/raid1/www/Hosts/bankrupt/CAR_Public/050208.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, February 8, 2005, Vol. 7, No. 27
Headlines
A.G. EDWARDS: Lawyers File Suit Over "Secret" Arrangements in CA
AGROPUR COOPERATIVE: Consumers Lodge $11M Suit Over Tainted Milk
AMERICAN HONDA: Recalls 486,659 Passenger Cars For Crash Hazard
BANK OF AMERICA: FL Entrepreneur Sues Over Bank's "Negligence"
BANK OF AMERICA: Settles CA Lawsuit Over $5 Check Cashing Fee
BAY AREA: FTC Reaches Settlement Over Credit Card Fraud Scheme
COLORADO: Group Lodges "Junk Fax" Suit Against 15 Firms
CONTINENTAL TIRE: Recalls 143 Tires Due to Defect, Crash Hazard
CREE INC.: NC Court Denies Summary Judgment For Securities Suit
DOR CHEMICALS: Accountant Files Suit V. Firm, Officers in Israel
ELECTRONIC ARTS: Plaintiffs Amend Employees' Lawsuit in CA Court
ELI LILLY: Stevenson & Associates Lodges $900M Zyprexa Lawsuit
GENERAL MOTORS: Recalls 87,000 Passenger Cars for Injury Hazard
IDAHO: ID A.G. Wasden Releases Top Ten Consumer Complaints List
KOMFORT CORPORATION: Recalls 18 Trailers Due To Crash Hazard
MICHIGAN: Homeowners Refusing $1.2M Detroit Firm Settlement
MICHIGAN SUGAR: Judge Gives Final Approval To $1.75M Settlement
PHILIP MORRIS: Wins Appeal Of $280B RICO Suit Over Past Profits
PHILIPPINES: Survivors Lose Suit Over Former Dictator's Estate
QUANTUM CORPORATION: Suit Certification Hearing Set March 2005
STATE AND COUNTY: TX A.G. Forges Last Auto Repair Settlements
UNITED STATES: LCCR Calls On Senators To Support S.5 Amendments
VERIZON COMMUNICATIONS: Customers Sue Over Anti-Spamming Methods
WET SEAL: Reports Receipt of Consolidated Class Action Complaint
ZAMP CORPORATION: Recalls 4,824 Helmets For Injury, Death Hazard
New Securities Fraud Cases
A.G. EDWARDS: Finkelstein & Krinsk Lodges Securities Suit in CA
CHINA AVIATION: Schiffrin & Barroway Files Securities Suit in NY
DIRECT GENERAL: Schiffrin & Barroway Lodges TN Securities Suit
DIRECT GENERAL: Wolf Popper Lodges Amended Securities Suit in TN
INPUT/OUTPUT: Lerach Coughlin Lodges Securities Fraud Suit in TX
PHARMOS CORPORATION: Stull Stull Lodges Securities Suit in NJ
TOWER AUTOMOTIVE: Federman & Sherwood Lodges NY Securities Suit
TOWER AUTOMOTIVE: Lerach Coughlin Files NY Securities Fraud Suit
*********
A.G. EDWARDS: Lawyers File Suit Over "Secret" Arrangements in CA
----------------------------------------------------------------
A group of lawyers filed a lawsuit seeking class action status
against A.G. Edwards & Sons Inc., accusing the securities broker
of letting hidden compensation arrangements affect its
investment recommendations, the UN Online News Service reports.
Filed in the U.S. District Court in San Diego, California, the
suit alleges that the securities broker failed to disclose
material facts about financial interests with third-party
suppliers of variable annuity contracts.
According to the complaint for the case, Kathleen Mitton vs.
A.G. Edwards, "The third parties paid monies and other
incentives to have variable annuities steered to them by A.G.
Edwards without properly disclosing the preexisting arrangement
to its customers." The complaint further states that "Secret"
arrangements with insurers for sharing contingent fees increased
customers' costs.
Ron Marron, a San Diego lawyer, is leading the team that filed
the complaint. He along with the other lawyers are seeking court
permission to represent a class that would include all consumers
who bought variable annuities through A.G. Edwards between
January 1, 1990, and February 3, 2005.
AGROPUR COOPERATIVE: Consumers Lodge $11M Suit Over Tainted Milk
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An $11 million class-action lawsuit has been filed on behalf of
a Toronto-area man and others against Agropur cooperative, which
owns the milk manufacturer Natrel, claiming that they became
sick after drinking Sealtest brand chocolate milk that was
contaminated with a cleaning chemical, The Toronto Star reports.
Filed by Toronto-based firm McPhadden, Samac, Berner, Barry, the
claim alleges that the people they are representing became ill
and continued to be ill after drinking the milk. It specifically
claims:
(1) David Occhiuto suffered from vomiting, diarrhea,
insomnia and extreme pain after drinking the tainted
milk;
(2) Mr. Occhiuto is still ill with stomach pains, insomnia,
dehydration;
(3) He is suffering psychologically and is experiencing
economic losses for prescriptions and medications and;
(4) Agropur Cooperative and Natrel should have known risks
associated with the processing of chocolate milk.
Nearly 12,000 one-litre Sealtest cartons of 1 percent chocolate
milk were recalled February 2 after a Toronto man went to
hospital feeling ill.
According to a statement by Natrel, the drink had been
contaminated with a cleaning chemical due to "human error."
Natrel further states, "During sanitation, some food grade
sanitizer was accidentally left over in the production lines at
the time of filling."
An evaluation of the sanitizer by Cantox Health Sciences
International, who was commissioned by Natrel, revealed the
solution is not toxic and does not pose a health hazard. The
evaluation stated, "Under a worst-case scenario, the
contaminated product is believed to contain 99.5 per cent water
and 0.5 per cent of a 'soap and vinegar'-like cleanser that is
comprised of several ingredients, all of which have been shown
to be not acutely toxic."
Furthermore, Natrel said that management would be reviewing
procedures at the plant "to ensure that such an incident does
not occur again."
Acknowledging "several reported adverse reactions associated
with this product," the Canadian Food Inspection Agency issued a
warning, that the public should not consume Sealtest brand 1%
Chocolate Milk bearing the UPC 0 64420 00170 2. The affected
batch most of which was distributed in Ontario is stamped with a
February 7 expiry date.
AMERICAN HONDA: Recalls 486,659 Passenger Cars For Crash Hazard
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American Honda Motor Co. is cooperating with the National
Highway Traffic Safety Administration by voluntarily recalling
486,659 passenger cars, namely:
(1) ACURA / TL, models 1999-2000
(2) HONDA / ACCORD, models 1999-2002
(3) HONDA / PRELUDE, models 1997-2001
On certain passenger vehicles, the interlock operation of the
ignition switch may not function properly, making it possible to
turn the ignition key to the "off" position and remove the key
without shifting the transmission to park. If the driver does
not shift to park before removing the key and fails to engage
the parking brake, the vehicle could roll and a crash could
occur.
Dealers will perform an inspection procedure that confirms
interlock function. Vehicles will be updated with a redesigned
interlock lever. The recall is expected to begin on February
2005. For more details, contact Honda by Phone: 1-800-999-1009
or Acura by Phone: 1-800-382-2238, or contact the NHTSA's auto
safety hotline: 1-888-327-4236.
BANK OF AMERICA: FL Entrepreneur Sues Over Bank's "Negligence"
--------------------------------------------------------------
A Miami businessman initiated a lawsuit against the Bank of
America, based on the question of who is responsible when a
customer's computer is hacked into, the Sun-Sentinel.com
reports. Joe Lopez, 42, filed the suit, alleging over $90,000
was stolen from his online banking account.
The suit, filed in Circuit Court in Miami, states that Bank of
America was negligent and failed to protect him from online
banking risks it knew about. Mr. Lopez is asking to recover the
money lost, plus interest and attorney fees. He told the Sun-
Sentinel "For Bank of America, $90,000 is peanuts. For me, it's
my world. The bank has turned its back on me."
The complaint is believed to be the first legal action by a
customer against a U.S. bank to recover money apparently stolen
by cybercriminals. Avivah Litan, an expert on online fraud for
Gartner Inc., a Stamford, Connecticut-based research firm,
called it "a landmark case," the Sun-Sentinel reports. He
states, "This exposes all the holes in the system. Banks
technically aren't responsible for what happens on your PC. But
banks can't reasonably expect consumers to protect themselves
from cybercriminals." Mr. Litan expects that future cases like
Mr. Lopez's will eventually pressure banks into adopting
stricter security measures for online banking.
What Mr. Lopez calls his "nightmare" began on April 6, when he
logged on to check on a wire transfer he was expecting. As head
of Ahlo Inc., a five-person company in the Doral area of Miami-
Dade that buys and sells printer ink and toner, Mr. Lopez often
wires money to and receives transfers from U.S. and Latin
American companies. When he checked his account, Mr. Lopez found
that $90,348.65 had been wired to Parex Bank in Riga, Latvia
without his approval.
According to the complaint, about $20,000 of the money was
withdrawn by the fraudulent recipient in Latvia. Parex froze the
rest, roughly $70,000.
The U.S. Secret Service, which investigates computer-based
attacks on banks, sent Mr. Lopez a letter in November saying its
"initial examination" had determined that a variant of a virus
called coreflood had existed on his computer systems. The
federal agency explained in its letter that coreflood is
malicious software code that can give an attacker remote access
to the infected system, but it did not explicitly say coreflood
was the cause of the loss.
The allegations in Mr. Lopez's complaint against the bank
include breach of contract, negligence, breach of fiduciary
duty, fraud and deceit, and intentional misrepresentation.
"Bank of America knew of the coreflood virus," Mr. Lopez's
lawyer, Ralph Patino of Coral Gables told the Sun-Sentinel. "Why
not tell their customers?" He even cites a letter from Bank of
America to customers in July recommending that they strengthen
their security measures as further proof that the bank knew
online banking was risky. He and Mr. Lopez say a large wire
transfer to Latvia, which is known in financial circles for its
problems with cybercriminals, should have raised a red flag.
Since then, to keep his company running, Mr. Lopez has taken out
a home equity loan of $30,000 and put $20,000 of his savings
into the company. And he no longer does wire transfers online.
"Online banking is here to stay," he said. "But the banks have
to step up to the plate."
Mr. Patino, believes that the complaint could become a class-
action suit to include others who have had smaller amounts of
money vanish from their online banking accounts and may have
little recourse.
BANK OF AMERICA: Settles CA Lawsuit Over $5 Check Cashing Fee
-------------------------------------------------------------
Bank of America reached a settlement of a California class
action lawsuit over its $5 check cashing fee. The suit was
brought last April by Karis House, Inc. on behalf of California
employers who claimed that the bank's check cashing fee, charged
to employees, could place employers in violation of the
California Labor Code.
Under the terms of the settlement, Bank of America offered 12
months of direct deposit payroll services at no charge for a
promotional period. By having their payroll checks deposited
directly into an account, employees of small businesses will be
able to avoid check cashing fees. They will also have access to
other banking services as relationship customers that previously
were not available to them.
"Bank of America has a long-standing commitment to small
businesses and offering banking services to those without access
to financial services," said Percy Simpson, Senior Vice
President, Bank of America. "This settlement is in keeping with
our commitment."
"This is a good settlement for both the employer community and
those employees, who for whatever reason don't have checking
accounts. This settlement basically accomplishes what we had
hoped for -- awareness in the employer community of Labor Code
Section 212 and free check cashing for more of those employees
who previously had to pay a fee," said Nick Roxborough, a
partner of Los Angeles based Roxborough, Pomerance & Nye LLP,
who filed the lawsuit.
The bank mailed approximately 350,000 letters to small business
customers in California, educating them on direct deposit
payroll services and extending the 12-months of direct deposit
payroll services at no additional charge for a promotional
period.
BAY AREA: FTC Reaches Settlement Over Credit Card Fraud Scheme
--------------------------------------------------------------
Christopher Tomasulo, a defendant named in a Federal Trade
Commission lawsuit against an operation that sold bogus credit
cards through telemarketing, is banned from selling credit-
related products.
In 2002, the FTC filed charges against Bay Area Business
Council, Inc., Peter J. Porcelli, II, and others for offering
consumers a low-interest unsecured MasterCard credit card for a
one-time processing fee. The defendants requested and debited
the fee, $199 or more, from consumers' bank accounts, but no
consumers received credit cards. Instead, they received a
package containing a non-functional "dummy" card with a
MasterCard logo and the name "Bay Area Business Council" or "1st
American Leisure Card" on the front, and a non-magnetic black
strip on the back. After receiving the defendants' package,
consumers learned for the first time that, for additional fees,
they could obtain a debit card, but never a credit card.
The settlement announced with Christopher Tomasulo, alleged in
the FTC's amended complaint to be an officer of the defendant
corporations, covers his supervision of the defendants' customer
service and sales operations. The settlement bans Tomasulo from
selling credit-related products, and prohibits him from
misrepresenting any fact material to a consumer's decision to
purchase any product or service.
In August 2002, the FTC filed a complaint against Bay Area
Business Council, Inc.; Bay Area Business Council Customer
Service Corp.; American Leisure Card Corp.; Peter J. Porcelli,
II; Christopher Tomasulo; and Bonnie A. Harris, as part of the
"Operation No-Credit" law enforcement sweep. The FTC amended its
complaint in October 2002 to include: Bay Memberships, Inc.; Bay
Vacations, Inc.; Sr. Marketing Consultants, Inc.; and Special
Technologies, Inc.
In April 2004, a federal district court granted the FTC's motion
for summary judgment and issued a permanent injunction against
the other defendants in the case. The Court's final order bans
the defendants from telemarketing and from selling credit-
related products. The order also prohibits the defendants from
making the types of misrepresentations cited in the FTC's
Amended Complaint, and from misrepresenting any fact material to
a consumer's decision to purchase the defendants' products or
services. In addition, the order requires the defendants to pay
more than $12 million in consumer redress.
The settlement pertains only to Mr. Tomasulo. In addition to the
ban against selling credit-related products, the settlement
contains a judgment for more than $12 million, which is
suspended based on his inability to pay. The judgment will
become payable in full if it is found that Mr. Tomasulo
misrepresented his financial condition.
The Commission vote authorizing staff to file the proposed
stipulated final judgment and order as to Christopher Tomasulo
was 5-0. It was filed in the U.S. District Court for the
Northern District of Illinois, Eastern Division, on January 26,
2005. The judge entered the stipulated final judgment and order
on February 2, 2005.
For more details, contact the FTC's Consumer Response Center,
Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580,
Phone: 1-877-FTC-HELP (1-877-382-4357), or visit the Website:
http://www.ftc.gov. Also contact, Brenda Mack, Office of Public
Affairs by Phone: 202-326-2182 or contact C. Steven Baker or
David A. O'Toole, FTC's Midwest Region - Chicago by Phone:
312-960-5634 or 312-960-5601.
COLORADO: Group Lodges "Junk Fax" Suit Against 15 Firms
-------------------------------------------------------
Consumer Crusade Inc., a consumer advocacy group that was
founded by nationally syndicated radio talk show host Tom
Martino, has filed 15 federal lawsuits against out-of-state
companies it says are major offenders in sending junk faxes to
Colorado residents and businesses, the Associated Press reports.
The group is suing businesses from Delaware to California,
accusing them of sending the unsolicited advertisements by fax
in violation of the Telephone Consumer Protection Act. The anti-
telemarketing law prohibits the sending of advertisement faxes
without the permission of the recipient, said Jim Demirali, a
Denver attorney working with Consumer Crusade.
Though hundreds of complaints have been filed in state and
county courts against smaller operations, the group is now going
after larger companies that cross state lines, Mr. Demirali told
AP. He also states, "The federal actions are designed to go
after the major offenders. This is a preliminary step to
shutting them off from the access they need to the marketplace.
These are all clever people, very sophisticated when it comes to
evading an enforcement of the act."
The lawsuits request at least $500 for each violation and ask a
federal judge to force the faxing companies to stop sending
their advertisements. More federal lawsuits though would be
filed seeking class-action status, which would allow more people
who had received such faxes to be added to the suits, Mr.
Demirali told AP.
Most of the companies being sued are those in the business of
sending faxes on behalf of other companies peddling mortgages,
travel, health insurance and stock alerts.
According to Mr. Demirali, Consumer Crusade has collected about
300,000 unwanted faxes from people across the country. The faxes
were entered into a computer database to identify similar
advertisements, phone numbers and other indicators linking the
faxes to a specific company. He told the Associated Press that
if the group reaches a settlement with the company or people
sending the unwanted faxes, $25 per fax is given to the
individual who gave the original faxes to Consumer Crusade.
The lawsuits were filed in U.S. District Court in Denver
against: Tennessee-based Glaco, Inc.; Midas Entertainment, Inc.
and IHire LLC in Delaware; Nevada-based Global Vending Services,
Inc., Everycontractor.com and Novinger, Brinkley, Spears, Leyva
and Associates, Inc.; Club Resort Intervals in New Hampshire;
Florida-based Vacation Showroom, Inc., The West Group of
Companies, Global Vacations USA, Inc., Public Telephone
Corporation of America and Internet Payphone Corp.; United Home
Savings in Maryland; and California-based Vacation Centers Inc.
and JD&T Enterprises Inc.
CONTINENTAL TIRE: Recalls 143 Tires Due to Defect, Crash Hazard
---------------------------------------------------------------
Continental Tire North America, Inc. is cooperating with the
National Highway Traffic Safety Administration (NHTSA) by
voluntarily recalling 143 tires, namely:
(1) CONTINENTAL / HDL
(2) CONTINENTAL / HSL
(3) CONTINENTAL / HSR
(4) CONTINENTAL / HTL
(5) GENERAL / S380A
(6) GENERAL / ST250
(7) TOYO / M122
(8) TOYO / M127
(9) YOKOHAMA / RY023
(10) YOKOHAMA / RY587
(11) YOKOHAMA / RY617
(12) YOKOHAMA / TY517
A variety of Continental, Toyo, General and Yokohama Tires,
which the rubber compound used in the shoulder pad component of
the tire is not the specified rubber compound as detailed in the
tire specification. The overall durability of the tire is
reduced, which if driven unchecked, the tire could degrade,
possibly resulting in a vehicle crash.
Continental Tire will notify its customers to replace the tires
free of charge. The recall is expected to begin during February
2005. Owners who do not receive the free remedy within a
reasonable time should contact the Company or contact the
NHTSA's auto safety hotline: 1-888-DASH-2-DOT (1-888-327-4236).
CREE INC.: NC Court Denies Summary Judgment For Securities Suit
---------------------------------------------------------------
The United States District Court for the Middle District of
North Carolina denied Cree, Inc.'s motion for summary judgment
for the consolidated class action filed against it, seeking
damages for alleged violations of securities laws by the Company
and certain of its officers and current and former directors.
A consolidated class action was initially filed, asserting,
among other claims, violations of federal securities laws,
including violations of Section 10(b) of the Securities Exchange
Act of 1934, as amended, and Rule 10b-5, and violations of
Section 20(a) and Section 18 of the Exchange Act against the
individual defendants and also asserts claims against certain of
the Company's officers under Section 304 of the Sarbanes-Oxley
Act of 2002.
The suit alleged that the Company made false and misleading
statements concerning its investments in certain public and
privately held companies, the Company's acquisition of the
UltraRF division of Spectrian, its supply agreement with
Spectrian, its agreements with C&C, and its employment
relationship with Eric Hunter and that the Company's financial
statements did not comply with the requirements of the
securities laws during the class period, an earlier Class Action
Reporter story (August 28,2004) states.
The suit was filed on behalf of a plaintiff class consisting of
purchasers of Cree stock between August 12, 1998 and June 13,
2003 and seeks, among other relief, unspecified damages and
disgorgement of profits by the individual defendants, plus costs
and expenses, including attorneys' accountants' and experts'
fees.
In February 2004, the Company moved that the court dismiss the
consolidated amended complaint on the grounds that it failed to
state a claim upon which relief can be granted and did not
satisfy the pleading requirements under applicable law. On
August 30, 2004, the court entered an order granting the motion
to dismiss without prejudice and allotting 45 days for the
plaintiffs to file an amended consolidated complaint.
The plaintiffs filed a First Amended Consolidated Class Action
Complaint on October 14, 2004, asserting essentially the same
claims and seeking the same relief as in their prior complaint.
The Company has filed a motion to dismiss the Amended Complaint,
which currently is pending. The Company also filed an early
motion for summary judgment based on the statute of limitations.
The court denied the motion without prejudice to the Company's
ability to re-file the motion, if necessary, at a later point in
the litigation.
The suit is styled "In re Cree, Inc. Securities Litigation, case
no. 03-CV-549," filed in the United States District Court for
the Middle District of North Carolina, under Judge Frank W.
Bullock, Jr.
Lawyers for the Company are:
(1) Donald Hugh Tucker, Jr., Michael W. Mitchell, Smith
Anderson, Blount, Dorsett, Mitchell & Jernigan, Pob
2611, Raleigh NC 27602-2611, Phone: 919-821-1220
(2) Bruce G. Vanyo, Wilson, Sonsini Goodrich & Rosati, 650
Page Mill Road, Palo Alto, CA 94304-1050, Phone: 650-
493-9300
(3) Gregory A. Harris, Nicholas I. Porritt, Wilson,
Sonsini, Goodrich & Rosati, P.C., 11921 Freedom Dr.,
Ste. 500 Reston, VA 20190-5634, Phone: 703-734-3100
Lawyers for the plaintiffs are:
(i) Abbey Gardy, LLP, 212 East 39th Street, New York, NY,
10016, Phone: 212.889.3700, E-mail: info@abbeygardy.com
(ii) Bernstein Litowitz Berger & Grossmann LLP (New York,
NY), 1285 Avenue of the Americas, 33rd Floor, New York,
NY, 10019, Phone: 212.554.1400, Fax: 212.554.1444, E-
mail: blbg@blbglaw.com
(iii) Cauley Geller Bowman Coates & Rudman, LLP (New York),
200 Broadhollow, Suite 406, Melville, NY, 11747, Phone:
631.367.7100, Fax: 631.367.1173,
(iv) Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (Washington,
DC), 1100 New York Avenue, N.W., Suite 500, West Tower,
Washington, DC, 20005, Phone: 202.408.4600, Fax:
202.408.4699, E-mail: lawinfo@cmht.com
(v) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(vi) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(vii) Wechsler Harwood LLP, 488 Madison Avenue 8th Floor, New
York, NY, 10022, Phone: 212.935.7400, E-mail:
info@whhf.com
DOR CHEMICALS: Accountant Files Suit V. Firm, Officers in Israel
----------------------------------------------------------------
Mario Gilman, an accountant by trade who had bought shares in
Dor Chemicals back in January 2004, filed a class-action motion
at the Tel Aviv District Court against the Company, its managers
(who all quit just recently) chairman Zvi Mor, CEO Michaek
Yanovski and CFO Yossi Dayan, its directors, all members of the
Dankner clan who had owned the company - David Dankner, Avraham
Dankner, Shmuel Dankner, Leah Dankner and Yitzhak Dankner;
accountants Kesselman and Kesselman and internal auditors of the
firm Yaakov Avital, claiming that they all "fell asleep on the
job," the Ha'aretz reports.
Mr. Gilman specifically claims in his suit that the managers
were negligent, deceitful and falsely represented Dor's
financial condition and that their conduct caused the share
price to crash, costing minority shareholders NIS 107 million in
losses. That suit also states that "According to the [external
auditor's] report, the controlling shareholders on one side, the
directors on the other, the management on the third, each acted
in turn either together or with the others who turned a blind
eye, to rob the till."
The suit is also claiming that in early 2003, Dor Chemicals had
presented its results for 2002, reporting tremendous profits of
more than NIS 200 million, however the profits later turned out
to be a figment of accounting imagination that had nothing to do
with the company's actual operations. Mr. Gilman explains that
what really happened is that Dor bought Moplefan at a fraction
of its book price.
Until the end of 2003, Dor Chemicals presented its business as
barreling along rosily. Though it did admit to losing a piffling
NIS 7.4 million for the year, it still declared a NIS 75 million
dividend to shareholders. Mr. Gilman charges, a dividend like
that is a significant indication that the company is succeeding
and that it also served to hide the company's true condition.
In utter contradiction to its report mentioning a minor loss in
2003, the company in fact had lost a tremendous amount more than
NIS 40 million. The defendants knew of it, yet they issued no
warning when publishing a report in November 2003, Mr. Gilman
declares. When the company's true 2003 financial statement was
released, the share price dived 20 percent. By year's end, Dor
Chemicals had lost 80 percent of its value.
The suit referred to an external auditor's report on the
shenanigans at Dor Chemicals, which raised serious questions
over the management of the firm. That report uncovered a slew of
payments to senior executives that had not been approved, which
were all retroactively approved by Dor's board, upon the release
of the report. Chairman of the Israel Securities Authority Moshe
Terry, who since last week has been waiting for the public to
act on the report and to file a class-action lawsuit, called the
behavior that was revealed by the report as "indescribable"
though he noted, "the worse deeds were committed by those who
have already left like Mr. Mor, Mr. Yanovski and Mr. Dayan."
ELECTRONIC ARTS: Plaintiffs Amend Employees' Lawsuit in CA Court
----------------------------------------------------------------
Electronic Arts, Inc. faces an amended class action filed in the
Superior Court in San Mateo, California, styled "Kirschenbaum v.
Electronic Arts Inc."
The complaint alleges that the Company improperly classified
"Image Production Employees" in California as exempt employees
and seeks injunctive relief, unspecified monetary damages,
interest and attorneys' fees. The complaint was first amended
on or about November 30, 2004 to add two former employees as
named-plaintiffs, and amended again on or about January 5, 2005
to add another former employee as a named-plaintiff. The
allegations in the complaint were not materially changed by the
amendments.
The suit is styled "Kirschenbaum v. Electronic Arts, Inc., case
no. CIV-440876," filed in the San Mateo County Superior Court in
California.
Plaintiffs Jamie Kirschenbaum, Mark West, Eric Kearns and Gianni
Aliotti are represented by Attorney Miranda P. Kolbe.
Representing the Company is Jessica R. Perry, 1000 Marsh Road,
Menlo Park, CA 94025, Phone: (650) 614-7400
ELI LILLY: Stevenson & Associates Lodges $900M Zyprexa Lawsuit
--------------------------------------------------------------
The firm of Stevenson & Associates commenced a class action in
the Ontario Superior Court against Eli Lilly & Company and Eli
Lilly Canada Inc., the makers and distributors of Zyprexa, for
damages claiming $900,000,000.00.
The action has been brought on behalf of all persons in Canada
who were prescribed Zyprexa and who became diabetic as a result
of taking that drug. The claim has been brought on behalf of the
plaintiff, Andrea Heward who was prescribed Zyprexa and
subsequently was diagnosed as diabetic. It is alleged that she
became diabetic as a result of having been prescribed Zyprexa.
She is now unable to work and is under constant medical care.
The lawyers for the plaintiff, Harvin Pitch, counsel to
Stevenson & Associates and Colin Stevenson intend to work with
law firms across Canada and the United States in pursuing this
claim and other similar claims against the manufacturers and
distributors of Zyprexa, Eli Lilly & Company and Eli Lilly
Canada Inc.
A copy of the statement of claim can be seen on the website
http://www.classproceedings.ca.Any further questions or
inquiries can be addressed to Harvin Pitch at
hpitch@teplitskycolson.com and Colin Stevenson at
cstevenson@stevensonlaw.net.
GENERAL MOTORS: Recalls 87,000 Passenger Cars for Injury Hazard
---------------------------------------------------------------
General Motors Corporation is cooperating with the National
Highway Traffic Safety Administration by voluntarily recalling
87,000 passenger cars, namely:
(1) CADILLAC / CTS, model 2004
(2) CADILLAC / SRX, model 2004
On certain passenger vehicles, an interaction between the
sensing and diagnostic module and vehicle electrical system may
cause the driver's frontal air bag and roof rail air bag to
deploy when the ignition key is turned to the "on" position.
Inadvertent deployment of driver's frontal air bag and roof rail
air bag will occur. A person positioned for driving may receive
minor injuries such as abrasions, from contact with the air bag.
Dealers will replace the sensing and diagnostic module. The
recall is expected to begin during May 2005. For more details,
contact the Company by Phone: 1-866-982-2339 or the NHTSA's auto
safety hotline: 1-888-327-4236.
IDAHO: ID A.G. Wasden Releases Top Ten Consumer Complaints List
---------------------------------------------------------------
The Idaho Attorney General's Office recovered a record
$5,777,643 for Idaho consumers in 2004, Attorney General
Lawrence Wasden said in a statement. A.G. Wasden released his
office's annual report on consumer protection during a news
conference in Boise.
The Attorney General said the office's consumer protection
enforcement efforts also collected $528,318 in civil penalties,
fines and fees. "The restitution recovered and distributed to
Idaho residents and businesses equates to $10.30 for each
taxpayer dollar appropriated for consumer protection staff,"
Attorney General Wasden said. "Additionally, money from civil
penalties, fees and reimbursed costs is deposited into the
consumer protection account and, pursuant to appropriation by
the legislature, used to fund consumer education. This year we
transferred nearly three quarters of a million dollars in
surplus funds from the consumer protection account to the
state's general fund."
A.G. Wasden also released the annual Attorney General's Top Ten
List of Consumer Complaints for 2004. The office handled 4,078
complaints last year, the highest number since 1998. "The top
ten list gives us an indication of what is on the minds of Idaho
consumers," Wasden said. " What seems most to be on their minds
this year is faxes, unsolicited faxes containing ads, to be more
specific."
The telecommunications category moved to the number one
position, with 2,726 complaints, Wasden said. This category
accounted for two-thirds of the complaints received by the
Attorney General's Office. Although this category includes all
complaints about telephone service, such as billing issues,
cramming and slamming, Wasden said the majority of
telecommunications complaints in 2004 related to fax
advertising.
"I hope that this will get better with Fax.com barred from
sending faxes into Idaho, but only time will tell," the Attorney
General said, referring to a settlement this year prohibiting
the nation's largest fax-spammer from operating in Idaho. "In
the meantime, we will continue to enforce the law as best we
can, and I encourage Idaho consumers, including businesses, to
file complaints with us regarding unsolicited fax
advertisements. As a side note, I want to remind everyone that
simply sending an unsolicited ad by fax is a violation of state
law. There is nothing in the law that permits sending these
faxes until the consumer tells you to stop."
The telephone solicitations category contains complaints about
telemarketers, including violations of the No Call Law.
Telephone solicitation complaints plummeted 48% in 2004, moving
this category to number two on the list. This is the third
straight year that complaints about telemarketers have fallen.
"I attribute this to a combination of our enforcement efforts
with regard to the No Call Law and to improved compliance by
telemarketers," Wasden said. "It is worth noting that there are
now more than 360,000 Idaho telephone numbers registered on the
Attorney General's No Call List."
The Top Ten Complaint categories for 2004 are:
(1) Telecommunications - 2,726 complaints
(2) Telephone solicitations - 326 complaints
(3) Motor vehicles - 229 complaints
(4) The Internet - 111 complaints
(5) Mail order sales - 92 complaints
(6) Credit cards - 69 complaints
(7) Electronic equipment and service - 66 complaints
(8) Construction - 58 complaints
(9) Retail store sales and service - 57 complaints
(10) Finance and lending - 50 complaints
The complete Consumer Protection Annual report is available on
the Attorney General's web site: http://www.ag.idaho.gov. For
more details, contact Bob Cooper by Phone: (208) 334-4112
KOMFORT CORPORATION: Recalls 18 Trailers Due To Crash Hazard
------------------------------------------------------------
Komfort Corporation is cooperating with the National Highway
Traffic Safety Administration by voluntarily recalling 18 Fifth
Wheel Trailers, namely:
(1) KOMFORT / 28FS, model 2004
(2) KOMFORT / 29FS, model 2004
On certain fifth wheel trailers equipped with aluminum wheels,
the thickness of the wheel may not allow for enough thread
engagement of the lug nuts. Lack of thread engagement could
allow the wheel to separate from the trailer and a crash could
occur without prior notice.
Dealers will replace the wheels. The recall began Janaury
4,2005. For more details, contact the Company by Phone:
800-554-2711 or the NHTSA's auto safety hotline: 1-888-327-4236.
MICHIGAN: Homeowners Refusing $1.2M Detroit Firm Settlement
-----------------------------------------------------------
Some Michigan homeowners are actually turning down money from a
$1.2 million settlement of a class-action lawsuit with a
Detroit-area company that leaked toxic chemicals after a 2001
explosion, the Associated Press reports.
Though hundreds of people could share in a $1.2 million
settlement, some eligible residents said they don't deserve any
money because they weren't exposed to fumes. While others said
they don't support the lawsuit and one woman even said she
shouldn't get any money because she "did not suffer." Still
another said she wasn't home, and taking the money wouldn't be
honest. She added at age 86, "you have to think about the
hereafter," AP reports.
About 25-hundred residents of Riverview, Trenton, Wyandotte and
Grosse Ile were evacuated from their homes after a railcar
exploded. Three ATOFINA Chemicals employees were killed and nine
got hurt. The lead plaintiffs in the class-action suit get
$1,000 each, while others get $550.
MICHIGAN SUGAR: Judge Gives Final Approval To $1.75M Settlement
---------------------------------------------------------------
Bay County Circuit, Michigan Judge Lawrence M. Bielawski given
final approval to the settlement of a class-action lawsuit filed
by neighbors of Michigan Sugar Co.'s Monitor Township plant,
ultimately paving the way for payments to about 3,500 households
later this year, The Bay City Times reports. Judge Bielawski
deemed the terms of the settlement, which puts an end to the
lawsuit filed in 2003, "fair, reasonable and in the public
interest."
The settlement calls for the former Monitor Sugar factory to
reduce or eliminate dust and odor emanating from the plant and
to pay out $1.75 million to people who live near the facility.
It also grants $3,500 to each of seven named plaintiffs in the
case and $1,500 to others who complained to state environmental
officials about the pollution or showed written interest in
joining the lawsuit, even if they live outside the designated
boundaries. Checks are expected to be sent out sometime in the
early fall.
"This is a settlement, without admission of fault," Charles M.
Denton, attorney for Michigan Sugar told the Bay City Times. "It
is a substantial settlement, but will allow our Euclid Avenue
plant to continue to be a significant employer in Bay City."
PHILIP MORRIS: Wins Appeal Of $280B RICO Suit Over Past Profits
---------------------------------------------------------------
Altria Group Inc.'s Philip Morris USA and other U.S. cigarette
makers can't be forced to forfeit $280 billion in past profits
as the U.S. government demanded in a civil racketeering lawsuit,
according to a recent ruling by an appeals court in Washington,
Bloomberg reports.
In its ruling, which eliminated one of the biggest concerns for
the tobacco industry, the court pointed out that the
racketeering law was aimed at preventing future violations and
doesn't allow the U.S. to seek recovery of alleged "prior ill-
gotten gains."
Thomas Russo, a partner at Gardner, Russo & Gardner in
Lancaster, Pennsylvania, told Bloomberg "This is a big deal."
Its assets of $3 billion include 3.3 million Altria shares, the
firm's largest holding. "It is gratifying to see the rule of law
fairly applied to facts and circumstances even though it
involves tobacco."
The Justice Department, which sued the companies for violating
federal racketeering law in 1999, has been pursuing its claims
at a trial in Washington. The recent decision though doesn't end
the trial, which has been under way since September 21 in front
of U.S. District Judge Gladys Kessler. The government may still
seek restrictions on the companies, including new limits on how
they market and advertise cigarettes.
In their appeal of a ruling by the trial judge, the companies
had argued that forfeiture of past profits wasn't authorized
under the law. A three-judge panel of the U.S. Circuit Court of
Appeals for the District of Columbia in Washington agreed, thus
they ruled 2-1 in the companies' favor.
The government had claimed the tobacco industry engaged in a
five-decade conspiracy to mislead the public about the dangers
of smoking, in violation of the federal Racketeer Influenced and
Corrupt Organizations Act, or RICO. RICO, passed in 1970, was
originally intended to target organized crime. The U.S. case
against the tobacco industry includes only civil claims.
Circuit Judge David Sentelle in writing for the court, "The
language of the statute explicitly provides three alternative
ways to deprive RICO defendants of control over the enterprise
and protect against future violations: divestment, injunction,
and dissolution. We need not twist the language to create a new
remedy not contemplated by the statute," Bloomberg reports.
PHILIPPINES: Survivors Lose Suit Over Former Dictator's Estate
--------------------------------------------------------------
Filipinos seeking compensation from the regime of former
dictator Ferdinand Marcos lost a major legal battle in their
quest to recover a $2 billion jury verdict to settle human-
rights abuses, the Associated Press reports.
A three-judge panel of the San Francisco-based 9th U.S. Circuit
Court of Appeals ruled that the 9,500 plaintiffs, most of them
still living in the Philippines, have no right to recover $683
million in Marcos assets that were transferred from a Swiss
account to the Philippine government, which claims ownership of
the money.
The plaintiffs filed a class-action lawsuit against the Marcos
estate in 1986, the year he was deposed as president after
ruling for 20 years. He and his family fled to Hawaii, where he
died in exile in 1989. In 1995, using a two-century-old U.S.
law, a Honolulu jury awarded plaintiffs $2 billion after finding
the former Philippine strongman responsible for summary
executions, disappearances and torture.
The plaintiffs though have not collected from that judgment,
which is nearing $4 billion with interest, and have been awarded
a combined $40 million from Marcos assets found in a New York
bank, which is currently on appeal.
Robert Swift, an attorney for the plaintiffs and others had
argued the $683 million transferred from the Swiss account to
the Philippine National Bank should have been awarded to their
clients. However, the Philippine government asserted that the
money was part of the national treasury, a decision the
country's highest court agreed with in 2003 when it ordered the
national bank to forward the money to the government.
In it's ruling, the U.S. appeals court explained that that
American courts have no legal right to overturn a foreign
country's supreme court despite the plaintiffs' 1995 jury award
in Honolulu. In this case, the decision applies to the
Philippine Supreme Court's order that the funds be forwarded to
the national treasury.
Jay Ziegler, an attorney for Philippine National Bank, said the
institution was gratified by the decision. He told AP, "We think
it is the correct result in this case. The Philippine Supreme
Court in 2003 ordered the funds forfeited to the government, and
the bank complied with the Supreme Court."
QUANTUM CORPORATION: Suit Certification Hearing Set March 2005
--------------------------------------------------------------
Hearing on class certification for an antitrust lawsuit filed
against Quantum Corporation and other photographic film
companies is set for March 2005 in the Superior Court of the
State of California for the County of San Francisco. Hitachi
Maxell, Ltd., Maxell Corporation of America, Fuji Photo Film
Co., Ltd., and Fuji Photo Film U.S.A., Inc. are named in the
lawsuit as codefendants.
The plaintiff, Franz Inc., alleges violation of California
antitrust law, violation of California unfair competition law,
and unjust enrichment. Franz Inc. charges, among other things,
that the defendants entered into agreements and conspired to
monopolize the market and fix prices for data storage tape
compatible with DLT tape drives.
Franz seeks an order that the lawsuit be maintained as a class
action and that defendants be enjoined from continuing the
violations alleged in the complaint. Franz also seeks
compensatory damages, treble damages, statutory damages,
attorneys' fees, costs, and interest.
The suit is styled "Franz, Inc., Individually, on behalf of all
others v. Quantum Corporation, et al, Case Number: CGC-03-
423301," filed in the Superior Court of San Francisco
California, under Judge Richard A. Kramer.
Attorneys for plaintiff Franz, Inc. are:
(1) David Lorie, 555 12th Street, Suite 1450, Oakland, CA
94607 USA, Phone: (510) 452-2000
(2) Raymond W. Morganti, Siemion, Huckabay, Bodary,
Padilla, Morganti & Bowerman, P.C., One Towne Square,
Suite 1400, P.O. Box 5068, Southfield, MI 40808-6506,
Phone: (248) 357-1400
(3) Robert C. Schubert, Schubert & Reed LLP, Two
Embarcadero Center, Suite 1660, San Francisco CA 94111,
Phone: (415) 788-4220
Defending the Company are:
(i) Loren Kieve, Oliver & Hedges, LLP, 50 California, 22nd
Floor, San Francisco CA 94111
(ii) Robert P. Mallory, McDermott, Will & Emery, 2049
Century Park East. 34th, Los Angeles CA 90067, Phone:
(310) 277-4110
(iii) Charles H. Samel, Howrey Simon Arnold & White LLP, 550
South Hope Street, Suite 110, Los Angeles, CA 90071,
Phone: (213) 892-1800
STATE AND COUNTY: TX A.G. Forges Last Auto Repair Settlements
-------------------------------------------------------------
Texas Attorney General Greg Abbott reached the last two in a
five-year series of settlements with various insurance companies
to give refunds to Texas policyholders who paid more out of
pocket on claims for auto repairs than their policies required.
State and County Mutual Fire Insurance Co. agreed to pay
$952,000, including interest, in refunds to about 2,900
policyholders who had auto repair claims from January 1996
through February 2003. In November the Attorney General filed a
settlement with Maryland Casualty Co., which requires the
company to make refunds totaling $53,000 to about 185 Texas
policyholders who filed claims between January 1996 and
September 1999.
"Consumers who make valid claims following traffic accidents
expect to be treated fairly by insurance companies," Attorney
General Abbott said. "They also deserve refunds from companies
that used deceptive means to take money from them through such
schemes as this."
The companies, along with others in the industry, engaged in a
systematic, unlawful practice known as "betterment," in which
they claimed the use of better or newer parts to repair the
vehicle increased its value. Companies then charged the amount
of this supposed "increased value" to the policyholders, thus
reducing the amount the company paid for the repairs.
Policyholders were then forced to make up the difference, in
addition to their deductible, to the repair shop.
Under the terms of the agreement announced today, most eligible
policyholders will automatically receive a check reflecting the
total amount of overcharges, plus interest, to customers who had
auto repair claims involving betterment. However, many
policyholders have not yet been identified, and these
individuals must submit a claim form to the settlement
administrator. Any consumer who believes he or she may be
entitled to a refund should call (817)-732-2111 (ext. 3025), or
mail an inquiry to Robert Hudson, Claims Administrator, c/o
Wellington Financial Services Inc., P.O. Box 230, Fort Worth, TX
76101.
Since 2000, the Attorney General has settled 19 betterment case
for an estimated $17.4 million in refunds, alleging that
insurance companies merely increased the value of the replaced
part, and not the entire vehicle. Texas law does not permit such
a charge or deduction, and auto insurance policies require that
the companies fully pay for the repair, less the deductible,
even if the parts used were better than the ones they replaced.
For more details, contact Angela Hale, Paco Felici, Jerry
Strickland, or Tom Kelley by Phone: (512) 463-2050
UNITED STATES: LCCR Calls On Senators To Support S.5 Amendments
---------------------------------------------------------------
Saying it is vital to protect the workplace and civil rights of
ordinary Americans, the Leadership Conference on Civil Rights
(LCCR), the nation's oldest, largest, and most diverse civil and
human rights coalition, called on U.S. Senators to support an
amendment to be offered by Senators Ted Kennedy and Maria
Cantwell to pending class action legislation (S. 5).
"The United States Senate should not throw out the baby of
worker and minority rights with the bathwater of curtailing
class-action lawsuits," said Nancy Zirkin, LCCR deputy director.
"There is absolutely no evidence that lawsuits brought by
workers seeking justice in state courts on issues ranging from
overtime pay to working off the clock are abusing the system. To
the contrary, failure to exempt such lawsuits in this
legislation is an abusive act against every hard-working
American seeking fair pay and a better life."
LCCR explained that state courts are the correct venue to
litigate wage-and-hour issues. Different states have different
laws. Forcing all wage-and-hour lawsuits into federal court will
not work because of the extraordinary difficulty of reconciling
so many different state laws. "Nearly all of the wage-and-hour
and anti-discrimination lawsuits brought in state courts are
brought by in-state workers against companies operating in that
state," continued Ms. Zirkin.
"Furthermore," said Ms. Zirkin, "I am truly shocked that so many
Senators who are avowed advocates of state's rights would so
cavalierly turn on their own states and constituents to support
a bill that will eviscerate state employment and civil rights
laws."
"The Senate should demonstrate that it is not anti-worker and
not anti-state. The fact is that many state labor laws provide
greater protections for workers such as broader overtime rights
and benefits for part-time workers. Furthermore, many states
have stronger laws that prohibit discrimination on the basis of
disability, ancestry, genetic information, parenthood, sexual
orientation, or familial status," said Ms. Zirkin. "And although
there are strong federal civil rights laws, many states have
stronger civil rights laws on the books. Without an exemption,
passage of S. 5 would have a chilling effect on other states
considering stronger civil rights legislation."
"To protect the civil rights of workers and minorities, the
Senate should exempt state wage-and-hour and civil rights
actions from the Class Action Fairness Act by passing the
amendment offered by Senators Kennedy and Cantwell," Ms. Zirkin
urged.
VERIZON COMMUNICATIONS: Customers Sue Over Anti-Spamming Methods
----------------------------------------------------------------
Verizon Communications is facing two class-action complaints by
its U.S. customers, who claim the Internet provider's anti-
spamming methods are interfering with legitimate e-mail, the
NorthJersey.com reports.
According to one complaint that was instigated by a law firm
with offices in Gloucester County and Philadelphia, "Like
killing a cockroach with an atom bomb ... Verizon's desperate
action caused massive disruption of its customers'
communications with foreign business partners, governmental
agencies, family and friends." In keeping with Verizon's
contracts with business customers, the complaint demands binding
arbitration through the American Arbitration Association.
Meanwhile, the other complaint, a conventional lawsuit filed in
California state court, involves five residential customers.
A Philadelphia law firm, Kohn, Swift & Graf, which specializes
in class-action lawsuits, is handling both cases. The firm is
currently inviting Verizon customers to become plaintiffs, and
dozens of people have responded so far, according to Michael J.
Boni, the lawyer handling the case.
Verizon customers began complaining in online forums in late
December that they weren't receiving e-mail from Europe. A
leaked company memo confirmed that Verizon had stepped up it's
blocking of foreign e-mail around that time. That memo also said
that unblocking e-mail from particular senders would take two
weeks.
Michael Kleeman, a Philadelphia lawyer who instigated the
arbitration complaint, told NorthJersey.com his firm was
receiving case referrals by e-mail from Great Britain and
Ireland. However, the referrals stopped coming December 6, and a
month later, the firm switched to another Internet provider.
The complaint alleges that Verizon, by blocking legitimate e-
mail without notice, breached its contract with customers and
thus seeks unspecified damages and an end to "unlawful
blocking."
Internet providers have become increasingly aggressive in
preventing spam from hitting their customers' inboxes. In
addition to using increasingly sophisticated filters, they
"blacklist" some servers, even servers of well-known Internet
providers that send out a lot of spam.
WET SEAL: Reports Receipt of Consolidated Class Action Complaint
----------------------------------------------------------------
Specialty retailer The Wet Seal, Inc. (NASDAQ:WTSLA), which had
previously reported that various class actions had been brought
against the Company, as well as certain former directors, and
former and current officers of the Company is now reporting that
it has received the court appointed, lead plaintiffs'
Consolidated Class Action Complaint, filed in the United States
District Court for the Central District of California, which
consolidates all of the previously reported class actions.
In summary, the complaint alleges that the defendants, including
the Company, violated the federal securities laws by making
material misstatements of fact or failing to disclose material
facts during the class period concerning its prospects to stem
ongoing losses in its Wet Seal division and return that business
to profitability.
The complaint also alleges that certain former directors and La
Senza Corporation, a Canadian company controlled by them,
unlawfully utilized material non-public information in
connection with the sale of the Company's stock by La Senza.
The complaint seeks class certification, compensatory damages,
interest, costs, attorney's fees and injunctive relief. At the
appropriate time, the Company intends to move to dismiss the
consolidated complaint.
Headquartered in Foothill Ranch, California, The Wet Seal, Inc.
is a leading specialty retailer of fashionable and contemporary
apparel and accessory items. The company currently operates a
total of 453 stores in 47 states, the District of Columbia and
Puerto Rico, including 359 Wet Seal stores and 94 Arden B.
stores.
ZAMP CORPORATION: Recalls 4,824 Helmets For Injury, Death Hazard
----------------------------------------------------------------
Zamp Sports Corporation is cooperating with the National Highway
Traffic Safety Administration (NHTSA) by voluntarily recalling
4,824 motorcycle helmets, namely:
(1) ZAMP S-1 SHORTY / H011003L
(2) ZAMP S-1 SHORTY / H011003M
(3) ZAMP S-1 SHORTY / H011003S
(4) ZAMP S-1 SHORTY / H011003XL
(5) ZAMP S-1 SHORTY / H011003XS
(6) ZAMP S-1 SHORTY / H011003XXL
(7) ZAMP S-1 SHORTY / H011015L
(8) ZAMP S-1 SHORTY / H011015M
(9) ZAMP S-1 SHORTY / H011015S
(10) ZAMP S-1 SHORTY / H011015XL
(11) ZAMP S-1 SHORTY / H011015XS
(12) ZAMP S-1 SHORTY / H011015XXL
(13) ZAMP S-1 SHORTY / H01103FL
(14) ZAMP S-1 SHORTY / H01103FM
(15) ZAMP S-1 SHORTY / H01103FS
(16) ZAMP S-1 SHORTY / H01103FXL
(17) ZAMP S-1 SHORTY / H01103FXS
(18) ZAMP S-1 SHORTY / H01103FXXL
(19) ZAMP S-1 SHORTY / H01115FL
(20) ZAMP S-1 SHORTY / H01115FM
(21) ZAMP S-1 SHORTY / H01115FS
(22) ZAMP S-1 SHORTY / H01115FXL
(23) ZAMP S-1 SHORTY / H01115FXS
(24) ZAMP S-1 SHORTY / H0113FLL
(25) ZAMP S-1 SHORTY / H0113FLM
(26) ZAMP S-1 SHORTY / H0113FLS
(27) ZAMP S-1 SHORTY / H0113FLXL
(28) ZAMP S-1 SHORTY / H0113FLXS
Certain Zamp S-1 Sporty motorcycle Helmets imported between
February 1 and July 31,2003 fail the penetration, retention
elongation, g-forces and labeling requirements of federal motor
vehicle safety standard no. 218, motorcycle helmets. In event
of a vehicle crash, the helmet will not adequately protect the
user, possibly resulting in serious injury or death.
Zamp Sports will notify its customers and replace these helmets
with an equivalent compliant helmet. The recall is expected to
begin February 2005. Owners who do not receive the free remedy
within a reasonable time should contact the Company by Phone:
916-861-0066 for NHTSA's auto safety hotline: 1-888-DASH-2-DOT
(1-888-327-4236).
New Securities Fraud Cases
A.G. EDWARDS: Finkelstein & Krinsk Lodges Securities Suit in CA
---------------------------------------------------------------
The law firm of Finkelstein & Krinsk, LLP, initiated a class
action in the United States District Court for the Southern
District of California on behalf of purchasers of Variable
Annuity Insurance Products ("Variable Annuities") from A.G.
Edwards & Sons, Inc. ("A.G. Edwards") between January 1, 1990
and February 3, 2005 (the "Class Period").
The complaint alleges that during the Class Period, A.G. Edwards
made false and misleading statements and omitted material facts
concerning its undisclosed financial interests with third party
suppliers of annuity contracts. The third parties paid monies
and other incentives to have Variable Annuities steered to them
by A.G. Edwards without properly disclosing the preexisting
arrangement to its customers.
A variable annuity is an insurance contract with characteristics
causing it to be treated as an "investment" under the Securities
Act of 1933. A Variable Annuity contract generally provides that
the purchaser agree to a simple "lump sum" premium or scheduled
fixed premiums for a pre-set number of years. The premiums are
deposited into a separate account after deducting expenses, fees
and charges specified in the contract. The premiums thus
collected in the annuitant's separate account are available for
tax deferred investment in one or more portfolios (called sub-
accounts). Upon maturity of the annuity, the annuitant receives
payment from the accumulated value in such amounts and upon the
terms specified in the underlying investment contract.
Rather than providing independent and unbiased services for
clients wanting to purchase Variable Annuities, A.G. Edwards
maintained secret contingent fee sharing agreements with a
number of insurance company underwriters of annuity contracts.
These activities cause insurance companies to collect higher
premiums than would be paid absent these arrangements and result
in A.G. Edwards customers paying inflated premiums for the
Variable Annuities.
For more details, contact Amy Lepine, Esq. of Finkelstein &
Krinsk, LLP by Phone: 877-493-5366 by Fax: 619-238-5425 or by E-
mail: ajl@classactionlaw.com OR Ronald A. Marron, Esq. of the
Law Office of Ronald A. Marron, APLC by Phone: 619-685-6969 by
Fax: 619-690-0983 or by E-mail: Ron.Marron@cox.net OR Frederick
Schenk, Esq. of Casey, Gerry, Reed & Schenk by Phone: 619-238-
1811 by Fax: 619-544-9232 or by E-mail: fschenk@cglaw.com and
Stephen Basser, Esq. of Barrack, Rodos & Bacine by Phone: 619-
230-0800 by Fax: 619-230-1874 or by E-mail: sbasser@barrack.com.
CHINA AVIATION: Schiffrin & Barroway Files Securities Suit in NY
----------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a class
action lawsuit in the United States District Court for the
Southern District of New York on behalf of all securities
purchasers of China Aviation Oil (Singapore) Corporation LTD
(OTC: CAOLF) ("China Avitaion" or the "Company") between March
27, 2003 and November 30, 2004 inclusive (the "Class Period").
The complaint charges China Aviation, Jia Changbin and Chen
Jiulin 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 lacked adequate internal controls and
risk management procedures;
(2) that as a consequence the Company engaged in
speculative derivative trading, forcing controlling
shareholders to raise funds to cover margin calls on
massive derivative losses; and
(3) that the Company kept $550 million in derivative
trading losses of the books, thereby artificially
inflating its financial results.
On November 30, 2004, China Oil announced that the Company had
suffered significant losses from speculative oil derivative
trading. As of November 29, 2004, the Company estimated that the
total cumulative losses (both realized and unrealized) incurred
by the Company were approximately US$550 million. On this news,
trading in the Company's shares was suspended after the shares
dropped to below S$1.00 per share, compared to prices as high as
S$1.70 per share, at which the shares traded during the Class
Period.
For more details, contact Marc A. Topaz, Esq. or Darren J.
Check, Esq. of Schiffrin & Barroway, LLP by Phone:
1-888-299-7706 or 1-610-667-7706 or by E-mail;
info@sbclasslaw.com.
DIRECT GENERAL: Schiffrin & Barroway Lodges TN Securities Suit
--------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a class
action lawsuit in the United States District Court for the
Middle District of Tennessee on behalf of all securities
purchasers of Direct General Corp. (NASDAQ: DRCT) ("Direct
General" or the "Company") between August 11, 2003, and January
26, 2005 inclusive (the "Class Period").
The complaint charges Direct General, William Adair, Jr., Barry
Elkins, Brian Moore, Jacqueline Adair, and Tammy Adair 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 defendants concealed the negative effect that
a chance in the law related to personal injury
protection coverage in Florida had on its business;
(2) that the Company maintained inadequate loss reserves
and failed to adjust for loss reserves with respect to
a change in the law related to personal injury
protection coverage in Florida. Beginning with policies
issued on or after October 1, 2003, Florida mandated
that the maximum personal injury protection coverage
deductible be reduced from $2,000 per occurrence to
$1,000 and that the limit be increased to $10,000 in
excess of the deductible as opposed to $10,000 less the
deductible;
(3) that as result of this, the Company had to further
increase its reserves by approximately $2.2 million;
and
(4) as a consequence of the foregoing, the Company's income
was materially overstated at all relevant times.
On January 26, 2005, Direct General announced that it had
completed its analysis of loss reserves as of December 31, 2004,
and had determined that it was necessary to strengthen its loss
reserves for an estimated 2.1 point increase in the expected
ultimate loss ratio for the 2004 accident year and to further
increase its reserves for prior accident years by approximately
$2.2 million. The news shocked the market. Shares of fell $8.88
per share, or 31.17 percent, on January 27, 2005, to close at
$19.61 per share.
For more details, contact Marc A. Topaz, Esq. or Darren J.
Check, Esq. of Schiffrin & Barroway, LLP by Phone:
1-888-299-7706 or 1-610-667-7706 or by E-mail;
info@sbclasslaw.com.
DIRECT GENERAL: Wolf Popper Lodges Amended Securities Suit in TN
----------------------------------------------------------------
The law firm of Wolf Popper LLP lodged an amended complaint in a
securities class action against Direct General Corporation
(Nasdaq: DRCT) expanding the Class Period to August 11, 2003
through January 26, 2005. The action includes investors in the
open market and on Direct General's two stock offerings. The
action was filed in the U.S. District Court for the Middle
District of Tennessee.
The amended complaint is based on Wolf Popper's continuing
investigation and includes allegations that insiders, including
the named defendants, sold approximately 2.4 million shares of
Direct General stock during the Class Period for total proceeds
of over $80 million.
In the amended complaint, plaintiff alleges that defendants
materially misrepresented on numerous occasions that Direct
General was performing extremely well, when in fact Direct
General had understated its loss reserves in light of Florida
legislation that was signed into law on July 11, 2003.
Direct General shocked investors when it disclosed on January
26, 2005 -- over 15 months after the passage of the Florida law
-- that it had not previously increased its reserves in light of
its exposure under Florida law during previous quarters, and
that it would consequently be required to increase its reserves
by $11 million pre-tax.
As a result of the news, Direct General shares plummeted nearly
31% to close on January 27, 2005 at $19.67 per share.
For more details, contact Robert C. Finkel, Esq. of WOLF POPPER
LLP by Mail: 845 Third Avenue, New York, NY 10022 by Phone:
212-451-9620 or 877-370-7704 by E-mail: irrep@wolfpopper.com or
visit their Web site: http://www.wolfpopper.com.
INPUT/OUTPUT: Lerach Coughlin Lodges Securities Fraud Suit in TX
----------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP ("Lerach Coughlin") initiated a class action in the United
States District Court for the Southern District of Texas on
behalf of purchasers of Input/Output, Inc. ("Input/Output")
(NYSE:IO) publicly traded securities during the period between
May 10, 2004 and January 4, 2005 (the "Class Period"), including
those who acquired their shares pursuant to the Company's June
2004 Secondary Stock Offering.
The complaint charges Input/Output and certain of its officers
and directors with violations of the Securities Exchange Act of
1934. Input/Output is a provider of seismic acquisition imaging
technology for exploration, production and reservoir monitoring
in land and marine, as well as shallow water and marsh
environments.
The complaint alleges that during the Class Period, defendants
issued materially false and misleading statements regarding the
Company's financial results and its business and prospects.
According to the complaint, during the Class Period defendants
failed to disclose and misrepresented the following material
adverse facts known to defendants or recklessly disregarded by
them:
(1) that the Company's products were defective;
(2) that customers were wrongfully induced into buying the
Company's products;
(3) that the integration of GX Technology ("GXT"), acquired
by the Company in May 2004, and Input/Output was
suffering from massive problems, preventing the
acquisition from being as accretive as claimed;
(4) that the GXT project pipeline was not on track, as
defendants had claimed; and
(5) that as a result of the above, the defendants'
statements about the Company were lacking in any
reasonable basis when made.
On January 4, 2005, Input/Output issued a press release wherein
it announced that fourth quarter results would be significantly
below the low end of the Company's guidance of $0.08 per share,
primarily because two high margin GXT data library sales were
not completed as expected. On this news, shares of Input/Output
fell $1.41 per share, or about 17%, to close at $6.90 per share,
on unusually high trading volume.
For more details, contact Samuel H. Rudman or David A. Rosenfeld
of Lerach Coughlin by Phone: 800/449-4900 or 619/231-1058 or by
E-mail: wsl@lerachlaw.com or visit their Web site:
http://www.lerachlaw.com/cases/inputoutput/.
PHARMOS CORPORATION: Stull Stull Lodges Securities Suit in NJ
-------------------------------------------------------------
The law firm of Stull, Stull & Brody initiated a class action
lawsuit 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. ("Pharmos") (Nasdaq:PARS)
between August 23, 2004 and December 17, 2004, inclusive (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"), 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 Tzivia Brody, Esq. of Stull, Stull &
Brody by by Mail: 6 East 45th Street, New York, NY 10017 by
Phone: 1-800-337-4983 by Fax: 212/490-2022 or by E-mail:
SSBNY@aol.com or visit their Web site: http://www.ssbny.com.
TOWER AUTOMOTIVE: Federman & Sherwood Lodges NY Securities Suit
---------------------------------------------------------------
The law firm of Federman & Sherwood initiated a securities class
action lawsuit in the Southern District of New York against
certain officers and directors of Tower Automotive, Inc. (NYSE:
TWR).
The complaint alleges violations of federal securities laws,
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10b-5, including allegations of issuing a series of
material misrepresentations to the market which had the effect
of artificially inflating the market price. The complaint
further alleges that the officers and directors of Tower
Automotive, Inc. actively concealed true facts that the
Company's liquidity issues were so poor that bankruptcy was
imminent. The class period is from February 14, 2003 through
January 21, 2005.
For more details, contact William B. Federman of FEDERMAN &
SHERWOOD by Mail: 120 N. Robinson, Suite 2720, Oklahoma City, OK
73102 by Phone: (405) 235-1560 by Fax: (405) 239-2112 by Mail:
wfederman@aol.com or visit their Web site:
http://www.federmanlaw.com.
TOWER AUTOMOTIVE: Lerach Coughlin Files NY Securities Fraud Suit
----------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP ("Lerach Coughlin") initiated a class action lawsuit in the
United States District Court for the Southern District of New
York on behalf of purchasers of Tower Automotive, Inc. ("Tower
Automotive") (NYSE: TWR) common stock during the period between
February 14, 2003, and January 21, 2005 (the "Class Period").
The complaint charges certain of Tower Automotive's officers and
directors with violations of the Securities Exchange Act of
1934. Tower Automotive is a global designer and producer of
vehicle structural components and assemblies used by every major
automotive original equipment manufacturer. On February 2, 2005,
the Company filed for bankruptcy protection under Chapter 11 of
the United States Bankruptcy Code in the Southern District of
New York and, therefore, the Company is not named as a
defendant.
The complaint alleges that, during the Class Period, defendants
failed to disclose and/or misrepresented the following adverse
facts, which were known to defendants, or recklessly disregarded
by them, at all relevant times:
(1) that the Company was facing increasing pressure from
automakers to dramatically lower its prices in order to
offset incentives that automakers were having to
provide in order to remain competitive;
(2) that the costs of steel and other raw materials were
continuing to rise and would do so in the future,
thereby increasing expenses and, when combined with the
squeeze being placed on the Company by automakers,
dramatically decreasing the Company's earnings ability.
To the extent that Tower purported to warn of the
impact of rising materials' prices, those warnings were
generic in nature and did not advise investors of the
full extent of the risks and uncertainties faced by the
Company as a result of rising materials' prices;
(3) that early pay programs that had been instituted by
automakers in 2001 which enabled automakers to pay
suppliers early for products and therefore get a
discount were going to be terminated, thereby depriving
the Company of a primary source of its liquidity;
(4) based on the foregoing, contrary to Defendants'
representations, the Company's financial condition was
declining precipitously such that the Company was
nearing insolvency and would have to file for
bankruptcy; and
(5) based on the foregoing, defendants had no reasonable
basis for their positive statements regarding the
Company's ability to control its liquidity issues.
Then, on January 20, 2005, the Company issued a press release
announcing that longer-than-anticipated holiday shutdowns at
certain key customers will reduce liquidity by $40 million
during the first quarter of 2005. On the following trading day,
Standard & Poor's ("S&P") slashed its rating on Tower Automotive
saying that the Company may have to restructure its finances
unless business improves over the next two quarters. S&P cut
Tower Automotive's corporate credit rating by three notches to
the deeply speculative "CCC" level from "B."
Market reaction to these announcements was swift and severe. On
January 21, 2005, shares of Tower Automotive common stock closed
at $0.75 per share, a decline of $1.61 per share, or almost 70%,
from its close on January 19, 2005.
For more details, contact Samuel H. Rudman or David A. Rosenfeld
of Lerach Coughlin by Phone: 800/449-4900 or 619/231-1058 or by
E-mail: wsl@lerachlaw.com or visit their Web site:
http://www.lerachlaw.com/cases/towerautomotive/.
*********
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asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
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*********
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Copyright 2005. All rights reserved. ISSN 1525-2272.
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