' right to choose through elections.
CLARUS CORPORATION: Discovery Proceeds in Securities Suit in GA
---------------------------------------------------------------
Discovery has commenced in the consolidated securities class
action filed against Clarus Corporation and certain of its
directors and officers in the United States District Court for
the Northern District of Georgia, on behalf of all purchasers of
common stock of the Company during the period beginning December
8, 1999 and ending on October 25, 2000.
Generally the amended complaint alleges claims against the
Company and the other defendants for violations of Sections
10(b) and 20(a) of the Securities Exchange Act of 1934, as
amended, and Rule 10b-5 promulgated thereunder. Generally, it
is alleged that the defendants made material misrepresentations
and omissions in public filings made with the Securities and
Exchange Commission and in certain press releases and other
public statements.
The amended complaint alleges that the market price of the
Company's common stock was artificially inflated during the
class periods. The plaintiffs seek unspecified compensatory
damages and costs (including attorneys' and expert fees),
expenses and other unspecified relief on behalf of the classes.
The court denied a motion to dismiss brought by the defendants
and the case is currently in discovery.
After reviewing the proceeding that is currently pending
(including the probable outcome, reasonably anticipated costs
and expenses, availability and limits of insurance coverage) the
Company believes the outcome of this proceeding will not have a
material adverse effect on our liquidity, financial condition or
results of operations. However, the results of complex legal
proceedings are difficult to predict. An unfavorable resolution
of the proceeding that is currently pending could adversely
affect the Company's business, results of operations, liquidity
or financial condition.
CONCORD CAMERA: FL Court Hears Motion For Stock Suit Dismissal
--------------------------------------------------------------
The United States District Court for the Southern District of
Florida heard oral arguments on Concord Camera Corporation's
motion to dismiss the class action filed against it and certain
of its officers, and current and former directors. The suit was
filed on behalf of all persons who purchased the Company's
Common Stock issued pursuant to the Company's September 26, 2000
secondary offering or during the period from September 26, 2000
through June 22, 2001, inclusive.
The amended complaint asserts, among other things, that the
Company made untrue statements of material fact and omitted to
state material facts necessary to make statements made not
misleading in the Registration Statement and Prospectus issued
in connection with the Secondary Offering, in periodic reports
it filed with the Securities and Exchange Commission (SEC) and
in press releases it made to the public regarding its operations
and financial results.
The allegations are centered on claims that the Company failed
to disclose that the transaction with then customer, KB
Gear Interactive, Inc. (KB Gear), was a highly risky
transaction, claims that throughout the Class Period the Company
failed to disclose that a large portion of its accounts
receivable was represented by a delinquent and uncollectible
balance due from then customer, KB Gear, and claims that such
failures artificially inflated the price of the Common Stock.
The amended complaint seeks unspecified damages, interest,
attorneys' fees, costs of suit and unspecified other and further
relief from the court.
The Company filed a motion to dismiss the amended complaint on
April 18, 2003. Oral argument on the Company's motion to
dismiss was heard by the court on October 2, 2003. The lawsuit
is in the earliest stage and discovery has not yet commenced.
Although the Company believes this lawsuit is without merit, its
outcome cannot be predicted, and if adversely determined, the
ultimate liability of the Company, which could be material,
cannot be ascertained.
On September 17, 2002, the Company was advised by the staff of
the SEC that it is conducting an informal inquiry related to the
matters asserted in the class action complaint. On October 15,
2002, the staff of Nasdaq requested certain information and
materials related to the matters asserted in the class action
complaint and as to matters related to the previously reported
embezzlement of Company funds by a former employee, uncovered in
April 2002.
In May 2003, a second class action complaint, containing
allegations which are the same or similar to the allegations in
the class action described above, was filed against the Company
and certain of its officers in the United States District Court
for the Southern District of Florida. On September 22, 2003,
the Court dismissed the second class action complaint, without
prejudice, for failure to serve the complaint upon the
defendants within the 120 day period prescribed by the Federal
Rules of Civil Procedure.
CONSTELLATION POWER: Court To Hear Arguments on Show Cause Order
----------------------------------------------------------------
The Superior Court for the County of San Francisco, California
will hear arguments on the show cause order it issued to
plaintiffs in the class action filed against Constellation Power
Development, Inc., former governor of California Gray Davis and
22 other defendants.
The action seeks damages of $43 billion, rescission and
reformation of approximately 38 long-term power purchase
contracts, and an injunction against improper spending by the
state of California.
The Company is named as a defendant but does not have a power
purchase agreement with the State of California. However, the
Company's High Desert Power Project does have a power purchase
agreement with the California Department of Water Resources.
In 2002, the court issued an order to the plaintiff asking that
he show cause why he had not yet served the defendants. In April
2002, a second show cause order was issued. After several
postponements, a hearing is now scheduled in February 2004 on
that order.
CORE LABORATORIES: Stock Lawsuits Consolidated, Moved To S.D. TX
----------------------------------------------------------------
The securities class actions filed against Core Laboratories NV
and certain of its officers have been consolidated and
transferred to the United States District Court for the Southern
District of Texas.
Since April 2003, several putative class actions were filed in
the United States District Court for the Southern District of
New York, alleging, among other things, that the defendants
violated Sections 10(b) and 20(a) of the Securities Exchange Act
of 1934. The complainants generally allege that the defendants
overstated the company's revenues and net income within the
first three quarters of 2002. The complaints seek unspecified
monetary damages.
FINOVA CAPITAL: Shareholders Launch Securities Fraud Suit in SC
---------------------------------------------------------------
FINOVA Capital Corporation faces a class action styled "Earle B.
Gregory, et al, v. FINOVA Capital Corporation, James T. Garrett,
et al.," filed in the Court of Common Pleas of Lancaster County,
South Carolina, case no. 2003-CP-29-967.
An amended complaint was served on November 5, 2003, prior to
the deadline for the Company to answer, plead, or otherwise
respond to the original complaint. The amended complaint is
styled as a class action, brought on behalf of twenty-five
individually named plaintiffs and three separately defined
classes. The named plaintiffs and the classes defined in the
amended complaint are all citizens of South Carolina who
purchased subordinated notes from The Thaxton Group Inc., a
borrower with a senior secured indebtedness to FINOVA of
approximately $110 million.
FIRST UNION: Appeals Court Vacates Plea, Remands Suit To M.D. FL
----------------------------------------------------------------
The U.S. Court of Appeals, Eleventh Circuit has vacated a plea
by plaintiffs and remanded to the U.S. District Court for the
Middle District of Florida a ruling by that court dismissing a
lawsuit filed on behalf of Kevin O' Halloran, Chapter 11 Trustee
for Greater Ministries Int'l. , et al. against First Union
National Bank of Florida over allegations that the bank, at
which the church maintained an account, permitted one of the
corporation's founders to allegedly embezzle millions of dollars
from investors in relation to a Ponzi scheme maintained by the
church.
The lawsuit accuses the bank of aiding and abetting crimes and
torts, assisting breach of fiduciary duties, breaching duty to
warn and control, and negligence.
In its decision, the Court of Appeals held that:
(1) trustee had standing to pursue claim against bank at
which corporate debtor maintained account, for
permitting one of corporation's founders to allegedly
embezzle millions of dollars from corporate account;
(2) allegations in the Trustee's complaint were
insufficient to state claim for relief; but
(3) dismissal should not have been with prejudice to
plaintiffs' ability to amend their complaint.
FPL GROUP: Seeks Summary Judgment For Florida Right-of-Way Suit
---------------------------------------------------------------
FPL Group, Inc. moved for summary judgment of all the claims in
a civil class action filed against it in Florida Circuit Court.
J. W. and Ernestine M. Thomas, Chester and Marie Jenkins, and
Ray Norman and Jack Teague filed the suit, as Co-Personal
Representatives on behalf of the Estate of Robert L. Johns,
against the Company and:
(1) FPL Group,
(2) FPL FiberNet,
(3) FPL Group Capital and
(4) FPL Investments Inc
This action is purportedly on behalf of all property owners in
Florida (excluding railroad and public rights of way) whose
property is encumbered by easements in favor of FPL, and on
whose property defendants have installed or intend to install
fiber-optic cable which defendants currently lease, license or
convey or intend to lease, license or convey for non-electric
transmission or distribution purposes.
The lawsuit alleges that FPL's easements do not permit the
installation and use of fiber-optic cable for general
communication purposes. The plaintiffs have asserted claims for
unlawful detainer, unjust enrichment and constructive trust and
seek injunctive relief and compensatory damages. In May 2002,
plaintiffs filed an amended complaint, adding allegations
regarding the installation of wireless communications equipment
on some easements, and adding a claim for declaratory relief. In
August 2002, Hazel and Lamar Jenkins were substituted for
Chester and Marie Jenkins as plaintiffs.
Defendants filed an answer and affirmative defenses to the
amended complaint in August 2002. The parties are now pursuing
discovery. In addition, in September 2003, FPL Group Capital
and FPL Investments moved for summary judgment as to all claims
asserted against them. Plaintiffs thereafter filed a Notice of
Voluntary Dismissal, seeking to dismiss without prejudice FPL
Group Capital and FPL Investments as defendants in the action.
FPL Group Capital and FPL Investments have moved, among other
things, for such dismissal to be entered with prejudice.
