/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/040108.mbx C L A S S A C T I O N R E P O R T E R Thursday, January 8, 2004, Vol. 6, No. 5 Headlines AGRO SUN: NY Agriculture Dept Warns Agasint Sundried Tomatoes ARIBA INC.: Reaches Settlement For Securities Fraud Suit in NY ARIBA INC.: CA Court To Hear Motion To Dismiss Securities Suit BCE: Ontario Court Dismisses Two $1 Billion Shareholder Lawsuits BIOVAIL CORPORATION: Boston Firm Aims For Lead Plaintiff Status BLUE CROSS/ BLUE SHIELD: Faces Suit By Doctors' Advocacy Group BRAVO SUPERMARKET: Recalls Store-Made Chicken Salad For Listeria CAMPBELL SOUP: Regulators Warn Division over Clam Chowder Soup CAPE CRAFTSMEN: Recalls 800 Tree Candleholders For Fire Hazard CATHOLIC CHURCH: 800 Church Abuse Lawsuits Filed In California CATHOLIC CHURCH: Audit Shows Church Complying With Abuse Policy COMPUTER SCIENCES: Plaintiffs File Amended Overtime Suit in CA COSTCO WHOLESALE: Faces Two Overtime Wage Lawsuits in CA Court EPHEDRA: Bush Government Bans Sale, Warns Consumers Of Dangers FREEHOLD: Day Laborers Launch Lawsuit Over Muster Zone's Closing FRESH DEL MONTE: Faces Antitrust Suits Over Marketing, Monopoly GEMSTAR-TV GUIDE: SEC Reveals Securities Fraud Charges V. Execs IOWA: Amputee Soldier Protests Refusal of Entrance To Night Club LACTALIS USA: Recalls Brie Cheese Due To Listeria Contamination MARTHA STEWART: Trial in Securities Suit Commences Jury Search NEVADA: Washoe County Property Owners Angry Over Tax Appraisals NEW YORK: City Agrees To Pay $3 Million Over Man Shot 41 Times ONLINE POWER: CO Court Enters Final Judgment V. Former Executive PNC FINANCIAL: Shareholders Told To Wait Till Litigation Settled SUN LIFE: Disabled Father Files Suit For Deducted Child Benefits TYCO INTERNATIONAL: NY Court Allows Magazine Article as Evidence VERIZON WIRELESS: Agrees To Pay Fee Lawsuit Settlement WAL-MART: Czechs, Illegal Workers To Join Lawsuit, Says Lawyer New Securities Fraud Cases AEROSONIC CORPORATION: Goodkind Labaton Files Stock Suit in FL AMERICAN PHYSICIANS: Charles Piven Files Securities Suit in MI BIOPURE CORPORATION: Stull Stull Files Securities Suit in MA CENTRAL PARKING: Marc Henzel Lodges Securities Suit in M.D. TN DYNACQ HEALTHCARE: Brodsky & Smith Launches TX Securities Suit DYNACQ HEALTHCARE: Milberg Weiss Lodges Securities Suit in TX DYNACQ HEALTHCARE: Lasky & Rifkind Launches TX Securities Suit NASDAQ: Landskroner Grieco Commences Securities Suit in S.D. NY NETWORK ENGINE: Goodkind Labaton Launches Securities Suit in MA NETWORK ENGINES: Marc Henzel Lodges Securities Suit in MA Court PARMALAT FINANZIARIA: Charles Piven Files Securities Suit in NY PARMALAT FINANZIARIA: Marc Henzel Launches Securities Suit in NY PMA CAPITAL: Marc Henzel Lodges Securities Fraud Suit in E.D. PA QUEST SOFTWARE: Marc Henzel Commences Securities Suit In C.D. CA TITAN PHARMACEUTICALS: Marc Henzel Lodges Securities Suit in CA VAN DER MOOLEN: Marc Henzel Launches Securities Suit in S.D. NY ********* AGRO SUN: NY Agriculture Dept Warns Agasint Sundried Tomatoes ------------------------------------------------------------- New York Agriculture Commissioner Nathan L. Rudgers warned sulfite allergic consumers and asthmatics to avoid consuming "Agro Sun Brand Sundried Tomatoes" due to the presence of undeclared sulfites in the product. "Agro Sun Brand Sundried Tomatoes" are being recalled by Suhad Food Corp., 223 Dyckman Street, New York, New York 10034. The product is packaged in a 3 ounce, clear ridged, plastic container that is uncoded. It was sold in the New York City metropolitan area. Routine sampling by New York State Department of Agriculture and Markets food inspectors revealed that the product contained high levels of sulfites, which were not declared on the label. Sulfites can cause deadly reactions in asthmatics and others suffering sulfite allergies. No illnesses have been reported to date. Consumers who have purchased "Agro Sun Brand Sundried Tomatoes" should return them to the place of purchase. ARIBA INC.: Reaches Settlement For Securities Fraud Suit in NY -------------------------------------------------------------- Ariba, Inc. 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, certain of its former officers and directors and three of the underwriters of its initial public offering. The suit, filed on behalf of purchasers of the Company's common stock in the period from June 23, 1999, the date of its initial public offering, to December 6, 2000, makes certain claims under the federal securities laws, including Sections 11 and 15 of the Securities Act and Sections 10(b) and 20(a) of the Exchange Act, relating to our initial public offering. The consolidated suit is styled "In re Ariba, Inc. Securities Litigation, 01 CIV 2359." On August 9, 2001, that consolidated action was further consolidated before a single judge with cases brought against additional issuers (who numbered in excess of 300) and their underwriters that made similar allegations regarding the initial public offerings of those issuers. The latter consolidation was for purposes of pretrial motions and discovery only. On February 14, 2002, the parties signed and filed a stipulation dismissing the consolidated action without prejudice against the Company and certain individual officers and directors, which the Court approved and entered as an order on March 1, 2002. On April 19, 2002, the plaintiffs filed an amended complaint in which they dropped their claims against the Company and the individual officers and directors under Sections 11 and 15 of the Securities Act, but elected to proceed with their claims against such defendants under Sections 10(b) and 20(a) of the Exchange Act. The amended complaint alleges that the prospectus pursuant to which shares of common stock were sold in the Company's initial public offering, which was incorporated in a registration statement filed with the SEC, contained certain false and misleading statements or omissions regarding the practices of our underwriters with respect to their allocation to their customers of shares of common stock in the Company's initial public offering and their receipt of commissions from those customers related to such allocations. The complaint further alleges that the underwriters provided positive analyst coverage of Ariba after the initial public offering, which had the effect of manipulating the market for Company stock. Plaintiffs contend that such statements and omissions from the prospectus and the alleged market manipulation by the underwriters through the use of analysts caused our post-initial public offering stock price to be artificially inflated. The actions seek compensatory damages in unspecified amounts as well as other relief. On July 15, 2002, Ariba and the officer and director defendants, along with other issuers and their related officer and director defendants, filed a joint motion to dismiss based on common issues. On November 18, 2002, during the pendency of the motion to dismiss, the Court entered as an order a stipulation by which all of the individual defendants were dismissed from the case without prejudice in return for executing a tolling agreement. On February 19, 2003, the Court rendered its decision on the motion to dismiss, granting a dismissal of the remaining Section 10(b) claim against the Company without prejudice. Plaintiffs have indicated that they intend to file an amended complaint. On June 24, 2003, a Special Litigation Committee of the Board of Directors of the Company approved a Memorandum of Understanding (MOU) reflecting a settlement in which the plaintiffs agreed to dismiss the case against Ariba with prejudice in return for the assignment by Ariba of claims that Ariba might have against its underwriters. No payment to the plaintiffs by the Company is required under the MOU. There can be no assurance that the MOU will result in a formal settlement or that the Court will approve the settlement that the MOU sets forth. ARIBA INC.: CA Court To Hear Motion To Dismiss Securities Suit -------------------------------------------------------------- The United States District Court for the Northern District of California will hear Ariba, Inc.'s motion to dismiss the consolidated securities class action filed against it and certain of its current and former officers and directors, on behalf of a class of purchasers of the Company's common stock in the period from January 11, 2000 to January 15, 2003. Several suits were initially filed, bringing claims under the federal securities laws, specifically Sections 10(b) and 20(a) of the Exchange Act, relating to the Company's announcement that it would restate certain of its consolidated financial statements, and, in the case of two complaints, relating to its acquisition activity and related accounting. Specifically, these actions alleged that certain of the Company's prior consolidated financial statements contained false and misleading statements or omissions relating to its failure to properly recognize expenses and other financial items, as reflected in the then proposed restatement. Plaintiffs contend that such statements or omissions caused the stock price to be artificially inflated. Plaintiffs seek compensatory damages as well as other relief. In a series of orders issued by the Court in February and March 2003, these cases were deemed related to each other and assigned to a single judge sitting in San Jose. On July 11, 2003, following briefing and a hearing on related motions, the Court entered two orders that together consolidated the related cases for all purposes into a single action captioned "In re Ariba, Inc. Securities Litigation, Case No. C-03-00277 JF," appointed a lead plaintiff, and approved the lead plaintiff's selection of counsel. On September 15, 2003, the lead plaintiff filed a Consolidated Amended Complaint, which restates the allegations and claims described above and adds a claim pursuant to Section 14(a) of the Exchange Act, based on the allegations and claims described above and adds a claim pursuant to Section 14(a) of the Exchange Act, based on the allegation that the Company failed to disclose certain payments and executive compensation items in its January 24, 2002 Proxy Statement. On November 17, 2003, defendants filed a motion to dismiss the action for failure to state a claim, which is currently scheduled for Court hearing on March 29, 2004. This case is still in its early stages. BCE: Ontario Court Dismisses Two $1 Billion Shareholder Lawsuits ---------------------------------------------------------------- Telecom giant BCE on Tuesday said that an Ontario Superior Court has dismissed two $1-billion lawsuits filed by two Bell Canada International shareholders against parent firm BCE Inc. and BCI, the Associated Press reports. "The court dismissed both lawsuits on the grounds that the actions abused the process of the court and disclosed no reasonable cause of action against BCE or BCI, and ordered that neither plaintiff may amend his statement of claim to again bring these suits before the court," BCE said in a release. Wilfred Shaw and Cameron Gillespie had filed suit over the issuance of BCI common shares on February 15, 2002, as part of a recapitalization plan and BCI's plan of arrangement, which was approved by the court on July 17, 2002. The shares eventually collapsed after the publicly traded subsidiary of BCE, which invested heavily in the Brazilian and broader South American telecom market, failed to recover and went out of business. In May 2003, a court dismissed an earlier request by Mr. Shaw to have a similar lawsuit certified as a class action. BCI has sold most of its assets and plans to liquidate the rest and resolve outstanding claims under court supervision. BCE, Canada's largest communications company, owns Bell Canada and controls Bell Globemedia, owner of CTV, the Globe and Mail newspaper and Internet portal Sympatico-Lycos. BIOVAIL CORPORATION: Boston Firm Aims For Lead Plaintiff Status --------------------------------------------------------------- Boston law firm, Scott + Scott, that launched a class action lawsuit against Canadian drug maker Biovail Corporation in November says former and current investors have a week left to contact the firm and possibly gain "lead plaintiff" status, the Associated Press news/ CP reports. Lead plaintiffs in a class action - who represent other shareholders claiming damages - are usually chosen on the basis of the size of their investment in the defendant company, Neil Rothstein, a partner with law firm, told AP. Other current or former Biovail shareholders during the 2002-2003 "class period" will automatically become regular plaintiffs, he added. The Scott + Scott suit, filed in U.S. district court for southern New York, claims that Biovail made false and misleading statements between May 17, 2002, and October 30, 2003, that artificially inflated the price of its common shares. The stock traded as high as $67.75 Cdn on the Toronto Stock Exchange during the period. Biovail stock (TSX:BVF) traded Tuesday at $28.86. up 21 cents, on the TSX. The Mississauga, Ontario-based company, which is also under scrutiny by U.S. authorities, has said class action suits filed by several U.S. firms on behalf of shareholders are frivolous and without merit. BLUE CROSS/ BLUE SHIELD: Faces Suit By Doctors' Advocacy Group -------------------------------------------------------------- North Carolina's largest advocacy group for physicians has sued Blue Cross and Blue Shield of North Carolina, charging that the company harmed doctors with unfair business practices that deny and delay payments for medical care, Knight-Ridder / Tribune Business News reports. "We want Blue Cross to start playing by the rules and start treating doctors fairly," Robert Seligson, executive director of the N.C. Medical Society, which represents 11,000 physicians in the state, told the Tribune Business News. The lawsuit, which the medical society filed in Wake County Superior Court on Monday afternoon, is similar to national legal challenges against Aetna U.S. Healthcare, Cigna Healthcare and other national for-profit insurers. Last March, Aetna agreed to pay $170 million to settle a class action by 700,000 doctors who alleged unfair business practices. Cigna agreed in September to spend $540 million to correct what physicians said was a pattern of systematically denying and delaying payments. The state medical society has retained the New York law firm of Milberg Weiss, which participated in the national suits. The group isn't seeking financial damages for its members from Chapel Hill-based Blue Cross. The goal, Mr. Seligson said, is to quickly secure meaningful changes in how the company processes and pays claims submitted by physicians. Blue Cross spokesman Mark Stinneford told the Tribune Business News the company had been working with the medical society to address its concerns when a national lawsuit filed in August against Blue Cross plans across the country changed the playing field. To protect its position in the national case, Blue Cross told the medical society it could continue only if talks were kept confidential, an offer the group declined. "We are the one insurer that has been willing to talk with physicians about these issues," Mr. Stinneford said. In its 30-page legal complaint, the medical society contends that Blue Cross has withheld "millions of dollars of lawful reimbursement" from physicians in various ways, including: (1) Using software programs to automatically deny payment for medical care or substitute a lower-paid procedure for the billed care. (2) Failing to make payments within 30 days after a claim is received, as required by state law, and requesting "redundant and excessive" medical records in order to delay such payments. (3) Refusing to pay for care that was pre-authorized by Blue Cross via telephone or computer. (4) Demanding that physicians refund "overpayments" of claims previously paid, even when the overpayment was a result of an error by Blue Cross. If the physician refuses to pay, refunds are automatically deducted from payments for current claims. In some cases, Blue Cross has asked for refunds, often for tens of thousands of dollars, as long as seven years after the overpayment was made, according to the medical society. "If you've got a number of claims (where a refund is demanded), it would be an unpleasant surprise in terms of cash flow," Dr. Lawrence M. Cutchin, a Tarboro internist who is the medical society's president, told the Tribune Business News. The medical society has been pressing Blue Cross to change its ways for years. In October 2002, during a hearing on Blue Cross's now-defunct attempt to become a for-profit company, Seligson publicly challenged the company's Chief Executive, Robert J. Greczyn, to address physicians' concerns. Medical society staff met several times with Blue Cross representatives last year and produced a preliminary framework for improvement, but it never went beyond the draft stage. "Just getting that little bit done took over a year, and there just wasn't enough there," said Carol Scheele, an associate general counsel for the medical society. Mr. Seligson said the medical society felt obligated to press the issue in the court because its individual members are no match for an insurer as large and powerful as Blue Cross, the state's largest carrier with about 2.8 million members. Notice of the lawsuit went out to medical society members via e-mail late Monday. "For a lot of our members, Blue Cross is the biggest source of revenue," Mr. Seligson said. "Doctors are very cautious about raising too much Cain for that reason." BRAVO SUPERMARKET: Recalls Store-Made Chicken Salad For Listeria ---------------------------------------------------------------- Bravo Supermarket, of 2061 Bartow Avenue, Bronx, NY 10475 urged consumers not to consume store-made chicken salad sold from the deli due to the potential of it being contaminated with Listeria monocytogenes, Bravo Supermarket is voluntarily recalling the products, which were sold in their 2061 Bartow Avenue, Bronx, NY 10475 store. The problem was discovered as a result of routine sampling December 2nd by New York State Department of Agriculture and Markets food inspectors. Production of the chicken salad has been suspended while the company investigates the source of the problem. Listeria is a common organism found in nature. It can cause serious complications for pregnant women, including stillbirth. Other problems can manifest in people with compromised immune systems and the elderly. No illnesses have been reported to date with this problem. Consumers who have purchased chicken salad from this establishment should discard it. Consumers with questions may contact Ramon Vargas at Bravo Supermarket 718-320-0930. CAMPBELL SOUP: Regulators Warn Division over Clam Chowder Soup -------------------------------------------------------------- The United States Food and Drug Administration (FDA) warned a Campbell Soup Co.'s StockPot division that its refrigerated clam chowder soup was prepared in unsanitary conditions that could pose a health hazard for consumers, Reuters reports. The FDA inspected the StockPot plant in Woodinville, Washington in September, and discovered "serious deviations" from seafood safety regulations, like inadequate temperature and cooling time to prevent the dangerous botulinium toxin. The FDA requires Campbell's StockPot unit to implement new safety and testing standards to ensure that the refrigerated, ready-to-use clam chowder soup is safe. The Company responded to the FDA letter in October, and the agency in its December letter recommended ways to implement corrective actions. "We may take further action if you do not promptly correct these violations," said FDA inspectors in the letter, Reuters reports. "For instance, we may take further action to seize your product(s) and/or enjoin your firm from operating." The company has 15 days to respond. Campbell officials were not immediately available to comment on Tuesday afternoon, Reuters stated. CAPE CRAFTSMEN: Recalls 800 Tree Candleholders For Fire Hazard -------------------------------------------------------------- Cape Craftsman is cooperating with the U.S. Consumer Product Safety Commission by voluntarily recalling 800 Mica Tree Candleholders. Flames from the tealight candle can ignite the candleholder, posing a fire and burn hazard. The company received one report of the rectangle-shaped candleholder igniting after a consumer lit the tealight candle. No injuries have been reported. The recalled copper and mica candleholders were sold in rectangular and square shapes. The 8.5-inch tall, square-shaped candleholder has a cut-out of an evergreen tree on each side. The 10-inch tall, rectangular-shaped candleholder has cut-outs of an evergreen tree, a star and moon on each side. The items were sold at Coldwater Creek stores nationwide from October 2003 through November 2003 for about $20. For more information, consumers should contact Customer Service toll-free at (800) 262-0040 between 6 a.m. and 3 a.m. ET or visit the firm's Web site at www.coldwatercreek.com. CATHOLIC CHURCH: 800 Church Abuse Lawsuits Filed In California -------------------------------------------------------------- According to lawyers for the plaintiffs, about 800 people across California took advantage of a 12-month window last year to file molestation lawsuits against the Roman Catholic Church, the Associated Press reports. Negotiations over the claims, they said, could yield one of the largest clergy abuse settlements in the nation's history. The initial estimate came as the U.S. Conference of Catholic Bishops prepared Tuesday to announce how well its 195 dioceses have followed the church's 2-year-old policy created in response to the clergy sex abuse scandal. About 500 of the cases are against the Archdiocese of Los Angeles, the nation's largest, while another 175 are spread among the dioceses of Orange, San Diego and San Bernardino, attorney Ray Boucher, whose office is handling filings for 320 plaintiffs in Southern California, told AP. Mr. Boucher has said a settlement with the Archdiocese of Los Angeles could surpass the Archdiocese of Boston's $85 million settlement with alleged victims, currently the largest in the country. In Northern California, about another 125 cases were filed. In some cases, the dioceses aren't yet sure of the total number of lawsuits they face. At least one diocese was still being served with new lawsuits Monday, five days after the official filing deadline of December 31. The Diocese of Monterey sent paralegals to several counties Monday to try to tally the lawsuits against it, a spokesman told AP. The Archdiocese of Los Angeles was still sorting through its cases, officials said. "But we have a great desire to deal with these claims in mediation and try to reach a settlement for all claims involved," Tod Tamberg, spokesman for the archdiocese, told AP. The flood of litigation is the result of a California law that took effect January 1, 2003, lifting for one year the statute of limitations for molestation lawsuits. Previously, alleged victims could sue only until their 26th birthday or three years after a time they could show they discovered they had emotional problems linked to molestation. Mr. Tamberg told AP many of the claims of sexual molestation brought against the church during the past year are "exaggerated, and some are demonstrably false." CATHOLIC CHURCH: Audit Shows Church Complying With Abuse Policy --------------------------------------------------------------- According to a church audit released Tuesday, nearly all of the nation's Roman Catholic bishops are carrying out a new mandatory policy they adopted to prevent sex abuse by priests, the Associated Press reports. However, critics said the study was fundamentally flawed. The review found 90 percent of the 195 U.S. dioceses were fully complying with the plan, which dictates how guilty priests should be punished and requires bishops to take steps to protect children. Among those considered out of compliance are the archdioceses of New York; Anchorage, Alaska; and Omaha, Neb. The prelates commissioned the report from the Gavin Group of Boston, a firm led by a former FBI official, and the investigation was overseen by Kathleen McChesney, a former top FBI agent and head of the bishops' watchdog Office of Child and Youth Protection. Victim advocates said bishops had too much control of how the audit was conducted, so it should be viewed skeptically. The bishops recommended whom the auditors should interview. According to the report, auditors were unable to view personnel files that would verify whether bishops were complying with the policy's ban on transferring offenders from one diocese to another. "This is the bishops grading themselves based on a test they devised," Peter Isely, of the Midwest chapter of the Survivors Network of those Abused by Priests, told AP. "I don't think anyone is going to be too surprised that after years of chronic failure they are now going to tell us they have miraculously become star performers." Ms. McChesney defended the audit, saying investigators spoke with people outside the church. She told AP she was confident the reports were accurate. COMPUTER SCIENCES: Plaintiffs File Amended Overtime Suit in CA -------------------------------------------------------------- Computer Sciences Corporation faces an amended overtime class action filed in the United States District Court in Los Angeles, California on behalf of current and former technical support workers who install and/or maintain computer software and hardware for the global IT conglomerate. Law firms Lieff, Cabraser, Heimann & Bernstein, LLP, Lewis & Feinberg, PC, and Rudy, Exelrod & Zieff, LLP filed the suit on behalf of current and former CSC systems administrators and technical staff from California, Connecticut, Delaware, Maine, Massachusetts, Michigan, North Carolina, and Washington. The suit, identified by Business Week (December 8, 2003) as a lawsuit that "could change the tech industry," charges that the company has a common practice of refusing to pay overtime compensation to its technical support workers in violation of the Federal Fair Labor Standards Act (FLSA) and state wage and hour laws. The lawsuit, entitled Giannetto, et al. v. Computer Sciences Corporation, No. CV 03-8201, is before Federal Judge Terry J. Hatter, Jr., of the United States District Court in Los Angeles, California. "Following the filing of the initial complaint against CSC, plaintiffs' counsel have been contacted by CSC workers across the nation reporting that they too were regularly required to work more than forty hours per week, including hours on weeknights and weekends without overtime pay," stated Lieff Cabraser partner James M. Finberg in a press release. "The amended complaint sets forth claims of many of these workers under the laws of California, Connecticut, Delaware, Maine, Massachusetts, Michigan, North Carolina, and Washington in addition to the FLSA." The lawsuit charges that CSC, a Fortune 500 company, unlawfully characterizes its technical support workers as 'exempt' in order to deprive them of overtime pay. CSC employs over 90,000 employees, and the proposed class includes thousands of CSC employees throughout America. "You cannot avoid paying overtime wages by providing a fancy sounding title to workers who are entitled to overtime pay under the law," stated Steven G. Zieff, a partner with Rudy, Exelrod & Zieff. "The lawsuit seeks to affirm the principle that computer installation and maintenance employees, including IT staff, are entitled to protection under federal and state overtime pay laws." "Workers are entitled to overtime pay unless they fall