/raid1/www/Hosts/bankrupt/CAR_Public/030325.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, March 25, 2003, Vol. 5, No. 59
Headlines
21st CENTURY: To Defend V. Suit Over "Biased" Total-Loss Value Software
21st CENTURY: CA Consumer Suit Alleges "Biased" Medical Review Program
ADVANCED FIBER: CA Court Dismisses Consolidated Securities Fraud Suit
BSQUARE CORPORATION: NY Court Refuses To Dismisses Securities Lawsuit
BSQUARE CORPORATION: Investors Commence Stock Fraud Lawsuit in S.D. FL
FIRST DATA: CA Court Grants Preliminary Approval To Service Fee Lawsuit
FIRST DATA: Agrees To Settle Consumer Lawsuit Over Wire Transfers in NY
HIGH SPEED: Court To Hear Arguments For Investor Fraud Suit Settlement
HIGH SPEED: NY Court Dismiss In Part Consolidated Securities Fraud Suit
INFORMATICA CORPORATION: NY Court Dismisses In Part Securities Lawsuit
INTERNATIONAL RECTIFIER: CA Court To Rule on Lawsuit Settlement in May
INTERPUBLIC GROUP: Asks For Transfer of Securities Lawsuits to S.D. NY
INTERPUBLIC GROUP: Asks DE Court To Dismiss Shareholder Derivative Suit
SONUS NETWORKS: NY Court Dismisses In Part Consolidated Securities Suit
SONUS NETWORKS: Plaintiffs Lodge Consolidated Securities Lawsuit in MA
SONUS NETWORKS: Plaintiffs Agree To Dismiss Shareholder Derivative Suit
TREX COMPANY: VA Court Dismisses Consolidated Securities Fraud Lawsuit
WILLIAMS COMPANIES: Asks OK Court To Dismiss Securities Fraud Lawsuits
WILLIAMS COMPANIES: Enters Settlement in CA Electric Ratepayers Suits
New Securities Fraud Cases
BAYER AG: Kirby McInerney Commences Securities Fraud Lawsuit in S.D. NY
INTERSTATE BAKERIES: Marc Henzel Commences Securities Suit in W.D. MO
KING PHARMACEUTICALS: Marc Henzel Commences Securities Suit in E.D. TN
MICHAELS STORES: Marc Henzel Commences Securities Fraud Suit in N.D. TX
MICHAELS STORES: Goodkind Labaton Commences Securities Suit in N.D. TX
PEC SOLUTIONS: Marc Henzel Commences Securities Fraud Suit in E.D. VA
PROVIDENT FINANCIAL: Marc Henzel Commences Securities Suit in N.D. GA
SOLECTRON CORPORATION: Marc Henzel Commences Securities Suit in N.D. CA
VAXGEN INC.: Marc Henzel Commences Securities Fraud Lawsuit in N.D. CA
VAXGEN INC.: Milberg Weiss Commences Securities Fraud Suit in N.D. CA
VITALWORKS INC.: Marc Henzel Launches Securities Fraud Suit in CT Court
VOICEFLASH NETWORKS: Marc Henzel Commences Securities Suit in S.D. FL
*********
21st CENTURY: To Defend V. Suit Over "Biased" Total-Loss Value Software
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21st Century Insurance Group faces a class action filed in the Los
Angeles Superior Court, alleging that the Company used "biased"
software in determining the value of total-loss automobiles. The suit
also names as defendants the 21st Century Insurance Company and 21st
Century Casualty Company.
The seeks national class action certification, injunctive relief, and
unspecified actual and punitive damages. The plaintiff alleges that
database providers use improper methodology to establish comparable
auto values and populate their databases with biased figures. The
Company and other carriers allegedly subscribe to the programs to
unfairly reduce claim costs.
This case is consolidated with similar actions against other insurers
for discovery and pre-trial motions.
21st CENTURY: CA Consumer Suit Alleges "Biased" Medical Review Program
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21st Century Insurance Company faces a class action filed in the Los
Angeles Superior Court. The complaint contends that after insureds
receive medical treatment, the Company uses a medical-review program
to adjust expenses to reasonable and necessary amounts for a given
geographic area.
The plaintiff alleges that the adjusted amount is "predetermined" and
"biased," creating an unfair pretext for reducing claim costs. This
case is consolidated with similar actions against other insurers for
discovery and pre-trial motions.
ADVANCED FIBER: CA Court Dismisses Consolidated Securities Fraud Suit
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The United States District Court for the Northern District of
California dismissed the consolidated class action against Advanced
Fiber Communications and certain of its current and former officers and
directors after parties reached a settlement in the suit. The
consolidated suit alleged various federal and state securities law
violations for the period March 25, 1997 through and including June 30,
1998, and sought an unspecified amount of damages.
In June 2002, the Company reached an agreement to settle the
consolidated securities class actions. On September 30, 2002, the
court entered an order preliminarily approving the settlement and
approving the form and manner of notice to class members. After a
hearing on the matter, the court entered a final judgment and order of
dismissal with prejudice of these consolidated securities class
actions.
The total settlement was $20 million. In connection with the
settlement, the Company recorded a $2.9 million charge to operating
expenses to cover the portion of the settlement that we did not expect
to be funded by insurance. The balance of the settlement amount was
funded by insurance proceeds.
Under the terms of the settlement, there was no finding of wrongdoing
on the part of any of the defendants or any other finding that the
claims alleged have merit. The defendants have denied, and continue to
deny, the truth of the allegations in the litigation and all liability,
fault or wrongdoing of any kind.
BSQUARE CORPORATION: NY Court Refuses To Dismisses Securities Lawsuit
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The United States District Court for the Southern District of New York
refused to dismiss the consolidated securities class action pending
against BSquare Corporation, certain of its current and former officers
and directors and the underwriters of its initial public offering. The
suit purport to be on behalf of purchasers of the Company's common
stock during the period from October 19, 1999 to December 6, 2000.
Plaintiffs allege that the underwriter defendants agreed to allocate
stock in the Company's initial public offering to certain investors in
exchange for excessive and undisclosed commissions and agreements by
those investors to make additional purchases of stock in the
aftermarket at pre-determined prices. Plaintiffs allege that the
prospectus for the Company's initial public offering was false and
misleading in violation of the securities laws because it did not
disclose these arrangements.
The action is being coordinated with approximately 300 other nearly
identical actions filed against other companies. On July 15, 2002, the
Company moved to dismiss all claims against it and the
individual defendants. The court dismissed the individual defendants
from the case without prejudice based upon stipulations of dismissal
filed by the plaintiffs and the individual defendants. On February 19,
2003, the court denied the motion to dismiss the complaint against the
Company.
The Company disputes the allegation of wrongdoing in this company and
intend to defend this action vigorously. However, due to the inherent
uncertainties of litigation, the Company cannot accurately predict the
ultimate outcome of the litigation. Any unfavorable outcome of
litigation could have an adverse impact on its business, financial
condition and results of operations.
BSQUARE CORPORATION: Investors Commence Stock Fraud Lawsuit in S.D. FL
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BSquare Corporation faces a class action filed in the United States
District Court for the Southern District of Florida. The suit also
names as defendants the Company's Chief Executive Officer, its former
Chief Financial Officer, and Credit Suisse First Boston (CSFB), the
lead underwriter involved in the Company's initial public offering.
The complaint makes similar allegations against approximately 50 other
companies for which CSFB was the lead or co-lead underwriter of an IPO.
The complaint alleges claims against the Company and the Individuals
for violations of the Securities Act of 1933 and/or violations of the
Securities and Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. The complaint also alleges claims based on common law
theories of:
(1) fraud,
(2) negligent misrepresentation,
(3) respondeat superior, and
(4) Florida state securities laws
The complaint alleges that the defendants disseminated false and
misleading information to the public, which misrepresented our initial
public offering price and the Company's financial condition and future
revenue prospects. The complaint further alleges that the effect of
the purported fraud was to manipulate the Company's stock price so that
the defendants could profit from the manipulation.
No date has been set for a response to this complaint. The Company
disputes the allegation of wrongdoing in this company and intends to
vigorously defend this action. Again, due to the inherent
uncertainties of litigation, the Company cannot accurately predict the
ultimate outcome of the litigation. Any unfavorable outcome of
litigation could have an adverse impact on the Company's business,
financial condition and results of operations.
FIRST DATA: CA Court Grants Preliminary Approval To Service Fee Lawsuit
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The Superior Court of the State of California for the County of Los
Angeles granted preliminary approval to settlement of the class action
filed against First Data Corporation and its subsidiaries Western Union
Financial Services, Inc. and Orlandi Valuta.
The putative class consists of those persons who have used Western
Union's or Orlandi Valuta's services after August 31, 1999 to transmit
money from California to Mexico, or who have used the Western Union or
Orlandi Valuta money transfer services to transmit money from
California to Mexico and have opted out of the nationwide settlement in
a prior suit filed by Luis Pelayo and Oscar Perales against Western
Union Financial Services, Inc., Orlandi Valuta and Orlandi Valuta
Nacional in the United States District Court for the Northern District
of Illinois (the Pelayo action).
Plaintiffs claim that Western Union and Orlandi Valuta charge an
undisclosed "commission" when they transmit consumers' money by wire to
Mexico, in that the exchange rate used in these transactions is less
favorable than the exchange rate that Western Union receives when it
trades dollars in the international money market. Plaintiffs assert
that Western Union's failure to disclose this commission in its
advertising and in the transactions violates state law.
On October 3, 2002, the parties in the suit submitted a proposed
settlement to the court for approval. The proposed settlement, which
is subject to preliminary and final approval by the court, states that:
(1) Western Union and Orlandi Valuta will issue coupons for
discounts on future money transfer transactions from
California to Mexico to class members who transferred money
from California to Mexico between January 1, 1987 and March
31, 2000;
(2) the Company also will make a cy pres payment of $1.5 million
to be distributed to charitable organizations that assist the
Mexican and Mexican-American communities in the State of
California;
(3) injunctive relief requiring Western Union and Orlandi Valuta
to make additional disclosures regarding their foreign
exchange practices and to include a provision in new and
renewed contracts with agents in Mexico prohibiting the
imposition of an undisclosed charge on recipients of money
transfers; and
(4) reasonable attorneys’ fees, expenses and costs as well as
the costs of settlement notice and administration.
On October 7, 2002, the court issued an order preliminarily approving
the settlement and enjoining the prosecution of any action that asserts
claims that would be resolved by the settlement. The court also has
scheduled a fairness hearing for August 4, 2003.
FIRST DATA: Agrees To Settle Consumer Lawsuit Over Wire Transfers in NY
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First Data Corporation agreed to settle a class action filed in the
United States District Court for the Eastern District of New York
against it and its subsidiary, Western Union Financial Services, Inc.
The suit asserts claims on behalf of a putative worldwide class of all
consumers who used the services of Western Union or Orlandi Valuta to
transmit money by wire:
(1) from the United States to a foreign country or territory
(excluding Mexico) from January 1, 1995 to the date when
defendants modified their send forms or receipts consistent
with the Pelayo settlement;
(2) from the United States to a foreign country or territory
(excluding Mexico) from the date when defendants had modified
their send forms or receipts consistent with the Pelayo
settlement to December 31, 2002;
(3) from the United States (excluding California) to Mexico from
September 1, 1999 to the date when defendants modified their
send forms or receipts consistent with the Pelayo settlement;
(4) from the United States (excluding California) to Mexico from
the date when defendants had modified their send forms or
receipts consistent with the Pelayo settlement to December 31,
2002;
(5) from foreign country or territory to the United States from
January 1, 1995 to the date when defendants modified their
send forms or receipts consistent with the Pelayo settlement;
and
(6) from a foreign country or territory to the United States from
the date when defendants had modified their send forms or
receipts consistent with the Pelayo settlement to December 31,
2002, provided that the international money transfer
transaction sent by the consumer during each of these periods
referenced above involved a currency exchange and was within a
country corridor that produced an average foreign exchange
revenue per transaction gain of at least $1.00.
Plaintiffs assert that defendants impose an undisclosed "charge" when
they transmit consumers' money by wire to international locations, in
that the exchange rate used in these transactions is less favorable
than the exchange rate that Western Union receives when it trades
dollars in the international money market. Plaintiffs further assert
that Western Union's failure to disclose this "charge" in the
transactions violates 18 U.S.C. section 1961 et seq., state deceptive
trade practices statutes, and civil conspiracy.
On September 30, 2002, the parties in the suit jointly filed papers
seeking an order preliminarily approving a proposed settlement. The
proposed settlement, which is subject to preliminary and final approval
by the court, includes the following terms:
(i) Western Union (and, with respect to money transfer
transactions from the U.S. other than California to Mexico,
Orlandi Valuta) will issue coupons for discounts on future
international money transfer transactions to customers who
transferred money from the U.S. to certain countries other
than Mexico between January 1, 1995 and approximately March
31, 2000 (for certain services, Western Union will issue
coupons for transactions conducted as late as December 31,
2001), from anywhere in the US other than California to Mexico
between September 1, 1999 and March 31, 2000 (again, for
certain services, Western Union will issue coupons for
transactions conducted as late as December 31, 2001), from
countries other than Canada to the U.S. between January 1,
1995 and approximately March 31, 2000, and from Canada to the
U.S. between January 1, 1995 and approximately July 31, 2002;
(ii) injunctive relief requiring Western Union and Orlandi Valuta
to make additional disclosures regarding their foreign
exchange practices;
(iii) defendants will pay plaintiffs' reasonable attorneys' fees,
expenses and costs; and
(iv) defendants will pay the costs of notice to the class and
settlement administration.
HIGH SPEED: Court To Hear Arguments For Investor Fraud Suit Settlement
----------------------------------------------------------------------
The Delaware Court of Chancery will hear on April 16, 2003 any
objections to the settlement proposed by High Speed Access Corporation
to settle the consolidated class action pending against it, its then
directors, certain former directors, Charter Communications, Inc. and
Paul Allen.
The suit alleges breach of fiduciary duty by the individual defendants
and Charter. The suit specifically alleges that, among other things,
the cash purchase price initially proposed by Charter, $73.0 million,
was grossly inadequate and that "(t)he purpose of the proposed
acquisition is to enable Charter and Allen to acquire (the Company's)
valuable assets for their own benefit at the expense of (the Company's)
public stockholders." The suit also alleges that the $81.1 million
purchase price under the Asset Purchase Agreement was "grossly
inadequate," and that Charter and Mr. Allen acted in a manner
calculated to benefit themselves at the expense of the Company's public
shareholders.
The plaintiffs ask to represent the interests of all common
stockholders of the Company and seek injunctive relief preventing the
Company from consummating the Asset Sale.
The Company believes the suit is entirely without merit. Nevertheless,
lawyers for the defendants in these lawsuits had discussions with
attorneys representing the plaintiffs in the first three lawsuits
concerning, among other topics, financial and other changes to the
terms of the then draft Asset Purchase Agreement.
As a result of these discussions, a tentative agreement was reached to
settle the suit subject to the completion of confirmatory discovery.
The tentative settlement was embodied in a Memorandum of Understanding
(MOU) dated as of January 10, 2002, executed by counsel to all parties
to the first three lawsuits.
The MOU provides, among other things, that the settlement is premised
upon defendants' acknowledgment that the prosecution of the first three
litigations was a "substantial causal factor" underlying defendants'
decision to condition the Asset Sale on the public stockholder majority
vote and was "one of the causal factors" underlying Charter's decision
to increase the consideration to be paid to the Company in connection
with the Asset Sale. The MOU further provides that defendants shall,
upon Court approval, pay up to $390,000, which amount will be allocated
among the defendants, to reimburse plaintiffs' counsel for the fees and
expenses incurred in pursuit of these litigations.
Confirmatory discovery now has been completed and final documentation
of the settlement has been negotiated and executed. The settlement,
however, is subject to the approval of the court following notice to
class members. In the event the court approves the settlement and no
other objection, motions or appeals are filed, the court's approval
will be deemed final on May 16, 2003.
HIGH SPEED: NY Court Dismiss In Part Consolidated Securities Fraud Suit
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The United States District Court for the Southern District of New York
dismissed in part the consolidated securities suit against High Speed
Access Corporation and:
(1) its President and Chief Financial Officer, Mr. George Willett,
(2) one of its former Presidents Mr. Ron Pitcock,
(3) Lehman Brothers, Inc.,
(4) J.P. Morgan Securities, Inc.,
(5) CIBC World Markets Corporation and
(6) Banc of America Securities, Inc.,
The suit alleges that the Company's Registration Statement, dated June
3, 1999, and Prospectus, dated June 4, 1999, for the issuance and
initial public offering of 13,000,000 shares of the Company's common
stock to investors contained material misrepresentations and/or
omissions. The purported class action alleges violations of Sections
11 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder.
The essence of the complaints is that defendants issued and sold the
Company's common stock pursuant to the Registration Statement for the
IPO without disclosing to investors that certain underwriters in the
offering had solicited and received excessive and undisclosed
commissions from certain investors. The complaints also allege that
the Company's Registration Statement for the IPO failed to disclose
that the underwriters allocated Company shares in the IPO to customers
in exchange for the customers' promises to purchase additional shares
in the aftermarket at pre-determined prices above the IPO price,
thereby maintaining, distorting and/or inflating the market price for
the shares in the aftermarket. The plaintiff asks to represent the
interest of all holders of the Company's common stock and seeks
unspecified monetary damages.
On July 15, 2002, the Company moved to dismiss all claims against it,
Mr. Willett and Mr. Pitcock. The allegations against Mr. Willett and
Mr. Pitcock were dismissed without prejudice on October 11, 2002
pursuant to a Reservation of Rights and Tolling Agreement dated as of
July 20, 2002.
On February 19, 2003, the court denied the Company's motion to dismiss
the alleged violations of Section 11 and 15 of the 1933 Act. However,
the court granted the Company's motion to dismiss the alleged
violations of Sections 10(b) and 20(a) of the 1934 Act and Rule 10b-
promulgated thereunder.
This action is being coordinated with nearly three hundred other nearly
identical actions filed against other companies. Prior to the February
19, 2003 ruling on the Company's motion to dismiss, there were
settlement discussions among the plaintiffs, the company defendants and
their insurance carriers, which if closed would have removed the
Company from the litigation without payment of any funds. However, as
a result of the recent ruling, the Company cannot opine as to whether
or when a settlement might occur.
With respect to the allegations against the Company, the Company
believes this lawsuit is without merit. The Company expresses no
opinion as to the allegations lodged against Lehman Brothers, Inc.,
J.P. Morgan Securities, Inc., CIBC World Markets Corporation, and Banc
of America Securities Inc.
INFORMATICA CORPORATION: NY Court Dismisses In Part Securities Lawsuit
----------------------------------------------------------------------
The United States District Court for the Southern District of New York
dismissed in part the consolidated securities class action filed
against Informatica Corporation, one of its current officers, one of
its former officers and several investment banking firms that served as
underwriters of its April 29,1999 initial public offering and September
28,2000 secondary public offering.
The suit, filed on behalf of all persons who purchased the Company's
common stock from April 29, 1999 through December 6, 2000, alleges
liability as to all defendants under Sections 11 and 15 of the
Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, on the grounds that the registration statement
for the offerings did not disclose that:
(1) the underwriters had agreed to allow certain customers to
purchase shares in the offerings in exchange for excess
commissions paid to the underwriters; and
(2) the underwriters had arranged for certain customers to
purchase additional shares in the aftermarket at predetermined
prices.
The amended complaint also alleges that false analyst reports were
issued. No specific damages are claimed.
The Company is aware that similar allegations have been made in other
lawsuits filed in the Southern District of New York challenging over
300 other initial public offerings and secondary offerings conducted in
1999 and 2000. Those cases have been consolidated for pretrial
purposes before the Honorable Judge Shira A. Scheindlin.
