/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/010808.mbx C L A S S A C T I O N R E P O R T E R Wednesday, August 8 2001, Vol. 3, No. 154 Headlines AIRSPAN NETWORKS: Milberg Weiss Lodges Securities Suit v. Underwriters AMERICAN AIRLINES: Antitrust Suit Against American Airlines Dismissed AVANEX CORPORATION: Wolf Haldenstein Files Securities Suit In S.D. NY CEM CORPORATION: Schatz & Nobel Files Shareholders Suit In W.D. NC CRITICAL PATH: Stull Stull Commences Securities Suit In S.D. New York DELANO TECHNOLOGY: Schiffrin & Barroway Files S.D. NY Securities Suit DUPONT PHARMACEUTICALS: Settles Coumadin Lawsuits For $44.5 Million FIREPOND INC.: Schiffrin & Barroway Begins Securities Suit In S.D. NY GREENMOUNTAIN.COM: Lawsuit Over Misleading Rates Gets Certification LIQUID AUDIO: Cauley Geller Starts Securities Suit In S.D. New York MEDIAPLEX INC.: Milberg Weiss Lodges Suit Against Three Underwriters MEDICALOGIC INC.: Bernstein Liebhard Files Securities Suit In S.D. NY MODEM MEDIA: Schiffrin & Barroway Begins Securities Suit In S.D. NY MOHAWK INDUSTRIES: Starts Paying $13.5M Settlement In Second Quarter ONVIA.COM: Announces Plan To Mount Defense v. Securities Suits In NY PRUCO LIFE: Sales Practices Actions Down From December's 109 THEGLOBE.COM: Milberg Weiss Initiates Securities Suit In S.D. New York STORAGENETWORKS INC.: Schiffrin & Barroway Files NY Securities Suit UNDERWRITERS LITIGATION: Lovell, Others Sue Several IPO Underwriters WASHINGTON MUTUAL: Cohen Milstein Files Consumer Law Violation Suit ********* AIRSPAN NETWORKS: Milberg Weiss Lodges Securities Suit v. Underwriters ---------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP lodged Monday a class action lawsuit on behalf of purchasers of the securities of Airspan Networks Inc. (NASDAQ: AIRN) between July 19, 2000 and December 6, 2000, inclusive. The action is pending in the United States District Court for the Southern District of New York, against defendants Credit Suisse First Boston Corporation and Lehman Brothers Inc. The complaint alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On or about July 19, 2000, Airspan commenced an initial public offering of 5,500,000 of its shares of common stock at an offering price of $15 per share. In connection therewith, Airspan filed a registration statement, which incorporated a prospectus, with the SEC. The complaint further alleges the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (1) defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which defendants allocated to those investors material portions of the restricted number of Airspan shares issued in connection with the Airspan IPO; and (2) Defendants had entered into agreements with customers whereby Defendants agreed to allocate Airspan shares to those customers in the Airspan IPO in exchange for which the customers agreed to purchase additional Airspan shares in the aftermarket at pre-determined prices. As alleged in the complaint, the SEC is investigating underwriting practices in connection with several other initial public offerings. For more details, contact: Steven G. Schulman or Samuel H. Rudman by Phone: 800/320-5081 by E-mail: airspancase@milbergNY.com or visit the firm's Website: www.milberg.com AMERICAN AIRLINES: Antitrust Suit Against American Airlines Dismissed --------------------------------------------------------------------- A federal judge recently dismissed a class action lawsuit brought against American Airlines by travel agents in Latin America and the Caribbean, who alleged that the company conspired with three other airlines based in the United States and an industry trade association to reduce their commissions to a 7-percent flat rate. Contending that U.S. antitrust laws were not intended to regulate competition in foreign economies, Dechert attorneys representing American Airlines argued in a motion to dismiss that the federal courts lack subject matter jurisdiction. Partners Robert C. Heim, Jennifer R. Clarke and George Gordon represented American Airlines in the suit, Turicentro S.A. v. American Airlines et al. In a 12-page memorandum, U.S. District Judge J. Curtis Joyner agreed with Dechert's argument, saying that -- even if the allegations in the suit were true -- there was no violation of the Sherman Antitrust Act because "generally speaking, American antitrust laws do not regulate the competitive conditions of other nations' economies." The Sherman Act, Joyner wrote, "does reach conduct outside our borders, but only when the conduct has an effect on American commerce." Furthermore, Joyner said, the Foreign Trade Antitrust Improvement Act (FTAIA) of 1982 placed clear limits on the geographic scope of U.S. antitrust law. Even if the alleged illegal conduct had taken place in the U.S., Joyner wrote that, "nowhere in their complaint do they aver that these effects have been felt on American soil." The suit's named plaintiffs -- travel agents located in San Jose, Calif., Costa Rica and Managua, Nicaragua -- "must look to the laws of the Caribbean and Latin America for redress in this case and we therefore find that this court lacks the requisite subject matter jurisdiction to hear this matter," Joyner concluded. Attorneys Joseph C. Kohn, Robert J. LaRocca and William E. Hoese of Kohn Swift & Graf filed the suit against the International Air Transport Association and four U.S. airlines -- Delta, American, United and Continental. Other defendants in the suit were: Delta, represented by attorney Francis P. Newell of Montgomery McCracken Walker & Rhoads; United, represented by attorney Richard J. Favretto of Mayer Brown & Platt; and IATA, represented by Sherry A. Swirsky of Schnader Harrison Segal & Lewis. AVANEX CORPORATION: Wolf Haldenstein Files Securities Suit In S.D. NY --------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP filed a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of purchasers of Avanex Corporation (Nasdaq: AVNX) securities between February 3, 2000 and December 6, 2000, inclusive. Named as defendants are Avanex, certain of its officers and directors, and its underwriters. The complaint alleges that defendants violated the federal securities laws by issuing and selling Avanex common stock pursuant to the February 3, 2000 IPO without disclosing to investors that some of the underwriters in the offering, including the lead underwriters, had solicited and received excessive and undisclosed commissions from certain investors. Specifically, the complaint alleges that in exchange for the excessive commissions, defendants allocated Avanex shares to customers at the IPO price. To receive the allocations (i.e., the ability to purchase shares) at the IPO price, the underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as the price of Avanex stock rocketed upward (a practice known on Wall Street as "laddering") was intended to (and did) drive Avanex's share price up to artificially high levels. This artificial price inflation enabled both the underwriters and their customers to reap enormous profits by buying stock at the IPO price and then selling it later for a profit at inflated aftermarket prices. For more details, contact: Wolf Haldenstein Adler Freeman & Herz LLP by Mail: at 270 Madison Avenue, New York, New York 10016 by Phone: (800) 575-0735 (Fred Taylor Isquith, Esq., Gregory Nespole, Esq., Thomas Burt, Esq., Gustavo Bruckner, Esq., Michael Miske, or George Peters) by E-mail: classmember@whafh.com or visit the firm's Website: www.whafh.com CEM CORPORATION: Schatz & Nobel Files Shareholders Suit In W.D. NC ------------------------------------------------------------------ Schatz & Nobel, PC lodged recently a class action lawsuit in the United States District Court for the Western District of North Carolina against CEM Corporation, Michael J. Collins, Ronald A. Norelli, John L. Chanon and George F. Krall, on behalf of all CEM shareholders who received $11.15 per share as consideration for a going private merger that was consummated on May 30, 2000. The class action lawsuit alleges, among other things, that CEM and certain of its officers and directors violated Section 14 of the Securities Exchange Act of 1934 and their fiduciary duties under North Carolina law. Specifically, Plaintiff alleges that Defendants made material misrepresentations to CEM shareholders concerning CEM's business and about the fairness of the $11.15 per share price offered as consideration to CEM shareholders. Plaintiff contends that as a result of defendants' wrongful acts, shareholders were induced to approve the going private merger at a price that was substantially below fair market value. For more details, contact: Andrew M. Schatz, Robert A. Izard or Jeffrey S. Nobel by Phone: (800) 797-5499 by E-mail: SN06106@aol.com or visit the firm's Website: www.snlaw.net CRITICAL PATH: Stull Stull Commences Securities Suit In S.D. New York --------------------------------------------------------------------- Stull, Stull & Brody commenced Monday a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of purchasers of Critical Path, Inc. (NASDAQ:CPTH) common stock between March 29, 1999 and July 18, 2001, inclusive. The complaint alleges that defendants violated the federal securities laws by issuing and selling Critical Path common stock pursuant to the March 29, 1999 IPO without disclosing to investors that some of the underwriters in the offering, including the lead underwriters, had solicited and received excessive and undisclosed commissions from certain investors. The complaint alleges that, in exchange for the excessive commissions, members of the underwriting group allocated Critical Path shares to customers at the IPO price of $24 per share. To receive the allocations (i.e., the ability to purchase shares) at $24, the underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as the price of Critical Path stock rocketed upward (a practice known on Wall Street as "laddering") was intended to (and did) drive Critical Path's share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the underwriters and their customers to reap enormous profits by buying stock at the $24 IPO price and then selling it later for a profit at inflated aftermarket prices. On March 29, 1999, the day of the initial public offering, Critical Path shares, which began trading at $24.00 per share, closed at $65.875 per share. By April 13, 1999, Critical Path shares had skyrocketed to a Class Period high of $134.875 per share. Rather than allowing their customers to keep their profits from the IPO, the complaint alleges, the underwriters required their customers to "kick back" some of their profits in the form of secret commissions. These secret commission payments were sometimes calculated after the fact based on how much profit each investor had made from his or her IPO stock allocation. The complaint further alleges that defendants violated the Securities Act of 1933 because the Prospectus distributed to investors and the Registration Statement filed with the SEC in order to gain regulatory approval for the Critical Path offering contained material misstatements regarding the commissions that the underwriters would derive from the IPO transaction and failed to disclose the additional commissions and "laddering" scheme discussed above. For additional information, contact: Tzivia Brody, Esq. by Phone: 1- 800-337-4983 (toll free) by E-mail: SSBNY@aol.com by Fax: 212/490-2022 or by Mail: 6 East 45th Street, New York, NY 10017 DELANO TECHNOLOGY: Schiffrin & Barroway Files S.D. NY Securities Suit --------------------------------------------------------------------- Schiffrin & Barroway, LLP lodged recently 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 Delano Technology Corporation (Nasdaq: DTEC) from February 8, 2000 through December 6, 2000, inclusive. The suit names as defendants the following: Delano Technology and FleetBoston Robertson Stephens. On or about February 8, 2000 Delano Technology commenced an initial public offering of 5,000,000 of its shares of common stock at an offering price of $18 per share. In connection therewith, Delano Technology filed a registration statement, which incorporated a prospectus, with the SEC. The complaint alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (1) Robertson Stephens had solicited and received excessive and undisclosed commissions from certain investors in exchange for which Robertson Stephens allocated to those investors material portions of the restricted number of Delano Technology shares issued in connection with the Delano Technology IPO; and (ii) Robertson Stephens had entered into agreements with customers whereby Robertson Stephens agreed to allocate Delano Technology shares to those customers in the Delano Technology IPO in exchange for which the customers agreed to purchase additional Delano Technology shares in the aftermarket at pre- determined prices. For further details, contact: Schiffrin & Barroway, LLP through Marc A. Topaz, Esq. or Stuart L. Berman, Esq. by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 1-888-299-7706 (toll free) or 1-610-667-7706 or by E-mail: info@sbclasslaw.com DUPONT PHARMACEUTICALS: Settles Coumadin Lawsuits For $44.5 Million ------------------------------------------------------------------- DuPont Pharmaceuticals Company, a wholly owned subsidiary of DuPont (NYSE: DD), and Co-Chair of the Executive Committee of Counsel for Plaintiffs, Miller Faucher and Cafferty LLP, and Goodkind Labaton Rudoff & Sucharow LLP, announced Monday that a judge in the US District Court for the District of Delaware has preliminarily approved a nationwide settlement that would end all class action lawsuits in the U.S. concerning the marketing, sale and promotion of the Company's prescription drug Coumadinr (warfarin sodium tablets, USP) Crystalline. None of the lawsuits involved personal injuries or claims that Coumadinr is not a safe or effective medication. The settlement will be supervised by the federal court in Delaware in a consolidated legal proceeding referred to as In Re Warfarin Sodium Antitrust Litigation. Under the settlement, DuPont Pharmaceuticals has agreed to pay $44.5 million to U.S. consumers and third party payors to resolve their claims that DuPont engaged in misleading marketing and promotional practices. DuPont Pharmaceuticals stated that it had settled without admitting any wrongdoing in order to avoid the burden and expense of further litigation with these plaintiffs. Plaintiffs' counsel stated that the settlement provides substantial benefits to, and is in the best interests of, the class members. Plaintiffs' counsel stated that they agreed to its terms after balancing the benefits of the settlement against the risks of continued protracted litigation against DuPont Pharmaceuticals Company and the likelihood of success. Finalization of the settlement, subject to final court approval and dismissal of all the pending class actions in the United States, is expected in the first quarter of 2002. DuPont Pharmaceuticals Company is a worldwide business focused on research, development and delivery of pharmaceuticals and imaging agents to treat unmet medical needs in the fights against HIV/AIDS, cardiovascular disease, inflammatory diseases, cancer and neurological diseases. Founded in 1802, the company operates in 70 countries and has 93,000 employees. FIREPOND INC.: Schiffrin & Barroway Begins Securities Suit In S.D. NY --------------------------------------------------------------------- Schiffrin & Barroway, LLP lodged recently 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 Firepond, Inc. (Nasdaq: FIRE) from February 3, 2000 through December 6, 2000, inclusive. The suit names as defendants: Firepond and FleetBoston Robertson Stephens. On or about February 3, 2000, Firepond commenced an initial public offering of 5,000,000 of its shares of common stock at an offering price of $22 per share. In connection therewith, Firepond filed a registration statement, which incorporated a prospectus, with the SEC. The complaint alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (1) Robertson Stephens had solicited and received excessive and undisclosed commissions from certain investors in exchange for which Robertson Stephens allocated to those investors material portions of the restricted number of Firepond shares issued in connection with the Firepond IPO; and (2) Robertson Stephens had entered into agreements with customers whereby Robertson Stephens agreed to allocate Firepond shares to those customers in the Firepond IPO in exchange for which the customers agreed to purchase additional Firepond shares in the aftermarket at pre-determined prices. For more information, contact: Schiffrin & Barroway, LLP through Marc A. Topaz, Esq. or Stuart L. Berman, Esq. by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 1-888-299-7706 (toll free) or 1-610-667-7706 or by E-mail: info@sbclasslaw.com GREENMOUNTAIN.COM: Lawsuit Over Misleading Rates Gets Certification ------------------------------------------------------------------- Allegheny County Judge Robert Horgos recently approved a class action lawsuit brought by Mark B. Aronson of Churchill, a suburb of Pittsburgh, against Greenmountain.com, a Texas electric company, over its misleading advertised rates, the Associated Press reported. Judge Horgos's ruling allows Aronson to sue Greenmountain for unspecified compensatory and punitive damages for himself and thousands of other electricity customers in Pennsylvania. The plaintiff was among thousands of Pennsylvania residents who participated in the state's Electric Choice Program. Under this program, Aronson switched to Austin, Texas-based Greenmountain.com, a company that markets electricity generated from the wind and other renewable sources. At first, says Aronson in the lawsuit, he relied on Greenmountain's advertised rates. However, Aronson states that Greenmountain misled customers by advertising a rate comparison chart that omitted state taxes from its rates. Since the taxes were added to the rates listed for the other competing utilities, Greenmountain's rates were misleadingly attractive, asserts the lawsuit. The lawsuit further alleges that the overstatement of Greenmountain's savings was an unfair or deceptive business practice, which violated Pennsylvania's Unfair Trade Practices and Consumer Protection Law. The law allows recovery of actual damages resulting from violation of the statute. The court also can award up to three times the actual damages, plus additional relief. Greenmountain has agreed to pay the state $100,000 to settle misleading advertising claims. And, Greenmountain has agreed to clarify its rates and tell consumers how to switch to other suppliers. LIQUID AUDIO: Cauley Geller Starts Securities Suit In S.D. New York ------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP recently commenced a class action in the United States District Court for the Southern District of New York on behalf of purchasers of Liquid Audio, Inc. (Nasdaq: LQID) securities during the period between July 8, 1999 and December 6, 2000, inclusive. The complaint charges the following defendants with violations of Sections 11, 12(a) (2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder: (1) Liquid Audio, (2) Lehman Brothers Inc., (3) BancBoston Robertson Stephens, (4) U.S. Bancorp Piper Jaffray Inc., (5) Gerald W. Kearby, (6) Gary J. Iwatani, (7) Philip R. Wiser, (8) Ann Winblad, (9) Silvia Kessel, (10) Sanford R. Climan and (11) Eric Robison On or about July 8, 1999, Liquid Audio commenced an initial public offering of 4.2 million of its shares of common stock at an offering price of $15.00 per share. In connection therewith, Liquid Audio filed a registration statement, which incorporated a prospectus, with the SEC. The complaint further alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (i) the Underwriter Defendants (Lehman Brothers, Robertson Stephens and Piper Jaffray) had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the Underwriter Defendants allocated to those investors material portions of the restricted number of Liquid Audio shares issued in connection with the Liquid Audio IPO; and (ii) the Underwriter Defendants had entered into agreements with customers whereby the Underwriter Defendants agreed to allocate Liquid Audio shares to those customers in the Liquid Audio IPO in exchange for which the customers agreed to purchase additional Liquid Audio shares in the aftermarket at pre-determined prices. For more information, contact: CAULEY GELLER BOWMAN & COATES, LLP through its Client Relations Department: Jackie Addison, Sue Null or Charlie Gastineau by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 1-888-551-9944 (toll free) or by E-mail: info@classlawyer.com MEDIAPLEX INC.: Milberg Weiss Lodges Suit Against Three Underwriters -------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP filed late last week a class action lawsuit on behalf of purchasers of the securities of Mediaplex, Inc. (NASDAQ:MPLX) between November 19, 1999 and December 6, 2000, inclusive. The action is pending in the United States District Court for the Southern District of New York against defendants Lehman Brothers, Inc., BancBoston Robertson Stephens, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated. The complaint alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On or about November 19, 1999 Mediaplex commenced an initial public offering of 6,000,000 of its shares of common stock at an offering price of $12 per share. In connection therewith, Mediaplex filed a registration statement, which incorporated a prospectus, with the SEC. The complaint further alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (1) Defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which Defendants allocated to those investors material portions of the restricted number of Mediaplex shares issued in connection with the Mediaplex IPO; and (2) Defendants had entered into agreements with customers whereby Defendants agreed to allocate Mediaplex shares to those customers in the Mediaplex IPO in exchange for which the customers agreed to purchase additional Mediaplex shares in the aftermarket at pre-determined prices. As alleged in the complaint, the SEC is investigating underwriting practices in connection with several other initial public offerings. For more information, contact: Steven G. Schulman or Samuel H. Rudman by Mail: One Pennsylvania Plaza, 49th fl., New York, NY, 10119-0165 by Phone: (800) 320-5081 by E-mail: mediaplexcase@milbergNY.com or visit the firm's Website: www.milberg.com MEDICALOGIC INC.: Bernstein Liebhard Files Securities Suit In S.D. NY --------------------------------------------------------------------- Bernstein Liebhard & Lifshitz, LLP recently lodged a securities class action lawsuit on behalf all persons who acquired MedicaLogic, Inc. (NASDAQ: MDLI) securities between December 13, 1999 and December 6, 2000. The case is pending in the United States District Court for the Southern District of New York. Named as defendants in the complaint are MedicaLogic and the following executive officers of MedicaLogic: Mark K. Leavitt and Frank J. Spina. The complaint also names as defendants the following underwriters of MedicaLogic's initial public offering: (1) Donaldson, Lufkin & Jenrette Securities Corporation, (2) BancBoston Robertson Stephens, Inc., (3) U.S. Bancorp Piper Jaffray Inc., and (4) DLJDIRECT Inc. The complaint charges defendants with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 for issuing a Registration Statement and Prospectus that contained materially false and misleading information and failed to disclose material information. The Prospectus was issued in connection with MedicaLogic's initial public offering of 5.9 million shares of common stock at $17.00 per share that was commenced on or about December 13, 1999. The complaint alleges that the Prospectus was false and misleading because it failed to disclose (i) the Underwriter Defendants' agreement with certain investors to provide them with significant amounts of MedicaLogic shares in the IPO in exchange for exorbitant and undisclosed commissions; and (ii) the agreement between the Underwriter Defendants and certain of its customers whereby the Underwriter Defendants would allocate shares in the IPO to those customers in exchange for the customers' agreement to purchase MedicaLogic shares in the after-market at pre- determined prices. The Securities and Exchange Commission and the U.S. Attorneys' Office are investigating underwriting practices in connection with numerous initial public offerings that were completed in 1999 and 2000. For more information, contact: Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone: (800) 217-1522 or 212-779-1414 or by E-mail: MDLI@bernlieb.com MODEM MEDIA: Schiffrin & Barroway Begins Securities Suit In S.D. NY ------------------------------------------------------------------- Schiffrin & Barroway, LLP commenced 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 Modem Media, Inc. (Nasdaq: MMPT) from February 5, 1999 through December 6, 2000, inclusive. The suit names as defendants: Modem Media, FleetBoston Robertson Stephens Inc., and Bear Stearns & Co., Inc. On or about February 5, 1999, Modem Media commenced an initial public offering of 2,600,000 of its shares of its common stock at an offering price of $16 per share. In connection therewith, Modem Media filed a registration statement, which incorporated a prospectus, with the SEC. The complaint alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (1) the Underwriter Defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the Underwriter Defendants allocated to those investors material portions of the restricted number of Modem Media shares issued in connection with the Modem Media IPO; and (2) the Underwriter Defendants had entered into agreements with customers whereby they agreed to allocate Modem Media shares to those customers in the Modem Media IPO in exchange for which the customers agreed to purchase additional Modem Media shares in the aftermarket at pre-determined prices. For further details, contact: Schiffrin & Barroway, LLP through Marc A. Topaz, Esq. or Stuart L. Berman, Esq. by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 1-888-299-7706 (toll free) or 1-610-667-7706 or by E-mail: info@sbclasslaw.com MOHAWK INDUSTRIES: Starts Paying $13.5M Settlement In Second Quarter -------------------------------------------------------------------- World's largest carpet maker Mohawk Industries started paying $13.5 million beginning second quarter this year as part of a deal settling two antitrust suits pending in Georgia. A recent SEC regulatory document revealed that the payment was part of an agreement that received final court approval last February. The final nod covers only the settlement of a 1995 price-fixing suit lodged by purchasers of polypropylene carpet. The 1998 suit filed by a class of purchaser of nylon carpet is under negotiation, the report said. Both suits are pending in the U.S. District Court for the Northern District of Georgia. "The Company denies all liability and wrongdoing and has agreed to settle these claims in order to avoid the costs of further litigation," the SEC report said. Mohawk is the second-largest maker of commercial and residential carpets and rugs in the US and one of the largest carpet makers in the world. The company produces a broad line of carpets in a range of prices under such names as Mohawk, Aladdin, American Weavers, Karastan, and Bigelow. ONVIA.COM: Announces Plan To Mount Defense v. Securities Suits In NY -------------------------------------------------------------------- Onvia.com Inc. bared recently plans to vigorously defend itself against pending securities class action in New York. The Company claims in its recent report to the Securities and Exchange Commission that the suits have no merits. Several persons who acquired securities of the Company between March 1, 2000 and December 6, 2000 filed the lawsuits in the U.S. District Court for the Southern District of New York. They charge the Company and its officers with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (and Rule 10b-5 promulgated thereunder) and Sections 11 and 15 of the Securities Act of 1933. The complaints allege that the Registration Statement and Prospectus were false and misleading because they failed to disclose that: (1) the agreements between CSFB and certain investors to provide them with significant amounts of restricted Onvia shares in the IPO in exchange for excessive and undisclosed commissions; and (2) the agreements between CSFB and certain customers under which the underwriters would allocate shares in the IPO to those customers in exchange for the customers' agreement to purchase Onvia shares in the after-market at pre-determined prices. "No lead plaintiff has been appointed and a consolidated complaint has not yet been filed," the Company said. Onvia is an online marketplace for such business supplies and services as Internet access and credit cards. The company offers 37,000 products, including computer hardware and software and telephone systems from providers such as AT&T and Earthlink. Its DemandStar.com gives business sellers access to bidding on government contracts while its Request for Quote division connects buyers and sellers to some 54,000 suppliers in more than 100 service categories. PRUCO LIFE: Sales Practices Actions Down From December's 109 ------------------------------------------------------------ The current number of sales practices class actions the Company is left facing is down to 61 from 109 as of March 31, Pruco Life of New Jersey reported recently. According to the Company, the marked decrease is attributable to the increase in the number of plaintiffs who opted to settle with the Company. The Company, however, is not discounting possibilities of additional suits to be filed by other class members who opted out of the settlement pact. A June 11 issue of the Class Action Reporter noted 109 sales practices actions against the Company as of December 31, 2000. These suits were 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. THEGLOBE.COM: Milberg Weiss Initiates Securities Suit In S.D. New York ---------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP filed late last week a class action lawsuit on behalf of purchasers of the securities of TheGlobe.com, Inc. (NASDAQ: TGLO.OB) between November 12, 1998 and December 6, 2000, inclusive. The action alleges the following as defendants: TheGlobe.com, Bear Stearns & Co. Inc., Michael Egan, Todd Krizelman, Stephen Paternot and Frank Joyce, and is pending in the United States District Court, Southern District of New York. The complaint alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On or about November 12, 1998, TheGlobe.com commenced an initial public offering of 3,100,000 of its shares of its common stock at an offering price of $9 per share. In connection therewith, TheGlobe.com filed a registration statement, which incorporated a prospectus, with the SEC. The complaint further alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (1) Bear Stearns had solicited and received excessive and undisclosed commissions from certain investors in exchange for which Bear Stearns allocated to those investors material portions of the restricted number of TheGlobe.com shares issued in connection with the TheGlobe.com IPO; and (ii) Bear Stearns had entered into agreements with customers whereby it agreed to allocate TheGlobe.com shares to those customers in the TheGlobe.com IPO in exchange for which the customers agreed to purchase additional TheGlobe.com shares in the aftermarket at pre-determined prices. For additional information, contact: Steven G. Schulman or Samuel H. Rudman by Mail: One Pennsylvania Plaza, 49th fl. New York, NY, 10119- 0165 by Phone: (800) 320-5081 by Email: theglobecase@milbergNY.com or visit the firm's Website: www.milberg.com STORAGENETWORKS INC.: Schiffrin & Barroway Files NY Securities Suit ------------------------------------------------------------------- Schiffrin & Barroway, LLP commenced recently 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 StorageNetworks, Inc. (Nasdaq: STOR) from June 30, 2000 through December 6, 2000, inclusive. The suit names as defendants: Goldman Sachs & Co., Credit Suisse First Boston Corporation and Salomon Smith Barney, Inc. On or about June 30, 2000 StorageNetworks commenced an initial public offering of 9,000,000 of its shares of common stock at an offering price of $15 per share. In connection therewith, StorageNetworks filed a registration statement, which incorporated a prospectus, with the SEC. The complaint alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (1) Defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which Defendants allocated to those investors material portions of the restricted number of StorageNetworks shares issued in connection with the StorageNetworks IPO; and (2) Defendants had entered into agreements with customers whereby Defendants agreed to allocate StorageNetworks shares to those customers in the StorageNetworks IPO in exchange for which the customers agreed to purchase additional StorageNetworks shares in the aftermarket at pre-determined prices. As alleged in the complaint, the SEC is investigating underwriting practices in connection with several other initial public offerings. For additional information, contact: Schiffrin & Barroway, LLP through Marc A. Topaz, Esq. or Stuart L. Berman, Esq. by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 1-888-299-7706 (toll free) or 1-610-667-7706 or by E-mail: info@sbclasslaw.com UNDERWRITERS LITIGATION: Lovell, Others Sue Several IPO Underwriters -------------------------------------------------------------------- Lovell & Stewart, LLP and other firms filed a class action lawsuit last week on behalf of all persons and entities who purchased between August 1, 1998 and August 1, 2001 Internet Infrastructure HOLDRs, Exodus Communications, Inc (Nasdaq:EXDS), Inktomi Corp. (Nasdaq:INKT), Vitria Technology, Inc. (Nasdaq:VITR), Software.com, and E.piphany, Inc. (Nasdaq:EPNY); as well as other internet and technology companies whose prices were inflated) by research reports issued by the following defendants: (1) Credit Suisse First Boston Corp., (2) The Goldman Sachs Group, Inc., (3) Merrill Lynch, Pierce, Fenner & Smith, Inc., (4) Morgan Stanley Dean Witter & Co., (5) BancBoston Robertson Stephens, Inc. or (6) Salomon Smith Barney, Inc. The action, Theresa T. Fadem Trust v. Credit Suisse First Boston Corp., et al., is pending in the U.S. District Court for the Southern District of New York, Docket No. 01-CV-7161 (KMW), and has been assigned to the Hon. Kimba M. Wood, U.S. District Judge. The lawsuit asserts claims under Sections 11 and 12(2) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder and the common law of the State of New York and seeks to recover damages. The complaint alleges that defendants violated the federal securities laws by artificially inflating the prices of Class Securities, to defendants' benefit, by systematically issuing research reports (including favorable "buy" recommendations) which contained the same uniform omissions of material facts, including: (i) the alleged material fact that the internal operations of defendants effectively mandated that defendants' analysts issue a favorable recommendation as an adjunct to defendants' obtaining (and their analysts' directly or indirectly sharing in) investment banking fees and other fees and business from the issuer of a Class Security; and (ii) the alleged material fact that defendants and their employees, including analysts, frequently acquired shares of class securities at a fraction of the price that public investors later paid therefor and would profit from research reports that enabled the analyst, his or her employer, and his or her co-workers to sell their holdings at generally higher prices. The complaint also alleges that defendant Merrill Lynch violated the Securities Act of 1933 because the Prospectus distributed to investors and the Registration Statement filed with the SEC in order to gain regulatory approval for the Internet Infrastructure HOLDRs offering failed to disclose that the prices of the HOLDRs constituent securities had been artificially inflated by defendants' misleading research reports and recommendations as set forth above. For more information, contact: Lovell & Stewart, LLP by Mail: 500 Fifth Avenue New York, New York 10110 WASHINGTON MUTUAL: Cohen Milstein Files Consumer Law Violation Suit ------------------------------------------------------------------- Cohen, Milstein, Hausfeld & Toll, PLLC filed a class action lawsuit in the Pierce County Superior Court, Washington, on behalf of borrowers for whom Bank United performed mortgage loan servicing. The complaint alleges defendants engaged in deceptive, unfair and oppressive business practices directed at mortgage loan borrowers, and breached the mortgage loan contracts that govern their mortgage loan servicing transactions. These practices include failing to post payments received from borrowers in a timely fashion and then charging the borrower a "late charge" and additional interest; imposing improper "property inspection" charges; and failing to respond to borrower complaints or remove improper charges assessed on borrowers. The complaint seeks an order that defendants pay back profits improperly derived from deceptive and unfair business practices, and that those amounts be distributed to those who have been harmed. The complaint charges Washington Mutual, Inc. (NYSE:WM), Bank United Corporation and Bank United of Texas, FSB with violations of the Washington Consumer Protection Act, breach of contract, and breach of the duty of good faith and fair dealing. Washington Mutual, Inc. acquired Bank United Corporation and its wholly owned subsidiary, Bank United of Texas, FSB, on February 8, 2001. Bank United operates one of the 25 largest residential mortgage loan servicing business in the United States. As of September 30, 1999, Bank United's single-family mortgage servicing portfolio totaled $30.9 billion. For more details, contact: Tamara Driscoll by Phone: 888/240-1238 or 206/521-0080 or Lisa M. Mezzetti of the firm's Washington D.C. office at 888/240-0775 or 202/408-4600 or by E-mail: tdriscoll@cmht.com or lmezzetti@cmht.com ********* 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., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, Larri-Nil Veloso and Lyndsey Resnick, Editors. Copyright 2001. 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. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *