/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/020411.mbx C L A S S A C T I O N R E P O R T E R Thursday, April 11, 2002, Vol. 4, No. 70 Headlines INDONESIA: Activists Criticize Hiring of Top Lawyers For Flood Suit NEVADA: Judge Says Fraud Suspect Has No Legal Claim Over Seized Money MIDWAY GAMES: Preparing for Appeals After Columbine Suit Dismissal UNITED STATES: Air Force Base Workers Allege Race, Gender and Age Bias CABLEVISION: Yankee Fans Sue After Dispute Prevents Games Broadcast Securities Fraud ADELPHIA COMMUNICATIONS: Abbey Gardy Lodges Securities Suit in E.D. PA AIRSPAN NETWORKS: Securities Suits Consolidated in S.D. New York ANTIGENICS INC.: Sued For Federal Securities Violations in S.D. NY ARTHUR ANDERSEN: Former Accountant Admits To Obstruction of Justice CAPITAL SENIOR: Reaches Settlement Agreement In Securities Suit in DE CORNELL COMPANIES: Schiffrin Barroway Lodges Securities Suit in TX E-REX INC.: Says Securities Fraud Suit in Nevada "Without Merit" EBENX INC.: Faces Suit For Securities Act Violations in S.D. New York ELOQUENT INC.: NY Judge Orders Consolidation of Securities Fraud Suits ENRON CORPORATION: Washington To Represent Public Bondholders In Suit FINITY HOLDINGS: Court Yet To Decide on Reconsideration Motion For Suit GEMSTAR-TV GUIDE: Stull Stull Commences Securities Suit in C.D. CA GEMSTAR-TV GUIDE: Pomerantz Haudek Lodges Securities Suit in C.D. CA GILAT SATELLITE: Labels "Without Merit" Securities Suits in VA and NY GILAT SATELLITE: Schiffrin Barroway Initiates Securities Suit in NY IMMERSION CORPORATION: To Mount Strong Defense V. Securities Suit in NY JDS UNIPHASE: Weiss Yourman Initiates Securities Fraud Suit in N.D. CA JNI CORPORATION: Outcome Uncertain in Securities Suits in CA, NY LUMENIS LTD.: Schiffrin Barroway Initiates Securities Suit in S.D. NY MADGE NETWORKS: Appeals Court Upholds CA Court's Suit Dismissal MARIMBA INC.: Faces Suit For Securities Act Violations in S.D. NY NEWPOWER HOLDINGS: Abbey Gardy Commences Securities Suit in S.D. NY PRIME GROUP: Securities Suits Dismissed After Acquisition Attempt Fails RETEK INC.: NY Court Dismisses Without Prejudice Securities Fraud Suits SONUS NETWORKS: Faces Suit For Federal Securities Violations in S.D. NY SYMBOL TECHNOLOGIES: Berger Montague Launches Securities Suit in NY THINK NEW: Mounting Vigorous Defense Against Consolidated Suit in NY VERSATEL TELECOM: Faces Suit For Securities Act Violations in S.D. NY VIA NET.WORKS: To Defend Vigorously Against Securities Suits in S.D. NY XOMA LTD: Plaintiffs Voluntarily Dismiss Securities Suit in N.D. CA ********* INDONESIA: Activists Criticize Hiring of Top Lawyers For Flood Suit ------------------------------------------------------------------- Activists condemned Jakarta Governor Sutiyoso's decision to hire high- profile attorneys for defense against victims of last year's flash floods in the upcoming class action trial at the Central Jakarta, the Jakarta Post reported recently. Instead of deploying officials from the City Legal Office, the administration has named lawyers from outside the government to handle the class actions. Azas Tigor Nainggolan of the Jakarta Social Institute (ISJ), a lawyer who represents the victims, said recently that Mr. Sutiyoso will misuse his power if he allocates funds from the 2002 City Budget to pay his lawyers. "As far as I know, the budget has never allocated funds for lawyers," said Mr. Tigor, who is also chairman of the Jakarta Residents Forum (Fakta). He added Mr. Sutiyoso is trying to use the people's money for his own interests against the public, especially the flood victims who are questioning his policy on flood control management in a class-action lawsuit. Previously, Mr. Sutiyoso reported Mr. Tigor to the police for defamation, after he publicly stated the governor had bribed certain city councilors. The flood victims' 14 representatives recently filed a class action demanding more than Rp 2.7 billion (US $270,000) in compensation from the President, Jakarta Governor and West Java Governor for losses incurred as a result of the floods. The suit charges the defendants with, among other things, negligence for having failed to give warnings before the floods. Activist Wardah Hafidz, chairwoman of the Urban Poor Consortium (UPC), shares Mr. Tigor's opinion, saying the governor's decision to hire the lawyers could be categorized as collusion and corruption practices. "Mr. Sutiyoso often has used public money without clear explanation or reason," said Ms. Wardah, who also supports the victims in their class action. Recently, the Betawi Brotherhood Forum (FBR) beat Ms. Wardah and her UPC members at the National Commission for Human Rights office, after she accused the forum of accepting money from Governor Sutiyoso. Ms. Wardah and Mr. Tigor are among the pro-bono lawyers assisting the flood victims in court, who will meet face-to-face with the Gov. Sutiyoso's lawyers, Mohamad Assegaf, Yan Juanda Saputra and R.E. Abikusno. Mr. Tigor said some 32 lawyers from ISJ, the Jakarta Legal Aid Institute (LBH) and the Indonesian Center for Environmental Law (ICEL) would be ready to fight the three lawyers in court. Both Mr. Assegaf and Mr. Yan are known for their high profile clients. Mr. Assegaf is the lawyer for former President Soeharto and Sjahril Sabirin, who was sentenced to three years in jail in the Bank Bali scandal, but still remains free. Yan Juanda is a lawyer for former president BJ Habibie, who was recently questioned as a witness in the State Logistics Agency (Bulog) scandal. After a recent meeting with his lawyers, Governor Sutiyoso stated that the lawyers' fee would be taken from the city budget. The fee, reportedly, has reached an hourly US$400 each for legal consultation. The lawyers are also entitled to 10 percent of any settlement or damages handed down after trial. NEVADA: Judge Says Fraud Suspect Has No Legal Claim Over Seized Money --------------------------------------------------------------------- Las Vegas Federal Judge Mark Denton ruled that fraud suspect Franklyn Perry has no legal claim to the US$22.1 million in cash seized from him last year by the Las Vegas police, the Las Vegas Review Journal reports. Mr. Perry, who was convicted of defrauding 50 investors of US$3.3 million through pyramid schemes, filed a class action early this year against the Las Vegas Police, alleging that the police were unjustly enriched when they seized the cash from his offices and residence after his July arrest. Mr. Perry's suit alleges, "Monies seized by Metro were not monies obtained from, nor employed in, furtherance of the alleged criminal violations now against Perry." Mr. Perry is also being held without bail on multiple sexual assault and pornography charges involving a juvenile victim. He is scheduled to go to trial July 8 before District Judge Nancy Saitta on multiple fraud and theft charges. Lawyer William Urga, who filed a class action last year for several of Mr. Perry's investors, said the Court's decision means his law firm may begin setting up a claims process to help investors recover money they gave Perry, the Las Vegas Review Journal reported. Mr. Urga said he will ask Judge Denton to approve plans to mail notices to known claimants, in addition to publishing notices in local, national and international newspapers to reach those who may not know about the ongoing litigation. MIDWAY GAMES: Preparing for Appeals After Columbine Suit Dismissal ------------------------------------------------------------------ Midway Games, Inc. intends to vigorously defend against possible appeals filed by the plaintiffs in the class action charging several videogame and entertainment companies with influencing two teenagers who initiated the 1999 Columbine shootings, after a Colorado federal court dismissed the suit in March 2002. Individuals representing the victims; parents, teachers, and students living, injured and deceased, as a result of the shootings by Eric Harris and Dylan Klebold at Columbine High School in Jefferson County, Colorado, filed the suit in April 2001. The suit named 25 defendants, including 18 companies in the videogame business, five companies that produced or distributed the movie "The Basketball Diaries" and two companies that allegedly provided obscene Internet content. The suit alleged alleges that Mr. Harris and Mr. Klebold, then 17 years old, were influenced by the allegedly violent content of unspecified videogames and that the videogame manufacturers and suppliers are liable for their conduct. On March 4, 2002 the court entered an opinion and order dismissing plaintiff's complaint in its entirety. As of March 19, 2002, plaintiffs had not filed a notice of appeal. UNITED STATES: Air Force Base Workers Allege Race, Gender and Age Bias ---------------------------------------------------------------------- Five white male civilian workers at the Warner Robins Air Logistics Center, recently filed a lawsuit against the Air Force, in US District Court, in Macon, Georgia, claiming that their performance appraisals were downgraded to fit a race-and gender-based quota system, the Macon Telegraph reported. The plaintiffs have asked the Court to certify the lawsuit as a class action, meaning many more workers could join the case. The lawsuit bases its case on violations of federal law. It alleges: (1) race and sex discrimination in violation of the Civil Rights Act of 1964, (2) age discrimination in violation of the Age Discrimination in Employment Act, and (3) conduct in violation of the equal protection and due process guaranteed in the Fifth Amendment of the Constitution. Specifically, the five men all allege the Air Force's appraisal system, which is used to determine pay raises, promotion and retention, discriminates based on race and sex. Four of the men, all older than 40, also allege age discrimination. All of the workers are assigned to the software division of Robins' Avionics Management Directorate, but their attorneys say the practice could be more widespread. "We suspect it is probably basewide, and that it may be bigger than that," attorney Alysa Freeman said. "We have reason to believe that it is prevalent throughout the entire base." Ms. Freeman said 10 other workers already have contacted her office with similar complaints against the Air Force. She is an associate in the office of Atlanta lawyer Lee Parks, who is representing the five workers. Mr. Parks won a reverse-discrimination lawsuit against the University of Georgia about its admissions policies. The five lead plaintiffs, Willie M. Barber, Bill Bobbitt, Danny L. Kilgore, Samuel J. Rawlins and Dwight F. Stone, who claim their performance appraisal scores were downgraded to favor a minority employee, are asking the Court to reinstate their original scores. The lawsuit does not name any dollar amounts as damages, but asks for back pay, lost benefits, lost money for pensions and bonuses, attorneys' fees and other compensatory and punitive damages. Ms. Freeman said the amount will depend on how much time passes before the case is resolved. Allegations of discrimination began circulating around the base last year when someone found e-mail messages on a shared computer drive, that were written and received by software division Supervisor Harry Jennings. Some of these messages appear to outline that performance appraisals were adjusted to favor a minority male worker in the software division and to downgrade those of some white males. Mr. Jennings has acknowledged writing and receiving the e-mail messages, which are now listed as evidence in the lawsuit. Mr. Jennings also has said that he was "just following orders" when he proposed in some of the documents to adjust employees' appraisal scores. "I was given that, statistically, we had minorities (who) were underrepresented in certain (performance) categories, and non- minorities were over-represented in certain categories, and I was told to fix it," Mr. Jennings told The Macon Telegraph. He said that his messages did not necessarily reflect the employees' final appraisal scores. He said he doesn't remember those scores. Civilian workers are categorized in their performance appraisals, based on points that rank them Superior, Excellent, Fully Successful, Minimally Acceptable or Unacceptable. The rankings are determined by the sum of numerical rankings assigned to specific aspects of job performance, and rankings are assigned by the employee's immediate supervisor. All five of the men claim their final point totals were adjusted downward, and documents obtained by the The Macon Telegraph show the scores of at least two of the plaintiffs were lower than those originally assigned. Robins officials said in a statement released last month that an inquiry conducted last year regarding the allegations "concluded there was no wrongdoing with regard to either law or policy." The said that Major General Wetekam, commander of the air logistics center, is reviewing the findings of that inquiry. CABLEVISION: Yankee Fans Sue After Dispute Prevents Games Broadcast ------------------------------------------------------------------- Fans of the New York Yankees commenced a class action in the United States District Court in Central Islip, New York against Cablevision, after the Company refused to televise New York Yankee games due to a dispute with YES Networks, the network that broadcasts most of the team's games, Associated Press reports. YES Networks, seeking to maximize its audience, accused Cablevision of making the new channel part of its basic package, putting it in all subscribers' homes. Cablevision wants to put YES on a "premium tier," available to those paying an extra fee. The Associated Press reports that YES is scheduled to show 130 of 162 regular-season games. Another 20 games will be carried on WCBS-TV and the rest will appear nationally on ESPN or Fox. Cablevision subscribers who want to watch the games on TV while negotiations continue filed the suit. "If we wait until the case is decided, the season will be over," Lenard Leeds, a lawyer for the plaintiffs, told AP. The suit wants the judge to appoint an arbitrator to mediate between the cable Company and YES. Leo Hindery, chairman and chief executive officer of YES, told AP he had not seen the lawsuit and declined to comment on it. "Whether the final resolution of this matter comes through customer outrage, political and regulatory intervention, or litigation, all YES has ever asked for, and will ever ask for, is the same treatment which Cablevision affords its own owned sports services," he said in a statement. Cablevision said it has made "a fair offer" to the YES Network. In a statement, the Company said, "We understand that fans are frustrated.While we believe today's lawsuit is without merit, we hope the Yankees will reconsider their position and allow fans to see the games." Securities Fraud ADELPHIA COMMUNICATIONS: Abbey Gardy Lodges Securities Suit in E.D. PA ---------------------------------------------------------------------- Abbey Gardy, LLP launched a securities class action against Adelphia Communications Corporation in the United States District Court for the Eastern District of Pennsylvania, on behalf of all persons or entities who purchased the Company's common stock during the period from April 2, 2001 through April 1, 2002, inclusive. The suit charges the Company and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that, throughout the class period, the Company failed to disclose billions of dollars of off-balance sheet debt related to Highland Holdings. The suit also alleges that the Company guaranteed credit facilities for certain closely held partnerships, which are controlled by the Rigas Family, the Company's controlling shareholder, and which used the money, in substantial part, to purchase securities from the Company. On March 27, 2002, the defendants disclosed the existence of the off- balance sheet debt. Then, on April 1, 2002, the Company announced