/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/030113.mbx C L A S S A C T I O N R E P O R T E R Monday, January 13, 2003, Vol. 5, No. 8 Headlines ALABAMA: Jackson County To Gain From Civil Rights Suit Consent Decree AYDIN CORPORATION: Employees Settle Laber Violations Suit For $4.1M BRIDGESTONE/FIRESTONE INC.: Steeltex Lawsuit Remanded To CA State Court BRISTOL-MYERS SQUIBB: Withdraws Anti-Depressant From European Market CATHOLIC CHURCH: Some Clergy Sex Abuse Suits May Be Consolidated In CA CREDIT CARDS: Visa, Mastercard On Same Side in Retailers Antitrust IOWA: Ex-Marycrest Students Accuse Teikyo University President Of Fraud K.G. MARX: Enters Agreement To Settle Five-Year-Old Securities Lawsuit MCDONALD'S CORPORATION: Vegetarians Question Settlement Distribution NETWORK ENGINES: Faces Shareholder Lawsuit Over Tidalware Acquisition NEW MEXICO: Lawyer Plans Suit Over Violation Of Women Inmates' Privacy NORTH CAROLINA: US Airways Flight 5481 Crashes At Take-off, 21 Killed PACE PRODUCTS: Recalls 145T Children's Soap Making Kits For Burn Hazard PHILADELPHIA: City Council Sues To Force Trash Pick-Up At Large Condos SECURITIES LITIGATION: SEC Launches Probe into Mutual Fund Overcharging ST. CLOUD: College Appoints New Leader, Plans To Restructure Office TENET HEALTHCARE: Expects Justice Department To Launch Billing Lawsuit VIVENDI UNIVERSAL: American Shareholders Commence Securities Suit in NY New Securities Fraud Cases CABLE & WIRELESS: Cohen Milstein Commences Securities Suits in E.D. VA CABLE & WIRELESS: Wechsler Harwood Commences Securities Suit in E.D. VA CYTYC CORPORATION: Marc Henzel Commences Securities Lawsuit in MA Court DIVERSA CORPORATION: Stull Stull Commences Securities Suit in S.D. NY MONEY STORE: Mark Kaufman, Curtis Trinko File Securities Lawsuit in NY MOTOROLA INC.: Weiss & Yourman Lodges Securities Fraud Suit in S.D. NY MOTOROLA INC.: Charles Piven Commences Securities Fraud Suit in S.D. NY MOTOROLA INC.: Glancy & Binkow Lodges Securities Fraud Suit in S.D. NY NASH FINCH: Wechsler Harwood Launches Securities Fraud Suit in MN Court SEPRACOR INC.: Wolf Popper Commences Securities Fraud Suit in MA Court SEPRACOR INC.: Bernard Gross Launches Securities Fraud Suit in MA Court ********* ALABAMA: Jackson County To Gain From Civil Rights Suit Consent Decree --------------------------------------------------------------------- Jackson County in Alabama stands to benefit from a consent decree that settled a class action filed against the state in 1988, according to the county's DHR Director Drenda King. The suit, which came to be known as the "R.C. case," was filed in the U.S. District Court on behalf of an 8-year-old Jefferson County boy with the initials R.C. His civil rights were allegedly violated because the state did not provide him with family preservation services and specialized care for his emotional needs, the Daily Sentinel reports. The suit was filed on behalf of 1,500 Alabama children. In May 1991, the case was settled in a consent decree, establishing standards by which the state's child protective services and foster care system were required to operate. The consent decree mandated the counties in the state of Alabama implement a set of child welfare reform measures by October 2002. The consent decree developed the following principles: (1) Children shall live with their families unless their safety cannot be protected with the provision of services; (2) Individualized services shall be based on an analysis of strengths and needs of the child and family; (3) Children who are living with their families or in foster care shall have access to services that are comprehensive and include concrete services. If necessary, services shall be created to meet the needs of children and families; (4) Individualized service plans will be realistic, strength based and changed as family needs change; (5) Children, families, foster families and others involved in the family's life shall have a voice in the planning process; (6) Services will be coordinated, therapeutic and culturally responsive; (7) Permanency and stability in children's lives will be promoted; (8) Services will be delivered in the most normalized setting appropriate to the family's strengths and needs; (9) Children will have access to their families through visitation, phone and mail, and other communication; (10) Children, families and foster families will have access to advocacy, including attorneys; (11) Children will be free from excessive medication, seclusion and restraint, and shall receive appropriate behavior management; (12) Older children will receive transition and independent living skills; (13) Needs of sex abuse victims will be met; (14) Child abuse and neglect allegations will be investigated quickly. Ms. King said each county was phased into the program's implementations. Jackson County was in stage 2. "We began the conversion process in 1995," she said. "We were declared converted by the court monitor in January of 1997. We were one of the first counties. I believe that is because Jackson County was already practicing good child welfare. We needed more money and more employees to carry out the programs, and the lawsuit gave us that." Because of this, Ms. King said she looks at the lawsuit as a positive development for Jackson County. Ms. King told the Sentinel this state has been a leader in child welfare reform, and other states are looking to Alabama to model their own reform programs. Lawsuits similar to the RC case have been filed in numerous other states. Ms. King said the widespread use and manufacture of crystal methamphetamine has impacted child welfare and made it difficult for Jackson County DHR to abide by some of the consent decree mandates. Ms. King said Jackson County DHR now has a record high of holding custody of 60 children, doubling the average. "At least half have come into our custody because of their families being involved with crystal meth," she said. Ms. King said Jackson County DHR has been lucky because roughly half of those 60 children have been placed in the homes of relatives rather than in foster homes. "Studies have shown chronic drug use does not have a high success rate of responding to treatment," Ms. King said. "It makes the reunification piece of the consent decree hard to achieve." Ms. King said the number of children in foster care indicates a serious problem, however the county is fortunate to have family members who will take on the role of raising relative's children who enter DHR custody. AYDIN CORPORATION: Employees Settle Laber Violations Suit For $4.1M ------------------------------------------------------------------- Eighty-three employees who alleged in a federal class action that Aydin Corporation violated labor laws by failing to pay them overtime, have reached a $4.1 million settlement with the company, The Philadelphia Inquirer reports. The case was unusual in that the employees were white-collar professionals, such as engineers, managers and executives, who were paid salaries. They stated in the lawsuit that Aydin, a defense contractor in Newtown Township, Bucks County, Pennsylvania, treated them like factory workers by making them fill out time sheets and docking them for missed hours during the day. However, when they worked more than 40 hours a week, they were told not to document the hours on the time sheets and were not paid overtime, said Scott Wolpert, a Fort Washington lawyer for the plaintiffs. The practice persisted for decades and is a violation of the Federal Labor Standards Act, Mr. Wolpert said. However, because of the three-year statute of limitations, the employees can only collect unpaid overtime for three