/raid1/www/Hosts/bankrupt/CAR_Public/051212.mbx
C L A S S A C T I O N R E P O R T E R
Monday, December 12, 2005, Vol. 7, No. 245
Headlines
ADVANCED INTERNET: Leads Click Fraud Case in CA V. Google, Inc.
BEST BUY: Employees Launch Race, Sex Discrimination Suit in CA
CANADA MORTGAGE: Couple Launches Suit in B.C. Over Leaky Condos
CHUCK E. CHEESE'S: Recalls Siren Whistles Due to Choking Hazard
CLICK DEFENSE: Seek Leave to Withdraw From CA Click Fraud Case
CONAGRA FOODS: Recalls Meat Products For Listeria Contamination
DIEBOLD INC.: VelvetRevolution Seeks Plaintiffs For Stock Suit
DIRECT GENERAL: TN Court Mulls Securities Fraud Suit Dismissal
DOBSON COMMUNICATIONS: Asks OK Court To Dismiss Securities Suit
DSW INC.: Agrees To Settle FTC Consumer Information Privacy Suit
GENESIS ENERGY: PQS Indemnification Claim For LA Suits Pending
GOETZ MEATS: Recalls Cured Meat Due To Staphylococcus Infection
IDX SYSTEMS: Reaches Agreement in Suit Over Proposed GE Merger
ISRAEL: Ex-GSS Director Faces Suit in NY Over 2002 Gaza Bombing
J & F DESIGN: Recalls 18,800 Pajama Sets Because of Burn Hazard
LOUISIANA: Judge Hears Evacuees' Complaints in Lawsuit V. FEMA
MEDTRONIC INC.: Judicial Panel Orders Consolidation of MN Cases
RADIO ONE: Final Fairness Hearing Set April 24,2006 in S.D. NY
RCN CORPORATION: Consolidated ERISA Lawsuit Pending in NJ Court
SPRINT NEXTEL: Discovery Proceeds in Securities Fraud Suit in KS
SPRINT NEXTEL: Shareholders Launch Securities Fraud Suit in KS
STARTEK INC.: Faces Consolidated Securities Fraud Lawsuit in CO
TRUSTREET PROPERTIES: TX Court Mulls Fraud Suit Dismissal Appeal
UNITED KINGDOM: House of Lords Rejects Blood-Clot Case Appeal
VALERO ENERGY: Named As Defendant in MTBE Contamination Lawsuits
VALERO ENERGY: Trial in IL Injury, Damages Litigation Begins
WEBMETHODS INC.: NY Settlement Fairness Hearing Set April 2006
New Securities Fraud Cases
BARRIER THERAPEUTICS: Rosen Law Firm Sets Lead Plaintiff Cut-Off
EVCI CAREER: Paskowitz & Associates Lodges Securities Suit in NY
EVCI CAREER: Schatz & Nobel Lodges Securities Fraud Suit in NY
FARO TECHNOLOGIES: Schatz & Nobel Lodges Securities Suit in FL
FARO TECHNOLOGIES: Scott + Scott Lodges Securities Suit in FL
GREAT WOLF: Scott + Scott Lodges New Securities Fraud Suit in WI
PIXAR ANIMATION: Scott + Scott Files Securities Fraud Suit in CA
REFCO INC.: Scott + Scott Expands Class Period in NY Fraud Suit
WELLS FARGO: Stull Stull Lodges Securities Fraud Suit in N.D. CA
*********
ADVANCED INTERNET: Leads Click Fraud Case in CA V. Google, Inc.
---------------------------------------------------------------
Advanced Internet Technologies (AIT), a two-time INC 500
Company, moved the United States District Court for the Northern
District of California to substitute in the Company as the
representative plaintiff in a lawsuit against Google, Inc. that
accuses the search engine giant of breach of contract and unfair
business practices.
The claims of AIT, a ten-year-old web hosting company and ICANN
accredited Domain Registrar based in North Carolina, center on
the issue of click fraud and Google's refusal to take steps
against it even though the company is well aware of the
practice. AIT has advertised with Google for years. The law
firms of Kabateck Brown Kellner LLP, Chitwood Harley Harnes LLP
and Law Offices of Shawn Khorrami are representing AIT in the
action.
In December 2004, Google's Chief Financial Officer told an
investors' conference about the threat posed by click fraud. The
lawsuit, which seeks class action status, questions the
seriousness of Google's efforts to combat the click fraud
threat. "Google is able to block spamming efforts from its own
Google Gmail service and should do the same to protect its pay-
per-click advertising clients. However, Google chooses to do
nothing because substantive action would both invalidate the
current paid search model and because a lot of people are making
a lot of money from this," said Clarence Briggs, AIT's Chief
Executive Officer. AIT says it has lost hundreds of thousands of
dollars to fraudulent clicks even though Google has the
capability to detect fraud. "We have been watching this and
documenting it for some time, not only for ourselves but for our
customers from our network and several other networks," said
Briggs, "and we have the technical expertise to prove without a
doubt that it is happening and that Google could do something
about it if they wanted to.
"This is a business model that pays lip service to concern about
fraud but, in fact, stands to lose money if the fraud is
vigorously pursued," said Mr. Briggs. Google's technology tracks
clicks for the purpose of charging fees; that same technology
could be used as a fraud screen. "You get a phone bill with the
numbers for which you were charged," said Briggs, "but Google
does not and will not provide you with records showing you the
clicks for which you were charged or where they originated."
Google has demonstrated some ability to track clicks based on
having made restitution to some companies for fraudulent clicks,
yet restitution appears to be exceedingly rare and Google
refused to make restitution to AIT even after AIT provided
Google with well-documented evidence of click fraud. With the Ad
Sense program, particularly, Google should be able to detect
fraud since it controls the entire network, from taking in money
to paying out commissions. "Many of the fraudulent clicks come
from overseas proxy servers; these RBL servers are widely known
as origins of fraud and spam and Google should block them like
any other responsible ISP does," said Mr. Briggs.
Nearly all of Google's revenue comes from PPC advertising; a
thorough cleansing of fraud would have a huge impact on that
revenue and would erode confidence in the entire PPC system.
Because multiple fraudulent clicks increase Google's revenue,
Google has an apparent conflict of interest when it purports to
police click fraud. Indeed, because such a large percentage of
clicks on PPC advertising may be fraudulent, a vigorous anti-
click fraud program might threaten Google's entire business
model.
It was activity that originated from overseas that really
grabbed AIT's attention. "Our campaign was for North America
only; so, how can someone tell me that clicks from Russia,
China, and Vietnam are legitimate?" asks Mr. Briggs. "When
multiple clicks from the same IP block hit our site in rapid
succession but none of those visitors stay, how is that
legitimate? And, how serious can you expect Google to be about
policing fraud since PPC advertising accounts for nearly all of
the company's revenue?"
"The real threat here is to the concept of paid search and
ultimately to the entire Internet," said Mr. Briggs. "If people
lose confidence in the commercial viability of the Internet it
threatens the very idea of an emerging global, digital economy.
Sooner or later, if something isn't done, the second Internet
bubble will burst."
The suit is styled, "Click Defense, Inc. v. Google, Inc., Case
No. 5:05-cv-02579-RMW," filed in the United States District
Court for the Northern District of California, under Judge
Ronald M. Whyte with referral to Judge Patricia V. Trumbull.
Representing the Plaintiff/s are, Richard L. Kellner and Frank
E. Marchetti of Kabateck Brown Kellner LLP, 350 S. Grand Ave.,
39th Floor, Los Angeles, CA 90071, Phone: 213-217-5000, Fax:
213-217-5010, E-mail: rlk@kbklawyers.com. Representing the
Defendant is Daralyn J. Durie of Keker & Van Nest, LLP, 710
Sansome St., San Francisco, CA 94111, Phone: 415-391-5400, Fax:
415-397-7188, E-mail: djd@kvn.com.
For more details, contact Darren Kaplan of Chitwood Harly
Harnes, LLP, Phone: 516-773-6090 x203.
BEST BUY: Employees Launch Race, Sex Discrimination Suit in CA
--------------------------------------------------------------
In the midst of its heaviest sales season of the year, Best Buy,
a multi-billion dollar national electronics chain, is being
charged with violating federal and state laws against race and
sex discrimination in employment.
Claiming that women and minorities, specifically African
Americans and Latinos, are paid less than white males, denied
promotions, and assigned to less desirable positions, current
and former employees of Best Buy filed a federal class action
civil rights lawsuit, Holloway et al. v. Best Buy Co., Inc., in
U. S. District Court in San Francisco. The law firms of Lieff
Cabraser Heimann & Bernstein, LLP and Schneider & Wallace are
representing the plaintiffs.
"Best Buy is touting its modern, high-tech products for
customers this holiday season. The company's views of women and
minority employees, however, remain outdated and obsolete," said
attorney Bill Lann Lee of Lieff Cabraser. Lee is the former
Assistant Attorney General for Civil Rights in the U.S.
Department of Justice.
"This company operates through a corporate culture of racial and
gender stereotypes," stated Todd Schneider of Schneider &
Wallace. "Best Buy enforces a nationwide policy that results in
the preference of white male employees in hiring and for
desirable job assignments. The low number of women and
minorities employed by Best Buy sets it apart from other large
retailers."
As an example of the corporate culture of stereotyping, the
lawsuit describes how Best Buy's policy of "segmentation"
requires managers and salespeople to target one of four
composite customer types, all white, and only one female. These
are: "Barry," a male with a six-figure income who purchases what
he wants regardless of cost; "Ray," a male who likes electronic
gadgets but may not always be able to afford what he wants; or
"Buzz," a young male interested in gaming and playstations who
makes small purchases. The only female customer to whom Best Buy
markets confirms gender stereotypes: "Jill" is "Barry's" wife --
a stay-at-home soccer mom.
Vallejo resident Jasmen Holloway, 22, worked at the Marin City
Best Buy from January 2001 until August 2005. "After I had
worked there for more than four years, I was interviewed for a
promotion and requested a pay increase. The promotion was given
to a white man with less experience than me. I was refused the
raise because they said that I had reached the maximum salary
cap for my position -- but I later learned that less
experienced, white male employees with fewer qualifications were
paid more than I was."
"I was angry at the way that I and other minorities in the store
were treated," added Ms. Holloway, who is African American.
"When I complained to the human resources department, they did
nothing -- so I filed a complaint with the Equal Employment
Opportunity Commission."
Cheryl Chappel, 40, currently an Administrative Senior at the
Mira Mesa Best Buy, was passed over for promotion in favor of a
part-time male employee, despite Ms. Chappel's excellent
performance reviews and more extensive experience. Best Buy
managers told her she was not promoted to operations supervisor
because it was "a man thing," and that there were few women on
the sales floor because "girls can't sell."
Ms. Chappel, who has also worked at the Best Buy in Chico, was
consistently paid less than male employees in comparable
positions at both sites. When she realized this was a pattern
for women employees, she filed a charge against Best Buy with
the Equal Employment Opportunity Commission (EEOC).
Additional plaintiffs include another woman from the Chico store
and three African American male employees from the Marin City
store who were paid less, denied promotions, assigned fewer
scheduled hours and received unequal job assignments and unequal
training opportunities than white males. The men were refused
sales jobs, even though they had prior experience in cell phone
and electronics sales. One African American employee was awarded
store MVP, yet nevertheless received lower pay than white
employees in comparable jobs.
The lawsuit charges that Best Buy recruits, hires and maintains
a disproportionately white and male sales force from which it
then promotes a disproportionately white male management force.
Nationwide, more than 80% of store managers, the top job in a
store, are white men, less than 10% are women, and less than 10%
are African-American or Latino. "Qualified women and minority
applicants are turned away," charged Lee, "and even when the
company does hire them, it generally does not permit them to
work on the sales floor -- the pathway to promotion. Rather they
are segregated to the stock room, cashier stations, and minor
sales positions."
"Our plaintiffs' experiences are not isolated examples of
employment practices or individual decisions," added Mr.
Schneider. "On the contrary, they are representative of Best
Buy's systematic discrimination against women, African Americans
and Latinos."
The lawsuit charges that Best Buy is violating federal and state
civil rights laws prohibiting employment discrimination based on
race or gender. The suit is seeking an injunction against Best
Buy's discriminatory practices and the institution of company
programs to ensure equal employment opportunities for women and
people of color. In addition, the suit is seeking back pay for
all plaintiffs.
Best Buy Company, Inc., a Minnesota-based corporation
specializing in consumer electronics, operates 679 retail stores
throughout the United States and has approximately 107,000
employees. Over 10% of its stores are in California. Its revenue
in 2005 totaled $27.4 billion.