Additionally, in October 2003, FPL Group moved for summary
judgment as to all claims asserted against it. Defendants have
also asked the court to set a schedule for resolution of whether
the case will proceed as a class action.
HARLEY DAVIDSON: WI Court Reviewing Consumer Suit Reinstatement
---------------------------------------------------------------
The Wisconsin Supreme Court is reviewing the reversal of
dismissal of a class action filed against Harley Davidson, Inc.,
on behalf of owners of 1999 and early-2000 model year Harley-
Davidson(R) motorcycles equipped with Twin Cam 88 and Twin Cam
88B engines.
In January 2001, the Company on its own initiative informed the
owners that it was extending the warranty for a rear cam bearing
to 5 years or 50,000 miles. Subsequently, on June 28, 2001, a
putative nationwide class action was filed against the Company
in state court in Milwaukee County, Wisconsin, which was amended
by a complaint filed September 28, 2001.
The complaint alleged that this cam bearing is defective and
asserted various legal theories. The complaint sought
unspecified compensatory and punitive damages for affected
owners, an order compelling the Company to repair the engines,
and other relief.
On February 27, 2002, the Company's motion to dismiss the
amended complaint was granted by the Wisconsin trial court and
the amended complaint was dismissed in its entirety. An appeal
was filed with the Wisconsin Court of Appeals.
On April 12, 2002, the same attorneys filed a second putative
nationwide class action against the Company in state court in
Milwaukee County, Wisconsin relating to this cam bearing issue
and asserting different legal theories than in the first action.
The complaint sought unspecified compensatory damages, an order
compelling the Company to repair the engines and other relief.
On September 23, 2002, the Company's motion to dismiss was
granted by the court, the complaint was dismissed in its
entirety, and no appeal was taken.
On January 14, 2003, the Wisconsin Court of Appeals reversed the
trial court's February 27, 2002 dismissal of the complaint in
the first action, and the Company petitioned the Wisconsin
Supreme Court for review. On June 12, 2003, the Company's
petition was granted and the matter is in the process of being
reviewed by the Wisconsin Supreme Court.
The Company believes that the Court of Appeals reversal was in
error, and the Company intends to continue to vigorously defend
this matter. The Company believes that the 5 year/50,000 mile
warranty extension it announced in January 2001 adequately
addresses the condition for affected owners.
IMCLONE SYSTEMS: Nov. 21, 2003 Deadline To Oppose Certification
---------------------------------------------------------------
Imclone Systems, Inc. has until November 21, 2003 to contest
class certification motions for the consolidated securities
class action filed against it and certain of its directors and
officers the United States District Court for the Southern
District of New York, styled "Irvine v. ImClone Systems
Incorporated et al., No. 02 Civ. 0109 (RO)." The consolidated
amended complaint named as defendants the Company, and:
(1) former President and Chief Executive Officer, Dr.
Samuel D. Waksal,
(2) former Chief Scientific Officer and then-President
and Chief Executive Officer, Dr. Harlan W. Waksal,
(3) former director and then-Chairman of the Board of
Directors, Robert F. Goldhammer,
(4) Richard Barth,
(5) David Kies,
(6) Paul Kopperl,
(7) John Mendelsohn and
(8) William Miller,
(9) former General Counsel, John Landes, and
(10) Vice President for Marketing and Sales, Ronald Martell,
The complaint asserted claims for securities fraud under
sections 10(b), 20(a) and Rule 10b-5 of the Securities Exchange
Act of 1934, on behalf of a purported class of persons who
purchased the Company's publicly traded securities between March
27, 2001 and January 25, 2002. The complaint also asserted
claims against Dr. Samuel D. Waksal under section 20A of the
Exchange Act on behalf of a separate purported sub-class of
purchasers of the Company's securities between December 27, 2001
and December 28, 2001.
The complaint generally alleged that various public statements
made by or on behalf of the Company or the other defendants
during 2001 and early 2002 regarding the prospects for FDA
approval of ERBITUX were false or misleading when made, that the
individual defendants were allegedly aware of material non-
public information regarding the actual prospects for ERBITUX at
the time that they engaged in transactions in the Company's
common stock and that members of the purported stockholder class
suffered damages when the market price of the Company's common
stock declined following disclosure of the information that
allegedly had not been previously disclosed.
The complaint sought to proceed on behalf of the alleged class
described above, sought monetary damages in an unspecified
amount and seeks recovery of plaintiffs' costs and attorneys'
fees.
On November 25, 2002, all defendants other than Dr. Samuel D.
Waksal filed a motion to dismiss the complaint for failure to
state a claim. On June 3, 2003, the court granted that motion
in part, dismissing the complaint as to defendants Mr.
Goldhammer, Mr. Barth, Mr. Kies, Mr. Kopperl, Mr. Landes, Mr.
Martell, Mr. Mendelsohn and Mr. Miller, but not dismissing it as
to the Company and Dr. Harlan W. Waksal. The Company, Dr.
Harlan W. Waksal and Dr. Samuel D. Waksal each filed an answer
to the complaint on June 27, 2003. On July 31, 2003 plaintiffs
filed a motion for class certification. Document discovery is
ongoing in the action.
INVESTORS FINANCIAL: Reaches Settlement For Overtime Wage Suit
--------------------------------------------------------------
Investors Financial Services Corporation reached a settlement
for the class action alleging, among other things, violations of
California wage and hour laws at the Company's Sacramento and
Walnut Creek facilities. The lawsuit was filed in the Superior
Court of California, County of Sacramento.
The Company reached an agreement in principle with
representatives of the plaintiffs to settle the case. As
currently agreed, the settlement will not have a material impact
on the Company's business, financial condition or results of
operations. The settlement is subject to preliminary approval
by the court, proper administration of payments to the class
members and final approval by the court.
MAIN STREET: Employees Launches CA Suit For Missed Meal Breaks
--------------------------------------------------------------
Main Street & Main faces a class action filed in California
State Court by a current employee, seeking damages, under
California law, for both missed breaks and missed meal breaks
the employee alleges she did not receive. This lawsuit relates
to the Company's California operations.
The Company intends to vigorously defend this lawsuit, both on
the merits of the employee's case and the issues relating to
class action status, the Company stated in its disclosure to the
Securities and Exchange Commission.
MINNESOTA CORN: MN Court Refuses To Dismiss Suit V. ADM Merger
--------------------------------------------------------------
Former shareholders of Minnesota Corn Processors (MCP) won their
first legal victory against former MCP executives in the lawsuit
over the company's merger with agri-giant Archer Daniels Midland
(ADM), as the judge denied the defendants' claims to dismiss the
case, Oxy-Fuel News reports.
The class action, filed in April with the Minnesota State Court,
Lyon County, was pursued by five former Company shareholders on
behalf of investors who purchased stock from March 27 to
September 5, 2002.
The lawsuit claims the MCP shareholders were misled and were not
made aware of substantial financial benefits the executives
stood to gain by the merger. Specifically, the lawsuit alleges
that in negotiating the merger with ADM, eight MCP officers
engaged in corporate waste, looting and numerous breaches of
fiduciary obligation in order to enhance their collective worth
by millions of dollars.
The defendants filed a motion in early June to dismiss the case
and in late October, Brown County District Judge John Rodenberg
issued a 38-page decision denying the dismissal, saying there
was enough evidence to proceed.
Robert Moilanen of the Zimmerman Reed law firm, which is
representing the plaintiffs, told Oxy-Fuel News he was "pleased
with the decision," but likened the judge's ruling not "to a
home run, but maybe a double or triple" for their side. That's
because the plaintiffs were also seeking a motion for punitive
damages against former MCP CEO Dan Thompson. The judge did not
dismiss that claim, but ruled it "premature."
However, the judge "left the door open" to pursue that option
later, Mr. Moilanen said, and that is something the plaintiffs
do plan on pursuing. As for the status of the case, both sides
are moving forward with the discovery phase of the trial and the
plaintiffs are going to be taking depositions over the next few
months. He estimates completion of numerous depositions
possibly not until late March or April 2004. After that, the
trial could be as early as late summer or early fall, but the
timing also depends on the court's calendar, he explained. Once
in the trial phase, the trial will last at least several weeks.
The shareholders' suit titled Steven Rupp et al. v. L. Daniel
Thompson et al. was filed on April 22, 2003 in the U.S. District
Court for the Fifth Judicial District of Minnesota, in Lyon
County and was assigned to Judge John Rodenberg. Plaintiffs in
this action are represented by Carolyn G. Anderson and Robert C.
Moilanen of Zimmerman Reed PLLP.
MORGAN STANLEY: Agrees to Pay $50M Fine In Widening Funds Probe
---------------------------------------------------------------
Morgan Stanley, in a move that further widens the mutual fund
industry scandal that has stained a growing list of firms and
dismayed many investors, agreed to pay a $50 million fine Monday
to settle charges that it pushed investors toward certain mutual
funds in order to gain millions more in commissions and did not
disclose the incentives to clients, AP newswire reports.
Charges leveled Monday by the Securities and Exchange Commission
and the National Association of Securities Dealers allege Morgan
Stanley steered clients toward "preferred" mutual funds in
exchange for millions of dollars in commission payments from
those fund companies. Morgan Stanley did not tell investors
about the practice or the higher fees. The arrangement
constituted a "firm-wide failure" in the Morgan Stanley's
disclosure practices, according to the SEC.
