/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/020415.mbx C L A S S A C T I O N R E P O R T E R Monday, April 15, 2002, Vol. 4, No. 73 Headlines BANK OF NEW YORK: Appeals Court Revives Suit Over Inkombank Collapse CATHOLIC CHURCH: Man Files Suit V. Manchester Priest Over Sexual Abuse CSX TRANSPORTATION: Settles 1987 Tank Car Fire Suit For $220M MICHIGAN: Appeals Court Overturns State's Prison Inmates' Visiting Rule SECURITY INDUSTRIAL: Court Grants Approval To Race Bias Suit Settlement SERVICE CORPORATION: Certification Hearing For Funeral Homes Suit Set SERVICE CORPORATION: FL Attorney General Files Grave Desecration Suit SPEEDWAY MOTORSPORTS: Suit Filed To Prevent Advertising of zMax System TRAVELERS INSURANCE: Trial in Asbestos Suits To Commence Sept. 2002 TRAVELERS INSURANCE: Faces Suits For Insurance Fraud, Unfair Trade UNITED LIBERTY: Policyholders File Suit in Ohio For Unpaid Dividends Securities Fraud ADELPHIA COMMUNICATIONS: Pomerantz Haudek Lodges Securities Suit in PA ADVANCED SWITCHING: Wechsler Harwood Lodges Securities Suit in E.D. VA ANIKA THERAPEUTICS: MA Court Grants Final Approval To $1.25M Settlement AT&T CORPORATION: Lovell Stewart Files Securities Suit in S.D. of NY CALPINE CORPORATION: Schiffrin Barroway Lodges Securities Suit in CA CAPSTONE TURBINE: Mounting Vigorous Defense V. Securities Suit in NY CLARUS CORPORATION: Asks GA Court For Securities Suit Dismissal DEPARTMENT 56: Asks MN Court To Dismiss Suit For Securities Violations EAGLE BUILDING: Berman DeValerio Commences Securities Suit in S.D. FL ENRON CORPORATION: Nine Banks Added To Billion-Dollar Securities Suit FLAG TELECOM: Cauley Geller Commences Securities Fraud Suit in S.D. NY FLAG TELECOM: Schiffrin Barroway Commences Securities Suit in S.D. NY GILAT SATELLITE: Bernstein Liebhard Commences Securities Suit in NY GRAPHIC PACKAGING: Sued For Preferred Stock Sale to Grover Trust in CO HUB GROUP: Labels "Without Merit" Securities Fraud Suit in E.D. IL JDS UNIPHASE: Wolf Haldenstein Commences Securities Suit in N.D. CA LORAL SPACE: Ask Court To Dismiss It As Defendant in Securities Suit LORAL SPACE: Faces Suit For Federal Securities Violations in S.D. NY MEASUREMENT SPECIALTIES: Schiffrin Barroway Files Securities Suit in NJ METAWAVE COMMUNICATIONS: Schiffrin Barroway Files Securities Suit in WA ONYX ACCEPTANCE: Appeals Court Upholds Dismissal of NY Securities Suit ROADHOUSE GRILL: Fine Hatfield Initiates Securities Suit in S.D. FL SECURE COMPUTING: Trial In CA Securities Fraud Suit Set For June 2003 SILICON IMAGE: Mounting Vigorous Defense V. Securities Suit in S.D. NY STILLWATER MINING: Milberg Weiss Commences Securities Suit in S.D. NY UNDERWRITERS LITIGATION: Probe Over Stock Recommendations Expanded ********* BANK OF NEW YORK: Appeals Court Revives Suit Over Inkombank Collapse -------------------------------------------------------------------- The United States Court of Appeals for the Second Circuit reversed a New York federal court's dismissal of a class action against The Bank of New York Company, Inc. and the Bank of New York (BNY) filed on behalf of all depositors of Joint Stock Bank Inkombank (Inkombank), who lost their deposits when the Russian bank collapsed in 1998. The twice-amended suit alleges that the defendants and their senior officers knew about, and aided and abetted the looting of Inkombank by its principals and participated in a scheme to transfer cash improperly from Russia to various off-shore accounts and to avoid Russian customs, currency and tax laws. The suit asserts causes of action for conversion and aiding and abetting conversion under New York law. In addition, the amended complaint states a claim under the Racketeer Influenced and Corrupt Organizations Act (RICO). In March 2001, the federal court dismissed the amended suit without leave to replead. The United States Court of Appeals for the Second Circuit vacated the dismissal because it disagreed with one ground of the dismissal. The Appeals Court then remanded the case to the lower court to consider alternate bases for dismissal. The Company believes that the allegations made in this action are without merit, and intends to defend the action vigorously. CATHOLIC CHURCH: Man Files Suit V. Manchester Priest Over Sexual Abuse ---------------------------------------------------------------------- In what is believed to be the first class action against the Diocese of Manchester, in New Hampshire, a Londonderry man says he was sexually abused by a Manchester Diocese priest when he was an altar boy, the Associated Press reported recently. The lawsuit, which seeks unspecified damages, requests a jury trial. The lawsuit was filed in Hillsborough County Superior Court, and accuses the Roman Catholic Church of concealing abuse allegations against numerous priests for decades and creating an environment of intimidation in which boys were afraid to report the assaults. The suit also charges former priest Robert J. Densmore of sexually abusing Craig Galluzzo at Our Lady of Fatima Catholic Church in New London. The lawsuit does not give dates or details. The lawsuit, on behalf of the now 41-year-old man and "all others similarly situated," names as well the Diocese of Manchester and others employed by the diocese. It seeks court approval to join all victims of abuse by the church in the suit, although it does not say how many class members are expected. "The acts and omissions of the defendants created an environment of permissiveness from the perspective of the offending priests, and an environment, from the perspective of class members, which discouraged the reporting of said abuse," the lawsuit says. The suit also accuses the Diocese of Manchester and its employees of conspiring to conceal the names of priests who abused children. "The ultimate end of this agreement was to obstruct the ability of law enforcement to prosecute the offenders, and/or to withhold relevant and important information regarding child abuse from authorities," the lawsuit states. It was not until February of 2002, the lawsuit says, that the diocese began to release names of accused priests, even though the allegations against the priests dated back to the early 1960s. Mr. Densmore's name was on the list released in February. A spokesman for the Diocese of Manchester could not be reached for comment, according to Associated Press. CSX TRANSPORTATION: Settles 1987 Tank Car Fire Suit For $220M -------------------------------------------------------------- CSX Transportation, Inc. agreed to settle for US$220 million the class action filed against it and eight other companies relating to alleged personal injuries that arose from a 1987 tank car fire. In September 1997, a state court jury in New Orleans, Louisiana returned a $2.5 billion punitive damages award against the Company. In October 1997, the Louisiana Supreme Court set aside the punitive damages judgment, ruling the judgment should not have been entered until all liability issues were resolved. The Louisiana Supreme Court issued a further decision authorizing and instructing the trial court to enter individual punitive damage judgments in favor of the 20 plaintiffs who had received awards of compensatory damages. The trial court then issued an opinion that granted the Company's motion for judgment notwithstanding the verdict and effectively reduced the amount of the punitive damages verdict from $2.5 billion to $850 million. A judgment reflecting the $850 million punitive award has been entered against the Company. The Company has obtained and posted an appeal bond. In June 2001, the Louisiana Court of Appeals for the Fourth Circuit affirmed the judgment of the trial court, which reduced the punitive damages verdict from $2.5 billion to $850 million. The Company moved the Louisiana Fourth Circuit Court for rehearing of certain issues raised in its appeal, but the appeals court denied the motion. The Company then filed with the Louisiana Supreme Court an application that the court take jurisdiction over and reverse the 1997 punitive damages award. The high Court's jurisdiction in this case is discretionary. The plaintiffs' counsel has opposed this motion. If the Louisiana Supreme Court takes jurisdiction of the case, an additional round of briefing and oral argument may precede any decision