/raid1/www/Hosts/bankrupt/CAR_Public/030210.mbx
C L A S S A C T I O N R E P O R T E R
Monday, February 10, 2003, Vol. 5, No. 28
Headlines
AMC ENTERTAINMENT: ADA Violations Suit Filed For Deaf Persons in TX, DC
AMC ENTERTAINMENT: DE Court Dismisses Shareholder Derivative Lawsuits
AMC ENTERTAINMENT: Investors File Shareholder Derivative Lawsuit in DE
CAMPBELL SOUP: Forges Settlement For Consolidated Securities Suit in NJ
CANADA: Calgary Lawyer Denies Part in Possible Suit V. Private School
CANADA: NCVA Representatives Proceeding With Metis War Veterans' Claim
CATHOLIC CHURCH: Abuse Victims Criticize Interim Boston Diocese Leader
Hi/FN INC.: CA Court To Hear Defendants' Demurrer in Derivative Lawsuit
INDIAN FUNDS: Attorneys' Behavior a "Mockery," Writes Judge Lamberth
ISM CANADA: Canadian Police Say Information on Disk Not Used Unlawfully
STARLINK LOGISTICS: Agrees To Settle Lawsuit For Non-Starlink Farmers
TOBACCO LITIGATION: Former Philip Morris Researcher Testifies in Suit
UNITED STATES: Senators Push New Law To Protect Class Action Plaintiffs
VIADOR INC.: Asks NY Court To Dismiss Consolidated Securities Lawsuit
New Securities Fraud Cases
AMERICREDIT CORPORATION: Rabin Murray Commences Securities Suit in TX
ARIBA INC.: Milberg Weiss Commences Securities Fraud Lawsuit in N.D. CA
ARIBA INC.: Weiss & Yourman Commences Securities Fraud Suit in N.D. CA
CABLE & WIRELESS: Two Law Firms Commence Securities Fraud Suit in NY
CLEARONE COMMUNICATIONS: Bernstein Liebhard Files Securities Suit in UT
CLEARONE COMMUNICATIONS: Abbey Gardy Lodges Securities Suit in UT Court
COSI INC.: Paskowitz & Associates Lodges Securities Lawsuit in S.D. NY
COSI INC.: Wolf Popper Commences Securities Fraud Lawsuit in S.D. NY
COSI INC.: Charles Piven Commences Securities Fraud Lawsuit in S.D. NY
MERRILL LYNCH: Rabin & Peckel Launches Securities Fraud Suit in S.D. NY
MERRILL LYNCH: Kaplan Fox Commences Securities Fraud Lawsuit in S.D. NY
MICHAELS STORES: Scott + Scott Lodges Securities Fraud Suit in N.D. TX
MICHAELS STORES: Charles Piven Commences Securities Lawsuit in N.D. TX
MICHAELS STORES: Scott + Scott Commences Securities Lawsuit in N.D. TX
MICHAELS STORES: Cauley Geller Commences Securities Lawsuit in N.D. TX
RURAL CELLULAR: Milberg Weiss Commences Securities Lawsuit in MN Court
RURAL CELLULAR: Wolf Haldenstein Commences Securities Suit in MN Court
TRANSKARYOTIC THERAPIES: Wolf Haldenstein Lodges Securities Suit in MA
TRANSKARYOTIC THERAPIES: Cauley Geller Commences Securities Suit in MA
TRANSKARYOTIC THERAPIES: Wechsler Harwood Lodges Securities Suit in MA
*********
AMC ENTERTAINMENT: ADA Violations Suit Filed For Deaf Persons in TX, DC
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AMC Entertainment International, Inc. faces two class actions alleging
it and other movie exhibitors and production companies violated the
Americans With Disabilities Act (ADA).
The first suit, entitled "Rob Todd v. AMC Entertainment International,
Inc.," is pending in the United States District Court for the Southern
District of Texas. Mr. Todd filed the suit on behalf of his son and
all deaf and severely hearing-impaired individuals against the Company,
four other exhibitors and nine movie production companies. The suit
claims that the production company defendants have violated the ADA by
failing to produce a sufficient number of films with closed captioning
and that the exhibition defendants have violated the ADA by failing to
show a sufficient number of closed captioned movies.
The suit seeks declaratory and injunctive relief that would require
producers to produce more films with closed captioning or a substitute
system to permit deaf and severely hearing impaired individuals to
attend movies.
A similar class action, entitled "Kevin Ball, et al. v. AMC
Entertainment Inc. and Loews Cineplex Entertainment Corporation" was
filed in the United States District Court for the District of Columbia.
The suit, however, involves only theatres in the District of Columbia
area. The Ball suit seeks to have the Company install a specified
substitute system, which the Company estimates would cost approximately
$12,000 to $16,000 per screen.
Based on the legislative history of the ADA and the regulations
promulgated thereunder, which provide that exhibitors are not required
to show closed caption films, the Company believes it unlikely that it
will be required to show closed caption films or install a substitute
system.
AMC ENTERTAINMENT: DE Court Dismisses Shareholder Derivative Lawsuits
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The Delaware Chancery Court dismissed the shareholder derivative
lawsuits pending against AMC Entertainment International, Inc. (as a
nominal defendant) and all of the members of its board of directors.
Other lawsuits are still pending against the Company. The derivative
suits were filed between July 31 and September 10, 2002. The suits
are:
(1) "Krajewski et al. v. Laurence M. Berg, et al." in the Circuit
Court of Jackson County, Kansas City, Missouri,
(2) "Lamb v. Laurence M. Berg, et al." in the Circuit Court of
Jackson County, Kansas City, Missouri,
(3) "David Shaev Keogh Plan v. Laurence M. Berg, et al." in the
Delaware Court of Chancery,
(4) "Brown v. Laurence M. Berg, et al." in the Delaware Court of
Chancery,
(5) "South Broadway Capital v. Peter C. Brown, et al." in the
Delaware Court of Chancery
Each of the five lawsuits was purportedly brought in the name of and
for the benefit of the Company, which is named as a nominal defendant,
and names as defendants:
(i) Laurence M. Berg,
(ii) Leon D. Black,
(iii) Peter C. Brown,
(iv) Charles J. Egan, Jr.,
(v) W. Thomas Grant II,
(vi) Charles S. Paul,
(vii) Marc J. Rowan and
(viii) Paul E. Vardeman
The complaints generally allege that the individual defendants violated
their fiduciary duties of loyalty and good faith and wasted corporate
assets by causing the company to improperly forgive loans to the
Company's Chief Executive Officer, Peter C. Brown, and Executive Vice
President, Philip M. Singleton, without adequate consideration. The
fifth complaint "South Broadway Capital v. Peter C. Brown, et al." also
alleges that defendants Mr. Black, Mr. Rowan and Mr. Berg, as
affiliates of Apollo Advisors, L.P., abused their ability to control
and influence the Company in connection with the loan forgiveness.
The plaintiffs seek unspecified damages on the Company's behalf
together with their costs, fees and expenses. The defendants believe
there is no merit to the allegations of wrongdoing.
On October 2, 2002, the Chancery Court entered an order consolidating
the Delaware Actions as "In Re: AMC Entertainment Shareholders
Litigation." On December 16, 2002, the Chancery Court entered an order
dismissing the pending Delaware Actions with prejudice.
AMC ENTERTAINMENT: Investors File Shareholder Derivative Lawsuit in DE
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AMC Entertainment International, Inc. faces a shareholder derivative
suit, captioned "Malone v. Brown et al." (Case No. 20103-NC), filed
in the Delaware Chancery Court. The suit was purportedly brought in
the name of and for the benefit of the Company, which is named as a
nominal defendant, and names as defendants:
(1) Peter C. Brown,
(2) Charles W. Egan, Jr.,
(3) W. Thomas Grant, II,
(4) Paul E. Vardeman,
(5) Leon D. Black,
(6) Marc J. Rowan,
(7) Laurence M. Berg, and
(8) Charles S. Paul
The complaint generally alleges the individual defendants violated
their fiduciary duties of loyalty and good faith, wasting corporate
assets by causing the Company to improperly forgive loans to the
Company's Chief Executive Officer, Peter C. Brown, and Executive Vice-
President, Philip M. Singleton, without adequate consideration, and
granted awards allegedly all in violation of the provisions of the
Company's 1999 Stock Option and Incentive Plan and the executive
compensation policy, as adopted by the compensation committee. The
plaintiffs seek unspecified damages on the Company's behalf together
with their costs, fees and expenses. The defendants believe there is
no merit to the allegations of wrongdoing.
CAMPBELL SOUP: Forges Settlement For Consolidated Securities Suit in NJ
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Campbell Soup Company (CPB) reached a settlement for the consolidated
class action filed in the United States District Court for the District
of New Jersey against it and two of its former executives. on behalf of
purchasers of the Company's stock between September 8,1997 and January
8,1999.
The consolidated suit arose from ten shareholder actions alleging,
among other things, that the defendants misrepresented the Company's
financial condition during the class period. The defendants allegedly
failed to disclose shipping and revenue recognition practices in
connection with the sale of certain company products at the end of the
company's fiscal quarters in violation of Section 10 (b) and 20 (a) of
the Securities Exchange Act of 1934, as amended, and Rule 10b-5
promulgated thereunder, an earlier Class Action Reporter states.
The Company said in a statement all claims will be dismissed and the
lawsuit terminated under the terms of the settlement in exchange for
$35 million. The Company said the settlement for the suit, which
centered on the company's shipping and sales practices in the late
1990s, will be fully covered by insurance.
CANADA: Calgary Lawyer Denies Part in Possible Suit V. Private School
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Calgary lawyer Craig Steele denied reports that he has been contacted
to help in a collective lawsuit against the Strathcona-Tweedsmuir
private school, after seven teens were killed during an outdoor
education trip in Rogers Pass, just south of Calgary, the Calgary
Herald reports.
The Globe and Mail had earlier reported that Mr. Steele was retained to
pursue to lawsuit, but Mr. Steele said the Globe got it wrong. "(The
reporter) misinterpreted something we were discussing. We have not been
retained. I'm asking for a retraction. I'm not involved, and I don't
know of anybody involved," he told the Herald.
Parents have criticized the school for permitting 14 Grade 10 students
to head into backcountry, particularly that less than two weeks
earlier, an avalanche in the area took several lives. However, some
parents have stated it is too early to consider legal action, the
Herald states.
A search at Court of Queen's Bench in Calgary late Wednesday afternoon
indicated no such documents had been filed either by the families of
the deceased teens or against Strathcona-Tweedsmuir School. It also
noted Alberta law says any payments that could be made as a result of
such action would be limited to $75,000 per family, or a total of
$525,000, plus court costs.
Six boys and one girl, all age 15, were swept to their deaths just
before noon local time. Seven other students and three adults on the
trip survived.
CANADA: NCVA Representatives Proceeding With Metis War Veterans' Claim
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Representatives of The National Council of Veteran Associations (NCVA)
in Geneva will now be able to proceed with the claim on behalf of M‚tis
veterans, NCVA Chairman Cliff Chadderton announced. A previous decision
by Ottawa Court Justice Ian McLellan, stated a lawsuit filed on behalf
of aboriginal war veterans could not succeed as a class action. The
Human Rights Committee will rule on a claim only when all domestic
remedies have been exhausted.
Judge McLellan said the reason behind the court decision was that a
class action is not the preferable procedure in this case's
circumstances, as the issues of discoverability relating to each
plaintiff overwhelms any common issues.
The National Council, which has Non-Governmental Status before the
United Nations, was asked to take the case to the Human Rights Centre
after an announcement on June 21, 2002 by Veterans Affairs Minister Rey
Pagtakhan to the effect that compensation would be paid only to status
Indians who had maintained their connection with the reservations.
The interest of the National Council, of which the National Aboriginal
Veterans of Canada is a constituent member, was the subject of an
extensive review by NCVA Executive members. The main consideration was
that the government failed to make an adequate provision for
rehabilitation following war service for M‚tis. This was evident
in the facts, researched at length by Mr. Chadderton, that the
Government's extensive rehabilitation plan known as the Veterans
Charter, to all extents and purposes excluded the M‚tis who could not:
(1) return to civilian employment;
(2) take advantage of veterans housing, which was available only
in urban communities;
(3) participate in training, in that their educational level prior
to World War II precluded them from being enrolled in
vocational schools or universities, or avail themselves of
business and professional loans.
For more details, contact Communications by Phone: 1-877-60MEDIA or by
E-mail: communications@waramps.ca or contact Cliff Chadderton after
office hours by Phone: (239) 466-8744 until 11:00 pm EST or Fax:
(239) 466-8176
CATHOLIC CHURCH: Abuse Victims Criticize Interim Boston Diocese Leader
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Alleged victims of sexual abuse by Catholic priests criticized the
interim leader of the Boston archdiocese, for downplaying his role in
several sexual abuse cases, the Associated Press reports.
Bishop Richard Lennon was chosen to serve as interim leader of the
Boston archdiocese after the controversial Cardinal Bernard Law
resigned two months ago. He was hailed as a fresh face untainted by
the clergy sex abuse scandal. However, his name has been mentioned in
the files of the Rev. Monsignor Michael Smith Foster and the Rev. John
Picardi, who was accused of inappropriately touching a New Jersey girl.
Archdiocese spokesman Rev. Christopher Coyne said in a statement that
Bishop Lennon's role in the cases was minimal. He added that in
several instances, Bishop Lennon was asked to give an opinion on an
issue of canon law, but did not make decisions on what to do with
priests accused of sexual abuse.
Victims criticized Bishop Lennon for downplaying his role. Rodney
Ford, the father of Gregory Ford, a man who says he was sexually abused
as a boy, told AP, "To come out and make a statement that he's never
been involved . and within a short period of time to find allegations
and his name tied to those, certainly, I think people are looking at
his credibility."
Bishop Lennon said in interviews shortly after his appointment in mid-
December that he had not read the personnel files of accused priests.
However in documents released Tuesday, Bishop Lennon noted in one memo
he had reviewed Rev. Picardi's file. Law has said police were told
about the allegation involving the girl, but did not arrest Rev.
Picardi because the charge of abuse could not be substantiated.
Other documents show that Bishop Lennon also attended a meeting at the
cardinal's residence on September 13, 2002, when church officials
discussed allegations against the Msgr. Foster. A memo after the
meeting says the group recommended Bishop Law reopen the investigation
of Msgr. Foster, in light of new evidence, AP reports.
Ann Hagan Webb of the New England chapter of the Survivors Network for
Those Abused by Priests told AP, victims have been upset by church
lawyers under Bishop Lennon's watch. Particularly troubling was a
decision to subpoena victims' therapists in civil lawsuits, and the
church's First Amendment arguments to have the lawsuits dismissed.
"Since he's been in office he's promised a lot and the actions, the
legal actions have been the opposite of what he's promised," she said.
Rev. Coyne told AP Bishop Lennon was not responsible for making
decisions regarding priests accused of sexual abuse. "He was the
canonical expert who was asked to offer his opinion specifically on
canonical issues," Rev. Coyne said. "Did he have a supervisory role or
an administrative role in any of these things? Was he involved in the
investigation of any of these things? No."