"When customers purchase mutual funds, they should understand
the nature and extent of any conflicts of interest that may
affect the transaction," said Stephen M. Cutler, the director of
the SEC's division of enforcement, in a written release.
At a news conference in Washington, D.C., Mr. Cutler said Morgan
Stanley's "conduct here clearly crossed the line." Asked
whether the SEC was considering charges against specific company
executives, he would say only that the investigation continues.
The government is conducting a broad probe of the $7 trillion
mutual fund business that has already resulted in the departures
of executives at several large firms, including Strong Capital
Management and Putnam Investments.
Hundreds of subpoenas have been issued by federal, state and
industry regulators, with civil charges filed against Putnam
Investments and employees at Prudential Securities. Individual
employees at Bank of America, Millennium Partners and Fred Alger
& Co. also have been charged by the state of New York, with two
guilty pleas so far.
Putnam, which has lost about $21 billion in assets under
management since the scandal, agreed to a partial settlement
with the SEC last week. The amount the company will be fined
has yet to be determined; the company has already begun
implementing reforms under the agreement. Charges against many
of the firms center on their use of market timing - selective
quick trades that skim profits from long-term shareholders.
Morgan Stanley, charged instead with failure to disclose
improper payments from mutual fund firms, agreed to the
settlement without officially admitting or denying the SEC's
findings.
However, in a statement, the brokerage firm sounded a note of
apology. "I regret that some of our sales and disclosure
practices have been found inadequate," Philip J. Purcell, Morgan
Stanley's chairman and CEO, said in a written statement. "We
take this most seriously because it strains the bonds we have
with our clients and our financial advisers."
The settlement calls for the company to pay $50 million - half
of it returned profits and interest, the other half a civil
penalty. All the money will be placed in a fund to be
distributed to investors who bought the "preferred" mutual fund
shares from January 1, 2000 to the present, the SEC said.
In addition, Morgan Stanley will add disclosures of its
practices to its Web site and in documents provided to
investors. For investors who bought $100,000 or more of certain
mutual fund shares in question, it will convert them to another
class of shares that charge lower fees. It will also hire an
independent consultant to review its practices, and adopt
changes recommended. The company will also no longer accept the
directed brokerage payments under investigation.
"Today's enforcement actions send a clear message that those who
choose to embrace commissions, higher payouts, and extra bonuses
over their duty to render conflict-free advice to their
customers will be sanctioned in the strongest of terms," Mary L.
Schapiro, NASD's lead regulator, said in a written release.
OLD FASHIONED FOODS: Recalls Cheese For Listeria Contamination
--------------------------------------------------------------
Old Fashioned Foods, of Mayville, WI, in cooperation with the
U.S. Food and Drug Administration (FDA), is voluntarily
recalling snack cheese spreads and spreadable cream cheese that
may be contaminated with Listeria monocytogenes bacteria,
officials at the Wisconsin Department of Agriculture, Trade and
Consumer Protection announced. No illness has been reported to
date in connection with the products.
The products were distributed under the brand name Old Fashioned
Cheeser to retail stores throughout Wisconsin, in the Twin
Cities area of Minnesota, and in the Rockford, Illinois, area.
The various flavored snack cheese spreads are in 8- ounce and
16-ounce plastic containers and code-dated 6X01 May 2005 and
6X02 May 2005. The flavored cream cheeses are in 8-ounce plastic
containers and code-dated 2 Nov 04. About 180 cases of the
cheese spreads and 45 cases of the cream cheese were
distributed. Consumers can return the products to the store
where they bought them.
In healthy individuals, Listeria monocytogenes can cause short-
term symptoms including high fever, severe headache, stiffness,
nausea, abdominal pain and diarrhea. The infection may be more
serious or even fatal among young children, frail or elderly
people, or others with weakened immune systems. Listeria
monocytogenes may cause miscarriage and stillbirth in pregnant
women.
The potential contamination was found by Old Fashioned Foods'
own testing program, which detected a positive result in one
sample. The company has ceased production and distribution of
these products while they and the Department of Agriculture,
Trade and Consumer Protection continue to investigate the cause
of the problem.
Consumers may call 1-800-346-0154 for more information.
OLD REPUBLIC: GA Court Grants Final Approval To Suit Settlement
---------------------------------------------------------------
The United States District Court for the Southern District of
Georgia granted final approval to the settlement of a class
action filed against Old Republic International Corporation's
principal mortgage guaranty insurance subsidiary.
The suit alleged that the subsidiary provided pool insurance and
other services to mortgage lenders at preferential, below market
prices in return for mortgage insurance business, and that the
practices violated the Real Estate Settlement Procedures Act.
Substantially identical lawsuits were also filed against all of
the other mortgage guaranty insurers. The Company's subsidiary
filed a summary judgment motion which the court ruled on
favorably, dismissing the lawsuit. The class plaintiffs
appealed, and the US Court of Appeals for the Eleventh Circuit
vacated the judgment and remanded the case back to the district
court. The subsidiary again filed motions seeking summary
judgment on grounds it had asserted earlier but which were not
considered by the court and opposing certification of the class.
On February 5, 2003, the court denied class certification. The
plaintiffs petitioned the court to reconsider its ruling or,
alternatively, to certify sub-classes. In order to bring the
matter to a conclusion and avoid the uncertainties and expenses
of further litigation, the subsidiary entered into settlement
negotiations with the plaintiffs and reached a settlement which
received final approval at a hearing set for that purpose on
October 24, 2003.
PEETS COFFEE: Reaches Agreement To Settle Employee Suits in CA
--------------------------------------------------------------
Peets Coffee & Tea, Inc. reached an agreement to settle two
class actions filed in the Superior Court of the State of
California, County of Orange, styled "Brian Taraz, et al vs.
Peet's Coffee & Tea, Inc.," and "Tracy Coffee, et al. vs. Peet's
Coffee & Tea, Inc."
These suits were filed by one former and one current store
manager alleging misclassification of employment position and
sought damages, restitution, reclassification and attorneys'
fees and costs.
On October 27, 2003, the Company announced that it had reached
an agreement in principle to settle the lawsuits to fully
resolve all claims brought by the plaintiffs. The settlement is
subject to the court's final approval and the Company's right to
terminate if more than 10% of the settlement class opts out of
the settlement.
PEROT SYSTEMS: Reaches Agreement To Settle Securities Suit in NY
----------------------------------------------------------------
Perot Systems Corporation reached an agreement to settle the
consolidated securities class action filed against it, some of
its current and former officers and the investment banks that
underwrote the Company's initial public offering, in the United
States District Court for the Southern District of New York.
The consolidated suit alleges violations of Rule 10b-5,
promulgated under the Securities Exchange Act of 1934, and
Sections 11, 12(a)(2) and 15 of the Securities Act of 1933.
Approximately 300 issuers and 40 investment banks have been sued
in similar cases. The suits against the issuers and
underwriters have been consolidated for pretrial purposes in the
IPO Allocation Securities Litigation.
The lawsuit involving the Company focuses on alleged improper
practices by the investment banks in connection with the
Company's initial public offering in February 1999. The
plaintiffs allege that the investment banks, in exchange for
allocating public offering shares to their customers, received
undisclosed commissions from their customers on the purchase of
securities and required their customers to purchase additional
Company shares in aftermarket trading.
The lawsuit also alleges that the Company should have disclosed
in its public offering prospectus the alleged practices of the
investment banks, whether or not the Company was aware that the
practices were occurring.
During 2002, the individual Company defendants were dismissed
from the case. In exchange for the dismissal, the individual
defendants entered agreements with the plaintiffs that toll the
running of the statute of limitations and permit the plaintiffs
to re-file claims against them in the future. In February 2003,
in response to the defendant's motion to dismiss, the court
dismissed the plaintiffs' Rule 10b-5 claims against the Company,
but did not dismiss the remaining claims.
The Company recently decided to accept a settlement proposal
presented to all issuer defendants. Pursuant to the proposed
settlement, plaintiffs would dismiss and release all claims
against the Company and its current and former officers and
directors, in exchange for an assurance by the insurance
companies collectively responsible for insuring the issuers in
all of the IPO cases that the plaintiffs will achieve a minimum
recovery (including amounts recovered from the underwriters),
and for the assignment or surrender of certain claims the
Company may have against the underwriters. The Company would
not be required to make any cash payment with respect to the
settlement.
The proposed settlement requires approval of an unspecified
percentage of issuers. The proposed settlement would also
require court approval, which cannot be assured. In the event
that the settlement is not completed, the Company will continue
to vigorously defend itself in this case.
PORTLAND GENERAL: Plaintiffs to Withdraw Consumer Fraud Lawsuits
----------------------------------------------------------------
Plaintiffs intend to withdraw two class actions filed against
the Portland General Electric Co., in Marion County Circuit
Court against PGE on behalf of two classes of electric service
customers.
One case asks to represent current PGE customers that were
customers during the period from April 1, 1995 to October 1,
2001 (Current Class) and the other case seeks to represent PGE
customers that were customers during the period from April 1,
1995 to October 1, 2001, but who are no longer customers (Former
Class). The suits seek damages of $190 million for the Current
Class and $70 million for the Former Class, from the inclusion
of a return on investment of Trojan in the rates PGE charges its
customers.
The Company denies the allegations.
PRAXAIR INC.: Faces 141 Personal Injury Suits Over Welding Fumes
----------------------------------------------------------------
Praxair, Inc. is a co-defendant with many other companies in 141
lawsuits alleging personal injury caused by manganese contained
in welding fumes, as of September 30, 2003. The cases were
pending in state and federal courts in Illinois, Mississippi,
Missouri, Texas, Louisiana, Georgia, West Virginia, Ohio, and
Arkansas. There were a total of 9,714 individual claimants in
these cases, and nine of the cases are class actions.
None of the class actions have been certified. All of the cases
that have been filed in the federal courts have been
transferred, under the Multidistrict Litigation procedure to US
District Court for the Northern District of Ohio for coordinated
or consolidated pretrial proceedings.
The plaintiffs seek unspecified compensatory and, in most
instances, punitive damages. In the past, the Company has
either been dismissed from the cases with no payment or has
settled a few cases for nominal amounts.
The Company believes that it has meritorious defenses to these
cases. While the outcome of litigation is uncertain, the
Company believes that the resolution of these cases will not
have a material adverse effect on its consolidated financial
position or on its consolidated results of operations or cash
flows in any given year.
PUTNAM FUNDS: SEC Chief Defends Mutual Fund Scandal Settlement
--------------------------------------------------------------
US Securities and Exchange Commission Chairman William Donaldson
defended a settlement with mutual fund firm Putnam Investments,
calling criticism of the pact "misguided and misinformed,"
Reuters news reports.
Last week, New York Attorney General Eliot Spitzer lashed out at
the SEC settlement with Putnam Investments over a securities
fraud case. AG Spitzer argued that the SEC had put the
interests of fund management companies above those of ordinary
investors.
In an opinion letter in the Wall Street Journal, Mr. Donaldson
said "by acting quickly, the SEC required Putnam to agree to
terms that produce immediate and lasting benefits for investors
currently holding Putnam funds."
Some have faulted the SEC for moving too quickly to settle with
Putnam, but Mr. Donaldson said that claim "misses the
significance of the action."
Putnam, a unit of Marsh & McLennan Cos. had agreed to reform its
business practices and reimburse clients to settle SEC charges
of improper short-term trading, but the agreement did not
address any civil penalty or monetary fines, which the SEC said
are still to be determined. Mr. Donaldson wrote, "the
settlement is not the end of the commission's investigation of
Putnam."
QUICKLOGIC CORPORATION: Reaches Settlement For Stock Suit in NY
---------------------------------------------------------------
Quicklogic Corporation reached a settlement for the consolidated
securities class action filed in the United States District
Court for the Southern District of New York against it, some
investment banks that underwrote its initial public offering,
and some of its officers and directors. This lawsuit is now
captioned "In re QuickLogic Corp. Initial Public Offering Sec.
Litig., Case No.01-cv-9503."
The complaint alleges excessive and undisclosed commissions in
connection with the allocation of shares of common stock in the
Company's initial and secondary public offerings and
artificially high prices through "tie-in" arrangements which
required the underwriters' customers to buy shares in the
aftermarket at pre-determined prices in violation of the federal
securities laws. Plaintiffs seek an unspecified amount of
damages on behalf of persons who purchased the Company's stock
pursuant to the registration statements between October 14, 1999
and December 6, 2000. The court has appointed a lead plaintiff
in this litigation.
On April 19, 2002, plaintiffs filed an amended complaint.
Various plaintiffs have filed similar actions asserting
virtually identical allegations against over 300 other public
companies, their underwriters, and their officers and directors
arising out of each company's public offering. These actions,
including the action against the Company, have been coordinated
for pretrial purposes and captioned In re Initial Public
Offering Securities Litigation, 21 MC 92.
Defendants in these cases filed an omnibus motion to dismiss on
common pleading issues. In October 2002, the Company's officers
and directors were voluntarily dismissed without prejudice. On
February 19, 2003, the court denied in part and granted in part
the motion to dismiss filed on behalf of defendants, including
the Company. The court's order did not dismiss any claims
against the Company. As a result, discovery may now proceed.
A proposal has been made for the settlement and release of
claims against the issuer defendants, including the Company, in
exchange for a guaranteed recovery to be paid by the issuer
defendants' insurance carriers and an assignment of certain
claims. The settlement is subject to a number of conditions,
including approval of the proposed settling parties and the
court. If the settlement does not occur, and litigation against
the Company continues, the Company believes it has meritorious
defenses to the allegations.
REGENERON PHARMACEUTICALS: Investors File Securities Suit in NY
---------------------------------------------------------------
Regeneron Pharmaceuticals and certain of its officers and
directors face several securities class actions filed in the
United States District Court for the Southern District of New
York, on behalf of a class consisting of investors in the
Company's publicly traded securities between March 28, 2000 and
March 30, 2003.
The suit alleges that the defendants misstated or omitted
material information concerning the safety and efficacy of
AXOKINE, in violation of Sections 10(b) and 20(a) of the
Securities and Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder.
Damages are sought in an unspecified amount. The Company's
management believes that the lawsuits are without merit. The
ultimate outcome of these matters cannot presently be
determined. Accordingly, no provision for any liability that
may result upon the resolution of these matters has been made in
the accompanying financial statements.
REHABCARE GROUP: Plaintiffs File Amended Securities Suit in MO
--------------------------------------------------------------
Plaintiffs filed an amended class action against Rehabcare
Group, Inc. in the United States District Court for the Eastern
District of Missouri alleging violations of the federal
securities laws. Certain current and former officers of the
Company are also defendants in the suit and are being jointly
defended with the Company.
The proposed class consists of persons who purchased shares of
the Company's common stock between August 10, 2000 and January
21, 2002. The plaintiffs filed an amended complaint in December
2002 that focuses primarily on alleged weaknesses in the
software system selected by the Company's Staffing Group and the
purported negative effects of such systems on the healthcare
staffing services business operations.
The Company's director and officer liability insurance carrier
has preliminarily accepted coverage of the action, including the
payment of defense costs after the satisfaction of the Company's
deductible, subject to the applicable limits of the policy. The
court recently issued an order denying the Company's motion to
dismiss, without prejudice, while directing the plaintiff to
amend its complaint to present its claims with more
particularity. The Company expects to file a new motion to
dismiss in the near future.
RHODE ISLAND: Plane Collision Kills Two In 'Untowered' Airport
--------------------------------------------------------------
A plane collision, involving a Cesna 182 and a Piper Archer,
killed two men at Westerly State Airport in Rhode Island Sunday
as one aircraft was landing and the other was taking off, AP
Newswire reports. The Sunday afternoon crash killed both men on
the Cessna 182 that was taking off. The three people on the
Piper Archer were taken to a hospital with minor injuries and
released.
The airport has no air traffic control tower, and pilots are
expected to notify each other when taking off and landing, Ted
Drozdz, chief aeronautics inspector for Rhode Island Airport
Corporation, told AP. Stephen Demko, an air safety investigator
for the National Transportation Safety Board, said it could take
a year to determine the cause of the collision.
Authorities said the tail of the Cessna touched the right wing
of the Piper. The Cessna then hit the ground nose-down, bounced
off the runway and landed upright, Mr. Demko said. The Piper
landed hard on the runway and its landing gear collapsed. The
Cessna's pilot, Hardy Franklin Lebel, 65, and passenger Peter
Budd Coleman, 58, died at a hospital after the collision.
Mr. Drozdz dismissed suggestions that the airport's lack of a
control tower contributed to the crash. "There are more
untowered airports in the United States than there are towered
airports," he said.
SEOUL SHIK: Recalls Jong-Hap Cookie Biscuits For Undeclared Eggs
----------------------------------------------------------------
New York-based Seoul Shik Poom Inc., in cooperation with the
U.S. Food and Drug Administration (FDA), is recalling (Jong-Hap
Cooki) Biscuits because it may contain undeclared eggs.
Consumers who are allergic to eggs may run the risk of serious
or life threatening allergic reactions if they consume this
product.
The recalled Biscuits packed in a 13.4-oz. clear, plastic
container were sold in NY, NJ, MA, VA, IL, MI, and MD. The
recall was initiated after routine sampling by New York State
Department of Agriculture and Markets Food Inspectors revealed
the presence of undeclared eggs in Biscuits in packages which
did not declare eggs as an ingredient on the label. No
illnesses have been reported to date in connection with this
problem.
Consumers who are allergic to eggs and purchased Biscuits are
urged to return them to the place of purchase. Consumers with
questions may contact the company at 1-800-674-4771.
TERAZOSIN LITIGATION: Antitrust Lawsuit Sent Back To FL Court
-------------------------------------------------------------
The U.S. Court of Appeals, Eleventh Circuit has vacated a plea
by Plaintiffs and remanded to the U.S. District Court for the
Southern District of Florida a ruling by that court granting
class certification of a lawsuit filed on behalf of direct
purchasers of the drug Terazosin hydrochloride against the
drug's manufacturers over allegations that agreements between
drug manufacturers delayed the introduction of the generic
version of the drug into the United States, and thereby injured
them in violation of the Clayton Act and the Sherman Antitrust
Act.
