/raid1/www/Hosts/bankrupt/CAR_Public/011226.mbx
C L A S S A C T I O N R E P O R T E R
Wednesday, December 26, 2001, Vol. 3, No. 251
Headlines
ACLN LTD.: Abbey Gardy Commences Securities Fraud Suit in S.D. New York
APROPOS TECHNOLOGY: Berman DeValerio, Charles Piven File Suit in IL
ARKANSAS: Judge Hears Testimonies on Adequacy of Mental Health System
CABOT CORPORATION: Faces Multiple Suits Due To PA Beryllium Operations
CORNING INC.: Wechsler Harwood Commences Securities Suit in W.D. NY
ENRON CORPORATION: University Of California Joins Texas Securities Suit
ENRON CORPORATION: Ohio Mulls Suit After Pension Plans Lose Millions
ENRON CORPORATION: Florida's Pension Loses, Officials Consider Suit
ESSO CORPORATION: Supreme Court Awards $1M To Gas Explosion Victims
FORD MOTOR: To Pay Black Workers $300T For Racial Harassment in MI
KOHLER CORPORATION: Recalls 41,000 Shower Doors For Accident Hazard
MCK COMMUNICATIONS: Wolf Haldenstein Announces Lead Plaintiff Deadline
STARMEDIA NETWORK: Spector Roseman Commences Securities Suit in S.D. NY
STARMEDIA NETWORK: Finkelstein Thompson Files Securities Suit in NY
TAKE-TWO INTERACTIVE: Wolf Popper Commences Securities Suit in S.D. NY
TAKE-TWO INTERACTIVE: Levy Levy Initiates Securities Suit in S.D. NY
TAKE-TWO INTERACTIVE: Bernstein Liebhard Files Securities Suit in NY
VERIZON DSL: Consumers Appeal Suit Dismissal, Oppose Transfer To VA
XOMA LTD.: Cauley Geller Commences Securities Suit in N.D. California
XOMA LTD.: Schiffrin Barroway Commences Securities Suit in N.D. CA
XPEDIOR INC.: Finkelstein Thompson Commences Securities Suit in S.D. NY
*28 Pharmaceutical Firms Sued For Antitrust Violations
*********
ACLN LTD.: Abbey Gardy Commences Securities Fraud Suit in S.D. New York
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Abbey Gardy LLP initiated a securities class action on behalf of all
persons who acquired A.C.L.N., Ltd. (NYSE: ASW) securities between
December 21, 1998 and December 20, 2001, inclusive in the United States
District Court for the Southern District Court of New York. Named as
defendants in the complaint are the Company and:
(1) Joseph Bisschops, Chairman and Managing Director,
(2) Aldo Labiad, Chief Executive and Operating Officer and
Managing Director, and
(3) Alex De Ridder, Vice President and Chief Financial Officer
The suit charges defendants with violations of Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. The complaint alleges, among other things, that beginning
with its public offering on June 26, 1998, if not before, defendants
commenced a continuing scheme, ending no earlier than December 20,
2001, to mislead the investing public and conceal the Company's true
financial state and business prospects. The truth about the Company was
undisclosed until the publication of an investigative report about it
by thestreet.com on December 20, 2001.
Upon publication of that report, Company shares, which had never traded
below $19 per share since the end of 2000, fell from $26.11 per share
to a low of $6.20 per share, closing at $9.40 per share.
The report disclosed, among other things, that from the time the
Company went public until it filed an annual report with the SEC on
June 29, 2000, as many as 2,265,221 shares held by entities controlled
by Chairman Joseph Bisschops, 29% of his total holdings, vanished from
the "principal and management shareholders" list in the company's SEC
filings. The missing shares belong to four of Mr. Bisschops' entities,
whose names also disappeared from the list:
(i) Pearlrose Holdings International,
(ii) Scott Investments,
(iii) Gilbert Management and
(iv) Emerald Sea Marine
The suit also alleges that:
(a) defendants have been claiming that the Company has assets that
it does not in fact own, such as the Sea Atef;
(b) defendants used the purported purchase of the Sea Atef to
conceal their diversion of Company funds to entities
affiliated with Mr. Bisschops in undisclosed related-party
transactions;
(c) defendants have been booking revenues as if the Sea Atef was
in continuous operation, during a period when it was in fact
not;
(d) defendants have been understating their selling, general and
administrative expenses;
(e) defendants have been re-characterizing payments to related-
parties after the fact to conceal those payments when
they were made;
(f) defendants have been overstating the number of cars that they
sold and, consequently, their sales revenue;
(g) the Company's revenue-recognition practices do not comply with
Generally Accepted Accounting Principles or their own
representations.
The suit further alleges that defendants' misrepresentations caused the
price of Company securities to be artificially inflated throughout the
class period.
For further details, contact Nancy Kaboolian by Phone: 800.889.3701 or
by E-mail: nkaboolian@abbeygardy.com.
APROPOS TECHNOLOGY: Berman DeValerio, Charles Piven File Suit in IL
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Berman DeValerio Pease Tabacco Burt & Pucillo and Law Offices Of
Charles J. Piven PA commenced a securities class action against Apropos
Technology, Inc. (Nasdaq:APRS) in the US District Court for the
Northern District of Illinois, on behalf of investors who bought the
Company's stock in its February 17, 2000 public offering or on the open
market through April 10, 2001. The initial complaint covered investors
who bought the stock through May 15, 2000. Named as defendants are the
company, some of its directors and certain underwriters who helped take
it public.
According to the complaint, the prospectus for the Company's February
17, 2000 offering falsely stated that co-founders Patrick K. Brady and
William W. Bach were active members of its executive management team
when they had stopped playing important roles within the company months
before the prospectus was issued. The prospectus listed Mr. Brady as
chief technology officer and Mr. Bach as vice president of technology.
