/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/050214.mbx C L A S S A C T I O N R E P O R T E R Monday, February 14, 2005, Vol. 7, No. 31 Headlines ABERCROMBIE & FITCH: MALDEF Publicizes $40M CA Settlement Fund ABERCROMBIE & FITCH: WA Employees' Suit Set To Be Heard By Judge ADDERALL XR: Linked To 20 Deaths, Health Canada Orders Recall AMERICA WEST: Settles Teamsters Pension Fund Lawsuit For $15 Mil AMERICAN HONDA: Recalls 486,659 Passenger Cars For Crash Hazard ARIZONA: Judge Accepts Efforts To Improve Teachers' Training ARKANSAS: Food Banks Share in $350T Vitamin Additives Settlement ARETT SALES: Recalls 2 Mil Barbecue Lighters Due To Fire Hazard BANK OF AMERICA: VA Judge Allows Workers To Join Overtime Suit DEB SHOPS: Recalls 48,000 Candleholders Because of Fire Hazard FIRST COMMAND: CA Attorneys Sue Over Systematic Investment Plan FORD MOTOR: OH Court Approves To Race Bias Lawsuit Settlement FORTNER FOODS: Recalls Ham Products For Listeria Contamination FOUNDRY NETWORKS: Plaintiffs Voluntarily Dismiss Judgment Appeal GENERAL MOTORS: Recalls Trucks, SUV, Vans For Injury, Crash Risk GENERAL MOTORS: Recalls 17,815 SUVs For Failing Safety Standard GENERAL MOTORS: Recalls 19,924 Passenger Cars For Brake Defect HARTFORD FINANCIAL: Applauds Passage Of Class Action Reform Bill HAWAII: Agrees To Pay $1.2 Mil in Acquitted Detainees' Lawsuit IC CORPORATION: Recalls 920 IC CE Buses For Defective Locknuts MASSACHUSETTS: AT&T Reaches Fraudulent Billing Settlement NEW STAR TOYS: Recalls 1,200 Toy Cars Because of Choking Hazard NEW YORK: Individuals Charged With Fraud For Filing False Claims PNC FINANCIAL: Employees Lodges PA Suit Over Pension Alteration RENT-A-CENTER: Appeals Court Rules That Judge Must Review Ruling SHIMANO AMERICAN: Recalls 13.63T Cables Due To Injury Hazard TEXAS: Homeowners Lodge Suit Over General Contractor's Expenses TEXAS: A.G. Abbot Files Immigration Fraud Suit V. Houston Woman TEXAS: A.G. Nets Favorable Judgment in Gym Membership Fraud Suit TODO DOLLAR: Recalls 102T Flashing Pacifiers For Choking Hazard UNION PACIFIC: TX Royalty Owners To Share in $30M Gas Settlement UNION PACIFIC: TX Royalty Owners To Share in $30M Gas Settlement UNITED STATES: ACEC Applauds Senate Passage of Reform Bill (S.5) UNITED STATES: AHIP Head Applauds Passage Of Lawsuit Reform Bill VALLEY PROTEINS: Deadline Set For Opting Out Of $2.3 Settlement WOOD MANUFACTURING: Recalls 7,577 Trailers Due To Crash Hazard New Securities Fraud Cases EPIX PHARMACEUTICALS: Marc S. Henzel Files Securities Suit in MA HUFFY CORPORATION: Stull Stull Files Securities Fraud Suit in OH HYPERCOM CORPORATION: Federman & Sherwood Files Stock Suit in AZ HYPERCOM CORPORATION: Lerach Coughlin Lodges AZ Securities Suit HYPERCOM CORPORATION: Marc S. Henzel Files Securities Suit in AZ HYPERCOM CORPORATION: Marc Henzel Lodges Securities Suit in AZ INPUT/OUTPUT: Marc Henzel Files Securities Fraud Suit in S.D. TX OFFICEMAX INC.: Spector Roseman Lodges Securities Suit in IL PHARMOS PHARMACEUTICAL: Marc S. Henzel Lodges NJ Securities Suit SIERRA WIRELESS: Stull Stull Lodges Securities Fraud Suit in CA SIPEX CORPORATION: Marc S. Henzel Lodges Securities Suit in CA SIRVA INC.: Marc Henzel Lodges Securities Fraud Suit in N.D. IL STAR GAS: Marc Henzel Commences Securities Fraud Lawsuit in CT STONEPATH GROUP: Marc Henzel Lodges Securities Suit in E.D. PA SUPPORTSOFT INC.: Marc Henzel Lodges Securities Suit in N.D. CA SWIFT TRANSPORTATION: Marc Henzel Lodges Securities Suit in AZ TOWER AUTOMOTIVE: Marc Henzel Lodges Securities Suit in S.D. NY ********* ABERCROMBIE & FITCH: MALDEF Publicizes $40M CA Settlement Fund -------------------------------------------------------------- Individuals who applied for a job at Abercrombie & Fitch and were turned down because of their race or sex, or those who worked at Abercrombie and were let go or relegated to the back room, that they may be eligible for payment from the settlement of a class action lawsuit against the retail giant, The Mexican American Legal Defense and Educational Fund (MALDEF) announced, according to the Filipino Express. The settlement applies to all women and all African Americans, Asian Americans and Latinos who either applied for a job at an Abercrombie store (or attempted to do so and were discouraged) or were employed there between February 24, 1999 and November 16, 2004. The stores include Abercrombie & Fitch, Abercrombie kids and Hollister stores. Tom Saenz, an attorney with MALDEF explains, "The settlement provides $40 million in compensation to Latino, African American, Asian American, and female applicants and employees discriminated against by Abercrombie." The settlement comes in the case of Gonzalez v. Abercrombie, a federal civil rights lawsuit filed in 2003 by MALDEF, the NAACP Legal Defense and Educational Fund (LDF), the Asian Pacific American Legal Center (APALC), and private plaintiffs' law firms on behalf of nine young adults of color, including students and graduates of the University of California and Stanford, who were refused sales jobs or terminated because of their race or ethnicity. Others across the country eventually joined the original plaintiffs, including women who were discriminated against based on their gender. The federal Equal Employment Opportunity Commission (EEOC) further strengthened the plaintiffs' position when it validated their claims. According to plaintiff Jennifer Lu, a recent graduate of UC Irvine who was terminated from a southern California Abercrombie & Fitch store, in addition to the money for class members, the settlement requires Abercrombie to substantially reform its recruitment, hiring, job assignment, promotion, and training practices. "It is a comprehensive package of reforms that will make minority and female employees feel more welcome." For more details, contact MALDEF, c/o Shaheena Ahmad Simons by Phone: (213) 629-2512 ext. 127 OR PALC, c/o Minah Park by Phone: (213) 241-0220 OR NAACP LDF, c/o Marcy DeVaux or John Tucker by Phone: (310) 342-5130 OR The Gonzalez v. Abercrombie Claims Administrator by Mail: P.O. Box 10564, Tallahassee, FL 32302- 2564 by Phone: 1-866-854-4175 or visit their Web site: http://www.abercrombieclaims.com. ABERCROMBIE & FITCH: WA Employees' Suit Set To Be Heard By Judge ---------------------------------------------------------------- Judge Julie Specter of the King County Superior Court in Washington is set to hear a lawsuit filed two years ago by Shelby Port, Lindsey King and other current and former Abercrombie & Fitch employees, claiming that the Company forces them to wear and buy their own clothes for seasonal promotions or risk losing their jobs, the Seattle Times reports. The suit, which was recently certified as a class-action lawsuit, specifically alleges that the Midwest retailer has an unwritten, but strictly enforced dress code that violates Washington law. Under that state law, employers cannot require employees to buy elaborate or expensive uniforms without compensation. Ms. King, a former manager at the retailer's Bellingham store, told the Seattle Times, "Well, I didn't want to have to show up every day in a miniskirt. But the real reason I'm participating in this is because I know that what they were doing was unfair and I know they were taking advantage of the associates by making them spend more money to purchase clothes for work than they would even take home." The suit contends that Abercrombie made a policy of requiring employees to buy and wear whatever outfits were being promoted by the Company as "The Look" at the time, which actually changes every three months. In addition, court documents say, employees were not allowed to wear items that had been marked for sale. Though unavailable for comment, attorneys for Abercrombie stated in court documents that were filed in the case that the Company does not require employees to either purchase or wear the Company's clothes as a condition of employment, the Times reports. Within the last few years, the Company has been boycotted for marketing thongs to elementary school-age girls and for selling a T-shirt that was deemed racist by members of the Asian community. Just recently, the Company settled a $40 million race- and gender-bias suit in California, agreeing to create an office of diversity and to recruit more black, Latino and Asian employees. Stephen P. Connor, representing the plaintiffs in the Washington State case, told the Times he hopes the lawsuit will compel the Company to reimburse employees for required clothing purchases. ADDERALL XR: Linked To 20 Deaths, Health Canada Orders Recall ------------------------------------------------------------- Health Canada has ordered a recall of the attention deficit hyperactivity disorder (ADHD) drug Adderall XR late Wednesday, after it was linked to 20 sudden deaths and a dozen strokes, including some among children, the Associated Press reports. The drug is manufactured by Shire Pharmaceuticals Group PLC, based in Basingstoke, England, and is sold in Canada and the United States. A related immediate-release form of the drug, sold simply as Adderall, is sold in the United States but has not been approved for sale in Canada, where 11,000 patients are prescribed Adderall XR. Canadian officials approved that drug in January 2004. Of the 20 cases of sudden deaths linked to the drug, 14 were in children. Two of the 12 strokes were suffered by children taking the drug. The adverse reactions were not associated with overdose, misuse or abuse of the drug, Health Canada spokesman Ryan Baker told AP. None of these deaths or strokes associated with Adderall XR were reported in Canada, Mr. Baker added. "However, Health Canada has received eight reports of adverse reactions ranging in severity from convulsions to minor skin rash," he told AP. "It's not been determined yet whether these reactions were a result of Adderall XR use." The U.S. Food and Drug Administration, however, said it had evaluated the same reports and doesn't believe the data warranted such action in the United States. In a statement late Wednesday, Health Canada said it is asking makers of related stimulants used to treat the commonly diagnosed condition to provide a thorough review of their worldwide safety data, AP reports. Shire's chief executive, Matthew Emmens, said in a statement late Wednesday that the Company "remains confident in the safety and efficacy" of the drug. Mr. Emmens told AP the FDA had reviewed the same data as Health Canada last year and sought an additional warning in September that the drug should not be prescribed for people with "structural cardiovascular abnormalities." About 700,000 people take Adderall XR in the United States, with about 300,000 more using Adderall, Shire spokesman Matthew Cabrey said Wednesday, according to AP. Shire reported $140 million in U.S. sales of the drugs in the third quarter of 2004. In a statement posted on its Web site late Wednesday, the FDA said it "does not feel that any immediate changes are warranted in the FDA labeling or approved use of this drug based upon its preliminary understanding of Health Canada's analyses of adverse event reports and FDA's own knowledge and assessment of the reports received by the agency." Health Canada is asking people taking the drug or parents of children on it to consult their physicians immediately to select alternatives. It is also asking them not to discard unused pills but rather to take them to a pharmacy for safe disposal. People taking related drugs for the management of ADHD should not stop their treatment but could consult their doctors if they have concerns, the department said, according to AP. In light of the international reports of adverse reactions, the department reviewed the drug's safety data and conducted a preliminary review of safety data for the other related stimulants authorized for treatment of ADHD in Canada. The incidence of serious adverse reactions leading to death was higher in Adderall and Adderall XR combined than in any other drugs of the class, the release said. AMERICA WEST: Settles Teamsters Pension Fund Lawsuit For $15 Mil ---------------------------------------------------------------- America West Airlines, several of its officers and directors and two major shareholders, Continental Airlines and TPG Partners, have agreed to settle a protracted class action shareholder lawsuit by the Teamsters pension fund for $15 million, the American City Business Journals Inc. reports. The five-year-old Teamsters lawsuit had alleged that some members of management of the Tempe-based airline artificially inflated the value of Company stock, before they sold it themselves, by failing to disclose the magnitude of an FAA investigation into maintenance records back in 1997 and 1998. America West spokeswoman Elise Eberwein told the Phoenix Business Journal Thursday that the settlement with the Teamsters, which still requires court approval, will not impact future earnings, since it will be paid through insurance and that the other defendants in the case will share in the payment. America West (NYSE: AWA) serves 96 destinations daily in the United States, Canada, Mexico and Costa Rica. AMERICAN HONDA: Recalls 486,659 Passenger Cars For Crash Hazard --------------------------------------------------------------- American Honda Motor Co. is cooperating with the National Highway Traffic Safety Administration (NHTSA) by voluntarily recalling 486,659 passenger vehicles, namely: (1) ACURA / TL, model 1999-2000 (2) HONDA / ACCORD, model 1999-2002 (3) HONDA / PRELUDE, model 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 during 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. ARIZONA: Judge Accepts Efforts To Improve Teachers' Training ------------------------------------------------------------ U.S. District Judge Raner Collins has accepted Arizona's efforts to improve training of teachers who instruct students learning English, the Associated Press reports. Despite accepting the state's efforts, the federal judge did reject a challenge that the state didn't deliver on promised improvements. Parents of English-learning students, who are plaintiffs in a class-action lawsuit, had asked the judge to rule that Arizona was in contempt of court for allegedly failing to abide by its 2000 promises. However, Judge Collins says the state Department of Education has put forth "a good faith effort." A lawyer for the plaintiffs, Tim Hogan, told AP the ruling disappoints him, but he adds that it doesn't end debate on the teacher training issue. ARKANSAS: Food Banks Share in $350T Vitamin Additives Settlement ---------------------------------------------------------------- Ozark Foodbank, a local food bank in Bethel Heights along with six other state food banks will receive a portion of a $350,000 class action settlement on a price-fixing conspiracy of vitamin additives in food products, the Springdale Morning News reports. The suit, filed by the McMath Law Firm, had brought a $750,000 settlement. The Arkansas Attorney General's Office provided assistance in determining statewide programs to use the money. Eventually, the settlement was split three ways, with $350,000 going to the Arkansas Hunger Relief Alliance, an organization of which Ozark Foodbank is a member. Other members of the organization are the Arkansas Foodbank Network, the Northeast Arkansas Foodbank, the North Central Arkansas Foodbank, the Northwest Arkansas Foodbank and Harvest Texarkana. In 2004, the alliance provided 13.6 million pounds of food to nearly 1,000 emergency food pantries, homeless shelters, soup kitchens and other organizations. Another $350,000 will go to the Meals On Wheels Association of America, which feeds elderly, homebound people who cannot shop or prepare their own meals. The University of Arkansas Medical System Champions Club of Arkansas, a program helps overweight children and their families make healthy lifestyle changes will receive the final $50,000. ARETT SALES: Recalls 2 Mil Barbecue Lighters Due To Fire Hazard --------------------------------------------------------------- In cooperation with the U.S. Consumer Product Safety Commission (CPSC), Arett Sales Corporation (ASC), of Cherry Hill, N.J., is recalling about 2 million multi-purpose barbecue lighters. Sold under the brand name "Kitchen Works," the lighters lack child-resistant mechanisms that meet federal safety standards. Young children could operate these lighters, which poses a fire hazard. Federal standards require multi-purpose lighters to have the same level of child-resistance as required in the safety standard for cigarette lighters. The child-resistant mechanism must operate safely, function for the expected life of the lighter, and not be easy to deactivate. The child-resistant mechanism also must automatically reset after each use. ASC has not received any reports of incidents or injuries involving these barbecue lighters. The recalled gas-fueled lighters have an orange or red plastic body, and a silver- colored metal nozzle. Each lighter measures 10 _- inches long. The lighters were made in China. Dollar stores nationwide sold the barbecue lighters from January 2001 through July 2004 for about $1. Consumers should stop using the lighters immediately and return them to the place of purchase for a full refund or dispose of the lighters in a manner that is in compliance with all state and local requirements. Lighters should not be incinerated or punctured. For more information, consumers should contact ASC toll-free at (800) 431-1212 between 9 a.m. and 4:30 p.m. ET Monday through Friday. BANK OF AMERICA: VA Judge Allows Workers To Join Overtime Suit -------------------------------------------------------------- A federal judge in the Western District of Virginia ruled that about 250 current and former Bank of America Corporation employees can now join a class-action lawsuit seeking compensation for unpaid overtime labor, the Associated Press reports. The suit charges that Bank of America improperly classified the workers as ineligible for overtime between September 2002 and April 2003. Furthermore, the suit also charges the bank of changing their classification, but improperly discouraged overtime claims. The affected employees had worked for the Banking Center Control Review department, performing on-site reviews at Bank of America branches. According to the suit, filed by former employee Cynthia Deel, the employees worked long hours and were expected to travel between branches on their own time. Ms. Deel left the Company in July 2003. A magistrate judge ruled in December that other employees could join the suit. The bank objected, but still Judge James Turk sided with the magistrate judge. Though the case will not come to trial for at least several more months, the court will soon start authorizing the wording of a letter to eligible workers inviting their participation. A spokeswoman for the Charlotte-based Company told AP the charges were "without merit" and that Bank of America would defend itself against the suit. DEB SHOPS: Recalls 48,000 Candleholders Because of Fire Hazard -------------------------------------------------------------- Deb Shops Inc., of Philadelphia, Pennsylvania and Horn Sing Ind. Company Ltd., of Taipei, Taiwan is cooperating with the United States Consumer Product Safety Commission by voluntarily recalling about 48,000 Decorative Candleholders. The hook or handle of the candleholder can overheat and break, causing the lit candle to fall out and pose a fire hazard. Deb Shops has received two reports of the metal candleholder burning through, causing the candle to fall and burn a small rug area. No injuries have been reported. This recall involves moon, dolphin and fish themed candleholders. The decorative candleholders are about 9-inches tall with a metal bucket that sits suspended from a hook. A votive candle sits inside the bucket. Manufactured in Taiwan, the candleholders were sold at all Deb Shops retail stores nationwide from November 2001 through November 2004 for about $13. Consumers should stop using the candleholder immediately and return it to the nearest Deb Shops retail store for a full refund. Consumer Contact: Contact Deb Shops Inc. at (800) 332-7467 between 9 a.m. and 5 p.m. ET or visit the firm's Web site at http://www.debshops.com/recall/candleholder. FIRST COMMAND: CA Attorneys Sue Over Systematic Investment Plan --------------------------------------------------------------- California attorneys filed a class-action lawsuit against First Command Financial Planning, which could result in payouts to military investors not included in last year's federal settlement, the Stars and Stripes reports. The suit, filed in the U.S. District Court of Southern California, asks for compensation for members of First Command's systematic investment plan, saying the Company used "false and misleading marketing" in its dealings with troops. However, First Command officials through Paul Cozby, a Company spokesman dismissed those accusations saying, "First Command Financial Planning is proud of its years of service to hundreds of thousands of military families. We believe the complaint filed in San Diego contains numerous factual inaccuracies and erroneous conclusions," the Stars and Stripes reports. In December, federal regulators had publicly revealed that First Command would refund about $4 million to customers who bought and sold the systematic investment plans between 1999 and 2004, a settlement that came after an investigation found the Company's salespeople had misled military personnel about costs and returns associated with the plan. Though Company officials did not admit to or deny the charges they have since stopped offering those funds. Norman Blumenthal, one of eight attorneys already signed on to the suit, told the Stars and Stripes anyone who bought a systematic investment plan before December 15 and did not sell the plan before that date could be eligible to join the class- action suit. He also explains that the ultimate goal of the legal action is to help customers not included in the federal settlement, but also "punished" by First Command's sales practices. He even adds, "You shouldn't put military personnel in a position where you're taking that much money away in fees. We think it's a bad plan." As stated in the lawsuit, the systematic investment plans took as much as 50 percent of investors' first-year savings in broker fees and higher-than-needed fees after that. It also alleges that salespeople for the firm lied about the likelihood of recouping that money and of misleading customers about better investment plans. Furthermore, Mr. Blumenthal said First Command customers do not need to sign up to become part of the class, if a settlement or verdict award is reached, all those eligible will be able to recover money, he however is encouraging military personnel he speaks with to talk with a financial adviser about their investments. A lead plaintiff for the case is to be named by May 1, at which point the courtroom process will begin. FORD MOTOR: OH Court Approves To Race Bias Lawsuit Settlement ------------------------------------------------------------- The United States District Court for the District of Ohio granted preliminary approval to a settlement proposed by Ford Motor Co., that would guarantee black employees access to an apprenticeship training program they say they were illegally barred from in the automaker's factories, The Associated Press reports. The Company's apprenticeship program allows unskilled laborers in Ford plants to learn skills for higher paying jobs including electricians and millwrights. Participation in the program can lead to better job security and improved opportunities for promotion, lawyers for the plaintiffs told The AP. The lawsuit represents black employees who took an application test for the program on or after January 1, 1997, and were not chosen. They said the selection process discriminated against black applicants in violation of state and federal civil rights laws. Ford says it did nothing wrong in administering the program at its plants nationwide, but it agreed to settle the lawsuit. Under the settlement, the Company will allocate 279 positions in the program for blacks and will pay $2,400 apiece to as many as 3,400 current and former Ford workers who could be eligible for the settlement. The Company also agreed to create a new selection program that would be monitored by an industrial psychologist with expertise in workplace and personnel issues. The proposed settlement could cost Ford more than $11 million, including $30,000 in payments to the 11 current and former Ford workers who filed the lawsuit in December, payment of their attorneys' fees and a later payment of $567,000 to the workers' lawyers for administering the settlement, The AP reports. U.S. District Judge S. Arthur Spiegel gave preliminary approval to the settlement Wednesday. He authorized the workers' lawyers to mail out letters to inform eligible participants, and set a June 1 hearing to determine whether to give the deal final approval. Telephone messages requesting comment were left Thursday with Ford spokesman Glenn Ray and United Auto Workers spokesman Roger Kerson, in Detroit, according to The AP. The UAW represents Ford workers and was sued because the union has an interest in the selection process for the program. FORTNER FOODS: Recalls Ham Products For Listeria Contamination -------------------------------------------------------------- Fortner Foods Commissary, a Murfreesboro, Tennessee, establishment, is voluntarily recalling ready-to-eat ham that may be contaminated with Listeria monocytogenes, the U.S. Department of Agriculture's Food Safety and Inspection Service announced. The ready-to-eat ham was distributed to four Sir Pizza restaurants; two in Murfreesboro and one each in La Vergne and Smyrna. It may have been an ingredient in several menu items served at the four restaurants February 5 and 6. The problem was discovered through routine FSIS sampling. FSIS has received no reports of illnesses associated with consumption of these products. Consumption of food contaminated with Listeria monocytogenes can cause listeriosis, an uncommon but potentially fatal disease. Healthy people rarely contract listeriosis. Listeriosis can cause high fever, severe headache, neck stiffness, and nausea. Listeriosis can also cause miscarriages and stillbirths, as well as serious and sometimes fatal infections in those with weak immune systems - infants, the frail or elderly, and persons with chronic disease, with HIV infection, or taking chemotherapy. Media and consumers with questions about the recall may contact Company President Nona Poole by Phone: (615) 896-9660. Consumers with food safety questions can phone the toll-free USDA Meat and Poultry Hotline at 1-888-MPHotline (1-888-674-6854). The hotline is available in English and Spanish and can be reached from l0 a.m. to 4 p.m. (Eastern Time) Monday through Friday. Recorded food safety messages are available 24 hours a day. FOUNDRY NETWORKS: Plaintiffs Voluntarily Dismiss Judgment Appeal ---------------------------------------------------------------- Plaintiffs have voluntarily dismissed their appeal of the judgment rendered in favor of Foundry Networks, Inc. and certain of its officers in the shareholder class action entitled "In re Foundry Networks Securities Litigation," pending in the Ninth Circuit Court of Appeals. As previously reported in the Company's SEC filings, in December 2000, several similar stockholder class action lawsuits were filed against the Company and certain of its officers in the United States District Court for the Northern District of California, following the Company's announcement of its anticipated financial results for the fourth quarter ended December 31, 2000. The lawsuits were subsequently consolidated by the District Court under the caption In re Foundry Networks, Inc. Securities Litigation, Master File No. C-00-4323-MMC. Lead Plaintiffs then filed a consolidated amended complaint, which alleged violations of federal securities laws and purported to seek damages on behalf of a class of stockholders who purchased the Company's common stock during the period from September 7, 2000 to December 19, 2000. On August 29, 2003, the United States District Court dismissed the action with prejudice and subsequently entered judgment in favor of Foundry Networks and the director and officer defendants. Plaintiffs appealed to the Ninth Circuit of Appeals. Argument on the appeal was set for February 17, 2005. Plaintiffs filed their unopposed motion for dismissal of the appeal on February 9, 2005. No settlement was paid in the action. The Company believes that the dismissal validates its position that the lawsuit was without merit. Shirli Wiess of the law firm of Gray Cary Ware & Freidenrich, LLP, represented foundry Networks and its directors and officers in the matter. The firm is now known as DLA Piper Rudnick Gray Cary US LLP. GENERAL MOTORS: Recalls Trucks, SUV, Vans For Injury, Crash Risk ---------------------------------------------------------------- General Motors Corporation is cooperating with the National Highway Traffic Safety Administration (NHTSA) by voluntarily recalling 155,465 trucks, sport utility vehicles and vans, namely: (1) CHEVROLET / AVALANCHE, model 2004-2005 (2) CHEVROLET / EXPRESS, model 2004-2005 (3) CHEVROLET / KODIAK, model 2004-2005 (4) CHEVROLET / SILVERADO, model 2004-2005 (5) CHEVROLET / SUBURBAN, model 2004-2005 (6) GMC / SAVANA, model 2004-2005 (7) GMC / SIERRA, model 2004-2005 (8) GMC / TOPKICK, model 2004-2005 (9) GMC / YUKON XL, model 2004-2005 (10) HUMMER / H2, model 2004-2005 Certain trucks, sport utility vehicles and vans equipped with Bosch hydro-boost brake assemblies, the hydraulic brake booster pressure accumulator may crack and separate from the hydro-boost assembly during normal operating conditions. If a separation occurred and the hood of the vehicle were open, fragments from the accumulator could cause injury to people in the immediate area. The presence of this crack or fractured surface could allow the hydraulic fluid to leak from the accumulator circuit of the booster assembly. The loss of fluid would cause increased steering and braking effort and a crash may occur without prior warning. Dealers will test the hydro-boost assembly for functional operation of the two-function valve. If the hydro-boost assembly fails the test, dealers are to replace the assembly. The recall is expected to begin during March 2005. For more details, contact Chevrolet by Phone: 1-800-630-2438, GMC by Phone: 1-866-996-9463 and Hummer by Phone: 1-800-732-5493, or contact the NHTSA's auto safety hotline: 1-888-327-4236. GENERAL MOTORS: Recalls 17,815 SUVs For Failing Safety Standard --------------------------------------------------------------- General Motors Corporation is cooperating with the National Highway Traffic Safety Administration (NHTSA) by voluntarily recalling 17,815 sport utility vehicles, namely: (1) BUICK / RAINIER, model 2005 (2) CHEVROLET / TRAILBLAZER, model 2005 (3) GMC / ENVOY, model 2005 (4) ISUZU / ASCENDER, model 2005 Certain sport utility vehicles fail to comply with the requirements of federal motor vehicle safety standard no. 212 "windshield mounting." The windshield urethane bead may not have adhered to the body in certain areas during the cure process. If a crash occurs, the windshield may not be retained, increasing the risk of injury to a vehicle occupant. Dealers will replace the windshield. The recall is expected to begin on March 10,2005. For more details, contact Buick by Phone: 1-866-608-8080, Chevrolet by Phone: 1-800-630-2438, or GMC by Phone: 1-866-996-9463, or contact the NHTSA auto safety hotline: 1-888-327-4236. GENERAL MOTORS: Recalls 19,924 Passenger Cars For Brake Defect -------------------------------------------------------------- General Motors Corporation is cooperating with the National Highway Traffic Safety Administration (NHTSA) by voluntarily recalling 19,924 passenger cars, namely: (1) CADILLAC / SRX, model 2004 (2) CADILLAC / XLR, model 2004 (3) PONTIAC / GRAND PRIX, model 2004 Certain passenger vehicles fail to comply with the requirements of the federal motor vehicle safety standard No. 124 "accelerator control systems." If one of the two accelerator pedal return springs fails and the temperature is 22 degrees Fahrenheit to -40 degrees Fahrenheit, the engine may not return to idle within three seconds, as required. If this were to occur, greater brake pedal force and a longer distance may be required to stop the vehicle. Dealers will replace the accelerator pedal assembly. This recall is expected to begin during March 2005. For more details, contact Cadillac by Phone: 1-866-982-2339 or Pontiac by Phone: 1-800-620-7668, or contact the NHTSA's auto safety hotline: 1-888-327-4236. HARTFORD FINANCIAL: Applauds Passage Of Class Action Reform Bill ---------------------------------------------------------------- The Hartford Financial Services Group, Inc. (NYSE: HIG), one of the nation's largest financial services and insurance companies, with 2004 revenues of $22.7 billion, applauded 72-26 vote in the United States Senate for passage of the Class Action Fairness Act, a bill debated by federal lawmakers for more than six years. Connecticut's two Senators, Christopher Dodd and Joseph Lieberman, helped steer the most recent version of this bill through the Senate. Supporters of the new legislation, including The Hartford, say that consumers and business win with this reform. The Class Action Fairness Act will significantly limit the certification of dubious class action lawsuits. Most importantly, the federal law will curb "venue shopping," a practice in which plaintiffs' lawyers bring large, national class actions in state courts that have little or no connection to the controversy. Class actions in these courts, typically located in remote counties, often lead to large settlements in which lawyers collect millions of dollars, while consumers receive little or nothing of value. "Today is an important day for all Americans, for the companies who make products for them and for the insurers whose policies protect those companies," said Ramani Ayer, Chairman and Chief Executive Officer of The Hartford. "Connecticut's senators, Christopher Dodd and Joseph Lieberman, deserve thanks from all of their constituents for helping to find a bi-partisan solution to this major problem." HAWAII: Agrees To Pay $1.2 Mil in Acquitted Detainees' Lawsuit -------------------------------------------------------------- The state of Hawaii agreed to pay $1.2 million to settle a federal class-action lawsuit that sought to stop a practice of detaining people who were returned to jail despite being found not guilty or ordered released by the courts, according to the American Civil Liberties Union (ACLU), The Honolulu Advertiser reports. The lawsuit was filed in December 2001 by the ACLU on behalf of nine people who alleged they were shackled, placed in court holding cells, taken back to the O'ahu Community Correctional Center and bodily searched after being acquitted. According to the ACLU, the state continued to hold some people for days and sometimes weeks. According to the Department of Public Safety, which was one of the defendants, at the time that the acquitted inmates were returned to OCCC to clear routine background checks and collect belongings before final court approval to be released. However, in January 2002, Circuit Judge Gail Nakatani ruled that people found not guilty should be allowed to leave the courtroom on their own and pick up their belongings at their convenience. Judge Nakatani said the release should be immediate, unless the defendant is being held on another matter. IC CORPORATION: Recalls 920 IC CE Buses For Defective Locknuts -------------------------------------------------------------- IC Corporation is cooperating with the National Highway Traffic Safety Administration (NHTSA) by voluntarily recalling 920 IC CE school buses, model 2005. Certain IC CE 2005 school buses manufactured between April 27 and October 13,2004 have locknuts that secures the hydraulic brake pivot bolt. These locknuts may not be torqued properly. The brake pedal may separate from the pivot bracket. This could prevent brake application. The Company will notify its customers and will inspect the locknut, replace if necessary and torque properly. The recall is expected to begin by March 26,2005. For more details, contact the NHTSA's auto safety hotline: 1-888-DASH-2-DOT (1-888-327-4236). MASSACHUSETTS: AT&T Reaches Fraudulent Billing Settlement --------------------------------------------------------- A T &T has agreed to a comprehensive settlement package, including more than $400,000 in restitution and calling cards for National Guard members based overseas, to resolve allegations that the Company improperly billed at least 40,000 Massachusetts consumers for long distance service, Attorney General Tom Reilly and Department of Telecommunications and Energy (DTE) Chairman Paul G. Afonso announced in a statement. The settlement, filed February 9, 2005 in Suffolk Superior Court, stems from allegations that the Company erroneously billed Massachusetts consumers close to $4 a month for an estimated two and a half months. As part of this settlement, AT &T has already refunded or credited more than $400,000 -- or an estimated $10 each - to affected Massachusetts consumers. "I am pleased that this Company is taking the steps necessary to correct the harm done to Massachusetts consumers," A.G. Reilly said. "This agreement not only provides refunds to affected individuals here in the Commonwealth, but provides the men and women of the National Guard, who are serving overseas in Iraq and Afghanistan, with an opportunity to call home." As part of the settlement, AT & T will deliver 1,100 calling cards -- with an estimated 20 minutes of calling time from Iraq or Afghanistan -- to members of the Massachusetts National Guard. The retail value of these cards is approximately $25,000. "Today's settlement ensures that customers will be billed correctly and only for the services they use, while serving notice that improper billing practices will not be tolerated in any form," DTE Chairman Afonso said. "I am grateful for the good work done by the consumer investigators at the DTE and the work by the Attorney General's Office in reaching this fair and important settlement." "Staying in touch with loved ones is vitally important to our Guard members overseas," Major General George W. Keefe said. "These phone cards will mean a lot to them and their families." The settlement also addresses customer service issues and consumers' ability to cancel their long-distance service with AT&T. Under the terms of the agreement, AT&T must address consumers "courteously" and provide a manager when requested. The Company must also clearly and conspicuously provide its long distance service cancellation policy in writing on its website and on the phone. To avoid billing problems in the future, AT&T must maintain an accurate list of Massachusetts customers and certify that it has ceased collection and correct negative credit reports regarding erroneous billing. AT&T must also stop any marketing relating to inquiries about erroneous billing and provide A.G. Reilly's Office with a 90-day status report on affected consumers and refund activity. In addition, AT&T will also pay $140,000 to the Commonwealth, the majority of which will go to the Massachusetts Local Consumer Aid Fund. A.G. Reilly's Office was referred this case by the DTE, which received close to 900 complaints. Several state Attorneys General have brought cases against AT & T alleging similar consumer violations. Nationwide an estimated one million consumers were improperly billed. Assistant Attorneys General Geoffrey G. Why and Scott D. Schafer of A.G. Reilly's Consumer Protection and Antitrust Division, Assistant Attorney General Karlen J. Reed of A.G. Reilly's Utilities Division, and Assistant Attorney General Glen M. Shor, handled this case with assistance from Karen Robinson, who directs the DTE's Consumer Division. NEW STAR TOYS: Recalls 1,200 Toy Cars Because of Choking Hazard --------------------------------------------------------------- New Star Toys & Gifts Inc., of Vernon, California is cooperating with the United States Consumer Product Safety Commission by voluntarily recalling about 1,200 Toy Cars. Small parts can break off during use, posing a choking hazard to young children. The recall includes two styles of toy cars. The Funny Puzzle Car or "Funny Game Car" is about 9-inches long. The car has an orange body, green interior and blue wheels. A frog button is on one side and lettered buttons are on the other. Stickers on the car read "FUNNY GAME CAR," "Funny Intelligence Game" and "NO. 1340." They are sold with four shape blocks that can be inserted in the windows of the car. The Funny Cartoon Car or "Beautiful Music Car" is a six-wheel truck about 16-inches long. The cab of the truck is yellow and the trailer is green. It has 15 spinning blocks on one side showing Spanish words and a plastic abacus on the other side and a play clock on the back. Stickers on the product read "Beautiful Music Car," "LOVELY CARTOON CAR" and "NO.1345." Both products have a yellow pull-string in the front. Manufactured in China, the toys were sold at all toy, department and discount stores nationwide from September 2004 through December 2004 for between $4 and $6. Consumers should take these toys away from young children, and return the recalled toys to the store where purchased for a refund. Consumer Contact: Contact New Star toll-free at (888) 647-0051 between 9 a.m. and 6 p.m. PT Monday through Friday. NEW YORK: Individuals Charged With Fraud For Filing False Claims ---------------------------------------------------------------- Two individuals have been charged for orchestrating separate scams that investigators say lead to the loss of more than $9 million by filing false claims on class actions across the country from a homeless shelter and a prison cell, the Newsday reports. According to investigators the two confidence men operated independently, scouring newspapers and legal notices for information on class-action settlements, and then sending in phony brokerage account statements, tax returns and other documents to support their claims. U.S. Attorney Roslynn Mauskopf told Newsday the two worked the schemes between 2001 and 2004 with most of the money being mailed to a homeless shelter in downtown San Diego, where Richard Lagerveld, 45, who lived in a shabby apartment nearby and hung out there allegedly picked it up. Officials told Newsday that the money sent to San Diego $9.2 million in total was mailed in checks by two court-appointed firms on Long Island that specialize in distributing the proceeds resulting from class-action suits across the nation. The other scheme was orchestrated by Alan Scott, 52, from his cell at the Federal Correctional Institution in Minersville, Pa., officials said. They also add that he had at least $200,000 mailed to outside addresses where accomplices picked it up. Pasquale D'Amuro, head of the FBI in New York, called the two "the legal and ethical equivalent of Gold Rush claim-jumpers," which mined the suits "like the mother lode," Newsday reports. Mr. Lagerveld allegedly received a check from one of the Long Island distribution firms, David Berdon & Co. of Jericho, for $2.2 million, his supposed share of a settlement of an anti- trust case involving glass manufacturing. Michael Rosebaum, the head of that firm, said that while the cases were unfortunate, his firm and similar ones handle "thousands and tens of thousands of claims every day involving hundreds of millions of dollars" without incident. Court records indicate that Mr. Lagerveld also received a check at the shelter for $6.5 million from another Long Island firm, the Garden City Group, in Garden City, which was money that came from a settlement of a class-action suit involving the stock of Oxford Health Plan. At arraignment on fraud charges before U.S. District Arthur Spatt in Central Islip, Mr. Lagerveld pleaded not guilty and thus was held without bail. His attorney, federal public defender Tracey Gaffey, declined to comment as did Assistant U.S. Attorney Bonnie Klapper. Mr. Scott, 52, of the Boston area, is serving a 96-month term in the Pennsylvania prison on unrelated fraud charges. He was charged with fraud for receiving a total of $200,000 from the two Long Island firms and several others around the country. He was also arraigned in Central Islip before federal magistrate James Orenstein, who ordered him temporarily moved to a New York prison for future hearings. Like the Lagerveld case, Mr. Scott's attorney, William Wexler of Babylon, also declined to comment, as did the prosecutor in his case, Assistant U.S. Attorney Mark Lesko. PNC FINANCIAL: Employees Lodges PA Suit Over Pension Alteration --------------------------------------------------------------- A federal lawsuit has been filed by three Cincinnati-area residents in U.S. District Court in Philadelphia against PNC Financial Service alleging that its 1999 decision to alter its method for calculating employees' pension benefits violates federal law and has significantly reduced their retirement incomes, the Pittsburgh Tribune-Review reports. Attorney Bryan Clobes, who represents the plaintiffs, told the Tribune-Review the lawsuit could apply to roughly 50,000 current and former PNC employees however it would have to be certified by the presiding judge as a valid class-action case. Mr. Clobes, who is with the Philadelphia law firm Miller Faucher and Cafferty LLP also said, "Companies are simply trying to increase profits, at the expense of their employees, by breaking the retirement promises they made to plan participants." The seven-count complaint alleges that in 1999, Pittsburgh-based PNC illegally converted its traditional pension plan to a cash balance plan, which according to the lawsuit is worth much less money, and will result in a reduction in benefits as employees grow older. Furthermore, the lawsuit alleges that PNC violated laws on private pension fund administration by, among other things, failing to notify employees that the change in the retirement program would result in a significant reduction in benefits. Experts explain that in a traditional defined-benefit pension plan, a worker receives a guaranteed monthly benefit at retirement with the amount being based on formulas that include variables such as age at retirement, years worked and rate of pay. Workers accrue more in their plans toward the end of their careers because, in most cases, their rates of pay increase. However, in a cash balance pension plan, contributions are more level over the years and critics contend that for this reason, some older workers can be shortchanged by thousands of dollars in benefits. PNC is one of a number of companies that have converted their traditional pension plans to cash balance plans. IBM, AT&T, Xerox and Cigna are among the highest-profile firms that made the pension switch. RENT-A-CENTER: Appeals Court Rules That Judge Must Review Ruling ---------------------------------------------------------------- A Los Angeles Superior Court judge must reconsider his ruling denying class action status to a lawsuit filed against Rent-A- Center Inc. over alleged labor and wage violations, according to the district's Court of Appeal, the Metropolitan News-Enterprise reports. In an unpublished decision, the court's Div. Seven pointed out that Judge Ralph W. Dau's ruling that individual issues would predominate in any litigation was undercut by the state Supreme Court's ruling last year in Sav-On Drug Stores, Inc. v. Superior Court, 34 Cal.4th 319, and by the First District's opinion a few months earlier in Bell v. Farmers Insurance Exchange (2004) 115 Cal.App.4th 715. Neither ruling though was available to Judge Dau when he made his ruling in March of 2003. Plaintiff Jeremy Burdusis had sued RAC in October 2001 claiming that the Texas-based rent-to-own operator had a policy of failing to pay overtime, failing to give employees proper meal and rest breaks and mailing final paychecks late. Justice Laurie Zelon noted in her opinion for the appellate panel that the attorneys for the Company had argued that RAC's employee handbook forbids working off the clock and provides employees a hotline to call to report any violations. When an attorney in a separate but similar case against RAC indicated he would request class certification in that suit, brought by Isreal French, Judge Dau ruled that Mr. French was bound by his ruling in the Burdusis case. In the end however, the appellate panel instructed Judge Dau to review the Sav-On and Bell decisions, both of which dealt with employee claims for unpaid overtime. Justice Zelon noted that in making his ruling, Judge Dau had relied on two out-of-state court decisions one from Ohio and the other from Texas. According to Justice Zelon, the general rule that trial judges are "afforded great latitude" in making class certification determinations was trumped in this situation by another general rule-that appellate court decisions should be applied retroactively "where to do so is not unfair and no public policy is implicated." Furthermore, she explains that applying the two rulings to the RAC litigation "is not unfair to the litigants in this action, as neither case represents an entirely `new' rule of law. Sav-On and Bell did not change the rules concerning whether a plaintiff group is amenable for class treatment because they applied the same standard to a different factual scenario and used proof through statistical evidence." She conceded though that the Texas and Ohio cases Judge Dau considered applied "virtually identical tests for certifying a class action." "However," she reasoned, "the determination here must be made in light of governing California law." Justice Zelon also pointed out that in Sav-On, the high court rejected arguments that individual damages calculations would be too cumbersome in a case in which workers claimed they had been misclassified as managers and denied overtime pay, suggesting that statistical sampling could be used. In Bell, also an overtime case, the First District rejected claims that a statistical methodology "would improperly relieve the employees of their burden under California law to establish they actually worked overtime," she observed. However, she said it was up to the trial court, not the appellate jurists, to decide how the case law should be applied to the RAC litigation, which is entitled Burdusis v. Rent-A- Center, Inc., B166923. James A. Krutcik and Angelo Nicholas Georggin of Bailey Pinney Georggin & Krutcik in Mission Viejo and James G. Bohm of Bohm, Francis, Kegel & Aguilera in Costa Mesa represented Mr. Burdusis on appeal, while Latham & Watkins attorneys Joel E. Krischer of the Los Angeles office and Laura Emily Hayward of the Costa Mesa office represented RAC. SHIMANO AMERICAN: Recalls 13.63T Cables Due To Injury Hazard ------------------------------------------------------------ Shimano American Corporation, of Irvine, California is cooperating with the United States Consumer Product Safety Commission by voluntarily recalling about 13,630 Shimano Road Racing Bicycle Brake Inner Cables. The bicycle brake cable can detach during braking, causing the rider to lose control and fall. Shimano has received one report of the brake inner cable detaching. No injuries have been reported. This recall involves aftermarket Shimano 1.6 mm X 1,700 mm brake inner cables for ATB and road racing bicycles. Dual ended brake cables packaged in quantities of ten have a part number of Y80098400/Z80098400. Individual packages have a part number of Y80098110/Z80098110. All single ended brake cables were packaged individually with part number Y80098300/Z80098300. Brake cables installed on mountain, BMX and flat handlebar bicycles are not affected by this recall. Manufactured in Japan, the bicycle parts were sold at all sporting goods and bicycle specialty stores nationwide from April 2003 through October 2004 for between $2 and $17. Consumers should contact their local bicycle dealer immediately to arrange for a free inspection. Consumers with the recalled brake cables will have a replacement cable installed free of charge. Consumer Contact: Contact Shimano American Corp. at (800) 353-4719 between 8 a.m. and 5 p.m. PT Monday through Friday or visit the firm's Web site at http://www.shimano.com. TEXAS: Homeowners Lodge Suit Over General Contractor's Expenses --------------------------------------------------------------- A national class action lawsuit has been filed in Miller County Circuit Court against Reliable Life Insurance Co., Capital County Mutual Fire Insurance Co., Prudential General Insurance & Casualty Insurance Co., Old Reliable Insurance Co. and Hartford Insurance Co. of the Midwest alleging that various home insurance companies are leaving homeowners paying the expense of general contractors, the Texarkana Gazette reports. Three Miller County residents are leading the lawsuit, namely: Joyce Beasley, Mary Smith and Warren Vammen, who are represented by the law firm of Patton, Roberts, McWilliams & Capshaw, of Texarkana, Texas. The lawsuit, which has been assigned to Circuit Judge Joe Griffin, claims that the insurance Company improperly profited at the expense of policyholders when paying claims for loss or damage to real estate. According to the lawsuit, "These underpayments, in the form of failing to pay general contractors' profit and overhead, have generated extensive profits and ill-gotten gains to (the insurance companies)." The lawsuit specifically accuses the companies of fraud. It is customary for general contractors, who will oversee work done on a construction project, to add a percentage to the total estimate for a job. Lawyers for the policyholders stated that in the industry, 20 percent is usually assessed for profit and overhead to cover the general contractors' fees. However, policyholders contend that they were never told that they were entitled to an allowance for the general contractors' fees. The lawyers say this means that policyholders paid the general contractors out of their own pockets, went without the services of a general contractor or served as their own general contractors for free. TEXAS: A.G. Abbot Files Immigration Fraud Suit V. Houston Woman --------------------------------------------------------------- Texas Attorney General Greg Abbott is suing a Houston woman for charging hundreds of Hispanic consumers hundreds of dollars per person for unauthorized legal advice, document preparation and other immigration-related consulting services. Elvia Diaz, who advertised in church bulletins and flyers and told clients she could get them work permits and other documents in as little as three months. Instead, she frequently filed applications incorrectly, causing her clients to miss critical deadlines and putting them in danger of deportation. "I am determined to stop scam artists like this woman who imperil the lives and futures of people who want to call Texas home," said Attorney General Abbott, who obtained a temporary restraining order against Ms. Diaz. "Texas law is quite clear about who is authorized to provide immigration consulting services, and those who disregard the law will be brought to justice." According to the lawsuit, which alleges violations of the Texas Deceptive Trade Practices Act, Ms. Diaz charged clients between $400 and $1,500 per person for immigration services she was not authorized to provide. In Texas, only licensed attorneys and nonprofit organizations specifically accredited by the U.S. Department of Justice's Board of Immigration Appeals (BIA) can charge fees to advise and represent clients in immigration matters. Whether consumers were trying to obtain residency, a work permit or citizenship status, she assured them they qualified and offered to fill out the appropriate applications to submit to U.S. Citizenship and Immigration Services. Several former clients reported their applications were returned multiple times because of incorrect addresses or incorrect fee amounts. Ms. Diaz charged one Jefferson County woman $2,000 to fill out immigration paperwork for her and her five children. She continually addressed the woman's petition to the wrong location, causing it to be returned at least 13 times. When the woman received a letter denying her application for permanent residency, she tried to seek advice from Ms. Diaz, but found her office closed and was unable to contact her by phone. "I wish Ms. Diaz could feel the heartache, suffering and stress I have had to feel as a result of doing business with her and the fear of having myself and my family deported - not to mention all the money she charged me to do things that were not necessary or correct," the woman said in her affidavit filed with the lawsuit. A Houston man paid Ms. Diaz $800 to file immigration papers for himself, his wife and his daughter. The paperwork was returned by federal officials about 20 times over a two-year period before the man was informed he and his family members permanent residency applications had been denied. "I wish I had never trusted Ms. Diaz with my family's future, but because I did, I do not know whether we will be able to stay in the United States or have to return to Mexico," the man said in his affidavit. The lawsuit also alleges Ms. Diaz, a notary public, violated the Texas notary public statute by advertising that she was a "notaria p'a." In Texas a notary public is an official witness during the signing of certain documents, but in Mexico the term "notaria p'a" is used to address certain highly experienced attorneys. Scam artists in Texas have long exploited this mistranslation to give Spanish-speaking clients the mistaken impression they are dealing with an attorney. Former or current clients of Diaz who are interested in obtaining their files can contact the Office of the Attorney General at 1-800-252-8011. Consumers can also call that number to file a complaint against any other suspected unauthorized operation. Assistance is available in Spanish and English. To see the Attorney General's complaint, visit the Website: http://www.oag.state.tx.us/newspubs/releases/2005/021005ediaz1.p df TEXAS: A.G. Nets Favorable Judgment in Gym Membership Fraud Suit ---------------------------------------------------------------- Texas Attorney General Greg Abbott has obtained a default judgment against a California man who fled Dallas last year after abruptly closing several Gold's Gym franchises without notifying members. The Attorney General also filed agreements with several unrelated Dallas-area fitness clubs to ensure compliance with state licensing laws and filed two new lawsuits against Austin- and Dallas-area clubs. "Since we embarked on this effort many months ago, our first objective was to take care of the many club members who were treated unfairly and lost lots of money in prepaid memberships," said Attorney General Abbott. "I am pleased our efforts have resulted in court orders for the return of these consumers' money, and we continue to pursue other fitness clubs that operate outside the law." The Attorney General filed the default judgment against former Gold's franchise owner Scott R. Theeringer, who allegedly fled Texas when these locations were closed: (1) Club Systems Inc., (Garland, Dallas and Carrollton); (2) Fitness Forever, Inc., (Arlington); and (3) Fitness Forever IV, Inc., (Fort Worth) The settlements announced today with Fitness Evolution (locations in Dallas and Carrollton), and Ultra Fitness, the new Gold's Gym franchise in Carrollton, ensure the businesses obtain the required registration with the Secretary of State's Office and a $20,000 security bond to protect members. The two new lawsuits were filed against Westlake Fitness of Austin and owner Charles Burnett, and SportsRidge Athletic Club of Richardson. The Attorney General sued Westlake Fitness for abruptly closing last year without notifying its Austin-area members. Burnett encountered financial difficulties in late 2003 and attempted in vain to sell the facility. In January 2004, he allegedly posted a notice at the site claiming a gas leak had prompted an immediate closure. He then removed all equipment from the facility and completely abandoned it by the following February. In the other suit, SportsRidge Athletic Club faces allegations that it failed to register and post a security with the Secretary of State. The Attorney General is authorized to seek civil penalties and injunctive relief from fitness clubs under the Texas Health Spa Act and the Texas Deceptive Trade Practices Act, including such violations as failing to post security and causing confusion among members as to the licensing of the businesses. TODO DOLLAR: Recalls 102T Flashing Pacifiers For Choking Hazard --------------------------------------------------------------- Todo Dollar Wholesale, of Los Angeles, California is cooperating with the United States Consumer Product Safety Commission by voluntarily recalling about 102,000 Flashing Pacifier with Whistle Necklace and Flashing Pacifier Shock Baby Necklaces. The nipple can detach from the pacifier, posing a choking hazard to young children. The recalled pacifier necklace consists of a 28-inch multi- colored cord with a 3-inch plastic pacifier that comes in assorted colors. On the Whistle Necklace pacifier, the nipple is the whistle, which contains a hole at the tip to be used as a blow hole. The pacifier handle operates as the on-off button for the flashing light on both pacifiers. "Flashing Pacifier Shock Baby Necklace" or "2-in-1 Flashing Pacifier with Whistle Necklace" is printed on the packaging of the pacifiers. Manufactured in China, the pacifiers were sold through Internet sales, distributors and small retail stores from January 2004 through November 2004 for about $1. Consumer Contact: For additional information, call Todo Dollar Wholesale toll-free at (866) 325-4732 between 9 a.m. and 5 p.m PT Monday through Friday. UNION PACIFIC: TX Royalty Owners To Share in $30M Gas Settlement ---------------------------------------------------------------- More than 35,000 royalty owners across Texas will share in a natural gas settlement that involves a class action lawsuit that was filed in 1998 against Union Pacific Resources Co., which could exceed $30 million, the Brenham Banner Press reports. The lawsuit had alleged that UPRC did not properly market natural gas produced from wells and or pay proper royalties from the mid-1990s to April 2004. Under the terms of the settlement, an immediate cash payment of $22 million and what attorneys called "prospective relief" of at least $8 million will be shelled out by UPRC. According to local attorney Hal Moorman, one of the local counsels working on the case, the "prospective relief" (the defendants agreed to change how royalty payments on future production will be calculated) could be worth as much as $16 million. UPRC, which was purchased by Andarko Petroleum Corp. after the suit was filed, was a major oil and gas developer around Texas, drilling hundred of wells. The lawsuit was initially a legal battle on whether it would be considered a "class action" filing to represent tens of thousands of royalty owners. A special trial judge appointed to preside over the case ruled it could be a class action lawsuit, however that was later reversed on appeal. In the mean time, settlement talks were opened that eventually went into mediation last summer with Brenham attorney Tom Bartley acting as chief mediator with a settlement being approved by District Judge Terry Flenniken last January. Mr. Moorman and Larry P. Urquhart of Moorman, Tate, Moorman, Urquhart and Haley served as local counsel. They were joined by two Houston law firms, who had served as co-lead counsel for the royalty owners, namely: James L. Reed Jr. and James J. Ormiston of Looper Reed & McGraw and Scott A. Love and George M. Fleming of Fleming & Associates. Asked for comment by the Brenham Banner Press, Mr. Reed called the settlement "a significant victory for the royalty owners." He also adds, "Not only did they recover money for past royalty underpayments, but the defendants have agreed to pay royalties properly in the future." Mr. Urquhart also commented about the settlement by saying that the amounts of payments will vary greatly. He explains, "There are some royalty owners who are going to get thousands of dollars and there are some who are going to get $7.28. There's a wide variation." UNION PACIFIC: TX Royalty Owners To Share in $30M Gas Settlement ---------------------------------------------------------------- More than 35,000 royalty owners across Texas will share in a natural gas settlement that involves a class action lawsuit that was filed in 1998 against Union Pacific Resources Co., which could exceed $30 million, the Brenham Banner Press reports. The lawsuit alleged that UPRC did not properly market natural gas produced from wells and or pay proper royalties from the mid- 1990s to April 2004. Under the terms of the settlement, an immediate cash payment of $22 million and what attorneys called "prospective relief" of at least $8 million will be shelled out by UPRC. Local attorney Hal Moorman, one of the local counsels working on the case, told the Banner Press the "prospective relief" (the defendants agreed to change how royalty payments on future production will be calculated) could be worth as much as $16 million. UPRC, which was purchased by Anadarko Petroleum Corp. after the suit was filed, was a major oil and gas developer around Texas, drilling hundred of wells. The lawsuit was initially a legal battle on whether it would be considered a "class action" filing to represent tens of thousands of royalty owners. A special trial judge appointed to preside over the case ruled it could be a class action lawsuit, however that was later reversed on appeal. In the mean time, settlement talks were opened that eventually went into mediation last summer with Brenham attorney Tom Bartley acting as chief mediator with a settlement being approved by District Judge Terry Flenniken last January. Mr. Moorman and Larry P. Urquhart of Moorman, Tate, Moorman, Urquhart and Haley served as local counsel. They were joined by two Houston law firms, who had served as co-lead counsel for the royalty owners, namely: James L. Reed Jr. and James J. Ormiston of Looper Reed & McGraw and Scott A. Love and George M. Fleming of Fleming & Associates. Asked for comment by the Brenham Banner Press, Mr. Reed called the settlement "a significant victory for the royalty owners." He also adds, "Not only did they recover money for past royalty underpayments, but the defendants have agreed to pay royalties properly in the future." Mr. Urquhart also commented about the settlement by saying that the amounts of payments will vary greatly. He explains, "There are some royalty owners who are going to get thousands of dollars and there are some who are going to get $7.28. There's a wide variation." UNITED STATES: ACEC Applauds Senate Passage of Reform Bill (S.5) ---------------------------------------------------------------- The American Council of Engineering Companies (ACEC) strongly endorsed the Senate passage of the Class Action Fairness Act (S.5), as a first step in bringing common sense and meaningful reform to a troubled U.S. legal system. The Class Action Fairness Act seeks to curb abuses of the class action lawsuit system. Backed by President Bush and Senate Majority Leader Bill First (R-TN), the legislation does not make any changes to substantive law, but instead would allow multi- state class action litigants to move their cases from state to federal court, thus avoiding "judicial hellholes" or certain state courts known for strong consumer bias, anti-business jurors and outrageous jury awards. "Jackpot justice and lawsuit abuse is out of control in the U.S. legal system and is one of the worst problems facing the business community," said ACEC President Dave Raymond. "U.S. tort costs have steadily increased reaching a record $246 billion in 2003 -- It is important and gratifying to see that this issue is being addressed in Congress and that the President has made this issue a priority for his second term." Raymond noted that engineering firms are increasingly becoming victims of lawsuit abuse. "There are always litigants out there looking for what they consider a deep pocket regardless of the facts or the merits of the case," Raymond said. "As a result, more and more engineers are becoming the answer to the question -- 'who else can we sue?' -- in a legal system out of balance." Abuse of the class action lawsuit system includes frivolous claims, gaming of the system to keep cases in lenient state courts, and collusive statements. Too often, lawsuits are only an attempt to force settlements from a corporation even though the corporation is not guilty of any wrongdoing. S.5 is the first component of a larger tort reform effort backed by the Council, which includes legislation to curb runaway medical malpractice awards that drive up the cost of health insurance for engineering firms. ACEC is also supportive of The Lawsuit Abuse Reduction Act, introduced last week by Rep. Lamar Smith, (R-Texas), which tightens the Federal Rules of Civil Procedure to establish mandatory sanctions against lawyers who file repeated frivolous lawsuits. The American Council of Engineering Companies (ACEC) is the business association of America's engineering industry, representing approximately 5,500 independent engineering companies throughout the United States engaged in the development of America's transportation, environmental, industrial, and other infrastructure. Founded in 1910 and headquartered in Washington, D.C., ACEC is a national federation of 51 state and regional organizations. UNITED STATES: AHIP Head Applauds Passage Of Lawsuit Reform Bill ---------------------------------------------------------------- Karen Ignagni, President and CEO of America's Health Insurance Plans (AHIP), released the following statement in response to the U.S. Senate passage of class action lawsuit reform. "Today, the Senate took an important first step on the road to fixing our broken civil litigation system by passing comprehensive class action lawsuit reform. By confronting this issue, we are one step closer to achieving a rational legal system. "We hope today's action is just the beginning, because lawsuit abuse is not limited to class action litigation. Indeed, it is our hope that Congress takes the next logical step and enacts medical liability reform legislation to rein in frivolous lawsuits and improve the quality and accessibility of health care." VALLEY PROTEINS: Deadline Set For Opting Out Of $2.3 Settlement --------------------------------------------------------------- Saluda County residents must choose by Friday how to address pollution complaints against the Valley Proteins plant, The State reports. Nearly all people living within four miles of the plant automatically become part of a class-action lawsuit against the plant, unless they choose to file individual suits. Valley Proteins reached a nearly $2.3 million settlement proposal in the case in January, and a judge is scheduled to rule on February 18 on whether such a settlement would be fair. According to plaintiff lawyer Ronald B. Cox, six of the roughly 1,400 people who could join the class action have opted out. For more information, call Mr. Cox at (803) 788-5220. WOOD MANUFACTURING: Recalls 7,577 Trailers Due To Crash Hazard -------------------------------------------------------------- Wood Manufacturing Co., Inc. is cooperating with the National Highway Traffic Safety Administration (NHTSA) by recalling 7,577 trailers, namely: (1) RANGER TRAIL / AF4500, model 2005 (2) RANGER TRAIL / AF5000, model 2004-2005 (3) RANGER TRAIL / CF3725, model 2004-2005 (4) RANGER TRAIL / CF4500, model 2004-2005 (5) RANGER TRAIL / CF5000, model 2004-2005 (6) RANGER TRAIL / FF3725, model 2004-2005 (7) RANGER TRAIL / FF4500, model 2004-2005 (8) RANGER TRAIL / FF5000, model 2004-2005 (9) RANGER TRAIL / SF3725, model 2004-2005 (10) RANGER TRAIL / SF4500, model 2004-2005 (11) RANGER TRAIL / SF5000, model 2004-2005 Certain trailers, equipped with truck-lite brand model 44,40 or 30 stop/tail light and front/rear side marker lights with no reflex lens or reflective material, fail to comply with the requirements of federal motor vehicle safety standard no. 108, "lamps, reflective devices and associated equipment." A reflex lens or reflective material is not incorporated in the lights. This reduced lighting level will affect drivers' visibility and a crash may occur without prior notice. Dealers will mail to owners a written notification along with instructions, diagrams and parts to apply a 4-red and 2 Amber SAE A 90 Adhesive Backed reflectors. Owners may also have dealers perform the work. The manufacturer has not yet provided an owner notification schedule. For more details, contact the Company by Phone: 612-337-1859 or the NHTSA's auto safety hotline: 1-888-327-4236. New Securities Fraud Cases EPIX PHARMACEUTICALS: Marc S. Henzel Files Securities Suit in MA ---------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a class action lawsuit in the United States District Court for the United States District Court for the District of Massachusetts on behalf of purchasers of EPIX Pharmaceuticals, Inc. (NASDAQ: EPIX) securities during the period between July 10, 2003 and January 14, 2005 (the "Class Period"). The complaint charges EPIX and certain of its officers and directors with violations of the Securities Exchange Act of 1934. EPIX (formerly known as EPIX Medical Inc.) is a developer of targeted contrast agents that are designed to improve the diagnostic quality of images produced by magnetic resonance imaging ("MRI"). MRI is an imaging technology for a range of applications, including the identification and diagnosis of a variety of medical disorders. The complaint alleges that, by the start of the Class Period, defendants became aware of clinical quality issues with the underlying data for their MS-325 Phase III program. MS-325 is designed to provide visual imaging of the vascular system through a type of MRI known as magnetic resonance angiography. These issues, including the generation of unintelligible imaging scans, made difficult, if not impossible, the proper control of their clinical test results and statistical analysis of the data and results. On December 16, 2003, defendants announced the submission of their New Drug Application ("NDA") for MS-325. Defendants continued to conceal the serious problems with their clinical program, specifically the poor quality of the underlying clinical data and problems with the statistical analysis. Defendants instead made positive and encouraging remarks about their "extensive scientific and clinical development" activities and prospects for product approval. Then, on January 14, 2005, as alleged in the Complaint, the Company reported shocking news about the MS-325 submission. Although defendants sought to place a positive spin on their receipt of an "approvable" action letter from the U.S. Food & Drug Administration ("FDA") for MS-325, the news was far from positive. The FDA had determined that problems with the Phase III clinical trials were so serious that it was impossible for them to come to a conclusion about the efficacy of MS-325. Worse, the FDA noted problems with the underlying data itself, problems that could not be resolved simply on the basis of re- analysis of the data. Thus, defendants delivered a serious setback to investors and, based on their news, the price of EPIX stock plunged 27%, to $10.67, for a loss of $3.98 per share, on volume of 11 million shares. For more details, contact the 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 by E- Mail: mhenzel182@aol.com. HUFFY CORPORATION: Stull Stull Files Securities Fraud Suit in OH ---------------------------------------------------------------- The law firm of Stull, Stull & Brody initiated a class action lawsuit 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. ("Huffy") (Pink Sheets: HUFCQ.PK) between April 16, 2002 and August 13, 2004, inclusive (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 acquisition; 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 Tzivia Brody, Esq. of Stull, Stull & Brody 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. HYPERCOM CORPORATION: Federman & Sherwood Files Stock Suit in AZ ---------------------------------------------------------------- The law firm of Federman & Sherwood initiated a class action lawsuit in the United States District Court of Arizona against Hypercom Corporation (NYSE: HYC). 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 class period is from April 30, 2004 through February 3, 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 E-mail: wfederman@aol.com or visit their Web site: http://www.federmanlaw.com. HYPERCOM CORPORATION: Lerach Coughlin Lodges AZ Securities Suit --------------------------------------------------------------- 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 District of Arizona on behalf of purchasers of Hypercom Corporation ("Hypercom") (NYSE:HYC) common stock during the period between April 30, 2004 and February 3, 2005 (the "Class Period"). The complaint charges Hypercom and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Hypercom manufactures, designs and sells end-to-end electronic payment solutions that include point-of-sale/point- of-transaction terminals, peripheral devices, transaction networking devices, transaction management systems and application software and provides related support and services. The complaint alleges that during the Class Period, defendants caused Hypercom's shares to trade at artificially inflated levels through the issuance of false and misleading financial statements. On February 4, 2005, before the market opened, the Company issued a press release announcing that its financial results for the first three quarters of 2004 would be restated following "determination that certain leases originated during that period by the Company's UK subsidiary, Hypercom EMEA, Inc., were incorrectly accounted for as sales-type leases, rather than operating leases. This accounting error, which relates to approximately 3,200 leases, resulted in an overstatement of net revenue for the first three quarters of 2004. The Company currently estimates that the adjustment to its financial statements will decrease net revenue for the nine months ended September 30, 2004 by up to $4.0 million as compared to previously announced results, and that operating profit for the same period will decrease by approximately 65 to 75% of the amount of the net revenue reduction." On this news, Hypercom shares closed down 18.3% at $4.46 per share on volume of 2.9 million shares, more than six times the stock's average full-day turnover. For more details, contact William Lerach or Darren Robbins 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/hypercom/. HYPERCOM CORPORATION: Marc S. Henzel Files Securities Suit in AZ ---------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a class action lawsuit in the United States District Court for the United States District Court for the District of Arizona on behalf of all securities purchasers of Hypercom Corporation (NYSE: HYC) from April 30, 2004 through February 3, 2005, inclusive (the "Class Period"). The complaint charges Hypercom and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Hypercom Corporation manufactures, designs and sells end- to-end electronic payment solutions that include point-of-sale (POS)/point-of-transaction terminals, peripheral devices, transaction networking devices, transaction management systems and application software and provides related support and services. 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's leases originated during the Class Period, by the Company's UK subsidiary, Hypercom EMEA, Inc., were improperly accounted for as "sales-type leases," rather than "operating leases;" (2) that as a result of this, the Company materially overstated its net revenue for the first three quarters of 2004 by at least $4.0 million; (3) that the Company had materially overstated its operating profit by at least 65-75% during the Class Period; (4) that the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP"); (5) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (6) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times. On February 4, 2005, prior to the opening of the market, Hypercom announced a restatement of prior 2004 quarterly financials. More specifically, the Company stated that certain leases originated during that period by the Company's UK subsidiary, Hypercom EMEA, Inc., were incorrectly accounted for as sales-type leases, rather than operating leases. This accounting error, which related to approximately 3,200 leases, resulted in an overstatement of net revenue for the first three quarters of 2004. The Company currently estimated that the adjustment to its financial statements would decrease net revenue for the nine months ended September 30, 2004 by up to $4.0 million as compared to previously announced results, and that operating profit for the same period would decrease by approximately 65 to 75% of the amount of the net revenue reduction. The Company had also determined that the internal control deficiency that gave rise to this restatement represented a material weakness, as defined by the PCAOB's Auditing Standard No. 2. Consequently, management would be unable to conclude that the Company's internal controls over financial reporting were effective as of December 31, 2004, and the Company's independent auditors, Ernst & Young LLP, were expected to issue an adverse opinion with respect to the Company's internal controls over financial reporting. News of this shocked the market. Shares of Hypercom fell $1.00 per share, or 18.32 percent, to close at $4.46 per share on unusually high trading volume. For more details, contact the 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 by E- Mail: mhenzel182@aol.com. HYPERCOM CORPORATION: Marc Henzel Lodges Securities Suit in AZ -------------------------------------------------------------- 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 Arizona on behalf of all securities purchasers of Hypercom Corporation (NYSE: HYC) from April 30, 2004 through February 3, 2005, inclusive. The complaint charges Hypercom and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Hypercom Corporation manufactures, designs and sells end- to-end electronic payment solutions that include point-of-sale (POS)/point-of-transaction terminals, peripheral devices, transaction networking devices, transaction management systems and application software and provides related support and services. 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's leases originated during the Class Period, by the Company's UK subsidiary, Hypercom EMEA, Inc., were improperly accounted for as "sales-type leases," rather than "operating leases;" (2) that as a result of this, the Company materially overstated its net revenue for the first three quarters of 2004 by at least $4.0 million; (3) that the Company had materially overstated its operating profit by at least 65-75% during the Class Period; (4) that the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP"); (5) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (6) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times. On February 4, 2005, prior to the opening of the market, Hypercom announced a restatement of prior 2004 quarterly financials. More specifically, the Company stated that certain leases originated during that period by the Company's UK subsidiary, Hypercom EMEA, Inc., were incorrectly accounted for as sales-type leases, rather than operating leases. This accounting error, which related to approximately 3,200 leases, resulted in an overstatement of net revenue for the first three quarters of 2004. The Company currently estimated that the adjustment to its financial statements would decrease net revenue for the nine months ended September 30, 2004 by up to $4.0 million as compared to previously announced results, and that operating profit for the same period would decrease by approximately 65 to 75% of the amount of the net revenue reduction. The Company had also determined that the internal control deficiency that gave rise to this restatement represented a material weakness, as defined by the PCAOB's Auditing Standard No. 2. Consequently, management would be unable to conclude that the Company's internal controls over financial reporting were effective as of December 31, 2004, and the Company's independent auditors, Ernst & Young LLP, were expected to issue an adverse opinion with respect to the Company's internal controls over financial reporting. News of this shocked the market. Shares of Hypercom fell $1.00 per share, or 18.32 percent, to close at $4.46 per share on unusually high trading volume. For more details, contact the Law Offices of Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004, Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 or by E-mail: mhenzel182@aol.com. INPUT/OUTPUT: Marc Henzel Files Securities Fraud Suit in S.D. TX ---------------------------------------------------------------- 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 Texas on behalf of purchasers of Input/Output, Inc. (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 the Law Offices of Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004, Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 or by E-mail: mhenzel182@aol.com. OFFICEMAX INC.: Spector Roseman Lodges Securities Suit in IL ------------------------------------------------------------ The law firm of Spector, Roseman & Kodroff, P.C. initiated a securities class action lawsuit in the United States District Court for the Northern District of Illinois, on behalf of purchasers of the common stock of OfficeMax, Inc. ("OfficeMax" or the "Company") (NYSE: OMX) between January 22, 2004 through January 11, 2005, inclusive (the "Class Period"). The Complaint alleges that defendants violated the federal securities laws by issuing materially false and misleading statements contained in press releases and filings with the Securities and Exchange Commission during the Class Period. Specifically, the Complaint alleges that during the Class Period, defendants made materially false and misleading statements with respect to OfficeMax's financial performance and internal controls. On December 20, 2004, the Company announced that it had launched an internal investigation into vendor claims, "that certain employees acted inappropriately in requesting promotional payments and in falsifying supporting documentation for approximately $3.3 million in claims billed to the vendor by OfficeMax during 2003 and 2004." On January 11, 2005, the Company announced that: (1) its recently appointed Chief Financial Officer, Brian Anderson, had resigned; (2) it was postponing the release of its earnings for the fourth quarter and full year 2004 pending the conclusion of an investigation into issues relating to its accounting for vendor income; (3) its investigation had confirmed the claims by a vendor to its retail business that certain employees fabricated supporting documentation for approximately $3.3 million in claims billed to the vendor by OfficeMax during 2003 and 2004; (4) it was expanding its investigation into vendor rebates and revenue recognition; and (5) it had terminated four employees as a result of information discovered through its investigation. On this news, the Company's stock fell $1.42, or 4.7%, to $28.88. For more details, contact Robert M. Roseman by Phone: 888-844-5862 or by E-mail: classaction@srk-law.com or visit their Web site: http://www.srk-law.com. PHARMOS PHARMACEUTICAL: Marc S. Henzel Lodges NJ Securities Suit ---------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a class action lawsuit 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 Corp. (Nasdaq: PARS) 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 the 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 by E- Mail: mhenzel182@aol.com. SIERRA WIRELESS: Stull Stull Lodges Securities Fraud Suit in CA --------------------------------------------------------------- The law firm of Stull, Stull & Brody initiated a class action lawsuit in the United States District Court for the Southern District of California, on behalf of all persons who purchased the securities and/or sold the put options of Sierra Wireless, Inc. ("Sierra") (Nasdaq:SWIR) between January 28, 2004 and January 26, 2005, inclusive (the "Class Period"). The Complaint alleges that Sierra and certain of its officers and directors violated federal securities laws by issuing materially false and misleading statements concerning the Company's financial results and business condition while failing to disclose material adverse facts, including: (1) that Sierra's revenues from its PC card products would decrease because channel partners and customers held excess inventory; (2) that excess inventory of PC cards held by the Company's channel partners and customers would lead to reduced orders and sales in future quarters; (3) that Sierra's dependence on revenue from sales of its embedded module products to palmOne for its Treo PDA product was greater than had been disclosed; (4) that Sierra faced increased competition in the PC card market; (5) and that Sierra' s recent introduction of its new Voq professional phone product added little revenue while it damaged the Company's relationship with a prime customer, palmOne, because the Voq product would compete with palmOne's Treo. On January 27, 2005, Sierra's stock plummeted 38% to $8.97, one day after the Company issued a press release announcing that its revenue and earnings per share for the fourth quarter of 2004 were below previous guidance, and that the Company expected a steep decline in revenue, and a net loss, in the first quarter of 2005. For more details, contact Tzivia Brody, Esq. of Stull, Stull & Brody 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. SIPEX CORPORATION: Marc S. Henzel Lodges Securities Suit in CA -------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a class action lawsuit 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 which were 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 the 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 by E- Mail: mhenzel182@aol.com. SIRVA INC.: Marc Henzel Lodges Securities Fraud 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 United States District Court for the Northern District of Illinois on behalf of all of the common stock of SIRVA, Inc. (NYSE: SIR) between November 24, 2003 and November 9, 2004, inclusive (the "Class Period") and on behalf of purchasers who bought SIRVA common stock pursuant to and/or traceable to the Company's June 8, 2004 Registration Statement. The complaint charges SIRVA and certain of its officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. SIRVA is in the global relocation industry, providing its solutions to a diverse customer base, including transferring corporate and government employees and moving individual consumers. According to the Complaint, the Company failed to disclose and misrepresented the following material adverse facts known to defendants or recklessly disregarded by them: (1) that the Company maintained inadequate reserves in the Network Services division; (2) that the growth and profitability of the Network Services division was being adversely affected; (3) that SIRVA failed to rationalize capacity, reduce fixed costs, and generate a more meaningful relocation volume growth in its European division; and (4) that the profitability of the European operations was suffering. Additionally, during the Class Period and with the Company's stock trading at artificially inflated prices, Company insiders embarked on an insider trading scheme. As a result of the insider trading scheme, Company insiders reaped more than $336 million in gross proceeds. On November 9, 2004, SIRVA reported third-quarter profit fell from the year-ago period as the Company booked a $15.2 million charge to increase insurance loss reserves. The Company said due to higher reserves for U.S. insurance claims and continued poor market conditions in Europe, 2004 earnings from continuing operations are now projected to be between 86 cents and 87 cents. For 2005, it expects to post earnings in the range of $1.25 to $1.30 per share. News of this shocked the market. Shares of SIRVA fell $5.83 per share, or 24.52 percent, to close at $17.95 per share. For more details, contact the Law Offices of Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004, Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 or by E-mail: mhenzel182@aol.com. STAR GAS: Marc Henzel Commences Securities Fraud Lawsuit in CT -------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the District of Connecticut on behalf of purchasers of Star Gas Partners, L.P. (NYSE:SGU) (NYSE:SGH) publicly traded securities during the period between December 4, 2003 and October 18, 2004 (the "Class Period"). The complaint charges Star Gas and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Star Gas is a diversified home energy distributor and service provider, specializing in heating oil, propane, natural gas and electricity. The complaint alleges that during the Class Period, defendants caused Star Gas's shares to trade at artificially inflated levels through the issuance of false and misleading statements. As a result of this inflation, Star Gas was able to complete a secondary public offering of 1.3 million common units and two note offerings totaling $65 million, raising net proceeds of $95 million during the Class Period. The truth, known by each of the defendants but concealed from the investing public during the Class Period, were as follows: (1) that the Company was experiencing massive delays in the centralization of its dispatch system and causing its customers to flee to competitors; (2) that the Company's Petro heating oil division's business process improvement program was faltering and not generating the benefits claimed by defendants; (3) that contrary to defendants' earlier indications, the Company was not able to increase or even maintain profit margins in its heating oil segment; (4) that the Company's second quarter 2004 claimed profit margins were an aberration and not indicative of the Company's success or ability to pass on the heating oil price increase because the Company had earlier acquired heating oil (sold in the second quarter) at a much lower basis; and (5) that as a result, defendants were facing imminent bankruptcy and would no longer be able to service the Company's debt, all of which would halt the Company's ability to maintain the Company's credit rating and/or obtain future financing. On October 18, 2004, TheStreet.com issued an article, entitled "Stocks In Motion: Star Gas," which stated: "Earnings at Star Gas' heating oil unit are expected to decline substantially, the Company said, which will not permit it to meet the borrowing conditions under its working capital line. Star is currently in talks with lenders to modify conditions and other terms that would allow its business unit to operate through the winter. If lenders do not agree, however, to offer modified terms, Star said it could be forced to seek alternative financing on 'extremely disadvantageous' terms or even be forced to seek bankruptcy protection." On this news, Star Gas's stock dropped to $4.32 per share from a closing price of $21.60 on the previous trading day. For more details, contact the Law Offices of Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004, Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 or by E-mail: mhenzel182@aol.com. STONEPATH GROUP: Marc Henzel Lodges Securities Suit in E.D. PA -------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Eastern District of Pennsylvania on behalf of all persons who purchased or acquired securities of Stonepath Group, Inc. (AMEX: STG) between May 7, 2003 and September 20, 2004, inclusive, seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act"). The Complaint charges Stonepath Group, Inc., Dennis L. Pelino, Bohn H. Crain, and Thomas L. Scully with violations of the Securities Exchange Act of 1934. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented that the Company understated its accrued purchased transportation liability and related costs of purchased transportation rendering the Company's Class Period financial statements materially false and misleading because they understated the Company's liabilities and expenses, and overstated the Company's net income and earnings before income, taxes, depreciation, and amortization ("EBITDA"). As a result of the above, the Company's reported financial results were in violation of GAAP. On September 20, 2004, the Company reported that it intended to restate its fiscal year 2003 and first and second quarter of 2004 financial statements. As a result of this news, the price of StonePath stock closed at $0.86 per share (on heavy trading volume of 4,830,200 shares), a 46% decrease from its close on September 19, 2004. For more details, contact the Law Offices of Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004, Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 or by E-mail: mhenzel182@aol.com. SUPPORTSOFT INC.: Marc Henzel Lodges Securities Suit in N.D. CA --------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action filed in the United States District Court for the Northern District of California on behalf of all securities purchasers of SupportSoft, Inc. (Nasdaq: SPRT) between January 20, 2004 and October 1, 2004, inclusive. The complaint charges SupportSoft, Radha R. Basu, and Brian M. Beattie with violations of the Securities Exchange Act of 1934. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company failed to close two $4.5 million transactions, due to major flaws in SupportSoft's internal controls; (2) that the Company was experiencing sales execution issues; (3) that SupportSoft's product pipeline was heavily weighted toward perpetual deals; (4) that due to the saturation of the domestic broadband market, the Company was facing a more challenging software spending environment of authorization signatures and longer sales cycles; and (5) that as a result of the above, the defendants' fiscal 2004 projections were lacking in any reasonable basis when made. On October 4, 2004, SupportSoft announced preliminary financial results for the quarter ended September 30, 2004. The Company expected total revenues for the third quarter 2004 to be in the range of $11.9 million to $12.3 million versus $13.5 million for the same period last year. GAAP loss per share was expected to be in the range of $0.01 to $0.04, this was well below expectations. News of this shocked the market. Shares of SupportSoft fell $3.41 per share, or 35.45 percent, to close at $6.21 per share. For more details, contact the Law Offices of Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004, Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 or by E-mail: mhenzel182@aol.com. SWIFT TRANSPORTATION: Marc Henzel Lodges Securities Suit in AZ -------------------------------------------------------------- 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 Arizona on behalf of all securities purchasers of Swift Transportation Co., Inc. (Nasdaq: SWFT) from October 16, 2003 through October 1, 2004, inclusive. The complaint charges Swift, Gary R. Enzor, Patrick J. Farley, Jerry C. Moyes, and William F. Riley III 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 conditional safety rating given to the Company by the FMSCA was not an error, but rather a true representation of Swift's performance; (2) that making the internal changes necessary to improve the rating was fiscally prohibitive; (3) that the Company had to absorb the cost of the new Department of Transportation regulations requiring that drivers be paid for loading time and time waiting to load; (4) that as a consequence of the foregoing, the Company was losing its competitive position and revenue, however, in order to maintain the appearance of financial well- being, for the benefit of defendant Moyes' personal finances, the Company systematically under-depreciating its capital assets thereby artificially inflating its revenues; (5) that as a result of this, the Company's financial results were in violation of Generally Accepted Accounting Principles ("GAAP"); (6) the Company lacked adequate internal controls; and (7) the Company's financial results were materially inflated at all relevant times. On September 15, 2004, Swift announced that it had adopted a new repurchase program, under which it may acquire up to $150 million of its common stock over the next several months. Additionally, Swift also announced that it expects Q3 earnings to range between 26 cents and 31 cents per share. This news shocked the market. Shares of Swift fell $2.18 per share, or 14.9 percent, on September 15, 2004, to close at $16.09 per share. On October 1, 2004, Swift announced that the previously disclosed informal inquiry by the SEC into certain stock trades by the Company and insiders, including defendant Moyes, had become a formal investigation. The investigation centers around certain stock trades made by defendant Moyes as well as selected the Company repurchases. On this news, shares of Swift tumbled an additional $.95 per share, or 5.4 percent, on October 4, 2004, to close at $16.54 per share. For more details, contact the Law Offices of Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004, Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 or by E-mail: mhenzel182@aol.com. TOWER AUTOMOTIVE: Marc Henzel Lodges Securities 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 purchasers of Tower Automotive, Inc. (NYSE: TWR) common stock during the period between February 14, 2003, and January 21, 2005. 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 the Law Offices of Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004, Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 or by 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 Se�orin, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2005. All rights reserved. ISSN 1525-2272. 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