CAR_Public/011114.mbx              C L A S S   A C T I O N   R E P O R T E R
  
           Wednesday, November 14, 2001, Vol. 3, No. 223


                          Headlines


ASIA PULP: Rabin Peckel Commences Securities Suit in S.D. New York
AUTO FINANCING: Jackson Says Financing "Economic Racial Profiling"
CANADA: Judge Dismiss Retirees Suits, Paves Way For Individual Suits
CANADA: Settlement In Walkerton E. Coli Class Action Reaching $100M
ENRON CORPORATION: Sued By Plan Beneficiaries For Claims Under ERISA

ENRON CORPORATION: Hoffman Edelson Initiates S.D. TX Securities Suit   
ENRON CORPORATION: Cauley Geller Initiates Securities Suit in E.D. TX
FORD MOTOR: Suit Alleges Latinos Charged With Higher Interest Rates
IBP INC.: Judge Awards $3 Million To 815 Washington Plant Workers
INTRENET INC.: Berman DeValerio Commences Securities Suit in S.D. OH

NEW YORK: Nursing Home Residents File Suit After Medicaid Policy Change
NEXTCARD INC.: Leblanc Waddell Initiates Securities Suit in N.D. CA
PACIFIC GATEWAY: Berman DeValerio Files Securities Suit in N.D. CA
SCI-QUEST.COM: Marc Henzel Commences Securities Suit in S.D. New York
SMARTDISK CORPORATION: Marc Henzel Initiates S.D. NY Securities Suit

SAIPAN FACTORIES: Trade Association Enthusiastic About Court Decision
STORAGENETWORKS INC.: Marc Henzel Commences Securities Suit in S.D. NY
TELAXIS COMMUNICATIONS: Marc Henzel Lodges Securities Suit in S.D. NY
TIBCO SOFTWARE: Marc Henzel Commences S.D. New York Securities Suit
TIDEL TECHNOLOGIES: Stull Stull Initiates Securities Suit in S.D. TX

TOBACCO LITIGATION: Lawyers Make Closing Statements In WV Smokers Suit
U.S. WIRELESS: Marc Henzel Commences Securities Suit in N.D. CA
VENTRO INC.: Marc Henzel Commences Securities Suit in N.D. California
VERSATA INC.: Marc Henzel Initiates Securities Suit In N.D. California



                         *********


ASIA PULP: Rabin Peckel Commences Securities Suit in S.D. New York
------------------------------------------------------------------
Rabin and Peckel LLP initiated a securities class action on behalf of
all purchasers of Asia Pulp & Paper Co. Ltd. (NYSE: PAP; OTC APUUY)
common stock during the period from December 17, 1998 through and
including April 4, 2001, both dates inclusive.

The suit, filed in the United States District Court for the Southern
District of New York, charges defendants with violations of sections
10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder.

The complaint alleges that during the class period, defendants issued
to the investing public false and misleading financial statements and
press releases concerning Asia Pulp's publicly reported earnings, net
income, and receivables.

The Company failed to disclose its exposure and loss on a derivative
swap contract and failed to disclose related party and uncollectible
receivables. Asia Pulp was delisted from the NYSE on July 5, 2001.

For more information, contact Rekha M. Carozza or Maurice Pesso by
Phone: (800) 497-8076 or (212) 682-1818 by Fax: (212) 682-1892 by E-
mail: email@rabinlaw.com or visit the firm's Website: www.rabinlaw.com


AUTO FINANCING: Jackson Says Financing "Economic Racial Profiling"
------------------------------------------------------------------
Rev. Jesse Jackson is speaking up for African Americans in the wake of
several class actions filed against auto manufacturers and finance
companies.

In press conferences in Chicago and Detroit, Jackson said he wants to
direct more attention to these companies' financing practices, saying
"this is the anthrax of economic exploitation.it's not a matter of
risk, it's a matter of race."

He adds "We never appreciated the role of the finance schemes of those
companies.Police profiling is just scratching the surface. It is the
economic race profiling and predator schemes that are the most
exploitative."

Auto finance companies like Nissan Motor Acceptance Corporation and
Ford Motor Credit, however, contend they only look at a borrower's
credit rating, not skin color.

In court documents in the suit against Nissan, blacks with the best
credit records paid $360 more in dealer-imposed "discretionary markup
fees" than whites with similar credit ratings.

Black borrowers with the worst credit ratings paid $327 more than
whites with similar ratings, according to a study based on numbers
provided by Nissan to the plaintiffs.

Plaintiffs' consultant in the case, Ian Ayres of Yale Law School, says
"When we look at a customer within the same credit tier we consistently
find the markup is higher for African-American borrowers than Caucasian
borrowers."

Nissan denied the charges, presenting its own expert economists who
found "absolutely no evidence of any illegal discrimination," according
to a company statement.

Spokeswoman Dierdre Dickerson asserts "We do not discriminate against
any of our customers, and we do not charge one group of people more
than any other."

She added that Nissan does not know the race of its credit applicants
and that it has no control over dealer markups.

Similar suits have been filed against the financing arms of Ford,
DaimlerChrysler and Toyota.

Jackson is calling for laws imposing caps on dealer financing.  He said
he has already had talks with Ford, General Motors and BMW and plans
discussions with Nissan and 10 other manufacturers.

"So far the auto companies are blaming each other and their dealers,"
Jackson said. "There's a lot of buck passing, but as the data comes in
they cannot outright deny this."


CANADA: Judge Dismiss Retirees Suits, Paves Way For Individual Suits
--------------------------------------------------------------------
Justice Arthur Gans recently dismissed a class-action suit by a group
of retired female University of Toronto professors and librarians
fighting for back pay and pension adjustments, The Toronto Star
reported recently.  

He stressed, however, that the plaintiffs have strong individual cases
against the University.

The justice's ruling raised the possibility that the university may
face as many as 108 suits from the women, mostly in their 70s, 80s and
90s, said Mary Eberts, the lawyer representing the women.

