/raid1/www/Hosts/bankrupt/CAR_Public/020725.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, July 25, 2002, Vol. 4, No. 146
Headlines
DAIMLERCHRYSLER AG: Class Action v. Mercedes Spurs Justice Dept. Probe
DRYVIT SYSTEMS: Settlement Proposed In Synthetic Stucco Suit
ENRON CORPORATION: Congressional Investigators Say Enron Hid Loans
GENERAL MOTORS: Appeals Court Overturns Class-Action Status
WORLDCOM INC.: Timeline of Giant's Incredible Collapse
* Slavery Reparations Movement Gains Momentum In Florida
New Securities Fraud Cases
AMERICAN EXPRESS: Bernstein Liebhard Commences Suit in S.D. New York
AOL TIME: Marc Henzel Commences Securities Fraud Suit in S.D. New York
AOL TIME: Bernstein Liebhard Commences Securities Fraud Suit in S.D. NY
CAPITOL ONE: Squitieri & Fearon Commences Securities Suit in E.D. VA
CROSS MEDIA: Marc Henzel Commences Securities Fraud Suit in S.D. NY
CRYOLIFE INC.: Marc Henzel Commences Securities Fraud Suit in N.D. GA
DUKE ENERGY: Marc Henzel Commences Securities Fraud Suit in S.D. NY
EL PASO: Marc Henzel Commences Securities Fraud Suit in S.D. Texas
FLEXTRONICS INTERNATIONAL: Wolf Haldenstein Files Securities Suit in NY
HALLIBURTON COMPANY: Marc Henzel Commences Securities Suit in N.D. TX
HPL TECHNOLOGIES: Abbey Gardy Initiates Securities Suit in N.D. CA
HPL TECHNOLOGIES: Weiss & Yourman Files Shareholders Suit in N.D. CA
HPL TECHNOLOGIES: Brodsky & Smith Probes Potential Securities Claims
KNIGHT TRADING: Marc Henzel Commences Securities Suit in New Jersey
MEDIA MARKETING: Brodsky & Smith Begins Shareholders Suit in S.D. NY
NICOR INC.: Charles Piven Commences Securities Fraud Suit in N.D. IL
OMNICOM GROUP: Marc Henzel Commences Securities Fraud Suit in S.D. NY
PERKINELMER INC.: Marc Henzel Commences Securities Suit in MA Court
SEEBEYOND TECHNOLOGY: Milberg Weiss Commences Securities Suit in CA
SEEBEYOND TECHNOLOGIES: Marc Henzel Commences Securities Suit in CA
SONUS NETWORKS: Marc Henzel Commences Securities Fraud Suit in MA Court
SUPERVALU INC.: Marc Henzel Commences Securities Fraud Suit in MN Court
TELLABS INC.: Marc Henzel Commences Securities Fraud Suit in N.D. IL
UNIROYAL TECHNOLOGY: Marc Henzel Commences Securities Suit in M.D. FL
VIVENDI UNIVERSAL: Marc Henzel Commences Securities Suit in S.D. NY
*********
DAIMLERCHRYSLER AG: Class Action v. Mercedes Spurs Justice Dept. Probe
----------------------------------------------------------------------
The Department of Justice's investigation into whether DaimlerChrysler
AG's Mercedes-Benz unit colluded with dealers in New York to keep new
vehicle prices there artificially high, stems directly from the 1999
lawsuit that alleged the conspiracy between Mercedes, an accounting
firm and 27 New York dealers to avoid price competition in the New York
area, the Detroit Free Press recently reported.
A federal judge turned down DaimlerChrysler's motion last September to
dismiss the lawsuit, which had been brought by a single dealer who is
now awaiting class-action certification.
DaimlerChrysler said Mercedes-Benz USA LLC, the sales arm for Mercedes,
and Mercedes-Benz Manhattan Inc., have been served with grand-jury
subpoenas as the federal government investigates allegations of price-
fixing across New York, New Jersey and Connecticut. The probe is being
handled by the antitrust division of the U.S. Department of Justice in
New York. Word of the investigation surfaced recently in a
DaimlerChrysler filing with the U.S. Securities and Exchange
Commission.
The lead plaintiff in the class action, Tamir Shanshab, owner of Coast
Automotive Group in Toms River, New Jersey, alleges that Mercedes and
various East Coast dealers shared normally confidential price and
profit information and enforced limits on sales and discounts in order
to artificially pump up the profits. He said dealers such as he who
tried to compete on price or didn't comply with other dealers were
"singled out and berated." The designated Class Period of the
conspiracy was alleged to be from February 1992 to August 1999.
In a statement released by Mercedes-Benz USA, the company said it was
unaware of any allegations beyond those in the class-action lawsuit.
"We are confident that, once the facts are brought out, it will be
clear that there was no wrongdoing. While we believe that the
allegations are without substance, we elected to disclose the
government inquiry in our SEC filing in the interest of transparency,"
the statement said.
DRYVIT SYSTEMS: Settlement Proposed In Synthetic Stucco Suit
------------------------------------------------------------
A tentative agreement has been reached between the court and Dryvit
Corp. to settle a class-action lawsuit filed on behalf of the owners of
homes clad in the Dryvit Exterior Insulation and Finish System (EIFS),
the Atlanta Journal-Constitution has reported. Under the terms of the
agreement the company will pay a portion of the cost of the repairs.
The lawsuit was filed in Jefferson County, Tenn., and is open to
homeowners in every state, except North Carolina. People who as of
June 5, 2002, own houses that were covered wholly or in part with the
company's product after January 1, 1989, may file a claim to be part of
the settlement, said Gary Mason, co-lead counsel for the plaintiffs in
Posey v. Dryvit Systems.
Synthetic stucco, a layered system of foam backing, mesh, a sealant and
a top coat, was used extensively for home building beginning in the mid
1980s. It was touted as a less expensive alternative to brick and was
considered a superior product because of its energy-saving qualities.
But before long problems began to surface: Water leaked through poorly
sealed openings around windows and door or under eaves; got trapped in
the foam backing and rotted the wood framing beneath. Stucco in
contact with the ground allowed termites to tunnel up through the foam.
Repairs could be extensive and expensive.
Builders like John Wieland, known for distinctive home design, were
major user of synthetic stucco. According to Rick Carruthers,
president of Wieland's Atlanta Homebuilding, the synthetic stucco
appeared to be a premium product. While it cost more than real stucco,
it did not have its problems.
"It didn't crack and the pigmentation was permanent, so you never had
to paint it," Mr. Carruthers said. "But we stopped using it in the
mid-'90s when problems began to surface."
Like other local builders, Wieland hired subcontractors to supply and
install the product. Often the company did not know which of several
synthetic stucco products was used on specific houses and, installers,
being small-business men, usually kept no records.
