CAR_Public/040927.mbx              C L A S S   A C T I O N   R E P O R T E R

             Monday, September 27, 2004, Vol. 6, No. 191

                          Headlines

ALLIED HOLDINGS: Appeals Court Upholds Ruling in OOIDA Lawsuit
AMERICAN MEDICAL: Settles FL Suit Over Health Insurance Policies
AUSTRALIA: High Court Dismisses Smokers' False Advertising Suit
CANADA: Consumers Lodge Ontario Suit V. Defective Bicycle Locks
CHARLOTTE RUSSE: Former CA Store Managers Launch Overtime Suit

CITIGROUP INC.: Judge Denies Motions To Dismiss Investor Suits
COLORADO: Law Firm Lodges Injunction V. Flawed Benefits System
COMPUTER ASSOCIATES: Ex-Officials Indicted For Securities Fraud
DELTA ENTERPRISE: Recalls 81T Directors' Chairs For Injury Risk
FANNIE MAE: Report Reveals GAAP Violations, Accounting Problems

FLORIDA: Judge Throws Out Challenge To Provisional-Ballot Law
FORD MOTOR: Recalls Explorers, Mountaineers Due To Injury Hazard
FORD MOTOR: Recalls 1,689 2004 Ford F150 SUVs Due To Fire Hazard
FORD MOTOR: Recalls 214,829 2003-2004 SUVs Due To Fire Hazard
FORD MOTOR: Recalls 253,076 2003-2004 SUVs Because of Fire Risk

GENERAL ELECTRIC: Settles SEC Action Over Former CEO's Benefits
HAWAIIAN AIRLINES: SEC Issues Cease-and-Desist Order V. Ex-CEO
HOLLINGER INTERNATIONAL: Law Firm Chair, Torys Face Stock Suit
ILLINOIS: SEC Files Settled Stock Manipulation Action V. Traders
JANSSEN PHARMACEUTICA: MI Court Upholds Ruling in Propulsid Suit

KRYPTONITE: Offers Exchanges For Faulty Locks, Suits Filed in IL
LOUISIANA: Prisoners Launch Lawsuit v. Public Defenders' Office
MEDQUIST INC.: Hospital Launches RICO Violations Suit in C.D. CA
MOBILE BILLBOARDS: SEC Launches GA Lawsuit Over Ponzi Scheme
NORVERGENCE INC.: State Instigates Consumer Fraud Investigation

ONEOK INC.: Verdict Reached in Trial Over Yaggy Storage Gas Leak
ORTHO-MCNEIL: Warned Over Failure To State Topamax Side Effects
UNITED STATES: Report Says Health Care Still Needs Improvement
WAL-MART STORES: Blacks Launch AK Suit Over Race Bias in Hiring
WILSON TRAILERS: Recalls 448 Grain Trailers For Accident Hazard

                 New Securities Fraud Cases

FEDERAL NATIONAL: Lerach Coughlin Files Securities Lawsuit in NY
FEDERAL NATIONAL: Schiffrin & Barroway Files DC Securities Suit
ST. PAUL TRAVELERS: Chitwood & Harley Lodges MN Securities Suit
TEAM TELECOM: Glancy Binkow Lodges Securities Fraud Suit in NJ
TECO ENERGY: Shepherd Finkelman Files Securities Suit in M.D. FL

THORATEC CORPORATION: Marc S. Henzel Files Securities Suit in CA
WET SEAL: Schiffrin & Barroway Files Securities Fraud Suit in CA
WIRELESS FACILITIES: Murray Frank Files CA Stock Fraud Lawsuit
WIRELESS FACILITIES: Spector Rosemna Files Securities Suit in CA
WORLD INFORMATION: Schatz & Nobel Files Securities Lawsuit in NY

ZIX CORPORATION: Schatz & Nobel Files Securities Suit in N.D. TX


                            *********


ALLIED HOLDINGS: Appeals Court Upholds Ruling in OOIDA Lawsuit
--------------------------------------------------------------
The United States Eleventh Circuit Court of Appeals ruled in
favor of The Owner-Operator Independent Drivers Association
(OOIDA) in its class action against Allied Holdings Inc.,
stating that owner-operator equipment leases with motor carriers
are exempt from compulsory arbitration under the Federal
Arbitration Act, Truckinginfo.com reports.

In March 2004, the United States District Court for the Northern
District of Georgia ruled that the arbitration provisions
contained in Allied's owner-operator leases could not be
enforced under the Federal Arbitration Act because the lease
agreements between truck drivers and motor carriers merely set
out the terms of the relationship as established by federal
truth-in-leasing regulations.  The appeals court upheld this
decision.


AMERICAN MEDICAL: Settles FL Suit Over Health Insurance Policies
----------------------------------------------------------------
American Medical Security Group, Inc. (NYSE: AMZ) (AMS), and
plaintiffs' attorneys reached an agreement to settle a class-
action lawsuit -- Addison v. American Medical Security, Inc. and
United Wisconsin Life Insurance Company (subsidiaries of AMS) --
pending in the Circuit Court of Palm Beach County, Florida.  The
agreement is to be presented to the Circuit Court for
preliminary approval.

The lawsuit, filed in 2002, involves issues relating to
discontinuation of health insurance policies in 1998 and a
rating methodology formerly used by the company.  Under terms of
the agreement, there is no admission or implication of liability
or wrongdoing on the part of AMS. Also, upon final approval, all
claims of participating class members will be dismissed and the
litigation terminated in exchange for consideration from AMS.

According to AMS, the company has adequate reserves to cover the
anticipated cost of the settlement and related expenses. As a
result, the agreement is expected to have no material effect on
the company's earnings or results of operations.

"We believe our actions in the state of Florida have at all
times been fair, lawful and in the interest of our customers,"
said Samuel V. Miller, AMS Chairman, President & Chief Executive
Officer. "However, this settlement allows us to remove a
considerable distraction and expense from our business."

American Medical Security Group, through its operating
subsidiaries, markets health-care benefits and insurance
products to small businesses, families and individuals. United
Wisconsin Life Insurance Company underwrites insurance products
of American Medical Security Group. The company serves customers
nationwide through partnerships with professional, independent
agents and quality health care providers.


AUSTRALIA: High Court Dismisses Smokers' False Advertising Suit
---------------------------------------------------------------
The Australia Supreme Court dismissed a class action filed
against several tobacco companies, seeking compensation for
illnesses caused by smoking, the plaintiffs' lawyer said,
according to Agence France Presse.

Cancer patient Myriam Cauvin filed the suit, alleging the
companies deceived smokers through false advertising.  Ms.
Cauvin, 40, suffered from emphysema and was a lung transplant
recipient after smoking regularly since she her early teens, an
earlier Class Action Reporter story (September 14,2004) said.
Ms. Cauvin wanted compensation of more than 200 million dollars
(140 million US) to be paid in to a compensation fund to help
pay smokers' medical costs.

The suit makes claims under a provision under New South Wales
law allowing individuals to sue on behalf of others in cases of
false advertising and misleading trade practices.  However,
Supreme Court Judge Virginia Bell found that the individuals in
such cases had to be identified to the court and refused to
accept the unqualified term "and other persons" that Ms. Cauvin
listed as plaintiffs alongside her own name in the lawsuit.

Ms. Cauvin's lawyer Neil Francey told AFP the decision was
disappointing and meant the end of more than two years' work.
He said the judgment had ramifications for class actions in
areas such as asbestos and mobile phone disease, as well as
providing a boost for tobacco firms.

"The technique of suing on behalf of other people in this way is
being denied," Mr. Francey told reporters outside the court, AFP
reports.  "I imagine they will be breathing a multi-billion
dollar sigh of relief."


CANADA: Consumers Lodge Ontario Suit V. Defective Bicycle Locks
---------------------------------------------------------------
A class action lawsuit has been filed in the Ontario Superior
Court against manufacturers and retailers of faulty bicycle
locks.

Consumers across Canada and around the world learned last week
that many U-locks with cylindrical key mechanisms can easily be
defeated with the simple twist of a Bic pen.

"Although the defect was reported in a specialized trade
magazine more than a decade ago, a number of manufacturers,
including Kryptonite, continued to market this type of lock as
the 'gold standard'" said Sean Dewart, one of the lawyers who
launched the class action. "Many of the locks are now nothing
more than expensive scrap metal and many bicycle owners are in
jeopardy of having their bikes easily stolen. The recall being
offered by one single manufacturer to exchange locks beginning
in mid-October is completely inadequate. Bicycle owners need
reliable locks now, not weeks or months from now. The lawsuit
has been commenced to provide meaningful recourse for thousands
of consumers."


CHARLOTTE RUSSE: Former CA Store Managers Launch Overtime Suit
--------------------------------------------------------------
San Diego, California-based fashion retailer Charlotte Russe
faces a class action filed in San Diego Superior Court by two of
its former store managers, alleging they were improperly denied
overtime pay, SignOnSanDiego reports.

Plaintiffs Jennel Gonzalez and Cherry Tubig filed the suit,
alleging that they were not truly in management positions,
because they spent more than half their time performing non-
managerial duties, such as stocking shelves, tending the
registers and setting up store displays.

The suit seeks roughly $12 million, including compensatory wages
plus interest, penalties and about $500,000 in attorney's fees,
William E. Harris, the plaintiffs' attorney, told
SignOnSanDiego.  The suit is filed on behalf of all the
Company's California store managers who worked from September
15,2000 through September 15,2004.

"I'm pretty confident that we can prevail in this case," Mr.
Harris said. "The staffing in these stores is very minimal,
leaving managers to pitch in with doing work beyond just
managing."

Charlotte Russe chief financial officer Dan Carter said the
company had no comment on the lawsuit, SignOnSanDiego reports.


CITIGROUP INC.: Judge Denies Motions To Dismiss Investor Suits
--------------------------------------------------------------
The Palm Beach circuit court in Florida denied five motions to
dismiss six major investor suits filed over the last 13 months
by Citigroup and Citigroup Global Markets (formerly Salomon
Smith Barney), after denying similar motions in a separate but
similar suit last Thursday. The investors, some of them WorldCom
employees, said they had lost their life savings of $600,000 to
$2 million by trusting the investment advice of former Smith
Barney telecommunications analyst Jack Grubman.

"These are not conventional brokerage suits, in which investors
are lucky to get pennies on the dollar," said the investors'
lawyer, Ted Babbitt, partner in the West Palm Beach trial law
firm Babbitt, Johnson, Osborne & Le Clainche, P.A. "These are
suits in Florida State Court on behalf of investors who are
seeking to recover their life savings and get punitive damages
besides. This is against a company with nearly $1.3 trillion in
assets that makes $555 a second before taxes, or $100 million
every two days. We contend that $100 million is not enough. The
only way to keep this from a jury at this point is through
summary judgment, and that is extremely rare."

The six-count suits include allegations of false information
negligently supplied for the guidance of others, outrageous
conduct causing severe emotional distress, fraud and violation
of Florida's "Blue Sky Laws," which entitle a buyer to damages
if a seller is untruthful in giving investment advice.

Today's ruling by Circuit Judge Arthur Wroble, Jr., means
discovery in these cases can move forward more quickly and that
the plaintiff can more easily compel top Citigroup and WorldCom
executives to testify in deposition or before a jury to learn
the truth about Citigroup's relationship to WorldCom. These
decisions could have deep reverberations throughout Wall Street
and ultimately help promote greater transparency in America's
investment community.

The six investors suit are:

     (1) Danny Boles v. Citigroup, Inc., et al., Fifteenth
         Judicial Circuit, Palm Beach County, 50 2004 CA 0040 09
         MB AG Judge Arthur Wroble

     (2) Amodio v. Citigroup, Inc., et al., Fifteenth Judicial
         Circuit, Palm Beach County, Fl., Case No. 502003 CA
         008635, Judge Arthur Wroble

     (3) Holtsberg v. Citigroup et al., Fifteenth Judicial
         Circuit, Palm Beach County, Fl., Case No. 50 20 04 CA
         00008, Judge Arthur Wroble

     (4) Abad v. Citigroup et al., Fifteenth Judicial Circuit,
         Palm Beach County, Fl., Case No. 50 2004 CA 0056 02 MB
         AG, Judge Arthur Wroble

     (5) Caradonna v. Citigroup et al., Fifteenth Judicial
         Circuit, Palm Beach County, Fl., 50-2004 CA 0052 29 MB
         AG, Judge Arthur Wroble

     (6) Gilman v. Citigroup et al., Fifteenth Judicial Circuit,
         Palm Beach County, Fl., 50 2004 CA 0049 58 MB AG

For more details, on these cases visit
http://www.babbitt-johnson.com


COLORADO: Law Firm Lodges Injunction V. Flawed Benefits System
--------------------------------------------------------------
A Denver-based law firm has filed an injunction to stop the use
of a new state computer program designed to streamline the
application process for potential welfare recipients, KKTV 11
News reports.

The Colorado Center on Law and Policy, which was previously
reported in the September 2, 2004 issue of CAR to have initiated
a class action lawsuit on behalf of needy Coloradans against the
state's new Colorado Benefits Management System (CBMS), claiming
that it will deny tens of thousands of the needy access to food
stamps, Medicaid and other benefits since it is so error-prone.

The new program, which the state claims of being able to reduce
paperwork and long lines for benefits applicants by putting
programs under one umbrella went online on September 1, 2004 at
a reported taxpayer cost of $130 million.

According to the Colorado Center on Law and Policy, they filed
the preliminary injunction in a bid to stop the system from
being used until it's working properly, which has an error rate
of about 33 percent. An error rate that clearly contradicts a
state agency's estimates placed at between 2 percent and 5
percent.

Furthermore, the law firm is also claiming that since the
Colorado Department of Human Services began using the new
system, some welfare recipients have been unable to get their
benefits and others have been kicked out of the system.


COMPUTER ASSOCIATES: Ex-Officials Indicted For Securities Fraud
---------------------------------------------------------------
Deputy Attorney General James B. Comey, U.S. Attorney Roslynn R.
Mauskopf of the Eastern District of New York, and FBI Director
Robert Mueller revealed the unsealing of an indictment charging
two former executives of Computer Associates International,
Inc., for their alleged participation in a long-running,
company-wide accounting fraud scheme and subsequent efforts to
obstruct the government's investigation.

The 10-count indictment, returned last Friday by a federal grand
jury in Brooklyn, New York and recently unsealed, charges Sanjay
Kumar, the former Chief Executive Officer and Chairman of the
Board of Computer Associates International, Inc. (CA), and
Stephen Richards, CA's former Head of Worldwide Sales, with
securities fraud conspiracy, obstruction of justice and
conspiracy to obstruct justice. Richards was also charged with
one count of perjury, and Kumar was also charged with one count
of making false statements to law enforcement officers.

In addition, Stephen Woghin, CA's former General Counsel and
Senior Vice President, pleaded guilty this morning to securities
fraud conspiracy and obstruction of justice charges for his role
in the fraudulent scheme. Woghin entered his plea before U.S.
District Judge I. Leo Glasser at the U.S. Courthouse in
Brooklyn.

The Department of Justice also revealed that CA has been charged
and has accepted responsibility for the illegal conduct of its
former executives, adopted significant corporate reforms, agreed
to continue its cooperation with the government's ongoing
investigation, and agreed to pay $225 million to compensate
victims of the fraud as part of a deferred prosecution
agreement. If CA abides by the terms of the agreement, the
United States Attorney's Office has agreed not to prosecute CA.
The agreement does not protect any individuals from prosecution.

"The defendants are accused of perpetrating a massive accounting
fraud that cost public investors hundreds of millions of dollars
when it collapsed. Then they allegedly tried to cover up their
crimes by lying," said Deputy Attorney General Comey, who chairs
the President's Corporate Fraud Task Force. "If proven true,
such conduct cannot be tolerated and the Corporate Fraud Task
Force's track record shows that it will be met with severe
penalties."

"For more than two years, former CA executives are allegedly
obstructed the government's investigation," said U.S. Attorney
Mauskopf, a member of the task force. "However, they failed to
prevent the government from getting to the truth. In fact, all
they accomplished was getting themselves charged with the
additional obstruction of justice crimes, which now carry stiff
penalties under Sarbanes-Oxley."

According to the indictment, in fiscal year 2000, Kumar and
Richards, along with others, allegedly took part in a systemic,
company-wide practice of falsely and fraudulently recording and
reporting within a fiscal quarter revenue associated with
certain license agreements, even though those agreements had not
in fact been finalized and signed during that quarter. This
practice, sometimes referred to within CA as the "35-day month"
or the "three-day window," violated generally accepted
accounting principles and resulted in the filing of materially
false financial statements.

The goal of the 35-day month, according to the indictment, was
to permit CA to report that it met or exceeded its projected
quarterly revenue and earnings when, in truth, it had not.

The indictment alleges instances in which Kumar and Richards
personally advanced the goals of the 35-day practice. For
example, Kumar, assisted by former CA Chief Financial Officer
Ira Zar, kept CA's books open at the end of fiscal periods. In
the week following the end of fiscal periods, while the books
were held open, Kumar and Richards directed CA sales managers
and salespeople to finalize and backdate license agreements.
Revenue from those falsely dated license agreements was then
improperly recognized in the quarter just ended. Kumar and
Richards allegedly met routinely and conferred with each other
and with Zar during the week following the end of fiscal periods
to determine whether CA had generated sufficient revenue to meet
the quarterly projections, and closed CA's books only after they
determined that CA had generated enough revenue to meet the
quarterly projections.

Zar and three other individuals - David Kaplan, former Senior
Vice President of Finance and Administration; David Rivard,
former Vice President of Finance; and Lloyd Silverstein, former
Divisional Senior Vice President in Charge of the Global Sales
Organization - have previously pleaded guilty to charges arising
out of the CA investigation.

The magnitude of the 35-day month accounting fraud scheme was
made apparent on April 26, 2004, when CA filed forms with the
Securities and Exchange Commission restating certain financial
data for the fiscal years 2000 and 2001. The restatement was
based on an internal investigation conducted by CA's Audit
Committee which found that $2.2 billion of revenue was booked
prematurely.

In early 2002, the United States Attorney's Office, the FBI and
the Northeast Regional Office of the SEC began investigations
into CA's accounting practices. In February 2002, CA retained a
law firm to represent it in connection with the government
investigations. Shortly after being retained, the company's law
firm met with Kumar, Richards, Woghin and other CA executives in
order to inquire into their knowledge of the practices that were
the subject of the government investigations. During these
meetings, the defendants and others allegedly failed to
disclose, falsely denied and concealed the existence of the 35-
day month practice. Kumar, Richards, Woghin and others allegedly
presented to the law firm an assortment of false justifications
to explain away evidence of the 35-day month practice. The
indictment alleges that Kumar, Richards and Woghin knew, and in
fact intended, that the company's law firm would present these
false justifications to the U.S. Attorney's Office, the SEC and
the FBI in an attempt to persuade the government that the 35-day
month practice never existed. The indictment further alleges
that Kumar frequently instructed Woghin to meet with CA
employees prior to their being interviewed by the government or
the company's lawyers to coach them on how to answer questions
without disclosing the 35-day month practice.

The indictment alleges that on Oct. 23, 2003, Richards perjured
himself while testifying under oath before the SEC by attempting
to conceal the existence of the 35-day month practice and his
involvement in it. The indictment also alleges that Kumar, in an
interview with the FBI and the U.S. Attorney's Office on Nov. 5,
2003, made materially false statements to conceal the same
scheme and his involvement in it.

If convicted on all counts, Kumar and Richards each face a
maximum prison sentence of 100 years. Woghin faces a maximum
prison sentence of 25 years on the charges to which he pleaded
guilty.

The charges in the indictment are merely allegations, and the
defendants are presumed innocent unless and until proven guilty.

Computer Associate's Agreement with the Government

In the agreement, which is to be executed as soon as possible,
CA has accepted responsibility for its conduct and acknowledged
that, as a result of the conduct of certain of its former
officers, executives and employees, the company filed multiple
materially false and misleading financial reports with the SEC,
made other materially false and misleading public statements and
omissions in connection with the purchase and sale of CA
securities, and obstructed the government's investigations.

Under the terms of the agreement, CA has also agreed to pay $225
million for purposes of compensating shareholders for losses
arising out of the company's criminal conduct. Last year, CA
settled a series of shareholder class action lawsuits through
which it agreed to issue up to 5.7 million shares of CA stock
and pay cash to compensate CA shareholders at a total cost to CA
of approximately $163 million.

In addition, pursuant to the agreement, CA has agreed to
continue its cooperation and to continue its implementation of
numerous remedial steps undertaken to ensure that the fraud at
CA does not recur. These remedial steps include:

The termination of CA officers and employees who were
responsible for the improper accounting, inaccurate financial
reporting, and obstruction of justice, as well as those who took
steps to obstruct or impede CA's internal investigation;

The appointment of new management, including, but not limited
to, an Interim Chief Executive Officer, a new Chief Operating
and Chief Financial Officer, a new Head of Worldwide Sales, and
a new General Counsel;

In addition to including former SEC Commissioner Laura Unger on
CA's Board of Directors, adding a minimum of two new independent
directors, so that no less than two-thirds of the members of
CA's board will be independent directors;

Establishing a new Compliance Committee, a new Disclosure
Committee, enhanced corporate governance procedures, and a
comprehensive ethics program;

Reorganizing CA's Finance Department, including the appointment
of a Corporate Controller, a Chief Accounting Officer, and a
Financial Controller for each of CA's primary business
functions, and the reorganizing of its Internal Audit
Department.

Under the agreement, the court will appoint an independent
examiner who will be empowered to review CA's compliance with
all of the terms and conditions in the agreement.

In light of CA's acceptance of responsibility, continued
cooperation, remedial measures, and agreement to compensate the
victims of its fraud, the United States Attorney's Office has
agreed not to prosecute CA for the fraudulent and obstructive
conduct of its former officers, executives and employees.
However, should CA violate the terms of the executed agreement,
or commit any other crimes, it shall be subject to prosecution,
including prosecution for the fraud that is the subject of the
indictment.

The President's Corporate Fraud Task Force was established in
July 2002 to coordinate and oversee all federal corporate fraud
investigations. In the first two years of Task Force operations,
the Department of Justice charged more than 900 defendants in
corporate fraud cases and obtained more than 500 convictions.
The Task Force works to enhance cooperation among its member
agencies and other federal, state and local authorities in
connection with the investigation and prosecution of significant
financial crimes.

The government's case is being prosecuted by Assistant United
States Attorneys David Pitofsky, Eric Corngold and Eric Komitee.


DELTA ENTERPRISE: Recalls 81T Directors' Chairs For Injury Risk
---------------------------------------------------------------
Delta Enterprise Corp., of New York, N.Y. is cooperating with
the United States Consumer Product Safety Commission by
voluntarily recalling about 81,000 Director's Chair for
Children.

The chair can inadvertently be misassembled so that the fabric
seat can come off the chair's frame and expose metal support
rods. If fabric seat comes off the frame, there is a laceration
and fall hazard to young children. Delta Enterprise Corp., has
received six reports of the fabric seat coming off. In two of
these reports, children received lacerations from the exposed
metal seat support rod, with one child requiring stitches. There
were two additional reports of minor injuries.

The product is a child's director-style chair, constructed of
tubular metal with a canvas seat and back. The chairs feature
popular characters such as "The Wiggles," "Dora the Explorer,"
"Spongebob Squarepants," and "Disney Princesses." The Model
Numbers for these recalled units are TC83536WG, TC83531DO,
TC83533PS and TC83532SB. The model number can be found on a
label on the leg of the chair.

Manufactured in China, the product was sold at discount
department and toy stores nationwide from April 2004 through
July 2004 for about $10.

Consumers are advised to stop using the chair immediately and
contact Delta Enterprise Corp., to receive a free repair kit
consisting of new assembly instructions and four straps, which
will prevent the fabric seat from coming off.

Consumer Contact: Call Delta Enterprises toll-free at
(877) 660-3777 between 9 a.m. and 5 p.m. ET Monday through
Friday or visit their Web site at
http://www.deltaenterprise.com/recall.html


FANNIE MAE: Report Reveals GAAP Violations, Accounting Problems
---------------------------------------------------------------
The Office of Federal Housing Enterprise Oversight (OFHEO)
issued a report saying that mortgage giant Fannie Mae had
serious accounting problems which could cast doubt on the
Company's past earnings reports and even its financial
soundness, the Associated Press reports.

The OFHEO regulators' report was issued after an eight-month
investigation.  The report also raised the possibility of
deliberate accounting maneuvers designed to bring bigger bonuses
to executives.

The report states that the Company violated generally accepted
accounting principles (GAAP) in its computations for
transactions involving derivatives, financial instruments that
it uses to hedge against interest-rate and other risk.   The
company allegedly also used an improper "cookie jar" reserve in
accounting for some items, a practice which, according to the
SEC, gives an inaccurate picture of a company's financial
performance.

In at least one instance, the OFHEO regulators found, it
appeared that Fannie Mae management put off some accounting for
expenses to a future reporting period in order to meet earnings
targets that triggered bonuses for executives.  Management at
Fannie Mae "deliberately developed and adopted" inappropriate
accounting policies, supported widespread violations of
generally accepted accounting principles, tolerated lax internal
controls and failed to properly investigate an employee's
concerns about accounting, the report said, AP reports.

In a letter to Company directors, OFHEO Director Armando Falcon
said the findings warrant "immediate remedial action."  In
addition, "we must consider the accountability of management and
whether we have sufficient confidence in management to fully
implement these corrective measures and bring about broad
cultural and operational changes," Mr. Falcon wrote in the
letter dated Monday, AP reports.  "The analysis and findings of
this report make it difficult to assert such confidence."

The government-sponsored company is the second-largest U.S.
financial institution behind Citigroup Inc., and is the second-
biggest seller of securities behind the U.S. Treasury.  It could
be ordered to decrease its financial leverage by raising fresh
capital or buying fewer mortgages - potentially making it harder
for some buyers to obtain financing for their home purchases.

The federal regulators are negotiating an agreement with the
Fannie Mae board, which has named a special committee of outside
directors to respond to OFHEO's allegations and the preliminary
inquiry by the SEC.  Fannie Mae spokeswoman Janice Daue declined
comment Thursday, according to AP.

Credit-rating agency Standard & Poor's said Thursday that it had
placed several of its ratings of Fannie Mae, including its
"risk-to-the-government" rating, on "CreditWatch Negative"
because of the regulators' findings. That means the ratings will
either be downgraded a notch or affirmed as they now stand,
based on future developments.


FLORIDA: Judge Throws Out Challenge To Provisional-Ballot Law
-------------------------------------------------------------
Leon County Circuit Judge L. Ralph Smith Jr. rejected a
challenge to Florida's provisional ballots by refusing to
certify a lawsuit seeking class action status on behalf of the
American Civil Liberties Union, the AFL-CIO, and the union
representing state and municipal workers, The Palm Beach Post
reports.

The judge effectively ignored lawyers' arguments that some
voters will be so confused by precinct changes caused by
hurricanes and redistricting that they won't know where to vote
in November.

The provisional ballots in question was originally created by
Florida lawmakers in the aftermath of the bungled 2000
presidential election in which thousands of voters complained
they were turned away from the polls after being inaccurately
eliminated from the voting rolls.

Under state law, a provisional ballot allows a voter who is not
on the precinct list to cast a ballot anyway. The county
canvassing board later examines the ballots and determines if
the voter was eligible to vote in that precinct. If not, the
ballot is rejected and the votes on it remain uncounted.

Opponents of the current law want Floridians to be able to cast
provisional ballots in any precinct and have the canvassing
boards later count only the votes in the races in which that
voter was eligible to cast a ballot.

At a news conference after Judge Smith's ruling, Alma Gonzalez,
an attorney for the union representing state and municipal
workers in Tallahassee stated, "We cannot return to the year
2000 where thousands and thousands of voters came to the polls,
cast their ballots, only to have them thrown away."

Currently the unions are planning to ask the District Court of
Appeal to send the case directly to the Florida Supreme Court so
a final decision can be issued before the November 2, 2004
presidential election on whether voters must cast provisional
ballots in their own precincts as state law requires.


FORD MOTOR: Recalls Explorers, Mountaineers Due To Injury Hazard
----------------------------------------------------------------
Ford Motor Company is cooperating with the National Highway
Traffic Safety Administration by recalling on September 9,2004,
955,732 sport utility vehicles, specifically 2002-2003 Ford
Explorers and 2002-2003 Ford Mountaineers.

On certain sport utility vehicles, the liftgate glass strut may
become disengaged or the hinge may fracture allowing the glass
to fall and possible break.  If the hinge should fracture, there
is a potential for the glass to fall and ultimately break.
Minor injuries could occur.

Dealers will have the liftgate glass strut brackets and glass
hinges replaced.  For the vehicles built from August 1,2000
through March 3,2002, the dealers will replace the hinges and
liftgate strut bracket.  On vehicles built from March 3,2002
through June 23,2003, the dealers will only replace the hinges.
The recall began on September 13,2004.

For more details, contact the Company by Phone: 1-800-392-3673
or contact the NHTSA's auto safety hotline: 1-888-DASH-2-DOT
(1-888-327-4236).


FORD MOTOR: Recalls 1,689 2004 Ford F150 SUVs Due To Fire Hazard
----------------------------------------------------------------
The Ford Motor Company is cooperating with the National Highway
Traffic Safety Administration (NHTSA) by voluntarily recalling
1,689 2004 Ford F150 sport utility vehicles, on September
9,2004.

On certain trucks equipped with 4.2L, 4.6L and 5.4L gasoline
engines, the fuel tank may have a depression at the seam between
the top and bottom halves of the tank.  If a depression is large
enough, fuel may permeate the fuel tank wall, resulting in a
fuel odor, illumination of the "service engine soon" indicator
light, or a fuel leak.  Fuel leakage, in the presence of an
ignition source, could result in a fire.

Dealers will replace the fuel tank.  The recall is expected to
begin September 20,2004.

For more information, contact the Company by Phone:
1-800-392-3673 or contact the NHTSA auto safety hotline:
1-888-DASH-2-DOT (1-888-327-4236).


FORD MOTOR: Recalls 214,829 2003-2004 SUVs Due To Fire Hazard
-------------------------------------------------------------
The Ford Motor Company is cooperating with the National Highway
Traffic Safety Administration (NHTSA) by recalling 214,829 sport
utility vehicles, namely:

     (1) Ford E150, model 2003-2004

     (2) Ford E250, model 2003-2004

     (3) Ford E350, model 2003-2004

     (4) Ford E450, model 2003-2004

     (5) Ford E550, model 2003-2004

On certain vans, an electronic control unit (ECU) diode may have
micro cracks or the propensity to crack.  If a crack is present,
a short between the electrical ground and power circuit in the
module may occur.  The short may cause and ABS malfunction that
may illuminate the ABS warning light, or the short may overheat
the module resulting in a burning odor, smoke and fire.  This
condition may occur while the vehicle is being driven or
unattended.

Dealers will add a heat shield to the ECU and have the fuse
replaced.  The recall is expected to begin on October 8,2004.

For more details, contact the Company by Phone: 1-800-392-3673
or contact the NHTSA's auto safety hotline: 1-888-DASH-2-DOT
(1-888-327-4236).


FORD MOTOR: Recalls 253,076 2003-2004 SUVs Because of Fire Risk
---------------------------------------------------------------
The Ford Motor Company is cooperating with the National Highway
Traffic Safety Administration (NHTSA) by voluntarily recalling
253,076 sport utility vehicles, namely:

     (1) Ford E150, model 2003-2004

     (2) Ford E250, model 2003-2004

     (3) Ford E350, model 2003-2004

     (4) Ford E450, model 2003-2004

     (5) Ford E550, model 2003-2004

On certain vans, the air filter element material process
resulted in an air filter paper element that can smolder or
burn.  This change in filter paper composition combined with the
configuration of the air induction system, may allow hot carbon
particles to contact the air filter element during certain
driving conditions that create hot particles.  These hot
particles may ignite the air filter element with the potential
for air induction system damage or underhood fire.

Dealers will inspect and replace the air filter element.  The
recall is expected to begin October 8,2004.  For more details,
contact the Company by Phone: 1-800-392-3673 or contact the
NHTSA's auto safety hotline: 1-888-DASH-2-DOT (1-888-327-4236).


GENERAL ELECTRIC: Settles SEC Action Over Former CEO's Benefits
---------------------------------------------------------------
The Securities and Exchange Commission instituted settled
enforcement proceedings against General Electric Company. The
Commission charged that GE failed to fully describe the
substantial benefits it had agreed to provide its former
chairman and CEO John F. "Jack" Welch, Jr. under an "employment
and post-retirement consulting agreement." GE settled the
proceedings by consenting to the entry of an Order that it cease
and desist from violating the proxy solicitation and periodic
reporting provisions of the federal securities laws.

"Shareholders have a clear interest in knowing how public
companies compensate there top executives," said Paul R.
Berger, Associate Director of the SEC's Division of Enforcement.
"Compliance with SEC disclosure rules ensures that shareholders
are provided a full and accurate understanding of senior
executives' compensation arrangements."

The Commission found that in proxy statements and annual reports
filed with the Commission from 1997-2002, GE failed to fully and
accurately describe the retirement benefits Welch was entitled
to receive from the company. In December 1996, GE and Welch
entered into an "employment and post-retirement consulting
agreement" under which Welch agreed to continue as CEO until he
was 65 and serve as a consultant thereafter. In the agreement,
Welch received, as his principal form of compensation, lifetime
access to the perquisites and benefits he had received as GE's
chairman and CEO. GE's proxy statements only referred to Welch's
entitlement to ".continued lifetime access to Company facilities
and services comparable to those that are currently made
available to him by the Company," but did not provide any other
specific information about the "facilities and services" Welch
would receive in retirement.

The agreement itself, which was appended as an exhibit to GE's
1996 annual report, stated that Welch was entitled to receive in
retirement "continued access to Company facilities and services
comparable to those provided to him prior to his retirement,
including access to Company aircraft, cars, office, apartments,
and financial planning services," but did not provide further
meaningful and complete disclosure of those "facilities and
services." Moreover, GE made no other disclosures in its SEC
filings that allowed investors to understand the nature and
scope of Welch's retirement benefits-specifically, investors
could not learn from GE's previously filed proxy statements many
of the most significant "facilities and services" Welch had been
provided prior to his retirement, including personal use of GE-
owned aircraft, personal use of chauffeured limousines and home
security systems.

The Commission further found that in the first year following
Welch's retirement in September 2001, Welch received
approximately $2.5 million in benefits under the agreement,
which included:

     (1) access to GE aircraft for unlimited personal use and
         for business travel;

     (2) exclusive use of a furnished New York City apartment
         that, according to GE, in 2003, had a rental value of
         approximately $50,000 a month and a resale value in
         excess of $11 million;

     (3) unrestricted access to a chauffeured limousine driven
         by professionals trained in security measures;

     (4) a leased Mercedes Benz;

     (5) office space in both New York City and in Connecticut;

     (6) the services of professional estate and tax advisors;

     (7) the services of a personal assistant;

     (8) communications systems and networks at Welch's homes,
         including television, fax, phone and computer systems,
         with technical support;

     (9) bodyguard security for various speaking engagements,
         including a book tour to promote his autobiography
         Jack: Straight from the Gut; and

    (10) installation of a security system in one of Welch's
         homes and continued  maintenance of security systems GE
         previously installed in three of Welch's other homes.

The Commission concluded that GE's inadequate disclosures
violated Sections 13(a) and 14(a) of the Securities Exchange Act
of 1934 and Rules 13a-1, 14a-3 and 14a-9 thereunder. Without
admitting or denying the Commission's findings, GE consented to
the issuance of the Order, which orders GE to cease and desist
from committing or causing any violations and any future
violations of the foregoing statutory provisions and rules.


HAWAIIAN AIRLINES: SEC Issues Cease-and-Desist Order V. Ex-CEO
--------------------------------------------------------------
The Securities and Exchange Commission instituted cease-and-
desist proceedings against John W. Adams, the former Chief
Executive Officer of Hawaiian Airlines, Inc., and AIP LLC, an
entity managed by Adams that held a controlling interest in
Hawaiian Airlines. The Commission instituted proceedings against
Adams and AIP for their role in Hawaiian's failure to disclose
important negative financial information to shareholders in a
tender offer from which Adams and AIP each benefited.

The Commission finds that during a June 2002 issuer tender offer
in which Hawaiian repurchased $25 million in stock from its
shareholders, Adams learned that the company's financial
condition had significantly deteriorated, but failed to disclose
the information to minority shareholders who were deciding
whether or not to tender their shares. Minority shareholders
who, unlike Adams and AIP, declined to tender their shares,
found the value of their stock significantly diminished when the
negative financial information was made public. Within nine
months after the tender offer, Hawaiian was in bankruptcy. While
certain minority shareholders lost their opportunity to realize
the benefits of the tender offer, Adams and AIP benefited by
more than $17 million by selling their shares to Hawaiian in the
tender offer.

Adams and AIP have agreed to a settlement in which, among other
things, they agree to repay nearly $2.5 million in profits from
their sales of Hawaiian stock in the tender offer. In connection
with the settlement, Adams and AIP neither admitted nor denied
the Commission's findings.

The Commission finds that Hawaiian initiated the $25 million
self-tender offer in June 2002, shortly after the company
received $25 million in payments from the federal government to
compensate air carriers for losses related to the attacks of
Sept. 11, 2001. Materials provided to shareholders represented
that the tender offer was a prudent use of the company's
resources, and that the company would remain solvent following
completion of the tender offer. According to the Commission,
however, Adams was aware that the company was experiencing a
significant financial decline, which was not disclosed to
shareholders. Among other things, during the pendency of the
tender offer Hawaiian revised its financial projections for 2002
from a $12 million operating profit to a     $9.3 million
operating loss.

The Commission also finds that Adams and AIP tendered their
shares and received over $17 million of the $25 million paid by
Hawaiian for the stock. Had those Hawaiian shareholders who
declined to tender their shares been informed that the continued
solvency of the company was far less certain than initially
represented, a proportionately smaller number of AIP's and
Adams' shares would have been purchased by the company. Hence,
AIP and Adams profited at the expense of non-tendering
shareholders who were unaware of the company's financial
decline.

The Commission's Order finds that Adams and AIP caused
Hawaiian's violations of Section 13(e)(1) of the Securities
Exchange Act of 1934 and Rule 13(e)-4(j)(2) thereunder, which
require a public company conducting a self-tender offer to
disclose promptly any material changes in the information
provided to securities holders. Without admitting or denying the
Commission's findings, Adams and AIP consented to an order that
they cease and desist from causing violations of these
provisions, and agreed to pay a total of approximately $2.5
million in disgorgement and prejudgment interest.


HOLLINGER INTERNATIONAL: Law Firm Chair, Torys Face Stock Suit
--------------------------------------------------------------
The Chairman of Chicago law firm Winston & Strawn's and Canadian
firm Torys were named in a shareholder class action filed
against Hollinger International, alleging violations of federal
securities laws, Legal Week reports.

Canadian firm The Merchant Law Group filed the suit, alleging
that chairman James Thompson and Torys were liable for failing
to disclose the transfer of Hollinger funds, inaccurate
financial results and material misrepresentations of sales of
Hollinger's assets.

Mr. Thompson, the chairman of leading Chicago law firm Winston &
Strawn and a former Governor of Illinois between 1977 and 1991,
allegedly received substantial political contributions from
Hollinger CEO Conrad Black during the class period.  The suit
alleges that Mr. Thompson was "motivated to assist in the
wrongdoing because he received political contributions from Lord
Black."

Mr. Thompson was chairman of Hollinger's audit committee and sat
on its compensation committee.  He also allegedly signed many of
the company's allegedly false and misleading Securities and
Exchange Commission (SEC) filings.

The suit named Torys for its role in acting as counsel to
Hollinger and other defendants, and providing legal advice to
Hollinger and its audit committees.  The claim adds, "(Torys')
knowingly participated in, and aided and abetted, the individual
defendants' breaches of fiduciary duty and their divestiture of
hundreds of millions of dollars of the purchase prices from the
sales of Hollinger assets."

A Torys spokesman said the firm was unable to comment on ongoing
litigation.  Mr. Thompson was unavailable for comment, Legal
Week reports.


ILLINOIS: SEC Files Settled Stock Manipulation Action V. Traders
----------------------------------------------------------------
The Securities and Exchange Commission filed a settled market
manipulation action in the U.S. District Court for the Northern
District of Illinois against three individual day traders,
Stanley Awdisho, Michael Kundrat, and Kristopher Smolinski.

The Commission's complaint alleges that approximately 75 times
between September and December of 1999, Awdisho, Kundrat and
Smolinski each manipulated the price of stock options by
engaging in a scheme commonly referred to as "small lot
baiting." Small lot baiting or "spoofing" involves an order
placed by a market participant with the intention of briefly
triggering a market movement from which the participant or
others may benefit by trading the opposite side of the original
manipulative order. The complaint further alleges that to carry
out the scheme, Awdisho, Kundrat and Smolinski placed limit
orders for a small number of options contracts on one options
exchange to artificially raise or lower that exchange's quoted
bid or offer. Awdisho, Kundrat and Smolinski then purchased or
sold much larger opposite positions on other exchanges that
matched the artificially raised or depressed price displayed at
the first exchange. After their larger orders were executed, the
Awdisho, Kundrat and Smolinski immediately sent an order to
cancel the initial bait order. As a result of the scheme, the
complaint alleges that Awdisho, Kundrat and Smolinski unfairly
profited at least $25,000 by obtaining execution of their larger
orders at more favorable prices than otherwise available in the
market.

Simultaneous with the filing of the Commission's complaint,
Awdisho, Kundrat and Smolinski consented, without admitting or
denying the allegations of the Complaint, to permanent
injunctions against future violations of Sections 9(a)(2) and
10(b) of the Securities Exchange Act of 1934 and Rule 10b-5
thereunder, the antimanipulation and antifraud Sections of the
Exchange Act. Awdisho and Kundrat also consented to the payment
of a $10,000 civil penalty.  Smolinski consented to the payment
of  a  $20,000 civil penalty. The action is titled, SEC v.
Stanley Awdisho, Michael Kundrat and Kristopher Smolinski, Civil
Action No. 04 C 6125, N.D. Ill. (LR-18894).


JANSSEN PHARMACEUTICA: MI Court Upholds Ruling in Propulsid Suit
----------------------------------------------------------------
The Mississippi Supreme Court upheld a 2003 by a Jefferson
County judge that separate trials were in order for plaintiffs
in a lawsuit against the makers of the heartburn drug Propulsid,
the Associated Press reports.

According to the Supreme Court of the 30 plaintiffs in the
Jefferson County case, only two were from Jefferson County and
that 10 others live elsewhere in Mississippi, while 18 live out
of state.

The original ruling by Circuit Judge Lamar Pickard had decreed
that separate trials would be held for the non-Jefferson County
residents and that those cases would be transferred to courts of
the plaintiffs' attorneys choosing. Judge Pickard also ruled
that the cases of the two Jefferson County residents would
continue as a single case.

The suit was filed against Janssen Pharmaceutica Inc. and its
parent company, Johnson & Johnson over the heartburn drug
Propulsid, which the plaintiffs claimed to have caused heart
problems, anxiety attacks and other conditions on patients
taking it.

In upholding the lower court's decision, the Supreme Court also
directed the plaintiffs to provide Pickard with those counties
where the other 10 in-state complaints would be filed, which had
ruled that it was improper to group the plaintiffs together when
their claims did not arise from the same incident.

Justice Chuck Easley, writing for the court, said Judge Pickard
should dismiss without prejudice the 18 claims filed by out-of-
state residents, which meant that the cases could be re-filed
but not in Mississippi.

The Supreme Court had halted proceedings in Propulsid cases last
year until it resolved the issue of venue and class action
raised by the attorneys for the drug maker, who have disputed
decisions that allowed plaintiffs to join in the lawsuits even
if they were from outside the area where the trial was being
heard.


KRYPTONITE: Offers Exchanges For Faulty Locks, Suits Filed in IL
----------------------------------------------------------------
According to General Manager Steve Down, Canton, Massachusetts-
based Kryptonite will be offering free exchanges to anyone who
owns one of its U-lock models requiring a circular key, a
popular type of lock with city bikers that is vulnerable to
picking with a simple ballpoint pen, the Chicago Tribune
reports.

The offer is more than the what the company had originally
indicated to would do earlier this week: Give free upgrades to
people who could prove they bought their locks within the last
two years and provide discounts for upgrades to others who had
the locks longer.

Mr. Down further states, Kryptonite felt responsible to offer
solutions, not excuses, and to deal with the problem.

The move comes after one biker posted a message on the Internet
about how easy it was to pick a Kryptonite lock with the shaft
of a Bic pen, while others posted videos showing people picking
the locks.

Kryptonite said the exchange for a more secure lock will be run
through local retailers and will start as soon as the company
accelerates production of the new locks. Lock owners can visit
the company's Web site, www.kryptonite.com , for registration
instructions.

However, not everyone feels satisfied with Kryptonite's response
to customer complaints. Several lawsuits have actually been
filed against Kryptonite, including at least two in Cook County
that seek class action status and allege consumer fraud or
misrepresentation.

Chicago lawyer Larry Drury, who filed one of the suits on behalf
of Lauren Dubler, who owned a lock but did not have a bike
stolen, is seeking a refund for anyone who bought a Kryptonite
lock that could have been picked with a pen.

Mr. Drury said Kryptonite's latest offer is too vague -- he is
concerned about references to current owners and people's
current locks -- and does not offer refunds for people who may
not want to deal with the company again. He also adds that
Kryptonite's exchange offer will not affect their suit in
anyway, since they are seeking refunds as the primary remedy.


LOUISIANA: Prisoners Launch Lawsuit v. Public Defenders' Office
---------------------------------------------------------------
The state of Louisiana faces a class action alleging that the
state's public-defender system wasn't doing an adequate job,
2theadvocate News reports.

Nine defendants in Lake Charles filed the suit in Calcasieu
Parish Court purportedly on behalf of anyone now served by the
Public Defender's Office in Calcasieu Parish or anyone who will
be part of the system in the future.  The suit names as
defendants Gov. Kathleen Blanco, the Legislature and state
government.

According to the suit, 90 percent of people in Calcasieu Parish
accused of crimes are poor enough to be declared indigent and
entitled to a public defender.  However, the $1.4 million budget
for the office does not allow it to employ enough lawyers, at
high enough salaries, to adequately represent clients.

All nine plaintiffs are in the Calcasieu Correctional Center,
the parish prison, awaiting trials on charges not specified in
the lawsuit.  Lead plaintiff John Anderson has no criminal
convictions but has been awaiting trial since his arrest in
September 2002.  Trials have been postponed twice.  The other
plaintiffs have been in jail anywhere from a year to more than
two years.  Some do not even know if they have a lawyer
representing them, the lawsuit says.

The lawsuit is just the opening shot of a war, backed by
powerful legal interests, against the state's public-defender
system.  "We're seeking a declaration that the system is broken
and an order requiring it to be fixed," attorney William
Jeffress of Washington, D.C., part of the legal team handling
the lawsuit, told 2theadvocate News.

Instituting more public defenders, and paying them higher
salaries, could be one solution.  The state board that hands out
state money for public defenders got only $7.8 million this
year, a third of what the state Supreme Court recommended.
Critics say the system also relies too much on unreliable local
revenue.

Mr. Jeffress said he could not comment on whether, or how much,
the lawsuit could increase costs to Louisiana taxpayers to
defend poor people accused of crimes.  He said, under the
current funding, "You can't possibly provide what we think the
Constitution requires."

Gov. Blanco said she had not yet seen the lawsuit but recognizes
the problem.  "We're going to have to just tackle it," she told
2theadvocate News.

Her chief attorney, executive counsel Terry Ryder, said Gov.
Blanco has taken two steps to improve the indigent defense
system during her first months in office - by adding $1.5
million in state funds, in a tight budget year, to the public-
defender system and by appointing a study group to come up with
possible solutions.

"I can't yet comment on the lawsuit. But we take the issue
seriously," Mr. Ryder said, according to 2theadvocate News.


MEDQUIST INC.: Hospital Launches RICO Violations Suit in C.D. CA
----------------------------------------------------------------
MedQuist, Inc. faces a class action filed in the United States
District Court for the Central District of California in Los
Angeles, alleging 18 claims of fraud, negligence and violations
of the federal Racketeer Influenced and Corrupt Organizations
(RICO) Act, Health Data Management reports.  The suit also names
as defendants several of the Company's current and former senior
executives, including:

     (1) Ronald Scarpone, executive vice president of marketing
         and new business development;

     (2) Michael Clark, senior vice president;

     (3) John Suender, former executive vice president and chief
         legal officer;

     (4) Brian Kearns, former CFO

The South Broward Hospital District, doing business as Memorial
Healthcare System, filed the suit against the medical
transcription technologies and services vendor, alleging
MedQuist wrongfully and fraudulently overcharged for
transcription services.

The suit alleges that the defendants "created a variety of
fraudulent schemes to improperly inflate invoices submitted for
payment to plaintiff and the class."  The Company allegedly
billed up to 10 lines per report for invisible characters known
as "print strings" that are embedded within the body of each
report.  According to the lawsuit, "print strings are software
characters that instruct the computer where to send the report
within the word processing system."

The Company also allegedly induced customers to enter into
arbitration clauses that limited the discovery of documents and
information available, "thereby hiding MedQuist's methods of
fraudulently inflating its invoices."  The Company also charged
clients for its own overhead costs, even though contracts did
not call for any payment of overhead by clients, and instructed
managers to lie when asked directly about how invoices were
calculated, deal aggressively with any client that challenged a
bill, and refuse to provide supporting documentation for
invoices.

Mount Laurel, N.J.-based MedQuist is reviewing the lawsuit and
has no immediate comment, according to a spokesperson, AP
reports.  The law firm of Greenberg Traurig LLP, Santa Monica,
California, is representing plaintiffs.


MOBILE BILLBOARDS: SEC Launches GA Lawsuit Over Ponzi Scheme
------------------------------------------------------------
The Securities and Exchange Commission filed a complaint in the
U.S. District Court for the Northern District of Georgia against
Mobile Billboards of America, Inc. (Mobile Billboards),
International Payphone Company (International Payphone) itself
and doing business as Outdoor Media Industries (Outdoor Media),
Reserve Guaranty Trust (Reserve Guaranty), Michael A. Lomas
(Lomas) and Michael L. Young (Young). Mobile Billboards is a
Delaware corporation with offices in Newbury, Ohio and
Bridgeton, Missouri. International Payphone, a Delaware
corporation, maintains its principal office in Norcross,
Georgia. Outdoor Media is a division of International Payphone
and has offices in Newbury, Ohio and Bridgeton, Missouri.
Reserve Guaranty, a Delaware statutory trust, is located in
Washington, DC. Lomas, who resides in Long Beach, California, is
the Chairman of Mobile Billboards. Young is the president and a
director of Mobile Billboards and resides in Bridgeton,
Missouri.

The complaint alleges that from 2001 through the present,
defendants Lomas, Young, Mobile Billboards, Outdoor Media and
Reserve Guaranty operated a Ponzi scheme involving the sale and
leaseback of mobile billboards, selling more than $60.5 million
of mobile billboard investments to more than 700 investors
nationwide.

The complaint charges the defendants with violations of Sections
5(a), 5(c) and 17(a) of the Securities Act of 1933, Section
10(b) of the Securities Exchange Act of 1934 (Exchange Act) and
Rule 10b-5 thereunder and Lomas and Young with aiding and
abetting violations of Section 15(a) of the Exchange Act,. The
complaint seeks, among other relief, disgorgement of all ill-
gotten gains with prejudgment interest, and the imposition of
civil penalties against defendants. On the same day the
complaint was filed, the defendants consented to orders
permanently enjoining the defendants from future violations,
freezing the assets of defendants, ordering accountings by Lomas
and Young, and appointing a Receiver for the assets of Mobile
Billboards, International Payphone, itself and doing business as
Outdoor Media, and Reserve Guaranty.

The Commission thanks the North Carolina Securities Division for
its assistance in this matter. The action is titled, SEC v.
Mobile Billboards of America, Inc., International Payphone
Company (itself and d/b/a Outdoor Media Industries), Reserve
Guaranty Trust, Michael A. Lomas and Michael L. Young, Civil
Action No. 1:04-CV-2763, NDGA] (LR-18893).


NORVERGENCE INC.: State Instigates Consumer Fraud Investigation
---------------------------------------------------------------
The state of New Jersey launched a consumer fraud investigation
into bankrupt Norvergence, Inc., which left more than 11,000
small business customers burdened with huge debts and
litigation, the Associated Press reports.

More than two-dozen banks and leasing companies have been asked
for documents that detail their business deals with the
telecommunications reseller, which filed for Chapter 7
bankruptcy in July.

According to Attorney General Peter C. Harvey, who is making
sure business people in New Jersey get what he or she pays for,
the company left as many as 1,000 small businesses without
service and owes its creditors an estimated $30 million.

Twenty other states and federal officials are looking into the
company, The Record of Bergen County reported.

Attorney Michael Green, who has filed a class action lawsuit on
behalf of the small business customers, said his clients were
promised telephone and Internet service at deep discounts when
they signed lease deals with NorVergence. Furthermore Mr. Green
stated that his clients also signed long-term deals to lease
equipment at prices far above what devices actually cost.

NorVergence sold the leases at a discount to the financial
services companies, which saw the contracts as an investment.
Those companies have demanded payment from the small businesses,
in some cases launching lawsuits and contacting credit agencies.

The Attorney General's Office has told the leasing companies
they must halt any legal action they are taking against former
NorVergence customers in New Jersey until the investigation is
completed.


ONEOK INC.: Verdict Reached in Trial Over Yaggy Storage Gas Leak
----------------------------------------------------------------
A Wyandotte County jury recently reached a verdict in a class
action lawsuit that was filed three years ago against energy
company, ONEOK, Inc. (NYSE: OKE) arising out of the escape of
natural gas from the Yaggy storage field outside of Hutchinson,
Kansas.

Previously reported in the June 15, 2004 edition of CAR, the
class action lawsuit, which was originally filed in Reno County
but later moved by District Judge Richard Rome to Wyandotte
County, Kansas for either a July or August hearing alleges that
the January 2001 gas leaks in ONEOK's Yaggy storage field
northwest of Hutchinson is believed to be responsible for a
series of explosions that destroyed several businesses and
killed two people in Hutchinson.

In his ruling to move the case, the Judge Rome stated that
intense pretrial publicity would make it hard for Tulsa, Okla.-
based ONEOK to get an impartial jury in Reno County. He also
pointed out that because landowners are part of the lawsuit and
thus disqualified from being jurors, it would be difficult to
find "a fair cross-section of the community" to sit on the jury.

The lawsuit includes anyone who owns a business or property in
the county, with attorneys contending that a gas leak and deadly
explosions in 2001 devalued all those properties.

While the plaintiffs sought damages in excess of $50 million
exclusive of punitive damages, the jury has awarded $5 million
in actual damages to the residential class. No damages were
awarded to the business class. No punitive damages were awarded.
The $5 million is covered by insurance.

This trial concludes all litigation related to the Yaggy
incident, with the exception of one case, which ONEOK is
appealing.


ORTHO-MCNEIL: Warned Over Failure To State Topamax Side Effects
---------------------------------------------------------------
The Food and Drug Administration warned Ortho-McNeil, a unit of
Johnson & Johnson, over the failure of marketing material for
its Topamax epilepsy and migraine drug to warn about a possibly
dangerous side effect, J&J announced this week, the Associated
Press reports.

The FDA stated that the marketing materials failed to warn users
that they could experience a drop in ability to sweat and an
increase in body temperature.  The materials also failed to warn
users of increased acidity in the body, which can lead to
hyperventilation and irregular heartbeats.  The FDA further said
that children are the most affected by the drug's side effects
and that the promotional material and the drug's Web site
encourages "the unsafe use of Topamax," and by children in
particular.

The FDA approved the use of Topamax daily to prevent migraines.
It was previously approved for use against epilepsy.  It had
2003 sales of more than $1 billion.

Ortho-McNeil spokeswoman Lesley Fishman said the company is
working with the agency to address its concerns, AP reports.
The company has until September 29 to respond to the agency in
writing.


UNITED STATES: Report Says Health Care Still Needs Improvement
--------------------------------------------------------------
The National Committee for Quality Assurance's annual report
states that requiring doctors and hospitals to report publicly
on their performance and tying that to their pay would
dramatically reduce avoidable deaths and costs attributable to
poor medical care, the Associated Press reports.  The private
group works on ways to improve health care quality.

The report described a significant gap in quality between the
best providers and the national average for treating a range of
common conditions that would not be tolerated in almost any
sector of the US economy.  The report further stated that wild
variations in medical care led to 79,000 avoidable deaths and
$1.8 billion in additional medical costs last year.

Despite the more than 10% increase in health insurance premiums
annually, the differences in health care quality persist.  "This
report underscores that all too often we are not getting good
value for that money," said Peter V. Lee, president and chief
executive of the Pacific Business Group on Health, a coalition
of businesses that provide health insurance to 3 million people,
AP reports.

The report cites as an example, health care for patients with
high blood pressure.  Failure to control high blood pressure
resulted in up to 26,000 deaths last year that could have been
avoided with competent medical care.  Better control of blood
pressure will lead to 2,500 fewer fatal heart attacks in 2004,
the report said.

The report further stated that health insurance plans that
publicly report their performance showed marked improvement in
most areas, including cholesterol management, diabetes care,
breast cancer screening and flue shots for adults.  Health plans
also did a better job of reducing cholesterol levels among
patients with diabetes.  However, those plans cover only about a
quarter of the U.S. population, about 69 million people.

"The data we have tell a great story, health care quality is
improving consistently and dramatically," said Margaret E.
O'Kane, NCQA's president, according to AP.  "Why don't we have
performance data for the other 75 percent of the U.S. health
care system?"

Last year's Medicare prescription drug law took a step in this
direction by linking a small portion of Medicare payments to
hospitals' willingness to submit quality data and conducting
trial runs that tie pay to performance for some health care
providers.

One notable exception to the upward trend in quality was
treatment of mental illness, which showed no improvement over
2002.  "Patients get the correct care only about 50 percent of
the time," the report said, AP states.

Harvard Pilgrim Health Care of Massachusetts was the top-rated
health plan for both clinical care and member satisfaction, the
report said.


WAL-MART STORES: Blacks Launch AK Suit Over Race Bias in Hiring
---------------------------------------------------------------
Wal-Mart Stores, Inc. faces a class action in the Arkansas
federal court, alleging the retail giant discriminated against
African-American in 12 Southern states, the Associated Press
reports.

Plaintiff Daryal T. Nelson filed the suit, alleging that the
Company rejects and discourages black applicants for truck-
driving jobs at its distribution centers in Arkansas, Alabama,
Florida, Georgia, Kentucky, Louisiana, Mississippi, North
Carolina, South Carolina, Tennessee, Texas, and Virginia.

The suit had a document from the Equal Employment Opportunity
Commission attached it, saying that it found "reasonable cause"
to believe that Mr. Nelson, a 22-year veteran of driving trucks,
was discriminated against.  The EEOC said Wal-Mart hired some
white drivers with more serious driving violations and less
experience than black applicants.

Gus Whitcomb, a spokesman for Wal-Mart, said Wednesday that he
couldn't comment on the lawsuit because he hadn't seen it, AP
reports.  However, he said, "We do not discriminate in our
hiring practices."


WILSON TRAILERS: Recalls 448 Grain Trailers For Accident Hazard
---------------------------------------------------------------
Wilson Trailer Company recalled 448 of its 2004 Grain Trailers
on September 9,2004.  On certain trailers, the wheel assembly
hub spindle nut on each axle may have been installed without a
"keeper."  The purpose of the keeper is to lock the spindle nut
in place and thereby, secure the wheel to the axle.

Failure to install the keeper can cause the wheel on the
affected axle to come off and cause personal injury to other
persons outside the vehicle and property damage.

Dealers will inspect and determine if each wheel assembly lacks
a keeper.  If the keeper is not present, it will be installed.
The recall began on September 15,2004.

For more details, contact the Wilson Trailer Company by Phone:
1-800-798-2002 or contact the National Highway Traffic Safety
Administration's auto safety hotline: 1-888-DASH-2-DOT
(1-888-327-4236).

                 New Securities Fraud Cases

FEDERAL NATIONAL: Lerach Coughlin Files Securities Lawsuit in NY
----------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP initiated a class action in the United States District Court
for the Southern District of New York on behalf of purchasers of
Federal National Mortgage Association ("Fannie Mae" or the
"Company") (NYSE:FNM) common stock during the period between
October 16, 2003 and September 22, 2004 (the "Class Period").

The complaint charges Fannie Mae and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Fannie Mae provides financing for home mortgages in the
United States. The Company was chartered by the United States
Congress to provide liquidity in the secondary mortgage market
to increase the availability and affordability of homeownership
for low-, moderate- and middle-income Americans. The complaint
alleges that during the Class Period, defendants issued
materially false and misleading statements regarding Fannie
Mae's financial results and growth rates. Specifically, the
complaint alleges that the Company issued materially false and
misleading statements in an effort to separate themselves from
the scandal that occurred at the Federal Home Loan Mortgage
Corporation ("Freddie Mac"), a similar, but smaller version of
its rival - Fannie Mae. In June 2003, Freddie Mac disclosed that
it had understated profits by some $4.5 billion for 2000-2002 in
an effort to smooth earnings and maintain its image on Wall
Street as a steady performer. The accounting crisis brought the
ouster of several top Freddie Mac executives, investigations by
the Justice Department and the SEC, and a record $125 million
fine in a settlement with the Office of Federal Housing
Enterprise Oversight ("OFHEO"), the office that regulates both
Fannie Mae and Freddie Mac and is responsible for ensuring that
they are adequately capitalized and operating safely. Soon
thereafter, OFHEO initiated an eight-month investigation of
Fannie Mae's accounting practices in which the agency found a
pattern of manipulation aimed at smoothing out volatility in
profits from quarter to quarter similar to that which occurred
at rival Freddie Mac.

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 the Company employed accounting practices in
         violation of GAAP in order to maintain the appearance
         of stable earnings;

     (2) that the Company's officers, including the Individual
         Defendants, committed these violations in order to
         achieve performance bonuses;

     (3) that the Company lacked adequate internal controls and
         was therefore unable to ascertain the true financial
         condition of the Company; and

     (4) that as a result, the value of the Company's net income
         and financial results were materially misstated at all
         relevant times.

Then, on September 22, 2004, the Company issued a press release
announcing that OFHEO had finished their special examination of
Fannie Mae's accounting policies and practices that started
approximately a year ago, following the problems at Freddie Mac.
The OFHEO report described that Fannie Mae had engaged in
improper activities including, but not limited to, the
following:

     (i) applied accounting methods and practices that do not
         comply with GAAP in accounting for the enterprise's
         derivatives transactions and hedging activities;

    (ii) employed an improper 'cookie jar' reserve in accounting
         for amortization of deferred price adjustments under
         GAAP;

   (iii) tolerated related internal control deficiencies;

    (iv) in at least one instance deferred expenses apparently
         to achieve bonus compensation targets; and

     (v) maintained a corporate culture that emphasized stable
         earnings at the expense of accurate financial
         disclosures.

In addition, the OFHEO's report to the Board stated that "the
matters detailed in this report are serious and raise doubts
concerning the validity of previously reported financial
results, the adequacy of regulatory capital, the quality of
management supervision, and the overall safety and soundness of
the Enterprise."

In reaction to the news of the accounting improprieties, the
price of Fannie Mae stock dropped precipitously falling from
$75.65 per share on September 22, 2004, to as low as $66.50 per
share on September 23, 2004, on extremely heavy volume.

For more details, contact Samuel H. Rudman or David A. Rosenfeld
of Lerach Coughlin Stoia Geller Rudman & Robbins LLP by Phone:
800-449-4900 by E-mail: wsl@lerachlaw.com or visit their Web
site: http://www.lerachlaw.com/cases/fanniemae/


FEDERAL NATIONAL: Schiffrin & Barroway Files DC Securities Suit
---------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a class
action lawsuit in the United States District Court for the
District of Columbia on behalf of all those who purchased
publicly traded securities of the Federal National Mortgage
Association (operating as Fannie Mae) (NYSE: FNM) ("Fannie Mae"
or the "Company") between October 11, 2000 and September 22,
2004, inclusive (the "Class Period").

The complaint charges Fannie Mae, Franklin D. Raines, J. Timothy
Howard, and Leanne G. Spencer with violations of Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. More specifically, the complaint alleges
that the Company failed to disclose and misrepresented the
following material adverse facts known to defendants or
recklessly disregarded by them:

     (1) that the Company applied accounting methods and
         practices that do not comply with GAAP in accounting
         for the enterprise's derivatives transactions and
         hedging activities;

     (2) that the Company had materially understated its accrued
         cost-of-access liability by $50-$80 million;

     (3) that the Company used "cookie jar" accounting wherein
         Fannie Mae arbitrarily distributed current gains to
         subsequent quarters in a bid to keep its revenue and
         earnings growth steady;

     (4) that the Company deferred expenses to achieve bonus
         compensation targets;

     (5) that the Company had insufficient and inadequate
         internal controls; and

     (6) that as a result, the value of the Company's net income
         and financial results was materially understated at all
         relevant times.

On September 22, 2004, Fannie Mae, prior to the opening of the
market, disclosed, in brief, the findings of the Office of
Federal Housing Enterprise Oversight ("OFHEO") report. The
report revealed that Fannie Mae was engaged in inappropriate
accounting practices. News of this shocked the market. Shares of
Fannie Mae fell $4.96 per share, or 6.56 percent, to close at
$70.69 per share on unusually high trading volume. After the
market closed on September 22, 2004, OFHEO released the complete
report detailing Fannie Mae's inappropriate accounting
practices. The market reacted swiftly. The next trading day
shares of Fannie Mae fell an additional $3.24 per share, or 4.58
percent, by noon on September 23, 2004.

For more details, contact Marc A. Topaz, Esq. or Darren J.
Check, Esq. of Schiffrin & Barroway, LLP by Phone:
1-888-299-7706 or 1-610-667-7706 or by E-mail:
info@sbclasslaw.com


ST. PAUL TRAVELERS: Chitwood & Harley Lodges MN Securities Suit
---------------------------------------------------------------
The law firm of Chitwood & Harley LLP initiated a securities
fraud class action complaint in the United States District Court
for the District of Minnesota on behalf of all Travelers
Property Casualty Corp. ("Travelers") Class A and Class B
shareholders whose shares of Travelers were automatically
exchanged for shares of The St. Paul Travelers Companies, Inc.
on or about April 1, 2004 (NYSE: STA - News) ("St. Paul") (the
"Class"). The lawsuit was filed against Travelers, St. Paul, St.
Paul Travelers and its top executives, CEO Jay Fishman and CFO
Jay Benet; St. Paul's former CFO Thomas Bradley; and Travelers'
former CEO, Robert Lipps.

The action arises out of the merger ("the Merger") between
Travelers and St. Paul pursuant to which Travelers shareholders
received shares of St. Paul Travelers stock at a predetermined
exchange ratio. The merger was approved based on representations
contained in a joint Proxy Statement and Registration Statement
issued on February 13, 2004. The Complaint alleges that both
Travelers and St. Paul negligently failed to disclose in that
document that St. Paul utilized a markedly different method for
calculating insurance reserves than that utilized by Travelers
and that applying Travelers' methodology, as was required, would
result in the necessity of having to increase reserves on St.
Paul's insurance policies by over $1 billion - approximately 12
percent of the value of St. Paul as determined by the merger
consideration. On June 17, 2004, news regarding this issue began
to trickle out to shareholders, and St. Paul Travelers stock
began to decline, falling from $41.10 on that date to $35.66 on
July 23, 2004, the date the size of the needed reserve
adjustment - $1.6 billion - was first announced. Thus, in a
matter of weeks, St. Paul Travelers shares declined in market
value by an astounding $3.66 billion.

Defendants St. Paul and St. Paul Travelers (its successors in
interest due to the Merger) are alleged to have violated
Sections 11 of the Securities Act of 1933, which provides for
liability without fault for any material misrepresentations in
or omissions from the Registration Statement that harmed
shareholders. The Complaint asserts that defendants Fishman and
Bradley likewise violated Section 11 by failing to conduct a
reasonable investigation into the adequacy of the disclosures in
the Registration Statement concerning St. Paul's reserves. All
defendants are also charged with violations of Section 14 of the
Securities Exchange Act of 1934, which prohibits the
solicitation of proxies for a shareholder vote by means of a
materially false or misleading proxy statement containing
misrepresentations or omissions.

For more details, contact Nichole B. Adams, Esq. by Phone:
1-888-873-3999, ext. 4873 by E-mail: nba@classlaw.com or visit
their Web site: http://www.classlaw.com


TEAM TELECOM: Glancy Binkow Lodges Securities Fraud Suit in NJ
---------------------------------------------------------------
The law firm of Glancy Binkow & Goldberg LLP initiated lawsuit
was in the United States District Court for the District of New
Jersey on behalf of a class (the "Class") consisting of all
persons who purchased or otherwise acquired securities of Team
Telecom International Ltd. ("TTI" or the "Company")(Nasdaq:TTIL)
between May 15, 2001 and November 14, 2002, inclusive (the
"Class Period").

The Complaint charges, among others, TTI and certain of the
Company's executive officers with violations of federal
securities laws. Plaintiff claims that defendants' omissions and
material misrepresentations concerning TTI's operations and
performance artificially inflated the Company's stock price,
inflicting damages on investors. TTI is an Israeli corporation
headquartered in Petach Tikvah, Israel, and a provider of
network management systems, operations support systems and
business support systems for communications service providers.
The Complaint alleges that throughout the Class Period TTI
engaged in a systematic scheme of accounting fraud to maintain
the facade of a steadily growing enterprise. In order to
facilitate this appearance, the Company engaged in a series of
flagrant violations of generally accepted accounting principals
("GAAP"), including, but not limited to, improperly classifying
assets and liabilities, improperly failing to report its
subsidiary's earnings on a consolidated basis and prematurely
and improperly recognizing revenues.

On November 12, 2002, a Company press release announced TTI's
third quarter 2002 financial results. The press release
announced revenues for the quarter of $10.3 million, compared
with $16.0 million for the third quarter of 2001, and an
operating loss of $6.8 million for the quarter, versus an
operating profit of $3.3 million in the year-ago quarter. Net
loss for the quarter was $6.1 million, or a loss of $0.51 per
diluted share, versus a net profit of $3.7 million, or $0.32 per
diluted share, in the prior year. This news shocked the market,
causing TTI shares to plummet more than 28% on the same day the
financial results were announced, November 12, 2002, and an
additional 7% on heavy trading for the two days following the
announcement.

For more details, contact Michael Goldberg, Esq. of Glancy
Binkow & Goldberg LLP by Mail: 1801 Avenue of the Stars, Suite
311, Los Angeles, CA 90067 by Phone: (310) 201-9150 or
(888) 773-9224 or by E-mail: info@glancylaw.com


TECO ENERGY: Shepherd Finkelman Files Securities Suit in M.D. FL
----------------------------------------------------------------
The law firm of Shepherd, Finkelman, Miller & Shah, LLC
initiated a lawsuit seeking class action status in the United
States District Court for the Middle District of Florida on
behalf of all persons (the "Class") who purchased the securities
of TECO Energy, Inc. (NYSE: TE - News; "TECO") between October
30, 2001 and February 4, 2003 (the "Class Period"), including
anyone who purchased in the October 10, 2002 or June 5, 2002
equity offerings or the January 10, 2002, May 8, 2002 or January
10, 2002 debt offerings.

The Complaint alleges that, during the Class Period, Defendants,
TECO, Robert D. Fagan, and Gordon L. Gillette, 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:

     (1) TECO is a holding company for regulated utilities and
         other unregulated businesses;

     (2) TECO owns no operating assets but holds all of the
         common stock of Tampa Electric Company directly or
         indirectly;

     (3) Defendants concealed problems with several independent
         power plant construction ventures for which TECO would
         ultimately be fully responsible, including the
         Company's full exposure to the bankruptcy of Enron
         Corporation, causing TECO shares to trade at
         artificially inflated levels and permitting defendants
         to sell over $4.2 million of their own personally held
         stock and to raise over $792 million selling equity
         securities in the capital markets during the Class
         Period;

     (4) as a result of a series of events in late 2002 and
         early 2003, the complex financing scheme that the
         Company had developed began to unravel as several large
         projects and their liabilities were "put" to TECO,
         thereby moving hundreds of millions of dollars of off-
         balance sheet debt onto TECO's balance sheet and
         resulting in the Company taking over a billion dollars
         in impairment charges; and

     (5) these events and the others described in the Complaint
         caused the price of TECO's common stock to plummet from
         a Class Period high of over $28 per share on April 23,
         2002 to below $13 per share on February 4, 2003,
         erasing hundreds of millions of dollars in market
         capitalization.


For more details, contact Scott R. Shepherd, Esq. or James E.
Miller, Esq. by Phone: 877/891-9880 or 866/540-5505 by E-mail:
sshepherd@classactioncounsel.com or
jmiller@classactioncounsel.com or visit their Web site:
http://www.classactioncounsel.com


THORATEC CORPORATION: Marc S. Henzel Files Securities Suit in CA
----------------------------------------------------------------
The law offices of Marc S. Henzel initiated a class action
lawsuit was filed in the United States District Court for the
Northern District of California on behalf of purc hasers of
Thoratec Corporation (NASDAQ:THOR) publicly traded securities
during the period between April 28, 2004 and June 29, 2004 (the
"Class Period").

The complaint charges Thoratec and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Thoratec is the leading supplier of implantable heart
pumps and left ventricular assist devices. The Company
manufactures these circulatory support products for use by
patients with congestive heart failure, including "end-stage"
patients. Traditionally these products have been used in such
patients as a "bridge to transplant," for patients awaiting a
heart transplant. In contrast, "Destination Therapy," or
permanent support, is the Company's flagship new treatment
option for patients with end-stage heart failure

The Company claims that its HeartMate XVE ("HeartMate") is an
approved ventricular assist device designed to provide permanent
support for these patients. The Complaint alleges that during
the Class Period, defendants made a number of false and
misleading statements regarding expected sales and the market
for the HeartMate as a "Destination Therapy" treatment for end-
stage heart failure patients. As a result of these statements,
Thoratec's stock traded at artificially inflated levels and
defendants were able to complete a $143.7 million note offering.

According to the complaint, during the Class Period defendants
knew but concealed from the investing public the following
adverse material facts:

     (1) even as the Company estimated that as many as 100,000
         patients per year in the U.S. could be helped by their
         new Destination Therapy treatment option, the actual
         "true" market for the product was far less than
         claimed, as it was severely constrained by limited
         reimbursement dollars available under Medicare and
         Medicaid service guidelines;

     (2) although the defendants claimed that there were
         approximately 900 hospital centers in the U.S.
         qualified for the practice of Destination Therapy and
         implantation of the HeartMate, in fact less than 75
         centers have been designated as Medicare-approved for
         Destination Therapy;

     (3) Medicare had rigid preset reimbursement guidelines and
         schedules for Destination Therapy that could only
         translate into a serious negative impact on the
         Company's FY2004 sales projections for the HeartMate;

     (4) cardiothorasic surgeons were rejecting and/or not
         accepting the HeartMate as a viable device for
         Destination Therapy patients because of issues with the
         device's reliability in a long-term setting;

     (5) the demand for the Company's Destination Therapy
         implants was not growing at the rate claimed;

     (6) the Company's Destination Therapy implant estimate for
         FY2004 of between 300 to 500 pumps was grossly
         overstated and was internally projected to be a
         fraction of this estimate;

     (7) the Company's FY2004 projections of $190-$200 million
         were overstated by tens of millions of dollars;

     (8) not only were CMS reimbursement charges delaying the
         number of implants, implantation centers and medical
         professionals had delayed any significant expansion of
         the existing implant programs until after October 1,
         2004 (the expected date of the availability of a
         significant increase in the CMS reimbursement rate);
         and

     (9) sales of the HeartMate implants would be depressed
         until Q4 2004, and as a result, the Company's earnings
         shortfall experienced in Q1 2004 (versus Q4 2003 and Q1
         2003) would not be made up for nearly one year, until
         Q1 2005, at best.

On June 29, 2004, after the market closed, Thoratec released its
preliminary results for the quarter ended June 30, 2004. These
results were much worse than previous forecasts. On this news
the price of Thoratec stock dropped precipitously to $10.74 per
share, a drop of more than 25% from the previous day's close, on
extraordinarily heavy volume of over 11 million shares.

For more details, contact Marc S. Henzel, Esq. of the law
offices of Marc S. Henzel by Mail: 273 Montgomery Ave, Suite 202
Bala Cynwyd, PA 19004-2808 by Phone: (888) 643-6735 or
(610) 660-8000 by Fax: (610) 660-8080 by E-mail:
Mhenzel182@aol.com or visit their Web site:
http://members.aol.com/mhenzel182


WET SEAL: Schiffrin & Barroway Files Securities Fraud Suit in CA
----------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a class
action lawsuit in the United States District Court for the
Central District of California on behalf of all securities
purchasers of The Wet Seal, Inc. (Nasdaq: WTSLA) ("Wet Seal" or
the "Company") from January 7, 2004 through August 19, 2004
inclusive (the "Class Period").

The complaint charges Wet Seal, Peter D. Whitford, Joseph E.
Deckop, and Irving Teitelbaum with violations of Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. More specifically, the Complaint alleges
that 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's strategic initiatives plan was not
         strengthening the Company's corporate standing. In
         fact, the Company's strategic initiatives plan was a
         complete and total disaster that was leading the
         Company into financial ruin;

     (2) that demand for the Company's products was based on
         deep-discounting and that without deep-discounting its
         products, demand for such was at an all time low; and

     (3) that as a result of the above, the Company's
         projections, outlooks, and positive statements, were
         lacking in any reasonable basis when made.

On August 19, 2004, Wet Seal, after the market closed, shocked
the market by reporting that net loss from continuing operations
of $3.20 per share for the second quarter ended July 31, 2004.
Following this post-market announcement, shares of Wet Seal shed
$1.25 per share, or 59.52 percent, to close at $0.85 per share
on unusually high trading volume on August 20, 2004.

For more details, contact 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


WIRELESS FACILITIES: Murray Frank Files CA Stock Fraud Lawsuit
--------------------------------------------------------------
The law firm of Murray, Frank & Sailer LLP initiated a class
action lawsuit in the United States District Court for the
Southern District of California on behalf of all purchasers of
the common stock of Wireless Facilities Inc. (Nasdaq:WFII)
("Wireless" or the "Company") from April 26, 2000 through August
4, 2004, inclusive (the "Class Period").

The complaint charges Wireless, Masood Tayebi, Terry Ashwill,
Daniel Stokely, Eric DeMarco, and Thomas Munro 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 known to
defendants or recklessly disregarded by them:

     (1) that the Company had materially underreported its
         burgeoning foreign tax burden;

     (2) that as a consequence of the foregoing, the Company
         materially inflated its net income or loss by 3-8
         percent or $10-12 million;

     (3) that the Company lacked adequate internal controls and
         was therefore unable to ascertain the true financial
         condition of the Company; and

     (4) that as result of the above, the Company's financial
         results were materially inflated at all relevant times.

On August 4, 2004, Wireless reported results for the second
quarter of fiscal year 2004. In addition, the Company announced
that it intends to restate its financial statements filed on
Form 10-K for the years 2001 through 2003 to accrue for certain
foreign tax contingencies. News of this shocked the market.
Shares of Wireless fell as much as, 30% and reached at one point
on August 5, 2004, its 52 week low of $4.61 per share on
unusually heavy trading volume. At the end of the trading day,
shares of Wireless fell $1.96 per share or 28.08 percent to
close at $5.02 per share.

For more details, contact Eric J. Belfi or Aaron D. Patton of
Murray, Frank & Sailer LLP by Phone: (800) 497-8076 or
(212) 682-1818 by Fax: (212) 682-1892 or by E-mail:
info@murrayfrank.com


WIRELESS FACILITIES: Spector Rosemna Files Securities Suit in CA
----------------------------------------------------------------
The law firm of Spector, Roseman & Kodroff, P.C. initiated a
securities class action lawsuit in the United States District
Court for the Southern District of California, on behalf of
purchasers of the common stock of Wireless Facilities, Inc.
("Wireless" or the "Company") (Nasdaq: WFIIE) between April 26,
2000 through August 4, 2004, inclusive (the "Class Period").

Included in the class are those persons who acquired shares of
Wireless through its acquisitions of Questus, Davis Bay, Defense
Systems, High Technology Solutions, Telia Academy and Telia
Contracting.

The Complaint alleges that defendants violated the federal
securities laws by issuing materially false and misleading
statements contained in press releases and filings with the
Securities and Exchange Commission during the Class Period.
Specifically, the Complaint alleges that Wireless, an
independent provider of outsourced communications and security
for the wireless communications industry, and certain of its
officers and directors issued materially false statements
concerning the company's financial condition.  It further
alleges that Wireless failed to disclose and misrepresented the
following material adverse facts:

     (1) that Wireless had materially under-reported its
         burgeoning foreign tax burden;

     (2) that as a consequence of the foregoing, Wireless
         materially inflated its net income by 3% to 8% or $10-
         12 million; and

     (3) that Wireless lacked adequate internal controls and was
         therefore unable to ascertain its true financial
         condition.

On August 4, 2004, Wireless reported results for the second
quarter of fiscal 2004. It also announced that it intends to
restate its financial results filed on Form 10-K for the years
2001 through 2003 to accrue for certain foreign tax
contingencies. On this news, shares of Wireless plummeted to
$5.02 per share, representing a decline of approximately 28%.

For more details, contact Robert M. Roseman by Phone:
888-844-5862 by E-mail: classaction@srk-law.com or visit their
Web site: http://www.srk-law.com


WORLD INFORMATION: Schatz & Nobel Files Securities Lawsuit in NY
----------------------------------------------------------------
The law firm of Schatz & Nobel, P.C. initiated a lawsuit seeking
class action status in the United States District Court for the
Southern District of New York on behalf of all persons who
purchased the securities of World Information Technology Inc.
(OTC: WRLT) ("World Information Technology") between January 3,
2003 and March 16, 2004 (the "Class Period").

The Complaint alleges that during the Class Period World
Information Technology reported artificially inflated sales,
accounts receivable and net income. The truth was partially
revealed when their outside auditor, Beckstead & Watts, LLP,
resigned in January, 2004. Then, on March 16, 2004, the
Securities and Exchange Commission temporarily suspended trading
of World Information Technology securities due to the inaccuracy
and incompleteness of its financial statements.

For more details, contact Wayne T. Boulton of Schatz & Nobel,
P.C. by Phone: (800) 797-5499 by E-mail: sn06106@aol.com or
visit their Web site: http://www.snlaw.net


ZIX CORPORATION: Schatz & Nobel Files Securities Suit in N.D. TX
----------------------------------------------------------------
The law firm of Schatz & Nobel, P.C. initiated a lawsuit seeking
class action status in the United States District Court for the
Northern District of Texas on behalf of all persons who
purchased the securities of Zix Corporation (Nasdaq: ZIXI)
("Zix") between October 30, 2003 and May 4, 2004 (the "Class
Period").

The Complaint alleges that Zix disseminated materially false and
misleading statements regarding its business and prospects. In
particular, the Complaint alleges that Zix concealed the fact
that it was experiencing sluggish doctor adoption to "e-
prescribing." The Complaint further alleges that claims that Zix
would achieve 1,000 deployed active doctors by the end of Q4
2003 was false and misleading because physicians would be
required to reconfigure their patient data, obtain wireless
coverage and implement a wireless network, severely undercutting
physician acceptance and deployment. Furthermore, the Complaint
alleges that Zix's claim that it had 4,000 deployments already
on order was false because, at the time of claim, the
physicians' sites had not been surveyed to evaluate
wireless/LANseeds. Finally, the Complaint alleges that new
offerings from Zix's Elron acquisition were delayed as a result
of integration problems.

On May 4, 2004, Zix announced its results for Q1 2004 which
included a larger than expected loss. On this news, Zix shares
fell from an opening of $14.25 per share on May 4, 2004 to close
at $8.89 per share on May 6, 2004.

For more details, contact Nancy Kulesa or Wayne T. Boulton by
Phone: (800) 797-5499 by E-mail: sn06106@aol.com or visit their
Web site: http://www.snlaw.net


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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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Copyright 2004.  All rights reserved.  ISSN 1525-2272.

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