Attorney Carmen Durso, who represents 35 people suing the Boston
archdiocese for alleged abuse by priests, told AP Bishop Lennon needs
to let victims know that going forward, the church's first priority is
to help victims. "What Lennon has to do is to show everyone that his
goal is not to protect the church from scandal, but to do the right
thing for people who have been harmed by the church," she said.
Hi/FN INC.: CA Court To Hear Defendants' Demurrer in Derivative Lawsuit
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The Superior Court of California for the County of Santa Clara is set
to hear the arguments for the dismissal of a shareholder derivative
actions against Hi/FN, Inc. and certain of its current and former
officers and directors on March 2003.
In March 2002, two actions were filed, one in the United States
District Court for the Northern District of California and one in the
Superior Court of California for the County of Santa Clara. The
derivative complaints alleged violations of California Corporations
Code Section 25402, breach of fiduciary duty and waste of corporate
assets.
On June 7, 2002, the federal court entered an order granting
plaintiff's motion to voluntarily dismiss the federal derivative action
without prejudice. On June 26, 2002, the state court sustained the
Company's demurrer, with leave to amend, on the ground that plaintiff
had failed to plead facts showing that he was excused from making
demand on the Company's board of directors. The court also ordered
limited discovery relating solely to the issue whether demand is
excused. The court did not rule upon the demurrer to the derivative
complaint filed by the individual director defendants. The plaintiff
filed an amended complaint and the defendants filed another demurrer,
scheduled for a March 10, 2003 hearing.
The Company and the individual director defendants believe the
allegations contained in the complaint are without merit.
INDIAN FUNDS: Attorneys' Behavior a "Mockery," Writes Judge Lamberth
---------------------------------------------------------------------
US federal Judge Royce Lamberth severely criticized the behavior of
government attorneys in handling the lawsuit brought on behalf of a
group of American Indians against the US Interior Department, the
Associated Press reports.
The suit alleges the Interior Department squandered billions of dollars
in oil, gas and timber royalties from Indian land that the department
was assigned to manage. Plaintiffs say losses, which date back to
1887, have reached $137 billion, including interest.
The department has acknowledged management problems, but says nowhere
near that much money was lost. Last year, Judge Lamberth held then-
Interior Secretary Gale Norton in contempt of court for concealing
shortcomings in repairing the management of the Indian money. The
department has appealed that ruling. He had also held her predecessor,
Bruce Babbitt, and Clinton Treasury Secretary Robert Rubin in contempt
in the case.
Judge Lamberth labeled the government lawyers' behavior "repugnant."
He said that the lawyers tried to cover misrepresentations they had
made in court last December and penalized them by ordering them to pay
the fees for the Indians' attorneys out of their own pocket. "The
conduct of defense counsel in this matter makes a mockery of all that
the Department of Justice stands for," Judge Lamberth wrote in a ruling
Wednesday, AP reports.
Judge Lamberth sanctioned Assistant Attorney General Robert B.
McCallum, who is currently the head of the Justice Department's Civil
Division, but has been nominated by President Bush to be associate
attorney general, the third-highest spot in the department. He also
mentioned Justice Department attorney Sandra Spooner.
"We have every confidence in the integrity and professionalism of our
Justice Department attorneys and their appropriate handling of this
case," department spokeswoman Barbara Comstock told AP. "We are
reviewing Judge Lamberth's ruling."
ISM CANADA: Canadian Police Say Information on Disk Not Used Unlawfully
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Canadian police are convinced that personal information stored on a
hard disk drive stolen from information technology firm ISM Canada has
not been used unlawfully, Globetechnology reports.
The disk was reported missing from ISM Canada's Regina office on
January 16, an earlier Class Action Reporter story states. The hard
drive, which contained sensitive government data and personal
information on the clients of ISM customers, disappeared from a
restricted area at the company's Regina office. Several government
departments and agencies were affected including Health, Finance, the
Saskatchewan Property Management Corporation (SPMC), the Public
Employees Benefits Agency (PEBA), SaskPower and SaskTel. Thousands of
Co-operators Life customers were told this week some of their personal
and financial information was on the hard drive. The disk contained a
variety of data including account information for customers of:
(1) Saskatchewan Power Corporation,
(2) Saskatchewan Telecommunications,
(3) the provincial workers' compensation plan,
(4) a unit of Co-operators Group Ltd. of Guelph, Ontario,
(5) Winnipeg-based Investors Group Inc. and
(6) thousands of Manitoba businesses
Police recovered the disk Monday evening. They also have in their
custody a 41-year-old Company employee. Police say the incident was a
petty crime, as the employee only wanted an extra 30 gigabytes of
personal hard-drive space. The employee deleted the information on it
and filled it with his own data.
"We are satisfied at this point that that information has not been used
unlawfully," Detective-Inspector Garry Hoedel told Globetechnology.
However, police have acknowledged that they cannot be sure what
happened to the personal, financial and medical records from the
Saskatchewan government and major Canadian financial institutions that
were stored on the drive.
Clients have launched a class action against the Company over the loss
of private information, an earlier Class Action Reporter story states.
The suit alleges the companies failed to properly protect the
information and did not promptly inform those affected.
"It's very worrisome," Tony Merchant, a lawyer who launched a lawsuit
on behalf of people whose data was lost told Globetechnology. He added
that the three-week gap raises troubling questions, particularly
because anyone with enough technical savvy to install a hard drive
would know that the hardware alone - a 30-gigabyte Western Digital
Caviar 307AA - is not particularly valuable. "Why would somebody steal
something worth only about $100?" he asked.
The lawsuit will proceed, he said, adding that he plans to apply to the
Saskatchewan Court of Queen's Bench within a week to certify it as a
class action.
The government of Saskatchewan -- which had driver-license and health-
card information on the drive, among other data -- is considering its
legal options, said Minister of Information Technology Andrew Thomson,
Globetechnology reports.
STARLINK LOGISTICS: Agrees To Settle Lawsuit For Non-Starlink Farmers
---------------------------------------------------------------------
Starlink Logistics, Inc. and Advanta USA, Inc. reached a settlement
with certain plaintiffs in class actions involving Starlink(TM) corn,
Melvyn I. Weiss of Milberg Weiss Bershad Hynes & Lerach LLP, attorney
for the plaintiffs, announced in a statement. The suit was filed on
behalf of farmers who grew corn other than StarLink corn.
As part of the proposed settlement, StarLink Logistics and Advanta USA
have agreed to pay a total of $110,000,000, plus interest, to fund a
settlement for the benefit of non-StarLink commercial corn farmers
nationwide. On February 5, 2003, Judges James Moran of the United
States District Court for the Northern District of Illinois,
preliminarily approved the proposed settlement. Before becoming final,
the proposed settlement is subject to further court review.
StarLink was a genetically modified corn that received EPA approval in
1998. It was approved for animal and industrial use but not for human
consumption.
"This agreement represents an outstanding result in a difficult and
hard-fought litigation," said Mr. Weiss. "The non-StarLink corn farmer
will now receive significant compensation without any further risks to
ultimate success on the many novel procedural and substantive issues in
the case."
John Wichtrich, president of StarLink Logistics, Inc., said, "This
agreement represents a significant advance in our ongoing efforts to
bring StarLink matter to a conclusion." Mr. Wichtrich added that the
company had adequate reserves to cover its contribution to the
settlement.
TOBACCO LITIGATION: Former Philip Morris Researcher Testifies in Suit
---------------------------------------------------------------------
A researcher testifying against tobacco giant Philip Morris said he was
hired in 1980 to find a substitute for nicotine in cigarettes that
would keep people smoking but not affect their hearts as nicotine does,
the Times-Picayune reports.
Doctor and researcher Victor J. DeNoble testified on Wednesday in the
class action filed against Philip Morris and three other big tobacco
companies, alleging that the Companies manipulated nicotine levels in
their products to keep smokers addicted. The suit was filed on behalf
of 1.5 million current and former Louisiana smokers. The suit does not
seek money damages; rather, it asks the companies be made to pay for
annual medical monitoring and stop-smoking assistance for anyone in the
class who wants such services.
Dr. De Noble said the Company told him they "a problem with nicotine."
That problem, he was told, was that nicotine causes the heart to speed
up and makes blood vessels constrict -- a factor that would trigger the
deaths of about 138,000 people each year, he said, according to the
Times Picayune. Dr. DeNoble was told to find out if testing could be
performed on rats and, if so, he should use them to find a substitute
for nicotine, he said. For the first two years of his four-year stint
with the tobacco giant, his work was considered secret because tobacco
firms had a gentlemen's agreement not to do "whole animal" research, he
said.
Dr. DeNoble added Philip Morris had been quietly searching for a
nicotine substitute for its products since the early 1970s and from
internal company documents he reviewed, it was clear to him "that
Phillip Morris knew that people smoked for nicotine."
Dr. DeNoble's experimented on rats to test nicotine substitutes, which
are substances created by altering the chemical structure of nicotine
in an effort to make the brain think it is getting nicotine without
causing trouble to the heart. He rigged up a system that injected
nicotine directly into a rat's vein every time the animal stepped on a
switch.
"After 21 days, the rat was pressing that switch to get nicotine 90
times a day," Dr. DeNoble said. Every morning, first thing, the rat
would go over and press the switch. Such behavior, Dr. DeNoble said,
"struck me as a typical pattern of people smoking."
After discovering a nicotine substitute that his lab rats liked and
didn't have a bad effect on their hearts, Phillip Morris officials
agreed to study it further, DeNoble testified. By early 1982, DeNoble
said he was asked to find a way to put the substitute into cigarettes.
Dr. DeNoble said that a week before Thanksgiving 1983, the president of
Philip Morris visited his lab and saw his rats pressing switches to get
nicotine.
"He asked me the question, 'Does this mean nicotine is addictive?' "
Dr. DeNoble told the jury. A lawyer who had accompanied the Philip
Morris official told him, "Don't answer that question."
In January 1984, Dr. DeNoble said, he was told by company brass, "We're
backing you 100 percent," but on the afternoon of April 5, he was told
his lab would close and that he no longer had a job with Philip Morris,
the Times Picayune states.
Under cross-examination by Philip Morris attorney Charles Gay, Dr.
DeNoble said the company's concern about using a nicotine substitute in
its cigarettes was that it would lead to regulation by the Food and
Drug Administration, the Times Picayune reports.
The trial, expected to last six months to a year, is in its third week.
Retired Civil District Court Judge Richard Ganucheau is presiding.
UNITED STATES: Senators Push New Law To Protect Class Action Plaintiffs
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Several US Senators have introduced the Class Action Fairness Act of
2003, a bipartisan legislation that would have major class actions
heard in federal, rather than state, courts, the National Underwriter
online reports.
Senators Chuck Grassley, R-Iowa, Herb Kohl, D-Wisconsin and Orrin
Hatch, R-Utah introduced the Act, which would allow class actions,
which normally are heard in state courts, to be heard in federal courts
if total damages exceed $2 million and the parties include citizens
from multiple states. The legislation further calls for judicial
scrutiny of settlements to assure fairness to plaintiffs, and "plain
English" notification to plaintiffs of the fact the class action has
been filed and of any proposed settlements.
Sen. Grassley told the National Underwriter the legislation is
necessary to help people understand their rights in class action
lawsuits and to protect them from unfair settlements. "The class
action system is full of problems," he said. "We need to protect the
rights of consumers and not allow attorneys to gain huge fees when
their clients are left with little."
"Right now," Sen. Kohl told the National Underwriter, "people across
the country can be dragged into class action lawsuits unaware of their
rights and unarmed on the legal battlefield."
Advocates of class action legal reform contend that some state courts
are biased against defendants and federal court jurisdiction is
necessary to ensure fairness. Carl Parks, senior vice president of
government relations with the Des Plaines, Ill.-based National
Association of Independent Insurers, praised the legislation, saying it
will restore basic principles of fairness in national class action
lawsuits.
VIADOR INC.: Asks NY Court To Dismiss Consolidated Securities Lawsuit
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Viador, Inc. asked the United States District Court for the Southern
District of New York to dismiss the consolidated securities class
action pending against it, certain of its current and former officers
and directors and the underwriters of its October 25, 1999 Initial
Public Offering (IPO).
The suit alleges that the defendants issued and sold the Company's
common stock pursuant to the IPO without disclosing to investors that
certain underwriters of the IPO had solicited and received excessive
and undisclosed commissions from certain investors. The complaint also
alleges that the registration statement for the IPO failed to disclose
that the underwriters allocated Company shares to customers in exchange
for the customers' promises to purchase additional shares in the
aftermarket at pre-determined prices above the offering price, thereby
maintaining, distorting and/or inflating the market price for the
shares in the after-market.
The lawsuit is part of the "IPO Allocation Securities Litigation"
pending in New York. Approximately 310 companies and over 40
underwriters have been sued in actions alleging claims nearly identical
to those alleged against the Company. The cases are being coordinated
for pre-trial purposes before the Hon. Schira Scheindlin.
The IPO Allocation Securities Litigation is in its early stages. A
motion to dismiss addressing issues common to the companies and
individuals who have been sued in these actions was filed on July 15,
2002. Discovery is stayed pending the outcome of motions to dismiss.
This proceeding is at a very early stage and the Company is unable to
predict its ultimate outcome. As the financial exposure is neither
estimable nor probable, no accrual has been made at this time.
New Securities Fraud Cases
AMERICREDIT CORPORATION: Rabin Murray Commences Securities Suit in TX
---------------------------------------------------------------------
Rabin Murray & Frank LLP initiated a securities class action in the
United States District Court for the Northern District of Texas on
behalf of all persons or entities who purchased or otherwise acquired
AmeriCredit Corporation common stock (NYSE:ACF) during the period from
April 14, 1999 through January 15, 2003, both dates inclusive. The
suit names as defendants the Company:
(1) Clifton H. Morris, Jr.,
(2) Daniel E. Berce, and
(3) Michael R. Barrington
The suit alleges that defendants violated the Securities Exchange Act
of 1934 by making a series of materially false and misleading
statements concerning the Company's financial results during the class
period. In particular, it is alleged that the Company improperly
deferred placing delinquent loans in default in order to avoid having
to increase reserves, which would have had a materially negative impact
on its income and earnings.
As such, it is alleged that the Company's income and earnings were
materially overstated during the class period. The suit alleges that
as a result of these false and misleading statements the price of
AmeriCredit common stock was artificially inflated throughout the class
period causing plaintiff and the other members of the class to suffer
damages.
For more details, contact Eric J. Belfi or Sharon Lee by Phone:
(800) 497-8076 or (212) 682-1818 by Fax: (212) 682-1892 by E-mail:
email@rabinlaw.com
ARIBA INC.: Milberg Weiss Commences Securities Fraud Lawsuit in N.D. CA
-----------------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class
action in the United States District Court for the Northern District of
California on behalf of purchasers of Ariba, Inc. (Nasdaq: ARBA)
publicly traded securities during the period between January 11, 2000
and January 15, 2003. Also included are those who acquired shares
through the acquisitions of Tradex Technologies, SupplierMarket.com and
Trading Dynamics, Inc.
The complaint charges Ariba and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. Ariba is a
spend- management software solutions provider. Ariba provides
software, services and network access to enable corporations to
evaluate and manage the cash costs associated with running their
business. On January 15, 2003, the Company issued a press release
entitled, "Ariba Provides Update on Accounting Review and Restatement
of Financial Statements."
The press release stated in part: "Ariba, Inc. announced today that it
will restate its financial statements for the fiscal years ended
September 30, 2001 and 2000 and for the quarters ended March 31, 2000
through June 30, 2002 as a result of an ongoing review of accounting
matters." While Ariba's financial statements were admittedly false,
the Company's top officers and directors took advantage of this and
sold nearly $692 million worth of their Ariba shares to the
unsuspecting public.
For more details, contact William Lerach or Darren Robbins by Phone: 1-
800-449-4900 by E-mail: wsl@milberg.com or visit the firm's Website:
http://www.milberg.com/cases/aribainc
ARIBA INC.: Weiss & Yourman Commences Securities Fraud Suit in N.D. CA
----------------------------------------------------------------------
Weiss & Yourman initiated a securities class action in the United
States District Court for the Northern District of California on behalf
of purchasers of Ariba, Inc. (Nasdaq: ARBAE) securities between January
11, 2000 and January 15, 2003, inclusive. Ariba is in the business of
providing Internet-based business to business software and services.
The suit charges that the Company and certain of its officers and
directors violated federal securities laws by issuing false and
misleading financial results in violation of Generally Accepted
Accounting Principles (GAAP), while at the same time reaping over $692
million in insider sales. Eventually, the Company was forced to
restate the Company's financial statements for the fiscal years 2000
and 2001, and for the first three quarters of 2002. The suit alleges
that during the class period plaintiff and the rest of the class
purchased Ariba securities at prices artificially inflated as a result
of defendants' false and misleading reports.
For more details, contact Weiss & Yourman - Los Angeles by Phone:
(800) 437-7918 by E-mail: info@wyca.com or visit the firm's Website:
http://www.wyca.com
CABLE & WIRELESS: Two Law Firms Commence Securities Fraud Suit in NY
--------------------------------------------------------------------
Fruchter & Twersky LLP and Abraham & Associates initiated a securities
class action on behalf of purchasers of publicly traded securities of
Cable & Wireless PLC (NYSE: CWP) between the period of August 6, 1999
and December 6, 2002, inclusive against the Company and certain of its
officers and directors, in the United States District Court in New
York.
Cable announced, in an August 6, 1999 press release that it had agreed
to sell One 2 One, a British based mobile telecommunications operator,
to Deutsche Telekom. The announced terms of the agreement detailed that
Deutsche Telekom would pay 6.9 billion pounds sterling in cash for 100%
of the equity ownership interest in One 2 One. Additionally, Deutsche
Telekom would provide for the repayment of 237 million pounds of
shareholder loans, and would assume nearly 1.5 billion pounds of third-
party debt.
The complaint alleges that those statements were materially false and
misleading because they failed to reveal that an essential term of the
One 2 One deal was a 1.5 billion pounds tax indemnification clause
agreed to by Cable, and specifically, a trigger clause, involving a
future downgrade of Cable's long-term debt rating below a predetermined
level, which would trigger a 1.5 billion pounds cash commitment on
behalf of Cable.
Moody's investment service announced on December 6, 2002, that it would
downgrade the long-term debt rating of Cable from Baa1 to Baa2. The
Company then surprised the market in a press release that same day
revealing that, as a result of the downgrade, the aforementioned
"ratings trigger" was activated. The announcement resulted in a 40
percent decline in the price of Cable's ADRs, from a closing price of
$3.90 per ADR on December 6, 2002, to a close at $2.33 per ADR on
December 9, 2002, on uncommonly high trading volume. The Company filed
a Form 6-K with the SEC on December 9, 2002 including a statement
concerning the tax indemnification "ratings trigger" clause.
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:
Fruchter@FruchterTwersky.com or contact Jeffrey S. Abraham by Phone:
(212) 714-2444 or (800) 938-0015, or by E-mail: Jsalaw@aol.com.
CLEARONE COMMUNICATIONS: Bernstein Liebhard Files Securities Suit in UT
-----------------------------------------------------------------------
Bernstein Liebhard & Lifshitz LLP initiated a securities class action
on behalf of all persons who acquired securities of ClearOne
Communications, Inc. (NASDAQ: CLRO) between April 17, 2001 to January
15, 2003, inclusive, in the United States District Court for the
District of Utah, Central Division against the Company, Frances M.
Flood, and Susie S. Strohm.
The suit charges that ClearOne and certain of its officers and
directors violated Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series
of material misrepresentations to the market during the class period,
thereby artificially inflating the price of ClearOne securities.
Specifically, the suit alleges that throughout the class period,
defendants engaged in a scheme to inflate the Company's revenues, net
income, and accounts receivable by improperly recognizing revenue. It
is alleged that this course of conduct, covering two annual reporting
periods and five separate quarterly reporting periods, was accomplished
primarily through a program of channel stuffing. It is further alleged
that Defendants shipped large amounts of inventory to the Company's
distributors at the end of each quarter with the understanding that the
distributors did not have to pay for these products until the
distributors resold the products to their own customers.
On January 15, 2003, this scheme was revealed when the SEC disclosed
Defendants' acts by filing a complaint against the Company. Company
stock dropped below $1.50 per share on this news, more than 90% lower
than its class period high.
For more details, contact Ms. Linda Flood by Mail: 10 East 40th Street,
New York, New York 10016 by Phone: (800) 217-1522 or 212-779-1414 by E-
mail: CLRO@bernlieb.com or visit the firm's Website:
http://www.bernlieb.com.
CLEARONE COMMUNICATIONS: Abbey Gardy Lodges Securities Suit in UT Court
-----------------------------------------------------------------------
Abbey Gardy, LLP initiated a securities class action in the United
States District Court for the District of Utah on behalf of all persons
or entities who purchased securities of ClearOne Communications, Inc.
(Nasdaq:CLRO) between January 16, 2001 and January 15, 2003, inclusive.
The suit charges the Company, Frances M. Flood, the Company's Chairman,
CEO and President, and Susie S. Strohm, the Company's CFO and Vice
President of Finance with violations of the Securities Exchange Act of
1934. The suit alleges that, in order to inflate the price of
ClearOne's stock, defendants caused the Company to falsely report its
financial results during the class period through improper revenue
recognition practices, including recognizing revenue for shipments to
distributors even though the distributors had the right to return or
exchange unsold goods.
As a result of this inflation, ClearOne was able to complete a private
offering of 1.2 million shares, raising proceeds of $25.5 million on
December 11, 2001. On January 15, 2003, the last day of the Class
Period, the Securities and Exchange Commission (SEC) filed a federal
lawsuit alleging that defendants violated numerous federal securities
laws, primarily through a program of "channel stuffing" -- shipping
large amounts of inventory to the company's distributors with the
understanding that the distributors did not have to pay for these
products until the distributors resold the products, and that in some
instances the distributors were given the right to return or exchange
products the distributors were unable to sell. The stock dropped below
$1.50 per share on this news, more than 90% lower than its class period
high. On February 28, 2003, it was announced that the US Attorney in
Utah began an investigation of ClearOne stemming from the SEC
complaint.