For more details, contact Stephen Cassidy or Monica Barsetti of
Lieff Cabraser, Phone: 415-956-1000 or 800-362-0481, Web site:
http://www.bbdiscrimination.com.
The suit is styled, "Holloway et al v. Best Buy Co., Inc., case
No. 3:05-cv-05056-MEJ," filed in the United States District
Court for the Northern District of California, under Judge
Maria-Elena James. Representing the Plaintiff/s are, Joshua
Konecky, Clint J. Brayton, Todd M. Schneider and W.H. Hank
Willson, IV of Schneider & Wallace, 180 Montgomery St., Suite
2000, San Francisco, CA 94104, Phone: (415) 421-7100, Fax:
(415) 421-7105, E-mail: jkonecky@schneiderwallace.com,
cbrayton@schneiderwallace.com, tschneider@schneiderwallace.com
and wwillson@schneiderwallace.com; and Eve H. Cervantez, James
M. Finberg, Bill Lann Lee, Daniel M. Hutchinson and Gena E.
Wiltsek of Lieff,Cabraser,Heimann & Bernstein, LLP, Embarcadero
Center West, 275 Battery St., 30th Floor, San Francisco, CA
94111, Phone: 415/956-1000, Fax: 415-956-1008, E-mail:
ecervantez@lchb.com, JFinberg@lchb.com and blee@lchb.com.
CANADA MORTGAGE: Couple Launches Suit in B.C. Over Leaky Condos
---------------------------------------------------------------
A newly elected Surrey councilor and her husband are the
representative plaintiffs in a class action lawsuit filed
against the Canada Mortgage and Housing Corporation on behalf of
all British Columbia leaky condo owners, The Richmond Review
reports.
Linda Hepner, who was sworn in recently as a member of Surrey
city council and until last week was the city's manager of
economic development, along with her husband Alan McMillan, an
Emily Carr Institute student registrar, purchased their White
Rock condo on Thrift Avenue when it was brand new in 1996. But,
it wasn't long after that the couple was saddled with a $60,000
repair bill because of water leaks that led to rotting walls.
"It meant my husband is still working," Mrs. Hepner told The
Richmond Review, noting that her 60-year-old husband could have
taken early retirement but needed to stay at work to pay for the
repairs. She adds, "Unless you're independently wealthy, that
kind of a hit is significant in anybody's life."
As the representative plaintiffs, the couple's story is typical
of the many condominium owners who since the early 1990s
purchased a home that eventually required extensive repairs due
to moisture damage and mould. In Mrs. Hepner's case, although
there were only eight units in the self-managed three-story wood
frame building, it was not easy to build consensus on what
course of action to take to repair their building after leaks
began to appear.
After an engineering firm was brought in to inspect their
building, the repair estimate exceeded $500,000, a figure that
left Mrs. Hepner "choked." She said, "No more or less so than
I'm sure hundreds and hundreds of others were."
Mrs. Hepner and her neighbors have never seen a penny of
compensation from the developer and builder of the complex. The
ordeal of fixing their building was so exhausting, Mrs. Hepner
explained, that seeking legal remedies simply wasn't an option
they actively pursued before. Mrs. Hepner read about Vancouver
law firm Singleton Urquhart's plans to pursue a class action
lawsuit and the couple made the decision to step forward.
The lawsuit seeks compensation from the federal government, and
specifically the CMHC, for the "thousands of homeowners in
British Columbia who have been plagued by the punitive cost of
repairing structural damage to their homes caused by water
ingress and subsequent rotting of the home's structure."
Asked what she would like to see done for leaky condo owners,
Mrs. Hepner told The Richmond Review, "I think that we know what
caused the problem. I think that if there are
individuals...within the government that knew this was going to
be an issue and did nothing to either...advise the public
generally as they should have...or deliberately withheld it,
then they need to be held accountable."
If the lawsuit is certified by the court, following a hearing
which could begin in late spring or early fall of 2006, other
leaky condo owners will be invited to join the lawsuit. A
previous attempt though to obtain certification of a leaky condo
class action lawsuit failed.
CHUCK E. CHEESE'S: Recalls Siren Whistles Due to Choking Hazard
---------------------------------------------------------------
In cooperation with the U.S. Consumer Product Safety Commission
(CPSC), Chuck E. Cheese's (CEC Entertainment) of Irving, Texas
is voluntarily recalling about 144,000 units of Bobby JackT
pajama Plastic Siren Whistles.
According to the Company, the recalled plastic siren whistle's
internal pieces can detach from the toy, posing a choking hazard
to children. Chuck E. Cheese's has received four reports of
children starting to choke and three reports of children
swallowing pieces of the plastic siren whistle.
The recalled plastic siren whistle is a red, green or purple
tube with small plastic pieces inside. The whistle is about 2-
inches long and 3/4- inch wide. The toy whistles were
distributed as prizes at Chuck E. Cheese's by redeeming 15
tickets earned by playing games.
Manufactured in China, the products were sold at Chuck E.
Cheese's nationwide from July 2005 through August 2005.
Remedy: Consumers should immediately take the recalled plastic
siren whistle away from children and discard it. Free
replacement whistles can be obtained by visiting any Chuck E.
Cheese's or contacting the company. Consumer Contact: For
additional information, contact CEC Entertainment Inc. at
(888) 778-7193 from 8 a.m. to 5 p.m. CT Monday through Friday,
or visit the firm's Web site: http://www.chuckecheese.com.
CLICK DEFENSE: Seek Leave to Withdraw From CA Click Fraud Case
--------------------------------------------------------------
Click Defense, Inc. states that it is asking permission to
withdraw as a representative plaintiff in the class action it
filed against Google, Inc. in the Northern District of
California.
Click Defense, Inc. is a provider of cutting edge click fraud
technology that enables customers to track, report on and
optimize their online advertising campaigns. Their software also
proactively monitors their campaigns to detect Click Fraud. "
We are only withdrawing as a representative plaintiff," said
Scott Boyenger, Click Defense's Chief Executive Officer, "in
order to concentrate our efforts in helping our clients develop
their claims of click fraud. We remain a member of the class and
our click fraud claims against Google will still be litigated
when and if the class is certified."
Click Defense, filed the lawsuit seeking class action status in
U.S. District Court in San Jose, California against Google,
Inc., accusing the Web search giant of failing to protect users
of its advertising program from "click fraud," costing them
approximately $5 million, an earlier Class Action Reporter story
(July 1, 2005) reports.
Click Defense's claims against Google center on the issue of
click fraud, and its complaint alleged that Google refused to
take steps against it even though the company was well aware of
the practice. Click Defense had brought the action on behalf of
Google customers who were the victims of click fraud. In light
of a pending motion by another potential plaintiff to join in
the action and act as representative plaintiff, Click Defense
will withdraw as a representative plaintiff.
A hearing on the motion for class certification in the Google
click fraud case has been scheduled for May of 2006.
The suit is styled, "Click Defense, Inc. v. Google, Inc., Case
No. 5:05-cv-02579-RMW," filed in the United States District
Court for the Northern District of California, under Judge
Ronald M. Whyte with referral to Judge Patricia V. Trumbull.
Representing the Plaintiff/s are, Richard L. Kellner and Frank
E. Marchetti of Kabateck Brown Kellner LLP, 350 S. Grand Ave.,
39th Floor, Los Angeles, CA 90071, Phone: 213-217-5000, Fax:
213-217-5010, E-mail: rlk@kbklawyers.com. Representing the
Defendant is Daralyn J. Durie of Keker & Van Nest, LLP, 710
Sansome St., San Francisco, CA 94111, Phone: 415-391-5400, Fax:
415-397-7188, E-mail: djd@kvn.com.
For more details, contact Darren T. Kaplan, counsel for Click
Defense, Inc., Phone: (404) 873-3900, E-mail:
dkaplan@chitwoodlaw.com.
CONAGRA FOODS: Recalls Meat Products For Listeria Contamination
---------------------------------------------------------------
ConAgra Foods, a Marshall, Mo., firm, is voluntarily recalling
approximately 9,550 pounds of various bologna, ham and turkey
lunch meal products that may be contaminated with Listeria
monocytogenes, the U.S. Department of Agriculture's Food Safety
and Inspection Service announced in a statement.
The products subject to recall are:
(1) 2.6-ounce packages of "ARMOUR, Lunch Makersr, CRACKER
CRUNCHERS, Cooked Ham, Contains a Nestler Crunchr Bar."
Each package bears the establishment number "Est. 1059"
inside the USDA seal of inspection and a sell by date,
"FEB 06, 2006," "FEB 09, 2006," "FEB 10, 2006" or "FEB
11, 2005." The package also bears the product code
"4660003427."
(2) 2.6-ounce packages of "ARMOUR, Lunch Makersr, CRACKER
CRUNCHERS, Turkey, Contains a Nestler Butterfingerr
Bar." Each package bears the establishment number "P-9"
inside the USDA seal of inspection and a sell by date,
"FEB 06, 2006" or "FEB 10, 2006." The package also
bears the product code "4660003428."
(3) 2.6-ounce and 8-fluid ounce packages of "ARMOUR, Lunch
Makersr Bologna Fun Kit, CRACKER CRUNCHERS, Bologna."
The package also contains a Nestler Crunchr Bar and
Hawaiian Punchr fruit drink. Each package bears the
establishment number "P-9" inside the USDA seal of
inspection and the sell by date, "FEB 11, 2006." The
package also bears the product code "4660002263."
(4) 2.6-ounce and 8-fluid ounce packages of "ARMOUR, Lunch
Makersr Ham Fun Kit, CRACKER CRUNCHERS, Cooked Ham."
The package also contains a Nestler Butterfingerr Bar
and Hawaiian Punchr fruit drink. Each package bears the
establishment number "Est. 1059" inside the USDA seal
of inspection and a sell by date, "FEB 10, 2006" or
"FEB 11, 2006." The package also bears the product code
"4660002262."
(5) 2.6-ounce and 8-fluid ounce packages of "ARMOUR, Lunch
Makersr Turkey Fun Kit, CRACKER CRUNCHERS, Turkey." The
package also contains a Nestler Crunchr Bar and
Hawaiian Punchr fruit drink. Each package bears the
establishment number "P-9" inside the USDA seal of
inspection and the sell by date, "FEB 10, 2006." The
package also bears the product code "4660002261."
The bologna, ham and turkey products were produced on various
dates between November 18 and 23 and were distributed to retail
establishments nationwide.
The problem was discovered through the establishment's
microbiological testing. FSIS has received no reports of
illnesses associated with consumption of the products.
Consumption of food contaminated with Listeria monocytogenes can
cause listeriosis, an uncommon but potentially fatal disease.
Healthy people rarely contract listeriosis. However, listeriosis
can cause high fever, severe headache, neck stiffness and
nausea. Listeriosis can also cause miscarriages and stillbirths,
as well as serious and sometimes fatal infections in those with
weakened immune systems, such as infants, the elderly and
persons with HIV infection or undergoing chemotherapy.
Media with questions about the recall should contact company
Public Affairs Director, Tania Graves at (402) 595-6258.
Consumers with questions about the recall should call the Lunch
Makers consumer information line at (800) 414-7500.
Consumers with food safety questions can call the toll-free USDA
Meat and Poultry Hotline at (888) 674-6854. The hotline is
available in English and Spanish and can be reached from l0 a.m.
to 4 p.m. (Eastern Time) Monday through Friday. Recorded food
safety messages are available 24 hours
a day.
DIEBOLD INC.: VelvetRevolution Seeks Plaintiffs For Stock Suit
--------------------------------------------------------------
VelvetRevolution.us, a coalition of more than 130 progressive
organizations demanding electoral reform, is seeking plaintiffs
for a potential class action securities litigation against
Diebold, Inc. (stock symbol: DBD).
The class for the suit will involve shareholders who purchased
or owned stock in the Ohio-based company any time between Oct.
22, 2003 and September 21, 2005. The lawsuit will involve
securities fraud violations and other troubling matters by the
controversial company, its CEO, and other current and former
members of its Board of Directors. VelvetRevolution is seeking
additional individuals and groups who may qualify as plaintiffs
in the specified class.
Those who owned or purchased Diebold stock, or mutual funds
which held Diebold stock during the period mentioned, are asked
to contact for possible addition to the plaintiff class.
Union groups who own or owned shares of Diebold or mutual funds
which invest in the company are specifically urged to contact VR
about joining the class action.
For more details, contact VelvetRevolution, E-mail:
LawSuit@VelvetRevolution.us or visit,
http://www.bradblog.com/archives/00002126.htm.
DIRECT GENERAL: TN Court Mulls Securities Fraud Suit Dismissal
--------------------------------------------------------------
The United States District Court for the Middle District of
Tennessee has yet to rule on Direct General Corporation's motion
to dismiss the consolidated securities class actions filed
against it and certain of its officers and directors.
Four putative class action lawsuits were initially filed between
January 31, 2005 and February 8, 2005. In each of these
lawsuits, the plaintiffs allege that the Company and certain of
its officers and directors made false and misleading statements
with respect to liabilities that had been recorded for unpaid
losses and loss adjustment expenses. Plaintiffs allege that the
Company's reported results did not fairly and adequately
represent its financial position, that certain legislation in
Florida which became effective in October 2003 negatively
impacted the Company's business and increased its liability and
risk of litigation and that the Company failed to adequately
strengthen its loss reserves to account for this increased risk.
The lawsuits further allege that certain officers and directors
sold shares of Company stock while they knew of the negative
impact of the change but before it was publicly released. The
plaintiffs in the case seek to recover damages on behalf of all
purchasers of Company stock during a class period to be
determined and attorneys' fees on behalf of themselves and
others similarly situated.
These cases have been consolidated and Lead Plaintiffs have been
appointed. Lead Plaintiffs allege that the Company and certain
of its officers and directors made false and misleading
statements with respect to liabilities that had been recorded
for unpaid losses and loss adjustment expenses. Lead Plaintiffs
assert claims under the Securities Exchange Act of 1934 and the
Securities Act of 1933.
Lead Plaintiffs generally contend that the Company and certain
of its officers and directors knew that certain legislation in
Florida, which became effective in October 2003, would
necessarily negatively impact its business by increasing its
liability and risk of litigation and that the Company failed to
timely strengthen its loss reserves to account for this alleged
known increased future risk. Lead Plaintiffs further assert that
certain officers and directors sold shares of Company stock
while they were aware of the allegedly known future negative
impact of the legislation, but before the reserves were
strengthened. Lead Plaintiffs seek to recover damages on behalf
of all purchasers of Company stock during a class period to be
determined and attorneys' fees.
The suit is styled "In Re: Direct General Corporation Securities
Litigation case no. 3:05-cv-00077," filed in the United States
District Court for the Middle District of Tennessee, under Judge
Todd J. Campbell. Representing the plaintiffs are:
(1) Ramzi Abadou, X. Jay Alvarez, Brian O. O'mara, Darren
J. Robbins of Lerach, Coughlin, Stoia, Geller, Rudman &
Robbins, LLP, 401 B Street, Suite 1600, San Diego, CA
92101, Phone: (619) 231-1058, E-mail:
ramzia@lerachlaw.com, jaya@lerachlaw.com,
briano@lerachlaw.com;
(2) Gordon Ball of Ball & Scott, Bank of America Center,
550 Main Avenue, Suite 750, Knoxville, TN 37902, Phone:
(865) 525-7028; and
(3) Karen Hanson Riebel, Lockridge Grindal Nauen P.L.L.P.,
100 Washington Avenue South, Suite 2200, Minneapolis,
MN 55401, Phone: (612) 339-6900
Representing the Company are Peter Q. Bassett and Scott P.
Hilsen of Alston & Bird, One Atlantic Center, 1201 W Peachtree
Street, Atlanta, GA 30309-3424, Phone: (404) 881-7000, E-mail:
pbassett@alston.com or shilsen@alston.com.
DOBSON COMMUNICATIONS: Asks OK Court To Dismiss Securities Suit
---------------------------------------------------------------
Dobson Communications Corporation asked the United States
District Court for the Western District of Oklahoma to dismiss
the consolidated securities class action filed against it and
certain of its officers and directors.
Several suits were initially filed, alleging violations of the
federal securities laws and seek unspecified damages,
purportedly on behalf of a class of purchasers of the Company's
publicly traded securities in the period between May 19, 2003
and August 9, 2004. In particular, the lawsuits allege that the
Company concealed significant decreases in revenues and failed
to disclose certain facts about our business, including:
(1) that the Company's rate of growth in roaming minutes
was substantially declining, and that it had
experienced negative growth in October 2003;
(2) that AT&T Wireless, its largest roaming customer, had
notified the Company that it wanted to dispose of its
equity interest in the Company that it had held since
its initial public offering, significantly decreasing
their interest in purchasing roaming capacity from the
Company;
(3) that Bank of America intended to dispose of its
substantial equity interest in the Company as soon as
AT&T Wireless disposed of its equity interest in the
Company;
(4) that the Company had been missing sales quotas and
losing market share throughout the relevant period; and
(5) that the Company lacked the internal controls required
to report meaningful financial results.
The suit were later consolidated in the United States District
Court for the Western District of Oklahoma. The court has
consolidated these actions into No. CIV-04-1394-C and the
consolidated action is pending. On July 5, 2005, motions to
dismiss the consolidated complaint were filed on behalf of all
defendants. Plaintiffs filed their response to the motions to
dismiss on September 6, 2005. Reply briefs were filed by the
defendants on October 3, 2005.
The first identified complaint in the litigation is styled
"Anthony Viscuso, et al. v. Dobson Communications, Inc., et al."
The plaintiff firms in this litigation are:
(i) Charles J. Piven World Trade Center-Baltimore,401 East
Pratt Suite 2525, Baltimore, MD, 21202 Phone:
410.332.0030, E-mail: pivenlaw@erols.com;
(ii) Federman & Sherwood 120 North Robinson, Suite 2720,
Oklahoma City, OK, 73102, Phone: 405-235-1560, E-mail:
wfederman@aol.com;
(iii) Law Offices of Brian M. Felgoise, P.C. Esquire at 261
Old York Road, Suite 423, Jenkintown, PA, 19046, Phone:
215.886.1900, E-mail: securitiesfraud@comcast.net;
(iv) Murray, Frank & Sailer LLP 275 Madison Ave 34th Flr,
New York, NY, 10016 Phone: 212.682.1818, Fax:
212.682.1892, E-mail: email@rabinlaw.com
(v) Murray, Frank & Sailer LLP 275 Madison Ave 34th Flr,
New York, NY, 10016 Phone: 212.682.1818, Fax:
212.682.1892, E-mail: email@rabinlaw.com
(vi) Schatz & Nobel, P.C. 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com
(vii) Schiffrin & Barroway, LLP 3 Bala Plaza E, Bala Cynwyd,
PA, 19004 Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
DSW INC.: Agrees To Settle FTC Consumer Information Privacy Suit
----------------------------------------------------------------
Shoe discounter DSW Inc. has agreed to settle Federal Trade
Commission charges that its failure to take reasonable security
measures to protect sensitive customer data was an unfair
practice that violated federal law. According to the FTC, DSW's
data-security failure allowed hackers to gain access to the
sensitive credit card, debit card, and checking account
information of more than 1.4 million customers. The settlement
will require DSW to implement a comprehensive information-
security program and obtain audits by an independent third-party
security professional every other year for 20 years.
Columbus, Ohio-based DSW operates approximately 190 stores in 32
states. In 2004, DSW generated $961 million in net sales and
sold approximately 23.7 million pairs of shoes.
According to the FTC's complaint, DSW uses computer networks to
obtain authorization for credit card, debit card, and check
purchases at its stores and to track inventory. For credit and
debit card purchases, DSW collects information, such as name,
card number, and expiration date, from the magnetic stripe on
the back of the cards. This magnetic stripe information is
particularly sensitive because it contains a security code that
can be used to create counterfeit cards that appear genuine in
the authorization process. For check purchases, DSW collects
information such as routing number, account number, check
number, and the consumer's driver's license number and state. In
each case, the information was wirelessly transmitted to a
computer network located in the store, and from there was sent
to the appropriate bank or check processor.
The FTC charges that until at least March 2005, DSW engaged in a
number of practices that, taken together, failed to provide
reasonable and appropriate security for sensitive customer
information. Specifically, the agency alleges that DSW:
(1) created unnecessary risks to sensitive information by
storing it in multiple files when it no longer had a
business need to keep the information;
(2) failed to use readily available security measures to
limit access to its computer networks through wireless
access points on the networks;
(3) stored the information in unencrypted files that could
be easily accessed using a commonly known user ID and
password;
(4) failed to limit sufficiently the ability of computers
on one in-store network to connect to computers on
other in-store and corporate networks; and
(5) failed to employ sufficient measures to detect
unauthorized access.
The FTC charges that a total of approximately 1.4 million credit
and debit cards and 96,000 checking accounts were compromised,
and that there have been fraudulent charges on some of these
accounts. Further, some customers whose checking account
information was compromised have incurred out-of-pocket expenses
in connection with closing their accounts and ordering new
checks. Some checking account customers have contacted DSW to
request reimbursement for their expenses, and DSW has provided
some amount of reimbursement to these customers. According to
DSW's SEC filings, as of July 2005, the company's exposure for
losses related to the breach ranges from $6.5 million to $9.5
million.
The FTC alleges that DSW's failure to secure customers'
sensitive information was an unfair practice because it caused
substantial injury that was not reasonably avoidable by
consumers and not outweighed by offsetting benefits to consumers
or competition. The settlement requires DSW to establish and
maintain a comprehensive information security program that
includes administrative, technical, and physical safeguards. The
settlement also requires DSW to obtain, every two years for the
next 20 years, an audit from a qualified, independent, third-
party professional to assure that its security program meets the
standards of the order. DSW also will be subject to standard
record keeping and reporting provisions to allow the FTC to
monitor compliance.
This is the FTC's seventh case challenging faulty data security
practices by retailers and others.
The Commission vote to accept the proposed consent agreement was
4-0. The FTC will publish an announcement regarding the
agreement in the Federal Register shortly. The agreement will be
subject to public comment for 30 days, beginning today and
continuing through January 2, 2006, after which the Commission
will decide whether to make it final. Comments should be
addressed to the FTC, Office of the Secretary, Room H-135, 600
Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC is
requesting that any comment filed in paper form near the end of
the public comment period be sent by courier or overnight
service, if possible, because U.S. postal mail in the Washington
area and at the Commission is subject to delay due to heightened
security precautions.
Copies of the complaint and consent order 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 and Jessica Rich, Bureau of Consumer Protection by
Phone: 202-326-3224 or visit the Website:
http://www.ftc.gov/opa/2005/12/dsw.htm.
GENESIS ENERGY: PQS Indemnification Claim For LA Suits Pending
--------------------------------------------------------------
Genesis Energy LP continues to face an indemnification claim
filed by Pennzoil-Quaker State Company (PQS), in relation to the
five consolidated class actions/mass tort actions filed against
PQS, in relation to a fire and explosion that occurred at the
Pennzoil Quaker State refinery in Shreveport, Louisiana, on
January 18, 2000.
The five suits were brought by neighbors living in the vicinity
of the PQS Shreveport, Louisiana refinery in the First Judicial
District Court, Caddo Parish, Louisiana, Cause Nos. 455,647-A,
455,658-B, 455,655-A, 456,574-A, and 458,379-C. PQS has brought
a third party demand against the Company and others for
indemnity with respect to the fire and explosion of January 18,
2000.
The Company was also named a defendant in a complaint filed on
January 11, 2001, in the 125th District Court of Harris County,
Texas, Cause No. 2001-01176. From the Company, Pennzoil-Quaker
State Company (PQS) was seeking property damages, loss of use
and business interruption suffered as a result of a fire and
explosion that occurred at the PQS claimed the fire and
explosion were caused, in part, by the Company selling to PQS
crude oil that was contaminated with organic chlorides. In
December 2003, the Company's insurance carriers settled this
litigation for $12.8 million.
GOETZ MEATS: Recalls Cured Meat Due To Staphylococcus Infection
---------------------------------------------------------------
Goetz Western Meats, an Everett, Wash., establishment, is
voluntarily recalling approximately 340 pounds of boneless honey
cured hams and smoked beef strips that may contain
Staphylococcus aureus enterotoxin, the U.S. Department of
Agriculture's Food Safety and Inspection Service announced
today.
The following products are subject to recall:
(1) Various sized vacuum-packed packages of "GOETZ, FULLY
COOKED, HONEY CURE HAM, WITH NATURAL JUICES." Each
package bears the code "10-26-05" and the establishment
number "EST. 6245" inside the USDA seal of inspection.
(2) Various sized vacuum-packed packages of "GOETZ, WESTERN
MEAT, GOETZ, SMOKED BEEF STRIPS." Each package bears
the code "10-28-05" and the establishment number "EST.
6245" inside the USDA seal of inspection.
The hams and beef strips were produced on Oct. 26 and Oct. 28,
2005. The products were shipped to retail establishments and
institutions in the Everett, Washington, area.
The problem was discovered by FSIS. Common symptoms of ingesting
products with Staphylococcus aureus enterotoxin include nausea,
vomiting, diarrhea and abdominal cramping. Consumers and media
with questions about the recall should contact company owner Jim
Horton at (425) 252-1151.
Consumers with food safety questions can call the toll-free USDA
Meat and Poultry Hotline at (888) 674-6854. The hotline is
available in English and Spanish and can be reached from l0 a.m.
to 4 p.m. (Eastern Time) Monday through Friday. Recorded food
safety messages are available 24 hours a day.
IDX SYSTEMS: Reaches Agreement in Suit Over Proposed GE Merger
--------------------------------------------------------------
IDX Systems Corporation (Nasdaq: IDXC) reports that it reached
an agreement in principle to settle the purported shareholder
class actions brought in connection with the Company's proposed
acquisition by General Electric Company ("GE") pursuant to a
merger agreement entered into by the Company, GE and Igloo
Acquisition Corporation, dated as of September 28, 2005.
Pursuant to the settlement, which is still subject to Court
approval, the Company agreed to make certain additional
disclosures and today filed a Current Report on Form 8-K
providing certain information beyond that provided in its Proxy
Statement, dated November 14, 2005, which was first mailed to
shareholders on or about November 16, 2005 (the "Proxy
Statement"). Upon receiving final Court approval, the litigation
will be dismissed and all claims against all defendants will be
resolved.
The complaint was filed on October 24, 2005 in Vermont Superior
Court, Chittenden County, and challenges the price of and the
process leading to IDX's previously announced merger agreement
with General Electric Company and a GE subsidiary, an earlier
Class Action Reporter story (November 3, 2005) reports.
For more details, contact Margo C. Happer, Vice President,
Investor Relations and Corporate Communications, Phone:
802-859-6169.
ISRAEL: Ex-GSS Director Faces Suit in NY Over 2002 Gaza Bombing
---------------------------------------------------------------
The Center for Constitutional Rights initiated a lawsuit in New
York against the former director of Israel's General Security
Service, alleging that he is responsible for a July 2002 bombing
that killed 15 people, including several children, in an
apartment building in Gaza City, The Associated Press reports.
The lawsuit, unsealed in U.S. District Court in Manhattan, seeks
class action status for survivors of the bombing in the al-Daraj
neighborhood and representatives or family members of those who
were killed. It sole defendant is former GSS director Avraham
Dichter.
Brought by the Center for Constitutional Rights, the lawsuit
seeks unspecified damages for what it calls a "targeted
assassination" in which the Israeli Air Force dropped a 2,205-
pound bomb on an apartment building in the Occupied Palestinian
Territory. According to the suit, the bombing killed Saleh
Mustafa Shehadeh, purportedly a leader of Hamas, on an upper
floor of the building, partially destroyed nine other buildings
and damaged 21 more, the lawsuit said. Eight of the 15 killed
were children, and another 150 people were injured.
The plaintiffs seek to hold Mr. Dichter responsible under
customary international law and the Torture Victim Protection
Act. They pointed out that the court would have jurisdiction for
human rights violations and war crimes under the U.S. Alien Tort
Claims Act, a law that has been used by Holocaust survivors and
relatives of people killed or tortured under despotic regimes
from South America to the Philippines.
Additionally, the lawsuit says that the bombing occurred as part
of a series of targeted attacks on suspected terrorists that has
killed 327 people and at least 174 non-targeted bystanders,
including at least 47 children, since September 2000. It claims
that Mr. Dichter had "developed, implemented and escalated the
practice of targeted killings."
A spokeswoman for the Center for Constitutional Rights told The
Associated Press that Mr. Dichter was served with the lawsuit
during a recent benefit in New York City.
J & F DESIGN: Recalls 18,800 Pajama Sets Because of Burn Hazard
---------------------------------------------------------------
In cooperation with the U.S. Consumer Product Safety Commission
(CPSC), J & F Design, Inc., of Bell, California is voluntarily
recalling about 18,800 units of Bobby JackT pajama sets.
According to the Company, these pajamas sets fail to meet the
federal mandatory standard for flammability of children's
sleepwear under the Flammable Fabrics Act. This poses a risk of
burn injuries to children. No incidents or injuries have been
reported.
The recalled pajama sets include a tank top and a pair of
shorts. Made of a polyester and cotton blend, the pajamas were
sold in four colors: green, fuchsia, light blue and light pink
in sizes extra small through extra large. The pajama tops have a
large, rubber decal of one or more monkeys on the front, and the
bottoms have a monkey print on them. A label on the inside of
the garment reads, "Bobby by BobbyJack."
Manufactured in China, the pajama sets were sold at J.C. Penney
stores nationwide from April 2005 through June 2005 for about
$15.
Remedy: Consumers should immediately stop wearing these pajama
sets and return them to any J.C. Penney store for a full refund.
Consumer Contact: For additional information, contact J & F
Design at (800) 305-0510 between 8:30 a.m. and 5 p.m. PT Monday
through Friday. Consumers also can visit the Bobby JackT Web
site: http://www.bobbyjackbrand.com.
LOUISIANA: Judge Hears Evacuees' Complaints in Lawsuit V. FEMA
--------------------------------------------------------------
Evacuees hoping to preserve a government program providing hotel
rooms to those displaced by Hurricane Katrina had their day in
court last week, when a federal judge heard an array of
complaints against the Federal Emergency Management Agency, The
Associated Press reports.
In addition to hearing claims that Katrina victims face unfair
and premature eviction from hotels, Judge Stanwood Duval will
hear testimony and arguments that FEMA has wrongfully denied
rental assistance to some evacuees.
Howard Godnick, an attorney for evacuees, who is seeking to make
the lawsuit a class action on behalf of all Katrina evacuees
told The Associated Press, "We plan on calling three victims, at
least two of whom are about to be evicted from hotels."
The lawsuit, the first filed against FEMA in relation to its
response to Katrina, says that the agency has violated and
continues to violate Federal law by failing to discharge its
obligations as the federal agency chartered to care for victims
of natural disasters. In addition to preserving the hotel
program, the suit, which was filed in United States District
Court for the Eastern District of Louisiana, seeks a court order
to require FEMA to make it easier for victims to apply for
temporary housing assistance, to improve the agency's outreach
and accessibility and immediately to provide trailers or other
alternatives to replace shelters, tents and other makeshift
arrangements. The suit also asks the court to force FEMA to
establish application guidelines under which victims can obtain
continued financial assistance beyond a three-month period and
receive adjustments based on family size and other factors. The
plaintiffs also request that the court order FEMA to eliminate
certain rules regarding the use of funds victims have already
received and to cease a policy whereby FEMA makes room for its
housing by evicting and destroying the homes of residents of
trailer parks, an earlier Class Action Reporter story (November
14, 2005) reports.
The legal action was brought by 14 named plaintiffs on their own
behalf and on the behalf of a class of people who lived in
Louisiana, Mississippi or Alabama on August 29, 2005 in areas
that were subsequently declared Federal Disaster Areas, were
displaced by Hurricane Katrina and have or will apply for
disaster housing assistance under the Stafford Act, an earlier
Class Action Reporter story (November 14, 2005) reports.
Originally, FEMA set a December 1 deadline for ending the hotel
program. However, stung by critics who said that would result in
the eviction of thousands of poor, extended the deadline to
December 15 for evacuees nationwide. In addition, FEMA also said
10 states - Alabama, Arkansas, California, Florida, Georgia,
Louisiana, Mississippi, Nevada, Tennessee and Texas - could
apply for extensions lasting until January 7, 2006, an earlier
Class Action Reporter story (November 30, 2005) reports.
However, even after extensions, some could face homelessness if
the hotel program ends, Mr. Godnick argues. FEMA officials
contend that anyone properly registered with FEMA and eligible
to receive federal assistance will have the tools and the
funding they need to get temporary housing.
About 41,000 hotel rooms are now occupied under the FEMA
program, which has cost the agency about $350 million so far,
FEMA spokeswoman Nicol Andrews told The Associated Press.
In addition to trying to preserve the hotel program, the lawsuit
contains a long list of complaints about FEMA's response to
Katrina.
In their response to the lawsuit, government lawyers say the
lawsuit should be dismissed under sovereign immunity laws that
protect government agencies from liability in the performance of
their duties. They argued that some of the claims in the lawsuit
are moot noting the single household rule and the rules
governing use of the initial rent aid checks were waived after
Katrina. Mr. Godnick counters though that the government has
failed to publicize those policy changes.
The suit is styled, "McWaters et al v. Federal Emergency
Management Agency et al., Case No. 2:05-cv-05488-SRD-DEK," filed
in the United States District Court for the Eastern District of
Louisiana, under Judge Stanwood R. Duval Jr. Representing the
Plaintiff/s are, John K. Pierre of John K. Pierre, Attorney at
Law, 2900 Westfork Dr., Suite 200, Baton Rouge, LA 70816, Phone:
225-295-5638; and Margaret Ann Pierre of Louisiana Department of
Justice, Litigation Division, 601 Poydras St., Suite 1725, New
Orleans, LA 70130, Phone: (504) 599-1200. Representing the
Defendant/s is Michael Sitcov of U.S. Department of Justice
Civil Division, Room 7210, P.O. Box 883, Washington, DC 20044,
Phone: (202) 514-3495.
MEDTRONIC INC.: Judicial Panel Orders Consolidation of MN Cases
----------------------------------------------------------------
A judicial panel ordered the consolidation of class actions
filed against Medtronic, Inc. related to its voluntary recall of
a heart device earlier this year, The Pioneer Press reports.
The order concerns pretrial proceedings in the U.S. District
Court for the District of Minnesota. The Company faces several
lawsuits related to the February recall of a subset of its
implantable cardioverter defibrillators (ICDs) and cardiac
resynchronization therapy defibrillators (CRT-Ds), including
certain of the Marquis VR/DR and Maximo VR/DR ICDs and certain
of the InSync I/II/III Marquis and InSync III CRT-D devices.
On February 11, 2005, the Company voluntarily began advising
physicians about a potential battery shorting mechanism that may
occur in the devices. The Company provided physicians with a
list of potentially affected patients and recommended that
physicians communicate with those patients so they could manage
the potential issue in a manner they felt was appropriate for
their individual patients.
Subsequent to this voluntary field action, later classified by
the FDA as a Class II Recall, putative class actions and
individual actions have been filed against the Company in
various state and federal jurisdictions, including one case in
the United States District Court for the Southern District of
Florida seeking to be consolidated for certain purposes under a
process known as Multi-District Litigation. Additional putative
class actions were also filed in Canada. The complaints
generally allege strict liability, negligence, warranty and
other common law and/or statutory claims; and seek compensatory
and punitive damages. The putative class action complaints also
seek class certification.
RADIO ONE: Final Fairness Hearing Set April 24,2006 in S.D. NY
--------------------------------------------------------------
Final fairness hearing for the settlement of the consolidated
securities class action filed against Radio One, Inc. and
certain of its officers and directors, styled "In re Radio One,
Inc. Initial Public Offering Securities Litigation, Case No. 01-
CV-10160" is set for April 24,2006 in the United States District
Court for the Southern District of New York.
Similar complaints were filed in the same court against hundreds
of other public companies (Issuers) that conducted initial
public offerings of their common stock in the late 1990s (the
IPO Lawsuits). In the complaint filed against the Company (as
amended), the plaintiffs claim that the Company, certain of its
officers and directors, and the underwriters of certain of its
public offerings violated Section 11 of the Securities Act of
1933 based on allegations that its registration statement and
prospectus failed to disclose material facts regarding the
compensation to be received by, and the stock allocation
practices of, the underwriters. The complaint also contains a
claim for violation of Section 10(b) of the Securities Exchange
Act of 1934 based on allegations that this omission constituted
a deceit on investors. The plaintiffs seek unspecified monetary
damages and other relief.
In July 2002, the Company joined in a global motion, filed by
the Issuers, to dismiss the IPO Lawsuits. In October 2002, the
court entered an order dismissing the Company's named officers
and directors from the IPO Lawsuits without prejudice, pursuant
to an agreement tolling the statute of limitations with respect
to the Company's officers and directors until September 30,
2003. In February 2003, the court issued a decision denying the
motion to dismiss the Section 11 and Section 10(b) claims
against the Company and most of the Issuers.
In July 2003, a Special Litigation Committee of the Company's
Board of Directors approved in principle a settlement proposal
with the plaintiffs that is anticipated to include most of the
Issuers. The proposed settlement would provide for the dismissal
with prejudice of all claims against the participating Issuers
and their officers and the assignment to plaintiffs of certain
potential claims that the Issuers may have against their
underwriters. The tentative settlement also provides that, in
the event that plaintiffs ultimately recover less than a
guaranteed sum from the underwriters, plaintiffs would be
entitled to payment by each participating Issuer's insurer of a
pro rata share of any shortfall in the plaintiffs guaranteed
recovery. In September 2003, in connection with the proposed
settlement, the Company's named officers and directors extended
the tolling agreement so that it would not expire prior to any
settlement being finalized. In June 2004, the Company executed
a final settlement agreement with the plaintiffs. On February
15, 2005, the Court issued a decision certifying a class action
for settlement purposes and granting preliminary approval of the
settlement subject to modification of certain bar orders
contemplated by the settlement. On August 31, 2005, the court
reaffirmed class certification and preliminary approval of the
modified settlement in a comprehensive order. In addition, the
court approved the form of Notice to be sent to members of the
settlement classes, which will be published and mailed beginning
November 15, 2005. The court has set a Final Settlement Fairness
Hearing on the settlement for April 24, 2006. The settlement is
still subject to statutory notice requirements and final
judicial approval.
The suit is styled "In re Radio One, Inc. Initial Public
Offering Securities Litigation, Case No. 01-CV-10160," related
to "In re Initial Public Offering Securities Litigation, Master
File No. 21 MC 92 (SAS)," filed in the United States District
Court for the Southern District of New York under Judge Shira A.
Scheindlin. The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300,
(3) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
RCN CORPORATION: Consolidated ERISA Lawsuit Pending in NJ Court
---------------------------------------------------------------
RCN Corporation continues to face a consolidated class action
filed in the United States District Court for the District of
New Jersey, styled "In re: RCN Corporation ERISA Litigation,
case no. 04-CV-5068 (SRC)."
On May 16, 2005, a consolidated class action was filed against
the Company and certain of its current and former directors,
officers, employee administrators and managers, as well as
Merrill Lynch Trust Company, FSB, as defendants for alleged
violations of the Employee Retirement Income Security Act of
1974 (ERISA). The suit seeks recovery of unspecified money
damages for the benefit of a purported class of participants and
beneficiaries of the RCN Savings And Stock Ownership Plan (the
"Savings Plan") as a result of the defendants' breaches of their
fiduciary duties under ERISA. No motion for class certification
has been filed by Plaintiffs. The litigation is subject to
certain limitations ordered by the Bankruptcy Court.
Previously, on September 22, 2004, former employee Deborah K.
Craig, on behalf of the Savings Plan and its participants and
beneficiaries, filed a Motion For Leave To File Proof Of Claim
(the "Late Claim Motion"), seeking to assert a claim against the
Company, after the claims bar date of August 11, 2004, for
alleged violations of ERISA to recover alleged losses similar to
those alleged in the suit.
On October 5, 2004, Ms. Craig filed a purported class action
complaint against certain fiduciaries of the Savings Plan within
the meaning of ERISA in a lawsuit captioned "Craig v.
Filipowicz, et al., Case No. 04-cv-07875 (JSR) (S.D.N.Y.),"
which was subsequently transferred to the District of New
Jersey, with a new Case No. 04-cv-05940 (SRC) (D.N.J.).
On November 3, 2004, the Bankruptcy Court issued an order
denying the Late Claim Motion in its entirety, which Ms. Craig
appealed to the United States District Court for the Southern
District of New York. On December 20, 2004, Ms. Craig sought
from the Bankruptcy Court limited relief (the "Injunction Relief
Motion"), for the benefit of herself and all other similarly
situated beneficiaries of the Savings Plan, from the injunction
issued by the Bankruptcy Court's order confirming the Plan for
the purpose of naming the Company as a nominal defendant in the
NJ Action.
On February 16, 2005, Ms. Craig filed a motion on the NJ Action
docket to have the NJ Action consolidated with certain other
related actions. On March 18, 2005, the United States District
Court for the Southern District of New York issued an order
affirming the Late Claim Order. On April 1, 2005, the
Bankruptcy Court entered an order (the "Injunction Relief
Order") granting the Injunction Relief Motion to the extent that
Ms. Craig and all other similarly situated parties
(collectively, the "Plaintiffs") are permitted to name the
Company as a nominal defendant in the pending Consolidated
Action and the Plaintiffs may enforce any judgment obtained
against the Company solely against any applicable insurance
companies and only up to limits of any applicable insurance
coverage, to the extent such coverage is available. The
Injunction Relief Order does not prevent the Plaintiffs from
pursuing litigation claims against others, including current or
former directors, officers, employees, partners, members, or
managers (collectively, the "Third Parties") of the Company or
any other reorganized debtor and collecting in full any judgment
Plaintiffs may obtain against such Third Parties. As an express
condition to the entry of the Injunctive Relief Order, Ms. Craig
waived any right of further appeal the denial of the Late Claim
Order. Subsequently, Plaintiffs filed the Class Action
Complaint in the ERISA Litigation to pursue their remedies
against the Company, subject to the limitations imposed by the
Bankruptcy Court, and additional Third Parties.
The suit is styled "THOMAS v. MCCOURT et al., case no. 3:04-cv-
05068-SRC-TJB," filed in the United States District Court for
the District of New Jersey, under Judge Stanley R. Chesler.
Representing the Company is Peter Michael Avery, PROSKAUER ROSE
LLP, One Newark Center, Newark NJ 07102, Phone: 973-274-3223, E-
mail: pavery@proskauer.com. Representing the plaintiffs are:
(1) Lisa J. Rodriguez, TRUJILLO RODRIGUEZ & RICHARDS, LLP,
8 Kings Highway West, Haddonfield NJ 08033, Phone:
(856) 795-9002, E-mail: lisa@trrlaw.com
(2) Ronen Sarraf, SARRAF GENTILE, LLP, 485 Seventh Avenue,
Suite 1005, New York, NY 10018, Phone: (212) 868-3610,
Fax: (212) 918-7967
(3) Gary S. Graifman, KANTROWITZ, GOLDHAMER & GRAIFMAN,
ESQS., 210 Summit Avenue, Montvale, NJ 07645, Phone:
(201) 391-7000, E-mail: ggraifman@kgglaw.com
SPRINT NEXTEL: Discovery Proceeds in Securities Fraud Suit in KS
----------------------------------------------------------------
Discovery is proceeding in the consolidated class action filed
against Sprint Nextel Corporation and its directors in the
District Court of Johnson County, Kansas.
In March 2004, eight purported class action lawsuits relating to
the recombination of the tracking stocks were filed against
Sprint Nextel and its directors by holders of PCS common stock.
Seven of the lawsuits were consolidated in the District Court of
Johnson County, Kansas. The eighth, pending in New York, has
been voluntarily stayed.
The consolidated lawsuit alleges breach of fiduciary duty in
connection with allocations between the wireline operations (FON
Group) and the wireless operations (PCS Group) before the
recombination of the tracking stocks and breach of fiduciary
duty in the recombination. The lawsuit seeks to rescind the
recombination and monetary damages.
In early 2005, the court denied defendants' motion to dismiss
the complaint and discovery is proceeding. All defendants have
denied plaintiffs' allegations and intend to defend this matter
vigorously.
SPRINT NEXTEL: Shareholders Launch Securities Fraud Suit in KS
--------------------------------------------------------------
Sprint Nextel Corporation faces a class action filed in the
United States District Court for the District of Kansas,
alleging that the Company's 2001 and 2002 proxy statements were
false and misleading in violation of federal securities laws to
the extent they described new employment agreements with senior
executives without disclosing that, according to the
allegations, replacement of those executives was inevitable.
These allegations, made in an amended complaint in a lawsuit
originally filed in 2003, are asserted against the Company and
certain current and former officers and directors, and seek to
recover any decline in the value of FON and PCS common stock
during the class period. The parties have stipulated that the
case can proceed as a class action. Allegations in the original
complaint, which asserted claims against the same defendants and
the Company's former independent auditor, were dismissed by the
court in April 2004.
The suit is styled "Vega v. Sprint Corporation PCS, case no.
2:03-cv-02589-KHV," filed in the United States District Court
for the District of Kansas, under Judge Kathryn H. Vratil.
Representing the Company are Elaine D. Koch and Meredith Jayne
Rund of Bryan Cave LLP- Kansas City, 3500 One Kansas City Place,
1200 Main Street, Kansas City, MO 64105-2100, Phone:
816-374-3200 x3235, Fax: 816-374-3300, E-mail:
edkoch@bryancave.com or meredith.rund@bryancave.com.
Representing the plaintiffs are Stacy M. Bunck of Polsinelli
Shalton Welte Suelthaus , P.C. -- KC, 700 West 47th Street,
Suite 1000, Kansas City, MO 64112-1802, Phone: 816-360-4336,
Fax: 816 753-1536, E-mail: sbunck@pswslaw.com; and Frank B. W.
McCollum, McCollum & Parks, L.C., Two Emanuel Cleaver II Blvd.-
#425, Kansas City, MO 64112
Phone: 816-756-1114, Fax: 816-756-0883, E-mail:
bmccollum@mccollumandparks.com.
STARTEK INC.: Faces Consolidated Securities Fraud Lawsuit in CO
---------------------------------------------------------------
StarTek, Inc. and certain of its current and former officers and
directors face a consolidated securities class action filed in
the United States District Court for the District of Colorado.
Two lawsuits, styled "West Palm Beach Firefighters' Pension Fund
v. StarTek, Inc., et al." and "John Alden v. StarTek, Inc., et
al.," were initially filed in July 2005. Each action is a
purported class action brought on behalf of all persons (except
defendants) who purchased shares of the Company's common stock
in a secondary offering by certain of the Company's stockholders
in June 2004, and in the open market between February 26, 2003,
and May 5, 2005. The complaints allege that the defendants made
false and misleading public statements about the Company and its
business and prospects in the prospectus for the secondary
offering, as well as in filings with the Securities and Exchange
Commission and in press releases issued during the Class Period,
and that the market price of the Company's common stock was
artificially inflated as a result. The complaints allege claims
under Sections 11 and 15 of the Securities Act of 1933, and
under Sections 10(b) and 20(a) of the Securities Exchange Act of
1934. The plaintiffs in both cases seek compensatory damages on
behalf of the alleged class and award of attorneys' fees and
costs of litigation.
On July 28, 2005, the court entered an order allowing the
plaintiffs to file a single consolidated and amended complaint
up to 60 days after the appointment of a lead plaintiff in the
case, and allowing the Company up to 60 days following the
filing of the amended complaint in which to file an answer. On
September 6, 2005, a motion for appointment of a lead plaintiff
was filed. As of November 4, no lead plaintiff had been
appointed. Once a lead plaintiff is appointed, the plaintiffs
will have 60 days to file a consolidated amended complaint.
The suit is styled "West Palm Beach Firefighters' Pension Fund
v. Startek, Inc. et al., case no. 1:05-cv-01265-PSF-OES," filed
in the United States District Court for the District of
Colorado, under Judge Phillip S. Figa. Representing the
plaintiffs is Matthew M. Wolf, Allen & Vellone, P.C., 1600 Stout
Street, #1100, Denver, CO 80202, U.S.A., Phone: 303-534-4499, E-
mail: mwolf@allen-vellone.com. Representing the Company are
James E. Nesland and Matthew Voss of Cooley Godward, LLP-
Colorado, 380 Interlocken Crescent, #900 Broomfield, CO 80021-
8023, U.S.A., Phone: 720-566-4000, Fax: 720-566-4099, E-mail:
neslandje@cooley.com and mvoss@cooley.com.
TRUSTREET PROPERTIES: TX Court Mulls Fraud Suit Dismissal Appeal
----------------------------------------------------------------
The District Court of Dallas County, Texas has yet to rule on
plaintiffs' appeal of dismissal of the class action filed
against Trustreet Properties, Inc. The suit also names as
defendants:
(1) U.S. Restaurant Properties, Inc. (USRP),
(2) 18 CNL Income Fund partnerships (the income funds) and
their general partners - namely James M. Seneff, Jr.,
Robert A. Bourne, and CNL Realty Corporation
(3) the Company's subsidiaries
Robert Lewis and Sutter Acquisition Fund, LLC, two limited
partners in several Income Funds, filed the suit on January
18,2005 under the case number 05-00083-F. The suit was filed as
a purported class action lawsuit on behalf of the limited
partners of the Income Funds. The complaint alleged that the
general partners of the Income Funds breached their fiduciary
duties in connection with the proposed mergers between the
Income Funds and USRP and that the Company, subsidiaries of the
Company and USRP aided and abetted in the alleged breaches of
fiduciary duties.
The complaint further alleged that the Income Fund general
partners violated provisions of the Income Fund partnership
agreements and demanded an accounting as to the affairs of the
Income Funds. On April 26, 2005, a supplemental plea to
jurisdiction was held. On May 2, 2005, the plaintiffs filed
their First Amended Petition for Class Action. In the Amended
Petition the plaintiffs did not add any parties or claims, but
they did add allegations that the general partners of the Income
Funds, with CNL Restaurant Properties, Inc. (CNLRP) and USRP,
prepared and distributed a false and misleading final proxy
statement filing to the limited partners of the Income Funds and
the shareholders of CNLRP and USRP. The plaintiffs are seeking
unspecified compensatory and exemplary damages and equitable
relief, which also included an injunction preventing the
defendants from proceeding with the mergers.
On May 26, 2005, the Court entered a Final Order Dismissing
Action for lack of subject matter jurisdiction. On June 22,
2005, the plaintiffs filed a Notice of Appeal of the Order of
Dismissal.
UNITED KINGDOM: House of Lords Rejects Blood-Clot Case Appeal
-------------------------------------------------------------
The United Kingdom's highest court of appeal, the House of
Lords, ruled against airline passengers who suffered potentially
fatal blood clots linked to air travel, essentially rejecting
their efforts to sue the airlines for compensation, The
Associated Press reports.
The House of Lords rejected claims brought on behalf of eight
British Airways PLC passengers or their families who either died
or claim their lives were impaired after developing clots known
as deep-vein thrombosis, or DVT. The passengers asked the court
to rule that the condition, which has been linked to long-haul
flights, be considered an accident under the Warsaw Convention,
which covers compensation for death and injury during air
travel. The Lords rejected the notion, declaring that since
there was nothing unusual in the course of the flights, "the
situation does not fall within any ordinary or extended
conception of 'accident'."
A ruling in favor of the claimants would have led to a class
action against 18 airlines, including British Airways, Qantas
Airways Ltd., Virgin Atlantic Airways and Continental Airlines
Inc. Commenting on the ruling, British Airways told The
Associated Press that it was pleased with the ruling, but
insisted it sympathized with those who suffered from the
condition.
The ruling upholds earlier decisions in favor of the airlines by
Britain's High Court in December 2002 and the Court of Appeal in
July 2003. The airlines reject liability for the condition.
Lawyers for eight claimants previously argued in the House of
Lords that the airlines failed to warn passengers that cramped
conditions and long hours in the air could give rise to the
condition and that breach of duty or obligation constituted an
accident.
The Court of Appeal ruled that the incident that caused the
condition was a "non-event" and therefore could not be called an
accident under the Warsaw Convention.
Deep-vein thrombosis, a condition in which a blood clot forms in
the deep leg veins, can be fatal if part of the clot breaks off
and blocks a blood vessel in the lungs. Britain in 2001 warned
passengers to avoid developing blood clots in their calves by
getting up and walking around during long flights.
VALERO ENERGY: Named As Defendant in MTBE Contamination Lawsuits
----------------------------------------------------------------
Valero Energy Corporation is named as a defendant in 64 cases
alleging liability related to methyl tertiary butyl ether (MTBE)
contamination in groundwater. (Premcor Refining Co., now
included within the Company, was also separately named in 53 of
these cases.)
The plaintiffs are generally water providers, governmental
authorities and private water companies alleging that refiners
and marketers of MTBE and gasoline containing MTBE are liable
for manufacturing or distributing a defective product. The
Company is named in these suits together with many other
refining industry companies. The Company is being sued
primarily as a refiner and marketer of MTBE and gasoline
containing MTBE. It does not own or operate gasoline station
facilities in most of the geographic locations in which damage
is alleged to have occurred.
The suits generally seek individual, unquantified compensatory
and punitive damages and attorneys' fees. All but one of these
cases have been removed to federal court by the defendants and
have been consolidated for pre-trial proceedings in the U.S.
District Court for the Southern District of New York (Multi-
District Litigation Docket No. 1358, "In re: Methyl-Tertiary
Butyl Ether Products Liability Litigation"). Four of these
cases have been selected by the court as focus cases for
discovery and pre-trial motions. Activity in the "non-focus"
cases is generally stayed pending certain determinations in the
focus cases.
VALERO ENERGY: Trial in IL Injury, Damages Litigation Begins
------------------------------------------------------------
Trial in the ten-year-old class action filed against Valero
Energy Corporation, styled "Rosolowski v. Clark Refining &
Marketing, Inc., et al. Case no. 95-L 014703," began on October
31,2005 in the Judicial Circuit Court, Cook County, Illinois.
This class action lawsuit, filed October 11, 1995, relates in
part to a release to the atmosphere of spent catalyst containing
low levels of heavy metals from the now-closed Blue Island,
Illinois refinery on October 7, 1994. The release resulted in
the temporary evacuation of certain areas near the refinery. The
case was certified as a class action in 2000 with three classes:
(1) persons purportedly affected by the October 7, 1994
catalyst release, but with no permanent health effects;
(2) persons with medical expenses for dependents
purportedly affected by the October 7, 1994 release;
and
(3) local residents claiming property damage or who have
suffered loss of use and enjoyment of their property
over a period of several years.
The lawsuit was once consolidated with another purported class
action, but was recently deconsolidated in anticipation of the
beginning of trial.
WEBMETHODS INC.: NY Settlement Fairness Hearing Set April 2006
--------------------------------------------------------------
Fairness hearing for the settlement of the consolidated
securities class action filed against webMethods, Inc., several
of its executive officers at the time of the Company's initial
public offering (IPO) and the managing underwriters of the
Company's initial public offering as defendants is set for April
2006 in the United States District Court for the Southern
District of New York.
The amended complaint alleges, among other things, that
underwriters of webMethods' IPO solicited and received excessive
commissions and demanded tie-in arrangements from the
underwriters' customers in connection with their allocation of
shares in webMethods' IPO, and that those activities allegedly
undertaken by the underwriters of webMethods' IPO were not
disclosed in the registration statement and final prospectus for
webMethods' IPO or disclosed to the public after the IPO.
The amended complaint also alleges that false analysts' reports
were issued by the underwriters. The amended complaint seeks
unspecified damages on behalf of a purported class of purchasers
of webMethods, Inc. common stock between February 10, 2000 and
December 6, 2000. This case has been consolidated as part of
"In Re Initial Public Offering Securities Litigation (SDNY)."
Claims against webMethods' executive officer defendants have
been dismissed without prejudice. webMethods has considered and
conditionally agreed to enter into a proposed settlement with
representatives of the plaintiffs in the consolidated
proceeding. Under the proposed settlement, the plaintiffs would
dismiss and release their claims against webMethods in exchange
for a contingent payment guaranty by the insurance companies
collectively responsible for insuring the issuers in the
consolidated action and assignment or surrender to the
plaintiffs by the settling issuers of certain claims that may be
held against the underwriter defendants.
The Company has considered and conditionally agreed with
representatives of the plaintiffs in the consolidated proceeding
to enter into a proposed settlement, which was amended in March
2005 and preliminarily approved by the court in late August
2005, with a settlement fairness hearing scheduled for April
2006. Under the proposed settlement, the plaintiffs would
dismiss and release their claims against the Company in exchange
for a contingent payment guaranty by the insurance companies
collectively responsible for insuring the issuers in the
consolidated action and assignment or surrender to the
plaintiffs by the settling issuers of certain claims that may be
held against the underwriter defendants.
The Suit is styled "In RE WebMethods, Inc. Securities
Litigation, case no. 1:01-cv-10830-SAS," related to "In Re IPO
Securities Litigation 21-MC-92," filed in the United States
District Court for the Southern District of New York, under
Judge Shira A. Scheindlin.
Representing the Company is John Luke Cuddihy of Williams &
Connelly L.L.P., 725 Twelfth Street N.W., Washington, DC 20005,
by Phone: (202) 434-5000. Representing the plaintiffs are:
(1) Stanley D. Bernstein, Bernstein Liebhard & Lifshitz,
LLP, 10 East 40th Street, New York, NY 10016, Phone:
(212) 779-1414 Fax: (212) 779-3218, E-mail:
bernstein@bernlieb.com
(2) Melvyn I. Weiss and Peter G.A. Safirstein, Milberg,
Weiss, Bershad, Hynes & Lerach, LLP, One Pennsylvania
Plaza, New York, NY 10119-0165 by Phone: (212) 594-5300
New Securities Fraud Cases
BARRIER THERAPEUTICS: Rosen Law Firm Sets Lead Plaintiff Cut-Off
----------------------------------------------------------------
The Rosen Law Firm reminds investors that they have until
December 12, 2005 to seek appointment by the Court as Lead
Plaintiff in the class action lawsuit filed by the Rosen Law
Firm on behalf of purchasers of Barrier Therapeutics, Inc,
("Barrier" or the "Company") (Nasdaq:BTRX), common stock during
the period between April 29, 2004 and June 29, 2005 (the "Class
Period"). Shareholders who purchased Barrier stock in the
Initial Public Offering ("IPO") on April 29, 2004 and/or in its
Secondary Offering on February 9, 2005 are also included in this
class action.
Filed in the United States District Court for the District of
New Jersey, the complaint charges Barrier and certain of its
officers and directors with violations of the Securities Act of
1933 and Securities Exchange Act of 1934. Barrier is a
biopharmaceutical company, engaged in the discovery,
development, and commercialization of pharmaceutical products in
the field of dermatology. The complaint alleges that Barrier
made a series of materially false and misleading statements
concerning the Company's business and products under
development. In particular, the Complaint alleges that these
statements were materially false and misleading because they
failed to disclose and misrepresented the following adverse
facts:
(1) that the Company had failed to perform its clinical
trials in conformity with FDA guidelines as they had
failed to disclose that they had secretly substituted
the petroleum base within Zimycan, the effect of which
was to substantially lessen the likelihood that the
drug could achieve FDA approval;
(2) that Hyphanox did not have a better safety or efficacy
profile than fluconazole/Diflucan and, in fact, as
investors ultimately learned, Hyphanox was
significantly less effective than fluconazole/Diflucan;
and
(3) as a result of the foregoing, defendants lacked any
reasonable basis for their positive statements about
Barrier.
For more details, contact Laurence Rosen, Esq. of The Rosen Law
Firm, P.A., Phone: (212) 686-1060 or 1-866-767-3653, Fax: (212)
202-3827, E-mail: lrosen@rosenlegal.com, Web site:
http://www.rosenlegal.com.
EVCI CAREER: Paskowitz & Associates Lodges Securities Suit in NY
----------------------------------------------------------------
The law firm of Paskowitz & Associates 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 EVCI
Career Colleges Holdings Corporation common stock or other
securities during the period from February 23, 2004 to October
20, 2005 (the "Class Period'').
The lawsuit was filed against EVCI Career Holdings Corp.
("EVCI"' or "the Company'") (NasdaqSC: EVCI--News), and its top
executives, and alleges fraud involving statements made to
public investors. The case has been assigned to the Hon. Charles
Brieant.
The Complaint alleges that, during the Class Period, EVCI
omitted and misrepresented material facts concerning the manner
in which its educational business was being run, including facts
concerning the degree of student support it provided, its
admission practices and its graduation rates. EVCI's practices
have led to criticism by the New York State Education
Department, and adverse action which, when revealed, led to
sharp declines in the price of the stock.
For more details, contact Laurence Paskowitz, Esq. of Paskowitz
& Associates, 800-705-9529, E-mail: classattorney@aol.com.
EVCI CAREER: Schatz & Nobel Lodges Securities Fraud Suit in NY
--------------------------------------------------------------
The law firm of Schatz & Nobel, P.C., initiated a lawsuit
seeking class action status 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 EVCI Career
Colleges Holdings Corporation ("EVCI" or the "Company")
(Nasdaq:EVCI) between February 23, 2004 and October 20, 2005
(the "Class Period").
The Complaint alleges defendants violated federal securities
laws by issuing a series of materially false statements.
Specifically, EVCI omitted and misrepresented material facts
concerning the manner in which its educational business was
being run, including facts concerning the degree of student
support it provided, its admission practices and its graduation
rates. EVCI's practices have led to criticism by the New York
State Education Department, and adverse action which, when
revealed, led to sharp declines in the price of the stock.
For more details, contact Wayne T. Boulton and Nancy A. Kulesa
of Schatz & Nobel, Phone: (800) 797-5499, E-mail:
sn06106@aol.com, Web site: http://www.snlaw.net.
FARO TECHNOLOGIES: Schatz & Nobel Lodges Securities Suit in FL
--------------------------------------------------------------
The law firm of Schatz & Nobel, P.C., initiated a lawsuit
seeking class action status in the United States District Court
for the Middle District of Florida on behalf of all persons who
purchased the publicly traded securities of FARO Technologies,
Inc. ("FARO" or the "Company") (Nasdaq:FARO) between May 6,
2004, and November 3, 2005 (the "Class Period"). Also included
are all those who acquired FARO's shares through its acquisition
of !Qvolution.
The Complaint alleges defendants violated federal securities
laws by issuing a series of materially false statements.
Specifically, FARO repeatedly issued false and misleading
quarterly and annualized financial guidance throughout the Class
Period knowing of the deficient and defective state of one or
more of its controls and systems, with an adverse impact on its
inventory accounting, order fulfillment and financial
statements. It is further alleged that even though defendants
quietly placed a resource management system into operation,
defendants continued to conceal their deficient and defective
controls and practices, causing the newly implemented system to
supply false and erroneous information to the Company's
departments and functions, with a continued direct, adverse
impact on order fulfillment and corporate earnings.
On November 3, 2005, FARO announced its third quarter of 2005
financial results. The results revealed that FARO had incurred a
pre-tax $1.6 million adjustment cost for inventory costing and
consumption variances related to the implementation of a new
enterprise resource planning ("ERP") system and that FARO had
not met growth targets. On this news, the price of FARO stock
plummeted $5.88, from its closing price of $22.38 on November 3,
2005, to finally close on November 7, 2005, at $16.50, for a
two-day loss of 26.38%.
For more details, contact Wayne T. Boulton and Nancy A. Kulesa
of Schatz & Nobel, Phone: (800) 797-5499, E-mail:
sn06106@aol.com, Web site: http://www.snlaw.net.
FARO TECHNOLOGIES: Scott + Scott Lodges Securities Suit in FL
-------------------------------------------------------------
The law firm of Scott + Scott, LLC, filed a securities fraud
class action in the United States District Court for the Middle
District of Florida (Orlando Division - No. 05-cv-1810) against
FARO Technologies Inc. ("FARO" or the "Company") (Nasdaq: FARO)
and individual defendants. Presently, the class is defined in
the complaint drafted by Scott+Scott as those who purchased FARO
securities between May 6, 2004, and November 3, 2005, inclusive
(the "Class Period"). However, any purchaser of FARO securities
can contact the firm as the class period may change as
information is revealed. FARO engages in the design,
development, marketing, and support of portable, software-
driven, 3D measurement systems for a range of manufacturing and
industrial applications.
The complaint alleges that defendants violated provisions of the
United States securities laws causing artificial inflation of
the Company's stock price. According to the complaint, the
Company repeatedly issued false and misleading quarterly and
annualized financial guidance throughout the Class Period in
knowing or reckless disregard of the deficient and defective
state of one or more of its controls and systems, with an
adverse impact on its inventory accounting, order fulfillment
and financial statements. It is further alleged that even though
defendants quietly placed a resource management system into
operation, defendants continued to conceal their deficient and
defective controls and practices, causing the newly implemented
system to supply false and erroneous information to the
Company's departments and functions, with a continued direct,
adverse impact on order fulfillment and corporate earnings.
Finally, investors learned the truth about the adverse impact of
the Company's alleged defective and deficient inventory-related
controls and systems on FARO's financial performance. As a
result of defendants' shocking news and disclosures following
the close of the markets on November 3, 2005, the price of FARO
stock plummeted $5.88, from its closing price of $22.38 on
November 3, 2005, to finally close on November 7, 2005, at
$16.50, for a two- day loss of 26.38%, on combined volume of
over 5.9 million shares.
For more details, contact Neil Rothstein of Scott + Scott, LLC,
Phone: +1-800-332-2259, ext. 22 or (Cell) +1-619-251-0887, E-
mail: nrothstein@scott-scott.com, (Institutional Investors)
InstitutionalInvestors@scott-scott.com or
FAROTechnologiesSecuritiesLitigation@scott-scott.com.
GREAT WOLF: Scott + Scott Lodges New Securities Fraud Suit in WI
----------------------------------------------------------------
The law firm of Scott + Scott, LLC, filed a new securities fraud
complaint in the United States District Court for the Western
District of Wisconsin (05-C-0687-C) against Great Wolf Resorts
Inc. ("Great Wolf" or the "Company") (Nasdaq: WOLF). Scott +
Scott's new complaint adds parties including: Citigroup Global
Markets, Inc., A.G. Edwards & Sons Inc., Raymond James &
Associates Inc., Calyon Securities (USA), Societe Generale,
ThinkEquity Partners, LLC, Rubin Brown Gornstein & Co., LLP, and
Deloitte and Touche.
The complaint seeks to represent all of those investors who
purchased or acquired Great Wolf securities between December 14,
2004, and July 28, 2005, inclusive (the "Class Period"), but any
purchaser of Great Wolf securities may contact the firm as this
class period can change as information is revealed.
Great Wolf owns, operates, and develops drive-to family resorts
featuring indoor water parks and other family-oriented
entertainment activities. The Company is headquartered in
Madison, Wisconsin. Scott+Scott's complaint alleges that
defendants' registration statements issued in connection with
the Company's 2004 Initial Public Offering ("IPO") contained
untrue statements of material fact. According to the complaint,
the Company provided misleading, unreliable and unpredictable
quarterly and annualized guidance based on its preferred non-
GAAP EBITDA measure. Since defendants' EBITDA number was
allegedly unreliable, both the Company's business prospects and
in fact the value of the underlying business was in doubt
because the value of the Company was based on a defective
valuation measure. It is alleged that the Company used this
defective measure to convince investors to buy the Company's
stock during the IPO.
EBIDTA, which stands for "earnings before interest, taxes,
depreciation, and amortization" is a measure of cash flow.
However, according to Richard McCaffrey of the Motley Fool,
EBIDTA is of "fairly limited usefulness."
On July 28, 2005, the Company's stock price sank as investors'
learned the true magnitude of the Company's earnings shortfall
and its cause -- the alleged unreliability of defendants' EBITDA
projections. Worse, analysts concluded that defendants were
fully aware of the true magnitude of the earnings miss when they
were out marketing clients at the end of June but failed to
publicly disclose the materiality of the problem at that time.
According to the Associated Press, analysts point to the
Company's inability to handle the increased competition, saying
it contributed to other problems, such as a second-quarter
earnings miss and questions about the company's internal
controls. On the news of July 28, 2005, the price of the
Company's stock plunged $6.12 to $13.65, on extremely heavy
volume. The price has continued to decline since July and today
trades at $10.37.
For more details, contact Neil Rothstein of Scott + Scott, LLC,
Phone: +1-800-332-2259, ext. 22 or (Cell) +1-619-251-0887, E-
mail: nrothstein@scott-scott.com, (Institutional Investors)
InstitutionalInvestors@scott-scott.com or
GreatWolfSecuritiesLitigation@scott-scott.com.
PIXAR ANIMATION: Scott + Scott Files Securities Fraud Suit in CA
----------------------------------------------------------------
The law firm of Scott + Scott, LLC, filed a new securities fraud
complaint in the United States District Court for the Northern
District of California (No. 05-5052) against Pixar Animation
Studios (Nasdaq: PIXR) and individual defendants. Presently, the
class is defined in the complaint as those who purchased Pixar
securities between January 18, 2005, and June 30, 2005,
inclusive (the "Class Period"). However, any purchaser of Pixar
securities can contact the firm as the class period may change
as information is revealed. Pixar engages in the creation,
development, and production of animated films and related
products worldwide.
The complaint alleges that during the Class Period, defendants
made false and misleading statements and omissions of material
fact in connection with sales of the Company's video releases of
its feature-length animated motion pictures for the domestic and
international retail markets. According to the complaint,
defendants' false and misleading statements served to conceal
material facts and mislead investors, regarding the changed and
disappointing trends and changing industry practices already
known to the trade, impacting the profitability of new video
releases. In spite of defendant's materially false and
misleading statements to the contrary, the Company would be
unable to achieve its lofty goals and revenue projections for
the sale of its video products, including revenue expectations
for its video release of "THE INCREDIBLES."
Finally, as the complaint alleges, the truth became known to
investors when defendants made their shocking disclosure, to
revise its 2Q 05 guidance, addressing the need to "increase its
reserves for returns." Although defendants sought to convince
investors that "THE INCREDIBLES" release was on its way to be a
best-seller for 2005, investors learned that they had set their
sights on a mirage, as the Company erased $6 million in net
income, with expectations for more pain by quarter's end. As a
result, the price of PIXAR stock plummeted $6.99, from its
closing price of $50.05 on June 30, 2005, to finally close on
July 1, 2005 at $43.06, for a loss of 13.9%, on heavy volume of
over 9.6 million shares.
For more details, contact Neil Rothstein of Scott + Scott, LLC,
Phone: +1-800-332-2259, ext. 22 or (Cell) +1-619-251-0887, E-
mail: nrothstein@scott-scott.com, (Institutional Investors)
InstitutionalInvestors@scott-scott.com or
PixarSecuritiesLitigation@scott-scott.com.
REFCO INC.: Scott + Scott Expands Class Period in NY Fraud Suit
---------------------------------------------------------------
The law firm of Scott + Scott, LLC, recently reached an
agreement with the former CEO Phillip R. Bennett ("Bennett") of
Refco, Inc. ("Refco" or the "Company") (Pink Sheets:RFXCQ) to
freeze assets he obtained in connection with his sale of Refco
stock in the Company's August 11, 2005 initial public offering
("IPO").
Scott + Scott now announces that as a result of its continued
investigations, it has expanded the Class Period to include
those bondholders who purchased or otherwise acquired bonds on
or after August 5, 2004, in the "original issuance" of the
$600,000,000 principal amount of 9% Senior Subordinated Notes
Due 2012, pursuant to the "Offering Circular" of July 22, 2004,
as well as those bondholders who participated or otherwise
acquired Refco securities on or after April 13, 2005, pursuant
to the registered "Exchange Offer" of April 6, 2005. As a
result, the securities class action complaint filed today
addresses the rights of investors who purchased Refco securities
between August 5, 2004, and October 18, 2005, inclusive (the
"Class Period"). More than ten new defendants have been added to
the litigation from the ongoing investigation, including three
purchaser/reseller banks and five new individual defendants
associated with the issuance, resale and swap of $600 million in
Refco bonds. Scott + Scott represents major institutional and
individual investors in this securities class action, first
filed on October 11, 2005 in the United States District Court
for the Southern District of New York, alleging pervasive fraud
by Mr. Bennett and other defendants associated with the Refco
IPO (Case No. 1:05-cv-08663-DC).
(http://biz.yahoo.com/prnews/051202/nyf036.html?.v=33).
For more details, contact Neil Rothstein of Scott + Scott, LLC,
Phone: +1-800-332-2259, ext. 22 or (Cell) +1-619-251-0887, E-
mail: nrothstein@scott-scott.com.
WELLS FARGO: Stull Stull Lodges Securities Fraud Suit in N.D. CA
----------------------------------------------------------------
The law firm of Stull, Stull & Brody initiated a class action
lawsuit in the United States District Court for the Northern
District of California against Wells Fargo & Company and certain
of its affiliates, on behalf of those who purchased Eaton Vance
mutual funds from Wells Fargo Investments, LLC ("Wells Fargo
Investments") during the period between June 30, 2000 and June
8, 2005, inclusive (the "Class Period").
The Eaton Vance mutual funds and their respective symbols are as
follows:
Eaton Vance AL Municipals (NASDAQ: ETALX) (NASDAQ: EVALX)
Eaton Vance AR Municipals (NASDAQ: ETARX) (NASDAQ: EVARX)
Eaton Vance Asian Small Companies (NASDAQ: EVASX) (NASDAQ:
EBASX)
Eaton Vance AZ Municipals (NASDAQ: ETAZX) (NASDAQ: EVAZX)
Eaton Vance Balanced (NASDAQ: EVIFX) (NASDAQ: EMIFX) (NASDAQ:
ECIFX)
Eaton Vance CA Ltd Maturity Munis (NASDAQ: EXCAX) (NASDAQ:
ELCAX)
Eaton Vance CA Municipals (NASDAQ: EACAX) (NASDAQ: EVCAX)
(NASDAQ: ECCAX)
Eaton Vance CO Municipals (NASDAQ: ETCOX) (NASDAQ: EVCLX)
Eaton Vance CT Municipals (NASDAQ: ETCTX) (NASDAQ: EVCTX)
Eaton Vance Diversified Income (NASDAQ: EADDX) (NASDAQ: EBDDX)
Eaton Vance Emerging Markets (NASDAQ: ETEMX) (NASDAQ: EMEMX)
Eaton Vance Equity Research (NASDAQ: EAERX)
Eaton Vance FL Insured Municipals (NASDAQ: EAFIX) (NASDAQ:
EBFIX)
Eaton Vance FL Ltd Maturity Munis (NASDAQ: EXFLX) (NASDAQ:
ELFLX)
(NASDAQ: EZFLX)
Eaton Vance FL Municipals (NASDAQ: ETFLX) (NASDAQ: EVFLX)
Eaton Vance Floating Rate (NASDAQ: EVBLX) (NASDAQ: EABLX)
(NASDAQ: EBBLX)
(NASDAQ: ECBLX) (NASDAQ: EIBLX)
Eaton Vance Floating-Rate & Hi Inc (NASDAQ: EVFHX) (NASDAQ:
EAFHX)
(NASDAQ: EBFHX) (NASDAQ: ECFHX) (NASDAQ: EIFHX)
Eaton Vance GA Municipals (NASDAQ: ETGAX) (NASDAQ: EVGAX)
Eaton Vance Global Growth (NASDAQ: ETIAX) (NASDAQ: EMIAX)
(NASDAQ: ECIAX)
Eaton Vance Government Obligations (NASDAQ: EVGOX) (NASDAQ:
EMGOX)
(NASDAQ: ECGOX)
Eaton Vance Greater China Growth (NASDAQ: EVCGX) (NASDAQ: EMCGX)
(NASDAQ: ECCGX)
Eaton Vance Greater India (NASDAQ: ETGIX) (NASDAQ: EMGIX)
Eaton Vance Growth (NASDAQ: EVGFX) (NASDAQ: EMGFX) (NASDAQ:
ECGFX)
Eaton Vance HI Municipals (NASDAQ: ETHWX) (NASDAQ: EVHWX)
Eaton Vance High-Income (NASDAQ: ETHIX) (NASDAQ: EVHIX) (NASDAQ:
ECHIX)
Eaton Vance High-Yield Municipals (NASDAQ: ETHYX) (NASDAQ:
EVHYX)
(NASDAQ: ECHYX)
Eaton Vance Income Fund of Boston (NASDAQ: EVIBX) (NASDAQ:
EBIBX)
(NASDAQ: ECIBX) (NASDAQ: EIBIX) (NASDAQ: ERIBX)
Eaton Vance KS Municipals (NASDAQ: ETKSX) (NASDAQ: EVKSX)
Eaton Vance KY Municipals (NASDAQ: ETKYX) (NASDAQ: EVKYX)
Eaton Vance LA Municipals (NASDAQ: ETLAX) (NASDAQ: EVLAX)
Eaton Vance Large-Cap Core (NASDAQ: EALCX) (NASDAQ: EBLCX)
(NASDAQ: ECLCX)
Eaton Vance Large-Cap Value (NASDAQ: EHSTX) (NASDAQ: EMSTX)
(NASDAQ: ECSTX)
(NASDAQ: EILVX) (NASDAQ: ERSTX)
Eaton Vance Low Duration (NASDAQ: EALDX) (NASDAQ: EBLDX)
(NASDAQ: ECLDX)
Eaton Vance MA Ltd Maturity Munis (NASDAQ: EXMAX) (NASDAQ:
ELMAX)
(NASDAQ: EZMAX)
Eaton Vance MA Municipals (NASDAQ: ETMAX) (NASDAQ: EVMAX)
Eaton Vance MD Municipals (NASDAQ: ETMDX) (NASDAQ: EVMYX)
Eaton Vance MI Municipals (NASDAQ: ETMIX) (NASDAQ: EVMIX)
Eaton Vance MN Municipals (NASDAQ: ETMNX) (NASDAQ: EVMNX)
Eaton Vance MO Municipals (NASDAQ: ETMOX) (NASDAQ: EVMOX)
Eaton Vance MS Municipals (NASDAQ: ETMSX) (NASDAQ: EVMSX)
Eaton Vance Municipal Bond (NASDAQ: ETMBX) (NASDAQ: EBMBX)
(NASDAQ: EVMBX)
Eaton Vance National Ltd Mat Munis (NASDAQ: EXNAX) (NASDAQ:
ELNAX)
(NASDAQ: EZNAX)
Eaton Vance National Municipals (NASDAQ: EANAX) (NASDAQ: EVHMX)
(NASDAQ: ECHMX) (NASDAQ: EIHMX)
Eaton Vance NC Municipals (NASDAQ: ETNCX) (NASDAQ: EVNCX)
Eaton Vance NJ Ltd Maturity Munis (NASDAQ: EXNJX) (NASDAQ:
ELNJX)
Eaton Vance NJ Municipals (NASDAQ: ETNJX) (NASDAQ: EVNJX)
Eaton Vance NY Ltd Maturity Munis (NASDAQ: EXNYX) (NASDAQ:
ELNYX)
(NASDAQ: EZNYX)
Eaton Vance NY Municipals (NASDAQ: ETNYX) (NASDAQ: EVNYX)
(NASDAQ: ECNYX)
Eaton Vance OH Ltd Maturity Munis (NASDAQ: EXOHX) (NASDAQ:
ELOHX)
Eaton Vance OH Municipals (NASDAQ: ETOHX) (NASDAQ: EVOHX)
Eaton Vance OR Municipals (NASDAQ: ETORX) (NASDAQ: EVORX)
Eaton Vance PA Ltd Maturity Munis (NASDAQ: EXPNX) (NASDAQ:
ELPNX)
(NASDAQ: EZPNX)
Eaton Vance PA Municipals (NASDAQ: ETPAX) (NASDAQ: EVPAX)
Eaton Vance RI Municipals (NASDAQ: ETRIX) (NASDAQ: EVRIX)
Eaton Vance SC Municipals (NASDAQ: EASCX) (NASDAQ: EVSCX)
Eaton Vance Small-Cap Growth (NASDAQ: ETEGX) (NASDAQ: EBSMX)
(NASDAQ: ECSMX)
Eaton Vance Small-Cap Value (NASDAQ: EAVSX) (NASDAQ: EBVSX)
(NASDAQ: ECVSX)
Eaton Vance Special Equities (NASDAQ: EVSEX) (NASDAQ: EMSEX)
(NASDAQ: ECSEX)
Eaton Vance Strategic Income (NASDAQ: ETSIX) (NASDAQ: EVSGX)
(NASDAQ: ECSIX)
Eaton Vance Tax-Managed Dividend Inc (NASDAQ: EADIX) (NASDAQ:
EBDIX)
(NASDAQ: ECDIX)
Eaton Vance Tax-Managed Emg Mkts (NASDAQ: EITEX)
Eaton Vance Tax-Mgd Eq Asset Alloc(NASDAQ: EAEAX) (NASDAQ:
EBEAX)
(NASDAQ: ECEAX)
Eaton Vance Tax-Mgd Growth 1.0 (NASDAQ: CAPEX)
Eaton Vance Tax-Mgd Growth 1.1 (NASDAQ: ETTGX) (NASDAQ: EMTGX)
(NASDAQ: ECTGX) (NASDAQ: EITMX)
Eaton Vance Tax-Mgd Growth 1.2 (NASDAQ: EXTGX) (NASDAQ: EYTGX)
(NASDAQ: EZTGX) (NASDAQ: EITGX)
Eaton Vance Tax-Mgd Intl Equity (NASDAQ: ETIGX) (NASDAQ: EMIGX)
(NASDAQ: ECIGX)
Eaton Vance Tax-Mgd Mid-Cap Core (NASDAQ: EXMCX) (NASDAQ: EBMCX)
(NASDAQ: ECMCX)
Eaton Vance Tax-Mgd Multi-Cap Opp (NASDAQ: EACPX) (NASDAQ:
EBCPX)
(NASDAQ: ECCPX)
Eaton Vance Tax-Mgd Sm-Cap Gr 1.1 (NASDAQ: ETMGX) (NASDAQ:
EMMGX)
(NASDAQ: ECMGX)
Eaton Vance Tax-Mgd Sm-Cap Gr 1.2 (NASDAQ: EXMGX) (NASDAQ:
EYMGX)
(NASDAQ: EZMGX)
Eaton Vance Tax-Mgd Small-Cap Value (NASDAQ: ESVAX)NASDAQ:
ESVBX)
(NASDAQ: ESVCX)
Eaton Vance Tax-Mgd Value (NASDAQ: EATVX) (NASDAQ: EBTVX)
(NASDAQ: ECTVX)
Eaton Vance TN Municipals (NASDAQ: ETTNX) (NASDAQ: EVTNX)
Eaton Vance Utilities (NASDAQ: EVTMX) (NASDAQ: EMTMX) (NASDAQ:
ECTMX)
Eaton Vance VA Municipals (NASDAQ: ETVAX) (NASDAQ: EVVAX)
Eaton Vance Worldwide Health Sci (NASDAQ: ETHSX) (NASDAQ: EMHSX)
(NASDAQ: ECHSX) (NASDAQ: ERHSX)
Eaton Vance WV Municipals (NASDAQ: ETWVX) (NASDAQ: EVWVX)
EV Atlanta Capital Intermediate Bond (NASDAQ: EIINX)
EV Atlanta Capital Large-Cap Growth (NASDAQ: EAALX) (NASDAQ:
EILGX)
EV Atlanta Capital Small-Cap (NASDAQ: EAASX) (NASDAQ: EISMX)
The Wells Fargo Preferred Funds include mutual funds in the
following mutual fund families: Franklin Templeton Investments,
Putnam Investments, MFS Investment Management, Fidelity
Investments, Evergreen Investments, Alliance Bernstein
Investment Research and Management, Van Kampen Investments, AIM
Distributors, Inc., Oppenheimer Funds, Inc., Eaton Vance Managed
Investments, ING Funds Distributors, LLC, Allianz Global
Investors Distributors, LLC, Federated, The Hartford Mutual
Funds, Dreyfus Service Corporation, Delaware Investments,
Pioneer Investment Management, Inc., Scudder Investments, and
Wells Fargo Mutual Funds.
The H.D. Vest Preferred Funds include mutual funds in the
following mutual fund families: Oppenheimer Funds, Putnam
Investments, Scudder Investments, MFS Investment Management, Van
Kampen Investments, Lincoln Financial Distributors, AIM
Investments, Phoenix Investment Partners, John Hancock Funds,
Wells Fargo Funds, American Funds, and Franklin Templeton
Investments.
The action is pending in the United States District Court for
the Northern District of California against defendant Wells
Fargo & Company and certain of its affiliated entities. The
complaint alleges that during the Class Period, defendants
served as financial advisors who purportedly provided unbiased
and honest investment advice to their clients. Unbeknownst to
investors, defendants, in clear contravention of their
disclosure obligations and fiduciary responsibilities, failed to
properly disclose that they had engaged in a scheme to
aggressively push Wells Fargo Investments and H.D. Vest sales
personnel to steer clients into purchasing certain Wells Fargo
Funds and Wells Fargo and H.D. Vest Preferred Funds
(collectively, "Shelf Space Funds") that provided financial
incentives and rewards to Wells Fargo and H.D. Vest and their
personnel based on sales. The complaint alleges that defendants'
undisclosed sales practices created an insurmountable conflict
of interest by providing substantial monetary incentives to sell
Shelf-Space Funds to their clients, even though such investments
were not in the clients' best interest. Wells Fargo Investments
and H.D. Vest's failure to disclose the incentives constituted
violations of federal securities laws.
The action also includes a subclass of persons who held any
shares of Wells Fargo Mutual Funds. The complaint additionally
alleges that the investment advisor subsidiary of Wells Fargo,
Wells Fargo Funds Management, created further undisclosed
material conflicts of interest by entering into revenue sharing
agreements with brokers at Wells Fargo Investments and H.D. Vest
to push investors into Wells Fargo Funds, regardless of whether
such investments were in the investors' best interests. The
investment advisors financed these arrangements by illegally
charging excessive and improper fees to the fund that should
have been invested in the underlying portfolio. In doing so they
breached their fiduciary duties to investors under the
Investment Company Act and state law and decreased shareholders'
investment returns.
The action includes a second subclass of persons who purchased a
Wells Fargo Financial Plan that held Wells Fargo Funds. The
Wells Fargo Financial Plans include, but are not limited to Full
Service Brokerage Accounts, Wells Asset Management accounts,
WellsChoice account, and WellsSelect account.
For more details, contact Tzivia Brody 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.
*********
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA. Glenn Ruel Senorin, Aurora Fatima Antonio and Lyndsey
Resnick, Editors.
Copyright 2005. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without
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Information contained herein is obtained from sources believed
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