/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/020715.mbx C L A S S A C T I O N R E P O R T E R Monday, July 15, 2002, Vol. 4, No. 138 Headlines APARTHEID LITIGATIONS: Archbishop Tutu Cautiously Supports US Lawyer ARGENTINA: Court Declares Partial Deposit Freeze "Unconstitutional" CANADA: BC Judge Grants Certification of Suit Over Alouette Lake Flood FUTURE FIRST: Faces Consumer Suit Over "Wet Ink Viaticals" in FL Court JOHNSON & JOHNSON: Faces Antitrust Suit Alleging Drug Patent Misuse MAJOR LEAGUE: Baseball Fans Consider Suit Over Disappointing All-Stars MASSACHUSETTS ELECTRIC: $1.9M Settlement Proposed to Right Overcharges OREGON: High School's Random Drug Test Study Faces Suit, Investigation PAYPAL INC.: Faces Two Suits Over $1.5B eBay Buy-out Offer in DE Court SERVICE CORPORATION: Lawyers To Present Arguments in Desecration Suit SOUTH TEXAS: Sued After 1,000 Patients Face Possible HIV Infection TOBACCO LITIGATION: Appeals Court Allows Antitrust Suit To Proceed WYETH CORPORATION: Faces Suit Over Harmful Effects of Hormone Drug *Drug Companies Face Heavy Costs From Antitrust, Price-Fixing Claims New Securities Fraud Cases 360NETWORKS INC.: Leo Desmond Commences Securities Suit in S.D. NY AMDOCS LTD.: Bernard Gross Initiates Securities Fraud Suit in E.D. MO CORPPRO CORPORATION: Brodsky & Smith Commences Securities Suit in OH CRYOLIFE INC.: Schiffrin & Barroway Commences Securities Suit in GA EDISON SCHOOLS: LeBlanc & Waddell Commences Securities Suit in S.D. NY FLEXTRONICS INTERNATIONAL: Bernard Gross Lodges Securities Suit in NY KNIGHT TRADING: Marc Henzel Commences Securities Suit in New Jersey KNIGHT TRADING: Schiffrin & Barroway Commences Securities Suit in NJ MERCK & CO.: Rabin & Peckel Commences Securities Fraud Suit in NJ MERRILL LYNCH: Cohen Milstein Commences Securities Suit in S.D. NY MERRILL LYNCH: Finkelstein Thompson Commences Securities Suit in MI MONTANA POWER: Dyer & Shuman Commences Securities Fraud Suit in Montana PEROT SYSTEMS: Emerson Firm Commences Securities Fraud Suit in N.D. TX SEEBEYOND TECHNOLOGY: Brodsky & Smith Commences Securities Suit in CA UNIROYAL TECHNOLOGY: Cohen Milstein Commences Securities Suit in VA WORLDCOM INC.: Lockridge Grindal Commences Securities Suit in S.D. MI WORLDCOM INC.: Rabin & Peckel Commences Securities Fraud Suit in NY ********* APARTHEID LITIGATIONS: Archbishop Tutu Cautiously Supports US Lawyer -------------------------------------------------------------------- Archbishop Desmond Tutu, who led South Africa's search for post- apartheid reconciliation, recently has given cautious support to US lawyer Ed Fagan's campaign for massive corporate compensation to the victims of apartheid policies, Reuters English News Service reports. "I think the case is one that can be made," Bishop Tutu said of Mr. Fagan's allegation that foreign companies bolstered the white minority government during the final decade of a black uprising against apartheid. Mr. Fagan arrived in South Africa recently to gather evidence for a class action scheduled to begin in New York on August 9 against US, Swiss, French and German corporations, including banks, oil companies and arms dealers. Mr. Fagan told Reuters that he would not claim a specific amount, but that the $100 billion paid out in various ways to victims of Germany's Second World War operations should serve as a guideline. Thousands of South Africans died in clashes with apartheid police in the 1980s and thousands more were detained without trial. Many activists were tortured by police and killed by state hit squads. "He clearly is an able lawyer. If we are able to get even a fraction of what he claims he can get, are we going to sniff at it?" Bishop Tutu told Reuter during an interview. Bishop Tutu, a Nobel peace laureate and chairman of the Truth and Reconciliation Commission (TRC) that probed the long war over apartheid, urged foreign corporations that traded with the white regime to volunteer redress. "I would say that they would come out better if they do not try to be defensive," Bishop Tutu said. "I would hope that there would be an acknowledgement that morality and ethics are as important for business as they are for politics," he added. Bishop Tutu, who has retained in retirement the title of an archbishop of the Anglican Church, said that Mr. Fagan had proved his ability in his controversial campaign for compensation from the Swiss banks that retained the deposits of Jews killed in the Nazi holocaust. "You can't argue with the fact that he got those billions, that he succeeded," Bishop Tutu said, referring to the $1.25 billion settlement Mr. Fagan obtained for his clients. "I do not think he would take on a case that is not viable." Bishop Tutu urged Mr. Fagan to be cautious, however, in the methods he uses to gather evidence for his case. He should not raise false hopes, the Archbishop added. He noted that a group including South African lawyers, is about to start a series of public meetings to gather more evidence. "Th[e public meetings] do raise very serious questions about the re-traumatizing of people. You need a great deal of sensitivity in that area," Bishop Tutu said. The state-appointed Truth and Reconciliation Commission (TRC) gathered evidence of more than 20,000 apartheid-related atrocities during three years of research and public hearings. Victims were counseled before, during and after their testimony, at hearings in which the tales of abuse, torture and murder frequently reduced Bishop to tears. "We often fell short of the kind of services that we should have provided," he said. The TRC recommended that the state provide compensation for the victims of apartheid, but no action has been taken on the proposal. ARGENTINA: Court Declares Partial Deposit Freeze "Unconstitutional" ------------------------------------------------------------------- Argentine Judge Emilia Garcia has declared unconstitutional the partial deposit freeze imposed by former President Fernando de la Rua in December last year in a case filed by the national ombudsman on behalf of all depositors, the local press reported, according to a recent report by Business News America. Judges have declared the deposit freeze unconstitutional on four previous occasions, but only in cases filed on behalf of individual plaintiffs. This time the ruling came in a class action. Meanwhile, Argentina's banking association (ABA) has reiterated demands that economy minister Roberto Lavagna devise a compulsory exchange program whereby depositors will have to exchange their fixed term deposits for government bonds. The banks also want Lavagna to take action to preempt potential lawsuits against such a ruling. A voluntary deposit for a bond swap has been deemed a failure. As of July 5, only 0.1 percent of eligible depositors had opted to exchange their savings for three-year dollar-denominated bonds, prompting the government to extend the deadline until July 16. Depositors with fixed-term savings have another two weeks to exchange their deposits for dollar-denominated 10-year bonds. The poor showing also coincided with the arrival of an International Monetary Fund Mission to negotiate further international aid to Argentina. CANADA: BC Judge Grants Certification of Suit Over Alouette Lake Flood ---------------------------------------------------------------------- British Columbia Supreme Court judge Robert Bauman yesterday gave official certification for class action proceedings on behalf of area residents who suffered property damage and physical injuries as a result of the flood. The suit alleges negligence on the part of BC Hydro and the District for failing to prevent the flood and failing to adequately warn residents in time to mitigate severe damage. BC Hydro owns and operates the Alouette Lake reservoir dam, part of the Alouette Power System. The dam is located just upstream from Maple Ridge where a number of people live along the banks of the Alouette River. Heavy rainfall in the weeks leading up to the 1995 flood caused the lake to rise to dangerously high levels, yet BC Hydro did not initiate the security measure of pre-spilling water until November 24, too late to prevent the flood on November 29. In what appeared to be a communication failure between BC Hydro and municipal staff, the district did not immediately warn residents about the impending flood. Many people were caught unaware and had no chance to secure personal belongings. "The financial loss and physical pain experienced by so many Maple Ridge residents were completely avoidable," said lawyer David Klein, managing partner of Klein Lyons. "As the dam owner and operator, BC Hydro had a duty to the people of Maple Ridge to monitor and control lake water levels, and the District of Maple Ridge had a duty to immediately warn of impending flood dangers. Regrettably, neither BC Hydro nor the District of Maple Ridge had adequate plans and procedures in place to prevent or to effectively manage a flood emergency." Al Pausche, representative plaintiff for the case, was among those who experienced both property damage and personal injury. A longshoreman who has lived on the riverfront since 1985, Mr. Pausche suffered hypothermia while trying to save his two boats, truck, trailer, and other belongings from being swept away by the surging river. Class action proceedings were delayed three years while the District of Maple Ridge filed a motion to be excluded from liability based on a six-month statute of limitations. Justice Bauman denied the District's motion on October 24, 2000 in a decision that significantly changed BC law. Citizens filing civil suits against municipalities now have the standard two-year window to file, the six-month limitation only applies in very limited circumstances. Justice Bauman's decision was upheld by the BC Court of Appeal on February 5, 2002, allowing the Alouette flood class action to proceed against both defendants. For more details, contact David Klein by Phone: 604-874-7171 or visit the firm's Website: http://www.kleinlyons.com FUTURE FIRST: Faces Consumer Suit Over "Wet Ink Viaticals" in FL Court ---------------------------------------------------------------------- The Future First Financial Group, Inc. faces a class action pending in the Circuit Court of the 15th Judicial Circuit in and for Palm Beach County, Florida. The lawsuit was filed on behalf of investors who purchased viatical settlements on life insurance policies that Future First agreed to rescind after the insurer, John Hancock Mutual Life Insurance Company, sued for recission in federal court. The complaint alleges that the Company violated the Florida Unfair and Deceptive Trade Practices Act by selling what are known in the industry as "wet ink viaticals." Wet ink viaticals derive their name from the fact that the life insurance policies are entered into solely for the purpose of immediate resale to a viatical settlement provider, like the defendant. The complaint alleges that the corporate practice of the Company was to represent that these policies were beyond the standard two year contestability period, and therefore there was no risk that the policies could be rescinded by the insurer. The suit was filed on behalf of all of those who purchased viatical settlements between April 15, 1998 and June 30, 1999 through the Company, relating to life insurance policies issued by John Hancock Mutual Life Insurance Company, that were rescinded on February 21, 2002. For more details, contact Robert C. Hackney by Mail: 561-627-0677 or visit the firm's Website: http://www.businesswire.com JOHNSON & JOHNSON: Faces Antitrust Suit Alleging Drug Patent Misuse ------------------------------------------------------------------- Johnson & Johnson's McNeil-PPC Inc. unit is accused in a lawsuit, seeking class action status, of misusing patents to block competition with a version of its Imodium anti-diarrhea medicine that also helps control gas, the Los Angeles Times reports. Patents protecting Imodium Advanced were invalidated by a federal judge in Philadelphia, on June 25, opening the door to competition from Perrigo Co., a maker of store brand over-the-counter drugs. Imodium Advanced, also sold over the counter, is an improvement on McNeil's A- D, which has generic rivals. McNeil plans to appeal the judge's ruling on the patents. Perrigo would have begun selling a generic version of Imodium Advanced as early as October 2000, if McNeil had not filed a patent-infringement suit, consumer Marna Berkman of New York, claims in a lawsuit, filed July 1, in Philadelphia. The lawsuit is seeking damages and a court order barring McNeil from improperly barring generic competition. The lawsuit also seeks class-action status on behalf of other consumers. Ms. Berkman's lawsuit alleges that McNeil engaged in anti-competitive conduct to "obtain and maintain monopoly power in the market for Imodium Advanced," the lawsuit says. McNeil spokesman Mark Gutsch said Ms. Berkman's antitrust suit is "baseless." "We obtained the patents in good faith and took no actions that interfered with Perrigo's right to market their product," Mr. Gutsche said. MAJOR LEAGUE: Baseball Fans Consider Suit Over Disappointing All-Stars ---------------------------------------------------------------------- Fans of Major League Baseball are considering the filing of a class action against the league, claiming breach of contract after they were disappointed by this week's All-Star ending. A Michigan man has already filed a lawsuit, seeking damages of more than $25,000 and demanding the game be completed, NewsNet5 reports. With both teams' 30-man rosters already depleted, the All-Star Game managers, umpires and Major League Baseball Commissioner Bud Selig decided the 73rd All-Star Game would end in a tie, 7-7, after 11 innings Tuesday night in Milwaukee. Paul Anderson of Marquette's National Sports Law Institute said such a suit would not advance very far. "Yes, could people sue? Definitely, but this one would be one of the toughest there is because not only was there a game, it went longer than a regulation game. Every player played until there was no one left. So it would be a real tough argument to make," Mr. Anderson said. He added 75 percent of cases like this get thrown out of court MASSACHUSETTS ELECTRIC: $1.9M Settlement Proposed to Right Overcharges ---------------------------------------------------------------------- The Massachusetts Electric Company has proposed refunding at least $1.9 million in overcharges to thousands of residential customers to settle a class action, Associated Press Newswires reports. The class action was filed in October 2001, by two Northampton residents. The proposed settlement was presented recently to Superior Court Judge Tina Page, who scheduled a December hearing on the settlement. Deborah Drew, a spokeswoman for the utility, said that the utility already has made refunds averaging $137 to about 13,800 customers who were erroneously placed in the higher-priced "default" category. In its proposed settlement of the 10-month-old lawsuit, the utility agreed to notify all of its more than 300,000 default customers that they may have been erroneously placed in the category. Ms. Drew said some people were misclassified when they moved within Massachusetts Electric's service area or when billing names changed. Massachusetts Electric has about 1.2 million customers in 168 communities across Massachusetts. OREGON: High School's Random Drug Test Study Faces Suit, Investigation ---------------------------------------------------------------------- A study aimed at determining whether random drug tests discourage drug use among high school athletes is receiving a large amount of attention. First, a class action, claiming students have been harassed or coerced into taking part in the study, has been filed against the Oregon Health & Science University Study (OHSU), the study's sponsor, and 14 Oregon school districts. Second, the Office for Human Research Protections has confirmed that the federal agency is investigating the OHSU's drug-test study, the Associated Press Newswires reports. The class action was filed in US District Court in Oregon and alleges that thousands of high school students were forced to take part in the study and suffered "psychological, social and economic harm." The lawsuit also seeks an injunction to halt the study, called Saturn, short for Student Athletic Testing Using Random Notification. "Once they look at this study, they will conclude there were ethical lapses, and the study should not have proceeded the way it did," said Alan Milstein, an attorney in Pennsauken, NJ, who is leading the lawsuit. Mr. Milstein said there was no evidence of a serious drug problem in Oregon schools before the study began, so "it is ludicrous" to spend $3.6 million to find out what most educators already know, or already prevent. The US Supreme Court recently upheld random drug tests for high school students. Pat El-Hinnawy, spokeswoman for the Office for Human Research Protections, confirmed that the federal agency began its investigation of the OHSU drug-test study several weeks before the class action was filed. Ms. El-Hinnawy said that the Office for Human Research Protections, a division of the US Department of Health and Human Services, cannot release details until the investigation is complete. "I can tell you, in general terms, that we investigate on the basis of whether institutions are in compliance with regulations," said Ms. El-Hinnawy from her office in Rockville, Md. The three-year, $3.6 million study, funded by the National Institutes of Health, is entering its third year. OHSU researchers, led by Dr. Linn Goldberg, designed the study to determine how widespread drug and alcohol use is among high school athletes, and whether random testing reduces it. Athletes at seven participating high schools face random urine tests for drugs and breath tests for alcohol. Students at six other schools serve as a control group with no drug testing. Another school dropped out of the study. OHSU officials said they had received a routine questionnaire on the study from the Office for Human Research Protections, and after replying, the institution received a follow-up questionnaire. "They wanted to know what's really behind these allegations, so we are in the process of responding to the latest set of questions," OHSU spokesman Martin Munguia said. PAYPAL INC.: Faces Two Suits Over $1.5B eBay Buy-out Offer in DE Court ---------------------------------------------------------------------- Online payment company PayPal, Inc. faces two class actions filed by its shareholders, relating to a $1.5 billion buyout offer the Company accepted from online auctioneer eBay Inc., CNET reports. The suits allege that an unfair takeover deal was struck between the two companies because they are too closely entwined. The suits, both of which were filed in Delaware Chancery Court, allege that statements from the Company's annual report indicate that its financial results and growth prospects could be hampered if any problems arose in its dealings with eBay. "PayPal thus has a tremendous interest in acceding to eBay's demands and eBay is in a position to ensure effectuation of this transaction without regard to its fairness to PayPal's shareholders," according to the lawsuit. Both lawsuits say PayPal executives violated their fiduciary duties to shareholders and ask the court to stop the takeover. "Any transaction to acquire the company at the consideration proposed does not represent the true value of the company and is unfair and inadequate constitutes unfair dealing on the part of eBay," said said plaintiff Kathleen Rooney, who is represented by the law firms Rosenthal, Monhait, Gross & Goddess and Milberg Weiss Bershad Hynes & Lerach. "Legal filings of this nature are very common following major acquisition announcements and they are rarely successful," eBay spokesman Kevin Pursglove said in a statement. "The claims in this action are meritless and we shall vigorously defend ourselves." SERVICE CORPORATION: Lawyers To Present Arguments in Desecration Suit --------------------------------------------------------------------- Lawyers for the plaintiffs in the class action against funeral services giant Service Corporation International will argue before the Broward County Circuit Court in Florida that the Company knew about the widespread problems at the two Menorah Gardens cemeteries, but chose to do nothing. The Company faces several class actions after the Florida Department of Law Enforcement discovered in April human remains in a wooded area at the Palm Beach County Cemetery. The allegations have grown to include bodies being put in the wrong location and buried atop each other instead of side by side. Other allegations include burial vaults being crushed or corpses being removed to make way for new burials, the Florida Sun-Sentinel reports. The news drew widespread outrage among the cemetery's customers. An investigation by state authorities confirmed the findings and led to the filing of a class action against the Company and its two Menorah Gardens Cemeteries in Florida state courts. Lawyers for the plaintiffs in the suit allege that due to the Company's negligence and inaction, the Company should pay dearly if the family members prevail in the lawsuit. The lawyers intend to persuade Broward County Circuit Judge J. Leonard Fleet that the case is worthy of punitive damages. Under Florida law, those bringing the lawsuit must demonstrate that their cases cross a legal threshold that entitles them to financially punish a defendant, the Sun-Sentinel reports. "We believe the facts, as we have discovered them in sworn depositions, give rise to the level of civil liability which would allow us punitive damages," attorney Neal Hirschfeld told the Sun-Sentinel. "We factually believe we have linked the local SCI company . by virtue of them having sent people (from headquarters in Houston) to South Florida to check on the problem, have their legal department look into the problem and do nothing about the problem until our lawsuit." Company attorneys, however, contend that family members who are named in the lawsuit shouldn't have been allowed to file the lawsuit because they are not spouses or children of the deceased. Among other technicalities, they also argue that the lawyers for the families have not been specific enough in their allegations. "This is really some of the first aspects of the true legalities of this thing," Company spokesman Don Mathis told the Sun-Sentinel. "It's not just the publicity part of it the attorneys have been working on. It's really now getting down to how the American legal system works." The Company has acknowledged issues regarding the spacing and numbering of graves at the cemeteries, but denied any knowledge of unearthing and dumping bodies. SOUTH TEXAS: Sued After 1,000 Patients Face Possible HIV Infection ------------------------------------------------------------------ The South Texas Regional Medical Center face a potential class action filed in the Atascosa County court, after one of its HIV-positive nurses allegedly injected herself with pain medication from a supply intended for patients, according to a MySanAntonio.com report. The suit also names as defendants Community Health Systems, Inc., the hospital's owner and Jacqueline Fillingim, the nurse in question. The woman who brought the suit, only identified as "Jane Doe," seeks suit certification as a class action on behalf of the 1,100 former patients who received the injectable pain medication Demerol during the seven months Ms. Fillingim worked at the hospital. The suit was commenced after the hospital revealed the possible contamination in March, almost three months after Ms. Fillingim left, and urged those patients to be tested for HIV, MySanAntonio.com reports. The suit alleges that the hospital was negligent by failing to do a better background check on Ms. Fillingim, despite the fact that she had previously surrendered her license and had a history of substance abuse. The hospital and CHS also allegedly portrayed the hospital was safe and improperly supervised Ms. Fillingim. The lawsuit claims patients are entitled to damages for emotional distress and mental anguish resulting "from the fear of HIV infection" to the pain of the HIV tests themselves. The plaintiff, a 42-year-old mother of four, told MySanAntonio.com she is awaiting the results of her second HIV test and worries she might have contracted the virus or passed it on to her family. "I live with that fear every day." Rosemary Walsh, a spokeswoman for the hospital and CHS, said Wednesday that neither had been served with the lawsuit. After reading a copy of the plaintiff's petition, she disputed the plaintiffs' assertion that the hospital refused to provide follow-up HIV tests. "The arrangements for that were very clear," she said. "We made reimbursements to physicians who had patients who required follow-up tests." Ms. Fillingim has not been charged, although a criminal investigation has been opened, according to MySanAntonio.com. The State Board of Nurse Examiners filed a complaint against her in April, and Ms. Fillingim surrendered her nursing license soon after. TOBACCO LITIGATION: Appeals Court Allows Antitrust Suit To Proceed ------------------------------------------------------------------ The Fourth Circuit Court of Appeals allowed the antitrust class action filed by tobacco farmers against the nation's top tobacco companies to proceed as a class action, rejecting the defendants' challenges to the suit, Reuters reports. The suit's 400,000 or so plaintiffs, who also include tobacco quota holders, who have the right to grow tobacco on their farms and lease their land to farmers, charge the defendants with conspiring to rig tobacco auctions and undermine government support programs. The suit, known as DeLoach, et al. v. Philip Morris Inc., et al, alleges the defendants violated antitrust laws by bid rigging at tobacco auctions as well as conspiring to undermine the tobacco quota and price support program administered by the federal government. The suit, pending before the US District Judge William Osteen in Greensboro, North Carolina, names as defendants: (1) Philip Morris USA, a unit of Philip Morris Cos. Inc., (2) RJ Reynolds Tobacco Co., a unit of RJ Reynolds Tobacco Holdings Inc., (3) Brown & Williamson Tobacco Corp., a unit of British American Tobacco Plc; (4) Lorillard Tobacco Co., a unit of Loews Corp. that is tracked by the Carolina Group Inc. tracking stock, (5) Universal Leaf Tobacco Co. Inc., (6) JP Taylor Co. Inc., (7) Dimon Inc., and (8) Standard Commercial Corp. The federal court granted class certification to the suit, but the defendants appealed the decision to a three-judge panel of the Fourth Circuit Court. In June, the panel rejected the defendants' appeal. The ruling of the full appeals court paves paving the way for a jury trial, according to Howrey Simon Arnold & White, the firm representing the growers. Alan Wiseman, an attorney representing the growers, said a scheduling order was entered to have discovery in the case completed by July 2003, and that the trial is set for March 2004. The defendant companies in the case could not be immediately reached for comment, Reuters reports. WYETH CORPORATION: Faces Suit Over Harmful Effects of Hormone Drug ------------------------------------------------------------------ Wyeth and Wyeth-Ayerst faces a national class action lawsuit on behalf of all persons who were prescribed the hormone replacement drug Prempro, chemically known as conjugated estrogens/medroxyprogesterone. As alleged in the suit, the defendants were named due to their responsibility in manufacturing, promoting, marketing, distributing and/or selling Prempro. The class action seeks to: (1) inform the public that users and consumers of Prempro are at an increased risk of harm and/or death; (2) establish a medical monitoring fund so that every consumer may be tested and treated for the adverse effects of Prempro; (3) reimburse monies paid for the product; and (4) provide compensation to all victims for personal injuries and death. Prempro is a medication commonly prescribed for patients in need of hormone replacement therapy. The drug, which falls within a category of drugs known as progestins, contains conjugated estrogens and medroxyprogesterone acetate. Approximately three million women in the United States take Prempro daily to replace hormones lost at menopause as a means for reducing incidence of post-menopausal symptoms such as hot flashes, night sweats and vaginal dryness. The drug first received FDA approval as a hormone replacement therapy in 1995. Between 1993 and 1998, the Women's Health Initiative (WHI), a group focused on the health and welfare of postmenopausal women, enrolled more than 16,000 women in a set of clinic trials to examine, among other things, the effect of estrogen plus progestin on the prevention of heart disease and hip fractures, and any associated change in risk for breast and colon cancer. The specific drug used during the study was Prempro supplied by Wyeth and Wyeth- Ayerst Research. On May 31, 2002, an independent advisory committee charged with reviewing the results of the clinical trials and ensuring participant safety, recommended that the trials be stopped based on a finding of increased breast cancer risk in the estrogen plus progestin group. On July 8, 2002, participants began receiving letters informing them about the results of the study and instructing them to stop study medications. The specific study findings for the estrogen plus progestin group compared to the placebo included: (i) 41% increase in strokes, (ii) 29% increase in heart attacks, (iii) 22% increase in total cardiovascular disease and (iv) 26% increase in breast cancer On July 9, 2002, the Journal of the American Medical Association released an expedited article concerning the WHI Prempro clinical trials. The article, originally scheduled for publication on July 17, 2002, summarizes the wide- ranging harm caused by Prempro, including the "increased risks for cardiovascular disease and invasive breast cancer," and notes that "there were more harmful than beneficial outcomes in the estrogen plus progestin group vs. the placebo group." For more details, contact Tobias L. Milrood by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 888-299-7706 (toll free) or 610-667-7706 or by E-mail: info@sbclasslaw.com *Drug Companies Face Heavy Costs From Antitrust, Price-Fixing Claims -------------------------------------------------------------------- Prescription-drug buyers are sending a blunt message to the pharmaceutical industry. They are sick of rising prices. Their remedy is turning into a legal headache for drug makers, as citizen groups, state governments, and federal regulators are piling on the lawsuits in a process reminiscent of the initial legal challenges that confronted the tobacco industry in the 1990s, the Times Union (Albany, N.Y.) reports. Disputing the allegations against them is an endeavor for which the drug makers realize they must prepare a vigorous defense. One of the pharmaceutical attorneys acknowledged that they will be faced with "substantial litigation from big class action plaintiff lawyers." No one is predicting that the surge of antitrust and price-fixing lawsuits will bring the $300 billion prescription drug business to its knees. However, experts say the litigation poses a significant and growing financial liability for an industry already troubled by slumping stock prices, a dearth of new drugs in the pipeline and an unfavorable political climate. In the litigation arena, the roster of defendants, in just a "clutch" of cases, includes some of the titans of the pharmaceutical industry: (1) Bristol-Myers Squibb Co. has been sued by 29 state attorneys general, who accuse the firm of using several fraudulent tactics to keep generic versions of its cancer-fighting drug Taxol off the market; (2) Another lawsuit accuses Astra-Zeneca PLC and Barr Laboratories of colluding to block a generic version of another cancer treatment, Tamoxifen; (3) Bayer Corp. has been hit with a lawsuit over its antibiotic Cipro; and (4) several employees of Schering-Plough Corp. have been subpoenaed to appear before a federal grand jury in Philadelphia, apparently over drug-pricing. Wall Street is watching the litigation carefully. Although there are multiple reasons for the drug makers' ills, a major stock index for the sector is off nearly 17 percent this year, experts say the litigation tide is a chief concern. "This (litigation and the continuing threat of more and more litigation) is at the forefront of the troubles plaguing the industry," said Todd Lebor, a pharmaceutical analyst at Morningstar, an independent investment-research firm in Chicago. The political pressures are growing as well. Critics see the gouging and carry this issue into all the debate forums; television, newspapers, radio, public lectures and discussion groups. They say the figures alone explain the public outrage over drug prices. Americans spent $154.5 billion last year on prescription drugs, exclusive of drugs dispensed by hospitals, says the National Institute for Health Care Management. That figure is up from $78.9 billion in 1997. The political uproar is real and hangs over the industry's future. On Capitol Hill and in statehouses across the nation, lawmakers fume over more-expensive drug purchases by Medicaid and other government health programs. And critics also are upset with the industry's lack of support for a Medicare drug benefit. Additional pressures come from yet another direction. Insurers, health maintenance organizations and other health plans are exercising newfound leverage to demand lower prices. The product-development line looks thin, and about $150 billion in revenue is at risk as patents expire over the next five years, analysts say. New Securities Fraud Cases 360NETWORKS INC.: Leo Desmond Commences Securities Suit in S.D. NY ------------------------------------------------------------------ The Law Offices of Leo W. Desmond initiated a securities class action on behalf of shareholders who acquired 360Networks, Inc. (Nasdaq:TSIXQ.PK) securities between November 8, 2000 and June 28, 2001, inclusive. The case is pending in the United States District Court for the Southern District of New York against: (1) Gregory B. Maffei, (2) Jimmy D. Byrd, (3) Larry Olsen, (4) Ron Stevenson, (5) Vanessa Wittman and (6) Steve Baker It is alleged that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10(b)(5) promulgated thereunder, by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Leo W. Desmond by Phone: 888-337-6663 or 561-712-8000 by E-Mail: Info@SecuritiesAttorney.com or visit the firm's Website: http://www.SecuritiesAttorney.com AMDOCS LTD.: Bernard Gross Initiates Securities Fraud Suit in E.D. MO --------------------------------------------------------------------- Bernard M. Gross commenced a securities class action on behalf of all persons who purchased or acquired Amdocs Limited (NYSE:DOX) securities between July 24, 2001 and June 20, 2002, in the United States District Court for the Eastern District of Missouri against the Company and: (1) Bruce K. Anderson, (2) Robert A. Minucci, (3) Avinoam Naor, and (4) Dov Baharav 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 July 24, 2001 and June 20, 2002, thereby artificially inflating the price of Company securities. As alleged in the complaint, these statements were materially false and misleading because they failed to disclose, among other things, that the Company's business and operations were being negatively affected by a host of adverse factors. Throughout the class period, defendants repeatedly emphasized that the Company was not being affected by the slowdown in the communications industry when, in fact, that was not true. The Complaint alleges that defendants artificially inflated its financial statements by maintaining inadequate reserves for doubtful accounts and failing to disclose that the Company's revenue growth improperly included revenues from a recent acquisition. On June 20, 2002, defendants shocked the market when they finally revealed that the revenue for the third quarter and year-end 2002 would be significantly lower than investors had been led to believe. The Company announced that pro forma earnings per share for third quarter of 2002 would be $0.20, a far cry from the previous guidance of $0.33. The Company also announced a massive lay-off and the resignation of the Company's Chief Executive Officer. As a result of the news, the stock plunged over 40% in one day on unusually large trading volumes. For more details, contact Susan Gross or Deborah R. Gross by Mail: 1515 Locust Street, 2nd Floor, Philadelphia, PA 19102 or visit the firm's Website: http://www.bernardmgross.com CORPPRO CORPORATION: Brodsky & Smith Commences Securities Suit in OH -------------------------------------------------------------------- Brodsky & Smith, LLC initiated a securities class action on behalf of shareholders who acquired Corrpro Companies, Inc (AMEX:CO) securities between April 1, 2000 and March 20, 2002, inclusive. The suit is pending in the United States District Court for the Eastern District of Ohio, against the Company and certain key officers and directors. The action charges that defendants violated the federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Jason L. Brodsky or Evan J. Smith by Mail: 11 Bala Avenue, Bala Cynwyd, PA 19004 by Phone: 877-LEGAL-90 or by E-mail: JBrodsky@Brodsky-Smith.com or Esmith@Brodsky-Smith.com CRYOLIFE INC.: Schiffrin & Barroway Commences Securities Suit in GA -------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Northern District of Georgia, Atlanta Division on behalf of all purchasers of the common stock of CryoLife, Inc. (NYSE: CRY) publicly traded securities during the period between August 11, 2000 and June 26, 2002, inclusive. The complaint 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 charges that the Company, although purporting to be a "leader in the development and commercialization of implantable human tissue" and that "patient safety is of paramount concern to us" was, in reality not in compliance with Food and Drug Administration (FDA) guidelines. Inherent in those representations is that the Company abides by and follows all FDA rules, regulations, and guidelines. On June 17, 2002, the FDA sent a letter to the Company detailing a laundry list of deficiencies and safety hazards at the Company's Kennesaw, Georgia facility. On June 24, 2002, the Company issued a press release, which stated that "since its inception, it has never before received a warning letter." This statement was blatantly false as the Company received a similar FDA warning letter in 1997, detailing "serious regulatory problems." The effect on the Company's stock price was significant and dramatic. The stock fell 18% on June 25, 2002 and an additional 16% on June 26, 2002. After trading as high as $31.31 on May 3, 2002, the stock dipped below $16.00 per share on June 27, 2002. For more details, contact Marc A. Topaz or Stuart L. Berman by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 888-299-7706 (toll free) or 610-667-7706 or by E-mail: info@sbclasslaw.com EDISON SCHOOLS: LeBlanc & Waddell Commences Securities Suit in S.D. NY ---------------------------------------------------------------------- LeBlanc & Waddell filed a securities class action against Edison Schools, Inc. (Nasdaq:EDSN) and three top officers, alleging the Company pumped up its stock price by improperly reporting revenue. The suit was filed in the United States District Court for the Southern District of New York, on behalf of all investors who bought Edison Schools common stock from November 11, 1999 through May 14, 2002. According to the complaint, the Company, a private operator of public schools, misled investors by releasing false financial information about its earnings. The complaint alleges that throughout the class period, the Company issued numerous quarterly press releases and filings with the Securities and Exchange Commission (SEC) reporting the company's supposedly growing revenue stream. These figures were materially false and misleading, the complaint says, because the Company improperly recognized as revenue money paid for teacher salaries, student transportation, and utility bills. In fact, the Company never received the money because it was remitted directly to the Company's "clients," namely local school districts and charter school boards. The lawsuit also claims that despite significant shareholder losses during the class period, the Company's President and CEO paid himself more than $5 million annually and in one year alone cashed out stock options in excess of $15 million. According to the suit, other top executives sold blocks of Company stock worth at least $5.5 million each. On May 14, 2002, the Company announced that it had been the subject of an SEC investigation and has entered into a settlement with the SEC under which it agreed to reclassify the revenues the Company had reported for numerous quarters. That day, Company stock closed at $2.94 per share, down significantly from a class period high of $36.75. For more details, contact Chad A. Dudley by Mail: 5353 Essen Lane, Suite 420, Baton Rouge LA 70809 by Phone: 800-988-314 or by E-mail: cdudley@lw-law.net FLEXTRONICS INTERNATIONAL: Bernard Gross Lodges Securities Suit in NY --------------------------------------------------------------------- Bernard M. Gross PC initiated a securities class action on behalf of all persons who purchased or acquired Flextronics International Ltd. (NASDAQ:FLEX) securities between October 2, 2001 through June 4, 2002. The case is pending in the United States District Court for the Southern District of New York against the Company and: (1) Michael E. Marks, (2) Michael McNamara and (3) Robert R. Dykes 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 October 2, 2001 and June 4, 2002. Specifically, the complaint alleges that defendants repeatedly emphasized that the Company was not experiencing declining sales nor being affected by the slowdown in the US or global economy, when, in fact, that was not true. The suit alleges that many of the Company's customers were experiencing severe financial difficulty such that it was highly foreseeable that they would be unable to complete anticipated sales, thereby causing the Company to suffer a decline in its revenues. The suit further alleges that defendants under-reported the amount of financing needed to complete the Company restructuring and over-stated the status of the completion of this reorganization. These alleged false statements concerning the Company's financial and operation condition were made in order to allow defendants to raise cash by selling more equity during the upcoming months. On June 4, 2002, defendants shocked the market when they finally revealed that the restructuring, which was purportedly paid for in October 2001 and substantially completed thereafter, was still far from complete. Defendants now admitted that there were at least an additional $150 million in restructuring charges that had to be recorded. In addition, defendants also stated that they could not possibly meet the Company's previous earnings and revenue forecasts for its first fiscal quarter 2003. On June 4, 20002 the stock price closed at $9.89, a 20% decrease from the prior day's closing price. For more details, contact Susan Gross or Deborah R. Gross by Mail: 1515 Locust Street, 2nd Floor, Philadelphia, PA 19102 or visit the firm's Website: http://www.bernardmgross.com KNIGHT TRADING: Marc Henzel Commences Securities Suit in New Jersey ------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court, District of New Jersey, on behalf of purchasers of the securities of Knight Trading Group, Inc. (Nasdaq:NITE) between February 29, 2000 and June 3, 2002, inclusive. 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 February 29, 2000 and June 3, 2002, thereby artificially inflating the price of Company securities. The complaint alleges that throughout the class period, defendants issued statements regarding the Company's financial performance and trading practices. As alleged in the complaint, these statements were materially false and misleading because they failed to disclose and/or misrepresented, among other things: (1) that Company traders were engaging in an elaborate system of trading-rule violations known as "front-running," in which customer orders were delayed while defendants' traders made purchases in the same stocks ordered by customers, thereby benefiting themselves at the expense of the customer; and (2) that the Company's front-running practices subjected the Company to the heightened risk that it would be sanctioned by the National Association of Securities Dealers (NASD). On June 3, 2002, the last day of the class period, the Company disclosed that its trading practices were being investigated by both the Securities and Exchange Commission and the NASD. Following this announcement, on June 4, 2002, when the market opened for trading, shares of the Company plummeted 28% from the previous day's close. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave, Suite 202 Bala Cynwyd, PA 19004-2808 by Phone: 888-643-6735 or 610-660-8000 by Fax: 610-660-8080 by E-mail: Mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182. KNIGHT TRADING: Schiffrin & Barroway Commences Securities Suit in NJ -------------------------------------------------------------------- Schiffrin & Barroway LLP initiated a securities class action against Knight Trading Group, Inc. (Nasdaq:NITE), claiming that the company misled investors about its business and financial condition. The suit is pending in the US District Court for the District of New Jersey, on behalf of all investors who bought Company securities between from February 29, 2000 through June 3, 2002. The suit alleges that the New Jersey-based Company issued statements regarding the Company's financial performance and trading practices. As alleged in the complaint, these statements were materially false and misleading because they failed to disclose and/or misrepresented, among other things: (1) that Company traders were engaging in an elaborate system of trading-rule violations known as "front-running," in which customer orders were delayed while defendants' traders made purchases in the same stocks ordered by customers, thereby benefiting themselves at the expense of the customer; and (2) that the Company's front-running practices subjected the Company to the heightened risk that it would be sanctioned by the National Association of Securities Dealers. On June 3, 2002, the last day of the class period, the Company disclosed that its trading practices were being investigated by both the Securities and Exchange Commission and the NASD. Following this announcement, on June 4, 2002, when the market opened for trading, shares of the Company plummeted 28% from the previous day's close. For more details, contact Shareholder Relations Manager by Phone: 888-299-7706 (toll free) or 610-822-2221 by E-mail: info@sbclasslaw.com MERCK & CO.: Rabin & Peckel Commences Securities Fraud Suit in NJ ----------------------------------------------------------------- Rabin & Peckel LLP initiated a securities class action in the United States District Court for the District of New Jersey, on behalf of all persons or entities who purchased Merck & Co., Inc. (NYSE:MRK) between July 23, 1999 through June 20, 2002, both dates inclusive against the Company and: (1) Kenneth C. Frazier, (2) Richard C. Henriques, (3) Raymond V. Gilmartin, (4) Judy C. Lewent and (5) Mary M. McDonald 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 publicly issuing a series of material misrepresentations during the class period, thereby artificially inflating the price of Company securities. The suit alleges that, throughout the class period, defendants issued numerous statements and filed quarterly and annual reports with the SEC which described the Company's increasing revenues and financial performance. As alleged in the suit, these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (i) that the Company had materially overstated its revenues (by roughly $4.6 billion in year 2001 alone) by improperly including as revenue the value of co-payments made by consumers to their pharmacies (since the entire amount of the co-payment is paid directly to, and retained by, the pharmacy); (ii) that the financial statements prepared and filed by defendants during the class period were not prepared in accordance with Generally Accepted Accounting Principles (GAAP) because neither Merck nor its Medco unit ever received any revenue from the co-payments that were made to pharmacies; and (iii) that as a result, defendants' statements concerning the size of the Company's revenues and financial results were lacking in a reasonable basis at all relevant times. On June 21, 2002, The Wall Street Journal published an article which revealed that Merck had boosted its reported revenues by billions of dollars (by roughly $4.6 billion in year 2001 alone) by improperly including as revenue the value of co-payments made by consumers with a prescription-drug card to their pharmacy to cover their portion of the cost of a prescription under an insurance plan. Following this report, shares of the Company fell $2.22 per share to close at $49.98 per share, after reaching a class period high of $94.875 on November 29, 2000, on volume of more than 15.2 million shares traded, or more than twice the average daily volume. For more details, contact Eric J. Belfi or Sharon Lee by Phone: 800-497-8076 or 212-682-1818 by Fax: 212-682-1892 or by E-mail: email@rabinlaw.com or visit the firm's Website: http://www.rabinlaw.com MERRILL LYNCH: Cohen Milstein Commences Securities Suit in S.D. NY ------------------------------------------------------------------ Cohen Milstein Hausfeld & Toll, PLLC initiated a securities class action in the United States District Court for the Southern District of New York on behalf of purchasers of shares of the Merrill Lynch Internet Infrastructure HOLDRs (AMEX:IIH) during the period of Feb. 24, 2000, through April 8, 2002. The suit names as defendants Merrill Lynch & Co., Inc. (NYSE:MER), Merrill Lynch Pierce Fenner & Smith, the Internet Infrastructure HOLDRs Trust and signatories of the Registration Statement and Prospectus filed with the SEC on Feb. 24, 2000. The complaint alleges that defendants violated sections 11, 12(a)(2), and 15 of the Securities Act of 1933 by issuing a series of false and misleading statements, and omissions of material fact, in the prospectus filed in connection with the initial public offering of the Internet Infrastructure HOLDRs. For more details, contact Steven J. Toll or Diana Steele Mail: 1100 New York Avenue, NW, West Tower, Suite 500, Washington DC 20005 by Phone: 888-240-0775 or 202-408-2600 by E-mail: stoll@cmht.com or dsteele@cmht.com or visit the firm's Website: http://www.cmht.com MERRILL LYNCH: Finkelstein Thompson Commences Securities Suit in MI ------------------------------------------------------------------- Finkelstein, Thompson & Loughran initiated a securities class action lawsuit against Merrill Lynch & Co., Inc. and the former head of its Internet group, Henry Blodget, on behalf of purchasers of Lycos, Inc. (n/k/a/ Terra Networks, S.A. (Nasdaq: TRLY) securities between June 15, 1999 and May 17, 2000, inclusive. Recently, the New York Attorney General, Eliot L. Spitzer lodged a similar probe against Merrill Lynch concerning Aether Systems and other "new economy" companies. Eliot L. Spitzer's published probe discusses: Buy.com, GoTo.com (n/k/a Overture Services (Nasdaq: OVER)), iVillage (Nasdaq: IVIL), Looksmart (Nasdaq: LOOK), Mypoints.com, Quokka Sports (PNK: QKKAQ.PK), Webvan (PNK: WBVNQ.PK), and Lifeminders (n/k/a Cross Media Marketing Corp (Amex:XMM)). Subsequently, Merrill Lynch agreed to pay $100 million to settle these charges. On June 5, 2002, Eliot L. Spitzer was reported as saying that "investors should use (the published probe) to regain some of their stock losses." The suit, filed in the United States District Court for the Eastern District of Michigan, alleges that Merrill Lynch and its well-known former Internet stock analyst Henry Blodget violated the federal securities laws by knowingly issuing false and misleading analyst reports regarding these "new economy" companies during the Class Period. Based on e-mails and other internal Merrill Lynch communications, which were made public as a result of the investigation conducted by the New York State Attorney General, Eliot L. Spitzer, the suit alleges that defendants failed to disclose a significant conflict of interest between their investment banking and research departments. Specifically, the suit alleges that Henry Blodget and other Merrill Lynch analysts issued very favorable analyst reports regarding these "new economy" companies to the public when they allegedly knew that the positive recommendations were unwarranted and false. The suit further alleges that, unbeknownst to the investing public, Merrill Lynch's buy recommendations and price targets for these "new economy" companies were driven by its efforts to attract lucrative investment banking business from these "new economy" companies rather than by the companies' fundamental merits. For more details, contact Adam T. Savett by Phone: 202-337-8000 or visit the firm's Website: http://www.ftllaw.com MONTANA POWER: Dyer & Shuman Commences Securities Fraud Suit in Montana ----------------------------------------------------------------------- Dyer & Shuman, LLP initiated a securities class action in the United States District Court for the District of Montana on behalf of purchasers of the securities of Montana Power Company, now known as Touch America Holdings, Inc. (NYSE: TAA), during the period between January 30, 2001 and November 14, 2001, against the Company and certain of its officers and directors. 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 January 30, 2001 and November 14, 2001, thereby artificially inflating the price of Company securities. Throughout the class period, defendants issued positive statements regarding the Company's successful restructuring from an energy company into a standalone telecommunications concern. Defendants' statements were materially false and misleading because they failed to disclose material adverse facts which were known to defendants or recklessly disregarded by them. For example, the Company was having problems with the assets that it acquired from Qwest Communications International (which had become its principal assets in lieu of the power generation assets, which it had sold) and in its relationship with Qwest. As a result of these problems, the Company was experiencing declining revenues in its telecommunications business, was experiencing declining demand for its products and services, and as a result, the Company's restructuring as a standalone telecommunications company was not meeting with success. On November 14, 2001, the Company issued a press release announcing its financial results for the third quarter of 2001, the period ending September 30, 2001, and disclosed that the Company's quarterly losses "reflect the continued slowing of the nation's economy and the difficult transition of Montana Power from a diversified energy company to Touch America." The press release also revealed that, as a result of poor third quarter results, the Company was not in compliance with certain financial covenants under its Senior Secured Credit Facility. Last, the press release revealed that the Company was engaged in litigation with Qwest concerning its purchase of certain assets from Qwest in June 2000 - litigation which had been ongoing since August 2001, but not meaningfully revealed to Montana Power investors. For more details, contact Trig R. Smith by Mail: 801 E. 17th Avenue Denver, CO 80218 or by Phone: 303-861-3003/800-711-6483 PEROT SYSTEMS: Emerson Firm Commences Securities Fraud Suit in N.D. TX ---------------------------------------------------------------------- The Emerson Firm initiated a securities class action in the United States District Court for the Northern District of Texas, Dallas Division on behalf of purchasers of Perot Systems Corp. (NYSE:PER) publicly traded securities during the period between February 2, 1999 and June 7, 2002, inclusive. The complaint 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 defendants omitted to disclose crucial facts regarding risky business practices in which the Company was engaged in order to try to obtain new consulting business and generate additional revenues. The complaint further alleges that when Wall Street learned of these practices after California State Sen. Joseph Dunn unearthed a Company sales presentation mapping out strategies to exploit weaknesses and loopholes in the California power grid, the Company's stock tumbled 19% on June 5, 2002 and an additional 11.3% to close at $12.90 on June 6, 2002, down from its class period high of $85.75. For more details, contact Tanya Autry by Phone: 800-663-9817 or by E- mail: tanya.autry@worldnet.att.net SEEBEYOND TECHNOLOGY: Brodsky & Smith Commences Securities Suit in CA --------------------------------------------------------------------- Brodsky & Smith, LLC initiated a securities class action on behalf of shareholders who acquired SeeBeyond Technology Corporation (Nasdaq:SBYN) securities between April 23, 2001 and April 22, 2002, inclusive, in the United States District Court for the Central District of California, against the Company and certain key officers and directors. The action charges that defendants violated the federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Jason L. Brodsky or Evan J. Smith by Mail: 11 Bala Avenue, Bala Cynwyd, PA 19004 by Phone: 877-LEGAL-90 or by E-mail: JBrodsky@Brodsky-Smith.com or Esmith@Brodsky-Smith.com UNIROYAL TECHNOLOGY: Cohen Milstein Commences Securities Suit in VA ------------------------------------------------------------------- Cohen, Milstein, Hausfeld & Toll, PLLC initiated a securities class action in the United States District Court for the Eastern District of Virginia on behalf of all persons, including former Sterling shareholders and the former holders of Sterling Semiconductor, Inc. securities, who acquired Uniroyal Technology Corporation's (Nasdaq:UTCI) common stock, pursuant to a Proxy, a Prospectus and a Registration Statement in connection with a merger agreement, which closed on May 31, 2000. The Complaint alleges that Uniroyal and certain of its officers and directors violated Sections 11, 12(1)(a)(2) and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, in an effort to inflate its stock price and induce Sterling shareholders to vote in favor of the merger. The suit further alleges defendants misrepresented and failed to disclose material facts relating to the Company's production facilities and ability to manufacture certain High Brightness Light Emitting Diodes (HB-LEDs) products in its Optoelectronics Division. The suit alleges that contrary to the representations made by the defendants, the Company was unable to manufacture HB-LED's in commercial quantities. When the truth began to be disclosed after the Merger, Company stock price dropped dramatically. It now trades at approximately $0.12 per share. For more details, contact Daniel S. Sommers or Elizabeth Finberg or Lisa Polk by Mail: 1100 New York Avenue, NW, Suite 500 - West Tower, Washington, DC 20005 by Phone: 888-240-0775 or 202-408-4600 or by E- mail: dsommers@cmht.com, efinberg@cmht.com or lpolk@cmht.com. WORLDCOM INC.: Lockridge Grindal Commences Securities Suit in S.D. MI --------------------------------------------------------------------- Lockridge Grindal Nauen PLLP initiated a securities class action on behalf of all persons who purchased or otherwise acquired the common stock of WorldCom, Inc. (Nasdaq:WCOM) between April 26, 2001 and June 25, 2002, in the United States District Court for the Southern District of Mississippi at Jackson. The action seeks remedies under the Securities Exchange Act of 1934 and names as defendants the Company and: (1) Bernard J. Ebbers, (2) Scott D. Sullivan and (3) Arthur Andersen, LLP The complaint alleges that during the class period, the Company, the nation's second-largest long-distance carrier, overstated its cash flow by $3.8 billion during the last five quarters. As detailed in the complaint, instead of the $1.4 billion in profits the Company reported in 2001 and $130 million so far this year, the Company now admits it lost money during those periods but does not know how much. As further detailed in the complaint, the Company, under the guidance of Mr. Ebbers and Mr. Sullivan, booked basic operating costs, such as basic network maintenance, as capital investments, a fictitious practice that hid expenses, inflated cash flow and allowed the Company to falsely report profits instead of losses. This practice boosted cash flow because it improperly treated costs as an asset that could be written down over time, not immediately, a blatant violation of Generally Accepted Accounting Principles and Generally Accepted Accounting Standards. Absent this improper accounting practice, the Company would have reported a net loss for 2001, as well as the first quarter of 2002. Instead, the Company reported false profits of $1.4 billion for 2001 and $130 million for the first quarter of 2002. The complaint also alleges that Arthur Andersen also knew that this type of accounting practice was improper and, according to published reports, Andersen's audit reports "could not be relied upon for at least" the five quarters in question. As an experienced auditor charged with the responsibility of preparing disclosures to be filed with the SEC, Andersen knew the line cost transfers did not comport with GAAP and GAAS, but either intentionally or recklessly disregarded this pervasive fraud to the detriment of the class. Andersen, however, issued a March 7, 2002, "Report Of Independent Public Accountants" that was included in the Company's false 2001 Form 10-K that was filed with the SEC on March 13, 2002. Andersen's opinion letter falsely stated that it had properly audited the Company's 2001 balance sheet and that in Andersen's opinion "(w)e believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of WorldCom, Inc. and subsidiaries as of December 31, 2000 and 2001, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States." For more details, contact Gregory J. Myers by Mail: 100 Washington Avenue South Suite 2200 Minneapolis, MN 55401 by Phone: 612-339-6900 or by E-mail: gjmyers@locklaw.com WORLDCOM INC.: Rabin & Peckel Commences Securities Fraud Suit in NY ------------------------------------------------------------------- Rabin & Peckel LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of purchasers of Global Crossing Ltd. (NYSE:GX) securities between June 15, 1999 and November 10, 2001, inclusive. The firm also filed another class action complaint was also filed in the Southern District of New York on behalf of purchasers of WorldCom, Inc. (Nasdaq:WCOM) securities between July 3, 1999 through April 21, 2002, inclusive. Salomon Smith Barney, Inc. and Jack Grubman are named as defendants in both actions. The suits allege that defendants violated sections 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder, by the issuance of analyst reports regarding Global Crossing and WorldCom which recommended the purchase of Global Crossing and WorldCom common stock and which set price targets for Global Crossing and WorldCom common stock without any reasonable factual basis. Furthermore, when issuing their Global Crossing and WorldCom reports, defendants failed to disclose significant, material conflicts of interest which they had, in light of their use of Grubman's reputation and his Global Crossing and WorldCom analyst reports, to obtain investment banking business for Salomon. Furthermore, in issuing their Global Crossing and WorldCom reports, in which they were recommending the purchase of Global Crossing and WorldCom stock, defendants failed to disclose material, non-public, adverse information which they possessed about Global Crossing and WorldCom as well as their true opinions about Global Crossing and WorldCom. Defendants also failed to disclose that Grubman, while issuing reports on Global Crossing and WorldCom recommending that investors purchase Global Crossing and WorldCom common stock, had been intimately involved in the management of Global Crossing and WorldCom. For more details, contact Eric J. Belfi or Sharon Lee by Phone: 800-497-8076 or 212-682-1818 by Fax: 212-682-1892 by E-mail: email@rabinlaw.com or visit the firm's Website: http://www.rabinlaw.com ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, 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. 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