Therein lies the problem for prospective claimants in the suit.
Homeowners who want to become part of the suit must prove that they
have Dryvit EIFS on their houses and not one of the other brands. One
clue is that the mesh Dryvit used is blue. But sometimes the
contractor used other manufacturers base coat or foam core. According
to Harry Johnson, owner of EIFS, a chemical test is the only way to
prove that the base coat is one brand or another.
Only owners who can prove the entire installation is Dryvit can qualify
for inclusion in the suit. And the manufacturer is not going to be
helpful. "That's their problem," snapped Ken Nota, corporate counsel
for Dryvit. "I'm not going to help them prove they have our product."
To say homeowners are reluctant to talk about their synthetic stucco
homes and the problems they have had is an understatement. They are
terrified they will never be able to sell their homes.
The settlement, if it is found fair at a hearing on October 1, will pay
for half the cost of repairs up to $30,000 on damaged dwellings and
provide free property inspections and a three-year limited warranty.
The settlement is designed to help people who have to sell their homes,
said Mr. Mason.
ENRON CORPORATION: Congressional Investigators Say Enron Hid Loans
------------------------------------------------------------------
Congressional investigators say Enron Corp. raised billions of dollars
in cash from major banks in what amounted to loans that it concealed as
it struggled to survive, The Washington Post recently reported.
In the final year before its bankruptcy protection filing, J.P. Morgan
Chase & Co., Citigroup Inc. and other banks transferred more than $5
billion to Enron, using complex transactions that were labeled as
energy trades, the newspaper reported, citing unnamed sources.
Enron shareholders have named J.P. Morgan Chase along with eight other
Wall Street firms as co-defendants in class-action lawsuits, charging
they schemed with the former Enron executives in ways they knew would
"bilk" investors out of at least $25 billion.
The question the Senate Governmental Affairs subcommittee on
investigations will examine, and which the shareholder lawsuits to some
extent already allege, is the extent to which major financial
institutions like J.P. Morgan and Citicorp knew of and aided Enron's
accounting deceptions. Enron, according to the newspaper, used the
payments to improve its cash flow on its financial statements, rather
than booking them as the debt they actually were.
The complex transactions, known as prepays, hid part of Enron's
mounting debt. These large advance payments received from the banks
were for supplies of natural gas or other commodities for which Enron
had contracts of delivery over a number of years.
GENERAL MOTORS: Appeals Court Overturns Class-Action Status
-----------------------------------------------------------
A discrimination lawsuit filed against General Motors Acceptance Corp.
(GMAC), by black customers claiming that they were charged higher
interest rates on car loans than whites was recently stripped of class-
action status, reports the Associated Press Newswires.
The 6th U.S. Circuit Court of Appeals, based in Cincinnati, agreed with
GMAC that claims for monetary damages involve "highly individualized
determinations that are not appropriate" for class-action status.
The original lawsuit was filed in 1998 by Addie D. Coleman, a black
woman upset over the financing agreement she received at a Nashville
dealership. She sued to obtain a change in the company's lending
practices and money back for black consumers who paid more than the
objective lending rate in the last 11 years.
Judge Alan E. Norris wrote that deciding the amount each plaintiff may
receive "eliminates the efficiencies created by adjudicating these
claims on a class-wide basis." Judges Eugene E. Siler Jr. and Ronald
Lee Gilman concurred.
The court also cited concerns by the U.S. Supreme Court over the
constitutionality of approving class-action status for lawsuits seeking
monetary damages. "Certification of a mandatory class that includes
money damages potentially compromises the Seventh Amendment and due
process rights of individual claimants," Judge Norris wrote.
The Seventh Amendment states that in lawsuits involving more than $20,
"the right of trial by jury shall be preserved, and no fact tried by a
jury, shall be otherwise re-examined in any court of the United
States."
The case was remanded back to U.S. District Judge Aleta Trauger of
Nashville, who expanded the lawsuit as a class action, but limited it
to black consumers who bought cars in Tennessee.
Clinton Watkins, Ms. Coleman's attorney in Nashville, said that a
motion to amend the lawsuit to remove claims for monetary damages was
submitted to Judge Trauger earlier this year. Since the issue was
already on appeal, Judge Trauger said she did not have the jurisdiction
to grant the motion. Instead, she filed papers in February showing her
intent to grant the motion once the appellate process ended.
"We will file an amended complaint, which the trial court has indicated
they will allow, and move for class certification consistent with the
Sixth Circuit opinion," Mr. Watkins said.
Ms. Coleman's lawsuit alleges that GMAC struck deals with car dealers
nationwide to increase finance rates. She contends dealers who
arranged financing for car buyers would obtain an objective rate from
the lender and then inflate the costs for customers they thought would
pay higher rates. The dealers would then split the extra money with
the lender without the customers' knowledge.
Another black Nashville woman filed a similar lawsuit against Nissan
Motors Acceptance Corporation; it remains a limited class-action
lawsuit.
Lawyers who filed the lawsuits estimate tens of thousands of black
consumers were overcharged $100 million or more by the automotive
financing companies.
WORLDCOM INC.: Timeline of Giant's Incredible Collapse
------------------------------------------------------
June 26: The US Securities and Exchange Commission files fraud charges
against WorldCom, a day after the company announced officials had
misrepresented US$3.9 billion in expenses for 2001 and the first
quarter of this year.
Standard and Poor's lowers its long-term corporate credit rating on
WorldCom to CCC- from B- -, citing "the high degree of uncertainty
surrounding WorldCom's ability to ultimately pay its outstanding debt"
of some US$30 billion.
June 28: Angry US investors holding WorldCom bonds file a class-action
suit in a federal court in Mississippi, brought on behalf of the
bondholders by New York's Wechsler Harwood Halebian and Feffer for
actions acquired between April 26, 2001 and June 25, 2002.
July 1: WorldCom defaults on two unsecured credit facilities worth a
total of US$4.25 billion, and says it is investigating possible new
accounting irregularities.
Standard and Poor's further downgrades its credit rating for WorldCom's
debt, already deemed to be equivalent to junk bonds.
The long-term corporate credit and senior unsecured debt ratings are
cut to CC- -, meaning the company is "highly vulnerable" to being
unable to pay its obligations.
July 3: Richard Breeden, a former Securities and Exchange Commission
chairman, is named by a New York judge as a corporate monitor to
oversee WorldCom operations.
July 8: As a congressional panel holds a hearing to get to the bottom
of the WorldCom debacle, company officials and its auditor blame each
other for the firm's massive accounting glitch and two former top
executives refuse to answer questions.
July 16: Three California pension funds sue WorldCom, its former
executives and the banks involved in its May 2001 bond offering,
seeking to recover US$318.5 million in investment losses.
July 21: WorldCom files for protection under Chapter 11 of the
bankruptcy code at 8:55 pm in the US District Court for the Southern
District of New York.
* Slavery Reparations Movement Gains Momentum In Florida
--------------------------------------------------------
A handful of professionals have started a Central Florida reparations
movement, joining an ever-growing national campaign to compensate black
for what their ancestors had to endure, The Orlando Sentinel reported
recently.
Some supporters of reparations seek compensation in the form of cash
for slave descendants, a prospect that legal experts find unlikely.
Other supporters only want to explore the role that government and
industry played during slavery, seek an apology and try to heal the
wounds through discussion. Still others support a reparations fund to
be used for education, job training, health and housing, a fund that
would enable the blacks that need it to get a step up into society's
mainstream.
A landmark class-action lawsuit filed in New York in March helped fuel
interest and debate, the Orlando Sentinel points out. The lawsuit,
brought by slave descendants, contends that three major corporations --
CSX Corp., Aetna Inc. and FleetBoston Financial Corp. -- unjustly
benefited from slavery. The suit seeks billions of dollars in damages.
Black activists, attorneys and respected thinkers have taken up the
cause. A group called the Reparations Coordinating Committee, headed
by Florida attorney Willie Gary, lawyer Johnnie Cochran and Harvard
Professor Charles Ogletree, has been researching a lawsuit against the
government and corporations and plans to file it later this year.
The idea actually has been around since 1865, when the federal
government pledged 40 acres and a mule to all freed slaves -- a promise
that was not fulfilled.
Activist Randall Robinson published a book in 2000 called The Debt:
What America Owes Blacks, which spurred renewed interest. Other
groups, such as the National Coalition of Blacks for Reparations in
America (NCOBRA), have been around for more than a decade. The issue
has spread through the Internet and is the talk of countless chat
rooms.
A "Millions for Reparations" march, organized by NCOBRA, is planned for
Washington, D.C. on August 17.
But reparations have been an emotional, and even divisive issue not
only between whites and blacks, but also within the black community.
"I think that reparations may cause more racial divide than I want to
see," said Dean Mosely, a black Orlando attorney and vice chairman of
the Orange Republican Party. "I think everyone acknowledges that
slavery is wrong, but I reject people hanging on to that and using it
as an excuse not to have certain successes."
Some supporters emphasize the legacy of reparations among other ethnic
groups. The German government and certain companies have paid $5
billion to Holocaust survivors; some Swiss banks paid another $1.25
billion to victims who claim assets held before World War II ended. In
1988, the U.S. government issued an apology and paid $20,000 to
Japanese-Americans interned during World War II.
In addition, at the end of the Civil War, some slave owners were
compensated for the loss of their slaves.
People ask questions during the debate that rages in all kinds of
forums, from over the coffee cups to the more formal setting of a
public hall with the media in full regalia: Should corporations be
blamed today for what took place more than a century ago? What is
adequate compensation? Could the nation pay it without going broke?
Some attempt has been made to answer these questions. About 34.6
million people identified themselves as black on the 2000 U.S. Census.
If each person received $100,000, for example, that would cost the
government or industry $3.46 trillion. By comparison, the entire
federal budget for this year is about $2.1 trillion. So, "that's not
going to happen," said a senior political analyst for the Joint
Center of Economic and Political Studies, a Washington think tank on
black issues. Addressing the realities of the political situation, the
analyst observed that the political climate is such that some
policymakers are even trying to abolish affirmative action, and that's
a more mainstream approach designed to cope with discrimination.
As for the corporate lawsuits, Paul LeBel, a law professor at Florida
State University's law school, said that attorneys would have to
demonstrate that specific victims suffered specific wrongdoing,
something difficult to prove more than a century later. But, Professor
LeBel points out that the lawsuits may draw attention to the need to
confront social ills in the black community, the way tobacco lawsuits
did for health concerns.
Desta Mehoo-Peddie, acting director of the University of Florida Law
School's Center for Study of Race and Race Relations, appears to have
in mind the design of still another kind of lawsuit, one grounded in
genocide. "There is no statute of limitations on murder or genocide.
The transatlantic slave trade was a crime against humanity, and many
corporations benefited greatly from slavery," she said.
The intent of the larger reparations movement is to persuade whites to
acknowledge that discrimination has taken place and that whites have
benefited, even if their ancestor didn't own slaves, the senior analyst
at the Joint Center of Economic and Political Studies said. Generally,
whites are not ready to accept that, he said.
Still, for many blacks, the reparations issue could be resolved largely
with just one gesture: an apology. "We need the government to say,
'Slavery is a heinous crime against humanity, and we as a country have
participated in it. We were wrong and we are sorry,' " said Ms.
Mehoo-Peddie. "That would start the reconciliation."
New Securities Fraud Cases
AMERICAN EXPRESS: Bernstein Liebhard Commences Suit in S.D. New York
--------------------------------------------------------------------
A securities class action lawsuit was commenced on behalf of all
persons who purchased or acquired American Express Company (NYSE: AXP)
securities between July 18, 1999 and July 17, 2001. A copy of the
complaint is available from the Court or from Bernstein Liebhard &
Lifshitz, LLP. Please visit our website at www.bernlieb.com or contact
us at (800) 217-1522 or by email at AXP@bernlieb.com.
The action is pending in the United States District Court for the
Southern District of New York. The complaint alleges that American
Express and certain of its officers and directors made misstatements
and omissions of material fact, including failing to disclose that
American Express was investing in a risky portfolio of high-yield or
"junk" bonds with ratings as low as "single-B" that carried the
potential for substantial losses if default rates in the junk bond
market increased, failing to disclose the true extent of American
Express's total exposure as a result of the foregoing after American
Express wrote down $182 million of its junk bond portfolio in April
2001, and failing to disclose that American Express was taking a
substantial and unnecessary risk by investing in high-yield securities
involving complex risk factors that American Express management and
personnel did not fully comprehend.
The complaint further alleges that after the full truth regarding
American Express's unnecessarily risky and imprudent investment
strategy began to become known to the market on July 18, 2001 when
American Express announced a surprise charge against earnings of $826
million, its third consecutive write-down of high-yield or "junk"
bonds, American Express stock traded as low as $37.17, down from a
class period high of over $62.00.
For more information, contact Ms. Linda Flood, Director of Shareholder
Relations, Bernstein Liebhard & Lifshitz, LLP by phone: 800-217-
1522/212-779-1414
AOL TIME: Marc Henzel Commences Securities Fraud Suit in S.D. New York
----------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court, Southern District of New York on
behalf of purchasers of the securities of AOL Time Warner, Inc. (NYSE:
AOL) between April 18, 2001 and April 24, 2002, inclusive. The action
is pending against the Company and:
(1) Stephen Case,
(2) Michael Kelly,
(3) Richard Parsons and
(4) Gerald M. Levin
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 18, 2001 and April 24, 2002, thereby artificially
inflating the price of Company securities.
As alleged in the complaint, defendants issued numerous materially
false and misleading statements concerning the Company, the synergies
derived from the merger of America Online Inc. and Time Warner, Inc.
and the Company's prospects and earnings projections.
The complaint alleges that these statements were materially false and
misleading because they failed to disclose:
(i) that the merger was not generating the synergies as
represented by defendants;
(ii) that the Company was experiencing declining advertising
revenues; and
(iii) that the Company had failed to properly write down the value
of more than $50 billion of goodwill, thereby artificially
inflating its reported financial results and rendering its
published financial statements materially false and misleading
and in violation of Generally Accepted Accounting Principles.
On April 24, 2002, the last day of the class period, the Company issued
a press release announcing its financial results for the first quarter
of 2002, and revealed that it would be taking a "one-time, non-cash
charge that reduced the carrying value of the Company's goodwill by
approximately $54 billion (Emphasis added.)."
Following this announcement, AOL Time Warner stock closed at $19.30 per
share, a decline of more than 66% from a class Period high of $56.60
per share. During the class period, prior to the disclosure of the
true facts about the Company, AOL Time Warner insiders sold their
personal holdings of AOL Time Warner common stock to the unsuspecting
public for proceeds in excess of $250 million.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave.,
Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735
by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com
AOL TIME: Bernstein Liebhard Commences Securities Fraud Suit in S.D. NY
-----------------------------------------------------------------------
Bernstein Liebhard & Lifshitz LLP initiated a securities class action
on behalf of all persons who purchased or acquired American Online,
Inc. between July 19, 1999 and January 10, 2001 and all persons who
purchased or acquired the common stock of AOL Time Warner, Inc. (NYSE:
AOL) between January 11, 2001 and July 17, 2002, inclusive. The action
is pending in the United States District Court, Southern District of
New York.
The complaint alleges that during the class period, AOL (and later AOL
Time Warner) made misrepresentations and/or omissions of material fact,
including affirmatively misstating AOL and AOL Time Warner's revenue
from online advertising sales by including in such revenues sums
received as one-time payments in connection with the termination of
contracts for online advertising.
The complaint further alleges that AOL artificially inflated its online
advertising revenues for fiscal 1Q 2001 by counting in such revenues
$16.4 million in online advertising that AOL required an enterprise
called 24dogs.com to purchase in order to settle a legal dispute, and
that AOL Time Warner artificially inflated its revenues from online
advertising sales by including in such revenues sums that AOL Time
Warner received in connection with selling online advertising for
online auction site eBay.
The complaint further alleges that defendant Ernst & Young, LLP
violated the federal securities laws by certifying AOL Time Warner's
financial statements as incorporated in AOL Time Warner's Annual Report
for its fiscal year 2001 filed with the U.S. Securities and Exchange
Commission on March 25, 2002 even though it knew (or recklessly failed
to discover) that AOL Time Warner had counted in revenue sums received
in connection with selling online advertising for online auction site
eBay.
When The Washington Post revealed the foregoing on July 18, 2002, AOL
Time Warner stock dropped to as low as $11.75, down from its class
period high of $58.51.
For more details, contact Ms. Linda Flood, Director of Shareholder
Relations by Mail: 10 East 40th Street, New York, New York 10016 by
Phone: 800-217-1522 or 212-779-1414 or by E-mail: AOL@bernlieb.com.
CAPITOL ONE: Squitieri & Fearon Commences Securities Suit in E.D. VA
--------------------------------------------------------------------
Squitieri & Fearon, LLP initiated a securities class action has been
filed in the United States District Court, Eastern District of
Virginia, Alexandria Division on behalf of those who purchased Capital
One Financial Corp. (NYSE:COF) common stock during the period from
March 29, 2001 through July 16, 2002.
The suit charges the Company and certain of its officers and directors
with violating the federal securities laws. Those officers and
directors are:
(1) Richard D. Fairbank, Chairman and Chief Executive Officer,
(2) Nigel W. Morris, President and Chief Operating Officer,
(3) David M. Willey, Executive Vice President and Chief Financial
Officer and
(4) Dennis Liberson, Vice President
The lawsuit claims that the Company and the officers who are named in
the Complaint made a series of false and misleading statements and
omissions of material fact regarding the percentage of sub-prime loans
in the CapOne loan portfolio and about the adequacy of the Company's
allowances and reserves as well as the quality and capabilities of its
internal controls.
For more details, contact Lee Squitieri or Stephen J. Fearon, Jr. by
Phone: 800-432-8174 or 646-487-3049 or by E-mail:
Stephen@sfclasslaw.com
CROSS MEDIA: Marc Henzel Commences Securities Fraud Suit in S.D. NY
-------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Southern District of New
York, on behalf of all persons and entities who purchased or otherwise
acquired the common stock of Cross Media Marketing Corporation (ASE:
XMM) between November 5, 2001 through July 11, 2002, inclusive. The
suit names as defendants the Company and Ronald Altbach.
The complaint charges the Company and Ronald Altbach, Chief Executive
Officer and Chairman of the Board of Directors, with violations of
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and
Rule 10b-5, by issuing a series of materially false and misleading
statements to the market during the class period.
On November 5, 2001, the start of the class period, the Company
announced that it expected both revenues and earnings for 2002 to
increase in excess of 50 percent. Defendants continued to issue
numerous press releases during the class period, which touted the
Company's performance and represented that revenues and earnings were
increasing. Additionally, defendants misrepresented the impact and
nature of the FTC proceedings brought against the Company and others.
The material misstatements and omissions had the cause and effect of
creating in the market an unrealistically positive assessment of Cross
Media and its business, finances and operations, thus causing the
Company's common stock to be overvalued and artificially inflated at
all relevant times.
The truth regarding Cross Media was not fully disclosed until July 12,
2002, when defendants finally revealed that Cross Media would have a
loss for the second quarter of 2002 and that revenues for the year
would be significantly less than previously predicted. In reactions to
the July 12 news release and conference call, the common stock price of
Cross Media dropped drastically, from $6.54 on July 10, to $4.88 on
July 11, to $2.71 on July 12.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave.,
Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735
by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com
CRYOLIFE INC.: Marc Henzel Commences Securities Fraud Suit in N.D. GA
---------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Northern District of
Georgia, Atlanta Division on behalf of purchasers of CryoLife, Inc.
(NYSE: CRY) publicly traded securities during the period between August
11, 2000 and June 26, 2002, inclusive.
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 which
detailed "serious regulatory problems."
The effect on Company 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 S. Henzel by Mail: 273 Montgomery Ave.,
Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735
by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com
DUKE ENERGY: Marc Henzel Commences Securities Fraud Suit in S.D. NY
-------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Southern District of New
York against Duke Energy Corporation (NYSE: DUK) and certain of its
principal officers and directors on behalf of all persons or entities
who purchased the Company's common stock between July 22, 1999 and May
17, 2002.
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, throughout the class
period, as alleged in the suit, defendants issued numerous statements
and filed quarterly and annual reports with the SEC, which described
the Company's increasing revenues and financial performance.
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 engaged in approximately $1 billion of
"round-trip" energy trades that provided no economic benefit
for the Company;
(ii) that the Company lacked the necessary internal controls to
adequately monitor the trading of its power; and
(iii) that as a result, the value of the Company's revenues and
financial results were materially overstated at all relevant
times.
On May 17, 2002, the last day of the class period, the Company issued a
press release announcing that it had "analyzed its trades for the
three-year period from 1999 through 2001 to identify those trades which
may have some of the characteristics of sell/buy-back trades." These
trades, known as "round- trip" or "wash" transactions, involve the
simultaneous buying and trading of power in the same price and same
amount and provide no economic benefit to the Company.
Following this announcement, and the disclosure of inquiries by both
the Federal Regulatory Commission and the Securities and Exchange
Commission, the market price of Company stock fell to $30.05 per share,
after reaching a split-adjusted class period high of $44.97 on November
30, 2000.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave.,
Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735
by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com
EL PASO: Marc Henzel Commences Securities Fraud Suit in S.D. Texas
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Southern District of Texas
on behalf of a class consisting of all persons who purchased securities
of El Paso Corporation (NYSE: EP) between July 25, 2001 and May 29,
2002, inclusive.
The suit charges the Company and certain of its officers and directors
with violations of federal securities laws. Among other things,
plaintiff claims that defendants; material omissions and the
dissemination of materially false and misleading statements regarding
the nature of the Company's trading practices and revenues caused its
stock price to become artificially inflated, inflicting damages on
investors.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave.,
Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735
by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com
FLEXTRONICS INTERNATIONAL: Wolf Haldenstein Files Securities Suit in NY
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Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class
action in the United States District Court for the Southern District of
New York on behalf of purchasers of Flextronics International, Ltd.
(Nasdq: FLEX) common stock between October 2, 2001 and June 4, 2002,
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.
The complaint alleges that the Company neglected to reveal that its
business and operations were being harmfully influenced by numerous
adverse issues, such as the fact that the Company was undergoing
decreasing sales as its business started to be affected by adverse
market forces.
During the class period, defendants repetitively stressed that the
Company was unaffected by the reduction in the US or global economy,
which was not true. In fact, throughout the class period, many of the
Company's clients were suffering excessive financial problems such that
it was highly probable that they would not complete expected sales,
causing it to endure a decrease in its revenues.
The suit further alleges that defendants had deliberately and/or
irresponsibly under-reported the quantity of financing necessary to
finalize the Company's restructuring while over-stating the position of
the completion of this reorganization, also making false statements
regarding the Company's financial and operational situation since it
was vital that defendants generate cash by selling more equity
throughout the upcoming months.
On June 4, 2002, defendants announced that there were at least an
additional $150 million in restructuring charges that must be
documented. Additionally, defendants stated that they would not be
able to meet the Company's earlier earnings and revenue forecasts for
its first fiscal quarter 2003.
For more details, contact Fred T. Isquith, Michael Miske, George Peters
or Derek Behnke by Mail: 270 Madison Avenue, New York, New York 10016,
by Phone: 800-575-0735 by E-mail: classmember@whafh.com or visit the
firm's Website: http://www.whafh.com. E-mail should refer to
Flextronics.
HALLIBURTON COMPANY: Marc Henzel Commences Securities Suit in N.D. TX
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Northern District of Texas
on behalf of purchasers of Halliburton Company (NYSE: HAL) publicly
traded securities during the period between July 22, 1999 and May 28,
2002, inclusive.
The complaint charges that the Company violated Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder,
by issuing a series of materially false and misleading statements to
the market between July 22, 1999 and May 28, 2002.
As alleged in the complaint, beginning in the fourth quarter of 1998,
unbeknownst to the public, the Company materially changed its revenue
recognition policy to recognize revenue on claims and change orders
relating to cost-overruns which its clients had not approved.
Previously, the Company would only recognize revenue on approved change
orders or claims.
The suit further alleges that the alteration of the Company's
accounting policy and financial results reported as a result thereof
throughout the class period were materially false and misleading and in
violation of Generally Accepted Accounting Principles (GAAP) because,
among other things, the accounting change was not disclosed to the
public or supported as the preferred accounting treatment in the
Company's financial statements and because collection of the claims or
change orders was not probable and the amounts involved could not be
estimated reliably.
As a result of these violations of GAAP, according to the complaint,
the Company's quarterly and annual earnings press releases and
financial reports filed with the Securities and Exchange Commission
(SEC) throughout the class period were materially false and misleading
and artificially inflated the Company's reported revenues and earnings,
thereby artificially inflating the price of Company securities.
On May 28, 2002, after the close of the market, the Company issued a
press release announcing that the SEC is conducting an investigation
into its accounting for cost overruns. In reaction to the press
release, the price of the Company common stock dropped by 3.3% in one
day on extremely heavy trading volume.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave.,
Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735
by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com
HPL TECHNOLOGIES: Abbey Gardy Initiates Securities Suit in N.D. CA
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The law firm of Abbey Gardy, LLP has filed a class action against HPL
Technologies Inc. (Nasdaq:HPLA) and David Lepejian, HPL's CEO and
Chairman and Ita Geva, HPL's Chief Financial Officer in the United
States District Court for the Northern District of California, San Jose
Division, on behalf of all persons or entities who purchased HPL
Technologies securities during the period from July 31, 2001, the day
HPL commenced trading on the Nasdaq to July 19, 2002, inclusive, the
day HPL announced that it had initiated an investigation into financial
and accounting irregularities.
The Complaint alleges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market during the Class Period, thereby artificially inflating the
price of HPL Technologies securities.
The complaint alleges that throughout the Class Period defendants
engaged in a massive fraud to, among other things, inflate HPL's
revenues. The complaint alleges that defendant made a series of
misleading statement starting on July 31, 2001. The complaint alleges
that the press releases dated August 17, 2001, October 24, 2001,
January 29, 2002, and May 9, 2002 were materially false and misleading.
The complaint alleges that the company's Form 10-Qs for the first
quarters ended June 30, 2001; September 30, 2001; and December 31, 2001
were materially false and misleading. In addition, the complaint
alleges that the Company's Form 10-K for the fiscal year ended March
31, 2002 was materially false and misleading. The complaint alleges
that each of these above referenced press releases and SEC filings
materially misrepresented HPL's revenues and growth as ultimately
admitted on July 19, 2002, the day the HPL announced that it had
initiated an investigation into accounting irregularities.
Finally, HPL announced that it had uncovered a massive accounting fraud
involving "fictitious transactions" and "falsified documents." The
company said that what was reported as cash on its balance sheet "is
not now, and may never have been in the Company's possession." HPL
further reported that, "at least $11 million of the $13.7 million in
revenue reported in the quarter ended March 31 was based on fake
transactions with the company's Japanese distributor, Canon Sales, Co."
The Company said that it will restate financial results for fiscal 2002
and may restate for fiscal 2001. The Company also announced that it has
fired it CEO and Chairman; defendant David Lepejian, who apparently was
a "central player" in the fraud. As a result of defendants' materially
false and misleading statements the price of HDL common stock was
inflated throughout the Class Period.
For more information, contact Nancy Kaboolian, Esq. or Mark Gardy, Esq.
of Abbey Gardy, LLP by Phone: (800) 889-3701 or (212) 889-3700 or by e-
mail: nkaboolian@abbeygardy.com
HPL TECHNOLOGIES: Weiss & Yourman Files Shareholders Suit in N.D. CA
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A class action lawsuit has been filed in the United States District
Court for the Northern District of California on behalf of persons who
acquired the securities of HPL Technologies, Inc. (Nasdaq: HPLA)
between October 2, 2001 and July 19, 2002.
The complaint alleges that HPL and certain of its officers and
directors violated the federal securities laws by filing false
financial revenues with the SEC for the three fiscal quarters covered
in the Class Period. The complaint alleges that, even though Defendants
knew or should have known that these revenues were improperly
recognized, they not only filed the false 10-Q's but reiterated these
artificially inflated revenues in a series of false and misleading
statements to the media and the investing community throughout the
Class Period.
The Company has initiated an investigation into these "irregularities"
and has removed CEO David Lepejian and CFO Ita Geva from their
positions. Lepejian and Geva are both named as defendants in the
lawsuit.
As soon as this news was disclosed on July 19, trading was halted on
the HPL stock, but share prices dropped by 70% in pre-market trading.
For further information, contact Vahn Alexander, Esq. of Weiss &
Yourman, Los Angeles by Phone: +1-800-437-7918 or e-mail: info@wyca.com
HPL TECHNOLOGIES: Brodsky & Smith Probes Potential Securities Claims
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Law offices of Brodsky & Smith, L.L.C. announced Tuesday an
investigation of potential claims on behalf of purchasers of HPL
Technologies (Nasdaq:HPLA) securities between July 31, 2001 (the date
of the initial public offering - IPO) and July 19, 2002, inclusive.
On July 19, 2002, HPL announced that it uncovered a massive accounting
fraud involving "fictitious transactions" and "falsified documents"
that were apparently orchestrated by its founder and former chief
executive officer, David Lepejian. HPL said much of what was reported
as "cash" on its balance sheet "is not now, and may never have been in
the company's possession." According to HPL, Mr. Lepejian's whereabouts
are presently unknown. HPL announced that it expects to restate its
results for the fiscal year ended March 31, 2002, and possibly the
prior year as well. Trading in HPL stock was suspended by the Nasdaq on
July 19, 2002.
If you were a purchaser of this stock during the period indicated and
want to discuss your legal rights, you may e-mail or call the law
office of Brodsky & Smith, L.L.C. who will, without obligation or cost
to you, attempt to answer your questions. You may contact Jason L.
Brodsky, Esquire or Evan J. Smith, Esquire at Brodsky & Smith, L.L.C.,
11 Bala Avenue, Bala Cynwyd, PA 19004, by e-mail at
esmith@Brodsky-Smith.com, or by calling toll free 877-LEGAL-90.
KNIGHT TRADING: Marc Henzel Commences Securities Suit in New Jersey
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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
action is pending against the Company and Kenneth D. Pasternak.
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 the 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 by Phone: 610-660-8000 or 888-643-6735
by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com
MEDIA MARKETING: Brodsky & Smith Begins Shareholders Suit in S.D. NY
--------------------------------------------------------------------
Law offices of Brodsky & Smith, L.L.C. announced Tuesday that a
securities class action lawsuit has been commenced on behalf of
shareholders who acquired Media Marketing Corporation (AMEX:XMM)
securities between November 5, 2001 through July 11, 2002, inclusive
(the Class Period).
The case is pending in the United States District Court for the
Southern District of New York, against the company and its former
Chairman and Chief Executive Officer.
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, Esquire or Evan J. Smith,
Esquire at Brodsky & Smith, L.L.C. by Mail: 11 Bala Avenue, Bala
Cynwyd, PA 19004 by e-mail: esmith@Brodsky-Smith.com or by Phone: 877-
LEGAL-90 (Toll free).
NICOR INC.: Charles Piven Commences Securities Fraud Suit in N.D. IL
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The Law Offices Of Charles J. Piven, PA initiated a securities class
action on behalf of shareholders who acquired Nicor, Inc. (NYSE:GAS)
securities between January 24, 2002 and July 18, 2002, inclusive, in
the United States District Court for the Northern District of Illinois,
against the Company and two of the Company's senior officers.
The action charges that defendants violated 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 Charles J. Piven by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by E-mail: 410-332-0030 or by E-mail:
hoffman@pivenlaw.com
OMNICOM GROUP: Marc Henzel Commences Securities Fraud Suit in S.D. NY
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Southern District of New
York against Omnicom Group Inc. (NYSE: OMC) and certain of its senior
officers with violations of the federal securities laws, on behalf of
all persons who purchased Company common stock on the open market
during the period April 25, 2000 through June 11, 2002, inclusive.
The complaint alleges that defendants materially misrepresented the
Company's financial results through improper accounting methods in
connection with certain acquisitions. More specifically, plaintiff
alleges that the Company fraudulently and misleadingly:
(1) reported growth in "organic" revenue that included revenue
generated by newly acquired companies; and
(2) failed to disclose the Company's future obligations relating
to its prior acquisitions.
The complaint further alleges that the Company transferred its minority
investments in various internet companies to a newly formed entity
(Seneca), enabling it to avoid writing down the value of its
investments in those companies, and that the Company failed to disclose
its contingent obligations to make additional investments in certain
partially acquired companies.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave.,
Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735
by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com
PERKINELMER INC.: Marc Henzel Commences Securities Suit in MA Court
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the District of Massachusetts,
on behalf of purchasers of the securities of PerkinElmer, Inc. (NYSE:
PKI) between July 15, 2001 and April 11, 2002, inclusive, against the
Company and:
(1) Gregory L. Summe (CEO, President and Chairman) and
(2) Robert F. Friel (CFO)
The complaint charges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of materially false and misleading
statements to the market between July 15, 2001 and April 11, 2002.
According to the complaint, the Company issued numerous press releases
regarding its performance during the class period which represented
that:
(i) the Company was successfully growing its revenues and
earnings,
(ii) the Company's transformation into a provider of health-related
products and services was proceeding successfully and
(iii) the Company would meet its financial performance targets for
2002.
The complaint further alleges that these, and other, representations
were materially false and misleading because they failed to disclose
that:
(a) the Company was experiencing a decline in the demand for its
products, especially at its Optoeletronics division,
(b) the Company was carrying tens of millions of dollars of
obsolete inventory on its books and
(c) the Company's expenses were soaring due to the spate of
numerous acquisitions and divestitures it had undertaken.
On March 1, 2002, the Company issued a press release revealing that
first quarter of 2002 revenues and earnings would be materially less
than the Company had represented its figures would be only three weeks
earlier. In reaction to the announcement, the price of its common stock
plummeted by 31%.
The full truth regarding the Company's business was not fully disclosed
until April 11, 2002, when the Company issued a press release revealing
that its reported earnings will be breakeven, instead of the figure of
$0.16-$0.17 per share that the Company had stated, on March 1, it
expects to earn, and that its revenues will decline in the first
quarter of 2002 because of weakness in all of its division.
In reaction to the announcement, Company stock plummeted by another
28%, falling from $16.70 per share on April 10, 2002 to $12.04 by the
close of April 11, on extremely heavy trading volume. The individual
defendants and other Company insiders sold a total of 595,000 Company
stock during the class period, reaping gross proceeds in excess of
$18.4 million and the Company completed a significant acquisition using
its common stock as currency.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave.,
Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735
by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com
SEEBEYOND TECHNOLOGY: Milberg Weiss Commences Securities Suit in CA
-------------------------------------------------------------------
Milberg Weiss Bershad Hynes Lerach LLP initiated a securities class
action in the United States District Court for the Central District of
California on behalf of purchasers of SeeBeyond Technology Corp.
(NASDAQ:SBYN) common stock during the period between Dec. 10, 2001 and
April 22, 2002.
The complaint charges the Company and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. The
complaint alleges that during the class period, defendants made
positive but false statements about the Company's results and business,
while concealing material adverse information about customers pushing
out orders.
As a result, Company stock traded at artificially inflated levels,
permitting defendants to complete a secondary public offering of 8.5
million shares (plus 1.2 million of an overallotment) for proceeds of
$82 million, including 2 million shares sold by Company CEO.
Immediately before the offering, the Company announced its 4thQ 01
results, which met analyst expectations. Defendants represented that
the Company had met the numbers without pulling in sales from the 1stQ
02 such that 1stQ 02 results would be favorable as well. The Company
indicated it had good visibility into 1stQ 02 results and forecast
revenues of more than $44 million for that quarter.
On April 1,2002, the Company preannounced its 1stQ 02 results in a
press release and conference call indicating it had revenues of $42.0
to $42.5 million in the 1stQ 02. The stock declined somewhat on what
was termed a "slight miss" from earnings estimates. Within hours of
this release, Company auditors called the Company objecting to its
revenue recognition on at least $2.2 million in transactions. The
Company concealed this problem over the following weeks.
Then, on April 22, 2002, after the market closed, the Company admitted
the 1stQ 02 revenues were actually only $40.3 million. On this news,
the Company's stock dropped by 50% to $3.15 per share.
For more details, contact William Lerach by Phone: 800-449-4900 or by
E-mail: wsl@milberg.com or visit the firm's Website:
http://www.milberg.com
SEEBEYOND TECHNOLOGIES: Marc Henzel Commences Securities Suit in CA
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Central District of
California on behalf of a class consisting of all persons who purchased
securities of SeeBeyond Technology Corporation (Nasdaq: SYBN) between
April 23, 2001, and April 22, 2002, inclusive.
The suit charges the Company and certain of its officers and directors
with violations of federal securities laws. Among other things,
plaintiff claims that defendants' material omissions and the
dissemination of materially false and misleading statements regarding
the Company's business prospects, revenue and earnings caused the
Company's stock price to become artificially inflated, inflicting
damages on investors.
The suit alleges that the Company overstated the demand for its
software products and failed to disclose that the Company had
improperly recognized certain revenues.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave.,
Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735
by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com
SONUS NETWORKS: Marc Henzel Commences Securities Fraud Suit in MA Court
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court, District of Massachusetts on
behalf of purchasers of the securities of Sonus Networks, Inc. (Nasdaq:
SONS) between December 11, 2000 and January 16, 2002, inclusive.
The action is pending against the Company and:
(1) Hassan M. Ahmed,
(2) Michael G. Hluchyj,
(3) Stephen J. Nill,
(4) Gary A. Rogers,
(5) Jeffrey Mayersohn,
(6) Frank T. Winiarski,
(7) Rubin Gruber,
(8) Edward T. Anderson and
(9) Anhousheh Ansari
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 December 11, 2000 and January 16, 2002, thereby
artificially inflating the price of Company securities.
The complaint alleges that defendants issued numerous statements which
highlighted the Company's financial performance and described the
Company's success in acquiring and/or developing new products which it
was then able to offer to current and prospective customers.
As alleged in the complaint, these statements were materially false and
misleading because they failed to disclose and/or misrepresented the
following adverse facts, among others:
(1) that certain products that the Company claimed it had sold to
Qwest Communications International, Inc. (Qwest) would not be
ready for deployment in time to meet Qwest's needs and would
result in Qwest having to purchase competing products from
Nortel;
(2) that the Company's highly-touted transaction with Qwest, which
contributed more than 10% of Sonus' first quarter 2001
revenues, was actually a quid pro quo deal wherein Sonus had
to agree to buy a $20 million Irrevocable Right of Use (IRUs)
from Qwest in exchange for a $20 million order from Qwest;
(3) that contrary to defendants' representations, Sonus' products
were not carrier class as they did not have 99.999%
availability, did not have voice quality as good as circuit-
switched networks and did not have sophisticated network
management and configuration capabilities; and
(4) as a result, Sonus was not on track to report revenues of $195
million in 2001.
On January 16, 2002, the last day of the class period, the Company
announced its disappointing fourth quarter and year-end 2001 results
and revealed that revenues for the year were just $173 million compared
to Class Period estimates exceeding $200 million. Following this
announcement, shares of Company stock fell below $5 per share.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave.,
Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735
by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com
SUPERVALU INC.: Marc Henzel Commences Securities Fraud Suit in MN Court
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the District of Minnesota on
behalf of all purchasers of the common stock of Supervalu, Inc. (NYSE:
SVU) from April 4, 2001 through 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 alleges
that defendants issued statements regarding the Company's annual
financial performance and filed reports confirming such performance
with the United States Securities and Exchange Commission (SEC).
The complaint alleges that these statements were materially false and
misleading because, among other things:
(1) the Company was employing improper accounting practices
regarding the cost of goods sold for at least the past four
years in violation of Generally Accepted Accounting
Principles. As a result, the Company announced on June 26,
2002 that it expects $21 million in additional expenses; and
(2) based on the foregoing, defendants' statements concerning the
financial condition of the Company were lacking in a
reasonable basis at all times.
The impact of these announcements was immediately felt in the market.
Shares of the Company fell sharply following the Company's statements
on June 26, 2002. Company stock closed on June 26, 2002, at $21.95
down approximately $6.11, or 22%. Subsequently, on July 1, 2002, a
mere five days after the Company disclosed the existence of its
internal investigation, the Company did, in fact, materially restate
its financial statements for all of Fiscal Years 2000, 2001 and 2002.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave.,
Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735
by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com
TELLABS INC.: Marc Henzel Commences Securities Fraud Suit in N.D. IL
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Northern District of
Illinois on behalf of purchasers of the securities of Tellabs, Inc.
(NASDAQ: TLAB) between December 11, 2000 and June 19, 2001 inclusive,
against the Company, Richard C. Notebaert (CEO, President, Director)
and Michael J. Birck (Chairman).
The complaint charges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of materially false and misleading
statements to the market between December 11, 2000 and June 19, 2001.
According to the complaint, the Company had represented to the public,
in press releases issued throughout the class period, that:
(1) its new products were enjoying strong demand,
(2) the seeming slowdown in its business was due to "component-
parts shortages which have been corrected" and
(3) the Company's business was strong fundamentally and the
Company would meet earnings and revenues expectations.
The complaint alleges that these, and other, statements were materially
false and misleading because, as alleged in the complaint, its new
optical networking line of products were inferior to the competition
and their products were not well-received or in high demand.
The complaint further alleges that, contrary to its statements to the
investing public, the Company's highly-touted acquisition of SALIX was
a failure as sales of the product line the Company gained in the
acquisition were falling.
On June 19, 2002, the Company issued a press release revealing that
second quarter of 2001 revenues would be 35% less than guidance
reiterated only weeks before, and that the Company's earnings would be
breakeven instead of the consensus $0.29 per share.
In reaction to the announcement, the price of the Company's common
stock fell by 31%, from $23 per share on June 19 to $15.87 on June 20,
representing a 75% decline from the class period high. During the
class period, Mr. Birck sold a total of 80,000 shares of Tellabs common
stock at prices between $64.25 to $65.38 per share, grossing proceeds
of more than $5.18 million.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave.,
Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735
by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com
UNIROYAL TECHNOLOGY: Marc Henzel Commences Securities Suit in M.D. FL
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Middle District of Florida
on behalf of purchasers of the securities of Uniroyal Technology Corp.
(NASDAQ: UTCI) between February 8, 2000 and May 13, 2002, inclusive.
The suit is pending against:
(1) George Zulanas, Jr., Executive Vice President, Chief Financial
Officer and Treasurer, and
(2) Howard R. Curd, Chairman of the Board and Chief Executive
Officer
The complaint charges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of materially false and misleading
statements to the market between February 8, 2000 and May 13, 2002.
According to the complaint, defendants issued a series of press
releases touting its financial stability and its acquisition of
Sterling Semiconductor, while strategically positioning the Company to
increase its participation in the explosive compound semiconductor
industry via internal growth.
However, unbeknownst to the investing public that purchased Company
stock during the class period:
(1) the Company was not a financially stable company;
(2) its acquisition of Sterling was not lucrative at all; and
(3) it was not strategically positioning the Company to increase
its participation in the explosive compound semiconductor
industry via acquisition and internal growth.
But for the Company's financial support, Sterling would probably have
been forced to seek protection under the bankruptcy laws. Sterling was
a development stage company and not, as defendants touted, "a leading
developer of silicon carbide technology and materials."
Moreover, in order to materially inflate the Company's net worth and
further foster the illusion of growth, defendants agreed to pay an
inflated price for Sterling with materially overvalued stock serving as
currency.
On December 31, 2001, eighteen months after having acquired Sterling in
exchange for stock, with a purported value of more than $40 million,
the Company shocked the market by announcing that it recorded a write-
down of Sterling goodwill of approximately $9,816,000.
On January 2, 2002, Company stock closed at $1.69 down from $3.20 the
previous day and substantially down from its class period high of
$71.125 reached on February 23, 2000.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave.,
Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735
by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com
VIVENDI UNIVERSAL: Marc Henzel Commences Securities Suit in S.D. NY
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Southern District of New
York on behalf of purchasers of the securities of Vivendi Universal
(NYSE: V; Paris Bourse: EX FP) between February 11, 2002 and July 3,
2002, inclusive, against the Company and Jean-Marie Messier, the
Company's former Chairman and Chief Executive Officer.
The complaint 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.
Specifically, prior to and during the class period, Mr. Messier took
the Company on an acquisition binge that, according to published
reports, resulted in the Company amassing approximately $18 billion in
debt as he turned the Company from a water concern into an
entertainment powerhouse. Under Mr. Messier's leadership, the Company
completed a $30 billion buyout of Canada's Seagram and a $10.3 billion
purchase of USA Networks Inc., the cable and entertainment company
owned by Hollywood mogul Barry Diller.
Concomitantly, Mr. Messier orchestrated a scheme to conceal the
severity of the Company's liquidity problems stemming from the massive
debt load incurred as a result of these, and other, transactions. In
fact, only days before his ouster by the Company Board, Mr. Messier
caused the Company to issue several press releases that falsely stated
that it did not face an immediate and severe cash shortage that
threatened its viability going forward absent an asset fire sale.
It was only after Vivendi's Board dislodged Mr. Messier that the
Company's new management disclosed the severity of the crisis and that
the Company would have to secure immediately both bridge and long-term
financing or default on its largest credit obligations.
As detailed in the suit, Mr. Messier failed to disclose the true
contours of the Company's cash crisis and his affirmative
misrepresentations to the contrary have given rise to an investigation
by French authorities concerning whether Mr. Messier disclosed in a
timely fashion that the Company was in dire financial straits.
Published reports also indicate that the Company is engaged in urgent
discussions with lenders to secure financing and is both considering
and negotiating the sale of assets.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave.,
Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735
by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com
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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
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