/raid1/www/Hosts/bankrupt/CAR_Public/050510.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, May 10, 2005, Vol. 7, No. 91
Headlines
AMERICAN INTERNATIONAL: Emerson Poynter Initiates ERISA Probe
ANTIGENICS INC.: NY Court Preliminarily Approves Suit Settlement
ARCHIPELAGO HOLDINGS: Wechsler Harwood Initiates Investigation
AUDIBLE INC.: Shareholders Launch Securities Fraud Lawsuit in NJ
AUDIBLE INC.: NY Court Preliminarily Approves Lawsuit Settlement
BACKWEB TECHNOLOGIES: NY Court Preliminarily OKs Suit Settlement
CANADIAN PACIFIC: ND Judge Grants Class Status For Minot Lawsuit
CENTRAL FREIGHT: Shareholder Launch Securities Suit in W.D. TX
CITIBANK SOUTH DAKOTA: NY Court Asked To Reconsider Suit Rulings
DELTATHREE INC.: NY Court Preliminarily Approves Suit Settlement
EACCELERATION CORPORATION: Inks Settlement For CA Consumer Suit
ENVIRONMENTAL SOLUTIONS: Faces Securities Fraud Suit in Canada
FORETRAVEL INC.: Recalls Class A Motorhomes Due To Fire Hazard
GENWORTH FINANCIAL: Settlement Allows Victims To Share $5.25 Mil
GREAT ATLANTIC: NY High Court Allows Employees' Suit To Proceed
HGK ASSET: Expects Exceptional Recovery Through WorldCom Lawsuit
IMERGENT INC.: Outraged Shareholders Demand Dismissal of Suits
INFORTE CORPORATION: NY Court Preliminarily OKs Suit Settlement
LOUDEYE CORPORATION: NY Court Preliminarily OKs Suit Settlement
MERCK & CO.: Kenneth B. Moll To File First Italian Vioxx Suit
MORGAN STANLEY: FL Firm Lodges $100M Suit Over Crucial Evidences
NET PERCEPTIONS: NY Court Preliminarily Approves Suit Settlement
OCCAM NETWORKS: NY Court Preliminarily OKs Stock Suit Settlement
ON SEMICONDUCTOR: NY Court Preliminarily OKs Lawsuit Settlement
PHILIP MORRIS: Federal Appeals Court Decertifies Simon II Suit
PUERTO RICO: Complies With Merit Discovery Requests in PR Suit
R.J. REYNOLDS: Applauds Unanimous Decision in Simon II Lawsuit
SILICON STORAGE: Pomerantz Haudek Firm Appointed Lead Plaintiff
SOYO INC.: Consumers Initiate Motherboard Fraud Suit in CA Court
TASER INTERNATIONAL: Securities Suits To Be Consolidated in AZ
VISHAY INTERTECHNOLOGY: Plaintiffs Mean To Continue Proctor Suit
WIRELESS FACILITIES: NY Court Preliminarily OKs Suit Settlement
WIRELESS FACILITIES: Asks CA Court To Dismiss Securities Lawsuit
New Securities Fraud Cases
AVAYA INC.: Wolf Haldenstein Lodges Securities Fraud Suit in NJ
MARTEK BIOSCIENCES: Charles J. Piven Files Securities Suit in MD
MBNA CORPORATION: Charles J. Piven Lodges Securities Suit in DE
R&G FINANCIAL: Milberg Weiss Lodges Securities Fraud Suit in PR
TRIBUNE CO.: Glancy Binkow Lodges Securities Fraud Lawsuit in IL
TRIBUNE CO.: Murray Frank Lodges Securities Fraud Suit in IL
XYBERNAUT CORPORATION: Landskroner Grieco Files Stock Suit in DE
*********
AMERICAN INTERNATIONAL: Emerson Poynter Initiates ERISA Probe
-------------------------------------------------------------
The law firm of Emerson Poynter LLP launched an investigation
against American International Group, Inc. ("AIG" or the
"Company") (NYSE:AIG) for violations of the Employee Retirement
Income Security Act of 1974 ("ERISA"). The investigation focuses
on investments in Company stock by the AIG Incentive Savings
Plan, the American General Agents' and Managers' Thrift Plan,
the American General Employees' Thrift and Incentive Plan (which
was merged into the AIG Incentive Savings Plan), and the
CommoLoCo Thrift Plan (the"Plans") from December 1, 1998 through
the present (the "Class Period").
Since February 2005, AIG has admitted to numerous accounting
errors in multiple areas of AIG's operations intended to improve
AIG's financial statements by reporting growth where it did not
exist. AIG has delayed issuance of its Annual Report for another
thirty days while internal investigations and outside auditors
seek to unravel various complex maneuvers. AIG has already
admitted that it will likely reduce its net worth by $2.7
billion and restate its financial results for the years from
2000 through 2004. These revelations follow the October 2004
allegations of involvement in Marsh & McLennan Companies'
illegal bid-rigging and contingent commission fee scheme.
Emerson Poynter's investigation focuses on concerns that AIG and
other fiduciaries for the Plans may have breached their ERISA-
mandated fiduciary duties of loyalty and prudence by
(1) failing to prudently and loyally manage the Plans'
assets by investing a significant amount of the Plans'
assets in AIG stock when it no longer was a prudent
investment for participants' retirement savings;
(2) failing to monitor and provide fiduciary appointees
with information that the appointing fiduciaries knew
or should have known the monitored fiduciaries needed
in order to prudently manage the Plans' assets;
(3) failing to provide complete and accurate information to
participants and beneficiaries regarding AIG's business
prospects and financial performance; and
(4) breaching their duty to avoid conflicts of interest.
For more details, contact Charles Gastineau, Tanya Autry, or
Michelle Raggio of Emerson Poynter LLP by Phone: (800) 663-9817
or (501) 907-2555 by Fax: (501) 907-2556 or by E-mail:
epllp@emersonpoynter.com.
ANTIGENICS INC.: NY Court Preliminarily Approves Suit Settlement
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The United States District Court for the Southern District of
New York granted preliminary approval to the settlement of the
consolidated securities class action filed against Antigenics,
Inc., its Chairman and Chief Executive Officer Garo Armen, and
two investment banking firms that served as underwriters in its
initial public offering. The suit was filed behalf of a class
of purchasers of its stock between February 3, 2000 and December
6, 2000.
Similar complaints were filed against about 300 other issuers,
their underwriters, and in many instances directors and
officers. These cases have been coordinated under the caption
"In re Initial Public Offering Securities Litigation, Civ. No.
21 MC 92 (SAS)," by order dated August 9, 2001.
The suit against the Company and Dr. Armen alleges that the
brokerage arms of the investment banking firms charged secret
excessive commissions to certain of their customers in return
for allocations of our stock in the offering. The suit also
alleges that shares of the Company's stock were allocated to
certain of the investment banking firms' customers based upon
agreements by such customers to purchase additional shares of
the Company's stock in the secondary market. The complaint
alleges that the Company is liable under Section 11 of the
Securities Act of 1933, as amended, and Dr. Armen is liable
under Sections 11 and 15 of the Securities Act because its
registration statement did not disclose these alleged practices.
On April 19, 2002, the plaintiffs in this action filed an
amended class action complaint, which contains new allegations.
Similar amended complaints were filed with respect to about 300
companies. In addition to the claims in the earlier complaint,
the amended complaint alleged that the Company and Dr. Armen
violated Sections 10(b) and 20 of the Securities Exchange Act
and SEC Rule 10b-5 by making false and misleading statements
and/or omissions in order to inflate stock price and conceal the
investment banking firms' alleged secret arrangements. The
claims against Dr. Armen, in his individual capacity, have been
dismissed without prejudice.
On July 15, 2002, the Company and Dr. Armen joined the Issuer
Defendants' Motion to Dismiss the Consolidated Amended
Complaints. By order of the Court, this motion set forth all
"common issues," i.e., "all grounds for dismissal common to all
or a significant number of Issuer Defendants." The hearing on
the Issuer Defendant's Motion to Dismiss and the other
Defendants' motions to Dismiss was held on November 1, 2002. On
February 19, 2003, the Court issued its opinion and order on the
Issuer Defendants' Motion to Dismiss. The Court granted the
Company's motion to dismiss the Rule 10b-5 and Section 20 claims
with leave to amend and denied its motion to dismiss the Section
11 and Section 15 claims. In June 2003, a proposed settlement
of this litigation was structured between the plaintiffs, the
issuer defendants in the consolidated actions, the issuer
officers and directors named as defendants, and the issuers'
insurance companies. The settlement would provide, among other
things, a release for the Company and for the individual
defendants for the conduct alleged to be wrongful in the amended
complaint. The Company would agree to undertake other
responsibilities under the partial settlement, including
agreeing to assign away, not assert, or release certain
potential claims us that may have against our underwriters. Any
direct financial impact of the proposed settlement is expected
to be borne by its insurance carriers.
In June 2004, an agreement of settlement was submitted to the
Court for preliminary approval. The court requested that any
objections to preliminary approval of the settlement be
submitted by July 14, 2004, and the underwriter defendants
formally objected to the settlement. The plaintiffs and issuer
defendants separately filed replies to the underwriter
defendants' objections to the settlement on August 4, 2004. The
court granted the preliminary approval motion on February 15,
2005, subject to certain modifications. The parties are
directed to report back to the court regarding the
modifications. If the parties are able to agree upon the
required modifications, and such modifications are acceptable to
the court, notice will be given to all class members of
settlement, a "fairness" hearing will be held and if the Court
determines that the settlement is fair to the class members, the
settlement will be approved. There can be no assurance that this
proposed settlement would be approved and implemented in its
current form, or at all.
The suit is styled "IN RE ANTIGENICS INC. INITIAL PUBLIC
OFFERING SECURITIES LITIGATION," filed in relation to "IN RE
INITIAL PUBLIC OFFERING SECURITIES LITIGATION, Master File No.
21 MC 92 (SAS)," both pending in the United States District
Court for the Southern District of New York, under Judge Shira
N. Scheindlin. The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
ARCHIPELAGO HOLDINGS: Wechsler Harwood Initiates Investigation
--------------------------------------------------------------
The law firm of Wechsler Harwood LLP is investigating claims
against Archipelago Holdings, Inc. ("Archipelago") (PCX:AX) that
concern whether Archipelago is failing to maximize shareholder
value in its proposed merger with the New York Stock Exchange
("NYSE").
Archipelago is taking advice in connection with that proposed
merger from the Goldman Saks Group, Inc. ("Goldman") while
Goldman, in an inherent conflict of interest position, is also
rendering advice to the NYSE, and Goldman's former CEO is now
head of the NYSE.
For more details, contact Samuel K. Rosen, Esq. of Wechsler
Harwood LLP by Phone: (877) 935-7400 ext. 235 or by E-mail:
srosen@whesq.com.
AUDIBLE INC.: Shareholders Launch Securities Fraud Lawsuit in NJ
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Audible, Inc. faces a purported class action complaint filed on
February 22,2005 in the United States District Court for the
District of New Jersey. The suit also names as defendants the
Company's Chief Executive Officer and its Chief Financial
Officer.
The complaint, filed by Dennis Carter on behalf of himself and
all other similarly situated investors, alleges violations of
sections 10(b) and 20(a) of the Securities Exchange Act of 1934,
and Securities and Exchange Commission Rule 10b-5, and alleges
that the defendants did not make complete and accurate
disclosures concerning the Company's future plans and prospects.
The plaintiff seeks unspecified damages on behalf of a purported
class of purchasers of Company securities during the period from
November 2, 2004 through February 15, 2005.
It is possible that additional complaints may be filed in the
future, the Company said in a filing with the Securities and
Exchange Commission. The Company expects that all individual
lawsuits will be consolidated into a single civil action.
