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/raid1/www/Hosts/bankrupt/CAR_Public/021023.mbx C L A S S A C T I O N R E P O R T E R Wednesday, October 23, 2002, Vol. 4, No. 210 Headlines ALABAMA: Supreme Court Refuses To Reinstate Suit Over Franchise Taxes CANADA: Human Rights Commission To Intervene in Suit For Autistic Kids CREDIT SUISSE: MA Regulators To File Complaint For Securities Fraud EARTHLINK INC.: Entering Suit Mediation Due To Faulty Internet Service INDIAN FUNDS: Fort Belknap Tribes Take Control Over Federal Programs INDIAN FUNDS: Neal McCaleb To Meet Rocky Mountain Tribes Over Funds LOUISIANA-PACIFIC: To Appeal Jury Verdict Awarding $29.6M To Plaintiffs MINOLTA BUSINESS: NY Court Refuses Request To Invite More Plaintiffs SWIFT TRANSPORTATION: NJ Court Refuses To Dismiss Suit Over Leases TELECOMS COMPANIES: WV Judge Allows Suit To Target Telecom Products UNITED KINGDOM: Suffolk Motorists Consider Suit Over Speed Limits Law VISKASE COMPANIES: Probe into Sausage Casings, Plastic Films Concluded WELLS FARGO: Agrees To Settle Employee Suit Over Toms Sierra Co. Sale WISCONSIN ENERGY: Denies Being Charged With Criminal Wrongdoing in Suit WYETH: Legal Fight Over Claims' Validity Threatens Diet-Drug Settlement *State Laws Banning Ex-Convicts From Voting Faces Scrutiny, Review New Securities Fraud Cases ALLEGHENY ENERGY: Wolf Haldenstein Launches Securities Suit in S.D. NY ATLAS AIR: Charles Piven Commences Securities Fraud Suit in S.D. NY CREDIT SUISSE: Charles Piven Launches Securities Fraud Suit in S.D. NY CONSECO INC.: Fruchter & Twersky Files Securities Fraud Suit in S.D. IN DPL INC.: Charles Piven Commences Securities Fraud Suit in S.D. Ohio ELECTRONIC DATA: Berger & Montague Commences Securities Suit in E.D. TX LIBERATE TECHNOLOGIES: Charles Piven Files Securities Suit in N.D. CA MERRILL LYNCH: Schatz & Nobel Commences Securities Fraud Suit in NY MERRILL LYNCH: Johnson & Perkinson Launches Securities Suit in S.D. NY SALOMON SMITH: Cohen Milstein Launches Securities Fraud Suit in S.D. NY SCHERING-PLOUGH: Charles Piven Commences Securities Suit in New Jersey SEARS ROEBUCK: Charles Piven Commences Securities Fraud Suit in N.D. IL SEARS ROEBUCK: Mark McNair Commences Securities Fraud Suit in N.D. IL SEARS ROEBUCK: Bernard Gross Commences Securities Fraud Suit in N.D. IL TXU CORPORATION: Mark McNair Commences Securities Suit in N.D. Texas VODAFONE PLC: Schatz & Nobel Commences Securities Fraud Suit in S.D. NY VODAFONE PLC: Johnson & Perkinson Commences Securities Suit in S.D. NY ********* ALABAMA: Supreme Court Refuses To Reinstate Suit Over Franchise Taxes --------------------------------------------------------------------- The United States Supreme Court refused to consider reinstating a class action filed against the state of Alabama, by about 15,000 companies seeking refunds of the state franchise tax, the Associated Press reports. The suit arose after the Supreme Court stated in a 1999 ruling that Alabama's franchise tax was unconstitutional because it taxed out-of- state companies doing business in Alabama at a higher rate than Alabama-based companies. The Alabama Supreme Court ruled for the state, but the plaintiffs appealed to the High Court, asking it to reverse the ruling. The Supreme Court stated that the Companies were ineligible for refunds from the unconstitutional franchise taxes they paid because the deadline for them to apply individually for refunds expired in September, state attorneys said, the Associated Press states. An attorney for the companies, Matthew H. Lembke, had told the Supreme Court that Alabama was trying to dodge its obligation to refund unconstitutional taxes and "other states will be emboldened in similar efforts . No matter how unpleasant refunds of unconstitutional taxes may be for Alabama and its treasury," the Constitution requires it, he told justices in paperwork, AP reports. Had the suit succeeded, the state would have had to face a potential US$750 million in refunds. "We avoided the nightmare," state attorney Susan Kennedy told AP. Gov. Don Siegelman said the Supreme Court decision was great financial news for the state and he hopes it will provide the impetus to address Alabama's corporate tax structure. "Now it's time to move forward and create a fair corporate tax structure, where powerful, out-of-state corporations cannot use accounting tricks to pay nothing to our schools," he said in a statement. CANADA: Human Rights Commission To Intervene in Suit For Autistic Kids ---------------------------------------------------------------------- A group representing hundreds of families of children with autism spectrum disorders announced that the Quebec Commission des droits de la personne et des droits de la jeunesse (Quebec's Human Rights Commission) has informed them of its intention to intervene on their behalf in their class action against the Quebec Government. The families have undertaken this legal action to put a halt to the Quebec Government's systematic discrimination which has been denying their children a medically necessary treatment, intensive behavioral early intervention. Only last week, a British Columbia Court of Appeal ruling against the BC Government established a clear precedent that it is discrimination under the Canadian Charter of Rights and Freedoms for a provincial government to not provide medically necessary fully funded intensive behavior intervention for children with Autism Spectrum Disorders of all ages as long as deemed beneficial by the child's physician. By rejecting the Government of British Colombia's appeal of the BC Supreme Court's Auton decision, the BC Court of Appeal's ruling on October 9 has provided additional support to the Quebec parents' class action suit. The unanimous decision upheld the Auton decision, which requires the BC Government to provide intensive early behavioral intervention, as a medical necessary treatment, for children with an Autism Spectrum Disorder (ASD). It has also opened the door for legal action on behalf of many thousands of children with autism conditions in various provinces in Canada who currently are being denied treatment. The Court of Appeal also extended the decision so that even school age children with Autism Spectrum Disorders, through court intervention if necessary, will be able to access such intervention if requested by the family physician (with the written support of a neurologist or psychologist), with non-compliant civil servants facing possible contempt charges. "This decision will go a long way to compel provinces and territories, such as Quebec, that have been unwilling to finally provide effective autism treatment to provide it regardless of severity, specific diagnosis or age," the Autism Society Canada said in a statement. "The court decision is all the more important given the rapid increase in the number of children diagnosed with autism conditions (63% increase from 1999 to 2001 in Canada). It is widely recognized that early intensive behavioral intervention can significantly improve the functioning of children with autism, which the BC Court of Appeal noted in its decision, and is critical to avoiding an otherwise bleak institutionalized future. Effective treatment provision will help to reduce lifelong costs to governments (cost-effectiveness research indicates by 50%), and will reduce the human suffering of people with autism conditions and their families. Because appropriate services are generally not available, human suffering associated with autism conditions in Canada is profound. Two Canadian courts have now spoken: not providing effective treatment in the form of intensive behavioral intervention to people with Autism Spectrum Disorders is discrimination under the Canadian Charter of Rights and Freedoms. Autism Society Canada, therefore, throws its full support behind the legal action undertaken by the Quebec Autism Class Action Committee. CREDIT SUISSE: MA Regulators To File Complaint For Securities Fraud ------------------------------------------------------------------- Federal regulators from the state of Massachusetts intend to file a civil complaint against investment firm Credit Suisse First Boston, alleging the firm controlled research at the bank, which led to misleading analyst reports. Investment bankers completely controlled the stock research produced by technology analysts at CSFB, which displayed a cavalier attitude toward investors, said Massachusetts Secretary of the Commonwealth William Galvin, who spoke at a news conference at the Massachusetts Statehouse in Boston, according to a Reuters report. Regulators also charged the firm allocated initial public offerings to senior executives to encourage them to have business with the firm. The regulators filed the suit, allegedly after the United States Securities and Exchange Commission failed to act on the complaints. A spokeswoman for CSFB was not immediately available for comment, according to Reuters. EARTHLINK INC.: Entering Suit Mediation Due To Faulty Internet Service ---------------------------------------------------------------------- Earthlink, Inc. will enter mediation in a class action filed 19 months ago in Multnomah County Circuit Court, on behalf of thousands of its current and former customers, the Oregonian reports. The suit was commenced after the Company merged it systems with OneMain.com, which it acquired in late 1999. During the merge, many former OneMain.com customers alleged that e-mail took days to send and receive and they couldn't upload Web pages. The suit seeks refunds for Teleport users who paid monthly service fees when their service was down. Compensation to businesses for any customers lost because of the outages also is sought. "I don't think that corporate takeovers and giant, huge business dealings should put normal people out as much as this did. That's why I'm fighting," Virginia Bruce, a Portland Web developer who is the lead plaintiff in the complaint, filed in March 2001 told the Oregonian. E- mail and Internet service problems made it tough to conduct business, she said. "I deal with most of my clients through e-mail." The court has yet to decide whether the case will receive class certification. The Company argued against certification, stating that Ms. Bruce did not cite a loss of specific billable hours and therefore doesn't represent business users who were harmed. Judge Edward J. Jones delayed a ruling on class certification, but earlier denied the Company's request to require arbitration, a process often favored by companies in class actions because of its quick resolution and frequently small penalties. In arbitration, an official hears arguments and issues a ruling that can rarely be appealed. In mediation, which both parties must agree to enter, a settlement is reached when both sides agree. If mediation fails, the dispute bounces back to court, the Oregonian states. INDIAN FUNDS: Fort Belknap Tribes Take Control Over Federal Programs -------------------------------------------------------------------- The Fort Belknap Assiniboine and Gros Ventre tribes continue to take control of reservation programs previously run by the Bureau of Indian Affairs (BIA) and the Indian Health Service (IHS), the Associated Press Newswires reports. The tribes, for example, recently signed a contract giving them control of $565,000 worth of programs, such as fire management, road maintenance, probate, enrollment and sewer and water systems. Another $877,829 in real estate and agriculture services also have been contracted, but the tribes will not take over administration until November 1. The tribes already were administering 35 programs previously run by BIA and IHS, including water resources, tribal courts, credit, law enforcement, transportation, criminal investigation, planning and several health programs. In 1975, Congress passed the Indian Self-Determination and Education Assistance Act, allowing tribes to administer the federal government's programs on their reservations. Some of the tribal members of the Fort Belknap Community Coalition say their tribes are not ready to administer so many programs, especially the complex real estate and trust programs on the 675,000-acre reservation. The Fort Belknap Indian Community Council says, however, that having such control is critical to the future of the tribes. Why this is administrative takeover is happening is probably best exemplified by the words of Fort Peck tribal President Ben Speakthunder, who recently spoke to the issue of why the tribal council chose to rid itself of BIA control and assume responsibility for the tribe's future. President Speakthunder, an Assiniboine, referred to the 130 years of Interior Department and BIA mismanagement of Indian funds, brought to light by the ongoing class action. The way the Indian trust funds are managed will change when the class action is settled over the admitted mishandling of the trust accounts by the BIA, he said. Tribal self-determination is the way to the future, whether it is managing the trust funds or whether it is taking control and protecting the Indians' resources for the future generations, be it oil, gas, grazing or water, President Speakthunder said. "Without these important natural resources -- our identity -- we are nothing." INDIAN FUNDS: Neal McCaleb To Meet Rocky Mountain Tribes Over Funds ------------------------------------------------------------------- Assistant Secretary of Indian Affairs Neal McCaleb will meet with Rocky Mountain tribes this week, in a consultation meeting that will discuss the United States government's management of their land, money and resources, the Billings Gazette reports. The meeting is the last of a dozen similar consultations held between the Interior Department and Indian tribes. The meetings were held because of an ongoing, court-induced effort to reform the department's Indian trust fund system. Several tribes have filed a class action against the department, saying the trust fund was mismanaged. In September, Federal Judge Royce Lamberth held Interior Secretary Gale Norton in contempt of court, for failing to account for money in the fund and lying about its efforts to fix the system. "This is an opportunity to work with tribes to get their input on trust reform," Nedra Darling, BIA spokeswoman, told the Gazette. "He's been looking forward to working with them directly." "We're tying to use the consultation as a place to get our word in, to come forward with a plan to address trust reform," Ervin Carlson, Blackfeet Tribal Business Council member told the Gazette. Ten Rocky Mountain tribes from Wyoming and Montana, as well as tribal representatives from around the country, are expected to attend. The Department is also hurrying to submit trust standards by January 6, 2003, a deadline set by the Court. "We are going to move heaven and Earth to meet the deadline," Dan Dubray, Interior Department spokesman told the Gazette. While the January deadline is cited as a reason for the current parting, the impasse between department and tribal leaders began to grow this summer after both sides failed to agree on trust reform legislation after nearly nine months of discussion. "We're concerned about having gone all this way and not really having anything to show for it," Mr. Dubray said. "We're looking forward to Billings and working with tribal leadership in developing our plan as time will allow us." LOUISIANA-PACIFIC: To Appeal Jury Verdict Awarding $29.6M To Plaintiffs ----------------------------------------------------------------------- Louisiana-Pacific Corporation will appeal a verdict by a jury in McLeod County, Minnesota District Court involving LP Inner-Seal siding that awarded $29.6 million to Butler Manufacturing Company. The Portland-based wood products company already has paid more than $400 million to settle about 139,000 claims arising from a national class action over its oriented strandboard siding, a mixture of wood flakes and resin pressed into boards. Homeowners began suing the Company in the early 1990s, when they found their home siding swelling with moisture, cracking and breaking up, according to an earlier Class Action Reporter story. "LP will take the appropriate steps with the trial judge, or the appellate courts if necessary, to have this verdict set aside. The verdict contradicts the National Class Action Settlement and treads on the jurisdiction of the Federal District Court of Oregon. We believe there are sufficient errors to warrant a new trial and we are confident the verdict will not stand," said Mark Fuchs, LP's senior counsel. LP is a premier supplier of building materials, delivering innovative, high-quality commodity and specialty products to its retail, wholesale, homebuilding and industrial customers. MINOLTA BUSINESS: NY Court Refuses Request To Invite More Plaintiffs -------------------------------------------------------------------- The United States District Court in New York denied a request by two former service technicians of Minolta Business Solutions, Inc. to allow them to invite other potential plaintiffs to join a class action alleging violations of the federal and state wage and hour law. In a rare refusal to grant permission to send notices of the pending action and opt-in consent forms, the court found no basis in the ongoing litigation to support the claim that the two plaintiffs were "similarly situated" to other service technicians for overtime pay purposes. The legal standard under the Fair Labor Standards Act for granting permission to send notices to other potential plaintiffs is very low, and there are very few reported decisions denying requests to give such notice. Lawsuits alleging violations of the federal Fair Labor Standards Act have become fertile ground for "collective action" complaints, where an employer could be liable for unpaid overtime wages and penalties for an entire class of employees working in similarly situated positions. Demonstrating that other employees are similarly situated has been an easy task, and the number of collective action FLSA cases is significantly higher than other types of class action lawsuits. In a major victory for the Company, this decision bars the plaintiffs from issuing notice of the federal claims absent further evidence and complicates plaintiffs' efforts to obtain class certification on other pending state law claims. Plaintiffs have requested a deferral on the issue of class certification on the state law claims until further discovery in the litigation provides additional information as to whether other employees were similarly affected. For more information, contact Paul Siegel and Marc Wenger of Jackson Lewis LLP by visiting the firm's Website: http://www.jacksonlewis.com SWIFT TRANSPORTATION: NJ Court Refuses To Dismiss Suit Over Leases ------------------------------------------------------------------ The United States District Court in New Jersey refused to dismiss a class action filed by the Owner-Operator Independent Drivers Association (OOIDA) against Swift Transportation Co., Inc. and its subsidiaries: (1) Swift Transportation Co. Inc. (NV), (2) M.S. Carriers Inc. and (3) M.S. Carriers Warehousing Distribution Inc. The suit alleges that the defendants' leases violated federal truth-in- leasing regulations. The Company sought dismissal by arguing that the plaintiff owner- operators did not have a private right of action under federal leasing regulations and, therefore, the court had no jurisdiction, Primedia Business Magazines reports. OOIDA said the leases fail to contain a number of provisions required by 49 C.F.R. 379.12 and also contain provisions in direct conflict with the leasing regulations. The carriers are also accused of failing to provide owner-operators with: (i) required documentation for chargebacks against compensation; (ii) forced purchase of insurance and other products and services; (iii) illegal deductions from escrow accounts; and (iv) failure to return escrow accounts within the required time after termination TELECOMS COMPANIES: WV Judge Allows Suit To Target Telecom Products ------------------------------------------------------------------- Kanawha County Circuit Court Judge Tod Kaufman allowed a class action against AT&T Corporation and Lucent Technologies Inc. to target products, including voice-mail systems, that allegedly did not meet standards for year 2000 compliance, plaintiffs' attorneys said on Monday, according to a Reuters reports The suit charges the two companies with selling or leasing telecommunications equipment from 1990 to 2000 that was not compliant with Year 2000 standards, thus forcing customers to purchase additional products. The suit further alleges that the defendants sold certain plaintiffs "service protection plans" under which they promised to keep the products in good working order but with respect to the alleged Y2K defect, defendants refused to provide free solutions that made the products Y2K Compliant. AT&T officials referred the matter to Lucent, which it spun off in 1996. Lucent said any so-called Y2K cases were transferred to Avaya Inc., which Lucent spun off in October 2000, according to a Reuters report. Avaya, a provider of voice and data networks, confirmed it is the lead company on the case, originally filed in 1999 in Charleston, West Virginia. In August, Judge Kaufman named Jackson General Hospital, Coldwell Banker/Landmark Realtors and Jefferds Corp., all West Virginia businesses, as representatives of the class. UNITED KINGDOM: Suffolk Motorists Consider Suit Over Speed Limits Law --------------------------------------------------------------------- Motorist in Suffolk, England are thinking of launching a class action on behalf of more than 50,000 drivers who could have been wrongly punished for breaking speed limits in Suffolk, the East Anglian Daily Times reports. The Association of British Drivers (ABD) might commence the suit, which questions the legality of the Suffolk law prosecuting motorists in some 30 mph zones across the country. The group seeks to "obtain justice" for motorists who have been penalized by limits that it claimed "have no legal force." Malcolm Heymer, of the ABD, claimed thousands of drivers had been illegally punished for speeding in the unenforceable zones since Suffolk County Council introduced the limits in the mid-1990s. "The ABD estimates that at least 50,000 drivers have been convicted of exceeding speed limits that we believe have no legal force," he told the Daily Times. "Consequently, we are exploring the possibility of bringing a class action to obtain justice for those who have been wrongfully fined and had their licenses endorsed . If the ABD is proved correct, not only will all those drivers who have been illegally prosecuted be eligible for compensation, but the county council will have to make new speed limit orders from scratch." Suffolk County Council introduced 30mph speed zones through all of its villages between 1994 and 1996. The ABD claimed there had been a "major error" in the way the council introduced speed limits on roads without street lighting, the East Anglian Daily Times states. Suffolk police speed enforcement officer Pc Mike Rayner criticized Suffolk County Council earlier this year over the problem, which means speed traps at 37 sites in Suffolk cannot be used successfully. Police have since uncovered inconsistencies in sections of the Road Traffic Regulation Act, making it virtually impossible to monitor speeding and enforce the 30mph limits through many Suffolk villages. Richard Spring, the Conservative MP for West Suffolk, has already written to Transport Secretary Alistair Darling to urge him to sort the situation and stop speeding drivers escaping punishment. Joan Girling, cabinet member on the council with responsibility for transport, was unavailable for comment last night, the Times states. However, Peter Thompson, the council's director of transport and environment, said it was working closely with the police and the Department of Transport to clarify "certain legal technicalities" regarding the enforcement of 30mph speed limits in Suffolk villages. VISKASE COMPANIES: Probe into Sausage Casings, Plastic Films Concluded ---------------------------------------------------------------------- Specialty meat packaging firm Viskase Companies announced that the United States Department of Justice has concluded its investigation into the Company's sausage casings and specialty plastic films and that no further action is to be taken, the Food Navigator reports. The Company said that it had fully co-operated with the DOJ during the investigation, which began in 1997. F. Edward Gustafson, president and chief executive officer of the company, said, "We are pleased with the DOJ's decision to close its lengthy investigation. There is no basis for the pending class action lawsuits that were filed as a result of the grand jury investigation and the company will continue to vigorously defend these claims." Viskase Companies has its major interests in food packaging. Principal products manufactured are cellulosic and nylon casings used in the preparation and packaging of processed meat products, according to the Food Navigator. WELLS FARGO: Agrees To Settle Employee Suit Over Toms Sierra Co. Sale --------------------------------------------------------------------- Wells Fargo Bank reached a settlement with the Department of Labor that will resolve the department's claim relating to the 1998 sale of Toms Sierra Co. of Colfax, which started over a dispute over how to value private Company stock bought by employee stock ownership plans (ESOP, the Sacramento Business Journal reports. The bank allegedly mishandled the sale of Toms Sierra, costing employees their retirement benefits. The Labor Department's suit claims that the bank Fargo approved the sale of the petroleum distribution company for far more than it was worth, causing the employee pension plan to lose more than $10 million. The bank's willingness to cooperate with regulators in a review of how it handles other employee stock ownership accounts is read by others as acknowledgment that the bank goofed, the Sacramento Business Journal states. The Company also had previously agreed to pay $5.6 million to the Toms Sierra pension plan to settle a related class action that claimed the bank inappropriately approved the sale. "Toms Sierra Co. Inc. and its current management has been vindicated," said Whitney Washburn, a Sacramento lawyer who represents the new owners. "We are pleased with the terms of the settlement between the Department of Labor and Wells Fargo Bank, and with Wells Fargo Bank's settlement payment to the Toms Sierra Co. employee stock ownership plan - and that Toms Sierra Co. was not named as a liable party in the Department of Labor lawsuit," Ms. Washburn continued. The agreement with Wells Fargo depends on fulfilling the terms agreed to in a related class action approved by a US District Court judge in Sacramento last month. Legal action by federal officials continues against the Toms family for allegedly reaping "unjust profits" from the sale. The Labor Department announced the deal but had no additional comment. The Company issued a brief statement that states, "Although Wells Fargo wishes the dispute had not arisen, it is pleased that its contribution will help pay retirement benefits to close to 300 people." WISCONSIN ENERGY: Denies Being Charged With Criminal Wrongdoing in Suit ----------------------------------------------------------------------- Wisconsin Energy Corp. belied in a press release rumors the Company had been charged with criminal wrongdoing in a complaint filed last week are unfounded. The criminal complaint, issued against Wisconsin State Sen. Charles Chvala, does not allege any wrongdoing by the Company or its representatives, nor does it allege any wrongdoing involving enactment of Power the Future legislation. The Company has no reason to believe that the validity of the legislation or agency review of the project will be adversely affected by the indictment. The complaint against Sen. Chvala charges the senator with various alleged acts of misconduct, including extortion (also known as "pay to play" allegations), misconduct in public office, unlawful political contributions, and various campaign finance violations. A contribution made by WEC to an issues advertisement entity known as "ICD-Issues, Inc." was identified, along with contributions from various other business entities to this independent expenditure group, in a portion of the complaint charging that Sen. Chvala misused funds contributed to ICD-Issues, Inc. during the 2002 Wisconsin State Senate election. As the complaint notes, contributions to such independent expenditure groups are lawful, and there is no allegation that the contribution made by WEC was improper or that WEC had any knowledge of, or involvement with, Sen. Chvala's alleged subsequent misuse of ICD- Issues, Inc. contributions. "There are no "pay to play" allegations or quid-pro-quo allegations in the complaint referring to WEC or the Power The Future legislation, nor any allegations that Sen. Chvala demanded the contribution for approval of the Power the Future legislation," the Company said in a statement. WYETH: Legal Fight Over Claims' Validity Threatens Diet-Drug Settlement ----------------------------------------------------------------------- Last August, Deb Toews, 43, responded to ads offering free exams, in Fresno, California, to anyone who had taken the Pondimin or Redux diet pills, which were recalled in 1997, because of heart and lung damage in some patients. Ms. Toews was examined and was told her heart was so badly damaged she needed surgery to save her life, according to a report by The Star-Ledger (Newark, NJ). Ms. Toews, of course, was devastated. She was urged by a lawyer, who talked to people after they had the exam, to join a class action against Wyeth, the drug maker that withdrew the pills. Instead, Ms. Toews, who is a registered nurse, sought a second opinion. What she learned, in a way, upset her even more. There is nothing wrong with her heart. Such episodes have sparked an ugly, behind-the-scenes brawl among dozens of lawyers from coast to coast, and it is threatening to derail a landmark $5 billion diet-drug settlement that was supposed to have been a model for resolving huge class actions. The dispute also has caused financial spasms at Wyeth, which changed its name from American Home products last year, in order to overhaul its image in the wake of the diet-pill scandal. Wall Street is already angry that the Madison-based drug maker has repeatedly misjudged the amount of money it owes in order to pay for all the diet-pill lawsuits, which include the thousands not covered by the class action settlement. At issue, in the brawling, is whether some of the 17,000 claims, already filed, list actual heart damage, or whether they were wrongfully submitted by lawyers seeking a bigger slice of the settlement. The $4.75 billion settlement fund is supposed to pay for damages or the cost of monitoring the health of the former diet-pill users. Wyeth, the lawyers who negotiated the original deal and the lawyers for the trust that administers the fund, all say that some of the claims are fraudulent. As a result, they say, the fund soon may run out of money, according to court documents. The calculation of how much money was needed to settle claims was based on valid records of sales plus other complex but equally valid considerations. From this calculation, it was determined that only a few thousand diet-pill claims were to be expected. Then came the fraudulent medical conclusions, and the claims began pouring in. By the end of August, more than 17,000 had been filed and that number could still double by year's end, according to court documents. At that rate, $14 billion would be needed - three times the current fund. Wyeth and its legal allies blame the large number of claims on aggressive advertising law firms soliciting diet-drug users. These law firms spent at least $51 million on television ads between 2000 and 2002, documents show. The lawyers accused of filing fraudulent claims deny any wrongdoing and are angry the dispute is delaying payments to some of their clients. "We have done nothing wrong," said Mr. Bern, whose firm, Napoli Kaiser Bern & Associates, is one of two firms accused by Wyeth and its legal allies of filing more than 700 fraudulent claims. "We followed the procedures set up by the court." The attorney who interviewed Ms. Toews in Fresno, Margo Dockendorf of Oceanside, California, did not return calls seeking comment. Ms. Toews contacted the FBI and was told an investigation would begin. Wyeth wants to avoid putting more money in the fund, according to Mr. Bern. Mr. Bern added that the lawyers who negotiated the settlement are trying to protect $430 million in fees, which are supposed to be paid from the settlement fund. "They used flawed statistics to come up with a settlement that is woefully inadequate. And those lawyers are concerned about one thing - fees. Now they want to audit every claim, which means the deal has dramatically and fundamentally changed," he said. Pursuing another possible fraud, Wyeth and its allies, are dealing with a dispute that hinges on the work of two cardiologists hired by Mr. Bern's firm and others, to conduct or review echocardiograms. This is an important aspect of the examination of the heart's function, in that the echocardiogram gauges heart damage and thus determines a diet-pill user's compensation. In court documents, Wyeth and its allies find it unbelievable that one doctor, Linda Crouse of Shawnee Mission, Kansas, reviewed thousands of echocardiograms in 10 months, while also performing her regular medical duties and seeing 80 patients a week. Wyeth hired a cardiac ultrasound expert, Arthur Weyman, to study 302 sample claims. Dr. Weyman said that two-thirds did not qualify for compensation, based on a complex formula that was designed as part of the original settlement. By contrast, court documents say heart damage was found in 64 percent of the claims submitted by the lawyers accused of filing fraudulent claims. Thomas Wagstaff, an attorney for Dr. Crouse, denied the accusations. The doctor, who was paid $720,000 for 1,000 exams, by two of the accused law firms, set aside her regular duties while she was reviewing or conducting exams, Mr. Wagstaff said. "She is not some flunky from the Midwest who will do whatever they ask. Her credentials are impeccable." The other cardiologist, Dr. Richard Mueller of New York, declined to comment. It is not clear whether Wyeth will be ordered to contribute additional money to the court-approved settlement. The drug maker already has set aside $14.6 billion in reserves for the fund and to cover the cost of litigating thousands of other lawsuits not covered by the settlement. *State Laws Banning Ex-Convicts From Voting Faces Scrutiny, Review ------------------------------------------------------------------ When Thomas Johnson moved from New York City in 1996, to start a prison aftercare ministry in Gainesville, Florida, he received critical support from several local elected officials. So, when election time arrived, Mr. Johnson wanted to express his thanks in one of the best ways he knew -- by voting for those who had helped him, according to a report from The Christian Science Monitor. However, when Mr. Johnson went to vote, he was told he could not vote in Florida. When he asked why, he was told it was because he is an ex-felon. It did not matter that Mr. Johnson had served his time and all his rights had been restored to him in New York State. Under Florida law, convicted felons are barred for life from voting. Mr. Johnson, a former crack addict, is now an ordained minister. Mr. Johnson is not alone in his plight. Nationwide, some 1.4 million ex-felons in 13 states are prohibited from voting. However, the tide may be turning against such laws. In recent years, voting law changes in five states have granted more than 440,000 ex-felons the right to vote, according to research at the University of Minnesota. A Harris poll in July found that 80 percent of Americans believe ex-felons who have served their terms should have the right to vote. Congressman John Conyers (D) of Michigan is introducing a bill to authorize restoration of voting rights in national elections for all ex-felons, probationers and parolees. These developments were discussed recently at a national symposium on felony disenfranchisement in Washington by some 230 community activists and criminal-justice specialists from 25 states. When a similar meeting took place in 1999, 60 people attended. "It (the issue of ex-felon voting rights) has just mushroomed," says Marc Mauer of The Sentencing Project, a liberal criminal justice policy group. The Sentencing Project and Human Rights Watch made national headlines in 1998, with a report that disclosed that nearly 13 percent of all African-American men were excluded from the political process because of felony convictions. In Florida, the largest state that bars ex- felons from voting, roughly a quarter of the state's African-American men are banned from the polls. Some analysts say such a significant disproportionate impact on African-American political participation in Florida is proof that the disenfranchisement law is a violation of the federal Voting Rights Act and the United States Constitution. However, there are others who disagree. In July, a federal judge in Miami dismissed a class action filed by Mr. Johnson and seven other ex- felons seeking to overturn the state provision. US District Judge James Lawrence King wrote in his dismissal order, "It is not racial discrimination that deprives felons, black or white, of their right to vote, but their own decision to commit an act for which they assume the risks of detection and punishment." Nancy Northup, an attorney with the Brennan Center Justice at NYU School of Law, who has worked on the suit, said Judge King's decision will be appealed. "This is not just affecting the ex-felons. It is affecting the ability of a lot of communities to elect candidates who they feel would best represent them," she said To some analysts, this is not necessarily a bad thing. "Do you really want a bloc of felons deciding elections?" asks Roger Clegg of the Center for Equal Opportunity, a conservative public-policy group in Northern Virginia. The potential inclusion of a large number of new voters is a sensitive issue in Florida, where the 2000 presidential election was decided by a razor-thin 537 votes. Mr. Clegg says that banning felons from the polls serves important societal interests by reinforcing the idea that criminals will face serious and, in some cases, permanent consequences for lawless conduct. "Before you assert a right to make a law, you should be willing to follow the law," Mr. Clegg says. Critics counter that felony disenfranchisement policies undercut the idea of rehabilitation and create a barrier to ex-felons becoming fully engaged Americans. "What this is saying, is that you will always be a second-class citizen, you will never be a full member of society," says Mr. Mauer. Mr. Clegg says the goal of rehabilitation is better served through the restoration of voting rights on a case-by-case basis to those who deserve it rather than through a wholesale policy change that will grant rights to some who may abuse them. Florida law permits individual ex-felons to petition the state government for reinstatement of voting rights. Critics say it is too complicated and takes too long. "There is obviously a delicate balance here," Mr. Clegg says. "Society wants to send the message that committing crimes is a bad thing that brings unpleasant consequences. On the other hand, you don't want people to think, 'I have committed a felony and I'll never be able to get a job again or vote again, or rejoin society.'" After six years, victory has been won by Mr. Johnson. While Mr. Johnson's lawsuit was dismissed in federal court, the resulting attention to his case caused Florida officials to reexamine their policy regarding ex-felon residents from out of state. Recently, election officials in Gainesville, gave Mr. Johnson a piece of good news - he is now legally authorized to vote in Florida. However, he says he will not be doing any celebrating until November at the earliest. "I am not taking anything for granted," he said, "until I see my name on the voter rolls." New Securities Fraud Cases ALLEGHENY ENERGY: Wolf Haldenstein Launches Securities Suit in S.D. NY ---------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class action in the United States District Court for the Southern District of New York, on behalf of purchasers of the securities, and options on the securities of Allegheny Energy, Inc. (NYSE: AYE) between April 23, 2001 and October 8, 2002, inclusive, against the Company and certain of its officers and directors. On March 16, 2001, Allegheny Energy's subsidiary Allegheny Energy Supply Company, LLC (Allegheny Energy Supply) announced that it completed its acquisition of Global Energy Markets (G.E.M.) from Merrill Lynch & Co., Inc. (Merrill Lynch). The complaint alleges that Allegheny Energy made false and misleading statements during the class period in that it omitted to state that its revenues (and revenue guidance) materially depended, on illusory, revenue creating, "wash transactions" with Enron, and other deceptive energy trading practices. At no point did Allegheny Energy disclose to the investing public that: (1) the surge in its revenues was attributable to G.E.M.'s practice of engaging in deceptive and illusory trades; and (2) that after the Enron story broke, Allegheny Energy could no longer engage in these deceptive trading practices as successfully, and that revenues would drop as a result. On September 25, 2002, the Company sued Merrill Lynch for fraud and breach of contract related to the G.E.M. acquisition. In that lawsuit, Allegheny Energy alleged that it overpaid for G.E.M. because the unit's financial reports had been inflated by sham trades involving Enron. The Company admitted that G.E.M engaged in a significant amount of wash or round trip energy trades with Enron, and perhaps others. The Company further admitted that the effect of those trades was to artificially inflate revenues, trading volumes and growth rate. The Company's September 25, 2002 admissions set a chain of events in motion, which would result in the Company's stock's tumble from a high of $12.85 on September 25, 2002 to $3.80 on October 8, 2002, a drop of $9.05, or 70%. On October 1, 2002, Moody's downgraded Allegheny Energy's credit to junk status. The Company, in a press release, reassured investors that this would not trigger any default or prepayment of the firm's debt. A week later, on October 8, 2002, the Company announced that it was in technical default under its credit agreements. For more details, contact Fred Taylor Isquith, Gregory Nespole, Scott Farrell, George Peters or Derek Behnke by Mail: 270 Madison Avenue, New York, New York 10016, by Phone: 800-575-0735 by E-mail: classmember@whafh.com or visit the firm's Website: http://www.whafh.com. All e-mail correspondence should make reference to Allegheny Energy. ATLAS AIR: Charles Piven Commences Securities Fraud Suit in S.D. NY ------------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who acquired Atlas Air Worldwide Holdings, Inc. (NYSE: CGO) securities between April 18, 2000 through October 15, 2002, inclusive, including shares purchased pursuant or traceable to May 2000 and September 2000 Prospectuses for public offerings of Company shares. The case is pending in the United States District Court for the Southern District of New York, against the Company, five of its senior officers and Morgan Stanley Dean Witter. 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 Piven by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202 by Phone: 410-986-0036 by E-mail: hoffman@pivenlaw.com or visit the firm's Website: http://www.pivenlaw.com CREDIT SUISSE: Charles Piven Launches Securities Fraud Suit in S.D. NY ---------------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who acquired Agilent Technologies, Inc. (NYSE: A) securities between December 13, 1999 and September 9, 2002, inclusive, in the United States District Court for the Southern District of New York, against defendant Credit Suisse First Boston Corporation. The action charges that defendant 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 Agilent's securities. For more details, contact Charles 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 or visit the firm's Website: http://www.pivenlaw.com CONSECO INC.: Fruchter & Twersky Files Securities Fraud Suit in S.D. IN ----------------------------------------------------------------------- Fruchter & Twersky LLP and Abraham & Associates initiated a securities class action on behalf of purchasers of publicly traded Senior Notes and other debt securities of Conseco, Inc. (OTC BB: CNCE) between the period of October 30, 2001 and August 12, 2002, inclusive against the Company and certain of its officers and directors. The complaint was filed in the United States District Court for the Southern District of Indiana, Indianapolis Division. The complaint alleges that defendants violated section 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by, among other things, disseminating a series of materially false and misleading statements regarding the Company's liquidity and the Company's manufactured-homes financing business. For more details, contact Jack G. Fruchter by Mail: One Pennsylvania Plaza, 19th Floor, New York, New York 10119, by Phone: 212-279-5050 or 800-440-8986 by Fax: 212-279-3655, or by E-mail: JFruchter@FruchterTwersky.com. DPL INC.: Charles Piven Commences Securities Fraud Suit in S.D. Ohio -------------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who acquired DPL, Inc. (NYSE: DPL) securities between March 30, 1999 and August 14, 2002, inclusive, in the United States District Court for the Southern District of Ohio, Western 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 Piven by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202 by Phone: 410-986-0036 by E-mail: hoffman@pivenlaw.com or visit the firm's Website: http://www.pivenlaw.com ELECTRONIC DATA: Berger & Montague Commences Securities Suit in E.D. TX ----------------------------------------------------------------------- Berger & Montague, PC initiated a securities class action against Electronic Data Systems Corp. (NYSE: EDS) and some of its officers and directors in the United States District Court for Eastern District of Texas on behalf of all persons or entities who purchased the Company's common stock between April 19, 2002 and September 24, 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, and claims 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 complaint asserts that defendants issued numerous statements highlighting the Company's strong financial performance despite the fact that its revenues were contingent on factors not in the Company's control, that overseas contracts were performing below expectations, and that the Company was recording and reporting receipts from contracts as assets even though the contracts were not yet fully completed. When Wall Street began to learn about the foregoing on September 18, 2002 after Company executives warned that a lack of new revenues would wipe out more than $0.60 per share of its Q3 earnings target of $0.74, the price of Company stock plummeted to a 52-week low of $17.20, down from a class period high of over $55.00. After further revelations regarding EDS's put-option and other liabilities emerged in the wake of the foregoing disclosures, EDS's share price tumbled even further, reaching an intraday low of $10.09 before closing at $11.68 on September 24, 2002. For more details, contact Sherrie R. Savett, Christopher L. Nelson, Kimberly A. Walker by Mail: 1622 Locust Street, Philadelphia, PA 19103 by Phone: 888-891-2289 or 215-875-3000 by Fax: 215-875-5715 by E-mail: InvestorProtect@bm.net or visit the firm's Website: http://www.bergermontague.com LIBERATE TECHNOLOGIES: Charles Piven Files Securities Suit in N.D. CA --------------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who acquired Liberate Technologies (Nasdaq: LBRT) securities between September 20, 2001 and October 15, 2002, inclusive, in the United States District Court for the Northern District of California, 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 Piven by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202 by Phone: 410-986-0036 by E-mail: hoffman@pivenlaw.com or visit the firm's Website: http://www.pivenlaw.com MERRILL LYNCH: Schatz & Nobel Commences Securities Fraud Suit in NY ------------------------------------------------------------------- Schatz & Nobel PC initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all persons who purchased or otherwise acquired the common stock of CMGI (Nasdaq: CMGI) from March 23, 1999 through October 6, 2000, inclusive. Also included are those who acquired Company shares through the acquisitions of: (1) Flycast (FCST), (2) Adforce (ADFC), (3) Tallan, Inc. (TALN), (4) Primedia, Inc. (PRM), (5) Altavista (AVTAF), (6) Yesmail.com Inc. (YESM), (7) Ubid, Inc. (UBID), and (8) ProxyMate The suit alleges that Merrill Lynch and its well-known Internet stock analyst Henry Blodget violated the federal securities laws by knowingly issuing false and misleading analyst reports regarding CMGI during the class period. Based on e-mails and other internal Merrill Lynch communications, which were made public as a result of the investigation conducted by the New York State Attorney General, the suit alleges that Defendants' failed to disclose a significant conflict of interest between their investment banking and research departments. Specifically, Henry Blodget and other Merrill Lynch analysts issued favorable analyst reports regarding CMGI to the public when they allegedly knew that positive recommendations were unwarranted. Unbeknownst to the investing public, Merrill Lynch's buy recommendations and price targets for CMGI were influenced by its efforts to attract lucrative investment banking business from CMGI and other internet companies. For more details, contact Nancy A. Kulesa by Phone: 800-797-5499 by E- mail: sn06106@aol.com or visit the firm's Website: http://www.snlaw.net MERRILL LYNCH: Johnson & Perkinson Launches Securities Suit in S.D. NY ---------------------------------------------------------------------- Johnson & Perkinson initiated a securities class action on behalf of all persons who acquired Exodus Communications, Inc. (EXDS) common stock between December 8, 1999 and June 19, 2001, inclusive in the Southern District of New York. The complaint alleges that Merrill Lynch & Co., Inc. and its analyst, Henry Blodget: (1) issued "Buy" recommendations about Exodus without any rational economic basis; (2) failed to disclose that they were issuing "Buy" recommendations to obtain investment banking business; and (3) concealed significant, material conflicts of interest that prevented them from providing independent objective analysis. Between March 24, 2000 and September 26, 2001, Exodus stock dropped from approximately $173.32 per share to less than $1 dollar per share. During this time period, Merrill Lynch repeatedly reiterated its Near- Term Buy/Long-Term Buy recommendation. For more details, contact Dennis J. Johnson or Jacob B. Perkinson by Mail: 1690 Williston Road, South Burlington, Vermont 05403 by Phone: 877-266-2133 or by E-mail: email@jpclasslaw.com. SALOMON SMITH: Cohen Milstein Launches Securities Fraud Suit in S.D. NY ----------------------------------------------------------------------- Cohen, Milstein, Hausfeld & Toll, PLLC initiated a securities class action in the United States District Court for the Southern District of New York against Salomon Smith Barney, Inc. and Jack Grubman on behalf of all persons or entities who purchased the common stock of Level 3 Communications, Inc. (Nasdaq:LVLT) from January 4, 1999 through June 18, 2001, inclusive. The suit arises as a result of the issuance by the defendants of analyst reports regarding Level 3 which recommended the purchase of Level 3 common stock and which set price targets for Level 3 common stock without any reasonable factual basis. Furthermore, when issuing the Level 3 reports, defendants failed to disclose significant, material conflicts of interest which they had, in light of their use of Mr. Grubman's reputation and his Level 3 analyst reports, to obtain investment banking business for Salomon Smith Barney. Furthermore, in issuing their Level 3 reports, in which they were recommending the purchase of Level 3 stock, Defendants failed to disclose material, non-public, adverse information, which they possessed about Level 3. Throughout the class period, Defendants maintained an "Outperform" or "Buy" recommendation on Level 3 in order to obtain and support lucrative financial deals for Salomon Smith Barney. Salomon Smith Barney garnered millions of dollars in fees as a result of underwriting and managing several debt and equity offerings on behalf of Level 3. For more details, contact Steven J. Toll, Esq. or Robert Smits by Phone: 888-240-0775 or 202-408-4600 by E-mail: stoll@cmht.com or rsmits@cmht.com or visit the firm's Website: http://www.cmht.com SCHERING-PLOUGH: Charles Piven Commences Securities Suit in New Jersey ---------------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who acquired Schering-Plough Corp. (NYSE: SGP) securities between October 1, 2002 and October 3, 2002, inclusive, 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 by E-mail: hoffman@pivenlaw.com or visit the firm's Website: http://www.pivenlaw.com SEARS ROEBUCK: Charles Piven Commences Securities Fraud Suit in N.D. IL ----------------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who acquired Sears, Roebuck & Co. (NYSE: S) securities between January 17, 2002 and October 17, 2002, inclusive, in the United States District Court for the Northern District of Illinois, Eastern Division, against the Company and: (1) Alan Lacy, (2) Glenn Richter, (3) Paul J. Liska and (4) Thomas E. Bergmann 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 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 SEARS ROEBUCK: Mark McNair Commences Securities Fraud Suit in N.D. IL --------------------------------------------------------------------- The Law Office of Mark McNair initiated a securities class action against Sears, Roebuck & Co. (NYSE:S). The complaint is on behalf of, and seeks damages for shareholders who purchased the stock between January 17, 2002 and October 17, 2002. The case is pending in the United States District Court for the Northern District of Illinois. The case 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 Mark McNair by Mail: 1101 30th Street PN.W. Suite 500, Washington, D.C, 20007 by Phone: 877-511-4717 or 202-872-4717 or by E-mail: mcnair@justice4investors.com. SEARS ROEBUCK: Bernard Gross Commences Securities Fraud Suit in N.D. IL ----------------------------------------------------------------------- Bernard M. Gross PC initiated a securities class action in the United States District Court for the Northern District of Illinois, on behalf of all persons and entities who purchased or otherwise acquired the common stock of Sears, Roebuck & Co. (NYSE:S) between January 17, 2002 and October 17, 2002, inclusive. The suit is pending in the United States District Court, Northern District of Illinois, against the Company and: (1) Alan Lacy, (2) Paul J. Liska, (3) Glenn Richter, and (4) Thomas E. Bergmann 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. As alleged in the suit, the Company issued numerous statements regarding its performance during the class period, which represented that the Company was successfully growing its revenues and earnings. Additionally, in each of its releases and financial reports, the Company reported its provisions for non-collectible accounts and in, its 2001 annual report represented that its reserves were "adequate". The suit alleges that these statements were materially false and misleading when made because they failed to disclose that the risk of customer defaults on Company credit card bills had risen dramatically throughout the class period and that the Company had under-reserved for this risk by hundreds of millions of dollars, thereby inflating its assets (by increasing accounts receivable) and earnings (by under reporting its expenses). On October 17, 2002, the Company surprised the market by issuing a press release stating that it would grow its 2002 earnings by 15%, rather than 22%, because of a "$222 million increase in the domestic provision for non-collectible accounts". In reaction to the announcement, the price of its common stock plunged 32%, falling from a $33.95 per share close on October 16 to a close of $23.15 per share on October 17, on trading of over 36 million shares. For more details, contact Deborah R. Gross or Susan Gross by Phone: 866-561-3600 (toll-free)/or 215-561-3600 by E-mail: susang@bernardmgross.com or debbie@bernardmgross.com or visit the firm's Website: http://www.bernardmgross.com TXU CORPORATION: Mark McNair Commences Securities Suit in N.D. Texas -------------------------------------------------------------------- The Law Office of Mark McNair initiated a securities class action against TXU Corp. (NYSE:TXU), on behalf of, and seeks damages for shareholders who purchased the Company's stock between April 25, 2002 and October 11, 2002. The case is pending in the United States District Court for the Northern District of Texas against the Company and certain of its officers and directors. The case 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. Specifically, Company investors have been stunned by two revelations. First, on October 4, 2002, the Company shocked the market by disclosing it expected materially lower earnings than had been previously predicted. These revelations caused the Company's common stock to decline over 55% in the next four trading days. Second, on October 14, 2002, before the market opened, TXU announced that it was cutting its dividend 80% to $0.125 per share and was selling all of its European assets. The Company's stock price immediately collapsed to as low as $10.10 per share before closing at $12.94. For more details, contact Mark McNair by Mail: 1101 30th Street PN.W. Suite 500, Washington, D.C, 20007 by Phone: 877-511-4717 or 202-872-4717 or by E-mail: mcnair@justice4investors.com. VODAFONE PLC: Schatz & Nobel Commences Securities Fraud Suit in S.D. NY ----------------------------------------------------------------------- Schatz & Nobel PC initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all persons who purchased or otherwise acquired the publicly traded securities of Vodafone Group PLC (NYSE: VOD) from March 7, 2001 through May 28, 2002, inclusive. Also included in the class are those who acquired Company shares through its acquisitions of Cellular Telecom and Telephone Integrated. The suit alleges that the Company and certain of its officers and directors issued false and misleading statements concerning its financial condition. Specifically, defendants failed to disclose that the Company was improperly delaying the write-down of billions of dollars of goodwill and impaired assets, thereby artificially inflating the Company's reported financial results. Despite defendants' claims that the Company had a "solid balance sheet," when the Company finally did write-off the value of its impaired assets and goodwill, the Company obliterated all profits for 2001 and 2002. On May 28, 2002, the Company announced massive write downs for goodwill of approximately 13.47 billion pounds sterling and exceptional items and operating costs of 5.4 billion pounds and exceptional non-operating costs of 865 million pounds. At the end of the class period, the price of Company ADRs closed at $15.19 per ADR, as compared to a class period high of $33.26 per ADR. For more details, contact Nancy A. Kulesa by Phone: 800-797-5499 by E- mail: sn06106@aol.com or visit the firm's Website: http://www.snlaw.net VODAFONE PLC: Johnson & Perkinson Commences Securities Suit in S.D. NY ---------------------------------------------------------------------- Johnson & Perkinson initiated a securities class action on behalf of purchasers of the securities of Vodafone Group plc (NYSE: VOD) between March 7, 2001 and May 28, 2002, inclusive, in the United States District Court for the Southern District of New York. 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, thereby artificially inflating the price of Company securities. In these statements, defendants highlighted the Company's strong financial performance and growth and reassured investors that Vodafone maintained a "solid balance sheet." As alleged, these statements were materially false and misleading because: (1) the Company was improperly delaying the write-down of billions of dollars of goodwill and impaired assets, thereby artificially inflating the Company's reported financial results. In fact, despite defendants' claims that the Company had a "solid balance sheet," when the Company finally did write-off the value of its impaired assets and goodwill, Vodafone obliterated all profits for 2001 and 2002; (2) the Company had grossly overpaid for the numerous acquisitions it had made in prior years; and (3) based on the foregoing, defendants' representation that the Company would continue to maintain its "record of delivering outstanding performance" was lacking in a reasonable basis. On the last day of the class period, the Company announced its financial results for the fiscal year 2002 and the period ending March 31, 2002, which included massive write downs for goodwill of approximately (pound)13.47 billion and exceptional items and operating costs of (pound)5.4 billion and exceptional non-operating costs of (pound)865 million. At the end of the class period, the price of Company ADRs closed at $15.19 per ADR, as compared to a class period high of $33.26 per ADR. For more details, contact Dennis J. Johnson or Jacob B. Perkinson by Mail: 1690 Williston Road, South Burlington, Vermont 05403 by Phone: 888-256-0890 or by E-mail: jplaw@adelphia.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. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *