/raid1/www/Hosts/bankrupt/CAR_Public/040729.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, July 29, 2004, Vol. 6, No. 149
Headlines
3C PATENT GROUP: Handal & Associates Retains Experts in CA Suit
AMERICAN HONDA: Report Leads To New Filing in CA Race-Bias Case
CAPITAL ONE: SEC Files DC Securities Suit V. Ex-CEO David Willey
GENERAL MOTORS: NHTSA Investigating Saturn Vue Rollover Reports
HAMILTON SHEA: SEC Sanctions Trader Found Guilty of Mail Fraud
HAWTHORNE STERLING: Judge Issues Initial Decision V. Ian Renert
ICT GROUP: Trial in WV Employees Lawsuit Set For April 19,2005
IPIX CORPORATION: Court Dismisses Appeal of Stock Suit Dismissal
KVH INDUSTRIES: Shareholders Launch Securities Fraud Suits in RI
MASSACHUSETTS: Civil Groups File Suit V. Random Bag Inspection
MICHIGAN: Appeals Court Rules School Biased V. Female Athletes
NATIONAL PIZZA: SEC Files Stock Fraud Suit V. Hershey Moss in CA
NBTY INC.: Roy Jacobs Lodges Amended Securities Suit in E.D. NY
NETFLIX INC.: Shareholders Launch Securities Lawsuits in N.D. CA
PAYPAL LITIGATION: Settlement Hearing Set September 24, 2004
RALLY'S HAMBURGERS: Plaintiffs Appeal Dismissal of Stock Lawsuit
REYNOLDS & REYNOLDS: Shareholders Launch Securities Suits in OH
RIGGS BANK: Accused of Hiding Pinochet's Assets, Lawsuit Urged
SALESFORCE.COM: Shareholders Launch Securities Fraud Suit in CA
SCIENTIFIC-ATLANTA: Adelphia Investors Lodge NY Securities Suit
SECOND CHANCE: PA AG Files Suit V. Defective Bulletproof Vests
SUTTER HEALTH: New Website Created To Monitor Firm's Activities
US FOODSERVICE: SEC Lodges $700M Securities Fraud Lawsuit in NY
US FOODSERVICE: SEC Lodges Securities Suit V. Peter Marion in NY
VIROPHARMA INC.: PA Court Approves $9M Securities Settlement
WASHINGTON: Judge Denies Motion To Throw Out Hanford Plaintiffs
WHITE ELECTRONICS: Shareholders Launch Securities Lawsuit in AZ
WYETH: Wins Pondimin Diet Drug Suit, Settles Another For $48,000
New Securities Fraud Cases
BAXTER INTERNATIONAL: Schiffrin & Barroway Files IL Fraud Suit
CARDINAL HEALTH: Marc Henzel Lodges Securities Suit in S.D. Ohio
COMMERCE BANCORP: Abbey Gardy Lodges Securities Fraud Suit in NJ
FERRO CORPORATION: Lerach Coughlin Lodges Securities Suit in OH
KEY ENERGY: Marc Henzel Lodges Securities Fraud Suits in W.D. TX
KVH INDUSTRIES: Lasky & Rifkind Lodges Securities Lawsuit in RI
KVH INDUSTRIES: Marc Henzel Lodges Securities Fraud Suit in RI
KVH INDUSTRIES: Milberg Weiss Lodges Securities Fraud Suit in RI
LEXAR MEDIA: Marc Henzel Lodges Securities Fraud Suit in N.D. CA
MERIX CORPORATION: Marc Henzel Files Securities Fraud Suit in OR
REYNOLDS & REYNOLDS: Lasky & Rifkind Files Securities Suit in OH
REYNOLDS & REYNOLDS: Marc Henzel Lodges Securities Suit in Ohio
SALESFORCE.COM INC.: Charles J. Piven Lodges CA Securities Suit
SHAW GROUP: Marc Henzel Lodges Securities Fraud Suit in E.D. LA
SPEAR & JACKSON: Marc Henzel Lodges Securities Suit in S.D. FL
SPORTSLINE.COM: Marc Henzel Lodges Securities Lawsuit in S.D. FL
UNIVERSAL HEALTH: Marc Henzel Lodges Securities Suit in E.D. PA
VICURON PHARMACEUTICALS: Marc Henzel Files Securities Suit in PA
WASHINGTON MUTUAL: Marc Henzel Lodges Securities Lawsuit in WA
WHITE ELECTRONIC: Brodsky & Smith Files Securities Lawsuit in AZ
*********
3C PATENT GROUP: Handal & Associates Retains Experts in CA Suit
---------------------------------------------------------------
The law firm of Handal & Associates has retained InteCap, Inc.,
and Walt Bratic to provide expert counseling and testimony in
its national class action against the 3C Patent Group consisting
of Sony Corporation (NYSE: SNE), Philips Electronics (NYSE: PHG)
and Pioneer Corporation (NYSE: PIO) filed in the United States
District Court for the Southern District of California. Philips
through its Philips Intellectual Property and Standards Unit
manages the 3C Patent Group (www.licensing.philips.com).
Shirley Webster and Walt Bratic will be primarily responsible
for work related to the 3C DVD Patent Group engagement. Each are
Managing Directors with the Houston office of InteCap, Inc., an
international consulting firm dedicated to advising clients on
economic, valuation, and strategy issues related to intellectual
property and complex commercial disputes. Ms. Webster and Mr.
Bratic consult with clients regarding licensing strategy and
practices in a variety of industries, including emerging
technology, pharmaceuticals, telecommunications, chemicals,
manufacturing, retail and service industries. Each have actively
consulted on intellectual property strategy, valuation and
competition issues for over fifteen years, providing assistance
to both small firms and Fortune 500 companies. Ms. Webster and
Mr. Bratic have provided expert testimony regarding accounting,
financial and economic issues in United States District Court,
United States Bankruptcy Court, state court, and arbitration
settings.
Recently Walt Bratic's guidance and testimony was instrumental
in the sweeping decision against Philips and Sony in: In re:
CERTAIN RECORDABLE COMPACT DISCS AND REWRITABLE COMPACT DISCS
matter before the UNITED STATES INTERNATIONAL TRADE COMMISSION
matter, Inv. NO. 337-TA-474 wherein the International Trade
Commissioner upheld the decision of an Administrative Law Judge
finding that Philip's and Sony's actions with respect to certain
CD-R/RW patents violated numerous provisions of the Sherman Act.
For more details, contact Tony Handal of Handal & Associates by
Phone: (619) 544-6400 by E-mail: ca@handal-litigation.com or
visit their Web site: http://www.handal-litigation.com
AMERICAN HONDA: Report Leads To New Filing in CA Race-Bias Case
---------------------------------------------------------------
In response to a new report on discriminatory auto loan markups
by American Honda Finance Corporation, Bill Lann Lee, former
Assistant Attorney General for Civil Rights and a partner at
Lieff Cabraser Heimann & Bernstein law frim, reported that:
"We are submitting this report to the court in our pending case
against Honda on behalf of Hispanic and African American car
buyers. While other lenders are moving to limit dealer
subjectivity in transactions, Honda's lending policies leave
unchecked the deliberate and unconscious biases of dealers.
Honda Finance is out of step. We want the court to be aware of
this."
The class action lawsuit, Pakeman v. American Honda Finance
Corporation, was filed in 2003 in Alameda County Superior Court
by Lieff Cabraser Heimann & Bernstein, the Lawyers' Committee
for Civil Rights, Goldstein Demchak Baller Borgen & Dardarian
and Antonio M. Lawson, of Lawson Law Offices in Oakland.
The report, prepared by Dr. Mark Cohen of Vanderbilt University,
is based on examination of records of 383,652 American Honda
Finance Corporation customers over the period June 1999 to April
2003. Dr. Cohen's study shows that Honda has subjected both its
African American and Hispanic customers to systemic
discrimination through uncontrolled dealer discretion in setting
markups, a differential markup structure and discriminatory tier
bumping. The report analyzes Honda lending data disclosed in a
discrimination lawsuit against the lender filed in Tennessee by
the National Consumer Law Center and several law firms. The full
report is available under the heading AFHC at www.nclc.org .
Some key findings of Dr. Cohen's report: African-American
borrowers on average pay more than two times the amount in
subjective markup compared to whites: $557 versus $227, a
difference of $330. Excluding contracts booked under
special zero markup programs, African-American borrowers
are charged on average $1,108 compared to only $698 for
whites, a difference of $410. The average markup is $858
for Hispanic borrowers, compared to $667 for white
customers.
In Pakeman, the African American and Hispanic car buyers in
California challenge alleged discrimination in finance charges
on loans for new and used motor vehicle purchases and leases.
Today's amended complaint alleges that American Honda Finance
Corporation charges African Americans and Hispanics a higher
markup than white car buyers with similar credit ratings.
According to Lee, "No legitimate credit reasons exist for this
markup, and it has a discriminatory impact on African American
and Hispanic customers."
In addition to Lieff Cabraser Heimann & Bernstein and the
Lawyers' Committee for Civil Rights, the Pakeman plaintiffs are
also represented by the Oakland-based law firm Goldstein Demchak
Baller Borgen & Dardarian and by Antonio M. Lawson, of Lawson
Law Offices in Oakland.
The case is titled, Pakeman v. American Honda Finance Corp.,
Case No. RG 03088920.
For more details, please visit
http://www.lieffcabraser.com/auto-loan-discrimination.htm.
CAPITAL ONE: SEC Files DC Securities Suit V. Ex-CEO David Willey
----------------------------------------------------------------
The Securities and Exchange Commission filed a complaint on July
26 in the U.S. District Court for the District of Columbia
alleging David M. Willey, former Chief Financial Officer of
Capital One Financial Corporation, engaged in insider trading in
the securities of Capital One. According to the complaint, the
examiner in charge of the Federal Reserve Board of Governors'
examination of Capital One advised Willey that the Fed was
likely to downgrade Capital One's supervisory assessment, and
that such a downgrade would result in some form of supervisory
action. Without informing other members of senior management or
the Capital One Board of Directors of this material information,
Willey engaged in a series of transactions in Capital One stock
in May 2002 and obtained profits in stock and cash through his
fraudulent trading valued at several million dollars. In
addition, the Commission's complaint alleges that Willey filed a
Form 4 disclosure statement with the Commission that failed to
report two of his May 2002 options exercises totaling 46,800
shares.
The Commission is seeking a permanent injunction, disgorgement
with prejudgment interest, an officer/director bar, and a civil
penalty against David M. Willey for violating Sections 10(b) and
16(a) of the Securities Exchange Act of 1934 and Rules 10b-5 and
16a-3 thereunder. The Commission's complaint also alleges that
Willey's wife, Joy S. Willey, is unjustly enriched because some
of the insider trading proceeds are in her possession.
Accordingly, the Commission is suing her as a Relief Defendant
to recover this unjust enrichment. The action is titled, SEC v.
David M. Willey and Joy S. Willey, Civil Action No. 1:04-CV-
01243, D.D.C.] (LR-18794)
GENERAL MOTORS: NHTSA Investigating Saturn Vue Rollover Reports
---------------------------------------------------------------
The National Highway Traffic Safety Administration (NHTSA) is
probing General Motors Corporation's Saturn Vue sport utility
vehicle after its rear suspension failed during two government
rollover tests, the Associated Press reports.
The NHTSA announced the left-rear suspension failed on both the
four-wheel-drive and front-wheel-drive the 2002-2004 model
Saturn Vues in June during a 45-mph test that includes a sharp
turn. A wheel collapsed beneath the vehicle both times. A
customer had also filed a complaint with the NHTSA, alleging his
rear wheel bent under his 2003 Vue when he swerved after his
vehicle left the road, causing the vehicle to roll over.
General Motors Corp. spokesman Jim Schell told AP the company
has sold around 230,000 Saturn Vues since they were introduced
in the 2002 model year. "We are cooperating with NHTSA on the
investigation," Schell said. He said he hasn't heard about any
problems with the Vue in internal company tests.
NHTSA began testing a vehicle's tendency to roll over with a
moving test this year. Before that, the agency measured rollover
propensity using a mathematical formula based on a vehicle's
height and width. Under the old formula, the 2003 Saturn Vue
received three out of five stars for rollover resistance. NHTSA
hasn't given the 2004 Vue a starred rating, AP states.
HAMILTON SHEA: SEC Sanctions Trader Found Guilty of Mail Fraud
--------------------------------------------------------------
The Securities and Exchange Commission issued an Order Making
Findings and Imposing Remedial Sanctions Pursuant to Section
15(b) of the Securities Exchange Act of 1934 (Order) against
Joseph F. DeSanto (DeSanto). The Order finds that on May 21,
2002, DeSanto pled guilty to one count of mail fraud before the
United States District Court for the Middle District of Florida
arising out of his association with The Hamilton Shea Group Inc.
(Hamilton Shea), a broker-dealer registered with the Commission.
The count of the criminal indictment to which DeSanto pled
guilty alleged that DeSanto:
(1) used undisclosed nominee accounts to control and
manipulate the prices of securities, and
(2) directed registered representatives at Hamilton Shea to
make material misrepresentations and omissions
concerning these securities and to effect unauthorized
trades in the accounts of firm customers.
Based on the above, the Order bars DeSanto from association with
any broker or dealer and from participation in any offering of a
penny stock. DeSanto consented to the issuance of the Order
without admitting or denying any of the allegations in the
administrative proceeding.
HAWTHORNE STERLING: Judge Issues Initial Decision V. Ian Renert
---------------------------------------------------------------
An Administrative Law Judge has issued an Initial Decision in
the Matter of Ian L. Renert. The Initial Decision finds that on
April 14, 2004, the U.S. District Court for the District of
Connecticut entered a final judgment against Ian L. Renert:
(1) permanently enjoining him from violating Sections 5(a),
5(c), and 17(a) of the Securities Act of 1933, Section
10(b) of the Securities Exchange Act of 1934 and Rule
10b-5 thereunder, Sections 206(1) and 206(2) of the
Investment Advisers Act of 1940, and Section 7(d) of
the Investment Company Act of 1940;
(2) ordering him to pay disgorgement of $717,276, plus
prejudgment interest of $117,264; and
(3) ordering him to pay a civil penalty of $250,000.
The Initial Decision bars Ian L. Renert from association with
any investment adviser.
A Securities and Exchange Commission complaint, filed in June
2001, alleged that Renert, the owner and control person of an
unregistered investment adviser, Hawthorne Sterling & Co.
(Hawthorne), was the architect of a $22 million fraudulent
offering of interests in unregistered offshore mutual funds. The
Commission alleged in its complaint that from at least June 1997
through June 2000, Renert and Hawthorne induced more than 700
investors in 49 states and more than 100 investors overseas to
purchase interests in 30 entities known as the Hawthorne
Sterling Family of Funds. According to the complaint, Renert and
Hawthorne misrepresented via the Internet, offshore seminars and
a network of sales agents that the funds would invest in bank
debentures, which in this case, were fictitious prime bank
instruments. The Commission also alleged that Renert and
Hawthorne failed to disclose that Renert used fund assets to
engage in day trading in Internet stocks, losing at least $2.2
million, and to fund a mortgage on one of Renert's homes.
ICT GROUP: Trial in WV Employees Lawsuit Set For April 19,2005
--------------------------------------------------------------
Trial in the class action filed against ICT Group, Inc. is set
for April 19,2005 in the Circuit Court of Berkeley County, West
Virginia.
William Shingleton filed the suit in 1998, alleging the Company
and twelve current and former members of Company management had
violated the West Virginia Wage Payment and Collection Act (the
Act) for failure to pay promised signing and incentive bonuses
and wage increases, failure to compensate employees for short
breaks or "transition" periods, production hours worked and
improper deductions for the cost of purchasing telephone
headsets.
The complaint also included a count for fraud, alleging that the
failure to pay for short break and transition time violated
specific representations made by the Company to its employees.
In addition to compensatory claims for unpaid wages, the
plaintiffs are seeking liquidated damages under the Act and
punitive damages for allegedly fraudulent conduct on the part of
the Company and the individual defendants.
The method of calculating liquidated damages under the Act is
one of the matters in dispute between the parties, and there is
a significant difference in the amount of potential liquidated
damages using the methods the plaintiffs and the Company contend
apply.
On August 26, 2002, the Court entered two separate orders
granting partial summary judgment against the Company and, in
the case of one of the orders, against three of the individual
defendants, finding that employees were not paid for all hours
attributable to short breaks and idle time of less than 30
minutes in duration.
On April 8, 2004, the plaintiffs filed a motion for partial
summary judgment on their common law fraud claim against the
defendants relating to the Company's sale of headsets to
employees. The defendants are vigorously opposing the motion,
which is still pending. On May 17, 2004, the defendants filed a
motion, which is still pending, to decertify the class as to all
fraud claims.
On June 9, 2004, the Company filed its Second Amended
Accounting, updating amounts the Company may potentially be
liable for relating to unpaid breaks and unpaid transition time,
including interest.
On April 23, 2004, the Court denied the defendant's motion to
vacate the Court's April 16, 2003 ruling which held that, under
the Act, every class member who was not paid transition time,
short breaks or other wages is owed liquidated damages equal to
a day's wages for every day the amounts due remain unpaid up to
a maximum of 30 days. The Court concluded that it could not
determine whether the calculation of liquidated damages under
the Act was disproportionate enough to violate the defendants'
due process rights prior to an actual award of compensatory
damages.
IPIX CORPORATION: Court Dismisses Appeal of Stock Suit Dismissal
----------------------------------------------------------------
The United States Ninth Circuit Court of Appeals dismissed the
appeal of the dismissal of the amended securities class action
filed against IPIX Corporation and Homestore.com, Inc. by the
California Teachers' Retirement System (CalSTRS).
The suit, filed on behalf of Homestore.com's stockholders,
alleges Homestore.com and the Company made misstatements and
omissions in its financial statements. The Complaint alleges
that during 2001, Homestore and IPIX entered into fraudulent
reciprocal transactions intended to artificially bolster and
maintain Homestore's and our respective stock prices. The
Complaint further alleges that Homestore's public statements
with respect to these transactions are attributable to the
Company and violate Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934.
The Company joined with other co-defendants and filed a joint
motion to dismiss, alleging that the Complaint fails to state a
claim upon which relief may be granted, among other things. On
March 7, 2003, the United States District Court for the District
of Central California granted the Company's motion to dismiss,
with prejudice. On April 7, 2004, the California Teachers'
Retirement System filed a notice of appeal with the United
States Court of Appeals for the Ninth Circuit appealing the
dismissal of the First Amended Consolidated Complaint for
violation of federal securities laws filed against
Homestore.com, Inc, the Company and the other named defendants.
KVH INDUSTRIES: Shareholders Launch Securities Fraud Suits in RI
----------------------------------------------------------------
KVH Industries, Inc. and certain of its officers and directors
face several securities class actions filed in the United States
District Court for Rhode Island, alleging violations of the
Securities Exchange Act of 1934.
KVH describes itself as a designer, manufacturer and marketer of
mobile satellite communications products for the
automotive/recreational vehicle/marine markets and navigation,
guidance and stabilization products for defense markets. The
complaint alleges that, throughout the Class Period, defendants
issued materially false and misleading statements regarding
KVH's increasing financial results and the strong demand for its
newly developed TracVision A5 and G8 satellite TV systems (the
'TracVision systems').
As alleged in the complaint, these statements were materially
false and misleading because they failed to disclose, among
other things:
(1) that defendants had 'stuffed' the retail channels with
overpriced TracVision systems;
(2) that the Company's revenues were not growing by
millions of dollars per quarter and the purported
growth trends in the Company's revenues could not be
sustained; and
(3) that KVH had not realized any material cost reduction
in the manufacture of its TracVision systems and would
be forced to write-down its inventory of manufactured
goods by millions of dollars.
The complaint further alleges that defendants failed to disclose
these adverse facts in order to complete a public offering of
KVH common stock, raising more than $51.5 million in much needed
capital. On July 6, 2004, before the market opened for trading,
KVH stunned the investing public by announcing that it was
slashing the retail price of its TracVision systems by more than
34% and taking a multi-million dollar write down of vendor
purchase commitments and on-hand inventories to reflect the true
value of KVH's TracVision systems sales. In pre-opening market
trading, KVH common stock declined more than 19%, to open at
$9.51 per share on July 6, 2004, a 49% decline from the public
offering price just 4 months prior.
The suits were filed on behalf of purchasers of the Company's
stock from January 6,2004 to July 2,2004. The plaintiff firms
in the suits are:
(1) Brian Felgoise, Mail: 230 South Broad Street, Suite
404, Philadelphia, PA, 19102, Phone: 215.735.6810, Fax:
215/735.5185;
(2) Charles J. Piven, Mail: World Trade Center-
Baltimore,401 East Pratt Suite 2525, Baltimore, MD,
21202, Phone: 410.332.0030, E-mail: pivenlaw@erols.com;
(3) Lerach Coughlin Stoia & Robbins LLP (Philadelphia),
Mail: 1845 Walnut St., Suite 945, Philadelphia, CA,
19103, Phone: 215.988.9546, Fax: 215.988.9885, E-mail:
info@lcsr.com;
(4) Schatz & Nobel, P.C., Mail: 330 Main Street, Hartford,
CT, 06106, Phone: 800.797.5499, Fax: 860.493.6290, E-
mail: sn06106@AOL.com;
(5) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
MASSACHUSETTS: Civil Groups File Suit V. Random Bag Inspection
--------------------------------------------------------------
The Massachusetts Bay Transportation Authority (MBTA) faces a
lawsuit filed by two civil rights groups in federal court
seeking to stop it from randomly inspecting passengers' bags,
the Associated Press reports.
The MBTA began random inspections Thursday, just before the
Democratic National Convention this week at Boston's
FleetCenter. The convention, which runs through Thursday, has
prompted security precautions across the city, including daily
helicopter patrols and Coast Guard searches of boats in Boston
Harbor.
The National Lawyers Guild and the American Anti-Discrimination
filed the suit in federal court, alleging that the random
inspections are an unconstitutional violation of personal
privacy. The suit further alleges the searches violate the
Fourth Amendment because they don't require information that the
person searched is suspected of criminal activity. A judge
scheduled an emergency hearing for Tuesday in the suit.
"There is no way the MBTA can implement this policy in a
constitutional manner," National Lawyers Guild national
president Michael Avery told the Associated Press.
MBTA spokesman Joe Pesaturo told AP the bags aren't opened.
Instead, they are run through a machine that detects explosives.
Mr. Pesaturo said so far no one has objected to having their
bags inspected. "We are extremely confident that the policy
will stand up to legal scrutiny," he said.
MICHIGAN: Appeals Court Rules School Biased V. Female Athletes
--------------------------------------------------------------
The 6th Circuit Court of Appeals ruled that the Michigan High
School Athletic Association (MHSAA) discriminates against female
high school athletes in Michigan by scheduling only their sports
in nontraditional and less advantageous seasons, in violation of
the United States Constitution. The National Women's Law Center
(NWLC), which is of counsel in the class action law suit MHSAA
v. Communities for Equity (CFE), praised the decision and urged
MHSAA to bring its scheduling of girls' sports into compliance
with the law.
"The district court, and now the court of appeals, has ruled
that MHSAA's scheduling of girls' sports violates the law," said
Neena Chaudhry, NWLC senior counsel. "MHSAA must stop asking
Michigan high school girls to get in line behind the boys and
instead focus on ensuring that girls have the athletic
opportunities they deserve." In December 2001, the federal
district court in Grand Rapids ruled that MHSAA's scheduling of
girls' sports violates the Constitution's Equal Protection
Clause and federal and state laws.
MHSAA schedules six high school girls' sports, but no boys'
sports, in nontraditional and disadvantageous seasons. As a
result, girls are harmed in ways that boys are not, including:
limited opportunities for athletic scholarships and
opportunities to play college sports; limited opportunities to
play in club or Olympic Development Programs; and missed
opportunities for awards and recognition, such as All-American
teams.
One example of MHSAA's backwards scheduling is that while
basketball is traditionally played in the winter and volleyball
is played in the fall, in Michigan girls have to play basketball
in the fall and volleyball in the winter.
The court's opinion cited one of MHSAA's own publications as
evidence that girls were treated differently than boys. In its
1990 Bulletin, MHSAA's Executive Director explains, "Boys'
sports were in [MHSAA member] schools first and girls' sports,
which came later, were fitted around the pre-existing boys
program."
"It is past time that Michigan girls get the equal opportunities
they deserve," said Ms. Chaudhry. "MHSAA should put into place
the compliance plan already approved by the district court
without delay."
NATIONAL PIZZA: SEC Files Stock Fraud Suit V. Hershey Moss in CA
----------------------------------------------------------------
The Securities and Exchange Commission filed a civil complaint
on July 6, 2004, against St. Louis businessman Hershey Moss. The
Commission's complaint alleges that Moss misrepresented the
business plan for his company, National Pizza Corporation, in
the company's registration statement for its initial public
offering. The registration statement portrayed National Pizza as
a legitimate start-up company, when in fact Moss intended to
sell it as a "shell company" to a privately-held company. As
alleged in the complaint, Moss's subterfuge allowed the company
to evade regulatory scrutiny aimed at preventing common abuses
(such as market manipulations) arising out of such shell company
mergers.
In the registration statement, filed in February 2002, Moss
represented that he intended to develop a national network of
frozen pizza distributors. When asked by the staff of the
Division of Corporation Finance, Moss affirmed that the company
had no plans to seek a business combination in the near future.
In fact, according to the complaint, at the same time Moss was
making such representations, he was secretly negotiating the
sale of National Pizza as a valuable public "shell" corporation
to a private company. Shortly after National Pizza's
registration statement became effective and it became a public
company, Moss closed the deal with the private entity, selling
his shell company for approximately $500,000 cash and 440,000
shares in the merged company.
Once the merger was completed, the new San Francisco-based
company (then known as BSP Onelink, and later renamed One Link 4
Travel, Inc.) applied to the NASD to list shares of its stock on
the OTC Bulletin Board. Because the merger appeared to be
inconsistent with National Pizza's public filings purporting to
pursue a pizza business, the NASD raised questions about the
timing of the merger negotiations. According to the complaint,
Moss falsely assured the NASD that he did not change his
intention to run a pizza business until after the company became
public. Following Moss's misrepresentations, the NASD approved
the travel company's listing application, allowing the shares to
be listed on the OTC Bulleting Board. Moss subsequently sold a
portion of his shares on the open market for approximately
$120,000.
The suit, brought in federal district court in San Francisco,
charges Moss with making false and misleading statements in
connection with the company's public offering (in violation of
Sections 17(a)(1) and 17(a)(3) of the Securities Act of 1933)
and misleading the NASD in connection with the listing of the
stock for public trading (in violation of Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 thereunder).
[SEC v. Hershey Moss, Case No. C 04-2683-JL
(N.D. Cal.)] (LR-18795)
NBTY INC.: Roy Jacobs Lodges Amended Securities Suit in E.D. NY
---------------------------------------------------------------
The law offices of Roy Jacobs & Associates initiated an amended
class action complaint in the United States District Court for
the Eastern District of New York on behalf of all persons who
purchased or otherwise acquired publicly traded securities of
NBTY, Inc. ("NBTY" or the "Company") (NYSE:NTY) between April
22, 2004 and July 22, 2004, inclusive, (the "Class Period"). The
amended complaint now expands the lawsuit to cover purchasers
between June 17, 2004 and July 22, 2004, and continues to assert
claims against NBTY and its top executives, Scott Rudolph and
Harvey Kamil.
Before the truth was revealed, defendant Rudolph sold 400,000
NTY shares for proceeds of over $14 million, at prices ranging
from $35-$37 per share, and defendant Kamil sold 157,000 NTY
shares for proceeds of over $6 million at price ranging from
$38-39 per share. With NTY shares at $19, innocent shareholders
have seen a large part of their investment lost, and the market
value of NTY has declined by more than a billion dollars.
The amended complaint alleges that Defendants violated Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule
10b-5. It asserts that the Company issued false and misleading
statements concerning its financial results for the quarter
ending March 31, 2004. On April 22, 2004, NBTY announced
increased sales in that quarter for its various business
segments, including its Direct Response segment, which sells
products through catalogs and the Internet. The increased sales
were attributed to "the Company's ability to more effectively
target market its customer base." In truth, the results were due
to special sales promotions, and not any generalized improvement
in the Company's marketing abilities. Indeed, it is alleged that
in the month of April sales in this segment dropped off 14%
because the special promotion had ended. On June 17, 2004, NBTY
shocked investors by announcing sales declines in the Direct
Response segment of 12% for the months of April and May, sending
shares plunging from a close of $36.50 the previous day to
$26.99 on trading volume of 8.3 million shares. On that date,
NBTY repeatedly said it could not address questions relating to
the financial impact of its Rexall acquisition, purportedly
because that acquisition had been fully integrated. On July 22,
2004, however, shareholders were surprised to learn that NBTY's
third quarter results were adversely impacted by issues relating
to the Rexall acquisition, including poor margins. NBTY shares
dropped to approximately $19 per share on this news.
For more details, contact Roy L. Jacobs, Esq. of Roy Jacobs &
Associates by Phone: 888-884-4490 or by E-mail:
classattorney@pipeline.com
NETFLIX INC.: Shareholders Launch Securities Lawsuits in N.D. CA
----------------------------------------------------------------
Netflix, Inc. faces several securities class actions filed in
the United States District Court for the Northern District of
California for violations of federal securities laws. The suits
also name as defendants:
(1) CEO Reed Hastings,
(2) CFO Barry McCarthy and
(3) Chief Marketing Officer Leslie Kilgore
The defendants allegedly failed to disclose the number of
subscriber cancellations being suffered by the Company, even as
they repeatedly touted the large number of new subscribers being
added to the Company's subscriber base.
The complaints further allege that they also consistently
understated the Company's churn rate (the percentage of its
subscribers that cancelled per month). They achieved this by
using an improper calculation of the rate that produced an
artificially low churn rate in quarters in which the Company was
adding substantial numbers of new subscribers.
The standard definition of churn rate (and the definition used
by other publicly-traded companies that report churn rate such
as Sprint and Nextel Partners) is 'the percentage of
participants who discontinue their use of a service divided by
the average number of total participants during a given period
of time.' Netflix instead divided canceling subscribers by
subscribers at the beginning of the period plus subscriber
additions.
Because beginning subscribers plus new subscribers were
consistently a larger number than average subscribers throughout
the Class Period, the Company reported an artificially low churn
rate throughout the Class Period by erasing the effect that
canceling subscribers had on average subscribers during each
period.
Moreover, it is alleged that the Company repeatedly made
statements throughout the Class Period that its churn rate was
declining to 'record lows,' when in fact in some of these
quarters its churn rate was markedly rising. For example, in the
third quarter of 2003, Netflix claimed that its churn rate had
reached a new record low of 5.2% when in fact its churn rate had
risen from 7% to 7.7% during the quarter.
Disclosure of actual subscriber cancellations and the actual
churn rate was critically important for investors analyzing the
Company's prospects and the potential of its business model. The
Company spends approximately $35 in marketing expense to acquire
each new subscriber. Had investors known that the Company was
being forced continuously to replenish its subscriber base
through additional marketing expenditures; it would have called
into question the potential long-term profitability of the
Company and the viability of its business model. In other words,
the Company's artificially low claimed churn rate obscured the
fact that it was not retaining many subscribers long enough to
break even on them.
The truth came to light when, after the market closed on July
15, 2004, the Company issued an earnings release which, for the
first time, disclosed the number of subscriber cancellations
during previous quarters. Specifically, the press release stated
that, while the Company had added 537,000 new subscribers during
the second quarter, it had suffered 422,000 subscriber
cancellation, meaning 72% of the Company's 583,000 new
subscribers in the second quarter of 2004 had merely replaced
subscribers who had cancelled. The release also showed that 41%
of the Company's 760,000 new subscribers in the second quarter
had merely replaced subscribers who had cancelled, and 71% of
the Company's 327,000 new subscribers in the second quarter of
2003 had merely replaced subscribers who had cancelled.
In response, Netflix shares declined from $32 per share to $20
per share over the next two days, a decline of 38%. During the
Class Period, the shares had traded as high as $39.77 per share,
during which period Hastings, McCarthy and Kilgore sold
approximately $13 million in Netflix shares.
The suits are filed on behalf of purchasers of the Company's
common stock from October 1,2003 to July 15,2004. The plaintiff
firms in the suits are:
(1) Charles J. Piven, Mail: World Trade Center-
Baltimore,401 East Pratt Suite 2525, Baltimore, MD,
21202, Phone: 410.332.0030, E-mail: pivenlaw@erols.com;
(2) Scott & Scott LLC, Mail: P.O. Box 192, 108 Norwich
Avenue, Colchester, CT, 06415, Phone: 860.537.5537,
Fax: 860.537.4432, e-mail: scottlaw@scott-scott.com
PAYPAL LITIGATION: Settlement Hearing Set September 24, 2004
------------------------------------------------------------
The United States District Court for the Northern District of
California - San Jose Division will hold a fairness hearing for
the proposed settlement of the In re PayPal Litigation Case No.
CV-02-01227-JF (PVT) on behalf of all Persons who opened a
PayPal account during the period from October 1, 1999 through
January 31, 2004. Excluded from the class are any judicial
officer to whom the lawsuit is assigned; PayPal and any of its
affiliates; any current or former employee, officer, or director
of PayPal; anyone who resides in Austria, Belgium, Denmark,
Germany, Greece, Finland, France, Ireland, Italy, Luxembourg,
Portugal, Spain, Sweden, The Netherlands, or United Kingdom; and
all persons who timely and validly request exclusion from the
class pursuant to this notice.
The Court has scheduled the hearing on September 24, 2004, at
9:00 a.m., before the Honorable Jeremy Fogel, United States
District Judge, United States District Court for the Northern
District of California, Courtroom 3, 5th Floor, 280 South First
Street, San Jose, California 95113.
For more details, contact A. J. De Bartolomeo of Girard Gibbs &
De Bartolomeo LLP by Mail: 601 California Street, Suite 1400,
San Francisco, CA 94108 by Phone: 415-981-4800 by Fax: 415-981-
4846 or by E-mail: girardgibbs@girardgibbs.com or Wolf Popper
LLP by Mail: 845 Third Avenue, New York, NY 10022 by Phone:
(212) 759-4600 or (877) 370-7703 or by Fax: (212) 486-2093 or
(877) 370-7704
RALLY'S HAMBURGERS: Plaintiffs Appeal Dismissal of Stock Lawsuit
----------------------------------------------------------------
Plaintiffs appealed the United States District Court for the
Western District of Kentucky, Louisville Division's ruling in
favor of Rally's Hamburgers, Inc. in the securities class action
filed against the Company on behalf of its stockholders.
In January and February 1994, two putative class action lawsuits
were filed against the Company, Burt Sugarman and GIANT GROUP,
LTD. and certain of the Company's former officers and directors
and its auditors. The cases were subsequently consolidated
under the case name "Jonathan Mittman et. al. vs. Rally's
Hamburgers, Inc., et. al."
The complaints allege that the defendants violated the
Securities Exchange Act of 1934, among other claims, by issuing
inaccurate public statements about Rally's in order to
arbitrarily inflate the price of its common stock. The
plaintiffs seek compensatory and other damages, and costs and
expenses associated with the litigation.
On April 15, 1994, Rally's filed a motion to dismiss and a
motion to strike. On April 5, 1995, the Court struck certain
provisions of the complaint but otherwise denied Rally's motion
to dismiss. In addition, the Court denied plaintiffs' motion
for class certification; the plaintiffs renewed this motion, and
despite opposition by the defendants, the Court granted such
motion for class certification on April 16, 1996, certifying a
class from July 20, 1992 to September 29, 1993. On August 22,
2003, the court ruled for the Company on all counts.
REYNOLDS & REYNOLDS: Shareholders Launch Securities Suits in OH
---------------------------------------------------------------
The Reynolds & Reynolds Company faces several securities class
actions filed in the United States District Court for the
Southern District of Ohio, alleging violations of federal
securities laws.
The suits charge Reynolds, Lloyd G. Waterhouse, and Dale L.
Medford with violations of the Securities Exchange Act of 1934.
More specifically, the Complaint alleges that the Company failed
to disclose and misrepresented the following material adverse
facts which were known to defendants or recklessly disregarded
by them:
(1) that the Company knew or recklessly disregarded the
fact that market demand for the Company's cutting edge
products, such as Reynolds Generation Series, was
lackluster;
(2) that as a consequence of the foregoing, the Company's
strategy for growth was seriously flawed as the Company
was forced to expend additional resources to pitch new
products to unwilling customers, while neglecting the
marketing of its more conventional revenue-producing
products; and
(3) that, as a result of the foregoing, defendants lacked a
reasonable basis for their positive statements about
the Company and their earnings projections.
On June 24, 2004, Reynolds announced that it anticipated
revenues and earnings would be lower than its previous estimates
when the Company reported results for its third fiscal quarter
on July 21, 2004. News of this shocked the market. Shares of
Reynolds fell $7.28 per share or 23.81 percent, on June 25,
2004, to close at $23.30 per share.
On July 7, 2004, Reynolds announced that CEO, Chairman and
President Lloyd 'Buzz' Waterhouse had resigned from the Company
and its board of directors, effective immediately. On the news
shares of Reynolds plummeted further. Shares of Reynolds fell a
further $.83 per share or 3.63 percent, on July 7, 2004, to
close at $22.12 per share.
The suits are filed on behalf of the Company's stockholders from
January 22,2003 to June 24,2004. The plaintiff firms in the
suits are:
(1) Brian Felgoise, Mail: 230 South Broad Street, Suite
404, Philadelphia, PA, 19102, Phone: 215.735.6810, Fax:
215/735.5185;
(2) Bull & Lifshitz, Mail: 18 East 41st St., New York, NY,
10017, Phone: 212.213.6222, Fax: 212.213.9405;
(3) Charles J. Piven, Mail: World Trade Center-Baltimore,
401 East Pratt Suite 2525, Baltimore, MD, 21202, Phone:
410.332.0030, E-mail: pivenlaw@erols.com;
(4) Schatz & Nobel, P.C., Mail: 330 Main Street, Hartford,
CT, 06106, Phone: 800.797.5499, Fax: 860.493.6290, E-
mail: sn06106@AOL.com;
(5) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610-667-7706, Fax: 610-667-
7056, E-mail: info@sbclasslaw.com
RIGGS BANK: Accused of Hiding Pinochet's Assets, Lawsuit Urged
--------------------------------------------------------------
A representative of victims of former Chilean dictator Augustus
Pinochet urged a Spanish judge to charge Riggs Bank for
concealing millions of dollars belonging to the dictator despite
a court order freezing his assets worldwide, cnn.com reports.
Spanish lawyer Juan Garces made the request last week to Judge
Baltasar Garzon after a United States Senate report released
last week concluded the American bank helped Mr. Pinochet "evade
legal proceedings related to his Riggs bank accounts." Mr.
Garces represents plaintiffs in a class action, which alleges
criminal and civil charges against Mr. Pinochet and about 100
individuals or organizations with specific claims against him.
Mr. Pinochet came to power in Chile in 1973 via a coup and ruled
for 27 years. In October 1998, Judge Garzon issued a warrant
against him, for genocide, terrorism and torture in the deaths
and disappearance of thousands of people, including some
Spaniards, during his regime. Mr. Pinochet was arrested in
London in October 1998. After a lengthy legal battle, Britain
permitted Mr. Pinochet to return home to Chile in 2000, rather
than face extradition to Spain, on the grounds that he was unfit
to stand trial.
Judge Garzon also issued an order in October 1998 to freeze
Pinochet's assets as a guarantee, that victims would receive
indemnity payments if Pinochet were ever convicted in court, Mr.
Garces told cnn.com.
Mr. Garces said the judge was expected to rule this week on the
new request. He told CNN that if Garzon agrees to proceed, it
could result in the Spanish government formally asking the U.S.
Department of Justice to press charges against Riggs Bank and
its top executives allegedly involved in the money laundering.
"Pinochet 1 was about torture and crimes against humanity," Mr.
Garces said, referring to earlier unsuccessful efforts to try
Pinochet for genocide and torture. "Pinochet 2 is about the
money the criminal made and hid . It's the same case, in two
facets, and in both, the key is international judicial
cooperation."
The U.S. Senate's Permanent Subcommittee on Investigations, in a
report issued July 15 in Washington, said Pinochet's accounts at
Riggs from 1994 until 2002 contained from $4 million to $8
million. The report further stated that the bank "resisted"
regulatory oversight of the Pinochet accounts, "despite red
flags involving the source of Mr. Pinochet's wealth, pending
legal proceedings to freeze his assets and public allegations of
serious wrongdoing by this client," cnn.com reports.
A Riggs Bank spokeswoman said Tuesday the bank would have no
comment on the Senate report, cnn.com states.
SALESFORCE.COM: Shareholders Launch Securities Fraud Suit in CA
---------------------------------------------------------------
salesforce.com and certain of its officers face a securities
class action filed in the United States District Court for the
Northern District of California, alleging violations of the
Securities Exchange Act of 1934.
salesforce.com is engaged in the provision of on-demand customer
relationship management ("CRM") solutions. The Company delivers
integrated and scalable enterprise applications for companies of
all sizes.
According to the complaint, the Company went public on June 21,
2004 in one of the "hottest" initial public offerings ("IPO") of
2004, with its price increasing to $17.20 on the first day of
trading from the offering price of $11.00 per share. This
offering had been delayed due to an interview salesforce.com's
CEO had given to The New York Times entitled "It's Not Google.
It's That Other Big I.P.O." While salesforce.com delayed the IPO
after this article, it did not retract statements in the
article. Nor did it tell investors that salesforce.com
management was expecting earnings to decline in FY2005. Then, on
July 21, 2004, salesforce.com disclosed that FY2005 would be
much worse than market expectations. On this news, the Company's
stock price declined to as low as $11.05 per share from the
prior day close of $16.06.
The complaint alleges that defendants knew but concealed from
the investing public during the Class Period that in the
Company's Prospectus, there was a clear trend in the Company's
diluted (and basic) earnings per share which defendants knew
investors would price into the Company's IPO price; and secretly
defendants actually knew that this upward trend in diluted EPS
had reversed itself long before the IPO.
As a result of the defendants' false statements,
salesforce.com's stock traded at inflated prices during the
Class Period, increasing to as high as $17.20 per share shortly
after the Company sold more than $117 million worth of its own
shares via a false and defective Registration Statement.
The suit, styled "Morrison, et al. v. Salesforce.com, Inc., et
al.," was filed on behalf of purchasers of the Company's common
stock from June 21,2004 to July 21,2004. The plaintiff firm in
the suit is Lerach Coughlin Stoia & Robbins LLP (San Francisco),
Mail: 100 Pine Street, Suite 2600, San Francisco, CA, 94111,
Phone: 415.288.4545, Fax: 415.288.4534, E-mail: info@lcsr.com
SCIENTIFIC-ATLANTA: Adelphia Investors Lodge NY Securities Suit
---------------------------------------------------------------
Scientific-Atlanta, Inc. (NYSE: SFA) reported that on July 26,
2004, it received a complaint naming Scientific-Atlanta and two
of Scientific-Atlanta's officers as defendants in a purported
securities class action in federal court in the Southern
District of New York.
The suit brought by investors in securities of Adelphia
Communications Corporation alleges that certain commercial
transactions between Adelphia and Scientific-Atlanta relating to
Adelphia's purchases of digital set-top boxes and a marketing
support agreement purportedly resulted in violations of the
anti-fraud provisions of the federal securities laws with
respect to investors in Adelphia securities.
Motorola is also a named defendant in this lawsuit with respect
to certain commercial transactions with Adelphia. The suit does
not allege any impropriety by Scientific-Atlanta regarding its
financial statements. Scientific-Atlanta denies the allegations.
SECOND CHANCE: PA AG Files Suit V. Defective Bulletproof Vests
--------------------------------------------------------------
Second Chance Body Armor, Inc. faces a lawsuit filed by
Pennsylvania Attorney General Jerry Pappert, over its
lightweight bulletproof vests, the Associated Press reports.
AG Pappert filed the suit against the nation's largest
manufacturer of bulletproof vests, alleging that the Company
failed to disclose for years that the material in some models
deteriorates with exposure to fluorescent light, heat and
humidity.
The Company used Zylon fibers - a material produced by Toyobo
Co. of Japan - in the vests to make them lighter and more
comfortable. AG Pappert alleged that in December 1998, Toyobo
informed the Company that the material significantly
deteriorated with exposure to fluorescent light. In August
2001, Toyobo officials again told the Company that heat and
humidity tests resulted in more problems.
"It's our position that Second Chance made a conscious decision
to hold off warning our law enforcement officials that
degradation problems with Zylon in bulletproof vests could
seriously compromise their effectiveness," AG Pappert said,
according to AP.
AG Pappert blamed the vests for the death of a police officer in
California and the wounding of an officer in suburban
Pittsburgh. He added that the Company discontinued production
of the lightweight vests last September.
The suit seeks the payment of hundreds of thousands of dollars
in civil penalties and refunds to Pennsylvania law enforcement
agencies that bought the lightweight vests.
The Company's representatives did not immediately return calls
for comment, AP states.
SUTTER HEALTH: New Website Created To Monitor Firm's Activities
---------------------------------------------------------------
On July 27, 2004, www.suttercorporatewatch.com went live on the
Internet. The new site, created by caregivers and patient
advocates, is designed to serve as a comprehensive resource to
assist the public in better monitoring Sutter Health, its
history of putting profits before the needs of patients and its
impacts on our communities.
The multi-billion dollar Sutter Health, Northern California's
largest hospital corporation, has faced sharp criticism from the
California Public Employees Retirement System for charging
prices that are 80% higher than the statewide average. In
addition, federal investigators recently found violations at
Sutter Solano Medical Center that posed an "immediate and
serious threat to the health and safety of patients."
Sutter Health made $465 million in profits in 2003, a profit
margin that is four times higher than the average for hospital
corporations across the nation. Although Sutter has "non-profit"
tax status, it operates a host of for-profit subsidiaries.
Sutter has been decried by the advocacy group Health Access and
the San Francisco Board of Supervisors for overcharging patients
without health insurance and then sending their accounts to
aggressive debt collection agencies
The new website provides access to information drawn from a wide
variety of sources, including state and federal health agencies,
the IRS, court records, and the press. Visitors to the site can
link to the class-action lawsuit filed against Sutter for
overcharging the uninsured, data summarizing Sutter's
skyrocketing profits that are 400% higher than the national
average, and the personal stories of patients victimized by
Sutter Health's discriminatory pricing and aggressive debt
collection practices.
The site also features a "press room" that provides links to a
constantly growing compilation of articles from various Northern
California media outlets detailing ongoing investigations of
Sutter Health, Sutter's history of price gouging, soaring
profits, poor treatment of employees, environmental hazards, and
patient care problems.
US FOODSERVICE: SEC Lodges $700M Securities Fraud Lawsuit in NY
---------------------------------------------------------------
The Securities and Exchange Commission filed a complaint in the
U.S. District Court for the Southern District of New York
alleging that Michael Resnick, Mark P. Kaiser, Timothy J. Lee
and William Carter engaged in or substantially participated in a
scheme to overstate the income of Royal Ahold (Koninklijke Ahold
N.V.) (Ahold) by $700 million or more in SEC filings and other
public announcements for at least fiscal years 2001 and 2002.
Resnick, Kaiser, Lee, and Carter were top executives at
Columbia, Maryland based wholesale food distributor U.S.
Foodservice (USF), a major subsidiary of Ahold. The complaint
alleges that they grossly inflated reported profits and induced
numerous suppliers to submit false confirmations to the
company's auditors in order to conceal their fraud. The
Commission alleges that Resnick, Kaiser, Lee and Carter violated
the antifraud provisions; aided and abetted violations of the
reporting provisions; and violated and aided and abetted
violations of the books and records provisions of the Securities
Exchange Act of 1934 (Exchange Act).
The Commission also alleges that Lee engaged in repeated
instances of tipping material, nonpublic information regarding
Ahold's April 2000 tender offer acquisition of U.S. Foodservice.
As a result of the tipping, an associate of Lee realized profits
of at least $363,000 from trading in the stock of U.S.
Foodservice. The Commission alleges that Lee, through his
insider tipping, violated the antifraud provisions of the
Exchange Act.
The Commission seeks a final judgment ordering the defendants to
disgorge all ill-gotten gains, including performance based-
bonuses; imposing civil money penalties; barring each of them
from serving as an officer or director of a public company; and
enjoining each of them from future violations, or aiding and
abetting violations, of Exchange Act Sections 10(b), 13(b)(5),
13(a), 13(b)(2)(A) and 13(b)(2)(B), and Exchange Act Rules 10b-
5, 12b-20, 13a-1, and 13b2-1. The Commission also seeks a final
judgment enjoining Lee from future violations of Section 14(e)
of the Exchange Act and Exchange Act Rule14e-3, and ordering Lee
to disgorge jointly and severally the trading profits of his
tippees.
The Commission's complaint alleges that compensation for
Resnick, Kaiser, Lee and Carter was based, in part, on USF's
ability to meet or exceed budgeted earnings targets. They each
received a substantial bonus in early 2002 because USF
purportedly satisfied earnings goals for fiscal year 2001.
They were each eligible for a substantial bonus if USF met
earnings targets for fiscal year 2002. They engaged in or
substantially participated in a scheme whereby USF "booked to
budget" -- reporting earnings equal to or greater than the
targets, regardless of the company's true performance.
The primary method used to carry out the fraudulent scheme to
"book to budget" was to improperly inflate USF's "promotional
allowance" income. A significant portion of USF's operating
income was based on payments by its suppliers, usually referred
to as promotional allowances. In a typical promotional allowance
arrangement, USF would pay the full wholesale price for a
product, then receive rebates of a portion of that price from
the supplier if certain purchase volume and other conditions
were met. They "booked to budget" by, among other things,
causing USF to record completely unsupported promotional
allowances sufficient to cover any shortfall to budgeted
earnings. When questioned by Ahold's independent auditors about
the promotional allowances recorded, Resnick, Kaiser and Lee are
alleged to have provided false and misleading justifications.
The Commission's complaint alleges that the defendants covered-
up the false earnings by making it appear that the inflated
promotional allowance income had been earned by, among other
things, inducing suppliers to confirm false promotional
allowance income, payments, and receivable balances,
manipulating the promotional allowance receivable and
manipulating and misapplying cash receipts and making false and
misleading statements, and material omissions, to the
company's independent auditors, other company personnel, and/or
Ahold personnel.
The Commission's complaint describes how Kaiser, Lee, and
Carter, in order to keep the fraud from being discovered,
participated in a systematic effort to corrupt the audit
process. Ahold's auditors attempted at the end of each fiscal
year to confirm with the vendors that they actually had
paid, or still owed, the promotional allowances recorded by
USF. The suppliers were convinced by Kaiser, Lee, and Carter to
sign audit confirmation letters even though they knew that the
letters were false.
Resnick, Kaiser, and Lee, in order to prevent the discovery of
the fraudulent scheme, took various additional steps to make it
appear that USF's promotional allowance receivable balance was
being paid by the suppliers. Among other things, they made, or
caused to be made, accounting entries that unilaterally deducted
material amounts from the balances that USF owed to the
suppliers for the products USF had purchased, and simultaneously
credited the promotional allowance receivable balance for the
amount of such deductions. These "deductions" were made at year-
end and had the net effect of making it appear that USF had made
material progress in collecting promotional allowance payments
allegedly due. Resnick, Kaiser, and Lee concealed the fact that
the deductions were not authorized, were not legitimate, and
that a substantial percentage of the deductions were reversed in
the early part of the following fiscal year.
The Commission further alleges that Resnick, Kaiser, Lee and
Carter also knew, or were reckless in not knowing, that the
amounts paid by some suppliers included prepayments on multi-
year contracts. But they falsely represented to USF personnel,
Ahold personnel, and/or the company's independent auditors that
none of the promotional allowance agreements included such
prepayments. As a result, USF treated the prepayments by
suppliers as if they were payments for currently owed
promotional allowances. This made it falsely appear that USF was
making material progress in collecting the inflated promotional
allowance income it had recorded.
The Commission's investigation is continuing. The Commission
acknowledges the assistance and cooperation of the Office of the
U.S. Attorney for the Southern District of New York, the New
York Office of the Federal Bureau of Investigation, and the U.S
Department of Labor, Employee Benefits Security Administration.
The action is titled, SEC v. Michael Resnick, Mark P. Kaiser,
Timothy J. Lee, and William Carter, No. 04 CV 5824 (HOLWELL)
SDNY (LR-18797)
US FOODSERVICE: SEC Lodges Securities Suit V. Peter Marion in NY
----------------------------------------------------------------
The Securities and Exchange Commission filed a complaint in the
U.S. District Court for the Southern District of New York
alleging that Peter O. Marion engaged in insider trading in the
securities of U.S. Foodservice, Inc. (USF) in February and March
of 2000 after a USF executive, Timothy J. Lee, gave him
material, nonpublic information concerning a proposed tender
offer for USF by Royal Ahold (Koninklijke Ahold, N.V.) (Ahold).
The Commission alleges that Marion, through his insider trading,
violated the antifraud provisions of the Securities Exchange Act
of 1934 ("Exchange Act"). The Commission seeks a final judgment
ordering Marion to disgorge all illegal profits, with
prejudgment interest thereon; imposing civil money penalties;
and enjoining him from future violations of Sections 10(b) and
14(e) of the Exchange Act and Exchange Act Rules 10b-5 and 14e-
3.
The Commission's complaint alleges that during the period Feb.
15, 2000, through March 1, 2000, after learning of Ahold's
intention to acquire USF at a price of $24 to $26 per share,
Marion purchased 36,000 shares of USF common stock at an average
price of $14.92 per share. On March 7, 2000, Ahold and USF
publicly announced Ahold's tender offer for USF at $26 per
share. Marion sold his shares at an average price of $25.02
shortly after the tender offer was announced. As a result of his
trading, Marion made illegal profits of approximately $363,894.
The complaint further alleges that Marion knew, or was reckless
in not knowing, that the information he possessed concerning the
proposed acquisition of USF was material and nonpublic and that
it had been communicated to him directly or indirectly in breach
of a duty of trust and confidence.
The Commission's investigation is continuing. The Commission
acknowledges the assistance and cooperation of the Office of the
U.S. Attorney for the Southern District of New York, the New
York Office of the Federal Bureau of Investigation, and the U.S.
Department of Labor, Employee Benefits Security Administration.
For further information see related Litigation Release No.
18797. The action is titled, SEC v. Peter O. Marion, No. 04 CV
5825 (FOX) SDNY (LR-18796)
VIROPHARMA INC.: PA Court Approves $9M Securities Settlement
------------------------------------------------------------
The United States District Court for the Eastern District of
Pennsylvania has issued an order granting preliminary approval
of a settlement of the In Re ViroPharma Incorporated Securities
Litigation class action. In March 2004, the Company had earlier
reported that it had entered into the agreement in principle to
settle this litigation, the Primezone Media Network reports.
The preliminary settlement calls for payment of $9.0 million by
the Company's insurance carriers to the class, without any
payment by ViroPharma or the other defendants, and for dismissal
of the action with prejudice. ViroPharma has denied and
continues to deny any and all allegations of wrongdoing in
connection with this matter, but believes that given the cost
and uncertainties associated with litigation, the settlement is
in the best interests of the Company and its stockholders. The
settlement is conditioned on final court approval after notice
to the plaintiff class and expiration of the time for appeal
from any order of the Court approving the settlement. There can
be no assurance that final court approval of the settlement will
be obtained.
For more details, contact Will Roberts - Director, Corporate
Communications of ViroPharma Incorporated by Phone:
(610) 321-6288
WASHINGTON: Judge Denies Motion To Throw Out Hanford Plaintiffs
---------------------------------------------------------------
U.S. District Judge William F. Nielsen denied a motion by former
contractors of the Hanford Nuclear Facility in Washington to
throw out plaintiffs from a radiation exposure case headed for
trial next March, the Spokesman-Review reports.
Thousands of people filed suit, alleging their health was harmed
by emissions of radioactive iodine 131 (I-131) during plutonium
production at the Hanford Nuclear Facility from 1944 through the
1960s.
Attorneys for DuPont, General Electric and other early Hanford
contractors argued that newspaper reports on Hanford should have
started the statute-of-limitations period earlier and all
plaintiffs who were diagnosed with thyroid cancer before Aug. 6,
1987 should be expelled from the case, because under Washington
state law, there exists a three-year statute of limitations for
people to file personal injury suits after they've learned they
may have been put at risk from toxic emissions or other hazards.
The Plaintiffs' attorneys, whose clients brought their claims
under the Price-Anderson Act, a federal statute governing
nuclear mishaps, which doesn't have a statute of limitations,
argued that the effects of the radiation were still being
debated in the mid-1980s and people couldn't be sure whether
there was a connection to their health problems until July 11,
1990, when a scientific panel of the Hanford Environmental Dose
Reconstruction Project first stated that Hanford releases were
large enough to cause serious risk of illness.
In his order, Judge Nielsen said, while the 9th U.S. Circuit
Court of Appeals has declined to decide whether federal or state
law applies to Price-Anderson Act claims, the 6th U.S. Circuit
Court of Appeals has ruled that state law prevails.
Judge Nielsen also ruled that the three-year statute of
limitations clock was suspended from Aug. 6, 1990 until May 30,
2003, when plaintiffs withdrew their motion to make the case a
class action. That means people still have another three years
until May 30, 2006 to file claims.
U.S. District Judge Alan McDonald, the case's previous judge,
earlier ruled on Sept. 22, 1994, that he was reserving judgment
on whether to certify the case as a class action. Judge McDonald
recused himself from the case last year after a plaintiffs'
lawyer raised conflict-of-interest objections over an orchard
he'd purchased in Ringold, Washington, in one of the farm
communities hardest hit by the Hanford radiation emissions, thus
there was no ruling on the class action issue.
WHITE ELECTRONICS: Shareholders Launch Securities Lawsuit in AZ
---------------------------------------------------------------
White Electronic Designs Corporation and certain of its officers
and directors face a class action filed in the United States
District Court in Arizona, alleging violations of the Securities
Exchange Act of 1934.
White Electronic provides semiconductor products for the wired
and wireless communication industry. The Company's products
include high-density memory products and multi-chip modules for
data communications providers. White Electronic also designs and
manufactures flat panel displays for commercial and military
aircrafts and ordnance delivery systems.
The complaint alleges that during the Class Period, defendants
issued materially false and misleading statements regarding
White Electronic's increasing revenues and long-term growth
prospects. In truth and in fact, however, defendants knew or
recklessly disregarded that White Electronic's increasing
revenues and earnings could not be sustained and that orders for
sales of the Company's microelectronic products for use in
military weapons and procurement programs had been declining
since at least the second quarter of fiscal 2003. Defendants
failed to disclose that the declines marked a long-term change
in priorities by the U.S. military following the build-up of
orders prior to the armed conflict in Iraq.
On June 9, 2004, White Electronic issued a press release
announcing its forecast for the third quarter of fiscal 2004,
the period ending July 3, 2004. The Company announced that it
expected net sales to be between 25 million, far short of
analysts' consensus estimates of approximately $30 million in
net sales for the third quarter 2004.
Following this news, the Company's stock plummeted 83 cents or
13.9% to $5.16 per share, on extremely heavy trading volume.
The suit was filed on behalf of purchasers of the company's
common stock from January 23,2003 to June 9,2004. The plaintiff
firm in the suit is Lerach Coughlin Stoia & Robbins LLP (San
Francisco), Mail: 100 Pine Street, Suite 2600, San Francisco,
CA, 94111, Phone: 415.288.4545, Fax: 415.288.4534, e-mail:
info@lcsr.com
WYETH: Wins Pondimin Diet Drug Suit, Settles Another For $48,000
----------------------------------------------------------------
A Pennsylvania jury ruled in favor of Madison, N.J.-based Wyeth
(NYSE: WYE) in a lawsuit filed by two former users of the diet
drug Pondimin ruled in its favor in one case and awarded the
other plaintiff $48,000 in compensatory damages, the Associated
Press reports.
The users had both claimed they suffered heart valve damage from
using the drug, which was part of the once wildly popular fen-
phen combination. Pondimin and the other drug, Redux, were
pulled from the market in September 1997 amid reports they had
caused heart valve damage and, in a small number of users, a
potentially deadly lung condition, the Associated Press reports.
As earlier reported the verdict comes just days after Wyeth
settled with former fen-phen users in a deal, which would give
them payments from a settlement trust fund sooner but would
receive less money.
New Securities Fraud Cases
BAXTER INTERNATIONAL: Schiffrin & Barroway Files IL Fraud Suit
--------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a class
action lawsuit was filed in the United States District Court for
the Northern District of Illinois, Eastern Division on behalf of
all purchasers of the publicly traded securities of Baxter
International Inc. (NYSE: BAX) ("Baxter" or the "Company") from
April 19, 2001 through July 21, 2004, inclusive (the "Class
Period").
The complaint charges Baxter, Robert Parkinson, Jr., Harry M.
Jansen Kraemer, Jr., Brian Anderson, and John Greisch with
violations of the Securities Exchange Act of 1934. More
specifically, the complaint alleges that during the Class Period
defendants issued false and misleading statements concerning its
business and financial condition. Specifically, defendants
failed to disclose and misrepresented the following material
adverse facts which were known to defendants or recklessly
disregarded by them:
(1) that the Company's financial results during the Class
Period were materially overstated;
(2) that the overstatement occurred because the Company
improperly and "incorrectly" recognized $40 million in
revenues and maintained inadequate and "incorrect"
provisions for bad debts relating to its Brazilian
operations;
(3) that as a result of this, the Company's financial
results were in violation of Generally Accepted
Accounting Principles ("GAAP");
(4) that the Company lacked adequate internal controls; and
(5) that as a result of the above, the Company's financial
results, including its net income figures, were
materially and artificially inflated at all relevant
times.
On July 22, 2004, Baxter announced that it planned to restate
its financial results for the years 2001 through 2003, and for
the first quarter of 2004. The restatement was primarily the
result of incorrect revenue recognition and inadequate
provisions for bad debts in Brazil during that period, which
would result in a decrease in net income over the restatement
period by an amount expected to be no more than $40 million, or
$0.07 per diluted share. The restatement was expected to result
in adjustments to sales over the period of an amount not more
than $70 million, representing less than 0.5 percent of sales in
any year. News of this shocked the market. Shares of Baxter fell
$1.48 per share, or 4.59 percent, to close at $30.79 per share
on unusually heavy trading volume.
For more details, Marc A. Topaz, Esq. or Darren J. Check, 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
CARDINAL HEALTH: Marc Henzel Lodges Securities Suit in S.D. Ohio
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Southern
District of Ohio on behalf of all purchasers of the common stock
of Cardinal Health, Inc. (NYSE: CAH) from October 24, 2000
through June 30, 2004 inclusive.
The complaint charges that Cardinal, Robert D. Walter, and
Richard J. Miller violated the Securities Exchange Act of 1934.
More specifically, the Complaint alleges that the Company failed
to disclose and misrepresented the following material adverse
facts which were known to defendants or recklessly disregarded
by them:
(1) that the Company manipulated various aspects of its
accounting practices to continuously portray
profitability to market;
(2) that the Company held inventory for an average of two
months, and reaped exorbitant profits from price
inflation;
(3) that the Company improperly accounted for the $22
million recovered from Vitamin makers accused of
overcharging Cardinal by booking such recoveries as
revenue when the antitrust cases had not been resolved;
(4) that the Company's pharmaceutical distribution business
improperly classified revenues by reporting the
revenues as either operating revenue or revenues form
bulk deliveries to consumer warehouses when revenues
were not derived from such;
(5) that as a consequence of the aforementioned practices,
the Company's financial results were in violation of
Generally Accepted Accounting Principles ("GAAP") and
the Company's own accounting interpretations on revenue
recognition;
(6) that the Company lacked adequate internal controls; and
(7) that the Company's earnings per share were materially
inflated; and
(8) that as a result of the above, the Company's financial
results were inflated at all relevant times.
On June 30, 2004, Cardinal announced earnings per share for its
fiscal year 2004 are expected to increase approximately 11
percent, which is below prior guidance of mid-teens or better
growth. Separately, the company announced that on June 21, as
part of the Securities and Exchange Commission's (SEC) formal
investigation disclosed by the company on May 14, it received an
SEC subpoena. In addition, Cardinal Health has learned that the
U.S. Attorney's Office for the Southern District of New York has
commenced an inquiry that the company understands relates to
this same subject. News of this shocked the market. Shares of
Cardinal fell $17.19 per share or 24.54 percent on July 1, 2004
to close at $52.86 per share. More than 35.5 million Cardinal
shares were traded, more than 15 times the three-month daily
average.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
COMMERCE BANCORP: Abbey Gardy Lodges Securities Fraud Suit in NJ
----------------------------------------------------------------
The law offices of Abbey Gardy, LLP commenced a Class Action
lawsuit in the United States District Court for the District of
New Jersey on behalf of a class (the "Class") of all persons who
purchased or acquired securities of Commerce Bancorp, Inc.
("Commerce" or the "Company") (NYSE:CBH) between June 18, 2002
and June 30, 2004 inclusive (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. The Complaint named as defendants
Commerce and Vernon W. Hill ("Hill"). The complaint alleges that
throughout the Class Period defendants made a series of material
misrepresentations and omissions in Commerce's press releases,
public filings and conference calls. Recently, a criminal
indictment was filed in U.S. District Court for the Eastern
District of Pennsylvania against a number of individuals
including, among others, Ronald A. White, a director of Commerce
PA, Glenn K. Holck, president of Commerce PA and Stephen M.
Umbrell, regional vice president of Commerce PA ("Indictment").
The federal investigation leading up to this Indictment was
never disclosed by Commerce in its SEC filings. This Indictment
has arisen from actions taken by Commerce and/or its
subsidiaries' employees, officers and directors to gain favor
and, subsequently, business from the City of Philadelphia. The
aggressive expansion of business by Commerce as well as the
actions undertaken by these employees, officers and/or directors
violated not only the Company's Codes of Ethics and Conduct, but
also the federal securities laws. Not disclosed was that
throughout 2002, and until October 2003, Commerce Bank paid
$15,000 a month to Ronald A. White apart from his compensation
for serving on the Board, and made other payments to favor his
interest. For 2002, Commerce paid White $182,000. In return for
this compensation White directed Corey Kemp, City of
Philadelphia treasurer, to award financial services and
contracts to Commerce PA and Commerce Capital on Commerce Bank's
behalf. Additionally, during this time period, Commerce waived
certain conditions on loans and made loans on favorable terms.
Additionally, during this time period, Commerce made numerous
campaign contributions and provided other remuneration to public
officials and political candidates. Banks are barred from
donating money to elected officials who oversee municipal bond
deals, but Commerce controls a Political Action Committee, which
contributed hundreds of thousands of dollars to numerous
politicians and government officials. As a result of these
disclosures, as well as the indictment on June 30, 2004,
Commerce stock went tumbling from a close on June 28 of $64.46 a
share to a close on June 29 of $61.15, and on June 30 of $55.01.
For more details, contact Susan Lee or Nancy Kaboolian, Esq. of
Abbey Gardy, LLP by Mail: 212 East 39th Street, New York, NY
10016 by Phone: (212) 889-3700 or (800) 889-3701 or by E-mail:
slee@abbeygardy.com
FERRO CORPORATION: Lerach Coughlin Lodges Securities Suit in OH
---------------------------------------------------------------
The law firm of Lerach Coughlin Stoia & Robbins LLP initiated a
class action lawsuit in the United States District Court for the
Northern District of Ohio on behalf of purchasers of Ferro
Corporation ("Ferro") (NYSE:FOE) securities during the period
between October 28, 2003 and July 22, 2004 (the "Class Period").
The complaint charges Ferro and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Ferro is a major international producer of performance
materials sold to a broad range of manufacturers serving diverse
markets throughout the world.
According to the complaint, on July 22, 2004, defendants
revealed that the Company was slashing earnings expectations for
the second quarter of fiscal 2004 by more than 70% based upon an
internal review, purportedly conducted in conjunction with
Ferro's closing its books for the quarter, which unearthed a
multi-million dollar overstatement of earnings resulting from
certain unspecified accounting manipulations. Upon this news,
the price of Ferro shares fell by more than 16% to close at
$20.68 per share.
The complaint alleges that defendants knew but concealed from
the investing public, that
(1) Ferro's polymer additives business was not profitable
and was incurring greater losses than had been
reported;
(2) that Ferro's efforts to raise the prices of its polymer
additives to products to offset increasing "raw
materials" costs had been ineffective, further eroding
the Company's revenues and profits;
(3) that the Company's purportedly improving cost controls,
especially regarding the Company's polymer additives
business, was, in fact, the product of accounting
manipulations that deferred and/or materially
understated the true operating costs of the business
from Ferro's public investors the increasing losses the
Company was actually incurring from its polymer
additive business; and
(4) that the Company's disclosure controls and procedures
were wholly ineffective contrary to defendants Ortino's
and Gannon's representations to investors.
For more details, contact Samuel H. Rudman or David A. Rosenfeld
of Lerach Coughlin Stoia & Robbins LLP by Phone: 800-449-4900 or
by E-mail: wsl@lcsr.com or visit their Web site:
http://www.lcsr.com/cases/ferro/
KEY ENERGY: Marc Henzel Lodges Securities Fraud Suits in W.D. TX
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action 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) between April 29, 2003 and
June 4, 2004, inclusive, (the "Class Period"), seeking to pursue
remedies under the Securities Exchange Act of 1934. The action,
is pending against defendants Key and Key directors and/or
officers Richard J. Alario, James J. Byerlotzer, Francis D. John
and Royce Mitchell.
The complaint alleges that during the Class Period, defendants'
publicly disseminated results of Key's operations and financial
condition contained artificially inflated 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 Key securities during the
Class Period.
The truth began to emerge on March 15, 2004. On that date, the
Company announced that that it would not meet the Securities and
Exchange Commission deadline for filing its annual report
because it had yet to complete its review of "certain idle
equipment" with a book value of $55 million, and that the review
might result in "a revision to the 2003 earnings." The Company
maintained, however, that, "the underlying fundamentals of the
Company are strong and the outlook remains positive." The next
two months were punctuated by a series of additional
disclosures, each of which further depressed Key's stock price.
The Class period ends June 4, 2004. The morning of the next
trading day, June 7, 2004, before the market opened, defendants
announced that they were "withdrawing all previous earnings
forecasts of operating results for 2004," that they were doing
so "in light of current uncertainties affecting the Company,"
and that they had received notice from the indenture trustee of
its 6.375% and 8.375% senior Notes that the Company was in
default and had 90 days to cure the default. On this news, the
price of Key shares plummeted on extremely high trading volume
of 13,963,900 shares. Key shares had closed at $9.62 on June 4,
2004. On June 7, 2004 they reached an intra-day low of $7.00,
down 27%, before rebounding to close the day at $8.67.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
KVH INDUSTRIES: Lasky & Rifkind Lodges Securities Lawsuit in RI
---------------------------------------------------------------
The law firm of Lasky & Rifkind, Ltd., initiated a lawsuit in
the United States District Court for the District of Rhode
Island, on behalf of persons who purchased or otherwise acquired
publicly traded securities of KVH Industries ("KVH" or the
"Company") (NASDAQ:KVHI) between January 6, 2004 and July 2,
2004, inclusive, (the "Class Period"). The lawsuit was filed
against KVH and certain officers and directors ("Defendants").
The complaint alleges that KVH 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.
Specifically, the complaint alleges that Defendants issued
materially false and misleading statements regarding its
financial results and the level of demand for its newly
developed TracVision A5 and G8 satellite TV systems. It is
alleged that these statements were false and misleading because
defendants had failed to disclose that they had "stuffed" the
retail channels with overpriced systems, that quarterly revenue
growth was not growing by millions of dollars and that growth
could not be sustained and that the Company had not seen the
level of cost reductions in the manufacture of its TracVision
systems and would be forced to write-down its inventory. It is
also alleged that Defendants failed to disclose these facts in
order to complete a public offering of its stock, which raised
approximately $51.5 million in proceeds.
On July 6, 2004, KVH announced that it was cutting the retail
price of its TracVision systems by more than 34% and taking a
multimillion dollar write down of vendor purchase agreements and
on-hand inventories. KVH opened for trading that morning at
$9.51 per share, a 49% decline from the price of the public
offering just four months earlier.
For more details, contact Lasky & Rifkind, Ltd. by Phone:
(800) 495-1868 or by E-mail: investorrelations@laskyrifkind.com
KVH INDUSTRIES: Marc Henzel Lodges Securities Fraud Suit in RI
--------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the District of
Rhode Island on behalf of purchasers of KVH Industries, Inc.
(Nasdaq: KVHI) publicly traded securities during the period
between January 6, 2004 and July 2, 2004 (the "Class Period").
The complaint charges KVH and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. KVH describes itself as a designer, manufacturer and
marketer of mobile satellite communications products for the
automotive/recreational vehicle/marine markets and navigation,
guidance and stabilization products for defense markets.
The complaint alleges that, throughout the Class Period,
defendants issued materially false and misleading statements
regarding KVH's increasing financial results and the strong
demand for its newly developed TracVision A5 and G8 satellite TV
systems (the "TracVision systems"). As alleged in the complaint,
these statements were materially false and misleading because
they failed to disclose, among other things:
(1) that defendants had "stuffed" the retail channels with
overpriced TracVision systems;
(2) that the Company's revenues were not growing by
millions of dollars per quarter and the purported
growth trends in the Company's revenues could not be
sustained; and
(3) that KVH had not realized any material cost reduction
in the manufacture of its TracVision systems and would
be forced to write-down its inventory of manufactured
goods by millions of dollars.
The complaint further alleges that defendants failed to disclose
these adverse facts in order to complete a public offering of
KVH common stock, raising more than $51.5 million in much needed
capital.
On or about July 6, 2004, before the market opened for trading,
KVH stunned the investing public by announcing that it was
slashing the retail price of its TracVision systems by more than
34% and taking a multi-million dollar write down of vendor
purchase commitments and on-hand inventories to reflect the true
value of KVH's TracVision systems sales. In pre-opening market
trading, KVH common stock declined more than 19%, to open at
$9.51 per share on July 6, 2004, a 49% decline from the public
offering price just 4 months prior.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
KVH INDUSTRIES: Milberg Weiss Lodges Securities Fraud Suit in RI
----------------------------------------------------------------
The law firm of Milberg Weiss Bershad & Schulman LLP initiated a
class action lawsuit on behalf of purchasers of the securities
of KVH Industries, Inc. ("KVH" or the "Company") (NASDAQ:KVHI)
between October 1, 2003 and July 2, 2004 inclusive (the "Class
Period"), seeking to pursue remedies under the Securities
Exchange Act of 1934 (the "Exchange Act").
The action, numbered 04-320-F, is pending in the United States
District Court for the District of Rhode Island, against
defendants KVH, Martin A. Kits van Heyningen and Patrick J.
Spratt.
The complaint alleges that during the Class Period defendants
knowingly or recklessly made materially false and misleading
statements that artificially inflated the price of KVH
securities. Specifically, the complaint alleges that, at the
commencement of the Class Period, defendants announced that they
had begun to market the TracVision A5 Antenna (the "TracVision
A5" or "A5") as an affordable device that would allow consumers
to watch television in their minivans, SUVs and other passenger
vehicles. Between October 1, 2003 and February 13, 2004,
defendants hyped the purported success of the Company's
TracVision A5 product launch and claimed that the product would
drive the Company's future growth and profitability. They blamed
the Company's lackluster performance on other parts of the
business and thereby propped up the price of KVH stock until
February 13, 2004 when, in an oversubscribed secondary offering,
the Company sold 2.75 million KVH shares for $18.75 a share for
total proceeds of $51.5 million, thereby increasing its market
capitalization by 23%, from $222 million to $273.5 million.
The complaint further alleges that, for the remainder of the
Class Period, the Company continued to make materially false and
misleading statements about the purported success of the
TracVision A5 product launch even as they were "stuffing the
channels" with product that retailers could not sell. The truth
emerged on July 2, 2004. On that date, after the close of
trading, defendants announced that they were establishing a $2.4
million inventory reserve in connection with TracVision A5 for
which there was little or no retailer demand and that, in a
desperate attempt to move the product, they were reducing the
manufacturers' suggested retail price from $3,495 to $2,295, and
it was immediately clear to analysts and investors that this
would result in margins that would preclude profitability for
the A5 for the foreseeable future. On this news, KVH shares,
this had closed July 2, 2004 at $12.50 opened for trading at
$9.51, a drop of more than 24%.
For more details, contact Steven G. Schulman, Peter E. Seidman
or Andrei V. Rado of Milberg Weiss Bershad & Schulman LLP by
Mail: One Pennsylvania Plaza, 49th fl., New York, NY 10119-0165
by Phone: (800) 320-5081 by E-mail: sfeerick@milbergweiss.com or
visit their Web site: http://www.milbergweiss.com
LEXAR MEDIA: Marc Henzel Lodges Securities Fraud Suit in N.D. CA
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Northern
District of California on behalf of purchasers of Lexar Media,
Inc. (Nasdaq: LEXR) publicly traded securities during the period
between July 17, 2003 and April 16, 2004, inclusive.
The complaint charges that Lexar, Eric Stang, and Brian McGee
violated Sections 10(b) and 20(a) of the Securities Exchange Act
of 1934, and Rule 10b- 5 promulgated thereunder, by issuing a
series of material misrepresentations to the market between July
17, 2003 and April 16, 2004. More specifically, the Complaint
alleges that the Company failed to disclose and misrepresented
the following material adverse facts which were known to
defendants or recklessly disregarded by them:
(1) that the Company underestimated the impact and the
timing of competitive pricing moves in the flash memory
market;
(2) that the Company's preferential supply relationship
with Samsung failed to insulate Lexar from fluctuations
in pricing and availability of flash memory, which
negatively affected the Company's product margins; and
(3) the Company lacked sufficient royalty income to offset
product gross margins pressure.
On April 15, 2004, Lexar reported financial results for the
first quarter ended March 31, 2004. After several quarters of
relatively stable average selling prices, second quarter price
declines were sizeable. These declines were occurring sooner
than Lexar had previously anticipated. News of this shocked the
market. Shares of Lexar fell $5.03 per share or 32.56 percent on
April 16, 2004, to close at $10.42 per share.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
MERIX CORPORATION: Marc Henzel Files Securities Fraud Suit in OR
----------------------------------------------------------------
The Law Offices of Marc S. Henzel commenced a securities class
action 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) from July 1, 2003 through May 13,
2004, inclusive.
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 S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
REYNOLDS & REYNOLDS: Lasky & Rifkind Files Securities Suit in OH
----------------------------------------------------------------
The law firm of Lasky & Rifkind, Ltd., initiated a lawsuit in
the United States District Court for the Southern District of
Ohio, on behalf of persons who purchased or otherwise acquired
publicly traded securities of The Reynolds & Reynolds Company
("Reynolds" or the "Company") (NYSE:REY) between January 22,
2003 and June 24, 2004, inclusive, (the "Class Period"). The
lawsuit was filed against Reynolds, Lloyd G. Waterhouse and Dale
L. Medford ("Defendants").
The complaint alleges that Defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. Specifically, the complaint alleges that
the Company failed to disclose and misrepresented that the
Company knew or recklessly disregarded the fact that market
demand for its newer products was weak, that as a consequence of
this weak demand its growth strategy was inhibited, forcing it
to incur additional expenses to sell new products to reticent
customers at the expense of selling its proven products and that
as a result of the foregoing, Defendants lacked a reasonable
basis for their positive statements and their earnings
projections.
On June 24, 2004, Reynolds announced that it anticipated
revenues and earnings would be lower than its previous estimates
when the Company reported its third fiscal quarter on July 21,
2004. Shares of Reynolds fell $7.28 per share or approximately
$25 on June 25, 2004, to close at $23.30 per share.
Additionally, on July 7, 2004, the Company announced that its
Chairman, CEO, and President Lloyd "Buzz" Waterhouse had
resigned from the accompany effective immediately. Shares fell
an additional 3.6% on this news.
For more details, contact Lasky & Rifkind, Ltd. by Phone:
(800) 495-1868 or by E-mail: investorrelations@laskyrifkind.com
REYNOLDS & REYNOLDS: Marc Henzel Lodges Securities Suit in Ohio
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Southern
District of Ohio on behalf of all purchasers of securities of
The Reynolds & Reynolds Company (NYSE: REY) from January 22,
2003 through June 24, 2004 inclusive.
The complaint charges Reynolds, Lloyd G. Waterhouse, and Dale L.
Medford with violations of the Securities Exchange Act of 1934.
More specifically, the Complaint alleges that the Company failed
to disclose and misrepresented the following material adverse
facts which were known to defendants or recklessly disregarded
by them:
(1) that the Company knew or recklessly disregarded the
fact that market demand for the Company's cutting edge
products, such as Reynolds Generation Series, was
lackluster;
(2) that as a consequence of the foregoing, the Company's
strategy for growth was seriously flawed as the Company
was forced to expend additional resources to pitch new
products to unwilling customers, while neglecting the
marketing of its more conventional revenue-producing
products; and
(3) that, as a result of the foregoing, defendants lacked a
reasonable basis for their positive statements about
the Company and their earnings projections.
On June 24, 2004, Reynolds announced that it anticipated
revenues and earnings would be lower than its previous estimates
when the Company reported results for its third fiscal quarter
on July 21, 2004. News of this shocked the market. Shares of
Reynolds fell $7.28 per share or 23.81 percent, on June 25,
2004, to close at $23.30 per share. On July 7, 2004, Reynolds
announced that CEO, Chairman and President Lloyd "Buzz"
Waterhouse had resigned from the Company and its board of
directors, effective immediately. On the news shares of Reynolds
plummeted further. Shares of Reynolds fell a further $.83 per
share or 3.63 percent, on July 7, 2004, to close at $22.12 per
share.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
SALESFORCE.COM INC.: Charles J. Piven Lodges CA Securities Suit
---------------------------------------------------------------
The law offices of Charles J. Piven, P.A. initiated a securities
class action lawsuit on behalf of shareholders who purchased,
converted, exchanged or otherwise acquired the common stock of
salesforce.com, inc. (NYSE:CRM) between June 21, 2004 and July
21, 2004, inclusive (the "Class Period").
The case is pending in the United States District Court for the
Northern District of California against defendant salesforce.com
and one or more of its officers and/or directors.
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, MD 21202 by Phone: 410-986-0036
by E-mail: hoffman@pivenlaw.com
SHAW GROUP: Marc Henzel Lodges Securities Fraud Suit in E.D. LA
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Eastern
District of Louisiana on behalf of purchasers of the securities
of The Shaw Group, Inc. (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.
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 Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
SPEAR & JACKSON: Marc Henzel Lodges Securities Suit in S.D. FL
--------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Southern
District of Florida on behalf of purchasers of Spear & Jackson,
Inc. (OTC:SJCK.OB) publicly traded securities during the period
between July 14, 2003 and April 15, 2004.
The complaint charges SJCK and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. SJCK manufactures and distributes tools, garden tools,
metrology equipment, woodworking tools and magnetic equipment.
The complaint alleges that during the Class Period defendants
disseminated materially false and misleading information to the
investing public that artificially inflated SJCK's share price.
According to the complaint, the true facts which were known by
each of the defendants, but concealed from the investing public
during the Class Period, were as follows:
(1) that defendants orchestrated a "pump-and dump" scheme
to manipulate the share price of SJCK stock by issuing
false information to tout SJCK stock to registered
representatives and broker-dealers around the country;
(2) that defendants used nominee companies based in the
British Virgin Islands illegally to obtain over 1.2
million shares of SJCK stock during 2002, some of which
was obtained through the filing of a fraudulent Form S-
8 registration statement;
(3) that the Company's repurchase of shares was not in
compliance with applicable rules;
(4) that the Company never had any intention of making open
market purchases as suggested in its January 16, 2004
release; and
(5) that the Company was not on track to achieve earnings
of $0.50 to $0.55 per share for 2004.
As a result of the defendants' false statements, SJCK's stock
price traded at inflated levels during the Class Period,
increasing to as high as $9.55 on July 15, 2003, whereby the
Company's top officers and directors sold more than $3 million
worth of their own shares. On April 16, 2004, it was announced
that U.S. securities regulators had sued SJCK Chief Executive
Dennis Crowley, alleging he used false information to boost the
Company's stock price while secretly selling $3 million in
shares. SJCK shares fell $0.52 to $1.85 on this news.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
SPORTSLINE.COM: Marc Henzel Lodges Securities Lawsuit in S.D. FL
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The Law Offices of Marc S. Henzel initiated a securities class
action against Sportsline.com Inc., Kenneth W. Sanders and
Michael Levy in the United States District Court for the
Southern District of Florida. The lawsuit was filed on behalf
of purchasers of Sportsline.Com Incorporated (NASDAQNM:SPLN)
common stock during the period between May 15, 2001 and
September 25, 2003.
The complaint charges Sportsline and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. The complaint alleges that defendants issued a series of
false and misleading statements regarding Sportsline's:
(1) advertising base and its ability to mitigate overall
diminished media spending;
(2) ability to reach positive EBITDA in the fourth quarter
of 2002;
(3) successful integration of its fantasy products and
their positive impact on the Company's overall growth
and presence in the Internet sports media industry; and
(4) ability to increase the Company's value through the
acquisition of the MVP.com store
In fact, according to the complaint, defendants knew and failed
to disclose:
(i) the Company's fantasy sports business was not as
significant a revenue source as the Company portrayed
it to be;
(ii) revenue derived from advertising sales was diminishing
and CBS was contributing significantly less advertising
revenue than disclosed;
(iii) a positive EBITDA could only be achieved by hiding
expenses and improperly classifying discontinued
operations; and
(iv) MVP.com's assets did not yield promised value.
As a result of the defendants' false and misleading statements,
Sportsline's stock traded at inflated prices during the Class
Period, increasing to as high as $3.85 on November 27, 2001.
On September 26, 2003, Sportsline shocked the market by
revealing that the Company was reducing its previous revenue and
earnings forecasts for the third quarter and full year 2003 and
that it is restating its reported financial results for the past
two and a half years. In response to the Company's devastating
news concerning the financial restatements, Sportsline's stock
price plummeted by more than 30% on volumes of about eight times
the daily average.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
UNIVERSAL HEALTH: Marc Henzel Lodges Securities Suit in E.D. PA
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action filed in the United States District Court for the Eastern
District of Pennsylvania on behalf of purchasers of the
securities of Universal Health Services, Inc. (NYSE: UHS)
between July 21, 2003 and February 27, 2004, inclusive, seeking
to pursue remedies under the Securities Exchange Act of 1934.
The action, numbered 04 cv 1233 is pending in the United States
District Court for the Eastern District of Pennsylvania against
defendants Universal Health and certain of its senior executive
officers. According to the complaint, 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.
The complaint alleges that defendants materially misled the
investing public, thereby inflating the price of UHS stock, by
publicly issuing false and misleading statements and omitting to
disclose material facts necessary to make defendants' statements
as set forth herein, not false and misleading. These statements
and omissions were materially false and misleading in that they
failed to disclose material adverse information and
misrepresented the truth about the Company, its financial
performance, earnings momentum, and future business prospects,
including:
(1) UHS was unable to compete effectively in key markets;
(2) UHS hospitals were losing better-paying patients to
their competitors and the proportion of uninsured
patients, who constitute a greater credit risk, was
increasing;
(3) due to poor case management, certain UHS hospitals were
unable to effectively manage their caseloads and, as a
consequence, had experienced an increase in the number
of patients who remained hospitalized at UHS facilities
beyond the period reimbursable by Medicaid and Medicare
and that, therefore, the hospitals were not receiving
full payments for the services provided;
(4) defendants failed to properly write-off uncollectible
receivables, and materially overstated UHS's financial
results by maintaining known uncollectible accounts as
assets during the Class Period;
(5) the Company's allowance for doubtful accounts was
insufficient and, as a result, the Company's reported
operating income was artificially inflated; and
(6) the Company's reported operating income was not a true
measure of the Company's operating performance because
defendants failed to properly deduct from operating
income the appropriate allowance for doubtful accounts.
On March 1, 2004, before the markets opened, defendants shocked
investors by withdrawing their guidance for 2004 and announcing
that earnings per diluted share for the three-month period
ending March 31, 2004 could be as much as 25% lower than the
$0.84 per diluted share recorded in the same period in the prior
year. Defendants attributed the decline in substantial part to
UHS's inability to compete effectively in two key markets in
Nevada and Texas, erosion of UHS's market share, poor case
management resulting in an increase in the length of patient
stays beyond the period reimbursable by Medicaid or Medicare,
and a pronounced increase in bad debt from uninsured patients.
The Company which had already increased its provision for
doubtful accounts in the fourth quarter of 2003 to $74.3
million, or 7.8% of revenues, as compared to $58 million, or
6.9% of revenues, during the prior year's fourth quarter, said
that bad debt in 2004 was likely to exceed the Company's
previously reported expectation of 9.5% of revenues. On this
news, the price of UHS shares fell $9.05, or 17%, to $44.88.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
VICURON PHARMACEUTICALS: Marc Henzel Files Securities Suit in PA
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Eastern
District of Pennsylvania on behalf of purchasers of the
securities of Vicuron Pharmaceuticals Incorporated (NasdaqNM:
MICU) between January 6, 2003 and May 24, 2004, inclusive.
The action is for remedies under the Securities Exchange Act of
1934. The Complaint alleges that, during the Class Period,
defendants artificially inflated the price of Vicuron stock by
concealing negative material information concerning both the
safety and efficacy of Anidulafungin, Vicuron's intravenous
treatment of fungal infections which is the subject of late-
stage clinical trials for the treatment of esophageal
candidiasis, invasive aspergillosis, and invasive
candidiasis/candidemia.
Defendants concealed key adverse information regarding the
development and commercialization of Anidulafungin, which raised
serious concerns about the FDA's future approval of the drug.
The partial disclosure of the contents of an FDA letter, dated
Monday, May 24, 2004, detailing the failure of Vicuron to supply
data necessary to support its claim that Anidulafungin can be
used to treat esophageal candidasis, caused Vicuron shares to
plummet $8.86 to $13.04, a loss of over 40% from the previous
trading day and a loss of over 45% from its Class Period high of
$23.90.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
WASHINGTON MUTUAL: Marc Henzel Lodges Securities Lawsuit in WA
--------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the District of
Washington on behalf of all purchasers of the securities of
Washington Mutual, Inc. (NYSE: WM) from April 15, 2003 through
June 28, 2004, inclusive.
The complaint charges Washington Mutual, Kerry K. Killinger,
Thomas W. Casey, and Craig J. Chapman with violations of the
Securities Exchange Act of 1934. More specifically, the
Complaint alleges that the Company failed to disclose and
misrepresented the following material adverse facts which were
known to defendants or recklessly disregarded by them:
(1) that the Company knew or recklessly disregarded the
fact that its solid earnings growth was inextricably
linked to the extraordinary mortgage volumes fueled by
low interest rates;
(2) that the Company knew or recklessly disregarded that
its earnings growth could not be sustained and that the
Company's business strategy was irreversibly flawed,
regardless of the Company's efforts to substantially
reduce operating costs and streamline and improve
operations to drive efficiency;
(3) and that as a consequence of the foregoing, defendants
lacked a reasonable basis for their positive statements
about the Company and their earnings projections.
On June 28, 2004, Washington Mutual announced that expectations
for a sustained increase in long-term interest rates would
significantly impact the Company's Mortgage Banking business
resulting in 2004 earnings below previous guidance. Higher
interest rates have lowered the Company's mortgage production
expectations at a time when cost reduction plans have not yet
fully taken effect. This news shocked the market. Shares of
Washington Mutual fell $2.84 per share, or 6.87 percent, on June
29, 2004, to close at $38.47 per share.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
WHITE ELECTRONIC: Brodsky & Smith Files Securities Lawsuit in AZ
----------------------------------------------------------------
The law offices of Brodsky & Smith, LLC initiated a securities
class action lawsuit on behalf of shareholders who purchased the
common stock and other securities of White Electronic Designs
Corporation ("White Electronic" or the "Company") (Nasdaq:WEDC)
between January 23, 2003 and June 9, 2004 inclusive (the "Class
Period"). The class action lawsuit was filed in the United
States District Court for the District of Arizona.
The Complaint alleges that defendants violated federal
securities laws by issuing a series of material
misrepresentations to the market during the Class Period,
thereby artificially inflating the price of White Electronic
securities. No class has yet been certified in the above action.
For more details, contact Marc L. Ackerman, Esq. or Evan J.
Smith, Esq. of Brodsky & Smith, LLC by Mail: Two Bala Plaza,
Suite 602, Bala Cynwyd, PA 19004 by Phone: 877-LEGAL-90 or by E-
mail: clients@brodsky-smith.com
*********
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Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
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news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
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*********
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Class Action Reporter is a daily newsletter, co-published by
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Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA. Glenn Ruel Se¤orin, Aurora Fatima Antonio and Lyndsey
Resnick, Editors.
Copyright 2004. All rights reserved. ISSN 1525-2272.
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