However, Company President and CEO Kevin G. Kerns had effectively
ousted Mr. Brady after a power struggle that culminated in July 1999.
The suit alleges that though Mr. Brady maintained his title, he no
longer had a company office or any employees who reported to him. The
suit also alleges that Mr. Kerns stripped Mr. Bach of his executive
managerial responsibilities and involvement in shaping the company's
core technology. The suit contends that Mr. Kerns, who became the de-
facto CTO, attempted to hire a replacement for Mr. Brady before the
prospectus was issued, but was unsuccessful. So, Mr. Brady and Mr. Bach
were listed in the prospectus as technology officers.
The suit alleges that the Company issued nearly 4 million shares of
common stock at $22 per share to thousands of investors based on
offering materials that falsely stated that the founders who designed
its key technological product were managing the company.
"As a technology company whose business plan and future success
depended heavily on proprietary technology, investors considered it
important that the Apropos founders - the people who developed and
patented that proprietary technology - still believed in the company,
its business and its technology," the complaint says. "Plaintiffs and
the other class members have lost tens of millions of dollars as a
result of these material misrepresentations and omissions in the
prospectus."
For more information, contact Michael G. Lange or Steven D. Morris by
Mail: One Liberty Square, Boston, Massachusetts 02109 by Phone: 800.
516.9626 by E-mail: law@bermanesq.com or visit the firm's Website:
http://www.bermanesq.comor Charles J. Piven by Mail: The World Trade
Center-Baltimore 401 East Pratt Street, Suite 2525 Baltimore, Maryland
21202 by Phone: 410.332.0030 or by E-mail: piven@pivenlaw.com
ARKANSAS: Judge Hears Testimonies on Adequacy of Mental Health System
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Federal Judge Stephen Reasoner recently heard three days of testimony
regarding the inability of the state of Arkansas to provide adequate
treatment for mentally ill people held on criminal charges, The Morning
News recently reported. Although the issue was narrowed to treatment
of criminal suspects in local jails, the state's entire mental-health
system appeared to be on trial in federal court at Little Rock.
The class action lawsuit accuses the state of allowing mentally ill
jail inmates to spend months in custody without treatment, even though
the courts have ordered mental evaluations. The lawsuit, which was
filed by the American Civil Liberties Union on behalf of several
mentally ill criminal suspects, named as defendants Sebastian County
Sheriff Frank Atkinson and Richard Hill, Deputy Director of the state
division of Mental Health Services in the Department of Human Services.
Testimony also focused on inadequacies at the State Hospital, the only
institution in Arkansas that takes mentally ill inmates. Dr. Larry
Miller, the hospital's Medical Director, said that the 186-bed facility
does not have adequate space for all the criminal suspects sent by
court order for mental evaluations. He said that the hospital only has
64 beds for such cases, but needs 140. "It's a serious situation.
There are folks in jail not getting treatment and getting sicker," Dr.
Miller said. "I hear horror stories every day."
Two circuit judges and law enforcement officers gave testimony about
inmates who sat in jail for a year waiting to be admitted to the State
Hospital and about other inmates so disturbed that they would eat their
flesh and feces. Kenny Whitlock, a former Department of Human Services
(DHS) official, accused the state of not committing enough resources to
help mentally ill patients. He contended that the Division of Mental
Health Services could have sought additional funding to deal with
inadequacies at the State Hospital. One DHS official acknowledged that
serious problems exist at the State Hospital, which, he said, "does
what it can" to deal with a growing caseload.
With the trial concluded, Judge Reasoner's role is to determine whether
the state's system of treatment for mentally ill inmates is
unconstitutional. If he comes to the conclusion that it is, he could
order the parties involved to find a solution. He could also order the
state to take action or put the system under federal court supervision.
Any decision will have a significant impact on the State Hospital and
the Division of Mental Health Service. However, if the system is
placed under court supervision, the entire state mental-health system
could come under scrutiny. The Governor, General Assembly and DHS
would then have to rethink the entire system of funding for mental-
health services.
There is plenty to consider, as vividly described in The Morning
News series of reports early this month on problems of the mentally ill
and the strain on programs available for their treatment. The problems
are not restricted to jail inmates, as statistics show that one in five
people has a diagnosable mental illness.
CABOT CORPORATION: Faces Multiple Suits Due To PA Beryllium Operations
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Cabot Corporation faces three class actions pending in Pennsylvania,
alleging personal injury caused by beryllium particle emissions at the
Company's mining facility in Reading over the course of many decades.
The Company entered the beryllium industry through an acquisition in
1978, but ceased manufacturing beryllium products at one of the
acquired facilities in 1980, and another portion of Cabot's former
beryllium business was sold to NGK Metals, Inc. in 1986.
The three suits are:
(1) A class action filed by individuals who reside within a 6-mile
zone surrounding the facility in Pennsylvania state court
asking the creation of a trust fund to pay for the medical
monitoring of the surrounding resident population;
(2) A class action on behalf of all of the Company's former
Pennsylvania employees in Pennsylvania state court also
requesting medical monitoring;
(3) A class action, filed in the United States District Court for
the Eastern District of Pennsylvania on behalf of workers who
have been employed by customers of various beryllium
manufacturers including the Company, seeking the creation of a
"medical surveillance and screening program" for all class
members;
(5) a class action filed by other individuals who reside within a
6-mile zone surrounding the Company's former facility in
Hazleton, Pennsylvania in Pennsylvania state court seeking the
creation of a trust fund to pay for the medical monitoring of
the surrounding resident population.
The suit relating to the employees of customers described in (3) above
has been dismissed, while the suit relating to the former employees of
the Company described in (2) above will soon be dismissed.
The Company believes it has valid defenses to these actions and will
assert them vigorously in the various venues in which claims have been
asserted. However, recent federal legislation creating a federally
funded compensation scheme for beryllium workers injured or otherwise
requiring medical screening or testing may well affect certain of
these pending beryllium cases.
CORNING INC.: Wechsler Harwood Commences Securities Suit in W.D. NY
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Wechsler Harwood Halebian & Feffer LLP initiated a securities class
action on behalf of all purchasers of the common stock of Corning, Inc.
(NYSE: GLW)` pursuant to the November 2, 2000 prospectus in the United
States District Court for the Western District of New York.
The suit alleges that defendants violated Sections 11, 12(a)(2) and 15
of the Securities Act of 1933 by issuing a materially false and
misleading registration statement and prospectus in connection with the
Company's offering of common stock and debentures in November 2000.
Specifically, the complaint alleges that the prospectus was materially
false and misleading, among other reasons, because:
(1) it stated that demand for the Company's products was robust;
(2) it omitted to disclose that the Company was amassing hundreds
of millions of dollars of obsolete inventory that would have
to be written-off; and
(3) given the foregoing, the projection of 25% earnings growth in
2001, contained in the prospectus, was lacking in a reasonable
basis at all times.
In July 2001, the Company announced it was taking a $5.1 billion charge
primarily related to two recent acquisitions, that it would also write
off $300 million in excess and obsolete inventory, and that it would
cut 1,000 jobs and close three plants. In July 2001, the Company
reported a massive second-quarter loss of $4.76 billion, or $5.13 per
share. Company shares closed that day at $13.77, down 80% from the
offering price.
For further details, contact David Leifer by Mail: Shareholder
Relations Department, 488 Madison Avenue 8th Floor, New York, New York
10022 by Phone: 877.935.7400 (Toll Free) or by E-mail:
dleifer@whhf.com.
ENRON CORPORATION: University Of California Joins Texas Securities Suit
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The University of California has joined the federal class action
against 29 senior executives of the Enron Corporation (NYSE: ENE) and
the national accounting firm of Arthur Andersen, LLP, pending in the US
District Court for the Southern District of Texas in Houston on behalf
of those who purchased Company securities between October 19, 1998 and
November 27, 2001.
The University incurred an aggregate total loss in their portfolios
amounting to $145 million, which represents approximately three-tenths
of one percent (0.30%) of the university's total investment funds. The
current market value of the portfolios was $54 billion as of November
30, 2001.
The suit alleges that the members of the class were the victims of a
fraudulent scheme whereby the defendants disseminated false financial
statements that artificially inflated the price of Company securities
and allowed the defendants to engage in $1.1 billion of illegal insider
trading. Among the senior executives named in the suit are former
president and chief executive officer Jeffrey Skilling and Kenneth Lay,
former chief executive officer and chairman of the board of directors.
The suit alleges that during the period specified, "defendants engaged
in massive insider trading while issuing false financial statements and
making false and misleading statements about the Company's purportedly
'record' results and strong operating performance. As a result of these
false statements, the Company's stock traded as high as $90.75,
allowing defendants to dump 17.3 million of their own Enron shares for
proceeds of $1.1 billion."
David H. Russ, Treasurer to the University regents, said "Even with the
demise of Enron occurring in November, the UCRP (University of
California Retirement Plan) equity portfolio recorded a return of 7.70
percent, which was within 0.08 percent of its performance benchmark."
He adds, "The alleged financial fraud losses from the retirement plan's
Enron position in no way affects the ability of the retirement plan,
which is in a strong overfunded position, to meet its obligations to
the beneficiaries."
The University has petitioned the court to be named as a lead plaintiff
in the lawsuit, which would allow the university to participate in the
management and oversight of the litigation on behalf of itself and all
other members of the class.
For more information, contact Charles McFadden of the University of
California, by Phone: 1.510.987.9193 or by E-mail:
charles.mcfadden@ucop.edu or Christopher Patti by Phone: 1.510.987.9800
ENRON CORPORATION: Ohio Mulls Suit After Pension Plans Lose Millions
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Ohio's state officials are still deciding whether to join a class
action with other large institutional investors against energy giant
Enron Corporation. Two of Ohio's largest public-pension plans lost a
combined $133 million in the Company's last month's collapse, the
Associated Press recently reported.
Ohio's Public Employees Retirement System will survive despite losing
$68 million, executive director Laurie Hacking said. "It always hurts
to lose money, but we should keep this in perspective," Ms. Hacking
said. "The Enron stock (represents) one-tenth of one percent of our
portfolio."
The State Teachers Retirement System lost $65 million when the stock
crashed. "Right now, we're assessing what path of litigation to
follow," said Stephen A. Mitchell, the system's Director of
Investments. Officials met recently with the State Attorney General's
office, which represents the state's five public pension funds.
As of September 30, the Public Employees' fund held 1.59 million in the
Company's shares while the teachers' fund owned 1.58 million shares.
The plans paid an average $43 per share.
Suing the bankrupt company might not be enough, Ms. Hacking said.
"We're not sure if this is just a carcass we're picking over, or
whether we will go after others," she said, such as the Company's
accounting firm, Arthur Andersen. The Company collapsed after
questionable bookkeeping practices to hide debt were revealed and a
plan for a competitor, Dynegy, to buy the company fell through.
ENRON CORPORATION: Florida's Pension Loses, Officials Consider Suit
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Florida's state officials are in the throes of deciding whether to join
other states in a lawsuit against Enron Corporation, the Orlando
Sentinel reported recently. Florida's pension fund for teachers, state
employees and county workers bought seven million shares in the energy
company before it filed for bankruptcy protection, leaving the
retirement fund facing hundreds of million of dollars in losses.
Tom Herndon, executive director of the Florida Board of Administration,
which manages the $100 billion Florida Retirement System paying
pensions for most state and local government employees, said the
decision would be made very soon. He added Florida also was
considering whether to take action against the investment advisers who
decided to buy Company shares for the state. Bill Patterson, director
of the office of investment for the AFL-CIO, said another potential
target of lawsuits is Arthur Andersen, the auditors who were supposed
to be watching over the Company's books.
Investors, whether they are individuals, or state or private funds,
rely on audits in making decisions. Arthur Andersen, unlike the
Company, is not in financial trouble. "Arthur Andersen is the only one
with money here," Mr. Patterson said.
Mr. Herndon said retirees would receive their full pensions despite the
losses, but state and local governments would have to pick up the tab
if the pension system's surplus from profitable investments doesn't
cover the losses. "To go from $100 billion-plus in revenue to your
stock selling for 28 cents a share is a pretty dramatic situation," Mr.
Herndon said recently, after meeting with one of the parade of law
firms seeking to represent the retirement system. "It's the scale of
collapse that's part of the issue."
Mr. Herndon said he had not yet estimated how many millions the state
had lost and asserted the loss was less than 1%. Most of the shares
were bought during the past 18 months and before the Company's stock
had began to plummet in October, it had sold for at least $20 a share
throughout 2001.
Governor Jeb Bush is one of three members of the pension fund's State
Board of Administration, which sets the investment policy and strategy.
State employees and private experts then decide on the specific stocks,
bonds and other investments that go into the portfolio. The other
members of the board are Comptroller Robert Milligan and Treasurer Tom
Gallagher.
Lisa Gates, a spokeswoman for the governor, said he was "looking at all
legal options to recover the loss of our employees' retirement funds.
Governor Bush played no role in the decision to invest in Enron. A
range of investment options is set by the (State Board of
Administration), and the investment managers chose within that range."
The Florida Retirement System covers 650,000 workers and 150,000
retirees. Nearly all workers in the state are part of it, except
federal workers and employees of big cities such as Orlando. About
55percent of the $100 billion is invested in U.S. stocks.
Company spokesman Eric Thode declined comment on the potential lawsuit
by Florida. Enron Corporation went from a Wall Street powerhouse with
close connections to the Bush White House to the largest corporate
failure in American history. Many private pension funds and state
retirement systems had invested in the company, which filed for Chapter
11 bankruptcy last month. Florida is one of several states considering
a class action suit that will be filed in federal court on December 21,
by a number of states.
The Company's decline began last month when it admitted it had
overstated profits by $586 million since 1997. Competitor Dynegy Inc.
sealed its fate when it pulled out of a deal to buy the company for $9
billion. Regulators and Congress now are investigating the Company.
Shortly before thousands of workers were laid off, the Company gave
bonuses to 500 top executives.
ESSO CORPORATION: Supreme Court Awards $1M To Gas Explosion Victims
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Supreme Court Justice Philip Cummins recently awarded more than $1
million in compensation to 10 victims of a huge explosion which killed
two workers and injured eight others at Esso Corporation's eastern
Victorian Longford gas plant three years ago, according to a report by
AAP News.
The Company was fined a record $2 million in the Supreme Court after a
jury found the company guilty of 11 criminal charges under the
Occupational Health and Safety Act. Earlier this year, Justice Cummins
ruled that the terms of settlement, in which the Company had agreed to
pay compensation to 18 other workers and family members, should remain
secret.
In a separate court action, one of Australia's largest class
actions, four legal firms are representing up to 20,000 businesses and
insurers in a compensation claim, estimated at $1.4 billion, against
the multinational petroleum company. This case is not expected to
start before the middle of next year.
Justice Cummins ruled that in the case of the 10 victims, $300,000
should go to Lynette Wilson, the 53-year-old widow of Peter Wilson, one
of the workers who died in the blast. Justice Cummins said he hoped
the compensation would be "a step in the healing of the suffering" of
the 10 people. Ms. Wilson's three sons each received $75,000.
The three daughters of the second man to die in the explosion, Martin
Lowery, 49, each received $50,000. A man described a hero of the
disaster, Martin Jackson, 38, then a trainee, was seriously injured
when he helped rescue other workers. He was awarded $200,000. His
wife Sue Ellen received $50,000. A contractor, Daryl Borthwick, 40,
who was also working on the site, and was one of two men who reported
what he saw as an impending disaster, received $100,000.
Gas supplies were cut to most Victorian homes and businesses for nearly
two weeks after the explosion on September 25, 1998.
FORD MOTOR: To Pay Black Workers $300T For Racial Harassment in MI
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Automobile giant Ford Motor Company agreed to pay $300,000 to
compensate 23 black plant workers who filed a federal racial harassment
lawsuit against the auto manufacturer, according to an Associated Press
report.
The US Equal Employment Opportunity Commission filed the suit on behalf
of the Company's employees who worked at the Company's New Model
Development Center in Allen Park, Michigan. The suit alleges various
acts of racial harassment, citing incidents when a white coworker hung
hangman's nooses on his forklift, "mocked what he considered to be
African-American styles of speech and manner of walking," and used
"insulting language." The employee was suspended without pay for a
month this fall and has since retired from the company, Ford
spokeswoman Anne Marie Gattari told Associated Press.
Adele Rapport, regional attorney for EEOC's Detroit district office,
said in a statement, "At this point we are particularly concerned about
threats and intimidation of employees who assisted and/or participated
in these proceedings.We expect that Ford will take immediate action to
protect victims and appropriately discipline employees who engage in
such conduct."
Ms. Gattari said that additional training sessions will be held for
workers and supervisors at the Allen Park plant. The Company already
requires all employees to attend classes designed to prevent
harassment.
KOHLER CORPORATION: Recalls 41,000 Shower Doors For Accident Hazard
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Kohler Corporation is cooperating with the US Consumer Product Safety
Commission (CPSC) by voluntarily recalling about 41,000 shower doors.
The door hinges can fail, causing the shower door to fall and injure
nearby consumers. The Company has received 11 reports of hinges
failing and shower doors falling, including one report of minor
injuries, such as cuts and scratches from sharp edges on the door's
frame.
The recalled shower doors include the Kohler Helios and Sterling
Freestyle models made from January 1997 through September 2001. The
hinges on the Helios and Freestyle models operate in a unique way which
allows the doors to swing back and forth. The door panels can retract
side to side without the use of anchored track guides common to many
shower doors. The shower doors were distributed for shower enclosure
and bathtub applications in both single and double door configurations
in a variety of sizes. They were sold in chrome, brass and white frame
finishes, and with a variety of glass treatments.
Home centers, showrooms, plumbers and building contractors sold
the Kohler and Sterling doors nationwide from January 1997 through
October 2001. The suggested list price started at about $440.
For more information, contact the Company by Phone: 866.782.6329
between 8 am and 5 pm CT Monday through Friday or visit the firm's
Website: http://www.kohler.com/doorrecall.
MCK COMMUNICATIONS: Wolf Haldenstein Announces Lead Plaintiff Deadline
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Wolf Haldenstein Adler Freeman Herz announced that the lead plaintiff
deadline in the securities suit against MCK Communications, Inc.
(NASDAQ:MCKC) is February 4, 2002. The suit was filed in the United
States District Court, Southern District of New York on behalf of
purchasers of the Company's securities between October 22, 1999 and
December 6, 2000, inclusive. The suit names as defendants the Company,
certain of its officers and underwriters:
(1) Banc of America Securities,
(2) Bear Stearns,
(3) CIBC World Markets,
(4) Dain Rauscher,
(5) FleetBoston Robertson Stephens,
(6) J.P. Morgan Securities,
(7) Deutsche Banc Alex. Brown,
(8) Lehman Brothers,
(9) Merrill Lynch,
(10) Morgan Stanley Dean Witter,
(11) Prudential Securities, and
(12) Salomon Smith Barney
The suit 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. In October 1999, the
Company commenced an initial public offering of 3.4 million 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 suit further alleges that
the prospectus was materially false and misleading because it failed to
disclose, among other things, that:
(i) the underwriters had solicited and received excessive and
undisclosed commissions from certain investors in exchange for
which those underwriters allocated to those investors material
portions of the restricted number of IPO shares issued in
connection with the IPO; and
(ii) the underwriters had entered into agreements with customers
whereby the underwriters 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 Fred Taylor Isquith, Thomas H. Burt,
Gustavo Bruckner, Michael Miske, George Peters or Derek Behnke by Mail:
270 Madison Avenue, New York, New York 10016 by Phone: 800.575.0735 by
E-mail: classmember@whafh.com or visit the firm's Website:
http://www.whafh.com.All e-mail correspondence should make reference
to MCKC.
STARMEDIA NETWORK: Spector Roseman Commences Securities Suit in S.D. NY
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Spector, Roseman & Kodroff, PC lodged a securities class action against
StarMedia Network, Inc. (Nasdaq: STRME) and its principal officers and
directors in the United States District Court for the Southern District
of New York on behalf of all persons or entities who purchased the
Company's stock during the class period from April 11, 2000 through
November 19, 2001.
The suit charges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market between April 11, 2000 and November 19, 2001 concerning the
Company's financial performance. The suit alleges that the Company
reported artificially inflated financial results in press releases and
filings made with the SEC by improperly recognizing revenue in
violation of Generally Accepted Accounting Principles.
Specifically, the complaint alleges that two of the Company's primary
subsidiaries, AdNet S.A. de C.V. and StarMedia Mexico, S.A. de C.V.,
had engaged in improper accounting practices which had the effect of
materially overstating the Company's reported revenues and earnings by
at least $10 million.
In November 2001, as alleged in the complaint, the Company issued a
press release announcing that based on the "preliminary" results of an
internal investigation into its accounting practices, it expects to
restate its financial statements for fiscal year 2000 and the first two
quarters of 2001 and that those financial statements should not be
relied upon. The Company further reported that its Chief Financial
Officer had "resigned."
Immediately following the announcement of the restatement, the Nasdaq
Stock Market halted trading in the Company's stock, pending the receipt
of additional information from the Company. Company stock last traded
at $0.38 per share, which is 98.5% less than the Class Period high of
$25.50, reached on April 11, 2000.
For more details, contact Jeffrey Kodroff by Phone: 888.844.5862 by E-
mail: classaction@srk-law.com or visit the firm's Website:
http://www.srk-law.com.
STARMEDIA NETWORK: Finkelstein Thompson Files Securities Suit in NY
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Finkelstein, Thompson & Loughran initiated a securities class action on
behalf of purchasers of the securities of StarMedia Network Inc.
(Nasdaq: STRM) between April 11, 2000 and November 19, 2001, inclusive
in the United States District Court for the Southern District of New
York.
The suit charges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market between April 11, 2000 and November 19, 2001 concerning the
Company's financial performance.
The complaint alleges that the Company reported artificially inflated
financial results in press releases and filings made with the SEC by
improperly recognizing revenue in violation of Generally Accepted
Accounting Principles. Specifically, the complaint alleges that two of
the Company's primary subsidiary, AdNet S.A. de C.V. and StarMedia
Mexico, S.A. de C.V., had engaged in improper accounting practices
which had the effect of materially overstating its reported revenues
and earnings by at least $10 million.
In November 2001, as alleged in the complaint, the Company issued a
press release announcing that based on the "preliminary" results of an
internal investigation into its accounting practices, it expects to
restate its financial statements for fiscal year 2000 and the first two
quarters of 2001 and that those financial statements should not be
relied upon. The Company further reported that its Chief Financial
Officer had "resigned."
Immediately following the announcement of the restatement, the NASDAQ
Stock Market halted trading in the Company's stock, pending the receipt
of additional information from the Company. Company stock last traded
at $0.38 per share, which is 98.5% less than the Class Period high of
$25.50, reached on April 11, 2000.
For more information, contact Andrew J. Morganti by Phone:
1.202.337.8000 by E-mail: ajm@ftllaw.com or visit the firm's Website:
http://www.ftllaw.com
TAKE-TWO INTERACTIVE: Wolf Popper Commences Securities Suit in S.D. NY
----------------------------------------------------------------------
Wolf Popper LLP has initiated a securities class action against Take-
Two Interactive Inc. (Nasdaq:TTWO) and certain of its senior officers
in the United States District Court for the Southern District of New
York on behalf of all persons or entities who purchased or otherwise
acquired the Company's common stock on the open market during the
period beginning on February 25, 2000 through December 13, 2001,
inclusive.
The suit alleges that during the class period, defendants materially
misrepresented the Company's financial results and performance for each
of the quarters of and full year of fiscal 2000, ended October 31,
2000, and each of the first three quarters of fiscal 2001, ended
January 31, 2001, April 30, 2001 and July 31, 2001, respectively, by
improperly recognizing revenue on sales to distributors.
In August 2001, the truth about the Company's financial condition began
to emerge when the effects of defendants' scheme began to negatively
impact the Company's financial results. It was not until December 14,
2001 and December 17, 2001, however, that the market began to learn
that defendants had caused the Company to improperly recognize revenue
for products shipped to distributors, where the distributors did not
have a binding commitment to pay for the products, in direct
contravention of GAAP.
Significantly, defendants' unlawful accounting practices enabled
defendants to portray the Company as a financially strong company that
was experiencing dramatic revenue growth, and which was poised for
future success when, in fact, the Company's purported success was the
result of improper accounting practices.
On December 14, 2001, following rumors of a possible restatement of the
Company's financial results, its common stock fell 31% - $4.72 a share
to $10.33 per share. During the class period, Company shares traded as
high as $24.50 per share.
Defendants were motivated to misrepresent the Company's financial
results, by among other things, their desire to sell approximately
900,000 shares of the Company's common stock during the class period at
artificially inflated prices for proceeds of over $15 million.
For further details, contact Michael A. Schwartz or James A. Harrod by
Mail: 845 Third Avenue New York, NY 10022-6689 by Phone: 212.451.9668,
212.451.9642 or 877.370.7703 (toll-free) by Fax: 212.486.2093 or
877.370.7704 by E-Mail: IRRep@wolfpopper.com or visit the firm's
Website: http://www.wolfpopper.com
TAKE-TWO INTERACTIVE: Levy Levy Initiates Securities Suit in S.D. NY
--------------------------------------------------------------------
Levy and Levy PC initiated a securities class action on behalf of
purchasers of the securities of Take-Two Interactive Software Inc.
(Nasdaq: TTWO) between February 24, 2000 and December 17, 2001
inclusive in the United States District Court for the Southern District
of New York. The suit names as defendants the Company and:
(1) Ryan A. Brant, CEO until February 26, 2001, thereafter
Chairman,
(2) Kelly G. Sumner, director until February 26, 2001, thereafter
CEO,
(3) James H. David Jr., CFO from the Company's third quarter of
fiscal year 2000,
(4) Paul Eibeler, President and director and
(5) Larry Muller, CFO until the third quarter of the Company's
fiscal year 2000
The suit charges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of materially false and misleading
statements to the market between February 24, 2000 and December 17,
2001, concerning its financial performance for the Company's fiscal
year 2000 and the first three quarters of the Company's fiscal year
2001.
Throughout the class period, defendants issued press releases reporting
the Company's quarterly and year-end financial performance, and filed
reports confirming such performance with the United States Securities
and Exchange Commission. These reports positively portrayed the
Company's performance during the class period and discussed several
quarters of supposedly "record" results. These statements, as alleged
in the complaint, were materially false and misleading because the
Company had, throughout the class period, improperly recognized
revenues, thereby inflating its reported sales and earnings.
On December 14, 2001, the price of the Company's stock plunged 31%,
falling from $15.05 to $10.33, as news leaked that it will likely
restate previously filed financial reports. On December 17, 2001 the
Company issued a press release announcing that it will restate its
financial results for its fiscal year 2000 and the first three quarters
of its fiscal year 2001. According to the press release, the Company
had improperly recognized revenue on products that were subsequently
returned to the Company.
For fiscal year 2000, the restatement will have the effect of
decreasing net sales by $12-$15 million and decreasing net income by
$3.1-$3.7 million. For the three quarters of 2001, the restatement will
have the effect of decreasing net sales by approximately $9.5 million
and increasing net income by $0.3 million.
For more information, contact Stephen G. Levy by Mail: One Stamford
Plaza, 263 Tresser Blvd., 9th Floor, Stamford, CT 06901 by Phone:
866.338.3674 (toll free) or 203.564.1920 or by E-mail: LLNYCT@aol.com
TAKE-TWO INTERACTIVE: Bernstein Liebhard Files Securities Suit in NY
--------------------------------------------------------------------
Bernstein Liebhard and Lifshitz LLP initiated a securities class action
on behalf of all persons who acquired Take-Two Interactive Software
Inc. (NASDAQ: TTWO) securities between February 24, 2000 and December
17, 2001, inclusive, in the United States District Court for the
Southern District of New York. Named as defendants in the complaint
are the Company and:
(1) Ryan A. Brant, CEO until February 26, 2001, thereafter
Chairman,
(2) Kelly G. Sumner, director until February 26, 2001, thereafter
CEO,
(3) James H. David Jr., CFO from the Company's third quarter of
fiscal year 2000,
(4) Paul Eibeler, President and director, and
(5) Larry Muller, CFO until the third quarter of the Company's
fiscal year 2000
The suit charges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of materially false and misleading
statements to the market between February 24, 2000 and December 17,
2001, concerning its financial performance for the Company's fiscal
year 2000 and the first three quarters of the Company's fiscal year
2001.
Throughout the class period, defendants issued press releases reporting
the Company's quarterly and year-end financial performance, and filed
reports confirming such performance with the United States Securities
and Exchange Commission. These reports positively portrayed the
Company's performance during the class period and discussed several
quarters of supposedly "record" results. These statements, as alleged
in the complaint, were materially false and misleading because the
Company had, throughout the class period, improperly recognized
revenues, thereby inflating its reported sales and earnings.
On December 14, 2001, the price of Company stock plunged 31%, falling
from $15.05 to $10.33, as news leaked that the Company will likely
restate previously filed financial reports. On December 17, 2001, the
Company issued a press release announcing that it will restate its
financial results for its fiscal year 2000 and the first three quarters
of its fiscal year 2001.
According to the press release, the Company had improperly recognized
revenue on products that were subsequently returned to it. For fiscal
year 2000, the restatement will have the effect of decreasing net sales
by $12-$15 million and decreasing net income by $3.1-$3.7 million. For
the three quarters of 2001, the restatement will have the effect of
decreasing net sales by approximately $9.5 million and increasing net
income by $0.3 million.
For more information, contact Ms. 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 by E-mail: TTWO@bernlieb.com or
visit the firm's Website: http://www.bernlieb.com
VERIZON DSL: Consumers Appeal Suit Dismissal, Oppose Transfer To VA
-------------------------------------------------------------------
A group of disgruntled Verizon DSL customers have appealed a state
court's decision dismissing a consumer class action alleging the
Company failed to deliver on promises for speedy high-speed Internet
access in the US Court of Appeals in Washington.
The suit, which accuses the company of, among other things, over-hyping
its DSL service in advertisements, failing to install it when promised,
and not providing speedy or reliable Internet connections as promised,
was dismissed by the Superior Court of the District of Columbia. The
State Court ruled that the nation's capital was an inappropriate forum.
The Court also ruled that the suit should be filed in Fairfax County,
Virginia, where the phone company's Internet division is headquartered.
The plaintiffs have objected to this ruling, saying it would ruin their
case. According to a Wired News report, Virginia state law does not
allow class action lawsuits, therefore, the plaintiffs would be result
forced to file individual lawsuits against the company, which would be
costly and impractical given the dollar amounts in dispute. Attorney
for the plaintiffs, Victoria Nugent asserts "The actual amounts in
dispute are at most a few hundred, maybe $1,000. It would take a very
determined and very angry plaintiff to bring a case as an individual."
In the appeal, lawyers argue that the vast majority of the Company's
customers do not live in Virginia and were not aware of the state's ban
on class action lawsuits. Although Verizon did notify customers of its
requirement for filing suits in Virginia, complainants argue that few
people knew that fact because it was contained in the fine print of a
lengthy online service contract. DSL customers were not required to
scroll through the whole contract before agreeing to accept the terms.
Moreover, even if they did read the fine print, plaintiffs' lawyers
argue that customers would not have been aware of its implications.
The appeal states, "No explanation is given that Virginia, unlike 48 of
the 50 states, does not permit class actions.Expecting the average
consumer reading the forum selection clause to be aware of the
subtleties of Virginia procedural law is simply unrealistic."
Company officials said that the ruling by the State Court was "a good
one," and said they have not had time to fully review the appeal, but
were confident about prospects for victory. Spokeswoman Briana
Growing told Wired News that the Company is confident it can withstand
the appeal.
XOMA LTD.: Cauley Geller Commences Securities Suit in N.D. California
---------------------------------------------------------------------
Cauley Geller Bowman & Coates LLP initiated a securities class action
in the United States District Court for the Northern District of
California on behalf of purchasers of XOMA, Ltd. (Nasdaq: XOMA) common
stock during the period between May 24, 2001 to October 4, 2001,
inclusive, including those persons who purchased shares in or traceable
to the Company's June 26 offering of 3 million shares.
The suit alleges that the Berkeley-based biopharmaceuticals
manufacturer issued false and misleading statements about its plans to
file a Food and Drug Administration (FDA) application for Xanelim, an
experimental psoriasis drug the Company was co-developing with
Genentech Inc. For the Company's investors, successful development of
Xanelim was pivotal. In 20 years, the company had never turned a profit
or brought a drug to market. Filing the application, known as a
Biologics Licensing Application (BLA), was an important step in gaining
FDA approval for the drug.
According to the complaint, the Company repeatedly said it planned to
file the BLA with the agency by the end of 2001 or the first quarter of
2002. That timetable would have put the Company and Genentech in a
neck-and-neck race with Biogen, Inc. to be the first manufacturer to
market an affective treatment for psoriasis. The winner would gain a
significant advantage in a lucrative market that is expected to reach
$2 billion by the year 2005.
In fact, the Company and Genentech were nearly a year behind Biogen.
The complaint alleges that at the time the Company told investors it
planned to file its BLA by the end of 2001, it knew but failed to
disclose that a change in its manufacturing process would necessarily
delay filing until after that date.
In October 2001, the Company admitted that it would not file the BLA
until the summer of 2002 at the earliest. The next day the price of the
Company's stock fell as low as $6.40 from a closing price of $9.76 per
share a day earlier.
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
XOMA LTD.: Schiffrin Barroway Commences Securities Suit in N.D. CA
------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Northern District of California on
behalf of all purchasers of the common stock of XOMA, Ltd. (Nasdaq:
XOMA) from May 24, 2001 through October 4, 2001, including those
persons who purchased shares in or traceable to the Company's June 26
offering of 3 million shares, inclusive.
The suit alleges that the Berkeley-based biopharmaceuticals
manufacturer issued false and misleading statements about its plans to
file a Food and Drug Administration (FDA) application for Xanelim, an
experimental psoriasis drug the Company was co-developing with
Genentech Inc. For Company investors, successful development of
Xanelim was pivotal. In 20 years, the company had never turned a profit
or brought a drug to market.
Filing the application, known as a Biologics Licensing Application
(BLA), was an important step in gaining FDA approval for the drug. The
Company repeatedly said it planned to file the BLA with the agency by
the end of 2001 or the first quarter of 2002. That timetable would
have put the Company and Genentech in a neck-and-neck race with Biogen,
Inc. to be the first manufacturer to market an effective treatment for
psoriasis. The winner would gain a significant advantage in a lucrative
market that is expected to reach $2 billion by the year 2005.
In fact, the Company and Genentech were nearly a year behind Biogen. At
the time the Company told investors it planned to file its BLA by the
end of 2001, it knew but failed to disclose that a change in its
manufacturing process would necessarily delay filing until after that
date.
On October 4, 2001, the Company admitted that it would not file the BLA
until the summer of 2002 at the earliest. The next day the price of the
Company's stock fell as low as $6.40 from a closing price of $9.76 per
share a day earlier.
For more details, contact Marc A. Topaz or Stuart L. Berman 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
XPEDIOR INC.: Finkelstein Thompson Commences Securities Suit in S.D. NY
-----------------------------------------------------------------------
Finkelstein, Thompson & Loughran filed a class action lawsuit in the
United States District Court for the Southern District of New York on
behalf of purchasers of the securities of Xpedior, Inc., (Nasdaq: XPDR)
between November 16, 1999 and December 6, 2000, inclusive against the:
(1) Bear, Stearns & Co., Inc.,
(2) FleetBoston Robertson Stephens Inc.,
(3) Goldman, Sachs & Co.,
(4) Merrill Lynch, Pierce, Fenner & Smith, Inc.,
(5) Morgan Stanley & Co.
The suit charges defendants with violations of Sections 11 of the
Securities Act of 1933. The complaint alleges that the prospectus was
materially false and misleading because it contained material
misrepresentations and omissions about:
(i) the agreements with customers whereby defendants had solicited
and received excessive and undisclosed commissions in exchange
for an allocation of the shares issued in connection with the
initial public offering; and
(ii) defendants had entered into agreements with customers whereby
they would allocate shares issued in connection with the
initial public offering in exchange for which the customers
agreed to purchase additional shares in the aftermarket at
pre-determined prices.
For further details, contact Andrew J. Morganti by Phone:
1.202.337.8000 by E-mail: ajm@ftllaw.com or visit the firm's Website:
http://www.ftllaw.com
*28 Pharmaceutical Firms Sued For Antitrust Violations
-------------------------------------------------------
Consumer coalition Prescription Access Litigation project has filed a
class action in the US District Court in Massachusetts against 28
pharmaceutical companies alleging the firms engaged in industry-wide
manipulation of drug prices, in violation of federal and state
antitrust laws, consumer protection laws and racketeering statutes,
according to a Boston Globe report.
The suit claims the firms sell doctors deeply discounted drugs to
promote use of their products, and then encouraged the doctors to bill
consumers and the federal government for the full price of the
medications.
The issue raised in the suit has been the subject of numerous criminal
investigations and federal reports, although this marks the first time
consumer groups have banded together to sue pharmaceutical firms.
According to the Boston Globe, the suit focuses on alleged manipulation
of the Average Wholesale Price (AWP), the price that drug companies
tell Medicare they sell their products for to retailers in the
marketplace. Medicare does not cover most prescription drugs for its
enrollees, but it does cover some medications that are administered by
health care providers, certain vaccines, and cancer and
immunosuppressant therapy.
Since Medicare is a government health insurance program for the
elderly, drug companies are required to give the program a price break
on drugs by charging 95 percent of the AWP. Elderly Americans enrolled
in Medicare generally pay 20 percent of the cost of covered drugs.
PAL lead attorney Thomas M. Sobol said there has been little action to
curb this illegal activity, although many investigations have been
initiated. Attorney Stephen Rosenfield asserts, "Our primary goal is to
change the system.It's not going to happen overnight. Back in 1994,
people said successful litigation against the tobacco companies would
not happen in our lifetime. In fact, it did."
Several of the defendants, including American Home Products and
Schering-Plough, which are named in the lawsuit, declined to comment on
the litigation. Schering-Plough spokesman William O'Donnell said the
company couldn't comment on the lawsuit but added that it "believes its
actions were legal and proper." Jeff Trewhitt, spokesman for the
Pharmaceutical Research and Manufacturers of America, said that the
organization cannot gather information about company pricing because of
antitrust laws.
*********
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.
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