CAR_Public/050127.mbx              C L A S S   A C T I O N   R E P O R T E R

             Thursday, January 27, 2005, Vol. 7, No. 19

                          Headlines

AMERICA ONLINE: Ex-Execs Plead Not Guilty To VA Stock Fraud Suit
ARIZONA: State Deadline For English Lesson Funding Set Again
CALIFORNIA: Low-Income Residents Sue Over Denied Medical Care
CATHOLIC CHURCH: NY Diocese Acts V. 17 Priests on Abuse Charges
CITY MORTGAGE: TX Court Hands Down $3.5M Consumer Fraud Judgment

DOLLAR TREE: CA Court Approves $7 Mil Overtime Suit Settlement
FRANCE: Commerce Head Advises V. Adoption of Class Action System
HUFFY CORPORATION: Law Firms Lodge Securities Fraud Suits in OH
ILLINOIS: Insurer Group Asks High Court To Adopt Suit Standards
ILLINOIS: Court Approves Settlement For $200 Mil Lottery Scam

INDIANA: ICLU Lodges Suit Over 5-Month Pendleton Prison Lockdown
MARSH & MCLENNAN: Bonsignore & Brewer Lodges Lawsuit V. Insurers
MCDONALD'S CORPORATION: Court Partly Reinstates Obesity Lawsuit
MERRILL LYNCH: Woman Lodges CA Suit Over Variable Annuity Sales
MIDLAND NATIONAL: Faces CA Suit Over Annuity Payment Schedules

NATIONAL RESEARCH: MI Joins Settlement of Student Privacy Suit
NEW YORK: Goldman Sachs, Morgan Stanley Pay $80M To Settle Suits
NICOR INC.: Directors Okays Settlement Of IL Derivative Action
ROWAN REGIONAL: Patient Launches Lawsuit Over Overcharging in NC
SOUTH KOREA: Government, Uri Party To Pass Class Action Bill

STANLEY MEDICAL: Widow Launches Lawsuit Over Brain Harvest in ME
UNITED STATES: Insurers Seen As Beneficiaries of Tort Reform
UNITED STATES: Senate Bill To Curb Various Wireless Lawsuits
UNITED STATES: Tort Reform Bill Gains Momentum in Senate Floor
VIOXX: Merck Withdraws Researcher From Study Critical of Vioxx

                    New Securities Fraud Cases

51JOB INC.: Marc Henzel Lodges Securities Fraud Suit in S.D. NY
AMERICAN BUSINESS: Squitieri & Fearon Lodges PA Securities Suit
AUTOBYTEL INC.: Marc Henzel Commences Securities Suit in C.D. CA
CONEXANT SYSTEMS: Chitwood Harley Lodges Securities Suit in NJ
CONEXANT SYSTEMS: Wolf Haldenstein Lodges Securities Suit in NJ

HUFFY CORPORATION: Marc Henzel Lodges Securities Suit in S.D. OH
HUFFY CORPORATION: Schatz & Nobel Lodges Securities Suit in OH
OFFICEMAX INC.: Marc Henzel Lodges Securities Suit in N.D. IL
OSI PHARMACEUTICALS: Schoengold Sporn Lodges NY Securities Suit
PHARMOS CORPORATION: Marc Henzel Lodges Securities Lawsuit in NJ

PHARMOS CORPORATION: Schatz & Nobel Lodges Securities Suit in NJ
SHURGARD STORAGE: Marc Henzel Lodges Securities Suit in W.D. WA
SIPEX CORPORATION: Marc Henzel Lodges Securities Suit in N.D. CA
TRAVELZOO: Marc Henzel Lodges Securities Fraud Suit in S.D. NY


                            *********


AMERICA ONLINE: Ex-Execs Plead Not Guilty To VA Stock Fraud Suit
----------------------------------------------------------------
Two former executives at America Online and four PurchasePro
executives pleaded innocent to stock fraud and other charges
filed against them in the United States District Court in
Alexandria, Virginia, the Associated Press reports.

The suit names as defendants:

     (1) Kent Wakeford, 36, of New York, former executive
         director at AOL's business affairs unit,

     (2) John Tuli, 37, of Weston, Massachusetts, a former vice
         president in AOL's NetBusiness unit,

     (3) PurchasePro founder, Charles "Junior" Johnson, 43, of
         Las Vegas;

     (4) Christopher Benyo, 43, of Greer, S.C., a former
         PurchasePro senior vice president of marketing;

     (5) Joseph Michael Kennedy, 51, of Morristown, N.J., a
         former PurchasePro chief technology officer, and

      (6) Scott Wiegand, 36, a former PurchasePro general
          counsel.

Six other former PurchasePro executives have previously pleaded
guilty in the case.  The six men requested a jury trial, which
was set for August 15.  Normally a trial date would have been
set in March to ensure defendants' right to a speedy trial.
However, U.S. District Judge Walter Kelley approved a request
from prosecutors to push the trial date back to August, citing
the case's complexity.

Prosecutors said the case involves hundreds of complicated
financial transactions and that they will present 45 to 50
witnesses at trial, which is expected to last five to eight
weeks, AP reports.

The suit alleges that in March and April 2001, the defendants
conspired to falsely inflate quarterly revenue at PurchasePro so
the company could meet revenue goals set by Wall Street analysts
and create an appearance of success to investors and
shareholders.  The suit specifically alleges that PurchasePro
gave AOL a stake in its company in exchange for AOL's help in
selling PurchasePro's core product, a so-called "marketplace
license" that was supposed to facilitate business-to-business
transactions.

When AOL was unable to sell the licenses, it cut secret side
deals with companies to induce them to buy the licenses, and the
executives engaged in various forms of deception to make it
appear that the licenses had been sold in the first quarter of
2001, so PurchasePro could meet its quarterly revenue goals,
according to the indictment, AP reports.

The indictment cites e-mails sent between Wakeford and Johnson,
the two principal figures in the alleged conspiracy, as evidence
of the fraud.  In one e-mail, Johnson expresses to Wakeford his
displeasure that AOL is not living up to its end of the bargain
and that AOL will leave him stuck "spinning a story for the
street" about why PurchasePro's revenue came up short.

"I expect AOL to step up to the plate and deliver for me like I
have every time I have been asked," Johnson wrote. "I pray this
can be resolved because I enjoy the relationship and that is why
I sold my soul."


ARIZONA: State Deadline For English Lesson Funding Set Again
------------------------------------------------------------
A federal judge in Tucson, Arizona has ordered the Legislature
to act by the end of its 2005 session to increase funding to
teach students English, the Associated Press reports.

US District Judge Raner Collins said the Legislature has until
April 30th or the end of the current regular session, whichever
comes later, to comply with another judge's 2000 order for
funding English-language learning programs. Legislative leaders
have set an informal April 15th target for ending the session,
however recent regular sessions have lasted into May and June.
Judge Collins' order came one day after a hearing during which
an attorney for parents in a class-action lawsuit asked him to
set the deadline.

A lawyer for state officials had asked Judge Collins to not set
a deadline, since according to legislative leaders in a letter
presented to him, they originally intended to have committees
review a cost study being prepared for the state.


CALIFORNIA: Low-Income Residents Sue Over Denied Medical Care
-------------------------------------------------------------
A class action lawsuit has been initiated against the San Diego
County Board of Supervisors and other agencies alleging that the
County Medical Services denied medical services to low-income
residents, which according to the five plaintiffs is a violation
of California law, the Associated Press reports.

According to the class action suit, the county of San Diego
denies life-saving care to any resident whose monthly income
exceeds $802 without considering the applicant's ability to pay
a portion of the medical expenses.

It specifically names the San Diego County Board of Supervisors,
the San Diego County Health and Human Services Agency, the
agency that administers the CMS program, Jean M. Shepard,
director of the San Diego County HHSA and those responsible for
administration of the CMS program throughout San Diego County.


CATHOLIC CHURCH: NY Diocese Acts V. 17 Priests on Abuse Charges
---------------------------------------------------------------
The Diocese of Rockville Centre on Long Island, New York
defrocked eight priests and permanently suspended nine for
sexual abuse allegations, the Associated Press reports.

The diocese informed parishioners in a three-page letter that
enumerated the status of the clergy abuse cases against 23
priests.  Besides the 17 priests disciplined, Bishop William F.
Murphy reported that three others await canonical trials, two
more have been cleared and proceedings against another have been
deferred, AP reports.

Several victims' rights groups criticized the bishop, saying the
identities of the disciplined priests should be made public.
Diocese spokesman Sean Dolan told AP the names of those priests
convicted on criminal charges have been disclosed.  However,
releasing the names of the suspended priests could violate their
privacy because they have not been proven guilty.


CITY MORTGAGE: TX Court Hands Down $3.5M Consumer Fraud Judgment
----------------------------------------------------------------
Texas Attorney General Greg Abbott hailed a $3.5 million
judgment against a Texas-based business for bilking hundreds of
Hispanic homeowners out of tens of thousands of dollars before
its owners fled the United States.  State District Judge Adolph
Canales also issued a permanent injunction against City Mortgage
Services, Inc. (not affiliated with CitiBank, CitiMortgage or
Plano-based City Mortgage Group) and its principals, Gustavo
Duarte and Alfredo Mendez, preventing the company from
defrauding any more consumers with its "debt-reduction service."

"This judgment shows Texas is serious about cracking down on
brazen schemes that target the Hispanic community," said
Attorney General Abbott.  "Home ownership is one of our most
cherished dreams, and I will not tolerate City Mortgage or any
other fraudulent operation exploiting those aspirations for
dishonest gain."

The judge found City Mortgage violated the Texas Deceptive Trade
Practices Act and the Texas Home Solicitation Act, and ordered
the defendants to pay $3.3 million in civil penalties and
$210,000 in restitution for the consumers.

City Mortgage, which had offices in Austin, Dallas, Fort Worth
and Houston, dispatched teams of door-to-door salespeople
throughout Hispanic neighborhoods, touting the company's "debt-
reduction service."  City Mortgage promised consumers it would
save them thousands of dollars by withdrawing money from their
accounts and then forwarding to their mortgage company a larger
monthly amount than their regular mortgage payment, thus
reducing the number of years it took to pay off the loan. The
company, which charged families between $700 and $1,000 to sign
up for the service, failed to forward hundreds of payments and
instead pocketed the money. City Mortgage shut down abruptly in
2004, leaving consumers owing their mortgage companies
substantial amounts of money in missed payments and late fees.
The owners fled the country and are being sought.

The judge's order also found City Mortgage failed to inform
consumers its service was something the homeowners could do
themselves by dealing directly with their mortgage companies.
Consumers who believe they have been victimized by City Mortgage
or similar operations should contact the Office of the Attorney
General at 1-800-252-8011. Assistance is available in English
and Spanish.


DOLLAR TREE: CA Court Approves $7 Mil Overtime Suit Settlement
--------------------------------------------------------------
The Orange County California Superior Court granted preliminary
approval to the settlement of the overtime class action filed
against Dollar Tree Stores, Inc. (DLTR) by its California
employees, Dow Jones Newswires reports.

Former employee Michael Williams filed the lawsuit on behalf of
managerial store associates of Dollar Tree and 98 Cents
Clearance Centers employed in California from July 11, 1997
through December 11, 2004.  The suit alleges that the Company's
store managers and assistant managers in California should have
been classified as non-exempt, hourly employees under California
law.  The suit further alleges that these employees should have
received overtime compensation and should have taken rest and
meal period breaks.

The suit asks the court to certify the case as a class action on
behalf of all California store employees who were misclassified
as exempt, salaried employees, were denied rest and meal period
breaks, or were required to work off the clock and, among other
things, award overtime compensation to these employees and
compensatory and punitive damages, an earlier Class Action
Reporter story (September 14,2004) reports.

The Company is required to pay $7.6 million to settle the suit.
The Company said the settlement is still contingent on final
court approval and other conditions and that it doesn't expect
the settlement to have a material impact on its results of
operations or financial condition in either its fourth quarter
ending Jan. 29, 2005, or its current fiscal year or in future
periods, Dow Jones Newswires reports.

Dollar Tree said it decided to settle the suit after considering
defense costs, potential damages should the plaintiffs prevail,
and the continued diversion of management resources.  Also,
Dollar Tree Stores said if more than 10 class members opt out of
the settlement, it can elect to revoke the settlement agreement.


FRANCE: Commerce Head Advises V. Adoption of Class Action System
----------------------------------------------------------------
The president of the U.S. Chamber of Commerce warned France not
to introduce U.S.-style class action lawsuits, saying they would
damage the economy and shift money from "good companies to
lawyers," the Financial Times reports.

Thomas Donohue, whose organization represents numerous U.S.
companies and associations, advised his hosts not to adopt
legislation allowing groups of workers, shareholders, or
consumers to pursue collective suits against companies, saying
the system would be open to abuse.  He also accused US law
firms, who he did not name, of seeking to promote the culture of
class action lawsuits abroad just as the Bush administration was
making life tougher for them back home.

In a press conference in Paris, he states, "We are closing down
some of the unproductive and unfortunate practices that sprung
up in the US, but these law firms are looking at the more
productive companies in France and are going into the export
business. Do not be fooled," the Financial Times reports.

As previously reported in the January 10, 2005 edition of the
Class Action Reporter, France's president, Jacques Chirac,
shocked business leaders by announcing that he had instructed
his government to introduce class action lawsuits, a move that
was welcomed by French consumer groups, but fiercely criticized
by big companies.

According to the consumer groups, introduction of collective
lawsuits would help redress the balance of economic power,
currently weighted in favor of producers, since unlike the
United States, France has few powerful consumer champions or
shareholder rights groups and independent pension funds capable
of taking on powerful companies.  The government stressed though
that it would learn from the American's experience and prevent
any abuses of the system by unscrupulous lawyers.

However, Ernest-Antoine SeilliSre, president of Medef, the
French employers' federation which hosted Mr. Donohue, echoed
the US Chamber of Commerce head's warnings, saying class action
lawsuits could have "catastrophic consequences" and added "We
are very active in trying to limit these measures," FT.com
reports.


HUFFY CORPORATION: Law Firms Lodge Securities Fraud Suits in OH
---------------------------------------------------------------
After a second firm publicly made its intention to sue the
company for alleged securities fraud violation, Huffy
Corporation is now facing a pair of class-action lawsuits, the
American City Business Journals reports.

According to Lerach Coughlin Stoia Geller Rudman and Robbins
LLP, it had filed a lawsuit against Huffy in the U.S. District
Court for the Southern District of Ohio just sometime after
Schatz and Nobel P.C., of Connecticut, announced it had done the
same against the Miamisburg-based Huffy.

Both lawsuits seek to represent those who bought Huffy stock
between April 16, 2002, and August 13, 2004 and are also both
seeking class-action status. The firms contend that following
its purchase of McCalla Co. and Gen-X Sports Inc., federal
securities law was breached by "false or misleading statements"
from Huffy regarding the company's growth and long-term
prospects. August 13 of last year is being used as the cutoff
period for the lawsuits because that is the day Huffy announced
it was making accounting adjustments of between $3.5 million and
$5 million for customer deductions, credits and reserves for
inventory valuation and doubtful account receivables for Huffy
Sports Canada. That day, company stock declined from 58 cents
per share to 35 cents per share.

Three days later, Huffy said it was being delisted from the New
York Stock Exchange and, in October, the company filed for
Chapter 11 bankruptcy reorganization. Huffy's stock now trades
on the Pink Sheets, and it continues daily operations.


ILLINOIS: Insurer Group Asks High Court To Adopt Suit Standards
---------------------------------------------------------------
Property Casualty Insurance Association of America is requesting
the Illinois Supreme Court to enact a rule that would set
standards for class-action lawsuit certifications that are in
line with federal requirements and those in most other states,
the Insurance Journal reports.

In a written statement to the court, the Des Plaines, Illinois-
based national insurance trade association expressed it support
for the adoption of proposed Rule 225, which would tighten
class-action requirements by requiring a court to find that the
class action be "superior" to other methods of adjudicating the
controversy and would require there be some reason for the class
action to be filed in Illinois.

The Rules Committee of the Illinois Supreme Court heard comments
at a public hearing on the proposal, which is supported by
several business organizations including the Illinois State
Chamber of Commerce, the Illinois Business Roundtable, the
Illinois Manufacturers' Association, and other companies and
individuals.

Greg LaCost, senior counsel and regional manager for PCI, told
the Insurance Journal, "Rule 225 is a reasonable yet significant
proposal. It does not seek to change the law in any radical way,
but would codify the 'best practices' currently followed in many
Illinois courts already. The rule would put Illinois class-
action certification standards in line with Federal Rule 23 and
rules of 38 other states."

Mr. LaCost pointed out that Many Illinois courts do not certify
classes that substantially involved residents and laws of other
states, but rulings of non-conforming courts make the
codification necessary to ensure fair and consistent treatment
of class actions throughout the state. He also noted that "a
class-action suit can be a valuable and appropriate litigation
tool in many circumstances, but adopting this rule will prevent
the forum shopping that can result in the so-called 'judicial
hellholes' described by the American Tort Reform Association.
Rulings of nonconforming courts make this codification necessary
to ensure fair and consistent treatment of class actions
throughout the state."


ILLINOIS: Court Approves Settlement For $200 Mil Lottery Scam
-------------------------------------------------------------
Madison County Circuit Judge Philip J. Kardis granted final
approval to one of the country's most notorious class-action
suits, perhaps ending its four-year odyssey through the courts,
The St. Louis Post-Dispatch reports.

The judge approved a settlement against Canadian con man James
Blair Down, who was accused of bilking 400,000 people out of an
estimated $200 million in a lottery scam in the 1990s. It calls
for Mr. Down to pay $10 million. His victims would get full
reimbursement if they have a receipt, canceled check or other
proof of loss. Those without proof, but whose names are in a
database that Mr. Down maintained, will get $100 to $200.

Judge Kardis though delayed ruling on attorney's fees, one of
the lawsuit's most contentious points. Jody Pope of New York, a
lawyer representing a group of plaintiffs opposed to the
settlement, challenged a proposed settlement that would have
paid $1.5 million to plaintiffs counsel Stephen Tillery and
Robert Forbes. Mr. also contended that the settlement was easy
on Mr. Down by grossly underestimating his assets. Mr. Down, who
now lives in Canada, pleaded guilty in 1998 of conspiring to
mail gambling materials. He served a six-month prison term and
paid about $12 million in restitution.

Mr. Pope unsuccessfully moved to have Judge Kardis removed from
the case, claiming that connections among the judge, Mr. Forbes
and Mr. Forbes' wife, Linda Forbes, prejudiced the proceedings
citing that before Judge Kardis was appointed to the bench in
1989, he was a partner with Mr. Forbes in the personal injury
firm of Kardis & Forbes. Linda Forbes now serves as Judge
Kardis' court reporter.

The case began in 2000 when the South Carolina law firm of Ness,
Motley filed suit in Madison County in 2000 on behalf of an
Irish restitution company, Interclaim Holdings. The suit
appeared to be a routine lawsuit in a county that has become a
national leader in class-action filings, but the case quickly
began generating controversy. Shortly after filing the suit,
Ness, Motley negotiated a deal with Mr. Down, cutting out
Interclaim. Under that settlement, conditionally approved in
November 2001 in Madison County, Mr. Down was to pay the
plaintiffs' lawyers $2 million and his 400,000 victims would
split $6 million. But the victims would probably never claim
anywhere near that amount because of a complicated claim form.

Interclaim then sued Ness, Motley in federal court in Chicago
over its handling of the case. Last summer a jury ordered the
firm to pay $36 million, which has been upheld on appeal. This
November 2001 settlement, since thrown out, prompted Lester
Brickman, a law professor at Cardozo Law School in New York and
a prominent critic of Madison County Circuit Court, to label it
"the most abusive class-action settlement of the decade, if not
the century," the St. Louis Post-Dispatch reports.

Meanwhile in the most recent ruling, Judge Kardis issued a
stinging rebuke to Mr. Pope, and denied the New York lawyer's
request for official standing in the case as an objector to the
settlement. "Objectors and their counsel have disrupted this
proceeding," Judge Kardis wrote, "by litigating this matter in
the press, and by moving for an unnecessary continuance."