AUDIBLE INC.: NY Court Preliminarily Approves Lawsuit Settlement
----------------------------------------------------------------
The United States District Court for the Southern District of
New York granted preliminary approval to the settlement of the
consolidated securities class action filed against Audible,
Inc., and certain of its officers, related to its initial public
offering (IPO) in July 1999.
Several suits were initially filed, also naming certain of the
underwriters of the IPO as well as certain of the Company's
directors and former directors as defendants. Approximately 300
other issuers and their underwriters have had similar suits
filed against them, all of which are included in a single
coordinated proceeding in the Southern District of New York (the
"IPO Litigations"). The complaints allege that the prospectus
and the registration statement for the Company's IPO failed to
disclose that the underwriters allegedly solicited and received
"excessive" commissions from investors and that some investors
in the Company's IPO allegedly agreed with the underwriters to
buy additional shares in the aftermarket in order to inflate the
price of the Company's stock.
An amended complaint was filed April 19, 2002. The Company and
certain of its officers, directors, and former directors were
named in the suits pursuant to Section 11 of the Securities Act
of 1933, Section 10(b) of the Exchange Act of 1934, and other
related provisions. The complaints seek unspecified damages,
attorney and expert fees, and other unspecified litigation
costs.
On July 1, 2002, the underwriter defendants in the consolidated
actions moved to dismiss all of the IPO Litigations, including
the action involving the Company. On July 15, the Company,
along other non-underwriter defendants in the coordinated cases
also moved to dismiss the IPO Litigations. On February 19, 2003,
the Court ruled on the motions. The Court granted the Company's
motion to dismiss the claims against us under Rule 10b-5, due to
the insufficiency of the allegations against the Company. The
motions to dismiss the claims under Section 11 of the Securities
Act were denied as to virtually all of the defendants in the
consolidated cases, including the Company. The Company's
individual officers, directors and former director defendants in
the IPO Litigation signed a tolling agreement and were dismissed
from the action without prejudice on October 9, 2002.
In June 2003, a proposed settlement of this litigation was
structured between the plaintiffs, the issuer defendants in the
consolidated actions, the issuer officers and directors named as
defendants, and the issuers' insurance companies. The
settlement would provide, among other things, a release for the
Company and for the individual defendants for the conduct
alleged to be wrongful in the amended complaint. The Company
would agree to undertake other responsibilities under the
partial settlement, including agreeing to assign away, not
assert, or release certain potential claims us that may have
against our underwriters. Any direct financial impact of the
proposed settlement is expected to be borne by its insurance
carriers.
In June 2004, an agreement of settlement was submitted to the
Court for preliminary approval. The court requested that any
objections to preliminary approval of the settlement be
submitted by July 14, 2004, and the underwriter defendants
formally objected to the settlement. The plaintiffs and issuer
defendants separately filed replies to the underwriter
defendants' objections to the settlement on August 4, 2004. The
court granted the preliminary approval motion on February 15,
2005, subject to certain modifications. The parties are
directed to report back to the court regarding the
modifications. If the parties are able to agree upon the
required modifications, and such modifications are acceptable to
the court, notice will be given to all class members of
settlement, a "fairness" hearing will be held and if the Court
determines that the settlement is fair to the class members, the
settlement will be approved. There can be no assurance that this
proposed settlement would be approved and implemented in its
current form, or at all.
The suit is styled "IN RE AUDIBLE INC. INITIAL PUBLIC OFFERING
SECURITIES LITIGATION," filed in relation to "IN RE INITIAL
PUBLIC OFFERING SECURITIES LITIGATION, Master File No. 21 MC 92
(SAS)," both pending in the United States District Court for the
Southern District of New York, under Judge Shira N. Scheindlin.
The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
BACKWEB TECHNOLOGIES: NY Court Preliminarily OKs Suit Settlement
----------------------------------------------------------------
The United States District Court for the Southern District of
New York granted preliminary approval to the settlement of the
consolidated securities class action filed against BackWeb
Technologies, Inc., six of its officers and directors, and
various underwriters for its initial public offering, styled "In
re BackWeb Technologies Ltd. Initial Public Offering Securities
Litigation, Case No. 01-CV-10000."
Similar cases have been filed alleging violations of the federal
securities laws in the initial public offerings of more than 300
other companies, and these cases have been coordinated for
pretrial proceedings as "In re Initial Public Offering
Securities Litigation, 21 MC 92." A consolidated amended
complaint filed in the BackWeb case asserts that the prospectus
from the Company's June 8, 1999 initial public offering failed
to disclose certain alleged improper actions by the underwriters
for the offering, including the receipt of excessive brokerage
commissions and agreements with customers regarding aftermarket
purchases of shares of the Company's stock. The complaint
alleges violations of Sections 11 and 15 of the Securities Act
of 1933, Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934, and Rule 10b-5 promulgated under the Securities
Exchange Act of 1934. On July 15, 2002, an omnibus motion to
dismiss was filed in the coordinated litigation on behalf of
defendants, including the Company, on common pleadings issues.
In October 2002, the Court dismissed all six individual
defendants from the litigation without prejudice, pursuant to a
stipulation. On February 19, 2003, the Court denied the motion
to dismiss with respect to the claims against the Company. No
trial date has yet been set.
A proposal has been made for the settlement and for the release
of claims against the issuer defendants, including BackWeb, has
been submitted to the Court. We have agreed to the proposal. The
settlement is subject to a number of conditions, including
approval by the proposed settling parties and the court.
The suit is styled "In re BackWeb Technologies Ltd. Initial
Public Offering Securities Litigation, Case No. 01-CV-10000,"
filed in relation to "IN RE INITIAL PUBLIC OFFERING SECURITIES
LITIGATION, Master File No. 21 MC 92 (SAS)," both pending in the
United States District Court for the Southern District of New
York, under Judge Shira N. Scheindlin. The plaintiff firms in
this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
CANADIAN PACIFIC: ND Judge Grants Class Status For Minot Lawsuit
----------------------------------------------------------------
The Chief Judge of the federal court in North Dakota granted
class certification to residents who suffered injuries or
property damage from the release of anhydrous ammonia by a
derailed Canadian Pacific (NYSE:CP) train on January 18, 2002,
near Minot, North Dakota.
According to Judge Hovland's order, "It is clear from the record
that issues concerning CPR's alleged negligence or fault can be
established through common evidence. . . . The Court recognizes
that even though important issues will need to be addressed
separately, common issues of CPR's alleged negligence, the toxic
nature of the anhydrous ammonia, and the injuries caused by
exposure are issues at the heart of this litigation. The
Plaintiffs have clearly established that they are a ``group
seeking to remedy a common legal grievance.'"
As a result of the Court's decision, everyone who was exposed to
the toxic release and who did not sign a release after February
18, 2002, is part of the class. That date is significant,
according to the Court, because a North Dakota law allows those
hurt to void any release they may have signed within 30 days of
an incident. Gordon Rudd, one of the attorneys for the class,
stated, "We fought hard to assure the protections of this law,
particularly because, after the derailment, Canadian Pacific
engaged in a scheme to obtain full releases in exchange for a
pittance. The railroad had stated very publicly that residents
were just being reimbursed for incidental expenses while
preserving their right to further compensation for injuries.
Later Canadian Pacific claimed the releases relinquished all
claims."
Just last month, the Federal Railroad Administration announced
it was investigating Canadian Pacific for violating federal
regulations in the shipping of hazardous materials in the U.S.
The United Transportation Union had accused the railroad of
failing to inform train crews of hazardous contents in train
cars. While these claims are not part of the class action, Rudd
says he's not surprised at the investigation: "The evidence
we've seen that led to the Minot disaster shows Soo Line and
Canadian Pacific's complete disregard for the safety of people
living near their track."
A consolidated case against Soo Line and Canadian Pacific is
also proceeding in Minneapolis on behalf of injured individuals.
Soo Line, the Canadian Pacific subsidiary that maintains the
track through Minot, is headquartered in Minneapolis. In June, a
Hennepin County judge will hear arguments that a jury should be
allowed to award punitive damages in the consolidated cases. The
punitive damages would be based upon the allegations that Soo
Line and Canadian Pacific knowingly allowed years of track decay
to persist so that they could continue to move longer and
heavier trains through North Dakota and Minnesota uninterrupted.
Critically, at the end of its investigation of the Minot
derailment, the National Transportation Safety Board (NTSB)
concluded that the derailment was due to a number of Canadian
Pacific's failures, including its failure to maintain a
temporary joint bar that had been left in place for 20 months on
light-gauge replacement track. That joint bar ultimately
cracked, throwing the train off the rails. The 2002 derailment
in Minot was not the railroad's first residential disaster. In
1994, the railroad had allowed similar conditions to go
unchecked before another train derailed just six miles away from
Minot. In that derailment, a car carrying flammable materials
exploded and severely burned a 16-year-old boy.
For more details, contact Zimmerman Reed or J. Gordon Rudd by
Phone: 612-386-4632.
CENTRAL FREIGHT: Shareholder Launch Securities Suit in W.D. TX
--------------------------------------------------------------
Central Freight Lines, Inc. and certain of its officers and
directors continue to face several securities class actions
filed in the United States District Court for the Western
District of Texas, issued in connection with or traceable to its
December 12, 2003 Initial Public Offering.
The suit generally alleges that false and misleading statements
were made in the Company's initial public offering registration
statement and prospectus, during the period surrounding the
Company's initial pubic offering and up to the press release
dated June 16, 2004. The class actions are in the initial
phases.
The two suits are styled "Udvare v. Central Freight Line, et al,
case no. 04-CV-177," and "Simon v. Central Freight Line, et al,
case no 04-cv-203," filed in the United States District Court
for the Western District of Texas, Waco, under Judge Walter S.
Smith.
Lawyers for the plaintiffs are:
(1) Michael Klein, Smith, Robertson, Elliott & Glen,
L.L.P., 1717 West Sixth Street, Suite 300, Austin, TX
78703, Phone: (512)225-5800;
(2) Marc A. Topaz, Stuart L. Berman, Richard Maniskas, Sean
M. Handler, Darren J. Check of Schiffrin & Barroway,
LLP, Three Bala Plaza East, Suite 400, Bala Cynwyd, PA
19004, Phone: (610) 667-7706
(3) Joe Kendall, Provost Umphrey, 3232 McKinney Ave., Suite
700, Dallas, TX 75204, Phone: (214) 744-3000
(4) Roger F. Claxton, Claxton & Hill, P.L.L.C., 3131
McKinney Ave., Suite 700, Dallas, TX 75204-2471, Phone:
(214) 969-9099
Lawyers for the defendants are:
(i) John L. Malesovas, Malesovas, Martin & Tekell, L.L.P.,
P.O. Box 1709, Waco, TX 76703-1709, Phone:
(254)753-1777
(ii) Nicole M. Healy, Kent W. Easter, Randolph Gaw of Wilson
Sonsini Goodrich & Rosati, 650 Page Mill Road, Palo
Alto, CA 94304-1050, Phone: (650) 493-9300
CITIBANK SOUTH DAKOTA: NY Court Asked To Reconsider Suit Rulings
----------------------------------------------------------------
Plaintiffs asked the United States District Court for the
Southern District of New York to reconsider portions of its
March 9,2005 rulings in the class action filed against Citibank
South Dakota (CBSD), some of its affiliates as well as Visa
U.S.A. Inc., Visa International Service Association, MasterCard
International Incorporated and other banks, styled "IN RE
CURRENCY CONVERSION FEE ANTITRUST LITIGATION."
The suit seeks unspecified damages and injunctive relief on
behalf of certain United States holders of VISA, MasterCard and
Diners Club branded general purpose credit cards who used those
cards since March 1, 1997 for foreign currency transactions.
The suit asserts, among other things, claims for alleged
violations of Section 1 of the Sherman Act, the Federal Truth-
in-Lending Act (TILA), and as to the Company, the South Dakota
Deceptive Trade Practices Act.
On October 15, 2004, the Court granted the plaintiffs' motion
for class certification of their Sherman Act and TILA claims but
denied the motion as to the South Dakota Deceptive Trade
Practices Act claim against CBSD. On March 9, 2005, the Court
granted in part and denied in part defendants' motions for
reconsideration of certain aspects of the October 15, 2004
rulings. Among other things, the Court narrowed the antitrust
classes to certain VISA-branded or MasterCard-branded
cardholders of CBSD and J.P. Morgan Chase & Co., and declined to
certify a Diners Club subclass. Plaintiffs have since filed a
motion asking the Court to reconsider portions of its March 9,
2005 rulings.
The suit is styled "In re: Currency Conversion Litigation, case
no. 1:01-md-01409-WHP," filed in the United States District
Court for the Southern District of New York, under Judge William
H. Pauley III. Representing the plaintiffs are Goldberg, Kohn,
Bell, Black, Rosenbloom & Moritz, Ltd., 55 East Monroe Street,
Suite 3700, Chicago, Illinois 60603 and Lerach Coughlin Stoia
Geller Rudman & Robbins LLP, 100 Pine Street, Suite 2600
San Francisco, CA 94111, Phone: (415) 288-4545, Fax:
(415) 288-4534.
DELTATHREE INC.: NY Court Preliminarily Approves Suit Settlement
----------------------------------------------------------------
The United States District Court for the Southern District of
New York granted preliminary approval to the settlement of the
consolidated securities class action filed against Deltathree,
Inc. and certain of its former officers and directors.
Several suits were initially filed, arising out of its initial
public offering in November 1999 (IPO). Various underwriters of
the IPO also are named as defendants in the actions. The
complaints allege, among other things, that the registration
statement and prospectus filed with the Securities and Exchange
Commission for purposes of the IPO were false and misleading
because they failed to disclose that the underwriters allegedly
solicited and received commissions from certain investors in
exchange for allocating to them shares of Company stock in
connection with the IPO and entered into agreements with their
customers to allocate such stock to those customers in exchange
for the customers agreeing to purchase additional shares in the
aftermarket at predetermined prices.
On August 8, 2001, the court ordered that these actions, along
with hundreds of IPO allocation cases against other issuers, be
transferred to Judge Shira Scheindlin for coordinated pre-trial
proceedings. In July 2002, omnibus motions to dismiss the
complaints based on common legal issues were filed on behalf of
all issuers and underwriters. On February 19, 2003, the Court
issued an opinion granting in part and denying in part those
motions to dismiss. The complaint against the Company was not
dismissed as a matter of law. Final settlement documentation is
in the process of being approved. Under the terms of the
proposed settlement agreement, the Company is not conceding any
liability and it will not bear any expenses associated with the
settlement, other than legal fees it may incur.
The suit is styled "In re Deltathree, Inc. Initial Public
Offering Securities Litigation," filed in relation to "IN RE
INITIAL PUBLIC OFFERING SECURITIES LITIGATION, Master File No.
21 MC 92 (SAS)," both pending in the United States District
Court for the Southern District of New York, under Judge Shira
N. Scheindlin. The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
EACCELERATION CORPORATION: Inks Settlement For CA Consumer Suit
---------------------------------------------------------------
eAcceleration Corporation reached a settlement for the class
action filed against in the Superior Court of the State of
California, County of San Joaquin - Stockton Branch, styled
"Consumer Advocates Rights Enforcement Society (CARES), for
itself and others similarly situated, and Patricia Cole, for
herself and all others similarly situated v. eAcceleration
Corp., a Delaware corporation, d/b/a Veloz.com, also d/b/a
StopSign.com; Acceleration Software International Corporation, a
Washington corporation, Clint Ballard and Diana Ballard,
Doubleclick, Inc., a Delaware corporation and Does 1-50
inclusive."
The complaint alleged that through the use of certain
advertising banners for the Company's products on the Internet,
the Company engaged in deceptive business practices and fraud
and were liable for public and private nuisance. The complaint
sought injunctive relief, disgorgement of profits, damages of
$100,000, or such other amount as the court deemed appropriate,
as well as attorneys' fees and costs.
Subsequent to the close of the yearend on December 31, 2004, the
Company settled this lawsuit for an immaterial amount. The
Company did not have to make any changes to its business
practices as a result of this settlement.
ENVIRONMENTAL SOLUTIONS: Faces Securities Fraud Suit in Canada
--------------------------------------------------------------
Environmental Solutions Worldwide, Inc. faces a statement of
claim filed in the Ontario Superior Court of Justice, purporting
to be a class action. The suit, filed by a current director and
others, alleges that the Company and other parties released and
disseminated false and misleading statements about its business
from on or about March 1999 through March 2000. The complaint
seeks damages of $100,000,000 and punitive damage of
$20,000,000.
The Company has not yet been served with the statement of claim
and believes the claims to be without merit. If served, the
Company intends to contest the claims vigorously, the Company
stated in a disclosure to the Securities and Exchange
Commission.
FORETRAVEL INC.: Recalls Class A Motorhomes Due To Fire Hazard
--------------------------------------------------------------
Foretravel, Inc. is cooperating with the National Highway
Traffic Safety Administration by voluntarily recalling 108 Class
A motorhomes, namely:
(1) FORETRAVEL / G295, model 2003-2006
(2) FORETRAVEL / U270, model 2003-2006
(3) FORETRAVEL / U295, model 2003-2006
(4) FORETRAVEL / U295T, model 2003-2006
(5) FORETRAVEL / U320T, model 2003-2006
On certain Class A motorhomes equipped with vehicle systems,
Aqua-Hot and Hydro-Hot water heaters, which use Webasto burner
tubes, the tubes do not meet specifications and could fail
prematurely. The surface temperature of the exhaust tube
exiting from the heater can increase and could potentially
ignite combustible materials in or around the vehicle.
Vehicle Systems is conducting the owner notification and remedy
for this campaign. For more details, contact Vehicle Systems by
Phone: 1-800-685-4298, the Company by Phone: 936-564-8367, or
the NHTSA auto safety hotline: 1-888-327-4236.
GENWORTH FINANCIAL: Settlement Allows Victims To Share $5.25 Mil
----------------------------------------------------------------
Customers of an estate planner who stands accused of swindling
investors will get some of their lost savings back from a $5.25
million settlement, The Associated Press reports.
The settlement came after a lawsuit was filed on behalf of
customers of Anthony Allen and his business partner, Gregory
Maynard. Mr. Allen, a former Fayetteville business owner, and
Mr. Maynard are charged with defrauding an estimated 120 people
out of as much as $14 million. Mr. Allen was the chief executive
officer of Client Relations, an estate-planning firm, and was
publisher of the local edition of Fifty Plus Magazine and owned
Client Relations-Travel Services Division. Mr. Allen, who
remains in jail awaiting trial, was arrested on October 13,
2003. Four days earlier, a civil lawsuit was filed on behalf of
Wilbur and Sarah Masters and Robert and Margaret Birke.
According to the lawsuit, the couples lost a combined $800,000
to Mr. Allen. Later that lawsuit was converted into a class-
action suit, allowing other people to join it.
Attorneys for the victims namely Ronnie Mitchell and Coy Brewer
estimate that the victims will receive about 40 percent of the
money they invested with Mr. Allen. Mr. Mitchell told AP that
Superior Court Judge John R. Jolly would begin reviewing each
victim's file next month to ensure that they are receiving the
proper amount with people getting their money by the end of the
year. He also adds that his clients, most of whom are elderly,
also did not want to face a drawn-out trial. In addition he
indicated to AP that he might sue other companies that did
business with Mr. Allen to get more money for the victims.
"After years of litigation, our fear was that the recovery would
be for the heirs of these individuals and not for the
individuals themselves," Mr. Mitchell told AP.
Mr. Jolly told AP that the money going to the victims is "more
than I ordinarily see in class-action cases."
Investigators explain that before he was caught, Mr. Allen
invested his clients' money with legitimate companies but later
talked them into investing in one of the companies he owned.
Later, he pocketed the money, investigators add.
The money is being paid by Genworth Financial Inc. of Richmond,
Va., a subsidiary of General Electric, since Mr. Allen served as
a broker for The Life Insurance Company of Virginia, which was
acquired in the late 1990s by GE Capital Assurance Co. GE
Capital Assurance transferred its business to Genworth Financial
Inc. when GE created Genworth Financial in late 2003.
A lawyer for Genworth said the company did nothing wrong but has
agreed to the settlement to avoid a long trial, AP reported.
In a separate settlement, the judge agreed that Genworth
Financial would pay $1.25 million in legal fees and other costs
of the lawsuit.
GREAT ATLANTIC: NY High Court Allows Employees' Suit To Proceed
---------------------------------------------------------------
A judge in the Supreme Court of New York ruled that a class
action lawsuit on behalf of New York employees' at Waldbaum's,
A&P, and The Food Emporium could go forward. Attorneys
representing the employees are from the law firms of Lieff,
Cabraser, Heimann & Bernstein, LLP and Outten & Golden LLP.
The plaintiffs filed their original class action complaint on
June 24, 2004. The complaint charges that the Waldbaum's, A&P,
and Food Emporium stores fail to pay employees overtime wages
and delete hours actually worked from time records in violation
of New York labor law.
The Great Atlantic & Pacific Tea Company, Inc. moved to dismiss
the case on the ground that the New York Labor Law does not
allow class actions. Justice Herman A. Cahn of the Supreme Court
denied the motion and upheld the rights of plaintiffs to bring
their lawsuit on behalf of a class.
Rachel Geman, a partner with Lieff, Cabraser, Heimann &
Bernstein, LLP, explained, "The plaintiffs in this lawsuit are
seeking to represent the dedicated and hard-working hourly
employees at A&P stores -- all the cashiers, clerks, bakers,
pharmacists and other hourly employees who were entitled to
overtime, put in the hours to do the hard work these jobs
require, but were denied the pay they earned by these grocery
chains."
"New York employers ignore the NY labor laws at their peril,"
stated Adam T. Klein, a partner with Outten & Golden LLP. "The
plaintiffs in this case played by the rules, and the Court's
Order confirms that there are rules that will protect them when
employers don't."
The lawsuit has been brought on behalf of a proposed class of
current and former full-time hourly employees of Waldbaum's,
A&P, and Food Emporium (all owned and operated by The Great
Atlantic & Pacific Tea Company, Inc.) in New York for the past
six years. The Great Atlantic & Pacific Tea Company, Inc.
operates approximately 140 supermarkets in the State of New
York, of which 76 are Waldbaum's division stores, 32 are A&P
division stores, and 32 are Food Emporium division stores.
Last year, Lieff Cabraser and Outten & Golden represented
several hundred current and former employees of A&P supermarkets
in the greater New York City metropolitan area in a similar case
involving unpaid overtime wages filed in federal court under the
federal Fair Labor Standards Act. In May 2004, the federal court
approved a settlement providing $3.11 million to the plaintiffs.
For more details, contact Rachel Geman of Lieff, Cabraser by
Phone: 212-355-9500 OR Tarik Fouad Ajami of Outten & Golden by
Phone: 212-245-1000 or visit
http://www.lieffcabraser.com/caseagainstAandP.htm.
HGK ASSET: Expects Exceptional Recovery Through WorldCom Lawsuit
----------------------------------------------------------------
HGK Asset Management, Inc. reports that Arthur Andersen LLP, the
last remaining defendant, which agreed to pay at least $65
million to settle claims asserted against it in the WorldCom
class action litigation.
Pending court approval, the Andersen settlement brought to
$6,128,056,840 the amount investment banks, auditors, and former
board members of WorldCom must pay by far the largest class
action settlement in U.S. history.
"This settlement agreement by Arthur Andersen LLP was the last
major obstacle remaining in resolution of the case. We estimate
that the HGK clients that invested in WorldCom bonds will
receive in excess of 50% of their recoverable damages," said
Jeffrey T. Harris, Chairman of HGK Asset Management, Inc.
("HGK"). "It is too early to estimate the exact amount of the
recovery for our clients, which will depend ultimately on such
factors as the number of other claimants who file or fail to
file proper claims. This settlement is far above the typical
investor recovery in class action suits, which, according to
NERA Economic Consulting, averaged about 2.8% in 2003."
"HGK Asset Management, Inc. is committed to protecting its
clients and to aggressively defending their interests. We
deplore the actions of companies like WorldCom because we
believe that good corporate governance is critical to the health
of the corporate system and the global economy," said Harris who
praised the performance of the law firm, Schoengold, Sporn,
Laitman & Lometti, which served as HGK's counsel in this
litigation.
Since the passage of Private Securities Litigation Reform Act
(PSLRA) in 1995, only a handful of professional asset management
organizations have stepped forward to lead a class action suit,
and HGK's success in this litigation is unparalleled.
HGK salutes the outstanding contributions of Alan G. Hevesi, New
York State Comptroller and sole Trustee of the New York State
Common Retirement Fund, who was appointed by the court as Lead
Plaintiff in the case. The Fresno County Employees Retirement
Association, the County of Fresno, California, and HGK Asset
Management, Inc. are Additional Named Plaintiffs and Certified
Class Representatives in the WorldCom Securities litigation.
HGK's involvement stems from its purchase of WorldCom bonds on
behalf of its clients. It is expected that most of the
settlement proceeds will eventually be paid to these
bondholders, following court approval.
The class action lawsuit was brought on behalf of all persons or
organizations that purchased or otherwise acquired publicly
traded securities of WorldCom during the period April 29, 1999
through June 25, 2002, inclusive.
For more details, contact Jeffrey T. Harris, Chairman or Arthur
E. Coia II, President of HGK Asset Management, Inc. by Phone:
(201) 659-3700 or visit their Web site: http://www.hgk.com.
IMERGENT INC.: Outraged Shareholders Demand Dismissal of Suits
--------------------------------------------------------------
Dozens of outraged Shareholders of Imergent, Inc. (Amex: IIG)
have warned six law firms who have filed or will file class
action lawsuits against Imergent, Inc. and has warned the lead
plaintiff shareholders in said class action litigation to
dismiss or abandon their Complaints.
The Shareholders of Imergent, Inc. assert that the law firm's
filing the class action, and their lead plaintiffs that the law
firms have solicited, have neglected and failed to do
independent due diligence and any independent investigation in
respect to Imergent, Inc., and have completely ignored the
Congressional requirement that Plaintiffs rather than lawyers
direct such cases. As well the law firms have guaranteed their
appointment by the lead plaintiffs as a result of their
solicitation of the lead plaintiffs and their requirement that
the lead plaintiffs simply only have the obligation to read the
Complaint.
Barry K. Rothman, attorney for the Shareholders of Imergent,
Inc. said, "The conduct of the law firms who have filed, or
contemplate filing a class action, and the conduct of the lead
plaintiffs are actionable securities violations, in wrongfully
attempting to certify the class."
For more details, contact Barry K. Rothman of Law Offices of
Barry K. Rothman by Phone: +1-310-557-0062.
INFORTE CORPORATION: NY Court Preliminarily OKs Suit Settlement
---------------------------------------------------------------
The United States District Court for the Southern District of
New York granted preliminary approval to the settlement of the
consolidated securities class action filed against InForte
Corporation and former officers Philip S. Bligh, Stephen C.P.
Mack and Nick Padgett.
The suit, styled "Mary C. Best v. Inforte Corp.; Goldman, Sachs
& Co.; Salomon Smith Barney, Inc.; Philip S. Bligh; Stephen
C.P. Mack and Nick Padgett, Case No. 01 CV 10836," is among more
than 300 putative class actions against certain issuers, their
officers and directors, and underwriters with respect to such
issuers' initial public offerings, coordinated as "In re Initial
Public Offering Securities Litigation, 21 MC 92 (SAS)."
An amended class action complaint was filed in the Case on April
19, 2002. The amended complaint in the Case alleges violations
of federal securities laws in connection with the Company's
initial public offering occurring in February 2000 and seeks
certification of a class of purchasers of Company stock,
unspecified damages, interest, attorneys' and expert witness
fees and other costs. The amended complaint does not allege any
claims relating to any alleged misrepresentations or omissions
with respect to the Company's business.
The individual defendants (Messrs. Bligh, Mack and Padgett) have
been dismissed from the case without prejudice pursuant to a
stipulated dismissal and a tolling agreement. The Company moved
to dismiss the plaintiff's case. On February 19, 2002, the
Court granted this motion in part, denied it in part and ordered
that discovery in the case may commence. The Court dismissed
with prejudice the plaintiff's purported claim against the
Company under Section 10(b) of the Securities Exchange Act of
1934, but left in place the plaintiff's claim under Section 11
of the Securities Act of 1933.
The Company has entered into a Memorandum of Understanding (the
MOU), along with most of the other defendant issuers in the
Multiple IPO Litigation, whereby such issuers and their officers
and directors (including the Company and Messrs. Bligh, Mack and
Padgett) will be dismissed with prejudice from the Multiple IPO
Litigation, subject to the satisfaction of certain conditions.
Under the terms of the MOU, neither the Company nor any of its
formerly named individual defendants admit any basis for
liability with respect to the claims in the Case. The MOU
provides that insurers for Inforte and the other defendant
issuers participating in the settlement will pay approximately
$1 billion to settle the Multiple IPO Litigation, except that no
such payment will occur until claims against the underwriters
are resolved and such payment will be paid only if the recovery
against the underwriters for such claims is less than $1 billion
and then only to the extent of any shortfall.
Under the terms of the MOU, neither the Company nor any of its
named directors will pay any amount of the settlement. The MOU
further provided that participating defendant issuers will
assign certain claims they may have against the defendant
underwriters in connection with the Multiple IPO Litigation. The
MOU is subject to the satisfaction of certain conditions,
including, among others, approval of the Court.
In an order dated February 15, 2005, the Court certified
settlement classes and class representatives and granted
preliminary approval to the settlement contemplated by the MOU
with certain modifications, including that the "bar order," or
claims that would be barred by the settlement, be modified
consistent with the Court's opinion. The Court has ordered the
parties to submit a revised settlement stipulation consistent
with its opinion and has also scheduled a further hearing to
determine the form, substance and program of notices to class
members and to determine the fairness of the settlement.
The suit is styled "IN RE INFORTE CORPORATION INITIAL PUBLIC
OFFERING SECURITIES LITIGATION, Case No. 01 CV 10836" filed in
relation to "IN RE INITIAL PUBLIC OFFERING SECURITIES
LITIGATION, Master File No. 21 MC 92 (SAS)," both pending in the
United States District Court for the Southern District of New
York, under Judge Shira N. Scheindlin. The plaintiff firms in
this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
LOUDEYE CORPORATION: NY Court Preliminarily OKs Suit Settlement
---------------------------------------------------------------
The United States District Court for the Southern District of
New York granted preliminary approval to the settlement of the
consolidated securities class action filed against Loudeye
Corporation, certain of its former officers and directors and
the underwriters of its initial public offering (IPO).
Between January 11 and December 6, 2001, class action complaints
were filed in the United States District Court for the Southern
District of New York. These actions were filed against 310
issuers (including the Company), 55 underwriters and numerous
individuals including certain of the Company's former officers
and directors. The various complaints were filed purportedly on
behalf of a class of persons who purchased the Company's common
stock during the time period between March 15 and December 6,
2000.
The complaints allege violations of the Securities Act of 1933
and the Securities Exchange Act of 1934, primarily based on
allegations that the Company's underwriters received undisclosed
compensation in connection with the Company's initial public
offering and that the underwriters entered into undisclosed
arrangements with some investors that were designed to distort
and/or inflate the market price for the Company's common stock
in the aftermarket. These actions were consolidated for pre-
trial purposes. No specific amount of damages has been claimed.
The Company and the individual defendants have demanded to be
indemnified by underwriter defendants pursuant to the
underwriting agreement entered into at the time of the initial
public offering. Presently all claims against the former
officers have been withdrawn without prejudice. The Court
suggested that the parties select six test cases to determine
class-action eligibility. The Company is not a party to any of
the test cases.
In March 2005, a proposed settlement initially structured in
June 2003 among plaintiffs, issuer defendants, issuer officers
and directors named as defendants, and issuers' insurance
companies, was approved by the Court. This proposed settlement
provides, among other matters, that:
(1) issuer defendants and related individual defendants
will be released from the litigation without any
liability other than certain expenses incurred to date
in connection with the litigation;
(2) issuer defendants' insurers will guarantee $1.0 billion
in recoveries by plaintiff class members;
(3) issuer defendants will assign certain claims against
underwriter defendants to the plaintiff class members;
and
(4) issuer defendants will have the opportunity to
recover certain litigation-related expenses if
plaintiffs recover more than $5.0 billion from
underwriter defendants.
The final settlement terms as approved by the Court differ from
the initial settlement proposal in that the settlement does not
bar the defendant underwriters from bringing contractual
indemnity claims against the issuer defendants, including the
Company. The Company's board of directors approved the proposed
settlement in August 2003 and is considering whether to approve
the final settlement terms.
The suit is styled "IN RE LOUDEYE CORPORATION INITIAL PUBLIC
OFFERING SECURITIES LITIGATION," filed in relation to "IN RE
INITIAL PUBLIC OFFERING SECURITIES LITIGATION, Master File No.
21 MC 92 (SAS)," both pending in the United States District
Court for the Southern District of New York, under Judge Shira
N. Scheindlin. The plaintiff firms in this litigation are:
(i) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(ii) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(iii) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
(iv) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(v) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(vi) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
MERCK & CO.: Kenneth B. Moll To File First Italian Vioxx Suit
-------------------------------------------------------------
At a press conference on held on May 9, 2005, the law firm of
Kenneth B. Moll & Associates, Ltd. stated their intention to
file in federal court in Chicago, Illinois, the first class
action lawsuit on behalf of all Italian citizens who allegedly
died or were seriously injured by the pain medication Vioxx.
The suit accuses pharmaceutical giant Merck & Co. of failing to
properly research the known risks of Vioxx and warn Italian
consumers of potentially fatal side effects. "Vioxx should never
have been marketed in the first place, in light of the known
risks of Cox-2 inhibitors," said Kenneth B. Moll. The
representation of Italian consumers was undertaken in
cooperation with CODACONS, the non-profit organization
established by Italian law with a mandate to safeguard
consumers.
On September 30, 2004, Merck withdrew Vioxx from all worldwide
markets after studies showed a three-fold risk of heart attack
and stroke. "Merck's decision to withdraw Vioxx from the market
came years after the company first learned of the health risks,"
said Mr. Moll. "Countless individuals in Italy and around the
world have suffered severe and fatal injuries which could have
been avoided if Merck had acted responsibly." The lawsuit seeks
the establishment of a medical monitoring fund to pay for the
testing of Italian consumers for dangerous side effects of
Vioxx.
Kenneth B. Moll & Associates, Ltd., one of the premier class
action and mass tort law firms in the U.S.A., has been contacted
by thousands of people in over 57 countries worldwide who have
taken Vioxx. "Our firm has represented non-U.S. citizens in many
prior lawsuits against American companies. However, this is the
first class action lawsuit on behalf of Italians seeking
compensation for serious injuries and deaths. We have a strong
working relationship with CODACONS and are happy to have their
cooperation in this ground-breaking case," said Mr. Moll.
MORGAN STANLEY: FL Firm Lodges $100M Suit Over Crucial Evidences
----------------------------------------------------------------
A Florida law firm initiated a purported class action suit
against Morgan Stanley, seeking $100 million in damages for its
failure to provide disgruntled clients with evidence that may
have been relevant in hundreds of past arbitration cases, The
Associated Press reports.
The purported class-action suit comes in the wake of Morgan
Stanley's recent acknowledgment that it has found electronic
tapes that potentially could contain documents of interest to
plaintiffs who claim they received faulty stock-research and
investment advice from Morgan Stanley. Filed in a Florida
court, the suit alleges that the Wall Street firm violated
contracts with clients by not giving them access to the recently
discovered documents. It thus seeks to represent as a class all
people who filed arbitration claims against Morgan Stanley since
1999.
Darren C. Blum, the Coral Springs, Florida, lawyer whose firm
filed the suit, told AP he has signed up "dozens" of clients but
sees the class-size ultimately expanding to about 1,000.
Even with those recent developments, Morgan Stanley spokeswoman
Andrea Slattery told AP that the firm considers the suit to be
"entirely without merit" and expects it to be dismissed. She
further adds, "We made a good-faith effort to notify litigants
and regulators that there may, underscore may, be additional
responsive e-mails, and the result is a class-action lawsuit."
Additionally, aside from the $100 million in compensatory
damages and unspecified punitive damages, the lawsuit also seeks
to reopen cases that New York Stock Exchange and NASD
arbitration panels have ruled on involving Morgan Stanley since
1999.
Morgan Stanley said it recently discovered the potential
evidence as it reviewed its e-mail-retention policies as part of
financier Ronald Perelman's fraud suit against Morgan Stanley,
AP reports. In a letter last month to lawyers who had
represented plaintiffs in arbitration cases, an outside attorney
for Morgan Stanley wrote that the firm "has recently come to
appreciate that there are additional sources that might contain
additional responsive e-mail. ... It will take an as-yet-unknown
period of time to determine if there is e-mail or other
electronic data from those sources" that should have been turned
over during the discovery process in the arbitration cases.
That letter outraged some plaintiffs' attorneys. The lawsuit
asserts, "Morgan Stanley's actions demonstrate a history of
discovery abuse preventing plaintiffs from obtaining a full and
fair hearing. Morgan Stanley has abused the arbitration process
for years, and has violated the discovery rules repeatedly."
NET PERCEPTIONS: NY Court Preliminarily Approves Suit Settlement
----------------------------------------------------------------
The United States District Court for the Southern District of
New York granted preliminary approval to the settlement of the
consolidated securities class action filed against Net
Perceptions, Inc., FleetBoston Robertson Stephens, Inc., the
lead underwriter of the Company's April 1999 initial public
offering, several other underwriters who participated in the
initial public offering, Steven J. Snyder, the Company's then
president and chief executive officer, and Thomas M. Donnelly,
the Company's then chief financial officer.
On November 2, 2001, Timothy J. Fox filed a purported class
action lawsuit, which has been assigned to the judge who is also
the pretrial coordinating judge for substantially similar
lawsuits involving more than 300 other issuers. An amended
class action complaint, captioned "In re Net Perceptions, Inc.
Initial Public Offering Securities Litigation, 01 Civ. 9675
(SAS)," was filed on April 22, 2002, expanding the basis for the
action to include allegations relating to the Company's March
2000 follow-on public offering in addition to those relating to
its initial public offering.
The amended complaint generally alleges that the defendants
violated federal securities laws by not disclosing certain
actions taken by the underwriter defendants in connection with
the Company's initial public offering and follow-on public
offering. The amended complaint alleges specifically that the
underwriter defendants, with the Company's direct participation
and agreement and without disclosure thereof, conspired to and
did raise and increase their underwriters' compensation and the
market prices of the Company's common stock following its
initial public offering and in its follow-on public offering by
requiring their customers, in exchange for receiving allocations
of shares of the Company's common stock sold in its initial
public offering, to pay excessive commissions on transactions in
other securities, to purchase additional shares of the Company's
common stock in the initial public offering aftermarket at pre-
determined prices above the initial public offering price, and
to purchase shares of the Company's common stock in its follow-
on public offering. The amended complaint seeks unspecified
monetary damages and certification of a plaintiff class
consisting of all persons who acquired the Company's common
stock between April 22, 1999 and December 6, 2000. The
plaintiffs have since agreed to dismiss the claims against Mr.
Snyder and Mr. Donnelly without prejudice, in return for their
agreement to toll any statute of limitations applicable to those
claims; and those claims have been dismissed without prejudice.
On July 15, 2002, all of the issuer defendants filed a joint
motion to dismiss the plaintiffs' claims in all of the related
cases. On February 19, 2003, the court ruled against the Company
on this motion.
The parties have negotiated a settlement that is subject to
approval by the Court. On February 15, 2005, the Court issued an
Opinion and Order preliminarily approving the settlement,
provided that the defendants and plaintiffs agree to a
modification narrowing the scope of the bar order set forth in
the original settlement agreement.
The suit is styled "In re Net Perceptions, Inc. Initial Public
Offering Securities Litigation, 01 Civ. 9675 (SAS)," filed in
relation to "IN RE INITIAL PUBLIC OFFERING SECURITIES
LITIGATION, Master File No. 21 MC 92 (SAS)," both pending in the
United States District Court for the Southern District of New
York, under Judge Shira N. Scheindlin. The plaintiff firms in
this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
OCCAM NETWORKS: NY Court Preliminarily OKs Stock Suit Settlement
----------------------------------------------------------------
The United States District Court for the Southern District of
New York granted preliminary approval to the settlement of the
consolidated securities class action filed against Occam
Networks, Inc. (formerly Accelerated Networks, Inc.), certain of
its then officers and directors and several investment banks
that were underwriters of the Company's initial public offering.
In June 2001, three putative stockholder class action lawsuits
were filed, and later consolidated, in the United States
District Court for the Southern District of New York. The Court
appointed a lead plaintiff on April 16, 2002, and plaintiffs
filed a Consolidated Amended Class Action Complaint on April 19,
2002.
The Complaint was filed on behalf of investors who purchased the
Company's stock between June 22, 2000 and December 6, 2000 and
alleged violations of Sections 11 and 15 of the 1933 Act and
Sections 10(b) and 20(a) and Rule 10b-5 of the 1934 Act against
one or both of the Company and the individual defendants. The
claims were based on allegations that the underwriter defendants
agreed to allocate stock in the Company's initial public
offering to certain investors in exchange for excessive and
undisclosed commissions and agreements by those investors to
make additional purchases in the aftermarket at pre-determined
prices. Plaintiffs alleged that the prospectus for the Company's
initial public offering was false and misleading in violation of
the securities laws because it did not disclose these
arrangements.
These lawsuits are part of the massive "IPO allocation"
litigation involving the conduct of underwriters in allocating
shares of successful initial public offerings. Over three
hundred other companies have been named in more than one
thousand similar lawsuits that have been filed by some of the
same plaintiffs' law firms. In October 2002, the plaintiffs
voluntarily dismissed the individual defendants without
prejudice. On February 19, 2003 a motion to dismiss filed by
the issuer defendants was heard and the court dismissed the
10(b), 20(a) and Rule 10b-5 claims against the Company.
On July 31, 2003, the Company agreed, together with over three
hundred other companies similarly situated, to settle with the
Plaintiffs. A Memorandum of Understanding (MOU), along with a
separate agreement and a performance bond of $1 billion issued
by the insurers for these companies is a guarantee, allocated
pro rata amongst all issuer companies, to the plaintiffs as part
of an overall recovery against all defendants including the
underwriter defendants who are not a signatory to the MOU. Any
recovery by the plaintiffs against the underwriter defendants
reduces amount to be paid by the issuer companies. The
settlement documents are in process and it is anticipated that
the Company will execute the settlement documents in 2005. This
settlement will require approval of the members of the class of
plaintiffs and the court.
The suit is styled "In re Accelerated Networks, Inc. Initial
Public Offering Securities Litigation," filed in relation to "IN
RE INITIAL PUBLIC OFFERING SECURITIES LITIGATION, Master File
No. 21 MC 92 (SAS)," both pending in the United States District
Court for the Southern District of New York, under Judge Shira
N. Scheindlin. The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
ON SEMICONDUCTOR: NY Court Preliminarily OKs Lawsuit Settlement
---------------------------------------------------------------
The United States District Court for the Southern District of
New York granted preliminary approval to the settlement of the
consolidated securities class action filed against ON
Semiconductor Corporation, certain of its former officers,
current and former directors and the underwriters for its
initial public offering.
During the period July 5, 2001 through July 27, 2001, the
Company was named as a defendant in three shareholder class
action lawsuits, alleging violations of the federal securities
laws. The suits were docketed in the U.S. District Court for
the Southern District of New York as:
(1) Abrams v. ON Semiconductor Corp., et al., C.A. No. 01-
CV-6114;
(2) Breuer v. ON Semiconductor Corp., et al., C.A. No. 01-
CV-6287; and
(3) Cohen v. ON Semiconductor Corp., et al., C.A. No. 01-
CV-6942
On April 19, 2002, the plaintiffs filed a single consolidated
amended complaint that supersedes the individual complaints
originally filed. The amended complaint alleges, among other
things, that the underwriters of the Company's initial public
offering improperly required their customers to pay the
underwriters' excessive commissions and to agree to buy
additional shares of its common stock in the aftermarket as
conditions of receiving shares in the Company's initial public
offering. The amended complaint further alleges that these
supposed practices of the underwriters should have been
disclosed in the Company's initial public offering prospectus
and registration statement. The amended complaint alleges
violations of both the registration and antifraud provisions of
the federal securities laws and seeks unspecified damages.
Various other plaintiffs have filed substantially similar class
action cases against approximately 300 other publicly traded
companies and their public offering underwriters in New York
City, which have all been transferred, along with the case
against the Company, to a single federal district judge for
purposes of coordinated case management.
On July 15, 2002, together with the other issuer defendants, the
Company filed a collective motion to dismiss the consolidated,
amended complaints against the issuers on various legal grounds
common to all or most of the issuer defendants. The underwriters
also filed separate motions to dismiss the claims against them.
In addition, the parties have stipulated to the voluntary
dismissal without prejudice of the Company's individual former
officers and current and former directors who were named as
defendants in our litigation, and they are no longer parties to
the litigation. On February 19, 2003, the Court issued its
ruling on the motions to dismiss filed by the underwriter and
issuer defendants. In that ruling the Court granted in part and
denied in part those motions. As to the claims brought against
the Company under the antifraud provisions of the securities
laws, the Court dismissed all of these claims with prejudice,
and refused to allow plaintiffs the opportunity to re-plead
these claims. As to the claims brought under the registration
provisions of the securities laws, which do not require that
intent to defraud be pleaded, the Court denied the motion to
dismiss these claims as to the Company and as to substantially
all of the other issuer defendants as well. The Court also
denied the underwriter defendants' motion to dismiss in all
respects.
In June 2003, upon the determination of a special independent
committee of the Company's Board of Directors, the Company
elected to participate in a proposed settlement with the
plaintiffs in this litigation. If ultimately approved by the
Court, this proposed settlement would result in a dismissal,
with prejudice, of all claims in the litigation against the
Company and against any of the other issuer defendants who elect
to participate in the proposed settlement, together with the
current or former officers and directors of participating
issuers who were named as individual defendants. The proposed
settlement does not provide for the resolution of any claims
against the underwriter defendants, and the litigation against
those defendants is continuing. The proposed settlement provides
that the class members in the class action cases brought against
the participating issuer defendants will be guaranteed a
recovery of $1 billion by the participating issuer defendants.
If recoveries totaling less than $1 billion are obtained by the
class members from the underwriter defendants, the class members
will be entitled to recover the difference between $1 billion
and the aggregate amount of those recoveries from the
participating issuer defendants. If recoveries totaling $1
billion or more are obtained by the class members from the
underwriter defendants, however, the monetary obligations to the
class members under the proposed settlement will be satisfied.
In addition, the Company and any other participating issuer
defendants will be required to assign to the class members
certain claims that it may have against the underwriters of its
initial public offerings.
The proposed settlement contemplates that any amounts necessary
to fund the settlement or settlement-related expenses would come
from participating issuers' directors and officers' liability
insurance policy proceeds, as opposed to funds of the
participating issuer defendants themselves. A participating
issuer defendant could be required to contribute to the costs of
the settlement if that issuer's insurance coverage were
insufficient to pay that issuer's allocable share of the
settlement costs. Consummation of the proposed settlement is
conditioned upon obtaining both preliminary and final approval
by the Court. Formal settlement documents were submitted to the
Court in June 2004, together with a motion asking the Court to
preliminarily approve the form of settlement. Certain
underwriters who were named as defendants in the settling cases,
and who are not parties to the proposed settlement, opposed
preliminary approval of the proposed settlement of those cases.
On February 15, 2005, the Court issued an order preliminarily
approving the proposed settlement in all respects but one. The
plaintiffs and the issuer defendants are in the process of
assessing whether to proceed with the proposed settlement, as
modified by the Court. If the plaintiffs and the issuer
defendants elect to proceed with the proposed settlement, as
modified by the Court, they will submit revised settlement
documents to the Court. The underwriter defendants may then
have an opportunity to object to the revised settlement
documents. If the Court approves the revised settlement
documents, it will direct that notice of the terms of the
proposed settlement be published in a newspaper and mailed to
all proposed class members and schedule a fairness hearing, at
which objections to the proposed settlement will be heard.
Thereafter, the Court will determine whether to grant final
approval to the proposed settlement.
The suit is styled "IN RE ON SEMICONDUCTOR CORPORATION INITIAL
PUBLIC OFFERING SECURITIES LITIGATION," filed in relation to "IN
RE INITIAL PUBLIC OFFERING SECURITIES LITIGATION, Master File
No. 21 MC 92 (SAS)," both pending in the United States District
Court for the Southern District of New York, under Judge Shira
N. Scheindlin. The plaintiff firms in this litigation are:
(i) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(ii) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(iii) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
(iv) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(v) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(vi) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
PHILIP MORRIS: Federal Appeals Court Decertifies Simon II Suit
--------------------------------------------------------------
A federal appeals court rejected an attempt to establish a
nationwide class solely for the purpose of establishing an
industry fund to pay punitive damages for yet-to-be filed claims
from smokers across the country. Philip Morris USA believes the
ruling is supported by settled decisions of the United States
Supreme Court and other federal courts construing class action
and punitive damages law.
"The appeals court decision is the correct and proper one," said
William S. Ohlemeyer, Philip Morris USA vice president and
associate general counsel.
The ruling came in a long-running case called Simon filed in
Brooklyn, N.Y. and assigned to U.S. District Judge Jack
Weinstein.
As previously reported in the November 1, 2002 edition of the
Class Action Reporter, the multi-million tobacco class action
was known as Simon II. It was commenced, seeking a joint trial
of common questions of law and fact relevant to determining
defendants' liability for punitive damages on all claims and
theories of relief set forth in the underlying cases pending
before the court.
Eventually, Simon II was narrowed to include only the three
cigarette smoker class actions. The suit names as defendants:
(1) Philip Morris USA,
(2) RJ Reynolds Tobacco Co.,
(3) Brown & Williamson Tobacco Corp.,
(4) The American Tobacco Co.,
(5) BAT Industries,
(6) Lorillard Tobacco Co. Inc. and
(7) Liggett Group Inc.
In a September 19, 2002 order, Judge Weinstein certified the
extraordinary class of nationwide smokers and their
representatives for punitive damages only.
PUERTO RICO: Complies With Merit Discovery Requests in PR Suit
--------------------------------------------------------------
Puerto Rico Telephone Company (PRTC) has complied with merit
discovery requests of plaintiffs in the class action filed
against Telecommunicaciones de Puerto Rico, Inc., who holds 100%
stock in PRTC.
On November 17, 2003, six residential subscribers and eight
business service subscribers filed a class action with the
Superior Court of Puerto Rico under the Puerto Rico
Telecommunications Act of 1996 and the Puerto Rico Class Action
Act of 1971. The plaintiffs have claimed that the Company's
charges for touchtone service are not based on cost, and
therefore violate of the Act. The plaintiffs have requested
that the Superior Court:
(1) issue an order certifying the case as a class action,
(2) designate the plaintiffs as representative of the
class,
(3) find that the charges are illegal, and
(4) order the Company to reimburse every subscriber for
excess payments made since September 1996.
On December 30, 2003, PRTC filed its answer to the complaint and
requested dismissal on the grounds that the claim is not a
legitimate class action suit. On February 17, 2004, the
plaintiffs filed their first set of interrogatories and request
for admissions to initiate discovery. A status conference was
held on April 30, 2004 and the Superior Court ruled that at this
stage of the proceedings the discovery process would be
addressed, but not limited to the determination of the class.
On June 28, 2004, a second hearing was held. During this hearing
PRTC was ordered to submit responses to the plaintiffs' request
for admissions and to their first and second sets of
interrogatories. PRTC submitted its responses to the
plaintiffs' request for admissions and to their first and second
sets of interrogatories on July 6 and July 16, 2004,
respectively. However, these responses were limited to the
issue of class certifications, and the interrogatories and
requests for admissions relating to the merits of the case were
objected and a protective order was requested. The Superior
Court denied PRTC's requests and ordered full responses. On July
16, 2004, PRTC filed a writ of certiorari with the Puerto Rico
Court of Appeals seeking reversal of the Superior Court's order
allowing discovery concerning the merits of the case before the
class certification issue is resolved.
On October 13, 2004, plaintiffs filed a motion opposing PRTC's
writ of certiorari. A determination is pending before the Court
of Appeals. On October 8, 2004, plaintiffs filed with the
Superior Court a motion requesting the dismissal and
substitution of one of the plaintiffs. The PR Court of Appeals
denied PRTC's writ of certiorari requesting the reversal of a
Superior Court order allowing unlimited discovery. PRTC had
intended to limit discovery to the class certification issue.
On November 15, 2004, the Superior Court held an evidentiary
hearing in order to determine if this case will be certified as
a class action. Even though the Court has not yet reached a
determination, at the hearing, the Judge ordered PRTC to comply
with the plaintiffs' merits discovery requests and PRTC has now
done so.
R.J. REYNOLDS: Applauds Unanimous Decision in Simon II Lawsuit
--------------------------------------------------------------
R.J. Reynolds Tobacco Company applauds the unanimous decision by
the 2nd Circuit U.S. Court of Appeals to overturn a class-
certification order in a smoking and health case, known as Simon
II that was entered on September 19, 2002 by a federal judge in
Brooklyn, New York.
"This decision is correct and in line with decisions made by
every other federal court and most state courts, which have
determined that class action lawsuits are not appropriate for
trying smoking and health cases," said Charles A. Blixt,
executive vice president and general counsel for R.J. Reynolds.
Jack B. Weinstein, senior U.S. district judge in the U.S.
District Court for the Eastern District of New York, had
certified the Simon II class as a nationwide, "punitive damages
non-opt-out class." With some exceptions, the class consisted of
any U.S. resident who had ever smoked and had been diagnosed
with various specified smoking-related diseases since April 9,
1993.
For more details, contact David Howard of R.J. Reynolds Tobacco
Company by Phone: +1-336-741-3489.
SILICON STORAGE: Pomerantz Haudek Firm Appointed Lead Plaintiff
---------------------------------------------------------------
The law firm of Pomerantz Haudek Block Grossman & Gross LLP was
appointed Lead Counsel in the federal class action lawsuit
against Silicon Storage Technology, Inc. ("Silicon Storage" or
the "Company") (Nasdaq:SSTI) and three of the company's officers
in United States District Court, Northern District of
California. The Louisiana State Employees' Retirement System and
the State of Louisiana District Attorney's Retirement System are
Lead Plaintiffs. The case has been brought under the Securities
Exchange Act of 1934 on behalf of purchasers of Silicon Storage
securities between March 22, 2004 and December 20, 2004,
inclusive (the "Class Period").
Silicon Storage produces flash memory semiconductor devices,
including so-called Nor flash memory devices, used in personal
computers, digital cameras and other consumer products. Revenue
from sales of such devices has contributed about 50% of the
Company's reported revenue.
In late 2003, defendants proclaimed the end of the downturn in
the semiconductor market and predicted increasing demand. During
the Class Period, defendants stated that Silicon Storage was
"the leader in low-density Nor Flash" and that Intel Corp.
("Intel"), Advanced Micro Devices, Inc. ("AMD") and other large
suppliers were "retreating" from the low-density flash storage
market. The Company predicted that the growing sales of its low
density memory devices would fuel increasing revenues and
earnings. Defendants also stated that the Company's profit
margins were increasing.
The facts, known to the defendants, but allegedly concealed from
the investing public, were that the Company was facing intense
competition from Intel, AMD and other suppliers, and that this
competition was reducing earnings and Silicon Storage's profit
margin. As a consequence, the Company accumulated excess
inventory that it did not write down as required by GAAP and
this failure to write down contributed to the artificial
inflation of the Company's reported earnings. During the Class
Period, when the Company's shares were trading at artificially
inflated prices, individual defendants exploited their corporate
positions by selling their personally held shares in Silicon
Storage for over $2.9 million. On January 18, 2005, the Company
disclosed that the SEC was investigating trading in Silicon
Storage shares by an executive and a director.
The current litigation focuses on Silicon Storage's knowing
misstatements during the Class Period, the inflationary impact
of these misstatements on the stock price, and the subsequent
stock price fall after the SEC initiated an investigation.
For more details, contact Jason S. Cowart of Pomerantz Haudek
Block Grossman & Gross LLP by Phone: 888-476-6529 or by E-mail:
jscowart@pomlaw.com.
SOYO INC.: Consumers Initiate Motherboard Fraud Suit in CA Court
----------------------------------------------------------------
SOYO, Inc. continues to face a class action filed California
Superior Court entitled "Gerry Normandan et al, v. SOYO Inc.
Case No. RCV 082128." The case seeks class action status and
alleges defects in motherboards which the Company distributes,
and that the Company misrepresented and omitted material facts
concerning the motherboards.
The plaintiff seeks restitution and disgorgement of all amounts
obtained by defendant as a result of alleged misconduct, plus
interest, actual damages, punitive damages and attorneys' fees.
The Company is vigorously defending the lawsuit and believes
that it will be resolved with no material adverse effect on the
Company, the Company said in a disclosure to the Securities and
Exchange Commission.
TASER INTERNATIONAL: Securities Suits To Be Consolidated in AZ
--------------------------------------------------------------
Parties intend to consolidate the securities class actions filed
against TASER International, Inc. and certain of its officers
and directors in the United States District Court for the
District of Arizona.
On January 10, 2005, a securities class action lawsuit was filed
against the Company and certain of its officers and directors,
captioned "Malasky v. TASER International, Inc., et al. Case No.
2:05 CV 115." Since then, numerous other securities class action
lawsuits were filed against the Company and certain of its
officers and directors. The majority of these lawsuits were
filed in the District of Arizona. Four actions were filed in
the United States District Court for the Southern District of
New York. The parties in three of the New York actions have
agreed to transfer the cases to the District of Arizona, and
defendants are in the process of seeking the transfer of the
fourth New York action to the District of Arizona. The parties
have submitted a proposed order to consolidate all actions in
the District of Arizona under the "Malasky" case file.
These actions are filed on behalf of the purchasers of the
Company's stock in various class periods, beginning as early as
May 29, 2003 and ending as late as January 14, 2005. The
complaints allege, among other things, violations of Section
10(b) of the Securities Exchange Act of 1934, as amended, and
Rule 10b-5, promulgated thereunder, and seek unspecified
monetary damages and other relief against all defendants. The
complaints allege generally that the Company and the individual
defendants made false or misleading public statements regarding,
among other things, the safety of the Company's products and the
Company's ability to meet its sales goals, including the
validity of a $1.5 million sales order with one of the Company's
distributors in the fourth quarter of 2004.
Pursuant to a proposed order, which has been submitted to the
court, defendants need not respond to any of the complaints
originally filed in these actions. Plaintiffs will file an
amended consolidated complaint after lead plaintiff and lead
counsel are chosen. Defendants will then respond to the amended
consolidated complaint.
VISHAY INTERTECHNOLOGY: Plaintiffs Mean To Continue Proctor Suit
----------------------------------------------------------------
Attorneys representing plaintiffs in Proctor v. Vishay
Intertechnology, Inc. et al., Case No. 1-04-CV-018977, currently
pending in California Superior Court, Santa Clara County, and
originally filed on August 12, 2002, issued the following
statement:
"Apparently, some investors are confused regarding whether all
pending lawsuits against Siliconix, Inc. and Vishay
Intertechnology, Inc. are on the verge of settlement. In fact,
the case we are prosecuting in California does not look to
settle anytime soon. Today Vishay Intertechnology, Inc. filed
with the Securities and Exchange Commission a document entitled,
"Amendment No. 2 to Form S-4." Page 10 of that document contains
the following statement concerning the Proctor lawsuit: "The
plaintiff purports to allege both derivative claims on behalf of
Siliconix, on which any recovery would inure directly to the
benefit of Siliconix and indirectly to its stockholders, and
class action claims, on which any recovery would inure directly
to Siliconix stockholders who were members of the class. If the
plaintiff were to prevail in the case, Vishay could be forced to
pay substantial damages, either to Siliconix or directly to the
stockholders of Siliconix.
Because the litigation is in its very early stages, the
plaintiff has not had an opportunity to take discovery. An
actual trial on the merits of the case would not likely occur in
the near term. Accordingly, Siliconix stockholders may not have
the ability to assess the value, if any, of the claims made in
the litigation, and, if there is value in the claims, whether
the value is adequately reflected in the consideration for
Siliconix stock currently offered by Vishay.
If Vishay is successful in consummating the offer and the
merger, any value in the pending litigation may be lost to the
public stockholders of Siliconix.
'If the offer and merger are successfully consummated, Vishay
will own 100% of the outstanding equity of Siliconix. In that
circumstance, any derivative claims asserted in the pending
litigation on behalf of Siliconix, even if successful, may inure
solely to the benefit of Vishay. Recovery on the purported class
action claims might also be denied to Siliconix stockholders,
either because Vishay is successful in having those claims
dismissed or they are otherwise mooted as a result of the
merger. Thus, the offer and merger may deprive stockholders of
any value in the pending litigation.
The attorneys for the plaintiffs in the Proctor v. Vishay
litigation intend to prosecute the case regardless of whether
Vishay's pending tender offer for Siliconix stock succeeds and
will contend that the offer and merger, even if effectuated, do
not moot the lawsuit."
For more details, contact The Law Offices of James A. Hennefer
by Phone: 415-421-6100 or by E-mail: jhennefer@hennefer-wood.com
OR Blecher & Collins by Mail: 611 West Sixth Street, 20th Floor,
Los Angeles, California 90017 by Phone: 213-622-4222 by Fax:
213-622-1656 or visit their Web site:
http://www.blechercollins.com/CM/Custom/TOCAboutBandC.asp.
WIRELESS FACILITIES: NY Court Preliminarily OKs Suit Settlement
---------------------------------------------------------------
The United States District Court for the Southern District of
New York granted preliminary approval to the settlement of the
consolidated securities class action filed against Wireless
Facilities, Inc. and certain of its directors and officers.
In June and July 2001, the Company and certain of its directors
and officers were named as defendants in five purported class
action complaints filed in the United States District Court for
the Southern District of New York on behalf of persons and
entities who acquired the Company's common stock at various
times on or after November 4, 1999. The respective complaints
allege that the registration statement and prospectus issued by
the Company in connection with the public offering of its common
stock contained untrue statements of material fact or omissions
of material fact in violation of the Securities Act of 1933 and
the Securities Exchange Act of 1934. Specifically, these claims
allege that the Company failed to disclose that the offering's
underwriters had:
(1) solicited and received additional and excessive
compensation and benefits from their customers beyond
what was listed in the registration statement and
prospectus and
(2) entered into tie-in or other arrangements with certain
of their customers which were allegedly designed to
maintain, distort and/or inflate the market price of
the Company's common stock in the aftermarket.
The complaints seek unspecified monetary damages and other
relief. This case is among the over 300 class action lawsuits
pending in the United States District Court for the Southern
District of New York that have come to be known as the IPO
laddering cases.
On October 9, 2002, the court signed Stipulations and Orders of
Dismissal, which dismissed the Company's named individual
officers and directors from the action, without prejudice, but
the Company remained a defendant in the case. On February 19,
2003, the court issued its decision on the joint motion to
dismiss the IPO laddering cases. The decision allowed the
plaintiffs to pursue their claim against the Company based on
its alleged issuance of a registration statement and prospectus
that failed to disclose a fraudulent scheme by the offering's
underwriters and dismissed, with leave to amend, the plaintiffs'
claim against the Company based on its alleged knowledge and
intent to defraud investors so as to benefit from an inflated
price for the Company's common stock in the aftermarket.
The plaintiffs, the Directors & Officers' insurance underwriters
and the Company, among other issuer co-defendants, have agreed
in principle to a form of settlement that would dismiss the
Company and its individual directors and officers from the
litigation without requiring that the Company fund the
settlement. The settlement documents are presently being
drafted, and will be submitted to the court for approval once
they have been finalized.
On March 10, 2005, the court signed an order certifying the
proposed settlement classes and the tentative proposed
settlement was approved contingent on changes required in the
order. The final settlement is expected to occur in the first
half of 2005. The company does not expect the settlement to have
a material impact on its operations or cash flow.
The suit is styled "IN RE WIRELESS FACILITIES, INC. INITIAL
PUBLIC OFFERING SECURITIES LITIGATION," filed in relation to "IN
RE INITIAL PUBLIC OFFERING SECURITIES LITIGATION, Master File
No. 21 MC 92 (SAS)," both pending in the United States District
Court for the Southern District of New York, under Judge Shira
N. Scheindlin. The plaintiff firms in this litigation are:
(i) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(ii) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(iii) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
(iv) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(v) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(vi) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
WIRELESS FACILITIES: Asks CA Court To Dismiss Securities Lawsuit
----------------------------------------------------------------
Wireless Facilities, Inc. asked the United States District Court
for the Southern District of California to dismiss the
consolidated securities class action filed against it and
certain of its officers and directors.
Several securities class action lawsuits were initially filed on
behalf of those who purchased, or otherwise acquired, the
Company's common stock between April 26, 2000 and August 4,
2004. The lawsuits generally allege that, during that time
period, Defendants made false and misleading statements to the
investing public about the Company's business and financial
results, causing its stock to trade at artificially inflated
levels. Based on these allegations, the lawsuits allege that
Defendants violated the Securities Exchange Act of 1934, and the
plaintiffs seek unspecified damages. These actions have been
consolidated into a single action in "In re Wireless Facilities,
Inc. Securities Litigation Master File No. 04CV1589-JAH."
The plaintiffs filed a consolidated complaint on January 31,
2005. The Company filed a motion to dismiss the consolidated
complaint on March 17, 2005. The hearing date for the motion to
dismiss is currently set for June 16, 2005 before the Federal
District Court.
The first identified complaint is styled "Cole, et al. v.
Wireless Facilities, Inc., et al. case no. 04-CV-1589," filed in
the United States District Court for the Southern District of
California. The plaintiff firms in this litigation are:
(1) Brodsky & Smith, LLC, 11 Bala Avenue, Suite 39, Bala
Cynwyd, PA, 19004, Phone: 610.668.7987, Fax:
610.660.0450, E-mail: esmith@Brodsky-Smith.com
(2) Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (Washington,
DC), 1100 New York Avenue, N.W., Suite 500, West Tower,
Washington, DC, 20005, Phone: 202.408.4600, Fax:
202.408.4699, E-mail: lawinfo@cmht.com
(3) Goodkind Labaton Rudoff & Sucharow LLP, 100 Park
Avenue, New York, NY, 10017 Phone: 212.907.0700, Fax:
212.818.0477, E-mail: info@glrslaw.com
(4) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com
(5) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(6) Shalov, Stone & Bonner, 276 Fifth Avenue, Suite 704,
New York, NY, 10001, Phone: 212.686.8004, Fax:
212.686.8005, E-mail: lawyer@lawssb.com
(7) Spector, Roseman, & Kodroff (San Diego), 600 West
Broadway, Suite 1800, San Diego, CA, 92101, Phone:
619.338.4514,
(8) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(9) Wolf Popper, LLP, 845 Third Avenue, New York, NY,
10022-6689 Phone: 877.370.7703, Fax: 212.486.2093, E-
mail: IRRep@wolfpopper.com
New Securities Fraud Cases
AVAYA INC.: Wolf Haldenstein Lodges Securities Fraud Suit in NJ
---------------------------------------------------------------
The law firm of Wolf Haldenstein Adler Freeman & Herz LLP
initiated a class action lawsuit in the United States District
Court for the District of New Jersey, on behalf of all persons
who purchased the securities of Avaya, Inc. ("Avaya" or the
"Company") (NYSE: AV) between October 5, 2004 and April 19,
2005, inclusive, (the "Class Period") against defendants Avaya
and certain officers and directors of the Company.
Our case name is Levitt v. Avaya, Inc., et al. The complaint
alleges that defendants violated the federal securities laws by
issuing materially false and misleading statements throughout
the Class Period that had the effect of artificially inflating
the market price of the Company's securities. Specifically, the
complaint alleges:
(1) the cost of the integration of Tenovis was much greater
than represented and rather than being "accretive" to
fiscal 2005 earnings or having a positive financial
impact within a short period of time, the acquisition
would, in fact, reduce Avaya's earnings by at least
$.06 per share during fiscal 2005;
(2) Avaya's changes in its delivery methods of products to
market was creating severe disruptions in sales;
(3) Avaya was experiencing a dramatic reduction of demand
in its U.S. market; and
(4) based on the foregoing, Avaya had no reasonable basis
to project an increase in profits or an increase in
revenues of 25-27% for fiscal 2005.
For more details, contact Fred Taylor Isquith, Esq., Gregory M.
Nespole, Esq., or Derek Behnke of Wolf Haldenstein Adler Freeman
& Herz LLP by Phone: 1-800-575-0735 or by E-mail:
classmember@whafh.com.
MARTEK BIOSCIENCES: Charles J. Piven Files Securities Suit in MD
----------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. initiated a securities
class action on behalf of shareholders who purchased, converted,
exchanged or otherwise acquired the common stock of Martek
Biosciences Corporation (Nasdaq:MATK) between December 9, 2004
and April 27, 2005, inclusive (the "Class Period").
The case is pending in the United States District Court for the
District of Maryland against defendant Martek, Henry Linsert,
Jr. and Peter L. Buzy. The action charges that defendants
violated federal securities laws by issuing a series of
materially false and misleading statements to the market
throughout the Class Period, which statements had the effect of
artificially inflating the market price of the Company's
securities. No class has yet been certified in the above action.
For more details, contact the Law Offices Of Charles J. Piven,
P.A. by Mail: The World Trade Center-Baltimore, 401 East Pratt
Street, Suite 2525, Baltimore, Maryland 21202 by Phone:
410/986-0036 or by email at hoffman@pivenlaw.com.
MBNA CORPORATION: Charles J. Piven Lodges Securities Suit in DE
---------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. initiated a securities
class action on behalf of shareholders who purchased, converted,
exchanged or otherwise acquired the common stock of MBNA
Corporation (NYSE: KRB) between January 20, 2005, and April 21,
2005, inclusive (the "Class Period").
The case is pending in the United States District Court for the
District of Delaware against defendant MBNA and one or more of
its officers and/or directors. The action charges that
defendants violated federal securities laws by issuing a series
of materially false and misleading statements to the market
throughout the Class Period, which statements had the effect of
artificially inflating the market price of the Company's
securities. No class has yet been certified in the above action.
For more details, contact the Law Offices Of Charles J. Piven,
P.A. by Mail: The World Trade Center-Baltimore, 401 East Pratt
Street, Suite 2525, Baltimore, Maryland 21202 by Phone:
410/986-0036 or by email at hoffman@pivenlaw.com.
R&G FINANCIAL: Milberg Weiss Lodges Securities Fraud Suit in PR
---------------------------------------------------------------
The law firm of Milberg Weiss Bershad & Schulman LLP initiated a
class action lawsuit on behalf of purchasers of the securities
of R&G Financial Corporation ("R&G" or the "Company") (NYSE:
RGF) between April 21, 2003 and April 25, 2005 inclusive, (the
"Class Period"), seeking to pursue remedies under the Securities
Exchange Act of 1934 (the "Exchange Act").
The action is pending in the United States District Court for
the District of Puerto Rico against defendants R&G Financial
Corp., Victor J. Galan, Joseph R. Sandoval And Ramon Prats.
The Complaint alleges that Defendants issued, or caused to be
issued, false and misleading statements during the Class Period
to artificially inflate the value of R&G stock. More
specifically, the Company failed to disclose and misrepresented
the following material adverse facts, known to defendants or
recklessly disregarded by them:
(1) that R&G's earnings quality had been significantly
weakened by the Company's use of more aggressive
assumptions to generate gain on sale income, as well as
to the value it retained in its interest only ("IO")
residuals in securitization transactions;
(2) that R&G's methodology used to calculate the fair value
of its IO residual interests retained in securitization
transactions was incorrect and caused the Company to
overstate its financial results by at least $50
million;
(3) that the Company's financial statements were not
prepared in accordance with Generally Accepted
Accounting Principles ("GAAP");
(4) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company; and
(5) that as a result, the value of the Company's net income
and financial results were materially overstated at all
relevant times.
On April 25, 2005, after the market had closed, R&G Financial
announced that it would restate its financial results for fiscal
years 2003 and 2004. Shares of R&G Financial fell $8.14 per
share, or 35.12 percent, on April 26, 2005, to close at $15.04.
A few hours after trading had concluded for the day, R&G issued
a press release announcing that it was the subject of an
informal SEC investigation related to it restatement
announcement.
For more details, contact Steven G. Schulman by Mail: One
Pennsylvania Plaza, 49th fl., New York, NY, 10119-0165 by Phone
number: (800) 320-5081 by E-mail: sfeerick@milbergweiss.com OR
Maya Saxena, Joseph E. White III or Ariel Acevedo by Mail: 5200
Town Center Circle, Suite 600, Boca Raton, FL 33486 by Phone:
(561) 361-5000 by E-mail: msaxena@milbergweiss.com,
jwhite@milbergweiss.com or aacevedo@milbergweiss.com or visit
their Web site: http://www.milbergweiss.com.
TRIBUNE CO.: Glancy Binkow Lodges Securities Fraud Lawsuit in IL
----------------------------------------------------------------
The law firm of Glancy Binkow & Goldberg LLP initiated a Class
Action lawsuit in the United States District Court for the
Northern District of Illinois on behalf of a class (the "Class")
consisting of all persons or entities who purchased or otherwise
acquired securities of Tribune Company ("Tribune" or the
"Company") (NYSE:TRB) during the period January 24, 2002 through
July 15, 2004 (the "Class Period").
The Complaint charges Tribune and certain of the Company's
executive officers with violations of federal securities laws.
Tribune, a media company, conducts operations in television,
publishing, radio stations and interactive ventures. The
Complaint alleges that during the Class Period defendants
intentionally overstated the circulation of several Tribune
publications, including Newsday and the Spanish-language
publication Hoy, in order to fraudulently extract higher
incentive payments from the papers' advertisers. These
fraudulently inflated circulation numbers were reported to
investors and the market on a regular basis, and the wrongfully
obtained proceeds based on these circulation figures
artificially inflated Tribune's financial results.
The Complaint alleges defendants failed to disclose material
adverse facts, including that:
(1) since at least fiscal 2001, defendants were inflating
the circulation of Hoy and Newsday;
(2) as a result, the Company's financial results during the
Class Period were artificially inflated and its
liabilities were understated;
(3) the Company's revenue and income were overstated by
millions of dollars;
(4) defendants had knowingly established extremely weak
circulation controls which allowed for the circulation
overstatements; and
(5) as a result of the above, defendants' ability to
continue to achieve future earnings-per-share and
revenue growth would be severely threatened, and would
and did result in $95 million in costs, fines, refunds
and investigation expenditures.
In June 2004 Tribune reported that Newsday and Hoy had inflated
circulation figures since 2001. Tribune also came under
increased scrutiny by the Audit Bureau of Circulations, a non-
profit, private entity that monitors the accuracy of circulation
numbers for publications nationwide. As a result of this
increasing pressure, Tribune finally admitted on July 15, 2004,
that its reported circulation numbers for Hoy and Newsday were
overstated. Tribune eventually announced it was conducting an
internal investigation and that it may refund to advertisers all
amounts they had been overcharged.
For more details, contact Lionel Z. Glancy or Michael Goldberg
of Glancy Binkow & Goldberg LLP by Phone: (310) 201-9150 or
(888) 773-9224 or by E-mail: info@glancylaw.com.
TRIBUNE CO.: Murray Frank Lodges Securities Fraud Suit in IL
------------------------------------------------------------
The law firm of Murray, Frank & Sailer LLP initiated a class
action lawsuit in the United States District Court for the
Northern District of Illinois on behalf of shareholders who
purchased or otherwise acquired the securities of Tribune
Company ("TRB" or the "Company") (NYSE:TRB) (NYSE:TXA) between
January 24, 2002 and July 15, 2004, inclusive (the "Class
Period"), seeking to pursue remedies under the Securities
Exchange Act of 1934.
The complaint alleges, that, in June 2004, Tribune reported that
two of its papers, Newsday and Spanish-language publication Hoy,
had inflated circulation figures since 2001. As alleged in the
complaint, this announcement set off a wave of increased
scrutiny throughout the publishing industry, with advertisers
keen to ensure that they were not being similarly duped. Tribune
also came under increased scrutiny with the Audit Bureau of
Circulations, a non-profit, private entity charged with
monitoring the accuracy of circulation numbers for publications
nationwide. As a result of this increasing pressure, Tribune
admitted on July 15, 2004 that its reported circulation numbers
for Hoy and Newsday were overstated. Tribune eventually
announced it was conducting an internal investigation and that
it may refund to advertisers all amounts that they had been
overcharged. In response to this announcement, Tribune's stock
price fell to $41 at the close of business on July 15, 2004, and
has never recovered. According to the complaint, the true facts,
which were known by defendants but concealed from the investing
public during the Class Period, were as follows:
(1) since at least FY 2001, defendants were inflating the
circulation of Tribune's Hoy and Newsday publications;
(2) as a result of said inflation, the Company's financial
results during the Class Period were artificially
inflated (including revenue, earnings per share ("EPS")
and accounts receivables) and the Company's liabilities
were understated;
(3) the Company's revenue and income was grossly overstated
by millions of dollars;
(4) defendants had knowingly established extremely weak, if
not purposeless, circulation controls which allowed for
the circulation overstatements and did not require that
circulation managers certify the claimed circulation;
and
(5) as a result, defendants' ability to continue to achieve
future EPS and revenue growth would be severely
threatened and would and did result in $95 million in
costs, fines, refunds and investigation expenditures.
For more details, contact Eric J. Belfi or Aaron D. Patton of
Murray, Frank & Sailer LLP by Phone: (800) 497-8076 or
(212) 682-1818 by Fax: (212) 682-1892 or by E-mail:
info@murrayfrank.com.
XYBERNAUT CORPORATION: Landskroner Grieco Files Stock Suit in DE
----------------------------------------------------------------
The law firm of Landskroner - Grieco - Madden, Ltd. initiated a
lawsuit seeking class action status in the United States
District Court for the District of Delaware on behalf of all
persons (the "Class") who purchased the securities of Xybernaut
Corporation (Nasdaq:XYBRE) ("Xybernaut" or the "Company") during
the period March 27, 2003 and April 8, 2005 (the "Class
Period"). A copy of the Complaint may be obtained from the
Court, or you can call our offices toll free at (866) 522-9500
to speak with an attorney regarding this matter and we will send
you a copy of the Complaint.
The Complaint charges Xybernaut, Edward G. Newman, Steven A.
Newman, M.D., and Thomas D. Davis 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 omitted or misrepresented material
facts about its financial condition, business prospects, revenue
expectations and internal controls during the Class Period.
On March 14, 2005, Xybernaut announced that it was seeking an
extension of time within which to file its annual report with
the Securities and Exchange Commission ("SEC"). On March 31,
2005, after the close of trading, Xybernaut belatedly revealed
that it was in dire financial and regulatory straits. The
Company issued a press release that day, which stated, in part:
"Xybernaut Corporation (Nasdaq:XYBRE) announced today that the
filing of its Form 10-K and other related reports for the year
ended December 31, 2004, anticipated to occur today, will be
further delayed, pending completion of an internal investigation
undertaken by its Audit Committee." The press release stated
that independent counsel had been engaged to assist in an
internal investigation of, "among other things, concerns brought
to the Audit Committee's attention relating to the internal
control environment of the Company, the propriety of certain
expenditures and the documentation of certain expenses of the
Chairman and CEO of the Company, the Company's transparency and
public disclosure process, the accuracy of certain public
disclosures, management's conduct in response to the
investigation, and the propriety of certain major transactions."
The press release further stated that the Company had received a
subpoena from the Northeast Regional Office of the SEC seeking
"documents and other information relating to the sale of Company
securities by any person identified as a selling shareholder in
any Company registration statement or other public filing."
On this news, the Company's share price, which at one time had
traded as high as $2.23 per share due to the Company's positive
press releases and false and misleading representations during
the Class Period, closed at $0.42 per share on March 31, 2005,
and then dropped further by almost fifty percent (50%), to close
at $0.24 per share on April 1, 2005.
On April 8, 2005, after the close of trading, Xybernaut
announced in a press release that "investors and others should
refrain from relying upon the Company's historical financial
statements... for the years ended December 31, 2002 and 2003,
and interim quarterly reports for the quarters ended March 31,
2003, June 30, 2003, September 30, 2003, March 31, 2004, June
30, 2004 and September 30, 2004." On the heels of this shocking
news, trading was again heavy and the Company's price per share
fell to $0.13 per share.
On April 19, 2005, the Company announced that, among other
things, Grant Thornton had resigned as the Company's auditor and
repeated that "no reliance should be placed upon certain of the
Company's historical financial statements, together with the
related audit reports the Company received from its outside
auditors." Plaintiff's investigation is continuing, and it is
anticipated that an amended complaint will be filed asserting
additional claims against other parties, including the Company's
former auditor Grant Thornton, LLP.
For more details, contact Jack Landskroner or Paul Grieco of
Landskroner - Grieco - Madden, Ltd. by Mail: 1360 West Ninth
Street, Suite 200, Cleveland, Ohio 44113 by Phone:
1-866-522-9500 or 216-522-9000 by E-mail:
jack@landskronerlaw.com or paul@landskronerlaw.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.
*********
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Copyright 2005. All rights reserved. ISSN 1525-2272.
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