Gans found he could not certify the class action suit because, though
the women as a group may use statistical evidence to attempt to prove
sexual discrimination, each plaintiff ultimately would have to prove
she was a victim of the discrimination.  Therefore, the justice
decided the issue must be settled with individual lawsuits.

Eberts noted that the judge "rejected the University's attempt to
kill the action."  

Clients I spoke to, she said, are happy that Gans acknowledged that
they individually have strong cases; thereby, in effect, preserving the
fundamental action.  "If we had to win one out of the two, it was good
we won this one," Eberts said.

One of the plaintiffs, English professor Phyllis Grosskurth, said that
"The judge made the fairest and most just judgment that he could
possibly have made.  I'm feeling ecstatic because we were a small band
of women who refused to give up and now the judge has spoken strongly
about the way the university dealt with us."

The women's lawsuit alleged systemic sex discrimination was the reason
women consistently were paid an average of 20 percent less than men.

The University has been fighting to have the case thrown out on the
grounds that arithmetical calculations don't take into account the
variables on which individual salaries were negotiated.  

It was this motion that Gans refused to approve.

The justice, instead, said the women had a case to make when they
allege the University "unjustly enriched" itself by paying them less
than men, and called the University's attempt to argue there was no
genuine issue for trial "a touch ironic."

"I'm not persuaded that the (women) merely stood by and watched the
salary deprivation take place," Justice Gans wrote.  "I am of the
opinion that the environment in which they functioned in the 1970s, if
not the 1980s, militated against an individual attack on the University
or a quest for redress."

He adds, "I dare say that any complaint by one without tenure might at
the time have been tantamount to academic suicide," Gans added.

University of Toronto president Robert Birgeneau welcomed the fact the
University would not have to fight a class-action lawsuit, and said it
would prefer to negotiate the individual cases through the Faculty
Association rather than in court.  

He said he hoped it could be part of the next round of bargaining that
begins in December.

"The troubling aspect of this is the demand for retroactivity,"
Birgeneau said, adding that any ruling on it would put institutions
trying to deal with cases of past inequities in a legal bind.

Eberts said, however, that she was confident the women are eager to sue
individually, and she would be contacting each of the 108 women to
discuss their cases.  

She said the women she has spoken to since the ruling want to proceed.


CANADA: Settlement In Walkerton E. Coli Class Action Reaching $100M
-------------------------------------------------------------------
The Canadian government could end up paying more than $100 million to
compensate victims of the May 2000 E. coli outbreak in Walkerton,
Ontario which was one of the nation's worst public health disasters.

Victims of the disaster, which killed 7 people and sickened more than
2,000, have so far collected $13 million in compensation and the
estimated bill could reach beyond $60 million.

The governments also paid for other costs, such as $15 million for
fixing the town's water system and $9 million to fund the public
inquiry into the contamination of the town's water.

Under a class action settlement reached eight months ago, anyone
affected by the outbreak is entitled to minimum compensation of $2,000.

Almost 6,200 checks, valued at $12.3 million, have been mailed out to
victims of the crisis, including Walkerton's 5,100 residents, said John
Taylor of Crawford Adjusters Canada, the court-appointed company
orchestrating the payments.

Another $1.2-million has been paid to 200 so-called Stage 2 applicants,
those who believe they are entitled to more than the minimum, and that
appears to be almost everybody.

Jamie Smith, lead plaintiff in the class action and an adviser to the
Superior Court Judge Warren Winkler who is overseeing the compensation
plan, said he's pleased with the way things are unfolding.

"Everything is going well with the plan itself (and) there haven't been
any complaints," Smith said.  "The big question is how we deal with
this long-term sickness thing."

Smith has asked Judge Winkler to order that a clinic be established in
Walkerton itself, "If they set up a clinic here and just [examined]
everyone, it would be a lot better logistically."

The deadline for Stage 1 applications is Jan. 2, 2002.

There's no deadline for finalizing Stage 2 applications, given that
long-term health problems from E. coli poisoning may not become
apparent for many years.


ENRON CORPORATION: Sued By Plan Beneficiaries For Claims Under ERISA
--------------------------------------------------------------------
Keller Rohrback LLP is currently investigating potential ERISA claims
on behalf of participants and beneficiaries of Enron Corporation's
retirement and 401(k) plans.

The investigation period covers January 2000 through October 2001. The
investigation focuses on concerns that, under the law interpreting
ERISA, Enron and its plan administrators may have breached their
fiduciary duties of loyalty and prudence by failing to disclose and
inform the plan participants and beneficiaries with respect to the use
of employer stock as a plan investment.

Rather than providing complete and accurate information to the plans'
participants, it may be alleged that the Company and the plan
administrators may have withheld and concealed material information,
thereby encouraging participants and beneficiaries to continue to make
and to maintain substantial investments in company stock and the plans.

This investigation is being conducted in light of recent events.

On October 16, 2001, Enron surprised the market when it announcing that
it was taking "non-recurring charges totaling $1.01 billion after-tax,
or ($1.11) loss per diluted share," in the third quarter of 2001.

The Company later revealed that a material portion of the charge
related to the unwinding of investments with certain limited
partnerships were controlled by Enron's CFO, and that it would be
eliminating more than $1 billion in shareholder equity as a result of
its unwinding of the investments.

As this news began to be assimilated by the market, the price of Enron
common stock dropped significantly.

In addition, several recently filed securities suits allege that
Company executives engaged in extensive insider trading, gaining
millions of dollars in personal proceeds.

Enron retirees have lost a substantial portion of their retirement
earnings due to the drop in value of their retirement assets.

For more information, contact Liza Catabay, Britt Tinglum or Lynn Sarko
by Phone: 800/776-6044 (toll-free) by E-mail:
investor@kellerrohrback.com or visit the firm's Website:
www.seattleclassaction.com


ENRON CORPORATION: Hoffman Edelson Initiates S.D. TX Securities Suit   
--------------------------------------------------------------------
Hoffman & Edelson, LLC commenced a securities class action on behalf of
purchasers of Enron Corp. (NYSE:ENE) securities between January 18,
2000 and October 17, 2001, inclusive.

The suit is pending in the United States District Court for the
Southern District of Texas, Houston Division, against the Company and:

     (1) Kenneth Lay,

     (2) Jeffrey K. Skilling and

     (3) Andrew Fastow

The Complaint alleges that the defendants violated Sections 10(b) and
20(a) of the Securities Exchange Act of l934, and Rule 10b-5
promulgated thereunder.

The defendants allegedly issued a series of material misrepresentations
to the market between January 18, 2000 and October 17, 2001, thereby
artificially inflating the price of Enron securities.

Specifically, the complaint alleges that the Company issued a series of
statements concerning its business, financial results and operations
which failed to disclose:

     (i) that the Company's Broadband Services Division was
         experiencing declining demand for bandwidth and the Company's
         efforts to create a trading market for bandwidth were not
         meeting with success as many of the market participants were
         not creditworthy;

    (ii) that the Company's operating results were materially
         overstated as a result of the Company failing to timely write-
         down the value of its investments with certain limited
         partnerships which were managed by the Company's chief
         financial officer; and

   (iii) that the Company was failing to write-down impaired assets on
         a timely basis in accordance with GAAP.

On October 16, 2001, Enron surprised the market by announcing that it
was taking non-recurring charges of $1.01 billion after-tax, or ($1.11)
loss per diluted share, in the third quarter of 2001, the period ending
September 30, 2001.

Subsequently, the Company revealed that a material portion of the
charge related to the unwinding of investments with certain limited
partnerships which were controlled by its chief financial officer and
that the Company would be eliminating more than $1 billion in
shareholder equity as a result of its unwinding of the investments.

As this news began to be assimilated by the market, the price of the
Enron's securities dropped significantly.

During the class period, Company insiders disposed of over $73 million
of their personally held common stock to unsuspecting investors.

This lawsuit is brought on behalf of purchasers of the securities of
Enron, which includes among others the following classes of stock:

     (a) Enron Common Stock;

     (b) Enron Capital, LLC, 8.00%, 11/30/43 series, 8 million shares
         outstanding, traded on the New York Stock Exchange;

     (c) Enron Capital Trust I, 8.3% Series, 8 million shares
         outstanding, traded on the New York Stock Exchange;

     (d) Enron Capital Trust II, 8.1250% series (preferred R), 6
         million shares outstanding, traded on the New York Stock
         Exchange;

     (e) Enron Capital Trust III, 200,000 shares outstanding;

     (f) Enron Capital Resources LP, 9.0%, 8/31/24 Series A, 3 million
         shares outstanding, traded on the New York Stock Exchange;

     (g) Portland General Electric, 7.75%, 6/15/07 series, 300,000
         shares outstanding, traded on the NASDAQ;

     (h) Portland General Electric, 8.25%, 12/31/35 Series A, 3 million
         shares outstanding, traded on the New York Stock Exchange;

For more information, contact Marc H. Edelson or Jerold B. Hoffman by
Mail: 45 W. Court Street, Doylestown, PA 18901 by Phone: (877) 537-6532
(toll-free) or by E-mail: Hofedlaw@aol.com.


ENRON CORPORATION: Cauley Geller Initiates Securities Suit in E.D. TX
---------------------------------------------------------------------
Cauley Geller Bowman & Coates LLP commenced a securities class action
on behalf of purchasers of Enron Corp. (NYSE:ENE) common stock during
the period between January 18, 1999 and November 8, 2001, inclusive.

The suit, pending in the US District Court for the Eastern District of
Texas, Texarkana Division, charges the Company and certain of its
officers and directors with violations of the federal securities laws.

This month, the Enron announced that it would restate its 1997, 1998,
1999, 2000 and 1st and 2nd 2001 results.

This was because of various income statement and balance sheet
adjustments required as the result of its determination that three
unconsolidated entities should have been consolidated in the financial
statements pursuant to Generally Accepted Accounting Principles which
caused Enron's 1997 through 2nd Quarter 2001 income and assets to be
materially overstated.

Throughout 1999 and 2000, the price of the Company's common stock
substantially increased, rising from $32.50 per share on January 18,
1999 to $83.125 per share on December 29, 2000.

The complaint alleges that a substantial basis for this huge gain was
the Enron's allegedly false and misleading reports of ever increasing
revenues and profits.

The effect of the restatement was dramatic. Rather than earning $698
million and $1.01 per share in 1998, the Company's restated earnings
fell to $585 million and $0.86 per share.

Net income was lowered $186 million in 1999 with EPS dropped from $1.10
to $0.79 and in 2000, net income was lowered $132 million and EPS
correspondingly fell from $1.12 to $0.97.

The restatement increased Enron debt by $561 million in 1998, $685
million in 1999 and $629 million in 2000. Shareholder's equity was
reduced by $448 million for 1998, $834 million for 1999, $1.16 billion
for 2000, $1.226 billion for first quarter 2001 and $929 million for
second quarter 2001.

During the class period, Company insiders disposed of over $73 million
of their personally held common stock to unsuspecting investors.

For more information, contact Jackie Addison, Sue Null or Shelly
Nicholson by Mail: P.O. Box 25438 Little Rock, AR 72221-5438 by Phone:
1-888-551-9944 or by E-mail: info@classlawyer.com


FORD MOTOR: Suit Alleges Latinos Charged With Higher Interest Rates
-------------------------------------------------------------------
Ford Motor Credit Corporation faces a class action lawsuit alleging the
Company unfairly charged Latin Americans with higher financing rates
than other customers in automobile showrooms in the Chicago area.

The suit was filed on behalf of Rudi Rodriguez and alleges the Company
encouraged dealers to take advantage of language barriers and not to
disclose finance rates to Latino customers.

The suit, states that the practice "has a devastating effect not only
on individual consumers but also on the entire Hispanic-American
community."


The suit further states, "Many Hispanic Americans are easy targets for
these predatory lending practices because of the language barriers that
exist."

Rodriguez's counsel Kenneth Wexler said his client was charged with an
18.95% interest rate when he bought a 1999 Ford Escort from Bert
Weinman Ford.

Wexler said the rate was much higher than finance rates charged to
white customers and added that the higher financing rates are not
related to the Latino customers' credit risks.

He said the Company usually set financing buy rates based on several
factors, including the age of the car.

"However, FMCC also induces and encourages dealers to charge rates
greater than the buy rate, but deceive consumers into believing that
they have received the buy rate," Wexler charges in the suit.

Another lawsuit filed by Wexler earlier in the week contends African
Americans are also discriminated against when buying cars. That suit
was filed on behalf of Lindah Wise against the Indianapolis-based Union
Acceptance Corporation.

Both suits seek unspecified damages.

Neither Ford nor Union Acceptance Corporation could be reached for
comment.


IBP INC.: Judge Awards $3 Million To 815 Washington Plant Workers
-----------------------------------------------------------------
IBP Inc. was ordered to pay $3 million in a class action suit filed by
815 current and former employees of their Pasco, Washington plant.

The employees filed the suit in 1998, alleging that the Company did not
pay them for time spent putting on protective equipment before shifts
or cleaning off blood, animal fat and bits of carcasses after.

U.S. District Judge ordered IBP, now a unit of meat giant Tyson Foods,
Inc. (NYSE: TSN) to pay the amount and awarded double damages on some
counts in the class action.

Lawyers for the workers are seeking $2.4 million in fees from IBP for
the lawsuit. A hearing is set for later in November.

Workers' attorney Corrie Yackulic said the ruling may expose the
Company to similar lawsuits at other plants.

IBP expects to appeal the decision, saying that the awards were far
less than the workers sought.

In a statement, the Company said, "Contrary to the claims made, we pay
our team members for all of the production time worked.We also pay for
the time they spend immediately before and after work, putting on and
taking off the clothing and equipment required for their jobs."

Another lawsuit has been filed for workers at the same plant who now
use part of their lunch break to remove gear and put it back on, or
wear it while they eat lunch.


INTRENET INC.: Berman DeValerio Commences Securities Suit in S.D. OH
--------------------------------------------------------------------
Berman DeValerio Pease Tabacco Burt and Pucillo LLP brought an action
against Intrenet, Inc. in the U.S. District Court for the Southern
District of Ohio, Western Division.

The suit seeks damages for violations of the federal securities laws on
behalf of all investors who purchased the Company's common stock
between February 19,1999 and October 13, 2000.

The complaint accuses Intrenet and two of its top officers of filing
materially false and misleading financial statements for 1998 and 1999.

During that time, the defendants improperly inflated net income by
about $1.3 million in violation of generally accepted accounting
principles.

The defendants either knew of these improper accounting practices or
recklessly disregarded them, the complaint says.

In October 2000, Intrenet issued a press release saying it was
investigating possible accounting irregularities at a subsidiary,
Advanced Distribution System, that could result in a restatement of
Intrenet's 1998 and 1999 financial statements, as well as its Form 10-
Qs for the first and second quarters of 2000.

Nasdaq Stock Market officials quickly suspended trading in the
Company's stock.

Then, on January 2, 2001, Intrenet said it would cease operations of
the company and all its subsidiaries for lack of funding.

For more information, contact Patrick Egan by Mail: One Liberty Square
Boston, MA 02109 by Phone: (617) 542-8300 by Fax: (617) 542-1194 or
visit the firm's Website: www.bermanesq.com


NEW YORK: Nursing Home Residents File Suit After Medicaid Policy Change
-----------------------------------------------------------------------
Three nursing home residents in Cayuga County, NY filed a federal class
action against Onondaga and Cayuga counties and the state, challenging
changes in requirements for Medicaid.

Edna Verdow, 82, filed a federal class-action lawsuit after the state's
Department of Social Services declared her ineligible for Medicaid
because she had established a $48,000 irrevocable trust for her
children.

The other two plaintiffs, Michael Chanko, 87, and Robert Rumpf, 81,
have nearly $500,000 each in their trusts, according to the lawsuit.
Both are living in Cayuga County nursing homes and have not released
any comment about the suit.

Four years ago when Edna's husband Ernest entered a nursing home, they
put up a trust where they put their nest egg to preserve their
children's inheritance.

The couple, wanting to ensure that the money went to their children and
not to any nursing home, signed an agreement saying the money was no
longer theirs and that they would never revoke their decision.

The government then didn't consider the fund as part of their assets,
and allowed Ernest's nursing home expenses from 1998 to 1999 to be
covered by Medicaid.  

However, when Edna moved into a nursing home last March, county
officials denied her application for Medicaid, saying that the trust is
a resource she could use to pay for her care at Loretto's Cunningham
nursing home.

County officials said they would pay for her Medicaid when the fund was
used up, saying taxpayers shouldn't have to pay for the nursing home
care of someone with money stocked away.

The policy change commenced a few months ago after two rulings in
Cayuga county and an appellate court determined that such trusts were
not irrevocable because the person who sets them up retains the power
to change his or her mind about who the beneficiaries are.

Zachary Carmen, Chief Welfare Attorney for Onondaga County spoke in
general about irrevocable trusts, saying "What they want to do is
appear to give it away by putting it into this trust.But they want to
hold some control over that trust."

He added that the courts have decided that that is enough control to
make what otherwise looked like an irrevocable trust more like a
revocable trust and as a revocable trust, "it's available."

He further argues "There's no question that these trusts are created
for any purpose other than to qualify for Medicaid.We made the argument
early on: You can't create your own poverty to qualify for public
assistance."

If people want to preserve their inheritance for their children and
still qualify for Medicaid, they can simply give the money to their
children, Karmen said.

Verdow's lawyer Cora Alsante says the change could affect hundreds of
people with irrevocable trusts in Onondaga County, and tens of
thousands across the state.

"I can't believe they're doing this," said Mary Meyer of Jamesville,
one of the Verdows' children. "We're not talking about tons of money.
But my parents worked hard and they wanted something left for their
kids."

Alsante asserts that without being able to protect their inheritance
with such trusts, people might have to decide between getting proper
nursing home care or staying home so their kids can have the money.

A state Health Department spokesman said the agency will decide within
a few weeks whether to change its view of such trusts, as Onondaga and
Cayuga counties have.

If the state decides the trusts still don't count as an asset in
deciding Medicaid eligibility, the counties would probably find it
difficult to maintain their new position, Karmen said.


NEXTCARD INC.: Leblanc Waddell Initiates Securities Suit in N.D. CA
-------------------------------------------------------------------
Leblanc and Waddell LLC commenced a securities class action against
NextCard, Inc. (NASDAQ:NXCD) in federal court, claiming that the credit
card company violated federal securities laws and misled investors
about being well capitalized.

The suit was filed in the U.S. District Court for the Northern District
of California on behalf of all investors who bought the Company stock
between March 30, 2000 and October 30, 2001.

The complaint says that NextCard and several top officers disseminated
false and misleading information about its capitalization in its
filings with the Securities and Exchange Commission for the 1999 and
2000 fiscal years and for part of 2001.

The misleading statements concerned the company's wholly owned
subsidiary, NextBank, and its classification under federal banking
guidelines.

Though the company repeatedly described NextBank in SEC filings as
"well capitalized" during the class period, the lawsuit alleges that
NextBank was in fact significantly undercapitalized.

The Company maintained this false "well capitalized" status by
improperly classifying credit losses as fraud losses.

In the third quarter of 2001, federal regulators put an abrupt halt to
these practices, forcing the Company to reclassify its fraud losses as
credit losses and to increase its allowances for loan losses.

Once the credit losses were properly categorized, NextBank became
"significantly undercapitalized" - a full $140 million below the level
required for "well capitalized" status.

On October 31, 2001, NextCard revealed that it was unable to provide
the needed capital to NextBank and could no longer operate on its own.

Investors watched as the company's stock plummeted from a closing price
of $5.35 per share on October 30 to a closing price of $0.87 the next
day.

The complaint also alleges that one of the individual defendants,
NextCard co-founder Jeremy R. Lent, sold $7.5 million worth of stock in
illegal insider trades, along with an additional $8.2 million in
indirect stock held by the Lent Family Trust.

For more information, contact Roger LeBlanc or Chad A. Dudley by Mail:
5353 Essen Lane, Suite 420 Baton Rouge LA 70809 by Phone: (800) 988-
3514 or by E-mail: rogerleblanc@lw-law.net


PACIFIC GATEWAY: Berman DeValerio Files Securities Suit in N.D. CA
------------------------------------------------------------------
Berman DeValerio Pease Tabacco Burt and Pucillo LLP initiated a
securities class action on behalf of public investors who purchased the
securities of Pacific Gateway Exchange, Inc. ("PGEX" or the "Company")
during the period May 14, 1999 through March 31, 2000.

The suit, pending in the Northern District of California, in the San
Francisco division, alleges claims arising under Sections 10(b) and 20
of the Securities and Exchange Act, 15 USC 78j(b) and 78t, and Rule
10b-5, 17 CFR 240.10b-5.

This action names three individuals as defendants:

     (1) Howard A. Neckowitz, the former Chief Executive Officer and
         Chairman of the Board of Directors,

     (2) Sandra D. Grey, the former Chief Financial Officer, and
         principal accounting officer; and

     (3) Gail E. Granton, the former Co-Chief Operating Officer of
         Global Marketing and Offshore Development.

Pacific Gateway is a Chapter 11 bankruptcy debtor and is not named as a
defendant in this action simply for the reason that the automatic stay,
applicable to bankruptcy cases, prevents plaintiffs from prosecuting a
case against the Company without leave of court.

This suit concerns Pacific Gateway's attempts to refocus its business
away from traditional telephone services, which were becoming
increasingly unprofitable, into fiber optic "bandwidth" services.

In the summer of 1998, Neckowitz announced the Company's transition
plans and declared that fiber optic services would allow the Company to
move into the expanding markets for internet, voice, data and video
traffic, while simultaneously lowering the Company's costs for
providing traditional telephone service.

A key step in this business strategy was Pacific Gateway's acquisition,
in the summer of 1998, of interests in two undersea fiber optic cables,
which were then under construction, the Japan-U.S. and Trans-Atlantic
14 (TAT-14) cable systems.

Expansion into this new business, however, was going to be expensive.
To finance these diversification plans, as well as its ongoing
operations, the Company entered into a $30 million credit facility on
December 1998, which was subsequently amended and increased to $100
million on November 30, 1999.

The Complaint alleges that prior to March 31, 2000, the end of the
Class Period, there was no public disclosure that, despite reported
"record" earnings:

     (1) payment defaults of over $60 million had occurred and were
         mounting;

     (2) those defaults constituted serious violations of the Company's
         loan covenants under a sizeable credit facility that the
         Company had with its lenders;

     (3) the Company's efforts to raise additional capital had
         collapsed; and

     (4) that the Company would not be able to make a $25.6 million
         payment to banks, due April 1, under the credit facility, or
         to make payments due on its investments in the Japan-U.S. and
         TAT-14 cable systems.

In March 2000, Pacific Gateway issued a press release, and its 1999 10-
K, which disclosed that it would not be able to pay down its credit
facility by the deadline, which was the next day.

The Company also disclosed that it had "discovered" that it had been in
default of its financial covenants since December 1999, although it did
not disclose the nature of the violations, or the fact that it was
currently in default on over $60 million in payment obligations to
vendors and other creditors.

Pacific Gateway also revealed that it had been forced to restate its
financial results for the first three quarters of 1999. Its auditors
had concluded that "the Company has current debt due and payable in
2000 and also has significant capital commitments that raise
substantial doubt about its ability to continue as a going concern."

Upon these disclosures, the price of Pacific Gateway stock plummeted
30% by the end of the day." The Company filed for bankruptcy on
December 29, 2000.