In its decision, the Court of Appeals held that District court's
failure to address whether three wholesalers in proposed class
of direct purchasers of drug created fundamental conflict among
class, as would preclude class certification in antitrust action
alleging that generic and name-brand drug manufacturers
conspired to delay introduction of generic version of drug, was
abuse of discretion.
VALLEY DRUG COMPANY, Louisiana Wholesale Drug Co., Inc., as
Plaintiffs-Appellees, Sherman Act Class Plaintiffs, as
Consolidated-Plaintiff-Appellee, Walgreen Co., Inc., Drug Mart
Pharmacy Corp., et al., as Plaintiffs, Hy-Vee, Inc., Stop & Shop
Supermarket Co., et al., as Consolidated-Plaintiffs.
GENEVA PHARMACEUTICALS, INC., Defendant, Zenith Goldline
Pharmaceuticals, Inc., Defendant, Abbott Laboratories,
Defendant-Consolidated-Defendant-Appellant, Novartis
Pharmaceuticals Corporation, Ivax Pharmaceuticals, Inc.,
f.k.a. Zenith Goldline Pharmaceuticals, Inc., Consolidated-
Defendants.
UST INC.: Continues Defense V. Smokeless Tobacco Product Suits
--------------------------------------------------------------
UST, Inc. is continuing to defend against several class actions
in various states filed on behalf of people using its smokeless
tobacco products. The Company is also working for alternative
settlements for the litigation.
The Company is named in an action in Illinois brought by
plaintiffs and purporting to state a class action "on behalf of
themselves and all other persons similarly situated" alleging
that the Company manipulates the nicotine levels and absorption
rates in its smokeless tobacco products and seeking to recover
monetary damages in an amount not less than the purchase price
of the Company's smokeless tobacco products and certain other
relief. The purported class excludes all persons who claim any
personal injury as a result of using the Company's smokeless
tobacco products.
The Company is also named in certain actions in West Virginia
brought on behalf of individual plaintiffs against cigarette
manufacturers, smokeless tobacco manufacturers, and other
organizations seeking damages and other relief in connection
with injuries allegedly sustained as a result of tobacco usage,
including smokeless tobacco products. Included among the
plaintiffs are six individuals alleging use of the Company's
smokeless tobacco products and alleging the types of injuries
claimed to be associated with the use of smokeless tobacco
products; five of the six individuals also allege the use of
other tobacco products.
The Company is named in a purported class action in Florida
brought by six plaintiffs on behalf of themselves and all others
similarly situated against various smokeless tobacco
manufacturers including the Company and other organizations for
personal injuries, including cancers of the mouth and larynx,
oral lesions, leukoplakia, facial disfigurement, gum and tooth
loss, fear of cancer, death and depression and other injuries
allegedly resulting from the use of defendants' smokeless
tobacco products. Plaintiffs also claim nicotine "addiction"
and seek unspecified compensatory damages and certain equitable
and other relief, including but not limited to, medical
monitoring.
The Company believes, and has been so advised by counsel
handling these cases, that it has a number of meritorious
defenses to all such pending litigation. Except as to the
Company's willingness to consider alternative solutions for
resolving certain regulatory and litigation issues, all such
cases are, and will continue to be, vigorously defended. The
Company believes that the ultimate outcome of all such pending
litigation will not have a material adverse effect on its
consolidated financial position, but may have a material impact
on its consolidated financial results for a particular reporting
period in which resolved.
VALEANT PHARMACEUTICALS: Reaches Settlement For Stock Suit in DE
----------------------------------------------------------------
Valeant Pharmaceuticals International reached a settlement for
the consolidated securities class action filed against it in the
Delaware Court of Chancery, styled "In re Ribapharm Inc.
Shareholders Litigation, Consol. C.A. No.20337." The suit
initially also named as defendants its subsidiary Ribapharm,
Inc., and certain of Ribapharm's directors and officers.
The First Amended Class Action Complaint alleges, among other
things, that the Company breached its fiduciary duties as a
controlling stockholder of Ribapharm in connection with its
tender offer for the shares of Ribapharm it did not already own.
On August 4, 2003, the Company and the plaintiffs reached an
agreement in principle to settle these lawsuits and, after
settlement papers are prepared, will present that settlement to
the Court of Chancery for its approval.
WEST FRONT: Recalls Nova Salmon Due to Listeria Contamination
-------------------------------------------------------------
New York-based West Front Andrew Corporation, in cooperation
with the U.S. Food and Drug Administration (FDA), is recalling
SLICED/ SMOKED NOVA SALMON due to Listeria contamination.
In healthy individuals, Listeria monocytogenes can cause short-
term symptoms including high fever, severe headache, stiffness,
nausea, abdominal pain and diarrhea. The infection may be more
serious or even fatal among young children, frail or elderly
people, or others with weakened immune systems. Listeria
monocytogenes may cause miscarriage and stillbirth in pregnant
women. The problem was discovered after routine sampling by New
York State Department of Agriculture and Markets Food Inspectors
found the product to be positive for Listeria monocytogenes.
The Company has voluntarily closed its deli department until
they, and Department officials, determine the source of the
problem. The sliced/smoked Nova Salmon was sold in the New York
City area only. No illnesses have been reported to date.
Consumers who have purchased SLICED/SMOKED NOVA SALMON should
not consume it, but should return it to the place of purchase.
Consumers with questions may contact the company at
(212) 371-9944.
WILD BLUEBERRIES: Jury Awards $56M Verdict in Price-Fixing Suit
---------------------------------------------------------------
A Maine State Court jury found several wild blueberry growers
liable for participating in a four-year price-fixing conspiracy
to fix the base price which the defendants paid to approximately
800 growers for wild blueberries. The suit, styled "Nate Pease,
et al. v. Jasper Wyman & Son, Inc., et al.," names as
defendants:
(1) Cherryfield Foods, Inc.,
(2) Jasper Wyman & Son, Inc., and
(3) Allen's Blueberry Freezer, Inc.
In addition to the price-fixing claim, the plaintiffs alleged
that the defendants agreed not to solicit each other's growers,
a type of market allocation claim that also is a per se
violation of the antitrust laws.
The jury ordered the three wild blueberry processing companies
to pay $18.68 million in damages, the amount which the growers
would have been paid absent the defendants' conspiracy. After a
mandatory trebling of this damage figure under Maine antitrust
law, the total amount of the verdict for the plaintiffs is $56
million.
According to Daniel A. Small, counsel for the growers, "Cartels
have ravaged economies domestically and globally, they have
fixed prices on both products they sell and products they buy.
Active enforcement of antitrust laws to achieve restitution for
the victims will restore balance to economies and deter future
misconduct. This case brings to light some of the unfair
practices of the blueberry processors that have taken advantage
of primarily small growers in Maine."
The Class is comprised of Maine wild blueberry growers who
directly or indirectly sold wild blueberries to any defendant
from February 28, 1996 through February 28, 2000 and has been
represented since 2000 by Daniel Small of Cohen, Milstein,
Hausfeld & Toll (Washington, D.C.) and William Robitzek of
Berman & Simmons (Lewiston, ME.)
WORLDCOM INC.: Employees Opt For Arbitration Instead of Lawsuit
---------------------------------------------------------------
The Law Firm of Klayman & Toskes, P.A. today announced it is
pursuing claims in excess of $50 million against Salomon Smith
Barney, now known as Citigroup Global Markets Inc., on behalf of
present and former WorldCom employees whose portfolios were
concentrated in WordCom stock and who do not wish to participate
in any class actions.
One claim seeks damages of $1,106,278 and alleges specific sales
practice violations at Salomon Smith Barney's Peachtree Road
branch in Atlanta. These violations include the over-
concentration of the investor's portfolio and the failure to
recommend hedging strategies to properly protect the investors'
concentrated and highly margined position. Smith Barney
recently consented to a $1 million fine after the New York Stock
Exchange found that it failed to adequately supervise its
brokers at the Atlanta, Peachtree Road branch office who advised
WorldCom employees to exercise their stock options and to hold
the resulting company shares on margin.
This advice given to employees created highly concentrated and
leveraged positions in company stock. The outcome of this
advice was the virtual loss of the employees' retirement "nest
egg." The NYSE findings included that Smith Barney's brokers
uniformly made these recommendations despite the customers'
varying risk profiles, investment experience or investment
objectives. These findings confirm the contentions that have
been alleged against Smith Barney by K&T on behalf of their
WorldCom employee clients since 2001.
Federal District Judge Denise Cote recently certified a class-
action lawsuit against Smith Barney involving WorldCom
shareholders. A growing trend among investors with large losses
is to use arbitration as a means of recovering losses.
For more information, contact Lawrence L. Klayman, of Klayman &
Toskes, P.A., by Phone: 888-997-9956, or visit the firm's
Website: http://www.nasd-law.com.
WORLDCOM INC.: Court Grants Certification To Securities Lawsuit
---------------------------------------------------------------
Federal District Judge Denise Cote certified as a class action
the lawsuit against MCI, formerly known as WorldCom, and
Citigroup Global Markets, formerly known as Salomon Smith
Barney. The 91-page ruling grants class status to anyone who
acquired publicly traded shares of WorldCom or MCI, in the
period from April 29, 1999 to June 25, 2002.
Recently, the United States Bankruptcy Court approved MCI's Plan
of Reorganization, which paves the way for the company to emerge
from Chapter 11 bankruptcy. As a result of MCI's pending
emergence from Chapter 11, it is likely that shares of MCI
traded under the symbols WCOEQ and MCWEQ will be cancelled,
leaving existing shareholders with a mere fraction of their
initial investment.
Jerrold Parker, co-founder of Parker & Waichman commented, "The
certification of the class action lawsuit filed against MCI
WorldCom and Salomon Smith Barney demonstrates that Wall Street
brokerages and public companies are seen as being equally
responsible for providing honest financial information to
shareholders and the investment community as a whole. It is
unthinkable that an investment firm would blatantly abandon
their fiduciary responsibility to their brokerage clients and
the entire marketplace to serve the interests of their
investment banking clients. We are committed to seeing that
Salomon Smith Barney is held responsible for the financial
damages they helped inflict on MCI and WorldCom shareholders."
The complaints already filed charge Salomon Smith Barney with
violations of Section 15(c) of the Securities Exchange Act of
1934, as well as various state statutes, for issuing fraudulent
research reports and for violating NYSE Rules 401, 472 and
476(a)(6), and NASD Rules 2110 and 2210, for issuing research
reports that were not based on principles of fair dealing and
good faith, did not provide a sound basis for evaluating facts,
contained exaggerated or unwarranted claims about the covered
companies, and/or contained opinions for which there were no
reasonable basis. The misconduct of Salomon Smith Barney was
detailed in the settlement announced earlier this year by
Securities Regulators and state securities officials.
The complaints also charge that WorldCom violated section 10(b)
of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder, by issuing a series of materially false
and misleading statements. WorldCom had publicly announced that
instead of the $1.4 billion in profits the Company reported in
2001 and $130 million in the first quarter of 2002, it actually
lost a considerable amount of money during those same periods.
ZAPATA INDUSTRIES: Former Workers File Suit For WARN Violations
---------------------------------------------------------------
Former employees of bottle-cap maker Zapata Industries Inc. have
sued the company for lost wages, claiming they were not given
the required legal notice that their factory would close,
Knight-Ridder / Tribune Business News reports.
More than 100 former employees have filed suit against the
Oklahoma Muskogee manufacturer in federal court under the Worker
Adjustment and Retraining Notification Act, which requires
companies to give 60 days notice when they close a plant.
Zapata announced October 1 it would consolidate its Muskogee
operations into a factory in its native Mexico. The factory
closed two weeks later and put 125 people out of work.
Muskogee attorney Bret Smith told the Tribune Business News he
is representing several groups of former employees in the
dispute and has filed motions for their lawsuits to be
consolidated into a class action. The company has requested
more time to respond to the suits, Mr. Smith said.
"Under the WARN Act, the employee is entitled to 60 days' wages
that they otherwise would have earned had proper notice been
given," he said.
A Zapata manager in Muskogee declined to comment Friday,
referring questions to a company official who was out of the
country, the Tribune Business News reports.
Layoffs have hit Muskogee, a long-time manufacturing center,
hard the past six weeks. Along with Zapata, toolbox maker
Waterloo Industries Inc. announced plans to close its plant next
year with the loss of almost 230 jobs. Waterloo will move
operations to its factories in Missouri and Arkansas. Earlier
this week, Schrader-Bridgeport said 207 workers would be laid
off when the company closes its 120,000 square-foot Muskogee
factory in July. Schrader-Bridgeport, which makes pneumatic and
fluid control systems, said it will transfer the work to
factories in Mexico and Illinois.
"It was really a bit of a surprise," David Edwards, chairman of
the Greater Muskogee Development Corporation, told The Tribune
Business News. "They said they were doing this in order to
remain globally competitive."
Mr. Edwards said the combined effect of more than 500 layoffs
has been a shock to the community. "Even though rumors have
been going around, the finality of it is a shock," Mr. Edwards
said. "It creates stress in the community and for the people
who work there and their families."
Tile maker Dal-Tile Corporation opened a Muskogee plant in the
summer that created about 300 jobs, Mr. Edwards said. QuikOrder
Inc. has announced plans to open an inbound call center early
next year that will employ about 250 people. The company takes
online restaurant orders.
"There's some good news," Mr. Edwards said. "But you like to
have those good things happen and the others stay in place
because that's what creates the prosperity."
The wrongful termination lawsuits titled Ronald Jennings v.
Zapata Industries Inc. (CJ-03-01610), McCoy v. Zapata Industries
Inc. (CJ-03-01615) and Michel Durant v. Zapata Industries Inc.
(CJ-03-01616) were filed on October 20, 2003 and October 21,
2003 in the U.S. District Court for the District of Oklahoma,
where they are pending before Judge G. Bruce Sewell, Judge
Thomas Alford and Judge James Edmondson respectively.
Plaintiffs in this action are represented by Bret Smith.
ZONAGEN INC.: Plaintiffs Appeal TX Securities Suit's Dismissal
--------------------------------------------------------------
Plaintiffs appealed the United States District Court for the
Southern District of Texas, Houston Division's dismissal of a
consolidated securities class action filed against Zonagen,
Inc., alleging violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, as amended, and Rule 10b-5
thereunder. The suit also names as defendants certain of the
Company's officers and directors.
The plaintiffs purported to bring the suit on behalf of all
purchasers of Zonagen common stock between February 7, 1996 and
January 9, 1998. The plaintiffs asserted that the defendants
made materially false and misleading statements and failed to
disclose material facts about the patents and patent
applications of the Company relating to VASOMAX(R) and Chito-ZN
(formerly named ImmuMax(TM)) and about the Company's clinical
trials of VASOMAX(R). The plaintiffs sought to have the action
declared to be a class action, and to have recessionary or
compensatory damages in an unstated amount, along with interest
and attorney's fees.
On March 30, 1999, the court granted the defendants' motion to
dismiss and dismissed the case with prejudice. The plaintiffs
filed an appeal. On September 25, 2001, the United States Fifth
Circuit Court of Appeals affirmed the dismissal of all claims
except one; the court reversed the trial court's dismissal of a
claim concerning the Company's disclosure about a patent
relating to VASOMAX(R). On June 13, 2003, the court granted the
defendants' motion for summary judgment as to that last
remaining claim, and entered a judgment dismissing the case with
prejudice.
The Company's management and the individual defendants believe
that these actions are without merit.
New Securities Fraud Cases
AMERICAN PHARMACEUTICALS: Marc Henzel Launches Stock Suit in IL
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Northern
District of Illinois on behalf of purchasers of the securities
of American Pharmaceuticals Partners, Inc. between February 19,
2002 and September 24, 2003, inclusive, seeking to pursue
remedies under the Securities Exchange Act of 1934, against
defendants:
(1) Patrick Soon-Shiong,
(2) Derek J. Brown,
(3) Jeffrey M. Yordon,
(4) Nicole S. Williams,
(5) American Bioscience, Inc., and,
(6) American Pharmaceutical Partners, Inc.
The complaint alleges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market between February 19, 2002 and
September 24, 2003.
The action alleges that defendants made materially false and
misleading statements with respect to the drug Abraxane, a
reformulated version of Taxol, under development for the
treatment of breast cancer. Throughout the class period,
defendants touted Abraxane as a safer and more effective
alternative to Taxol, the world's best-selling chemotherapy drug
for cancer. Defendants claimed that clinical studies had
indicated that:
(i) Abraxane could be administered without Cremophor, a
toxic substance with severe side-effects that limited
the tolerable dose and effectiveness of Taxol;
(ii) unlike Taxol, Abraxane could be administered without
the need for potentially harmful steroid pre-medication
and other drugs that reduce the loss of white blood
cells;
(iii) because Abraxane was not formulated with a toxic
substance it could be delivered in much higher doses
than Taxol and was therefore more effective than Taxol
with respect to reduction in tumor size; and
(iv) because it can be injected intravenously directly to
the location of the tumor, Abraxane therapy is only
one-half hour, compared to 3 hours for Taxol.
The Company stated, repeatedly, that studies indicated that
"ABI-007 (Abraxane) is apparently well tolerated" at high doses
without the need for steroid premedication and G-CSF support.
The truth began to emerge on September 24, 2003. On that date,
defendants issued an ostensibly positive news release to
announce the preliminary results of Phase III testing of
Abraxane. However, commentators noted that the news release did
not include the data underlying the trial results, and that the
trial lacked a common safeguard known as double blinding
designed to prevent research bias, since doctors and patients
both knew whether Abraxane or Taxol was in use.
Moreover, in the release APP narrowed some of its claims for
Abraxane, stating not that Abraxane was well tolerated without
the need for steroid premedication and G-CSF support (to reduce
loss of white blood cells) but rather, noted the absence of
"severe hypersensitivity reactions despite no routine pre-
medication in patients receiving Abraxane" and stated that the
procedure was to administer Abraxane "without routine steroid
pretreatment or growth factor support."
The lack of backup data, and the distinction between "no steroid
pretreatment" and "no routine steroid pretreatment" was not lost
on investors; as the market digested the release and its
implications, APP's share price fell 32% from a Class Period
high of $44.14 on September 24, 2003 to a closing price of
$29.59 on September 26, 2003. Two trading days before the
announcement -- but after APP had seen the Phase III trial
results -- defendant Patrick Soon-Shiong disposed of 300,000
shares of his personally held APP stock while the stock was
trading at between $38.68 and $35.47.
For more information, contact Marc S. Henzel by Mail: 273
Montgomery Ave, Suite 202 Bala Cynwyd, PA 19004-2808, by Phone:
(888) 643-6735 or (610) 660-8000, by Fax: (610) 660-8080, by E-
mail: Mhenzel182@aol.com, or visit the firm's Website:
http://members.aol.com/mhenzel182.
BIOVAIL CORPORATION: Alfred Yates Lodges Securities Suit in NY
--------------------------------------------------------------
The Law Office of Alfred G. Yates, Jr. initiated a class action
lawsuit in the United States District Court for the Southern of
New York on behalf of purchasers of the securities of Biovail
Corp. between May 17, 2002 and October 30, 2003, inclusive,
seeking to pursue remedies under the Securities Exchange Act of
1934, against the Company and:
(1) Eugene N. Melnyk,
(2) Rolf K. Reininghaus and,
(3) Brian H. Crombie
The complaint charges Biovail and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. According to the complaint, Biovail consistently reported
"record" growth throughout the Class Period, and defendants
issued positive earnings and income growth forecasts of 30%
throughout this period. Unbeknownst to investors, however,
Biovail allegedly used hundreds of millions of dollars in
proceeds from previously issued stock to make acquisitions and
thereby create the illusion of increasing revenue and demand for
Biovail products. This scheme also allowed certain defendants to
obtain more than $40 million in performance-based stock grants
and options.
The complaint also alleges that defendants failed to disclose
that during the Class Period defendants could not maintain the
Company's historical profit margins and revenue growth at or
above 30% amidst growing competition; that earnings forecasts
were not based on reasonable assumptions, especially given the
fact that defendants knew that the Company was experiencing an
overall slow-down in internal growth and that the Company could
not control the production and sales costs of Biovail's
expensive products; and that such growth could not possibly keep
pace with the Company's historical performance, much less exceed
it.
According to the complaint, defendants knew throughout the Class
Period that its earnings forecasts for Biovail could not be met
as evidenced by the fact that the Company was considering
emergency plans for bolstering its business through essential
acquisitions which were designed to replace foreseeable
declining revenues. On October 30, 2003, Biovail shocked the
market by announcing revised guidance for 2004 and its financial
results for the third quarter of 2003, which were substantially
below prior guidance - (net income down 83% for the quarter and
with revenue growth of 10% versus prior guidance of more than
30%).
Defendants issued a series of releases which revealed rising
expenses which far outpaced any prior guidance or plan and lower
revenues which far underperformed plan. Immediately following
this disclosure, Biovail's shares plummeted, 20% or $5.38 per
share, from the prior day's high, in the single day's trading
session to a new 52 week trading low.
For more information, contact Alfred G. Yates, Jr., by Phone:
800-391-5164 or 412-391-5164, or by E-mail: yateslaw@aol.com.
BIOVAIL CORPORATION: Schatz & Nobel Files Stock Suit in S.D. NY
----------------------------------------------------------------
Schatz & Nobel, PC initiated a lawsuit seeking class action
status in the United States District Court for the Southern
District of New York on behalf of all persons who purchased the
common shares of Biovail Corporation between February 7, 2003
and October 30, 2003 for violations of the federal securities
laws.
The Complaint alleges that Biovail and certain of its officers
and directors made materially false and misleading statements
during the Class Period. Specifically, Defendants made material
misrepresentations concerning Biovail's financial results and
business by, inter alia, improperly reporting revenue and
earnings attributable to the sales of a generic version of
Prilosec and misstating the demand in the marketplace for that
product.
Plaintiff further alleges that these material misrepresentations
artificially inflated the price of Biovail's common shares,
which traded as high as $50.30 on the New York Stock Exchange
and as high as CD $67.75 on the Toronto Stock Exchange during
the Class Period.
For more information, contact Andrew M. Schatz, Jeffrey S.
Nobel, or Nancy A. Kulesa, by Phone: (800) 797-5499, by E-mail:
SN06106@aol.com, or visit the firm's Website:
http://www.snlaw.net.
BOSTON COMMUNICATIONS: Schiffrin & Barroway Files Lawsuit in MA
---------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a class action lawsuit in
the United States District Court for the District of
Massachusetts on behalf of all purchasers of publicly traded
securities of Boston Communications Group, Inc. from April 16,
2003 through July 16, 2003 inclusive.
The complaint alleges that defendants Boston Communications
Group, Inc., Karen A. Walker, and Edward H. Snowden 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 April 16, 2003
and July 16, 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 Boston Communications was aware that Verizon
Wireless, Inc. would not be renewing its billing
services contract with Boston Communications because
Verizon was creating its own internal billing system
instead of continuing to use Boston Communications for
billing services; and,
(2) that Boston Communications was aware that Verizon's
decision to create its own internal billing system
would lead to a significant loss of revenue for Boston
Communications.
On July 16, 2003, after the market had closed, Boston
Communications announced the truth about its contract
negotiations with Verizon. The Company stated that its contract
with Verizon is scheduled, according to its terms, to be
renegotiated in 2003. The Company is currently in contract
discussions with Verizon. The terms and conditions, including
the length of the contract and pricing have not yet been
determined.
Verizon has also requested that Boston Communications provide
support services to assist Verizon in testing its own internal
prepaid platform in 2004 which could potentially displace prepay
services currently being provided by Boston Communications. None
of the Company's contracts are exclusive and its carrier
customers have and continue to use and/or test competing
products in certain markets.
The market reacted swiftly to this news, with the Company's
stock falling 39%, or $8.46 from a closing price of $21.16 on
July 16, 2003 to close at $12.70 on July 17, 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.
CLEAN HARBORS: Cauley Geller Lodges Securities Fraud 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 Clean Harbors, Inc.
publicly traded securities during the period between November
19, 2002 and August 14, 2003, inclusive.
The complaint alleges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder. Specifically, the complaint alleges that
by the start of the Class Period, unbeknownst to investors,
Clean Harbors was experiencing difficulties integrating the
operations of Safety-Kleen Corporation's Chemical Services
Division, which it had just acquired.
Moreover, the integration process was distracting the Company
from its core business, thereby causing the Company to
experience declining results. Notwithstanding the foregoing
difficulties, throughout the Class Period, defendants projected
increasing revenues and earnings for the Company, which caused a
dramatic increase in the price of Clean Harbors common stock.
While the stock was trading at these levels, certain Clean
Harbor insiders sold their personally-held Clean Harbors common
stock to the unsuspecting public.
In addition, defendant McKim engaged in a forward sale of
200,000 shares of his stock which permitted him to lock in gains
in his stock but not suffer from any decline in the price of
Clean Harbors stock.
Then, on May 14, 2003, Clean Harbors surprised the market by
announcing that its EBITDA for the first quarter of 2003 was
below the quarterly minimum required by certain covenants in the
Company's loan agreements and that the Company would have to
renegotiate the terms of its agreements with its lenders. In
response to this announcement, the price of Clean Harbors stock
plummeted from $12.89 per share to $10.90 per share on extremely
heavy trading volume.
The true extent of the problems at Clean Harbors were not
finally revealed until August 14, 2003, when it announced that
it would miss its earnings targets for the second quarter of
2003 and that it was being negatively impacted by a variety of
factors. Following this announcement, the price of Clean Harbors
common stock declined further to $6.23 per share.
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:
1-888-551-9944 toll free, by Fax: 1-501-312-8505, by E-mail:
info@cauleygeller.com, or visit the firm's Website:
http://www.cauleygeller.com.
FRIEDMAN'S INC: Milberg Weiss Lodges Securities Suit in N.D. GA
---------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP, initiated a securities
class action in the United States District Court for the
Northern District of Georgia on behalf of purchasers of
Friedman's Inc. common stock during the period between January
26, 2000 and November 11, 2003, against the Company and:
(1) Victor M. Suglia,
(2) Bradley J. Stinn
(3) Sterling B. Brinkley, and
(4) Douglas Anderson
The complaint alleges violations of the Securities Exchange Act
of 1934. The complaint alleges that Defendants issued a series
of false and misleading statements regarding FRM's financial
results and business model, resulting in the Company materially
overstating its earnings for the fiscal years 2000 through 2002,
and the first three quarters of 2003.
The earnings issued and representations concerning those results
were false and misleading when made, as FRM's financial
statements during the Class Period were in violation of GAAP and
SEC rules. These improper practices are now the subject of a
Securities and Exchange Commission investigation, as well as an
investigation by the Department of Justice.
In fact, defendants knew and failed to disclose material adverse
information and misrepresented the truth about the Company, its
financial performance, earnings momentum, and future business
prospects, including:
(i) the Company's allowance for doubtful accounts was
woefully inadequate;
(ii) FRM's credit losses during the Class Period were
significantly higher than its reserves and higher than
defendants publicly represented; and
(iii) Defendants failed to properly write-off uncollectible
receivables, and materially overstated FRM's financial
results by maintaining known uncollectible accounts as
assets during the Class Period.
As a result of the Defendants' false and misleading statements,
FRM's stock traded at inflated prices during the Class Period,
increasing to as high as $16.15 on September 8, 2003.
On November 11, 2003, FRM shocked the market by warning about
its future performance, and the material adverse impact of the
"increase in allowance for doubtful accounts". The Company also
revealed that FRM's Chief Financial Officer, Victoria Suglia,
had been placed on "leave" as a result of the government
investigations.
As a result, FRM was forced to dramatically boost its allowance
for doubtful accounts, resulting in a sizable charge of as much
as $0.43 per share for 2003. In response to the Company's
devastating news concerning the financial fraud, FRM's stock
price plummeted by more than 40% on volumes of about thirteen
times the daily average.
The Individual Defendants engaged in such a scheme to inflate
the price of FRM securities in order to protect and enhance
their executive positions and the substantial compensation and
prestige they obtained thereby; enhance the value of their
personal holdings of FRM securities; complete public offerings;
prevent violation of the covenants in the Company's credit
facility agreement and maximize the amount allowed to be
borrowed by the Company under this agreement; and avoid repaying
millions of dollars in personal loans from the Company.
For more information, contact Maya Saxena, by Mail: 5355 Town
Center Road, Suite 900, Boca Raton, FL 33486, by Phone:
(561) 361-5000, or by E-mail: msaxena@milberg.com, or contact
Steven G. Schulman, by Mail: One Pennsylvania Plaza, 49th fl.,
New York, NY, 10119-0165, by Phone: 800) 320-5081, or visit the
firm's Website: http://www.milberg.com.
FRIEDMAN'S INC: Abbey Gardy Commences Securities Suit in N.D. GA
----------------------------------------------------------------
Abbey Gardy, LLP initiated a class action lawsuit in the United
States District for the Northern District of Georgia, on behalf
of persons who purchased or otherwise acquired publicly traded
securities of Friedman's Inc. between January 26, 2000 and
November 17, 2003, inclusive, against the Company and:
(1) Victor M. Suglia,
(2) Bradley J. Stinn,
(3) Sterling B. Brinkley and,
(4) Douglas Anderson
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 Friedman's securities.
The complaint alleges that Defendants issued false and
misleading statements with respect to the Company's financial
results since 2000. Specifically the complaint alleges that the
Company's allowance for doubtful accounts was woefully
inadequate, that the company's credit losses were significantly
higher than its reserves and higher than the Company
represented, and that the Company failed to properly write off
uncollectable receivables.
On November 11, 2003, Friedman's stunned the market by warning
about its future performance, and the material adverse impact of
"increasing its allowance for doubtful accounts." The initial
the Company reported that allowance for doubtful accounts was
expected to be in the range of 14 percent to 17 percent of
accounts receivable. The Company also revealed it had placed
its Chief Financial Officer, Victor Suglia on administrative
leave. On this news, shares of Friedman's lost over 40% in
value on heavy volume.
On November 17, 2003, Friedman's admitted that the bad debt
allowance could exceed 17 percent and that its financial
statements for fiscal years 2000, 2001 and 2002 and the first
three quarters of fiscal 2003 will be restated and those figures
should no longer be relied upon. On this news, shares of
Friedman's were down approximately 18%.
For more information, contact Nancy Kaboolian by Mail: 212 East
39th Street, New York, New York 10016, by Phone: (212) 889-3700
or (800) 889-3701 (Toll Free), or by E-mail:
Nkaboolian@abbeygardy.com.
GILEAD SCIENCES: Charles Piven Files Securities Fraud Suit in CA
----------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. initiated a securities
class action in the United States District Court for the
Northern District of California on behalf of shareholders who
purchased, converted, exchanged or otherwise acquired the common
stock of Gilead Sciences, Inc. between July 14, 2003 and October
28, 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 Charles J. Piven, by Mail: The
World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525,
Baltimore, Maryland 21202, by Phone: 410/986-0036, or by E-mail:
hoffman@pivenlaw.com.
GILEAD SCIENCES: Cauley Geller Launches Securities Lawsuit in CA
----------------------------------------------------------------
Cauley Geller Bowman & Rudman, LLP initiated a securities class
action in the United States District Court for the Northern
District of California on behalf of purchasers of Gilead
Sciences, Inc. publicly traded securities during the period
between July 14, 2003 and October 28, 2003, inclusive, against
the Company and:
(1) John C. Martin,
(2) John F. Milligan,
(3) Mark L. Perry,
(4) Norbert W. Bischofberger,
(5) Anthony Carraciolo, and,
(6) William A. Lee
The lawsuit alleges defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market between July 14, 2003 through
October 28, 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:
(i) that Gilead was aware that its revenue was not
increasing due to sales of its drug Viread;
(ii) that Gilead was aware that Viread sales had only
increased because wholesalers bought an excessive
amount of the drug before July 27, 2003 in an attempt
to avoid the price increase scheduled for July 27,
2003;
(iii) that Gilead was aware that its wholesalers' over-buying
of Viread to avoid the price increase accounted for $33
to $37 million, not the $25 to $30 million that Gilead
originally purported; and
(iv) that Gilead was aware that the wholesaler over-buying
would decrease projected revenue in the future.
On October 28, 2003, Gilead announced that sales of Viread in
the third quarter 2003 would be less than expected due to an
inventory buildup by wholesalers. The market reacted swiftly to
this news, with the Company's stock falling 12%, or $7.46 per
share from a high of $59.46 per share on October 28, 2003 to
close at $52.00 per share on October 29, 2003.
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:
1-888-551-9944 toll free, by Fax: 1-501-312-8505, by E-mail:
info@cauleygeller.com, or visit the firm's Website:
http://www.cauleygellar.com.
NYSE SPECIALISTS: Lovell Stewart Files Securities Suit S.D. NY
----------------------------------------------------------------
The law firm of Lovell Stewart Halebian LLP initiated a class
action lawsuit in the U.S. District Court for the Southern
District of New York against LaBranche & Co., Bear Wagner
Specialists, Spear, Leeds & Kellogg, Van der Moolen Specialists
USA, and Fleet Specialist, Inc., which, as a group, execute
transactions in a significant majority of all stocks traded on
the New York Stock Exchange.
The Complaint asserts claims on behalf of all persons who
purchased or sold stocks in transactions executed by the
Specialist Defendants during the period January 1, 2000 through
December 31, 2002 inclusive. The lawsuit asserts claims under
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10b-5 promulgated by the SEC thereunder and the common
law and seeks to recover compensatory as well as punitive
damages.
According to the complaint, during the Class Period, the
Specialist Defendants allegedly took advantage of their unique
access to information regarding orders and trading in their
client stocks and their ability to determine the order in which
customer orders are executed by engaging in practices including
"trading ahead," "interpositioning," and "freezing the book" or
going into "report mode."
The complaint alleges that by "trading ahead" of customer
orders, the Specialist Defendants essentially diverted trading
profits from plaintiff and the Class to themselves. The
complaint further alleges that by engaging in
"interpositioning," the Specialist Defendants caused public
investors (including plaintiff and the Class) to incur damages
by allegedly depriving them of the sale price for their stock
that they would have realized had the Specialist Defendants
properly matched orders rather than engaging in interpositioning
in order to lock in a riskless profit.
Additionally, the complaint alleges that the Specialist
Defendants caused public investors whose orders were placed via
the electronic SuperDOT system to incur damages by engaging in a
practice known as "freezing the book," which frequently resulted
in SuperDOT orders being matched with other orders only after an
artificial freeze in trading instituted by the Specialist
Defendants. The complaint alleges that when the book was
unfrozen, investors' orders placed via SuperDOT were filled at
less favorable prices than those at which other orders were
filled.
For more information, contact Christopher Lovell, Victor E.
Stewart, or Christopher J. Gray, Esq., of Lovell Stewart
Halebian LLP, by Mail: 500 Fifth Avenue, New York, New York
10110, by Phone: 212-608-1900, or by E-mail:
classaction@lshllp.com.
PRICEMART INC.: Lasky & Rifkind Files Securities Suit in S.D. CA
----------------------------------------------------------------
The law firm of Lasky & Rifkind, Ltd. initiated a lawsuit in the
United States District Court for the Southern District of
California, on behalf of persons who purchased or otherwise
acquired publicly traded securities of PriceSmart Inc. between
December 20, 2001 and November 7, 2003, inclusive, against the
Company and:
(1) Gilbert A. Partida and,
(2) Allan C. Youngberg
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.
Specifically, the complaint alleges that the defendants'
statements were materially false and misleading as they failed
to disclose or misreprented that the company had materially
overstated its net income and earnings per share, due to its
overstating warehouse sales and that the company lacked adequate
internal controls and was therefore unable to ascertain the true
financial condition of the company.
On November 10, 2003, before the markets opened, the Company
shocked the market by announcing that it was restating its
financial results for the fiscal year 2002 and the first three
quarters of fiscal year 2003. The market reacted negatively to
the news, sending the value of the company's shares lower by 9%
to $8.34 per share.
For more information, contact Leigh Lasky, by Phone:
800-495-1868.
PRICEMART INC.: Charles Piven Lodges Securities Suit in S.D. CA
---------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. initiated a securities
class action lawsuit in the United States District Court for the
Southern District of California on behalf of shareholders who
purchased, converted, exchanged or otherwise acquired the common
stock of PriceSmart, Inc. between December 20, 2001 and November
7, 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 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.
*********
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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
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http://litigationdatasource.com/asbestos_defendant_profiles.html
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
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Editors.
Copyright 2003. All rights reserved. ISSN 1525-2272.
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