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/raid1/www/Hosts/bankrupt/CAR_Public/020826.mbx C L A S S A C T I O N R E P O R T E R Monday, August 26, 2002, Vol. 4, No. 168 Headlines AIRSPAN NETWORKS: Asks NY Court To Dismiss Consolidated Securities Suit ANSWER PRODUCTS: Voluntarily Recalls 850 Bicycles For Injury Hazard ANTIGENICS INC.: Asks For Consolidated Securities Suit Dismissal APARTHEID LITIGATIONS: Latest Compensation Suit Targets More Companies AT CROSS: Appeals Court Partially Upholds Dismissal of Securities Suit CHUBB CORPORATION: Plaintiffs File Amended Shareholder Suit in NJ Court DELTA AIRLINES: Asks For Review of MI Court's Certification of Lawsuit DELTA AIRLINES: Trial in Antitrust Lawsuit Set For April 2003 In NC DELTA AIRLINES: Six Travel Agencies Sue Over Antitrust Violations in CA DELTA AIRLINES: Trial in Suit For RICO Violations Set For June 2003 DJ ORTHOPEDICS: CA Court Partially Dismisses Securities Fraud Suit FLORIDA: Jacksonville Offers Accord To AT&T For Reimbursing Subscribers GLAXOSMITHKLINE: FDA Requests That Paxil TV Advertisement Ban Be Lifted INDIAN TRUST: Accounting Debacle Bigger Than Enron, Attorney Says MARTHA STEWART: Shareholder Files New Suit V. Martha Stewart, Officers MATTRESS DISCOUNTERS: Settling Overtime Wage Suit For $1.75M in CA MORTON'S OF CHICAGO: Waiters Claim Bosses Taking Share Of Their Tips NETRO CORPORATION: Asks Court To Dismiss Consolidated Securities Suit OHIO: Suit Claiming Separate School System Exists For Blacks Dismissed PHOENIX HOME: Asks NY Court To Dismiss Suit Over Reorganization Plan VISUAL NETWORKS: MD Court Dismisses Consolidated Securities Fraud Suit New Securities Fraud Cases ANDRX CORPORATION: Beatie and Osborn Commences Securities Suit in FL AON CORPORATION: Wechsler Harwood Commences Securities Suit in N.D. IL BELLSOUTH CORPORATION: Chitwood & Harley Files Securities Suit in GA CAPITAL ONE: Kirby McInerney Commences Securities Fraud Suit in E.D. VA EAGLE BUILDING: Sichenzia Ross Appointed As Lead Counsel in FL Suit HOUSEHOLD INTERNATIONAL: Milberg Weiss Commences Securities Suit in IL HOUSEHOLD INTERNATIONAL: Cauley Geller Commences Securities Suit in IL HPL TECHNOLOGIES: Neiman Garland Commences Securities Suit in N.D. CA ICN PHARMACEUTICALS: Kirby McInerney Commences Securities Suit in NY INTERPUBLIC GROUP: Cauley Geller Commences Securities Suit in S.D. NY INTERPUBLIC GROUP: Mark McNair Commences Securities Suit in S.D. NY INTERPUBLIC GROUP: Schiffrin & Barroway Lodges Securities Suit in NY MORGAN STANLEY: Wolf Haldenstein Commences Securities Suit in S.D. NY RIVERSTONE NETWORKS: Mark McNair Commences Securities Suit in N.D. CA ********* AIRSPAN NETWORKS: Asks NY Court To Dismiss Consolidated Securities Suit ----------------------------------------------------------------------- Airspan Networks, Inc. asked the United States District Court for the Southern District of New York to dismiss the consolidated securities class action pending against it and: (1) Eric D. Stonestrom, President and Chief Executive Officer, (2) Joseph J. Caffarelli, former Senior Vice President and Chief Financial Officer, (3) Matthew Desch, Chairman, (4) Jonathan Paget, Executive Vice President and Chief Operating Officer, and (5) certain underwriters of the Company's July 2000 initial public offering The complaint alleges violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 for issuing a Registration Statement and Prospectus that contained materially false and misleading information and failed to disclose material information. In particular, plaintiffs allege that the underwriter-defendants agreed to allocate stock in the Company's initial public offering to certain investors in exchange for excessive and undisclosed commissions and the investors' agreements to make additional stock purchases in the aftermarket at pre-determined prices. The plaintiffs allege that the Registration Statement and Prospectus for the Company's initial public offering were false and misleading in violation of the securities laws because they did not disclose these arrangements. The action is being coordinated with over three hundred other nearly identical actions. On July 15, 2002, the Company and the individual defendants moved to dismiss all claims against them. The court has not ruled on this motion. The Company intends to vigorously defend itself and its officers against this lawsuit. ANSWER PRODUCTS: Voluntarily Recalls 850 Bicycles For Injury Hazard ------------------------------------------------------------------- Answer Products, Inc. is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 850 mountain bicycles. The spring and adjuster can separate from the suspension fork and strike the rider, causing injuries. The Company has received 18 reports of these adjusters separating from the fork and being projected at riders, causing four consumers to suffer cuts, bruises and one chipped tooth. The recalled 2002 model forks were installed on Specialized Rockhopper A-1 Comp and Mongoose Hot Link Sommet series bicycles. "MANITOU" is printed on the side of the fork and the model name, "Six Elite" and "Six Super," is printed on the arch of the fork and on the side of the fork leg. The bicycles were manufactured in Asia. Bicycle stores nationwide and mail-order catalogs sold these bicycles from January 2002 through August 2002 for between $800 and $900. For more details, contact the Company by Phone: 800-423-0273 between 8 am and 5 pm PT Monday through Friday or visit the firm's Website: http://www.answerproducts.com/safetynotice.htm. ANTIGENICS INC.: Asks For Consolidated Securities Suit Dismissal ---------------------------------------------------------------- Antigenics, Inc. asked the United States District Court for the Southern District of New York to dismiss the consolidated securities class action pending against it, its Chairman and Chief Executive Officer Garo Armen, and two investment banking firms that served as underwriters in its initial public offering. The amended suit, filed on behalf of purchasers of the Company's stock between February 3, 2000 and December 6, 2000, alleges that the brokerage arms of the investment banking firms charged secret excessive commissions to certain of their customers in return for allocations of the Company's stock in the offering. The suit also alleges that shares of Company stock were allocated to certain of the investment banking firms' customers based upon an agreement by such customers to purchase additional shares of our stock in the secondary market. The complaint alleges that the Company is liable under Section 11 of the Securities Act of 1933, as amended and Dr. Armen is liable under Sections 11 and 15 of the Securities Act because the Company's registration statement did not disclose these alleged practices. The suit also alleges that the Company and Dr. Armen violated Section 10(b) of the Securities Exchange Act and SEC Rule 10(b)-5 by making false and misleading statements and/or omissions in order to inflate the Company's stock price and conceal the investment banking firms' alleged secret arrangements. The amended complaint further alleges that Dr. Armen, as a "control person" of the Company, violated Section 20 of the Securities Exchange Act. On July 15, 2002, the Company and Dr. Armen filed a motion to dismiss the suit, along with other defendants in similar suits in New York federal court. By order of the court, this motion set forth all "common issues" i.e., all grounds for dismissal common to all or a significant number of issuer defendants. All individual defenses are preserved and may be asserted in subsequent motions after the common issues are resolved. No date has yet been set for the hearing on the Issuer Defendant's Motion to Dismiss. APARTHEID LITIGATIONS: Latest Compensation Suit Targets More Companies ---------------------------------------------------------------------- Computers makers are the target of the latest lawsuit seeking compensation for victims of South Africa's apartheid system, accused of providing the technology that supported the brutal regime of racial segregation, the Associated Press Newswires reports. The lawsuit seeks class action status and was brought on behalf of a North Carolina couple, Frank and Sylvia Brown, who had lived in South Africa in the early 1960s, when