years prior to the filing of the lawsuit in 1998. According to Mr. Wolpert, a former manager in human resources in Aydin was the whistle-blower in the case. The lawsuit was filed in Philadelphia, and the settlement was approved by US District Court Judge Anita Brody in December. Checks ranging from $1,500 to $194,000 each are being distributed to the employees who participated in the lawsuit, said Mr. Wolpert. Of the $4.1 million, $1.23 million will be paid as attorney fees, he added. BRIDGESTONE/FIRESTONE INC.: Steeltex Lawsuit Remanded To CA State Court ----------------------------------------------------------------------- Judge Christina A. Snyder of the United States District Court for the Central District of California granted the plaintiffs' motion to remand the national class action against Bridgestone/Firestone, Inc. and Bridgestone Corporation today to California Superior Court. Filed on August 13, 2002, the lawsuit alleges that the defects have resulted in thousands of tire failures in Steeltex R4S, R4S II and A/T tires, causing injuries and multiple deaths. Causes of action against the two defendants in the lawsuit include: (1) fraudulent concealment, (2) deceptive practices in violation of the consumer legal remedies act, (3) violation of unfair practices act, (4) strict liability, (5) negligence and breach of warranty Commenting on the remand of the case back to the California Superior Court, Joseph L. Lisoni of the Pasadena, CA-based law firm of Lisoni & Lisoni, which filed the lawsuit, noted that the case was originally filed in the state court and that is where it properly belongs. Mr. Lisoni remarked, "Now that it has been returned to its proper court jurisdiction, we are now hopeful that the defendants will not prolong this litigation. Our main goal has always been to get the Steeltex tires off the streets and we urge Bridgestone/Firestone to recall them immediately. By doing so, they will not only save more accidents, deaths and injuries but minimize the damage to their reputation as well." Mr. Lisoni emphasized if Firestone neglects to take the "proper decisive action.needed," the lawsuit will proceed as well as the public education program that has been initiated to warn consumers of the potential danger that could result from Steeltex tire defects. Concurrently, he added, a campaign is in process to enlist the aid of federal, state and local government representatives and agencies in taking whatever action is appropriate to protect the health and safety of Americans. Regardless of the outcome of the litigation, Mr. Lisoni stressed his firm is working closely with the National Highway Traffic Safety Administration (NHTSA) to get it to reopen its investigation of the Steeltex tire series which it suspended on April 9, 2002. On November 15, 2002, Mr. Lisoni formally petitioned the NHTSA to reopen the investigation. On December 23, in a written request, the agency asked for additional information and documentation to support the petition, which Mr. Lisoni has indicated he will provide very soon. "Time is of the essence," Mr. Lisoni noted, adding, "whether through the lawsuit, the NHTSA petition or other government action, we will not cease our efforts until the more than 30 million Steeltex tires Bridgestone/Firestone has produced are not a threat to the public's safety any more." BRISTOL-MYERS SQUIBB: Withdraws Anti-Depressant From European Market -------------------------------------------------------------------- Bristol-Myers Squibb is withdrawing from the European market its antidepressant drug Dutonin, known as Serzone in the United States, because in rare cases it can cause fatal liver damage, The Wall Street Journal Europe reports. Lawsuits already have begun piling up in the United States against Bristol-Myers regarding Serzone. "We probably have about 1,000 clients at this point," said Michael O'Meara, a Chicago lawyer who has filed suit in US District Court in Chicago, seeking class action status. The Company has in recent years been responding differentially across the globe to concerns about the drug. In June 2001, the Company sent letters to Canadian doctors warning of the drug's sometimes-fatal effects on the liver. Six months later the US Food and Drug Administration required that a similar letter be sent to US, doctors and told the company to add a warning to the drug's label highlighting dangerous side-effects. The drug's use was discontinued recently in Sweden. Earlier this week, the company's Dutch subsidiary said it would stop commercializing the drug in the Netherlands in April, after the Netherlands Medicine Assessment Board announced that it was investigating the drug upon receiving 26 reports of serious liver failure and some deaths related to the drug's use. Bristol-Myers is in the midst of one of the worst periods in its 144- year history. Sales have fallen, and the company has conceded that its accounting for the last three years was so flawed that its results must be restated. A front page story in the Wall Street Journal last month reported even more accounting problems than the company has admitted. Its high-profle partnership with ImClone systems Inc. has led to a $1.1 billion write-off by Bristol-Myers. CATHOLIC CHURCH: Some Clergy Sex Abuse Suits May Be Consolidated In CA ---------------------------------------------------------------------- Attorneys for alleged victims of clergy sex abuse and two Southern California Roman Catholic dioceses consented recently to a framework that could consolidate up to 500 molestation lawsuits before a single judge, the Associated Press Newswires reports. As part of the agreement, the Archdiocese of Lost Angeles and the Diocese of Orange, agreed to review and begin turning over within 30 days some personnel files, parish transfer records and other documents that plaintiffs' lawyers have requested. The agreement does not include San Bernardino and San Diego dioceses. The meeting was called by County Superior Judge Peter D. Lichtman, who specializes in complex cases, to develop procedures for dealing with the tide of sex abuse cases involving Catholic priests that is expected to develop this year in response to a state law that extends through 2003, the statute of limitations for alleged victims to sue. Judge Lichtman has been urging the two sides in a class action against the Los Angeles archdiocese toward mediation. He said he would assume responsibility for four lawsuits that already have been filed in Orange County "for settlement purposes." Judge Lichtman has indicated that he would be willing to mediate any active or pending cases from the four Southern California jurisdictions. Raymond Boucher, a Beverly Hills lawyer whose firm is representing more than 160 people suing Catholic officials throughout the state, and who acted on behalf of the nine plaintiffs lawyers present, asked Judge Lichtman to order the Archdiocese of Los Angeles to produce personnel and other confidential records it has on priests who have been named in lawsuits or could be named in the future based on past allegations. Since this seemed to be a thorny issue, and it was decided that future hearings will likely be held to determine which documents the church must make available and which it can refuse to hand over to protect priests' privacy rights. Judge Lichtman set another status conference for February 25. Between now and then, the plaintiffs' lawyers are supposed to develop a "case mangement order" proposing how the lawsuits will be handled at various stages in the system and to draw up a spreadsheet containing information on all the alleged victims and their alleged abusers. CREDIT CARDS: Visa, Mastercard On Same Side in Retailers Antitrust Suit ----------------------------------------------------------------------- Longtime rivals Visa and Mastercard are fighting on the same side in an antitrust class action filed by Wal-Mart Stores, Inc. and four million other retailers, as a New York judge hears summary judgment arguments in the suit, CNNfn reports. The suit alleges argues that the credit card companies leveraged their market power to promote their own systems in the growing debit card market, charging higher fees that were passed on to consumers. The plaintiffs further alleges that the policy unfairly forces any business that signs on for the credit card system to also accept debit transactions at higher fees. While Visa and MasterCard each have separate defense teams and are only named together in one part of the suit, they have filed joint briefs asserting the same fundamental arguments. Both say that their policy of forcing retailers to "honor all cards" with the associations' logos provides more choice to consumers and that other payment networks - such as NYCE, MAC, STAR and PULSE - are still thriving, CNNfn reports. The 1996 suit, delayed while the parties disputed its class action status in appeals courts, highlights the unique relationship between the leading payment card companies. Both companies are private associations comprised predominantly of the same member banks, most of whom issue or have issued both Visas and MasterCards, CNNfn reports. "We find ourselves in the same position because we are a similar organization and have similar reasons for having an 'honor all cards' rule," Stephen Theoharis, senior vice president and director of litigation at Visa, of the Wal-Mart suit, told CNNfn. He said any payment systems network would support the same argument because universal acceptance is central to the systems' functionality. To Lloyd Constantine - who represents the plaintiffs and has described Visa and MasterCard as a "credit card cartel" - the companies used the rule in an attempt to monopolize the debit card market. Visa and MasterCard's offline form of debit payment, which requires a signature, costs $1.50 per $100 transaction, retailers say. This compares with 10 cents for rival offline systems that require entering personal identification numbers (PINs), CNNfn reports. IOWA: Ex-Marycrest Students Accuse Teikyo University President Of Fraud ----------------------------------------------------------------------- A group of former students of Marycrest International University have filed a lawsuit seeking class action status against the Japanese head of the Teiyko University Group, claiming he defrauded the students, Associated Press Newswires reports. The lawsuit was filed recently in Denver, Colorado, site of Marycrest's chiropractic college. Twenty former students of the college are named as plaintiffs. They are seeking class action status for the case so that the lawsuit can proceed on behalf of all Marycrest students at both the Davenport, Iowa and Denver schools, both of which closed last year. The students are seeking unspecified damages as compensation for tuition and other expenses, plus unspecified punitive damages. President Okinaga presides over Teikyo in Japan and a network of related affiliates that allegedly controlled Marycrest and several other American colleges in which Mr. Okinaga had a financial stake. The lawsuit accuses Mr. Okinaga of civil conspiracy, negligent misrepresentation, deceptive trade practices and breach of contract. The students claim Mr. Okinaga treated Marycrest not as a tax-exempt, non-profit public trust, but as a business in which he sought to maximize profits at students' expense. The lawsuit also claims that Shoichi Okinaga, president of Teiyko, and others falsely represented Marycrest as a "normal or typical United States college" and did not disclose the fact that "it was inevitable the school would close." K.G. MARX: Enters Agreement To Settle Five-Year-Old Securities Lawsuit ---------------------------------------------------------------------- An investor lawsuit against party-store company, K.G. Marx, has been settled, nearly five years after the last store closed, The Columbus Dispatch reports. K.G. Marx, based in Westerville, raised nearly $900,000 in a stock offering in 1995, to expand its chain of party stores, but within a few years it was in bankruptcy court. Investors sued and have reached an agreement to receive nearly $600,000 back, said Todd Neuman, an attorney who represented 182 investors in the lawsuit. "That is a phenomenal return for a class-action case," Mr. Neuman said. K.G. Marx opened its first store in 1980, specializing in party supplies. The company gradually added more central Ohio stores and expanded its offerings to rental equipment. The company finally had a chain of seven stores, but ran into problems and downsized over time until only three stores remained Those stores were closed in July 1998. MCDONALD'S CORPORATION: Vegetarians Question Settlement Distribution -------------------------------------------------------------------- Some vegetarians, including the lead lawyer, are challenging how McDonald's Corporation will distribute $10 million to settle the mislabeling case involving beef-flavored french fries, the Associated Press reports. An Illinois Circuit Court judge in Chicago will hear arguments on who should receive the money and why. The Seattle attorney who brought the original lawsuit against the fast- food giant, Harish Bharti, told AP he will object to the company's list of proposed recipients in part because the selection process was "rigged," favoring those who either don't represent the majority of vegetarians or who are sympathetic to McDonald's. "I am deeply concerned that the funds not be allocated to a relatively small number of interest groups determined by ... lawyers with personal preferences or prejudices unrelated to the actual needs and concerns of the class members," Mr. Bharti said in a brief. He wants the court to appoint an impartial third party to draw up a new recipients' list. The operator of a Web site for vegetarians, VegSource.com, has filed objections to the settlement distribution. Jeffrey A. Nelson contends some would-be recipients are "in fact anti-vegetarian," according to an AP report. Some, Mr. Nelson said, had publicly opposed bringing a class-action lawsuit against McDonald's for representing its fries and hash browns as being vegetarian when they were, in fact, cooked in beef-flavored oils. To settle the matter, McDonald's, based in Oak Brook, Ill., issued an apology and agreed to pay $10 million - 60 percent to vegetarian groups, 20 percent to Hindu and/or Sikh organizations, 10 percent to children's nutrition and hunger relief efforts and 10 percent to those promoting the understanding of Kosher foods and dietary practices. Besides various vegetarian groups, three universities, Tufts, Loma Linda in California and the University of North Carolina at Chapel Hill, will divide $1.3 million, according to the submitted list. Responding to complaints over the choice of recipients, McDonald's filed a brief saying that some complaints are "substantive but many . fall into the category of petty gripes or sour grapes over not receiving funds . When distributing a large sum of money, it is impossible to please every potential grant recipient or interested party," the company said. Of Mr. Nelson's complaint, McDonald's said in the brief that it "reflects intramural squabbling within the vegetarian community about tactics for achieving vegetarian aims." NETWORK ENGINES: Faces Shareholder Lawsuit Over Tidalware Acquisition --------------------------------------------------------------------- Network Engines, Inc. (Nasdaq: NENG) faces a purported class action and derivative lawsuit in the Court of Chancery in the State of Delaware. The suit also names as defendants its Board of Directors and relates to the acquisition of TidalWire Inc. The plaintiffs allege Network Engines and its Board of Directors breached their fiduciary duties by, among other things, paying an excessive amount for the acquisition of TidalWire, and purportedly failing to disclose material facts in the Company's distributed Joint Proxy Statement/Information Statement regarding Network Engines' shares issuance in the merger. The plaintiffs are seeking damages, rescission of the merger and other relief. Network Engines believes it has highly meritorious defenses and intends to vigorously defend against the suit. Network Engines completed the acquisition of TidalWire Inc., a privately held company dedicated to the distribution and support of storage networking products, on December 27, 2002. The transaction, valued at approximately $18 million, created a combined company dedicated to the development, manufacturing, and distribution of server appliances and complementary products for storage, security and network management applications. NEW MEXICO: Lawyer Plans Suit Over Violation Of Women Inmates' Privacy ---------------------------------------------------------------------- A female inmate of the new Metropolitan Detention Center in Albuquerque, claims male guards spy on her and other women while they shower and undertake other private physical care of themselves in the jail, the Albuquerque Journal reports. Inmate Shauna Bateman said through her lawyer that jail officials have ignored seven requests that they put up a structure to obscure guards' view of the shower in Pod D, where she is housed. Albuquerque attorney Samuel Bregman said he will file a class action, naming other women as potential plaintiffs if the problems are not corrected very soon. "A lawsuit would be filed in federal court and could involve dozens, if not a couple hundred" female inmates as plaintiffs, Mr. Bregman said. In addition to her complaint about being observed in the shower, Ms. Bateman said that in other instances maintenance men and male attorneys walked into her pod unannounced. Ms. Bateman also says a surveillance camera, which she believes was operated by male guards, was directly pointed at showers that female inmates use. Mr. Bregman said his client and other women also complain of being spied upon while they use the toilet. Mr. Bregman said there was a $2 solution to the problem, shower curtains. NORTH CAROLINA: US Airways Flight 5481 Crashes At Take-off, 21 Killed --------------------------------------------------------------------- A US Airways commuter plane crashed and burned during take-off, killing 21 passengers aboard, the Associated Press reports. US Airways Express Flight 5481, a Beech 1900 twin-engine turboprop, was just taking off from the Charlotte Douglas International Airport in North Carolina when it veered back toward the ground, clipping a corner of the hangar as it fell, officials stated. Investigators for the National Transportation Safety Board have already recovered the flight data recorder and the cockpit voice recorder for the doomed plane, hoping to shed light on the cause of the crash - the deadliest US air accident in nearly 14 months. Investigators told AP they are ruling nothing out. FBI agent-in-charge Chris Swecker said there is no preliminary indication of terrorism. The pilot, identified by US Airways as Katie Leslie of Charlotte, contacted the tower at takeoff to report an emergency, said Greg Martin, a spokesman for the Federal Aviation Administration. "However, (the transmission) was cut short and the emergency was never identified," he said. "It just happened so quickly," Yvonne Hepler, who saw the crash from about 500 yards away, told AP. "It just disintegrated in a matter of seconds." Her co-worker, Dee Addison, ran outside to see people running from a maintenance hangar. "It didn't even look like a plane," she said. "It was totally demolished." No one on the ground was injured, though a portion of the hangar - a maintenance facility for US Airways - was scorched and battered. Smoke poured from the wreckage, so thick "you could taste it in your mouth," Addison told AP. A maintenance alert for the type of plane involved in the crash was issued in August indicating that attachment bolts for the vertical stabilizer were found loose on one plane during a scheduled inspection, the Associated Press reports. The FAA has issued nearly two dozen airworthiness directives on the 1900-D since 1994. The directives warn of problems that must be repaired if found in an aircraft. PACE PRODUCTS: Recalls 145T Children's Soap Making Kits For Burn Hazard ----------------------------------------------------------------------- Pace Products, Inc. is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 145,000 children's soap making kits. The soap may get too hot when heated in the microwave oven and leak from the tray mold posing a burn hazard to children. The Company has received three reports of burn injuries from the heated soap, including a 6-year-old girl who received burns to her hand. The soap kits were sold under the name 'Soap Making for Kids." The kits include a plastic mold tray, three bars of glycerine, string and an instruction book. "SCHOLASTIC INC." and "Made in U.S.A." are printed on the back of the soap kit box. Scholastic Book Clubs and Book Fairs sold the recalled soap kits at schools nationwide from March 2000 through November 2002 and bookstores sold the recalled soap kits from March 1998 through November 2002 for about $8. For more details, contact the Company by Phone: (800) 541-7670 between 8 am and 5 pm ET Monday or visit the firm's Website: http://www.paceplace.com PHILADELPHIA: City Council Sues To Force Trash Pick-Up At Large Condos ---------------------------------------------------------------------- The City Council recently went to court, suing the city to end its longtime refusal to collect garbage from large condominium buildings, the Associated Press Newswires reports. Hundreds of condominium associations that now pay for private trash pick-up also have filed a class action alleging that the city's practice of collecting garbage from some taxpayers, but not from others, is unconstitutional. The Council is asking the Philadelphia Court of Common Pleas to order Mayor John F. Street to enforce an ordinance that extends municipal trash service to all cooperative and condominium buildings in the city. For decades, the city has not collected trash from buildings with more than six housing units, a restriction common in large cities nationwide. The mayor has consistently shown his opposition to such an extension of service. Mayor Street, in a letter to the Council in September, wrote that adding large condominiums to city trash routes would cost at least $1.7 million annually, a figure that was too expensive. Additionally, the mayor refused to sign the ordinance extending trash service, which was passed by the Council in June and became law over his objection in September. The mayor said he would refuse to enforce it. Mayor Street's lawyers have said the Council has no authority over the city's trash collection practices. City Council President Anna C. Vera, said the mayor does not have the authority to ignore the law. The Council's lawyer, Robert Daniels, said Mayor Street was failing to carry out his oath of office to uphold the law. Meanwhile, a federal judge has ruled in the lawsuit brought by the condominium associations, saying that the city could not legally refuse to pick up trash from the high-rise condominium buildings while allowing pickup at large but low-rise blocks of row-house buildings. That ruling is on appeal by the associations to the Third US Circuit Court of Appeals, which has taken a harsher view of such lawsuits. The Third Circuit last month upheld trash pickup rules in a city suburb, holding that municipalities were free to decide what types of buildings should get service. SECURITIES LITIGATION: SEC Launches Probe into Mutual Fund Overcharging ----------------------------------------------------------------------- Outgoing Securities and Exchange Commission (SEC) Chairman Harvey Pitt said brokerage companies may have overcharged mutual fund investors by "a huge amount," the Associated Press reports. SEC regulators and the National Association of Securities Dealers have commenced an investigation over allegations that brokerage firms may have overcharged fund investors by failing to provide available discounts. "If it's a widespread problem, it could be a significant amount of money," Mr. Pitt told reporters Wednesday after an evening address to a meeting of mutual fund directors. He declined to estimate how much money might be at stake, saying, "we don't know enough yet." Mr. Pitt will soon be leaving the SEC after resigning under pressure in November following a series of political missteps. Last month, President Bush nominated investment banker William H. Donaldson, a former chairman of the New York Stock Exchange, to replace Mr. Pitt as head of the besieged agency. The Senate must first confirm Mr. Donaldson, AP reports. In this latest regulatory investigation, mutual funds aren't accused of any wrongdoing. Regulators are concentrating on brokerage firms, looking at how they handle funds that carry a sales charge, or "load." Funds frequently discount such fees, based on the amount invested, with different levels or breakpoints for applying lower fees. Probes are focused on whether brokerages that sell mutual funds with sales loads are making the discounts available to eligible investors. If they haven't, regulators said investors who bought shares in load funds through brokerage companies would have been overcharged, AP states. Mr. Pitt said the allegations may not amount to anything, or could be a massive problem requiring enforcement actions. "We are talking, potentially, about a huge amount of money, and that money went somewhere," other than to investors, he told fund directors. Asked about the state of US corporations, Mr. Pitt sounded an optimistic note, saying he thinks companies are better governed now than in prior decades, with better-educated executives and more diligent board members. A flurry of legislation and rules put into effect in the wake of corporate accounting scandals at Enron Corp., WorldCom Inc. and others won't be a cure-all for corporate scandals, Mr. Pitt stressed. "We can make the system better," he noted, according to AP. "We can't make people better." ST. CLOUD: College Appoints New Leader, Plans To Restructure Office ------------------------------------------------------------------- The affirmative action office at St. Cloud State University has a new leader, hired recently as interim affirmative action compliance and support officer. He will serve until a permanent officer is hired, the Associated Press Newswires reports. The school appointed Aly Xiong, a Stillwater consultant, to head up its affirmative action office. His duties include educating employees and students about the university's discrimination policies and assisting in the application of federal and state regulations. The university will launch a national search for a permanent affirmative action officer after it reorganizes the structure of the office, said university spokeswoman Lisa Helmin Foss. The office came under fire in February 2002, after the US Equal Employment and Opportunity Commission (EEOC) issued a report. The EEOC investigated the climate on campus at the request of the university, following a series of EEOC complaints accusing the school of discrimination. The report states there is a lack of trust and confidence in the affirmative action office and its grievance process. Laurel Allen, who headed the office then, left for a job in New York, three months later. A class action accusing the school of anti-Semitism, which the university settled, also singled out the affirmative action office. Settlement of the lawsuit requires the university to reorganize the office. TENET HEALTHCARE: Expects Justice Department To Launch Billing Lawsuit ---------------------------------------------------------------------- Tenet Healthcare Corporation is expecting the United States Justice Department to commence a lawsuit over alleged improper Medicare billing, the Associated Press reports. Several securities suits were commenced after the Company's shares plunged 70% due to charges that two doctors at a hospital in Redding performed hundreds of unnecessary heart surgeries, and that doctors at a hospital in San Diego may have paid to recruit patients. The Company also announced in June that it had agreed to pay $55.75 million to settle several government claims involving alleged over-billing by its hospitals. Federal officials have raided both hospitals as part of ongoing investigations that have thus far centered on the doctors, not the Tenet facilities, the Associated Press reports. No charges have been filed. Settlement negotiations stalled Wednesday and the nation's second- largest hospital chain said it expects the government to sue within a few days. "We regret that we have been unable to reach an amicable resolution of these issues," Christi R. Sulzbach, Tenet's general counsel, told AP. A call seeking comment from the Department of Justice was not immediately returned, AP states. VIVENDI UNIVERSAL: American Shareholders Commence Securities Suit in NY ----------------------------------------------------------------------- American shareholders commenced a securities suit in the United States District Court in the Southern District of New York against Vivendi Universal SA and former chief executive Jean-Marie Messier, the Financial Times reports, citing the complaint. The suit alleges that Mr. Messier artificially inflated the second- largest media company's share price by misrepresenting the company's financial position, FT said. The suit also alleges he masked the risk of a cash crisis, overstated earnings by not writing down impaired goodwill, improperly consolidated minority investments and incorrectly recognized revenue. Investigations into Vivendi's accounts under Mr. Messier in the US and Europe, which are still underway, could have an impact on the US shareholders' suit. The courts will decide whether the class action is admissible in coming weeks, the FT said. New Securities' Fraud Cases CABLE & WIRELESS: Cohen Milstein Commences Securities Suits in E.D. VA ---------------------------------------------------------------------- Cohen, Milstein, Hausfeld & Toll, PLLC, initiated a securities class action against Cable & Wireless and certain of its officers and directors (NYSE: CWP) in the United States District Court for the Eastern District of Virginia on behalf of all persons who purchased or otherwise acquired the securities of CWP between August 6, 1999 and December 6, 2002, inclusive. The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between August 6, 1999 and December 6, 2002. Specifically, the complaint alleges defendant Cable issued a press release on August 6, 1999, announcing it had agreed to sell One 2 One, a British based mobile telecommunications operator, to Deutsche Telekom. Under the announced terms of the agreement, Deutsche Telekom would pay 6.9 billion pounds sterling in cash for 100% of the equity ownership interest in One 2 One including the repayment of 237 million pounds of shareholder loans, and would assume approximately 1.5 billion pounds of third-party debt. According to the complaint, such statements were materially false and misleading because they failed to disclose a critical term of the One 2 One deal was a 1.5 billion pounds tax indemnification clause agreed to by Cable, and more specifically, a trigger clause, whereby a future downgrade of Cable's long-term debt rating below a predetermined threshold would trigger a 1.5 billion pounds cash obligation on behalf of Cable. On December 6, 2002, Moody's investment service announced it would downgrade the long-term debt rating of Cable from Baa1 to Baa2. Cable then shocked the market in a press release that same day stating that, as a consequence of the downgrade, the above mentioned "ratings trigger" was activated. The announcement caused the price of Cable's ADRs to fall by 40 percent in one business day, from a closing price of $3.90 per ADR on December 6, 2002, to close at $2.33 per ADR on December 9, 2002, on unusually high trading volume. Subsequently, the company filed a Form 6-K with the SEC on December 9, 2002, which included a statement regarding the tax indemnification "ratings trigger" clause. For more details, contact Steven J. Toll or Mary Ann Fink by Mail: 1100 New York Avenue, NW Suite 500 - West Tower, Washington, DC 20005 by Phone: 888-240-0775 or 202-408-4600 by E-mail: stoll@cmht.com or mfink@cmht.com or visit the firm's Website: http://www.cmht.com CABLE & WIRELESS: Wechsler Harwood Commences Securities Suit in E.D. VA ----------------------------------------------------------------------- Wechsler Harwood LLP initiated a securities class action on behalf of shareholders who purchased, converted, exchanged or otherwise acquired American Depository Receipts (ADRs) of Cable and Wireless PLC (NYSE:CWP) between August 6, 1999 and December 6, 2002, inclusive. The case is pending against Cable & Wireless in the United States District Court for the Eastern District of Virginia. The complaint alleges the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between August 6, 1999 and December 6, 2002. Specifically, the complaint alleges that the Company issued a press release on August 6, 1999, announcing that it had agreed to sell One 2 One, a British based mobile telecommunications operator, to Deutsche Telekom. Under the announced terms of the agreement, Deutsche Telekom would pay 6.9 billion pounds sterling in cash for 100% of the equity ownership interest in One 2 One including the repayment of 237 million pounds of shareholder loans, and would assume approximately 1.5 billion pounds of third-party debt. According to the complaint, these statements were materially false and misleading because they failed to disclose that a critical term of the One 2 One deal was a 1.5 billion pounds tax indemnification clause agreed to by Cable. More specifically, it contained a trigger clause, whereby a future downgrade of Cable's long-term debt rating below a predetermined threshold would trigger a 1.5 billion pounds cash obligation on behalf of Cable. On December 6, 2002, Moody's investment service announced it would downgrade the long-term debt rating of Cable from Baa1 to Baa2. Cable then shocked the market in a press release that same day stating, as a consequence of the downgrade, the above mentioned "ratings trigger" was activated. The announcement caused the price of Cable's ADRs to fall by 40 percent in one business day, from a closing price of $3.90 per ADR on December 6, 2002, to close at $2.33 per ADR on December 9, 2002, on unusually high trading volume. Subsequently, the company filed a Form 6-K with the SEC on December 9, 2002, which included a statement regarding the tax indemnification "ratings trigger" clause. For more details, contact David Leifer by Mail: 488 Madison Avenue, 8th Floor, New York, New York 10022 by Phone: (877) 935-7400 or by E-mail: dleifer@whesq.com CYTYC CORPORATION: Marc Henzel Commences Securities Lawsuit in MA Court ----------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action on behalf of purchasers of the securities of Cytyc Corporation (NASDAQ: CYTC) between July 25, 2001 and June 25, 2002 inclusive in the United States District Court for the District of Massachusetts against the Company and: (1) Patric Sullivan (CEO throughout the class period, President until January 30, 2002, Chairman since November 7, 2001) and (2) Robert L. Bowen (CFO) The complaint charges the defendants violated 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 between July 25, 2001 to June 25, 2002. Among other things, the complaint alleges that throughout the class period, Cytyc issued press releases representing that it was enjoying record revenue and earnings growth, increasing the market share of its primary product (ThinPrep), and its revenues would grow by 25% in 2002 over 2001, to $275-$300 million. The Company also asserted it was not negatively impacted, and would not be negatively impacted, by the general economic slowdown that was well underway at the time. These statements were materially false and misleading, according to the complaint, because they failed to disclose that the Company's seemingly-impressive revenue and earnings growth was attributable, in material part, to overstocking of inventory at the laboratories which purchased ThinPrep in large volumes in reaction to deep discounts offered by Cytyc. Cytyc recognizes revenue upon shipment. The complaint further alleges the defendants were motivated to commit the alleged securities laws violations in order to pump up the Company's results so it could use its inflated stock as currency for key corporate acquisitions. On December 3, 2001, Cytyc acquired Pro- Duct Health, Inc. for $167 million in Cytyc common stock and cash and, on February 2, 2002, announced it entered a definitive merger agreement to acquire Digene Corporation using Cytyc common stock and cash. At the time, the Digene acquisition was valued at $554 million. On April 24, 2002, after the close of trading, Cytyc revealed, in a conference call, that its revenues and earnings for 2002 would be materially less than the market had been led to believe. Instead of revenues between $295-$305 million, the Company stated 2002 sales would be as low as $270 million, and reduced earnings expectations from $0.66 per share to $0.55 per share. According to the Company, the cut was due to inventory reduction by its customers (laboratories), which had overstocked ThinPrep in the first quarter of 2002 and would meet end-user demand from inventory instead of new orders. In response to the announcement, which was contrary to repeated assurances by the Company, the price of Cytyc common stock plummeted by 36.5%, falling from a $24.80 per share close on April 24 to close at $15.73 on April 25, on extremely heavy trading volume. The truth regarding the Company's business, however was still undisclosed, according to the complaint. On June 25, 2002, Cytyc shocked the market by again lowering its expected revenues for 2002 to $230-$245 million and earnings per share to $0.40-$0.44. In a conference call held later that day, Cytyc announced that it was considering switching its revenue recognition model from its current recognition-on-shipment to a system more reflective of end-user demand. In response, Cytyc's stock price plummeted again, this time by 39%, falling from a $11.46 per share close on June 24, to close at $6.88 per share on June 25, on extremely heavy trading volume. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004-2808, by Phone: (888) 643-6735 or (610) 660-8000 by Fax; (610) 660-8080, by E-mail: Mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182. DIVERSA CORPORATION: Stull Stull Commences Securities Suit in S.D. NY --------------------------------------------------------------------- Stull, Stull & Brody initiated a securities class action on behalf of purchasers of the common stock of Diversa Corporation (NASDAQ: DVSA) between February 14, 2000 and December 6, 2000, inclusive. The action is pending in the United States District Court, Southern District of New York against the Company and: (1) Jay M. Short, (2) Karin Eastham, (3) James H. Cavanaugh, (4) Bear Stearns Co., Inc., (5) J.P. Morgan Securities, Inc. (as successor-in-interest to Chase H&Q), (6) Chase H&Q, (7) Deutsche Banc Alex. Brown, (8) Credit Suisse First Boston (as successor-in-interest to DLJ), (9) ABN Amro Securities (as successor-in-interest to ING Baring Furman Selz), (10) ING Baring Furman Selz, (11) Merrill Lynch Pierce Fenner & Smith, Inc., (12) Morgan Stanley, Robertson Stephens, Inc. (as successor-in- interest to FleetBoston Robertson Stephens Inc.), (13) Salomon Smith Barney, Inc., (14) SG Cowen Securities Corp., (15) Warburg Dillon Read, (16) RBC Dain Rauscher (as successor-in-interest to Dain Rauscher Wessels), (17) Dain Rauscher, (18) Needham & Company, Inc., (19) Pacific Growth Equities, Inc., (20) RBC Dain Rauscher (as successor-in-interest to Tucker Anthony) and (21) Tucker Anthony The complaint alleges violations of Sections 11 and 15 of the Securities Act of 1933 and Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. In February 2000, Diversa commenced an initial public offering of 7,250,000 of its shares of common stock at an offering price of $24 per share. In connection therewith, Diversa filed with the SEC a registration statement, which incorporated a prospectus. The complaint further alleges, among other things, that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (i) the Underwriter Defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the Underwriter Defendants allocated to those investors material portions of the Diversa shares issued in connection with the Diversa IPO; and (ii) the Underwriter Defendants had entered into agreements with customers whereby the Underwriter Defendants agreed to allocate Diversa shares to those customers in the Diversa IPO in exchange for which the customers agreed to purchase additional Diversa shares in the aftermarket at pre-determined prices. In addition, the complaint alleges that certain of the Underwriter Defendants improperly utilized their analysts, who were compromised by undisclosed conflicts of interest, to artificially inflate or maintain the price of Diversa stock. For more details, contact Tzivia Brody by Mail: 6 East 45th Street New York, NY, 10017 by Phone: 1-800-337-4983 by E-mail: ssbny@aol.com or visit the firm's Website: http://www.ssbny.com MONEY STORE: Mark Kaufman, Curtis Trinko File Securities Lawsuit in NY ---------------------------------------------------------------------- The Law Offices of Mark S. Kaufman and the Law Offices of Curtis V. Trinko, LLP commenced a securities class action in the United States District Court for the Southern District of New York against Sacramento-based The Money Store and TMS Mortgage, Inc. (now known as HomEq Servicing Corporation). They allege a series of improper mortgage lending and service practices harming California homeowners. Among other allegations, the class action contends The Money Store and HomeEq have routinely violated both California and federal law by charging California borrowers who are behind on their mortgage payments for the costs of attorney demand letters, home appraisals, property inspections, attorneys fees and other lender expenses. The lawsuit also alleges The Money Store had a Colorado law firm, Moss, Codilis LLP, send out over 89,000 form default letters on its behalf, creating the false impression that the firm had been retained by the Money Store. The firm actually did little more than provide The Money Store with its letterhead. Finally, plaintiffs allege the Money Store routinely charged dishonored check fees in excess of those allowed under the standard form loan documents issued to California borrowers, and in situations such as where borrowers were enrolled in an Automatic Payment Plan, where the lender was not allowed to assess such fees. For more details, contact Mark Kaufman of The Law Offices of Mark S. Kaufman by Mail: 36 West 44th Street, Suite 900 New York, NY 10036 by Phone: (212) 592-2226 by E-mail: Mkaufman@onsiteaccess.com or contact Paul Grobman by Mail: 535 Fifth Avenue, 33rd floor New York, NY 10017 by Phone: (212) 983-5880 by E-mail: Grobtown@aol.com or Neal DeYoung of the Law Offices of Curtis V. Trinko, LLP by Mail: 16 West 46th Street, Seventh Floor New York, NY 10301 by Phone: (212) 490-9550 by E-mail: Ctrinko@trinko.com MOTOROLA INC.: Weiss & Yourman Lodges Securities Fraud Suit in S.D. NY ---------------------------------------------------------------------- Weiss & Yourman initiated a securities class action against defendant Carl F. Koenemann, in the United States District Court for the Southern District of New York, on behalf of purchasers of Motorola, Inc. (NYSE:MOT) securities between February 3, 2000 and May 14, 2001. The complaint charges the defendant with violations of the Securities Exchange Act of 1934. The complaint alleges that the defendant issued false and misleading statements, artificially inflating the stock. For more details, contact Mark D. Smilow, David C. Katz, and James E. Tullman by Mail: The French Building, 551 Fifth Avenue, Suite 1600 New York NY 10176 by Phone: (888) 593-4771 or (212) 682-3025 by E-mail: info@wynyc.com MOTOROLA INC.: 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 purchased, converted, exchanged or otherwise acquired the common stock of Motorola, Inc. (NYSE:MOT) between February 3, 2000 and May 14, 2001, inclusive, in the United States District Court for the Southern District of New York against defendant Carl F. Koenemann. The action charges the defendant violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period, artificially inflating the market price of the Company securities. For more details, contact Charles J. Piven, PA by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202 by Phone: 410-986-0036 or by E-mail: hoffman@pivenlaw.com MOTOROLA INC.: Glancy & Binkow Lodges Securities Fraud Suit in S.D. NY ---------------------------------------------------------------------- Glancy & Binkow LLP 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 securities of Motorola, Inc. (NYSE:MOT) between February 3, 2000 and April 6, 2001, inclusive. The suit charges the Company's former Chief Financial Officer, Carl F. Koenemann, with violations of federal securities laws. Among other things, plaintiff claims the defendant's material omissions and dissemination of materially false and misleading statements concerning the Company's business operations caused Company stock prices to become artificially inflated, inflicting damages on investors. The suit alleges the defendant misrepresented the nature of a three-year deal for Motorola to provide products and services to Telsim, a Turkish cellular phone system operator. The suit also charges the defendant failed to disclose that the deal required Motorola to provide Telsim with $1.7 billion in vendor financing to purchase Motorola products, or that serious problems had developed in the companies' relationship. The nature of the Telsim deal was revealed in Motorola's March 29, 2001, Proxy Statement filed with the Securities and Exchange Commission. Motorola's subsequent quarterly SEC filing revealed that $728 million of the Telsim loan was past due. For more details, contact Michael Goldberg by Mail: 1801 Avenue of the Stars, Suite 311, Los Angeles, California 90067, by Phone: (310) 201-9161 or (888) 773-9224 or by E-mail: info@glancylaw.com. NASH FINCH: Wechsler Harwood Launches Securities Fraud Suit in MN Court ----------------------------------------------------------------------- Wechsler Harwood LLP initiated a securities class action on behalf of all purchasers of the common stock of Nash Finch Company (Nasdaq:NAFCE) common stock during the period between July 7, 2000 and November 8, 2002, inclusive, in the United States District Court for the District of Minnesota. The complaint charges Nash Finch Company and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Nash Finch is a food distribution and retail company in the United States. Specifically, the complaint alleges that Nash Finch issued false statements, including false financial results in which the Company included income from vendor promotions to which Nash Finch was not entitled, so as to maintain favorable credit ratings on its debt. As a result of defendants' false statements, the Company's stock traded at artificially inflated levels, permitting Nash Finch to maintain credit ratings on its $400 million in debt. Then, on November 8, 2002, Nash Finch issued a press release entitled "Nash Finch Explains Postponement of Earnings Release" which disclosed an SEC inquiry into its accounting practices. Once this news was revealed, Nash Finch's stock collapsed to $7.60 before closing at $8.18, some 70% below the Class Period high of $28.85. It was also noted in November 2002, that Nash Finch's former CFO had sued the Company claiming he was fired in 2000 for refusing to manipulate Nash Finch's reported financial results. For more details, contact Ramon Pi�on by Mail: 488 Madison Avenue, 8th Floor, New York, New York 10022 by Phone: (877) 935-7400 or by E-mail: rpinon@whesq.com SEPRACOR INC.: Wolf Popper Commences Securities Fraud Suit in MA Court ---------------------------------------------------------------------- Wolf Popper LLP charged Sepracor Inc. (Nasdaq:SEPR) and certain of its senior officers with violations of the federal securities laws on behalf of all persons who purchased the Company's common stock on the open market during the period May 17, 1999 through March 6, 2002. The case was filed in the United States District Court for the District of Massachusetts. The plaintiff alleges during the class period the defendants made materially false and misleading statements about the safety of Sepracor's new allergic rhinitis treatment drug, Soltara, and the adequacy of safety data to support an approvable New Drug Application (NDA) for Soltara. Specifically, the defendants: (1) omitted to disclose that extended accumulation and retention of Soltara in tissues was observed during pre-clinical studies; (2) omitted that Soltara had caused hepatic phospholipidosis and cardiomyopathy in animals during preclinical studies; (3) misrepresented that clinical studies for the Soltara NDA provided adequate safety data and assurance that Soltara does not cause QTc prolongation (delayed or irregular heartbeats) in humans; and (4) falsely touted the safety profile of Soltara and the approvability of the Soltara NDA by March 2002. As a result of the defendants' material misrepresentations and omissions, the market price of Sepracor common stock was artificially inflated during the class period, trading as high as $137.39 per share. On March 7, 2002, Sepracor shocked the market by issuing a press release, disclosing that the U.S. Food and Drug Administration (FDA) would issue a "not approvable" letter for the Soltara NDA due to the FDA's concerns about observed adverse Soltara accumulation and cardiovascular events, and the inadequacy of safety data in the Soltara NDA. Immediately and on the same day, Sepracor common stock price plummeted by $27.63 per share, or 58.45%, to $19.64 per share - resulting in substantial loss for Sepracor shareholders. For more details, contact Robert C. Finkel by Mail: 845 Third Avenue, New York, NY 10022-6689 by Phone: 212-451-9620 or 877-370-7703 by Fax: 212-486-2093 or 877-370-7704 by E-Mail: IRRep@wolfpopper.com or visit the firm's Website: http://www.wolfpopper.com SEPRACOR INC.: Bernard Gross Launches Securities Fraud Suit in MA Court ----------------------------------------------------------------------- The Law Offices of Bernard M. Gross, PC initiated a securities class action in the United States District Court for the District of Massachusetts, on behalf of all persons and entities who purchased or otherwise acquired the common stock and/or bonds of Sepracor Inc. (Nasdaq:SEPR) between May 17, 1999 and March 6, 2002, inclusive. The suit names as defendants the Company and: (1) Paul D. Rubin, M.D., (2) Timothy J. Barberich, and (3) David P. Southwell 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, throughout the class period, defendants issued press releases stating: (i) they were "confident" that the FDA would approve the Company's antihistamine drug, Soltara, by March 2002, followed by Soltara's launch in the summer of 2002; (ii) that there was no evidence that Soltara caused cardiac effects; (iii) that the Company had tested Soltara for such periods and in such doses that the drug had reached the maximum accumulation in patients' bodies without adverse effects; and (iv) that the FDA had told the Company that the Company's safety testing of Soltara was sufficient to allay any concerns about cardiac effects of Soltara. In fact, as defendants admitted in March 2002, at and after the end of the class period: (a) Soltara had caused cardiomyopathy, an adverse, potentially fatal cardiac effects, in rats, as well as phospholipidosis, a serious liver disorder, in dogs; (b) the Company had not tested Soltara at the maximum concentrations in patients' bodies and, therefore, had not shown that Soltara would not cause cardiac effects in any patient treated with the drug; and (c) the FDA had not told the Company that its safety studies of Soltara were sufficient to allay concerns about cardiac effects. In addition, in the Company's studies of Soltara in animals, dogs treated with Soltara, had experienced Qt prolongation, the very effect that caused earlier antihistamines to be withdrawn from the market due to deaths in some patients. Had the investing public known these facts, the plaintiffs purport it would have been apparent it was highly improbable Soltara would be approved by the FDA based on the existing evidence from the Company's testing of the drug. On March 7, 2002, the Company revealed the FDA had declined to approve the Company's application to market Soltara because of facts defendants had misrepresented, these disclosures caused the market price of Sepracor securities to fall precipitously. Thus, the price of the Company's 7% convertible subordinated debentures fell from approximately par prior to the March 7 announcement to approximately $67 per $100 after the announcement. The market price of Sepracor securities declined almost 60% on trading volume of nearly 52.3 million shares, which was approximately 70% of Sepracor's outstanding stock. For more details, contact Deborah R. Gross or Susan R. Gross by Phone: (866) 561-3600 (toll-free), (215) 561-3600 or visit the firm's Website: http://www.bernardmgross.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 * * *