/raid1/www/Hosts/bankrupt/CAR_Public/020731.mbx
C L A S S A C T I O N R E P O R T E R
Wednesday, July 31, 2002, Vol. 4, No. 150
Headlines
CATHOLIC CHURCH: Attorneys Defend V. Camden Diocese Sexual Abuse Suit
CRAYFISH CO.: Plaintiffs File Amended Securities Suit in S.D. New York
DRUMMOND FINANCIAL: Agrees To Settle Shareholder Derivative Lawsuit
E-REX INC.: Securities Suit Dismissed After Not Meeting Court Standards
EXXON/MOBIL: Former Employees File Suit For ERISA Violations in CO
NORANDA INC.: Canada Firm Seeks Authorization For Lawsuit Over Pensions
PENNSYLVANIA: Court Reinstates Inmates' Lawsuit Over R-Rated Films
STATE FARM: Insured Asked To Join Lawsuit Over Auto Repair Policy
TEXAS: Appeals Court Rules in State's Favor, Says Medicaid Improved
UNITRIN INC.: Fairness Hearing For Race Suit Settlement Set in August
WARNACO GROUP: Investors File Two Lawsuits Over Misleading Financials
*Corporate Bill Has Shareholder Repayment Defects, Say Experts
New Securities Fraud Cases
AMERADA HESS: Charles Piven Commences Securities Fraud Suit in NJ
AOL TIME: Spector Roseman Commences Securities Fraud Suit in S.D. NY
AOL TIME: Much Shelist Commences Securities Fraud Suit in S.D. NY
AOL TIME: Kaplan Fox Launches Suit for Securities Violations in S.D. NY
AOL TIME: Cohen Milstein Commences Securities Fraud Suit in E.D. VA
CAPITAL ONE: Wechsler Harwood Commences Securities Suit in E.D. VA
EL PASO: Charles Piven Commences Securities Fraud Suit in S.D. Texas
FLEXTRONICS INTERNATIONAL: Wechsler Harwood Files Securities Suit in NY
HPL TECHNOLOGIES: Glancy & Binkow Commences Securities Suit in N.D. CA
HPL TECHNOLOGIES: Weinstein Kitchenoff Launches Securities Suit in CA
ICN PHARMACEUTICALS: Glancy & Binkow Commences Securities Suit in NY
INSIGHT ENTERPRISES: Bernard Gross Commences Securities Suit in AZ
INTERBANK FUNDING: Finkelstein Thompson Commences Securities Suit in DC
KNIGHT TRADING: Cauley Geller Commences Securities Suit in New Jersey
MERRILL LYNCH: Cohen Milstein Commences Securities Suit in S.D. NY
MERRILL LYNCH: Cohen Milstein Commences Securities Suit in S.D. NY
NICOR INC.: Milberg Weiss Commences Securities Fraud Suit in N.D. IL
NICOR INC.: Pomerantz Haudek Commences Securities Fraud Suit in N.D. IL
NICOR INC.: Howard Smith Commences Securities Fraud Suit in N.D. IL
NICOR INC.: Leo Desmond Commences Securities Fraud Suit in N.D. IL
NICOR INC.: Charles Piven Commences Securities Fraud Suit in E.D. OH
NICOR INC.: Schiffrin & Barroway Commences Securities Suit in N.D. IL
NICOR INC.: Cauley Geller Commences Securities Fraud Suit in N.D. IL
PERKINELMER INC.: Rabin & Peckel Commences Securities Fraud Suit in MA
RIVERSTONE NETWORKS: Charles Piven Commences Securities Suit in N.D. CA
SEEBEYOND TECHNOLOGY: Kirby McInerney Commences Securities Suit in CA
SUPERVALU INC.: Howard Smith Commences Securities Suit in Minnesota
VIVENDI UNIVERSAL: Charles Piven Commences Securities Suit in S.D. NY
VIVENDI UNIVERSAL: Cauley Geller Commences Securities Suit in C.D. CA
VIVENDI UNIVERSAL: Schiffrin & Barroway Lodges Securities Suit in CA
*********
CATHOLIC CHURCH: Attorneys Defend V. Camden Diocese Sexual Abuse Suit
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Attorneys for the Camden Diocese in Atlantic County will defend against
a class action filed by five women who accused a Roman Catholic priest
of sexually abusing them in St. Thomas Church in Brigantine in the
1970s, the Atlantic County News reports.
The five women represent a group of 14 plaintiffs, who said the diocese
covered up the abuse committed by 18 priests. Two of the women claim
Fr. Seidenberg sexually assaulted them on a weekly basis after their
father died in 1971. Margaret Horton was 6 and Kathleen Palmer Karins
was 13 when the abuse allegedly began.
Three other plaintiffs, who claim they were assaulted at the St. Thomas
rectory in Brigantine and the Our Lady Star of the Sea rectory in Cape
May, are cousins of Ms. Horton and Ms. Karins. The five women are now
between the ages of 38 and 50, but they claim, with the exception of
Horton, they were all teenagers when the abuse began, the Atlantic
County News reports. The plaintiffs assert the diocese was notified of
the abuse in 1972 but allowed it to continue.
Attorneys for the church is using the statute of limitations for its
defense, arguing that the alleged victims did not bring their case to
court within the two-year time limit allowed in New Jersey. This
approach was severely criticized by Atlantic County Superior Court
Judge John Himmelberger early this year in a similar suit involving a
set of brothers who claimed they were sexually abused. Judge
Himmelberger admonished the diocese for playing legal hardball,
although the suit ended in favor of the diocese.
Fr. Seidenberg, who denies the abuse, retired from St. Augustine's
Church in Ocean City in 1996, two years after the lawsuit was filed.
He now lives in Somers Point and could not be reached for comment, the
Atlantic County News reports.
CRAYFISH CO.: Plaintiffs File Amended Securities Suit in S.D. New York
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Plaintiffs in the securities class action against Tokyo-based Crayfish
Co. Ltd., filed a consolidated amended securities class action in the
United States District Court for the Southern District of New York,
according to a report by Asia Pulse.
Eleven suits were commenced in September 2000, against
the Company and:
(1) its CEO at the time,
(2) Hikari Tsushin Inc.,
(3) Morgan Stanley Dean Witter,
(4) Nomura Securities International Inc., and
(5) Merrill Lynch & Co.
The lawsuits included allegations that during the course of its March
8, 2000 public offering of American Depository Shares, the Company
failed to disclose material facts about the decline in business of its
principal shareholder and former business partner, Hikari Tsushin. The
lawsuit included related allegations against the other defendants.
On September 26, 2001, the court entered an order consolidating all 11
actions and appointed lead plaintiff and lead counsel for the
plaintiffs. On June 4, 2002, the court entered another order
appointing a new lead plaintiff and new lead counsel for the
plaintiffs.
A consolidated amended class action was served on July 19, 2002, naming
eight additional lead plaintiffs, and Ralph M. Stone of Shalov Stone &
Bonner LLP, and Stanford P. Dumain of Milberg Weiss Bershad Hynes &
Lerach LLP as co-lead counsel.
The Company is defending against this lawsuit, but it is Company policy
not to comment on the details of ongoing litigations.
DRUMMOND FINANCIAL: Agrees To Settle Shareholder Derivative Lawsuit
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Drummond Financial Corporation (OTCBB: DFCU) agreed to settle a
shareholder derivative class action, filed in September 1999 by Gibralt
Holdings Ltd. against the Company and certain of its directors and
officers and others as defendants. The action was filed in the form of
a class action on behalf of shareholders, but has not received court
certification as such.
The suit was subsequently amended to substitute certain individual
plaintiffs in place of Gibralt and amend the action to withdraw certain
claims dismissed by the court and clarify other claims.
In order to avoid, among other things, the inherent cost, time
consuming nature and uncertainty of litigation, on July 25, 2002, the
parties entered into a stipulation and agreement of compromise,
settlement and release in connection with the proposed settlement of
the action.
The settlement is subject to final court approval. If such approval is
obtained, the Company will make an offer to purchase all of the
outstanding shares of the Company's common stock not owned by the
defendants and/or their associates and affiliates at a price of $1.25
per share. The offer to purchase is anticipated within 10 business
days of the settlement becoming final.
E-REX INC.: Securities Suit Dismissed After Not Meeting Court Standards
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The civil lawsuit filed against Miami technology company E-Rex (OTC BB:
EREX) was dismissed with prejudice, after a federal court ruled that
the plaintiffs' complaint did not meet federal court standards, the
South Florida Business Journal reports.
"The plaintiffs were unable to provide any facts or evidence to
substantiate their lawsuit," E-Rex attorney Ruben F. Sanchez told the
Business Journal.
The Company said Judge James C. Mahan appointed an auditor to examine
the Company's financial records at the plaintiff's expense, but never
granted the plaintiff's request to appoint a receiver to temporarily
run the company, nor did he grant the group's request of class action
status.
The suit, filed by Chris Ford, successor trustee of the Carol Gamble
Trust 86, charges the Company with fraud, civil theft, failure to repay
a promissory note and breach of fiduciary duties on the part of the
Company, and Donald Mitchell, who was serving as chairman and president
of IIBI at the same time he was the Company's chairman of the board.
The suit also names as defendants:
(1) Carl Dilly, President, CEO,
(2) Joseph Pacheco, director, and
(3) Jeffrey Harvey, former Director and Treasurer
The Company told the Business Journal that it intends to pursue legal
action already filed in US District Court in California against Ford,
the Carol J. Gamble Trust and other individuals and companies for
securities violations, attempted illegal takeover, stock manipulation,
defamation, extortion and violation of federal statues. Despite the
plan to continue legal action, Company President Carl Dilley said his
company looked forward to concentrating on issues other than legal
ones.
"With this distraction behind us, E-Rex can now focus its energies
exclusively on executing the strategic partnerships that will provide
us the market striking power to make Dragonfly a tremendous success,"
Mr. Dilley told the Business Journal.
EXXON/MOBIL: Former Employees File Suit For ERISA Violations in CO
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Exxon/Mobil faces a class action filed on behalf of a former employee
and others similarly situated whose severance benefits Exxon/Mobil
wrongfully denied. The suit is pending in the United States District
Court of Colorado.
The suit alleges that Exxon/Mobil arbitrarily denied severance benefits
to plaintiff and hundreds of other former Exxon/Mobil employees in
violation of the express terms of the severance plan and the Employee
Retirement Income Security Act (ERISA).
The suit alleges that plaintiff and many other former Exxon/Mobil
employees were denied substantial severance benefits because of
Exxon/Mobil's improper interpretation of an express term of its own
severance plan. Following its merger with Mobil in 1999, Exxon
demanded that many of its employees relocate in excess of 50 miles from
their previous employment location.
The suit alleges that the express terms of a severance plan allowed
such employees to resign with full severance benefits if they elected
not to sell their homes and move their families to new locations
further than 50 miles away.
The suit alleges that Exxon/Mobil, contrary to the express terms of the
severance plan, took the position that a "principal place of
employment" was not where an employee lived and worked, but rather the
location where the Company wanted the employee to move following the
merger. Plaintiff and members of the class, however, never lived,
worked or paid taxes at the location Exxon/Mobil arbitrarily designated
as their "principal place of employment."
The suit further alleges that plaintiff and members of the class were
forced to move more than 50 miles or face termination without the
severance benefits to which they were entitled. The suit alleges that
Exxon/Mobil's denial of benefits to plaintiffs and members of the class
was unreasonable and capricious in violation of the express terms of
the severance plan and ERISA.
For more details, contact Vinton Allen & Vellone by Phone: 303-534-4499
by E-mail: mwolf@vavlaw.com or visit the firm's Website:
http://www.vavlaw.comor contact Berger & Montague by Phone:
800-424-6690 by E-mail: investorprotect@bm.net or visit the firm's
Website: http://www.bergermontague.com
NORANDA INC.: Canada Firm Seeks Authorization For Lawsuit Over Pensions
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Montreal law firm Unterberg, Labelle, Lebeau & Morgan asked the Quebec
Superior Court to authorize a class action against Noranda Inc., on
behalf of a retired human relations manager of the Company and on
behalf of 2,700 non-union Company retirees and older staff, relating to
company pensions, the National Post reports.
"It's like certification in the United States and the process could
well be lengthy," Paul Unterberg, senior partner in Unterberg, Labelle,
Lebeau & Morgan told the Post. "At this point we're asking the judge
to find there are sufficient grounds to go ahead."
The issue centers on the interpretation of clauses in the Company's
non-contributory defined pension plan. "We're studying the heavy
documentation just filed and we won't comment until next week," H,lene
Gagnon, Company spokesperson told the Post.
The retired CEZ manager maintains his pension should be based on the 60
best earning months of his 35 years of service, including vacation pay,
bonuses and fringe benefits, while it is now based on average earnings
for the final 60 months, said Mr. Unterburg.
PENNSYLVANIA: Court Reinstates Inmates' Lawsuit Over R-Rated Films
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A federal appeals court has reinstated a class action brought by
prisoners who want to see R-rated films, the New York Times News
Service reports.
The prisoners, all in a federal penitentiary in McKean, Pa., contend in
the lawsuit that their First Amendment rights were violated by a 1996
federal law prohibiting "the viewing of R, X and NC-17 rated movies" in
federal prisons. The same law bans a variety of "amenities or personal
comforts," including martial arts instruction, weight-lifting
equipment, hot plates and electric guitars. The law, introduced by
Rep. Richard Zimmer, R-N.J., who has since left Congress, was intended
to make prison less pleasant.
"If they wanted to ban all movies on the basis of the interest in
punishment, they could do that," said Jere Krakoff, a lawyer in
Pittsburgh, who represents the prisoners. "But from a political
standpoint and a literary standpoint, there is no basis for saying as a
categorical matter that all R-rated movies are forbidden."
The legal papers on behalf of the prisoners cite "Schindler's List,"
"Amistad," "Glory," and "The English Patient" as examples of R-rated
movies that should not be forbidden in a federal prison.
A spokesman for the Bureau of Prisons, Daniel R. Dunne, said that X-
rated movies were banned before the law was enacted and that prison
wardens had discretion over which other films to show. However, he
would not discuss the case further.
In its legal papers, the government emphasized that the rights of
prisoners are limited, and that prison security, the deterrence of
crime and the rehabilitation of inmates are all served by banning R-
rated films.
The lower court Judge Sean J. McLaughlin ruled that the restriction on
R-rated movies was "reasonably related to legitimate penological
interests." Aside from referring to common sense, he did not explain
how.
The Third US Circuit Court of Appeals reversed the lower court's
decision last week and sent the case back to the lower court for a
fuller consideration of the issues.
"Is it a matter of common sense, as was argued here, that prohibiting
movies rated R or NC-17 deters the general public from committing
crimes, let they be sent to prison where they are not permitted watch
R-rated movies?" the appeals court judges asked. "We are not so sure."
STATE FARM: Insured Asked To Join Lawsuit Over Auto Repair Policy
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Policyholders of Arizona's largest auto insurance company are being
asked whether they want to be part of a class action charging State
Farm with cheating them out of covered auto repairs, The Arizona Daily
Star reports.
At the heart of the lawsuit is the contention that State Farm adjusters
do not authorize payments for the full cost of repairs to cars owned by
the policyholders. According to estimates, there could be about
300,000 policyholders whose vehicles have been repaired since 1993, and
who, according to the lawsuit, may have been defrauded.
Legal notices going out inform many of the Company's 650,000
policyholders that they will be part of the lawsuit unless they opt out
by the end of next month. Generally speaking, few of the policyholders
take that route, meaning they will end up being represented at an
upcoming trial by the attorney for the lead plaintiff Stacey Skene, who
claims that the insurance company defrauded her by refusing to perform
the necessary repairs to her vehicle.
Maricopa County Superior Court Judge Gary Donahoe said that Ms. Skene's
claim is so typical of that of other State Farm customers that a
single, all-encompassing lawsuit is the best way to go. The
alternative would be to force each of the insured to file a lawsuit
with claims worth only a few hundred to a few thousand each.
TEXAS: Appeals Court Rules in State's Favor, Says Medicaid Improved
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Texas' Medicaid program has noticeably improved, after a class action
was filed in 1993, charging the state with not providing adequate care
for children enrolled in Medicaid. This was discussed when the US
Fifth Circuit Court of Appeals ruled in favor of the state last week,
the Associated Press reports.
The court noted that more young children have been enrolled in the
government health care program for the poor and disabled. A greater
number of workers are also helping run the program, and legislators
have poured more money than ever before into Medicaid.
Plaintiffs' counsel Susan Zinn was disappointed by the ruling, and told
AP that the plaintiffs have not yet reached a decision whether to
appeal. However, Ms. Zinn conceded that there have been positive
changes, though she contends not enough, in the program since the
lawsuit named for Carla Frew, one of the poor children for whom the
lawsuit was filed.
"Medicaid is supposed to be one of the most important sources of
preventive and comprehensive health care for children in the country.
The 5th Circuit recognizes that Texas was doing a bad job providing
health care to poor children before the Frew lawsuit was filed. We
hope that Texas Medicaid officials don't view the court's decision as a
green light to let things go back to the way they used to be," Ms. Zinn
told AP.
Both children's rights advocates and state officials agree that there
is still much work to be done. The Health and Human Services
Commission, which runs the program, vowed to continue improving the
program that covers more than 1.5 million children.
"We take our responsibility to provide appropriate medical care to
Medicaid children very seriously. We remain dedicated to providing
quality care and continuously improving our program to meet children's
health needs," said spokeswoman Kristie Zamrazil, according to an AP
report.
Attorney General John Cornyn, the Republican US Senate nominee, said he
was pleased the court recognized the program was better, but
acknowledged there was still room for improvement. "There is always
more that we can do, and I am pleased that the state can now continue
to move forward without the unnecessary micromanagement of a federal
court," Mr. Cornyn said.
The appeals court acknowledged that Texas was not reaching every child
in need, but said it did not have to as long as state Medicaid
officials did not deny services to anyone who asked for them. The
ruling said Texas has increased participation in the program from 29
percent in 1993 to 66 percent in 2000 by making improvements, including
spending more money on outreach than any other state in the nation and
adding workers, the Associated Press reports.
UNITRIN INC.: Fairness Hearing For Race Suit Settlement Set in August
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Fairness hearing for the settlement of the consolidated class action
suit pending against Unitrin, Inc. and its subsidiary United Insurance
Company of America, has been set for August 27,2002, in the United
States District Court for the Eastern District of Louisiana.
In October 1999, the Florida Department of Insurance filed and served a
subpoena upon the Company's subsidiary, United Insurance Company of
America, in connection with that Department's investigation into the
sale and servicing of industrial life insurance and small face amount
life insurance policies in the State of Florida.
Subsequently, on December 15, 1999, a purported nationwide class action
lawsuit was filed against United in the United States District Court
for the Middle District of Florida, on behalf of "all African-American
persons who have (or have had at the time of the policy's termination),
an ownership interest in one or more Industrial Life Insurance Policies
issued, serviced, administered or purchased from United."
Plaintiffs allege discrimination in premium rates in violation of 42
U.S.C. 1981 and 1982 in addition to various state law claims.
Unspecified compensatory and punitive damages are sought together with
equitable relief.
The Company has determined that United and its other career agency life
insurance subsidiaries have in force insurance policies in which race
was used as an underwriting factor in pricing or benefits. However, to
the best of the Company's knowledge, all such practices ceased 30 or
more years ago with regard to newly issued policies.
At least twenty similar lawsuits have been filed in other jurisdictions
against the Company and/or its career agency life insurance
subsidiaries. The Judicial Panel on Multi-District Litigation ordered
that substantially all of these lawsuits be consolidated for pretrial
purposes in the United States District Court for the Eastern District
of Louisiana.
On May 2, 2002, the Company announced an agreement to resolve issues
relating to the use of race as a factor in the underwriting and pricing
of life insurance by United and its subsidiaries. The settlement
agreement, which has received preliminary approval by an Alabama state
court, will resolve all pending class action lawsuits on this issue, as
well as other issues in the litigation unrelated to race-based
underwriting.
At the same time, the Company announced the completion of a regulatory
agreement concerning these matters with the Illinois Department of
Insurance on behalf of insurance regulators nationwide.
The Company believes that the settlement will not have a material
adverse effect on the Company's financial position, but could have a
material adverse effect on its results for a given period.
WARNACO GROUP: Investors File Two Lawsuits Over Misleading Financials
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The bankrupt New York clothing firm, Warnaco Group Inc., that sought
Chapter 11 bankruptcy protection in June 2001, now faces two class
actions, claiming the company misled investors about profit margins
shortly before it took bankruptcy protection, the St. Louis Post-
Dispatch reports.
"Essentially, the charge says there was a vast failure to be truthful
about the financial condition of the company," said Fred Isquith, an
attorney representing plaintiffs in one of the lawsuits. However, it
does not appear that University of Missouri President Manuel Pacheco, a
member of the firm's board of directors, received the kind of big
payouts many executives of now-bankrupt companies are currently
criticized for accepting.
The two shareholder lawsuits accuse the Company of misstating profits
and withholding other critical information to inflate its stock price.
Both lawsuits also accuse the Company of deceiving investors during
periods that coincide with Mr. Pacheco's tenure on the board.
Mr. Pacheco joined the Company's board in August 1999. In that
quarter, the company's stock was valued as high as $27.375, but that
was almost a 40 percent decrease from a year earlier. SEC documents
show Company earnings continued to deteriorate in 2000. In April 2001,
Warnaco announced the SEC was investigating it for inaccurate financial
reporting. Two months later, with shares trading for less than 50
cents, Warnaco filed for bankruptcy.
Mr. Isquith says the actions by the Company's executives and board of
directors are similar to those by their counterparts at Enron and
WorldCom, but Mr. Pacheco sees it differently, saying, "Since I came on
the board and other directors were established . Warnaco has made a
good deal of progress, and sometimes what happens in the past is simply
a prelude to the future."
The Company pays its board members an annual retainer of $50,000, plus
additional money for attending board and shareholder meetings. Mr.
Pacheco also owns 80,000 of the Company that are now virtually
worthless.
*Corporate Bill Has Shareholder Repayment Defects, Say Experts
--------------------------------------------------------------
Congress's plan to reimburse defrauded shareholders with penalties paid
by corporate wrongdoers sounds good in theory, but probably would do
little to help most investors, say the experts, according to a recent
report in the Los Angeles Times.
The proposal is part of the massive accounting and financial reform
bill passed by the House and Senate last week and sent to President
Bush. It calls for all fines assessed against executives and
corporations by the Securities and Exchange Commission to go to a
victim restitution fund. That money now is sent to the Treasury
Department. Lawmakers touted the plan as a way to compensate
shareholders who have lost huge sums in the flood of accounting
scandals.
However, the relatively small amounts typically collected in such
cases, coupled with the logistical difficulty of disbursing the funds
to potentially millions of people, means people actually would receive
little money, many experts have said, reported the Los Angeles Times.
"It is going to be very hard for investors to prove they are entitled
to get some of this money," said Stephen Bainbridge, a UCLA corporate
and securities law professor. "It is going to be costly to administer
this program, and an investor is going to get pennies on the dollar."
However, lawmakers are anxious to show they are responding to the
corporate scandals and are helping victims, the experts have said. It
would really be better to earmark the money for the SEC to hire
additional lawyers and accountants to prevent future frauds, Mr.
Bainbridge said. While the SEC collected $23.9 million in penalties
last year, and has taken in $44.9 million so far this year, that is but
a fraction of the billions of dollars in stock value lost by
shareholders of Enron, WorldCom and the like.
The SEC already compensates some victims out of a separate program
requiring executives to disgorge ill-gotten gains. Such gains include
salary, bonuses and stock option proceeds that managers received during
the period in which their fraud occurred. However, the disgorgement
program illustrates the difficulty the SEC faces in collecting money
and dispensing it to victims.
The SEC won court orders last year requiring executives and companies
to disgorge $530 million, but the agency collected just $27.5 million,
or five percent of the total ordered. Of the $632 million in court-
ordered disgorgements this year, the SEC so far has taken in $73
million, or 12 percent of the total.
Investors have received even less than the amounts recovered, because
the SEC, working with the courts, reimburses investors only in cases in
which it is financially feasible to do so, said Brian Gross, an SEC
spokesman in Washington. The relatively small amounts reflect, in some
instances, that some executives go broke because of their free-spending
ways and because of attorney costs and have no money left to disgorge.
"A lot of funds are simply gone by the time you get to them," said Mr.
Gross.
When the SEC determines it is uneconomical to pay victims, any
disgorgement monies collected are funneled to the Treasury, Mr. Gross
said. The agency has no figures on how much disgorgement money has
found its way into investors' hands over the years, he said.
Still, defrauded investors probably would welcome any dollars they
could get through the SEC. Their alternative, private shareholder
lawsuits typically provide low recovery rates as well. Indeed, class
action lawsuits that shareholders bring against companies often
generate the headlines, but investors usually receive only a fraction
of what they lost, data show.
Since 1900, the average securities class action has been settled for 12
cents of every dollar in claimed losses, according to National Economic
Research Associates Inc., a White Plains, New York, consulting firm.
That excludes attorneys' fees, which can lop 30 percent or more off a
settlement.
Investors who are eligible for restitution by the SEC usually are
notified by the agency. They also can fill out claims forms placed in
ads in financial newspapers and other publications, Mr. Gross said.
However, figuring out who is owed the money, and getting it to them, is
a time-consuming and expensive process for the SEC, and would only get
worse under the corporate reform bill, experts say.
"The administrative mess in trying figure out who is a deserving
shareholder in a single securities suit is typically a monumental
headache," said Michael Young, a civil defense attorney at Willkie Farr
& Gallagher in New York. "How are they possibly going to calculate
deserving shareholders in all the securities fraud actions over the
course of a single year?"
New Securities Fraud Cases
AMERADA HESS: Charles Piven Commences Securities Fraud Suit in NJ
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The Law Offices Of Charles J. Piven, PA initiated a securities class
action on behalf of shareholders who acquired Amerada Hess Corp. (NYSE:
AHC) securities between February 9, 2001 and July 11, 2001, inclusive.
The suit is pending in the United States District Court for the
District of New Jersey, against the Company and certain of its officers
and directors.
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 Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
AOL TIME: Spector Roseman Commences Securities Fraud Suit in S.D. NY
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Spector Roseman & Kodroff PC initiated a securities class action
against AOL Time Warner, Inc. (NYSE: AOL), on behalf of all persons who
purchased or otherwise acquired the Company's securities of AOL during
the period October 19, 2000 through July 17, 2002, inclusive, in the
United States District Court for the Southern District of New York.
The suit alleges that during the class period, the Company recognized
revenue on a variety of transactions in violation of generally accepted
accounting principles in an effort to mask the decline in advertising
revenues. The true facts were disclosed to investors, only after AOL
common stock plummeted in value by more than 70% from its trading price
at the beginning of the class period ($46.91) to its trading price at
the end of the class period.
When the true facts concerning the Company's recognition of revenue in
violation of GAAP were revealed in a Washington Post article on July
18, 2002, Company shares declined an additional 10%, to close on July
18, 2002 at $12.45. On July 24, 2002, the Company then disclosed that
it is the subject of an SEC investigation concerning the Company's
accounting of advertising revenue.
For more details, contact Robert Roseman by Phone: 1-888-844-5862 or
visit the firm's Website: http://www.srk-law.com/dbjoinaclassaction.asp
AOL TIME: Much Shelist Commences Securities Fraud Suit in S.D. NY
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Much Shelist Freed Denenberg Ament & Rubenstein, PC initiated a
securities class action against AOL Time Warner, Inc. (NYSE:AOL) and
certain of its officers and directors in the United States District
Court for the Southern District of New York. The suit was filed on
behalf of all persons and entities who purchased in the open market or
acquired through an exchange of securities the common stock of AOL Time
Warner during the period October 18, 2000 through July 17, 2002,
inclusive. The suit names as defendants the Company and:
(1) America Online, Inc.,
(2) Stephen M. Case, America Online's Chairman and CEO before the
merger and AOL Time Warner's current Chairman of the Board,
(3) Robert W. Pittman, America Online's President and COO before
the merger and AOL Time Warner's Co-Chief Operating Officer
and board member until he resigned from the Company on July
18, 2002; and
(4) J. Michael Kelly, America Online's Senior Vice President and
CFO before the merger and AOL Time Warner's current CFO and
Executive Vice President
The defendants allegedly 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. These alleged misstatements had the effect of artificially
inflating the price of Company securities.
The suit further alleges that during the class period defendants failed
to disclose promptly and accurately the negative trends in business
being experienced by AOL Time Warner and America Online. The suit also
alleges that defendants caused AOL Time Warner and America Online to
improperly recognize advertising revenue. Specifically, the suit
charges, among other allegations, that:
(i) America Online improperly converted a $23 million arbitration
award into advertising revenue;
(ii) America Online improperly converted another pending
litigation, with Ticketmaster, into $13 million in advertising
revenue;
(iii) America Online sold advertisements on behalf of online auction
company eBay Inc., and improperly booked the sale of eBay's
ads as America Online's own revenue;
(iv) America Online bartered advertisements for computer equipment
in a deal with Sun Microsystems Inc.;
(v) In what one America Online insider termed a "science fiction"
deal to create revenue, America Online counted stock rights as
advertising and commerce revenue in a deal with a Las Vegas
firm called PurchasePro.com Inc.; and
(vi) America Online renegotiated long-term advertising contracts it
risked losing into short-term gains that boosted its quarterly
revenue.
As a result, the Company's reported financial results and published
financial statements were materially false and misleading and violated
Generally Accepted Accounting Principles.
On July 18, 2002, The Washington Post published a report, based on
statements of former Company employees and confidential documents,
which revealed how the Company, and America Online before, were able to
consistently report advertising revenue that defied the industry-wide
advertising downturn. Within hours of The Washington Post article
being published, Mr. Pittman resigned from the Company.
Company stock closed on July 18, 2002 at $12.45 per share, down more
than 78% from its class-period high. The stock fall, however, did not
end there because after the market closed on July 24, 2002, AOL Time
Warner disclosed that the United States Securities and Exchange
Commission is conducting a "fact-finding" investigation into the way
the Company's America Online unit booked certain advertising
transactions. AOL Time Warner shares opened trading on July 25, 2002 at
$9.64 per share.
For more details, contact Carol V. Gilden by Phone: 800-470-6824 or by
E-mail: investorhelp@muchshelist.com
AOL TIME: Kaplan Fox Launches Suit for Securities Violations in S.D. NY
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Kaplan Fox & Kilsheimer LLP initiated a securities class action against
AOL Time Warner, Inc. (NYSE: AOL), certain of its officers and
directors and Ernest & Young, LLP in the United States District Court
for the Southern District of New York. This suit is brought on behalf
of all persons or entities who purchased, converted, exchanged or
otherwise acquired the Company's securities of America Online between
July 19, 1999 and January 10, 2001 and all persons who purchased,
converted, exchanged or otherwise acquired the securities of AOL Time
Warner, Inc. between January 11, 2001 and July 17, 2002, inclusive.
The complaint alleges that AOL Time Warner and certain of its officers
and directors violated the federal securities laws. The complaint
alleges, among other things, that during the class period defendants
made material misrepresentations and/or omitted to state material facts
relating to AOL's online advertising revenues.
The complaint further alleges that, AOL and AOL Time Warner booked
revenue form one-time payments received from online advertising clients
as advertising revenue in order to artificially inflate their revenues
derived from online advertising.
The complaint also alleges that 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 SEC on March 25, 2002 even though it knew (or
recklessly failed to discover) that AOL had counted in revenue sums
received in connection with selling online advertising for online
auction site eBay. When the truth was revealed regarding AOL in an
article in The Washington Post on July 18, 2002, AOL Time Warner stock
dropped to as low as $11.75, down from its class period high of $58.51.
As a result of Defendants' false and misleading statements, investors
were damaged, by purchasing AOL and AOL Time Warner securities at
artificially inflated levels during the class period.
For more details, contact Frederic S. Fox, Joel B. Strauss or Hae Sung
Nam by Mail: 805 Third Avenue, 22nd Floor, New York, NY 10022 by Phone:
800-290-1952 by or 212-687-1980 by Fax: 212-687-7714 or by E-mail:
mail@kaplanfox.com
AOL TIME: Cohen Milstein Commences Securities Fraud Suit in E.D. VA
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Cohen, Milstein, Hausfeld & Toll, PLLC initiated a securities class
action in the United States District Court for the Eastern District of
Virginia, Alexandria Division, on behalf of purchasers of AOL Time
Warner (NYSE:AOL) during the period between October 18, 2000 and July
17, 2002, inclusive.
The suit alleges that during the class period, the Company recognized
revenue on a variety of transactions in violation of generally accepted
accounting principles in an effort to hide the decline in advertising
revenues.
When the true facts concerning the Company's recognition of revenue in
violation of GAAP were revealed in a Washington Post article on July
18, 2002, Company shares declined an additional 10% to close on July
18, 2002 at $12.45. At the beginning of the class period, the
Company's common stock traded at approximately $47 per share.
For more details, contact Daniel S. Sommers or Lisa Polk by Mail: 1100
New York Avenue, N.W. Suite 500, West Tower Washington, D.C. 20005, by
Phone: 888-240-0775 or 202-408-4600 by E-mail: dsommers@cmht.com or
lpolk@cmht.com or visit the firm's Website: http://www.cmht.com.
CAPITAL ONE: Wechsler Harwood Commences Securities Suit in E.D. VA
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Wechsler Harwood Halebian & Feffer LLP initiated a securities class
action on behalf of all persons who purchased, exchanged or otherwise
acquired the common stock of Capital One Financial Corp. (NYSE:COF)
between January 15, 2002 and July 16, 2002 inclusive in the United
States District Court for the Eastern District of Virginia against the
Company and:
(1) Richard D. Fairbank (Company CEO and Chairman),
(2) Nigel W. Morris (Company President and COO) and
(3) David M. Willey
The lawsuit asserts claims under Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC
thereunder and seeks to recover damages. Specifically, the complaint
alleges that the Company issued numerous press releases regarding its
performance during the class period which represented that the Company
was experiencing quarter after quarter of record earnings and revenue
growth while maintaining "stringent risk management practices" and
adequate loan loss reserves.
The complaint further alleges that these, and other, representations
were materially false and misleading because they failed to disclose
that the Company was in violation of federal guidelines regarding
adequate levels of capitalization and loan loss reserves and that it
was not effectively managing its rapid growth.
On July 16, 2002, the Company revealed that it had entered into an
agreement with regulators, which required the Company to boost reserves
by $247 million in the second quarter of 2002, tie-up additional
capital and institute infrastructure reforms in order to deal
adequately with its high rate of growth, especially in the subprime
market. In reaction to the announcement, Company stock plummeted by
39%, falling from a $50.60 per share close on July 16 to $30.48 per
share by the close of July 17, on extremely heavy trading volume.
During the class period, as alleged in the complaint, Company insiders,
including Mr. Willey, profited by selling a total of over $8.2 million
in the Company's common stock at artificially inflated prices and the
Company undertook a convertible debt offering for $650 million on April
19, 2002.
For more details, contact David Leifer by Mail: 488 Madison Avenue, 8th
Floor, New York, New York 10022 by Phone: 877-935-7400 or by E-mail:
dleifer@whhf.com
EL PASO: Charles Piven Commences Securities Fraud Suit in S.D. Texas
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The Law Offices Of Charles J. Piven, PA initiated a securities class
action on behalf of shareholders who acquired El Paso Corporation
(NYSE: EP) securities between January 29, 2001 and May 29, 2002,
inclusive. The suit is pending in the United States District Court for
the Southern District of Texas, Houston Division, against the Company
and certain of its officers and directors.
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, PA by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
FLEXTRONICS INTERNATIONAL: Wechsler Harwood Files Securities Suit in NY
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Wechsler Harwood Halebian & Feffer LLP initiated a securities class
action in the United States District Court for Southern District of New
York on behalf of purchasers of the securities of Flextronics
International Ltd. (Nasdaq:FLEX) between October 2, 2001 and June 4,
2002, inclusive against the Company and certain of its officers.
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, thereby artificially
inflating the price of Company securities.
The complaint alleges that the Company failed to disclose that its
business and operations were being negatively affected by a host of
adverse factors, including, but not limited to, the following:
(1) that the Company was experiencing declining sales as its
business began to be affected by adverse market forces.
Throughout the class period, defendants repeatedly emphasized
that the Company was not being affected by the slowdown in the
US or global economy, when, in fact, that was not true;
(2) throughout the class period, 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. At all times throughout the class
period, defendants lacked a reasonable basis upon which to
publish and/or affirm the revenue guidance they provided to
analysts and investors; and
(3) defendants had purposely and/or recklessly under-reported the
amount of financing needed to complete the Company's
restructuring and over-stated the status of the completion of
this reorganization, as well as made false statements
concerning the Company's financial and operational condition
because it was critical that defendants raise cash by selling
more equity during the upcoming months.
On June 4, 2002, the last day of the class period, 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 must 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.
In response to this negative announcement, the price of Company stock
dropped precipitously, falling from $12.32 per share to as low as $9.50
per share, a decline of almost 23%, on tremendous volume of 47 million
Company shares traded.
For more details, contact Craig Lowther by Mail: 488 Madison Avenue,
8th Floor, New York, New York 10022 by Phone: 877-935-7400 by E-mail:
clowther@whhf.com
HPL TECHNOLOGIES: Glancy & Binkow Commences Securities Suit in N.D. CA
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Glancy & Binkow LLP initiated a securities class action in the United
States District Court for the Northern District of California on behalf
of all persons who purchased securities of HPL Technologies, Inc.
(Nasdaq:HPLA) between July 31, 2001 and July 19, 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 business operations and accounting
practices caused its stock price to become artificially inflated,
inflicting damages on investors.
The suit alleges that during the class period, defendants improperly
recognized revenue on sales to distributors, thereby artificially
inflating the Company's earnings and stock price. When it was revealed
that the Company had fired its CEO and that the Company's previously
issued financial statements were unreliable, the Company's stock price
reportedly had plummeted more than 70% in one day before trading was
halted.
For more details, contact Michael Goldberg by Mail: 1801 Avenue of the
Stars, Suite 311, Los Angeles, California 90067 by Phone: 310-201-9161
or 888-773-9224 or by E-mail: info@glancylaw.com.
HPL TECHNOLOGIES: Weinstein Kitchenoff Launches Securities Suit in CA
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Weinstein Kitchenoff Scarlato & Goldman Ltd. initiated a securities
class action on behalf of purchasers of HPL Technologies, Inc. (Nasdaq:
HPLAE) common stock between July 31, 2001 through July 18, 2002, in the
United States District Court for the Northern District of California,
against the Company and:
(1) Y. David Lepejian, and
(2) Ita Geva
The suit charges defendants with engaging in a massive accounting fraud
involving fictitious transactions and falsified documents in order to
inflate the Company's revenues and earnings. According to the
complaint, defendants' fraud caused the price of Company stock to be
artificially inflated during the class period. Defendants took
advantage of this inflation, selling 85,000 shares of their individual
the Company's holdings.
On July 19, 2002, the Company announced that it was investigating
"accounting irregularities" in prior quarters and would likely restate
its results for the fiscal year ended July 31, 2002. The Company's
stock price collapsed 72% to as low as $4 per share on the news before
trading was halted.
For more details, contact Brian Penny or Paul Scarlato by Phone:
877-805-7200 by E-mail: penny@wksg.com or scarlato@wksg.com or visit
the firm's Website: http://www.wksg.com
ICN PHARMACEUTICALS: Glancy & Binkow Commences Securities Suit in NY
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Glancy & Binkow LLP initiated a securities class action in the United
States District Court for the Eastern District Of New York on behalf of
purchasers of securities of ICN Pharmaceuticals, Inc. during the period
between November 1, 2001 and July 11, 2002.
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' omissions and misleading statements
regarding the nature of the Company's business operations, revenue and
earnings caused the Company's stock price to become artificially
inflated, inflicting damages on investors.
For more details, contact Michael Goldberg by Phone: 310-201-9150 or
Lionel Z. Glancy by Phone: 310-201-9150
INSIGHT ENTERPRISES: Bernard Gross Commences Securities Suit in AZ
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Bernard M. Gross PC initiated a securities class action in the United
States District Court for the District of Arizona, on behalf of all
persons and entities who purchased or otherwise acquired the common
stock of Insight Enterprises, Inc. (Nasdaq:NSIT) between April 26, 2002
and July 17, 2002, inclusive. The suit, pending in the United States
District Court, District of Arizona, names as defendants the Company
and:
(1) Eric J. Crown,
(2) Timothy A. Crown, and
(3) Stanley Laybourne
The complaint charges the defendants 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 April 25, 2002, after the close of the market, defendants issued the
Company's First Quarter 2002 earnings press release for the three
months ended March 31, 2002 and held a conference call with analysts.
The press release touted the company's accomplishments. During the
conference call on April 25, 2002, defendants stated that the Company
expected to see substantial growth in sales in the Second Quarter of
2002, the three months which began April 1, 2002, to between $720
million and $760 million with Second Quarter earnings growing to
between $0.31 and $0.35 per share. The response from the market to
defendants' statements was dramatic. The per share price of Insight
common stock jumped 26% from a close of $21.30 on April 25, 2002 to a
close of $26.46 on April 26, 2002.
Unbeknownst to investors, however, the Company, already one month into
the Second Quarter of 2002, was suffering from undisclosed adverse
facts which were negatively impacting its revenues and profits and
which would cause it to reverse it sequential growth pattern and report
earnings per share for the Second Quarter that, at best, would be flat
compared to the First Quarter reported in 2002 earnings per share and
significantly below the $0.31 to $0.35 cents defendants told the market
they were expecting for the Second Quarter of 2002.
The truth regarding the Company was not fully disclosed until July 17,
2002, when defendants finally revealed that the Company anticipated
Second Quarter earnings per share in the range of only $0.26 and $0.29,
flat with the prior year's quarter and the First Quarter of 2002.
The press release blamed the lower results on operating losses in its
UK operations caused by reduced sales and a lower gross profit
percentage. The press release also stated that the president and chief
operating officer of the UK operations had resigned.
In response to the surprise negative announcement on July 17, 2002,
after the close of the market, the price of the Company's common stock
dropped precipitously, falling from $23.74 per share on July 17, 2001
to close at $13.36 per share on July 18, 2002, a decline of almost 44%,
on volume of 12 million Insight shares.
For more details, contact Deborah R. Gross or Susan Gross by Mail: 1515
Locust Street, Second Floor, Philadelphia, PA 19102 by Phone:
866-561-3600 (toll-free) or 215-561-3600 or by E-mail:
susang@bernardmgross.com or debbie@bernardmgross.com or visit the
firm's Website: http://www.bernardmgross.com
INTERBANK FUNDING: Finkelstein Thompson Commences Securities Suit in DC
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Finkelstein, Thompson & Loughran initiated a securities class action
against several officers and directors of InterBank Funding Corporation
and its affiliates and subsidiaries and Radin Glass & Co., an
accounting firm for InterBank, on behalf of purchasers of InterBank
securities between July 26, 1999 and June 7, 2002, inclusive.
The suit, filed in the United States District Court for the District of
Columbia, alleges that the defendants violated the federal securities
laws by knowingly issuing false and misleading statements regarding:
(1) the past performance of InterBank securities,
(2) the ability of InterBank to make interest payments, and
(3) the true nature and amount of inter-fund transfers necessary
for InterBank to operate.
Specifically, the suit alleges that the defendants failed to disclose
millions of dollars in loan losses and the impact of those losses on
return statistics and financial statements published by the Company.
The suit further alleges that the defendants concealed the fact that
interest payments to investors were made in significant part out of
current or future offering proceeds, not out of income.
The suit also alleges that defendants failed to disclose the Company's
ability to operate depended on tens of millions of dollars of inter-
fund transfers.
For more details, contact Adam T. Savett or Donald J. Enright by Phone:
866-592-1960 or by E-mail: ats@ftllaw.com or dje@ftllaw.com or visit
the firm's Website: http://www.ftllaw.com
KNIGHT TRADING: Cauley Geller Commences Securities Suit in New Jersey
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Cauley Geller Bowman & Coates, LLP initiated a securities class action
in the United States District Court for the District of New Jersey on
behalf of purchasers of Knight Trading Group, Inc. (Nasdaq: NITE)
securities during the period between February 29, 2000 and June 3,
2002, inclusive.
The complaint alleges that the New Jersey-based Company issued
statements regarding its 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 Jackie Addison, Sue Null or Ellie Baker by
Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 888-551-9944
by E-mail: info@classlawyer.com or visit the firm's Website:
http://www.classlawyer.com
MERRILL LYNCH: Cohen Milstein Commences Securities Suit in S.D. NY
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Cohen Milstein Hausfeld & Toll PLLC initiated a securities class action
in the US District Court for the Southern District of New York on
behalf of purchasers of shares of the Merrill Lynch Internet HOLDRs
Trust (AMEX:HHH) during the period of September 23, 1999 through April
8, 2002. The suit names as defendants Merrill Lynch & Co., Inc.
(NYSE:MER), Merrill Lynch, Pierce, Fenner & Smith, the Internet HOLDRs
Trust and signatories of the Registration Statement and Prospectus
filed with the SEC on September 23, 1999.
The complaint asserts claims under sections 11, 12(a)(2), and 15 of the
Securities Act of 1933. The complaint alleges, among other things,
that during the class period, defendants issued false and misleading
statements, and omissions of material fact, in the registration
statement and prospectus issued in connection with the initial public
offering of the Internet HOLDRS. The Internet HOLDRs are "basket
securities, " and each Internet HOLDRs share represents an undivided
beneficial ownership in (initially) 20 specified companies in the
Internet sector. Thus, the price of the Internet HOLDRs was directly
related to and moved with the price of the Underlying Securities.
The complaint alleges that Merrill Lynch artificially inflated the
stock prices of Internet companies covered by Merrill Lynch, which
included many of the Internet HOLDRs' Underlying Securities, by having
its Internet Group analysts prepare and issue false and misleading
reports, and which did not set forth the true opinions held by those
analysts. Merrill Lynch is alleged to have engaged in this scheme as
part of a larger pattern whereby Merrill Lynch Internet Group analysts,
often under pressure from the company's investment bankers, were
initiating, continuing and/or manipulating research coverage to
maintain and attract investment banking business.
The complaint's allegations are based, in part, on information from the
investigation of Merrill Lynch and its Internet Group conducted by the
New York State Attorney General.
For more details, contact Steven J. Toll or Diana Steele by Mail: 1100
New York Avenue, NW West Tower, Suite 500, Washington DC 20005 by
Phone: 888-240-0775 or 202-408-4600 by E-mail: stoll@cmht.com or
dsteele@cmht.com or visit the firm's Website: http://www.cmht.com
MERRILL LYNCH: Cohen Milstein Commences Securities Suit in S.D. NY
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Cohen Milstein Hausfeld & Toll, PLLC initiated a securities class
action in the US District Court for the Southern District of New York
on behalf of purchasers of shares of the Merrill Lynch B2B Internet
HOLDRs (AMEX:BHH) during the period of February 24, 2000 and April 8,
2002. The suit names as defendants Merrill Lynch & Co., Inc.
(NYSE:MER), Merrill Lynch, Pierce, Fenner & Smith, the B2B Internet
HOLDRs Trust and signatories of the registration statement and
prospectus filed with the SEC on February 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
B2B Internet HOLDRs.
For more details, contact Steven J. Toll or Katrina Jurgill by Mail:
1100 New York Avenue, NW West Tower, Suite 500, Washington DC 20005 by
Phone: 888-240-0775 or 202-408-4600 by E-mail: stoll@cmht.com or
kjurgill@cmht.com or visit the firm's Website: http://www.cmht.com
NICOR INC.: Milberg Weiss Commences Securities Fraud Suit in N.D. IL
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Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class
action in the United States District Court for the Northern District of
Illinois on behalf of purchasers of Nicor Inc. (NYSE:GAS) publicly
traded securities during the period between Jan. 24, 2002 and July 18,
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 reported
false financial results and made false statements about the Company's
finances, business and prospects, including the Company's handling of
its gas cost performance-based rate (PBR) program and that the Company
manipulated its results through the PBR program in order to inflate the
Company's operating performance, causing the Company's stock to trade
at artificially inflated levels.
The Company has now admitted that its revenue and earnings for at least
the 1stQ 2002 were materially overstated and will have to be restated.
For more details, contact William Lerach by Phone: 800-449-4900 by E-
mail: wsl@milberg.com or visit the firm's Website:
http://www.milberg.com
NICOR INC.: Pomerantz Haudek Commences Securities Fraud Suit in N.D. IL
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Pomerantz Haudek Block Grossman & Gross LLP initiated a securities
class action against Nicor Inc. (NYSE:GAS) and two of the Company's
senior officers on behalf of investors who purchased or otherwise
acquired the securities of the Company during the period from January
24, 2002 through July 18, 2002, inclusive, in the United States
District Court for the Northern District of Illinois.
The suit charges that defendants issued false and misleading financial
statements and press releases concerning the Company's publicly
reported earnings.
After the market closed on July 18, 2002, the Company issued a press
release announcing that it may restate prior results in response to
improprieties at its gas business. The Company indicated that the
Illinois Commerce Commission and other governmental agencies are
investigating allegations that the gas distribution business acted
improperly in connection with a performance-based rate program.
Also according to the press release, reported results for the six
months ended June 30, 2002 were negatively impacted by accounting
irregularities at a retail energy marketing joint venture which is 50%
owned by the Company and 50% owned by Dynegy Inc.
For more details, contact Andrew G. Tolan by Phone: 888-476-6529
(888-4-POMLAW) by E-mail: agtolan@pomlaw.com or visit the firm's
Website: http://www.pomerantzlaw.com
NICOR INC.: Howard Smith Commences Securities Fraud Suit in N.D. IL
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The Law Offices of Howard G. Smith initiated a securities class action
on behalf of shareholders who acquired Nicor, Inc. (NYSE:GAS) between
January 24, 2000 and July 18, 2002, inclusive. The case is pending in
the United States District Court for the Northern District of Illinois
against the Company and certain of its officers and directors.
The suit charges that defendants violated federal securities laws by
issuing a series of materially false and misleading statements to the
market throughout the class period. These false and misleading
statements had the effect of artificially inflating the market price of
the Company's securities, inflicting damages on investors.
For more details, contact Howard G. Smith by Phone: 215-638-4847 or
888-638-4847 or by E-mail: LEGUL2000@aol.com.
NICOR INC.: Leo Desmond Commences Securities Fraud Suit in N.D. IL
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The Law Offices of Leo W. Desmond 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. The case is
pending in the United States District Court for the Northern District
of Illinois against the Company and:
(1) Thomas L. Fisher and
(2) Kathleen L. Halloran
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
NICOR INC.: Charles Piven Commences Securities Fraud Suit in E.D. OH
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The Law Offices Of Charles J. Piven, PA 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 of its
officers and directors.
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 Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
NICOR INC.: Schiffrin & Barroway Commences Securities Suit in N.D. IL
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Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Northern District of Illinois on
behalf of all purchasers of the common stock of Nicor Inc. (NYSE: GAS)
publicly traded securities during the period between Jan. 24, 2002 and
July 18, 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 during the class period, defendants reported false financial
results and made false statements about the Company's finances,
business and prospects, including the Company's handling of its gas
cost performance-based rate (PBR) program and that the Company
manipulated its results through the PBR program in order to inflate the
Company's operating performance, causing the Company's stock to trade
at artificially inflated levels. The Company has now admitted that its
revenue and earnings for at least the 1stQ 2002 were materially
overstated and will have to be restated.
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
NICOR INC.: Cauley Geller Commences Securities Fraud Suit in N.D. IL
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Cauley Geller Bowman & Coates, LLP initiated a securities class action
in the United States District Court for the Northern District of
Illinois on behalf of purchasers of Nicor Inc. (NYSE: GAS) publicly
traded securities during the period between January 24, 2002 and July
18, 2002, inclusive.
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 reported
false financial results and made false statements about the Company's
finances, business and prospects, including the Company's handling of
its gas cost performance-based rate (PBR) program and that the Company
manipulated its results through the PBR program in order to inflate the
Company's operating performance, causing the Company's stock to trade
at artificially inflated levels. The Company has now admitted that its
revenue and earnings for at least the 1stQ 2002 were materially
overstated and will have to be restated.
For more details, contact Jackie Addison, Sue Null or Ellie Baker by
Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 888-551-9944
or by E-mail: info@classlawyer.com
PERKINELMER INC.: Rabin & Peckel Commences Securities Fraud Suit in MA
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Rabin & Peckel, LLP initiated a securities class action in the United
States District Court for the District of Massachusetts on behalf of
all persons or entities who purchased PerkinElmer, Inc. (NYSE:PKI)
between July 15, 2001 and April 11, 2002, both dates inclusive. The
suit names the Company, Gregory L. Summe, and Robert F. Friel are named
as defendants in this action.
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.
According to the complaint, the Company issued numerous press releases
regarding its performance during the class period, which represented
that:
(1) the Company was successfully growing its revenues and
earnings;
(2) the Company's transformation into a provider of health-related
products and services was proceeding successfully; and
(3) 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:
(i) the Company was experiencing a decline in the demand for its
products, especially at its Optoeletronics division;
(ii) the Company was carrying tens of millions of dollars of
obsolete inventory on its books; and
(iii) 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 the Company's
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
expected to earn, and that its revenues will decline in the first
quarter of 2002 because of weakness in all of its divisions.
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
PerkinElmer common 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 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
RIVERSTONE NETWORKS: Charles Piven Commences Securities Suit in N.D. CA
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The Law Offices Of Charles J. Piven, PA initiated a securities class
action on behalf of shareholders who acquired Riverstone Networks, Inc.
(Nasdaq: RSTN) securities between August 20, 2001 and June 5, 2002,
inclusive. The suit is pending in the United States District Court for
the Northern District of California.
The action charges violations of the federal securities laws due to the
Company 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, PA by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
SEEBEYOND TECHNOLOGY: Kirby McInerney Commences Securities Suit in CA
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Kirby McInerney & Squire, LLP launched a securities class action in the
United States District Court for the Central District of California,
Western Division, on behalf of all purchasers of SeeBeyond Technology
Corp. common stock (Nasdaq:SBYN) during the period from April 23, 2001
through April 22, 2002.
The complaint asserts claims for violation of Section 10(b) and 20(a)
of the Securities and Exchange Act of 1934 against the Company, its
Chief Executive Officer and its Chief Financial Officer. The alleged
violations, according to the complaint, stem from materially false and
misleading statements issued by the defendants during the class period
that misrepresented to the public the Company's financial results
(which, during the class period, were inflated through premature
recognition of revenue); thereby causing Company stock to trade at
artificially-inflated prices.
The complaint alleges that, in order to ensure the success of a
secondary stock offering in which the Company and its CEO raised tens
of millions of dollars, the Company announced - just prior to the
offering - fourth quarter financial results inflated by "pulling in"
revenue from future quarters and reporting it as having been earned in
the fourth quarter of 2001.
As detailed in the complaint, this allowed the Company to report
revenues that met financial guidance, and allowed the offering to
proceed on terms more advantageous to the Company and its CEO.
On April 2, 2002, the Company announced financial results for its first
quarter of 2002. As the Company would only admit 3 weeks later, these
results included approximately $2.2 million of revenues that had been
pulled in from the future quarter (which allowed the Company to report
revenue figures that approximated its financial guidance).
Unbeknownst to the public until April 23, 2002 (and as Company
executives later admitted in a May 7, 2002 Wall Street Journal
article), the Company's auditors contacted the Company on April 2, 2002
to inform that the financial results as stated on April 2, 2002 were
incorrect and misleading. No public mention of this was made.
On April 22, 2002, the Company announced first quarter financial
results from which this $2.2 million had disappeared. This sudden
shortfall, which altered the Company's other financial metrics and
results for the worse as well, caused Company stock to lose 50% of its
value on April 23, 2002, when it closed at slightly above $3 per share.
For more details, contact Ira M. Press or Ori Braun by Mail: 830 Third
Avenue, 10th Floor, New York, New York 10022 by Phone: 212-317-2300 or
888-529-4787 or by E-Mail: obraun@kmslaw.com
SUPERVALU INC.: Howard Smith Commences Securities Suit in Minnesota
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The Law Offices of Howard G. Smith initiated a securities class action
on behalf of shareholders who acquired Supervalu, Inc. (NYSE:SVU)
between April 4, 2001 and June 26, 2002, inclusive. The case is
pending in the United States District Court for the District of
Minnesota against the Company and certain of its officers and
directors.
The suit charges that defendants violated federal securities laws by
issuing a series of materially false and misleading statements to the
market throughout the class period. These false and misleading
statements had the effect of artificially inflating the market price of
the Company's securities, inflicting damages on investors.
For more details, contact Howard G. Smith by Phone: 215-638-4847 or
888-638-4847 or by E-mail: LEGUL2000@aol.com.
VIVENDI UNIVERSAL: Charles Piven Commences Securities Suit in S.D. NY
---------------------------------------------------------------------
The Law Offices Of Charles J. Piven, PA initiated a securities class
action has been commenced on behalf of shareholders who acquired
Vivendi Universal (NYSE: V); (Paris Bourse: EX FP) securities between
February 11, 2002 and July 3, 2002, inclusive. The case is pending in
the United States District Court for the Southern District of New York,
against the Company and Jean-Marie Messier, the Company's former
Chairman and Chief Executive Officer.
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, PA by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
VIVENDI UNIVERSAL: Cauley Geller Commences Securities Suit in C.D. CA
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Cauley Geller Bowman & Coates, LLP initiated a securities class action
in the United States District Court for the Central District of
California on behalf of purchasers of Vivendi Universal, S.A. (NYSE: V)
common stock and American Depository Receipts (ADRs) during the period
between April 23, 2001 and July 2, 2002, inclusive.
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' false
statements artificially inflated Vivendi ADRs to as high as $68.80 per
ADR. Defendants reported favorable, but misleading, financial results
to the market and represented that Vivendi was not as susceptible to
economic problems as competitors and that the Company had the "highest
resiliency and lowest sensitivity to recessionary environment." The
defendants also represented that Vivendi was successfully implementing
recent mergers, which were being reorganized quickly to generate
synergies.
These positive but false statements allowed the Company to complete
additional acquisitions in its $100 billion buying spree between 1998
and 2001. In late June 2002, news leaked from Vivendi that its debt
was at alarming levels, causing Vivendi's ADRs to decline in price from
$28 to $20. Vivendi's ordinary shares declined in similar fashion.
Nonetheless, Vivendi's CEO reassured the market that liquidity was not
a problem and the ADRs did not totally collapse. However, as ratings
agencies continued to downgrade the Company's debt, the ADRs continued
to decline.
On July 2,2002, Vivendi's debt was downgraded again and the Company was
in danger of default. On July 3,2002, Vivendi's CEO was forced to
resign. Vivendi ADRs collapsed upon these revelations, falling to $15-
21/32 on 7/3/02 on huge volume of 8 million shares.
For more details, contact Jackie Addison, Sue Null or Ellie Baker by
Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 888-551-9944
or by E-mail: info@classlawyer.com or visit the firm's Website:
http://www.classlawyer.com
VIVENDI UNIVERSAL: Schiffrin & Barroway Lodges Securities Suit in CA
--------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Central District of California on
behalf of all purchasers of the common stock of Vivendi Universal, S.A.
(NYSE: V) common stock and American Depository Receipts (ADRs) during
the period between April 23, 2001 and July 2, 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 during the class period, defendants' false statements artificially
inflated Vivendi ADRs to as high as $68.80 per ADR. Defendants reported
favorable, but misleading, financial results to the market and
represented that Vivendi was not as susceptible to economic problems as
competitors and that the Company had the "highest resiliency and lowest
sensitivity to recessionary environment." The defendants also
represented that Vivendi was successfully implementing recent mergers
which were being reorganized quickly to generate synergies.
These positive but false statements allowed the Company to complete
additional acquisitions in its $100 billion buying spree between 1998
and 2001. In late June 2002, news leaked from Vivendi that its debt
was at alarming levels, causing Vivendi's ADRs to decline in price from
$28 to $20. Vivendi's ordinary shares declined in similar fashion.
Nonetheless, Vivendi's CEO reassured the market that liquidity was not
a problem and the ADRs did not totally collapse. However, as ratings
agencies continued to downgrade the Company's debt, the ADRs continued
to decline.
On July 2,2002, Vivendi's debt was downgraded again and the Company was
in danger of default. On July 3,2002, Vivendi's CEO was forced to
resign. Vivendi ADRs collapsed upon these revelations, falling to $15-
21/32 on July 3,2002 on huge volume of 8 million shares.
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
*********
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.
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