they were forcibly removed from their homes in Simonstown and relocated to a black "ghetto," where they married in 1973, separately made their way to the United States, where Sylvia is now a citizen and Frank a permanent resident. Unisys Corp. and Fujitsu Ltd. helped "lubricate the wheels and machinery of racism, exclusion and repression," according to the lawsuit filed this month in US District Court in Newark. The companies, and their corporate predecessors, knew that their products were used by the white regime to dominate the black-majority nation, the lawsuit charges. The apartheid system denied basic rights to all nonwhite residents from 1948 to 1993. Unisys, based in Bluebell, Pa., was formed in 1986 by the merger of Sperry Corp. and Burroughs Corp., which both sold to South Africa, the lawsuit charges. Also sued were Amdahl Corp., now known as Fujisu IT Holdings Inc., and ICL Ltd., now called Fujitsu Services Ltd., which are units of Fujitsu, a Japanese electronics maker with its US base in Sunnyvale, California. The sales "knowingly and notoriously violated the United Nations sanctions against the apartheid system by providing it with military equipment and hardware," the lawsuit claimed. Fujitsu spokeswoman Patricia Davis said, "All product shipments to that country have been done in strict compliance with US government export regulations and the company was a signatory to the Sullivan Principles, a voluntary set of business guidelines aimed at improving the condition of the nonwhite population in South Africa." In the past two months, their lawyers have filed two other lawsuits seeking reparations from companies they claimed did business with South Africa, namely - Citigroup, the largest financial institution in the United States, and two Swiss banks, UBS and Credit Suisse. The other is pending against IBM and three German banks, Deutsche Bank, Dresdner Bank and Commerzbank. These actions were filed in federal court in Manhattan, where they may be consolidated with the lawsuit filed in Newark, said one the lawyers, Diane E. Sammons. Ms. Sammons said the legal team is pursuing its claims on the same concepts used in reaching multibillion dollar settlements for Holocaust victims from Swiss banks and German industry. "It is based upon theories of unjust enrichment and breach of international law," Ms. Sammons said. AT CROSS: Appeals Court Partially Upholds Dismissal of Securities Suit ---------------------------------------------------------------------- The United States First Circuit Court of Appeals partially upheld the dismissal of a securities class action pending against AT Cross Co. and certain of its officers and directors. The suit was filed in the United States District Court for the District of Rhode Island, alleging that the defendants violated federal securities laws by making material misstatements and omissions in the Company's public filings and statements relating to the Company's Pen Computing Group (PCG) business. The suit seeks class action status including all purchasers of the Company's Class A common stock between September 17, 1997 and April 22, 1999. In June 2000, the Company filed a motion to dismiss, which was granted by the court in June 2001. The plaintiffs then appealed the decision to the First Circuit Court of Appeals. On March 20, 2002, the Court of Appeals for the First Circuit issued a judgment affirming the dismissal of all claims asserted against the: (1) W. Russell Boss Jr. Trust A, (2) W. Russell Boss Jr. Trust B and (3) W. Russell Boss Jr. Trust C The court also reversed the district court's dismissal of the claims asserted against the Company and the named individual defendants. The appeals court's ruling was limited to a finding that the plaintiff's complaint had satisfied the pleading requirements of the Private Securities Litigation Reform Act of 1995. The court did not opine on the merits of plaintiff's claims. The Company maintains that the claims are without merit and continues to vigorously defend the litigation. CHUBB CORPORATION: Plaintiffs File Amended Shareholder Suit in NJ Court ----------------------------------------------------------------------- The California Public Employees and Retirement System (CaLPERS) filed an amended class action after the United States District Court for the District of New Jersey dismissed in its entirety the original suit filed against Chubb Corporation and: (1) Dean R. O'Hare, (2) Henry B. Schram, (3) David B. Kelso (4) Stephen J. Sills, (5) Robert H. Kullas, (6) Robert V. Deutsch, and (7) Executive Risk Inc. According to an earlier Class Action Reporter story, the defendants are allegedly liable for certain misrepresentations and omissions regarding, among other matters, disclosures made between April 27, 1999 and October 15, 1999 relating to the improved pricing in the Company's standard commercial insurance business and relating to the offer of the Company's securities to, and solicitation of votes from, the former shareholders of Executive Risk, Inc. in connection with its acquisition of Executive Risk, Inc. The Company also faces a shareholders' derivative suit in the same court, charging the Company and its directors with: (i) breaching their fiduciary duties; (ii) engaging in gross mismanagement; and (iii) failing properly to exercise control over the dissemination of information regarding the Company's operations and performance, which allegations are based on substantially the same allegations made in the prior suit. The Company is defending the action vigorously. DELTA AIRLINES: Asks For Review of MI Court's Certification of Lawsuit ---------------------------------------------------------------------- Delta Airlines filed a petition asking for a review of the US District Court for the Eastern District of Michigan's ruling granting class certification to an antitrust suit filed against it, along with: (1) Northwest Airlines, (2) US Airways, and (3) the Airlines Reporting Corporation, an airline-owned company that operates a centralized clearinghouse for travel agents to report and account for airline ticket sales. According to an earlier Class Action Reporter story, the suit alleges, among other things: (i) that the defendants and certain other airlines conspired with the Company in violation of Section 1 of the Sherman Act to restrain competition and assist the Company in fixing and maintaining anti-competitive prices for air passenger service to and from its Atlanta and Cincinnati hubs; and (ii) that the Company violated Section 2 of the Sherman Act by exercising monopoly power to establish such prices in an anticompetitive or exclusionary manner. The complaint further asserts that, for purposes of plaintiffs' damages claims, the purported plaintiff class consists of all persons who purchased a Delta full-fare ticket between June 11, 1995 and the present on routes: (a) that start or end at the Company's hubs in Atlanta or Cincinnati; (b) on which the Company has over a 50% market share; (c) that are longer than 150 miles; and (d) that have total annual traffic of over 30,000 passengers In May 2002, the court granted the plaintiffs' motion for class action certification and denied the airlines' motions for summary judgment. The airline defendants then a petition for review of the class certification with the US Court of Appeals for the Sixth Circuit, which has not yet decided whether to permit this interlocutory appeal. DELTA AIRLINES: Trial in Antitrust Lawsuit Set For April 2003 In NC ------------------------------------------------------------------- Trial in the antitrust class action pending against Delta Airlines and other airline companies in the US District Court for the Eastern District of North Carolina is set for April 29,2003. The suit, filed on behalf of all travel agents in the United States which sold tickets from September 1, 1997 to the present on any of the defendant airlines, alleges that the Company and the other airline defendants conspired to fix travel agent commissions in violation of Section 1 of the Sherman Act. The court has not yet ruled on plaintiffs' motion for class action certification. The Company vowed to vigorously oppose the suit. DELTA AIRLINES: Six Travel Agencies Sue Over Antitrust Violations in CA ----------------------------------------------------------------------- Delta Airlines was named as a defendant in a class action filed by six travel agencies in the United States District Court for the Central District of California. The suit also names as defendants: (1) American Airlines, (2) United Airlines and (3) Orbitz, LLC The suit, filed on behalf of an alleged nationwide class of traditional travel agents, alleges that the defendants violated Sections 1 and 2 of the Sherman Act by conspiring: (1) to prevent travel agents from acting as effective competitors in the distribution of airline tickets to passengers; and (2) to monopolize the distribution of common carrier air travel in the United States. The Company intends to mount a vigorous defense against the suit. DELTA AIRLINES: Trial in Suit For RICO Violations Set For June 2003 ------------------------------------------------------------------- Trial in the class action filed by two travel agencies against Delta Airlines in the United States District Court for the Central District of California is set for June 3,2003. The suit, filed on behalf of all travel agencies from which the Company has demanded payment for breach of the agencies' contractual and fiduciary duties to Delta in connection with Delta ticket sale transactions during the period from September 20, 1997 to the present. The lawsuit alleges that the Company's conduct: (1) violates the Racketeer Influenced and Corrupt Organizations Act of 1970; and (2) creates liability for unjust enrichment. The plaintiffs, who have requested a jury trial, are seeking injunctive and declaratory relief, costs and attorneys' fees, and unspecified treble damages. DJ ORTHOPEDICS: CA Court Partially Dismisses Securities Fraud Suit ------------------------------------------------------------------ The United States District Court for the Southern District of California granted in part and denied in part, DJ Orthopedics, Inc.'s motion to dismiss the consolidated securities class action pending against it and: (1) Leslie H. Cross, President and Chief Executive Officer, (2) Cyril Talbot III, former Senior Vice President, Finance, Chief Financial Officer, and Secretary, (3) Charles T. Orsatti, former Chairman of the Company's Board of Directors, (4) Mitchell J. Blutt, M.D., director, (5) Kirby L. Cramer, director, (6) Damion E. Wicker, M.D., director, and (4) the underwriters of the Company's initial public offering. The consolidated suit arose from several suits filed in the United States District Courts for the Southern District of New York and for the Southern District of California on behalf of purchasers of the Company's common stock alleging violations of the federal securities laws in connection with the Company's November 15, 2001 initial public offering. The complaints alleged that defendants violated Sections 11, 12, and 15 of the Securities Act of 1933 by, among other things, misrepresenting and/or failing to disclose material facts in connection with the Company's registration statement and prospectus for the initial public offering. On February 25, 2002, plaintiffs agreed to dismiss the New York actions without prejudice. On February 28, 2002, a federal district court judge consolidated the Southern District of California actions into a single action, and appointed Oracle Partners, LP as lead plaintiff. On May 3, 2002, the lead plaintiff filed its consolidated amended complaint. On June 17, 2002, the Company and the other defendants filed a motion to dismiss the consolidated suit, which the court granted in part and denied in part the motion to dismiss. The court dismissed several categories of the misstatements and omissions alleged by plaintiffs. The remaining allegation pertains to a purported failure to disclose material intra-quarterly sales data in the registration statement and prospectus. The Company believes the claims are without merit and intends to defend the action vigorously. However, there can be no assurance that the Company will succeed in defending or settling this action. Additionally, there can be no assurance that the action will not have a material adverse effect on the Company's business. FLORIDA: Jacksonville Offers Accord To AT&T For Reimbursing Subscribers ----------------------------------------------------------------------- Jacksonville has sent its own proposal to AT&T Broadband on how to reimburse subscribers for customer service problems dating back to last summer, and how to protect customers from future problems, The Florida Times-Union reports. The city did not specify a rebate dollar amount for customer rebates, but the proposal was adamant that subscribers would still be eligible for any settlement that would come out of a pending class action. A settlement between Jacksonville and AT&T, says the city's proposal, is "not to diminish the rights of the parties in the class action litigation or the (state) attorney general's investigation in any manner." AT&T officials want the settlement with the city to cover all complaints, including the class action filed in Jacksonville in May. The city's proposal includes tougher customer service standards and city audits of AT&T's performance and finances. The city's proposal, to satisfy AT&T's demands, also includes approval of the company's planned merger with Comcast Corp., which could get federal approval as early as this fall. City Council President Jerry Holland said he doesn't expect a settlement to be reached this week, a few more negotiation sessions could be necessary, he said. Mediation is scheduled for next month in the class action, filed on behalf of all one million AT&T cable customers in Florida. Attorneys for the customers will be seeking far more for customers to satisfy their allegations of poor customer service, than the $7 rebate figure proposed by AT&T, said Stephanie Hartley, one of the class action attorneys. GLAXOSMITHKLINE: FDA Requests That Paxil TV Advertisement Ban Be Lifted ----------------------------------------------------------------------- A federal judge exceeded her authority when she banned some national TV commercials for the popular anti-depressant Paxil, said the Food and Drug Administration when it asked a federal court to rescind the order, according to a report by the Associated Press Newswires. "This is not about a single product or a single company, but about the FDA's authority over prescription drug advertising," agency spokesman Lawrence Bachorik said. Judge Mariana Pfaelzer recently banned TV ads that claim Paxil is not habit-forming, saying that such ads "created inaccurate expectations about the ease of withdrawal from the drug." Judge Pfaelzer found that in other countries, labels on the drug warn of adverse reactions when its use is discontinued. The agency's brief said there are often side effects when patients stop taking certain medications "abruptly." However, the FDA labels drugs as habit-forming only when they "cause drug-seeking behavior, often with the user escalating the dose for psychological or physical gratification." The ruling against drug manufacturer GlaxoSmithKline in Judge Pfaelzer's court, came about a year after a civil lawsuit was filed on behalf of 35 patients who claimed they suffered withdrawal symptoms such as nausea, fever and "electric zaps" to their bodies. The plaintiffs' attorney Karen Barth said the judge was "well within her jurisdiction" in making the ruling. A hearing has been set for October 7, to decide whether the lawsuit should be converted to a nationwide class action, she said. In the meantime, company attorneys are appealing the ruling. The FDA, and not the courts, "has the expertise and responsibility for reviewing and regulating pharmaceutical ads," David Stout, a Company president said in a statement. INDIAN TRUST: Accounting Debacle Bigger Than Enron, Attorney Says ----------------------------------------------------------------- The U.S. government's mishandling of American Indian trust money is a scandal bigger than Enron, an attorney told members of two Oklahoma Indian tribes recently, Associated Press Newswires reports. "It is the biggest cover-up and corruption scandal this country has ever seen," said Dennis Gingold, an attorney for Elouise Cobell, who represents about 500,000 Indians in a class action against the US Interior Department. Ms. Cobell and four other Indians filed a lawsuit in 1996, claiming that the Interior Department mishandled the Individual Indian Money trust fund, which collects and distributes royalties to tribal members in return for such uses of Indian lands as grazing, mining, oil drilling, timber harvesting, among others. About $137 billion is still unaccounted for, according to documents filed by Ms. Cobell's attorneys. Ms. Cobell, of Browning, Montana, told members of the Quapaw and Miami tribes that she sought accountability after authorities told her there was no money in her account. Among other defendants, the lawsuit names Neal McCaleb, the Interior Department's assistant secretary for Indian Affairs, who was named last year to head the Bureau of Indian Affairs. The lawsuit was filed before he took office. In 1999, US District Court Judge Royce C. Lamberth ordered the Interior Department to account for all funds, dating back to when the trust began in 1887, and to fix the system. The lawsuit seeks a full and accurate accounting of all trust funds and a correction of account balances in conformity with that accounting, according to plaintiffs. It also seeks to reform the broken Indian trust management system. Mr. Gingold said anyone with computer knowledge could tap into the accounts and steal the money. After a report on the accessibility of the Interior's computer system was issued, the Individual Indian Management database was removed from the Internet. The Interior Department was ordered to issue checks, but Interior Secretary Gale Norton admitted it took nearly two months just to start issuing checks to account holders. In October, Judge Lamberth ordered that Secretary Norton and Assistant Secretary McCaleb would face contempt charges for failing to correct the system. He said that after the trial, he would consider appointing a receiver. However, Judge Lamberth has yet to rule on whether the two are guilty of contempt for not moving quickly to resolve the account balances. Judge Lamberth ordered the contempt trial after his appointed monitor found numerous problems with the steps taken by the Interior Department to reconcile the accounts and with the Department's honesty about reporting setbacks. Judge Lamberth also found the department was not protecting the security of the accounts. The plaintiffs claim that Ms. Norton and Mr. McCaleb never started the accounting process for Indian funds as ordered by the court, the plaintiffs claim. MARTHA STEWART: Shareholder Files New Suit V. Martha Stewart, Officers ---------------------------------------------------------------------- A Martha Stewart Living Omnimedia Inc. shareholder has sued Martha Stewart and other officers, alleging that they sold Company stock before the shares fell sharply on news that federal investigators were probing Martha Stewart as an individual for possible insider trading, according to a recent report by The Wall Street Journal. The suit's claims of insider trading in Company shares could open a new chapter in the story, which so far has focused on whether Ms. Stewart had inside information when she sold nearly 4,000 shares of ImClone Systems Inc. a day before ImClone announced bad news that sent its shares tumbling. The lawsuit, filed on behalf of shareholder Howard Rosen, and seeking class action status, in the United States District Court in New York, does not offer evidence showing that Ms. Stewart knew she was under federal investigation and conveyed that information to others. That could be a problem with the lawsuit. "A lawyer bringing these cases must be able to show probability of insider trading," said Stephen Crimmins, a partner at Pepper Hamilton LLP and the former deputy chief litigation counsel at the Securities and Exchange Commission (SEC). Showing a possibility is not sufficient, he added. The Company, named as defendant along with nine other parties, said the lawsuit "is without foundation, and we intend to defend it aggressively." Federal investigators probing Ms. Stewart for possible insider trading and obstruction of justice in the ImClone case, meanwhile, are not pursuing possible insider trading in the shares of Ms. Stewart's own company, people familiar with the situation said. The lawsuit brought by shareholder Howard Rosen alleges that Ms. Stewart and her associates sold their shares for $79 million with knowledge "of the fact that Ms. Stewart was secretly being investigated for insider trading and that this would severely damage Ms. Stewart's image, the company's most precious asset." Company shares fell from a high of $20.93 during March to a low of $6.29 early this month, following revelations in June that prosecutors were questioning Ms. Stewart in connection with possible insider trading in ImClone shares. Ms. Stewart announced January 8, that she had sold three million shares in her company to ValueAct Capital Partners, now the Company's second- largest holder behind Ms. Stewart. According to the securities fraud indictment of ImClone's former Chief Executive Samuel Waksal, a personal friend of Ms. Stewart, the SEC first requested documents from ImClone "on or about that date." Persons involved in the developing matters relating to the Martha Stewart-ImClone-Martha Stewart Living triangle, nonetheless, are charting the relevant trading histories - as, for example, the law firm of Milberg Weiss Bershad Hynes & Lerach, which is representing shareholder Howard Rosen. In Washington, events continue to swirl about Ms. Stewart in the now- public investigation of her conduct in relation to the sale of ImClone shares. The House Energy and Commerce Committee members expressed concern about redacted items in documents Ms. Stewart provided earlier in the week. A spokeswoman for Ms. Stewart said portions of some documents that were redacted contained proprietary or personal information that "had nothing to do with ImClone." The Committee, however, has asked Ms. Stewart's attorneys to come in to review the records with them, and show them original documents from which information was redacted. MATTRESS DISCOUNTERS: Settling Overtime Wage Suit For $1.75M in CA ------------------------------------------------------------------ Furniture retailer Mattress Discounters Corporation agreed to settle a class action pending in California state court on behalf of certain current and former employees alleging unfair labor practices. The action sought allegedly unpaid wages and penalties, attorneys' fees, and costs. The tentative agreement reached to resolve this litigation, is subject to approval by the court and by the members of the plaintiff class. Pursuant to the terms of the proposed settlement, the Company would be obligated to provide cash and non-cash consideration of $1.75 million related to restitution to the class members and for legal and administrative costs. Such proposed settlement would be satisfied through a cash payment of $0.7 million and non-cash benefits being provided to the members of the plaintiff class. MORTON'S OF CHICAGO: Waiters Claim Bosses Taking Share Of Their Tips -------------------------------------------------------------------- Waiters at the Morton's of Chicago restaurants allege in a class action filed against restaurant chain Morton's Restaurant Group, in Manhattan Federal Court, that their bosses at the famed steakhouses are taking a cut of their tips, the New York Daily News reports. The lawsuit, filed by more than 100 waiters and former waiters at the `tony' restaurants, is asking the court to stop their bosses' alleged practice of taking a share of their tips, and they also are asking to get reimbursement of the monies taken. One of the chain's two restaurants in Manhattan is on Fifth Avenue at 45th Street. The other, on West Street near the World Trade Center site, has been closed since September 11. The waiters allege they are forced to hand a percentage of their cash and credit card tips to managerial staff, including, in some instances, the catering manager and the food and beverage director. That, contends the lawsuit, is a violation of the federal Fair Labor Standards Act, as well as the New York State labor laws. Traditionally, waiters give a small percentage of their tips to busboys and bartenders but not to management employees, who are salaried staff. NETRO CORPORATION: Asks Court To Dismiss Consolidated Securities Suit --------------------------------------------------------------------- Netro Corporation asked the United States District Court for the Southern District of New York to dismiss the consolidated securities class action pending against the Company and: (1) Richard Moley, (2) Gideon Ben-Efraim, (3) Michael T. Everett, (4) Dain Rauscher, Inc., (5) FleetBoston Robertson Stephens, Inc., and (6) Merrill Lynch, Pierce, Fenner and Smith, Inc. The suits actions are two of more than 1,000 lawsuits currently pending against more than 300 different issuers, certain officers and directors of these issuers and more than 45 different underwriters arising out of initial public offerings occurring between December 1997 and December 2000. By order dated August 9, 2001, Chief Judge Michael B. Mukasey assigned the IPO Allocation Litigation, including the above suits, to the Honorable Shira A. Scheindlin for all pre-trial purposes. On September 7, 2001, Judge Scheindlin adjourned the time for all defendants in the IPO Allocation Litigation, including the Company and the individual defendants, to answer, move or otherwise respond to current and future complaints indefinitely pending further instruction from the court. The suits were later consolidated. The consolidated suit alleges claims against the Company arising under Section 11 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and against the individual defendants under Section 10(b), Rule 10b-5 and Section 20(a) of the Exchange Act, and Section 15 of the 33 Act. The claims allege various misconduct arising from the Company's August 1999 initial public offering and March 2000 follow-on offering of its common stock, including, among other things, that the disclosures made in connection with the offerings were incomplete or misleading in various respects. The allegations include, among other things, that the Company and the individual defendants failed to disclose that the underwriter defendants: (i) charged the Company excessive commissions and inflated transaction fees in violation of the securities laws and regulations; and (ii) allowed certain investors to take part in the Company's initial public offering in exchange for promises that these investors would purchase additional shares in the after-market for the purpose of inflating and maintaining the market price of the Company's common stock. The suit seeks to certify a class of shareholders who purchased the Company's common stock between August 18, 1999 and December 6, 2000, and to recover monetary damages from defendants in an unspecified amount, as well as plaintiff's attorneys' fees and expenses in bringing the action. The dismissal motions are in the process of being briefed. The suit is in its earliest stages. The Company and the individual defendants believe the claims asserted against them are without merit, and they intend vigorously to defend themselves against those claims. OHIO: Suit Claiming Separate School System Exists For Blacks Dismissed ---------------------------------------------------------------------- A federal judge has thrown out a lawsuit by a Columbus Board of Education member who says a dual school system exists in the city, which denies black children an equal education, The Columbus Dispatch reports. For board member Bill Moss and 26 other plaintiffs, it was the final rebuke by the court. US District Court Judge Edmund A. Sargus sharply criticized the lawsuit as "nearly impossible to decipher," when he gave the Moss group a chance to rewrite its allegations against the school system last year. This week, Judge Sargus said the new allegations are nearly identical, and he dismissed all the claims against the school board and its members, including Mr. Moss, the Columbus Education Association and its president, John Grossman, the Ohio Department of Education and a number of suburban school districts. The amended complaint "falls woefully short" of showing violations of federal law or that the defendants are liable for the alleged discrimination, Judge Sargus wrote. Byron Potts, one of the attorneys for the plaintiffs, said he was not surprised by the decision. "This is just one step in the long journey. We are prepared to go the full distance," Mr. Potts said. He wants the suit certified as a class action against the school system and expects to file an appeal shortly. Mr. Moss, who represented himself, said the case might be over for him. "I am getting kind of weary. I can't carry the cross by myself," he said recently. In the lawsuit, Mr. Moss and the other plaintiffs said the 1986 Win-Win agreement between Columbus Public Schools and other Franklin County districts that allows about 40 percent of Columbus children to attend suburban schools, has promoted white flight and removed taxes from the city core. The suburban districts agreed to compensate Columbus schools with tax dollars, and that land annexed by the city after the agreement was signed would be served by city schools. Mr. Moss filed a discrimination suit against the school system and others after a Dispatch series showed that in 2000, four years after the school board ended busing as a means to integrate Columbus schools, the schools were re-segregated by race and income, student achievement, teacher training and resources. Mr. Moss named a host of defendants the first year of the filing of the discrimination suit, including business leaders and the city of Columbus. Most defendants had been dropped or dismissed from the lawsuit before this week's ruling dismissing the lawsuit entirely. PHOENIX HOME: Asks NY Court To Dismiss Suit Over Reorganization Plan -------------------------------------------------------------------- Phoenix Home Life Mutual Insurance Co. asked the Supreme Court of the State of New York to dismiss the remaining class action pending against it, seeking to challenge its reorganization and the adequacy of the information provided to policyholders regarding the plan of reorganization. The suit was filed on behalf of a putative class consisting of the eligible policyholders of the Company as of December 18, 2000, the date the plan of reorganization was adopted. The defendants named in the lawsuit include the Company, its parent Phoenix Companies, Inc., their directors, and its financial advisor in connection with the reorganization. The Company filed a motion to dismiss the suit and it is still pending. The court had earlier dismissed another suit, containing virtually identical allegations to the first suit, on April 12, 2002. VISUAL NETWORKS: MD Court Dismisses Consolidated Securities Fraud Suit ---------------------------------------------------------------------- The United States District Court for the District of Maryland dismissed the consolidated securities class action filed against Visual Networks, Inc. (Nasdaq: VNWK) and Scott Stouffer, chairman of the board and the former chief executive officer. The complaint, originally filed in mid- 2000, alleged that between February 7, 2000 and August 23, 2000, the defendants made false and misleading statements that had the effect of inflating the market price of Company , in violation of Securities 10(b) and 20(a) of the Securities Exchange Act of 1934. The Company's motion to dismiss was granted and the action was dismissed by the order of the Honorable Deborah K. Chasanow, United States District Judge for the District of Maryland. "We are extremely pleased with this ruling. We have said all along that these complaints were totally without merit," Elton King, Company president and chief executive officer said in a statement. "Having put this case behind us, we can now fully focus on continued execution and solid business fundamentals." New Securities Fraud Cases ANDRX CORPORATION: Beatie and Osborn Commences Securities Suit in FL -------------------------------------------------------------------- Beatie and Osborn LLP initiated a securities class action in the United States District Court for the Southern District of Florida on behalf of individuals who acquired Andrx Corporation (NASDAQ: ADRX) common stock during the period between January 1, 1999 and August 12, 2002. The complaint charges the Company with issuing false and misleading statements concerning its business and financial condition in violation of the federal securities laws. Specifically, the complaint alleges that defendant issued statements regarding its annual financial performance that were materially false and misleading because, among other things the Company was employing improper accounting practices regarding the accounts receivable for approximately the past three and one-half years in violation of Generally Accepted Accounting Principles. As a result, the Company announced on August 12, 2002 that it expects to have to reduce its accounts receivable by approximately $15 million. For more details, contact Eduard Korsinsky or Benjamin D. Coleman by Mail: 521 Fifth Avenue, 34th Floor New York, New York 10175 by Phone: 800-891-6305 by Fax: 212-888-9664 by E-mail: clientrelations@bandolaw.com or visit the firm's Website: http://www.bandolaw.com AON CORPORATION: Wechsler Harwood Commences Securities Suit in N.D. IL ---------------------------------------------------------------------- Wechsler Harwood Halebian & Feffer LLP 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 Aon Corporation (NYSE:AOC) between May 4, 1999 and August 6, 2002, inclusive. The suit alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between May 4, 1999 and August 6, 2002, thereby artificially inflating the price of Company securities. Throughout the class period, as alleged in the complaint, defendants issued numerous statements and filed quarterly and annual reports with the SEC which described the Company's earnings and financial performance. The complaint alleges that these statements were materially false and misleading because they failed to disclose and/or misrepresented these adverse facts, among others: (1) that the Company had materially overstated its net income by $27 million in 1999, $24 million in 2000, and $5 million in the first quarter of 2002; (2) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (3) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times. On August 7, 2002, before the market opened for trading, the Company shocked the market when it announced, among other things, that: (i) it had failed to meet analysts' expectations on its earnings for the second quarter by a wide margin; (ii) because of the slumping financial markets, it had canceled a spinoff of its insurance underwriting businesses to shareholders; and (iii) the SEC had began an investigation of its accounting and was questioning several items in the Company's accounts, including the reporting of investment write-downs, the timing of some costs and a reinsurance recoverable item and the decision not to consolidate certain special purpose vehicles. The Company also stated that, if the SEC says it is necessary, it will have to restate its earnings for the past three years. Following this report, Company shares fell $6.43 per share to close at $14.77 per share, a one-day decline of 30.3%, on volume of more than 20 million shares traded, or more than twenty times the average daily volume. For more details, contact Patricia Guiteau by Mail: 488 Madison Avenue, 8th Floor, New York, New York 10022 by Phone: 877-935-7400 by E-mail: pguiteau@whhf.com or visit the firm's Website: http://www.whhf.com BELLSOUTH CORPORATION: Chitwood & Harley Files Securities Suit in GA -------------------------------------------------------------------- Chitwood & Harley initiated a securities class action in the United States District Court for the Northern District of Georgia on behalf of all persons who purchased or otherwise acquired the securities of BellSouth Corporation (NYSE: "BLS") between January 22, 2001 and July 19, 2002, inclusive. The complaint charges the Company and certain of its officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that during the class period, defendants misled their investors by issuing false and misleading statements and failing to disclose material facts about the Company's business. Defendants misrepresented the truth about, inter alia, the Company's operations and financial condition and as a result, the price of Company securities was artificially inflated during the class period. During the class period, the Company reported quarter after quarter of "record" financial results and financial growth despite a rapidly deteriorating market for telecommunications companies. In fact, as the Company was ultimately forced to reveal, the financial prospects for the Company were far from the Company's representations. On July 22, 2002, the Company announced that its earnings had dropped by an astonishing 67% for the second quarter of 2002, missing Wall Street estimates. The Company revealed that weak economic conditions in Central and Latin America had, and were continuing to have, a material, adverse impact on the Company's earnings and profitability. In response to the Company's devastating July 22, 2002 news, Company stock plummeted by over 18% to $22 per share on enormous trading volume of over 18 million shares, a stunning increase from the Company's average trading volume of about 4.3 million shares. For more details, contact Nikole Davenport by Mail: Promenade II, 1230 Peachtree treet, NE Atlanta Georgia 30309 by Phone: 888-873-3999 (toll- free) by E-mail: nmd@classlaw.com or visit the firm's Website: http://www.classlaw.com. CAPITAL ONE: Kirby McInerney Commences Securities Fraud Suit in E.D. VA ----------------------------------------------------------------------- Kirby McInerney Squire, LLP initiated a securities class action in the United States District Court for the Eastern District of Virginia on behalf of all purchasers of Capital One Financial Corp. securities (NYSE:COF) during the period from January 15, 2002 through July 16, 2002. The lawsuit asserts claims for violation of Section 10(b) and 20(a) of the Securities and Exchange Act of 1934 against the Company as well as its Chief Executive, Chief Financial and Chief Operating Officers. The alleged violations, according to the lawsuit, stem from materially false and misleading statements made by the defendants during the class period that materially misrepresented the Company's financial performance (inflating reported earnings by failing to take adequate reserves for sub-prime loans), thereby causing its securities to trade at artificially-inflated prices. During the class period, as the suit alleges, the Company reported experiencing quarter after quarter of record earnings and revenue growth while maintaining "stringent risk management practices" and adequate loan loss reserves. These representations, according to the suit, were materially false and misleading. In fact, as the Company would admit on July 16, 2002, it was in violation of federal guidelines regarding adequate levels of capitalization and loan loss reserves. On July 16, 2002, the Company revealed that it had entered into an agreement with regulators requiring it to boost reserves by $247 million in the second quarter of 2002, and to institute infrastructure reforms in order to deal adequately with its high rate of growth, especially in the subprime market. In reaction to this news, Company shares lost over one-third of their value in one day, falling from $50.60 per share on July 16 to close at $30.48 per share on July 17. 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 Toll Free 888-529-4787 by E-Mail: obraun@kmslaw.com or visit the firm's Website: http://www.kmslaw.com EAGLE BUILDING: Sichenzia Ross Appointed As Lead Counsel in FL Suit ------------------------------------------------------------------- The United States District Court for the Southern District of Florida appointed Sichenzia Ross Friedman Ference LLP as lead counsel in a securities class action against Eagle Buildings Technologies, Inc. (Pink Sheets:EGBT) and certain of its officers, directors and outside accounting firm. The firm, along with two other law firms, will serve as lead counsel for all persons or entities who purchased the Company's common stock between August 11, 2000 and February 14, 2002, inclusive. The suit alleges that defendants violated Section 10(b) of the Securities Exchange Act of 1934 by issuing a series of materially false and misleading statements about the Company's quarterly financial results for the second and third quarters of 2000, its year-end 2000 financial results, and its quarterly financial results for first, second, and third quarters of 2001. The suit alleges that as a result of these false and misleading statements the price of Company common stock was artificially inflated throughout the class period causing plaintiffs and the other members of the class to suffer damages. For more details, contact Marc J. Ross by Mail: 1065 Avenue of the Americas, 21st Floor, New York, NY 10018 by Phone: 212-930-9700 by Fax: 212-930-9725 by E-mail: mross@srfllp.net or visit the firm's Website: http://www.srfllp.com. HOUSEHOLD INTERNATIONAL: Milberg Weiss Commences Securities Suit in IL ---------------------------------------------------------------------- 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 Household International, Inc. (NYSE:HI) publicly traded securities during the period between October 23, 1997 and August 14, 2002. The complaint charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Company is principally a non-operating holding company engaged in three reportable segments: consumer, credit card services and international. The consumer segment includes consumer lending, mortgage services, retail services and auto finance businesses. The credit card services include the domestic MasterCard and Visa credit card business. The Company's international segment includes foreign operations in the United Kingdom and Canada. The complaint alleges that during the class period, defendants caused Company shares to trade at artificially inflated levels through the issuance of false and misleading financial statements by, among other things, failing to properly amortize the Company's co-branding agreements, and failing to record its expenses associated with its marketing initiatives. In addition, the defendants improperly "re- aged" Company's accounts, thereby concealing the Company's actual delinquency ratios. 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 HOUSEHOLD INTERNATIONAL: Cauley Geller Commences Securities Suit in IL ---------------------------------------------------------------------- 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 Household International, Inc. (NYSE: HI) publicly traded securities during the period between October 23, 1997 and August 14, 2002, inclusive. The complaint charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Company is principally a non-operating holding company engaged in three reportable segments: consumer, credit card services and international. The consumer segment includes consumer lending, mortgage services, retail services and auto finance businesses. The credit card services include the domestic MasterCard and Visa credit card business. The Company's international segment includes foreign operations in the United Kingdom and Canada. The complaint alleges that during the class period, defendants caused Company shares to trade at artificially inflated levels through the issuance of false and misleading financial statements by, among other things, failing to properly amortize the Company's co-branding agreements, and failing to record its expenses associated with its marketing initiatives. In addition, the defendants improperly "re-aged" Company accounts, thereby concealing the Company's actual delinquency ratios. 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@cauleygeller.com or visit the firm's Website: http://www.cauleygeller.com HPL TECHNOLOGIES: Neiman Garland Commences Securities Suit in N.D. CA --------------------------------------------------------------------- Jeffrey Neiman, Joseph Garland and Mel Urbach initiated a securities class action against HPL Technologies, Inc. (Nasdaq: HPLA) and certain of its officers and directors as well as its outside auditor, PricewaterhouseCoopers, in the US District Court for the Northern District of California, on behalf of all who purchased Company securities between August 27, 2001 and July 18, 2002, inclusive. The complaint alleges that in each of HPL's four quarterly reports (its first, second, third, and fourth quarter reports of its fiscal year ended March 31, 2002) following its July 31, 2001 IPO, it reported increasing net sales and income, and made positive statements attributing its increasing revenues to the ongoing market need for its software. On June 24, 2002, HPL filed its annual report on Form 10-K with the SEC, which included financial statements that PricewaterhouseCoopers opined "present fairly, in all material respects, the financial position of HPL" for the years ending March 31, 2002 and 2001. On July 19, 2002, HPL announced that it was looking into "financial and accounting irregularities involving revenue reported during prior periods." "The Company believes that a material amount of revenue was improperly recognized during one or more earlier periods in connection with sales to an international distributor." HPL also said that an investigation was being conducted and that "until the investigation is completed, no further reliance should be placed on the Company's previously issued financial statements." For more details, contact Jeffrey Neiman by Phone: 866-539-3788 or 718-677-1430 by Fax: 718-258-2937 or by E-mail: JeffreyNeiman@AOL.COM ICN PHARMACEUTICALS: Kirby McInerney Commences Securities Suit in NY -------------------------------------------------------------------- Kirby McInerney & Squire, LLP initiated a securities class action in the United States District Court for the Eastern District of New York on behalf of all purchasers of ICN Pharmaceuticals, Inc. common stock (NYSE:ICN) during the period from May 3, 2001 through July 11, 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 as well as its Chief Executive and Chief Financial Officers. The alleged violations, according to the complaint, stem from materially false and misleading statements made by the defendants during the class period that materially misrepresented the Company's financial performance (inflating reported revenues during the class period) and caused its stock to trade at artificially-inflated prices. The complaint alleges that, during the class period, Company shares traded at prices inflated to above $25 per share by the defendants' reporting of revenues inflated by "channel-stuffing." On July 11, 2002, ICN shares dramatically deflated, losing over 50% of their value in one day, when the Company announced that it would not be able to meet previously-announced financial guidance regarding second-quarter revenues and earnings and admitted that revenues and earnings would be depressed throughout the year due to the high inventory levels created by the Company's earlier flooding of the sales channels. 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 by E-Mail: obraun@kmslaw.com INTERPUBLIC GROUP: Cauley Geller Commences Securities Suit in S.D. NY --------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of purchasers of The Interpublic Group of Companies, Inc. (NYSE: IPG) publicly traded securities during the period between October 28, 1997 and August 13, 2002, inclusive. The suit alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between October 28, 1997 and August 13, 2002, thereby artificially inflating the price of Company securities. Throughout the class period, as alleged in the complaint, defendants issued numerous statements and filed quarterly and annual reports with the SEC, which described the Company's increasing net income and financial performance. 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, throughout the class period, the Company was overstating its net income by failing to expense certain charges which should have been expensed; (2) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (3) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times. On August 5, 2002, the Company announced that it would be rescheduling the release of its second quarter 2002 earnings "to accommodate the Audit Committee of its Board of Directors," which was interpreted by the market to potentially involve the Company's accounting. In response to the uncertainty surrounding defendants' announcement, investors sold off shares of the Company, which dropped $4.69 per share, or 23.8%, to close at $14.99 per share. On August 13, 2002, the last day of the class period, the nature of the Company's delay of its second quarter 2002 earnings release became evident when the Company announced, among other things, that it had "identified $68.5 million of charges, principally in Europe, which had not been properly expensed," which will cause the company to restate its previously issued financial statements going back to 1997 and prior. 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@cauleygeller.com or visit the firm's Website: http://www.cauleygeller.com INTERPUBLIC GROUP: Mark McNair Commences Securities Suit in S.D. NY ------------------------------------------------------------------- The Law Office Of Mark McNair initiated a securities class action on behalf of shareholders who acquired The Interpublic Group of Companies, Inc. (NYSE:IPG) securities between October 28, 1997 through and including August 13, 2002, inclusive, in the United States District Court for the Southern District Of New York against the Company and certain of its officers and directors. The suit alleges 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 IPG during the class period. On August 5, 2002, the Company announced that it would be rescheduling the release of its second quarter 2002 earnings "to accommodate the Audit Committee of its Board of Directors," which was interpreted by the market to potentially involve the Company's accounting. In response to the Company' announcement, investors sold off shares of the Company, which dropped $4.69 per share, or 23.8%. For more details, contact Mark McNair by Mail: 1101 30th St. N.W. Suite 500, Washington, DC 20007 by Phone: 877-511-4717 or 202-872-4717 or by E-mail: mcnair@justice4investors.com. INTERPUBLIC GROUP: Schiffrin & Barroway Lodges Securities Suit in NY -------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all purchasers of the common stock of The Interpublic Group of Companies, Inc. (NYSE: IPG) from October 28, 1997 through August 13, 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 numerous statements and filed quarterly and annual reports with the SEC which described the Company's increasing net income and financial performance. 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, throughout the class period, the Company was overstating its net income by failing to expense certain charges which should have been expensed; (2) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (3) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times. On August 5, 2002, the Company announced that it would be rescheduling the release of its second quarter 2002 earnings "to accommodate the Audit Committee of its Board of Directors," which was interpreted by the market to potentially involve the Company's accounting. In response to the uncertainty surrounding defendants' announcement, investors sold off Company shares, which dropped $4.69 per share, or 23.8%, to close at $14.99 per share. On August 13, 2002, the last day of the class period, the nature of the Company's delay of its second quarter 2002 earnings release became evident when the Company announced, among other things, that it had "identified $68.5 million of charges, principally in Europe, which had not been properly expensed," which will cause the company to restate its previously issued financial statements going back to 1997 and prior. 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 MORGAN STANLEY: Wolf Haldenstein Commences Securities Suit in S.D. NY --------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP initiated in the United States District Court for the Southern District of New York a securities class action on behalf of all purchasers of Morgan Stanley Dean Witter Technology Fund shares, of all four share classes (Nasdaq: TEKAX through TEKDX) from the public offering for the Fund on September 25, 2000 through July 31, 2002, inclusive. The suit names Morgan Stanley Dean Witter & Co., Morgan Stanley Dean Witter Technology Fund and others for violations of Sections 11, 12 and 15 of the Securities Act of 1933 and of other federal statutory law. The Morgan Stanley Dean Witter Technology Fund recently changed its name to the Morgan Stanley Technology Fund. The defendants were: (1) the underwriters for the common stock of certain of the companies in the Technology Fund's portfolio; (2) the investment bankers and corporate finance specialists for certain of the companies whose securities are in the Fund's portfolio; (3) seeking to obtain additional investment banking business from these present and former clients and from other companies whose shares also were/are in the Fund's portfolio; (4) the issuers of the shares in the Fund; (5) preparing and publicly disseminating research reports and recommendations on many of the companies whose shares were in the Fund's portfolio; and (6) the broker for certain members of the class This action arises as a result of the issuance by the defendants of shares in the Fund, and concerns material misstatements and omissions by defendants in the Prospectus, relating to defendants' conflicts of interest, which include but are not limited to the following: (i) defendants failed to disclose and omitted material information that MSDW had had investment banking relationships with, including having brought public, certain of the companies whose securities were part of the Fund's portfolio. Defendants disclosed neither this general fact nor the identities of the particular companies with which it had investment banking relationships; (ii) defendants failed to disclose and omitted material information concerning that MSDW was continuing to seek investment banking relationships with many of the companies whose securities were part of the Fund's portfolio; and (iii) defendants failed to disclose and omitted material information concerning that a material part of the total compensation paid to MSDW research analysts was based upon obtaining investment banking business for MSDW and not upon the accuracy of their research about a given company. Hence, MSDW and its affiliated companies including the Fund recommended investments in and/or invested in companies in order to enhance MSDW's opportunity to obtain investment banking business from those companies (without regard to whether they were good investments for the investors including plaintiffs and the Class). For more details, contact George Peters, Derek Behnke, Robert B. Weintraub and Daniel W. Krasner 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 MSDW Technology Fund. RIVERSTONE NETWORKS: Mark McNair Commences Securities Suit in N.D. CA --------------------------------------------------------------------- The Law Office Of Mark McNair initiated a securities class action on behalf of shareholders who acquired of Riverstone Networks, Inc. (Nasdaq:RSTN) securities during the period between August 10, 2001 and June 5, 2002, inclusive, in the United States District Court for the Northern District of California. The complaint alleges that the Company, a provider of metropolitan area networking solutions, and certain of its officers and directors issued false and misleading statements concerning its business and financial condition. Among other things, the complaint alleges that each defendant was aware that the Company would be unable to meet its projected Q2 02 to Q1 03 revenue and earnings per share (EPS) targets unless they manipulated the Company's revenue, earnings and receivables. However, because the "appearance" of growth was so critical to defendants' plan to inflate the price of Company shares and sell their own shares and raise monies via its $150 million debt offer, defendants continued to maintain throughout the class period that the Company would meet revenue projections and EPS when, in reality, defendants knew that the Company could not achieve their projections without attempting to fraudulently record revenue by inducing clients who defendants knew did not have the ability to pay to agree to take delivery of goods and that the Company was, in fact, suffering from greater losses. For more details, contact Mark McNair by Mail: 1101 30th St. N.W. Suite 500, Washington, DC 20007 by Phone: 877-511-4717 or 202-872-4717 or by E-mail: mcnair@justice4investors.com. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2002. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re- mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. 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