On July 15, 2002, the Company and its affiliated individual defendants
(as well as all other issuer defendants) filed a motion to dismiss the
complaint. On February 19, 2003, the court ruled on the motions to
dismiss. The court denied the motions to dismiss the claims under the
Securities Act of 1933 in all but ten cases, including the case
involving the Company. The court denied the motion to dismiss the
claim under Section 10(a) of the Securities Exchange Act of 1934
against the Company and 184 other issuer defendants. The court denied
the motion to dismiss the claims under Section 10(a) and 20(a) of the
Securities Exchange Act of 1934 against the Company's individual
defendants and sixty-two other individual defendants.
The Company believes that it has meritorious defenses to the claims
against it.
INTERNATIONAL RECTIFIER: CA Court To Rule on Lawsuit Settlement in May
----------------------------------------------------------------------
The United States District Court for the Central District of
California, Western Division will hear arguments for the settlement of
a consolidated class action against International Rectifier
Corporation, on May 28, 2003.
The lawsuits had named the company and certain of its directors and
officers, seeking unspecified but substantial compensatory and punitive
damages for alleged intentional and negligent misrepresentations and
violations of the federal securities laws in connection with the public
offering of the company's common stock completed in April 1991 and the
redemption and conversion in June 1991 of its 9% Convertible
Subordinated Debentures due 2010.
They also alleged that the firm's projections for growth in fiscal 1992
were materially misleading. Two of these suits also named the
company's underwriters, Kidder, Peabody& Co. Incorporated and
Montgomery Securities, as defendants.
The purpose of the hearing is to determine:
(1) whether the proposed settlement, which provides for the
dismissal of the claims in this class action litigation for
no payment to Plaintiffs, Plaintiffs' Counsel, or to any
Class Member as provided in the Stipulation of Settlement on
file with the Court, should be approved as fair, just,
reasonable and adequate; and
(2) whether the Final Judgment dismissing the Action with
prejudice should be entered
For more details, contact Kevin J. Yourman or Vahn Alexander of Weiss &
Yourman by Mail: 10940 Wilshire Blvd., 24th Floor, Los Angeles, CA
90024 or by Phone: (310) 208-2800
INTERPUBLIC GROUP: Asks For Transfer of Securities Lawsuits to S.D. NY
----------------------------------------------------------------------
The Interpublic Group of Companies asked for the transfer of two
securities class actions to the United States District Court for the
Southern District of New York. The suits were filed against the
Company and certain of its present and former directors and officers by
a purported class of purchasers of Company stock shortly after the
Company's November 13, 2002 announcement regarding the restatement of
its previously reported earnings for the periods January 1, 1997
through March 31, 2002. The purported classes consist of Company
shareholders who acquired Company stock on or about June 25, 2001 in
connection with the Company's acquisition of True North Communications,
Inc.
These lawsuits allege that the Company and certain of its present and
former directors and officers allegedly made misleading statements in
connection with the filing of a registration statement on May 9, 2001
in which the Company issued 67,644,272 shares of its common stock for
the purpose of acquiring True North, including the alleged failure to
disclose the existence of additional charges that would need to be
expensed and the lack of adequate internal financial controls, which
allegedly resulted in an overstatement of Interpublic's financial
results at that time. The suits allege that such misleading statements
constitute violations of Sections 11 and 15 of the Securities Act of
1933. No amount of damages is specified in the complaints. These
actions were filed in the Circuit Court of Cook County, Illinois.
On December 18, 2002, defendants removed these actions from Illinois
state court to the United States District Court for the Northern
District of Illinois. Plaintiffs have moved to remand the actions to
Illinois state court, and have opposed defendants' motion to transfer.
Those motions are now pending.
INTERPUBLIC GROUP: Asks DE Court To Dismiss Shareholder Derivative Suit
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The Interpublic Group of Companies, Inc. asked the Delaware Court of
Chancery in New Castle County to dismiss the amended consolidated
shareholder derivative suit filed by a single shareholder acting on
behalf of the Company against the Board of Directors. The suit alleges
a breach of fiduciary duties to Interpublic's shareholders. The amended
suit does not state a specific amount of damages.
On January 27, 2003, defendants filed motions to dismiss the
consolidated suit, and those motions are currently pending.
While the proceedings are in the early stages and contain an element of
uncertainty, the Company has no reason to believe that the final
resolution of the actions will have a material adverse effect on its
financial position, cash flows or results of operations.
SONUS NETWORKS: NY Court Dismisses In Part Consolidated Securities Suit
-----------------------------------------------------------------------
The United States District Court for the Southern District of New York
dismissed in part the consolidated securities class action filed
against Sonus Networks, Inc., two of its officers and the lead
underwriters alleging violations of the federal securities laws in
connection with the Company's initial public offering (IPO), seeking
unspecified monetary damages.
The purchaser seeks to represent a class of persons who purchased the
Company's common stock between the IPO on May 24, 2000 and December 6,
2000. The amended complaint alleges that the Company's registration
statement contained false or misleading information or omitted to state
material facts concerning the alleged receipt of undisclosed
compensation by the underwriters and the existence of undisclosed
arrangements between underwriters and certain purchasers to make
additional purchases in the after market. The claims against the
Company are asserted under Sections 10(b) and 11 of the Securities Act
of 1933 and against the individual defendants under Sections 11 and 15
of that Act.
Other plaintiffs have filed substantially similar class action cases
against approximately 300 other publicly traded companies and their IPO
underwriters which, along with the actions against the Company, have
been transferred to a single federal judge for purposes of coordinated
case management.
On July 15, 2002, the Company, together with the other issuers named as
defendants in these coordinated proceedings, filed a collective motion
to dismiss the consolidated amended complaints on various legal grounds
common to all or most of the issuer defendants. The plaintiffs
voluntarily dismissed the claims against the individual defendants,
including those Company officers named in the complaint.
On February 19, 2003, the court granted a portion of the motion to
dismiss by dismissing the Section 10(b) claims against certain
defendants including the Company, but denied the remainder of the
motion as to the defendants. Accordingly, the case will proceed
against the Company on the Section 11 claims. The outcome of the
litigation remains uncertain.
SONUS NETWORKS: Plaintiffs Lodge Consolidated Securities Lawsuit in MA
----------------------------------------------------------------------
Plaintiffs in several securities class actions filed against Sonus
Networks, Inc. filed a consolidated suit in the United States District
Court for the District of Massachusetts.
The suit charges the Company, certain officers and directors and a
former officer with violations of Sections 10(b) and 20(a) and Rule
10b(5) of the Securities Exchange Act of 1934. The purchasers seek to
represent a class of persons who purchased the Company's common stock
between December 11, 2000 and January 16, 2002, and seek unspecified
monetary damages. The suits are essentially identical and allege that
the Company made false and misleading statements about its products and
business.
The Company believes the claims in the consolidated amended complaint
are without merit and that it has substantial legal and factual
defenses.
SONUS NETWORKS: Plaintiffs Agree To Dismiss Shareholder Derivative Suit
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Plaintiffs in the shareholder derivative lawsuit pending against Sonus
Networks, Inc. and its directors in the Superior Court of Middlesex
County of Massachusetts agreed to dismiss the suit, without prejudice.
The suit alleges that the Company's directors breached their fiduciary
duties. The complaint seeks an unspecified amount of compensatory and
other damages and relief on behalf of the Company.
After the Company submitted a motion to dismiss the complaint on
multiple grounds, the plaintiff agreed to dismiss the complaint without
prejudice retaining the right to refile the complaint at a later date.
The complaint was dismissed on February 4, 2003.
TREX COMPANY: VA Court Dismisses Consolidated Securities Fraud Lawsuit
----------------------------------------------------------------------
The United States District Court for the Western District of Virginia
dismissed the consolidated securities class action filed against Trex
Company, and:
(1) Robert G. Matheny, the President and a director of the
company,
(2) Roger A. Wittenberg, then Executive Vice President of Material
Sourcing and International Operations and a director of the
company,
(3) Anthony J. Cavanna, the Executive Vice President and Chief
Financial Officer and a director of the company, and
(4) Andrew U. Ferrari, the Executive Vice President of Marketing
and Business Development and a director of the company,
The suit, filed on behalf of purchasers of the Company's securities
between November 2, 2000 and June 18, 2001, alleged that the defendants
violated Sections 10(b) and 20(a) of and Rule 10b-5 under the
Securities Exchange Act of 1934 by making false and misleading public
statements or omissions concerning the Company's operating and
financial results, expectations, and business and by filing misleading
reports on Forms 10-Q and 10-K with the SEC.
The public statements and disclosures in the Company's reports that the
plaintiffs alleged to be false and misleading related primarily to the
Company's operating performance and prospects and anticipated customer
demand for Trex in the fourth quarter of 2000 and first and second
quarters of 2001. The plaintiffs sought unspecified monetary damages
together with any other relief permitted by law, equity and federal
statutory provisions identified in the complaints.
The defendants filed a motion to have the amended suit dismissed with
prejudice, which the court granted. The final order was accompanied by
a memorandum opinion granting the defendants' motion to dismiss the
amended suit for failure to state a claim. In the memorandum opinion,
the court found that plaintiffs had not pleaded facts raising a strong
inference that any disclosure challenged was made with fraudulent
intent or was materially misleading or omissive. The plaintiffs did
not appeal this decision.
WILLIAMS COMPANIES: Asks OK Court To Dismiss Securities Fraud Lawsuits
----------------------------------------------------------------------
Williams Companies, Inc. asked the United States District Court for the
Northern District of Oklahoma to dismiss numerous securities class
actions alleging that the Company, Williams Communications Group and
certain corporate officers and directors, acted jointly and separately
to inflate the stock price of both companies. Other suits allege
similar causes of action related to a public offering in early January
2002, known as the FELINE PACS offering.
This case was filed against the Company, certain of its corporate
officers, all members of its board of directors and all of the
offerings' underwriters. In addition, in 2002 class action complaints
were filed in the United States District Court for the Northern
District of Oklahoma against the Company and the members of our board
of directors under the Employee Retirement Income Security Act by
participants in the Company's 401(k) plan based on similar allegations.
Oral argument on the motions will be held in April 2003.
WILLIAMS COMPANIES: Enters Settlement in CA Electric Ratepayers Suits
---------------------------------------------------------------------
Williams Companies, Inc. has entered into a settlement for the class
actions filed between November 2000 and May 2001 on behalf of
California electric ratepayers against California power generators and
traders including Energy Marketing & Trading, in California Superior
Court in San Diego County.
These lawsuits concern the increase in power prices in California
during the summer of 2000 through the winter of 2000-01. The suits
claim that the defendants acted to manipulate prices in violation of
the California antitrust and business practice statutes and other state
and federal laws. Plaintiffs are seeking injunctive relief as well as
restitution, disgorgement, appointment of a receiver, and damages,
including treble damages.
As part of a comprehensive settlement with the state of California and
other parties, the Company and the plaintiffs in these suits have
resolved these claims. While the settlement is final as to the state
of California, the court must rule as to the ratepayer plaintiffs.
New Securities Fraud Cases
BAYER AG: Kirby McInerney Commences Securities Fraud Lawsuit in S.D. NY
-----------------------------------------------------------------------
Kirby McInerney & Squire, LLP initiated a securities class action on
behalf of purchasers of American Depository Shares (ADRs) of Bayer AG
(NYSE:BAY) between March 30, 1998 and February 22, 2003, inclusive.
(Prior to January 23, 2002, Bayer AG traded on the NASDAQ under the
symbol BAYZY). The suit is pending in the United States District Court
for the Southern District of New York.
The complaint against Bayer AG and its wholly owned subsidiary, Bayer
Corporation, alleges, among other things, that throughout the class
period defendants misrepresented Bayer AG's success through the
promotion of its cholesterol lowering drug, Baycol. Defendants'
statements were materially false and misleading because Bayer AG's own
scientists were stating internally that Baycol, when administered with
other popular medications or at high dosages, caused unacceptable risk
of serious side effects. In fact, throughout the class period Bayer AG
was informed that patients taking Baycol were experiencing serious and
life threatening side effects. Baycol was belatedly withdrawn from the
market in August 2001 after the FDA raised serious concerns about the
safety of Baycol in light of reports of Baycol patients dying.
The true facts concerning defendants' knowledge of the dangers of
Baycol and the Company's potential liability to Baycol patients were
not completely disclosed until February 22, 2003, in connection with
court filings in various personal injury actions commenced against
Bayer AG by persons who had been prescribed Baycol and had suffered
severe side effects. These court documents demonstrated defendants'
early knowledge of the risk of serious or life threatening side effects
to patients taking Baycol, including the knowledge that patients taking
Baycol were found to have 5 to 10 times the chance of developing a life
threatening illness -- rhabdomyolysis -- as patients taking other
similar medicines.
The price per share of Bayer AG ADRs fell approximately 17% when Baycol
was withdrawn from the market in August 2001. Following the February
22, 2003 disclosure of the true state of defendants' knowledge of the
dangers of Baycol, Bayer AG ADRs declined an additional 27%, from
$17.15 per share to $12.58 days after the revelation -- more than 68%
below the trading price at the beginning of the class period ($39.75).
For more information contact Ira M. Press or Kenneth Ryu by Mail: 830
Third Avenue, 10th Floor, New York NY 10022 by Phone: (888) 529-4787 by
E-mail: kryu@kmslaw.com or visit the firm's Website:
http://www.kmslaw.com.
INTERSTATE BAKERIES: Marc Henzel Commences Securities Suit in W.D. MO
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Western District of
Missouri on behalf of purchasers of Interstate Bakeries Corporation
(NYSE: IBC) common stock during the period between September 17, 2002
and December 17, 2002, inclusive.
The complaint alleges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market between September 17, 2002 and December 17, 2002, thereby
artificially inflating the price of IBC common stock. Throughout the
class period, as alleged in the suit, defendants issued numerous
statements regarding the Company's financial performance and future
prospects.
Specifically, defendants claimed that the Company was experiencing a
rebound in the sales of its sweet cake products, which had slowed down
in the previous quarter, and described how the Company would be able to
increase prices for certain bread products and maintain its anticipated
level of profitability in the face of increasing commodity prices. The
complaint alleges that these statements were materially false and
misleading because they failed to disclose and/or misrepresented the
following adverse facts, among others:
(1) that since the beginning of the class period, the Company was
actually experiencing a negative variance with respect to cake
sales as compared to the prior year and, therefore, had not
seen any indication of any rebound in cake sales; and
(2) the Company did not maintain sufficient centralized control
over price increases to ensure that the Company could raise
prices on bread products without damaging profitability;
defendants knew that an increase in prices typically would
result in a sacrifice in market share and the Company actually
was exposed to significant risk with respect to its ability to
attain profits based upon commodity prices.
On December 17, 2002, the last day of the class period, IBC shocked the
market by reporting extremely poor second quarter earnings, which it
attributed primarily to weak sales of its sweet cakes. Following this
announcement, shares of IBC common stock plunged in value by over 35%,
from $23.16 per share on December 16, 2002, to $15.00 per share on
December 17, 2002, on extremely heavy trading volume that was almost
fifty (50) times more active than normal. Prior to the disclosure of
the Company's true financial condition, certain of the Individual
Defendants and other IBC insiders sold shares of their personally-held
common stock for gross proceeds in excess of $16 million.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
KING PHARMACEUTICALS: Marc Henzel Commences Securities Suit in E.D. TN
----------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Eastern District of
Tennessee, Northeastern Division at Greeneville, on behalf of
purchasers of King Pharmaceuticals (NYSE: KG) publicly traded
securities during the period between February 16, 2000 and March 10,
2003, inclusive.
The complaint alleges that defendants violated sections 10(b) and 20(a)
of the Securities & Exchange Act of 1934 by issuing materially false
and misleading statements during the class period and violated sections
11 and 15 of the Securities Act of 1933 by issuing a materially false
and misleading Registration Statement and Prospectus in connection with
the Company's acquisition of Jones Pharma, Inc.
Specifically, the Complaint alleges that defendants issued statements
regarding the Company's financial performance and future prospects and
the strong demand for its branded pharmaceutical products, notably
Altace and Levoxyl. Moreover, the Complaint alleges that the Company
failed to disclose that certain of its rebate and pricing practices
subjected it to heightened governmental scrutiny.
As alleged in the suit, these statements were each materially false and
misleading when made as they misrepresented and/or omitted the
following adverse facts which then existed and disclosure of which was
necessary to make the statements made not false and/or misleading,
including:
(1) that the Company's rebate practices and "best price" lists
subjected it to heightened regulatory scrutiny as governmental
agencies increased their activity in this area;
(2) that the Company had understated the level of generic
competition for Levoxyl; and
(3) that the Company had engaged in questionable sales to VitaRx
and Prison Health Services during 1999 and 2000.
On March 11, 2003, King Pharmaceuticals shocked the market when it
revealed that it was subject to an SEC investigation for, among other
things:
(i) the sales of its products to VitaRx and Prison Health Services
during 1999 and 2000;
(ii) its "bestprice" lists;
(iii) all documents related to the pricing of its pharmaceutical
products to any governmental Medicaid agency during 1999; and
(iv) the accrual and payment of rebates on Altace from 2000 to the
present.
In response to this announcement, the price of King Pharmaceuticals
common stock declined precipitously, falling from $15.90 per share to
$12.17 per share.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
MICHAELS STORES: Marc Henzel Commences Securities Fraud Suit in N.D. TX
-----------------------------------------------------------------------
The Law Offices of Marc S. Henzel 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.
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 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 information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
MICHAELS STORES: Goodkind Labaton Commences Securities Suit in N.D. TX
----------------------------------------------------------------------
Goodkind Labaton Rudoff & Sucharow LLP initiated a securities class
action pursuant to Section 21D(a)(3)(A)(i) of the Securities Exchange
Act of 1934, in the United States District Court for the Northern
District of Texas, Dallas Division on behalf of all who purchased or
otherwise acquired Michaels Stores, Inc. common stock between August 8,
2002 and November 7, 2002 inclusive. The named defendants are the
Company, R. Michael Rouleau and Bryan M. Decordova.
The complaint charges Defendants with violations of Sections 10(b) and
20 of the Securities Exchange Act of 1934. Michaels Stores is a
national retailer providing materials for decorators and craftspeople.
The complaint alleges that between August 8, 2002 and November 7, 2002,
defendants issued a number of press releases, and filed a number of
quarterly reports with the Securities and Exchange Commission (SEC),
that misled members of the class as to the true value of the Company.
Specifically, the complaint alleges that in the press releases and
quarterly reports, defendants touted the financial success of the
Company and claimed they had great confidence in the Company's
financial future. In addition, defendants stated that they were
raising the Company's fiscal year 2002 earnings guidance estimate.
During this period, Company insiders sold approximately $15 million of
personally held Company stock.
However, the complaint alleges that the defendants failed to adequately
and properly advise investors that the reported financial results of
the Company were attributable, in part, to the Company's reversal of a
reserve in the second quarter of 2002. The reserve reversal was
critical to the financial successes reported by the Company but this
important information was 'buried' by Defendants in a quarterly filing
and not properly discussed with market analysts. Then on November 7,
2002, after Company insiders had profited by selling their personally
held stock, Defendants revealed that the Company was not as financially
strong as previously suggested and that same store sales for the third
quarter 2002 were disappointing. Defendants also lowered the Company's
full year earnings estimate. News of the lowered earning estimate and
the reserve reversal caused the Company's stock price to fall from
$44.98 to $33.90 (24%).
For more details, contact Henry J. Young by Mail: 100 Park Avenue, 12th
Floor New York, New York 10017-5563 by Phone: (212) 907-0700 by E-mail:
hyoung@glrslaw.com or visit the firm's Website: http://www.glrslaw.com
PEC SOLUTIONS: Marc Henzel Commences Securities Fraud Suit in E.D. VA
---------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Eastern District of
Virginia on behalf of all purchasers of the common stock of PEC
Solutions Inc. (NasdaqNM: PECS) from October 22, 2002 through March 14,
2003, inclusive.
Throughout the class period, as alleged in the complaint, defendants
issued a series of materially false and misleading statements
concerning the Company's business, operations and prospects. The suit
alleges that these statements were materially false and misleading when
made as they failed to disclose and misrepresented the following
adverse facts, among others:
(1) that the Company was experiencing declining demand for its
products and services as the failure of Congress to approve a
budget for 2003 was causing governmental agencies to delay
projects;
(2) that the Company was experiencing material problems with
certain of its biometric identification contracts and would
not be generating the revenue that it had anticipated from
those contracts; and
(3) as a result of the foregoing, the Company was materially
overstating the strength of its pipeline of projects and its
prospects.
On March 14, 2003, after the close of the market, as alleged in the
complaint, PEC Solutions shocked the market when it issued a press
release announcing that it was revising its guidance for the first
quarter 2003 and for the year ending December 31, 2003. In response to
this announcement, the price of PEC Solutions common stock declined
precipitously falling from $15.80 per share to $9.81 per share, a
decline of more than 37%, on extremely heavy trading volume.
During the class period, prior to the disclosure of the true facts, the
individual defendants and other PEC Solutions insiders sold their
personally-held shares of PEC Solutions common stock to the
unsuspecting public reaping proceeds of more than $13 million
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
PROVIDENT FINANCIAL: Marc Henzel Commences Securities Suit in N.D. GA
---------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Northern District of
Georgia, on behalf of all persons who purchased securities of Provident
Financial Group (Nasdaq: PFGI) between January 17, 1997 and March 5,
2003, inclusive, and who were injured thereby.
Provident Financial Group Inc.'s earnings restatement is one for the
record books - its six years worth of revisions is the longest
continuous string of amendments in memory for a US company. However,
if history is any indication, Provident's problems are only just
beginning.
The company's stock lost 20% on Wednesday, the day of the announcement
by the Cincinnati banking company, but a study from New York
University's Stern School of Business finds that the stocks of
companies that announce restatements drop for three straight sessions
on average. "Earnings restatements rewrite a company's history,"
generally in an unflattering way, said Min Wu of NYU's Department of
Accounting, Taxation and Business Law, who conducted the study in
conjunction with Softrax, whose software helps companies tally revenue.
When companies restate earnings, and particularly when that's
accompanied by a warning about future earnings - as was the case with
Provident - there are usually reverberations, Ms. Wu said. "Analysts'
downgrades, class-action lawsuits and management shuffles are not
uncommon and they cast a shadow over the firms, quite often for a long
time."
Provident launched a quick offensive in an effort to restore its
credibility, said Christopher Carey, the company's executive vice
president and chief financial officer. "We acted as soon as we found
out and have been talking to people all day emphasizing this was
totally inadvertent on our part and would never had been done if we had
known differently," Mr. Carey told Dow Jones Newswires. "At some point
we expect to go out and tell people face-to-face exactly why it
happened and exactly why it won't happen again."
However, he acknowledged Provident "has certainly experienced a big
setback." Provident has plenty of company in revising its financial
reports. Restatements appear as commonly today as increases in profit
expectations did in the late 1990s. And restatements have spiked
further since the Sarbanes-Oxley Act was passed in July. The law calls
for stringent reporting by companies and requires executives to certify
results. Consider how times have already changed. From 1994 through
1997, just 220 public companies restated earnings. Over the next four
years - 1998 to 2001 - that number quadrupled to roughly 900, according
to Wu's research. And this year there have already been dozens of
restatements, with one of the most high- profile being Royal Ahold NV
(AHO), which said last month it would restate $500 million of earnings
going back two years.
But six years "is very, very unusual," said Joe Cooper of Thomson
Financial/ First Call, who said he could not recall a longer string
than the 24 quarters that Provident's move will encompass. Provident
"voluntarily" made its disclosure like three-fourths of companies do,
according to Mr. Wu's research, and that can be a plus for retaining
investor credibility. The bank holding company has since notified the
Federal Reserve and the Securities and Exchange Commission of the
errors and said it expects to file its 10-K report, with the correct
data, on time - another positive, Mr. Wu said. Provident is also in
the majority of companies that give the amount of the restatement on
the day they announce the development, Mr. Wu said. The other one-
third do not, with the data coming as soon as two days after and as
late as one and a half years. The average is one to two months, she
added.
Provident's restatement totaled $70.3 million over the six years, and
the company said it was able to pin down the numbers immediately after
recognizing the deals involved nine leases that were posted as off-
balance-sheet transactions and shouldn't have been. By keeping these
transactions off the balance sheet, the company "gave the appearance it
had more capital and higher income," said Wilson Smith, banking analyst
at Cohen Brothers in Philadelphia. "That's something that could hang
over their head for a while, but be mitigated by the proactive steps
they're discussing."
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
SOLECTRON CORPORATION: Marc Henzel Commences Securities Suit in N.D. CA
-----------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
filed in the United States District Court for the Northern District of
California on behalf of all purchasers of the common stock of Solectron
Corporation (NYSE: SLR) publicly traded securities during the period
between September 17, 2001 and September 26, 2002, inclusive.
The complaint charges Solectron Corporation and certain of its officers
and directors with issuing false and misleading statements concerning
its business and financial condition. Specifically, the complaint
alleges that defendants issued numerous statements reporting
artificially inflated financial results.
The suit alleges that these statements were materially false and
misleading because they failed to disclose and/or misrepresented the
following adverse facts, among others:
(1) that the Company was carrying tens of millions of dollars of
obsolete and unsaleable inventory in its Technology Solutions
division which was required to be written down. As a result
of the foregoing, Solectron's reported financial results were
artificially inflated at all times during the class period;
(2) as a result of the Company's failure to write down its
inventory in a timely manner, the financial statements
published by the Company during the class period were not
prepared in accordance with Generally Accepted Accounting
Principles and were materially false and misleading; and
(3) that it was materially false and misleading to characterize
the Company's earnings during the Class Period, as ``in line''
with Company guidance, when had the Company properly accounted
for its inventory it would have drastically missed its
guidance.
On September 26, 2002, after the market closed, Solectron issued a
press release announcing its financial results for the fourth quarter
of 2002 and fiscal year 2002. The Company also reported that it was
booking a pre-tax charge of $97 million to reserve for inventory
revaluation and write-off. Solectron attributed the bulk of the charge
to "inventory risk assumed by Solectron's product-oriented Technology
Solutions business unit."
Following this announcement, and other revelations, shares of Solectron
common stock fell from their previous close.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
VAXGEN INC.: Marc Henzel Commences Securities Fraud Lawsuit in N.D. CA
----------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Northern District of
California on behalf of purchasers of VaxGen Inc. (NASDAQ: VXGN)
securities during the period between August 6, 2002 and February 26,
2003.
The complaint charges the Company and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. The
Company is engaged in the development and commercialization of AIDSVAX,
a vaccine designed to prevent infection or disease caused by HIV (Human
Immunodeficiency Virus), the virus that causes AIDS. During the class
period, defendants were completing the final stages of AIDSVAX's Phase
III clinical trials required to obtain Food and Drug Administration
approval to market AIDSVAX as an AIDS vaccine. Throughout the class
period, defendants caused VaxGen to make a number of positive
statements about the status of the trial and describing their eventual
plans to manufacture and market AIDSVAX, causing VaxGen's stock to
trade at artificially inflated prices.
On February 23, 2003, VaxGen shocked the market by reporting the long-
anticipated results of the US trials, disclosing that the "study did
not show a statistically significant reduction of HIV infection within
the study population as a whole, which was the primary endpoint of the
trial." The partial disclosure of the overall failure of the US
clinical trial caused VaxGen's shares to plummet, declining over 50% to
approximately $3 per share on February 24, 2003.
However, even when defendants released the results on February 24,
2003, they claimed that while the vaccine failed to demonstrate
efficacy on US caucasians, the trials had demonstrated 30%-84% efficacy
rates in US blacks and Asians. That analysis, the company said, had
less than a 1% chance of being due to random chance, making it highly
statistically significant. VaxGen President Donald P. Francis touted
the results as evidence that AIDSVAX could protect against HIV
infection. As reported by The Wall Street Journal on February 24,
2003, the "results overall won't lead the Food and Drug Administration
to approve the vaccine for use in the wider public, but the company
hopes that further analysis, as well as results from another trial
being conducted in Thailand on injection drug users, may prompt the
agency to approve the vaccine for some ethnic minorities." These
corrective statements had their intended effect and VaxGen's stock
closed at close to $7 per share on February 24, 2003.
However, on February 26, 2003, defendants were forced to admit that the
reliability of their earlier reports of higher efficacy rates for non-
caucasians were impaired because they had not taken the requisite
"penalties" to account for the fact that less than 500 of the 5000
clinical trial participants were non-caucasians, resulting in an
extremely small subset of data being analyzed for non-caucasians. As
the news that earlier promises that AIDSVAX could prove useful for non-
caucasians fell apart, the stock declined further, resulting in a total
loss in market cap since November 18, 2002 of approximately 85%.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
VAXGEN INC.: Milberg Weiss Commences Securities Fraud Suit 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 VaxGen Inc. (NASDAQ:VXGN)
securities during the period between August 6, 2002 and February 26,
2003.
The complaint charges the Company and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. The
Company is engaged in the development and commercialization of AIDSVAX,
a vaccine designed to prevent infection or disease caused by HIV (Human
Immunodeficiency Virus), the virus that causes AIDS. During the class
period, defendants were completing the final stages of AIDSVAX's Phase
III clinical trials required to obtain Food and Drug Administration
approval to market AIDSVAX as an AIDS vaccine. Throughout the class
period, defendants caused VaxGen to make a number of positive
statements about the status of the trial and describing their eventual
plans to manufacture and market AIDSVAX, causing VaxGen's stock to
trade at artificially inflated prices.
On February 23, 2003, VaxGen shocked the market by reporting the long-
anticipated results of the US trials, disclosing that the "study did
not show a statistically significant reduction of HIV infection within
the study population as a whole, which was the primary endpoint of the
trial." The partial disclosure of the overall failure of the US
clinical trial caused VaxGen's shares to plummet, declining over 50% to
approximately $3 per share on February 24, 2003.
However, even when defendants released the results on February 24,
2003, they claimed that while the vaccine failed to demonstrate
efficacy on US caucasians, the trials had demonstrated 30%-84% efficacy
rates in US blacks and Asians. That analysis, the company said, had
less than a 1% chance of being due to random chance, making it highly
statistically significant. VaxGen President Donald P. Francis touted
the results as evidence that AIDSVAX could protect against HIV
infection.
As reported by The Wall Street Journal on February 24, 2003, the
"results overall won't lead the Food and Drug Administration to approve
the vaccine for use in the wider public, but the company hopes that
further analysis, as well as results from another trial being conducted
in Thailand on injection drug users, may prompt the agency to approve
the vaccine for some ethnic minorities." These corrective statements
had their intended effect and VaxGen's stock closed at close to $7 per
share on February 24, 2003.
However, on February 26, 2003, defendants were forced to admit that the
reliability of their earlier reports of higher efficacy rates for non-
caucasians were impaired because they had not taken the requisite
"penalties" to account for the fact that less than 500 of the 5000
clinical trial participants were non-caucasians, resulting in an
extremely small subset of data being analyzed for non-caucasians. As
the news that earlier promises that AIDSVAX could prove useful for non-
caucasians fell apart, the stock declined further, resulting in a total
loss in market cap since November 18, 2002 of approximately 85%.
For more details, contact William Lerach by Phone: 800/449-4900 by E-
mail: wsl@milberg.com or visit the firm's Website:
http://www.milberg.com
VITALWORKS INC.: Marc Henzel Launches Securities Fraud Suit in CT Court
-----------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the District of Connecticut on
behalf of all purchasers of the common stock of VitalWorks, Inc.
(NasdaqNM: VWKS) publicly traded securities during the period between
April 24, 2002 and October 23, 2002, inclusive.
The complaint charges the Company and certain of its officers and
directors with issuing false misleading statements concerning its
business and financial condition. Specifically, the complaint alleges
that the defendants issued false and misleading statements concerning
the Company's increasing revenues and future prospects.
On October 23, 2002, the Company announced that it had failed to
achieve pre- announced third quarter 2002 revenues and was lowering
revenue guidance for the remainder of fiscal year 2002; additionally,
the Company reported that it was lowering revenue guidance for fiscal
year 2003 by over 10%. Market reaction to defendants' belated
disclosures was swift and severe.
On October 24, 2002, the first day of trading following VitalWorks
announcements, the price of VitalWorks common shares fell over 56% in
value to close at $3.13 per share on record trading volume of over 14
million shares.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
VOICEFLASH NETWORKS: Marc Henzel Commences Securities Suit in S.D. FL
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The Law Offices of Marc S. Henzel initiated a securities class action
against VoiceFlash Networks, Inc. (OTC: VFNX.PK) and certain of its
officers was commenced in the United States District Court for the
Southern District of Florida, on behalf of purchasers of VoiceFlash
shares between March 15, 2002 and January 24, 2003.
The complaint charges defendants with violations of the Securities
Exchange Act of 1934. It alleges that defendants issued a series of
material misrepresentations that caused plaintiff and other members of
the class to purchase VoiceFlash common stock at artificially inflated
prices.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182
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