that it was requesting an extension to file its Annual Report on Form 10-K with the SEC. The Company reported that the extension was being sought to allow the Company and its outside auditors additional time to review certain accounting matters relating to co-borrowing credit facilities which the Company is a party. In response to these negative announcements, the price of Company common stock dropped from $20.39 per share on March 26, 2002, to $13.12 per share on April 1, 2002. The price of other Company debt securities also materially declined. For more details, contact Nancy Kaboolian or Jennifer Haas by Phone: 800-889-3701 by E-mail: JHaas@abbeygardy.com or nkaboolian@abbeygardy.com or visit the firm's Web site: http://www.abbeygardy.com AIRSPAN NETWORKS: Securities Suits Consolidated in S.D. New York ---------------------------------------------------------------- Airspan Networks, Inc. intends to vigorously oppose three securities class actions pending in the United States District Court for the Southern District of New York naming as defendants the Company and: (1) Eric D. Stonestrom, President and Chief Executive Officer, (2) Joseph J. Caffarelli, former Senior Vice President and Chief Financial Officer, (3) Matthew Desch, Chairman (4) Jonathan Paget, Executive Vice President and Chief Operating Officer, and (5) certain underwriters of the Company's July 2000 initial public offering. The suits allege 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. In particular, the suits allege that the underwriter-defendants agreed to allocate stock in the Company's initial public offering to certain investors in exchange for excessive and undisclosed commissions and agreements by those investors to make additional purchases of stock in the aftermarket at pre-determined prices. The suits allege that the prospectus for the Company's initial public offering was false and misleading in violation of the securities laws because it did not disclose these arrangements. The complaints have been consolidated into a single action, which is being coordinated with over three hundred other nearly identical actions. The Company is not required to respond to the suits' claims before a consolidated complaint is filed, and no date has been set for any response to the complaint. ANTIGENICS INC.: Sued For Federal Securities Violations in S.D. NY ------------------------------------------------------------------ Antigenics, Inc. faces a securities class action pending in the United States District Court in the Southern District of New York, action on behalf of purchasers of the Company's securities between February 3, 2000 and December 6, 2000, inclusive. The suit names as defendants the Company and: (1) U.S. Bancorp Piper Jaffray, Inc., (2) FleetBoston Robertson Stephens Inc., and (3) Garo Armen. The complaint alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Specifically, the suit alleges that these underwriters charged secret excessive commissions to certain of their customers in return for allocations of the Company's stock in the offering. The suit also alleges that shares of the Company's stock were allocated to certain of the underwriters' customers based upon an agreement by such customers to purchase subsequent shares of our stock in the secondary market. The Company intends to vigorously defend against these claims. ARTHUR ANDERSEN: Former Accountant Admits To Obstruction of Justice ------------------------------------------------------------------- Former top Arthur Andersen accountant, David Duncan, pleaded guilty to obstructing justice in the investigation of the Enron collapse, admitting that he personally destroyed Enron's records after he learned that the Securities and Exchange Commission wanted to review the energy giant's records, Reuters Reports. Mr. Duncan made his plea to a single felony count of obstructing justice before federal judge Melinda Harmon, saying, "I accept that my conduct violated federal criminal law and I am willing to accept responsibility for it.I know documents were in fact destroyed so that they would be unavailable to the SEC and others." Mr. Duncan's plea gives the US Justice Department a powerful weapon in its fight for compensation from the beleaguered auditing firm. One former federal prosecutor called the plea a "devastating blow to Andersen." Robert Mintz, now a specialist in white-collar criminal defense at the McCarter and English firm, told Reuters, "The government now has someone who will provide them with an insider's look at some of the motives behind the conduct of Andersen." The firm had fired Mr. Duncan in January, blaming him for the wholesale shredding of papers and deletion of electronic records. However, when the Justice Department unsealed its indictment against Chicago-based Andersen, the firm's lawyers have said that Duncan may have exercised poor judgement but did nothing illegal. Mr. Duncan's plea is the first plea bargain in the suit. He could face a sentence of up to 10 years in prison, a maximum fine of 250,000 and potential restitution costs, but based on his cooperation, he may face a lower sentence, up to the court's discretion, Reuters states. Trial in the suit is set for May 6, 2002. CAPITAL SENIOR: Reaches Settlement Agreement In Securities Suit in DE --------------------------------------------------------------------- Capital Senior Living Corporation forged a memorandum of understanding (MOU) to settle a securities class action pending in the Delaware Court of Chancery on behalf of certain holders of assignee interests in NHP Retirement Housing Partners I LP (NHP). The suit was commenced against the Company and: (1) Capital Senior Living Properties 2-NHPCT (2) NHP, and (3) NHP's general partner. Lead plaintiff Robert Lewis purchased ninety Assignee Interests in NHP in February 1993 for $180. The suit alleges, among other things, that the defendants breached, or aided and abetted a breach of, the express and implied terms of the NHP Partnership Agreement in connection with the sale of four properties by NHP to Capital Senior Living Properties 2-NHPCT, Inc in September 1998. The complaint seeks, among other relief, rescission of the 1998 Transaction and unspecified damages. On July 9, 1999, the defendants filed a motion to dismiss the case. Subsequently, the plaintiff amended his complaint adding allegations challenging the terms of the sale in December 2001 of the Amberleigh retirement facility to BRE/ CSL LLC. In January 2002, the parties to the suit entered into a memorandum of understanding providing for the settlement of the suit subject to certain terms and conditions, including the filing of an amended complaint and receipt of the approval of the Chancery court. The proposed settlement contemplates the creation of a settlement fund in the amount of approximately $0.8 million, of which NHP will contribute $0.3 million, the amount of the deductible of NHP's directors and officers' liability insurance policy at the time the suit was filed. Virtually all of the balance of the settlement fund will be contributed by the various insurance brokers and agents, and their insurers, in connection with the resolution of certain claims for coverage under the D&O Policy. The settlement contribution of the Company and its affiliates will be $43,000. If approved by the Chancery court, the settlement fund, less any award of attorney's fees for plaintiff's counsel approved by the court, will be distributed to a class of Assignee Holders of NHP. In December 2001, Leonard Kalmenson filed a motion to intervene in the Delaware Action on the behalf of a class of holders of Pension Notes in the event the Chancery court determines that the claims asserted in the suit are derivative in nature. The complaint in intervention filed by Mr. Kalmenson names the same defendants in the suit as well as Retirement Associates, Inc., the sole stockholder and General Partner, and various current and former directors of Retirement Associates, Inc. The complaint in intervention essentially alleges, among other things, a variety of claims challenging the 1998 transaction and a claim for breach of contract relating to the failure of NHP to pay the full amount of principal and interest owed on the Pension Notes on their maturity date. NHP and the Company believe that the allegations asserted by Mr. Kalmenson are without merit and that his motion to intervene is moot in view of the proposed settlement of the suit. CORNELL COMPANIES: Schiffrin Barroway Lodges Securities Suit in TX ------------------------------------------------------------------ Schiffrin & Barroway, LLP initiated a securities class action in the US District Court for the Southern District of Texas alleging that Cornell Companies, Inc. (NYSE:CRN) misled shareholders about its business and financial condition. The suit alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (and/or the Securities Act of 1933) on behalf of all investors who bought the Company's securities between March 6, 2001 and March 5, 2002. The suit alleges that the Texas-based Cornell Companies, Inc.'s stock traded as high as $18.40. Defendants took advantage of this artificial inflation, selling 3.4 million shares of Company stock for proceeds of more than $48 million in a November 2001 secondary offering. On February 6, 2002, Bloomberg ran an article on the Company, which stated in part, "Cornell Cos., which operates 69 prisons in 13 states and the District of Columbia, said it will review the accounting of an August real estate transaction involving 11 properties. Its shares fell as much as 63 percent. The Company received a letter Thursday from auditor Arthur Andersen LLP that raised concern about the transaction, said Larry Stein of FRB Weber Shandwick, a firm that handles public relations for Cornell. The Andersen review was part of a year-end audit." Upon these disclosures, Company stock dropped to as low as $6.50 before closing at $9.96 on February 6, 2002, some 45% below the class period high of $18.40. On March 6, 2002, the Company issued a press release entitled, "Cornell Companies Inc. to Restate Its Financials for Year Ended December 31, 2000 and Subsequent Quarters." On this news, the Company's shares plummeted once again by more than 10%. For more details, contact Marc A. Topaz or Stuart L. Berman by Phone: 888-299-7706 (toll free)/610-822-2221 by E-mail: info@sbclasslaw.com or visit the firm's Web site: http://www.sbclasslaw.com E-REX INC.: Says Securities Fraud Suit in Nevada "Without Merit" ---------------------------------------------------------------- E-Rex, Inc. faces a securities class action pending in the United States District Court for the District of Nevada against the Company, its board of directors, a former director, its legal counsel, and two corporate entities. The plaintiffs, who are also shareholders of the Company, allege that: (1) they acquired Company stock based on misrepresentations; (2) management of the Company misappropriated assets of the Company; and (3) the defendants violated the Securities Act of 1933 and the Securities Exchange Act of 1934. A hearing has been set for March 7, 2002, on plaintiff's motion for appointment of a receiver and/or custodian, or in the alternative for call of a special meeting of shareholders. The Company is vigorously defending this lawsuit although the Company believes that the action lacks merit. The case is at a stage where no discovery has been taken and no prediction can be made as to the outcome of this case. EBENX INC.: Faces Suit For Securities Act Violations in S.D. New York --------------------------------------------------------------------- eBenx, Inc. faces a securities class action filed on behalf of purchasers of the Company's securities between December 9, 1999 and December 6, 2000, inclusive, in the United States District Court for the Southern District of New York. The suit names as defendants the Company and: (1) BancBoston Robertson Stephens, Inc., (2) Warburg Dillon Read LLC, (3) Thomas Weisel Partners LLC, (4) Mark W. Tierney, Chairman, (5) John J. Davis, Chief Executive Officer, and (6) Scott P. Halstead, Executive Vice President & General Manager- Corporate Solutions 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. The suit alleges that the Company's prospectus, filed in connection with its initial public offering, was materially false and misleading because it failed to disclose certain commissions and agreements between the aforementioned parties and certain investors and customers. The Company intends to vigorously defend against this lawsuit. ELOQUENT INC.: NY Judge Orders Consolidation of Securities Fraud Suits ---------------------------------------------------------------------- New York Federal Judge Shira Scheindlin ordered the plaintiffs in the securities class actions against Eloquent, Inc. to file a consolidated amended suit by April 17,2002. The suits were commenced in July 2001 against the Company and certain of its officers and directors in the United States District Court for the Southern District of New York. The suits were similar to hundreds of complaints filed in the same court against hundreds of other public companies that conducted initial public offerings of their common stock in the late 1990s. In each of these complaints, the plaintiffs allege that the Company, certain of its officers and directors and its IPO underwriters violated the federal securities laws because the Company's IPO registration statement and prospectus contained untrue statements of material fact or omitted material facts regarding the compensation to be received by, and the stock allocation practices of, the IPO underwriters. On August 8, 2001, the IPO suits were consolidated for pretrial purposes before Judge Scheindlin. Judge Scheindlin held an initial case management conference in September 2001, at which time she ordered, among other things, that the time for all defendants in the IPO suits to respond to any complaint be postponed until further order of the Court. Thus, the Company has not been required to answer any of the complaints, and no discovery has been served on the Company. At a further status conference on March 11, 2002, Judge Scheindlin stated that she would appoint lead plaintiffs counsel in the IPO suits by the end of March 2002 and that she would require the appointed lead plaintiffs counsel to file amended, consolidated complaints in the IPO suits by April 17, 2002. She further stated that she did not expect the defendants to file motions to dismiss the amended, consolidated complaints until the summer of 2002. The Company believes that these lawsuits are without merit and intends to defend against them vigorously. ENRON CORPORATION: Washington To Represent Public Bondholders In Suit --------------------------------------------------------------------- Washington State has been selected to represent some of the public bondholders in a securities fraud class action against Enron Corporation, state Attorney General Christine Gregoire said recently, according to an Associated Press report. Attorneys filed an amended complaint with the US District Court in Houston, seeking to recoup $97.5 million the State's pension systems lost when Enron bonds plummeted in value. The original lawsuit was filed late last year in Houston on behalf of shareholders and large investors, alleging that 29 current and former Enron executives and board members gained $1.2 billion by selling company stock before Enron filed for bankruptcy protection. The University of California Board of Regents is the lead plaintiff. Because of the size and complexity of the case, the Regents' lawyers are appointing lead representatives for several categories of investors. Washington was chosen to represent some of the public entities that bought Enron bonds. The Washington State Investment Board, which oversees a multibillion-dollar portfolio on behalf of public pensioners and state government, bought $60 million worth of Enron bonds in July 1998, and $50 million more in May 1999. The state already was included in the class action, but designation as a subclass representative will give it more clout, Ms. Gregoire said. "This role will give Washington a voice on litigation tactics, settlements and distribution of proceeds," said the Attorney General, who was a central player in a multi-state lawsuit against the tobacco industry, which agreed, in 1998, to pay $206 billion to the 46 plaintiff states. Ms. Gregoire pointed out that as representative of some of the public bondholders, Washington has a better chance of aggressively pursuing contentions that Enron misled investors through improper accounting, disclosure of false information and other questionable tactics to hide its debt. Deputy Attorney General David Walsh said it is not yet known how many public entities the state will represent once the court approves designation of the state by the California Regents. Gary Bruebaker, acting director of the state's investment Board, said that although the state has a duty to try to recover "all losses that are a result of misleading information presented in the financial marketplace," Washington's public pensions are not threatened by the Enron losses. The State's holdings are "broadly diversified, and losses related to the Enron case are an extremely small proportion, 17 one-hundredths of one percent, of the total retirement fund portfolio," Mr. Bruebaker said. FINITY HOLDINGS: Court Yet To Decide on Reconsideration Motion For Suit ----------------------------------------------------------------------- The United States District Court for the Southern District of California has yet to decide on plaintiffs' motion for reconsideration of the court's dismissal of a securities class action against Finity Holdings, Inc. The suit was commenced in July 2000, on behalf of purchasers of the common stock of the Company from January 1, 1998 through and including March 13, 2001. The complaint outlines these allegations: (1) violations of the anti-fraud provisions of the Securities Exchange Act of 1934, (2) violations of California securities laws, (3) violations of the Racketeer Influenced Corrupt Organizations Act, (4) fraud, and (5) conspiracy The Company filed a motion in mid-2001 to dismiss the entire case because the plaintiff's attorneys were not pursuing the case. The Court later granted the motion with prejudice for failure to prosecute the case, plaintiffs' inaction and failure to comply with the Court's order to serve an amended complaint upon the defendants by March 2001. The order would have ended the litigation, except that in early August of 2001, the plaintiffs in this case submitted a motion for reconsideration of the ruling. The Company expected a ruling on the motion for reconsideration in mid September 2001, but the court has not yet issued a ruling. The plaintiff's attorneys then filed a second suit following their failure in the above case in the same court. The suit is essentially the same case as the first one, with a new lead plaintiff, and makes the same allegations. The Company has not yet answered the complaint in the case. GEMSTAR-TV GUIDE: Stull Stull Commences Securities Suit in C.D. CA ------------------------------------------------------------------ Stull Stull and Brody initiated a securities class action in the United States District Court for the Central District of California, on behalf of purchasers or acquirers of Gemstar-TV Guide International, Inc. (Nasdaq:GMST) common stock between August 11, 1999 and April 1, 2002, inclusive. The suit alleges that in contravention to generally accepted accounting principles (GAAP), defendants materially misrepresented the Company's Fiscal 2001 financial results by failing to disclose that $20.8 million of the Company's $101 million in Interactive group sales came from a barter exchange of intellectual property with Fantasy Sports and that $58.9 million of its $327 million Technology and Licensing segment revenue for 2001 was related to accruals based on Scientific-Atlanta Inc. (SFA) set-top box shipments that would only be realized upon a successful ruling in a civil suit in Georgia federal court. Additionally, the suit alleges that defendants violated federal securities laws through the issuance and dissemination of a materially false and misleading registration statement containing the joint proxy/prospectus, and amendments thereto used in connection with the consummation of a merger between the Company and SkyMall, Inc. in July, 2002. Due to defendants' deceptive and illegal conduct, plaintiff and the other class members purchased and/or acquired their Company securities at inflated prices. Had plaintiff and the other class members been aware of the truthful condition of the Company and the adverse impact that defendants' statements and omissions were having on the Company, they would not have purchased or acquired their shares, or at least not at artificially inflated prices. For more information, contact Marc L. Godino by Phone: 888-388-4605 by E-mail: info@secfraud.com or visit the firm's Web site: http://www.secfraud.com GEMSTAR-TV GUIDE: Pomerantz Haudek Lodges Securities Suit in C.D. CA -------------------------------------------------------------------- Pomerantz Haudek Block Grossman and Gross LLP initiated a securities class action against Gemstar-TV Guide International, Inc. (Nasdaq:GMST), alleging the Company improperly recognized $107.6 million in licensing revenue from cable TV equipment maker Scientific- Atlanta, Inc. since 1999, although Scientific-Atlanta stopped making payments to Gemstar beginning in 1999. The suit was filed on behalf of purchasers of the Company's common stock during the period from November 10, 1999 through April 1, 2002, inclusive, in the United States District Court for the Central District of California. The Company and two of its senior officers are charged with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The suit further alleges that the Company improperly booked $20 million in revenue from advertising space it purportedly "sold" on its interactive program guides (IPGs) to a company called Fantasy Sports, although the transaction was actually a "barter arrangement" in which, the Company received intellectual patents, not cash, from Fantasy Sports. The suit charges that as a result of defendant's misrepresentations and omissions about the Company's financial results and condition, the price of the Company shares traded at artificially inflated prices during the class period. On April 1, 2002, when the Company filed its 10-K for the year ended December 31, 2001, it belatedly provided some disclosures of its improper revenue recognition practices. Upon this revelation, the price of the Company's shares fell as much as 37%, or $5.35, to $9.01 on volume of 51.4 million. In addition, numerous analysts lowered their ratings on the Company's stock. For more information, contact Andrew G. Tolan by Phone: 888-476-6529 /888-4-POMLAW by E-mail: agtolan@pomlaw.com or visit the firm's Web site: http://www.pomlaw.com GILAT SATELLITE: Labels "Without Merit" Securities Suits in VA and NY --------------------------------------------------------------------- Gilat Satellite Networks, Ltd. faces several securities class actions pending in the United States District Courts for the Eastern District of New York and the Eastern District of Virginia against the Company and certain of its officers and directors. The suits, filed on behalf of purchasers of the Company's securities between August 14, 2000 and October 2, 2001 inclusive, allege violations of the federal securities laws and claim that the Company issued material misrepresentations to the market. The suit alleges 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 during the class period, thereby artificially inflating the price of Company securities. The Company believes the allegations against it and its officers and directors are without merit and intends to contest them vigorously. However, these legal proceedings are in the preliminary stages and the Company cannot predict their outcome. GILAT SATELLITE: Schiffrin Barroway Initiates Securities Suit in NY ------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the US District Court for the Eastern District of New York against Gilat Satellite Networks, Ltd. (Nasdaq:GILTF) on behalf of purchasers of the Company's securities between August 14,2000 through October 2,2001. The suit alleges the Company misled shareholders about its business and financial condition, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The suit alleges that the Company knew or recklessly disregarded, yet covered up the fact, that: (1) the demand for and acceptance of its products and the products of its subsidiary, StarBand Communications, Inc., were greatly overstated; (2) it was having difficulty manufacturing and selling its chief product, Very Small Aperture Terminal (VSAT) profitably; (3) its purported gross profit margins were false; (4) it was materially understating its costs and expenses and (5) the Company, accordingly, would have to take massive charge- offs, numbering in the hundreds of millions of dollars in the future. The suit claims that defendants' material omissions and the dissemination of materially false and misleading statements caused the Company's stock price to become artificially inflated, inflicting enormous damages on investors. For more details, contact Marc A. Topaz or Stuart L. Berman by Phone: 888-299-7706 (toll free) or 610-822-2221 by E-mail: info@sbclasslaw.com or visit the firm's Web site: http://www.sbclasslaw.com IMMERSION CORPORATION: To Mount Strong Defense V. Securities Suit in NY ----------------------------------------------------------------------- Immersion Corporation faces a securities class action pending in the United States District Court for the Southern District of New York against the Company and: (1) Louis Rosenberg, former CEO, President and Chairman, (2) Victor Viegas, CFO, (3) Bruce Schena, former Chief Technology Officer, and Director, (4) FleetBoston Robertson Stephens Inc. and (5) Bear, Stearns & Co. Inc. In November 1999, the Company commenced an initial public offering of 4,250,000 of its shares of common stock at an offering price of $12 per share. In connection therewith, the Company filed a registration statement, which incorporated a prospectus with the SEC. 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. The suit further alleges that the prospectus was materially false and misleading because it failed to disclose, among other things, that: (i) the underwriter defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the defendants allocated to those investors material portions of the restricted number of Company shares issued in connection with the IPO; and (ii) the underwriter defendants had entered into agreements with customers whereby they 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. The Company intends to vigorously defend against this litigation. JDS UNIPHASE: Weiss Yourman Initiates Securities Fraud Suit in N.D. CA ---------------------------------------------------------------------- Weiss and Yourman commenced a securities class action in United States District Court for the Northern District of California on behalf of purchasers of JDS Uniphase Corporation (Nasdaq: JDSU) securities between July 27, 1999 and July 26, 2001, inclusive. The complaint alleges that the Company, certain of its high-ranking officers and its controlling shareholder violated federal securities laws by deliberately inflating the Company's stock price through the issuance of false and misleading reports, press releases and statements to securities analysts. Specifically, defendants misrepresented the demand for the Company's products, misrepresented the success of its acquisitions, and failed to timely account for changes in goodwill. The suit alleges that defendants needed to maintain an artificially inflated stock price in order to successfully negotiate stock-for-stock acquisitions. In addition, defendants also used the opportunity to sell off over 25 million shares of their personal holdings of Company stock at artificially inflated prices. For more information, contact Weiss & Yourman - Los Angeles by Phone: 800-437-7918 by E-mail: info@wyca.com or visit the firm's Web site: http://www.wyca.com JNI CORPORATION: Outcome Uncertain in Securities Suits in CA, NY ----------------------------------------------------------------- JNI Corporation and certain of its officers and directors face several securities class action suits pending in the United States District Courts for the Southern District of California and the Southern District of New York. The suits allege that the defendants made misrepresentations and omissions in violation of sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and sections 11, 12(a)(2) and 15 of the Securities Act of 1933. As a result of the suits, a derivative case has been filed in California alleging that certain of the Company's officers and directors breached their fiduciary duties to the Company in connection with the events alleged in the class action lawsuits. In a disclosure to the Securities and Exchange Commission, the Company said that such litigation could result in substantial costs to the Company and a diversion of management's attention and resources. The Company believes that the lawsuits are without legal merit and intends to defend them vigorously. However, because the lawsuits are at an early stage, it is not possible to predict whether the Company will incur any material liability in connection with such lawsuits. LUMENIS LTD.: Schiffrin Barroway Initiates Securities Suit in S.D. NY --------------------------------------------------------------------- Schiffrin and Barroway LLP commenced a securities class action against Lumenis Ltd. (Nasdaq:LUME) claiming that the Company misled investors about its business and financial condition, in the United States District Court for the Southern District of New York on behalf of all investors who bought Company securities between January 7, 2002 through February 28, 2002. The suit alleges that the Company discounted and disputed marketplace rumors about its operations even as it knew it was being investigated by the SEC and that its distributors had been contacted by the SEC. Additionally, even after announcing in a press release that it was subject to an SEC investigation, the Company continued to hide the fact that it had been aware of the SEC investigation and had been providing information to the SEC for several weeks. On February 28, 2002, the Company revealed the facts concerning the SEC investigation in a conference call. These shocking revelations caused the stock to plummet 30% in one day and more than 69% from its class period high, resulting in damages to plaintiff and members of the class. For more information, contact the Shareholder Relations Manager by Phone: 888-299-7706 (toll free)/610-822-2221 by E-mail: info@sbclasslaw.com or visit the firm's Web site: http://www.sbclasslaw.com MADGE NETWORKS: Appeals Court Upholds CA Court's Suit Dismissal --------------------------------------------------------------- The United States Ninth Circuit Court of Appeals affirmed a federal court's dismissal of the securities class action filed against Madge Networks NV (NASDAQ NM: MADGF) on behalf of purchasers of the Company's common stock from October 12,1995 to June 13,1996. The suit charged the Company, subsidiary Madge Networks, Inc. and certain of its former and current executive officers with misrepresenting or failing to disclose material facts about the Company's operations, anticipated financial results and anticipated success of the Company's products, in violation of the US federal securities laws. After allowing for several rounds of amendments to the complaint, the United States District Court for the Northern District of California dismissed the plaintiffs' allegations as insufficient to state a claim. The plaintiffs then appealed the dismissal to the Ninth Circuit Appeals Court, which affirmed the lower Court's dismissal last month. MARIMBA INC.: Faces Suit For Securities Act Violations in S.D. NY ----------------------------------------------------------------- Marimba, Inc. faces a consolidated securities class action in the United States District Court for the Southern District of New York charging the Company, certain of its officers and directors, and the underwriters of its initial public offering with violations of federal securities laws. The suit alleges that the underwriters of the Company's initial public offering violated the securities laws by failing to disclose certain alleged compensation arrangements (such as undisclosed commissions or stock stabilization practices) in the offering's registration statement. The suit alleges violations of Section 11 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934. The Company intends to defend these actions vigorously. However, due to the inherent uncertainties of litigation, the Company cannot accurately predict the ultimate outcome of the litigation. NEWPOWER HOLDINGS: Abbey Gardy Commences Securities Suit in S.D. NY ------------------------------------------------------------------- Abbey Gardy, LLP initiated a securities class action against NewPower Holdings, Inc. (NYSE:NPW) 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 common stock during the period from October 5, 2000 through December 5, 2001, inclusive. The complaint charges the Company and certain of its officers and directors with issuing false and misleading statements concerning, among other things, the inadequacy of risk management systems put in place in conjunction with the Company's affiliate, Enron Energy Services, Inc. (EES), and the true nature and purpose of certain related party transactions, including transactions pursuant to which Enron attempted to hedge its investment in the Company through use of a partnership known as "Raptor III," which was conceived and designed by Enron CFO Andrew Fastow. The suit also alleges that the Company and certain of its officers and directors misrepresented or failed to disclose: (1) that the Company had not adopted effective and appropriate hedging strategies against volatility of commodity prices; (2) that the Company was on course to achieve its financial goals and had sufficient liquidity to do so; and (3) that certain forward contracts with EES posed little risk of loss when in truth and in fact they were driving the Company toward insolvency, and were largely structured to protect and enrich Enron, its controlling shareholder. For more information, contact Nancy Kaboolian or Jennifer Haas by Phone: 800-889-3701 or by E-mail: JHaas@abbeygardy.com or nkaboolian@abbeygardy.com PRIME GROUP: Securities Suits Dismissed After Acquisition Attempt Fails ----------------------------------------------------------------------- Plaintiffs in the shareholder class actions against Prime Group Realty Trusts voluntarily dismissed three suits after the proposed acquisition of the Company by Cadim, Inc., an affiliate of Caisse de depot et placement du Quebec (CDP) Capital and The Prime Group, Inc. (PGI) was withdrawn. A total of five suits were commenced against the Company and its trustees, three in the Circuit Court for Baltimore City, Maryland, one in the Circuit Court for Montgomery County, Maryland and one in the Circuit Court of Cook County (Chancery Division), Illinois. Also named as defendants in certain of the lawsuits are PGI, Cadim, Inc. and CDP Capital. The suits alleged, among other things, that the potential acquisition would undercompensate the Company's shareholders for their common shares and that certain members of the Company's Board breached their fiduciary duties by allegedly engaging in a scheme to acquire the Company's outstanding common shares at an inadequate purchase price. Cadim inc. later withdrew the proposal in October 2001. Following the withdrawal, the Company and the other parties to these lawsuits initially agreed to halt further proceedings until the possibility of a similar transaction is definitively foreclosed. Subsequently, the parties voluntarily dismissed three of these lawsuits and the other two lawsuits are in the process of being voluntarily dismissed. RETEK INC.: NY Court Dismisses Without Prejudice Securities Fraud Suits ----------------------------------------------------------------------- The United States District Court for the Southern District of New York dismissed without prejudice the consolidated securities class action pending against Retek, Inc. and certain of its officers and directors, alleging violations of securities laws. The consolidated suit arose from three suits commenced in June 2001, alleging violations of Sections 11 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The suits allege that the prospectus was false or misleading in that it failed to disclose: (1) that the underwriters allegedly were paid excessive commissions by certain customers in return for receiving shares in the initial public offering and (2) that certain of the underwriters' customers allegedly agreed to purchase additional shares of the Company's common stock in the aftermarket in return for an allocation of shares in the initial public offering. The suits further assert that, as a result of these omissions from the prospectus, the price of the Company's common stock was artificially inflated between November 18, 1999 and December 6, 2000 and that the defendants are liable for unspecified damages to those persons who purchased the Company's common stock during that period. In August 2001, these actions were consolidated for pre-trial purposes before a single judge along with similar actions involving the initial public offerings of numerous other issuers. On February 14, 2002, the parties signed and filed a stipulation dismissing the consolidated action without prejudice against the Company and the individual officers and directors named in the various suits, which led to the suits' dismissal by the Court. SONUS NETWORKS: Faces Suit For Federal Securities Violations in S.D. NY ----------------------------------------------------------------------- Sonus Networks, Inc. intends to vigorously defend against a securities class action filed on behalf of purchasers of its common stock between May 24, 2000 and December 6, 2000, inclusive, in the United States District Court, Southern District of New York. The suit names the Company, certain of its officers and its underwriters as defendants. The complaint alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint 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 the underwriters allocated to those investors material portions of the restricted number of 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. SYMBOL TECHNOLOGIES: Berger Montague Launches Securities Suit in NY ------------------------------------------------------------------- Berger & Montague, PC initiated a securities class action against certain of the officers and directors of Symbol Technologies, Inc. (NYSE: SBL) in the United States District Court for the Eastern District of New York, on behalf of all persons or entities who purchased the Company's common stock during the period from October 20, 2000 through February 12, 2002. The complaint charges the Company and three top officers with engaging in improper accounting practices to keep the company's financial results in line with analysts' expectations. The Company, based in Holtsville, NY, develops and markets mobile and wireless computer devices. Specifically, the defendants are accused of improperly booking a $10 million royalty payment in the third quarter of 2000 and of improperly recording more than $40 million in revenue in the first quarter of 2001. When news of the suspicious accounting practices first emerged in a February 13, 2002 newspaper article, the price of Company stock quickly dropped 17%, or $2.50 a share, to $11.70 a share. The following day, February 14, 2002, the Company announced the abrupt retirement of chief executive officer and revealed poor quarterly and annual results. The Company's stock price again fell sharply on the new reports, closing at $8.40 per share on February 15, 2002. For more information, contact Sherrie R. Savett, Barbara A. Podell or Kimberly A. Walker by Mail: 1622 Locust Street, Philadelphia, PA 19103 by Phone: 888-891-2289 or 215-875-3000 by Fax: 215-875-5715 by E-mail: InvestorProtect@bm.net or visit the firm's Web site: http://www.bergermontague.com THINK NEW: Mounting Vigorous Defense Against Consolidated Suit in NY -------------------------------------------------------------------- THINK New Ideas, Inc. faces a consolidated securities class action pending in the United States District Court for the Southern District of New York on behalf of all persons who purchased or otherwise acquired shares of the Company's common stock in the period from November 14, 1997, through September 21, 1998. The suit names as defendants the Company and: (1) Ronald Bloom, former officer and former member of the Company's Board of Directors, (2) Melvin Epstein, former Company officer, and (3) Scott Mednick, former Company officer The consolidated suit arose from seven class actions commenced in October 1998. The suit alleges that: (1) the Company and certain of its current and former officers and directors disseminated materially false and misleading information about the Company's financial position and results of operations through certain public statements and in certain documents filed by the Company with the Securities and Exchange Commission; (2) these statements and documents caused the market price of the Company's common stock to be artificially inflated; (3) the plaintiffs purchased shares of common stock at such artificially inflated prices and, as a consequence of such purchases, suffered damages. The Company filed a motion to dismiss the suit on a number of grounds, which the court granted in March 2000. The plaintiffs then filed a second consolidated and amended suit, which the defendants again moved to dismiss. The court, however, denied the motion, and set the deadline for fact discovery last February 22, 2002. The plaintiffs' motion for class certification is pending before the court, and the defendants have until April 5, 2002 to file an opposition to that motion. The Company believes there are meritorious defenses to the claims made in the second amended complaint and intends to contest those claims vigorously. VERSATEL TELECOM: Faces Suit For Securities Act Violations in S.D. NY --------------------------------------------------------------------- Versatel Telecom International, NV denied allegations in a securities class action filed in the United States District Court for the Southern District of New York on behalf of purchasers of the Company's common stock from July 23,1999 to December 6,2000. The suit charges the Company, certain of its officers and directors and certain underwriters of its initial public offering with violations of Sections 11 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The suit alleges that the Company's prospectus was false or misleading in that it failed to disclose: (1) that the underwriters allegedly were paid excessive commissions by certain customers in return for receiving shares in the initial public offering and (2) that certain of the underwriters' customers allegedly agreed to purchase additional shares of the Company in the aftermarket in return for an allocation of shares in the initial public offering. The suit further contends that, as a result of those omissions from the prospectus, the price of Company stock was artificially during the class period and that the defendants are liable for unspecified damages to those persons who purchased stock during that period. Hundreds of cases against numerous other issuers and their underwriters that make similar allegations involving the initial public offerings of those issuers were consolidated before a single judge on August 9, 2001 for purposes of pretrial motions and discovery only. The action against the Company has been consolidated along with those cases. The Company intends to contest the action vigorously. VIA NET.WORKS: To Defend Vigorously Against Securities Suits in S.D. NY ----------------------------------------------------------------------- Via Net.Works, Inc. was named as a defendant in a securities class action in the United States District Court for the Southern District of New York. The suit also names as defendants certain of the Company's officers and certain of the underwriters who supported its initial public offering. The suit alleges that the prospectus the Company filed with its registration statement in connection with our IPO was materially false and misleading because it failed to disclose, among other things, that: (1) the named underwriters had solicited and received excessive and undisclosed commissions from certain investors in exchange for the right to purchase large blocks of the Company's shares; and (2) the named underwriters had entered into agreements with certain of their customers to allocate Company shares in exchange for which the customers agreed to purchase additional shares in the aftermarket at pre-determined prices, thereby artificially inflating the Company's stock price. The suit further 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 arising out of the alleged failure to disclose and the alleged materially misleading disclosures made with respect to the commissions and the tie-in arrangements in the prospectus. The Company said in a disclosure to the Securities and Exchange Commission that the defense of this action may distract its senior management from the normal operation of business and may cause it to incur substantial defense costs. The Company believes that the allegations are without merit and has engaged counsel to defend the action. XOMA LTD: Plaintiffs Voluntarily Dismiss Securities Suit in N.D. CA ----------------------------------------------------------------- Plaintiffs in the securities class actions filed against XOMA, Ltd. voluntarily dismissed their suits without prejudice. The lawsuits were filed on behalf of all persons who purchased the Company's common stock during the period between May 24, 2001 and October 4, 2001 in the US District Court for the Northern District of California. The suits charged the Company, Genentech Inc., and certain of their officers and directors with violations of the Securities Exchange Act of 1934. The suits further alleged that defendants' false and misleading statements concerning the Company's intent to file its Biologics Licensing Application with the Food and Drug Administration for the drug Xanelim artificially inflated the price of the stock. After further investigation of this matter, plaintiffs and their counsel concluded that the suits should be voluntarily dismissed without prejudice. Accordingly, pursuant to Federal Rules of Civil Procedure 41(a)(1), plaintiffs notified defendants of their intent, and defendants agreed to the dismissal, with each side bearing its own costs. No consideration has been exchanged, and neither plaintiffs nor their counsel will receive any compensation or reimbursement of expenses. Moreover, plaintiffs believe that the class will not be prejudiced, as the statute of limitations has not run, and no members of the class are barred from pursuing their own individual claims against defendants or renewing the class action if they so choose. For more information, contact Jennifer Abrams of Berman DeValerio Pease Tabacco Burt & Pucillo by Phone: 415-433-3200 ********* 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 2002. 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 * * *