/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/040329.mbx C L A S S A C T I O N R E P O R T E R Monday, March 29, 2004, Vol. 6, No. 62 Headlines AFFYMETRIX INC.: CA Court Dismisses Securities Violations Suit ANNUITY & LIFE: CT Court Refuses To Dismiss Securities Lawsuit BLACK HILLS: Natural Gas Pricing Suits Consolidated in S.D. NY CCA TREATED WOOD: LA Court Refuses To Certify Lawsuit V. 3 Firms CENTERPOINT ENERGY: Dismissed From NY Natural Gas Pricing Suits DENTSPLY INTERNATIONAL: Seeks Reversal of CA Suit Certification DQE INC.: Fact, Expert Witness Discovery in PA Lawsuit Extended INTERPORE INTERNATIONAL: Shareholders Launch Fraud Lawsuit in CA IONICS INC.: MA Court Refuses To Dismiss Securities Fraud Suit JOHN FRIEDA: Recalls Hair Spray Due To Bacterial Contamination LATTICE SEMICONDUCTOR: Faces Probe Into Restatement of Finances OCWEN FINANCIAL: FL Court Approves Securities Lawsuit Settlement OCWEN FINANCIAL: Request To Consolidate Suits Filed in JPMDL PROPHARMA INC.: Recalls Nasal Decongestant Due To Contamination RIVERSTONE NETWORKS: Reaches Settlement For CA Securities Suit STANLEY FURNITURE: Recalls 318 Isabella Cribs For Injury Hazard STERICYCLE INC.: Antitrust Lawsuits Consolidated in Utah Court SUNRISE POWER: Plaintiffs File Amended Unfair Trade Suit in CA STEWART INFORMATION: To Appeal Certification For Consumer Suit TERADYNE INC.: U.S. Judge Recommends Securities Suit Dismissal TIME WARNER: Motion To Dismiss Securities Lawsuit Pending in NY TIME WARNER: NY Court Grants Stay of Discovery in ERISA Lawsuits TIME WARNER: Shareholders Launch Securities Fraud Lawsuit in TX TIME WARNER: PurchasePro Investors Lodge Securities Suits in NY VERTEX PHARMACEUTICALS: MA Court Consolidates Securities Suits XCEL ENERGY: Trial in MN Securities Set To Begin February 1,2006 XCEL ENERGY: Discovery Proceeding in ERISA Violations Lawsuits XL CAPITAL: Shareholders Lodge Securities Fraud Suit in CT Court XL CAPITAL: CT Court Refuses To Dismiss ANR Securities Lawsuit New Securities Fraud Cases aaiPHARMA INC.: Schiffrin & Barroway Files Securities Suit in NC aaiPHARMA INC.: Milberg Weiss Lodges Securities Fraud Suit in NC aaiPHARMA INC.: Wechsler Harwood Lodges Securities Suit in NC EL PASO CORPORATION: Stull Stull Lodges Securities Suit in TX ITT EDUCATIONAL: Paskowitz & Associates Lodges Stock Suit in IN ROYAL DUTCH/SHELL: Kirby McInerney Files Securities Suit in NJ ********* AFFYMETRIX INC.: CA Court Dismisses Securities Violations Suit -------------------------------------------------------------- The United States District Court for the Northern District of California dismissed without prejudice the securities class action filed against Affymetrix, Inc., and certain of its executive officers and directors. On April 10, 2003, two individuals filed a purported shareholder class action lawsuit under the federal securities laws, against the Company, three of its executive officers and one outside director. The lawsuit relates to the Company's January 29, 2003 announcement of its financial expectations for 2003 and subsequent announcement on April 3, 2003, updating the Company's financial guidance for the first quarter of 2003. The lawsuit alleges, among other things, that the Company's January 29, 2003 financial guidance was misleading and GlaxoSmithKline plc sold the Company's shares during the first quarter of 2003 while in possession of material nonpublic information. On June 10, 2003, the plaintiffs in this action filed a notice of voluntary dismissal of the lawsuit without prejudice, and the Court granted the dismissal by order dated June 12, 2003. On May 20, 2003, two other individuals filed a second purported shareholder class action lawsuit in the United States District Court for the Northern District of California that is substantively identical to the one filed on April 10, 2003. The second lawsuit alleges the same claims against the same defendants on behalf of the same purported class of shareholders (those who purchased securities of Affymetrix between January 29, 2003 and April 3, 2003) as the earlier-filed lawsuit. This case is still in the pleading stage. On September 5, 2003, the Court granted the plaintiffs' unopposed motion for appointment of themselves as lead plaintiffs and approved their selection of lead counsel for the purported class. The plaintiffs filed an amended complaint on November 7, 2003. Affymetrix and the individual defendants filed a motion to dismiss the amended complaint on December 22, 2003 and on March 11, 2004 the court granted the motion to dismiss without prejudice in order to allow the plaintiffs the opportunity to attempt to remedy the pleading defects in their amended complaint if they choose to do so. The Company believes that the claims set forth in the purported class action lawsuit are without merit. ANNUITY & LIFE: CT Court Refuses To Dismiss Securities Lawsuit -------------------------------------------------------------- The United States District Court for the District of Connecticut refused several defendants' motions to dismiss the consolidated securities class action filed against Annuity & Life Re Holdings, Ltd. and certain of its present and former officers and directors. The suit seeks unspecified monetary damages, alleging that the defendants violated certain provisions of the United States securities laws by making various alleged material misstatements and omissions in public filings and press releases. The suit also names as defendants XL Capital Ltd and two additional directors. On October 1, 2003, the Company answered the amended and consolidated complaint and denied liability on the claims the plaintiffs have asserted. In January 2004, the court ordered that a related action that the plaintiffs filed against KPMG LLP (United States) and KPMG in Bermuda be consolidated with the action against the Company. In February 2004, the court denied certain individual defendants' motions to dismiss the action. In March 2004, the court denied motions to dismiss filed by certain other individual defendants and XL Capital Ltd. The court has not yet ruled on one individual defendant's motion to dismiss. BLACK HILLS: Natural Gas Pricing Suits Consolidated in S.D. NY -------------------------------------------------------------- The securities class actions filed against Black Hills Corporation have been consolidated with other similar actions in the United States District Court for the Southern District of New York. On August 18, 2003, Cornerstone Propane Partners, L.P. commenced a putative class action against over thirty energy companies, styled "Cornerstone Propane Partners, L.P. v. Reliant Energy Services, Inc., et. al., Civ. No. 03-CV-6168." The complaint, which names Black Hills Corporation and Enserco Energy Inc. as defendants, asserts claims for an unspecified amount of damages, based upon alleged violations of the Commodity Exchange Act. General allegations in the complaint assert that defendants manipulated natural gas futures contracts through false reporting of prices and volumes. Similar specific allegations are made against Black Hills Corporation and Enserco, based upon claims that former traders at Enserco reported false price and volume information to trade publications. Other defendants are alleged to have manipulated spot market gas prices by engaging in "wash trades" and/or by "churning" natural gas trades. Initially, the plaintiff seeks an order certifying the proceeding as a class action according to applicable rules. The Company will deny all claims for damages and vigorously defend this action, beginning with the request for class certification. On October 1, 2003, Roberto E. Calle Gracey commenced a putative class action lawsuit against a group of defendants that sets forth claims and demands similar to those described above with respect to the Cornerstone Propane Litigation. Black Hills Corporation and Enserco Energy, Inc. are named as defendants in this action, styled "Gracey v. American Electric Power Company, Inc., et. al., Civ. No., 03-CV-7750." On December 5, 2003, the suits were consolidated with other actions involving similar claims against other parties, in a civil action captioned In re Natural Gas Commodity Litigation, 03 CV 6186(VM), United States District Court, Southern District of New York. All further proceedings relative to these matters will be conducted in the consolidated action. CCA TREATED WOOD: LA Court Refuses To Certify Lawsuit V. 3 Firms ---------------------------------------------------------------- The United States District Court in Western Louisiana has rejected an attempt to bring a class action lawsuit challenging the safety of wood treated with Chromated Copper Arsenate (CCA) against the three major CCA manufacturers, as well as Home Depot and Lowe's. The ruling in Ardoin vs. Stine Lumber Co. was made after the plaintiffs took the unusual step of attempting to dismiss their own lawsuit. Defendants refused to consent to a dismissal and insisted on a ruling on the class certification issue. The court thus denied the plaintiffs' attempted dismissal and ordered a hearing on the class issue. Plaintiffs then conceded that the nationwide class they sought was untenable and "should be stricken." Plaintiffs continued to seek a class of Louisiana residents only, but the court concluded that the plaintiffs' case was "not as persuasive or as thorough" as the defendants'. In a strongly worded ruling for the defense, District Court Judge Patricia Minaldi rejected all of the plaintiffs' arguments for class certification, particularly their reliance on the EPA, "One of their foremost arguments is their claim that the EPA has banned CCA treated wood . But a close reading of the EPA materials offered by the plaintiffs reveals that wood treaters voluntarily stopped producing CCA wood because they now have new treatment available." (Ardoin vs. Stine Lumber Co., 02 CV 2502 Memorandum Ruling, pg. 12) This is the third time a court has rejected class certification of a case challenging the safety of CCA-treated wood. No court has ever granted class action status to such a case. In rejecting the plaintiffs' arguments once again, Judge Minaldi considered that, "The EPA specifically says that "it has not concluded that CCA- treated wood poses any unreasonable risk to the public or the environment," and specifically advises consumers not to "replace or remove existing structures made with CCA-treated wood or the soil surrounding those structures." (Ardoin vs. Stine Lumber Co., 02 CV 2502 Memorandum Ruling, pg. 12) "Even the plaintiffs realized the frivolous nature of their own claims and tried to walk away before the court was able to make its ruling," Jim Hale, executive director of the Wood Preservative Science Council, said in a statement. "This ruling is a major vindication for the treated wood industry." CENTERPOINT ENERGY: Dismissed From NY Natural Gas Pricing Suits --------------------------------------------------------------- Plaintiffs voluntarily dismissed Centerpoint Energy Houston Electric, LLC from several class actions filed against it and Reliant Energy Services in the United States District Court in New York on behalf of purchasers of natural gas futures contracts on the New York Mercantile Exchange. The complaints alleged that the defendants manipulated the price of natural gas through their gas trading activities and price reporting practices in violation of the Commodity Exchange Act during the period January 1, 2000 through December 31, 2002. The plaintiffs sought damages based on the effect of such alleged manipulation on the value of the gas futures contracts they bought or sold. DENTSPLY INTERNATIONAL: Seeks Reversal of CA Suit Certification --------------------------------------------------------------- Dentsply International, Inc. filed a writ of mandate in the appellate court seeking reversal of the class certification for the lawsuit filed against it in the California Superior Court, Los Angeles County. Bruce Glover, D.D.S. filed the suit, alleging, inter alia, breach of express and implied warranties, fraud, unfair trade practices and negligent misrepresentation in the Company's manufacture and sale of Advance(R) cement. The Complaint seeks damages in an unspecified amount for costs incurred in repairing dental work in which the Advance(R) product allegedly failed. In September 2003, the Plaintiff filed a Motion for class certification, which the Company opposed. Oral arguments were held in December 2003, and in January 2004, the Judge entered an Order granting class certification only on the claims of breach of warranty and fraud. In general, the Class is defined as California dentists who purchased and used Advance(R) cement and were required, because of failures of Advance(R), to repair or reperform dental procedures. The Advance(R) cement product was sold from 1994 through 2000 and total sales in the United States during that period were approximately $5.2 million. DQE INC.: Fact, Expert Witness Discovery in PA Lawsuit Extended --------------------------------------------------------------- The United States District Court for the Western District of Pennsylvania extended fact discovery in the consolidated securities class action against DQE, Inc. through April 2004, with expert witness discovery to continue until August 2004. The suit also names as defendant David Marshall, the Company's former chairman, chief executive officer and president. The suit, styled "In re DQE, Inc. Securities Litigation, Master File No. 01-1851," alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and Section 12(a)(2) of the Securities Act of 1933. The complaint also alleges controlling person liability under Section 20(a) of the Exchange Act and Section 15 of the Securities Act. The complaint alleges that between December 6, 2000 and April 30, 2001, the defendants issued a number of materially false and misleading statements concerning investments made by the Company's subsidiary, DQE Enterprises, Inc., and the impact that these investments would have on the Company's current and future financial results. More particularly, the complaint alleges that Holdings and Mr. Marshall stated their expectation that certain companies in which DQE Enterprises had invested would undertake initial public offerings of their shares, with the result that the Company's earnings would be positively impacted by the public market valuation of DQE Enterprises' interests in these companies, but failed to disclose allegedly adverse facts that made the possibility of successful public offerings of the securities of these companies unlikely. The complaint seeks an award of unspecified compensatory damages, and an order permitting class members who purchased Holdings shares through a dividend reinvestment plan to rescind those purchases, pre- and post-judgment interest, attorneys' fees and expenses of litigation and unspecified equitable and injunctive relief. On May 20, 2003, the court certified a class to include purchasers of the Company's common stock during the period from December 6, 2000 through April 30, 2001, and a sub-class to include purchasers of the Company's common stock through the Company's dividend reinvestment and stock purchase plan during the same period. Since December 2002, the Company has been engaged in pre-trial discovery. INTERPORE INTERNATIONAL: Shareholders Launch Fraud Lawsuit in CA ---------------------------------------------------------------- Interpore International, Inc. and each member of its board of directors face a securities class action filed in the Superior Court of the State of California, County of Orange, styled "Abrams v. Interpore International, Inc., et al., (Case No. 04CC00093." The suit alleges that the Company and its directors breached the fiduciary duties of care, loyalty, candor, and independence owed to Interpore's stockholders in connection with the proposed acquisition of Interpore by Biomet, Inc. Specifically, the lawsuit alleges that Interpore and its directors failed to take steps to maximize the value of Interpore, took steps to avoid competitive bidding, gave Biomet an unfair advantage, failed to solicit other potential acquirors or alternative transactions and failed to properly value Interpore. The plaintiff seeks to enjoin Interpore from proceeding with the proposed acquisition by Biomet. Additionally, the complaint seeks certification of a class, a declaration that Interpore and its directors have breached their fiduciary duties in entering into the proposed transaction with Biomet, an injunction barring the proposed acquisition and directing Interpore to pursue a transaction in the best interests of its stockholders, a constructive trust upon any benefits improperly received by Interpore or any of its directors as a result of the proposed acquisition, costs, and attorneys' and experts' fees. IONICS INC.: MA Court Refuses To Dismiss Securities Fraud Suit -------------------------------------------------------------- The United States District Court for the District of Massachusetts refused to dismiss the consolidated securities class action filed against Ionics, Inc., its former Chief Executive Officer, and its Chief Financial Officer, styled "Jerome Deckler v. Ionics, Inc., et al." Plaintiff alleges violations of the federal securities laws relating to the restatement of the Company's financial statements for the first and second quarters of 2002 announced in November 2002, and other material misrepresentations and omissions concerning the Company's financial results. The plaintiffs are seeking an unspecified amount of compensatory damages and their costs and expenses, including legal fees. The Company believes the allegations in the lawsuit are without merit. The case is in the early discovery stage. While the Company believes that the litigation will have no material adverse impact on its financial condition, results of operations or cash flows, the litigation process is inherently uncertain and the Company can make no assurances as to the ultimate outcome of this matter. JOHN FRIEDA: Recalls Hair Spray Due To Bacterial Contamination -------------------------------------------------------------- John Frieda Professional Hair Care, Inc. is voluntarily recalling a limited amount of its Sheer Blond Curvaceous Blonde 6.7 fluid ounces pump spray, sold only at Eckerd stores in the states of Delaware, Maryland, New Jersey, Pennsylvania and Virginia. The voluntary recall was initiated after routine testing revealed a possible contamination with Pseudomonas, a bacterium which can cause infections in an open wound or cut in rare circumstances. The infections are easily treated with antibiotics and usually do not represent a serious health effect. The recalled product was distributed only to Eckerd drug stores in the above-mentioned states. A total of 104 cases (624 bottles) are affected by this recall. The Eckerd stores who received the indicated lots have been notified and are pulling the product from their shelves. The product recall is limited to the following lot codes: S001AW037 and S001AW040. The code is printed on the bottom of the bottle. Sheer Blonde Curvaceous Blonde bottles, not bearing the above codes, are not affected by the recall nor are all other John Frieda Professional Hair Care Inc., products. No illnesses have been reported, to date, in connection with this recall. Consumers who purchased the recalled lots are urged to return them to the Eckerd store where they purchased the product for a full refund. Consumers with questions may contact the Company's consumer relations toll free hotline: 1-800-521-3189 between the hours of 8am - 5pm Monday through Friday, EST. LATTICE SEMICONDUCTOR: Faces Probe Into Restatement of Finances --------------------------------------------------------------- Lattice Semiconductor Corporation faces an investigation by Scott + Scott, LLC, a U.S. law firm based in Connecticut with offices in Ohio and California, over its announcement Wednesday that it would restate three quarters of results due to accounting errors and deficiencies in its internal controls. The restatements for the first three quarters of 2003 reduced revenues by $10.6 million and increased its losses by $8.9 million, or 8 cents per share. After the restatements, Lattice posted a 2003 net loss of $91.8 million, or 82 cents a share. Lattice has lost over twenty-five percent of its value since January of this year. For more details, contact Neil Rothstein of Scott + Scott LLC by Mail: 108 Norwich Avenue, Colchester, CT 06415 by Phone: 860/537-3818 by Fax: 860/537- 4432 or by E-mail: nrothstein@scott-scott.com OCWEN FINANCIAL: FL Court Approves Securities Lawsuit Settlement ---------------------------------------------------------------- The Fifteenth Judicial Circuit Court, Palm Beach County, Florida approved the settlement for the securities class action filed against Ocwen Financial Corporation (OCN), Ocwen Asset Financial Investment Corporation (OAC) and certain OAC directors on behalf of a putative class of OAC public shareholders. The plaintiffs in both complaints sought to enjoin consummation of the acquisition of OAC by OCN. The injunction was denied, and on October 14, 1999 OCN was dismissed as a party. Plaintiffs' remaining claims were for damages for alleged breaches of common law fiduciary duties. In October 2001, the parties reached an agreement in principle, which provides for a payment to plaintiffs in complete settlement off all claims for damages and attorney's fees and costs. On September 29, 2003, the Court approved the settlement and entered final judgment, thus bringing the litigation to a conclusion. OCWEN FINANCIAL: Request To Consolidate Suits Filed in JPMDL ------------------------------------------------------------ A petition to consolidate several class actions filed against Ocwen Financial Corporation and certain of its affiliates, including Ocwen Federal Bank FSB is pending before the United States Judicial Panel for Multidistrict Litigation. The lawsuits challenging the Bank's mortgage servicing practices. The lawsuits allege that the defendants violated federal and state statutes, including the federal Real Estate Settlement Procedures Act, Fair Debt Collection Practices Act and state deceptive trade practices statutes, and assert common law claims. The lawsuits seek actual and punitive damages, and injunctive and other relief. These lawsuits are at an early stage of proceedings, and no court has yet considered a motion for class certification. A petition to consolidate the lawsuits is currently pending before the United States Judicial Panel on Multi-District Litigation, under caption styled: In re Ocwen Federal Bank FSB Mortgage Servicing Litigation, MDL Docket No. 1604. PROPHARMA INC.: Recalls Nasal Decongestant Due To Contamination --------------------------------------------------------------- Propharma, Inc., Miami, Florida is recalling "Major Twice-A-Day 12 Hour Nasal Spray - Nasal Decongestant, 1/2 oz. bottle, Lot #K4496, Exp 10/06 because the lot is contaminated with a type of bacteria called Burkholderia cepacia. Use of this contaminated product could cause serious or potentially life-threatening infections in patients with compromised immune systems, particularly individuals with cystic fibrosis. This product is a nasal decongestant containing the active ingredient oxymetazoline hydrochloride 0.05%, the lot number and expiration date are found on the bottom of the carton and the back of the bottle label. The entire lot has been distributed nationwide to wholesalers, pharmacies, hospitals and retailers by Major Pharmaceuticals, Livonia, MI 48150. Major Pharmaceuticals has initiated a recall to the consumer level. Propharma was alerted to this problem following reports of infections and findings of Burkholderia cepacia in the nasal spray by a hospital in Colorado. FDA sample analysis confirmed the presence of the bacteria in unopened bottles from the affected lot. Consumers and retailers that have the product should return it to their place of purchase for a full refund. Consumers with questions regarding the recall may contact Major Pharmaceuticals by Phone: 734-743-6181. RIVERSTONE NETWORKS: Reaches Settlement For CA Securities Suit -------------------------------------------------------------- Riverstone Networks (OTC:RSTN.PK) reached an agreement in principle to settle all securities class action lawsuits pending against the company in the U.S. District Court in San Francisco, California. Under the terms of the agreement, the plaintiff class will receive a total cash payment of $18.5 million. Riverstone's primary directors and officers' liability insurer committed to pay approximately $11 million of such amount, subject to a reservation of rights by the insurer to seek repayment of that amount. The insurer subsequently has raised questions as to whether it will honor in full this commitment. The settlement payment (net of the amounts, if any, received from its insurers) will be paid by Riverstone, which intends to take all necessary steps to seek reimbursement from its insurers. Riverstone is seeking a prompt determination that the company and its officers and directors are unconditionally entitled to use all of its remaining insurance. The Company currently has $26 million of directors and officers' liability insurance, comprised of approximately $11 million already committed to the settlement by the primary insurer and $15 million of excess liability insurance coverage, which the Company intends to use to offset remaining settlement and defense costs. The settlement is subject to court approval, and does not reflect any admission of wrongdoing by Riverstone or any of the former officers or directors named as defendants in the litigation. For more details, contact Roger A. Barnes, Executive Vice President and Chief Financial Officer by Phone: 408-878-6500 or contact Howard Kalt of Kalt Rosen & Co. LLC by Phone: 415-397-2686 or by E-mail: info@KRC-IR.com STANLEY FURNITURE: Recalls 318 Isabella Cribs For Injury Hazard --------------------------------------------------------------- Stanley Furniture Company is cooperating with the U.S. Consumer Product Safety Commission by voluntarily recalling 318 Isabella model cribs. An incorrect screw (used to attach the movable gate) was provided for the assembly of some of these cribs. The crib cannot be assembled using this screw. However, if consumers have substituted their own screw, it may not properly hold the movable gate in place. The result is a potential risk that a child could fall from the crib or become entrapped between the gate and the mattress. These are Isabella model cribs with model number 326-94C1 or 326-94C2. The model number appears on the bar code label. The Isabella cribs are distributed through Stanley Furniture's Young America line. They are made of wood and painted white. Department and furniture stores nationwide sold these items from November 2003 through February 2004 for about $980. For more details, contact Stanley Furniture by Phone: (888) 839- 6822 between 8 a.m. and 5 p.m. ET Monday through Friday. STERICYCLE INC.: Antitrust Lawsuits Consolidated in Utah Court -------------------------------------------------------------- The eight class actions filed against Stericycle, Inc. have been consolidated in the United States District Court in Utah. In January 2003, the Company was sued in the United States District Court in Arizona by a private plaintiff claiming anti- competitive conduct in Arizona, Colorado and Utah from November 1997 to the present and seeking certification of the lawsuit as a class action on behalf of all of the Company's customers and of Browning Ferries Industries, Inc. (BFI), which it acquired, in the three-state area during the period in question. Over the next three months, four similar suits were filed in the United States District Court in Utah, Arizona, Colorado and New Mexico. In February and May 2003, two additional suits were filed in the United States District Court in Utah and Arizona claiming substantially the same anticompetitive conduct but not seeking class action certification. In December 2003, an eighth suit was filed in the United States District Court in Utah claiming monopolistic and other anticompetitive conduct in California during the prior four years and seeking certification of the suit as a class action on behalf of all California customers of ours during this four-year period. The first five suits have been consolidated under one consolidated class action complaint; the next two suits have been consolidated for discovery purposes; and the eighth suit has been coordinated for discovery purposes. SUNRISE POWER: Plaintiffs File Amended Unfair Trade Suit in CA -------------------------------------------------------------- Plaintiffs filed an amended class action against Sunrise Power Company and other sellers of long-term power to the California Department of Water Resources in the Superior Court of the State of California, City and County of San Francisco, "individually, and on behalf of the general public and as a representative taxpayer suit" against sellers of long-term power to the California Department of Water Resources. The lawsuit alleges that the defendants, including Sunrise Power Company, engaged in unfair and fraudulent business practices by knowingly taking advantage of a manipulated power market to obtain unfair contract terms. The lawsuit seeks to enjoin enforcement of the "unfair and oppressive terms and conditions" in the contracts, as well as restitution by the defendants of excessive monies obtained by the defendants. Plaintiffs in several other class action lawsuits pending in Northern California have filed petitions requesting the Millar lawsuit be consolidated with those lawsuits. The defendants in the Millar lawsuit and other class action suits removed all the lawsuits to the U.S. District Court, Northern District of California, and filed a motion to stay all proceedings pending final resolution of the jurisdictional issue. On July 9, 2003, Judge Whaley of the U.S. District Court concluded the federal court lacked jurisdiction and remanded the case to the originating San Francisco Superior Court. Defendants, including Sunrise Power Company, stipulated to respond to the complaint thirty days after it is assigned to a specific court of the San Francisco Superior Court. In December 2003, Plaintiff James Millar filed a First Amended Class Action and Representative Action Complaint which contains allegations similar to those in the earlier complaint but also alleges a class action. One of the newly added parties has again removed the lawsuit to federal court, where it is currently pending (subject to remand). STEWART INFORMATION: To Appeal Certification For Consumer Suit -------------------------------------------------------------- Stewart Information Services Corporation intends to appeal the class certification granted to a lawsuit filed in the Supreme Court State of New York - Nassau County, alleging that the Company directly and through its agencies routinely collected excess premiums in connection with refinance transactions. Similar actions were brought against seven other underwriters and the matters have been consolidated. Each plaintiff moved for class certification and on January 8, 2004 class certification was granted. The plaintiffs are two individuals on behalf of themselves and others similarly situated against a subsidiary of the Company. The Company has engaged counsel and denies culpability on a number of grounds. The complaint seeks damages on "amounts yet to be determined" and also seeks reasonable attorney fees and other relief the court deems just and proper. TERADYNE INC.: U.S. Judge Recommends Securities Suit Dismissal -------------------------------------------------------------- The United States Magistrate Judge recommended the dismissal of the consolidated securities class action filed against Teradyne, Inc. and two of its executive officers. The complaint alleges, among other things, that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, by making, during the period from July 14, 2000 until October 17, 2000, material misrepresentations and omissions to the investing public regarding Teradyne's business operations and future prospects. The complaint seeks unspecified damages, including compensatory damages and recovery of reasonable attorneys' fees and costs. The Company filed a motion to dismiss all claims asserted in the complaint on February 7, 2003. On April 9, 2003, the lead plaintiffs filed a memorandum in opposition to the Company's motion to dismiss. On May 28, 2003, Teradyne filed a reply memorandum in support of its motion to dismiss all claims asserted in the complaint. Oral arguments in connection with Teradyne's motion to dismiss were presented to the District Court on June 26, 2003. Claims asserted in this case are similar to the claims asserted in the California securities case discussed above, which is pending in the Federal District Court in San Diego, California. On January 16, 2004, the U.S. Magistrate Judge recommended to the U.S. District Court that Teradyne's motion to dismiss the consolidated amended class action complaint in its entirety be allowed without prejudice. On February 2, 2004, the lead plaintiffs filed an objection to the U.S. Magistrate Judge's recommendation. Teradyne is currently preparing its response to the lead plaintiffs' objection. TIME WARNER: Motion To Dismiss Securities Lawsuit Pending in NY --------------------------------------------------------------- Time Warner, Inc.'s motion for dismissal of the consolidated securities class action filed in the United States District Court for the Southern District of New York is still pending. As of March 1, 2004, 30 shareholder class action lawsuits have been filed naming as defendants the Company, certain current and former executives of the Company and, in several instances, America Online, Inc. These lawsuits were initially filed in U.S. District Courts for the Southern District of New York, the Eastern District of Virginia and the Eastern District of Texas. The complaints purport to be made on behalf of certain shareholders of the Company and allege that the Company made material misrepresentations and/or omissions of material fact in violation of Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange Act. Plaintiffs claim that the Company failed to disclose America Online's declining advertising revenues and that the Company and America Online inappropriately inflated advertising revenues in a series of transactions. Certain of the lawsuits also allege that certain of the individual defendants and other insiders at the Company improperly sold their personal holdings of Time Warner stock, that the Company failed to disclose that the Merger was not generating the synergies anticipated at the time of the announcement of the Merger and, further, that the Company inappropriately delayed writing down more than $50 billion of goodwill. The lawsuits seek an unspecified amount in compensatory damages. All of these lawsuits have been centralized in the U.S. District Court for the Southern District of New York for coordinated or consolidated pretrial proceedings (along with other federal derivative lawsuits and certain lawsuits brought under the Employee Retirement Income Security Act (ERISA)) under the caption "In re AOL Time Warner Inc. Securities and ERISA Litigation." Additional lawsuits filed by individual shareholders have also been consolidated for pretrial proceedings. The Minnesota State Board of Investment has been designated lead plaintiff for the consolidated securities actions and filed a consolidated amended complaint on April 15, 2003, adding additional defendants including additional officers and directors of the Company, and: (1) Morgan Stanley & Co., (2) Salomon Smith Barney Inc., (3) Citigroup Inc., (4) Banc of America Securities LLC and (5) JP Morgan Chase & Co. Plaintiffs also added additional allegations, including that the Company made material misrepresentations in its Registration Statements and Joint Proxy Statement-Prospectus related to the Merger and in its Registration Statements pursuant to which debt securities were issued in April 2001 and April 2002, allegedly in violation of Section 11 and Section 12 of the Securities Act of 1933. On July 14, 2003, the Company filed a motion to dismiss the consolidated amended complaint. On July 25, 2003, the court denied plaintiffs' motion for relief from the automatic stay of discovery that is in effect under the Private Securities Litigation Reform Act of 1995. The Company, while defending against these lawsuits vigorously, is unable to predict the outcome of these suits or reasonably estimate a range of possible loss, the Company said in a regulatory filing. TIME WARNER: NY Court Grants Stay of Discovery in ERISA Lawsuits ---------------------------------------------------------------- The United States District Court for the Southern District of New York granted Time Warner, Inc.'s motion for limited stay in discovery in the consolidated class actions filed against it, certain of its current and former directors and officers of the Company and certain members of the Administrative Committees of Plans. As of March 1, 2004, three putative class actions have been filed alleging violations of the Employee Retirement Income Security Act (ERISA) on behalf of current and former participants in the AOL Time Warner Savings Plan, the AOL Time Warner Thrift Plan and/or the TWC Savings Plan. The lawsuits allege that the Company and other defendants breached certain fiduciary duties to plan participants by, inter alia, continuing to offer Time Warner stock as an investment under the Plans, and by failing to disclose, among other things, that the Company was experiencing declining advertising revenues and that the Company was inappropriately inflating advertising revenues through various transactions. The complaints seek unspecified damages and unspecified equitable relief. On July 3, 2003, plaintiffs filed a consolidated amended complaint naming additional defendants, including America Online, Inc., certain current and former officers, directors and employees of the Company and Fidelity Management Trust Company. On September 12, 2003, the Company filed a motion to dismiss the consolidated ERISA complaint and that motion is pending. TIME WARNER: Shareholders Launch Securities Fraud Lawsuit in TX --------------------------------------------------------------- Time Warner, Inc. faces a class action filed in the District Court of Cass County, Texas, styled "McClure et al. v. AOL Time Warner Inc. et al.," in on behalf of several purchasers of Company stock. The suit names as defendants the Company and certain current and former officers, directors and employees of the Company. Plaintiffs allege that the Company made material misrepresentations in its registration statements in violation of Sections 11 and 12 of the Securities Act of 1933. Plaintiffs also allege breach of fiduciary duty and common law fraud. Plaintiffs seek unspecified compensatory damages. The Company is unable to predict the outcome of this suit or reasonably estimate a range of possible loss, it stated in a regulatory filing. TIME WARNER: PurchasePro Investors Lodge Securities Suits in NY --------------------------------------------------------------- Time Warner, Inc. faces three class action lawsuits filed in the United States District Court for the Southern District of New York against the Company, America Online and certain former officers and employees. The complaints purport to be brought on behalf of purchasers of stock in PurchasePro Inc. (PPRO). Plaintiffs allege that the Company violated Sections 10(b) and 20(a) of the Exchange Act by aiding and abetting PPRO's alleged inflation of its financial results. The Company intends to defend against these lawsuits vigorously. The Company is unable to predict the outcome of these suits or reasonably estimate a range of possible loss, the Company stated in a disclosure to the Securities and Exchange Commission. VERTEX PHARMACEUTICALS: MA Court Consolidates Securities Suits -------------------------------------------------------------- The United States District Court for the District of Massachusetts consolidated several securities class actions filed against Vertex Pharmaceuticals, Inc. and certain of its current and former officers and employees, styled: (1) Carlos Marcano v. Vertex Pharmaceuticals, et al., (2) City of Dearborn Heights General Governmental Employees' Retirement System v. Vertex Pharmaceuticals, et al., (3) Stephen Anish v. Vertex Pharmaceuticals, et al., (4) William Johns v. Vertex Pharmaceuticals, et al. and (5) Ben Harrington v. Vertex Pharmaceuticals, et al. The plaintiffs claim that the defendants made material misrepresentations and/or omissions of material fact regarding VX-745, an investigational agent with potential in the treatment of inflammatory and neurological diseases, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act and Rule 10(b)(5). The plaintiffs seek certification as a class action, compensatory damages in an unspecified amount, and unspecified equitable or injunctive relief. The Company believes that the claims are without merit, it stated in a regulatory filing. XCEL ENERGY: Trial in MN Securities Set To Begin February 1,2006 ---------------------------------------------------------------- The United States District Court for the District of Minnesota ordered the amended securities class action filed against Xcel Energy, Inc. to be ready for trial by February 1,2006. The suit was filed on behalf of purchasers of the Company's common stock between January 31, 2001 and July 26, 2002. The suit also names as defendants: (1) Wayne H. Brunetti, chairman and chief executive officer, (2) Edward J. McIntyre, former vice president and chief financial officer, (3) former chairman James J. Howard, (4) Gary R. Johnson, general counsel, (5) Richard C. Kelly, then president of Xcel Energy Enterprises, (6) David H. Peterson, (7) Leonard A. Bluhm, and (8) William T. Pieper and (9) former independent director of NRG, Luella G. Goldberg Among other things, the complaint alleged violations of Section 10(b) of the Securities Exchange Act and Rule 10(b-5) related to allegedly false and misleading disclosures concerning various issues including but not limited to "round trip" energy trades; the nature, extent and seriousness of liquidity and credit difficulties at NRG; and the existence of cross-default provisions (with NRG credit agreements) in certain of Xcel Energy's credit agreements. The suit also asserts claims of false and misleading disclosures, also regarding "round trip" trades and the cross- default provisions, as well as the extent to which the "fortunes" of NRG were tied to Xcel Energy, especially in the event of a buyback of NRG's publicly owned shares under Section11 of the Securities Act, with respect to issuance of the senior notes by NRG. The amended complaint seeks compensatory and rescissionary damages, interest and an award of fees and expenses. On September 30, 2003, in response to the defendants' motion to dismiss, the court issued an order dismissing the claims brought by purchasers of the NRG senior notes against defendants James Howard, Gary R. Johnson, Richard C. Kelly, David H. Peterson, Leonard A. Bluhm, William T. Pieper and Luella Goldberg. The court, however, denied the motion related to claims brought by Xcel Energy shareholders against Xcel Energy, James Howard, Wayne Brunetti and Edward McIntyre. Presently the parties are in the preliminary stages of discovery. XCEL ENERGY: Discovery Proceeding in ERISA Violations Lawsuits -------------------------------------------------------------- Discovery is proceeding in two identical class actions filed against Xcel Energy, Inc. in the United States District Court for the District of Colorado, styled "Newcome vs. Xcel Energy Inc." and "Barday vs. Xcel Energy Inc." The suits were filed on behalf of classes of employee participants in Xcel Energy's and its predecessors' 401(k) or ESOP plans, from as early as September 23, 1999, forward. The complaints in the actions name as the Company and: (1) its directors, (2) certain former directors, (3) James J. Howard, (4) Giannantonio Ferrari, (5) certain present and former officers, (6) Edward J. McIntyre and (7) David E. Ripka The complaints allege violations of the Employee Retirement Income Security Act (ERISA) in the form of breach of fiduciary duty in allowing or encouraging purchase, contribution and/or retention of Xcel Energy's common stock in the plans and making misleading statements and omissions in that regard. The complaints seek injunctive relief, restitution, disgorgement and other remedial relief, interest and an award of fees and expenses. The defendants have filed motions to dismiss the complaints upon which no rulings have yet been made. The plaintiffs have made certain voluntary disclosure of information, and discovery is proceeding. Upon motion of defendants, the cases have been transferred to the District of Minnesota for purposes of coordination with the securities class actions and shareholders derivative action pending there. XL CAPITAL: Shareholders Lodge Securities Fraud Suit in CT Court ---------------------------------------------------------------- XL Capital, Ltd. and certain of its officers and directors were named as defendants in a putative class action filed in United States District Court, District of Connecticut, styled "Malin et al. v. XL Capital Ltd et al." The action purports to be on behalf of purchasers of the Company's common stock between November 1, 2001 and October 16, 2003. The suit alleges claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The suit alleges that the defendants violated the Securities Laws by, among other things, failing to disclose in various public and shareholder and investor reports and other communications the alleged inadequacy of the Company's loss reserves for its NAC Re subsidiary (now known as XL Reinsurance America, Inc.) and that, as a consequence, the Company's earnings and assets were materially overstated. The time for the Company to respond to the Complaint has not occurred and there has been no discovery in the Action. The Company and these officers and directors intend to vigorously defend the claims asserted against them. XL CAPITAL: CT Court Refuses To Dismiss ANR Securities Lawsuit -------------------------------------------------------------- The United States District Court for the District of Connecticut refused XL Capital Ltd.'s motion to dismiss the consolidated amended class action filed against the Company and executive officers Michael P. Exposito and Brian O'Hara. The suit was filed by certain shareholders of Annuity and Life Re (Holdings), Ltd. (ANR) and names as defendants ANR and certain present and former officers and directors of ANR. The suit seeks unspecified money damages on behalf of purchasers of ANR stock. The suit is styled "Schnall v. Annuity and Life Re (Holdings), Ltd., Civil Action No. 02-CV-2133 (GLG)." The plaintiffs claim that the defendants violated certain provisions of the United States securities laws by making (or being responsible as alleged controlling persons for) various alleged material misstatements and omissions in public filings and press releases of ANR. The Company owned between approximately 11% and 13% of the stock of ANR, and Mr. Esposito and Mr. O'Hara (indemnities of the Company) were directors of ANR, during the assertedly relevant period. On October 23, 2003, KPMG LLP, the auditor of ANR, was named in a separate lawsuit in the District of Connecticut alleging similar securities violations relating to KPMG's auditing of the ANR financial statements. That suit is styled Communication Workers of America v. KPMG LLP, Civil Action No. 03-CV-1825 (GLG). The KPMG suit has been consolidated with the initial suit Action. New Securities Fraud Cases aaiPHARMA INC.: Schiffrin & Barroway Files Securities Suit in NC ---------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a Class Action lawsuit in the United States District Court for the Eastern District of North Carolina, Southern Division, on behalf of all purchasers of the common stock of aaiPharma, Inc. from April 24, 2002 through February 27, 2004, inclusive, against defendants aaiPharma, and: (1) Philip S. Tabbiner, and (2) William L. Ginna, Jr. The lawsuit alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. More specifically, the complaint alleges that, throughout the Class Period, defendants issued numerous statements to the market concerning the Company's financial results, which failed to disclose and/or misrepresented the following adverse facts, among others: (i) that the Company's core business plan was deteriorating; (ii) that the Company was unloading inventory onto wholesalers in order to make sales; (iii) that the aforementioned practice was necessary because the Company needed to keep its stock price up in order to fend off a third party suitor; (iv) that the Company was improperly recognizing revenue, in violation of Generally Accepted Accounting Principles, from sales that were not complete; and (v) as a result, the Company's financial results were materially inflated at all relevant times. On February 5, 2004, aaiPharma announced that the Company expected net revenues to be between $340 million and $355 million for 2004. Diluted earnings per share for 2004 were expected to remain, as previously disclosed, between $1.45 and $1.52. Based on current trends, milestones achieved and other developments, the Company expected to generate earnings of $0.27 to $0.30 per diluted share during the first quarter of 2004. Additionally, the Company announced that it was setting aside money to pay for refunds on older medicines after an unusually high return rate in the fourth quarter. On news of this, shares of aaiPharma fell 23 percent, or $6.36 per share to close at $21.24 per share on extremely heavy volume. On March 1, 2004, aaiPharma stated that an internal investigation had been commenced due to "sales abnormalities in the Company's Brethine (R) and Darvoct (TM) product lines during the second half of 2003." The Company further stated that the results of this investigation could have a "material" impact on financial results for the first quarter and all of fiscal 2004. On news of this, aaiPharma stock fell an additional 36% on unusually high trading volumes. For more information, contact Marc A. Topaz or Stuart L. Berman, by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004, by Phone: 1-888-299-7706 (toll free) or 1-610-667-7706, or by E-mail: info@sbclasslaw.com. aaiPHARMA INC.: Milberg Weiss Lodges Securities Fraud Suit in NC ---------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP initiated a class action lawsuit in the United States District Court for the Eastern District of North Carolina, on behalf of purchasers of the securities of AaiPharma, Inc. between April 24, 2002 and February 27, 2004, inclusive, seeking to pursue remedies under the Securities Exchange Act of 1934, against defendants aaiPharma, and: (1) Philip S. Tabbiner, and (2) William L. Ginna, Jr. The lawsuit alleges violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. Throughout the Class Period, defendants issued quarter after quarter of "record" financial results. Defendants emphasized increased revenues throughout the Class Period, fueled by strong sales of pharmaceutical products including sales of Brethine, an asthma medication. Defendants failed to disclose that these stellar financial results were only made possible through improper sales practices, such as "channel stuffing" or flooding wholesalers with products in order to artificially boost sales, and failing to properly reserve for product returns in violation of Generally Accepted Accounting Principles. As a result, defendants' Class Period financial statements were materially overstated. On February 5, 2004, before the market opened, defendants shocked the market by announcing that due to excessive product returns of products such as Brethine, and necessary additions to product return reserves, fourth quarter net revenues were reduced by $15.9 million. In response to the news concerning AaiPharma's previously undisclosed inventory issues, the price of AaiPharma stock dropped from over $27 per share on February 4, 2004 to $21.30 on February 5, 2004, a drop of over 23% on unusually large trading volumes of 4.8 million shares traded. On March 1, 2004, defendants admitted that an internal investigation had been commenced due to "sales abnormalities in the Company's Brethiner and DarvoctT product lines during the second half of 2003." The Company further revealed that the results of this investigation could have a "material" impact on financial results for the first quarter and all of fiscal 2004. In response to this news, AaiPharma stock plunged an additional 36% on abnormally high trading volumes. For more information, contact Steven G. Schulman, by Mail: One Pennsylvania Plaza, 49th fl., New York, NY, 10119-0165, by Phone:(800) 320-5081, or by E-mail: aaipharma@milberg.com. aaiPHARMA INC.: Wechsler Harwood Lodges Securities Suit in NC ------------------------------------------------------------- Wechsler Harwood LLP initiated a Federal Securities fraud class action in the United States District Court for the Eastern District of North Carolina, on behalf of persons or entities who purchased or otherwise acquired the securities of AaiPharma, Inc. from April 24, 2002 through and including March 1, 2004, against aaipharma, and: (1) Frederick D. Sancilio, (2) Philip S. Tabbiner, and (3) William L. Gina, Jr. The complaint, styled: Miller v. AaiPharma, Inc., et al., 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 throughout the Class Period, defendants issued quarter after quarter of "record" financial results. Defendants emphasized increased revenues throughout the Class Period, fueled by strong sales of pharmaceutical products. The complaint alleges that Defendants failed to disclose that these stellar financial results were only made possible through improper sales practices, such as "channel stuffing" or flooding wholesalers with products in order to artificially boost sales, and failing to properly reserve for product returns in violation of Generally Accepted Accounting Principles. On February 5, 2004, before the market opened, defendants announced that fourth quarter net revenues were reduced by $15.9 million. In response to the news concerning AaiPharma's previously undisclosed inventory issues, the price of AaiPharma stock dropped from over $27 per share on February 4, 2004 to $21.30 on February 5, 2004, a drop of over 23% on unusually large trading volumes of 4.8 million shares traded. The stock continued to drop as the fraudulent nature of the Company's sales and accounting practices came to light, trading at only $20 per share on February 9, 2004. On March 1, the Company confirmed investors' worst fears by announcing that it is investigating "sales abnormalities" in key product lines, that "will materially affect" its outlook for the first quarter and full-year 2004 and that it was withdrawing earnings estimates for those periods. On this news, AaiPharma shares again plunged another $5.51, or 36%, to $9.77. For more information, contact David Leifer, Shareholder Relations Department, by Mail: 488 Madison Avenue, 8th Floor, New York, N.Y. 10022, by Phone:(877) 935-7400, or by E-mail: dleifer@whesq.com. EL PASO CORPORATION: Stull Stull Lodges Securities Suit in TX ------------------------------------------------------------- Stull, Stull & Brody, LLP initiated a class action lawsuit in the United States District Court for the Southern District of Texas, on behalf of a class of all persons who purchased or acquired the common stock of El Paso Corp. between March 30, 2003 and February 17, 2004, 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 during the Class Period, thereby artificially inflating the price of El Paso securities. More specifically, the Complaint alleges that, throughout the Class Period, defendants caused El Paso to report in its public filings, press releases and other public statements favorable financial results by, among other things, artificially inflating the Company's reported reserves as it relates to oil and natural gas. The Complaint alleges, among other things, that defendants failed to disclose that the Company's estimates were based on improperly manipulated reported reserve estimates that deviated from industry standards and resulted in a knowingly false high estimate of reported reserves. On February 17, 2004, El Paso announced that the Company had overstated its reported reserves by 41% or 1.8 trillion cubic feet and warned of a $1 billion pretax charge triggered by the revision. On this news, El Paso shares fell 18% and traded as low as $7.26 per share. For more information, contact Tzivia Brody, by Mail: 6 East 45th Street, New York, NY 10017, by Phone: 1-800-337-4983 (toll free), by E-mail: SSBNY@aol.com, or visit the firm's Web site: http://www.ssbny.com. ITT EDUCATIONAL: Paskowitz & Associates Lodges Stock Suit in IN --------------------------------------------------------------- Paskowitz & Associates initiated a class action suit in the United States District Court for the Southern District of Indiana, on behalf of purchasers of ITT Educational Services, Inc. publicly traded securities during the period between April 17, 2003 and February 25, 2004, inclusive, against defendants ITT/ESI, and: (1) Rene R. Champagne, and (2) Kevin M. Modany The lawsuit alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. More specifically, the complaint alleges that throughout the Class Period, ITT/ESI issued multiple press releases highlighting the Company's increasing financial performance and the continued robust demand for its educational programs. The Company also disclosed in its filings with the Securities & Exchange Commission during the Class Period that a substantial portion of the tuition paid by its students comes from federal education aid programs, which the Company's schools are authorized to offer. These statements, however, were materially false and misleading because they failed to disclose: (i) that the statistics that the Company provided to the government in order to continue its eligibility in offering Title IV programs were inaccurate; (2) that defendants' actions would result in reputational harm to the Company's schools and possible disqualification of the Company's students from future participation in federal education aid programs; and (3) that as a result, defendants' positive statements concerning the Company's future prospects were lacking in a reasonable basis when made. As defendants continued to issue positive statements about the Company and its future prospects, shares of the Company's stock steadily increased. Throughout this period, ITT/ESI insiders took advantage of the artificial inflation in the Company's stock and sold approximately $8,455,385 of their personally held shares to the unsuspecting public at artificially inflated prices. On February 25, 2004, ITT/ESI shocked the market when it announced that federal agents had raided the Company's corporate headquarters in Indianapolis. The agents carried search warrants that were issued from a grand jury probe by the Southern District of Texas. According to the Company, the investigation involved grand jury subpoenas of records concerning student placement, retention, graduation, attendance, recruitment, grades, graduates' salaries and transfers of students' credits to other colleges. Trading was halted throughout the morning. When trading resumed, shares of the Company's stock fell to $38.50 per share, a decline of $18.90 per share, or approximately 33%, on extremely high trading volume. For more information, contact Paskowitz & Associates, by Phone: 1-800-705-9529 (toll free), or by E-mail: classattorney@aol.com. ROYAL DUTCH/SHELL: Kirby McInerney Files Securities Suit in NJ -------------------------------------------------------------- Kirby McInerney & Squire, LLP initiated a class action lawsuit in the United States District Court for the District of New Jersey, on behalf of a class of purchasers of Royal Dutch Petroleum Company and/or The Shell Transport and Trading Company, plc. securities during the period from April 8, 1999 through January 9, 2004, inclusive. The action charges Royal Dutch Petroleum Company and The Shell Transport and Trading Company, PLC and certain of their subsidiaries and officers with violations of Sections 10(b) and Rule 10b-5 and Section 20(a) of the Securities Exchange Act of 1934. The alleged violations stem from the dissemination of false and misleading statements, which had the effect - during the Class Period - of artificially inflating the price of Royal Dutch/Shell's securities. The action alleges that during the Class Period Royal Dutch/Shell issued a series of material misrepresentations to the market concerning Royal Dutch/Shell's financial standing that failed to disclose and/or misrepresented the following adverse facts, among others: (i) the defendants had overstated Royal Dutch/Shell's proved oil and gas reserve figures by 20%, amounting to 3.9 billion barrels of oil equivalent; (ii) Royal Dutch/Shell's booking of proved reserves during the Class Period failed to meet SEC standards or even Royal Dutch/Shell's own publicly-stated policies on booking reserves; (iii) Royal Dutch/Shell overstated reserves by including in its proved oil and gas reserve figures estimates from the Gorgon project in Australia and fields in Nigeria when such projects did not meet industry and SEC standards for proved reserves; (iv) Royal Dutch/Shell booked as proved reserves from the Gorgon venture even though the oil companies it partnered with had not; (v) Royal Dutch/Shell booked proved reserves for many projects before a final investment decision had been made; and (vi) as a result, Royal Dutch/Shell's market value was materially overstated at all relevant times. When Royal Dutch/Shell announced, on January 9, 2004, that it would reduce its proved oil and gas reserves by 20%, the price of Royal Dutch's and Shell's American Depository Receipts and common stock fell sharply, and Standard & Poor's and Moody's placed Royal Dutch/Shell's credit ratings on review for a possible downgrade. For more information, contact Peter S. Linden or Vivian Lee, by Mail: 830 Third Avenue, 10th Floor, New York, New York 10022, by Phone: (212) 317-2300 or (888) 529-4787 (toll free), or by E- mail: vlee@kmslaw.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. ********* 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. 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