For more information, contact Christopher T. Heffelfinger by Mail:
Suite 2025 425 California Street (Between Sansome and Montgomery), San
Francisco, CA 94104 by Phone: (415) 433-3200 by Fax: (415) 433-6382 or
visit the firm's Website: www.bermanesq.com


SCI-QUEST.COM: Marc Henzel Commences Securities Suit in S.D. New York
---------------------------------------------------------------------
The Law Office of Marc S. Henzel initiated a securities class action on
behalf of purchasers of the securities of SciQuest.com, Inc. (NASDAQ:
SQST) between November 19, 1999 and December 6, 2000, inclusive.

The suit, filed in the United States District Court for the Southern
District of New York, names as defendants:

     (1) BancBoston Robertson Stephens, Inc.,

     (2) Credit Suisse First Boston Corp.,

     (3) Goldman Sachs & Co., Inc., and

     (4) 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.

In November 1999, Sci-Quest commenced an initial public offering of
7,500,000 of its shares of common stock, at an offering price of $16
per share.

In connection therewith, the Company 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) 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 Company shares issued in
         connection with the IPO; and

    (ii) defendants had entered into agreements with customers whereby
         defendants agreed to allocate shares to those customers in the
         IPO in exchange for which the customers agreed to purchase
         additional shares in the aftermarket at pre-determined prices.

For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: (610) 660-8000 or (888)
643-6735 by Fax: (610) 660-8080 by E-Mail: mhenzel182@aol.com or visit
the firm's Website: http://members.aol.com/mhenzel182


SMARTDISK CORPORATION: Marc Henzel Initiates S.D. NY Securities Suit
--------------------------------------------------------------------
The Law Office of Marc S. Henzel filed a securities class action on
behalf of all persons who acquired SmartDisk Corporation (NASDAQ: SMDK)
securities between October 6, 1999 and December 6, 2000.

The suit, pending in the United States District Court for the Southern
District of New York, names as defendants the Company and:

     (1) Addison M. Fischer,

     (2) Michael S. Battaglia,

     (3) Michael R. Mattingly,

     (4) BancBoston Robertson Stephens Inc.,

     (5) Hambrecht & Quist LLC, and

     (6) U.S. Bancorp Piper Jaffray, 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 SmartDisk's initial public
offering of 3,000,000 shares of common stock at $13.00 per share that
was completed last October 1999.

The complaint alleges that the prospectus was false and misleading
because it failed to disclose:

     (i) the underwriters agreement with certain investors to provide
         them with significant amounts of restricted shares in the IPO
         in exchange for exorbitant and undisclosed commissions; and

    (ii) the agreement between the underwriters and certain of its
         customers whereby the underwriters would allocate shares in
         the IPO to those customers in exchange for the customers'
         agreement to purchase Company shares in the aftermarket at
         pre-determined prices.

For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: (610) 660-8000 or (888)
643-6735 by Fax: (610) 660-8080 by E-Mail: mhenzel182@aol.com or visit
the firm's Website: http://members.aol.com/mhenzel182


SAIPAN FACTORIES: Trade Association Enthusiastic About Court Decision
---------------------------------------------------------------------
The Saipan Garment Manufacturers Association (SGMA) welcomed federal
court's decision dismissing in part the class action suit brought
against Saipan garment factory owners and US retailers.

The suit was filed in 1999 on behalf of more than 13,000 Saipan garment
workers who allegedly often work 12-hour days, seven days a week, in
unsafe, unclean conditions.

The suit also alleges that the industry employs foreign workers,
primarily young women from China, and requires them to sign "shadow
contracts" waiving their basic human rights.

These workers were also allegedly forced to pay "recruitment fees" as
high as $7,000 just to come to the US, creating an indentured status
that has been illegal in the United States since the civil war.

The suit contends that these practices are a violation of US labor laws
and international treaties.

Last month, Northern Marianas Federal Court Judge Alex R. Munson upheld
Racketeering Influenced and Corrupt Organizations (RICO) claims but
disallowed claims under the Alien Tort Claims Act.

SGMA Executive Director Richard Pierce expressed optimism at the
decision, saying "As an industry, with some of our association's
members named, we are relieved with this decision.we can finally look
forward to a day in court where perhaps the facts will replace what we
read from opposing counsel's press releases."

Industry counsels believe the court's decision essentially dismisses
the conspiracy theory between the retailers and the defendants.

It also dismisses the allegations of slavery, violations of the alien
tort act and contentions by plaintiffs of involuntary servitude in the
Saipan factories.

"The court stripped the complaint of all the sensational, made for TV
allegations so favored by plaintiffs' counsel," said Pierce. "It really
helps clear the air."

Pierce predicted victory, stating, "We look forward to that day in
court where the remaining allegations are tested on their merit, and
can be recognized, instead of mischaracterized."

The case had been mired in procedural battles waged while plaintiffs'
counsel fought the transfer of the matter to the U.S. District Court
located on Saipan.


STORAGENETWORKS INC.: Marc Henzel Commences Securities Suit in S.D. NY
----------------------------------------------------------------------
The Law Office of Marc S. Henzel initiated a securities class action on
behalf of purchasers of the securities of StorageNetworks, Inc.
(NASDAQ: STOR) between June 30, 2000 and December 6, 2000, inclusive.

The suit, pending in the United States District Court for the Southern
District of New York, names as defendants Goldman Sachs & Co., Credit
Suisse First Boston Corporation and Salomon Smith Barney, Inc.

The complaint alleges violations of Section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.

In June 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, the Company 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) 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 Company shares issued in
         connection with the IPO; and

    (ii) Defendants had entered into agreements with customers whereby
         defendants agreed to allocate Company shares to those
         customers in the IPO in exchange for which the customers
         agreed to purchase additional 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 Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: (610) 660-8000 or (888)
643-6735 by Fax: (610) 660-8080 by E-Mail: mhenzel182@aol.com or visit
the firm's Website: http://members.aol.com/mhenzel182


TELAXIS COMMUNICATIONS: Marc Henzel Lodges Securities Suit in S.D. NY
---------------------------------------------------------------------
The Law Office of Marc S. Henzel filed a securities class action on
behalf of all purchasers of Telaxis Communications Corporation (NASDAQ:
TLXS) securities between February 1, 2000 and December 6, 2000.

The suit, pending in the United States District Court for the Southern
District of New York, names as defendants the Company and:

     (1) John L. Youngblood,

     (2) Dennis C. Stempel,

     (3) Credit Suisse First Boston Corporation,

     (4) Banc of America Securities, LLC,

     (5) CIBC World Markets, Inc.

The above were co-lead underwriters of the Telaxis' initial public
offering of 4,000,000 shares of common stock at $17.00 per share on
February 1, 2000.

The complaint charges defendants 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 for issuing a registration statement and prospectus that contained
material misrepresentations and/or omissions.

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 restricted Company
         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 shares in the after-
         market at pre-determined prices.

For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: (610) 660-8000 or (888)
643-6735 by Fax: (610) 660-8080 by E-Mail: mhenzel182@aol.com or visit
the firm's Website: http://members.aol.com/mhenzel182


TIBCO SOFTWARE: Marc Henzel Commences S.D. New York Securities Suit
-------------------------------------------------------------------
The Law Office of Marc S. Henzel initiated a securities class action
lawsuit on behalf of all persons who purchased the securities and/or
sold the put options of Tibco Software, Inc. (NASDAQ: TIBX) between
July 13, 1999 and July 3, 2001, inclusive.

The suit, pending in the United States District Court for the Southern
District of New York, names the Company and defendants:

     (1) Vivek Y. Ranadive,

     (2) Paul G. Hansen,

     (3) Douglas M. Atkin,

     (4) Yogen K. Dalal,

     (5) Edward R. Kozel,

     (6) Donald J. Listwin,

     (7) Larry W. Sonsini,

     (8) John G. Gaysom and

     (9) Philip Wood

The defendants allegedly violated the federal securities laws by
issuing and selling Tibco common stock pursuant to the July 13, 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,
the underwriters allocated Company shares to customers at the IPO price
of $15.00 per share.

To receive the allocations (i.e., the ability to purchase shares) at
$15.00, the underwriters' brokerage customers allegedly had to agree to
purchase additional shares in the aftermarket at progressively higher
prices.

The alleged requirement that customers make additional purchases at
progressively higher prices as the price of Tibco stock rocketed upward
(a practice known on Wall Street as "laddering") was intended to (and
did) drive Company 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 $15.00 IPO price and then selling it later for a profit at
inflated aftermarket prices, which rose as high as $147 on March 9,
2000.

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
laws because the prospectus distributed to investors and the
registration statement filed with the SEC in order to gain regulatory
approval for the offering contained material misstatements regarding
the commissions that the underwriters would derive from the IPO
transaction. The filings also failed to disclose the additional
commissions and "laddering" schemes.

For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: (610) 660-8000 or (888)
643-6735 by Fax: (610) 660-8080 by E-Mail: mhenzel182@aol.com or visit
the firm's Website: http://members.aol.com/mhenzel182


TIDEL TECHNOLOGIES: Stull Stull Initiates Securities Suit in S.D. TX
--------------------------------------------------------------------
Stull Stull and Brody commenced a securities class action on behalf of
purchasers of Tidel Technologies, Inc. (NASDAQ:ATMS) common stock from
between April 6, 2000 and February 8, 2001, inclusive.

The suit was filed in the United States District Court for the Southern
District of Texas, Houston Division against the Company and:

     (1) James T. Rash,

     (2) Mark K. Levenick,

     (3) James L. Britton III and

     (4) Jerrell G. Clay.

The complaint alleges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder.

The defendants allegedly issued a series of material misrepresentations
to the market between April 6, 2000 and February 8, 2001, thereby
artificially inflating the price of the Company's common stock.

Specifically, the complaint alleges that, during the class period,
Tidel falsely touted its sales of automated teller machines, or ATMs,
at a "record" pace.

These materially false and misleading statements allowed the Company to
begin trading on the NASDAQ national trading system, which would have
been impossible without the Company's false and misleading statement
and the consequent artificial inflation of the Company's stock price.

When Tidel finally disclosed that its largest customer's orders would
be at "substantially reduced levels for the quarter ending March 31,
2001," the Company's stock price declined precipitously.

The lawsuit alleges that the Company knew during the time period but
did not disclose that its largest customer was in the process of
switching to a competitor and reducing orders.

For further details, contact Tzivia Brody by Mail: 6 East 45th Street,
New York NY 10017 by Phone: 1-800-337-4983 (toll-free) by Fax: (212)
490-2022 or by E-mail: SSBNY@aol.com


TOBACCO LITIGATION: Lawyers Make Closing Statements In WV Smokers Suit
----------------------------------------------------------------------
Lawyers for West Virginian smokers have started making their closing
statements in the trial of the landmark class action against four of
the nation's biggest tobacco companies.

The class action was filed on behalf of 250,000 West Virginia smokers
who have consumed the equivalent of a pack a day for at least five
years without becoming sick.

The smokers sued RJ Reynolds, Philip Morris, Lorillard and Brown and
Williamson, alleging they manufactured a "defective product" that puts
smokers at risk of contracting serious diseases.

The smokers are asking for an unprecedented medical monitoring program
that provides tests to earlier detect smoking related diseases such as
lung cancer, emphysema and chronic obstructive pulmonary disease.

The proposed program includes two tests:

     (1) spirometry, a lung function test, for all smokers at age 40
         who have not yet been diagnosed with a tobacco-related
         illness. A second test would be administered at age 45, with
         follow-up tests every two years;

     (2) spiral computed tomography scans that can allegedly could
         reveal disease earlier than traditional chest x-rays, starting
         at age 50

Plaintiffs' lawyer Scott Segal asserted in his closing statements that
thousands of health smokers deserved medical testing because the
Companies did not acknowledge their product's dangers.

He also contended that the Companies did nothing to make it safer,
saying "There have been 40 years of lost opportunities."

The Companies have countered that the tests have not been proven to
detect disease soon enough to make a difference in the outcome, and
have risky follow-up procedures that would outweigh potential benefits.  

RJ Reynolds attorney Jeff Furr said the program was ".a worthless
screening procedure that will not benefit the members of this class in
any way."

