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             C L A S S   A C T I O N   R E P O R T E R

               Monday, June 11 2001, Vol. 3, No. 113

                              Headlines

ALLIANCE DATA: Two Subsidiaries Named In Florida Consumer Lawsuits
AMAZON.COM: Federal Trade Commission Discontinues Enforcement Action
CABLETRON SYSTEMS: Court Dismisses Securities Suit In Rhode Islands
CELL PATHWAYS: Reaches Deal To Settle 1999 Securities Suit For $3.75M
CISCO SYSTEMS: Faces Numerous Securities Suits In N.D. California

EBAY INC.: Plaintiffs Appeal CA Case Citing Violation Of State Laws
FIRST UNION: Merger Partner Opposes Discovery On NC Shareholder Suit
FIRST UNION: Partner Asks Transfer Of Cases To Special Business Court
HYBRID NETWORKS: Continues To Belie Allegations In CA Securities Suits
HYBRID NETWORKS: Keeps Denying Charges In Federal Securities Suits

INTERTRUST TECHNOLOGIES: Schiffrin & Barroway Files Suit In S.D. NY
K-DUR20 LITIGATION: PAL Sues Drug Makers For Anticompetitive Deal
MCKEESON HBOC: Court Has Yet To Issue Decision On Motions To Dismiss
NATIONAL AUTO: $6.5 Million Settlement Offer Receives Final Court Nod
NATIONWIDE FIDELITY: Continues Strong Defense In Retirement Plan Suit

NETWORK COMMERCE: Stull Stull Files Shareholder Suit in W.D. WA
PRUCO LIFE: Remains A Defendant In 109 Sales Practices Lawsuits
SCIENCE DYNAMICS: Sued In South Carolina For Its Commander System
SOUTH CAROLINA: Video Poker Machine Owners Allege State Takings
STAMPS.COM INC: Stull Stull Commences Securities Suit in S.D. NY

TOPPS COMPANY: No Date Set For Oral Argument Of Plaintiffs' Appeal
TOPPS COMPANY: CA Court Hears Arguments On Earlier Tentative Ruling
VECTOR GROUP: Subsidiary Faces 43 Health Care Reimbursement Actions
VECTOR GROUP: Pays $6.27 Million To Maintain Status Quo In Florida
XEROX CORPORATION: Ruling On Objections To Consolidation Not Yet Out


* Congress, Regulators To Look Into Methods, Behaviors Of Analysts


                              *********


ALLIANCE DATA: Two Subsidiaries Named In Florida Consumer Lawsuits
------------------------------------------------------------------
A group of World Financial cardholders filed a putative class action
complaint against World Financial on November 16, 2000, in the United
States District Court, Southern District of Florida, Miami Division.
World Financial is a wholly owned subsidiary of Alliance Data Systems.

The plaintiffs, individually and on behalf of all others similarly
situated, commenced the action alleging that World Financial engaged in
a systematic program of false, misleading, and deceptive practices to
improperly bill and collect consumer debts from thousands of
cardholders.

The suit stems from World Financial's practices involved in calculating
finance charges and in crediting cardholder payments on the next
business day if received after 6:30 a.m.

The plaintiffs contend that such practices are deceptive and result in
the imposition of excessive finance charges and other penalties to
cardholders. The plaintiffs allege that World Financial, through such
practices, has violated several federal and Florida state consumer
protection statutes and breached cardholder contracts.

The plaintiffs have not specified an amount of damages, but have
requested, individually and on behalf of a putative class, monetary and
punitive damages for the alleged stated claims and permanent
injunctions for alleged statutory violations.

This complaint was subsequently amended to include another subsidiary,
ADS Alliance Data Systems, Inc., as a defendant.

"We believe these allegations are without merit and intend to defend
this matter vigorously," the Company said in a recent regulatory filing
with the Securities and Exchange Commission.


AMAZON.COM: Federal Trade Commission Discontinues Enforcement Action
--------------------------------------------------------------------
The Federal Trade Commission has decided to drop its enforcement action
against Amazon.com, Inc. even though it acknowledges that the Company  
"likely" has engaged in breaches of privacy in relation to information
in its database about consumers, according to a report published
recently in the Wall Street Journal.  

The trade commission said Amazon.com, Inc. and its Alexa Internet
subsidiary probably made deceptive statements about their privacy
practices, but shouldn't be punished because the problem has been
addressed.  

Instead of a brief statement on privacy practices, Alexa now publishes
many pages stating that what it does about consumer data in its
possession is nothing.

Internet privacy activist Richard Smith last year complained to the
Commission that Amazon was secretly collecting personal data on
customers through Alexa's system, which is designed to assist shopping
and other activities online.  

Earlier, customers complaining about the same practices filed a class
action suit, which was eventually settled for about $2 million, with
Amazon continuing to deny wrongdoing.


CABLETRON SYSTEMS: Court Dismisses Securities Suit In Rhode Islands
-------------------------------------------------------------------
A consolidated class action lawsuit raising claims against Cabletron
Systems, Inc. and some officers and directors of Cabletron was filed in
the United States district court for the district of New Hampshire and,
following transfer, is pending in the district of Rhode Island.

The complaint alleges that Cabletron and several of its officers and
directors made materially false and misleading information about
Cabletron's operations and acted in violation of Section 10(b) of and
Rule 10b-5 under the Securities Exchange Act of 1934 during the
period between March 3, 1997 and December 2, 1997.

The complaint also alleges that Cabletron's accounting practices
resulted in the disclosure of materially misleading financial results
during the same period.

More specifically, the complaint challenged Cabletron's revenue
recognition policies, accounting for product returns, and the validity
of some sales. The complaint does not specify the amount of damages
sought on behalf of the class.

Cabletron and other defendants moved to dismiss the complaint and, by
order dated December 23, 1998, the district court expressed its
intention to grant Cabletron's motion to dismiss unless the plaintiffs
amended their complaint.

The plaintiffs served a second consolidated class action complaint, and
Cabletron has filed a motion to dismiss this second complaint. In a
ruling dated May 23, 2001, the district court dismissed this complaint
with prejudice. The plaintiffs may choose to appeal this ruling to the
First Circuit Court of Appeals.


CELL PATHWAYS: Reaches Deal To Settle 1999 Securities Suit For $3.75M
---------------------------------------------------------------------
Cell Pathways, Inc. (NASDAQ: CLPA) announced Thursday last week that
the Company has reached an agreement in principle with plaintiffs to
settle all claims in the consolidated 1999 securities class action
lawsuit pending against Cell Pathways and its officers in United States
District Court in Philadelphia.

The settlement amount, $3.75 million, will be funded by the Company's
insurance carrier. The settlement is subject to execution of a final
agreement, court approval, and notice and an opportunity to object
being provided to the shareholder class.

"While we vigorously deny allegations of any wrongdoing, we believe
that agreeing to this settlement is in the best interest of our
shareholders to avoid the further distraction of this litigation," said
Robert J. Towarnicki, chairman, president and chief executive officer
of Cell Pathways.

Cell Pathways, Inc., headquartered in Horsham, Pennsylvania, is a
development stage pharmaceutical company focused on the research,
development and commercialization of novel and unique medications to
prevent and treat cancer.


CISCO SYSTEMS: Faces Numerous Securities Suits In N.D. California
-----------------------------------------------------------------
Beginning on April 20, 2001, a number of purported shareholder class
action lawsuits have been filed in the United States District Court for
the Northern District of California against Cisco Systems, Inc. and
certain of its officers and directors.

The lawsuits are essentially identical, and purport to bring suit on
behalf of those who purchased the Company's publicly traded securities
between August 10, 1999 and April 16, 2001.

Plaintiffs allege that defendants made false and misleading statements,
purport to assert claims for violations of the federal securities laws,
and seek unspecified compensatory damages and other relief.

"The Company believes the claims are without merit and intends to
defend the actions vigorously," said a recent regulatory document filed
by the Company with the Securities and Exchange Commission.


EBAY INC.: Plaintiffs Appeal CA Case Citing Violation Of State Laws
-------------------------------------------------------------------
On April 25, 2000, eBay, Inc. was served with a lawsuit, Gentry et.al.
v. eBay, Inc. et.al, filed in Superior Court in San Diego, California.
The lawsuit was filed on behalf of a purported class of eBay users who
purchased allegedly forged autographed sports memorabilia on eBay.

The lawsuit claims the Company was negligent in permitting certain
named (and other unnamed) defendants to sell allegedly forged
autographed sports memorabilia on eBay.

In addition, the lawsuit claims the Company violated California unfair
competition law and a section of the California Civil Code, which
prohibits "dealers" from selling sports memorabilia without a
"Certificate of Authenticity."

On January 26, 2001, the court issued a ruling dismissing all claims
against the Company in the lawsuit. The court ruled that the Company's
business falls within the safe harbor provisions of 47 USC 230, which
grants Internet service providers such as eBay with immunity from state
claims based on the conduct of third parties.

The court also noted that the Company was not a "dealer" under
California law and thus not required to provide certificates of
authenticity with autographs sold over its site by third parties.

All counts of the plaintiffs' suit were dismissed with prejudice as to
eBay. The plaintiffs have filed an appeal of this ruling.


FIRST UNION: Merger Partner Opposes Discovery On NC Shareholder Suit
--------------------------------------------------------------------
On or about April 20, 2001, an individual stockholder of Wachovia
Corporation, a merger partner of First Union Corporation, purporting to
represent a class of holders of Wachovia common stock, filed a putative
Class Action Complaint against Wachovia, Leslie M. Baker, Jr. and
Morris W. Offitt captioned Krim v. Wachovia, et al., No. 1:01CV00417,
in the United States District Court for the Middle District of
North Carolina.

The complaint alleges that the defendants breached their fiduciary
duties by agreeing to the merger. The complaint seeks injunctive
relief, unspecified damages, and costs and attorneys' fees.

On or about April 30, 2001, an amended complaint was filed against the
same defendants asserting similar claims and seeking similar relief. On
or about May 4, 2001, the plaintiff moved for expedited discovery,
which Wachovia has opposed.


FIRST UNION: Partner Asks Transfer Of Cases To Special Business Court
---------------------------------------------------------------------
On May 1, 2001, an individual stockholder of Wachovia Corporation, a
merger partner of First Union Corporation, filed a putative class
action complaint on behalf of a purported class of common stock holders
of Wachovia.

The suit names Wachovia and the Wachovia directors, which is captioned
Bennett v. Baker, et al., in North Carolina Superior Court, Forsyth
County.

The complaint alleges that the Wachovia directors breached their
fiduciary duties by entering into the merger agreement with First
Union.

On May 14 and 17, respectively, Heany v. Wachovia, et al. File No.
01CVS4748 and Wachsman v. Wachovia, et al. File No. 01CVS4810 were also
filed in the same court with identical complaints and claims.

On or about May 24, 2001, plaintiff filed a motion for class
certification. On May 25, 2001, Wachovia, its directors and First Union
filed a motion to transfer the Heaney, Bennett and Wachsman putative
shareholder class action complaints filed in various North Carolina
state courts before a special Superior Court Business Judge for Complex
Business Cases.


HYBRID NETWORKS: Continues To Belie Allegations In CA Securities Suits
----------------------------------------------------------------------
In June 1998, five class action lawsuits were filed in San Mateo County
Superior Court, California against Hybrid Networks, Inc., two of its
directors, four former directors and two former officers.

The lawsuits were brought on behalf of purchasers of the Company's
common stock during the class period commencing November 12, 1997 (the
date of the Company's initial public offering) and ending June 1, 1998.

In July 1998, a sixth class action lawsuit was filed in the same court
against the same defendants, although the class period was extended to
June 18, 1998.  All six lawsuits also named as defendants the
underwriters in the Company's initial public offering, but the
underwriters have since been dismissed from the cases.

The complaints in the State Actions claimed that the Company and the
other defendants violated the anti-fraud provisions of the California
securities laws, alleging that the financial statements used in
connection with the Company's initial public offering and the financial
statements issued subsequently during the class period, as well as
related statements made on behalf of the Company during the initial
public offering and subsequently regarding the Company's past and
prospective financial condition and results of operations, were false
and misleading.

The complaints also alleged that the Company and the other defendants
made these misrepresentations in order to inflate the price of the
Company's common stock for the initial public offering and during the
class period. The Company and the other defendants denied the charges
of wrongdoing.


HYBRID NETWORKS: Keeps Denying Charges In Federal Securities Suits
------------------------------------------------------------------
Two federal securities class action lawsuits were filed in the U.S.
District Court for the Northern District of California against Hybrid
Networks, Inc. on July and August 1998.

Both Federal Actions were brought against the same defendants as the
State Actions, except that the second Federal Action also named as a
defendant Price Waterhouse Coopers, LLP (PWC), the Company's former
independent accountants.

The class period for the first Federal Action is from November 12, 1997
to June 1, 1998, and the class period in the second Federal Action
extends to June 17, 1998.

The complaints in both Federal Actions claimed that the Company and the
other defendants violated the anti-fraud provisions of the federal
securities laws, on the basis of allegations that are similar to those
made by the plaintiffs in the state class action lawsuits.

The Company and the other defendants deny these charges of wrongdoing.

        
INTERTRUST TECHNOLOGIES: Schiffrin & Barroway Files Suit In S.D. NY
-------------------------------------------------------------------
Schiffrin & Barroway, LLP filed a class action lawsuit in the United
States District Court for the Southern District of New York on behalf
of all purchasers of the common stock of InterTrust Technologies
Corporation (Nasdaq: ITRU) from October 26, 1999 through December 6,
2000, inclusive.

The complaint charges InterTrust and certain of its officers and
directors with issuing false and misleading statements concerning its
business and financial condition.

Specifically, the complaint alleges that defendants disseminated
materially false and misleading information in connection with
InterTrust's initial public offering on or about October 26, 1999 and
InterTrust's secondary offering on or about April 6, 2000.

For more details, contact: Schiffrin & Barroway, LLP (Marc A. Topaz,
Esq. or Stuart L. Berman, Esq.) at Three Bala Plaza East, Suite 400,
Bala Cynwyd, PA  19004, toll free at 1-888-299-7706 or 1-610-667-7706,
or via e-mail at info@sbclasslaw.com.


K-DUR20 LITIGATION: PAL Sues Drug Makers For Anticompetitive Deal
-----------------------------------------------------------------
Boston-based Prescription Access Litigation project (PAL) announced
Thursday that it has filed six class action lawsuits in state and
federal courts against three pharmaceutical companies.

The lawsuits allege that Schering-Plough Corp. (NYSE: SGP), maker of K-
DUR20; privately held Upsher-Smith Laboratories, and American Home
Products Corp. (NYSE: AHP) entered into illegal agreements in the
market of K-DUR20, a potassium supplement that is often prescribed in
conjunction with high blood pressure medication. K-DUR20 is the fourth
most frequently prescribed drug to the elderly.

The class action suits allege that consumers have been paying
artificially inflated prices for K-DUR20 for over three years because
the three companies unfairly and unlawfully entered into
anticompetitive agreements aimed at keeping low-cost generic forms of
K-DUR20 off the market.

Under the agreements, Schering-Plough paid Upsher-Smith and ESI
Lederle, Inc., a division of AHP, upwards of $80 million to delay their
generic forms of K-DUR20, the most widely prescribed form of K-DUR20.

The lawsuits further allege that the illegal agreements between the
companies prevented any other generic version of K-DUR20 from coming
onto the market. Generic pharmaceuticals feature the same active
ingredients as their brand name counterparts but, according to PAL, are
typically 30 to 80 percent cheaper.

As alleged in the complaint, Schering-Plough estimates state that the
first year of low-priced generic competition would decrease its K-DUR20
sales by over $30 million.

"The result of these types of illegal agreements between brand name and
generic companies is that they force consumers to pay artificially high
prices for a very important and popular medication," said Kim
Shellenberger, PAL's director. "In the case of K-DUR20, these consumers
are often elderly Americans on a fixed income who cannot afford to be
picking up the tab for pharmaceutical companies' back room deals."

The K-DUR20 filings are the third legal move in as many months by PAL,
a coalition of more than 30 organizations formed to combat illegal drug
company practices that inflate prices for needed medications.

In April, PAL filed six lawsuits in state and federal courts against
Bristol-Myers Squibb for illegally keeping a generic version of BuSpar,
an anti-anxiety drug, off the market. In May, PAL filed lawsuits in six
states and in federal court against AstraZeneca and Barr Laboratories
for price collusion over tamoxifen, a breast cancer drug that is the
most widely prescribed anti-cancer drug.

PAL's K-DUR20 class action lawsuits are being filed in U.S. District
Courts in New Jersey and Minnesota and in state courts in New York,
Louisiana, Massachusetts and Maine.

Plaintiffs in the actions, all members of the PAL coalition, include
the New York Statewide Senior Action Council (www.nysenior.org), Maine-
based Consumers for Affordable Health Care (www.mainecahc.org), the
Dorchester-based Massachusetts Senior Action Council, and individual
users of the drug.

The plaintiff groups are represented by Carey & Danis, LLC of St. Louis
(www.careydanis.com); New York-based Milberg Weiss Bershad Hynes &
Lerach LLP (www.milberg.com); and Lieff, Cabraser, Heimann & Bernstein,
LLP of San Francisco (www.lchb.com).


MCKEESON HBOC: Court Has Yet To Issue Decision On Motions To Dismiss
--------------------------------------------------------------------
On November 2, 1999, the Honorable Ronald M. Whyte of the Northern
District of California issued an order consolidating fifty-three
Federal Securities Actions into one action entitled In re MCKEESON
HBOC, INC. Securities Litigation, (Case No. C-99-20743-RMW).

On December 22, 1999, Judge Whyte appointed the New York State Common
Retirement Fund as lead plaintiff and approved Lead Plaintiff's choice
of counsel. An amended and consolidated complaint was filed on February
25, 2000.

The amended complaint generally alleges that the defendants violated
the federal securities laws in connection with the events leading to
the Company's decision to restate its financial statements.

On September 28, 2000, Judge Whyte dismissed all of the claims in the
amended complaint, which alleged violations of Section 11 of the
Securities Act of 1933 with prejudice, Section 10(b) and 14(a) of the
Securities Exchange Act of 1934.

On November 14, 2000, Lead Plaintiff filed its second amended and
consolidated class action complaint.  On January 18, 2001, the Company
and all Directors and former directors and officers named as
defendants, moved to dismiss claims under Section 14(a) of the Exchange
Act in its entirety, and the Company moved to dismiss the claim under
Section 10(b).

These motions were heard on March 23, 2001, and the Court has not yet
issued a ruling.


NATIONAL AUTO: $6.5 Million Settlement Offer Receives Final Court Nod
---------------------------------------------------------------------
National Auto Credit Inc. disclosed in a recent regulatory document
filed with the Securities and Exchange Commission that the $6.5 million
settlement deal for the 1998 consolidated securities suit received
final court approval earlier this year.

This case had been pending in the United States District Court for the
Northern District of Ohio since 1998.  Eleven suits were originally
brought against former officers and directors of the Company after its
former independent auditors Deloitte & Touche, LLP resigned in January
1998.

The actions, which were consolidated, alleged fraud and other
violations of the federal securities laws and sought money damages as
the result of various alleged frauds and violations of the Securities
Exchange Act of 1934, including misrepresentations about the adequacy
of the Company's allowance for credit losses and its loan underwriting
practices.


NATIONWIDE FIDELITY: Continues Strong Defense In Retirement Plan Suit
---------------------------------------------------------------------
On October 29, 1998, Nationwide Fidelity Advisor Annuity Variable
Account was named in a lawsuit filed in Ohio state court related to the
sale of deferred annuity products for use as investments in tax-
deferred contributory retirement plans (Mercedes Castillo v. Nationwide
Financial Services, Inc., Nationwide Life Insurance Company and
Nationwide Life and Annuity Insurance Company).

On May 3, 1999, the complaint was amended to, among other things, add
Marcus Shore as a second plaintiff. The amended complaint is brought as
a class action on behalf of all persons who purchased individual
deferred annuity contracts or participated in group annuity contracts
sold by Nationwide and the other named Nationwide affiliates which were
used to fund certain tax-deferred retirement plans.

The amended complaint seeks unspecified compensatory and punitive
damages. No class has been certified.

On June 11, 1999, Nationwide and the other named defendants filed a
motion to dismiss the amended complaint. On March 8, 2000, the court
denied the motion to dismiss the amended complaint filed by Nationwide
and other named defendants.

Nationwide intends to defend this lawsuit vigorously.


NETWORK COMMERCE: Stull Stull Files Shareholder Suit in W.D. WA
---------------------------------------------------------------
Stull, Stull & Brody filed a class action lawsuit last week in the
United States District Court for the Western District of Washington at
Seattle, on behalf of purchasers of Network Commerce, Inc.
(NASDAQ:NWKC) common stock between September 28, 1999 and April 16,
2001.

The complaint alleges that defendant Network Commerce, Inc. and its
Chairman and CEO Dwayne M. Walker violated Sections 11, 12(2), and 15
of the Securities Act of 1933, and Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.

It is alleged that during the Class Period, defendants disseminated to
the investing public false and misleading registration statements and
Prospectuses related to Network Commerce's initial and secondary public
offerings, as well as its merger with Ubarter.com.

Defendants distributed to the investing public false and misleading
financial statements and press releases concerning the Company's growth
of revenue, earnings, and ability to achieve profitability, the
complaint alleged.

For more information, contact: Tzivia Brody, Esq. at Stull, Stull &
Brody by calling toll-free 1-800-337-4983, or by e-mail at
SSBNY@aol.com, or by fax at 212/490-2022, or by writing to Stull, Stull
& Brody, 6 East 45th Street, New York, NY 10017.


PRUCO LIFE: Remains A Defendant In 109 Sales Practices Lawsuits
---------------------------------------------------------------
As of December 31, 2000, Pruco Life Insurance Company of New Jersey, an
indirect wholly owned subsidiary of Prudential Insurance Company of
America, remained a party to approximately 109 individual sales
practices actions filed by policyholders who "opted out" of the class
action settlement relating to permanent life insurance policies issued
in the United States between 1982 and 1995.

Some of these cases seek substantial damages while others seek
unspecified compensatory, punitive or treble damages. It is possible
that substantial punitive damages might be awarded in one or more of
these cases. Additional suits may also be filed by other individuals
who "opted out" of the settlements.

Prudential has indemnified Pruco Life for any liabilities incurred in
connection with sales practices litigation covering policyholders of
individual permanent life insurance policies issued in the United
States from 1982 to 1995.

As of December 31, 2000 Prudential has paid or reserved for payment
$4.405 billion before tax, equivalent to $2.850 billion after tax, to
provide for remediation costs, and additional sales practices costs
including related administrative costs, regulatory fines, penalties and
related payments, litigation costs and settlements, including
settlements associated with the resolution of claims of deceptive sales
practices asserted by policyholders who elected to "opt-out" of the
class action settlement and litigate their claims against Prudential
separately, and other fees and expenses associated with the resolution
of sales practices issues.

SCIENCE DYNAMICS: Sued In South Carolina For Its Commander System
-----------------------------------------------------------------
Science Dynamics Corporation has been named as a defendant in a lawsuit
brought by prisoners of correctional institutions in which its
Commander systems have been installed.  

The lawsuit is entitled Mildred Fair, et al., v. Sprint Payphone
Services, Inc.,et al.,  U.S. District Court, District of South
Carolina, Greenville Division, Docket  No.: CA No. 6:01-626-20.    

This is a class action lawsuit brought against numerous defendants,
including a number of telephone companies.  

The Commander system is designed for small to mid sized municipal and
county correctional facilities requiring control for up to 40 inmate
telephone lines.  

"We believe that we have adequate defenses against such a lawsuit, and
given the nature of our involvement with the transactions set forth in
the complaint, we do not believe the lawsuit to be material," said the
Company in a recent report to SEC.


SOUTH CAROLINA: Video Poker Machine Owners Allege State Takings
---------------------------------------------------------------
Owners of video poker machines in a dozen South Carolina counties say
they should be compensated for monies lost on contracts to rent out
video poker machines, when the state allowed voters to shut them down
in a county-by-county referendum in 1994.  

According to an Associated Press dispatch, the class action alleges,
that even though the state Supreme Court held the referendum
unconstitutional two years later, still the state illegally had taken
their property.  

This is because the video poker businesses had been forced to close
down and, consequently, they had to break their delivery contracts with
the video poker machine operators, said Cam Lewis, attorney for the
machine owners.

Although Lewis did not give an estimate of how much money the owners
had lost, the attorney did say that the hundreds of owners in the 12
counties were seeking compensation not for profits lost but for the
value of their interest in the contracts.

Lewis emphasized that profits were not being sought as he countered the
state's defense that profits lost may not be recovered under a takings
claim.  The court may take several days to issue an opinion.


STAMPS.COM INC: Stull Stull Commences Securities Suit in S.D. NY
----------------------------------------------------------------
Stull, Stull & Brody filed a class action lawsuit last week in the
United States District Court for the Southern District of New York, on
behalf of purchasers of Stamps.com, Inc. (NASDAQ:STMP) common stock
between June 24, 1999 and May 16, 2001.

The complaint alleges that defendant Stamps.com, Inc. and certain of
its current and former officers and directors violated the federal
securities laws by issuing and selling Stamps.com common stock pursuant
to the IPO and secondary offering without disclosing to investors that
at least one of the lead underwriters in the IPO had solicited and
received excessive and undisclosed commissions from certain investors.

The complaint further alleges that defendants violated the Securities
Act of 1933 because the Prospectuses distributed to investors and the
Registration Statements filed with the SEC in order to gain regulatory
approval for the Stamps.com offerings contained material misstatements.

For more information, contact: Tzivia Brody, Esq. at Stull, Stull &
Brody by calling toll-free 1-800-337-4983, or by e-mail at
SSBNY@aol.com, or by fax at 212/490-2022, or by writing to Stull, Stull
& Brody, 6 East 45th Street, New York, NY 10017.


TOPPS COMPANY: No Date Set For Oral Argument Of Plaintiffs' Appeal
------------------------------------------------------------------
In November 1998, Topps Company, Inc. was named as a defendant in a
purported class action commenced in the United States District Court
for the Southern District of California entitled Rodriquez, et al. v.
The Topps Company, Inc., No. CV 2121-B (AJB) (S.D. Cal.)  

The Class Action alleges that the Company violated the Racketeer
Influenced and Corrupt Organizations Act and the California Unfair
Business Practices Act, by its practice of selling sports and
entertainment trading cards with randomly inserted "insert" cards
allegedly in violation of state and federal anti-gambling laws.

On January 22, 1999, plaintiffs moved to consolidate the Class Action
with similar class actions pending against several of the Company's
principal competitors and licensors in the California Court.  

On January 25, 1999, the Company moved to dismiss the complaint or,
alternatively, to transfer the Class Action to the Eastern District of
New York or stay the Class Action pending the outcome of the
Declaratory Judgment Action pending in the Eastern District of New
York.

By orders dated May 14, 1999, the California Court denied the
Company's motions to dismiss or transfer the Class Action but granted
the Company's motion to stay the Class Action pending the outcome of
the Declaratory Judgment Action.  

The California Court also denied plaintiffs' motion to consolidate the
Class Action with similar purported class actions.  On April 18, 2000,
the California Court entered an order requiring plaintiffs in the Class
Action as well as in the other purported Class Actions to show cause
why all such actions should not be dismissed.  

By order dated June 21, 2000, the California Court vacated its May 14,
2000 order denying the Company's motion to dismiss the Class,
dismissed the RICO claim in the Class Action with prejudice and
without leave to re-plead, and dismissed the pendent state law claims
without prejudice.  

Plaintiffs filed a notice of appeal of the California Court's decision
to the United States Court of Appeals for the Ninth Circuit on July 21,
2000.  Briefing has been completed but the Court has not yet set a date
to hear oral argument.


TOPPS COMPANY: CA Court Hears Arguments On Earlier Tentative Ruling
-------------------------------------------------------------------
On August 21, 2000, Topps Company, Inc. was named as a defendant in a
purported class action commenced in the Superior Court of the State of
California for the County of Alameda entitled Chase et al. v. The
Upper Deck Company, et al. No. 830257-9.

The California Class Action alleges that the Company and other
manufacturers and licensors of sports and entertainment trading cards
committed unlawful, unfair and fraudulent business acts under the
California Unfair Business Practices Act and the California Consumer
Legal Remedies Act by the practice of selling trading cards with
randomly inserted  "insert" cards allegedly in violation of state and
federal anti-gambling laws and state consumer laws.

The California Class Action asserts three claims for relief and seeks
declaratory, equitable and injunctive relief and attorneys' fees on
behalf of a purported nationwide class of trading card purchasers.  

Plaintiff filed an amended complaint on October 13, 2000, including an
amendment to demand compensatory and punitive damages and restitution.  
On December 14, 2000, plaintiff moved for summary judgment on one of
his CUBPA claims.  

On December 15, 2000, all defendants filed a motion to dismiss two of
the claims for failure to state a claim upon which relief can be
granted; a motion for summary judgment dismissing the remaining claim;
and a motion to strike all allegations of fraudulent or deceptive
representations and all references to plaintiff's prayer for monetary
relief.  

On March 29, 2001, the Court issued a tentative ruling granting
defendants' motion for summary judgment on the grounds that the
defendant's practices do not constitute illegal gambling as a matter of
law, but denying the demurrer to the extent that the remaining two
claims allege false or misleading advertising practices unrelated to
the gambling issue.  

On March 30, 2001, in accordance with the California State practice,
the Court heard oral argument on whether or not its tentative ruling
should stand as a final ruling.  Thereafter, the court issued a
tentative ruling denying the motion for summary adjudication and
demurrer and set a hearing last June 1, 2001 to hear additional
argument on the motion.


VECTOR GROUP: Subsidiary Faces 43 Health Care Reimbursement Actions
-------------------------------------------------------------------
The cigarette industry continues to be challenged on numerous fronts.
New cases continue to be commenced against Liggett Group, the
cigarette-manufacturing subsidiary of Vector Group, Ltd. and other
cigarette manufacturers.

As of March 31, 2001, there were approximately 314 individual
suits, 43 purported class actions and 104 governmental and other third-
party payor health care reimbursement actions pending in the United
States in which Liggett was a named defendant.

In addition to these cases, during 2000, an action against cigarette
manufacturers involving approximately 1,200 named individual plaintiffs
was consolidated before a single West Virginia state court. Liggett is
a defendant in most of the cases pending in West Virginia.

Approximately 38 other purported class action complaints have been
filed against the cigarette manufacturers for alleged antitrust
violations.

As new cases are commenced, the costs associated with defending these
cases and the risks relating to the inherent unpredictability of
litigation continue to increase.


VECTOR GROUP: Pays $6.27 Million To Maintain Status Quo In Florida
------------------------------------------------------------------
An unfavorable verdict was returned in the first phase of the ENGLE
smoking and health class action trial pending in Florida. In July 2000,
the jury awarded $790 million in punitive damages against Liggett in
the second phase of the trial, and the court entered an order of final
judgment.

Liggett intends to pursue all available post-trial and appellate
remedies. If this verdict is not eventually reversed on appeal, or
substantially reduced by the court, it could have a material adverse
effect on Vector.

Liggett has filed the $3.45 million bond required under recent Florida
legislation that limits the size of any bond required, pending appeal,
to stay execution of a punitive damages verdict.

On May 7, 2001, Liggett reached an agreement with the class in the
ENGLE case, which will provide assurance to Liggett that the stay of
execution, currently in effect under the Florida bonding statute, will
not be lifted or limited at any point until completion of all appeals,
including to the United States Supreme Court.

As required by the agreement, Liggett paid $6.27 million into an escrow
account to be held for the benefit of the ENGLE class, and released,
along with Liggett's existing $3.45 million statutory bond, to the
court for the benefit of the class upon completion of the appeals
process.

It is possible these additional cases could be decided unfavorably and
that there could be further adverse developments in the ENGLE case.
Management cannot predict the cash requirements related to any future
settlements and judgments, including cash required to bond any appeals,
and there is a risk that those requirements will not be able to be met.


XEROX CORPORATION: Ruling On Objections To Consolidation Not Yet Out
--------------------------------------------------------------------
Xerox Corporation recently reported to the Securities and Exchange
Commission that the court in Connecticut has not yet ruled on the
plaintiffs' objections to its order consolidating 12 purported class
actions pending before it.

Plaintiffs had earlier filed objections challenging the appointment of
lead plaintiffs and lead and liaison counsel.

The twelve purported class actions is pending in the United States
District Court for the District of Connecticut against the Company,
KPMG LLP (KPMG), and Paul A. Allaire, G. Richard Thoman, Anne M.
Mulcahy and Barry D. Romeril.

The consolidated action purports to be a class action on behalf of the
named plaintiffs and all purchasers of securities of, and bonds issued
by, the Company during the period between February 15, 1998 and
February 6, 2001.

Among other things, the consolidated complaint generally alleges that
each of the Company, KPMG, the individuals and additional defendants
Philip Fishbach and Gregory Tayler violated Sections 10(b) and/or 20(a)
of the 34 Act and Securities and Exchange Commission Rule 10b-5
thereunder.


* Congress, Regulators To Look Into Methods, Behaviors Of Analysts
------------------------------------------------------------------
Investors are looking twice at the behavior and methods of the analysts
who sold them the dot.com boom and, as a result, are launching into
litigation, according to a recent report in the "Guardian."

US regulators also have found some allegedly criminal acts as well as
questionable behavior among the financial sector's biggest firms. More
specifically, the methods used to underwrite new shares are being
investigated by the SEC, the US attorney's office and the National
Association of Securities Dealers and could lead to criminal charges.  

A grand jury is reviewing evidence that several of Wall Street's
biggest banks effectively demanded kickbacks from institutional clients
in return for giving them lucrative shares in initial public offerings.

In England, several private investors have contacted Jacob Zamansky,
head of US law firm Zamansky & Associates, about filing complaints
against analysts.  It is believed that Zamansky may file these cases
very soon.  

In the US, Zamansky already has filed more than 20 claims against Wall
Street firms and their analysts. One of the first of these claims was
filed against Henry Blodget, one of the street's best-known Internet
analysts, and Merrill Lynch, his firm.

This lawsuit accuses these two defendants of  "systematic fraud . . .
on an industry-wide basis" for highly recommending shares in Internet
stocks without revealing the extent of their financial reliance on the
company. One of the plaintiffs, Dr. Debases Kanjilal, a New York
pediatrician, is claiming the $600,000 he lost from an investment in
one online directory company and 10md in punitive damages. Merrill
Lynch describes the charges as meritless.

Sirota & Sirota, a New York law firm, has filed a class action
complaint for at least 15 individuals against seven banks: CSFB,
Goldman Sachs, Lehman Brothers, Merrill Lynch, Morgan Stanley,
Bancboston Robertson Stephens and Salomon Smith Barney. The banks are
all expected to defend themselves vigorously.  

This lawsuit and others claim that hedge funds and other institutional
investors were awarded large chunks of IPO shares in return for a
promise that the bank would receive a certain percentage of it back in
commission fees. Asking for kickbacks and 'laddering' a stock, by
making an investor pay for more shares at higher prices later, is
illegal.  

Additionally, the SEC is understood to have subpoenaed trading records
for VA Linux, which achieved a record-breaking first day gain of 700%
in November 1999, to see how much a bank made from its IPO in
underwriting and subsequent commission fees.

The investigations have so far focused on CSFB, where several employees
have been told they face possible regulatory action by the NASD. Two
have been sent on administrative leave. The bank has said it is
cooperating with the government inquiries but has denied any wrongdoing
alleged in the class action lawsuits.

CSFB also issued a statement saying that Frank Quattrone, the head of
its hi-tech group, was "not responsible for overseeing brokerage
accounts or commissions, nor is he or was he responsible for IPO
allocations to clients".  Insiders privately fear regulators could be
looking for a high profile scapegoat - a Michael Milken for the
Internet age.

Investigation into the behavior and methods of analysts shows that most
Wall Street banks reward analysts using client review and banking fees,
but few chart the success of an analyst's recommendations. During the
buying and selling frenzy of recent years, hi-tech analysts have used
new valuation tools to justify large premiums, and "the analysts pumped
up this tech bubble and left investors holding the bag," said the class
action attorney Jacob Zamansky.

On June 14, some investment bankers are expected to appear before
Congress to discuss their methods of doing business. Republican
Congressman Richard Baker has said that he believes the coded language
used on Wall Street penalizes ordinary investors.

For example, at a time when most US shares were trading at all-time
highs, nearly 74% were rated either 'strong buy' or 'buy'. Only those
institutional investors lucky enough to receive a call from the
investment bank would know which of the "accumulate" or "hold" stocks
should be dumped.  

"The writing is so coded that only sophisticated investors understand
that you would have to be an idiot to own the stock," said Baker.  "Mom
and Pop investors are not getting the same treatment."  

One of the behaviors of analysts during the boom years, now being
looked at closely, is the way they chased what went up without trying
to understand why it did.

Congress is presently considering changes to laws governing securities
advice to make it more transparent. "Clearly the status quo is not
acceptable," said Baker.

All these events -- class action suits, pending legislation,
congressional hearings -- have encouraged Wall Street firms to address
the problem of how they do business.

In this connection, the Securities Industry Association, a trade body,
and senior bankers are working on a code of conduct expected to call
for more disclosure.  Baker indicates that he is "optimistic" that the
code will be presented at this month's hearing.

Some firms, such as Prudential Securities, are also banning vague
recommendations, to be replaced by straightforward buys or sells.


                             *********

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
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Washington, D.C.  Enid Sterling, Larri-Nil G. Veloso and Lyndsey
Resnick, Editors.

Copyright 2001.  All rights reserved.  ISSN 1525-2272.

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