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C L A S S A C T I O N R E P O R T E R
Tuesday, June 22, 2004, Vol. 6, No. 122
Headlines
7-ELEVEN INC.: IN Court To Rule on Property Suit Certification
BEACON HILL: SEC Sues Four Principals, Expands Fraud Case in NJ
CARGILL INC.: Plaintiffs Want Documents Shown To Public
COSTCO WHOLESALE: Employees Launch Overtime Wage Lawsuits in CA
DuPONT: Seeking To Block Release of Document on Teflon Chemical
GENETICALLY ENGINEERED SEED: Canada Farmers Sue Over GE Canola
GLAXOSMITHKLINE: UK Group Considering Suit Over Anti-Depressant
HIBERNIA FOODS: Shareholders File Securities Act Violations Suit
INSIDER TRADING: SEC Lodges NY Fraud Lawsuit V. Four Individuals
INVISION TECHNOLOGIES: Signs MOU To Settle CA Securities Suits
NETWORK ASSOCIATES: Jury Indicts Former CFO For Securities Fraud
NEVADA: Washoe County Court Refuses To Dismiss Property Tax Suit
NEW YORK: Education Dept Settles Suits For Struggling Students
SBC COMMUNICATIONS: Customers To Get Claim Forms With June Bill
SOUTH AFRICA: Ed Fagan To File Suit V. Exploitation of Resources
TORONTO HYDRO: Faces Suits Over Late Payment Charges in Canada
TYSON FOODS: DE Court Grants Summary Judgment in IBP Merger Suit
New Securities Fraud Cases
ADOLOR CORPORATION: Berger & Montague Lodges Lawsuit in E.D. PA
BEA SYSTEMS: Weiss & Yourman Lodges Securities Suit in N.D. CA
BISYS GROUP: Cohen Milstein Lodges Securities Lawsuit in S.D. NY
BUSINESS OBJECTS: Milberg Weiss Files Securities Suit in N.D. CA
DESCARTES SYSTEMS: Wolf Haldenstein Lodges Securities Suit in NY
GLOBAL CROSSING: Bernstein Liebhard Lodges Securities Suit in NY
KEY ENERGY: Schiffrin & Barroway Lodges Securities Lawsuit in TX
KEY ENERGY: Geller Rudman Files Securities Fraud Suit in W.D. TX
MERIX CORPORATION: Stoll Stoll Launches Securities Lawsuit in OR
MERIX CORPORATION: Schiffrin & Barroway Lodges Stock Suit in OR
OMNIVISION TECHNOLOGIES: Kirby McInerney Files Suit in N.D. CA
OMNIVISION TECHNOLOGIES: Anatoly Weiser Files CA Securities Suit
OMNIVISION TECHNOLOGIES: Bernstein Liebhard Lodges CA Stock Suit
SHAW GROUP: Anatoly Weisser Lodges Securities Suit in E.D. LA
SHAW GROUP: Charles J. Piven Lodges Securities Suit in E.D. LA
SHAW GROUP: Geller Rudman Lodges Securities Lawsuit in E.D. LA
SHAW GROUP: Milberg Weiss Lodges Securities Lawsuit in E.D. LA
SYNOVIS LIFE: Lerach Coughlin Lodges Securities Fraud Suit in MN
*********
7-ELEVEN INC.: IN Court To Rule on Property Suit Certification
--------------------------------------------------------------
The Elkhart Superior Court in Indiana gave the parties in the
lawsuit filed against 7-Eleven, Inc. and MDK Corporation by
eight families in Goshen, Indiana to submit "findings of facts
and conclusions of the law," the Goshen College Record reports.
The plaintiffs, at one point, all lived near the 7-Eleven on
Main Street in Goshen. The defendants allegedly contaminated
their homes with benzene from neglected underground gas leaks.
Michaela Powell, head of security at Goshen College, is one of
the plaintiffs involved in the lawsuit. She said the gas leaks
have caused various problems for her and her former neighbors.
"It's just a constant feeling of sickness and depression," she
told the College Record.
According to the Indiana Department of Environmental Management,
gas leaked out of an underground 7-Eleven tank in 2001. The
families claim the gas leaks have led to health problems, and
thus want to pursue a class-action suit.
Judge George W. Biddlecome also gave each side 10 days to rebut
or respond to the other group's position. With these added
legal arguments and facts, Judge Biddlecome will then have the
information he needs to make the ruling on class-action status.
If the judge allows the suit to expand into a class-action case,
Tom Barnard, an environmental lawyer from Indianapolis who is
representing the plaintiffs, said approximately 64 current and
former residents around the 7-Eleven in Goshen would be eligible
for compensation. The exact number of houses will be up to the
judge's ruling. Mr. Barnard told the College Record, "The judge
is not required to issue a ruling by a certain date."
When asked for comment by "The Record," Margaret Chabris, of 7-
Eleven's corporate communications, said, "Because this matter is
of litigation, our attorneys have advised us not to discuss the
facts of the case."
BEACON HILL: SEC Sues Four Principals, Expands Fraud Case in NJ
---------------------------------------------------------------
The Securities and Exchange Commission filed, subject to the
approval of the Court, an amended complaint in this pending
action naming as defendants the four principals of Beacon Hill
Asset Management LLC, a hedge fund manager located in Summit,
New Jersey, and expanding the charges against Beacon Hill. The
four principals are John D. Barry, the President, Thomas P.
Daniels, the Chief Investment Officer, John M. Irwin, the Senior
Portfolio Manager, and Mark P. Miszkiewicz, the Chief Financial
Officer. The SEC filed the original complaint in this action on
Nov. 7, 2002, charging Beacon Hill with fraud.
The amended complaint alleges, among other things, that the four
principals of Beacon Hill together implemented a fraudulent
scheme that resulted in investors losing more than $300 million.
The allegations are that from at least the beginning of 2002
through October 2002, Beacon Hill and its principals made
material misrepresentations to investors and engaged in other
fraudulent conduct. The misrepresentations concerned the
methodology Beacon Hill used for calculating the net asset
values of the hedge funds it managed; the hedging and trading
strategy for the purportedly "market neutral" funds; and the
value and performance of the funds.
The SEC alleges that by engaging in this and other conduct,
Beacon Hill, Barry, Daniels, Irwin, and Miszkiewicz violated
Section 17(a)(1), (2) and (3) of the Securities Act of 1933, and
Section 10(b) of the Exchange Act of 1934 and Rule 10b-5
thereunder. Additionally, through this conduct Beacon Hill
violated Sections 206(1), (2) and (3) of the Investment Advisers
Act of 1940, and defendants Barry, Daniels, Irwin, and
Miszkiewicz aided and abetted Beacon Hill's violations of these
sections. The Commission seeks from the defendants permanent
injunctions, disgorgement plus prejudgment interest, and civil
penalties. The amended complaint also names as relief defendants
and seeks disgorgement from the wives of the principals of
Beacon Hill.
The suit is styled "SEC v. Beacon Hill Asset Management LLC,
John D. Barry, Thomas P. Daniels, John M. Irwin, and Mark P.
Miszkiewicz, Defendants, and Beacon Hill Master, Ltd., Bristol
Fund, Ltd., Safe Harbor Fund L.P., Safe Harbor Asset Management
LLC, Milestone Plus Partners L.P., Milestone Global Advisors,
L.P., Nancy Daniels, Marie Irwin, Ellen Lynch and Jennifer
Tindell, Relief Defendants, Civil Action No. 02 CV 8855 (LAK)
[SDNY]."
CARGILL INC.: Plaintiffs Want Documents Shown To Public
-------------------------------------------------------
Plaintiffs in the race discrimination lawsuit filed against
Cargill, Inc. are seeking the United States District Court in
Minnesota's permission to make available to the public several
confidential documents that the Company wants sealed, the
Associated Press reports.
Lead plaintiff Charles Scott worked for the Company from 1991 to
1997 in Texas, Tennessee and then Minnesota, he said. Mr.
Scott, 37 and an African-American, alleges he was passed over
for promotions or just never got word of advancement
opportunities. In 1997, he alleges, he was told he was "no
longer a fit" in his department and the company had no other
position for him. He said he saw similar things happening to
other black colleagues.
Mr. Scott is part of the second racial discrimination lawsuit
the Minneapolis law firm Sprenger & Lang has filed against the
Minnetonka-based agribusiness giant. In 1985, the Company agreed
to pay $1.2 million and establish procedures to hire and promote
more black candidates. However, after the court order expired
four years later, the company not only reverted to its old ways,
things got worse for its black employees, attorney Lawrence
Schaefer told the Associated Press.
The Company wants to block a document stating an analysis of its
employment practices based on company records. The report was
written by experts hired and paid for by Mr. Scott's attorneys.
Mr. Scott and his attorneys are among those nationwide who say
the public is too often shut out of employment lawsuits dealing
with charges such as racial discrimination, sexual harassment
and overtime abuses, AP reports.
Many plaintiffs' attorneys say these cases involve such
important social issues that the "court of public opinion"
should play a role - such as when as people decide whose
products to buy. However, corporate attorneys say the system
works fine. They say they're not withholding important
information from plaintiffs; they just expect courts to keep
private information private.
"The openness is part of the whole process of fixing the
problem," Mr. Scott told AP. "I'm not doing this just for my
own benefit. I want that if my daughter, 20 years from now,
wants to work for Cargill, things will be different for her."
Cargill spokesman Bill Brady told the Associated Press that he
believes it is following the terms of an early agreement between
both sides on what qualifies as confidential. "There's a great
deal of legal precedent that allows, and in some cases requires,
litigants to keep documents confidential for reasons of
individual privacy, confidential business information or
attorney-client confidentiality," he said. "Those historic
precedents guide our decisions in this - and indeed in all -
litigation in which we're involved."
COSTCO WHOLESALE: Employees Launch Overtime Wage Lawsuits in CA
---------------------------------------------------------------
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; and
(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 expects to vigorously defend these
actions. The Company does not believe that any claim,
proceeding or litigation, either alone or in the aggregate, will
have a material adverse effect on its consolidated financial
position or results of operations.
DuPONT: Seeking To Block Release of Document on Teflon Chemical
---------------------------------------------------------------
Chemical maker DuPont is preparing for a tussle with the
Environmental Protection Agency, over a one page document on the
chemical perfluorooctanoic acid and its salts, also known as
PFOA or C-8, the Associated Press reports.
Although PFOA is used in making Teflon, it is not part of Teflon
itself. Chemical makers are required to notify EPA of any
information showing a chemical poses "substantial risk" to
health and the environment.
The contested document associates the unregulated chemical, used
in making Teflon, with birth defects. The Company asserts the
document fell short of the standard required for reporting
because it was an informal record in the early 1980s of levels
of PFOA in blood samples from eight women who recently had given
birth and who had worked in or near a plant. One woman had a 4-
month-old with a confirmed birth defect in a nostril and eye;
another had a 2-year-old with an unconfirmed birth defect in an
eye and tear duct, the document said.
"There's just no association to PFOA for the reporting
requirements," DuPont spokesman Clif Webb said, the Associated
Press reports. "It is not harmful to human health and the
environment . We're confident we complied. . We're well aware of
the reporting requirements."
The EPA says it expects to take action soon. It is
investigating "alleged violations by DuPont for failure to
report health related information regarding PFOA" and "expects
to take formal action against DuPont soon," according to a brief
statement agency officials provided Thursday, AP reports.
The EPA began taking a look last year after the Environmental
Working Group, a Washington-based research and advocacy
organization, complained DuPont should have turned over the
document to EPA but had not. The document was found among
public records of a class-action lawsuit against DuPont brought
by residents living near its Parkersburg, West Virginia, plant.
The residents contended their drinking water was contaminated by
PFOA, AP reports.
"EPA should impose the maximum fine available under law on
DuPont for their failure to tell communities and EPA about tap
water contamination and birth defects with Teflon chemicals,"
Richard Wiles, a senior vice president of the environmental
group, told AP.
GENETICALLY ENGINEERED SEED: Canada Farmers Sue Over GE Canola
--------------------------------------------------------------
Saskatchewan, Canada's certified organic producers filed a class
action against companies that created genetically engineered
(GE) seed, seeking to hold the defendants liable for the damage
caused to organic farmers by the introduction of GE canola, the
AGReport states.
Triple-resistant canola weeds were found on a farm in northern
Alberta as a result of cross-pollination by bees and wind. It
is believed the plants resulted from inadvertent crossing of
three different canola systems genetically engineered for the
herbicides Roundup (glyphosate), Liberty (glufosinate-ammonium),
and Pursuit (imazethapyr).
A scientific study by a University of Bordeaux professor has
found that sediment in the Richelieu River, a tributary of the
St. Lawrence River surrounded by fields of genetically
engineered Bt corn, contains concentrations of Bt that are five
times higher than in nearby agricultural watersheds.
The producers, led by the Saskatchewan Organic Directorate, says
there are questions of liability for the unwanted and
uncontrolled spread of GE canola plants, as well as concerns
about how the use of GE plants might affect the environment.
"When you choose organic products, you support farmers who grow
crops and raise animals without the use of genetically
engineered seeds or growth hormones," Katherine DiMatteo,
executive director of the Organic Trade Association, which
represents the organic industry throughout Canada and the United
States, told the AGReport. "Each purchase of organic products
sends a message that you want your foods produced without
genetic engineering."
The organization added there is no requirement to label products
made with genetically engineered seeds or growth hormones, but
consumers can avoid genetically engineered food products by
choosing organic products. Organic farmers are prohibited from
using genetically engineered seeds or growth hormones, the
AGReport stated.
GLAXOSMITHKLINE: UK Group Considering Suit Over Anti-Depressant
---------------------------------------------------------------
The UK Seroxat Users' Group is considering a class action
against pharmaceutical giant GlaxoSmithKline, over its
controversial anti-depressant drug Seroxat, scotsman.com
reports.
Lawyers for the group said they are just "weeks away" from
launching a class action claiming the drug is defective under
consumer law. They are expected to claim unspecified damages
for the group's 3,500 members and demand information from GSK as
to how users can stop taking the drug.
Mark Harvey, a partner in law firm Hugh James, confirmed he
would be writing to GSK over the coming weeks to formally notify
it of the action, scotsman.com reports.
"We think it is a strong case", he told The Scotsman. "All the
evidence we have seen suggests the drug is defective . We want
people who are having difficulties withdrawing to be told how to
do it safely, warnings that there is an increased risk of
suicide and compensation for those affected."
He added that his law firm was representing people who had
suffered "significant withdrawal reactions;" those who were
unable to quit using the drug and the families of users who have
committed suicide.
GSK already faces a US-based civil action filed by New York
Attorney General Eliot Spitzer, claiming the company engaged in
"repeated and persistent fraud" by failing to disclose
information about Seroxat's safety and effectiveness.
A spokesman for GSK responded, scotsman.com reports, "We will
assess it (the claim) when we receive something from them."
HIBERNIA FOODS: Shareholders File Securities Act Violations Suit
----------------------------------------------------------------
Hibernia Foods, Inc. faces a multimillion-dollar securities
class action filed by law firm Weiss & Yourman, on behalf of
purchasers of the Company's stock between August 1999 and
October 2003, the Sunday Business Post reports. The suit also
names as defendants its former chairman and chief executive
Oliver Murphy, chief financial officer Colm Delves, and auditors
PricewaterhouseCoopers (PwC).
The defendants allegedly prepared and disseminated materially
false and misleading information to the investing public. In
the statement of claim, it is alleged that the defendants had
access to adverse undisclosed information about Hibernia's
business, operations and financial condition and that the
individual defendants - Mr. Murphy and Mr. Delves - recklessly
diregarded mis-statements contained in Hibernia's SEC filings,
press releases and other communications, and were aware of their
materially false and misleading nature.
The Company allegedly violated US accounting rules and
manipulated its financial statements by failing to record in a
timely fashion write downs in the value of its property, plant
and equipment from 2000-2002, thereby artificially overstating
assets and understated net losses, and failed to disclose the
nature and extent of deep discounts offered to customers from
1999 to 2002.
The plaintiff also alleges that PwC had the opportunity to
examine documentation relating to Hibernia's business and
financial results, which would have revealed that, as alleged by
the plaintiff, Hibernia had a history of operating and cashflow
losses, it was selling at deep discounts, its assets were
significantly impaired, and it was highly leveraged and would
not be able to operate as a going concern.
INSIDER TRADING: SEC Lodges NY Fraud Lawsuit V. Four Individuals
----------------------------------------------------------------
The Securities and Exchange Commission filed a complaint in the
U.S. District Court for the Southern District of New York
alleging that Fiore J. Gallucci, Ronald A. Manzo, and Gary B.
Taffet engaged in repeated instances of insider tipping and
trading involving the securities of several companies ahead of
public announcements that the companies were targets in
contemplated business combinations. The Commission alleges that
Gallucci, Manzo, and Taffet, through their insider tipping and
trading, each violated the antifraud provisions and the tender
offer trading provisions of the federal securities laws. The
Commission seeks a final judgment ordering the defendants to
disgorge all illegal profits, including those of their tippees,
with prejudgment interest thereon; imposing civil money
penalties; and enjoining each of the defendants from future
violations of the federal securities laws.
The Commission's complaint alleges that, at various times during
1998 and 1999, Gallucci, at the time a bond salesman, learned
the identities of the target companies from his wife, a
secretary for a senior mergers and acquisitions partner at the
law firm of Skadden Arps Slate Meagher & Flom (Skadden Arps) in
New York. Skadden Arps represented a company in connection with
each of these contemplated business combinations, and Gallucci's
wife learned the target companies' identities in the course of
her employment. The complaint alleges that she disclosed the
information to Gallucci only after he expressly assured her that
he would not disclose it to others or use it for trading
purposes. The complaint also alleges that, although Gallucci
himself did not trade on the basis of the information, he did
misappropriate it from his wife by disclosing it and its source
to Manzo, his long-time friend and owner of a New Jersey
insurance company that did business with local government
entities in New Jersey. Manzo purchased securities of the target
companies, garnering illegal profits of more than $900,000. The
complaint further alleges that, in addition, Manzo tipped a
friend, Taffet, who was an owner of a company that provided
insurance advice to local government entities in New Jersey and
who had strong political ties in the state. Taffet purchased
securities of several of the target companies, resulting in
illegal profits of approximately $247,000. The complaint also
alleges that Manzo and Taffet each tipped other individuals who
themselves traded on the basis of those tips, and one of those
individuals tipped two others, who also traded. The total
additional illicit profits from these direct and indirect
tippees is approximately $1.8 million.
The Commission's investigation is continuing. The Commission
acknowledges the assistance and cooperation of the New York
Stock Exchange, the American Stock Exchange, and the Office of
the U.S. Attorney for the Southern District of New York.
The suit is styled "SEC v. Fiore J. Gallucci, Ronald A. Manzo,
and Gary B. Taffet, No. 04 CV 04493 (SAS)."
INVISION TECHNOLOGIES: Signs MOU To Settle CA Securities Suits
--------------------------------------------------------------
InVision Technology signed a memorandum of understanding with
General Electric (GE) to settle lawsuits related to its proposed
merger with the Company, the Associated Press reports.
In March, GE announced it was purchasing Newark-based InVision
for $900 million or $50 a share. The deal is expected to close
July 15. InVision shareholders are scheduled to vote on the
proposed merger next Friday, at the company's headquarters.
The settlement proposal is in the case Waltman, et al v.
InVision, a class action filed in California Superior Court for
Alameda County. The complaint also names as defendants
directors for both General Electric and InVision.
Under the lawsuit settlement, the Company could pay as much as
$450,000 for attorney's fees and costs, if approved by the
court. In the proxy statement, InVision said the lawsuit lists
several objections to the merger.
"The complaints allege that, in pursuing the transaction with GE
and approving the merger agreement, the directors violated their
fiduciary duties to the holders of InVision common stock, by
among other things, failing to obtain the highest price
reasonably available, tailoring the terms of transaction to meet
GE's needs, engaging in self-dealing and obtaining personal
financial benefits not shared equally by the plaintiffs and
other stockholders," the proxy states.
InVision said it was pleased to settle the matter. "We've said
all along that the lawsuits were completely without merit," Stan
Neve, a spokesman for InVision, told AP.
NETWORK ASSOCIATES: Jury Indicts Former CFO For Securities Fraud
----------------------------------------------------------------
A San Francisco, California federal grand jury indicted Network
Associates' former chief financial officer for securities fraud
and conspiracy and for manipulating the Company's financial
statements by overstating company revenue by almost half-a-
billion, The Daily Review reports.
The jury handed down the verdict against Prabhat Goyal, 49, last
week. Mr. Goyal allegedly disguised the Company's payments to
its distributors as discounts, rebates and marketing fees, to
persuad their distributors to hold excess inventory and not
return unsold products. The distributors were also required to
purchase more products that they could sell in a given quarter -
practice labeled "channel stuffing."
Mr. Goyal allegedly hid these manipulations from his company's
outside auditors and board of directors. As a result of his
manipulations, the company's revenue was overstated by more than
$470 million and its losses understated by about $330 million
from 1998 to 2000. Mr. Goyal also is accused of:
(1) filing false and misleading documents with the
Securities and Exchange Commission;
(2) making bogus entries in Network Associates' financial
books and records;
(3) making false statements and material omissions to
outside auditors; and
(4) making materially false and misleading public
statements about Network Associates' financial
performance.
"Investors need to be able to rely on the financial statements
made by public companies, and these efforts to defraud the
markets undermine the integrity of our financial institutions,"
U.S. Attorney Kevin Ryan told the Daily Review.
Goyal was the company's CFO from March 1996 through December
2000, when he, Chairman and Chief Executive Officer Bill Larson
and President Peter Watkins resigned after the company warned of
a fourth-quarter loss and an accounting-methods change. The
company last year agreed to pay shareholders $70 million to
settle a class-action lawsuit over inflated stock prices as a
result of the book-cooking.
NEVADA: Washoe County Court Refuses To Dismiss Property Tax Suit
----------------------------------------------------------------
Washoe County District Judge William Maddox refused to dismiss
the class action filed against the state of Nevada and Washoe
County, challenging property tax assessments, the North Lake
Tahoe Bonanza reports. A similar suit filed by the Village
League to Save Incline Assets was dismissed last month.
"Unlike the other (class action) lawsuit, we did go through the
correct process in challenging the assessments, and the county
and state still tried to dismiss it," Les Barta, one of the 18
residents who filed suit challenging property tax assessments,
told the Bonanza. "The judge is allowing the case to move
forward on one key issue - whether the county assessor followed
the regulations in his tax assessments."
If the judge rules that the assessor did not follow correct
procedures, Mr. Barta explained, all properties in Incline
Village and Crystal Bay will have to be reappraised. "If we win
this case it will be a huge victory because it will set the
precedence for all of Incline Village," he said. "If the
decision is favorable for the 18 us, all of Incline Village and
Crystal Bay will win, and the assessor will have to follow the
law from now on."
NEW YORK: Education Dept Settles Suits For Struggling Students
--------------------------------------------------------------
A tentative settlement was forged between New York City's
Department of Education and Advocates for Children, a group that
filed suits alleging that three high schools illegally
discharged struggling students, The New York Times reports.
The suits were filed against Franklin K. Lane High School,
Bushwick High School and Martin Luther King Jr. High School.
New York City officials agreed that York schools had an
obligation to allow students to work toward high school
graduation until they are 21. In recent years, many older
students who have fallen behind have been directed into high
school equivalency programs.
In a memorandum accompanying the final settlement, United States
District Court in Brooklyn, New York judge Jack B. Weinstein
said that although the lawsuits directly affect only a few of
the city's 1.1 million students, the principles involved,
accepted by the city, "set an important standard for the entire
system."
According to the New York Times, Judge Weinstein said the cases
"exposed a lesion - the alleged 'pushing out' of difficult-to-
educate students - that has been festering for many years," all
the way back to a case he heard 35 years ago against Franklin K.
Lane.
The Department of Education denied liability in the suits
against the three high schools, but it promised to act to ensure
that more students are helped toward graduation. Under the
settlement in the Franklin K. Lane case, students will be
allowed to re-enroll, and the community center will also offer
at least 12 hours a week of support services to current and
discharged Lane students. The city has also announced an $8
million initiative to develop new programs and schools for
students in the Bronx.
In a letter dated Wednesday, Michael Best, the Department of
Education's general counsel, told Jill Chaifetz, the executive
director of Advocates for Children, that the department would
provide information the group has requested and collaborate on
training school officials on discharge policies. The new
relationship, he said, was being made "with the understanding
that Advocates for Children is not currently planning to
commence citywide litigation on these issues," and would cease
if the group filed any more lawsuits, the New York Times
reports. The agreement was forged just before the group
considered filing a citywide class action.
In the letter, the department said it would seek suggestions
from Advocates for Children on improving the training manual for
those interviews. The department also agreed to the group's
request for reports on how many discharges and transfers there
have been citywide in the last two school years, how many school
officials have been trained in the new planning interview
policies and procedures, and how many such interviews have been
conducted, the New York Times reports.
The Department of Education sent mailings this year to all
public school students discharged or transferred to non-diploma
programs from July 2, 2003, to January 21, 2004, telling them of
their right to return to school.
SBC COMMUNICATIONS: Customers To Get Claim Forms With June Bill
---------------------------------------------------------------
SBC Communications, Inc. will be mailing claim forms for
subscribers and former subscribers of SBC Voice Mail in the
customers' June bills, in line with the settlement of a class
action filed against the Company, the Edwardsville Intelligencer
reports.
The suit charged the Company with misleading its subscribers by
failing to disclose the true charges for voice mail. In
addition to paying a monthly fee for the service, customers were
also charged a local-call fee of approximately 5 cents every
time someone left them a voice mail message.
The suit was later dismissed as the Company offered one month of
free speed-dial service to the complainants. However, the
Citizens Utility Board (CUB) objected to the settlement, which
also included a provision for the service to continue at $5 per
month unless the customer ordered it to be stopped. The Company
promised that if the settlement was reached, it would send out a
notice that the settlement had been reached.
Under the terms of the new settlement, the company agreed to
give subscribers who have had voice mail for more than a year a
one-time credit of $15 on their telephone bills. Those who have
had voice mail for six months to a year will get a $10 credit
and customers who have had the service less than six months will
get a $5 credit.
The credits should begin to appear on SBC bills in September and
be completed by the end of the year. The total amount to be
credited to Illinois customers could reach $40 million,
according to CUB estimates of the number of voice mail
subscribers. Former voice mail customers who are no longer with
SBC will get a check instead of a credit to their telephone
bill.
According to CUB, the settlement covers all residential and
business customers who have subscribed to voice mail through
SBC, Ameritech, Illinois Bell Telephone Co., or any of the other
Bell companies in SBC's Midwest Region of Illinois, Indiana,
Michigan, Ohio, and Wisconsin.
Eligible subscribers need to fill out the form, date it, sign
it, and send it in no later than September 1 in order to receive
the compensation. Former SBC Voice Mail customers who changed
to another telephone service are also eligible for the
compensation and can get a claim form at one of two Web sites:
http://www.CitizensUtilityBoard.orgor
http://www.sbc.com/vmclassactionclaimform.
The claim forms are to be sent to the SBC Voice Mail Claims
Administrator, in care of P.O. Box 377770, Chicago, IL 60637-
2510.
Customers who have questions about the settlement can leave a
message at the special toll-free line that has been set up to
field inquiries, 1-800-247-5316.
SOUTH AFRICA: Ed Fagan To File Suit V. Exploitation of Resources
----------------------------------------------------------------
South African President Thobao Mbeki, former president Nelson
Mandela and eight multinational companies face a possible
lawsuit for "siding with the industry against the people," in
the exploitation of the country's natural resources, Independent
Online World News reports. The suit specifically names as
defendants:
(1) IBM,
(2) Anglo American,
(3) Gold Fields,
(4) Union Bank of Switzerland,
(5) Sasol/Natref 1,
(6) Startcor/Union Carbide and
(7) Vatmetco
Controversial American attorney Ed Fagan filed the suit, saying
in court documents filed at the weekend in the US District
Court, that the government's actions are "in the same or similar
fashion as they did during the apartheid era."
The suit further alleges that President Mbeki interfered with
claims against corporate defendants and made secret deals with
them, to block legal action against the Companies. The suit
seeks that the government, which is the legal successor to the
apartheid regime, and the companies pay $20-billion into a
"humanitarian fund."
Mr. Fagan told Sapa that this was a quarter of what Germany's
post-Nazi government had paid to victims of its oppressive
predecessor. "Unlike South Africa's present government, it was
not the legal successor to the Nazi regime. Despite that it
still established a program that provided the opportunity for
people to make claims," he said.
A report in The Observer newspaper in Britain said IBM stood
accused of "designing, marketing and managing" computer systems
that helped the state control the black majority. "All the
companies deny liability and are believed to be contesting the
action," the report said, referring only to those it had
mentioned.
TORONTO HYDRO: Faces Suits Over Late Payment Charges in Canada
--------------------------------------------------------------
The former Toronto Hydro-Electric Commission faces two class
actions relating to the Commission's practice of charging late
payment on overdue utility bills.
A class action claiming $500,000,000 in restitution payments
plus interest was served on the Commission, as the
representative of the defendant class consisting of all
municipal electric utilities in Ontario which have charged late
payment charges on overdue utility bills at any time after April
1, 1981. The claim is that late payment penalties result in
municipal electric utilities receiving interest at effective
rates in excess of 60% per year, which is illegal under Section
347(1)(b) of the Criminal Code.
The Electricity Distributors Association (EDA), in cooperation
with the Commission, is undertaking the defense of this class
action. At this time it is not possible to quantify the effect,
if any, of the action on the consolidated financial statements
of THC, the Commission said in a disclosure to the Canadian
Securities and Exchange Commission.
A substantially similar class action claiming $64,000,000 in
restitutionary payments plus interest was commenced against the
Toronto Hydro-Electric Commission. The action was initiated
against the Toronto Hydro-Electric Commission directly as a
municipal electrical utility which made late payment charges on
overdue utility bills at any time after April 1, 1981. In the
action, the proposed representative plaintiffs allege that late
payment charges resulted in the Toronto Hydro-Electric
Commission receiving interest at effective rates in excess of
60% per year, which is illegal under Section 347(1)(b) of the
Criminal Code.
The EDA, in cooperation with the Corporation, is undertaking the
defence of the action. The action is at a preliminary stage.
No examinations for discovery have been conducted and no class
has been certified for purposes of the action.
TYSON FOODS: DE Court Grants Summary Judgment in IBP Merger Suit
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The United States District Court in Delaware granted summary
judgment to Tyson Foods Inc., the world's largest meat
processor, in a securities class action, charging it with lying
about its reasons for attempting to back out of a deal to buy
rival IBP, Inc, the Associated Press reports.
Judge Sue Robinson decided that defendants former Tyson senior
chairman Don Tyson and his son John, present chairman and chief
executive of the company, were not responsible for could
allegedly false statements in a March 2001 press release
announcing the end of the planned merger.
The four institutional investors who served as lead plaintiffs
said in court papers they lost more than $20 million when
Tyson's move to escape the merger triggered a steep drop in
IBP's stock price.
The Company did ultimately acquire the Company, on orders from
Vice Chancellor Leo Strine of Delaware's Court of Chancery, who
found the poultry producer was not fraudulently induced into the
merger and should be held to the deal.
New Securities Fraud Cases
ADOLOR CORPORATION: Berger & Montague Lodges Lawsuit in E.D. PA
---------------------------------------------------------------
The law firm of Berger & Montague, P.C. initiated a class action
suit against Adolor Corporation ("Adolor" or the "Company")
(Nasdaq:ADLR) and certain of its officers in the United States
District Court for the Eastern District of Pennsylvania on
behalf of all persons or entities who purchased Adolor common
stock from September 23, 2003 through January 14, 2004 (the
"Class Period").
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 the SEC by issuing materially false
and misleading statements throughout the Class Period that had
the effect of artificially inflating the market price of the
Company's securities.
The Complaint alleges that Adolor and certain of its officers
issued materially false statements concerning the clinical
trails for the Company's drug Entereg. Specifically, defendants
failed to disclose that:
(1) Entereg missed the primary endpoint of time to recovery
of gastrointestinal function;
(2) Entereg did not reduce the time to a hospital
discharge;
(3) Entereg failed to meet its goal of allowing patients to
tolerate food more quickly after surgery; and
(4) Adolor knew that it was likely to have to conduct
additional research because it had excluded from the
study certain patient subgroups known to produce
disappointing results.
As a result of the defendants' alleged false statements,
Adolor's stock price traded at inflated prices during the Class
Period, causing millions of dollars of damages to the Class. On
November 12, 2003, as shares traded at prices as high as $18.14,
the Company sold 6,900,000 shares of its common stock for gross
proceeds of approximately $119 million.
On January 13, 2004, the Company reported shocking news about
the third in the series of Phase III clinical trials for the
Company's new drug application submission. On this news, the
price of Adolor's stock plunged 37%, trading as low as $13.73
per share, on an unprecedented volume of 12.7 million shares.
For more details, contact Sherrie R. Savett, Esq., Douglas M.
Risen, Esq. or Diane Werwinski, Investor Relations Manager of
Berger & Montague, P.C. by Phone: (888) 891-2289 or
(215) 875-3000 by Fax: (215) 875-5715 by E-mail:
InvestorProtect@bm.net or visit their Web site:
http://www.bergermontague.com
BEA SYSTEMS: Weiss & Yourman Lodges Securities Suit in N.D. CA
--------------------------------------------------------------
The law firm of Weiss & Yourman initiated a class action lawsuit
in the United States District Court for the Northern District of
California on behalf of persons who acquired the securities of
BEA Systems, Inc., (Nasdaq: BEAS) between November 13, 2003 and
May 13, 2004 (the "Class Period").
BEA is a provider of application infrastructure software and
related services that help companies build distributed systems
that extend investments in existing computer systems and provide
the foundation for running an integrated business.
The complaint alleges that BEA and certain of its officers
violated the Securities Exchange Act of 1934 by making false and
misleading statements to the investing public regarding BEA's
business and prospects, causing BEA's stock price to trade at
artificially inflated levels during the Class Period. At the
same time, defendants sold off more than $13 million worth of
their personal shares. Following BEA's reported third quarter
results, the Company's shares fell 30% to $8 per share.
As more fully detailed in the Complaint, defendants concealed
from the public that BEA was experiencing material sales
execution problems in its licensing division, resulting in
license reserve being down in the comparable quarter and in the
sequential quarter. During the Company's attempted
reorganization, sales were actually disrupted and its WebLogic
8.1 Platform was not selling as well as defendants had claimed.
For more details, contact Vahn Alexander, Esq. of Weiss &
Yourman - Los Angeles by Phone: (800) 437-7918 or E-mail:
info@wyca.com or visit their Web site: http://www.wyca.com
BISYS GROUP: Cohen Milstein Lodges Securities Lawsuit in S.D. NY
----------------------------------------------------------------
The law firm of Cohen, Milstein, Hausfeld, & Toll, P.L.L.C.
filed a lawsuit on behalf of its client against The BISYS Group,
Inc. (NYSE:BSG) ("BISYS" or the "Company") in the United States
District Court for the Southern District of New York. BISYS is a
provider of business process outsourcing services to the
financial services sector.
The complaint charges BISYS and certain of its officers and
directors with violating the Securities Exchange Act of 1934 and
Rule 10b-5 promulgated there under, by issuing a series of false
and misleading financial statements that caused the Company's
shares to trade at artificially high levels between Oct. 23,
2000, and May 17, 2004, (the "Class Period"). While the stock
was trading at these artificially high levels, BISYS raised $250
million in a convertible note offering, and corporate insiders
received tens of millions of dollars in proceeds from the sale
of their BISYS shares.
Plaintiff alleges that, during the Class Period, defendants
issued materially false and misleading financial statements that
misrepresented the financial condition of the Company to
investors, causing them to purchase BISYS shares at artificially
inflated prices and to be damaged thereby. According to
plaintiff, the truth about the Company's operations and its
financial condition was not revealed to investors until after
the close of ordinary trading on May 17, 2004 when BISYS issued
a press release stating that the previously reported adjustment
of $24.7 million to commissions receivable in its Life Insurance
Division needed to be increased to roughly $70-$80 million and
this adjustment would require the Company to make "a restatement
of its financial results for each of the fiscal years ended June
30, 2003, 2002, and 2001, as well as its interim results for
fiscal 2004." Plaintiff seeks to recover damages on behalf of
all purchasers of BISYS common stock during the Class Period.
For more details, contact Steven J. Toll, Esq. or Elena Takacs
of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. by Mail: 1100 New
York Avenue, N.W., West Tower - Suite 500, Washington, D.C.
20005 by Phone: 888-240-0775 or 202-408-4600 or E-mail:
stoll@cmht.com or etakacs@cmht.com
BUSINESS OBJECTS: Milberg Weiss Files Securities Suit in N.D. CA
----------------------------------------------------------------
The law firm of Milberg Weiss Bershad & Schulman LLP initiated a
class action lawsuit on behalf of purchasers of the securities
of Business Objects S.A. ("Business Objects" or the "Company")
(NASDAQ:BOBJ) between April 23, 2003 and April 29, 2004,
inclusive, (the "Class Period"), seeking to pursue remedies
under the Securities Exchange Act of 1934 (the "Exchange Act").
The action is pending before the Honorable Martin J. Jenkins in
the United States District Court for the Northern District of
California, case number C 04-2401 MJJ, against defendants
Business Objects, Bernard Liautaud (CEO and Chairman), John
Olsen (COO), and Jim Tolonen (CFO).
The complaint alleges that during the Class Period defendants
artificially inflated the price of Business Objects securities
by materially misrepresenting the financial condition of the
Company. According to the complaint,
(1) the Company failed to successfully integrate Crystal
Decisions, a software company acquired during the Class
Period;
(2) the Company was experiencing slower than projected
revenue growth;
(3) the Company had improperly recognized deferred revenues
from a backlog of customer contracts, thereby
materially inflating the Company's reported financial
results; and
(4) the demand for Business Objects' Enterprise 6 software
was less than reported by the Company, and that the
software was unstable and potentially incompatible with
other of the Company's products.
On April 29, 2004, after the market closed, Business Objects
reported disappointing first-quarter 2004 results, including
earnings of $0.10 per diluted share, which was at the bottom of
the range previously forecast by defendants, and missed
analysts' consensus estimates of $0.15. Moreover, the Company
reported disappointing revenues of $217 million and provided
second-quarter 2004 guidance, which was well below analysts'
consensus estimates. In reaction to this news, the price of the
Company's American Depository Shares dropped $6.66, or 23.3%,
from their closing price on April 29, 2004, to close on April
30, 2004 at $21.92, on unusually high volume. On May 4, 2004,
Business Objects' disclosed in its first-quarter 2004 report,
filed with the SEC, that the SEC had commenced an informal
inquiry into the Company's "practices with respect to backlog",
or customers contracts that have not yet been recognized on a
company's balance sheet or income statement. Analysts explained
that the SEC inquiry related to the Company' deferred revenue
balance, which increased from $136 million in the fourth quarter
of 2003 to $165 million in the first quarter of 2004 following
its acquisition of Crystal Decisions.
For more details, 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 or E-mail:
sfeerick@milbergweiss.com or visit their Web site:
http://www.milbergweiss.com
DESCARTES SYSTEMS: Wolf Haldenstein Lodges Securities Suit in NY
----------------------------------------------------------------
The law firm of Wolf Haldenstein Adler Freeman & Herz LLP filed
a class action lawsuit in the United States District Court for
the Southern District of New York, on behalf of all persons who
purchased the securities of Descartes Systems Group, Inc.
("Descartes" or the "Company") (Nasdaq: DSGX) between June 4,
2003 and May 6, 2004, inclusive, (the "Class Period") against
defendants Descartes and certain officers of the Company.
The case name is Van Fraassen v. Descartes Systems Group, Inc.,
et al.
The complaint alleges that defendants violated the federal
securities laws by issuing materially false and misleading
statements throughout the Class Period that had the effect of
artificially inflating the market price of the Company's
securities.
The Complaint alleges that statements made by the defendants
during the class period were each materially false and
misleading because they failed to disclose and misrepresented
the following adverse facts:
(1) that Descartes' financial statements were materially
false and misleading;
(2) that the Company was recording revenue on contingent
contracts where contingencies were unfulfilled and in
violation of generally accepted accounting principles
and SAB 101;
(3) that the Company lacked adequate internal controls to
ensure the accuracy of its financial statements;
(4) and that, as a result of the foregoing, defendants
lacked a reasonable basis for their positive statements
about the Company and their earnings projections.
For more details, contact Fred Taylor Isquith, Esq., Gregory M.
Nespole, Esq., Christopher S. Hinton, Esq., George Peters, or
Derek Behnke of Wolf Haldenstein Adler Freeman & Herz LLP by
Mail: 270 Madison Avenue, New York, New York 10016 by Phone:
(800) 575-0735 by E-mail: classmember@whafh.com or visit their
Web site: http://www.whafh.com/cases/descartes.htm
GLOBAL CROSSING: Bernstein Liebhard Lodges Securities Suit in NY
----------------------------------------------------------------
The law firm of Bernstein Liebhard & Lifshitz, LLP initiated
securities class action lawsuit on behalf of all persons who
acquired securities of Global Crossing Ltd. ("Global Crossing"
or the "Company")(NASDAQ: GLBCE) between December 9, 2003 and
April 26, 2004, inclusive (the "Class Period").
The case is pending in the United States District Court for the
Southern District of New York, against Global Crossing, John
Legere, and Daniel O'Brien.
The Complaint charges that Global Crossing and certain officers
and directors 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 Global Crossing's securities.
Specifically, the Complaint alleges that throughout the Class
Period, Global Crossing reported positive results in publicly
disseminated press releases and SEC filings. Defendants,
however, knew or recklessly disregarded that:
(1) Global Crossing lacked adequate internal controls,
(2) Global Crossing's costs of access were materially
understated in Global Crossing's financial statements,
and, as a result,
(3) Global Crossing's reported earnings were at all
relevant times, artificially inflated.
The truth was revealed on April 27, 2004, minutes after the
market opened, when defendants disclosed that Global Crossing
would restate its previously issued financial statements as far
back as fiscal 2002 because defendants had understated the
accrued cost of access liability by $50 million to $80 million.
The Company stated that the understatement of its cost of access
liability was due to "incorrect estimates of cost of access
expenses and the failure to reconcile these expenses to vendor
invoices," that there were material weaknesses in its internal
controls, and that investors should disregard the Company's
financial statements for fiscal 2002 and 2003, including interim
periods. The Company further stated that investors should
disregard defendants' previous guidance with respect to Global
Crossing's 2004 results. In reaction to this news, the price of
Global Crossing common stock fell $5.00, or 27.4%, from its
previous day's closing price of $18.20 per share, to close on
April 27, 2004 at $13.20.
For more details, contact Bernstein Liebhard & Lifshitz, LLP by
Phone: (800) 217-1522 by E-mail: GLBCE@bernlieb.com or visit
their Web site: http://www.bernlieb.com
KEY ENERGY: Schiffrin & Barroway Lodges Securities Lawsuit in TX
----------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP has initiated a class
action lawsuit in the United States District Court for the
Western District of Texas on behalf of purchasers of the
securities of Key Energy Services, Inc. (NYSE: KEG) ("Key
Energy" or the "Company") between April 29, 2003 and June 4,
2004, inclusive (the "Class Period").
The complaint charges Key Energy, Francis D. John, Richard J.
Alario, James J. Byerlotzer, and Royce W. Mitchell with
violations of the Securities Exchange Act of 1934. The complaint
alleges that defendants failed to disclose or indicate the
following:
(1) that the Company had materially overstated its
revenues, net income, and earnings per share;
(2) that defendants failed to take certain write-downs of
approximately $78 million of assets, consisting
predominantly of idle equipment;
(3) that the defendants failed to amortize its goodwill;
(4) that the defendants failed to record $5 million of
goodwill and other intangible assets relating to an
acquisition in the Company's South Texas Division in
2003, in violation of generally accepted accounting
principles ("GAAP");
(5) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company; and
(6) that as result of the above, the Company's financial
results were materially inflated at all relevant times.
On March 15, 2004, Key Energy announced it had filed notice with
the SEC on Form 12b-25 to extend the period in which it intended
to file its Annual Report on Form 10-K. Shortly thereafter, the
Company shocked the markets when it announced that it would not
file its Annual Report on Form 10-K for the year ended December
31, 2003 by the March 30, 2004 extended deadline. More
specifically, Key Energy stated that as a result of the
Company's continuing review, the Company currently believed that
a write-down of approximately $78 million of assets, consisting
predominantly of idle equipment, would be required, a
substantial portion of which the Company believed should have
been recorded in one or more prior years. As a result, the
Company expected to restate one or more prior year financial
statements.
Then on June 7, 2004, before the markets opened, Key Energy
announced that it was withdrawing earnings forecasts for fiscal
2004 and that it had received a notice of default under its
6.375% and 8.375% Senior Notes. The Company stated that it was
withdrawing all previous earnings forecasts of operating results
for 2004. The Company was doing so in light of current
uncertainties affecting the Company, including the costs of the
ongoing audit of the Company's 2003 financial statements and
restatement of prior years' financial statements, bank and other
lender waivers, ongoing Audit Committee and SEC investigations,
costs related to previously announced management changes and
costs related to management consolidation in the Company's
Midland office.
The market reacted swiftly to the news. Shares of Key Energy
fell $.95 or 9.88 percent, on June 7, 2004, to close at $8.67
per share.
For more details, contact Marc A. Topaz, Esq. or Stuart L.
Berman, Esq. of Schiffrin & Barroway, LLP by Mail: Three Bala
Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone:
1-888-299-7706 or 1-610-667-7706 or by E-mail:
info@sbclasslaw.com
KEY ENERGY: Geller Rudman Files Securities Fraud Suit in W.D. TX
----------------------------------------------------------------
The Law Firm of Geller Rudman, PLLC initiated a securities class
action in the United States District Court for the Western
District of Texas on behalf of purchasers of Key Energy Services
(NYSE: KEG) publicly traded securities during the period between
April 29, 2003 and June 4, 2004, inclusive (the "Class Period").
The complaint charges Key Energy, Francis D. John, Richard J.
Alario, James J. Byerlotzer, and Royce W. Mitchell with
violations of the Securities Exchange Act of 1934. The complaint
alleges that defendants failed to disclose or indicate the
following:
(1) that the Company had materially overstated its
revenues, net income, and earnings per share;
(2) that defendants failed to take certain write-downs of
approximately $78 million of assets, consisting
predominantly of idle equipment;
(3) that the defendants failed to amortize its goodwill;
(4) that the defendants failed to record $5 million of
goodwill and other intangible assets relating to an
acquisition in the Company's South Texas Division in
2003, in violation of generally accepted accounting
principles ("GAAP");
(5) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company; and
(6) that as result of the above, the Company's financial
results were materially inflated at all relevant times.
On March 15, 2004, Key Energy announced it had filed notice with
the SEC on Form 12b-25 to extend the period in which it intended
to file its Annual Report on Form 10-K. Shortly thereafter, the
Company shocked the markets when it announced that it would not
file its Annual Report on Form 10-K for the year ended December
31, 2003 by the March 30, 2004 extended deadline. More
specifically, Key Energy stated that as a result of the
Company's continuing review, the Company currently believed that
a write-down of approximately $78 million of assets, consisting
predominantly of idle equipment, would be required, a
substantial portion of which the Company believed should have
been recorded in one or more prior years. As a result, the
Company expected to restate one or more prior year financial
statements.
Then on June 7, 2004, before the markets opened, Key Energy
announced that it was withdrawing earnings forecasts for fiscal
2004 and that it had received a notice of default under its
6.375% and 8.375% Senior Notes. The Company stated that it was
withdrawing all previous earnings forecasts of operating results
for 2004. The Company was doing so in light of current
uncertainties affecting the Company, including the costs of the
ongoing audit of the Company's 2003 financial statements and
restatement of prior years' financial statements, bank and other
lender waivers, ongoing Audit Committee and SEC investigations,
costs related to previously announced management changes and
costs related to management consolidation in the Company's
Midland office.
The market reacted swiftly to the news. Shares of Key Energy
fell $.95 or 9.88 percent, on June 7, 2004, to close at $8.67
per share.
For more details, contact Samuel H. Rudman, Esq. or David A.
Rosenfeld, Esq. of GELLER RUDMAN, PLLC by Mail: Client Relations
Department - 200 Broadhollow, Suite 406, Melville, NY 11747 by
Phone: 631-367-7100 or 1-877-992-2555 by Fax: 1-631-367-1173 by
E-mail: info@geller-rudman.com or visit their Web site:
http://www.geller-rudman.com/case_signup_sec.asp?cID=305
MERIX CORPORATION: Stoll Stoll Launches Securities Lawsuit in OR
----------------------------------------------------------------
The law firm of Stoll Stoll Berne Lokting & Shlachter P.C.
initiated a securities class action lawsuit in the United States
District Court for the District of Oregon on behalf of all
purchasers of the common stock of Merix Corporation (Nasdaq:
MERX) between July 1, 2003 and May 13, 2004, inclusive (the
"Class Period").
The complaint charges Merix and certain of its officers and
directors with issuing false and misleading statements,
including overly optimistic earnings and revenue projections,
statements regarding increasing demand for its premium priced
and quick-turn products. Specifically, the complaint alleges
that, during the Class Period, the Company issued materially
false statements that demand for its premium-priced and quick-
turn products was increasing, when it knew that demand was in
fact softening for its product, especially with regard to a
major networking customer. These statements had the effect of
artificially raising the price of Merix stock so that Merix
could complete a public offering generating more than $100
million, and so insiders could sell more than $3.2 million of
Merix stock during the Class Period. Investors who purchased
Merix shares during the Class Period did so at inflated prices
and were thereby damaged. On May 14, 2004, Merix stunned
investors by announcing that it was not going to meet its
previously issued earnings guidance for the quarter ending May
29, 2004 of $0.19 to $0.22 per share, and the company would
actually post a loss of $0.03 to $0.06 per share.
For more details, contact David F. Rees of Stoll Stoll Berne
Lokting & Shlachter P.C. by Phone: 1-503-227-1600 or by E-mail:
drees@ssbls.com
MERIX CORPORATION: Schiffrin & Barroway Lodges Stock Suit in OR
---------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a securities
class action lawsuit in the United States District Court for the
District of Oregon on behalf of all purchasers of the common
stock of Merix Corporation (Nasdaq: MERX) ("Merix" or the
"Company") from July 1, 2003 through May 13, 2004, inclusive
(the "Class Period").
The complaint charges Merix, Mark Hollinger and Jamie S. Brown
with violations of the Securities Exchange Act of 1934. The
complaint alleges that defendants failed to disclose or indicate
the following:
(1) that the Company over relied, in their financial
projections, on the customers' future demand for
premium-priced and reduced-lead-time products, which
had previously accounted for 50% of the Company sales;
(2) that the Company failed to adequately insulate itself
from the softening demand, specifically with regard to
supply needs of a major networking customer;
(3) that the Company failed to appreciate the market
conditions, which did not support the Company's
aggressive growth; and
(4) that, as a result of the foregoing, defendants lacked a
reasonable basis for their positive statements about
the Company and their earnings projections.
On May 13, 2004, after the close of the market, Merix revised
guidance for the fourth quarter of fiscal 2004, ending May 29,
2004. News of this shocked the market. Shares of Merix fell
$4.64 per share or 30.29 percent on May 14, 2004, to close at
$10.68 per share.
For more details, contact Marc A. Topaz, Esq. or Stuart L.
Berman, Esq. Schiffrin & Barroway, LLP by Mail: Three Bala Plaza
East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 1-888-299-7706
or 1-610-667-7706 or by E-mail: info@sbclasslaw.com
OMNIVISION TECHNOLOGIES: Kirby McInerney Files Suit in N.D. CA
--------------------------------------------------------------
The law firm of Kirby McInerney & Squire, LLP initiated a
securities class action in the United States District Court for
the Northern District of California on behalf of all purchasers
of OmniVision Technologies, Inc. ("OmniVision" or the "Company")
(Nasdaq:OVTI) securities during the period from June 11, 2003
through June 8, 2004, inclusive (the "Class Period").
The action charges OmniVision and certain of its senior officers
with violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. 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 OmniVision's
shares.
Investors allege that during the Class Period, Descartes
disseminated materially false and misleading information.
Specifically: the Company failed to disclose and misrepresented
the following material adverse facts known to defendants or
recklessly disregarded by them:
(1) that the Company knew or recklessly disregarded the
fact that the Company was losing customers to larger
rivals such as Micron Technologies, Inc., Texas
Instruments Inc., and National Semiconductor
Corporation;
(2) that the Company knew or recklessly disregarded that
its surging growth was hitting a plateau, due to the
decline in the customer base;
(3) that the defendants, in order to mask the decline in
growth, manipulated the Company's financial results
through improper revenue recognition, which was in
violation of Generally Accepted Accounting Principles;
and
(4) that as a result, the Company's financial results were
materially inflated and inaccurate at all relevant
times.
For more details, contact Vivian Lee KIRBY McINERNEY & SQUIRE,
LLP by Mail: 830 Third Avenue, 10th Floor, New York, New York
10022 by Phone: (212) 317-2300 or (888) 529-4787 by E-mail:
vlee@kmslaw.com or visit their Web site:
http://www.kmslaw.com/new_cases/omnivision/omnivision.htm
OMNIVISION TECHNOLOGIES: Anatoly Weiser Files CA Securities Suit
----------------------------------------------------------------
The Law Offices Of Anatoly Weiser initiated a securities lawsuit
on behalf of shareholders who purchased the common stock of
OmniVision Technologies, Inc. ("OmniVision" or the "Company")
(Nasdaq:OVTI) between February 19, 2003 and June 8, 2004,
inclusive (the "Class Period"). The lawsuit was filed in the
United States District Court for the Northern District of
California.
The complaint alleges that OmniVision and certain officers
violated sections 10(b) and 20(a) of the Exchange Act, and Rule
10b-5 promulgated thereunder, by issuing a series of material
misrepresentations to the market during the Class Period.
For more details, contact the Law Offices Of Anatoly Weiser by
Phone: (877) 736-5411 by Fax: (858) 225-0838 or by E-mail:
info@classlawsuit.com
OMNIVISION TECHNOLOGIES: Bernstein Liebhard Lodges CA Stock Suit
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The law firm of Bernstein Liebhard & Lifshitz, LLP initiated a
securities class action lawsuit in the United States District
Court for the Northern District of California on behalf of all
persons who purchased or acquired securities of OmniVision
Technologies, Inc. (NASDAQ: OVTI) ("OmniVision" or the
"Company") between February 19, 2003 through June 8, 2004,
inclusive (the "Class Period"), seeking to pursue remedies under
the Securities Exchange Act of 1934 (the "Exchange Act").
The complaint alleges that during the Class Period, defendants
caused OmniVision's shares to trade at artificially inflated
levels through the issuance of false and misleading financial
statements. As a result of this inflation, OmniVision was able
to complete a secondary offering of its stock raising $113
million in net proceeds and the three individual defendants were
able to sell 1,322,950 shares of their OmniVision stock for
proceeds exceeding $30 million.
On June 9, 2004, OmniVision delayed the release of its 4thQ FY
2004 results and admitted it may have to restate results due to
the timing of revenue recognition during the first three
quarters of FY 2004, and possibly FY 2003. The Company also
reduced earnings guidance for the 1stQ FY 2005. In response to
this announcement, the Company's shares plummeted to as low as
$17.34 per share, before closing at $17.63 on enormous volume of
40.1 million shares. This was a reduction in OmniVision's stock
price of nearly 50% from the Class Period high of $33.39 per
share.
For more details, contact the Shareholder Relations Department
of Bernstein Liebhard & Lifshitz, LLP by Mail: 10 East 40th
Street, New York, New York 10016 by Phone: (800) 217-1522 or
(212) 779-1414 by E-mail: OVTI@bernlieb.com or visit their Web
site: http://www.bernlieb.com
SHAW GROUP: Anatoly Weisser Lodges Securities Suit in E.D. LA
-------------------------------------------------------------
The Law Offices Of Anatoly Weiser initiated a securities lawsuit
on behalf of shareholders who purchased the common stock of The
Shaw Group, Inc. ("SGR" or the "Company") (NYSE:SGR) between
October 19, 2000 and June 10, 2004, inclusive (the "Class
Period"). The lawsuit was filed in the United States District
Court for the Eastern District of Louisiana.
The complaint alleges that SGR and certain officers violated
sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market during the Class Period.
For more details, contact the Law Offices Of Anatoly Weiser by
Phone: (877) 736-5411 by Fax: (858) 225-0838 or by E-mail:
info@classlawsuit.com
SHAW GROUP: Charles J. Piven Lodges Securities Suit in E.D. LA
--------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. has commenced a
securities class action on behalf of shareholders who purchased,
converted, exchanged or otherwise acquired the common stock of
The Shaw Group, Inc. (NYSE:SGR) between October 19, 2000 and
June 10, 2004, inclusive (the "Class Period").
The case is pending in the United States District Court for the
Eastern District of Louisiana. 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.
No class has yet been certified in the above action.
For more details, contact the Law Offices Of Charles J. Piven,
P.A. by Mail: The World Trade Center-Baltimore, 401 East Pratt
Street, Suite 2525, Baltimore, Maryland 21202 by Phone:
410/986-0036 by E-mail: hoffman@pivenlaw.com
SHAW GROUP: Geller Rudman Lodges Securities Lawsuit in E.D. LA
--------------------------------------------------------------
The Law Firm of Geller Rudman, PLLC initiated a securities class
action in the United States District Court for the Eastern
District of Louisiana on behalf of purchasers of The Shaw Group,
Inc. (NYSE: SGR) ("Shaw" or the "Company") publicly traded
securities during the period between October 19, 2000 and June
10, 2004, inclusive (the "Class Period").
The complaint charges that defendants Shaw, Tim Barfield Jr.,
J.M. Bernhard, Jr., Richard F. Gill and Robert Belk violated
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934,
and Rule 10b-5 promulgated thereunder, by issuing a series of
material misrepresentations to the market between October 19,
2000 and June 10, 2004, about the Company's financial outlook,
thereby artificially inflating the price of Shaw stock. Shaw
describes itself as a provider of complete piping systems and
comprehensive engineering procurement and construction services
to the power industry. The complaint alleges that, during the
Class Period, defendants' publicly disseminated results of
Shaw's operations and financial condition contained artificially
inflated earnings and revenues, assets and income. Such results
were not prepared or reported in accordance with Generally
Accepted Accounting Principles and deceived investors as to the
Company's true performance, thereby artificially inflating the
price of Shaw securities during the Class Period. Specifically,
the complaint alleges that the defendants artificially inflated
the Company's reported revenues and earnings by improperly
establishing and drawing on reserve accounts established in
connection with a series of large acquisitions, including the
acquisition of Stone & Webster Inc. in July 2000 and the
acquisition of The IT Group in May 2002. The complaint further
alleges that defendants prematurely recognized revenue in
violation of Shaw's own purported policies and Generally
Accepted Accounting Principles, and that defendants failed to
disclose the extent to which Shaw was vulnerable to changes in
power generation market conditions.
The truth emerged after the market closed on June 10, 2004 when
Shaw announced that it had been notified by the SEC that the SEC
was conducting an inquiry that appeared to focus on the
Company's accounting for acquisitions. On this news, Shaw stock,
which had traded at a class period high of $62.37, fell 12.4%
from a closing price of $12.28 on June 10, 2004 to a closing
price of $10.75 on the next trading day (June 14, 2004) on more
than four times normal volume. During the class period, Company
insiders sold Shaw shares at prices artificially inflated by
defendants' materially false and misleading statements, for
proceeds in excess of $80 million. Additionally, during the
Class Period, Shaw sold $490 million convertible zero coupon,
liquid yield option notes.
For more details, contact Samuel H. Rudman, Esq. or David A.
Rosenfeld, Esq. of GELLER RUDMAN, PLLC by Mail: Client Relations
Department - 200 Broadhollow, Suite 406, Melville, NY 11747 by
Phone: 631-367-7100 or 1-877-992-2555 by Fax: 1-631-367-1173 by
E-mail: info@geller-rudman.com or visit their Web site:
http://www.geller-rudman.com/case_signup_sec.asp?cID=304
SHAW GROUP: Milberg Weiss Lodges Securities Lawsuit in E.D. LA
--------------------------------------------------------------
The law firm of Milberg Weiss Bershad & Schulman LLP has
initiated a class action lawsuit on behalf of purchasers of the
securities of The Shaw Group, Inc. ("Shaw" or the "Company")
(NYSE: SGR) between October 19, 2000 and June 10, 2004,
inclusive, (the "Class Period"), seeking to pursue remedies
under the Securities Exchange Act of 1934 (the "Exchange Act").
The action, numbered 04-1685, is pending in the United States
District Court for the Eastern District of Louisiana against
defendants Shaw, Tim Barfield Jr., J.M. Bernhard, Jr., Richard
F. Gill and Robert Belk.
Shaw describes itself as a provider of complete piping systems
and comprehensive engineering procurement and construction
services to the power industry. The complaint alleges that,
during the Class Period, defendants' publicly disseminated
results of Shaw's operations and financial condition contained
artificially inflated earnings and revenues, assets and income.
Such results were not prepared or reported in accordance with
Generally Accepted Accounting Principles and deceived investors
as to the Company's true performance, thereby artificially
inflating the price of Shaw securities during the Class Period.
Specifically, the complaint alleges that the defendants
artificially inflated the Company's reported revenues and
earnings by improperly establishing and drawing on reserve
accounts established in connection with a series of large
acquisitions, including the acquisition of Stone & Webster Inc.
in July 2000 and the acquisition of The IT Group in May 2002.
The complaint further alleges that defendants prematurely
recognized revenue in violation of Shaw's own purported policies
and Generally Accepted Accounting Principles, and that
defendants failed to disclose the extent to which Shaw was
vulnerable to changes in power generation market conditions.
The truth emerged after the market closed on June 10, 2004 when
Shaw announced that it had been notified by the SEC that the SEC
was conducting an inquiry that appeared to focus on the
Company's accounting for acquisitions. On this news, Shaw stock,
which had traded at a class period high of $62.37, fell 12.4%
from a closing price of $12.28 on June 10, 2004 to a closing
price of $10.75 on the next trading day (June 14, 2004) on more
than four times normal volume. During the class period, Company
insiders sold Shaw shares at prices artificially inflated by
defendants' materially false and misleading statements, for
proceeds in excess of $80 million. Additionally, during the
Class Period, Shaw sold $490 million convertible zero coupon,
liquid yield option notes.
For more details, 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 or E-mail:
sfeerick@milbergweiss.com or visit their Web site:
http://www.milbergweiss.com
SYNOVIS LIFE: Lerach Coughlin Lodges Securities Fraud Suit in MN
----------------------------------------------------------------
The law firm of Lerach Coughlin Stoia & Robbins LLP initiated a
class action suit in the United States District Court for the
District of Minnesota on behalf of purchasers of Synovis Life
Technologies, Inc. ("Synovis") (NASDAQ:SYNO) securities during
the period between October 16, 2003 and May 18, 2004 (the "Class
Period").
The complaint charges Synovis and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Synovis is a diversified medical device company that
develops, manufacturers and markets products for the surgical
and interventional treatment of disease.
The complaint alleges that during the Class Period, defendants
issued a series of materially false and misleading statements
about the Company's business and prospects, which artificially
inflated the price of the Company's securities. The true facts,
which were known by the defendants, but concealed from the
investing public, included:
(1) the Company's surgical business was not on track for
year-to-year growth but was actually declining;
(2) the Company's Peri-Strips were actually losing market
share to a competing device made by Gore-Medical;
(3) even defendants' explanations for "why" the Company's
Peri-Strips sales fell short were grossly false and
misleading, as defendants claimed that sales fell due
to capacity constraints, i.e., the number of surgeons
qualified to perform procedures had declined, taking
sales down as well, which claim was false for several
reasons, including that Peri-Strips are only used in
25% of gastric by-pass procedures and therefore growth
would track with market acceptance; and even if the
number of gastric by-pass procedures did decline, the
medical communities' conversion to the "laproscopic"
method (which uses S-12 Peri-Strips) from the "open"
method (which used 103 Peri-Strips), would have stemmed
this decline in the Company's Peri-Strips sales;
(4) the Company's "interventional" side had little to zero
growth prospects; and
(5) as a result of the above, the Company's projections of
fiscal 2004 EPS of $.56-$.60 and revenues of $75-$79
million were false and misleading.
On May 19, 2004, before the market opened, Synovis drastically
cut its guidance for fiscal 2004 in a press release which
stated, in pertinent part: "At the halfway point of the year, we
have fallen behind our own expectations and have clearly not met
the expectations of the market .... While the interventional
business showed significant sequential improvement during the
second quarter, it is not yet back to fiscal 2003 levels. In the
surgical business, several factors affecting the gastric bypass
market evolved during the second quarter, constraining recent
Peri-Strips sales growth and near-term growth prospects for
Peri-Strips use in gastric bypass surgery. The magnitude of the
revenue shortfall in the interventional business, combined with
changes in the gastric bypass market, significantly reduce the
likelihood of the strong year-over-year growth we expected in
fiscal 2004."
On this news, Synovis stock fell from a close of $14.65 on May
18, 2004 to a close of $9.25 on May 19, 2004, for a single-day
decline of more than 36% on very heavy trading volume.
For more details, contact William Lerach or Darren Robbins of
Lerach Coughlin Stoia & Robbins LLP by Phone: 800-449-4900 by E-
mail: wsl@lcsr.com or visit their Web site:
http://www.lcsr.com/cases/synovis/
*********
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Copyright 2004. All rights reserved. ISSN 1525-2272.
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