The decision came a day after the Illinois Supreme Court held a
hearing in Chicago over concerns by business interests that the
class-action process was being misused, particularly in Madison
County, to benefit trial lawyers.


INDIANA: ICLU Lodges Suit Over 5-Month Pendleton Prison Lockdown
----------------------------------------------------------------
The Indiana Civil Liberties Union (ICLU) is filing a class
action against the state on behalf of more than 400 inmates who
were under lockdown at the state prison in Pendleton, Indiana
for nearly five months, the Associated Press reports.

The suit, filed in the United States District Court in
Indianapolis, Indiana, alleged that the lockdown left some
inmates in conditions unfit for dogs.  The ICLU say it amounted
to cruel and unusual punishment.  The ICLU says some inmates
were forced to share a cell 12 feet by eight feet, except for
three showers per week.

A Department of Correction spokeswoman says the agency does not
comment on pending litigation, AP reports.  Over 1,400 inmates
are housed in the prison about 25 miles northwest of
Indianapolis.


MARSH & MCLENNAN: Bonsignore & Brewer Lodges Lawsuit V. Insurers
----------------------------------------------------------------
In the latest legal action involving allegations of bid rigging
and contingent commissions within the insurance industry, the
Massachusetts-based law firm of Bonsignore & Brewer filed a
civil suit in the U.S. District Court in Boston against Marsh &
McLennan Cos. Inc., ACE Ltd., American International Group Inc.,
The Hartford Financial Services Group Inc. and MetLife Inc., the
BI Daily News reports.

The suit alleges that MMC, through its Marsh Inc. unit, engaged
in a systematic bid-rigging scheme and conspiracy to steer
business to ACE, AIG, The Hartford and MetLife, through
collusive agreements that provided Marsh with contingent
commissions.

Filed on behalf of an individual Marsh client and seeks class
action status, the suit is the latest legal action against the
world's largest brokerage. It follows New York Attorney General
Eliot Spitzer's fraud and bid-rigging lawsuit filed last October
against MMC, in which AIG, ACE and The Hartford are cited in the
bid-rigging allegations but are not named as defendants. It is
seeking compensatory damages and the disgorgement of "all
unlawfully obtained monies and profits."

The factual allegations made in the latest suit are similar to
the allegations made by Mr. Spitzer, however Robert J.
Bonsignore of Bonsignore & Brewer law firm, stressed that his
suit has a different focus, according to him, "We're tying to
give the corporate death penalty to the few executives who skim
off the top."


MCDONALD'S CORPORATION: Court Partly Reinstates Obesity Lawsuit
---------------------------------------------------------------
The United States 2nd Circuit Court of Appeals reinstated
several claims in the controversial class action filed against
McDonald's Corporation for making people fat, the Associated
Press reports.  The appellate court reinstated claims pertaining
to deceptive advertising, saying that a lower court judge erred
when he dismissed the suit.

The suit, filed on behalf of overweight children who ate at two
McDonald's branches in the Bronx borough of New York City, seeks
unspecified damages from the firm over health problems that
included diabetes, coronary heart disease, high blood pressure
and elevated cholesterol.  One of the plaintiffs is a 15-year-
old who allegedly weighs 400 pounds and had diabetes after
eating McDonald's food every day since he was six, an earlier
Class Action Reporter story (January 24,2003) states.

In January 2003, U.S. District Judge Robert Sweet dismissed the
case, saying that the plaintiffs failed to show that customers
of the world's largest fast-food chain were unaware that eating
too much McDonald's fare could be unhealthy.

"This opinion is guided by the principle that legal consequences
should not attach to the consumption of hamburgers and other
fast-food fare unless consumers are unaware of the dangers of
eating such food," Judge Sweet said, the Class Action Reporter
stated.  "If consumers know . the potential ill health effect of
eating at McDonald's, they cannot blame McDonald's if they,
nonetheless, choose to satiate their appetite with a surfeit of
supersized McDonald's products."

However, the appeals court said New York's general business law
requires a plaintiff to show only that deceptive advertising was
misleading and that the plaintiff was injured as a result.  The
panel upheld other parts of the dismissal.

The opinion, written by U.S. District Judge Jed Rakoff, Amalia
Kearse and Guido Calabresi, concluded that Judge Sweet erred in
his ruling when he concluded the plaintiffs had failed to show
an adequate link between their consumption of McDonald's food
and their alleged injuries.  "This, however, is the sort of
information that is appropriately the subject of discovery,"
which Sweet did not allow, the appeals panel wrote. The case was
sent back to Sweet for further proceedings.

In a statement, Oak Brook, Illinois-based McDonald's Corporation
said "common sense tells you this particular case makes no
sense," adding the ruling "simply delays the inevitable
conclusion that this case is without merit," AP reports.  A
message left for the lawyer representing two children named in
the lawsuit was not immediately returned.

The suit, styled "Pelman, et al v. McDonald's Corp., et al, case
no. 1:02-cv-07821-RWS," was initially filed in the United States
District Court for the Southern District of New York, under
Judge Robert W. Sweet.  It was appealed at the United States 2nd
Circuit Court of Appeals, under Judge Jed Rakoff.

Lawyer for the plaintiffs is Samuel Hirsch, 350 Fifth Avenue
Suite 2418, New York, NY 10118, Phone: (212) 947-3800.  Lawyers
for the defendants are Bruce Roger Braun, Bradley E. Lerman,
Thomas J. Quigley of Winston & Strawn LLP (IL), 35 West Wacker
Drive, Chicago, IL 60601, Phone: (312) 558-5600, Fax:
(312)-558-5700, E-mail: bbraun@winston.com, blerman@winston.com
or tquigley@winston.com; and Anne Kimball, 225 West Wacker Drive
#2800, Chicago, IL 60606, Phone: (312) 201-2000


MERRILL LYNCH: Woman Lodges CA Suit Over Variable Annuity Sales
---------------------------------------------------------------
Jane Westbrook of Santee initiated a second class-action
complaint for violations of federal securities laws in U.S.
District Court in San Diego, this time naming securities dealer
Merrill Lynch & Co. Inc., the North County Times reports.

Filed a day after William Dornon of Vista lodged a nearly
identical complaint against financial services giant Morgan
Stanley Inc., the suit alleges that the plaintiffs were induced
by the companies through investment counselors to purchase
securities known as variable annuities without being told that
the firms would receive undisclosed sales commissions from the
insurance companies issuing the annuities.

Both Mr. Westbrook and Mr. Dornon are represented by San Diego
attorney Ronald Marron, who said the practice of selling
variable annuities to elderly investors is so common that he is
seeking to have the suits recognized by the court as class
actions. He has estimated that the number of people who may
qualify as members of the class could be "from the thousands to
the tens of thousands."

As previously reported in the January 25, 2005 edition of the
Class Action Reporter, Mr. Dornon's suit alleges that Morgan
Stanley sold an insurance product called variable annuities to
plaintiff as an investment without telling him that the
insurance company was paying Morgan Stanley a fee for
recommending and selling its product.

A variable annuity is an insurance contract that is recognized
under the federal Securities Act of 1933 as being an investment
contract. The premium, usually paid as a lump sum at the
beginning of the contract, is available for tax-deferred
investment, usually in mutual funds, which are themselves made
up of common stocks. The investments produce capital gains and
earned interest, and usually the annuity includes a death
benefit. Because of its makeup, the variable annuity can
represent risk to the buyer, whose exposure is the up-front
premium payment. He may or may not reap a financial reward in
the end, and he may face considerable expense in the form of
early termination charges if he does not hold the annuity to
maturity.

Ron Marron, attorney for the 77-year-old Mr. Dornon, told the
North County Times contracts of that sort usually are not seen
as wise investments for the elderly, whose immediate concern is
preservation of assets and income production that can be
accessed regularly. Mr. Marron told the North County Times,
"I've never seen a variable annuity case that didn't involve a
sale to an elderly person," and adds, "frankly, this is a simple
case of elder abuse."

The complaint further alleges that Morgan Stanley unjustly
enriched itself by steering clients into the variable annuities,
and that the company committed investment fraud. It also asks
the court to certify the suit as a class action and asks for
compensatory and punitive damages and for disgorgement of all
the company's gains from the sale of variable annuities with
undisclosed commission arrangements.

California Department of Insurance spokesman Normal Williams
declined to comment on Mr. Dornon's case directly. "We're not
participating or taking any action on this complaint, so it's
not something we're working on," Mr. Williams told the North
County Times. "As far as the variable annuities issue is
concerned, in a broad sense (Insurance Commissioner John
Garamendi) is investigating a broad range that includes all
broker activities."


MIDLAND NATIONAL: Faces CA Suit Over Annuity Payment Schedules
--------------------------------------------------------------
Midland National Life Insurance Company of West Des Moines, Iowa
faces a lawsuit, charging it with selling annuities with payment
schedules calling for payments to start long after the end of
the purchasers' projected lifespans, the National Underwriter
reports.

Lawyer William Shernoff of Shernoff Bidart & Darras L.L.P. filed
the suit, saying that life insurers should make some effort to
compare annuity deferral periods with customers' life
expectancies.  Mr. Shernoff has joined with other lawyers to
file a suit concerning the deferral period issue in a state
court in Los Angeles, California.  The lawyers are filing
purportedly on behalf of a large class of older annuity
purchasers who have bought contracts with long deferral periods.

In the suit, Mr. Shernoff identifies one annuitant, John
Migliaccio, who was 73 when he paid $43,000 for a Midland
National annuity.  Mr. Migliaccio, who has died, was scheduled
to start receiving annuity payments when he was 115, Shernoff
told the National Underwriter.  "The aim of this class action is
to stop the sale of such policies to senior citizens and to
refund premiums to those who already have been sold such
policies," Shernoff says in a statement about the Los Angeles
suit.

Other lawyers working on the suit include Howard Finkelstein and
Stephen Basser.

A Midland National spokesman declined to comment on the suit,
The National Underwriter stated.  "We've just received the
complaint, and we haven't had a chance to review it," the
spokesman said.


NATIONAL RESEARCH: MI Joins Settlement of Student Privacy Suit
--------------------------------------------------------------
Michigan has joined a multi-state settlement with a leading data
collection company stemming from the Company's undisclosed
sharing of high school students' personal information with
marketers eager to reach the teen consumers, Attorney General
Mike Cox announced in a statement.

Under the terms of the settlement, the National Research Center
for College and University Admissions (NRCCUA) will voluntarily
pay $300,000 to the 42 participating states and change its
practices to safeguard the privacy and security of student data.
A Missouri not-for-profit corporation, NRCCUA regularly collects
student data through surveys disseminated by high school
teachers, guidance counselors, and the Internet.  Instead of
providing the data only to colleges, universities, and other
education-related entities that were disclosed to students,
NRCCUA also shared the data with businesses for non-educational
purposes.

"Protecting our children's personal information is essential,
particularly when considering the dangers of identity theft," AG
Cox said.  "Parents and schools must be vigilant in teaching
children not to give out their information to anyone who asks,
whether in person, over the telephone, by mail, or on the
Internet."

The settlement requires that NRCCUA must:

     (1) Not misrepresent how personally identifiable student
         information will be collected, used or disclosed, or
         how the collection of the information is funded;

     (2) Disclose clearly and conspicuously why it collects
         personal information of students and describe the types
         of entities that may receive students' information;

     (3) Include disclosures in all privacy statements,
         questionnaires, survey instruments, and other
         documents;

     (4) Cease all future use of survey data if a parent (in the
         case of a minor) or an adult high school student
         requests that the student not complete the survey or
         directs NRCCUA to stop using information already
         collected;

     (5) Provide schools with a notice for parents that explains
         the survey and how parents may opt their children out
         of completing the survey, in the event NRCCUA changes
         its current practice and allows others to use its
         survey data for non-educational, marketing purposes.

Parents and students wishing to restrict the use of students'
information may contact their schools or the NRCCUA at
http://www.nrccua.org. Tips on preventing identity theft are
available on the Attorney General's Web site,
http://www.michigan.gov/ag,or by calling the Consumer
Protection Division's toll- free number, 1-877-765-8388.


NEW YORK: Goldman Sachs, Morgan Stanley Pay $80M To Settle Suits
----------------------------------------------------------------
In a settlement with the Securities and Exchange Commission,
Goldman Sachs and Morgan Stanley agreed to pay $40 million each
to settle allegations that they sought commitments from
customers to buy shares after an initial public offering in a
move to support the price after the stock began trading, the New
York Times reports.

The settlement, which brings to a conclusion another chapter of
regulatory scrutiny of the marketing and selling of hot new
offerings in the technology boom of 1999 and 2000, is one of
many alleged malpractices that Wall Street firms have settled
with regulators, including awarding coveted shares of initial
offerings to chief executives to secure lucrative investment
banking business and accepting kickbacks in the form of inflated
trading commissions from investors who received high-demand
shares in initial public offerings.

The SEC's complaints against Goldman Sachs and Morgan Stanley
accused them of violating a rule that prohibits the offering
underwriters from trying to induce investors to buy shares after
trading begins. Since, the rule does not require proof of market
manipulation or intent to manipulate such cases are contentious
on Wall Street because underwriters also have an obligation to
gauge demand for the shares when trading starts in the open
market.

Stephen M. Cutler, director of enforcement at the commission,
told the Times Goldman Sachs and Morgan Stanley settled the
complaints without admitting or denying wrongdoing, he also
describe their decision to settle by saying, "These cases
underscore the commission's resolve to ensure the integrity of
I.P.O. markets by prohibiting conduct that could artificially
stimulate demand or higher prices in the aftermarket - whether
or not there is manipulative effect."

In the complaints that were filed by the SEC, both firms
communicated to prospective customers that they might get better
allocations of a hot offering if they agreed to buy shares in
the trading immediately afterward, when shares would typically
rise sharply. The SEC complaints also outlined various examples
of the firms' encouraging certain customers to increase the
price at which they would agree to buy in this aftermarket.

Commenting on the settlement, Melissa Stoneberg, a Morgan
Stanley spokeswoman, told the Times "Since news of the
settlement was first reported in June of last year, we have been
working with the S.E.C. staff to finalize its terms and we are
happy this is now resolved." For their part, Lucas van Praag, a
Goldman Sachs spokesman, said the "firm does not comment on
regulatory matters."

The issue is a gray one for many on Wall Street, since part of
an investment bank's responsibility in managing an initial
public offering is to canvass its customers and determine
whether they are interested in buying shares, how many a
customer might want at a certain price and what that customer's
intentions are with the stock. Corporate chief executives want
customers interested in holding their stock, rather than buying
and selling large quantities, which may cause the stock's price
to fluctuate.

Mark K. Schonfeld, the director of the SEC's Northeast regional
office told the Times "The rule is written to prohibit attempts
to induce and not just actual inducement," he also reiterates,
"It's a protective rule."


NICOR INC.: Directors Okays Settlement Of IL Derivative Action
--------------------------------------------------------------
Nicor Inc.'s (NYSE:GAS) board of directors has approved a
preliminary agreement to settle the shareholder derivative
action brought in the Circuit Court of Cook County in August
2002 against certain Nicor directors and officers. The final
settlement is contingent upon execution of a formal stipulation
of settlement and approval by the court and entry of final
judgment by the court. The defendants' agreement to the terms of
the derivative settlement does not constitute an admission of
liability.

As part of the settlement, the Company has agreed to adopt
certain new corporate governance policies and has acknowledged
that the filing of the derivative action was a meaningful factor
in the corporate governance and personnel changes made during
the prosecution of the derivative action and in the directors
and officers carriers' decision to make the payments described
below. The new policies include strengthened independence
requirements for directors, lead audit partner rotation
requirements, additional regulatory and accounting training,
outside board membership limitations, required interim reporting
to the board and the general counsel regarding the company's
compliance obligations to the Illinois Commerce Commission (ICC)
and the adequacy of the company's ICC disclosures; and a minimum
number of executive sessions of the independent directors
outside the presence of management.

The defendants have agreed to a payment of $3.5 million to the
derivative plaintiffs' counsel in fees and expenses to be paid
out of insurance proceeds.

In April 2004, the Company announced that one of its directors
and officers insurance carriers agreed to pay $29 million to a
third party escrow agent on behalf of the company and its
insured directors and officers to be used to satisfy liabilities
and expenses associated with claims asserted against them in a
securities class action, a shareholder derivative action, or
related matters. Upon final court approval of the settlement of
the shareholder derivative action, the escrow will be terminated
and the company will receive approximately $25.5 million, which
is the original escrow amount of $29 million reduced by the $3.5
million payment of derivative plaintiffs' counsel fees
referenced above.

In connection with the settlement, the Company has also entered
into a Settlement Term Sheet with its excess insurance carrier,
pursuant to which the excess insurance carrier agreed to pay the
company $4 million upon final court approval of the settlement
of the shareholder derivative action.

Amounts related to the preliminary agreement to settle the
shareholder derivative action, the amounts held in escrow, and
the settlement with the excess insurance carrier, have not been
reflected in the Company's previously reported earnings or its
earnings guidance provided on November 4, 2004 as part of its
earnings press release for the period ended September 30, 2004.
The Company is in the process of determining the appropriate
periods in which to include the foregoing amounts.


ROWAN REGIONAL: Patient Launches Lawsuit Over Overcharging in NC
----------------------------------------------------------------
Rowan Regional Medical Center, in response to a former patient's
allegation that the hospital overcharged her for treatment in
its Emergency Department, said it would defend itself and its
collection policy in court.

Rowan Regional sued the patient in November 2004 -- more than a
year after the patient's car accident, during which no payment
was made on her bill.  The counter suit against Rowan Regional
was filed in Rowan County Court in North Carolina by a Salisbury
woman who claims she was overcharged and not given an estimate
of charges prior to being treated in the Emergency Department.
Notice of the counter suit was served on Rowan Regional last
Friday.

The patient was brought to Rowan Regional following an
automobile accident in June 2003. She was treated in the
Emergency Department before being kept overnight for observation
and released the next day.

"The patient has made no effort to pay anything on her bill,
despite repeated phone calls and letters from us," said Paula
Tucker, Director of the Business Office at Rowan Regional
Medical Center. "In fact, she never returned a phone call or
responded to a letter from us in the 17 months between her
treatment and when a lawsuit was finally filed against her."

"Rowan Regional provided more than $8,542,000 in charity care to
uninsured and self-pay patients in the last fiscal year (which
ended September 30, 2004)," said Marlin Markham, Chief Financial
Officer at Rowan Regional. "We would have been happy to help her
work out a payment schedule if she had only responded to our
requests for information."

The patient's counter suit against Rowan Regional asks the court
for class action status, and is similar to suits filed against
other hospitals across the state and the nation in recent weeks.

One of her claims is that Rowan Regional and other hospitals use
two tiers of pricing, which keeps uninsured patients from
reaping the benefits of volume discounts such as those
negotiated by insurance companies for the people they insure.

Rowan Regional's policy uses federal poverty guidelines to
establish levels of payment, and the total amount to be paid by
uninsured and self- paying patients for hospital services.
Patients who don't have health insurance, or who aren't covered
by Medicare, Medicaid or other government programs can request
financial counseling to make payment arrangements.

"For years, we've made financial counselors available to
patients who needed consideration with bills, whether they had
insurance or not," said Charles W. Elliott, Jr., Chief Executive
Officer at Rowan Regional Medical Center.

"Even with the new policy, we know some patients will be unable
to pay a significant amount, and in some cases anything, on
their hospital bills. We work with patients on a daily basis to
make a careful review of their financial situation. We recognize
the fact that some people are out of work or for other reasons
are unable to pay medical expenses.

"We and other hospitals always treat patients in the Emergency
Department regardless of their ability to pay," Elliott said.
"And we constantly urge our patients to let us know if their
financial situation changes. But patients need to communicate
with our Business Office if they have difficulties paying so
that we can help them."

Rowan Regional Medical Center is a private, not-for-profit,
acute care hospital. It offers women's health services,
cardiology, oncology, and inpatient rehabilitation services,
extensive outpatient services, a 24-hour Emergency Department,
hospice and home health services, and psychiatric services.


SOUTH KOREA: Government, Uri Party To Pass Class Action Bill
------------------------------------------------------------
The South Korean government and the ruling Uri Party plan to
pass the revised bill concerning the securities class action
system next month, to help local companies prepare for the
retroactive lawsuit regarding their past corporate wrongdoings,
The Korea Times reports.

Under the class action lawsuit system, small shareholders can
file a lawsuit against listed companies involved in questionable
market activities such as unfair disclosure, stock price
manipulation, insider trading and accounting irregularities.  A
group of at least 50 shareholders holding a combined 0.01
percent of the company's outstanding shares are eligible to file
lawsuits but the court's ruling is applied to all shareholders
alike.

The class action system was started in the United States in the
1960s to protect the rights of the individual.  In 1990, Korea
created a draft of the law, but the law was later shelved for 14
years, due to protests by businesses.  Back in June 2003, the
government agreed upon the introduction of the law in return for
$2 billion in loans from the International Bank for
Reconstruction and Development (IBRD).

About 82 listed companies with at least 2 trillion won ($1.9
billion) in assets, 5.2 percent of the total listed firms on the
Korea Stock Exchange and the Kosdaq Stock Market, are subject to
the law from January 1, 2005 but the law will be applied to
those with less than 2 trillion won from 2007, the Korea Times
reports.

Last December, the Legislation and Judiciary Committee of the
National Assembly previously turned down the two-year
postponement of the system with a vote of 5-3, with the result
meaning companies with dubious records going back two to three
years up until January 19 will be punished for their
irregularities as well as any auditors who are involved.

Prime Minister Lee Hae-chan on Monday chaired a policy
consultation meeting attended by officials from the economy-
related ministries and the governing party to discuss a number
of economy-related bills, including the class action lawsuit, in
an effort to successfully pass them at the National Assembly's
special session next month.

Both ruling and opposition party had initially decided to waive
the retroactive securities class action lawsuit for one year
regarding the past wrongdoings of listed companies such as
accounting irregularities committed before Jan 19, 2004 when the
lawsuit became law.  The government and the Uri Party are now
poised to extend the grace period for two more years until 2007,
The Korea Times reports.

Local businessmen have asserted that false accountings and other
corporate wrongdoings made before January 19, 2004 should be
exempt from the class action lawsuit, adding that the lawsuit
should not be retroactive since most corporate balance sheets of
local listed companies will show past records of false
statements, according to the Korea Times.  Large conglomerates
such as Samsung Group expressed concerns that without the
postponement of the lawsuit system, they would suffer countless
class action suits and huge legal expenses, they added.

However, officials at the Financial Supervisory Commission told
the Korea Times that companies should not try to avoid
responsibilities for their wrongdoings even if it happened
before the class action lawsuit went into effect.


STANLEY MEDICAL: Widow Launches Lawsuit Over Brain Harvest in ME
----------------------------------------------------------------
Alice Geary, 57, the widow of Raymond Geary, who died in a car
crash on April 27, 2000, at the age of 54 and who had served on
the City Council in the 1980s filed suit against a Bucksport man
and others for "harvesting" her dead husband's brain for use in
research without her consent, the Bangor Daily News reports.

In her suit, Mrs. Geary claimed that Matthew Cyr of Bucksport
improperly persuaded the State Medical Examiner's Office to
release Mr. Geary's brain to a Bethesda, Maryland-based research
firm. Mr. Cyr, a Bucksport police officer, was the state's
funeral inspector during the late 1990s and early 2000s, he
resigned had resigned from the state post in August, but remains
a Bucksport officer.

In an investigation last year, the Maine Sunday Telegram found
that 31 of 99 brains sent from Maine to Stanley Medical Research
Institute lacked the proper consent forms from family members.
The suit claims that the institute, paid Mr. Cyr and others
around the country $1.9 million in 2002 for brain collection.
Mr. Cyr was paid $1,000 to $2,000 for each brain he sent to
SMRI, according to the newspaper, for a total of about $150,000.
SMRI supported research on schizophrenia and manic depression,
and as of early 2001 "had reportedly shipped out 100,000
sections of brain tissue to researchers on several continents."

The suit further claimed that "as of the summer of 2003, the
laboratory was the repository of one of the largest brain
collections in the world - numbering over 400 'specimens."' Mrs.
Geary's suit seeks the return of her late husband's brain and
other body parts, and asks the court to award actual and
punitive damages. It named SMRI, its director, Dr. E. Fuller
Torrey, and Lorie Stevens of Bucksport, Cyr's domestic partner
as defendants as well.

According to Mrs. Geary's complaint, Mr. Cyr called her on the
evening of her husband's death, asking her to agree to donate
her husband's organs. She had refused, hanging up on Mr. Cyr.
The next day, Mrs. Geary claimed, she received another call from
him. The suit further claims, "The call upset [her] and she told
the caller no, that she was not interested and that she would
not agree to donate her husband's organs. The caller mentioned
something about the Stanley Institute and asked if she would
agree to donate a small sample of tissue." Mrs. Geary insists
she was clear with Mr. Cyr that she would not give her consent,
the Bangor Daily News reports.

Furthermore, Mrs. Geary believes that Mr. Cyr and his partner
Mr. Stevens "filed and signed a document falsely stating that
she consented to the donation of the brain and other organs,"
the suit claims. It also alleges that Mr. Cyr contacted the
medical examiner's office before the autopsy "and told them he
had obtained [her] consent for [Mr. Geary's] organs and tissue
to be donated to SMRI."

By reading the autopsy report, Mrs. Geary learned on December 8,
more than four years after the funeral, that her late husband's
"brain, dura, pineal, spleen, pituitary, blood and portions of
other organs" were sent to SMRI.

The suit points out that Maine law, adopted in 1969, requires
that an organ donation by a spouse "be made by a signed
document, or by telegraphic message, recorded telephonic message
or telephonic message witnessed in writing by at least two
people."

Two Portland lawyers are exploring the possibility of launching
a class-action lawsuit on behalf of other Maine families who
believe organs from dead relatives were sent to SMRI without
their consent, The Associated Press reported earlier this month.


UNITED STATES: Insurers Seen As Beneficiaries of Tort Reform
------------------------------------------------------------
The insurance industry would be one of the top beneficiaries, if
legislation limiting class-action lawsuits were passed this
year, the CBS MarketWatch reports.

The bill, which was introduced in the Senate recently, would
transfer more class-action suits to federal courts from state
courts.  It's designed to prevent venue shopping, a tactic in
which class action complaints are filed in local jurisdictions
that have a history of making companies pay huge damages to
plaintiffs.  Class-action lawsuits are filed on behalf of groups
of plaintiffs with similar grievances. They're designed to cut
the cost of litigation because individuals group together to
file one complaint rather than numerous suits.

However, according to the Property Casualty Insurers Association
of America, a trade group, the number of class-action suits has
surged by more than 1,000 percent in the past decade, boosting
litigation costs for U.S. consumers and businesses to more than
$200 billion a year. The trade group further stated that while
businesses carry the direct burden, many of these litigation
costs are covered by insurance and as costs spiral, the rates
insurers charge on policies can end up being inadequate. It
pointed out that this type of uncertainty also makes it
difficult to set prices on new policies.

Joseph Annotti, a spokesman for the trade group, also told CBS
Marketwatch, "This bill will hopefully lend more predictability
to future litigation costs and insurers crave that
predictability. Predictable costs help insurers more accurately
set rates and leads to more stable insurance prices."

However, Robert Bonsignore, a partner at Medford, Massachusetts-
based law firm Bonsignore & Brewer, contended that shifting more
class-action suits to federal courts would discourage victims
from filing claims because the system is more complicated and
time-consuming. He adds, "This legislation is corrupt and is
being pushed forward by big businesses that want immunity from
illegal acts. It will be the beginning of the end for insurers'
liabilities."

A similar class-action bill failed by one vote in the Senate
last year, however, the insurance industry is now more hopeful
after Republicans gained seats in the November elections.

Dennis Kelly, a spokesman for the American Insurance Association
told CBS Marketwatch, "The fact that the Senate Republican
leadership has made this class-action reform one of its top
priorities is very encouraging, however, we do not see this
gaining passage easily and we're ready to fight off any
amendments that would weaken the bill."

Furthermore, success with this bill may also smooth the passage
of other insurance-friendly legislation, such as the formation
of a multi-billion dollar asbestos fund and the capping of
damages related to medical malpractice, Mr. Annotti told CBS
MarketWatch.


UNITED STATES: Senate Bill To Curb Various Wireless Lawsuits
------------------------------------------------------------
Sen. Charles Grassley (R-Iowa), chairman of the Senate Finance
Committee, has introduced legislation that could curb consumer
and health class-action suits brought against the wireless
industry in recent years, the RCR Wireless News reports.

In remarks to the Senate, Sen. Grassley stated, "In the 109th
Congress we once again have the opportunity to stop class-action
lawyers from being able to snag millions of dollars while class-
action members receive a worthless coupon or even nothing. Many
class actions are just frivolous lawsuits filed by crafty
lawyers who want to make a quick buck and do little or nothing
for the consumers these cases are allegedly supposed to help. We
need to put an end to the frivolous litigation tax that everyone
ends up paying."

Though he chairs the Senate Finance Committee the Judiciary
Committee would handle his Class Action Fairness bill. Part of a
broader Republican tort reform campaign and supported by the
Bush administration, the class-action bill is the top priority
for the GOP congressional leadership in 2005.

The bill, which consumer groups and trial lawyers have
vehemently opposed, would create federal jurisdiction over class
actions in which the aggregate amount in controversy exceeds $5
million and any member of a plaintiff class is a citizen of a
different state from any defendant. Under those provisions
alone, many past and present wireless suits would be barred from
state courts.

While the bill would maneuver many suits to federal court, it
would not entirely prevent state class-action litigation, since
one provision in the bill keeps local controversies in state
court and allows removal of class actions that are truly inter-
state in character to federal court. Under this provision, cases
would stay in state court if the plaintiffs have sued at least
one in-state defendant whose conduct forms a significant basis
of their claims, if the principal injuries occurred in the state
where the suit is brought, and if no class action has been filed
alleging the same claims against any of the defendants in the
last three years.


UNITED STATES: Tort Reform Bill Gains Momentum in Senate Floor
--------------------------------------------------------------
A bill aimed at curbing class action lawsuits gained ground in
the U.S. Senate as the leader of the Republican majority set
debate for the week of February 7 and the top Democrat said he
thought the measure would pass, Reuters reports.

Senate Majority Leader Bill Frist told reporters, "My goal is to
get a class action (bill) on that week of February the 7th,"
Reuters reports.  A long-time dream of the U.S. corporate
community and favored by President George W. Bush, the bill
would move most large multi-state class action lawsuits into
federal court. Sponsored mostly by Republicans, the bill would
keep plaintiffs from shopping for friendly court forums.
However, critics argue that the proposal will make it harder for
some class action suits to be heard at all, especially multi-
state consumer cases, because some federal courts have refused
to take such cases.

Class action reform bills have passed the House of
Representatives three times in six years, but the Senate has
always blocked them, last year alone the bill stalled in a
procedural snarl even though more than 60 senators supported it.

The Senate's new minority leader, Democrat Harry Reid of Utah,
has indicated a willingness to let the bill come up for debate
and a vote if the House of Representatives, which has a larger
Republican majority, will accept the Senate version. Asked on
whether he thought the bill would pass the Senate this time
around, the democrat answered simply "yes," Reuters reports.

Senate Judiciary Committee Chairman Arlen Specter, a
Pennsylvania Republican, stated that he hoped his panel would
approve the legislation on February 3, Reuters reports.

In the House, aides said lawmakers would carefully consider
whatever the Senate does. A spokesman for House Judiciary
Committee Chairman Jim Sensenbrenner, a Wisconsin Republican
told Reuters, "I'd say, the Senate passing class action reform
would be a tremendous achievement. Class action supporters are
extremely encouraged by what we are hearing in the Senate, which
has been the obstacle in the past."

Class action lawsuits allow plaintiffs to combine their claims
into one lawsuit against a common defendant. In addition to
shifting larger class actions to federal court, the bill would
limit coupon settlements in which plaintiffs often receive
little in compensation while lawyers get big fees.

Though opposed by trial lawyers and a coalition of civil rights,
environmental and consumer groups, who are expected to try to
amend the bill, the Republican majority on Sen. Specter's
committee and the Senate floor could however make this
difficult.


VIOXX: Merck Withdraws Researcher From Study Critical of Vioxx
--------------------------------------------------------------
Pharmaceutical firm Merck & Co. forced on of its researchers to
remove her name from a study linking Vioxx to heart attacks,
then criticized the findings before ultimately pulling the
arthritis drug from the market last fall, two of the scientist's
colleagues said, according to AP.

The Archives of Internal Medicine contains several studies about
Vioxx and Celebrex, drugs belonging to a class called Cox-2
inhibitors.  The painkillers were once heavily promoted as
stomach-friendly alternatives to aspirin, but on September 30,
Merck withdrew Vioxx from the market because of a study
suggesting it doubled the risk of heart attack and stroke.
Last month, Celebrex maker Pfizer Inc. halted its ads after a
study linked high doses with increased heart and stroke risks.
The drugs are now under congressional and regulatory scrutiny/

The journal contains several studies about the drugs, which were
also heavily promoted painkillers advertised as stomach-friendly
alternatives to aspirin. They are under congressional and
regulatory scrutiny.

One new report echoes previous data suggesting that in some
older patients the drugs might not offer as much protection as
thought against gastrointestinal problems.  A separate study
suggests they have been over-prescribed, frequently to patients
at low risk for GI problems.  Other research supports evidence
that Vioxx increases some patients' blood pressure, AP reports.
The Archives reports, published Monday, come just weeks before a
February 16-18 Food and Drug Administration meeting on the
safety of all Cox-2 drugs.

The watchdog group Public Citizen petitioned the FDA to
immediately remove from the market Celebrex and a related drug,
Bextra, because of the potential heart risks.  Critics contend
Merck attempted for years to suppress Vioxx risks found in
numerous studies.  The company maintains it has acted
responsibly.

"Even after funding and agreeing with the design of the study,
Merck publicly discredited our findings," Drs. Daniel Solomon
and Jerry Avorn of Boston's Brigham and Women's Hospital wrote
in this week's Archives of Internal Medicine, according to AP.

Merck spokeswoman Anita Larsen confirmed the Company's action,
saying Merck believed the study's conclusions "were not
supported by the data," AP reports.  The incident came about six
months before another study prompted the drugmaker to withdraw
Vioxx.

The author-removal incident, mentioned in previous news reports,
involved a Merck study of more than 50,000 patients age 65 and
older taking Vioxx, Celebrex, traditional painkillers or none of
the drugs.  The results, published last year in the journal
Circulation, showed Vioxx patients faced a higher heart attack
risk than the other groups.  When the results came in, "Merck
required a co-author who was an employee of the company to
remove her name from the article immediately prior to
publication," Solomon and Avorn said in an Archives editorial,
AP reports.

Dr. Solomon identified the co-author as Merck epidemiologist
Carolyn Cannuscio.  She did not respond to e-mail and telephone
requests for comment, according to AP.

Ms. Larsen told AP publication policies at Circulation and Merck
allowed the drugmaker to remove the employee's name "if the
authors draw conclusions that are not supported by the data."
She said Cannuscio agreed with Merck's decision.


                    New Securities Fraud Cases

51JOB INC.: Marc Henzel Lodges Securities Fraud Suit in S.D. NY
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the United States
District Court for the Southern District of New York on behalf
of all persons who purchased the publicly traded securities of
51Job, Inc. (Nasdaq: JOBS) between November 4, 2004 and January
14, 2005.

The Complaint alleges that 51Job violated United States
securities laws by issuing false or misleading public
statements. Specifically, the Complaint alleges that 51Job
failed to disclose the fact that it improperly recognized
recruitment advertising revenue in 3Q04. Moreover, the Complaint
alleges 51Job failed to disclose the fact that the drop in late-
December advertising suggested that many Chinese firms have
adopted a more Western schedule for hiring and, as a result of
this market shift, 51Job was forced to sharply lower its profit
outlook.

On January 18, 2005, 51Job announced softness in sales for the
latter part of the month of December 2004, the exit of the
peripheral stationery and office supplies business and updated
guidance for the fourth quarter of 2004. It disclosed that
fourth quarter total revenues are now expected to be between
RMB117 and RMB121 million, compared with RMB140 million, the
low-end of its previous forecasted range. On this news, shares
of 51Job fell from a close of $43.82 per share on January 14,
2005, to close at $28.32 per share on January 18, 2005, the next
trading day.

For more details, contact Law Offices of Marc S. Henzel by Mail:
273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004, by Phone:
610.660.8000 or 888.643.6735 by Fax: 610.660.8080
E-Mail: mhenzel182@aol.com


AMERICAN BUSINESS: Squitieri & Fearon Lodges PA Securities Suit
---------------------------------------------------------------
The law firm of Squitieri & Fearon, LLP initiated a class action
lawsuit in the United States District Court for the Eastern
District of Pennsylvania on behalf of purchasers of the
subordinated notes of American Business Financial Services
(Nasdaq:ABFI) ("ABFI" or the "Company") during the period
January 27, 2000 through January 21, 2005 (the "Class Period").

The Complaint charges that certain of the Company's officers and
directors violated the federal Securities Act of 1933 by
misrepresenting the Company's financial performance and business
operations, overstating the Company's revenues and earnings,
maintaining insufficient reserves, and failing to disclose
significant problems with the Company's business during the
Class Period.

The lawsuit seeks to recover on behalf of investors who bought
the Company's subordinated notes pursuant to materially false
and misleading prospectuses and registration statements which
violated Sections 11 and 12 of the Securities Act of 1933.

At the end of 2004, the Company stopped paying principal and
interest on maturity and stopped honoring checks written on ABFI
money market accounts. On December 23, 2004 the Company issued a
press release stating that it was unable to make any payments on
the Company's notes as they became due and on January 21, 2005
the Company announced that it had filed for bankruptcy
protection.

For more details, contact Stephen J. Fearon, Jr. of Squitieri &
Fearon, LLP by Phone: (212) 421-6492 or by E-mail:
Stephen@sfclasslaw.com.


AUTOBYTEL INC.: Marc Henzel Commences Securities Suit in C.D. CA
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Central
District of California on behalf of all securities purchasers of
the Autobytel Inc. (Nasdaq: ABTL) from July 24, 2003 through
October 20, 2004 inclusive.

The complaint charges Autobytel, Michael Fuchs, Jeffrey
Schwartz, and Hoshi Printer 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 inappropriately recognized some
         unapplied credits;

     (2) that as a result of this, the Company's financial
         results were materially inflated by $900,000;

     (3) that the Company's financial results were in violation
         of Generally Accepted Accounting Principles ("GAAP");

     (4) that the Company lacked adequate internal controls; and

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

On October 21, 2004, Autobytel announced partial third quarter
2004 financial results and that it would reschedule its earnings
conference call and webcast, which had been scheduled for that
afternoon. Furthermore, the Company announced that the Audit
Committee of the Board of Directors of the Company was directing
an internal review of the accounting treatment of certain
unapplied credits that were recognized as revenue during the
four quarters ended March 31, 2004. This news shocked the
market. Shares of Autobytel fell $1.93 per share, or 21.91
percent, on October 21, 2004, to close at $6.80 per share.

For more details, contact Law Offices of Marc S. Henzel by Mail:
273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004, by Phone:
610.660.8000 or 888.643.6735 by Fax: 610.660.8080
E-Mail: mhenzel182@aol.com


CONEXANT SYSTEMS: Chitwood Harley Lodges Securities Suit in NJ
--------------------------------------------------------------
The law firm of Chitwood & Harley LLP initiated a securities
fraud class action complaint in the United States District Court
for the District of New Jersey against Conexant Systems, Inc.
("Conexant" or the "Company") (NASDAQ: CNXT), Dwight W. Decker
and Armando Geday on behalf of purchasers of Conexant securities
during the period between November 3, 2003 and November 4, 2004
(the "Class Period"). A copy of the complaint is available from
the court and will be posted on our website, www.classlaw.com,
for the next two months.

The complaint charges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of materially false
and misleading statements to the market concerning the merger
with GlobespanVirta, stating that the merged Company would
deliver stronger financial performance and create more value for
its shareholders, customers and employees than either Conexant
or GlobespanVirata could if they continued operating
independently between November 3, 2003 and November 4, 2004,
inclusive. In addition, the Complaint alleges that, throughout
the Class Period, Defendants issued a series of false and
misleading statements regarding its wireless local area network
("WLAN") business, which was acquired by GlobespanVirata from
Intersil in August, 2003, the manner in which that business unit
had been integrated into the Company and its ability to
contribute to Company earnings. The Complaint alleges that, in
actuality, the merger of Conexant and GlobespanVirata was not
successful and, throughout the Class Period, the Company was
facing severe integration problems with respect to the combined
companies' parallel DSL and wireless technology offerings, as
well as their sales and administrative functions. The Complaint
also alleges that the Company failed to properly integrate the
WLAN business unit and made material misrepresentations
regarding this business unit because, during the Class Period,
Defendants had effectively ceased working upon the integration
of the WLAN business unit -- which was a critical component of
the rationale for the merger.

The truth began to emerge on November 4, 2004, when Conexant
released its financial and operational results for the fourth
quarter ended October 1, 2004, reporting that its "fourth fiscal
quarter 2004 revenues of $213.1 million decreased 20 percent
from the third fiscal quarter revenues of $267.6 million," and
stating that "'Conexant's sequential decline in revenues to
$213.1 million in the fourth fiscal quarter was largely due to
excess channel inventory that resulted from lower-than-expected
customer demand....'" On this news, Conexant stock fell 10% on
November 5, 2004. This marked fall in stock price followed a
decline in Conexant's stock price of over 43% on July 6, 2004,
when the Company announced similarly disappointing performance
in the third quarter of 2004.

For more details, contact Nichole Browning 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.


CONEXANT SYSTEMS: Wolf Haldenstein Lodges Securities Suit in NJ
---------------------------------------------------------------
The law firm of Wolf Haldenstein Adler Freeman & Herz LLP filed
a class action lawsuit in the United States District Court for
the District of New Jersey, on behalf of all persons who
purchased or otherwise acquired the securities of Conexant
Systems, Inc. ("Conexant" or the "Company") [Nasdaq: CNXT]
between March 1, 2004 and November 4, 2004, inclusive, (the
"Class Period") against defendants Conexant and certain officers
and directors of the Company.

The case name is Gaines v. Conexant Systems, Inc., et al. The
complaint alleges that defendants violated the federal
securities laws by issuing materially false and misleading
statements throughout the Class Period that had the effect of
artificially inflating the market price of the Company's
securities.

Throughout the Class Period, defendants issued statements, press
releases and filed quarterly and annual reports with the SEC
describing the Company's business operations and financial
condition. The Complaint alleges that these representations were
materially false and misleading because they failed to disclose
the following adverse facts:

     (1) that the Company was stuffing the channel with
         products, such that its revenues did not reflect the
         true, end- user demand for its products;

     (2) that the Company's inventory glut would lead to lowered
         revenues as distributors and retailers would need to
         exhaust existing inventory before purchasing new
         products from Conexant;

     (3) that the combined company was suffering from serious
         operating deficiencies, particularly in the wireless
         local area network ("WLAN") division of Globespan that
         was not effectively integrated into the combined
         company's operations, causing the Company to lose its
         leadership position in the WLAN market; and

     (4) that, contrary to defendants express representations
         that the Globespan integration was "on schedule" and
         that "outstanding progress" was being made in that
         regard, integration of the Globespan acquisition was
         mishandled, causing such a massive drain on the Company
         that, by the end of the Class Period, the outlook for
         the much larger combined company was worse than
         Conexant's stand-alone prospects.

On November 4, 2004, defendants issued a press release
announcing disappointing results for the fourth quarter of 2004,
including a loss of $367.5 million ($0.79 per share) which was
blamed on poor demand, inventory buildup and failed product
launches. Later that day, the Company held a conference call to
discuss its fourth quarter results. Defendant Geday's response
to an analyst's question revealed that the Company's inventory
glut was not a recent phenomenon, but had been building for as
long as five quarters. In reaction to the Company's press
release and conference call, the price of Conexant securities
dropped to $1.60 per share on November 5, 2004 from $1.76 on
November 4, 2004. As detailed in the complaint, earlier
announcements that only partially disclosed the facts about
Conexant's business had already taken a heavy toll on Conexant's
stock price, which traded as high as $7.77 per share during the
Class Period.

For more details, contact Fred Taylor Isquith, Esq., Lawrence
Kolker, Esq., Gustavo Bruckner, Esq., or Derek Behnke of Wolf
Haldenstein Adler Freeman & Herz LLP by Phone: 270 Madison
Avenue, New York, NY 10016 by Phone: (800) 575-0735 by E-mail:
classmember@whafh.com or visit their Web site:
http://www.whafh.com.


HUFFY CORPORATION: Marc Henzel Lodges Securities Suit in S.D. OH
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the United States
District Court for the Southern District of Ohio on behalf of
all persons who purchased the publicly traded securities of
Huffy Corp. (Pink Sheets: HUFCQ.PK) between April 16, 2002 and
August 13, 2004.

The Complaint alleges that Huffy violated federal securities
laws by issuing false or misleading public statements.
Specifically, the Complaint alleges that Huffy's positive
statements concerning its growth and long-term prospects were
false and misleading because Huffy was experiencing problems
integrating the McCalla and Gen-X acquisitions; Huffy's Canadian
operations were engaged in improper accounting practices; legacy
costs associated with discontinued operations were continuing to
mount; and, as a result of the foregoing, Huffy's financial
condition was dramatically eroding such that it was approaching
insolvency.

On August 13, 2004, Huffy issued a press release announcing
that, in the course of its review of its financial statements
for the first quarter of 2004, it had determined that certain
accounting entries, estimated in the range of $3.5 to $5.0
million and related primarily to customer deductions, credits
and reserves for inventory valuation and doubtful account
receivables for Huffy Sports Canada (formerly known as Gen-X
Sports), were more properly reflected in the period ended
December 31, 2003 rather than in the first quarter of 2004. In
response to this announcement, the price of Huffy common stock
declined from a close of $0.58 per share on August 13, 2004, to
close at $0.35 per share on August 14, 2004. Then, on August 16,
2004, Huffy announced that it was being delisted from the New
York Stock Exchange ("NYSE"). Finally, on October 20, 2004,
Huffy announced that it was filing for bankruptcy.

For more details, contact Law Offices of Marc S. Henzel by Mail:
273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004, by Phone:
610.660.8000 or 888.643.6735 by Fax: 610.660.8080
E-Mail: mhenzel182@aol.com


HUFFY CORPORATION: Schatz & Nobel Lodges Securities Suit in OH
--------------------------------------------------------------
The law firm of Schatz & Nobel, P.C. initiated a lawsuit seeking
class action status has been filed in the United States District
Court for the Southern District of Ohio on behalf of all persons
who purchased the publicly traded securities of Huffy Corp.
(Pink Sheets: HUFCQ.PK) ("Huffy") between April 16, 2002 and
August 13, 2004 (the "Class Period").

The Complaint alleges that Huffy violated federal securities
laws by issuing false or misleading public statements.
Specifically, the Complaint alleges that Huffy's positive
statements concerning its growth and long-term prospects were
false and misleading because Huffy was experiencing problems
integrating the McCalla and Gen-X acquisitions; Huffy's Canadian
operations were engaged in improper accounting practices; legacy
costs associated with discontinued operations were continuing to
mount; and, as a result of the foregoing, Huffy's financial
condition was dramatically eroding such that it was approaching
insolvency.

On August 13, 2004, Huffy issued a press release announcing
that, in the course of its review of its financial statements
for the first quarter of 2004, it had determined that certain
accounting entries, estimated in the range of $3.5 to $5.0
million and related primarily to customer deductions, credits
and reserves for inventory valuation and doubtful account
receivables for Huffy Sports Canada (formerly known as Gen-X
Sports), were more properly reflected in the period ended
December 31, 2003 rather than in the first quarter of 2004. In
response to this announcement, the price of Huffy common stock
declined from a close of $0.58 per share on August 13, 2004, to
close at $0.35 per share on August 14, 2004. Then, on August 16,
2004, Huffy announced that it was being delisted from the New
York Stock Exchange ("NYSE"). Finally, on October 20, 2004,
Huffy announced that it was filing for bankruptcy.

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


OFFICEMAX INC.: Marc Henzel Lodges Securities Suit in N.D. IL
-------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Northern
District of Illinois on behalf of purchasers of OfficeMax Inc.
(NYSE: OMX) publicly traded securities during the period between
November 9, 2004 and January 11, 2005.

The complaint charges OfficeMax and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. OfficeMax, formerly Boise Cascade Corporation, is a
multinational contract and retail distributor of office supplies
and paper, technology products and office furniture.

The complaint alleges that during the Class Period, defendants
made false and misleading statements regarding the Company's
earnings. The facts, which were known by each of the defendants
but concealed from the investing public during the Class Period,
were as follows:

     (1) that for a period of at least two years, millions of
         dollars worth of the Company's sales were fraudulently
         booked as legitimate sales;

     (2) that the Company was using (and manipulating its use
         of) "vendor allowances" (monies paid by suppliers for
         promotions, prime shelf space, discounts and rebates)
         in order to manipulate the Company's earnings and
         timing of revenue recognition;

     (3) that the Company's Q4 2004 results and those beyond
         were being eroded by the Company's internal
         investigation costs and the halting of the Company's
         abusive vendor allowance scheme;

     (4) that the Company lacked the necessary internal controls
         to insure all revenue reported complied with generally
         accepted accounting principles; and

     (5) that the Company had entered into a long term-paper
         supply contract with Boise Cascade, LLC, which,
         unbeknownst to investors, was not commensurate with the
         market rate.

As a result of defendants' false statements, OfficeMax shares
traded at inflated levels during the Class Period, increasing to
as high as $32.52 on December 16, 2004, whereby the Company's
top officers and directors arranged to sell nearly $1.5 billion
worth of the Company's notes.

On January 12, 2005, OfficeMax announced that its chief
financial officer had resigned and that it would postpone the
release of its earnings for the fourth quarter and full year
2004, pending the conclusion of an internal investigation into
issues relating to its accounting for vendor income.

For more details, contact Law Offices of Marc S. Henzel by Mail:
273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004, by Phone:
610.660.8000 or 888.643.6735 by Fax: 610.660.8080
E-Mail: mhenzel182@aol.com


OSI PHARMACEUTICALS: Schoengold Sporn Lodges NY Securities Suit
---------------------------------------------------------------
The law firm of Schoengold Sporn Laitman & Lometti, P.C.
("SSLL") initiated a class action lawsuit against OSI
Pharmaceuticals, Inc. ("OSIP" or the "Company") (Nasdaq:OSIP)
and certain key officers and directors in the United States
District Court for the Eastern District of New York on behalf of
all purchasers of OSIP securities during the period between
October 26, 2004 and November 22, 2004 (the "Class Period").

The Complaint alleges that defendants OSIP, Colin Goodard,
Robert I. Ingram, Gabriel Leung, Nicole Onetto, Robert L. Van
Nostrand, John P. White and certain members of the Company's
Board of Director violated Section 11, 12(a)(2) and 15 of the
Securities Act of 1933 having caused, allowed or permitted false
and materially misleading registration statement and prospectus
dated November 10, 2004 to be issued, whereby $445,000,000 of
OSIP's stock was sold to the investing public at artificially
inflated prices. In addition, defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations about the Company's new anti-cancer drug
Tarecva, which failed to disclose and /or misrepresented the
following adverse facts, among others, that the defendants knew,
at least as early as October 26, 2004 that:

     (1) the Food and Drug Administration ("FDA") would require
         that OSIP disclose in it labeling for Tarceva that no
         survival benefit was observed in the epidermal growth
         factor receptor ("EGFR")-negative subgroup; and

     (2) OSIP did not have sufficient data to claim that Tarceva
         provided a survivability benefit for EGFR-negative
         patients.

As a result of the foregoing, the defendants' positive
statements only served to artificially inflate the Company's
stock price.

On November 19, 2004, a Piper Jaffray analyst report commented
on the FDA's approval of Tarceva and a "surprise" in the
labeling of Tarceva. The "surprise" in labeling shows that
contrary to the Company's prior representation to the investing
public, there is currently no scientifically significant data
for OSIP's statement that Tarceva provided a survivability
benefit for EGFR-negative patients. The revelation in this
analyst report caused OSIP's stock price to drop from $64.25 per
share on November 18, 2004 to $58.16 per share on November 19,
2004, on volume of 18,496,800 -- over ten times the previous
day's volume. The Company's common stock price continued to drop
following the publication of the Piper Jaffray analyst report to
$54.22 per share on Monday, November 22, 2004.

For more details, contact Jay P. Saltzman, Esq. or Frank R.
Schirripa, Esq. of Schoengold Sporn Laitman & Lometti, P.C. by
Mail: 19 Fulton Street, Suite 406, New York, New York 10038 by
Phone: (212) 964-0046 by Fax: (212) 267-8137 or (866) 348-7700
by E-mail: shareholderrelations@spornlaw.com or visit their Web
site: www.spornlaw.com.


PHARMOS CORPORATION: Marc Henzel Lodges Securities Lawsuit in NJ
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the United States
District Court for the District of New Jersey on behalf of all
persons who purchased the publicly traded securities of Pharmos
Corporation (Nasdaq: PARS) between August 23, 2004 and December
17, 2004.

The Complaint alleges that Pharmos violated federal securities
laws by issuing false or misleading public statements.
Specifically, the Complaint alleges that Dexanabinol, the
company's flagship drug product, in Phase III trials for
Traumatic Brain Injury ("TBI") trial, was not exhibiting a
materially favorable reaction. However, prior to disclosing this
information to the public, Pharmos sold $16.75 million worth of
stock in a private placement. Furthermore, the company's CEO
sold 20% of his holdings and its President sold almost 50% of
his holdings. Such sales occurred after the close of Phase III
enrollment and after the six month post-enrollment period had
concluded. On December 20, 2004, just weeks after insiders sold
400,000 shares of stock, Pharmos announced that Dexanabinol was
not found to be materially effective in Phase III testing.
Furthermore, after years of touting the effectiveness of
Dexanabinol, Pharmos abruptly ceased its effort to gain approval
for Dexanabinol for TBI.

For more details, contact Law Offices of Marc S. Henzel by Mail:
273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004, by Phone:
610.660.8000 or 888.643.6735 by Fax: 610.660.8080
E-Mail: mhenzel182@aol.com


PHARMOS CORPORATION: Schatz & Nobel Lodges Securities Suit in NJ
----------------------------------------------------------------
The law firm of Schatz & Nobel, P.C. initiated a lawsuit seeking
class action status has been filed in the United States District
Court for the District of New Jersey on behalf of all persons
who purchased the publicly traded securities of Pharmos Corp.
(Nasdaq: PARS) ("Pharmos") between August 23, 2004 and December
17, 2004 (the "Class Period").

The Complaint alleges that Pharmos violated federal securities
laws by issuing false or misleading public statements.
Specifically, the Complaint alleges that Dexanabinol, the
company's flagship drug product, in Phase III trials for
Traumatic Brain Injury ("TBI") trial, was not exhibiting a
materially favorable reaction. However, prior to disclosing this
information to the public, Pharmos sold $16.75 million worth of
stock in a private placement. Furthermore, the company's CEO
sold 20% of his holdings and its President sold almost 50% of
his holdings. Such sales occurred after the close of Phase III
enrollment and after the six month post-enrollment period had
concluded. On December 20, 2004, just weeks after insiders sold
400,000 shares of stock, Pharmos announced that Dexanabinol was
not found to be materially effective in Phase III testing.
Furthermore, after years of touting the effectiveness of
Dexanabinol, Pharmos abruptly ceased its effort to gain approval
for Dexanabinol for TBI.

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


SHURGARD STORAGE: Marc Henzel Lodges Securities Suit in W.D. WA
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Western
District of Washington on behalf of all persons who purchased
the publicly traded securities of Shurgard Storage Centers, Inc.
(NYSE: SHU) between May 9, 2001 and March 26, 2004 (the "Class
Period"), including purchasers in the July 10, 2003 and June 25,
2002 stock offerings and the March 24, 2003 debt offering.

The Complaint alleges that Shurgard violated federal securities
laws by issuing false or misleading public statements. On May
17, 2004, Shurgard announced that it was restating its financial
results after a re-audit of its financial statements for the
years ended December 31, 2001 and 2002 and for the first three
quarters of 2003. Shurgard indicated that its new auditors,
PricewaterhouseCoopers, had identified accounting errors
impacting prior periods which had to be restated.

For more details, contact Law Offices of Marc S. Henzel by Mail:
273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004, by Phone:
610.660.8000 or 888.643.6735 by Fax: 610.660.8080
E-Mail: mhenzel182@aol.com


SIPEX CORPORATION: Marc Henzel Lodges Securities Suit in N.D. CA
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Northern
District of California on behalf of all securities purchasers of
Sipex Corporation (Nasdaq: SIPX) between April 10, 2003 and
January 20, 2005, inclusive (the "Class Period").

The complaint charges Sipex, Douglas M. McBurnie, Walid
Maghribi, Phillip A. Kagel, and Clyde R. Wallin 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 inappropriately recognized revenue on
         sales for which price protection, stock rotation and/or
         return rights were granted;

     (2) that the Company's financial results were in violation
         of Generally Accepted Accounting Principles ("GAAP");

     (3) that the Company lacked adequate internal controls; and

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

On January 20, 2005 Sipex announced that the Company may restate
its financial statements for the fiscal year ended December 31,
2003 and the fiscal quarters ended April 3, 2004, July 3, 2004
and October 2, 2004 due to the possible improper recognition of
revenue during these periods on sales for which price
protection, stock rotation and/or return rights may have been
granted. The news shocked the market. Shares of Sipex fell $0.90
per share, or 23.44 percent, on January 21, 2005 to close at
$2.94 per share, on unusually high volume.

For more details, contact Law Offices of Marc S. Henzel by Mail:
273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004, by Phone:
610.660.8000 or 888.643.6735 by Fax: 610.660.8080
E-Mail: mhenzel182@aol.com


TRAVELZOO: Marc Henzel Lodges Securities Fraud Suit in S.D. NY
--------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the United States
District Court for the Southern District of New York on behalf
of all persons who purchased the publicly traded securities of
Travelzoo (NasdaqNM:TZOO) between October 12, 2004 and January
21, 2005 (the "Class Period").

A profit warning and report of an SEC inquiry whacked highflying
Travelzoo (NasdaqNM:TZOO) Monday, marking the latest casualty in
an ugly fourth-quarter earnings season. The provider of online
travel deals earned 9 cents a share in the fourth quarter, up
350% vs. a year earlier, but 4 cents below Thomson First Call's
mean estimate. Travelzoo also said the SEC is probing stock-
trading activity last year. Travelzoo plunged 25% to 55.33 --
49% off its Dec. 28 peak

For more details, contact Law Offices of Marc S. Henzel by Mail:
273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004, by Phone:
610.660.8000 or 888.643.6735 by Fax: 610.660.8080
E-Mail: mhenzel182@aol.com

                         *********


A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.

Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.

                            *********


S U B S C R I P T I O N   I N F O R M A T I O N

Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA.   Glenn Ruel Seorin, Aurora Fatima Antonio and Lyndsey
Resnick, Editors.

Copyright 2005.  All rights reserved.  ISSN 1525-2272.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.

Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.

The CAR subscription rate is $575 for six months delivered via
e-mail.  Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each.  For subscription information, contact Christopher
Beard at 240/629-3300.

                  * * *  End of Transmission  * * *