under one of the specific legal exemptions to paying overtime, such as computer professionals who are primarily engaged in software development," explained Lewis & Feinberg principal Todd F. Jackson. "The CSC workers in the lawsuit are responsible for installing software and maintaining computer networks, not developing new software. They do not qualify for the software development exemption, or any other exemption, under wage and hour laws." Members of the media can obtain a copy of the amended complaint by contacting Monica Barsetti of Lieff Cabraser at 415-956-1000 or by email at mbarsetti@lchb.com. Current and former technical support workers who wish to report their work experiences should visit the website: http://www.lieffcabraser.com/cscwagessuit.htm to learn more about the lawsuit. The webpage allows witnesses and claimants to contact plaintiffs' counsel. Fopr more details, contact James M. Finberg of LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP by Mail: 275 Battery Street, 30th Floor San Francisco, CA 94111 by Phone: (415) 956-1000 by Fax: (415) 956-1008; or contact Todd F. Jackson of LEWIS & FEINBERG, PC by Mail: 436 14th Street, Suite 1505, Oakland, CA 94612 by Phone: (510) 839-6824 by Fax: (510) 839-7839; or contact Steven G. Zieff of RUDY, EXELROD & ZIEFF, LLP by Mail: 351 California Street, Suite 700, San Francisco, CA 94104 by Phone: (415) 434-9800 or (800) 869-0165 or by Fax: (415) 434-0513 COSTCO WHOLESALE: Faces Two Overtime Wage Lawsuits in CA Court -------------------------------------------------------------- Costco Wholesale Corporation faces two class actions filed on behalf of certain present and former Costco managers in California, in which plaintiffs allege that they have not been properly compensated for overtime work. The suits are styled: (1) "Scott M. Williams v. Costco Wholesale Corporation," United States District Court (San Diego), Case No. 02- CV-2003 NAJ (JFS); Superior Court for the County of San Diego, Case No. GIC 792559; (2) Greg Randall v. Costco Wholesale Corporation, Superior Court for the County of Los Angeles, Case No. BC 296369 Presently, claims are made under various provisions of the California Labor Code and the California Business and Professions Code. Plaintiffs seek restitution/disgorgement, compensatory damages, various statutory penalties, liquidated damages, punitive, treble and exemplary damages, and attorneys' fees. In neither case has the Court determined whether the action should proceed as a class action or, if so, the definition of the class. The Company will fight the allegations and does not believe that any claim, proceeding or litigation, either alone or in the aggregate, will have a material adverse effect on the Company's financial position or results of its operations. EPHEDRA: Bush Government Bans Sale, Warns Consumers Of Dangers -------------------------------------------------------------- The Bush administration is banning the sale of ephedra early next year, and has urged consumers to immediately stop using the herbal stimulant, which has been linked to 155 deaths and dozens of heart attacks and strokes, Asbury Park Press/ AP news reports. Although ephedra, used in some weight-loss and body-building products, has been controversial for some time, it captured public attention when it was blamed in part for the death of 23- year-old Baltimore Orioles pitcher Steve Bechler in spring training. A lawyer for Wall-based Nutraquest Inc., which made the diet supplement Mr. Bechler had been using, said the product was safe if used properly. "It has been our position all along that the product Xenadrine RFA was safe if taken as directed by healthy individuals," Richard H. Catalina Jr. told AP. He declined to comment on the ephedra ban. Federal Health and Human Services Secretary Tommy Thompson told AP people should stop using ephedra products immediately. Ephedra once was hugely popular for weight loss and body building, but it can cause life-threatening side effects even in seemingly healthy people who use the recommended doses, because the amphetamine-like stimulant speeds heart rate and constricts blood vessels. The ban isn't immediate because federal rules require certain paperwork steps that mean the earliest it could take effect would be March. However, the FDA wrote 62 current and former manufacturers yesterday that "we intend to shut you down," said Commissioner Mark McClellan. Nutraquest, formerly known as Cytodyne Technologies, is in Chapter 11 bankruptcy reorganization proceedings. It stopped selling any products containing ephedra early this year because they were no longer profitable, Mr. Catalina said. Xenadrine RFA-1 was the top-selling ephedra product in the country in recent years, the company said. In May, Nutraquest sold the licensing and marketing rights to all Cytodyne products to a company in Hicksville, N.Y., that had served as the contract manufacturer for the products for years. That Hicksville-based company sells an ephedra-free product called Xenadrine EFX. Mr. Catalina said a number of wrongful-death and personal-injury lawsuits against Nutraquest, and a lawsuit in which Nutraquest is blaming the Orioles for Mr. Bechler's death, are being consolidated in U.S. Bankruptcy Court in Trenton. The company was ordered in May to pay $12.5 million to California consumers when a judge in a class action ruled that the company misled consumers by making exaggerated claims about Xenadrine RFA-1's safety and effectiveness. Nutraquest is appealing the ruling. "It's about time," Ed O'Toole, co-owner of the Vitamin Works at Monmouth Mall in Eatontown, who has not sold any products containing ephedra since the store opened in 1995, told AP. "The federal government could have and should have banned ephedra eight or nine years ago when it became such a popular over-the-counter product." The medical community has known about the harmful side effects of ephedrine, the active ingredient in ephedra, for at least 20 years, Mr. O'Toole said. "The next step should be to crack on the so-called ephedra-free products that contain caffeine and other dangerous methylxanthine products," he said. "Because it's long been known that the use of stimulants for people with problems with energy or weight actually leads to more harm than good." The federal government's ban on ephedra is largely symbolic because most big manufacturers stopped making ephedra a year ago, O'Toole said. What has been sold since then has been the inventory that was produced previously, he said. Sales already have plummeted because of publicity about the herb's dangers, which peaked after Mr. Bechler's death in February. The Nutrition Business Journal estimates $500 million worth of ephedra was sold this year, down from $1.3 billion in 2002. Mr. O'Toole said he knew of no retailer in Monmouth and Ocean counties that continues to sell ephedra-based products. Consumers who continue to want the product buy it online, he said. "We haven't sold any (ephedra products) in about a year," said Irwin Fischer, a pharmacist and owner of Steven Nutrition Center and Steven Drugs in West Long Branch. Mr. Fischer said he stopped because of "bad publicity." He said ephedra products would not be dangerous if they were used as they are supposed to be used. "People abuse things, though," he added. KS Fitness Center in Dover Township does not sell ephedra products or any other supplement, said manager John Messina, who declined to comment further. "We are pleased but not surprised that ephedra has become the first supplement ever to be banned by the federal government," David Meiselman, the lawyer for Kiley Bechler, the widow of the Oriole pitcher, in a prepared statement, told AP. "...Now we must go after the pushers of these products that poison and kill us." Bechler is suing Nutraquest for $600 million. The baseball player's mother, Pat Bechler, welcomed the ban. "It won't bring Steve back, but it will help and protect other people," she said. Her husband, Ernie, recently urged Congress to pass a ban, saying, "Please don't let my son die in vain." "It's a dead product, and unfortunately it has become a dead product over the backs of a lot of dead people when the FDA could have acted before," Dr. Sidney Wolfe of the consumer advocacy group Public Citizen, told AP. FREEHOLD: Day Laborers Launch Lawsuit Over Muster Zone's Closing ---------------------------------------------------------------- The Puerto Rican Legal Defense and Education Fund filed a class action, in U.S. District Court in Trenton, New Jersey against Freehold for embarking on a "deliberate and coordinated campaign to harass Latino day workers" who gather at a borough "muster zone" to seek employment, the Asbury Park Press reports. The lawsuit was filed on behalf of The Committee of Workers for Progress and Social Welfare, a newly formed group made up of local day laborers; Monmouth County Residents for Immigrant Rights; the National Day Laborers Organizing Network; and six of the workers who live in the borough. The lawsuit alleges that the borough is depriving scores of workers of their constitutional and civil rights by closing down the Throckmorton Street gathering site, which was established by the borough about five years ago. It contends 50 to 100 laborers use the site at any one time, but Mayor Michael Wilson said there could be several hundred people assembled there. The Borough Council decided in the fall to close the muster zone as of Jan. 1 because the barren tract of land in front of the Conrail tracks had become what some officials called a magnet for illegal employment. The council also cited an increase in nuisance complaints in the area, such as loitering, littering and excessive horn honking; a spike in the student population because the zone had brought to the town immigrants who enrolled their children in school; and a burden on municipal services. Second Baptist Church, near the zone, has said it would open a hiring hall for day laborers on its property starting tomorrow, and church officials were to meet today to finalize those plans. Cesar A. Perales, president and general counsel for the Manhattan-based legal defense fund, said the U.S. Constitution applies not only to citizens but anyone who sets foot on U.S. soil. Therefore the workers have a First Amendment right to gather and discuss employment and a Fourteenth Amendment right to due process under the law, he said. "It's crucial that the harassment of the plaintiffs has to stop," Mr. Perales said during a news conference on the federal courthouse steps. The lawsuit cites several examples of what it contends are harassment and intimidation by borough officials, police and code enforcement officers. "In short, the borough is waging its own war on terror on these Latino day laborers," according to court papers. Mayor Michael Wilson, named as a defendant in the lawsuit, was not available for comment yesterday, the Ashbury Park Press reports. Borough officials have said repeatedly that closing the muster zone is not discriminatory. They have been criticized at recent council meetings by immigrant-rights supporters for shutting down the site, and defended by residents who say the borough has to control the influx of illegal immigrants because they are overwhelming borough services without paying a fair share of taxes. The borough distributed fliers stating that anyone who uses the muster zone in the new year will face a defiant trespass charge, which could result in penalties of up to a $500 fine and 30 days in jail. Violators will be reported to the federal Department of Homeland Security, the flier adds. The notices also were distributed to Spanish-language publications in the area and in locations in Mexico where immigrants have come from previously. The suit questions the constitutionality of a loitering ordinance that allows police officers to write summonses that list no charge but "discretion of a police officer." Two of the plaintiffs were issued these summonses on September 6. Adalberto Cruz and his cousin, Everado Cruz, had just walked out of a Broad Street convenience store with some coffee and were headed to the muster zone when an officer stopped them and asked for identification. They were frisked and each given the $150 summons, according to court papers. "We believe this is just part of the harassment that has been going on for the past couple of years," Mr. Perales said. Police Capt. Michael DiAiso said the summons is often used in court to allow a disorderly person's offense to be downgraded so that the defendant does not get a criminal record but still pays a fine. Mr. DiAiso denied that police harass members of the Latino community, which is estimated to comprise more than 4,000 of the borough's nearly 11,000 residents. The lawsuit contends "the borough's code enforcement officers have ``raided' private homes in these Latino neighborhoods late at night to evict alleged ``unauthorized' guests." Henry Stryker III, borough director of code enforcement, said that his office does respond to complaints of illegal occupancy and other violations - a newly established complaint hot line has produced about 25 calls so far - but that his team does not have the power to evict people. Mr. Stryker said the borough created a quality-of-life enforcement team in July 2002. It consists of a code enforcement officer and a special police officer who make inspections during evening hours, usually between 5 and 9:30 p.m. To date, the officers have written summonses to landlords for approximately 50 overcrowding violations. Alejandro Abarca, 28, of Freehold has been frequenting the muster zone for the past eight months. He has worked for landscapers, contractors and house painters. This week he is working at a car wash, even though he is a trained laboratory technician. Mr. Abarca got nervous when he learned that the borough was closing the muster zone. "It's a real disaster," he said, noting that he sends money to the wife and infant son he left behind in Mexico. "If I cannot be there waiting for a job, how can I earn money?" Mr. Abarca downplayed the borough's rationale for shutting down the site and said the lawsuit is a way to call attention to the plight of day laborers who rely on the zone so passing contractors, landscapers and farmers can pick them up. "The borough's actions are unjust and directed against a special group," he said. Mr. Abarca, a member of The Committee of Workers for Progress and Social Welfare, joined members of his group and the other immigrant-rights activists at the news conference. He said he is relieved that Second Baptist has agreed to operate a temporary hiring hall from 6 to 11 a.m. Monday through Saturday. He is grateful, but the hours are not enough, he said, noting that he sometimes gets picked up for jobs in the early afternoon. "It's going to help, but it's not the solution," he said. FRESH DEL MONTE: Faces Antitrust Suits Over Marketing, Monopoly --------------------------------------------------------------- Fresh Del Monte Produce Inc. said in a press release that it will fight two antitrust lawsuits alleging the produce company monopolized, or tried to monopolize, the market for extra-sweet pineapples, Dow Jones Business News reports. Fresh Del Monte said the suits, filed in U.S. District Courts in New York and Massachusetts, were brought by a wholesale purchaser. The suits seek class-action status. Company representatives weren't immediately available late Tuesday to identify the wholesale purchaser, Dow Jones reports. Fresh Del Monte also said all aspects of its production and marketing of the Del Monte Gold Extra Sweet pineapple were proper and in full compliance with the U.S. antitrust laws, and that the allegations in the complaints are entirely without merit. According to an October report in The Wall Street Journal, Dole Food Co. (DOL), Chiquita Brands International Inc. (CQB) and others are planting thousands of acres of competing pineapples in Central America. The Journal said Fresh Del Monte controls 70% of the fresh, whole pineapple business in the U.S., and the worldwide market for the fruit is valued at more than $1 billion a year. It also noted that Fresh Del Monte, which had sales of $2.09 billion in 2002, holds a patent on the Gold pineapple. GEMSTAR-TV GUIDE: SEC Reveals Securities Fraud Charges V. Execs --------------------------------------------------------------- The Securities and Exchange Commission revealed the details of the securities fraud charges against three former senior executives of Gemstar-TV Guide International, Inc. - its former co-president, its former general counsel, and the former chief financial officer of its wholly owned subsidiary, TV Guide, Inc. The complaint charges that these executives participated in Gemstar's widespread and complex scheme to inflate its licensing and advertising revenue and to mislead investors about the company's true financial performance. The SEC's action, filed in U.S. District Court in Los Angeles, California, amends the Commission's complaint filed against Gemstar's former chief executive officer, Henry C. Yuen, and former chief financial officer, Elsie M. Leung, on June 19, 2003. The complaint seeks permanent injunctions, civil money penalties, disgorgement of ill-gotten gains (including salaries, bonuses and any proceeds from the sale of stock during the fraud), and bars from service as an officer or director of a public company. The SEC's new charges name these defendants: (1) Peter C. Boylan, age 39, of Tulsa, Oklahoma. From July 2000 to April 1, 2002, Mr. Boylan was a co-president, co-chief operating officer, and member of the board of directors of Gemstar, and co-chairman, chief executive officer, and co-president of Gemstar's wholly owned subsidiary, TV Guide, Inc.; (2) Jonathan B. Orlick, age 46, of Chatsworth, California. During the relevant period, Mr. Orlick served as general counsel, executive vice president, and a member of the board of directors of Gemstar. He is a member of the Washington, D.C. and Florida bars; (3) Craig Waggy, age 44, of Tulsa, Oklahoma. Mr. Waggy was the chief financial officer of TV Guide from September 1997 to May 2002. Mr. Waggy holds a master's degree in accounting and was employed at a major accounting firm for approximately 13 years. Gemstar is a Los Angeles-based media and technology company that, among other things, publishes TV Guide magazine and develops, licenses, and markets an interactive program guide (IPG) for televisions that enables consumers to navigate through and select television programs. During the relevant period, Gemstar generated revenues from the IPG by licensing the technology to third parties and selling advertising on the IPG. In statements to securities analysts and the investing public, Gemstar repeatedly touted the IPG technology and IPG advertising revenues as the company's future and as the "value driver" of the company's stock, and downplayed expected declines in revenue from TV Guide magazine. The SEC's amended complaint alleges that, from June 1999 through September 2002, Gemstar overstated its total revenues by at least $248 million to meet its ambitious projections for revenue growth from IPG licensing and advertising. As described in the SEC's amended complaint, Gemstar manipulated its financial results through the following schemes. (1) Improperly reporting IPG licensing and advertising revenue from expired, disputed, or non-existent agreements; (2) Improperly reporting IPG advertising revenue from related transactions as if they were unrelated transactions. Some of the related transactions involved either "round-trip" transactions in which Gemstar paid money to a third party and then received it back as purported IPG advertising revenue or non- monetary transactions in which Gemstar used IPG advertising to acquire other advertising or assets; (3) Improperly reporting revenues switched from its media and licensing business sectors to its IPG advertising sector. Gemstar switched the revenue by structuring transactions unrelated to IPG advertising so that all or a portion of the amount to be paid to Gemstar was nominally and artificially designated as the purchase of IPG advertising; (4) Improperly reporting IPG advertising revenue from TV Guide when Gemstar had not run the advertising; (5) Improperly reporting IPG licensing revenue by recognizing the revenue from an eight-year licensing contract over twelve months. The amended complaint alleges that Mr. Boylan participated in Gemstar's fraudulent reporting of transactions relating to IPG advertising. The amended complaint alleges that Mr. Boylan structured two transactions unrelated to IPG advertising so that a portion of the amount to be paid to Gemstar was nominally and artificially allocated to the sale of IPG advertising. The amended complaint further alleges that in press releases, conference calls with securities analysts, and annual reports, Mr. Boylan omitted to disclose material information regarding the transactions. The amended complaint also alleges that Mr. Orlick participated in Gemstar's fraudulent recording and disclosure of certain IPG licensing and advertising revenue. The amended complaint alleges that Mr. Orlick knew, but omitted to disclose, that Gemstar was improperly recognizing and reporting material amounts of licensing revenue from two companies. The amended complaint also alleges that Mr. Orlick participated in Gemstar's fraudulent recognition of this licensing revenue by repeatedly signing false management representation letters to Gemstar's auditors regarding the status of negotiations with one of the companies. Mr. Orlick failed to disclose material information regarding certain of Gemstar's IPG revenue. The amended complaint alleges that Mr. Waggy participated in Gemstar's fraudulent recognition and disclosure of certain IPG advertising revenue. The amended complaint alleges that Mr. Waggy participated in Gemstar's fraudulent recognition of IPG advertising revenue from TV Guide for advertising that did not run, from a third party that did not have the financial ability to pay for the advertising, and from an advertising barter transaction. Mr. Waggy also omitted to disclose material information regarding certain of Gemstar's IPG revenue. The amended complaint further alleges that Mr. Waggy participated in Gemstar's fraudulent disclosure by preparing annual and quarterly reports that omitted to disclose that certain IPG advertising revenue was improperly recognized and misrepresented that certain IPG advertising was unrelated to Gemstar's other transactions with the advertiser. The SEC's amended complaint charges Mr. Boylan, Mr. Orlick, and Mr. Waggy with securities fraud, falsifying Gemstar's books and records, and aiding and abetting Gemstar's reporting and record- keeping violations of the federal securities laws. The amended complaint also charges Mr. Orlick with lying to Gemstar's auditors. Previously, the U.S. District Court in Los Angeles granted the SEC's application for an order requiring Gemstar to escrow any extraordinary payments to any of its directors, officers, partners, controlling persons, agents, or employees pursuant to Section 1103 of the Sarbanes-Oxley Act of 2002. The Court's order placed in escrow, subject to court supervision, approximately $37.64 million in cash payments that Gemstar had previously agreed to pay to Mr. Yuen and Mr. Leung. The Commission's investigation into the conduct of others is continuing. The suit is styled "SEC v. Henry C. Yuen, et al., Case No. CV 03-4376 NM (MANx)." IOWA: Amputee Soldier Protests Refusal of Entrance To Night Club ---------------------------------------------------------------- Abby Jackson, wife of Spc. Robert "B.J." Jackson, 22, who lost his legs in an explosion last August while serving with the Iowa Army National Guard in Iraq, says her husband was denied access to an upscale nightclub in Clive last week because his shoes weren't fancy enough, The Des Moines Register reports. "Both of us told (an employee) that those were the only shoes he can wear with his prosthetic legs," Abby Jackson told the Register. "I even told them he lost them in Iraq." However, Tom Baldwin, owner of Crush, says the couple did not explain to his bouncers that Mr. Jackson has to wear his tennis shoes with his prosthetic legs. The club, which calls itself a "casually swank joint," prohibits tennis shoes and hooded sweat shirts, Mr. Baldwin told the Register. "We make exceptions for people all the time . There's no reason why we would deny entry to someone with prosthetic legs." Mr. Baldwin was one of four nightclub owners who in 2002 paid an undisclosed sum to Duane Pack and Michael Ward, two men who challenged the legality of bar dress codes. The owners of the three bars, two of which are defunct, had to formally apologize to blacks and pledge to treat patrons equally as part of the settlement for the class action brought against them. "It's certainly disappointing to see . after the passage of the Americans with Disabilities Act, this type of treatment not only to a person with a disability, but also a veteran," Sen. Tom Harkin's spokewoman, Allison Dobson, told The Register. Ms. Dobson said the senator feels the nightclub should consider changing its policy and apologize for the incident. Jill Fulitano-Avery, administrator of the Iowa Division of Persons with Disabilities said she has never heard of such a case. If the Jacksons' story is accurate, she said, "it sounds outrageous; people with disabilities have the same rights as anyone else." Ms. Fulitano-Avery, who is also the mother of a double amputee, said the shoes made for prosthetic legs are hard to find and very expensive. "I would not be surprised at all if he only had one pair." The night out with friends was one of the couple's first since Mr. Jackson began learning to walk again in early November. "I was upset," Mr. Jackson told the Register Saturday from an airport on his way back to San Antonio where he's receiving medical treatment. "We all thought they were kidding," said Abby Jackson. "He had his cane with him and everything. I don't even think he knew how to react to it . He was really upset." Mr. Jackson was wearing a pair of black suede Nike tennis shoes, specially inclined to fit his prosthetics. "They're actually pretty dressy," Abby Jackson said. "He wanted to pick a pair of shoes that he could wear with everything." "It was very insulting," Brandon Beveridge, a close childhood friend of Jackson's who, along with his wife, Stephanie, was out with the couple, told the Register. "B.J. pulled up his pants to show them; I remember seeing the steel." Abby Jackson said the couple and their friends went to the Sports Palace and Nightclub in Des Moines after leaving Crush. "Everybody recognized him. They gave him a T-shirt and bought him a drink on the house," she said. "They told him to come back any time. That made it a little bit easier for him." The Jacksons said they have no desire to return to Crush. "A guy goes to war and loses his legs, and this is the thanks he gets," Abby Jackson said. She also said she had considered talking to an attorney about what happened. Des Moines lawyer Roxanne Conlin said the couple has a case if they choose to pursue it. "There is simply no excuse for this," said Ms. Conlin, who has represented numerous cases of discrimination in the past. "This violates both state and federal law in my opinion. Iowa law forbids discrimination on the basis of disability in public accommodations." LACTALIS USA: Recalls Brie Cheese Due To Listeria Contamination --------------------------------------------------------------- Lactalis USA of Turlock, CA announced today that it is recalling 1,782 cases of Brie President Soft-Ripened Cheese Double Cream in seven-ounce gold foil wedges because it has the potential to be contaminated with Listeria monocytogenes, an organism which can cause serious and sometimes fatal infections in young children, frail or elderly people, and others with weakened immune systems. Although healthy individuals may suffer only short-term symptoms such as high fever, severe headache, stiffness, nausea, abdominal pain and diarrhea, listeria infection can cause miscarriages and stillbirths among pregnant women. The recalled Brie President Soft-Ripened Cheese Double Cream in seven-ounce gold foil wedges was distributed nationwide in retail stores. The contaminated cheese was discovered through routine sampling and testing by the Florida State Department of Agriculture and Consumer Services. Lactalis USA representatives report that no illnesses are known to have occurred as a result of consumption of this product. The product being recalled consists of seven-ounce packages bearing the lot code "Sell by 01/10/04 307". The code is found on the bottom of the gold foil packaging. Consumers who possess any of the suspect packages are advised not to consume it and are asked to return it to the store where they purchased it. Refunds may be obtained at that time. The Lactalis USA recall is being conducted in cooperation with the Food and Drug Administration (FDA). Consumers with questions may contact the company at 1 (800) 828-7031. MARTHA STEWART: Trial in Securities Suit Commences Jury Search -------------------------------------------------------------- Hundreds of New Yorkers crowded into a federal courthouse on Tuesday where they were ordered to answer questions about whether they could fairly decide the obstruction of justice and securities fraud case against Martha Stewart, Reuters news reports. The potential jurors were greeted with security measures that went beyond the normally tight restrictions at the imposing federal courthouse. U.S. marshals patrolled outside, long lines formed at the metal detectors, and court officers stood guard outside the jury assembly room to keep out media and the public. Once seated in red leather chairs in the assembly room, potential jurors were given a thick questionnaire to complete, the first step in a jury selection process that will last at least two weeks. Ms. Stewart, the lifestyle trend-setter who established her own media company, is facing charges that she obstructed justice and lied to investigators looking into her sale of stock in ImClone, a biotech company founded by a close friend. Opening statements are expected to occur in the last week of January, and jurors will likely spend a lengthy five or six weeks listening to evidence in the case. However, an impartial jury could be difficult to find given the publicity surrounding the case, according to legal experts who said questionnaires are often used in such high profile trials. U.S. District Judge Miriam Goldman Cedarbaum has not released the questionnaire to the public, but the forms typically contain straightforward questions about whether potential jurors have developed views about the defendant and allow lawyers an early glimpse of the jury pool. Jeffrey Frederick, director of jury research for the National Legal Research Group in Charlottesville, Virginia, told Reuters lawyers like to include "open ended" questions that allow potential panelists to express what they might have heard about the case. "The language they use sometimes gives an indication of their feelings," he said. Lawyers involved in the case will have a chance to see the completed forms on Wednesday and must inform the court of those jurors they want removed for cause by January 12. Jurors that remain in the pool will return to federal court in Manhattan on January 20, when they will be asked to answer questions from attorneys for the defense and government in a process known as voir dire. That is the first day Ms. Stewart is likely to appear in court. She faces criminal charges stemming from her Dec. 27, 2001, sale of 3,928 shares of biotechnology company ImClone Systems Inc., run by friend Samuel Waksal. The sale came one day before ImClone said health regulators had rejected a key drug application, sending its shares plunging. While not charged with insider trading by the federal prosecutors, Ms. Stewart will have to stand trial on accusations that she made false statements about the sale. Ms. Stewart has said she is not guilty of the charges, Reuters reports. NEVADA: Washoe County Property Owners Angry Over Tax Appraisals --------------------------------------------------------------- Caughlin Ranch residents might be next in line to join a property tax revolt sparked by Incline Village homeowners, the Reno Gazette-Journal reports. Larry Winkler and his wife, Jeannie Cassinelli, whose property assessments increased 67 percent this year, said they intend to send a message on how to appeal Washoe County's assessed property values this week to 1,600 home owners in Caughlin Ranch, Juniper Hills and Juniper Terraces -exclusive neighborhoods in the southwest Truckee Meadows. The message will appear in a newsletter prepared by Dickson Realty, where Ms. Cassinelli is a real estate agent. "It's getting to the point where you have a second mortgage on your house for life - your tax bill," Mr. Winkler said. "What needs to happen is the tax law has to change." More than 807 property value appeals have been filed with the Washoe County Assessor's Office, a recent check found. All but four are from Incline Village. This fall, the Village League to Save Incline Assets filed a class action against the assessor, complaining about what property owners call an arbitrary system of rating their views of Lake Tahoe. Another pending lawsuit involves 16 property owners who appealed their property values this year. Mr. Winkler, a commercial artist who lives in Caughlin Ranch, told the Journal he's upset the taxable value of his land has been raised from $117,000 this year to $195,000 next year - a 67 percent increase. He said he spent nearly two hours with three appraisers in the assessor's office recently to get appraisal records for his property. "It was like going to a car dealer," he said. He said he finally was given three comparable property sales that could have been used in raising his land value. Of the three sales, he said, one sale was the last vacant lot in his immediate neighborhood. He said the buyer spent a lot of money for it. "That doesn't mean every lot in the neighborhood should be valued the same way," he told the Journal. He plans to appeal. Ernie McNeill, a senior appraiser in the assessor's office, said Mr. Winkler spent about 30 to 45 minutes in the office. He was given a copy of the appraisal report on his property and maps with comparable land sales. "To my knowledge, that was everything he asked for or needed," he told the Journal. The Caughlin Ranch area was re-appraised this year in a once-in- five-year cycle. Each year, one-fifth of Washoe County is subject to an in-depth appraisal. Last year, Incline Village property was assessed. Deputy District Attorney Blaine Cartlidge said the assessor's office is unfairly being made a scapegoat for complaints over property values. The complaints from Incline Village and now at Caughlin Ranch, he said, "reveal nothing but frustration with a very complex tax system and rising property values, neither of which the assessor controls," he said. "This is the most complicated tax system in the country." Ted Harris, a leader in the Incline Village tax revolt, said the county assessor's office asked for trouble. In tax hearings early this year, Mr. Harris said, Mr. Cartlidge said there was no tax revolt because only 123 Incline taxpayers filed appeals. "They sat on their rights," Mr. Harris told the Journal, in recalling Cartlidge's words. "Literally, thousands of people are upset by the assessor's methods," he said. As for Caughlin Ranch residents, Harris said, "We are offering advice and counsel and suggest they follow the same procedures we use." NEW YORK: City Agrees To Pay $3 Million Over Man Shot 41 Times -------------------------------------------------------------- In a statement released Tuesday, New York City Corporate Counsel Michael Cardozo, said that the city has agreed to pay $3 million to the family of Amadou Diallo, the unarmed West African immigrant shot to death by police nearly five years ago, the Associated Press reports. "The mayor, the police department and the city deeply regret what occurred and extend their sympathies to the Diallo family," the statement read. Mr. Diallo was shot to death in the vestibule of his Bronx apartment building on February 4, 1999, by undercover officers who said they mistook his wallet for a gun. The officers fired 41 shots, hitting the street vendor from Guinea 19 times and making the killing an international symbol of police brutality. The officers were acquitted of state criminal charges in a February 2000 trial that was moved to Albany because of pretrial publicity. The Justice Department decided not to bring federal civil rights charges against the officers. Mr. Diallo's parents, Saikou and Kadiatou, had sought $81 million in their negligence lawsuit against the city. An attorney for the family said the Diallos are "very grateful to finally achieve closure." "This is without a doubt the largest settlement in New York for the wrongful death of an unemployed man with no dependents," attorney Anthony Gair told AP. "It shows the city and the Bloomberg administration, unlike the prior administration, wanted to make amends." City lawyers earlier had argued that Mr. Diallo "caused or contributed" to his death by assuming a "combat position" and disregarding police commands. Blaming Amadou for his own death angered his mother more than the officers' acquittal, she said in a book released last year, "My Heart Will Cross This Ocean." "Why wasn't the scenario turned around?" she writes, AP reports. "He was the one standing on his doorstep, watching four men in jeans, sneakers and hooded sweat shirts leap out of their red car, heading straight for him. They were the ones who acted unpredictably." The officers said they wanted to talk to Diallo because he resembled a suspect in a rape case, AP reports. The shooting set off an investigation into racial profiling, and Police Commissioner Raymond Kelly spelled out an anti-profiling policy in 2002. ONLINE POWER: CO Court Enters Final Judgment V. Former Executive ---------------------------------------------------------------- The Securities and Exchange Commission announced that on December 12, 2003, the U.S. District Court for the District of Colorado entered a Final Judgment as to Kris M. Budinger, former president of Online Power Supply. The judgment settles the Commission's claims against Mr. Budinger in a civil action filed on January 21, 2003. The complaint alleges that Mr. Budinger made false and misleading statements or omitted to state material facts to investors concerning, among other things, compensation that OnLine paid to registered representatives, and that Mr. Budinger misappropriated some of the proceeds from the sale of 841,000 shares of OnLine treasury stock. The complaint further alleges that Mr. Budinger violated Sections 5(a), 5(c), and 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and aided and abetted Online's violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20, 13a-1 and 13a- 13 thereunder. Mr. Budinger consented, without admitting or denying any factual allegations in the complaint, to the entry of the Order, which imposes an officer and director bar against him, along with a penny stock bar. The Order also requires Mr. Budinger to pay disgorgement in the total amount of $106,000, but waived payment of disgorgement and did not impose a penalty based on his demonstrated inability to pay them. In addition, Mr. Budinger consented to a permanent injunction restraining and enjoining him from violating Sections 5(a), 5(c), and 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, Sections 13(a) and 13(b)(2)(A) and Rules 12b-20, 13a-1 and 13a-13 thereunder. The suit is styled "SEC v. Online Power Supply, Inc., Larry G. Arnold and Kris M. Budinger, Civil Action No. 03-M-0121 (OES)." PNC FINANCIAL: Shareholders Told To Wait Till Litigation Settled ---------------------------------------------------------------- Shareholders of PNC Financial Services Group who are wondering if they're entitled to a piece of the $90 million shareholder restitution fund set up as part of PNC's settlement with the government over securities fraud charges are being told to sit tight, Knight-Ridder / Tribune Business News reports. The Philadelphia attorney administering the fund said that he wouldn't know who's eligible for compensation or how much they'll get until litigation over the matter, including a class action lawsuit, is settled. "This may be a lengthy process," Louis Fryman, chairman of Fox Rothschild LLP told the Tribune Business News. The restitution fund was established to settle claims stemming from accounting maneuvers PNC used to artificially inflate profits in 2001. PNC's stock price plunged after regulators forced the company to reverse the moves and restate profits. A consolidated class action, filed in U.S. District Court in Pittsburgh, covers purchasers of PNC stock between July 19, 2001, and July 18, 2002. Employees with stock in PNC's 401(k) savings plan are being represented by Independent Fiduciary Services Inc., of Washington, D.C. Mr. Fryman said shareholders entitled to restitution didn't have to take any action to be included in the settlement, but that anyone with concerns or questions could write to him at 200 Market Street, Tenth Floor, Philadelphia, PA 19103-3291. He also urged possible claimants to keep records of their stock ownership. SUN LIFE: Disabled Father Files Suit For Deducted Child Benefits ---------------------------------------------------------------- John Ruffolo of Kitchener, Ontario, filed a lawsuit against Sun Life Assurance Co. alleging the insurer wrongfully deducted federal child benefits from its payments to a disabled father of two children, AP News/ CP reports. The lawsuit is seeking court certification for a class action suit on behalf of others whose monthly disability benefits from Sun Life group policies have been reduced to reflect Canada Pension Plan child benefits. Kirk Baert of Toronto law firm Koskie Minsky said a class action could seek an estimated $10 million in damages and another $1 million in punitive damages, plus a court order prohibiting Sun Life from deducting CPP child benefits from monthly benefits owed to disabled persons. According to the claim, Mr. Ruffolo, 48, suffered brain injuries diagnosed in November 1991 and is permanently disabled. At that time he had been working for manufacturer Royal Plastics Ltd. of Woodbridge, Ontario. He receives monthly disability benefits as a policyholder with Sun Life worth $2,223.33 per month in March 1992. Shortly thereafter, the claim alleges, Sun Life began "wrongfully" deducting an amount equal to Mr. Ruffolo's CPP benefit for his two children from his monthly entitlements "in contravention of its terms and in breach of Sun Life's duties," Mr. Baert told AP. The claim alleges Sun Life was "callous" and "high-handed," and accuses the insurer of having "failed to meet the minimum standards of practice required of it as a provider of group disability insurance by making such monthly deductions and accordingly, failing to pay the disabled person's legitimate claims." The current maximum CPP child benefit to a disabled contributor is $192.68 per month. According to the claim, Sun Life "failed to act in good faith and to deal with Mr. Ruffolo in a fair and reasonable manner, contrary to the duties it owed of the utmost good faith." Calls to Sun Life were not immediately returned, AP reports. TYCO INTERNATIONAL: NY Court Allows Magazine Article as Evidence ---------------------------------------------------------------- New York Judge Michael Obus allowed a May 2001 BusinessWeek article on Tyco International Ltd. to be admitted into evidence in the corporate larceny trial against former top executives L. Dennis Kozlowski and Mark Swartz, the Associated Press reports. Mr. Kozlowski and former Tyco Chief Financial Officer Mark Swartz are standing trial in State Supreme Court in New York on charges of corporate larceny. The two executives allegedly stole $600 million of company money and used it to fund a lavish lifestyle, an earlier Class Action Reporter story (December 10,2003) states. The New York District Attorney's office and the federal Securities and Exchange Commission discovered that Mr. Kozlowski bought a 15,000-square foot home in Boca Raton, Florida using a $19 million loan from the Company that was later forgiven. Additionally, Mr. Kozlowski allegedly charged a $2 million birthday party for his second wife on Sardinia to the Company, an earlier Class Action Reporter story (October 9,2003) states. Mr. Swartz, on the other had, allegedly used Tyco millions for personal investments and real estate speculation, and took out millions of improper bonuses and loans, which he did not repay. Prosecutors have been trying to get this article into evidence, because it allegedly showed that Mr. Kozlowski willfully disseminated false or misleading statements about the company and its financial management. William C. Symonds, author of the article, has been subpoenaed in the suit, but he is fighting it. Last month, an attorney for the publication argued that Mr. Symonds shouldn't be forced to testify and is protected from doing so under New York's shield law if the scope of questioning goes beyond attesting to the accuracy of Mr. Kozlowski's quotes. The judge hasn't ruled on whether Mr. Symonds will have to testify. Judge Obus said that he would allow a portion of the article that was disseminated internally at the Bermuda conglomerate through an in-house newsletter. The excerpt will be discussed as part of the expected testimony of a Tyco internal communications employee, AP reports. Meanwhile, Jennifer Burns, the third member of a Tyco group that managed the personal finances of Kozlowski and Swartz, took the stand Tuesday, AP states. Ms. Burns testified that she agreed to serve as trustee for a trust that was purchasing apartments at 1 Central Park West in New York on behalf of Swartz without having full knowledge of what her responsibilities as trustee were. She added that Kathy McRae, her boss in executive treasury at Tyco, told her that Mr. Swartz wanted to avoid publicity in the matter and needed someone else to be the named trustee. "He did not want it all over the newspapers before the transaction went through," she said. VERIZON WIRELESS: Agrees To Pay Fee Lawsuit Settlement ------------------------------------------------------ Verizon Wireless agreed to give most of its current and former customers credits and vouchers worth from $30 to $45 to settle a class action lawsuit accusing the nation's biggest mobile phone carrier of improper billing and failing to fully disclose fees and terms, Knight-Ridder / Tribune Business News reports. The settlement covers customers of Verizon Wireless and certain partners between January 1, 1991, and November 2, 2003. A spokeswoman declined to say how many customers were eligible or how much the agreement would cost. The company, which denied any wrongdoing, currently has 36 million customers nationwide. The suit, filed in San Diego in 2000, alleged Bedminster, N.J.- based Verizon Wireless engaged in various improper practices, including charging for airtime on "toll free" calls, charging roaming fees when they didn't apply and falsely claiming it had nationwide service. The settlement, which received preliminary approval in California Superior Court in mid-November, is expected to get the final nod in April. Customers will receive details once that happens, Verizon said. Current customers don't have to do anything to qualify for settlement funds, but former customers must complete a claim form. Forms are available online by visiting www.verizonwireless.com and doing a search for Verizon Wireless Campbell settlement. For more information, contact toll free settlement hot line at 1-866-881-7170. WAL-MART: Czechs, Illegal Workers To Join Lawsuit, Says Lawyer -------------------------------------------------------------- U.S. Attorney James Linsey said that dozens of Czechs and others who once worked illegally at Wal-Mart stores in the United States will join a lawsuit against the retail giant seeking millions of dollars in compensation, the Associated Press reports. Mr. Linsey, wrapping up a weeklong visit to Prague, said he plans to add new names to a class-action list of plaintiffs "very soon." The lawsuit was filed by Mr. Linsey and other lawyers on November 10 on behalf of nine Mexican workers who were among 245 people from 18 countries taken into custody in a 21-state sweep that targeted contract cleaning crews at 58 Wal-Mart stores in October. Although most of those detained were Mexicans, who accounted for 90 arrests, 35 workers were from the Czech Republic and many others came from other post-communist countries. Mr. Linsey accuses Wal-Mart of conspiring in a criminal enterprise by using contractors to violate the civil rights and wage protections of immigrants without proper documentation who were hired to clean its stores. "Wal-Mart cannot deny that they know that these people are in the stores," he told AP. Most of the immigrants had to work seven days a week, 365 days a year, with no medical coverage and no extra money for working overtime, Mr. Linsey said. They received virtually no money first few months of their employment, he said. "This is the 21st century, and this is what in essence is slavery going on in the United States of America. It's outrageous," Mr. Linsey said. Wal-Mart on Monday denied any wrongdoing and said the lawsuit was groundless, AP reports. "We are especially concerned about allegations that undocumented workers were not treated fairly, whether they were from Mexico or Eastern Europe or wherever," said spokeswoman Mona Williams, speaking from Wal-Mart headquarters in Bentonville, Arkansas. "We are just very sorry that contractors we hired took advantage of the fact that they had no other job option or legal recourse. That's simply wrong . We don't think they have any basis for such a suit. These workers were hired by contractors and we feel that the suit is absolutely without merit." Mr. Linsey was in the Czech Republic to find Czechs who were recruited for jobs at Wal-Mart. So far, he said, up to 28 Czechs have approached him from among 200 workers worldwide, including about 50 in the United States. "We are looking for the clients in terms of thousands, maybe tens of thousands of dollars," Linsey said, adding that individual damages would depend on the number of months or years worked. "For Wal-Mart, we're talking about millions of dollars." A website was launched in various languages a month ago to give former Wal-Mart workers information about the lawsuit, Linsey said. Many immigrants who since have left the United States are willing to be named in the suit, and those who fear legal repercussions would be identified by pseudonyms. The Czech Republic was the first country Linsey visited during his search for immigrants once employed at Wal-Mart stores. He said he has discussed the dispute with Mexican, Polish and Czech authorities. New Securities Fraud Cases AEROSONIC CORPORATION: Goodkind Labaton Files Stock Suit in FL -------------------------------------------------------------- The law firm of Goodkind Labaton Rudoff & Sucharow LLP initiated a class action lawsuit, in the United States District Court for the Middle District of Florida, on behalf of persons who purchased or otherwise acquired publicly traded securities of Aerosonic Corp. between May 3, 1999 and March 17, 2003, inclusive, against Aerosonic Corporation, and certain of its officers and directors. The complaint alleges that Defendants artificially inflated the price of Aerosonic shares during the Class Period. Specifically, on March 17, 2003 Defendants revealed what appeared to be certain discrepancies in previously reported financial information concerning inventory accounting and revenue recognition. The market reacted negatively to this news, sending the share price of Aerosonic 24% lower to $3.32 per share. For more information, contact Christopher Keller, by Phone: 800-321-0476, or E-mail: investorrelations@glrslaw.com. AMERICAN PHYSICIANS: Charles Piven Files Securities Suit in MI -------------------------------------------------------------- The Law Offices Of Charles J. Piven, P.A. initiated a securities class action, in the United States District Court for the Western District of Michigan (Grand Rapids), on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of American Physicians Capital, Inc. between February 13, 2003 and November 6, 2003, inclusive, against the Company, William B. Cheeseman, and Frank H. Freund. 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. BIOPURE CORPORATION: Stull Stull Files Securities Suit in MA ------------------------------------------------------------- Stull, Stull & Brody, LLP initiated a class action lawsuit, in the United States District Court for the District of Massachusetts, on behalf of all purchasers of common shares of Biopure Corporation between March 17, 2003 and December 24, 2003, inclusive. In addition, plaintiff in the Complaint that was filed asserts claims on behalf of a subclass of persons who traded contemporaneously with defendants Carl W. Rausch, and Thomas A. Moore Notably, defendant Rausch sold large amounts of his Biopure common share holdings during the Class Period while plaintiff and other members of the Class and Subclass were purchasing their shares. The Complaint alleges that Defendants Rausch and Moore made these sales while in the possession of material adverse non-public information about the Company as described below. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and that defendants Rausch and Moore also violated Section 20(A) of the Exchange Act. Section 20(A) requires that insiders who illegally sold their shares of Biopure stock give up their gains from these sales to persons who purchased their shares. The Complaint alleges that the defendants made numerous positive and misleading statements in Biopure's public filings and press releases about the progress of the Biopure's licensing application with the Food and Drug Administration for one of the Company's primary products -- Hemopure. In particular, defendants from the start of the Class Period concealed the fact that the FDA had raised significant "safety concerns" about Hemopure because of adverse clinical data about this drug obtained from its use with orthopedic surgical patients and that the FDA had, in fact, put a hold on further trials of this drug with trauma patients. In addition to several public offerings that took place during the Class Period, as noted above, certain defendants were unloading large amounts of their Biopure common shares while in possession of non-public information about the halt of clinical trials with trauma patients and other material adverse non-public information about Hemopure while plaintiff and members of the proposed Class and Subclass were buying shares. Under pressure from an investigation by the Securities Exchange Commission on December 24, 2003 Biopure stunned the investing public by finally announcing that the FDA had halted further trials of Hemopure because of safety concerns and that commercial release of Hemopure would be delayed beyond mid-2004. The market reaction to news of the truth was quick. On the first day after the news was announced Biopure common shares lost 16% of their value falling to $2.43 per share from a Class Period high of $8.25 on August 21, 2002 when plaintiff bought many of his Biopure shares. For more information, contact Howard T. Longman, by Mail: 6 East 45th Street, New York, NY 10017, by Phone: toll-free at 1-800-337-4983, Fax: 212/490-2022, or by E-mail: TSVI@aol.com. CENTRAL PARKING: Marc Henzel Lodges Securities Suit in M.D. TN -------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Middle District of Tennessee, Nashville Division, on behalf of all purchasers of the common stock of Central Parking Corporation (NYSE: CPC) from November 4, 2002 through February 13, 2003, inclusive. The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between November 4, 2002 and February 13, 2003, thereby artificially inflating the price of Central Parking common stock. The Complaint alleges that these statements were materially false and misleading because they failed to disclose and misrepresented the following adverse facts, among others: (1) that the Company's internal controls were inadequate to record and document the Company's financial results; (2) that the Company was materially understating its bad debt reserve, thereby overstating its earnings; (3) that the Company was materially understating its accounts payable, thereby overstating its financial condition; and (4) as a result of the foregoing, the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles and, therefore, were materially false and misleading. On February 14, 2003, Central Parking shocked the market when it announced that it would be taking a charge to increase its bad debt reserve and that it would be taking a charge to increase its accounts payables. In response to this announcement, the price of Central Parking common stock dropped from $15.82 on February 13, 2003 to a close of $12.31 on February 14, 2003, or a single-day decline of more than 22%, on more than seven times normal trading volume. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com DYNACQ HEALTHCARE: Brodsky & Smith Launches TX Securities Suit -------------------------------------------------------------- The law offices of Brodsky & Smith, LLC initiated a securities class action lawsuit, in the United States District Court for the Southern District of Texas, on behalf of shareholders who purchased the common stock and other securities of Dynacq Healthcare Inc., between January 14, 2003 and December 18, 2003, inclusive. The Complaint alleges that defendants violated federal securities laws by issuing a series of material misrepresentations to the market during the Class Period, thereby artificially inflating the price of Dynacq securities. For more information, contact Marc L. Ackerman, or Evan J. Smith, by Mail: Two Bala Plaza, Suite 602, Bala Cynwyd, PA 19004, by Phone: toll free 877-LEGAL-90, or by E-mail: clients@brodsky-smith.com. DYNACQ HEALTHCARE: Milberg Weiss Lodges Securities Suit in TX ------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP initiated a class action lawsuit, in the United States District Court for the Southern District of Texas, on behalf of purchasers of the securities of Dynacq Healthcare, Inc. between January 14, 2003 and December 18, 2003, inclusive, seeking to pursue remedies under the Securities Exchange Act of 1934, against the Company and: (1) Philip S. Chan, and (2) Chiu M. Chan The complaint alleges that defendants knowingly or recklessly made materially false and misleading statement throughout the class period with respect to Dynacq's financial performance. Specifically, the complaint alleges that the defendants' made statements that were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts: (i) that the Company had materially overstated its earnings, revenues, net income, and earnings per share; (ii) that the Company was improperly accounting for its costs and revenue in violation of Generally Accepted Accounting Principals; (iii) that the Company lacked adequate internal controls, and (iv) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times. On December 2, 2003, the Company announced that it was requesting an automatic extension of up to 15 days for filing its 2003 Form 10-K. The Company stated that recently the Division of Corporation Finance of the United States Securities and Exchange Commission commented upon Dynacq's periodic filings. On December 16, 2003, the Company announced that it would further postpone the filing of its 2003 Form 10-K until the SEC completed its review of Dynacq's periodic filings and its independent auditors have completed their audit of the Company's Aug. 31, 2003 financial statements. On December 18, 2003, the Company announced that Ernst & Young, LLP resigned late on December 17, 2003 as the Company's independent auditor effective immediately. E&Y advised the Company that E&Y resigned due to the Company's lack of internal controls necessary to develop reliable financial statements. News of this shocked the market with shares of Dynacq falling 18.56 percent or $2.04 per share to close at $8.95 per share on December 18, 2003. The Company further shocked the market when it announced, after the markets had closed on December 18, 2003, that it had received a NASDAQ Staff Determination stating that because Dynacq failed to comply with the requirement of NASD Marketplace Rule 4310 c (14), that it file a copy of its Form 10-K Annual Report to the Securities and Exchange Commission in a timely fashion, that its common stock would be delisted from the NASDAQ on December 30, 2003, unless Dynacq requested a hearing. Additionally, the Company disclosed that it had received a notice from the Ft. Worth, Texas office of the SEC that it was conducting an informal investigation pertaining to Dynacq's reporting of its financial statements, its recognition of costs and revenue, its allowances for doubtful accounts, and its internal controls. For more information, contact Steven G. Schulman, Peter E. Seidman, or Andrei V. Rado, by Mail: One Pennsylvania Plaza, 49th fl., New York, NY, 10119-0165, by Phone: (800) 320-5081, by E-mail: dynacqhealthcase@milberg.com, or visit the firm's Website: http://www.milberg.com. DYNACQ HEALTHCARE: Lasky & Rifkind Launches TX Securities Suit -------------------------------------------------------------- Lasky & Rifkind, LLP initiated a lawsuit in the United States District Court for the Southern District of Texas, on behalf of persons who purchased or otherwise acquired publicly traded securities of Dynacq Healthcare Inc. between January 14, 2003 and December 18, 2003, inclusive, against Dynacq and certain officers and directors. 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 Defendants fraudulently certified that Dynacq's financial statements for the first three quarters of fiscal 2003 were compiled in accordance with Generally Accepted Accounting Principles. On December 2, 2003, Dynacq announced that it was requesting an automatic extension of 15 days to file its Form 10K with the SEC. Then on December 18, 2003, the Company announced that its auditor, Ernst & Young LLP, had resigned due to the Company's "lack of internal controls necessary to develop reliable financial statements." On that same day the Company announced that NASDAQ would delist its shares for failing to file its annual documentation in a timely manner, and it was notified that the SEC had opened an investigation into the company's financial reporting. The market reacted negatively to this news, falling $4.86 per share, or approximately 54%, to $4.09 per share. For more information, call (800) 495-1868 to speak with an advisor. NASDAQ: Landskroner Grieco Commences Securities Suit in S.D. NY --------------------------------------------------------------- The law firm of Landskroner Grieco, Ltd. initiated a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of all persons who traded the stock of Corinthian Colleges, Inc. between 10:46 a.m. and approximately 12:30 p.m. on December 5, 2003, against the Nasdaq Stock Market Inc. and Robert Greifeld (Pres. And CEO) According to the complaint, defendants violated sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b- 5. The complaint alleges that beginning at approximately 10:46 a.m. on December 5, 2003, the market price of COCO fell precipitously from $57.45 to as low as $38.97 per share within 12 minutes. At 10:58 a.m., Nasdaq halted trading in COCO, stating that the plunge was caused by "misuse or malfunction" of an electronic trading system. Nasdaq permitted trading to resume approximately one hour later at 11:55 a.m. When COCO reopened at 11:55 a.m., the price of the stock recovered quickly. Approximately 30 minutes after trading in COCO resumed, Nasdaq belatedly announced that it would cancel all trades in COCO made between 10:46 a.m. and 10:58:08 a.m. At no time prior to approximately 12:30 p.m. did Nasdaq inform investors that it would cancel all trades in COCO between 10:46 a.m. and 10:58:08 a.m. Therefore, during the period between the time COCO resumed trading at 11:55 a.m. and the time Nasdaq announced the cancellation of such trades at approximately 12:30 p.m., investors made trading decisions in reliance on Nasdaq's statement that trading had resumed and without knowing that Nasdaq had decided to cancel the trades between 10:46 a.m. and 10:58:08 a.m. Nasdaq's belated cancellation of such trades caused injury to investors who traded COCO securities between 10:46 a.m. and approximately 12:30 p.m. on December 5, 2003. Investors who had their purchases canceled and who sold shares after trading resumed were forced to buy shares at inflated prices to cover their sell orders, turning their profits into losses through no fault of their own. For more information, contact Jack Landskroner, by Mail: 1360 West 9th Street, Suite 200, Cleveland, Ohio 44113, by Phone: (866) 522-9500 (toll-free), by E-mail: jack@landskronerlaw.com, or visit the firm's Website: www.landskronerlaw.com. NETWORK ENGINE: Goodkind Labaton Launches Securities Suit in MA --------------------------------------------------------------- Goodkind Labaton Rudoff & Sucharow LLP initiated a class action lawsuit, in the United States District Court for the District of Massachusetts, on behalf of persons who purchased or otherwise acquired publicly traded securities of Network Engines Inc. between November 6, 2003 and December 10, 2003, inclusive, against Network Engines and certain of its officers and directors. The complaint alleges that Defendants knew but failed to disclose that Network Engines was in the process of renegotiating its distribution contract with EMC, and that EMC was calling for price reductions, which if agreed to, would negatively impact the Company's financial results. Nevertheless, throughout the class period, the Company continued to issue positive statements, touting the company's financial performance and the success of its relationship with its largest customer EMC. On December 10, 2003, the Company announced, along with other items, that it had renegotiated its distribution contract with EMC. The amendment to the contract would negatively impact the company's results. Following this announcement, shares of network Engines fell $3.92 per share, or 39% to close at $6.10 per share. For more information, contact Christopher Keller, by Phone: 800-321-0476, or E-mail: investorrelations@glrslaw.com. NETWORK ENGINES: Marc Henzel Lodges Securities Suit in MA Court --------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the District of Massachusetts on behalf of purchasers of Network Engines, Inc. (Nasdaq: NENG) publicly traded securities during the period between November 6, 2003 and December 10, 2003, inclusive. The complaint alleges that by the start of the Class Period, defendants knew, but failed to disclose, that Network Engines was in the process of renegotiating its distribution contract with EMC, and that EMC was demanding price reductions, which, if agreed to, would negatively impact the Company's future financial results. Nevertheless, throughout the Class Period, defendants issued positive statements highlighting the Company's strong financial performance, continued growth and the success of its relationship with EMC, its largest customer. Defendants failed to disclose, however: (1) that the Company was in the process of renegotiating its distribution contract with EMC; (2) that EMC was demanding price concessions to bring its agreement with Network Engines in line with the pricing that Network Engines was providing to other customers; (3) that the new distribution contract with EMC would negatively impact the Company's future financial performance; (4) that the Company would not be able to sustain the growth in its gross margins as a result of the amended contract; and (5) as a result, the Company's positive statements issued during the Class Period were materially false and misleading when made. Finally, on December 10, 2003, the Company announced, among other things, that it had renegotiated its distribution contract with EMC and the amended contract would negatively impact the Company's gross profit related to the sale of EMC-approved Host Bus Adapters and the Company's distribution operations gross profit. Following this announcement, shares of Network Engines common stock fell $3.92 per share, or 39%, to close at $6.10 per share, on extraordinarily high trading volume, and have continued to decline since that time. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com PARMALAT FINANZIARIA: Charles Piven Files Securities Suit in NY ---------------------------------------------------------------- The Law Offices Of Charles J. Piven, P.A. initiated a securities class action, in the United States District Court for the Southern District of New York, on behalf of those who purchased securities (including stock, bonds and notes) of Parmalat Finanziaria, SpA between January 5, 1999 and December 29, 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. PARMALAT FINANZIARIA: Marc Henzel Launches Securities Suit in NY ---------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Southern District of New York on behalf of purchasers of the securities of Parmalat Finanziaria, SpA (OTC:PARAF.PK Milan:PRF IM) and its subsidiaries during the period between January 5, 1999 and December 29, 2003. The complaint charges certain of Parmalat's senior insiders and its legal, accounting and financial advisors with violations of the Securities Exchange Act of 1934. Parmalat is an international food and dairy company. The complaint alleges that Parmalat's senior insiders, together with Parmalat's legal, accounting and financial advisors, concocted a massive scheme whereby they overstated Parmalat's reported profits and assets for more than a decade. The alleged scheme involved the creation of bogus bank accounts, the use of forged financial records and the manipulation of Parmalat's balance sheet and income statement via fictitious investment assets and sham transactions, and was designed to and did allow defendants to divert approximately $1 billion to themselves and/or to companies controlled by them via professional fees and clandestine asset transfers and enabled Parmalat to raise more than $5 billion from unsuspecting investors from the sale of newly issued securities. The fraudulent scheme began to unravel in the fourth quarter of 2003, when, contrary to defendants' Class Period representations that Parmalat was experiencing strong growth in net operating profit and had a healthy balance sheet, it was disclosed that: (1) almost 40% of Parmalat's entire asset base, purportedly held in a bank account at Bank of America, did not exist; (2) Parmalat had been declared insolvent; (3) the $625 million of Parmalat's cash purportedly invested in a liquid investment fund in the Cayman Islands could not be retrieved; (4) defendants had manipulated the Company's income statements and balance sheet for more than a decade by using off-shore shell companies, special purpose entities, forged documents and sham transactions; and (5) at least eight Parmalat senior insiders, auditors and lawyers, including certain of the defendants, had been taken into custody for the perpetration of this multi- billion dollar fraud. As the magnitude of the fraud began to reach the market, the complaint alleges that defendants attempted to destroy evidence and/or ordered their subordinates to destroy evidence of the fraudulent scheme in an effort to evade liability for their participation in one of the most shocking corporate scandals ever to afflict the public financial markets. The revelations of defendants' misconduct caused the price of Parmalat stock to plunge 95% before trading was suspended on December 29, 2003. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com PMA CAPITAL: Marc Henzel Lodges Securities Fraud Suit in E.D. PA ---------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Eastern District of Pennsylvania on behalf of all persons who purchased the securities of PMA Capital Corporation (NasdaqNM: PMACA) (AMEX: PMK) between November 13, 1998 and November 3, 2003 seeking remedies under the Securities Exchange Act of 1934 (NasdaqNM: PMACA) and on behalf of all persons who purchased securities of PMA issued in public offerings dated October 16, 2002, 4.25% Convertible Senior Debentures Due 2022 (the "4.25% Debentures") and June 5, 2003, 8.5% Monthly Income Senior Notes due 2018 (the "8.5% Notes'" (AMEX:PMK) seeking remedies under Sections 11, 12 (a), 20 and 15 of the Securities Act of 1933. On November 4, 2003, before the market opened, PMA disclosed in a press release and a concurrent SEC filing on Form 8-K, that it would record a pre-tax charge of $150 million primarily to compensate for PMA Re's inadequate loss reserves. Defendants stated that an internal review of the Company's reserves revealed that the material charge ``relates to higher than expected underwriting losses in PMA Re's reinsurance operations, primarily from casualty business written in accident years 1997 to 2000.'' As a result of this charge, the Company suspended its common stock dividend, and has engaged Banc of America Securities LLC to explore ``strategic alternatives.'' On the same day, PMA announced that it was in discussions with the Pennsylvania Insurance Department over the Company's insurance operations. Immediately following this announcement, the price of PMA common stock plummeted $8.11, or 61.7 percent, from its previous day's trading, to close at $5.03 per share. On November 6, 2003, PMA revealed that the write down will effectively force the Company to withdraw from the reinsurance business, and that defendant John W. Smithson had resigned as President and Chief Executive Officer of PMA. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com QUEST SOFTWARE: Marc Henzel Commences Securities Suit In C.D. CA ---------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Central District of California on behalf of purchasers of Quest Software, Inc. (NASDAQ: QSFT) publicly traded securities during the period between April 30, 2002 and July 23, 2003. The complaint charges Quest and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Quest provides application and information availability software solutions that enhance the performance and reliability of e-business, enterprise and custom applications and enable the delivery of information across the enterprise. The complaint alleges that during the Class Period, defendants caused Quest's shares to trade at artificially inflated levels through the issuance of false and misleading financial statements. On July 23, 2003, Quest revealed that its 2002 and Q1 03 results were false when issued due to a "computational error" in revenue recognition. The stock dropped below $9 per share on this news. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com TITAN PHARMACEUTICALS: Marc Henzel Lodges Securities Suit in CA --------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Northern District of California on behalf of purchasers of Titan Pharmaceuticals, Inc. (AMEX: TTP) common stock during the period between December 1, 1999 and July 22, 2002. The complaint charges Titan Pharmaceuticals and certain of its officers and directors with violations of the Securities Exchange Act of 1934. During the Class Period, Titan Pharmaceuticals sought to develop Iloperidone (Zomaril), a potential new drug for the treatment of schizophrenia. The complaint alleges that from the very beginning of the Class Period, defendants declared that the development program for Iloperidone was making steady progress through Phase III clinical trials and towards drug approval in the U.S. Defendants expressed excitement over the safety and efficacy of Iloperidone and with the Phase III study results, particularly the statistically significant reduction in the symptoms of schizophrenia in patients. Defendants concluded that the positive late-stage development results pointed to an important role for Iloperidone as an important new option for the treatment of schizophrenia. Heightened expectations for the success of Iloperidone stood in contrast to an ongoing process of U.S. Food and Drug Administration review of serious unaddressed safety issues facing older, established antipsychotic drugs. This process has resulted in the imposition of severe marketing restrictions for a number of established antipsychotic drugs. However, during the Class Period, defendants artificially inflated the price of Titan Pharmaceuticals shares by issuing a series of materially false and misleading statements about the Company's Investigational New Drug and New Drug Applications for Iloperidone (Zomaril). As a result of the defendants' alleged false statements, Titan Pharmaceuticals stock traded at inflated prices during the Class Period, causing millions of dollars of damages to the Class. However, based on the disclosures made in defendants' press release of July 22, 2002, pointing to the ability of Iloperidone to prolong the QT interval and raising serious questions about Iloperidone cardiovascular safety and marketability, the price of Titan Pharmaceuticals' shares fell a precipitous 58%, to $1.63, its lowest level ever, on volume of 3.8 million shares. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com VAN DER MOOLEN: Marc Henzel Launches Securities Suit in S.D. NY --------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all persons who purchased the American Depository Receipt shares (ADRs) of Van der Moolen Holding N.V. (NYSE:VDM), between October 18, 2001 through October 15, 2003, inclusive. The complaint charges Van Der Moolen Holding N.V., Friedrich M.J. Bottcher, Frank F. Dorjee, James P. Cleaver, Jr., and Casper F. Rondeltap with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Van der Moolen acts as a specialty firm on the New York Stock Exchange (NYSE). As a specialist on the NYSE, Van der Moolen is required to uphold the rules and requirements of the NYSE. One such requirement that Van der Moolen must adhere to is called the "negative obligation." The negative obligation is the duty to hang back and not trade for the specialist firm's own account when enough public investor orders exist to pair up naturally, without undue intervention. Rather than uphold its duties, Van der Moolen, during the class period, repeatedly violated its duties by engaging in an illegal scheme to drive up the Company's financial results. More specifically, the Complaint alleges that the Company's statements concerning its financial results during the class period were materially false and misleading because they failed to disclose and misrepresented the following adverse facts, among others: (1) that Van der Moolen engaged in the illegal practice of "front-running" trades at the NYSE, which allowed Van der Moolen to act on nonpublic information to trade ahead of customers lacking that knowledge and pocket a profit on each trade; (2) that Van der Moolen illegally "traded ahead" of customer orders by causing or allowing its traders to put Van der Moolen's own interest ahead of investors by ignoring one investor order in the process of interacting with another investor, thereby creating more illegal profits for the Company; (3) that Van der Moolen, throughout the Class Period, improperly recognized revenue from its illegal scheme in violation of Generally Accepted Accounting Principles (GAAP); and (4) as a result of this illegal scheme, Van der Moolen materially overstated and artificially inflated its earnings and net income. On April 17, 2003, the NYSE issued a statement wherein it disclosed that it had begun an investigation of the specialist firms of the NYSE. On news of this Van der Moolen ADRs fell 4.8% or $0.52 per share to close at $10.19 per share. On April 18, 2003, The Wall Street Journal reported that Van der Moolen and others were the subject of an investigation by the NYSE into illegal trading practices on the floor of the NYSE. Additionally on April 18, 2003, Bloomberg reported that the SEC had also begun an investigation into illegal trading practices by specialist firms, such as Van der Moolen. On news of this, Van der Moolen ADRs fell another 4.7% or $0.48 per share to close at $9.71 per share on April 21, 2003. On September 22, 2003, The Wall Street Journal reported that SEC had intensified its inquiry into the NYSE specialist firms, like Van der Moolen. The article noted that SEC was not only investigating the illegal "front-running" practices of the specialist firms, like Van der Moolen but was now investigating whether floor traders "traded ahead" of customer orders. On news of this, Van der Moolen ADRs fell 4.4% or $0.62 per share to close at $ 13.35 per share. Lastly, on October 16, 2003, the NYSE announced that the NYSE Enforcement Division had decided to bring disciplinary action against Van der Moolen and the other specialist firms. Additionally, the NYSE stated that for the three- year period ended December 31, 2002, Van der Moolen disadvantaged customers who entered orders via the NYSE's Designated Order Turnaround System ("DOT") through alleged "interpositioning" resulting in losses to customers of approximately $10 million. In the case of such alleged "interpositioning" Van der Moolen is believed to have traded unnecessarily as dealer with DOT orders on one side of the market, and then immediately traded with DOT orders on the opposite side, at a profit to the specialist. The NYSE further stated that Van der Moolen's illegal actions resulted in additional losses to customers of approximately $25 million. In these alleged "one-sided trading" cases, the specialist is believed to have traded unnecessarily, as dealer, on one side of the market only, at a price level where one or more DOT orders could have traded instead. News of this shocked the market. Van der Moolen ADRs fell 14.7% or $1.56 per share to close at $9.05 per share on extremely high volume. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com ********* A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the Class Action Reporter. Submissions via e-mail to carconf@beard.com are encouraged. Each Friday's edition of the CAR includes a section featuring news on asbestos-related litigation and profiles of target asbestos defendants that, according to independent researches, collectively face billions of dollars in asbestos-related liabilities. The Asbestos Defendant Profiles is backed by an online database created to respond to custom searches. Go to http://litigationdatasource.com/asbestos_defendant_profiles.html ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Roberto Amor, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2004. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *