/raid1/www/Hosts/bankrupt/CAR_Public/050627.mbx
C L A S S A C T I O N R E P O R T E R
Monday, June 27, 2005, Vol. 7, No. 125
Headlines
AMERCO: Asks AZ Court To Dismiss Consolidated Securities Lawsuit
BLUE BIRD: Recalls 45 Ultra LF Buses Due to Structural Defect
CANADA: High Court to Hear Appeal For $140M Gay Partner Lawsuit
CENTERPOINT ENERGY: Consumers File Suit V. Heat Cut-off in MN
CHRONIC CANDY: IL Attorney General To Investigate Hempseed Candy
CONNECTICUT: Robins Kaplan Launches Suit V. Banks Over Card Fees
EXXON CORPORATION: Supreme Court Affirms 11th Circuit's Ruling
FORD MOTOR: Consumers Launch CPO Vehicles Fraud Suit in CA Court
GENERAL MOTORS: Recalls 6698 2003-05 Models Due to Brake Defect
GLOBAL HEALINGS: FL Court Orders Restitution For Insurance Fraud
GREAT CIRCUS: IL Attorney General Files Deceptive Practices Suit
HAWAII: Suit Seeks "Locality Pay" For State, AL Federal Workers
HAYES LEMMERZ: Securities Settlement Hearing Set July 20, 2005
HYTRIN LITIGATION: KS Consumers To Receive Refunds in Settlement
IBM CORPORATION: Litigation Settlement Hearing Set July 1, 2005
INCOME SOLUTIONS: IL Attorney General Files Consumer Fraud Suit
INDIANA: Judge Declines to Rule on Suit V. Dr. Mark Weinberger
IOWA: To Use Share in $1.7 Mil Microsoft Pact To Improve Police
KENTUCKY: Judge Postpones Decision For $120M Priest Abuse Deal
LAW CENTERS: KY Consumers To Receive Restitution Due To Fraud
MANULIFE SECURITIES: Suit Over Portus Alternative Discontinued
MEHLVILLE CHRYSLER: IL AG Madigan Files Consumer Fraud Lawsuit
MICROSOFT CORPORATION: NC Schools To Get $41M From Settlement
MORGAN SPAULDING: SEC Lodges Securities Fraud Lawsuit in N.D. TX
MULTI-PLAYS OF AMERICA: Ordered To Refund Customers Due To Fraud
NORTH CAROLINA: Banks Named in CT Lawsuit Over Transaction Fees
OMEGA FLEX: AR Consumers Launch TracPipe Product Defect Lawsuit
PRESTIGE TOY: Recalls 1.5T Water Teethers Due to Injury Hazard
ROYAL BANK: Agrees To Settle Enron Litigation For $41.8 Million
ROYAL LINKS: Golf Operators Launch Suit Over Refreshment Carts
SEMPRA ENERGY: Files Request For FERC Jurisdiction Over CA Suit
TRUSTSOFT INC.: TX Court Issues Injunction For Consumer Fraud
US AUTO: AZ Attorney General Goddard Files Consumer Fraud Suit
WORLDWIDE XCEED: Lawsuit Settlement Hearing Set August 11, 2005
New Securities Fraud Cases
CONAGRA FOODS: Charles J. Piven Lodges Securities Lawsuit in TX
CYBERONICS INC.: Charles J. Piven Lodges Securities Suit in TX
DITECH COMMUNICATIONS: Wechsler Harwood Lodges Stock Suit in CA
DRDGOLD LIMITED: Brodksy & Smith Lodges Securities Lawsuit in NY
DRDGOLD LIMITED: Stull Stull Lodges Securities Fraud Suit in NY
EXIDE TECHNOLOGIES: Marc S. Henzel Lodges Securities Suit in NJ
HILB ROGAL: Charles J. Piven Lodges Securities Fraud Suit in TX
HILB ROGAL: Finkelstein Thompson Lodges Securities Lawsuit in VA
HILB GLOBAL: Goodkind Labaton Lodges Securities Fraud Suit in VA
HILB ROGAL: Schatz & Nobel Lodges Securities Fraud Lawsuit in VA
LAZARD LIMITED: Marc S. Henzel Files Securities Fraud Suit in NY
MAGMA DESIGN: Marc S. Henzel Lodges Securities Fraud Suit in CA
OCA INC.: Cohen Milstein Lodges Securities Fraud Suit in E.D. LA
POSSIS MEDICAL: Lerach Coughlin Lodges Securities Lawsuit in MN
*********
AMERCO: Asks AZ Court To Dismiss Consolidated Securities Lawsuit
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AMERCO asked the United States District Court for the District
of Arizona to dismiss a consolidated putative class action filed
against it, entitled "In Re AMERCO Securities Litigation, United
States District Court, Case No. CV-N-03-0050-ECR (RAM)."
The action alleges claims for violation of Section 10(b) of the
Securities Exchange Act and Rule 10b-5 there under, section
20(a) of the Securities Exchange Act of 1934 and sections 11,
12, and 15 of the Securities Act of 1933. The action alleges
that AMERCO engaged in transactions with SAC entities that
falsely improved AMERCO's financial statements and that AMERCO
failed to disclose the transactions properly.
Several suits were initially filed in the United Sates District
Court, District of Nevada, namely:
(1) Article Four Trust v. AMERCO, et al., District of
Nevada, United States District Court, Case No. CV-N-03-
0050-DWH-VPC
(2) Mates v. AMERCO, et al., United States District Court,
District of Nevada, Case No. CV-N-0 3-0107
(3) Klug v. AMERCO, et al., United States District Court of
Nevada, Case No. CV-S-03-0380
(4) Holdings v. AMERCO, et al., United States District
Court, District of Nevada, Case No. CV-N-03-0199
BLUE BIRD: Recalls 45 Ultra LF Buses Due to Structural Defect
-------------------------------------------------------------
Blue Bird Body Company in cooperation with the National Highway
Traffic Safety Administration's Office of Defects Investigation
(ODI) is voluntarily recalling about 45 2003-06 Blue Bird Ultra
LF buses due to structural defect.
According to the ODI, on certain commercial busses equipped with
vapor door assemblies, the two piece curved connecting rods when
used as an element of the door actuation linkage in conjunction
with a vapor medium pneumatic differential engine, maybe subject
to fatigue failure resulting in bending or breaking of the
connecting rod. A broken connecting rod can allow the door panel
to move freely in an uncontrolled manner, leaving passengers
inside the vehicle unprotected by the door panel and enabling a
protruding door panel to strike persons or objects outside the
vehicle.
As a remedy, blue Bird is working with Vapor Bus International
to notify owners and have the repair performed on their
vehicles. The remedy consists of replacing the two-piece
connecting rod with a one-piece connecting rod. NHTSA CAMPAIGN
ID Number: 05V281000, Recall Date: June 14, 2005.
For more details, contact Blue Bird by Phone: 478-822-2242,
Vapor Bus by Phone: 847-777-6400 or the NHTSA Auto Safety
Hotline: 1-888-327-4236.
CANADA: High Court to Hear Appeal For $140M Gay Partner Lawsuit
---------------------------------------------------------------
The Supreme Court of Canada agreed to hear an appeal for a case
involving widowed partners of gays and lesbians that could cost
the federal government as much as $140 million dollars in
retroactive pension benefits, the 365Gay.com reports.
The case, which is believed to be the biggest gay class action
suit ever filed, stems from a federal government legislation
recognizing same-sex relationships under the Canada Pension Plan
that was passed in 2000 and made retroactive to January 1, 1998.
Gays argued that it should have been backdated to April 1985,
when gays and lesbians were granted equality under Canada's
Charter of Rights and Freedoms, thus later they would begin a
class action suit to recover the unpaid benefits due an
estimated 1,500 survivors, many of whom became widowed at the
height of the AIDS crisis.
Last November Ontario's highest court ruled that denying
retroactive same-sex benefits to widowed gays and lesbians
violates their rights and is unconstitutional. In that ruling
the Appeal Court sided with a lower-court judge that the federal
government should not have limited back payments when it
extended equality rights to same-sex couples.
The court in its written ruling said, "Excluding many of those
who were intended to be included is not rationally connected to
the objective of the law, which is to end the discriminatory
exclusion of same-sex partners from CPP benefits." That ruling
affected about $80 million in back benefits. Across the country
though the amount could rise to $140 million.
In spite of the ruling, the federal government appealed the
ruling the Supreme Court and it is expected that the court will
hear the case this fall.
CENTERPOINT ENERGY: Consumers File Suit V. Heat Cut-off in MN
-------------------------------------------------------------
CenterPoint Energy faces a class action lawsuit filed in
Hennepin District Court on behalf of low-income Minnesotans
whose heat was cut off last winter, The Minneapolis Star Tribune
reports.
The suit alleges that the Company illegally disconnected the
heat of low-income Minnesotans who were entitled to an arrange
payment plan under Minnesota's Cold Weather Rule. That rule is
designed to make sure that Minnesotans, regardless of income,
have heat during the coldest months.
Filed by the Nichols, Kaster & Anderson law firm, the suit was
brought as a response to an investigation into CenterPoint by
the Minnesota attorney general's office, which was released last
week. The plaintiffs are Velva Stewart, 61, of Minneapolis,
Ahmed Rasheed, 48, of Golden Valley, and Jacob Denedo, 48, of
Brooklyn Park.
The suit alleges that CenterPoint Energy repeatedly told the
plaintiffs that they had to pay large portions of their balances
before their heat would be turned back on, which was in clear in
violation of the Cold Weather Rule. Additionally, it alleges
that CenterPoint also refused to enter into affordable payment
plans with them.
CHRONIC CANDY: IL Attorney General To Investigate Hempseed Candy
----------------------------------------------------------------
Illinois Attorney General Lisa Madigan's office intends to issue
a subpoena to obtain further information regarding the
advertising and marketing practices of California-based Chronic
Candy.
Attorney General Madigan said recent news reports that Chronic
Candy sells hemp seed oil-flavored lollipops using the slogan,
"like taking a hit with every lick," prompted the investigation
by her office. Ms. Madigan said her office will request
documents and answers to questions related to the Company's
marketing practices.
She said the Company's Web site, www.ChronicCandy.com,
advertises it Chronic Candy Pops, commonly referred to as "pot
suckers," in quantities of "One Ounce," "Half Ounce," "Twenty
Sack" and "Nickel Bag." Those quantities and terms also are
commonly used in the sale of marijuana.
"Stores should not be selling or promoting products to kids that
encourage the use of illegal drugs," Attorney General Madigan
said. "Parents tell their kids not to smoke, not to drink and
not to do drugs. They shouldn't have to contend with companies
that are doing just the opposite."
She said her office will investigate whether the Company is in
violation of the Illinois Consumer Fraud and Deceptive Business
Practices Act.
For more details, contact Melissa Merz by Phone: 312-814-3118 or
877-844-5461 (TTY) or by E-mail: mmerz@atg.state.il.us.
CONNECTICUT: Robins Kaplan Launches Suit V. Banks Over Card Fees
----------------------------------------------------------------
The law firm of Robins, Kaplan, Miller & Ciresi L.L.P. launched
an antitrust class action lawsuit in the U.S. District Court for
the District of Connecticut against Visa, MasterCard, Bank of
America, Citibank, Bank One, Chase Manhattan Bank, JPMorgan
Chase, Fleet Bank, Capital One and other major banks on behalf
of merchants alleging collusive practices of their setting, by
horizontal agreement, credit card interchange fees at supra-
competitive levels. The Complaint seeks injunctive relief to
stop the alleged anticompetitive practices plus damages.
The plaintiffs, Photos Etc. Corporation, doing business as 30
Minute Photos Etc., of Irvine, CA; Traditions Classic Home
Furnishings of St. Paul, MN; CHS Inc. of St. Paul, MN; A Dash Of
Salt, L.L.C. of Bridgeport, CT; and KSARRA, L.L.C. of Newtown,
CT, represent a class of merchants that operate millions of
commercial businesses throughout the United States that accept
Visa and MasterCard as a form of payment. At issue are the
alleged practices by the defendants that cause merchants to pay
supra-competitive, exorbitant and fixed interchange fees for the
acceptance of these credit card payments.
"Merchants have little or no ability to negotiate with Visa and
MasterCard for lower interchange fees, and these fees are a
'hidden tax' that raise prices paid by consumers for almost
every product they buy," says K. Craig Wildfang, a partner at
Robins, Kaplan, Miller & Ciresi L.L.P., who represents the
plaintiffs. "Visa and MasterCard have previously been found to
have 'market power' in the relevant markets, so Visa, MasterCard
and the banks now have the burden of proving that they have set
the interchange fees at the correct competitive level. Even
Visa's own economists admit that they cannot satisfy this
burden. Due to Visa and MasterCard's market power, the United
States has the highest credit card interchange fees among
industrialized countries. Regulatory authorities in many other
countries, from the European Union to Australia, have recently
adopted measures to reduce interchange fees, but in the United
States, it will take action by the courts to accomplish this."
"Prior litigation, which challenged narrow aspects of Visa and
MasterCard's collusive conduct, has proven ineffective at
restraining the increase in credit card interchange fees, and as
regulatory action is unlikely, class action litigation is the
only alternative that offers merchants any prospect for relief
from high, and rising, interchange fees. The card issuing banks
that control Visa and MasterCard have the ability to set the
interchange fees as high as they want, without any market force
to restrain them," says Wildfang, who is leading the litigation
at the Firm with attorney David A. Balto, and others. Co-counsel
is Richard Bieder of Koskoff, Koskoff & Bieder PC in Bridgeport,
CT.
"Interchange fees are just a way that credit card companies
squeeze merchants to enhance their revenue stream. There is
absolutely no need for these fees to be so high, and without
anything to control them, the banks and the credit card
companies continue to find ways to escalate the fees. We hope
this lawsuit leads to significant changes," says Mitch
Goldstone, President and CEO of 30 Minute Photos Etc. and
30minphotos.com, a national online boutique photo service.
Goldstone and co-owner Carl Berman write The Credit Card
Interchange Blog, at http://www.waytoohigh.com.
"The U.S. credit card system is seriously broken and mismanaged,
and millions of merchants and consumers are unnecessarily paying
for it through credit card interchange fees that are increasing
at an alarming rate. This lawsuit will hopefully result in a
much-needed major reform of the credit card industry," says
Michael Schumann, co-owner of Traditions Classic Home
Furnishings, which operates retail furniture stores in St. Paul
and Minneapolis, MN and Naples, FL.
"Small merchants do not have any options available to them to
fight this individually, but collectively, I am confident we can
make a difference against big banks and credit card companies.
These interchange fees definitely affect my bottom line, and I'm
ready to stand up for a change," says Jonathan Mathias, owner of
A Dash of Salt, L.L.C., a restaurant and catering business in
Bridgeport, CT.
For more details, contact Vivian Hood of Robins, Kaplan, Miller
& Ciresi, L.L.P., Phone: +1-904-220-1915, E-mail:
hoodv@jaffeassociates.com or vivianhood@hotmail.com, Web site:
http://www.rkmc.com.
EXXON CORPORATION: Supreme Court Affirms 11th Circuit's Ruling
--------------------------------------------------------------
The Supreme Court of the United States, in an opinion authored
by Justice Kennedy, affirmed the Eleventh Circuit Court of
Appeals' decision in the Exxon dealer "Discount for Cash" class
action, Allapattah Services, Inc. et al. v. Exxon Corporation,
Case No. 04-70.
The Court found that even those class members with claims
ordinarily too small to be independently brought in the federal
court may participate in the jury's verdict against Exxon. With
prejudgment interest, the verdict currently exceeds $1.3
billion. The Supreme Court's decision falls on the heels of the
district court's order sanctioning Exxon for its attempts to
frustrate the claims process established by the court to pay
class members entitled to participate in the verdict.
The case involves current or former direct-served gas station
dealers who owned or operated an Exxon service station between
March 1, 1983 and August 28, 1994, and had one or more Sales
Agreements with Exxon. The law firm of Stearns Weaver Miller
Weissler Alhadeff & Sitterson, P.A. represents the class.
At a February 2001 trial in Miami federal court, attorneys for
the class proved to a jury that Exxon Corporation overcharged
its service station owners for the wholesale price of motor fuel
for 11 years and then fraudulently concealed the overcharges.
The Eleventh Circuit Court of Appeals later affirmed the verdict
and orders of the trial court. Exxon appealed to the Supreme
Court, which accepted review only on the limited question of
whether the trial court had jurisdiction over individual class
member claims worth less than $50,000 at the time the case was
filed in 1991.
"We are obviously pleased with the decision announced today by
the Supreme Court," said Miami attorney Eugene Stearns of
Stearns Weaver Miller, who represented the Class at trial and on
appeal. "The manner in which Exxon dealt with its dealers was
simply outrageous, and we will be doing everything humanly
possible to bring the claims process to conclusion at the
earliest possible time."
Almost 11,000 claims were filed before the December 1, 2005
claims deadline. The district court has appointed former United
States District Court Judge Tom Scott as Special Master to
administer the claims process.
The case is styled, Allapattah Services, Inc. et al. v. Exxon
Corporation, Case No. 04-70. Eugene E. Stearns, Esq. and Mark
Dikeman of Stearns Weaver Miller Weissler Alhadeff & Sitterson,
P.A represent the plaintiff.
For more details, contact Eugene E. Stearns, Esq., or Mark
Dikeman of Stearns Weaver Miller Weissler Alhadeff & Sitterson,
P.A., Phone: +1-305-789-3200 OR Toni Splichal, Phone:
+1-305-372-1234, Fax: 305-372-8565, E-mail:
tsplichal@wraggcasas.com OR Garden City Group, Claims
Administrator, Phone: 888-769-7759, Web site:
http://www.exxondealerclassaction.comOR Class Counsel, Phone:
800-810-3590, Web site: http://www.exxondealerattorneys.com.
FORD MOTOR: Consumers Launch CPO Vehicles Fraud Suit in CA Court
----------------------------------------------------------------
Millions of consumers were defrauded into paying some $1,000
extra for a so-called certified pre-owned used car (CPO) over
the past four years when the car may have gone through the same
inspection as any other used car, according to a class action
law suit filed recently by McClellan & Gomez in Superior Court
against Ford Motor Company and Claremont Ford, of Los Angeles.
John Gomez, of the San Diego firm of McClellan & Gomez, one of
three law firms involved as counsel in the suit, said Ford
promoted the CPO by saying that "if it's not certified, it's
just used."
"In fact, they are all used," said Mr. Gomez. "Unbeknownst to
consumers who decide to purchase CPO vehicles, the inspection
conducted on the vehicles is the same inspection that the
technicians perform on all used vehicles whether they are part
of the CPO program or not."
The other law firms involved in the suit are Lerach Coughlin
Stoia Geller Rudman & Robbins, LLP, and Robbins Umeda & Fink,
all of San Diego.
Mr. Gomez became involved in the CPO issue when his firm
represented the family of a 17-year-old girl who died in
Southern California in a so-called CPO car. The car, it was
later learned, was sold with frame damage and had a history of
brake and steering problems. They discovered a fraudulent CPO
program, deceptive practices by at least one dealer and a lack
of involvement by the car manufacturer. McClellan & Gomez
brought suit against the driver of the other vehicle, Ford Motor
Company and El Cajon Ford. The parties settled this year for an
undisclosed amount.
"Manufacturers such as Ford market these CPO cars as the best of
the best," said Mr. Gomez. "But can this marketing be trusted?
Should consumers be spending billions of dollars a year for a
perceived benefit that does not exist?"
The suit notes that the purpose of marketing these vehicles as
CPO is to give consumers peace of mind that the vehicle has
undergone a special inspection and is being certified by the
manufacturer. At Ford dealers, a consumer receives a certificate
signed by Steve Lyons, president of Ford Division, which
congratulates the new owner on his or her purchase, and assures
them that their vehicle has passed a series of rigorous
inspections to verify that it meets or exceeds all program
standards and quality commitments. The certificate also
highlights various aspects of the 115-point inspection Ford
states the vehicle has undergone, and lists other purported
benefits of purchasing a CPO vehicle.
According to the suit, the inspection conducted on CPO vehicles
is the same inspection that the technicians perform on all used
vehicles. This fact is not disclosed to consumers who pay $1,080
more for the CPO vehicle than a regular used vehicle.
"If all 1.4 million CPO cars sold in 2005 were bogus, that would
mean consumers were paying some $1.5 billion extra for no real
benefit," said Mr. Gomez.
The suit alleges that the defendants' failure to disclose that
the inspection process is the same for all used vehicles,
whether in the program or not, makes its business practices
unfair and deceptive.
"Losing money is one thing," Mr. Gomez said. "But a bogus
inspection program can have fatal consequences as we experienced
in San Diego, when a young girl died in a wreck in a so-called
CPO car. It had been purchased at auction, had a history of
frame damage and steering problems and was sold without any
special inspection. Its history was never revealed to the
buyers. Consumers shouldn't have to ask detailed questions about
vehicle history, acquisition, inspection, previous damage,
guarantees and warrantees before purchasing a CPO vehicle. CPO
should stand for something meaningful, not just a marketing ploy
by the manufacturer and dealer."
The suit notes that the number of CPO vehicles sold in the U.S.
in 2003 amounted to approximately 38% of all used-car sales.
Recent data shows that approximately 1.375 million CPO vehicles
were sold in the United States in 2004, and estimates for 2005
sales reach over 1.4 million. The suit seek damages of the CPO
premium plus interest, punitive damages to prevent Ford or other
auto dealers from engaging in similar practices, an order
requiring Ford to stop advertising CPO vehicles as having gone
through a special inspection process and requiring Ford to
change their CPO program so that it offers an inspection that is
different than that performed on regular used cars.
For more details, contact John Gomez of McClellan & Gomez, 1144
State St., San Diego, CA, 92101, Phone: (619) 231-0505, Fax:
(619) 544-0540, Web site: http://www.mcclellanandgomez.com.
GENERAL MOTORS: Recalls 6698 2003-05 Models Due to Brake Defect
---------------------------------------------------------------
General Motors Corporation in cooperation with the National
Highway Traffic Safety Administration's Office of Defects
Investigation (ODI) is voluntarily recalling about 6698 2003-05
Chevrolet Kodiak and 2003-05 GMC Topkick vehicles due service
brake defect.
According to the ODI, certain 2003-05 model year 4500/5500
series Chevrolet Kodiak, school bus chassis and GMC Topkick
vehicles and 2003-04 model year GMC school bus chassis vehicles
equipped with an 8.1L engine and hydromax brake system. The
power steering hose may come into contact with a portion of the
intermediate steering shaft. A hole could be worn in the hose
and a loss of hydraulic fluid would occur. If there is
sufficient amount of fluid loss, the driver will hear noise from
the power steering pump, the brake warning light and warning
tone will activate. Increased effort may be required for
steering and braking, increasing the risk of a crash.
As a remedy, GM will notify its customers and dealers will
reroute the power steering hose. If the steel braiding of the
hose is exposed, dealers are to replace the hose. This remedy
will be at no charge to the consumer. NHTSA CAMPAIGN ID Number:
05V288000, Recall Date: June 16, 2005.
For more details, contact Chevrolet by Phone: 800-630-2438,
General Motors by Phone: 866-996-9463 or the NHTSA Auto Safety
Hotline: 1-888-327-4236.
GLOBAL HEALINGS: FL Court Orders Restitution For Insurance Fraud
----------------------------------------------------------------
Florida Attorney General Charlie Crist's office won a lawsuit
against a State of Washington-based company that sold fraudulent
bonds purporting to eliminate the need for standard insurance
coverage, a false claim that cost 425 Florida victims $300 per
person, for a total loss of $127,500.
Leon County Circuit Judge Jonathan Sjostrom entered a final
judgment against Global Healings Society and owner Joseph
Michael Gardinier, requiring the defendants to pay restitution
as well as fines of $1,000 per victim, a total of more than
$550,000.
"This judgment marks a victory for Florida consumers and sends a
clear message that fraud of this type has no place in our
state," said Attorney General Crist. "Floridians depend on
insurance offered by reputable agents to protect them from
significant financial liability, and those offering phony
alternatives face serious legal consequences."
An investigation conducted by the Attorney General's Economic
Crimes Division revealed that Global Healings Society was
selling what it claimed were "financial bonds" over the
Internet. Gardinier, owner and caretaker of the organization,
directed its activities and was responsible for the various bond
programs sponsored by Global Healings. The bonds purported to
protect the bearers from financial responsibility in the event
of any incident that would warrant an insurance claim. Not only
were the bonds fraudulent, but there was no money available for
the injured party in the event that a claim was filed against a
bearer of the bonds. Types of bonds offered by Global Healings
included an auto bond, a health bond, a home equity bond, a
student bond, a "Benefit for Life" bond and a community
financial bond. The organization was not licensed to do business
in Florida, nor was it an authorized insurer in the state.
The Florida Department of Highway Safety and Motor Vehicles
determined that the organization's auto bond card was not valid
to prove insurance coverage as required by law. In response,
Gardinier conducted a series of conference calls to members of
the organization soliciting donations to cover the cost of suing
the State of Florida. Similar solicitations were made in Montana
and Washington, where Global Healings has already been
prohibited from conducting business.
GREAT CIRCUS: IL Attorney General Files Deceptive Practices Suit
----------------------------------------------------------------
Illinois Attorney General Lisa Madigan filed a lawsuit against
the operators of a circus she said fraudulently advertised two
March 14 performances in Springfield as "the first appearance in
this hemisphere from behind the Great Wall of China."
Last February, promoters of the so-called Great Circus of China
obtained approval from officials of the Springfield Public
Schools to provide free tickets to district students aged 14 and
under. According to Attorney General Madigan's suit, promoters
allegedly failed to disclose that admission for parents and
other circus goers was $20. Promoters also distributed tickets
and coupons at area restaurants and gas stations which
represented that the circus was held "in cooperation with the
Peoples Republic of China" and part of an "Olympic goodwill tour
of America to celebrate the 2008 Olympics."
"This event was certainly disappointing, but we allege that it
was fraudulent as well," she said.
During the publicity run-up to March 14, posters throughout the
area boasted, "2000 years of artistry and tradition explode in
the world's most amazing circus, beyond belief." Promotional
material also included phrases like "dynasty acrobats" from the
People's Republic, a "Chinese lion dance" and "an overall unique
and authentic Chinese cultural experience."
Contrary to claims in the promotional materials, the Springfield
performances allegedly did not include Chinese performers or a
"unique" Chinese cultural experience. For example, the
Springfield circuses substituted non-Chinese performers who wore
silk beanies and black wigs and a woman who "hula-hooped" to
modern "Techno" music.
Attorney General Madigan said disgruntled attendees began
contacting her office the next day asking about the event. Many
who had purchased tickets left during intermission or earlier
and their requests for refunds were refused by circus
representatives who blamed a medical emergency for the absence
of Chinese performers that evening.
The lawsuit, filed in Sangamon County Circuit Court, charges
Frank Walker, Charles Davenport, Judy Kaye and Lavel Martello,
doing business as The Great Circus of China, with violating the
Illinois Consumer Fraud and Deceptive Business Practices Act and
the Uniform Deceptive Trade Practices Act. Madigan said the
company's purported business address is the same as a United
Parcel Service location in Las Vegas. Defendant Kaye's address
is a P.O. Box in Gainesville, Texas.
In February, defendant Davenport contracted with the Illinois
Department of Agriculture to lease space at the State
Fairgrounds for the two March 14 performances and submitted an
insurance certificate issued to Bailey/Wallace and Rogers Bros.
Circus, Inc., doing business as the Great Circus of China.
Attorney General Madigan said that no such corporation exists.
She said there is, in fact, a group affiliated with the People's
Republic of China that conducts business as The Great Circus of
China which gained national publicity as it toured the United
States over the past two years.
The suit maintains that the circus that played Springfield in
March misrepresented itself by falsely aligning itself with the
good name and reputation of the authentic circus troupe. The
suit seeks a permanent injunction and asks the court to void all
contracts that were entered into by the defendants. The suit
also seeks full restitution for consumers, a civil penalty of
$50,000 and an additional $50,000 per violation found to be
committed with the intent to defraud. In addition, Attorney
General Madigan is asking the court to impose a civil penalty of
$10,000 per violation committed against victims age 65 and
older.
Assistant Attorney General William Reif is handling the case for
Attorney General Madigan's Consumer Fraud Bureau. For more
information, contact Melissa Merz by Phone: 312-814-3118 or
877-844-5461 (TTY).
HAWAII: Suit Seeks "Locality Pay" For State, AL Federal Workers
---------------------------------------------------------------
A federal class action lawsuit that was filed in the U.S.
District Court in Honolulu alleges that federal government
retirees in Hawaii and Alaska are being discriminated against
because they do not receive "locality pay" that federal retirees
in the other 48 states receive, The Associated Press reports.
The suit, which seeks pay adjustments of 12 percent to 26
percent for the Hawaii and Alaska retirees, alleges that workers
in Hawaii and Alaska were excluded from provisions of a 1990
federal pay law that adds "locality pay" for affected workers in
the continental United States.
According to Margery Bronster, one of the attorneys representing
the plaintiffs, that action of excluding her clients is
unconstitutional. She told AP that due to the exclusion some of
the plaintiffs have had to move to the mainland just so they can
receive higher retirement pay.
HAYES LEMMERZ: Securities Settlement Hearing Set July 20, 2005
--------------------------------------------------------------
The United States District Court for the Eastern District of
Michigan - Southern Division will hold a fairness hearing for
the proposed $2.25 million settlement in the matter: In re Hayes
Lemmerz International, Inc. Equity Securities Litigation on
behalf of all persons or entities who purchased or otherwise
acquired the equity securities of the Company during the period
from June 3, 1999 through and including September 5, 2001, and
who were damaged thereby.
The Court scheduled a fairness hearing to approve the proposed
settlement, which will be held before the Honorable Arthur J.
Tarnow in the United States District Court for the Eastern
District of Michigan, Southern Division, at 2:30pm, on July 20,
2005.
For more details, contact Hayes Lemmerz Equity Securities
Litigation c/o The Garden City Group, Inc., P.O. Box 9000 #6236,
Merrick, NY, 11566-9000, Phone: (800) 298-0815, Web site:
http://www.gardencitygroup.comOR Daniel A. Osbron, Esq. of
Beatie and Osborn, LLP, 521 Fifth Ave., Suite 3400, New York,
NY, 10175, Phone: (212) 888-9000, Web site:
http://www.bandolaw.com.
HYTRIN LITIGATION: KS Consumers To Receive Refunds in Settlement
----------------------------------------------------------------
Consumers who purchased the brand name prescription medication
Hytrin are eligible for refunds from a $30.7 million nationwide
settlement agreement, Kansas Attorney General Phill Kline
announced in a statement. The refunds to consumers and third
party payers in 18 states will be paid by two companies who, the
complaint alleged, had conspired to engage in anticompetitive
conduct that delayed the availability of a more affordable
generic version of the medication.
Hytrin, which is used in the treatment of hypertension and
enlarged prostate, is manufactured by Abbott Laboratories, and
the generic version (called "terazosin") is produced by Geneva
Pharmaceuticals. According to a federal lawsuit, Abbott
wrongfully paid Geneva to delay introduction of its generic
version of Hytrin and took other steps to delay competition from
lower priced generic versions of its product. This illegal
activity harmed consumers.
Under the settlement agreement, which is still subject to final
court approval, Abbott and Geneva would provide $28.7 million
for consumers and third party payers in Kansas and 17 other
states. The most direct way for consumers to obtain claims forms
is through the settlement website:
http://www.terazosinlitigation.com. Claims forms must be mailed
to the settlement administrator no later than July 15, 2005.
The settlement will benefit consumers who purchased terazosin
products between October 15, 1995, and March 7, 2005, and
amounts of refunds will depend on how many consumers file claims
against the settlement fund.
Between 1999 and 2001, a number of consumers filed lawsuits
against Abbott and Geneva. The cases were consolidated into a
single lawsuit in federal court in the Southern District of
Florida. After conducting their own investigations, the states
of Kansas, Florida and Colorado filed their own lawsuit in the
same court. The settlement establishes a separate $2 million
fund to reimburse state agency claims and litigation costs
incurred by Kansas, Florida and Colorado.
Consumers may obtain a claims form from the settlement website;
by calling the settlement administrator toll free at 1 877 886
0283; or by writing to the settlement administrator at: In re
Terazosin Hydrochloride Antitrust Litigation, c/o Complete Claim
Solutions, Inc., P.O. Box 24607, West Palm Beach, FL 33416.
IBM CORPORATION: Litigation Settlement Hearing Set July 1, 2005
---------------------------------------------------------------
The District Court of Burleson County Texas, 21st Judicial
District will hold a fairness hearing for the proposed
settlement of the IBM Deskstar 75GXP Litigation on behalf of all
purchasers in the United States of the new International
Business Machines Corporation's Deskstar 75GXP hard disk drives
either as a stand alone unit or as part of a pre-assembled
computer system.
The Court will hold the hearing in the District Court of
Burleson County Texas, 21st Judicial District, on July 1, 2005,
at 10:00 a.m., Burleson County Courthouse, 100 W. Buck,
Caldwell, TX, 77836.
For more details, contact IBM Deskstar 75GXP Litigation, c/o
Berdon Claims Administration, LLC, P.O. Box 9007, Jericho, NY,
11753-8907, Web site: http://www.ibmdeskstar75gxplitigation.com
OR Kelly Pulls of Pulls Taylor Woodson, LLP, 2600 Airport
Freeway, Forth Worth, TX, 76111 OR Jonathan Shub, Esq., 1528
Walnut St., 3rd Floor, Philadelphia, PA, 19102, Phone:
(215) 790-7300 or (800) 883-2299, Fax: 215-546-0942, E-mail:
sasheller@sheller.com.
INCOME SOLUTIONS: IL Attorney General Files Consumer Fraud Suit
---------------------------------------------------------------
Illinois Attorney General Lisa Madigan filed a lawsuit in Cook
County Circuit Court against Income Solutions, Inc., an out-of-
state company, and its Illinois-based owner, alleging they
cashed in on consumers' desire to work from home by advertising
and operating a fraudulent envelope stuffing business.
More than 20 consumer complaints about this business have been
filed with Attorney General Madigan's Consumer Protection
Division and the Better Business Bureaus in Illinois and Nevada.
The complaints allege the work-at-home company lured consumers
with promises of large profits. After sending in cash to
receive their supplies and completing the assigned work, the
consumers allegedly never received the advertised compensation.
The lawsuit names as defendants Income Solutions, Inc., a Nevada
corporation, and its owner, Joseph A. Munizzi, of Lemont. The
corporation was involuntarily dissolved in Nevada in 2004 and,
after failing to file proper documentation in Illinois, lost its
authorization to transact business in this state.
The lawsuit alleges that since at least April 2004, Mr. Munizzi
and his company have used newspaper and direct mail
advertisements to solicit consumers to participate in their
work-at-home scheme. The bold advertisements claimed, "YOU COULD
BE EARNING BIG PAYCHECKS WITHIN TWO WEEKS . IF YOU ACT NOW!!"
"Work at home schemes are often common scams, and I urge
consumers tempted by an envelope stuffing advertisement to
carefully consider the offer before sending in any money,"
Attorney General Madigan said
The defendants stated in their advertisements that consumers
could earn between $442.20 and $2,948 per week by stuffing
envelopes. The consumers were required to pay fees ranging from
$59 to $149, and they mailed their checks to the company's post
office box in Las Vegas, Nevada. The Attorney General alleges
that the mail received at the Las Vegas post office box was
forwarded to another post office box in Willowbrook, Illinios.
While the Company represented in its advertisements that
consumers would earn $7.37 per envelope, they allegedly failed
to disclose that consumers would earn this money only if the
recipient of the mailing ordered the nutritional product being
offered for sale by the defendants.
According to consumer complaints, once the checks were sent to
the Company, consumers either never received the envelope
stuffing materials or were not paid the compensation promised in
the advertisements. In some instances, consumers who ordered
envelope stuffing materials were sent information on a different
program, which costs an additional $299, about making money from
home by processing tax liens.
The lawsuit charges the defendants with violations of the
Illinois Consumer Fraud and Deceptive Business Practices Act and
the Uniform Deceptive Trade Practices Act. The lawsuit asks the
court to prohibit the defendants from engaging in the business
of advertising, offering for sale, or selling envelope stuffing
work-at-home schemes and from further violating Illinois'
consumer protection laws. The lawsuit also seeks a civil penalty
of $50,000 and additional penalties of $50,000 per violation
found to be committed with the intent to defraud. Finally, the
lawsuit asks the court to order the defendants to pay
restitution to consumers.
Assistant Attorney General Janice Parker is handling the case
for Attorney General Madigan's Consumer Protection Division.
For more details, contact Ms. Madigan's Website:
http://www.IllinoisAttorneyGeneral.gov/consumers/workathome.html
.
INDIANA: Judge Declines to Rule on Suit V. Dr. Mark Weinberger
--------------------------------------------------------------
Lake Superior Court Judge John Pera declined to rule on whether
to certify a class action lawsuit against Dr. Mark Weinberger,
The Gary Post Tribune reports.
As previously reported in November 11, 2004 edition of the Class
Action Reporter a lawsuit was initiated on behalf of Michelle
Weiss in U.S. District Court in Hammond, Indiana that sought to
stop representatives of a missing sinus doctor Mark Weinberger
from collecting debts she alleges are not owed to the clinic,
the Munster Times reports.
Ms. Weiss, a former patient of Dr. Weinberger, went to the
Merrillville-based doctor for a sinus-related procedure in
September and received a bill for $678 she maintains she doesn't
owe. Robert Stochel, Ms. Weiss attorney, said he has received
numerous phone calls from former patients of the missing doctor
after Munster-based collection agencies began sending out
billings last week seeking money due to the clinic. He further
notes that the stories of those he spoke to were all similar to
his client in that the callers thought they didn't owe the
clinic more money than what had already been paid by their
health care insurance provider.
The suit sought to stop Robert Handler, the court-appointed
receiver for Dr. Weinberger's clinic, from collecting debts and
obligations allegedly owed to the clinic. The suit also alleges
that Mr. Handler and those he represents are violating federal
and state laws by attempting to collect the debts that are not
owed. Furthermore, the lawsuit is also seeking damages from the
defendant, attorney fees and costs along with an order declaring
any claims for amounts greater than what was paid by the
patient's health care provider are void.
Mr. Handler recently said that he was responsible for hiring
Trustmark Recovery Services and Medical Billing, both based in
Munster, to handle the billing and collection for the Weinberger
Sinus Clinic located at 255 E. 90th Drive.
Dr. Weinberger, who had marketed himself as the "Nose Doctor"
because of his specialty in treating sinus-related problems was
reported missing in late September by family members after he
declined to return home with them from a trip to Greece. He has
not returned to his office since, and creditors have placed the
business under a court-ordered receivership to satisfy more than
$5.7 million in unpaid claims.
In regards to the recent decision, Valparaiso-based attorney
Kenneth J. Allen had urged the judge to rule on his
certification request, which was first submitted to the courts
in October. Mr. Allen argued that trial rules mandated that
certification be denied or approved as expediently as was
practical. However, Dr. Weinberger's attorney, Jon Schmoll,
questioned whether Judge Pera even had subject matter
jurisdiction to hear the case. Mr. Allen countered by accusing
Mr. Schmoll of being "disingenuous" and using stall tactics.
In the end, Judge Pera deferred a decision, saying he wanted to
study court documents further. He stated, "I don't think there
is any other court in Lake County that abhors delays more than I
do." The judge gave attorneys for both sides time to file
briefs and replies. Mr. Schmoll also will get 30 days to depose
Peggy Hood, the class action representative whose sister, cancer
victim Phyllis Barnes, died because Dr. Weinberger allegedly
failed to diagnose her condition accurately.
After the hearing, Mr. Allen expressed his disappointment over
the judge's decision by saying, "We were ready to argue the
motion ... but I have no issue with the judge's scheduling.
These are important decisions." He also told the Tribune that he
was worried about making sure Dr. Weinberger's victims were
compensated before all the doctor's assets were seized and sold
off to appease creditors and other litigants. He also said
insurance coverage of the assets should ensure eventual
compensation. Never the less, Mr. Allen told the Tribune that
though the victims remain "distressed" they are taking the
delays "in stride."
Individuals familiar with the case told the Tribune that if
certified, the case brought by Ms. Hood and 70 other unnamed
victims could be consolidated with a second case involving Kayla
Thomas, a child whose cancer was allegedly misdiagnosed by
Weinberger. That suit has 40 victims. Meanwhile, Mr. Schmoll
has told the Tribune that he plans to appeal to the Supreme
Court if the class action is certified.
IOWA: To Use Share in $1.7 Mil Microsoft Pact To Improve Police
---------------------------------------------------------------
Iowa intends to spend the $1.7 million it collected from the
Microsoft Corporation antitrust case to improve the use of DNA
evidence and purchase 37 State Patrol vehicles, state Attorney
General Tom Miller said in a statement. The money comes from
about $2 million the Company paid earlier to Iowa in
compensation for attorney costs in the case.
"The money we won in the Microsoft case will be put to good
use," said Mr. Tom Miller. "The Legislature and Governor get
credit for using this money to help meet important law
enforcement needs in the state." The Legislature included the
funding in the Justice Systems Appropriation Bill, and Governor
Vilsack signed the measure last week.
Mr. Miller said $785,000 will be spent for 37 new State Patrol
vehicles, $904,206 will be spent for lab equipment and staffing
to upgrade the state's DNA capability, and $25,000 will be spent
to upgrade the on-line Sex Offender Registry. About $350,000 of
Iowa's $2 million payment from Microsoft was allocated earlier
for other antitrust enforcement efforts.
"The State Patrol cars will help ensure safety on our highways,"
he said, "and the DNA money will be used to establish an all-
felons data base, which I have long advocated. Everyone
convicted of a felony must give a DNA sample, and that will aid
future investigations as well as help solve and prosecute more
previously-unsolved crimes."
Under the 2002 settlement of the antitrust case brought by Mr.
Miller and other Attorneys General, Microsoft agreed to pay the
states a total of $28.6 million. The amount included $25 million
in compensation for the states' attorney fees and costs of
litigation, and $3.6 million the states will use for continued
enforcement and compliance. Iowa's share, about $2 million, was
higher than the average payment because of Mr. Miller's
leadership in the case. Such attorney fees are calculated at
rates that would be paid to private attorneys, even though state
attorney general offices undertake cases as part of their day-
to-day work at much lower salaries. Mr. Miller said the lawsuit
also has resulted in continued monitoring of Microsoft for
antitrust violations.
KENTUCKY: Judge Postpones Decision For $120M Priest Abuse Deal
--------------------------------------------------------------
Judge John W. Potter of Louisville postponed a decision on
whether to approve a proposed $120 million class action
settlement over sexual abuse by Catholic priests in northern
Kentucky, The Associated Press reports.
Originally scheduled for June 23, the hearing was moved to July
5, 2005. Neither the diocese nor the plaintiffs requested that
the judge delay the hearing.
The delay came two weeks after Potter, a retired Jefferson
County circuit judge appointed 18 months ago as a special judge
in the Boone County case, ordered attorneys to rewrite the
public notices of the settlement.
As previously reported in the June 13, 2005 edition of the Class
Action Reporter, Judge Potter, a retired Jefferson County judge
was appointed 18 months ago as a special judge in the Boone
County case, set another hearing for June 23 to review a new
public notice for the settlement, which would compensate victims
who were fondled, raped or sodomized by priests and other church
employees. Upon the settlement of the case Judge Potter asked
Stan Chesley, who represented those who sued the diocese, and
Carrie Huff, an attorney for the Covington Diocese, to rework
the notice to specify that the diocese has $40 million on hand
and is pursuing the other $80 million. Judge Potter said he's
hoping for a settlement in the case to keep the plaintiffs from
having to testify about being molested.
Both attorneys told AP that they sent Judge Potter a new public
notice before June 23, but then got word that the hearing was
postponed. Ms. Huff even pointed out, "He did this on his own
motion. We did not ask for it." Mr. Chesley also told AP that he
hopes to allay Judge Potter's concerns about the proposed
settlement. "This is real stuff, and we want to get it done," he
said.
As previously reported in the February 18, 2003 edition of the
Class Action Reporter, the class action suit, which was filed in
Boone County Circuit Court by Cincinnati-based Mr. Chesley,
claims that 21 priests and some other workers abused more than
150 victims in the Diocese of Covington for decades while church
officials did nothing to stop the misconduct.
According to the court filings, from about 1956, information on
the sexual abuse of minors by diocesan priests has been
concealed from the public, including parents of children in
schools and parishes where the alleged perpetrators were
assigned, as well as from family members of employees of the
diocese. Specifically, the suit accuses the diocese, which is
just across the Ohio River from Cincinnati, of a 50-year cover-
up of sexual abuse by priests and others.
It is still unclear how many people are part of the class
action, but Judge Potter has ordered a "census" to be conducted
to determine the exact number of victims who will come forward.
Previously, Ms. Huff told AP that the diocese had about $40
million on hand, which could compensate 200 victims, a deal that
the attorneys expect.
Under the settlement, the victims would receive awards ranging
from $5,000 to $450,000, based on the severity of abuse, and
those in the highest category would be eligible to apply to a
special fund for extraordinary claims.
In addition, the settlement also call for the publishing of
notices on television and in newspapers for past victims of
clergy abuse to step forward and make claims to the settlement
fund.
Still up for grabs though is $80 million the Covington Diocese
wants from three insurance companies as part of the settlement.
As of the moment, the diocese is suing three insurance companies
in federal court to force them to pay the money.
The settlement requires victims to file an application to make a
claim by a deadline, not yet set. That would give the court a
total number of people seeking damages. Then, they would face a
second deadline to file a full claim for money. Any money not
distributed must be returned to the diocese or the insurance
companies.
LAW CENTERS: KY Consumers To Receive Restitution Due To Fraud
-------------------------------------------------------------
Kentucky consumers who were victimized by the Law Centers for
Consumer Protection, a Bennington, Vermont-based debt reduction
business, may be entitled to restitution through the U.S.
Department of Justice, state Attorney General Greg Stumbo
announced in a statement. This business formerly operated under
the name Andrew F. Capoccia Law Centers of Albany, New York.
Between 1997 and 2003, this business represented nearly 20,000
clients who had problems with unsecured debt, primarily credit
card debt. In 2003, the business declared bankruptcy while owing
approximately $23 million to about 13,000 clients. Through a
series of court actions, the U.S. Department of Justice has
recovered a portion of this money and will distribute it to
affected consumers. The Department of Justice now seeks to
locate affected consumers, particularly those who may have moved
since last being contacted by the Law Centers.
Any consumer who believes he or she is owed money by the Law
Centers should contact the Department of Justice's centralized
Victim Notification Center by Phone: 1-866-DOJ-4YOU or the U.S.
Attorney's Office by Phone: 1-802-951-6725. For more
information, please contact the Office of the Attorney General
by Mail: State Capitol, Suite 118, Frankfort, Kentucky 40601 by
Phone: (502) 696-5300.
MANULIFE SECURITIES: Suit Over Portus Alternative Discontinued
--------------------------------------------------------------
The class action commenced against Manulife Securities
International Ltd. and Manulife Financial Corporation in
connection with Portus Alternative Asset Management has been
discontinued.
Court documents indicate that the class counsel asked for
discontinuance of the class action after they concluded that the
offer by Manulife Securities to acquire the interest of its
clients who were referred to Portus by advisors licensed by
Manulife Securities was "fair and reasonable". Class counsel has
recommended that their clients accept the offer, which expires
July 15, 2005.
The discontinuance was approved in Ontario Superior Court
recently, following an appearance by class counsel and Manulife
legal representatives. The judge in granting the motion to
discontinue said: "The record discloses exemplary corporate
behavior on the part of Manulife. I am satisfied that the offer
made by Manulife is fair, reasonable and responsible."
Clients who qualify for the offer by Manulife Securities have
until the July 15 deadline to choose among three options - a
principal-protected note, guaranteed investments, or cash - for
their principal investment in Portus.
For more details, contact Manulife Securities Customer Care
Centre, Phone: 1-866-397-7788.
MEHLVILLE CHRYSLER: IL AG Madigan Files Consumer Fraud Lawsuit
--------------------------------------------------------------
Illinois Attorney General Lisa Madigan filed a complaint
alleging a Monroe County car dealership lured consumers to its
car lot with advertisements promising low-cost cars, but then
used fraudulent sales and financing practices to sell cars at
higher prices and without promised features.
The lawsuit names as a defendant Mehlville Chrysler, Inc.,
formerly known as Mehlville Chrysler-Plymouth, Inc., and doing
business as Metro Chrysler Centre, located at 500 Admiral Weinel
Blvd., in Columbia. The defendant is charged with violations of
the Illinois Consumer Fraud and Deceptive Business Practices Act
and the Illinois Administrative Rules on Motor Vehicle
Advertising.
More than 120 consumers have lodged complaints against Metro
Chrysler with Attorney General Madigan's Consumer Protection
Division, the Better Business Bureau and the Columbia Police
Department. Her office has received nine complaints from senior
citizens.
Consumers allege they were lured to the car lot by
advertisements offering low-priced vehicles, but when they
arrived at the dealership those cars were not available at the
advertised prices. Metro Chrysler representatives allegedly used
deceptive sales practices, including changing the terms of the
deal after it was negotiated, promising features that the
vehicle did not have and processing credit card payments or
cashing checks without authorization. In addition, some
consumers allege they were verbally insulted by Metro Chrysler
employees.
"This appears to be a bait-and-switch scheme," Attorney General
Madigan said. "The consumers were lured onto Metro Chrysler's
car lot with offers that did not exist. The dealers then tried
to hook the consumers into purchasing more expensive vehicles."
According to the lawsuit, Metro Chrysler published newspaper
advertisements that failed to clearly and conspicuously disclose
all material terms and conditions of the offer. For example, the
advertisements allegedly used footnotes to modify the terms of
the offer and advertised a total vehicle price from which
limited rebates already had been deducted. When consumers tried
to obtain the advertised prices, they were surprised to learn
that they had to be in the military, farm bureau members or
realtors to obtain certain advertised prices.
The lawsuit also alleges Metro Chrysler's sales and financing
practices were fraudulent. In some cases, Metro Chrysler
allegedly drew up contracts with higher prices than those
previously quoted to the consumers. When negotiations failed and
consumers attempted to leave the dealership, Metro Chrysler
employees allegedly yelled, threatened and shouted obscenities
at consumers.
In addition, consumers were required to leave their car keys
with the dealership during negotiations. According to the
lawsuit, dealership employees allegedly failed to promptly
return the keys, or in some cases permanently lost the
consumers' keys, when the consumers attempted to leave.
The lawsuit also alleges that after signing the contract and
before handing over the keys to the consumer, Metro Chrysler
represented that the purchase was complete even though financing
had not yet been obtained. In cases when financing through a
third party institution was rejected, the consumers allegedly
were told they must return to the dealership to sign a new
contract under less desirable terms. Under these circumstances,
Illinois consumer protection laws required Metro Chrysler to
return the down payment and the trade-in vehicle, or the value
of the vehicle if it had been sold, to the consumer, the
Attorney General said.
The lawsuit asks the court to prohibit the defendant from
unlawfully engaging in the business of advertising, offering for
sale and selling motor vehicles in Illinois. The lawsuit also
seeks a civil penalty of $50,000 and additional penalties of
$50,000 per violation found to be committed with the intent to
defraud. Additionally, the suit seeks $10,000 per violation
committed against a person 65 or older. Finally, Madigan's
lawsuit asks the court to order the defendants to pay
restitution to consumers.
Assistant Attorney General Cassandra Karimi is handling the case
for Attorney General Madigan's Consumer Protection Division.
MICROSOFT CORPORATION: NC Schools To Get $41M From Settlement
-------------------------------------------------------------
North Carolina schools are set to receive $41 million from
Microsoft Corporation as part of a legal settlement between the
state and the software giant, the NBC-17 reports.
As reported in previous edition of the Class Action Reporter,
the state was one of several that filed class action suits
against Microsoft on the heels of a federal antitrust lawsuit
against the company. In a 2003 settlement, Microsoft agreed to
pay $89 million worth of vouchers to North Carolinians and to
make half of any unclaimed benefits available to some of North
Carolina's neediest public schools.
Former Raleigh City Councilman Kieran Shanahan, who was the lead
attorney for North Carolina in the case, told NBC-17 that the
school funding will amount to about $41 million worth of credits
for computers and educational software, which the state plans to
direct to the schools and students who need it most.
In addition, Bob Bellamy, of the North Carolina Department of
Public Instruction told NBC-17, "What we want to make sure is
that we don't just spend money to buy a couple more computers.
We want to make a sustained, lasting change in the schools, and
by putting this kind of money into school technology, I think
it'll make a real difference."
Under the agreement, the money or credits are to be paid to DPI
for distribution to the individual schools. Ms. Shanahan though
did not know when that would happen.
MORGAN SPAULDING: SEC Lodges Securities Fraud Lawsuit in N.D. TX
----------------------------------------------------------------
The Securities and Exchange Commission initiated a civil
injunctive action in the United States District Court for the
Northern District of Texas against Jackie Gross and two entities
he owned and controlled, including Morgan Spaulding, Inc., a
defunct Texas-based broker-dealer.
The Commission's complaint alleges that these defendants engaged
in a fraudulent scheme to distribute nearly $15 million in stock
issued pursuant to Regulation S, a section of the federal
securities laws that permits companies to sell unregistered
shares to overseas investors. The complaint seeks disgorgement
of the defendants' ill-gotten gains, civil penalties, and
permanent injunctions against future violations of certain of
the antifraud and broker-dealer registration provisions of the
federal securities laws. The complaint also charges Telvest
Communications, a Texas company that Mr. Gross controlled and
Arizona-based broker John Flanders with acting as unregistered
broker-dealers in connection with the fraudulent transactions.
The Commission's complaint alleges that from approximately late
2001 through September 30, 2003, Gross, along with Telvest and
his wholly owned entity Morgan Spaulding, facilitated the sale
of nearly $15 million in unregistered shares of U.S.-based
companies to overseas investors by, among other things,
deceiving the investors into believing that nearly all of the
stock purchase price would be remitted to the companies issuing
shares. In fact, only approximately 30 to 45 percent of the
invested proceeds actually made it to the issuers. The rest went
to Mr. Gross, Morgan Spaulding and Telvest, to overseas
brokerage firms as undisclosed commissions and as "finder fees"
to promoters including defendant John Flanders. The complaint
alleges that Telvest and Mr. Flanders acted as unregistered
broker-dealers in connection with the fraudulent stock sales.
The Commission's complaint charges Gross, Morgan Spaulding and
Telvest with violating Section 17(a) of the Securities Act of
1933 (Securities Act), Section 10(b) of the Securities Exchange
Act of 1934 (Exchange Act) and Rule 10b-5 thereunder. Telvest
and Mr. Flanders are charged with violating Section 15(a) of the
Exchange Act. Mr. Gross is also charged with Telvest's and
Morgan Spaulding's violations of Section 10(b) of the Exchange
Act and Rule 10b-5 thereunder, and for Telvest's violation of
Section 15(a) of the Exchange Act, as a control person under
Section 20(a) of the Exchange Act. The case is styled, SEC v.
Jackie Gross, et al., Civil Action No. 3:05CV1251(N), USDC, N.D.
Texas (LR-19275).
MULTI-PLAYS OF AMERICA: Ordered To Refund Customers Due To Fraud
----------------------------------------------------------------
A Buffalo, NY, company that claims to sell booklets of "winning"
lottery numbers must make full refunds to any Iowa consumer who
requests a refund - and the Company has been permanently
prohibited from selling any goods or services in Iowa, Iowa
Attorney General Tom Miller announced in a statement.
Multi-Plays of America, Inc., makes phone pitches that they "are
producing winning numbers in different lotteries across the
country every month." According to a telephone script, Multi-
Plays tells consumers, "We cycle in our scientific formula, and
that gives us the most likely winning combinations." Multi-Plays
electronically debited consumer bank accounts in amounts ranging
from $39.95 for a one week 'trial offer' to $149 per month or
$298 quarterly.
"We allege that Multi-Plays violated Iowa's Consumer Fraud Act,"
said Attorney General Miller. "We looked into it after receiving
several complaints, and we believe the operation tended to
victimize older Iowans."
On June 10,2005, Polk County District Court Judge Eliza Ovrom
issued a Consent Judgment and order that:
(1) Permanently prohibits Multi-Plays from selling goods or
services to any Iowan
(2) Orders Multi-Plays to make a full refund to any Iowan
who requests it.
(3) Orders Multi-Plays to pay $3,000 to the state consumer
fund for protecting older Iowans.
(4) Prohibits Multi-Plays from selling or renting names,
addresses and phone numbers of any Iowa consumers.
Attorney General Miller urged consumers who desire a refund to
write to the Consumer Protection Division, Hoover Bldg., Des
Moines, Iowa 50319, or by Phone: 515-281-5926 or 888-777-4590
(toll-free.) Mr. Miller's office also will directly contact
known Iowa Multi-Plays customers.
"Lottery drawings are random and there really is no way to
predict which numbers will be drawn," said Iowa Lottery CEO Ed
Stanek. "You can use your own creativity to come up with lots of
ways to pick your numbers -- there is no need to pay for
advice!"
The Consumer Protection Division filed a consumer fraud lawsuit
and Judge Ovrom entered the Consent Judgment with terms agreed-
to by the defendants, including the order to make refunds and
not to do business in Iowa. Defendants named in the suit are
Multi-Plays of America, Inc., also doing business as M.P.
Publishing, and Michael J. Geiger and Michael Marranca, each 50%
owners of Multi-Plays.
Multi-Plays printed material and its web site
(http://www.multiplays.com),list a business address at 450
Niagara Falls Blvd., Buffalo NY 14223, and a telephone number of
1-888-252-0877.
The Attorney General's Consumer Protection Division
investigation was sparked by several complaints. Two complaints
were filed by adult children regarding elderly parents who had
been billed. Two complaints came from older Iowans who said they
had agreed to a one-time $39.95 "trial-offer" payment, but then
had been billed $149 or $298 (in one case leading to bank over-
drawn charges as well.) Another complainant said she had not
ordered anything and "the first I knew of this" was when she
spotted bank account debits totaling $298.
Debits were made electronically from consumers' bank accounts.
Refunds were obtained for consumers who complained to the
Attorney General, but the Consumer Protection Division continued
to look into the situation. The booklets consumers would
receive for their payment included a wallet-card with five
numbers listed for Iowa Cash Game, three for Pick 3, and 3 for
Midday Pick 3.
NORTH CAROLINA: Banks Named in CT Lawsuit Over Transaction Fees
---------------------------------------------------------------
The nation's largest banks, including Charlotte, North Carolina-
based Bank of America Corporation and Wachovia Corporation, are
named in a Connecticut lawsuit that accuses the companies of
illegally fixing prices on the transaction fees they charge
merchants on credit-card purchases made through MasterCard
International Inc. or Visa USA Inc., The American City Business
Journals Inc. reports.
According to The Wall Street Journal, the suit names Visa and
MasterCard and their largest member banks as defendants. Along
with BofA and Wachovia, the banks are J.P. Morgan Chase & Co.,
Citigroup Inc. and MBNA Corporation. It was filed by a few small
and midsize businesses, which are seeking to represent all of
the nation's retailers as a class action case, claiming
unspecified billions of dollars in damages.
In addition, the newspaper reports that more businesses are
challenging the fees. Some, according to the paper, have
recently won large, undisclosed settlements with Visa and
MasterCard that slash the charges. Some of those that recently
won against the companies include: Wal-Mart Stores Inc., the
nation's largest retailer, won concessions valued at more than
$1 billion, while others, including Best Buy Co., Toys "R" Us
Inc., The Home Depot Inc. and CVS Corp., are negotiating or have
already won fee cuts, lawyers close to those cases told the
Journal.
OMEGA FLEX: AR Consumers Launch TracPipe Product Defect Lawsuit
---------------------------------------------------------------
Omega Flex, Inc. faces a class action filed in the Clark County
Circuit Court in Arkansas, styled "Berry, et al. v. Titeflex
Corp., et al."
The suit alleges, among other things, that the Company's
corrugated stainless steel tubing product TracPipe and similar
products manufactured by several other manufacturers (also named
as defendants in the case) is defective, or that instructions,
warnings and training in the installation of corrugated
stainless steel tubing are defective, against potential damage
to the corrugated stainless steel tubing systems and the
structures served by these systems, caused by the nearby
lightning strikes.
The plaintiffs in this case have named three other corrugated
stainless steel tubing manufacturers, and one plumber residing
in Arkansas, as defendants in this matter, and are seeking class
action certification as representatives of all similarly
situated persons in the United States, or in the alternative, in
Arkansas and Texas, pursuant to the Arkansas rules of civil
procedure.
The case has only recently been filed, and no determinations
have been made as of the date of this information statement
whether to certify the class either within the United States, or
within the states of Texas and Arkansas.
PRESTIGE TOY: Recalls 1.5T Water Teethers Due to Injury Hazard
--------------------------------------------------------------
In cooperation with the U.S. Consumer Product Safety Commission
(CPSC), Prestige Toy Corporation, of New York, New York is
voluntarily recalling about 1,500 units of Spinning Water
Teethers.
The plastic spinner in the center of the teether can break,
causing small beads to fall out. This poses a choking hazard to
young children. Prestige Toy Corp. received one report from a
consumer that the spinning component of one of these teethers
broke apart, releasing two small beads. No injuries were
reported.
The water-filled teether is bright green or blue with a green
and blue plastic butterfly or turtle in the center, which spins
around. The spinner contains small beads, which produce a
rattling sound. They have Style #47447 (butterfly) and #47448
(turtle) written on the packaging.
Manufactured in China, the teethers were sold at all Carter's
Stores nationwide from March 2005 through April 2005 for about
$5.
Remedy: Consumers should take these teethers away from young
children and return the item to Prestige Toy Corp. for a full
refund.
Consumer Contact: Contact Prestige Toy Corp.'s Hotline at (866)
666-8266 between 9 a.m. and 5 p.m. ET Monday through Friday.
ROYAL BANK: Agrees To Settle Enron Litigation For $41.8 Million
---------------------------------------------------------------
The Royal Bank of Scotland (RBS) agreed to settle legal disputes
about its alleged role in the December 2001 bankruptcy of energy
giant Enron Corporation, Banking Business Review Online reports.
The bank is one of the ten financial institutions that Enron
believes was capable of preventing its collapse. These include
Barclays, Canadian Imperial Bank of Commerce, Citigroup, Credit
Suisse First Boston, Deutsche Bank, JP Morgan Chase, Merrill
Lynch & Co, Royal Bank of Canada and the Toronto-Dominion Bank.
The suit alleges that the banks aided and abetted breaches of
fiduciary duties and fraud, and engaged in civil conspiracy. The
suit also includes bankruptcy-based claims relating to equitable
subordination, preferential and/or fraudulent transfers and the
re-characterization of certain transactions.
JPMorgan Chase reached a settlement for the litigation earlier
this month, agreeing to pay $2.2 billion for its role in Enron's
collapse, a June 16,2005 Class Action Reporter story states.
The bank agreed to pay $41.8 million to settle the litigation
and is forfeiting its rights in the Company's bankruptcy estate
as well as its own claims against the Company, worth $329
million, for which it will pay $20 million to the Company. It
is still reportedly awaiting separate class action litigation
from Enron shareholders.
ROYAL LINKS: Golf Operators Launch Suit Over Refreshment Carts
--------------------------------------------------------------
Royal Links USA Inc., in Springfield Township, faces a lawsuit
seeking class action status that was filed in U.S. District
Court in Toledo, Ohio on behalf of hundreds of angry golf course
operators nationwide who allege it reneged on a promise to pay
monthly reimbursements if they agreed to lease refreshment carts
that carried advertising, The Toledo Blade reports.
The suit claims that the Company made deals with golf course
operators across the country from January 1, 2002, through the
end of last year to provide beverage caddies from third-party
leasing companies, usually for a 60-month term.
Under the arrangement, the golf course operators could sell
beverages and keep the proceeds and would allow Royal Links to
display advertising panels from the national sponsors on the
carts, the suit states. Royal Links also was to reimburse the
course operators monthly for the lease costs.
However, the carts, according to the suit were being provided by
a third party, and when the local firm told the golf operators
in October that it no longer would pay the reimbursements, the
operators were still responsible for the cart leases. It goes on
to state that some operators were unaware the carts were being
provided by another party and would not have signed the deal had
they known the lease and the reimbursement weren't linked.
Jeff Christensen, president of SGM Inc., which runs a golf
course in Twain Harte, California, is on the hook for $2,440 a
month for eight beverage caddies. SGM is the lead plaintiff in
one of two lawsuits that were combined this month.
Ken Pester, owner of Pike Run Golf Course near Ottawa, Ohio, is
paying $306.66 a month for the one cart he agreed to lease. He
told The Blade, "I feel like I was cheated. Anytime you enter
into an agreement and it's not the way you thought it would be,
you don't feel good about it."
The lawsuit, which has been set for trial June 13, 2006, before
Judge David Katz, alleges "breach of contract, breach of the
implied covenant of good faith and fair dealing, and fraudulent
inducement of contract."
Court documents revealed that word of the problems surfaced late
last year, when golf course operators began filing complaints
with the Better Business Bureau of Northwestern Ohio and
Southeastern Michigan.
A Royal Links official told The Blade last fall that the firm
was aware of two or three complaints, had responded to the BBB,
and was trying to resolve the issues.
Counterparts on Internet message boards echoed Mr. Pester's
sentiments, so the National Association of Golf Course Operators
has begun providing updates and information on its Web site
about the controversy, said Jay Karen, the group's spokesman. He
adds, "Royal Links seems to have targeted more modest facilities
with small budgets, out in the middle of nowhere, many of which
can't afford $12,000 to $15,000 for large refrigerated beverage
carts." Additionally, he estimated that up to 1,200 golf courses
might be involved.
Andrew Gifford, an attorney with Lord, Bissell & Brook in
Chicago who is representing the operators, told The Blade, "We
hope to get full restitution for all of the course owners and
operators nationwide who got lured into this scheme for use of
the beverage carts."
SEMPRA ENERGY: Files Request For FERC Jurisdiction Over CA Suit
---------------------------------------------------------------
Sempra Energy Inc. (SRE), along with its Southern California Gas
Co. and San Diego Gas & Electric Co. units, filed a petition
with the Federal Energy Regulatory Commission, or FERC, seeking
an order that FERC has exclusive jurisdiction with respect to
issues raised in a San Diego Superior Court class action
lawsuit, The MarketWatch reports.
According to a Form 8-K filed with the Securities and Exchange
Commission, the cases that are being disputed included class
action and individual antitrust and unfair competition lawsuits
that were filed as early as 2000, and consolidated in San Diego
Superior Court. The suits allege that Sempra Energy, Southern
California Gas and San Diego Gas & Electric, along with El Paso
Natural Gas Co. and its affiliates, unlawfully sought to control
natural gas and electricity markets.
In addition the filing stated that the Superior Court has
previously rejected assertions of FERC exclusive jurisdiction
and a FERC ruling favorable to Sempra Energy and its units
wouldn't in itself dispose of the litigation.
TRUSTSOFT INC.: TX Court Issues Injunction For Consumer Fraud
-------------------------------------------------------------
The United States District Court for the Southern District of
Texas issued a preliminary injunction against Trustsoft, Inc.,
an operation that used bogus "scans" and illegal spam to market
an anti-spyware program that didn't work as claimed, at the
request of the Federal Trade Commission (FTC). The injunction
froze the Company's assets and bars it from making deceptive
claims.
The agency alleges that the operation violated federal laws and
has asked the court to permanently bar the deceptive marketing
and order redress for consumers. The FTC alleges that to
capitalize on legitimate consumer concerns about spyware and
induce consumers to download its anti-spyware product,
"SpyKiller," the operation aggressively and deceptively marketed
SpyKiller, using the Web sites of affiliates, banner and pop-up
ads, and spam.
The FTC alleges defendants sent pop-up and e-mail messages
informing consumers that their computers had been remotely
"scanned" and that spyware had been "detected" even though
defendants had not performed any such scans. The defendants'
marketing materials urged consumers to access the SpyKiller Web
site to get a "free scan" for spyware. While the SpyKiller
"scan" was running, the program displayed a status report
entitled "Spyware Found on your PC:" that included a category
called "Live Spyware Processes." In fact, the FTC alleges, this
category deceptively identified anti-virus programs, word
processing programs, or any of the processes running on the
system as spyware. Then, even though the "scan" itself was free,
consumers had to pay roughly $39.95 to enable SpyKiller's
"removal" capabilities. Defendants promised in their marketing
materials that SpyKiller would find and remove "all" spyware,
including "all traces" of particular spyware on consumers'
computers. However, the FTC complaint alleges the software
failed to remove significant amounts of spyware, including
specified spyware defendants claimed on their Web site to
remove. The agency alleges that the deceptive claims violate the
FTC Act.
The FTC also alleges that spam messages promoting the SpyKiller
software contained similar deceptive claims, failed to identify
themselves as advertising, used false "from" lines, gave no
valid postal addresses, and failed to provide consumers with
notice of and the ability to "opt-out," in violation of the CAN-
SPAM Act.
The court entered a temporary restraining order on June 1, 2005,
and a stipulated preliminary injunction order on June 14, 2005.
The agency is seeking a permanent ban on the deceptive claims
and will ask the court to order consumer redress from defendants
Trustsoft, Inc. and its Houston, Texas-based principal, Danilo
Ladendorf.
The Commission vote to authorize staff to file the complaint was
5-0. The complaint was filed in the U.S. District Court for the
Southern District of Texas. The Commission files a complaint
when it has "reason to believe" that the law has been or is
being violated, and it appears to the Commission that a
proceeding is in the public interest. The complaint is not a
finding or ruling that the defendant has actually violated the
law. The case will be decided by the court.
Copies of the complaint and stipulated preliminary injunction
are available from the FTC's Web site at http://www.ftc.govand
also from the FTC's Consumer Response Center, Room 130, 600
Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works
for the consumer to prevent fraudulent, deceptive, and unfair
business practices in the marketplace and to provide information
to help consumers spot, stop, and avoid them. To file a
complaint in English or Spanish (bilingual counselors are
available to take complaints), or to get free information on any
of 150 consumer topics, call toll-free, 1-877-FTC-HELP
(1-877-382-4357), or use the complaint form at
http://www.ftc.gov.The FTC enters Internet, telemarketing,
identity theft, and other fraud-related complaints into Consumer
Sentinel, a secure, online database available to hundreds of
civil and criminal law enforcement agencies in the U.S. and
abroad. For more details, contact Claudia Bourne Farrell,
Office of Public Affairs by Phone: 202-326-2181 or contact
Robert Kaye or Tara Flynn, Bureau of Consumer Protection by
Phone: 202-326-2215 or 202-326-3710 or visit the Website:
http://www.ftc.gov/opa/2005/06/trustsoft.htm.
US AUTO: AZ Attorney General Goddard Files Consumer Fraud Suit
--------------------------------------------------------------
Arizona Attorney General Terry Goddard filed a lawsuit against
U.S. Auto Management Corporation of Phoenix and its affiliated
offices located in Cave Creek, Glendale, Mesa, and Scottsdale,
as well as a spin-off company, Auto Payment Solutions, alleging
that the companies engaged in a vehicle sublease rescue scheme
that often harmed car owners and lessees financially and damaged
their credit.
The complaint, filed June 16 in Maricopa County Superior Court,
alleges that between 2000 and 2004, U.S. Auto Management (USAM)
and Auto Payment Solutions offered owners and lessees of
vehicles subject to retail installment loans or lease contracts
the opportunity to be relieved of their existing loan or lease
obligations. USAM and Auto Payment Solutions located a sub-
lessee to assume the owner's remaining monthly payments until
the vehicle was paid off or the lease term concluded and take
possession of the vehicle.
"Victims who could not afford to make their car payments sought
help, but these companies often only made things worse. Instead
of helping consumers as they promised, these companies often
took advantage of them with deceptive claims," Attorney General
Goddard said. "Consumers need to be wary of these types of
quick-fix offers."
Court documents allege that USAM and Auto Payment Solutions'
various Web sites represented that the companies:
(1) Could provide vehicle owners with a means of removing
themselves from loan or lease payments without
dealership or lender penalties;
(2) Guaranteed that all vehicle monthly loan or lease
payments, as well as insurance premiums, would be made
on time;
(3) Verified and monitored required auto insurance
premiums; and
(4) Created a worry free-arrangement to protect the owner's
investment and credit.
The owners varied their promises, but used the same basic
business model to entice customers into turning over their
vehicles. The USAM Cave Creek and Scottsdale locations also
purchased print advertisements and ran commercials on the radio.
The lawsuit states that USAM and Auto Payment Solutions did not
deliver on their promises and violated the Arizona Consumer
Fraud Act by falsely representing their vehicle sublease rescue
services. Specifically:
(1) USAM and Auto Payment Solutions told vehicle owners
that they could find a user to assume the lease or loan
payments, when in fact, the owner's lease or loan
documents likely prohibited such a practice;
(2) USAM and Auto Payment Solutions concealed from vehicle
owners the fact that vehicle subleases are prohibited
by Arizona law;
(3) USAM and Auto Payment Solutions concealed the owner's
financial lender often prohibited the sublease of
vehicles without lender approval;
(4) USAM and Auto Payment Solutions assured owners that
vehicle users would maintain full insurance coverage on
vehicles in their possession, when in fact, numerous
users did not maintain such insurance;
(5) USAM and Auto Payment Solutions told customers that a
person "using" the owner's vehicle would maintain and
repair any damage to vehicles in their possession,
when in fact the companies often lost contact with the
vehicle user and could not monitor maintenance or
repair records.
The Attorney General's Office is asking the Maricopa County
Superior Court to:
(i) Permanently restrain the Defendants from further
conduct;
(ii) Provide restitution to the victims in this case;
(iii) Require the Defendants to return to all the victims any
money or property acquired through deceptive practices;
(iv) Impose a penalty of up to $10,000 for each violation of
the Arizona Consumer Fraud Act;
(v) Require the Defendants to reimburse the Attorney
General for costs of the investigation and reasonable
attorney's fees.
Arizona residents who feel they have been a victim of any fraud
are asked to contact the Attorney General's Office in Phoenix at
602-542-5763; in Tucson at 520-628-6504 or outside the Phoenix
or Tucson Metro areas at 1-800-352-8431 or visit the Web site:
http://www.azag.gov. Residents can also visit one of the
satellite offices located throughout Arizona to file a consumer
complaint. A list of satellite office locations can be found on
the Web site: http://www.azag.gov.
WORLDWIDE XCEED: Lawsuit Settlement Hearing Set August 11, 2005
---------------------------------------------------------------
The United States District Court of Southern District of New
York will hold a fairness hearing in the proposed $4.4 million
settlement in the matter: Worldwide Xceed Group Securities
Litigation, on behalf of all persons or entities who purchased
the firm's common stock during the period November 29, 1999,
through November 15, 2000.
The haring will be held on August 11, 2005, at 12:45 p.m.,
before the Honorable Gerard E. Lynch, United States District
Court for the Southern District of New York, 40 Centre St., New
York, NY, 10007.
For more details, contact Worldwide Xceed Group Securities
Litigation c/o Berdon Claims Administration, LLC, P.O. Box,
9014, Jericho, NY, 11753-8914, Phone: (800) 766-3330, Fax:
(516) 931-0810, Web site: http://www.berdonllp.com/claims.
New Securities Fraud Cases
CONAGRA FOODS: Charles J. Piven Lodges Securities Lawsuit in TX
---------------------------------------------------------------
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 ConAgra
Foods, Inc. (NYSE: CAG) between September 18, 2003 and June 7,
2005, inclusive (the "Class Period").
The case is pending in the United States District Court for the
District of Nebraska against defendant ConAgra Foods, Inc. 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., The World Trade Center-Baltimore, 401 East Pratt Street,
Suite 2525, Baltimore, MD, 21202, Phone: 410/986-0036, E-mail:
hoffman@pivenlaw.com.
CYBERONICS INC.: Charles J. Piven Lodges Securities Suit in TX
--------------------------------------------------------------
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 Cyberonics,
Inc. (NASDAQ: CYBX) between June 15, 2004 and October 1, 2004,
inclusive (the "Class Period").
The case is pending in the United States District Court for the
Southern District of Texas against defendant Cyberonics 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., The World Trade Center-Baltimore, 401 East Pratt Street,
Suite 2525, Baltimore, MD, 21202, Phone: 410/986-0036, E-mail:
hoffman@pivenlaw.com.
DITECH COMMUNICATIONS: Wechsler Harwood Lodges Stock Suit in CA
---------------------------------------------------------------
The law firm of Wechsler Harwood, LLP initiated a class action
lawsuit in the United States District Court for the Northern
District of California on behalf of purchasers of the securities
of Ditech Communications Corp. ("Ditech" or the "Company")
(Nasdaq:DITC) between August 25, 2004 and May 26, 2005,
inclusive (the "Class Period"), seeking to pursue remedies under
the Securities Exchange Act of 1934 (the "Exchange Act") against
defendants Ditech, Timothy K. Montgomery (Ditech's Chief
Executive Officer, President and Chairman) and William J.
Tamblyn (Ditech's CFO).
The Complaint alleges that defendants made materially false and
misleading misrepresentations and omissions regarding two
aspects of Ditech's business: Ditech's Voice Quality Assurance
("VQA") Services and the impact upon the Company of a merger
between Sprint Corp. ("Sprint") and Nextel Communications, Inc.
("Nextel").
During the Class Period, defendants represented that Ditech had
received two significant VQA orders from new customers in Asia.
The Company touted this as the first success in its efforts to
enter the VQA market in a rapidly growing geographical area. In
fact, however, the orders were not solidified. The purported
customers were not obligated to, and, as it turned out, did not
purchase the services.
In addition, in December 2004, Nextel (which accounted for over
40% of Ditech's revenues) announced a merger with Sprint. Given
the importance of Nextel to Ditech's business, certain
securities analysts posited that the cost cutting and
integration of Nextel and Sprint operations might result in less
business for Ditech. In response, defendants represented that
the merger should not be of concern to Ditech investors and that
it was "quite good" for the Company. In fact, as defendants knew
or recklessly disregarded, the Nextel-Sprint merger posed a
serious threat to Ditech's business, one that could erase nearly
half of its revenues.
While the price of Ditech shares was artificially inflated by
defendants' false statements and failures to disclose, Company
insiders, including defendants Montgomery and Tamblyn, sold a
total of 320,000 of their personally held Ditech shares for
gross proceeds of $6,715,650.
Investors began to learn the truth about the purported VQA
orders on November 3, 2004, when the Company announced that the
highly-touted orders had not shipped, causing the Company to
miss its revenue goals for the second quarter of 2005 and
calling into question the Company's VQA expansion plans. The
price of Ditech common stock fell by 25.5% to $16.60 per share
in response to the announcement, on unusually heavy trading
volume. Defendants, however, maintained this was merely a
"delay" and that they still expected the orders to ship, a claim
that defendants knew, or recklessly disregarded, was misleading.
The truth about the impact of the Nextel-Sprint merger on Ditech
was revealed after the close of trading on May 26, 2005. At that
time, Ditech announced that orders from Nextel dropped
substantially as a result of the Nextel-Sprint merger and that a
continuing decline in orders was expected. Although defendants
did not directly address the issue in this release, the promised
VQA sales to the two new customers from Asia still did not
materialize, nearly a year after defendants supposedly "secured"
the orders. In response to this announcement, Ditech common
stock dropped by 38%, to $7.79 per share, on unusually heavy
trading volume.
For more details, contact Virgilio Soler, Jr., Shareholder
Relations Department of Wechsler Harwood LLP, Phone:
(877) 935-7400, E-mail: vsoler@whesq.com.
DRDGOLD LIMITED: Brodksy & Smith Lodges Securities Lawsuit in NY
----------------------------------------------------------------
Law Offices of Brodsky & Smith, LLC initiated a class action
lawsuit in the United States District Court for the Southern
District of New York on behalf of all securities purchasers of
DRDGOLD Ltd. (NASDAQ: DROOY) (f/k/a Durban Roodepoort Deep,
Limited) ("DRD" or the "Company") between October 23, 2003 and
February 25, 2005, inclusive (the "Class Period").
The complaint charges DRD, Mark Wellesley-Wood and Ian Louis
Murray with violations of the Securities Exchange Act of 1934.
More specifically, the Complaint alleges that the Company failed
to disclose and misrepresented the following material adverse
facts, which were known to defendants or recklessly disregarded
by them:
(1) that the Company's South African operations,
specifically the North West Operations, were
underperforming due to production problems;
(2) that the South African Rand was negatively impacting
the Company's operations;
(3) that due to (1) and (2), DRD materially overstated its
net worth by failing to take timely writedowns;
(4) that the Company lacked the cash to adequately cover
future commitments and continue as a going concern;
(5) that defendants' statements about the Company's growth
and progress were lacking in any reasonable basis when
made.
On February 18, 2005, DRD announced that Company headline loss
per share would be more than 200 percent higher than the
previous reporting period. Then, on February 24, 2005, DRD
released its interim financial results, which revealed that the
Company incurred and continued to incur significant losses and
that operations were in process of being restructured. On this
news, the shares of DRD fell by $0.38 per share, or 25 percent,
on February 24, 2005, to close at $1.11 per share.
For more details, contact Marc L. Ackerman, Esq. or Evan J.
Smith, Esq. of Brodsky & Smith, LLC, Two Bala Plaza, Suite 602,
Bala Cynwyd, PA, 19004, Phone: 877-LEGAL-90, E-mail:
clients@brodsky-smith.com, Web site:
http://www.brodsky-smith.com.
DRDGOLD LIMITED: Stull Stull Lodges Securities Fraud Suit in NY
---------------------------------------------------------------
The law firm of Stull, Stull & Brody initiated a class action
lawsuit in the United States District Court for the Southern
District of New York, on behalf of all persons who purchased the
publicly traded securities of DRDGOLD Limited, formerly known as
Durban Roodepoort Deep, Limited ("DRDGOLD" or the "Company")
(NASDAQ: DROOY) between October 23, 2003 and February 24, 2005,
inclusive (the "Class Period").
The complaint alleges that DRDGOLD and certain of its officers
and directors violated federal securities laws. Specifically,
defendants made numerous statements regarding:
(1) the successful restructuring of the Company's North
West Operations in South America;
(2) the Company's ability to reduce the negative impact of
the increasing value of the Southern African Rand
versus the U.S. Dollar; and
(3) the increasing strength of the Company's balance sheet.
In truth, the Company's problems with its North West
Operations were never fully resolved and resulted in
the Company being forced to record an impairment charge
for the full value of its mining assets there.
Despite representations to the contrary, DRDGOLD continued to be
negatively impacted by the increasing value of the South African
Rand. Further, these problems resulted in the Company being
forced to announce that it might not be able to operate as a
going concern. When this information was belatedly disclosed to
the public, shares of DRDGOLD fell more than 25%.
For more details, contact Tzivia Brody, Esq. of Stull, Stull &
Brody, 6 East 45th Street, New York, NY, 10017, Phone:
1-800-337-4983, Fax: 212/490-2022, E-mail: SSBNY@aol.com, Web
site: http://www.ssbny.com.
EXIDE TECHNOLOGIES: Marc S. Henzel Lodges Securities Suit in NJ
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a class action
lawsuit in the United States District Court for the District of
New Jersey on behalf of the purchased or otherwise acquired the
securities of Exide Technologies (NasdaqNM: XIDE), between
November 16, 2004 and May 17, 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 New Jersey against defendants Exide, Gordon A.
Ulsh (President, CEO and a Director), Craig Muhlhauser (former
President and CEO), and J. Timothy Gargaro (CFO and Executive
VP). According to the complaint, defendants violated sections
10(b) and 20(a) of the Exchange Act, and Rule 10b-5, by issuing
a series of material misrepresentations to the market during the
Class Period.
The complaint alleges that Exide, a producer and recycler of
lead-acid batteries, was heavily dependent on financing to
support its operations during the Class Period, having emerged
from bankruptcy protection in May 2004. The Company had
negotiated a $365 million senior secured credit facility which
required the Company to comply with several financial covenants,
including: that the Company maintain a specified ratio of debt
to equity (the "Leverage Ratio Covenant"), and that the Company
maintain minimum consolidated earnings before income, taxes,
depreciation, amortization ("EBITDA") (the "EBITDA Covenant")
(collectively, with the Leverage Ratio Covenant, the
"Covenants"). Throughout the Class Period, defendants
represented that the Company could maintain compliance with the
Covenants because, among other things, they had reorganized
Exide's business, successfully implemented cost-savings measures
and increased productivity. In addition, defendants stated that
they had hedged against commodity price fluctuations, including
the price of lead, which was the primary material used in the
production of batteries. On February 14, 2005, defendants
revealed that the Company was in violation of the Leverage Ratio
Covenant, however, assured investors, that Exide's lenders would
waive the Leverage Ratio Covenant. Moreover, defendants
emphasized that the Company was in compliance with the EBITDA
Covenant, and that it was not at risk of defaulting on the
credit facility.
The truth began to emerge on May 16, 2005. On that day, after
the market closed, defendants issued a press release stating
they expected Exide to violate the Covenants for the fiscal
year-ended March 31, 2005 as a result of the "impact of
commodity costs; the loss of overhead absorption due to an
inventory-reduction initiative; other fourth-quarter inventory
valuation adjustments; and costs associated with Sarbanes-Oxley
compliance efforts." In reaction to this announcement, the price
of Exide stock, which had closed at $11.15 per share on May 16,
2005, fell to an opening price of $5.75 per share the following
trading day, representing a one-day decline of $5.40, or 48%,
and closed out the day at $6.88 per share on extremely heavy
volume of over nine million shares, 50 times the daily average
volume. On May 17, 2005, after the market closed, defendant
Gargaro made the following additional shocking revelations:
(1) the Company expected to report adjusted EBITDA of $100
million to $107 million for the full-year 2005, and
therefore, failed to satisfy the minimum EBITDA
Covenant which required minimum EBITDA of $130 million;
(2) several "unanticipated and unusual items," including
write-offs of obsolete and discontinued products, had
resulted in a reduction of earnings of between $15
million and $20 million;
(3) the Company lacked the ability to properly forecast its
inventory requirements; and
(4) the Company had violated the terms of a contract with a
large customer and, consequently, was required to
record an adjustment of $1.5 to $2 million.
In reaction to this news, the price of Exide shares fell another
$1.55, or 22 %, from their closing price of $6.88 on May 17,
2005, to close at $5.33 on May 18, 2005. Defendants were
motivated to commit the fraud alleged herein so that Exide could
complete a $350 million private placement of senior notes and
floating rate convertible senior subordinated notes.
For more details, contact the Law Offices of Marc S. Henzel, 273
Montgomery Ave., Suite 202, Bala Cynwyd, PA, 19004, Phone:
610-660-8000 or 888-643-6735, Fax: 610-660-8080, E-Mail:
mhenzel182@aol.com.
HILB ROGAL: Charles J. Piven Lodges Securities Fraud Suit in TX
---------------------------------------------------------------
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 Hilb Rogal &
Hobbs Co. (NYSE: HRH) between February 14, 2002 and May 26,
2005, inclusive (the "Class Period").
The case is pending in the United States District Court for the
Eastern District of Virginia against defendant Hilb Rogal,
Andrew L. Rogal, Martin L. Vaughan, III, Timothy J. Korman,
Carolyn Jones, Robert W. Blanton, Jr. and Robert B. Lockhart.
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., The World Trade Center-Baltimore, 401 East Pratt Street,
Suite 2525, Baltimore, MD, 21202, Phone: 410/986-0036, E-mail:
hoffman@pivenlaw.com.
HILB ROGAL: Finkelstein Thompson Lodges Securities Lawsuit in VA
----------------------------------------------------------------
The law firm of Finkelstein, Thompson & Loughran initiated a
class action lawsuit in the United States District Court for the
Eastern District of Virginia on behalf of all purchasers of Hilb
Rogal & Hobbs Company securities between February 14, 2002 and
May 26, 2005, inclusive (the "Class Period"). The lawsuit was
filed against Hilb Rogal & Hobbs Company ("Hilb Rogal" or "the
Company") (NYSE: HRH) and certain current and former officers.
The Complaint asserts claims for violations of the federal
securities laws, as described below.
The Complaint alleges that defendants violated the federal
securities laws by issuing a series of false and misleading
statements in its quarterly and annual filings with the
Securities and Exchange Commission. Plaintiff specifically
alleges that defendants violated the federal securities laws by
failing to disclose that:
(1) the company was paying or receiving the equivalent of
kickbacks when placing its clients' insurance business;
(2) the Company's contingent and override commissions were
designed to steer its business to insurance carriers
who provided kickbacks;
(3) the Company's business practices were against the
interests of its clients, were fraudulent and illegal,
and could potentially result in civil and/or criminal
liability; and
(4) a substantial portion of the Company's revenues were
derived from kickbacks and improper commissions, making
the Company's financial statements substantially
inflated throughout the Class Period.
On May 26, 2005, the Company announced that its Chief Operating
Officer had resigned following an internal review of business
practices. This review discovered that the Company made improper
payments out of Hilb Rogal's Hartford offices related to the
placement of insurance policies. In reaction to this revelation,
Hilb Rogal's share price fell $4.51 on May 27, 2005, down nearly
12 percent from its prior closing price, thereby damaging
plaintiff and the Class.
For more details, contact Donald J. Enright, or Benjamin J. Weir
of Finkelstein, Thompson & Loughran, Phone: +1-202-337-8000, E-
mail: dje@ftllaw.com or bjw@ftllaw.com.
HILB GLOBAL: Goodkind Labaton Lodges Securities Fraud Suit in VA
----------------------------------------------------------------
The law firm of Goodkind Labaton Rudoff & Sucharow LLP initiated
a class action lawsuit in the United States District Court for
the Eastern District of Virginia, on behalf of shareholders who
purchased or otherwise acquired the publicly traded securities
of Hilb Rogal & Hobbs Co. ("Hilb Rogal" or the "Company")
(NYSE:HRH) between February 14, 2002 and May 26, 2005,
inclusive, (the "Class Period"). The lawsuit was filed against
Hilb Rogal, Andrew L. Rogal, Martin L. Vaughan III, Timothy J.
Korman, Carolyn Jones, Robert W. Blanton Jr. and Robert B.
Lockhart ("Defendants").
The complaint alleges that Defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. Specifically, Defendants are alleged to
have issued a series of false and misleading statements during
the Class Period, which failed to disclose that:
(1) the Company was paying or receiving the equivalent of
kickbacks or bribes in connection with placing its
clients' insurance business;
(2) the Company's contingent and/or override commissions
were designed to allow the Company to steer its flow of
business to those insurance carriers which agreed to
pay it kickbacks;
(3) the Company's business practices were in direct
conflict of interest with its customers, were
fraudulent and illegal, and could open the Company up
to civil and criminal liability, lost future revenues,
tarnished reputation, potential inability to borrow,
and potential loss of customers; and
(4) a substantial portion of the Company's revenues were
derived from the improper commissions, so that the
Company's financial statements were materially inflated
at all relevant times.
On May 26, 2005, the Company announced that its Chief Operating
Officer, Defendant Robert B. Lockhart, had resigned following a
review of the Company's business practices. The internal
inquiry, which was commenced in response to numerous states'
attorneys general and other legal and regulatory bodies
investigations, found that the Company made improper payments
out of its Hartford offices in connection with the placement of
insurance policies. Shares of Hilb Rogal reacted negatively to
the news, falling from $38.20 per share on May 26, 2005 to
$33.69 per share on May 27, 2005, on heavy trading volume.
For more details, contact Christopher Keller, Esq. of The Law
Firm of Goodkind Labaton Rudoff & Sucharow LLP, Phone:
800-321-0476, Web site:
http://www.glrslaw.com/get/?case=HilbRogal.
HILB ROGAL: Schatz & Nobel Lodges Securities Fraud Lawsuit in VA
----------------------------------------------------------------
The law firm of Schatz & Nobel, P.C. initiated a lawsuit seeking
class action status in the United States District Court for the
Eastern District of Virginia on behalf of all persons who
purchased the publicly traded securities of Hilb Rogal & Hobbs
Co. (NYSE: HRH) ("Hilb Rogal & Hobbs") between February 14, 2002
and May 26, 2005 (the "Class Period").
The Complaint alleges that Hilb Rogal & Hobbs violated federal
securities laws by issuing false or misleading public
statements. Specifically, the Complaint alleges that Hilb Rogal
& Hobbs was paying or receiving improper kickbacks in connection
with placing its clients' insurance business. On May 26, 2005,
Hilb Rogal & Hobbs announced that its Chief Operating Officer,
Robert B. Lockhart, had resigned following a review of these
business practices. An internal inquiry found that improper
payments had been made out of the company's Hartford,
Connecticut offices. On this news, shares of Hilb Rogal & Hobbs
fell from a close of $38.20 per share on May 26, 2005, to close
at $33.69 per share on May 27, 2005.
For more details, contact Wayne T. Boulton or Nancy Kulesa of
Schatz & Nobel, P.C., Phone: (800) 797-5499, E-mail:
sn06106@aol.com, Web site: http://www.snlaw.net.
LAZARD LIMITED: Marc S. Henzel Files Securities Fraud Suit in NY
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a class action
lawsuit in the in the United States District Court for the
Southern District of New York on behalf of purchasers of Lazard
Ltd. (NYSE: LAZ) publicly-traded securities who purchased such
securities pursuant and/or traceable to the Company's false and
misleading Registration Statement and Prospectus issued in
connection with the initial public offering of Lazard shares
(the "IPO"), together with those who purchased their shares in
the open market between May 4, 2005 and May 12, 2005 inclusive
(the "Class Period").
Lazard is a financial advisory and asset management firm. The
complaint alleges that Lazard, Goldman Sachs & Co ("Goldman")
(the lead underwriter of the IPO), and certain of the Company's
officers and directors violated the Securities Act of 1933 and
the Securities Exchange Act of 1934 by issuing a materially
false and misleading Registration and Prospectus in connection
with the Company's IPO, which was priced at $25 per share, and
continuing to conceal material facts about the true value of the
Company's stock price after the stock began to trade on the open
market.
Specifically, the complaint alleges that the Registration
Statement/Prospectus failed to disclose, among other things,
that:
(1) the basis for the $25 price for shares sold in the IPO
was to enable defendant Bruce Wasserstein (the
Company's Chief Executive Officer) to raise sufficient
funds to gain control of the Company from Michel David
Weill ("David Weill"), a cousin of the Company's
founders;
(2) that prior to the IPO, market demand had indicated that
the proper price for the IPO was only $22 per share;
(3) that to "create a market" and thereby manufacture an
appearance that Lazard's IPO was fairly and properly
priced, Goldman arranged to sell millions of shares to
hedge funds with side agreements that they could
immediately "flip the shares" and that Goldman would
immediately buy them back;
(4) that the Prospectus had failed to adequately and fully
comply with S-K Item 505 which requires a prospectus to
describe "the various factors considered in determining
the offering price" when common shares without an
established public trading market are being registered;
and
(5) that, in violation of Securities and Exchange
Commission regulations, the Registration
Statement/Prospectus failed to disclose that Gerardo
Braggiotti, the Company's deputy Chairman in Europe and
a major rainmaker of new business for the Company, who
had only supported the IPO because of a promise (which
was later reneged on) that he would be appointed as
head of Lazard's European operations, was likely to
leave Lazard and/or cause turmoil within the
organization as he opposed the IPO and opposed
defendant Wasserstein's purchase of David Weill's
shares.
On May 12, 2005, only days after the IPO, and right after
Goldman stopped buying back the Company's shares, the price of
the Company's shares plunged from $25 per share to less than $21
per share.
For more details, contact the Law Offices of Marc S. Henzel, 273
Montgomery Ave., Suite 202, Bala Cynwyd, PA, 19004, Phone:
610-660-8000 or 888-643-6735, Fax: 610-660-8080, E-Mail:
mhenzel182@aol.com.
MAGMA DESIGN: Marc S. Henzel Lodges Securities Fraud Suit in CA
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a class action
lawsuit in the United States District Court for the Northern
District of California on behalf of all persons who purchased
the publicly traded securities of Magma Design Automation, Inc.
(Nasdaq: LAVA) between October 23, 2002 and April 12, 2005,
inclusive (the "Class Period"). Also included are all those who
acquired Magma's shares through its acquisitions of Majave,
Random Logic, Aplus Design or Silicon Metrics.
The Complaint alleges that Magma and certain of its officers and
directors violated federal securities laws. Specifically,
defendants failed to disclose that Magma faced the serious risk
of infringing on intellectual property rights of competitor
Synopsys because inventions that were critical to Magma's
business, and which were patented by Magma, were designed by
Magma's chief scientist while employed by Synopsys. Defendants
aggressively denounced the allegations, characterizing them as
completely baseless. While Magma's stock price was artificially
inflated, insiders sold 4,436,163 shares of common stock reaping
gross proceeds of $82,385,174.
On April 13, 2005, the market learned that Magma's Chief
Scientist admitted, in a sworn declaration filed in the Synopsys
infringement action, that inventions covered by two of Magma's
patents were conceived by him while he was employed by Synopsys
and that his supervisor at Magma, and likely others, knew that
the inventions covered by the patents were conceived by him at
Synopsis and were encompassed by an agreement with Synopsis
granting Synopsis the rights to those inventions. On this news,
Magma's stock plummeted 40.7%, from $9.42 per share on April 12,
2005 to $5.58 per share on April 13, 2005.
For more details, contact the Law Offices of Marc S. Henzel, 273
Montgomery Ave., Suite 202, Bala Cynwyd, PA, 19004, Phone:
610-660-8000 or 888-643-6735, Fax: 610-660-8080, E-Mail:
mhenzel182@aol.com.
OCA INC.: Cohen Milstein Lodges Securities Fraud Suit in E.D. LA
----------------------------------------------------------------
The law firm of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. filed
a lawsuit on behalf of its client and on behalf of other
similarly situated purchasers of the securities of OCA, Inc.
(NYSE:OCS) ("OCA" or the "Company") common stock between May 18,
2004 and June 7, 2005, inclusive (the "Class Period"), in the
United States District Court for the Eastern District of
Louisiana.
The Complaint charges OCA and certain of its present officers
and directors with violation of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 (the "Exchange Act"). The
Complaint alleges that defendants omitted or misrepresented
material adverse facts about the Company's financial condition,
business prospects, revenue expectations and internal controls
during the Class Period.
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 OCA stock. Specifically, it
is alleged, that on June 7, 2005, the defendants admitted that
they overstated patient receivables in the 2004 Form 10-Q's
filed for the periods ending March 31, June 30, and September 30
of that year. The Company has not yet disclosed the extent of
the necessary restatement of these periods, but has indicated
that the amount is material and that their statements should not
be relied upon by investors. The Company also disclosed that its
Board of Directors appointed a Special Committee to review
"certain journal entries recorded in the Company's general
ledger, the circumstances in which they originated and their
impact on the Company's financial statements." In addition, the
Special Committee is reviewing "certain alleged changes in data
provided to the Company's independent registered public
accounting firm."
Following this news, and the Company's continued delay in
filling its annual report on Form 10-K, OCA's stock fell almost
40% on June 7, 2005, to close at $2.58 per share on unusually
high trading volume.
For more details, contact Steven J. Toll, Esq. or Robert C.
Smits of Cohen, Milstein, Hausfeld & Toll, P.L.L.C., 1100 New
York Avenue, N.W., West Tower, Suite 500, Washington, D.C.,
20005, Phone: 888-240-0775 or 202-408-4600, E-mail:
stoll@cmht.com or rsmits@cmht.com.
POSSIS MEDICAL: Lerach Coughlin Lodges Securities Lawsuit in MN
---------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP ("Lerach Coughlin") initiated a class action in the United
States District Court for the District of Minnesota on behalf of
purchasers of Possis Medical, Inc. ("Possis") (NASDAQ:POSS)
common stock during the period between September 25, 2002 and
August 24, 2004 (the "Class Period").
The complaint charges Possis and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Possis engages in the development, manufacture and
marketing of medical devices.
The complaint alleges that during the Class Period, defendants
made false and misleading statements regarding the Company's
business and prospects, including about the capabilities and
safety of its primary product, the AngioJet system. As a result
of defendants' false statements, Possis stock traded at inflated
levels during the Class Period, whereby the Company's top
officers and directors arranged for the sale of more than $1.2
million worth of Company shares.
Then, in August 2004, Possis reported its results from its 480
patient, post-marketing study called AiMI. The study used the
Company's AngioJet catheter for removing thrombus prior to
balloon angioplasty and stinting in acute myocardial
infarctions. The primary endpoint of the trial was the final
infarct size at 14-28 days. The results of the trial not only
showed that the primary endpoint was not achieved, but that the
control arm had statistically significant, smaller infarcts than
the AngioJet arm. These revelations sent the Company's shares
into a free-fall. The complaint alleges that Possis had led
investors to believe that the AiMI study would show that there
was a clear benefit from prophylactic use in all "heart attack"
patients and this would convince the medical community that this
should become the standard of care in such cases.
Once this news was released, Possis stock collapsed 40% from
$30.76 to $18.53 per share on volume of 14.8 million shares.
According to the complaint, the true facts, which were concealed
from the investing public during the Class Period, were as
follows:
(1) defendants' claims relating to the utility of the
AngioJet catheter were materially false, as the study
cited as a basis for these claims was, like defendants'
projections, manipulated and/or simply manufactured,
since the study proved what defendants already knew -
there was no statistically significant difference;
(2) defendants' study was manipulated and/or manufactured,
as the August 2004 revelations suggest that the control
group was different at baseline than the AngioJet arm;
(3) the AngioJet system was not more effective than
existing alternatives, nor did the AngioJet system
reduce significant procedural complications or
significantly increase positive benefits such as
improved blood flow or other similar effects; and
(4) the Company's clarifications relating to the benefits
of the AngioJet issued during the Class Period were not
based on fact or scientifically based assumptions, but
rather on defendants' own fabricated "guess work."
For more details, contact William Lerach or Darren Robbins of
Lerach Coughlin, Phone: 800/449-4900 or 619/231-1058, E-mail:
wsl@lerachlaw.com, Web site:
http://www.lerachlaw.com/cases/possis/.
*********
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asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
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*********
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Class Action Reporter is a daily newsletter, co-published by
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Copyright 2004. All rights reserved. ISSN 1525-2272.
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