Furr also argued that the lawsuit aims to "turn the tobacco companies
into insurers that pay for free medical testing," without even
requiring smokers to stop the habit.

He added no matter what reading a test gave, the best way to avoid
disease would be to stop smoking.

Segal says medical monitoring is necessary because technology now makes
the early detection of disease possible.

"We've got a chance to do something here that's never been done
before," he said in an Associated Press report. "This isn't pie-in-the-
sky science; these are real human beings. They are not statistics."


U.S. WIRELESS: Marc Henzel Commences Securities Suit in N.D. CA
---------------------------------------------------------------
The Law Office of Marc S. Henzel initiated a securities class action on
behalf of purchasers of U.S. Wireless Corporation (NASDAQ: USWC; USWCE)
publicly traded securities during the period between June 29, 1999 and
May 25, 2001.

The suit, pending in the U.S. District Court for the Northern District
of California, charges the Company and its former Chairman and CEO with
violations of the Securities Exchange Act of 1934.

U.S. Wireless, through a national network of wireless location systems,
enables wireless carriers to offer location-enhanced services,
including 911 caller pinpointing, localized news and traffic updates,
vehicle and asset tracking, and carrier network management services.

The complaint alleges that during the class period, in order to conceal
their self dealing transactions, defendants caused the Company to
falsely report its results for fiscal 2000 through improper
characterization of the benefit and the beneficiaries of the issuance
of shares of the Company's stock.

As a result of this mischaracterization, U.S. Wireless' net loss
attributable to common shareholders was understated by $6.2 million, or
35%.

Ultimately, the Company revealed that its results for fiscal 2000 were
in error and would be restated to record the share issuances at fair
market value and record a loss of $5.3 million for the shares and $0.9
million for certain tax effects.

Absent defendants' improper accounting, U.S. Wireless would have
reported much less favorable fiscal 2000 earnings.

In May 2001, Nasdaq issued an unusual press release entitled "Nasdaq
Halts Trading of U.S. Wireless Corporation and Requests Additional
Information from Company."

On this news, the Company's shares were halted from trading at $2.91,
88% lower than the class period high of $24.50.

For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: (610) 660-8000 or (888)
643-6735 by Fax: (610) 660-8080 by E-Mail: mhenzel182@aol.com or visit
the firm's Website: http://members.aol.com/mhenzel182


VENTRO INC.: Marc Henzel Commences Securities Suit in N.D. California
---------------------------------------------------------------------
The Law Office of Marc S. Henzel initiated a securities class action on
behalf of purchasers of Ventro Corp. (NASDAQ: VNTR) common stock during
the period between Feb. 15, 2000 and Dec. 6, 2000.

The suit, filed in the United States District Court for the Northern
District of California, charges the Company and certain of its officers
and directors with violations of the Securities Exchange Act of 1934.

During the class period, Ventro built and operated platforms for
vertical business-to-business e-commerce marketplace companies. The
complaint alleges that by December 1999, defendants knew that the
Company's existing business model did not work.

Moreover, by the beginning of the class period it was evident to
defendants that the Company did not possess the technology to
successfully compete as a marketplace.

Defendants knew this would severely impair Ventro's future revenue
growth. However, defendants wanted to raise additional money through
debt offerings before the bottom fell out of Company stock price.

Thus, defendants continued to make positive but false statements about
the Ventro's business and future revenues. As a result, Company stock
traded as high as $243-1/2 per share during the class period.

In December 2000, the Company announced a restructuring in which it
closed down two out of three of its main B2B marketplaces. In early
2001, it was revealed that the Company's CEO and the other defendants
had realized by December 1999 that its business model of independent
marketplaces didn't make sense.

It was revealed that even Ventro's partners were not satisfied with its
technology for operating the marketplaces. By this time Company stock
had declined to less than $2 per share.

Defendants' misconduct has wiped out over $4 billion in market
capitalization as Company stock has fallen 99% from its class period
high of over $243 per share as the truth about the Company, its
operations and prospects began to reach the market

For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: (610) 660-8000 or (888)
643-6735 by Fax: (610) 660-8080 by E-Mail: mhenzel182@aol.com or visit
the firm's Website: http://members.aol.com/mhenzel182


VERSATA INC.: Marc Henzel Initiates Securities Suit In N.D. California
----------------------------------------------------------------------
The Law Office of Marc S. Henzel commenced a securities class action
against Versata, Inc. (Nasdaq: VATA) on behalf of all purchasers of
Company shares during the period April 24, 2000 to March 29, 2001.

The suit, filed in the United States District Court for the Northern
District of California, alleges claims under Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934.

The complaint alleges that the defendants made material
misrepresentations and omissions of material facts concerning the
Versata's business performance during the class period.

In particular, on March 29, the Company announced that it would file a
Notification of Late Filing of its Annual Report on Form 10-K, for the
year ended December 31, 2000, with the SEC.

The delay was attributed to an ongoing inquiry into improper
recognition of revenue during the 2000 fiscal year.

Kevin Ferrell, CFO during the 2000 fiscal year, left Versata on
February 7, 2001. John A. Hewitt, Jr., president and CEO during the
2000 fiscal year, left the Company on March 29, 2001 without
explanation, as did Peter Harrison, Sr. VP - Sales.

During the class period, certain of the Company's officers and
directors, including President and CEO Hewitt, sold 295,000 shares of
Versata's stock at allegedly inflated prices (as high as $24.97) for
insider trading proceeds in excess of $3.7 million.

On news of the revenue recognition problems and executive exodus,
Company shares fell more than 72% in a single day, until NASDAQ halted
trading, requesting further information from the Company.

In March 2001, Versata closed at $0.28, down $0.75 from the prior day's
close of $1.03, and down from a 52-week high of $83.

Trading in the Company's stock remains halted while NASDAQ seeks
further information.

For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: (610) 660-8000 or (888)
643-6735 by Fax: (610) 660-8080 by E-Mail: mhenzel182@aol.com or visit
the firm's Website: http://members.aol.com/menzel182
    
                              *********


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, Aurora Fatima
Antonio 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 240/629-3300.

                  * * *  End of Transmission  * * *