For more details, contact Nancy Kaboolian by Phone: (800) 889-3701 by
E-mail: Nkaboolian@abbeygardy.com or visit the firm's Website:
http://www.abbeygardy.com
COSI INC.: Paskowitz & Associates Lodges Securities Lawsuit in S.D. NY
----------------------------------------------------------------------
Paskowitz & Associates initiated a securities class action on behalf of
purchasers of the common stock of Cosi, Inc. (NASDAQ: COSI: news)
between November 21, 2002 and February 3, 2003, inclusive, in the
United States District Court, Southern District of New York. The named
defendants are the Comapny, former CEO Andy Stenzler, and the members
of Cosi's Board of Directors who signed the Registration Statement for
Cosi's November 21, 2002 initial public offering. Also named as a
defendant is the lead underwriter for that offering, William Blair &
Co., LLC.
The suit alleges that defendants violated Section 11 of the Securities
Act of 1933 by issuing a false and misleading Registration Statement
and Prospectus in connection with Cosi's initial public offering of 5.5
million shares at $7 per share on November 21, 2002. The Prospectus
represented that the proceeds of the offering were anticipated to be
sufficient to fund the Company's fast growth business plan for at least
two years, allowing Cosi to open between 53 and 59 new company-owned
specialty sandwich shops in 2003.
Just ten weeks after the offering, on February 3, 2003, Cosi shocked
the market by announcing the immediate resignation of CEO and co-
founder Andy Stenzler from his position, that Cosi would lay off
personnel, that it would open just 10 new stores in 2003, and that it
would immediately reverse its touted company-owned stores business
model to one involving turning the business over to franchisees.
The suit alleges that, at the time of the initial public offering,
Cosi's business plan had already failed, and that the proceeds raised
in the offering were far less than anticipated, and less than were
needed to fund even the Company's short term needs, let alone its
ambitious business plan for 24 months. The suit alleges that the
defendants failed to exercise reasonable due diligence to ensure that
the Prospectus disclosed all material facts. In reaction to this
unexpected bad news, Cosi shares fell significantly, closing at $2.80
per share on February 4, 2003, down $1.67 or almost 40% in just two
trading days.
For more details, contact Laurence D. Paskowitz by Phone: 800/705-9529
or by E-mail: classattorney@aol.com
COSI INC.: Wolf Popper Commences Securities Fraud Lawsuit in S.D. NY
--------------------------------------------------------------------
Wolf Popper LLP initiated a securities class action against Cosi, Inc.
(Nasdaq:COSI) on behalf of persons who purchased Cosi common stock
issued under and/or traceable to the Company's Registration Statement
and Prospectus dated November 13, 2002, which was declared effective by
the SEC on November 21, 2002, and filed in connection with Cosi's
initial public offering, through February 3, 2002, inclusive.
Defendants in this action include certain of the Company's executive
officers and members its Board of Directors, as well as William Blair &
Co., the underwriter on the IPO. The suit is pending in the United
States District Court for the Southern District of New York.
The plaintiff alleges that the Registration Statement/Prospectus
contained materially false and misleading statements concerning the
Company's business prospects and the expected use of the IPO proceeds.
Specifically, the plaintiff alleges that the Company misrepresented its
ability to use the IPO proceeds to open 53 to 59 restaurants in 2003.
Ten short weeks after the offering, on February 3, 2002, the falsity of
defendants' statements in the Registration/Statement became abundantly
clear. In a press release on that date, the Company announced that the
financing from the offering was inadequate to open 53 to 59 new stores
and that Cosi expected to open only 10 Company-owned restaurants in
2003. Following the disclosure, the price per share of Cosi common
stock fell $1.67 or almost 40% to close on February 4, 2003 at $2.80
per share.
For more details, contact Robert Finkel by Mail: 845 Third Avenue, New
York, NY 10022 by Phone: 212-451-9668 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
COSI INC.: Charles Piven Commences Securities Fraud Lawsuit in S.D. NY
----------------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. initiated a securities class
action on behalf of shareholders who purchased, converted, exchanged or
otherwise acquired the common stock of Cosi, Inc. (NASDAQ: COSI)
between November 21, 2002 and February 3, 2003, inclusive. The case is
pending in the United States District Court for the Southern District
of New York against the Company and certain of its officers and
directors.
The action charges that defendants violated federal securities laws by
issuing a false and misleading Registration Statement and Prospectus in
connection with Cosi's initial public offering of 5.5 million shares at
$7 per share on November 21, 2002.
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
MERRILL LYNCH: Rabin & Peckel Launches Securities Fraud Suit in S.D. NY
-----------------------------------------------------------------------
Rabin & Peckel LLP initiated a securities class action in the United
States District Court for the Southern District of New York on behalf
of all persons or entities who purchased or otherwise acquired
Homestore, Inc. securities (Nasdaq:HOMS) between September 8, 1999 and
September 21, 2001, both dates inclusive. Merrill Lynch & Co., Inc.
and Henry Blodget are named as defendants in the complaint.
The complaint charges defendants Merrill Lynch and Mr. Blodget with
violations of the Securities Exchange Act of 1934. The complaint
alleges that defendants issued analyst reports concerning Homestore
that recommended the purchase of Homestore common stock and that set
price targets for Homestore common stock, which were materially false
and misleading and lacked any reasonable factual basis.
In particular, it is alleged that defendants failed to disclose
significant material conflicts of interest which resulted from the use
by Merrill Lynch of Mr. Blodget's reputation and ability to issue
favorable analyst reports, to obtain investment banking business for
Merrill Lynch.
It is also alleged that defendants, in issuing their Homestore analyst
reports, in which they recommended the purchase of Homestore
securities, failed to disclose material, non-public, adverse
information which they possessed about Homestore. Throughout the class
period, defendants maintained an "Accumulate/Buy" or "Buy/Buy"
recommendation on Homestore stock in order to obtain and support
lucrative financial deals for Merrill Lynch.
For more details, contact Eric J. Belfi or Sharon Lee by Phone:
(800) 497-8076, (212) 682-1818 by Fax: (212) 682-1892 by E-mail:
email@rabinlaw.com or visit the firm's Website: http://www.rabinlaw.com
MERRILL LYNCH: Kaplan Fox Commences Securities Fraud Lawsuit in S.D. NY
----------------------------------------------------------------------
Kaplan Fox & Kilsheimer LLP initiated a securities class action against
Merrill Lynch & Co., Inc., and Internet stock analyst and First Vice
President of Merrill Lynch, Henry Blodget, in the United States
District Court for the Southern District of New York on behalf of all
persons or entities who purchased the common stock of Homestore.com
(NASDAQ: HOMS) between September 8, 1999 and September 21, 2001
inclusive.
The complaint alleges that defendants violated the federal securities
laws by issuing analyst reports regarding Homestore that recommended
the purchase of Homestore common stock and which set price targets for
Homestore common stock, without any reasonable factual basis.
Furthermore, when issuing their Homestore analyst reports, the
defendants failed to disclose significant, material conflicts of
interest which they had, in light of their use of Mr. Blodget's
reputation and his Homestore analyst reports, to obtain investment
banking business for Merrill Lynch.
Furthermore, in issuing their Homestore analyst reports, in which they
were recommending the purchase of Homestore common stock, the
defendants failed to disclose material, non-public, adverse information
which they possessed about Homestore. Throughout the class period, the
Defendants maintained a "BUY/BUY" or "ACCUMULATE/BUY" recommendation on
Homestore in order to obtain lucrative financial deals for Merrill
Lynch. As a result of defendants' false and misleading analyst
reports, Homestore common stock traded at artificially inflated levels
during the class period.
For more details, contact Frederic S. Fox or Donald R. Hall by Mail:
805 Third Avenue, 22nd Floor, New York, NY 10022 by Phone:
(800) 290-1952 by Fax: (212) 687-1980 by E-mail: mail@kaplanfox.com or
visit the firm's Website: http://www.kaplanfox.com
MICHAELS STORES: Scott + Scott Lodges Securities Fraud Suit in N.D. TX
----------------------------------------------------------------------
Scott + Scott, LLC initiated a securities class action in the United
States District Court for the Northern District of Texas on behalf of
purchasers of Michaels Stores, Inc. (NYSE: MIK) stock during the period
between August 8, 2002 through November 7, 2002.
The complaint charges Michaels Stores and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. The
complaint alleges that during the class period, defendants repeatedly
represented that Michaels Stores' financial condition was strong and
that the Company was increasing its market share and would continue to
do so in the foreseeable future. The Company was persistent in its
claims despite a known downturn in the consumer-goods markets and a
very, very difficult earnings environment. In fact, throughout the
Class Period, defendants consistently appeared at analyst conferences
and in other public forums and made very positive statements about
Michaels Stores.
Thus it was only on November 7, 2002, when the Company released results
for its third quarter 2002, that investors learned the following:
(1) defendants' claims that Michaels Stores' purported "record
setting" growth was the result of systems and/or
infrastructure upgrades, or any other improvements made by
defendants, were false;
(2) Many of Michaels Stores' customers were already curtailing
their spending for hobby and entertainment -- or
discretionary purchases -- by the inception of the class
period and, as a result, Michaels Stores was experiencing the
same adverse market conditions which were negatively
impacting the Company's competitors;
(3) the Company was not "in great shape," it did not have
"considerable momentum" and was not proceeding according to
guidance sponsored or provided by defendants; and
(4) notwithstanding defendants' efforts to create the materially
false impression that the Company had achieved record results
in the fiscal second quarter, the truth was that Michaels
Stores was already suffering from the same adverse market
conditions other retailers were experiencing.
In all, during the class period, at the time that Michaels Stores was
being adversely affected by the aforementioned factors, but prior to
any disclosure to the market, certain of the defendants sold more than
$15.3 million worth of their personally held Michaels Stores common
stock while in possession of material adverse information. In fact,
the CEO and President of the Company sold over 125,000 shares of his
privately held Company shares during the class period for over $5.8
million in proceeds.
For more details, contact David R. Scott or Neil Rothstein by Mail: 108
Norwich Avenue, Colchester, Connecticut 06415 at 800/404-7770 by Phone:
800-404-7770 by Fax: 860/537-4432 by E-mail: drscott@scott-scott.com or
nrothstein@scott-scott.com or visit the firm's Website:
http://www.scott-scott.com
MICHAELS STORES: Charles Piven Commences Securities Lawsuit in N.D. TX
----------------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. initiated a securities class
action on behalf of shareholders who purchased, converted, exchanged or
otherwise acquired the common stock of Michaels Stores, Inc. (NYSE:
MIK) between August 8, 2002 and November 7, 2002, inclusive. 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 action charges that defendants violated federal securities laws by
issuing a series of materially false and misleading statements to the
market throughout the class period which statements had the effect of
artificially inflating the market price of the Company's securities.
For more details, contact Charles J. Piven by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
MICHAELS STORES: Scott + Scott Commences Securities Lawsuit in N.D. TX
----------------------------------------------------------------------
Scott + Scott, LLC initiated a securities class action in the United
States District Court for the Northern District of Texas on behalf of
purchasers of Michaels Stores, Inc. (NYSE: MIK) stock during the period
between August 8, 2002 through November 7, 2002.
The complaint charges the Company and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. The
complaint alleges that during the class period, defendants repeatedly
represented that the Company's financial condition was strong and that
the Company was increasing its market share and would continue to do so
in the foreseeable future. The Company was persistent in its claims
despite a known downturn in the consumer-goods markets and a very, very
difficult earnings environment. In fact, throughout the class period,
defendants consistently appeared at analyst conferences and in other
public forums and made very positive statements about Michaels Stores.
Thus it was only on November 7, 2002, when the Company released results
for its third quarter 2002, that investors learned the following:
(1) defendants' claims that Michaels Stores' purported "record
setting" growth was the result of systems and/or
infrastructure upgrades, or any other improvements made by
defendants, were false;
(2) many of Michaels Stores' customers were already curtailing
their spending for hobby and entertainment - or discretionary
purchases - by the inception of the class period and, as a
result, Michaels Stores was experiencing the same adverse
market conditions which were negatively impacting the
Company's competitors;
(3) the Company was not "in great shape," it did not have
"considerable momentum" and was not proceeding according to
guidance sponsored or provided by defendants; and
(4) notwithstanding defendants' efforts to create the materially
false impression that the Company had achieved record results
in the fiscal second quarter, the truth was that Michaels
Stores was already suffering from the same adverse market
conditions other retailers were experiencing.
In all, during the class period, at the time that Michaels Stores was
being adversely affected by the aforementioned factors, but prior to
any disclosure to the market, certain of the defendants sold more than
$15.3 million worth of their personally held Michaels Stores common
stock while in possession of material adverse information. In fact,
the CEO and President of the Company sold over 125,000 shares of his
privately held Company shares during the class period for over $5.8
million in proceeds.
For more details, contact David R. Scott or Neil Rothstein by Mail: 108
Norwich Avenue, Colchester, Connecticut 06415 by Phone: 800/404-7770 by
Fax: 860/537-4432 by E-mail: drscott@scott-scott.com or
nrothstein@scott-scott.com or visit the firm's Website:
http://www.scott-scott.com/news/news.htm
MICHAELS STORES: Cauley Geller Commences Securities Lawsuit in N.D. TX
----------------------------------------------------------------------
Cauley Geller Bowman Coates & Rudman, LLP initiated a securities class
action in the United States District Court for the Northern District of
Texas on behalf of purchasers of Michaels Stores, Inc. (NYSE: MIK)
stock during the period between August 8, 2002 and November 7, 2002,
inclusive.
The complaint charges Michaels Stores and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. The
complaint alleges that during the class period, defendants repeatedly
represented that Michaels Stores' financial condition was strong and
that the Company was increasing its market share and would continue to
do so in the foreseeable future. The Company was persistent in its
claims despite a known downturn in the consumer-goods markets and a
very, very difficult earnings environment. In fact, throughout the
class period, defendants consistently appeared at analyst conferences
and in other public forums and made very positive statements about
Michaels Stores.
Thus it was only on November 7, 2002, when the Company released results
for its third quarter 2002, that investors learned the following:
(1) defendants' claims that Michaels Stores' purported "record
setting" growth was the result of systems and/or
infrastructure upgrades, or any other improvements made by
defendants, were false;
(2) many of Michaels Stores' customers were already curtailing
their spending for hobby and entertainment -- or discretionary
purchases -- by the inception of the class period and, as a
result, Michaels Stores was experiencing the same adverse
market conditions which were negatively impacting the
Company's competitors;
(3) the Company was not "in great shape," it did not have
"considerable momentum" and was not proceeding according to
guidance sponsored or provided by defendants; and
(4) notwithstanding defendants' efforts to create the materially
false impression that the Company had achieved record results
in the fiscal second quarter, the truth was that Michaels
Stores was already suffering from the same adverse market
conditions other retailers were experiencing.
In all, during the class period, at the time that Michaels Stores was
being adversely affected by the aforementioned factors, but prior to
any disclosure to the market, certain of the defendants sold more than
$15.3 million worth of their personally held Michaels Stores common
stock while in possession of material adverse information. In fact,
the CEO and President of the Company sold over 125,000 shares of his
privately held Company shares during the class period for over $5.8
million in proceeds.
For more details, contact Jackie Addison, Heather Gann or Sue Null by
Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone:
1-888-551-9944 by E-mail: info@cauleygeller.com or visit the firm's
Website: http://www.cauleygeller.com
RURAL CELLULAR: Milberg Weiss Commences Securities Lawsuit in MN Court
----------------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class
action in the United States District Court for the District of
Minnesota on behalf of purchasers of Rural Cellular Corporation
(Nasdaq: RCCC) publicly traded securities during the period between May
7, 2001 and November 12, 2002.
The complaint charges Rural Cellular and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. The
complaint alleges that during the class period, defendants caused Rural
Cellular's shares to trade at artificially inflated levels through the
issuance of false and misleading financial statements. Then, on
November 12, 2002, after the market closed, defendants revealed that
Rural Cellular's fiscal 2001 through Q2 2002 results had been
materially misstated and would have to be restated.
Rural Cellular has now admitted that it inappropriately recorded
transactions included in its FY 2001 through Q2 2002 results, and has
restated those results to remove millions in improperly reported income
(which illegally decreased the Company's losses) such that its FY 2001
through Q2 2002 financial statements were not a fair presentation of
Rural Cellular's results and were presented in violation of Generally
Accepted Accounting Principles and SEC rules.
For more details, contact William Lerach, or Darren Robbins by Phone:
1-800-449-4900 by E-mail: wsl@milberg.com or visit the firm's Website:
http://www.milberg.com/cases/ruralcellular
RURAL CELLULAR: Wolf Haldenstein Commences Securities Suit in MN Court
----------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP filed a securities class
action in the United States District Court for the District of
Minnesota, on behalf of all persons who purchased the securities of
Rural Cellular Corporation (OTC Bulletin Board: RCCC.OB) between
January 6, 2002 and November 13, 2002, inclusive (the "Class Period"),
against the Company and certain of its officers and directors.
The complaint alleges that defendants issued false and misleading
statements concerning its business and financial condition during the
class period. Specifically, the complaint alleges that defendants are
liable as a participant in a fraudulent scheme and course of conduct
that operated as a fraud or deceit on purchasers of Rural Cellular
common stock by disseminating materially false and misleading
statements and/or concealing material adverse facts. The scheme:
(1) misled the investing public concerning Rural Cellular's
business, operations and management and the intrinsic value of
Rural Cellular common stock;
(2) allowed Rural Cellular to sell and register debt securities
valued at $300 million; and
(3) caused Plaintiff and members of the class to purchase Rural
Cellular common stock at artificially inflated prices
For more details, contact Fred Taylor Isquith, Michael Miske, George
Peters or Derek Behnke by Mail: 270 Madison Avenue, New York, New York
10016, by Phone: (800) 575-0735 by E-mail: classmember@whafh.com or
visit the firm's Website: http://www.whafh.com. All e-mail
correspondence should make reference to Rural Cellular.
TRANSKARYOTIC THERAPIES: Wolf Haldenstein Lodges Securities Suit in MA
----------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class
action in the United States District Court for the District of
Massachusetts, on behalf of all persons who purchased the securities,
or who sold the put options, of Transkaryotic Therapies, Inc. (Nasdaq:
TKTX) between January 4, 2001 and January 14, 2003, inclusive against
the Company and certain of its officers and directors.
The complaint alleges that throughout the class period, defendants made
misrepresentations and nondisclosures of material fact to the investing
public regarding TKT's prospects for FDA approval concerning the
marketing of TKT's Replagal enzyme therapy for the treatment of Fabry
disease.
The complaint further alleges that defendants knew, from their
continuing communications with the FDA, that the FDA regarded TKT's
data on the primary pain reduction endpoint of TKT's Phase II study to
be uninterpretable, and that the FDA considered that TKT's cardiac and
renal data did not support approval.
Following the market close on October 2, 2002, TKT disclosed that the
FDA had concluded that TKT's data on pain reduction was
"uninterpretable," and that TKT had resolved not to rely on that data
to attain FDA approval in order to market Replagal. Rather, defendants
declared that TKT would principally rely on its data concerning cardiac
and renal improvement in Phase II tests for patients receiving
Replagal.
However, at the January 14, 2003 Advisory Committee meeting, the FDA
substantiated that it had informed TKT that the renal and liver data
did not support approval as early as December 2000. On January 15,
2003, TKT closed at $6.49, declining over 85% below its class period
high. During the class period, the Company sold $267 million in common
stock in secondary public offerings and substantial insider trading
occurred. Defendant Richard F. Selden, for example, sold 90,000 shares
of his personal holdings of TKT common stock during the class period
for total consideration of $2,800,000.
For more details, contact Fred Taylor Isquith, 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 TKT.
TRANSKARYOTIC THERAPIES: Cauley Geller Commences Securities Suit in MA
----------------------------------------------------------------------
Cauley Geller Bowman Coates & Rudman, LLP initiated a securities class
action in the United States District Court for the District of
Massachusetts on behalf of purchasers of Transkaryotic Therapies Inc.
(Nasdaq: TKTX) publicly traded securities during the period between
January 3, 2001 and January 14, 2003, inclusive.
The complaint alleges that the 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.
At a meeting held on January 14, 2003, by the United States Food and
Drug Administration Endocrinologic and Metabolic Drugs Advisory
Committee, the Committee voted 15-0 against recommendation of Replagal,
Transkaryotic's drug for the treatment of Fabry disease, to the United
States Food and Drug Administration (FDA).
The Committee believed that Transkaryotic had not provided sufficient
evidence for the approval of Replagal. Defendants knew by virtue of
their ongoing communications with the FDA that the FDA considered the
Company's data on the primary pain reduction endpoint of
Transkaryotic's Phase II study to be uninterpretable, and further that
the FDA considered that the Company's cardiac and renal data did not
support approval. When shares of the Company's common stock resumed
trading on January 15, 2003, the shares lost more than 25% of their
value, falling to $6.49 per share.
For more details, contact Jackie Addison, Heather Gann or Sue Null by
Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone:
1-888-551-9944 by E-mail: info@cauleygeller.com or visit the firm's
Website: http://www.cauleygeller.com
TRANSKARYOTIC THERAPIES: Wechsler Harwood Lodges Securities Suit in MA
---------------------------------------------------------------------
Wechsler Harwood LLP initiated securities class action against
Transkaryotic Therapies, Inc. (Nasdaq:TKTX), on behalf of persons who
purchased or otherwise acquired the securities of Transkaryotic
Therapies, Inc. during the period from January 4, 2001 through and
including January 13, 2003. The suit names the Company as a defendant,
along with Richard F. Selden, the Company's President and CEO and
Rodman W. Moorhead III, the Company's Chairman, and is pending in the
United States District Court in Massachusetts.
The complaint asserts securities fraud claims under sections 10(b) and
20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder. The complaint alleges that the defendants
violated the federal securities laws by making materially false and
misleading statements and failing to disclose material adverse
information regarding the prospects for FDA approval of Replagal,
Transkaryotic's drug for the treatment of Fabry Disease.
In particular, the complaint alleges that defendants repeatedly
represented that FDA approval was not only likely, but imminent, when
they knew or should have known that the Replagal Biologics License
Application (BLA) the Company had submitted to the FDA was grossly
deficient and could not support approval.
At a meeting on January 14, 2003, the FDA Advisory Committee voted 15-0
to tell the FDA that Transkaryotic had not provided sufficient evidence
that Replagal is effective in treating Fabry Disease. When
Transkaryotic shares resumed trading on January 15, 2003, they lost
more than 25% of their value in a single day, falling to $6.49 per
share.
For more details, contact David Leifer by Mail: 488 Madison Avenue, 8th
Floor, New York, New York 10022 by Phone: (877) 935-7400 by E-mail:
dleifer@whesq.com or visit the firm's website: http://www.whesq.com
*********
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Copyright 2002. All rights reserved. ISSN 1525-2272.
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