/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/110922.mbx C L A S S A C T I O N R E P O R T E R Thursday, September 22, 2011, Vol. 13, No. 188 Headlines 1-800-FLOWERS.COM: Class Suit in New York Remains Pending BREVARD COUNTY, FL: Headlight Violation Ticketing Challenged CLARCOR INC: Illinois Court Further Stays MDL Proceeding vs. Unit GOV'T OF CANADA: May Face Class Suit over Power Relicensing Deal HURD MILLWORK: Class Action Settlement Gets Preliminary Approval MOBILE COUNTY, AL: School Board Sued Over Discrimination NATIONAL CITY BANK: Judge Tosses $7-Mil. Class Action Settlement OPLINK COMMUNICATIONS: Appeals in IPO Suit Settlement Pending PHILIP MORRIS: Trial in Light Cigarettes Class Action Begins RALCORP HOLDINGS: Faces Class Action Over ConAgra Foods Buyout SEQUANS COMMUNICATIONS: Faces Shareholder Class Action in N.Y. UBS AG: Claims on Foreign-Traded Securities Can't Proceed UBS AG: Exposure to Rogue Trade Class Actions May Be Limited ********* 1-800-FLOWERS.COM: Class Suit in New York Remains Pending --------------------------------------------------------- On November 10, 2010, a purported class action complaint was filed in the United States District Court for the Eastern District of New York naming 1-800-FLOWERS.COM, Inc., (along with Trilegiant Corporation, Inc., Affinion, Inc. and Chase Bank USA, N.A.) as defendants in an action purporting to assert claims against the Company alleging violations arising under the Connecticut Unfair Trade Practices Act among other statutes, and for breach of contract and unjust enrichment in connection with certain post- transaction marketing practices in which certain of the Company's subsidiaries previously engaged with certain third-party vendors. Plaintiffs seek to have this case certified as a class action and seek restitution and other damages, all in an amount in excess of $5 million. The Company says it intends to defend this action vigorously. No further updates were reported in the Company's September 16, 2011, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended July 3, 2011. BREVARD COUNTY, FL: Headlight Violation Ticketing Challenged ------------------------------------------------------------ Rick Neale, writing for Florida Today, reports that since January 2010, the Brevard County Sheriff's Office has issued 12 citations and 13 warnings for flashing-light violations, said Debra Holt, records manager. However, a handful of those motorists contacted by Florida Today said they were not ticketed for headlight violations. Rather, they displayed colorful LED lights on their vehicle undercarriages and license-plate holders, which the statute bans. Lt. Alex Herrera said he had never heard of a driver ticketed for flashing headlights on the Space Coast. "It's just not something that's commonly seen on our end. But we do have the issues where people have the LEDs that are blue or red, and they're flashing," Mr. Herrera said. "We don't want anyone out here to be construed that they're law enforcement when they're not." After Erich Campbell passed two Florida Highway Patrol cruisers parked in the median near Tampa International Airport in December 2009, he used his headlights to warn oncoming drivers of the radar patrol. That's when -- to his surprise -- one of the troopers pulled over his silver Toyota Tundra and ticketed him for improper flashing of high beams. "Within 60 seconds, literally within one minute, they had me stopped on the side of the road," recalled Campbell, 38, a former electrician and full-time student. Late last month, the Land O'Lakes resident filed a class- action lawsuit in Tallahassee against the FHP and other Sunshine State traffic-enforcement agencies. He seeks an injunction barring law enforcement from issuing headlight-flash tickets, plus refunds and civil damages for previously cited motorists. Gary Biller, executive director of the National Motorists Association, said he has not heard of a similar lawsuit in the country. Rich Roberts, spokesman for the International Union of Police Associations, said the Florida statute is intended to ban after- market flashing lights to prevent people from impersonating a police officer. He said the law's language needs clarification from the court or legislators. Mr. Campbell's lawyer, J. Marc Jones of Oviedo, claims his client's First Amendment right to free speech was violated. "It's not about traffic. This is about government going too far, the intentional misapplication of a statute solely to produce money. That's just wrong," Mr. Jones said. "The flashing of lights to communicate with another driver is clearly speech. The statute in question has nothing to do with communication with another driver," he said. David Hudson Jr., a scholar at the First Amendment Center at Vanderbilt University in Nashville, Tenn., said motorists previously have challenged headlight-flashing tickets in New Jersey, Ohio and Tennessee, but those were individual cases, rather than the statewide class-action lawsuit in Florida. "The First Amendment protects all sorts of nonverbal conduct, it protects more than the spoken or printed word," Mr. Hudson Jr. said. "Courts have found that a wide variety of actions -- such as honking one's horn or flashing one's headlights -- are forms of communication under the First Amendment." CLARCOR INC: Illinois Court Further Stays MDL Proceeding vs. Unit ----------------------------------------------------------------- The U.S. District Court for the Northern District of Illinois has continued its stay of further discovery in the antitrust multidistrict litigation involving CLARCOR Inc.'s subsidiary, according to the Company's September 16, 2011, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended August 27, 2011. On March 31, 2008, S&E Quick Lube, a filter distributor, filed a lawsuit in U.S. District Court for the District of Connecticut alleging that virtually every major North American engine filter manufacturer, including the Company's subsidiary, Baldwin Filters, Inc. (the "Defendant Group"), engaged in a conspiracy to fix prices, rig bids and allocate U.S. customers for aftermarket filters. This lawsuit is a purported class action on behalf of direct purchasers of filters from the Defendant Group. Parallel purported class actions, including on behalf of indirect purchasers of filters, have been filed by other plaintiffs against the Defendant Group in a variety of jurisdictions in the United States and Canada. In addition, the Attorney General of the State of Florida and the County of Suffolk, New York, have filed complaints against the Defendant Group based on these same allegations, and the Attorney General of the State of Washington requested various documents, information and cooperation, which the Company has agreed to provide. All of the U.S. cases, including the actions brought by and/or on behalf of governmental entities, have been consolidated into a single multi-district litigation in the Northern District of Illinois. The Company believes all of these lawsuits and the claims made therein to be without merit and is vigorously defending them. On June 24, 2011, William Burch, a former employee of two other defendants in the Defendant Group and the key instigator of the lawsuits, and key witness for the plaintiffs, pleaded guilty to a charge brought by the United States Attorney for the Eastern District of Pennsylvania of making false statements to the United States Antitrust Division of the Department of Justice ("DOJ"). In pleading guilty to this charge, Mr. Burch admits that he fabricated certain key evidence relevant to the lawsuits at issue and thereafter lied about it to the DOJ. He is scheduled to be sentenced in October 2011. As a result of this development, the court overseeing the civil antitrust litigation in the Northern District of Illinois has continued its stay of further discovery and ordered plaintiffs to respond to several defense motions seeking to exclude evidence associated with Mr. Burch. GOV'T OF CANADA: May Face Class Suit over Power Relicensing Deal ---------------------------------------------------------------- Mike Hudson, writing for Niagara Falls Reporter, reports that documents made available to the Niagara Falls Reporter this week show clearly that an environmental impact study mandated by the Federal Energy Regulatory Commission for the New York Power Authority's relicensing agreement with the Tuscarora Nation never occurred, calling into question the legality of the entire accord. Concerned members of the tribe have contacted noted Niagara Falls attorney John Bartolomei to explore various legal options that might be open to them, including the possibility of a class action lawsuit. The C$100 million agreement between the Power Authority and the Tuscarora has been the subject of heated debate on the reservation. Critics charge that tribal Clerk Leo Henry and Neil Patterson Sr. -- who negotiated the deal and signed the final documents -- have done little to improve the lives of tribal members despite the newfound wealth. Much of the C$12,484,752 the tribe has already received under the agreement is tied up in mutual funds and money market accounts, and a shroud of secrecy cloaks Messrs. Henry and Patterson's plans for what to do with it. An Aug. 2, 2005 memorandum of agreement between the nation and the Power Authority is quite specific about the environmental work. "The Power Authority intends to notify the Federal Energy Regulatory Commission of its intent to apply for a new license for the Niagara Power Project and will conduct pre-filing consultation with the (Tuscaroras), resource agencies and other stakeholders, including the development of environmental data required for relicensing," the memorandum states. Curiously, Neil Patterson Sr. signed the document using the title "Chief" before his name, despite the fact that he is not a chief and was in fact denied elevation to that rank at a ceremony on the Tonawanda Seneca Reservation this past April. Mr. Henry also signed the memorandum. Interestingly, the first C$5 million payment made by the Power Authority to the Tuscaroras came in December 2005, just four months after the signing. This has led some on the reservation to question whether the payment was connected to the sudden dropping of the environmental requirements. The final environmental impact statement, issued in December 2006, states, "The Tuscarora Nation has not raised environmental justice concerns, and we assume, by signing their agreement with the Power Authority, their concerns about the project have been addressed." A third document, filed on behalf of the Public Power Coalition and the Eastern Niagara Power Project Alliance, also speaks to environmental concerns, specifically those relating to a complaint filed by a Tuscarora rights group. "In addition, the order does not address a pending complaint filed by the Tuscarora Nation Landholders Coalition describing the impact of the project on water pollution and the surrounding environment. The Commission must address this complaint before it can issue a new license," it says. Clearly, an environmental impact study was a requirement under the agreement between the Tuscarora Nation and the Power Authority. And just as clearly, no such study was undertaken. Furthermore, a formal complaint filed by the landholders was ignored in the rush to get the agreement signed. What, if any, impact this will have on the agreement as a whole will be discussed when tribal members meet with Mr. Bartolomei this week. They are hopeful a court case could compel Messrs. Patterson and Henry, and the tribe's attorney, Kendra Winkelstein, to be deposed under oath concerning the settlement and other matters. The controversy over the C$100 million settlement has fueled dissension on the reservation, where many live below the poverty level and often are denied access to basic services like electrical power and medical treatment at the Tuscarora Clinic. The settlement agreement also gives one megawatt of power to the nation annually, enough to provide free electricity to every home on the reservation. It is uncertain what this power allotment is being used for, and many believe it is being sold back to Niagara Mohawk or some other power company for cash. The U.S. Justice Department has opened an investigation into the case, and state Sen. George Maziarz has asked state Attorney General Eric Schneiderman to look into the situation as well. "These checks, payable to the Tuscarora Nation of Indians, have been being delivered to Leo Henry's house," Sen. Maziarz said. "There is no accounting to anyone what happens to the money after the checks are cashed." Sen. Maziarz also questions why state officials would allow the deal to go down as it did. "I have a hard time justifying in my mind the fact that this small group of people is getting C$100 million without any accountability whatsoever, not even to their own people," he said. "It's crazy." A June 8 letter sent by Tuscarora Elder Douglas S. Anderson and addressed to both President Barack Obama and New York Gov. Andrew Cuomo stated in plain English that the C$100 million settlement the Tuscarora received had been "misappropriated" and that the state and federal governments should immediately freeze all tribal assets. Repeated attempts over the past several months to get Messrs. Patterson and Henry or Ms. Winkelstein, to comment on the record have been unsuccessful. Frustrated Tuscaroras have told the Reporter their own efforts to find out what their money is being spent on have been likewise rebuffed. The tribe has no written constitution, and decisions are often made on the fly in the living room of the Patterson home, where "tribal council" meetings are held. No public records are made of these meetings. Ross Johnson, one of the most vocal opponents of the Henry- Patterson leadership, expressed the frustration of many on the reservation. "I personally became involved in this after I couldn't tolerate this type of dysfunctional government any longer, and I know I'm not alone," he said. "Our nation could have so many programs for our children, money for businesses, a source of income for the nation that each member would benefit from, and more. But with our current leaders, it will never happen. We will continue to become more reliant on public assistance from New York state." HURD MILLWORK: Class Action Settlement Gets Preliminary Approval ---------------------------------------------------------------- Wausau Daily Herald reports that a federal judge has preliminarily approved a $1.65 million settlement for Hurd Millwork Inc. customers who claim they bought leaky windows and doors in the 1990s. The suit filed by a Milwaukee man in 2005 contends that doors and windows Hurd made from Jan. 1, 1994, to Dec. 31, 1998, leaked, which reduced the products' insulating capacity. Hurd has denied the suit's allegations but has proposed a settlement to avoid additional costs and risks of protracted litigation. The suit's claim for breach of warranty was dismissed in 2009, but that decision now is being appealed. Earlier this year, both sides in the class-action suit proposed the settlement and District Judge Lynn Adelman granted initial approval to it on Sept. 2, finding it "fair, reasonable and adequate." Plaintiffs' attorney fees will be paid from the $1.65 million settlement. MOBILE COUNTY, AL: School Board Sued Over Discrimination -------------------------------------------------------- Courthouse News Service reports that seven assistant principals say in a federal class action that the Board of School Commissioners of Mobile County, and School Superintendent Roy Nichols Jr. will not let black principals work at schools with predominantly white student bodies. A copy of the Complaint in July, et al. v. Board of School Commissioners of Mobile County, et al., Case No. 11-cv-00539 (S.D. Ala.), is available at: http://www.courthousenews.com/2011/09/19/SchoolSeg.pdf The Plaintiffs are represented by: Gregory B. Stein, Esq. Mary E. Pilcher, Esq. STEIN AND PILCHER, L.L.C. 104 St. Francis Street, Ste. 601 Post Office Box 1051 Mobile, AL 36633 Telephone: (251) 433-2002 E-mail: Gstein@mobilebaylaw.com Mpilcher@mobilebaylaw.com - and - Robert L. Wiggins, Esq., Esq. Robert F. Childs, Esq., Esq. Candis A. McGowan, Esq. WIGGINS, CHILDS, QUINN & PANZASIS, LLC The Kress Building 301 19th Street North Birmingham, AL 35203 Telephone: (205) 314-0500 E-mail: Rwiggins@wcqp.com Rfc@wcqp.com Cmcgowan@wcqp.com NATIONAL CITY BANK: Judge Tosses $7-Mil. Class Action Settlement ---------------------------------------------------------------- Reuben Kramer at Courthouse News Service reports that a federal judge threw out a $7 million settlement to a class action alleging discriminatory loan practices, citing class-certification issues that arose after the Supreme Court ruled on the Wal-Mart case. The May 2008 lawsuit accused National City Bank of violating the Fair Housing Act by "placing minority mortgagors into higher- priced sub-prime loans because of their race." Clients said the bank's "discretionary pricing policy" allowed loan officers to tack on higher fees to an otherwise objective financing rate, and that minorities got more expensive mortgages. The suit cited an ACORN study that said black and Latino homeowners were 2.7 times and 2.3 times more likely than white people to receive subprime loans, respectively. "Differences in economic status are not to blame," the lawsuit states. "These racial disparities were found to persist even among borrowers of the same income level." The disparities "are not mere coincidences," according to the complaint. "They are the result of a systematic and predatory policy of targeting minority borrowers for high cost loans." Homeowners also claimed that discriminatory credit-pricing policies "cause persons with identical or similar credit scores to pay differing amounts for obtaining credit. Such subjective loan pricing -- which by design imposes differing finance charges on persons with the same or similar credit profiles -- disparately impacts defendants' minority borrowers." The class later named PNC Financial Services as a successor-in- interest to National City. Discovery began after the parties stipulated to dismissal of claims concerning mortgages from National City subsidiary First Franklin Corp. Those pending claims have been consolidated in California's Northern District. During discovery, National City produced data related to more than two million loans made from 2001 to 2008. U.S. District Judge Eduardo Robreno said the data detailed all the loans made to white, Latino and black borrowers during that time period, and "included the annual percentage rate, the term of the loan . . . the interest rate for the loan, the borrower's income, the borrower's ethnicity and race, the borrower's credit score, the borrower's debt-to-income ratio" and a litany of other information. After a May 2010 mediation session, parties agreed to a $7 million settlement for a class of more than 153,000 borrowers, which the judge granted conditional approval. In addition to the $7 million payout, the proposed settlement required National City to provide a toll-free hotline where mortgagors could discuss loan modification and foreclosure avoidance with English- and Spanish-speaking consultants. The deal also included a provision directing payment of $75,000 each to the National Council of La Raza and Neighborhood Housing Services of Chicago (NHSC) "for providing loss mitigation and/or foreclosure avoidance counseling services." In a December 2010 fairness hearing, Judge Robreno ordered briefing on some issues he found concerning. He wanted to know what the differences were between the foreclosure avoidance program already provided by defendants and the ones set to be implemented by La Raza and NHSC, and how the two organizations were selected, including "any connections between counsel and the organizations, whether or not the organizations provide referrals for counsel, and why two organizations were selected instead of one." In the meantime, the U.S. Supreme Court issued a landmark reversal in Wal-Mart Stores. v. Dukes, a sex-discrimination case brought on behalf of 1.5 million current and former female Wal-Mart workers, accusing the company of favoring men over women with respect to pay and promotion. Judge Robreno said the parties had recognized Dukes -- one of the largest civil rights class actions in American history -- as "highly relevant" to the National City case. The five-justice majority had reversed certification of the class, finding that the plaintiffs had not sufficiently shown that they shared common questions of law and fact. He agreed on Sept. 8 "under the Supreme Court's recent precedent . . . the class fails to establish the requirement of commonality and typicality." In the National City case, "there were many loan officers that were involved in using discretion that created the alleged discrimination," Judge Robreno wrote. "Thus, despite the regression analysis alleging an overall disparate impact [on minority mortgagors], the fact that each loan officer would likely proffer different reasoning for how she applied her discretion to loan applications further supports the conclusion that the issues involved in the case will differ based on which loan officer each plaintiff received her loan from," the 18-page decision states. "Applying Dukes, plaintiffs would likely have to show the disparate impact and analysis for each loan officer or at a minimum each group of loan officers working for a specific supervisor," he wrote. A telephone conference is set for Sept. 30. A copy of the Memorandum in Rodriguez, et al. v. National City Bank, et al., Case No. 08-cv-02059 (E.D. Pa.), is available at: http://www.courthousenews.com/2011/09/19/nat.%20city%20opinion.pdf OPLINK COMMUNICATIONS: Appeals in IPO Suit Settlement Pending ------------------------------------------------------------- In November 2001, Oplink Communications, Inc., and certain of its officers and directors were named as defendants in a class action shareholder complaint filed in the United States District Court for the Southern District of New York. In the amended complaint, the plaintiffs alleged that Oplink, certain of Oplink's officers and directors and the underwriters of Oplink's initial public offering ("IPO") violated Section 11 of the Securities Act of 1933 based on allegations that Oplink's registration statement and prospectus failed to disclose material facts regarding the compensation to be received by, and the stock allocation practices of, the IPO underwriters. Similar complaints were filed by plaintiffs against hundreds of other public companies that went public in the late 1990s and early 2000s and their IPO underwriters (collectively, the "IPO Lawsuits"). During the summer of 2008, the parties engaged in a formal mediation process to discuss a global resolution of the IPO Lawsuits. Ultimately, the parties reached an agreement to settle all 309 cases against all defendants, and entered into a settlement agreement in April 2009. The settlement provides for a $586 million recovery in total, divided among the 309 cases. Oplink's share of the settlement is roughly $327,458, which is the amount Oplink will be required to pay if the settlement is finally approved. In October 2009, the Court certified the settlement class in each case and granted final approval to the settlement. A number of appeals have been filed with the Second Circuit Court of Appeals, challenging the fairness of the settlement. A number of shareholder plaintiffs have also filed petitions for leave to appeal the class certification portion of Judge Scheindlin's ruling. These appeals and petitions are pending. No further updates were reported in the Company's September 16, 2011, Form 10-K filing with the U.S. Securities and Exchange Commission for the year ended July 3, 2011. PHILIP MORRIS: Trial in Light Cigarettes Class Action Begins ------------------------------------------------------------ Valerie Schremp Hahn, writing for STLtoday.com, reports that lawyers are seeking up to a billion dollars in a class action suit on behalf of Missouri smokers against tobacco giant Philip Morris, accused of claiming light cigarettes were safer than regular cigarettes when they weren't. About 700 million packs of Marlboro Light cigarettes were sold in Missouri from early 1995 until the end of 2002, the time period the suit covers, plaintiff's attorney Stephen Swedlow argued as the case opened on Sept. 19 in St. Louis. The suit, filed in 2000, is not meant to blame Philip Morris for the personal choice of someone choosing to smoke perfectly legal cigarettes, he said. "The problem is, this product is mislabeled," he said. "You don't get to sell low-fat yogurt that isn't low-fat." The light cigarette packages promised lower tar and nicotine when they were made with the same tobacco as regular cigarettes, and smokers might compensate for the lower nicotine by inhaling more deeply, he said. "The reason this is the most genius fraud in the state of Missouri is because smokers can't figure this out for themselves," he said. He said Marlboro Light cigarettes are the best-selling cigarette product in the state. Philip Morris attorney Beth Wilkinson argued that Marlboro Light cigarettes are different than regular Marlboro Reds, and include eleven percent less tobacco, more ventilation, and a longer filter. Both types of cigarettes carried the same surgeon general's warnings, she said. She said many sources say the light cigarettes deliver less nicotine, and that by 1981 the public health community knew that people might compensate by inhaling more deeply with light cigarettes, she said. "So how is that a secret?" she said. She said the class action lawyers can't say how large their class is, when its members began smoking, and its habits of smoking Marlboro Light cigarettes. Philip Morris attorneys said the plaintiffs produced an economic model that estimated damages at around one billion dollars. If the jury finds in favor of the plaintiffs, punitive damages would be determined in a second phase of the trial. The trial is expected to last until around Thanksgiving. Twelve jurors and eight alternates were seated on Sep. 19. Several class representatives were originally part of the suit, but the last remaining one is Deborah Larsen, 60, of Jefferson County. She smoked about a pack and a half of Marlboro Lights a day from 1979 until 2002, when she quit. Philip Morris attorneys say she was sought out by the plaintiff's attorneys to represent the class. This is the second large tobacco trial in St. Louis Circuit Judge Michael David's courtroom this year. In April, big tobacco companies prevailed in a sweep of verdicts against hospitals seeking to recoup the costs of treating smokers' diseases. That trial started in January and took two and a half months to present. In 2003, another case involving the marketing of light and low-tar cigarettes as safer led to a $10.1 billion verdict against Philip Morris in Madison County Circuit Court. The Illinois Supreme Court overturned it, and earlier this year the case was revived by a lower appeals court. RALCORP HOLDINGS: Faces Class Action Over ConAgra Foods Buyout -------------------------------------------------------------- Joe Harris at Courthouse News Service reports that Ralcorp Holdings executives breached their duty to shareholders by shunning buyout offers from ConAgra Foods at well above market value, according to a class action in city court. Ralcorp is a leading producer of store-brand foods. "Ralcorp's Board of Directors has repeatedly and unreasonably refused to even discuss a potential transaction with ConAgra in spite of numerous premium offers for all of the outstanding company shares," the complaint states. "Instead, Ralcorp has erected barriers to any unsolicited takeover, and hastily and belatedly created and introduced its own plan to break up the company." Named plaintiff Jennifer Howard says ConAgra's offer was 32% higher than Ralcorp's closing stock price on March 21, a 25% premium to Ralcorp's one-month average closing price as of April 28, and a 20% premium of Ralcorp's closing stock price on April 28. She says that rather than discuss the bid with ConAgra, Ralcorp executives created barriers to a takeover such as spinning off Post Foods, even though ConAgra sweetened the offer. "On September 14, 2011, Bloomberg published a story entitled 'Ralcorp Board Costing Investors $1 Billion in ConAgra Opposition,'" the complaint states. "The news story pointed out the ConAgra's $94 per share offer could go as high as $104 were the companies to engage in a dialogue." The class asks that Ralcorp be ordered to enter into negotiations with ConAgra and negotiate the best deal for shareholders. They are represented by Mark Goldenberg with Goldenberg Heller Antognoli, of Edwardsville, Ill. Ralcorp, founded in 1995, has about 10,800 employees, many of them in Missouri, according to the complaint. Ralcorp and 11 members of its Board of Directors are named as defendants. ConAgra is not a party to the complaint. A copy of the Complaint in Howard v. Stiritz, et al., Case No. 1122-CC09665 (Mo. Cir. Ct., St. Louis Cty.), is available at: http://www.courthousenews.com/2011/09/19/Ralcorp.pdf The Plaintiff is represented by: Mark C. Goldenberg, Esq. Thomas P. Rosenfeld, Esq. GOLDENBERG HELLER ANTOGNOLI & ROWLAND P.C. 2227 South State Route 157 Edwardsville, IL 62025 Telephone: (618) 656-5150 E-mail: mark@ghalaw.com tom@ghalaw.com - and - Gregory M. Nespole, Esq. Alan D. Weiss, Esq. Matthew M. Guiney, Esq. WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP 270 Madison Avenue New York, NY 10016 Telephone: (212) 545-4600 E-mail: nespole@whafh.com aweiss@whafh.com guiney@whafh.com SEQUANS COMMUNICATIONS: Faces Shareholder Class Action in N.Y. -------------------------------------------------------------- Robbins Umeda LLP, a shareholder rights litigation firm, disclosed that a federal securities class action has been filed by an investor in the U.S. District Court for the Southern District of New York on behalf of purchasers of Sequans Communications S.A. American Depositary Shares between April 15, 2011, and July 27, 2011. The complaint alleges that beginning on April 15, 2011, certain officers and directors at Sequans issued a series of positive statements to investors about the business condition, future prospects, and true performance of the company that were materially false and misleading, and that were designed to artificially inflate the value of the company. In particular, the complaint alleges that officials at Sequans withheld material adverse facts about declining revenue from its WiMAX product line, the decreasing demand for WiMAX in the 4G market, the ability of Sequans to generate revenue in the 4G LTE market, and the company's growing dependency on sales to HTC, its largest customer. On July 28, 2011, Sequans released its second quarter results for fiscal year 2011. These results were in stark contrast to optimistic statements made by officials, and seemed to confirm that the company was performing well below expectation. On this news, the company's stock lost $6.88 per share, or 45% of their value, to close on July 28, 2011 at just $8.55. As more allegations continue to surface, the value of Sequans' stock continues to decline; after trading as high as $15.43 on July 27, 2011, shares of Sequans closed on September 12, 2011 at just $4.83 per share. If you invested in Sequans during the Class Period and would like more information about your shareholder rights, please contact attorney Gregory E. Del Gaizo at 800-350-6003 or via the shareholder information form on our Web site. One option that may be available is to move for lead plaintiff in the class action, which serves an important role in the potential prosecution of this case. Robbins Umeda LLP represents individual and institutional shareholders in derivative, direct, and class action lawsuits. The law firm's skilled litigation teams include former federal prosecutors, former defense counsel from top multinational corporate law firms, and career shareholder rights attorneys. UBS AG: Claims on Foreign-Traded Securities Can't Proceed --------------------------------------------------------- Alison Frankel, writing for Thomson Reuters, reports that in the summer of 2010, as the securities class action bar was trying to come up with ways to get around the U.S. Supreme Court's ban on claims based on foreign-traded securities in Morrison v. National Australia Bank, some intrepid plaintiffs' lawyers posited a creative theory. Many foreign companies offered American Depository Receipts, which are traded on U.S. exchanges. Since ADRs are based on the foreign-traded shares, they argued, those shares are, by extension, "listed" on U.S. exchanges. The theory was derided by defense lawyers, including George Conway of Wachtell, Lipton, Rosen & Katz, who won Morrison at the Supreme Court. Mr. Conway called the "listed" theory "N-U-T-S," and a succession of federal judges eventually agreed. In the 14 months since the Morrison ruling, judges have interpreted the court's stricture expansively, applying Morrison's ban on extraterritorial application of securities laws to cases involving not just securities fraud, but also claims under the 1933 Securities Act, claims involving unlisted credit default swaps, and even allegations of racketeering. As judges tossed case after case against foreign defendants, one securities class action was left undecided. But it was a huge one: Plaintiffs asserted more than $100 billion (with a b) in losses, alleged that UBS deceived shareholders about its exposure to subprime mortgages and its allegedly illegal sheltering of U.S. tax evaders. Moreover, class counsel from Grant & Eisenhofer, Kessler Topaz Meltzer & Check, and Motley Rice had the strongest argument of any securities plaintiffs on the "listed" theory. UBS doesn't trade ADRs or American Depository Shares on U.S. exchanges. It trades common shares. About 12% of UBS shares are listed in the United States (according to Harvard law professor Allen Ferrell, in a declaration in the UBS litigation). Given that an investor could buy a share of UBS on the Swiss exchange in the morning and trade it on the NYSE in the afternoon, plaintiffs argued, all UBS stock was, in essence, listed on U.S. exchanges and thus immune from Morrison's bar. Unfortunately for the class -- and for all investors hoping to salvage some scrap of hope from the Morrison wreckage -- federal judge Richard Sullivan of the Southern District of New York disagreed. In a long-awaited 10-page ruling on Sept. 13, Judge Sullivan found that shareholders could only proceed with claims based on shares actually listed in the United States. Foreign- listed shares are out. The ruling wipes out almost 90% of UBS's exposure. UBS was represented by Robert Giuffra of Sullivan & Cromwell. "We are pleased with the court's decision dismissing all claims based on purchases of UBS's shares outside of the United States," he said in an e-mail. Class counsel Jay Eisenhofer of Grant & Eisenhofer didn't respond to an e-mail. For the broader securities bar, said Mr. Conway of Wachtell, Judge Sullivan's UBS ruling means an end to plaintiffs' attempts to get around Morrison. "The 'listed securities' argument in this case was the last gasp," he said in an e-mail. "Now it's all over -- (plaintiffs) don't even bother to bring these cases anymore." In fact, in a Sept. 9 brief in the Vivendi case, one of Morrison's biggest casualties, a coalition of some of the biggest securities class action firms in the business was left hoping for help from Congress, via the Securities and Exchange Commission's mandate in Dodd-Frank, or else from some wistfully imagined future Supreme Court. "The undersigned further submit that Morrison was wrongly decided and look forward to a day when a future Supreme Court corrects the error and reinstates the conduct and effects tests that had prevailed in (the Second) Circuit and elsewhere for decades." UBS AG: Exposure to Rogue Trade Class Actions May Be Limited ------------------------------------------------------------ Andrew Longstreth, writing for Reuters, reports that UBS AG is under pressure for failing to monitor an equity trader suspected of causing a $2.3 billion loss for the Swiss bank, but its exposure to U.S. class-action litigation over the scandal may be limited. Following negative announcements from companies, lawyers for U.S. shareholders routinely file class-actions in American courts alleging that misrepresentations were made to investors. But so far, plaintiffs' lawyers who specialize in these kinds of cases have been quiet in response to the UBS scandal. As of Sept. 19, there had been no public announcements of any securities fraud lawsuits filed over the UBS trading losses, although some lawyers said they are keeping their options open. "We'll look closely at it," said Steven Toll, a prominent class- action lawyer from law firm Cohen Milstein Sellers & Toll in Washington, D.C. On Sept. 15, UBS stunned markets when it announced that a London trader concealed "unauthorized speculative trading in various S&P 500, DAX and EuroStoxx index futures over the last three months" by creating fictitious hedging positions in internal systems. Trader Kweku Adoboli was charged on Friday with fraud and false accounting dating to 2008. It was the latest embarrassment for UBS, which has sought to recover from its near collapse during the financial crisis and an investigation into allegations it helped wealthy U.S. clients evade paying taxes. But the scandal will present obstacles to investors who try to seek redress in U.S. courts. Shareholder damages appear relatively small. On the day before UBS announced its trading losses, the company's shares on the New York Stock Exchange closed at $12.68. The next day they closed at $11.41. Under U.S. securities laws, damages cannot exceed the difference between the price investors paid for their shares and the average price of the stock over a 90-day period beginning on the date when the information correcting the misstatement was disseminated. If, during the 90-day period, shares of UBS rise significantly, it could negate any potential damages. Another obstacle for plaintiffs is a U.S. Supreme Court ruling that recently stopped a case against Societe Generale over the company's failure to stop unauthorized trades by employee Jerome Kerviel, who racked up a $6.7 billion loss in 2008. Mr. Kerviel was sentenced to three years in prison in October 2010 by a Paris court. In a lawsuit brought in Manhattan federal court, shareholders alleged Societe Generale ignored internal red flags of Mr. Kerviel's trading and misrepresented the quality of its management policies and internal controls to investors. As a result, Societe Generale's corporate and investment banking division was forced to restate 98% of its originally reported net income for the six-month period ended June 30, 2007, according to the plaintiffs. But in dismissing the case, U.S. District Judge Richard Berman in Manhattan last September cited the U.S. Supreme Court's 2010 ruling, Morrison v. National Australia Bank Ltd., which barred shareholders from bringing claims for shares purchased on foreign exchanges. Judge Berman found that because the plaintiffs -- Vermont Pension Investment Committee and Boilermaker-Blacksmith National Pension Fund -- had purchased their Societe Generale shares on foreign exchanges, they were barred from bringing claims in the United States. UBS itself was the beneficiary of the Morrison ruling just last week in a case alleging the bank misled investors about its exposure to subprime mortgages and its allegedly illegal sheltering of U.S. tax evaders. The plaintiffs, who claimed more than $100 billion in losses, attempted a novel argument to avoid the Supreme Court's Morrison ruling. They argued that, while their shares were purchased abroad, they should be able to bring claims in the United States because UBS common shares are traded on the New York Stock Exchange. In a decision on Sept.13, U.S. District Court Judge Richard Sullivan in Manhattan rejected that argument and in the process wiped out almost 90% of UBS's exposure in the lawsuit. Because only about 12% of UBS shares are listed in the United States, the bank's exposure would be limited if shareholders brought a class-action case over the trading scandal, said Hannah Buxbaum, a professor at Indiana University's law school. "It's a relatively small number of plaintiffs' claims that would survive a Morrison review," she said. ********* 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. Leah Felisilda, Noemi Irene A. Adala, Joy A. Agravante, Julie Anne Lopez, Christopher Patalinghug, Frauline Abangan and Peter A. Chapman, Editors. Copyright 2011. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. 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