by the court. In November 2001, the Company announced that it had reached a proposed settlement of the litigation, subject to a fairness hearing and court approval. The amount to be paid under the proposed settlement is $220 million to resolve all claims arising out of the 1987 fire and evacuation (whether or not included in the present class action). A preliminary settlement agreement between the Company and the plaintiffs' management committee on behalf of the plaintiff case has been preliminarily approved by the trial court, and has been publicly filed. The trial court conducted the fairness hearing for the settlement in April 2, 2002, at which the court considered final approval of the settlement. The court, however, has not released its decision regarding the settlement. The Company is confident that the court will grant final approval to the settlement. If the proposed settlement is not approved and the litigation thereby disposed of, the Company intends to continue to pursue an aggressive legal strategy, including the pursuit of the proceedings in the Louisiana Supreme Court and, if necessary, proceedings before the United States Supreme Court. MICHIGAN: Appeals Court Overturns State's Prison Inmates' Visiting Rule ----------------------------------------------------------------------- The United States Circuit Court of Appeals, based in Cincinnati, overturned Michigan's state rules over who may visit prison inmates, the Associated Press reported recently, ruling in a class action filed in Michigan federal court by prisoners and their prospective visitors. The suit challenged the 1995 rules limiting who can visit Michigan inmates. Earlier, Federal Judge Nancy Edmunds found the visiting rules unconstitutional. The Appeals Court agreed, saying, "Under our constitution, even those lawfully imprisoned for serious crimes retain some basic constitutional rights." The Appeals Court added that the state Department of Corrections "has implemented a series of haphazard policies that violated these rights and did real harm to inmates in its care." Judge Edmunds and the Appeals Court ruled for the inmates, saying the regulations were not reasonably related to prison control. The Appeals Court wrote, "In the present case, the regulations fall below the minimum standards of decency owed by a civilized society to those it has incarcerated." The prison-visiting rules banned visits from prisoners' minor relatives and former prisoners who were not immediate family. It also banned visitors except attorneys and clergy for prisoners who had twice violated the department's drug abuse policies. The department said an increase in visitors was making it difficult to control smuggling of drugs and weapons. Children also were banned because they were more difficult to supervise. A spokesman for the Department of Corrections, Matt Davis, said the department disagreed with the ruling. "We are disappointed in it; we think the judgment is in error," Mr. Davis said. The department is studying the ruling and may appeal, he added. SECURITY INDUSTRIAL: Court Grants Approval To Race Bias Suit Settlement ----------------------------------------------------------------------- The Louisiana State Court granted final approval to the settlement proposed by Security Industrial Insurance Company, now known as Security Plan Life Insurance Company, to settle ten securities class actions, charging the Company with instituting race-based premiums in its insurance policies. The ten suits are almost identical, alleging that: (1) the defendants sold life insurance products to plaintiffs and other African Americans without disclosing that premiums paid would likely exceed the face value of the policies; and (2) that plaintiffs paid higher premiums than Caucasian policyholders and received proportionately lower death benefits. In several of the cases, the Company filed a motion to dismiss all claims for failure to state a cause of action and/or for summary judgment. On January 9, 2002, the Louisiana State Court gave final approval to a class action with respect to the claims in the lawsuits. The Court's final approval determined such settlement to be fair, reasonable and adequate for the class, which was certified by the Court for settlement purposes only. The settlement provides agreed-upon amounts of compensation to class members in exchange for a release of all pending and future claims they may have against the Company and certain of its affiliates. SERVICE CORPORATION: Certification Hearing For Funeral Homes Suit Set --------------------------------------------------------------------- The class certification hearing for the grave desecration class action against Service Corporation International is set for May 28, 2002 in the Circuit Court for the 17th Judicial Circuit in and for Broward County, Florida. The suit also names the Company-owned Menorah Gardens & Funeral Chapels as defendant. The suit, brought on behalf of all persons with burial plots or family members buried at Menorah Gardens & Funeral Chapels in Florida, allege that that defendants have failed to exercise reasonable care in handling remains by secretly: (1) dumping remains in a wooded area; (2) burying remains in locations other than the ones purchased; (3) crushing vaults to make room for other vaults; (4) burying remains on top of the other or head to foot rather than side-by-side; (5) moving remains; and (6) co-mingling remains. The suit alleges that the above conduct constitutes: (i) negligence, (ii) tortious interference with the handling of dead bodies, (iii) infliction of emotional distress, and (iv) violation of industry specific state statutes, as well as the state's Deceptive and Unfair Trade Practices Act Since the litigation is in its preliminary stages and discovery has just commenced, the Company cannot quantify its ultimate liability, if any, for the payment of damages or predict the outcome of the litigation. The Company intends to continue its investigation and to aggressively defend itself in this lawsuit as well as continue to cooperate with state officials in resolving the issues presented. SERVICE CORPORATION: FL Attorney General Files Grave Desecration Suit --------------------------------------------------------------------- The Florida Attorney General and State Comptroller commenced a class action against Service Corporation International relating to the alleged grave desecrations at the Menorah Gardens & Funeral Chapels, in the Circuit Court of the 15th Judicial Circuit in and for Palm Beach County, Florida. The suit also names the Menorah Gardens as a defendant. The suit alleges that defendants conducted their business through the willful use of false and deceptive representations regarding: (1) the certainty of plot location and size, (2) the permanence of interment and (3) the nature and quality of the care that defendants intended to provide The suit further alleges that defendants violated Florida statutes by engaging in the above referenced conduct. The suit seeks: (i) the appointment of a receiver or administrator to manage and correct the operations of the defendants' Florida Menorah Gardens facilities; (ii) a full accounting of all plots sold and offered for sale by defendants at their Florida Menorah Gardens facilities; (iii) an award of unspecified actual damages sustained by consumers; (iv) an award of unspecified punitive damages pursuant to Florida statue; (v) imposition of civil penalties for each violation of the Florida statutes; (vi) an award of attorneys' fees and costs; and (vii) a permanent injunction against the defendants prohibiting them from engaging in the funeral and/or cemetery business at their Florida Menorah Gardens facilities, using false or misleading representations in their advertising and sales materials directed to the State of Florida and violating the Florida Statutes Since the litigation is in its preliminary stages, the Company cannot quantify its ultimate liability, if any, for the payment of damages or predict the outcome of the litigation. The Company vowed to vigorously defend against the suit. SPEEDWAY MOTORSPORTS: Suit Filed To Prevent Advertising of zMax System ---------------------------------------------------------------------- Speedway Motorsports, Inc. and subsidiary Oil-Chem Research Corporation faces a class action pending in the Superior Court of Gaston County, North Carolina alleging violations of the North Carolina Unfair and Deceptive Trade Practices Act. The suit is substantially similar to a lawsuit filed by the Federal Trade Commission (FTC) in North Carolina federal court, seeking to enjoin the two Companies from advertising zMax Power System for use in motor vehicles. The Court has not certified the class, but the parties have begun discovery. The Company intends to defend itself vigorously, and does not believe the outcome of this lawsuit will have a material adverse effect on its financial position or future results of operations. TRAVELERS INSURANCE: Trial in Asbestos Suits To Commence Sept. 2002 ------------------------------------------------------------------- Trial in the asbestos-related class action against Travelers Insurance Group Holdings, Inc. and other insurers pending in West Virginia state court is set to commence in September 2002. The suit was filed in October 2001, alleging that the defendants' conduct violated the West Virginia Unfair Trade Practice Act. The case seeks to reopen large numbers of settled asbestos claims and to impose liability on insurers directly. In November 2001, plaintiffs in consolidated asbestos actions pending before a mass tort panel of judges in West Virginia State Court moved to amend their complaint to name the Company as a defendant, alleging that the Company and other insurers breached duties to asbestos product end users. In March 2002, the Court granted the motion to amend. Lawsuits based on similar allegations have also been filed against the Company in Louisiana, Massachusetts and Texas courts. The Company expects that more suits of a similar nature will be brought against them soon. The Company believes it has meritorious defenses to the suits, and intends to vigorously oppose them. TRAVELERS INSURANCE: Faces Suits For Insurance Fraud, Unfair Trade ------------------------------------------------------------------ Travelers Insurance Group Holdings, Inc. faces several class actions filed in various jurisdictions since January 1997 against some of the Company's subsidiaries, dozens of other insurers and the National Council on Compensation Insurance (NCCI) The allegations in the suits are substantially similar, alleging that the defendants conspired to collect excessive or improper premiums on loss-sensitive workers' compensation insurance policies in violation of state insurance laws, antitrust laws, and state unfair trade practices laws. After several voluntary dismissals, refilings and consolidations, actions are currently pending in these jurisdictions: (1) Georgia (Melvin Simon & Associates, Inc., et al. v. Standard Fire Insurance Company, et al.) - defendant's motion to dismiss denied; (2) Tennessee (Bristol Hotel Asset Company, et al. v. The Aetna Casualty and Surety Company, et al.) - suit is partially dismissed; (3) Florida (Bristol Hotel Asset Company, et al. v. Allianz Insurance Company, et al. and Bristol Hotel Management Corporation, et al. v. Aetna Casualty & Surety Company, et al.) - suit is still pending; (4) New Jersey (Foodarama Supermarkets, Inc., et al. v. Allianz Insurance Company, et al.) - suit is partially dismissed; (5) Illinois (CR/PL Management Co., et al. v. Allianz Insurance Company Group, et al.) - suit is partially dismissed; (6) Pennsylvania (Foodarama Supermarkets, Inc. v. American Insurance Company, et al.) - suit is dismissed; (7) Missouri (American Freightways Corporation, et al. v. American Insurance Co., et al.) - suit is partially dismissed; (8) California (Bristol Hotels & Resorts, et al. v. NCCI, et al.) - appeals court reverses dismissal of suit by lower court; (9) Texas (Sandwich Chef of Texas, Inc., et al. v. Reliance National Indemnity Insurance Company, et al.) - defendant's motion to dismiss denied; (10) Alabama (Alumax Inc., et al. v. Allianz Insurance Company, et al.) - suit is partially dismissed; (11) Michigan (Alumax, Inc., et al. v. National Surety Corp., et al.) - defendants' motion to dismiss denied; (12) Kentucky (Payless Cashways, Inc. et al. v. National Surety Corp. et al.) - defendants' motion to dismiss denied; (13) New York (Burnham Service Corp. v. American Motorists Insurance Company, et al.) - suit is dismissed; and (14) Arizona (Albany International Corp. v. American Home Assurance Company, et al.) - suit is partially dismissed. The Company has vigorously defended all of these cases and intends to continue doing so. UNITED LIBERTY: Policyholders File Suit in Ohio For Unpaid Dividends -------------------------------------------------------------------- United Liberty Life Insurance faces a class action pending in Ohio State Court on behalf or all policyholders whose polices were issued in Ohio and were still in force in 1993. The suit refers to a particular class of life insurance policies that the Company issued over a period of years ending around 1971. The suit alleges that the Company's dividend payments on these policies from 1993 through 1999 were less than the required amount. The suit did not specify the amount of the alleged underpayment but implies a maximum of about $850,000. The suit also alleges that the Company is liable to pay punitive damages, also in an unspecified amount, for breach of an implied covenant of good faith and fair dealing to the plaintiffs in relation to the dividends. Pre-trial discovery is continuing. The Company has filed a motion for summary judgment to which the plaintiffs have not yet responded. Although the Company has requested mediation of the action, the plaintiffs would not agree to the request for mediation until the Company made an offer to settle the case. Consequently, the Company has offered to settle the matter for payments over time, which would include attorneys' fees, and which would be contingent upon an exchange or reformation of the insurance policies currently owned by the members of the class for policies with an increased premium and a set dividend. The Company has denied the material allegations of the suit and is defending the action vigorously. At this stage of the litigation, the Company is unable to determine whether an unfavorable outcome of the action is likely to occur or alternatively, whether the chance of such an outcome is remote. Securities Fraud ADELPHIA COMMUNICATIONS: Pomerantz Haudek Lodges Securities Suit in PA ---------------------------------------------------------------------- Pomerantz Haudek Block Grossman and Gross LLP corrected the class period in the securities class action it filed against Adelphia Communications Corporation (Nasdaq:ADLAC) in the United States District Court for the Eastern District of Pennsylvania. The suit was filed on behalf of purchasers from April 2,2001 through March 26,2002. The suit charges the Company with manipulating its financial statements whereupon it misrepresented its earnings and financial results, thereby artificially inflating its stock price by improper accounting practices. The suit charges the Company and five of its senior officers with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. On March 27, 2002, the Company disclosed for the first time in conjunction with fiscal 2001 financial results that it was liable for at least $2.3 billion in debt related to the co-borrowing guarantees entered into with Highland Holdings, a third party controlled by the defendants. Following the announcement, the price of Company stock fell to $16.70 per share, a loss of approximately 20% of the value of the stock from the previous trading day. During the class period, Company shares traded as high as $45 per share. 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 ADVANCED SWITCHING: Wechsler Harwood Lodges Securities Suit in E.D. VA ---------------------------------------------------------------------- Wechsler Harwood Halebian & Feffer LLP initiated a securities class action on behalf of an investor in the United States District Court for the Eastern District of Virginia on behalf of purchasers who purchased Advanced Switching Communications, Inc. (Nasdaq: ASCX) publicly traded securities between October 5, 2000 and February 12, 2002, inclusive. The suit alleges that the Company and certain of its officers and directors violated the federal securities laws by issuing materially false and misleading statements throughout the class period that had the effect of artificially inflating the market price of the Company's securities. Specifically, the suit alleges that throughout the class period, defendants issued a series of misstatements concerning shipment and capabilities of the Company's A-4000 product, the A-4500, and a $24 million contract with Qwest Communications. On February 5, 2002, the Company announced liquidation and subsequently announced on February 12, 2002, that one of its principal customers sought a $17 million refund due to defective products. For more information, contact Craig Lowther by Mail: 488 Madison Avenue, 8th Floor, New York, New York 10022 by Phone: 877-935-7400 or by E-mail: clowther@whhf.com ANIKA THERAPEUTICS: MA Court Grants Final Approval To $1.25M Settlement ----------------------------------------------------------------------- The United States District Court for the District of Massachussetts approved the US$1.25 million settlement proposed by Anika Therapeutics, Inc. to settle the consolidated securities class action pending against the Company and: (1) J. Melville Engle, former chief executive officer, and (2) Sean Moran, former chief financial officer The consolidated suit was filed on behalf of all purchasers of the Company's shares between April 15, 1998 and May 30, 2000. The suit alleges that the Company and the individual defendants violated the federal securities laws by making material misrepresentations and omissions in certain public disclosures during the class period. The alleged misrepresentations and omissions relate to the Company's historical revenue recognition policies and its restatement of revenues for 1998 and the first three quarters of 1999. In December 2000, the defendants each filed motions to dismiss the suit, which the plaintiffs opposed. Before the court decided the motions to dismiss, the parties reached agreement on the terms of a potential settlement of the action. Accordingly, the parties negotiated and entered into a Memorandum of Understanding dated March 8, 2001 and the parties negotiated and entered into a stipulation and agreement of settlement, compromise and release, which contains the terms of a settlement of the action, subject to approval by the court. The Court later entered an order of preliminary approval in connection with the settlement proceedings. After preliminary approval, the plaintiffs' counsel sent notice of the proposed settlement to the class, and the Company paid $1.25 million into a settlement fund that may, among other things, be used to pay authorized members of the class. The Court originally scheduled the final settlement hearing for August 8, 2001. Pursuant to the joint request of counsel for the plaintiffs and counsel for the Company, the hearing was extended because of the restatement of financial results for certain prior periods filed in the Annual Report on Form 10-K for the year ended December 31, 2000. The final settlement hearing was held on October 22, 2001, and the Court gave the settlement final approval. AT&T CORPORATION: Lovell Stewart Files Securities Suit in S.D. of NY -------------------------------------------------------------------- Lovell & Stewart, LLP initiated a securities class action alleging misstatements and omissions of material fact that artificially inflated the market price of the common stock of At Home Corporation (d/b/a Excite@Home) (OTCBB:ATHMQ.OB). The suit was filed on behalf of all persons who purchased, converted, exchanged or otherwise acquired the common stock of At Home Corp. between March 28, 2000 and August 28, 2001, inclusive, in the United States District Court for the Southern District of New York. The lawsuit asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder and seeks to recover damages. The suit alleges that AT&T Corporation and certain current and former officers and directors of Excite@Home violated the federal securities laws by making misstatements regarding, and by failing to disclose adverse material facts regarding, Excite@Home's business and financial condition and AT&T's true intentions with respect to At Home Corp. and the Excite@Home broadband network during the class period. Specifically, the suit alleges that defendants failed to disclose that Excite@Home was burning through its cash at a substantially higher rate than indicated in its filings with the SEC and in other public statements and that At Home had obtained $100 million worth of convertible note financing in June 2001 based on alleged misrepresentations that subjected the company to the threat of immediate claims that could put it into bankruptcy. The suit further alleges that defendants affirmatively misrepresented the amount of cash that At Home would need to finance its ongoing operations for the calendar year 2001 by falsely stating in April 2001 that an additional $85 million in financing would be sufficient to meet Excite@Home's needs for cash during 2001. Despite obtaining a total of $185 million in new financing, the complaint alleges, on September 29, 2001, At Home announced that it would seek bankruptcy protection, and on October 23, 2001, At Home Corp.'s share price hit a 52-week low of four cents per share. The suit further alleges that defendant AT&T Corporation, which at all relevant times held a 74% voting interest in Excite@Home, is liable for the foregoing under Section 20(a) of the Securities Exchange Act of 1934 based on its status as a control person of Excite@Home. For more information, contact Christopher Lovell or Christopher J. Gray by Phone: 212-608-1900 by E-mail: sklovell@aol.com or visit the firm's Web site: http://www.lovellstewart.com CALPINE CORPORATION: Schiffrin Barroway Lodges Securities Suit in CA -------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Northern District of California against Calpine Corporation (NYSE:CPN), on behalf of purchasers of the Company's shares between January 5,2001 and December 13,2001. The suit alleges the Company misled shareholders about its business and financial condition, and seeks damages for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The suit alleges that the California-based Company owns, develops, acquires, and operates power-generation facilities and sells electricity and steam, primarily in the US Calpine's stock, which went public in 1996, on a split adjusted basis, went from $2 at the IPO stage to over $33 in January 2001. The suit alleges that the Company's stock price was very important because the Company was planning at this time to build or acquire $15 billion of plants over the next four years. The financing for these plants was based on the performance of its stock because many of its bond buyers were looking to convert to common stock. If the stock did not perform, financing would be difficult to fund the Company's expansion. However, certain of the Company's manipulative transactions, including those with Enron, such as inflated revenues, began to emerge on December 9, 2001. On December 14, 2001, prior to the market opening, Moody's Investors Service announced that it might cut the credit rating on the Company's $11.6 billion of debt to junk. In response, Company shares plummeted to $12.50, a more than 26% drop. Then, after the close of the market on December 14, 2001, Moody's Investors Service announced that it had in fact cut its rating of the Company's debt to junk. As now revealed, at all times during the class period, defendants issued false and misleading statements and press releases concerning the Company's sale of and demand for power and the Company's ability to generate sufficient cash revenue to service its debt. During the class period, before the disclosure of the true facts, the individual defendants sold their personally held common stock generating more than $34 million in proceeds and the Company raised billions of dollars in a series of debt offerings. For more information, 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 Website: http://www.sbclasslaw.com CAPSTONE TURBINE: Mounting Vigorous Defense V. Securities Suit in NY -------------------------------------------------------------------- Capstone Turbine Corporation faces a securities class action filed in the United States District Court for the Southern District of New York against the Company, two of its officers, and the underwriters of its initial public offering. The suit was filed on behalf of purchasers of the Company's common stock during the period from June 28, 2000 to December 6, 2000. The suit alleges 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 suit further alleges 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 Company understands that over three hundred other issuers have been named as defendants in nearly identical lawsuits filed by some of the same plaintiffs' law firms. The Company intends to defend these actions vigorously. CLARUS CORPORATION: Asks GA Court For Securities Suit Dismissal --------------------------------------------------------------- Clarus Corporation asked the United States District Court for the Northern District of Georgia to dismiss the consolidated securities class action pending against the Company and certain of its directors and officers. The suit purports to be on behalf of all purchasers of the Company's common stock from October 20,1999 to October 25,2000. The suit alleges claims against the defendants for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder with respect to alleged material misrepresentations and omissions in public filings made with the Securities and Exchange Commission and certain press releases and other public statements made by the Company and certain of its officers relating to its business, results of operations, financial condition and future prospects. As a result of these misstatements and omissions, the market price of the Company's common stock was artificially inflated during the class period. The Company believes that it has complied with all of its obligations under the federal securities laws and intends to defend this lawsuit vigorously. As a result of consultation with legal representation and current insurance coverage, the Company does not believe the lawsuit will have a material impact on its results of operations or financial position. DEPARTMENT 56: Asks MN Court To Dismiss Suit For Securities Violations ---------------------------------------------------------------------- Department 56, Inc. asked the United States District Court for the District of Minnesota to dismiss the securities class action filed against it and its Chief Executive Officer, Susan E. Engel, on behalf of purchasers of the Company's stock from February 24,1999 to April 26,2000. The suit alleges the defendants violated federal securities laws by making a series of false and misleading statements concerning the Company's financial statements. The Court heard oral arguments on the Company's motion to dismiss on March 22, 2002, but has not yet released a decision. The Company intends to defend this lawsuit vigorously, but it is unable to predict the outcome of these proceedings or to reasonably estimate the impact, if any, that the ultimate resolution of these matters will have on its results of operations, financial position or cash flows. EAGLE BUILDING: Berman DeValerio Commences Securities Suit in S.D. FL --------------------------------------------------------------------- Berman DeValerio Pease Tabacco Burt & Pucillo initiated a securities class action against Eagle Building Technologies, Inc. (Nasdaq:EGBT), accusing the Company and its former chairman of misleading investors. The suit is pending in the United States District Court for the Southern District of Florida, West Palm Beach Division, on behalf of all investors who bought the Company's common stock from April 18, 2001 through February 14, 2002 According to the suit, the Company reported fabricated revenue from its construction business in India and deceived the public about the nature of its Indian operations. The suit also says that the defendants issued false statements about purportedly "revolutionary" airport security technology in a news release issued two weeks after the September 11, 2001 attacks on New York and Washington. On February 14, 2002, the Company announced that it would be forced to issue earnings restatements for fiscal years 2000 and 2001. That same day, the complaint said, the United States Securities and Exchange Commission began an investigation into the Company's foreign operations and its post-September 11 statements about an airport security system, mail sterilization technology and money laundering detection software. News of the alleged fraud triggered a sharp drop in the Company's stock price, which had traded as high as $12.30 a share during the class period. On February 14, the Company's share price fell 68% to $1.44. For more information, contact Michael J. Pucillo or Wendy H. Zoberman by Mail: Northbridge Centre, Suite 1701, 515 North Flagler Drive, West Palm Beach, FL 33401 by Phone: 561-835-9400 by E-mail: law@bermanesq.com or visit the firm's Web site: http://www.bermanesq.com. ENRON CORPORATION: Nine Banks Added To Billion-Dollar Securities Suit --------------------------------------------------------------------- An amended complaint of 503 pages, in a consolidated class action against fallen energy trader Enron Corporation, was filed in the United States District Court, in Houston, Texas, by lead counsel, the law firm of Milberg Weiss Bershad Hynes & Lerach LLP, the Charleston Gazette reported. The original $25 billion lawsuit was filed in December on behalf of large investors, with the University of California, which lost millions of dollars when Enron collapsed, as lead plaintiff. The new consolidated complaint includes more than three dozen new defendants, chief among them being nine major banks and two national law firms. The apparent reason for the new filing appears to be an intensification of effort to recoup billions of dollars for investors in the now-bankrupt Enron Corporation. The financial landscape looks bleak, what with Enron bankrupt and Andersen losing clients daily - the plaintiffs need new defendants with money or assets to pay off if they win, or reach a settlement stage. Included in the roster of new defendants are nine of the most reputable and financially sound investment banks in the country. They are: (1) J.P. Morgan Chase & Co., (2) Citigroup, Inc., (3) Credit Suisse First Boston USA Inc., (4) Canadian Imperial Bank of Commerce (CIBC), (5) Bank of America Corporation, (6) Merrill Lynch & Co., (7) Barclays Bank PLC, (8) Deutsche Bank AG and (9) Lehman Brothers Holding Inc. Essentially, the new consolidated complaint alleges that the nine investment banks financed lucrative schemes that helped Enron Corporation maintain its pre-collapse image as a profit powerhouse, according to the consolidated complaint and the Charleston Gazette. William Lerach, lead attorney in the case, says the banks' knowledge of the questionable partnerships and financial vehicles gave them an inside view of Enron's financial condition as they, the banks, sold securities to investors, according to the consolidated complaint, and as reported by the Charleston Gazette. The structures (the SPEs or special partnerships), backed by Enron stock, and in part developed and funded by the banks, allegedly hid debt and inflated profits. Their ability to go unnoticed depended on sustaining a high stock price, since drops in shares would trigger debt payments that would require Enron to issue more shares and reduce shareholder equity. The new consolidated complaint alleges that "this fraudulent scheme could not have been and was not perpetrated only by Enron and its insiders. It was designed and/or perpetrated only via the active and knowing involvement of" Enron's law firms, banks and accounting firm. FLAG TELECOM: Cauley Geller Commences Securities Fraud Suit in S.D. NY ---------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of purchasers of FLAG Telecom Holdings, Ltd. (Nasdaq: FTHL) common stock during the period between March 23, 2001 and February 13, 2002, inclusive. The suit names as defendants the Company and: (1) Andres Bande, CEO and Chairman, (2) Edward McCormack, Chief Operating Officer, (3) Andrew Evans, Chief Technology Officer and (4) Larry Bautista, Chief Financial Officer until August 2001 The suit charged the defendants with issuing false and misleading statements concerning its business and financial condition. Specifically, the suit alleges that throughout the class period, the Company reported strong year-over-year revenue growth. Unbeknownst to investors, however, as alleged in the complaint, the Company was experiencing diminishing revenue growth. The suit alleges that in order to create the impression that: (1) the Company was continuing to experience growth; and (2) the Company engaged in a series of reciprocal transactions with certain competitors for the purchase and sale of dark fiber optic cable - the so-called dark fiber swap. The suit alleges that as a result of these transactions, the Company artificially inflated its operating results and materially misrepresented its financial results at all relevant times. For more information, contact Jackie Addison, Sue Null or Shelly Nicholson by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 888-551-9944 by E-mail: info@classlawyer.com or visit the firm's Web site: http://www.classlawyer.com FLAG TELECOM: Schiffrin Barroway Commences Securities Suit in S.D. NY --------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all purchasers of the common stock of FLAG Telecom Holdings, Ltd. (Nasdaq: FTHL) from March 23, 2001 through February 13, 2002, inclusive. The suit names as defendants the Company and: (1) Andres Bande, CEO and Chairman, (2) Edward McCormack, Chief Operating Officer, (3) Andrew Evans, Chief Technology Officer and (4) Larry Bautista, Chief Financial Officer until August 2001 The suit charges the defendants with issuing false and misleading statements concerning its business and financial condition. Specifically, the suit alleges that throughout the class period, the Company reported strong year-over-year revenue growth. Unbeknownst to investors, however, as alleged in the complaint, the Company was experiencing diminishing revenue growth. The suit alleges that in order to create the impression that the Company was continuing to experience growth, the Company engaged in a series of reciprocal transactions with certain competitors for the purchase and sale of dark fiber optic cable, the so-called "dark fiber swap." The suit alleges that as a result of these transactions, the Company artificially inflated its operating results and materially misrepresented its financial results at all relevant times. For more information, contact Marc A. Topaz or Stuart L. Berman by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 888-299-7706 (toll free) or 610-667-7706 by E-mail: info@sbclasslaw.com or visit the firm's Web site: http://www.sbclasslaw.com GILAT SATELLITE: Bernstein Liebhard Commences Securities Suit in NY ------------------------------------------------------------------- Bernstein Liebhard and Lifshitz LLP initiated a securities class action on behalf of all persons who acquired Gilat Satellite Networks, Ltd. (NASDAQ: GILTF) securities between November 13, 2000 and October 2, 2001, in the United States District Court, Eastern District of New York, against the Company, Yoel Gat and Yoav Libovitch. 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 between November 13, 2000 and October 2, 2001, thereby artificially inflating the price of Company securities. Prior to and throughout the class period, as alleged in the complaint, the Company issued a series of materially false and misleading statements which materially misrepresented its financial condition and results because, among other things, the Company was improperly delaying the writedown of tens of millions of dollars of inventory and investments which were impaired and of diminishing value. In addition, the Company failed to disclose that its StarBand division was experiencing significant difficulties attracting customers and was not generating the revenues for the Company that defendants had caused the market to expect. On October 2, 2001, the last day of the class period, the Company issued a press release announcing that its financial results for the third quarter of 2001 would be below previously announced guidance and that it was taking additional charges. The Company reported that revenues for the third quarter were expected to be $80 million - as compared to the $150 million announced on May 14, 2001 - and that the Company expected to report a loss of $267 million or approximately $11.40 per share. Following this announcement, the price of Company shares dropped from $5.38 per share to $3.32 per share, a decline of more than 38% on heavy trading volume. For more information, contact Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone: 800-217-1522 or 212-779-1414 by E-mail: GILTF@bernlieb.com or visit the firm's Web site: http://www.bernlieb.com. GRAPHIC PACKAGING: Sued For Preferred Stock Sale to Grover Trust in CO ---------------------------------------------------------------------- Graphic Packaging International Corporation faces a class action filed on February 19, 2002 in the United States District Court for Jefferson County, Colorado against the Company and certain of its shareholders and directors. The suit alleges that the defendants breached their fiduciary duties in connection with the Company's issuance on August 15, 2000, of its Series B Preferred Stock to the Grover Coors Trust. The suit seeks to rescind the sale of the Series B Preferred Stock, unspecified damages and costs and attorney's fees. The Company intends to vigorously defend these claims. HUB GROUP: Labels "Without Merit" Securities Fraud Suit in E.D. IL ------------------------------------------------------------------ Hub Group, Inc. vowed to vigorously defend against several class actions pending in the United States District Court for the Northern District of Illinois, Eastern Division against the Company, its current and former officers who signed its recent periodic reports filed with the Securities and Exchange Commission and its auditors. The suits uniformly allege that the defendants violated Section 10(b) and Rule 10b-5 thereunder and Section 20(a) of the Securities Exchange Act of 1934 by filing or causing to be filed with the Securities and Exchange Commission periodic reports that contained inaccurate financial statements. The Company believes that this suit is without merit. However, it stated in a disclosure to the SEC that an adverse judgment in this lawsuit could have a material adverse affect on its financial position and results of operations. JDS UNIPHASE: Wolf Haldenstein Commences Securities Suit in N.D. CA ------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP launched a securities class action in the 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, against the Company and certain of its officers and directors. The suit alleges that defendants violated the federal securities laws by issuing materially false and misleading statements throughout the class period that had the effect of artificially inflating the market price of the Company's securities. Throughout the class period, defendants depicted to the investing public that the Company's demand was robust and that its prospects for the future, through the end of fiscal 2001, were superb. A conference call on July 27, 1999 relayed that the Company was on track to report 60% year-over-year net income growth. Defendants also claimed that the Company had numerous engineers observing its clients and their amount of inventory, allowing the Company to be aware of future slowdowns in demand. The suit also alleges that the defendants distorted the financial benefits of the acquisitions of Optical Coating Labs, Cronos Integrated Microsystems, E-Tek Dynamics and SDL Inc., among others and claimed the Company was not as dependant on clients such as Lucent and Nortel as it truly was. During the class period, 25.2 million shares of the Company stock were sold or disposed for $2.1 billion by the individual defendants and the Company's controlling shareholder. On July 26, 2001, the 3rd Quarter results for fiscal 2001 were restated. Also, the Company announced a $44 billion write-off in goodwill concerning its acquisitions, inventory write-downs, and that its fiscal 2001 EPS would be only $0.16 and that in fiscal 2002, it would assume a loss of $0.15. Pursuant to this news, the Company's shares fell as low as $7.90, a 94% decline of the class period high of $146.32. For more details, contact Fred Taylor Isquith, Michael Miske, Gustavo Bruckner, 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 Web site: http://www.whafh.com. E-mail should refer to JDS Uniphase. LORAL SPACE: Ask Court To Dismiss It As Defendant in Securities Suit -------------------------------------------------------------------- Loral Space and Communications, Ltd. asked the United States District Court for the Southern District of New York to dismiss it and Bernard L. Schwartz as defendants in the consolidated securities suit filed in relation to the collapse of Globalstar Telecommunications Ltd., which filed for Chapter 11 bankruptcy early this year. The suit also names as defendants: (1) Globalstar Telecommunications Limited (GTL), (2) Globalstar, LP, and (3) Globalstar Capital Corporation The suit alleges that: (i) all defendants (except Loral) violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, by making material misstatements or failing to state material facts about Globalstar's business and prospects; (ii) defendants Loral and Schwartz are secondarily liable for these alleged misstatements and omissions under Section 20(a) of the Exchange Act as alleged "controlling persons" of Globalstar; (iii) defendants GTL and Schwartz are liable under Section 11 of the Securities Act of 1933 for untrue statements of material facts in or omissions of material facts from a registration statement relating to the sale of shares of GTL common stock in January 2000; (iv) defendant GTL is liable under Section 12(2)(a) of the Securities Act for untrue statements of material facts in or omissions of material facts from a prospectus and prospectus supplement relating to the sale of shares of GTL common stock in January 2000; and (v) defendants Loral and Schwartz are secondarily liable under Section 15 of the Securities Act for GTL's primary violations of Sections 11 and 12(2)(a) of the Securities Act as alleged "controlling persons" of GTL. The class of plaintiffs on whose behalf the lawsuit has been asserted consists of all buyers of securities of Globalstar, Globalstar Capital and GTL during the period from December 6, 1999 through October 27, 2000, excluding the defendants and certain persons related or affiliated therewith. The Company intends to vigorously defend against the suit. LORAL SPACE: Faces Suit For Federal Securities Violations in S.D. NY -------------------------------------------------------------------- Loral Space and Communications faces seven securities class actions filed in the United States District Court for the Southern District of New York on behalf of all purchasers of the Company's common stock from November 4,1999 to February 1,2001. The suit names the Company, Bernard L. Schwartz and Richard Townsend as defendants. The suits allege that: (1) the defendants violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, by making material misstatements or failing to state material facts about the Company's business and prospects, and (2) Mr. Schwartz and Mr. Townsend are secondarily liable for these alleged misstatements and omissions under Section 20(a) of the Exchange Act as alleged "controlling persons" of the Company. The Company believes that it has meritorious defenses to the suit and intends to vigorously oppose them. The lead plaintiffs in the suit have been given until April 18, 2002 to file a consolidated amended suit. MEASUREMENT SPECIALTIES: Schiffrin Barroway Files Securities Suit in NJ ----------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the District of New Jersey against Measurement Specialties, Inc. (AMEX:MSS), claiming the Company misled shareholders about its business and financial condition. The suit seeks damages for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of all investors who bought Measurement Specialties, Inc. securities between August 1, 2001 and February 14, 2002. The suit alleges that the Company's registration statement and prospectus issued in connection with the Offering misrepresented and omitted material facts concerning the Company's financial results. Furthermore, during the class period, and in violation of generally accepted accounting principles, defendants caused the Company to falsely report favorable financial results by, among other things, improperly recognizing revenues and overstating inventories. As a result, the Company's stock traded at artificially inflated levels during the class period. For more information, contact Marc A. Topaz or Stuart L. Berman by Phone: 888-299-7706 (toll free) or 610-822-2221 by Fax: 610-822-0002 by E-mail: info@sbclasslaw.com or visit the firms' Web site: http://www.sbclasslaw.com. METAWAVE COMMUNICATIONS: Schiffrin Barroway Files Securities Suit in WA ----------------------------------------------------------------------- Schiffrin and Barroway LLP initiated a securities class action against Metawave Communications Corporation (Nasdaq:MTWV) claiming that the company misled investors about its business and financial condition. The suit was filed in the United States District Court for the Western District of Washington on behalf of all investors who bought the Company's securities between April 25, 2001 and March 14, 2002. The suti alleges that the Company's SpotLight systems provide a solution for wireless network operators facing capacity constraints within their networks. The Company's systems reportedly increase overall network capacity, improve or maintain network quality, reduce network operating costs, and manage network infrastructure. The complaint alleges that during the class period, defendants caused the Company's shares to trade at artificially inflated levels through the issuance of false and misleading financial statements. As a result of this inflation, the company was able to complete private placement offerings, raising net proceeds of $30 million during the class period. On March 14, 2002, just months after the last offering was completed, the Company revealed that its FY 2001 results were false when issued. The stock dropped below $1 per share on this news. 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 Website: http://www.sbclasslaw.com ONYX ACCEPTANCE: Appeals Court Upholds Dismissal of NY Securities Suit ---------------------------------------------------------------------- The United States Ninth Circuit Court of Appeals upheld the dismissal of a class action filed against Onyx Acceptance Corporation, alleging violations of federal securities laws. The suit was initially commenced in January 2000 against the Company and certain of its officers and directors in the United States District Court for the Central District of California. The suit alleges violations of of Section 10(b) and 20(a) of the Securities and Exchange Act of 1934 arising from the Company's prior use of the cash-in method of measuring and accounting for credit enhancement assets in the financial statements. The Company asserted that its previous use of the cash-in method of measuring and accounting for credit enhancement assets was consistent with then current generally accepted accounting principles and accounting practices of other finance companies. The Federal Court later dismissed the suit with prejudice, but the plaintiffs appealed this decision to the Ninth Circuit Court. The Company intends to vigorously defend itself against such proceedings, but concedes there is a chance that its results of operations, financial condition and cash flows could be materially and adversely affected by unfavorable outcomes. ROADHOUSE GRILL: Fine Hatfield Initiates Securities Suit in S.D. FL ------------------------------------------------------------------- Fine & Hatfield launched a securities class action in the United States District Court for the Southern District of Florida on behalf of purchasers of Roadhouse Grill, Inc. (OTC:GRLL) securities between August 31, 1998 and August 1, 2001, inclusive, (the "Class Period") against defendants the Company and certain of its officers and directors. The suit asserts claims against defendants for violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The suit alleges that as a result of materially false and misleading statements concerning the Company's products, operations, and financial results, the Company's securities traded at artificially inflated prices during the class period. The complaint alleges that the artificial inflation continued until the Company admitted that it would be forced to restate its prior overstated and inflated financial results. For more information, contact Danny E. Glass or B. Scott Daugherty by Phone: 812-425-3592 or by E-mail: deg@fine-hatfield.com or bsd@fine- hatfield.com SECURE COMPUTING: Trial In CA Securities Fraud Suit Set For June 2003 --------------------------------------------------------------------- Trial in the consolidated securities class action pending against Secure Computing Corporation and certain of its present and former directors and officers in the United States District Court for the Northern District of California will begin on June 23, 2003. The suit arose from several class actions commenced in April 1999 on behalf of individuals who acquired the Company's stock between November 10, 1998 and March 31, 1999. The suit alleges that the defendants made false and misleading statements about the Company's business condition and prospects in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5. The Company asked the Court to dismiss the suit in August 2001, but the Court denied the motion. Discovery is proceeding in the suit. Certain of the Company's former and current officers and directors also face a purported derivative action in California Superior Court, Santa Clara County, with the Company named as nominal defendant. The derivative action makes essentially the same factual allegations as the securities class actions and alleges various causes of action, including that the defendants breached their corporate fiduciary duties. The Company believes that there are meritorious defenses to this action and intends to defend itself vigorously. However, it stated in a disclosure to the Securities and Exchange Commission that an unfavorable resolution could have a material adverse effect on its business, results of operations and financial condition. SILICON IMAGE: Mounting Vigorous Defense V. Securities Suit in S.D. NY ---------------------------------------------------------------------- Silicon Image, Inc. faces a securities class action pending in the United States District Court for the Southern District of New York alleging federal securities violations on behalf of purchasers of the securities of Silicon Image Inc. between October 5, 1999 and December 6, 2000, inclusive. The suit names the Company, certain of its officers and directors, and its underwriters as defendants. 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 specifically alleges that the defendants were part of a scheme to manipulate the price of the Company's stock in the aftermarket following the Company's initial public offering. Response to the suit and discovery in this action on behalf of the Company and individual defendants has been stayed by order of the court. The suit is proceeding as part of a coordinated action of over 300 such cases brought by plaintiffs in the Southern District of New York. The Company believes the suit is without merit and intends to vigorously oppose the suit. At this time, however, the Company cannot opine as to the outcome of this lawsuit. STILLWATER MINING: Milberg Weiss Commences Securities Suit in S.D. NY --------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class action on behalf of purchasers of the securities of Stillwater Mining Company (NYSE: SWC) between April 20, 2001 and April 1, 2002, inclusive, in the United States District Court, Southern District of New York against the Company and: (1) Francis R. McAllister, (2) James A. Sabala and (3) Harry C. Smith. 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 between April 20, 2001 and April 1, 2002, thereby artificially inflating the price of Company securities. Throughout the class period, as alleged in the complaint, the Company issued a series of materially false and misleading statements regarding its financial performance and filed reports confirming such performance with the United States Securities and Exchange Commission. The suit alleges that these statements were materially false and misleading because, among other things: (i) the Company improperly classified "mineralized material" as "probable reserves;" (ii) defendants' improper manipulation of probable reserves overstated the Company's class period net income because defendants depreciated the Company's plant and equipment costs according of the life of these reserves. If defendants had properly accounted for these reserves, depreciation would have occurred much faster; and (iii) the reduction in probable reserves will likely result in an impairment charge, or a restatement of at least fiscal year 2001 results. Furthermore, defendants failed to disclose that the SEC had advised the Company by mid-December 2001/ early January 2002 that its methodology for the calculation of probable ore reserves was improper and would have to be changed. On April 2, 2002, when defendants belatedly disclosed that the Company's accounting practices had been condemned by the SEC, the stock dropped by 24% in one day on extraordinarily high volumes of 4,743,600 shares traded, vastly greater than the Company's average trading volume of approximately 400,000 shares per day. The full extent of the Company's losses is still unknown to the market, since the revision to reserves could adversely impact 2001 net income, and result in a downward financial restatement of prior quarters. For more information, contact Steven G. Schulman or Samuel H. Rudman by Mail: One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 by Phone: 800-320-5081 by E-mail: Stillwatercase@milbergNY.com or visit the firm's Web site: http://www.milberg.com UNDERWRITERS LITIGATION: Probe Over Stock Recommendations Expanded ------------------------------------------------------------------ New York's attorney general expanded its investigation on the accuracy and honesty of Wall Street analysts in their advice on what stocks to buy to include six other firms aside from Merill Lynch & Co., the only publicly-named focus of the probe. "The investigation is extensive and it goes far beyond Merrill Lynch," Marc Violette, spokesman for Attorney General Eliot Spitzer, told Associated Press. "The investigation also involves a number of other very prominent Wall Street investment banks." Mr. Violette declined to mention the other investment banks, but a source familiar with the investigation told Associated Press that the firms being investigated are: (1) Goldman Sachs Group Inc.; (2) Credit Suisse First Boston, a unit of Credit Suisse Group; (3) Morgan Stanley Dean Witter & Co.; (4) the UBS PaineWebber division of UBS AG; (5) the Salomon Smith Barney unit of Citigroup Inc.; and (6) Bear Sterns Co. In a report on its Web site Wednesday, The Wall Street Journal said Lehman Brothers Holdings Inc. and Lazard Freres were also among the firms that have received subpoenas or would receive them shortly. The attorney generals office last week obtained a court order requiring Merrill Lynch to make detailed disclosures on its business. A 10-month investigation allegedly showed the Company had lied to clients and recommended shares they knew were bad investments. According to the Associated Press, critics say analysts often promote stocks they cover so their firms can get lucrative merger and acquisition or stock underwriting fees from those same companies. Merrill Lynch has denied the allegations and is currently looking for other legal options. Eric R. Dinallo, the attorney general's bureau chief for investment protection, said Merrill Lynch and other brokerages must reform the way they go about recommending stocks so individuals can make educated decisions about their investments. "Our goal is to make sure that individual investors can have faith in the investment advice they receive from Wall Street," Dinallo told AP. "It appears from our investigation that many investors may have been badly served by investment analysts operating with severe conflicts of interests." The other investment firms have not released any comments on the investigation. ********* 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. 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