/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/030722.mbx C L A S S A C T I O N R E P O R T E R Tuesday, July 22, 2003, Vol. 5, No. 143 Headlines ALCOHOL FIRMS: Alcoholics To File Suit Over Drinking Problems AOL TIME: Calpers, Calstrs Launch Securities Fraud Suits in CA AOL TIME: OH Attorney General Launches Securities Fraud Lawsuit BRIGHTPOINT INC.: IN Courts Approves Securities Suit Settlement CONTINENTAL AIRLINES: Trial in Travel Agents' Suit Set Feb. 2004 COSMETICS ANTITRUST: Reaches Settlement, Offering Free Products DUCK DELIVERY: Recalls Cut Melons Due To Listeria Contamination FEDEX CORPORATION: Oral Arguments in Consumer Suit Set July 2003 FERDINAND MARCOS: Human Rights Victims To Share in $680M Award NEW JERSEY: Files Lawsuit v. Firms Causing Pension Fund Losses PHILIP MORRIS: Asks IL Court To Prevent Enforcement of $10B Bond PIPER JAFFRAY: Discovery Proceeds in Securities Suit in S.D. NY PIPER JAFFRAY: Asks NY Court To Dismiss Stock Antitrust Lawsuit SERENADE FOODS: Recalls Duck Products Due To Undeclared Allergen SINGING MACHINE: Investors Lodge Securities Lawsuits in S.D. FL STAMPEDE MEAT: Recalls Frozen Beef Due to E. Coli Contamination TRAFFIX INC.: Dismissed As Defendant in Spam Lawsuit in IL Court TRAFFIX INC.: Seeking Dismissal for Suits Over Spam Mails in UT UNITED STATES: Lawyers Urged To Fight For Consumers in CA Meet WADE COOK: Agrees With Atty. Gen. To Keep Private Consumer Info WAL-MART STORES: FL Court To Decide on Bias Suit Certification New Securities Fraud Cases ADMINISTAFF INC.: Bernstein Liebhard Lodges Stock Lawsuit in TX CROMPTON COMPANY: Milberg Weiss Files Securities Suit in N.D. CA CRYO-CELL INTERNATIONAL: Seeger Weiss Lodges Stock Lawsuit in FL INTERMUNE INC.: Marc Henzel Lodges Securities Lawsuit in N.D. CA MATRIA HEALTHCARE: Charles Piven Lodges Stock Lawsuit in N.D. GA MATRIA HEALTHCARE: Chitwood & Harley Lodges Stock Lawsuit in GA MERRILL LYNCH: Pomerantz Haudek Files Securities Suit in S.D. NY SINGING MACHINE: Marc Henzel Lodges Securities Suit in S.D. FL SINGING MACHINE: Schiffrin & Barroway Files Stock Lawsuit in FL SINGING MACHINE: Cauley Geller Lodges Securities Suit in S.D. FL ********* ALCOHOL FIRMS: Alcoholics To File Suit Over Drinking Problems ------------------------------------------------------------- Twelve alcoholics from Glasgow, Scotland are attempting to file a class action against the drinks industry for failing to warn them of the dangers of alcoholism, the Daily Record reports. The group, the first in the United Kingdom to file a lawsuit against the multi-billion pound drinks industry, asserts the lives of its members were destroyed by drinking. The group will assert that drinking caused health problems, loss of jobs, relationship breakdown and adversely affected their quality of life - which the companies should have warned them about. Experts from Glasgow solicitors Ross Harper believe they can use the arguments employed in successful prosecutions against huge American tobacco companies in 2000 to win their case, the Daily Record reports. Lawyer Jim Price said he will apply for Legal Aid and then take the test case before the Court of Session in Edinburgh, Scotland. He told the Daily Record, "Any litigation would have to be based on whether or not the product causes harm and whether or not the producer has a duty of care to customers . The purported illnesses our clients suffer follow the same pattern as the smoking arguments did." In America, legislation forcing the drinks industry to carry health warnings was introduced 10 years ago and similar moves are being proposed in Ireland. The move comes after Americans have filed lawsuits against tobacco seeking compensation for injuries due to smoking. AOL TIME: Calpers, Calstrs Launch Securities Fraud Suits in CA -------------------------------------------------------------- AOL Time Warner, Inc. faces lawsuits filed by two of the nation's largest pension funds in the Superior Court of California in Sacramento County, over alleged accounting irregularities at AOL, before and after its 2001 merger with Time Warner, Reuters reports. Calpers, the California Public Employees' Retirement System filed a $250 million suit and Calstrs, the California State Teachers' Retirement System filed a suit seeking about $200 million, charging the Company with overstating its revenues and inflating its stock price. The suits were filed following at least 30 securities suits filed against the company. In January 2001, AOL and Time Warner agreed to merge in a $106.2 billion deal. Last year, however, the Company said it would restate results and reduce revenue by $190 million, as its accounting practices were intensely scrutinized. The Calpers suit alleges that the Company's AOL Internet division inflated its advertising income by at least $1.7 billion by using fraudulent transactions and accounting practices before and after the merger. The suit names as defendants AOL Time Warner, America Online Inc. and current and former executives including Stephen Case, Gerald Levin, Robert Pittman and David Colburn. The suit also names Salomon Smith Barney Inc., Morgan Stanley and Co. and Ernest and Young LLP as agents involved in the merger. Details of the Calstrs lawsuits were not immediately available, Reuters reports. A representative for AOL Time Warner could not be immediately reached for comment. AOL Time Warner shares closed at $16.74 per share, up 34 cents on Friday. The stock has lost more than 70 percent from a peak of $56.15 in May of 2001 but has gained about 28 percent so far this year amid a broad rally in the US equity market, Reuters states. AOL TIME: OH Attorney General Launches Securities Fraud Lawsuit --------------------------------------------------------------- Ohio Attorney General Jim Petro filed a lawsuit against AOL Time Warner, charging it and its predecessor companies - America Online and Time Warner - with issuing misleading financial statements to help complete the merger, thus causing the state public employee pension funds to lose more than $100 million in investments, the Associated Press reports. Ohio's public pensions owned Time Warner stock before the merger and held about $5 million shares in the combined company. The Securities and Exchange Commission and the US Justice Department are looking at the company's financial and accounting practices. Atty. General Petro told AP that while a class action has been filed on behalf of those who owned stock in AOL, Time Warner and the combined company, the state stands a better chance of recovering losses by joining a suit brought by larger institutional investors. BRIGHTPOINT INC.: IN Courts Approves Securities Suit Settlement --------------------------------------------------------------- Brightpoint, Inc. (NASDAQ:CELL) announced that the courts have approved the settlements referred to in the Company's press release dated April 30, 2003, and have dismissed all pending shareholder related litigation against the Company and others, including its current and former officers and directors. The United States District Court for the Southern District of Indiana has approved the settlement and dismissal of the class action filed in the United States District Court for the Southern District of Indiana, consolidated under the caption In re Brightpoint Securities Litigation. On July 2, 2003, the Marion Circuit Court, Indianapolis, Indiana approved the settlement and dismissal of the shareholder derivative action entitled Nora Lee v. Robert J. Laikin, et al., filed in the Marion Circuit Court, Indianapolis, Indiana. Brightpoint is one of the world's largest distributors of mobile phones. Brightpoint supports the global wireless telecommunications and data industry, providing quickly deployed, flexible and cost effective third party solutions. For more details, contact Steven E. Fivel by Phone: (317) 707-2355 CONTINENTAL AIRLINES: Trial in Travel Agents' Suit Set Feb. 2004 ---------------------------------------------------------------- Trial in the travel agents' class action against Continental Airlines and other air carriers is set for February 2,2004 in the United States District Court for the Eastern District of North Carolina. A travel agent filed this class action on behalf of herself and other similarly situated US travel agents, challenging the reduction and ultimate elimination of travel agent base commissions by certain air carriers, including the Company and other domestic and international air carriers. The amended complaint alleges an unlawful agreement among the airline defendants to reduce, cap or eliminate commissions in violation of federal antitrust laws during the years 1997 to 2002. The plaintiffs seek compensatory and treble damages, injunctive relief and their attorneys' fees. The class was certified on September 18, 2002. Discovery has been completed. Summary judgment and other motions are pending. The Company believes the plaintiffs' claims are without merit. A final adverse court decision awarding substantial money damages, however, would have a material adverse impact on the Company's financial condition, liquidity or results of operations, it disclosed in a filing with the Securities and Exchange Commission. COSMETICS ANTITRUST: Reaches Settlement, Offering Free Products --------------------------------------------------------------- Several big cosmetics companies have followed Estee Lauder's example and agreed to settle a cosmetics price-fixing lawsuit by giving away $175 million worth of products, the Associated Press reports. The suit, filed on behalf of people who bought cosmetics from several retail stores between May 29,1884 and June 1,2003, alleged that the retail price of the "prestige" cosmetics sold in department and specialty stores was collusively controlled by the retailer and manufacturer defendants in violation of the Cartwright Act and the California Unfair Competition Act, an earlier Class Action Reporter story states. The Companies will implement the settlement in about a year, and would involve products specially manufactured for the occasion, according to lawyers involved in the case. "Virtually every woman who buys cosmetics knows that department store cosmetics are never discounted, never go on sale and are priced identically in any department store in any city through the country," Terry Gross, one of the plaintiffs' lawyers told the Associated Press. "This kind of conduct does not happen in a competitive environment without collusion." Sally Susman, a spokeswoman for Estee Lauder, said the companies deny the allegations. "We strongly disagree with the claims and have moved to settle to get on with our business and not get tangled in a protracted lawsuit," Ms. Susman told AP. Other defendants in the suit are: (1) L'Oreal, (2) Clarins Boucheron, (3) Chanel, (4) Christian Dior, (5) Conopco, (6) Guerlain, (7) Bloomingdale's, (8) Dillard's, (9) Federated Department Stores, (10) Gottschalk's, (11) May Department Stores, (12) Neiman Marcus, (13) Nordstrom, (14) Saks and (15) Target DUCK DELIVERY: Recalls Cut Melons Due To Listeria Contamination --------------------------------------------------------------- Duck Delivery Produce, Inc. of Portland, Oregon is voluntarily recalling cut honeydew and cut cantaloupe melons because they have the potential to be contaminated with Listeria monocytogenes, an organism which can cause serious and sometimes fatal infections in young children, frail or elderly people and others with weakened immune systems. Although healthy individuals may suffer only short-term symptoms such as high fever, severe headache, stiffness, nausea, abdominal pain and diarrhea, listeria infection can cause miscarriages and stillbirths among pregnant women. The cut honeydew and cut cantaloupe melons are sold as single fruit items or in various combinations with other fruits and packaged in plastic trays, plastic cups or plastic bags and sold in retail stores in Washington, Oregon and Idaho. Products contain a "sell by" date on or before 07-21-03. Some of the fruit has the brand "Mary's Select" and other product does not have a brand name. All products are labeled "distributed by Duck Delivery Produce." No illnesses have been reported to date. The Washington State Department of Agriculture conducted routine sampling of the product held for retail sale. Analysis found samples to be contaminated with Listeria monocytogenes. For more details, contact John Rich at Duck Delivery Produce from 8 am to 5 pm Monday through Friday by Phone: 1-800-452-2481. FEDEX CORPORATION: Oral Arguments in Consumer Suit Set July 2003 ---------------------------------------------------------------- Oral arguments for the appeal of the United States District Court in San Diego, California's ruling against Fedex Express is set for July 2003. A class action lawsuit is pending against the Company generally alleging that customers who had late deliveries during the 1997 Teamsters strike at United Parcel Service were entitled to a full refund of shipping charges pursuant to our money-back guarantee, regardless of whether they gave timely notice of their claim. At the hearing on the plaintiffs' motion for summary judgment, the court ruled against the Company. Including accrued interest through May 31, 2003 and fees for the plaintiffs' attorney, the judgment totals approximately $70 million. The Company has denied any liability with respect to this claim. The Company has appealed the judgment to the US Court of Appeals for the 9th Circuit and expects a ruling in the next nine months. FERDINAND MARCOS: Human Rights Victims To Share in $680M Award -------------------------------------------------------------- Philippine President Gloria Macapagal-Arroyo said that victims of human rights abuses during the Ferdinand Marcos regime should take part in the hundreds of millions in his assets that a Philippine court awarded to the government, the Agence France Presse reports. "I support the allocation of part of the funds for the compensation of human rights victims," Pres. Arroyo said. " We must lend recognition to the Filipino people's struggle for freedom, justice and redemption - and the individuals who sacrificed life and limb." The Philippine Supreme Court earlier ruled that the government should be awarded the Swiss bank funds worth an estimated US$680 million - a ruling that was regarded as a victory against the Marcos family. The funds were frozen after Mr. Marcos was overthrown in a popular revolt in 1986, and were transferred to an escrow account in Manila in 1998. The funds are believed to be part of a huge fortune amassed by the dictator during his 20- year regime. In 1995, the United States District Court in Hawaii awarded US$2 billion to 10,000 human rights victims who filed a class action against the Marcos Estate. The group later agreed to settle with the government of former president Joseph Estrada to split the Swiss bank funds if the High Court rules favorable, AFP reports. Mr. Estrada was later overthrown in another popular uprising in 2001, and is now facing massive corruption charges. President Arroyo did not elaborate, however, how the money would be made available to the victims and which government agency would be authorized to disburse it. Under the law, any recovered ill-gotten wealth by the Marcos family would go to the government's agrarian reform program. NEW JERSEY: Files Lawsuit v. Firms Causing Pension Fund Losses -------------------------------------------------------------- New Jersey's Acting Attorney General Peter C. Harvey told the Associated Press recently that the state is the lead plaintiff in at least four of the eight cases being brought as class actions claiming that the corporation sued cost the state pension fund millions of dollars in losses. Settlement negotiations with at least one of the corporations are nearly underway, Mr. Harvey said. The legal distinction of being lead plaintiff gives New Jersey lawyers power to determine everything from what motions will be filed to how much should settle the lawsuits. Most of the lawsuits likely will be settled, Mr. Harvey said. "I do not think anybody has the expectation that any of these cases will be tried, given the enormous amount of money at stake," said Mr. Harvey. New Jersey is one of many states suing corporations, claiming that fraud, mismanagement or other wrongdoing caused stocks to lose value, forging large losses to pension funds and other public investments. Most of the corporate defendants have declined to comment publicly. In their court papers, some have said New Jersey's accusations do not meet federal standards for filing claims and should be dismissed. New Jersey filed its first four cases late last year after the state pension funds lost $22 billion in the stock market downturn of the past two years. Payments to retirees have not been threatened by the investment drain, but the losses mean taxpayers might have to pay $1 billion into the fund to meet reserve requirements, thus adding to the state's fiscal difficulties. Across the nation, class actions by investors rose dramatically last year. The 224 class actions filed in state and federal courts was 31 percent higher than the 172 for 2001. Settlements are also on the rise, the Stanford review found, with $2.3 billion being paid to end 98 lawsuits nationwide last year. Since 1995, settlements have averaged $12 million; most were $6 million. One of the reasons for the rising of settlement amounts is the quality of the lawsuits themselves, a byproduct of a 1995 federal law that increased standards for filing, said John Beckerman, an associate dean at the Rutgers-Camden School of Law. Another change is that more of the larger institutional investors, like New Jersey and California, which leads the Enron lawsuits, are driving cases, rather than the law firms doing the work, said Professor Beckerman an associate dean at the Rutgers- Camden School of Law. Public agencies save money by having specialized law firms do the work. New Jersey will use at least 12 specialized law firms in their suits. A retired Superior Court judge, with extensive experience in civil litigation and complex settlements, oversees the litigation and reports to Acting Attorney General Harvey. Professor Beckermann said law firms usually collected between eight and 15 percent of the settlement; whereas, before the change in federal regulations, firms usually were paid 30 percent. The state also is being very cautious as to what lawsuits it actually does file. "You have to pick your targets wisely because you have to protect your resources and prevent your losses," said Mr. Harvey. Where the state does proceed, the circumstances are usually clear, Mr. Harvey added. "In some cases, it is essentially fraud." PHILIP MORRIS: Asks IL Court To Prevent Enforcement of $10B Bond ---------------------------------------------------------------- Philip Morris USA asked the Illinois Supreme Court to prevent the Price class action plaintiffs from attempting to enforce a $10.1 billion judgment until it decides whether the reduced bond established by the trial court was proper. Earlier this week the Illinois Fifth District Court of Appeals, at the request of the Price plaintiffs, ruled that Madison County Circuit Court Judge Nicholas Byron exceeded his authority by setting a bond lower than the amount of the judgment, plus interest and costs. The court returned the case to the Madison County trial judge for the sole purpose of reconsidering the amount, terms, conditions and security of the bond. A 30-day stay is in place while the trial court conducts those proceedings. "Philip Morris USA believes the appellate court's interpretation is in conflict with the letter and the spirit of the Illinois Supreme Court's rules and decisions regarding a lower court's discretion in establishing the amount of a bond and staying collection of a judgment," a company statement stated. "Since the Supreme Court is the body that makes these rules, it is entirely appropriate at this point for the Supreme Court to interpret its rules," said William S. Ohlemeyer, Philip Morris USA vice president and associate general counsel. "The company is simply asking the Supreme Court to halt any action by Judge Byron to change the terms of the bond he set and reaffirm the trial judge's discretion that the reduced bond is adequate to protect the financial interests of both the Price plaintiffs and Philip Morris USA." "While that appellate review is under way, the company also is asking the Supreme Court to issue a stay that would prevent Price plaintiffs from attempting to seize any of the company's assets to satisfy the $10.1 billion judgment Judge Byron handed down," he said. Judge Byron initially ordered the company to post a $12 billion bond in order to stay enforcement of his $10.1 billion verdict, but after lengthy hearings decided to require the company to place a $6 billion note owed PM USA, the $420 million annual interest the note generates and an additional $800 million in cash payable in quarterly installments in an escrow account controlled by the court clerk. Attorneys for the class appealed the bond order because they contended it was insufficient to protect the financial interests of the class during the course of the appeal and that, by rule, Judge Byron had no discretion to reduce the bond below the amount of the judgment, plus interests and costs. Plaintiffs asked the intermediate appellate court to fix a $14.645 billion cash or surety bond. If the bond is secured by other forms of security, plaintiffs asked for a bond in excess of $30 billion. Mr. Ohlemeyer said Supreme Court review is necessary at this point because "this is a matter of critical importance, not only for Philip Morris USA but for any defendant facing a lawsuit in Illinois . The appellate court's decision seriously jeopardizes Philip Morris USA's due process rights to pursue its appeal under both the Illinois and United States constitutions; that reason alone is sufficient for the Illinois Supreme Court to intervene now." At issue is Illinois Supreme Court Rule 305(b) that states, in part, "on notice and motion, and an opportunity for opposing parties to be heard, the (trial) court may stay the enforcement of any judgment . conditioned upon such terms that are just . It makes little sense that the Illinois Supreme Court would on the one hand require a bond for the entire amount of a judgment plus interest and costs be posted in order to stay execution of a judgment, and on the other hand adopt a rule that gives the trial court flexibility to reduce that amount to one that is 'just'," he continued. "No one, not even the Price plaintiffs, can argue the bond Judge Byron ultimately set is not 'just'. While it is onerous to Philip Morris USA, it is more than adequate to protect the plaintiffs' financial interests during the course of an appeal," Mr. Ohlemeyer said. "Philip Morris USA made it abundantly clear to the trial court that it could not post a $12 billion bond; the court reviewed the facts, agreed and accordingly exercised its discretion by reducing the bond required to an amount that could be met by the company while still providing financial security to the plaintiffs during the appellate process," he added. During hearings before Judge Byron, even Price plaintiffs' attorney Steven Tillery conceded that the trial court "had absolute discretion" and "a wide degree of latitude" to change the terms of the bond required, a position in direct opposition to the one he took before the state appellate court. PIPER JAFFRAY: Discovery Proceeds in Securities Suit in S.D. NY --------------------------------------------------------------- Discovery has commenced in the coordinated class actions filed against Piper Jaffray Companies in the United States District Court for the Southern District of New York involving the allocation of securities in certain initial public offerings. These complaints assert claims pursuant to Section 11 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder based, in part, upon allegations that: (1) between 1998 and 2000 the underwriters of certain initial public offerings of technology and Internet- related companies obtained excessive compensation by allocating shares in these initial public offerings to preferred customers who, in return, purportedly agreed to pay additional compensation to the underwriters who failed to disclose the additional compensation; and (2) that the underwriters' customers who received favorable allocations of shares in initial public offerings agreed to purchase additional shares of the same issuer in the secondary market at pre-determined prices. These complaints seek unspecified damages. The defendants' motions to dismiss the complaints filed on July 1, 2002 and oral argument on the motions to dismiss was heard on November 14, 2002. The court entered its order largely denying the motions to dismiss on February 19, 2003. Discovery has commenced pursuant to an agreement between the parties and it is anticipated that a formal scheduling order will be entered by the Court in the future. PIPER JAFFRAY: Asks NY Court To Dismiss Stock Antitrust Lawsuit --------------------------------------------------------------- Piper Jaffray Companies, along with other leading securities firms asked the United States District Court for the Southern District of New York to dismiss the consolidated amended class action filed against them on behalf of purchasers of shares issued in certain initial public offerings for US companies. The suit alleges that defendants conspired in offerings between $20 and $80 million to fix the underwriters' discount at 7 percent of the offering amount in violation of Section 1 of the Sherman Act. The court dismissed this consolidated action with prejudice and denied plaintiffs' motion to amend the complaint and include an issuer plaintiff. The court stated that its decision did not affect any class actions filed on behalf of issuer plaintiffs. The Second Circuit Court of Appeals reversed the district court's decision on December 13, 2002 and remanded the action to the district court. A motion to dismiss was filed with the district court on March 26, 2003 seeking dismissal of this action and the issuer plaintiff action described below in their entirety based upon the argument that the determination of underwriting fees is impliedly immune from the antitrust laws because of the extensive federal regulation of the securities markets. Plaintiffs filed their opposition to the motion to dismiss on April 25, 2003. The underwriter defendants filed a motion for leave to file a supplemental memorandum of law in further support of their motion to dismiss on June 10, 2003. A ruling on the motion to dismiss is currently pending. Limited discovery has been approved during the pendency of the motion to dismiss and is proceeding at this time. A consolidated securities class action has also been filed in the United States District Court for the Southern District of New York on behalf of issuer plaintiffs asserting substantially similar antitrust claims based upon allegations that 7 percent underwriters' discounts violate the Sherman Act. The district court denied defendants' motion to dismiss the complaint on September 30, 2002. Defendants filed a motion to certify the order for interlocutory appeal on October 15, 2002. On March 26, 2003, the motion to dismiss based upon implied immunity was also filed in connection with this action. As described above, plaintiffs filed their opposition to the motion to dismiss on April 25, 2003 and limited discovery is proceeding at this time. SERENADE FOODS: Recalls Duck Products Due To Undeclared Allergen ---------------------------------------------------------------- Serenade Foods, a Milford, Ind., establishment doing business as Maple Leaf Farms, Inc., is voluntarily recalling approximately 200 pounds of frozen, ready-to-eat duck products because of an undeclared allergen (sesame seeds), the US Department of Agriculture's Food Safety and Inspection Service announced in a statement. Serenade Foods is recalling its Roast Half Duckling with Szechwan Sauce because it is incorrectly labeled as Oriental Seasoned Roast Half Duck. The products being recalled are labeled as 9-lb. cases and individual sample pieces of "Maple Leaf Farms ORIENTAL SEASONED ROAST HALF DUCK" bearing the code "003515812" or "003515812PCS." The 9-lb. cases also bear the lot code "2340" and the establishment code "P-2375" inside the USDA seal of inspection. The products were produced on December 6, 2002, and distributed to hotels, restaurants and institutions in Colorado, Florida, Illinois, Indiana, Massachusetts, Michigan, New York, Texas and Virginia. The problem was discovered by Maple Leaf Farms, Inc., which contacted FSIS to initiate the recall. For more details, contact the Company by Phone: (574) 658-4121. SINGING MACHINE: Investors Lodge Securities Lawsuits in S.D. FL --------------------------------------------------------------- The Singing Machine Company, Inc. and certain of its officers and directors face six securities class actions in the United States District Court for the Southern District of Florida on behalf of all persons who purchased the Company's securities during the various class action periods specified in the complaints. The complaints that have been filed allege violations of Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934 and Rule 10(b)-5. The complaints seek compensatory damages, attorney's fees and injunctive relief. While the specific factual allegations vary slightly in each case, the complaints generally allege that defendants falsely represented the Company's financial results during the relevant class periods. STAMPEDE MEAT: Recalls Frozen Beef Due to E. Coli Contamination --------------------------------------------------------------- Stampede Meat, Inc., a Chicago, Illinois, establishment, is voluntarily recalling approximately 739,000 pounds of frozen beef products, mostly vacuum packaged steaks, that may be contaminated with E. coli O157:H7, the US Department of Agriculture's Food Safety and Inspection Service announced in a statement. The products subject to recall were produced between March 17 and March 22, 2003, and bear the establishment code "EST. 19113" inside the USDA mark of inspection. The products were distributed to restaurants, institutions and retail stores nationwide. The products were also distributed to consumers through door-to-door sales. Additionally, the products were distributed to institutions in Canada. The recall was initiated after epidemiological case studies conducted by public health officials concluded the recalled product may be linked to five E. coli O157:H7 illnesses in Minnesota, Kansas and Michigan. Public health officials from FSIS, the Centers for Disease Control and Prevention, and several state health departments are continuing to investigate the extent of the outbreak and determine if additional products are linked to illnesses reported. E. coli O157:H7 is a potentially deadly bacteria that can cause bloody diarrhea and dehydration. The very young, seniors and persons with compromised immune systems are the most susceptible to foodborne illness. Generally, steaks are not considered a high-risk source of E. coli O157: H7. However, the products subject to recall were injected with tenderizers and flavor- enhancing solutions, and that process may have transferred the bacteria from the surface to the inside of the product. Consumers should return the recalled products to the point of purchase and cook similar (tenderized) products to an internal temperature of 160 degrees as measured with a food thermometer. For more details, contact Bill Asleson, company executive manager by Phone: (800) 353-0933. TRAFFIX INC.: Dismissed As Defendant in Spam Lawsuit in IL Court ---------------------------------------------------------------- The Circuit Court of Cook County, Illinois granted Traffix, Inc.'s motion asking for its dismissal as a defendant in a class action entitled "Rydel v. Comtrad Industries, Inc., et al." The suit was initially filed against Columbia House, one of the Company's clients. Plaintiff claims to have received unsolicited commercial e-mail from, among others, Columbia House, in violation of Illinois law. Columbia House advised the Company that it believes that they did not approve the email in question when it was sent, and asserted a claim for indemnification against the Company pursuant to our contract. The company and Columbia House agreed to defer resolution of the indemnification claim (and reserved each of their respective rights). Columbia House is defending against the class action. Its motion to dismiss the complaint has been dismissed. On January 2003, the Company was named as a defendant in the suit. In an additional count in the complaint, the plaintiff asserts that the Company violated the Illinois Consumer Fraud and Deceptive Business Practices Act by providing to a co- defendant a list of consumers who had consented to receive commercial e-mails when, the complaint alleges, they had not. The complaint seeks injunctive relief and unspecified damages. The Company's motion to dismiss the complaint was granted in June 2003, and the plaintiff has filed an appeal. TRAFFIX INC.: Seeking Dismissal for Suits Over Spam Mails in UT --------------------------------------------------------------- Traffix, Inc. is working for the dismissal of two claims filed in the District Court of Utah, Third Judicial District, Salt Lake County, Sandy Department: (1) WATTERS V. TRAFFIX, INC., MONGLYPH.COM, AND PHILLIP C. WILSON AND JOHN DOES ONE THROUGH TEN, (No. 20413327); and (2) HARRISON V. TRAFFIX, INC. AND JOHN DOES ONE THROUGH TEN, (No. 20414190) In each of these actions, the plaintiff claims to represent a class of Utah residents who received unsolicited commercial e- mail in violation of Utah law. The Watters case was recently dismissed and the Company is currently engaged in discussions to resolve the remaining matter for an amount that would not be material to the results of operations, cash flows or financial position of the Company. The Company is unable to determine the ultimate outcomes of any of the foregoing claims, and, accordingly, no provision for loss has been recorded in the un-audited financial statements included in this report. UNITED STATES: Lawyers Urged To Fight For Consumers in CA Meet -------------------------------------------------------------- Mary E. Alexander, San Francisco consumer attorney and president of the Association of Trial Lawyers of America, is bringing 2000 trial lawyers to their national convention in San Francisco July 23 "to strengthen the fight for consumer rights under attack by Congress and the White House." Ms. Alexander is asserting, "Consumer rights are under attack in the Congress and the White House." She chastised Senate and House bills to cap damages and block class action lawsuits, as well as "arbitrary bashing of lawyers", as "good for raising donations from corporate interests but doing no one any good." In an op-ed this week in the San Jose Mercury News, Alexander points out that President Bush has made over 50 attacks against trial lawyers in speeches since taking office. She asserts that the real agenda of the critics is to "reward the insurance industry and corporations with higher profits and less accountability and prohibit juries of regular Americans from holding harmful interests accountable." She will address the opening and closing of the convention and will be available to media: 8 AM Sunday, July 20, and 8 AM and 8 PM Wed., July 23; she will also be available to press before and after the Membership Meeting, Noon Wed., July 23. All events occur at the San Francisco Hilton, 333 O'Farrell Street. The Association of Trial Lawyers of America (ATLA) has 60,000 members. Ms. Alexander stated that the convention would work "to strengthen the fight against the Administration's and Congress' anti-consumer actions, especially concerning medical malpractice rights, and class action lawsuits against major malfeasant corporations like Enron and Global Crossing, who are almost unaccountable on issues from pensions to pollution." WADE COOK: Agrees With Atty. Gen. To Keep Private Consumer Info --------------------------------------------------------------- Texas Attorney General Greg Abbott, supported by the California Attorney General, successfully intervened to protect the personal financial information of 75,000 Texans - and one million consumers nationwide - all former customers listed on a database of bankrupt Wade Cook Financial Corporation. Wade Cook, a Seattle-based company, previously marketed seminars and related materials that focused on how to become rich by trading in the stock market. While the marketing of seminars by itself is not unlawful, the company engaged in practices that Texas and 13 other states found to be deceptive. The one million consumers whose privacy rights have been protected are listed on the company's customer database. In bankruptcy proceedings, such a database can be considered a company "asset" which contains confidential information, all of which could have been compromised, except for the Texas Attorney General's intervention. "It is imperative in such cases to require safeguards to protect consumers from being victimized again by identity theft or privacy violations," said Attorney General Abbott. "We believe there is no legitimate reason for someone to be trafficking in credit card and other personal financial data. Moreover, we're pleased the court appointed a bankruptcy trustee who agreed with our position to destroy this sensitive financial data before any transfer of the customer list to a new buyer." On June 20, the trustee appointed in this Chapter 11 bankruptcy proceeding in Seattle proposed to sell Wade Cook's customer database without the new safeguards intact. The trustee also proposed to share with the prospective purchaser of the company a percentage of future earnings from the use of that database. However, the trustee later agreed to Attorney General Abbott's pre-sale condition that all personal financial information of consumers nationwide would be protected from disclosure. This includes credit card and social security numbers, personal financial information or customer profile data. The Texas Attorney General as sole state intervener also successfully obtained specific disclosures from prospective buyers to ascertain their integrity, a measure that ensures consumers will not be further victimized. Potential purchasers, for example, were required to provide sworn statements that neither they nor their affiliates have been the subject of enforcement actions, investigations or lawsuits alleging fraud during the preceding two years. Texas and 13 other states previously sued Wade Cook Financial, charging that the Company misrepresented to consumers that its security trades were highly profitable, which induced consumers to buy into the seminars and related materials. However, most of the Wade Cook profits were derived from the sale of the seminars and materials, not the securities trading business. WAL-MART STORES: FL Court To Decide on Bias Suit Certification -------------------------------------------------------------- United States District Court for the District of Florida Judge Martin Jenkins will hear arguments on class certification for a sex discrimination suit filed against Wal-Mart Stores, Inc, the Associated Press reports. Six women commenced the suit against the retail giant, charging it with discriminating against them in pay and promotions because of their gender. The lawsuit was filed in 2001 by plaintiffs: (1) Betty Dukes, (2) Micki Earwood, (3) Kimberly Miller, (4) Stephanie Odle, (5) Sandra Stevenson and (6) Patricia Surgeson The plaintiffs allege several incidents of discrimination, including a required meeting for female managers held at a strip club, and another meeting at a Hooters restaurant, which is known for scantily clad female servers. A favorable decision will allow 1.5 million women to participate in the suit. A ruling is not expected for months, however. Bentonville-based Wal-Mart argues the class would be too big to manage and claims the plaintiffs did not use commonly accepted statistical methods in compiling their numbers, the Associated Press reports. Also, the company argues that the scope of the proposed class is without precedent. Wal-Mart spokesman Mona Williams told AP the company's promotion rates of women shows that Wal-Mart has "more opportunities for women than any other employer in the country." The plaintiffs say Wal-Mart only started keeping those statistics as the evidence-gathering period in the lawsuit was coming to a close in January. New Securities Fraud Cases ADMINISTAFF INC.: Bernstein Liebhard Lodges Stock Lawsuit in TX --------------------------------------------------------------- Bernstein Liebhard & Lifshitz LLP initiated a securities class action in the United States District Court for the Southern District of Texas on behalf of all persons who purchased or acquired Administaff, Inc. (NYSE:ASF) securities between April 3, 2001 and July 31, 2002, inclusive. The complaint charges Administaff and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Administaff is a professional employer organization that provides a comprehensive personnel management system encompassing a broad range of services, including benefits and payroll administration, health and workers' compensation insurance programs, personnel records management, employer liability management, employee recruiting and selection, employee performance management and employee training and development services. The complaint alleges that defendants issued a series of material misrepresentations artificially inflating the price of Administaff securities. The complaint further alleges that these statements were materially false and misleading because they failed to disclose and misrepresented the following adverse facts: (1) that Administaff was improperly calculating pricing on worksite employees for employers with declining costs; (2) that Administaff's accounting did not match costs with pricing on healthcare insurance such that future results would be adversely affected by the inadequate pricing; and (3) that Administaff was improperly grossing up revenues with worksite employee payroll costs. On August 1, 2002, before the open of trading, Administaff shocked the investing public when it released its financial and operational results for the second quarter ended June 30, 2002, reporting "a net loss and diluted net loss per share of $3.2 million and $0.11" as compared to Thomson Financial/First Call estimates of $0.04 earnings per share. Market reaction was swift and negative, with Administaff stock falling from a close of $7.50 on July 31, 2002 to a close of $4.20 on Aug. 1, 2002, or a single-day decline of 44% in heavy trading. For more details, contact Ms. Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016, by Phone: (800) 217-1522 or (212) 779-1414 or by E-mail: ASF@bernlieb.com. CROMPTON COMPANY: Milberg Weiss Files Securities 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 Crompton Corporation (NYSE:CK) publicly traded securities, including former Crompton & Knowles and Witco shareholders who exchanged their shares of stock for CK Witco stock pursuant to the merger during the period between October 26, 1998 and October 8, 2002. The complaint charges Crompton and certain of its officers and directors with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. Crompton manufactures and markets a wide variety of polymer and specialty products. The complaint alleges that during the Class Period, defendants caused Crompton's shares to trade at artificially inflated levels through the issuance of false and misleading financial statements by: (1) agreeing to charge prices at certain levels and otherwise to fix, increase, maintain or stabilize prices of rubber chemicals sold in the United States; (2) selling rubber chemicals at the agreed upon prices; and (3) inflating their profits via the above acts. As a result, the Company's shares traded at inflated prices enabling the Company to refinance its debt and consummate a major acquisition using its inflated securities as currency. For more details, contact William Lerach by Phone: 800-449-4900 by E-mail: wsl@milberg.com CRYO-CELL INTERNATIONAL: Seeger Weiss Lodges Stock Lawsuit in FL ---------------------------------------------------------------- Seeger Weiss LLP initiated a securities class action in the United States District Court for the Middle District of Florida, Tampa Division, on behalf of all persons who purchased the publicly traded securities of Cryo Cell International, Inc. (NasdaqSC:CCELE), from March 16, 1999 through May 20, 2003, inclusive. Cryo Cell is a corporation with its principal place of business located in Clearwater, Florida. Cryo Cell purports that it is engaged in the business of cryogenic cellular storage and the design and development of cellular storage devices. The Company markets that customers should preserve blood taken from their newborns' umbilical cords because the blood is believed to contain a large number of stem cells, which may be useful to the child or another family member later in life to potentially cure diseases. The suit names as defendants: (1) Mercedes Walton, (2) Gerald F. Maas, (3) Mill M. Taymans, (4) Edward Modzelewsik, (5) Frederick C.S. Wilhelm, (6) Wanda D. Dearth, (7) Junior Winokur, (8) Daniel D. Richard, (9) Ronald Richard, (10) Charles D. Nyberg, (11) John v. Hargiss, (12) Cryo Cell International, Inc., (13) Weinick Sanders Leventhal & Co., LLP and (14) Mirsky, Furst & Associates, P.A. The suit 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 March 16, 1999 and May 20, 2003, thereby artificially inflating the price of Cryo Cell securities. During the Class Period, the Company issued statements that failed to disclose and/or misrepresented the following adverse facts, among others: (i) that the Company had materially overstated its earnings, net income and earnings per share; (ii) that the Company continually recognized revenue in violation of generally accepted accounting principles (GAAP) with respect to related-party transactions, revenue sharing agreements and revenue recognition for the sale of area licenses. As a result of the defendants' actions, the Company's financial results were materially overstated at all relevant times. On April 15, 2003, Cryo Cell issued a press release disclosing for the first time that it may be necessary to restate its financial results for fiscal years 2001 and 2002 because of improper recognition of revenue. On May 20, 2003, defendants revealed that the Company's new auditor had suddenly resigned, just a short period after it was retained. By May 21, 2003, Cryo Cell stock had lost most of its value, and traded at only $0.94 per share, a steep decline from the stock's Class Period high of over $10 per share in August 2001. For more details, contact Stephen A. Weiss, David R. Buchanan, or Eric T. Chaffin by Mail: One William Street, New York, New York 10004 by E-Mail: sweiss@seegerweiss.com or dbuchanan@seegerweiss.com or echaffin@seegerweiss.com by Phone: (212) 584-0700 or (877) 539-4125 INTERMUNE INC.: Marc Henzel Lodges Securities 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 all purchasers of the securities of InterMune, Inc. (NASDAQ:ITMN) during the period January 6, 2003 to June 11, 2003, inclusive. The complaint charges that the Company and the Company's CEO, W. Scott Harkonen, violated Section 10(b) and 20(a) of the Securities Exchange Act of 1934 by making false and misleading statements about one of the its leading products, Actimmune. Specifically, the complaint alleges that defendants were aware that demand for Actimmune was declining because: (1) the most recent clinical study showed that Actimmune was not effective in the treatment of certain pulmonary diseases; (2) Actimmune inventory levels were increasing; and (3) doctor demand was falling due, in part, to the Company's decision to curtail physician education, the lifeblood of InterMune's off-label sales of Actimmune. However, despite this knowledge, the Company falsely stated during the class period that it was on course to meet projected revenue figures, which had not been previously reduced to reflect lowered demand for the drug. On June 11, 2003, the Company announced that it was cutting its 2003 revenue guidance figures and slashing projected earnings from Actimmune. The Company also announced it had overstated the number of patients using Actimmune and that, contrary to its earlier representations, demand for Actimmune from physicians was flat. These disclosures sent the Company's stock price plummeting to $16.74, a 33% one-day fall. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave, Suite 202 Bala Cynwyd, PA 19004-2808, by Phone: 888-643-6735 or 610-660-8000, by Fax: 610-660-8080, by E-mail: Mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182. MATRIA HEALTHCARE: Charles Piven Lodges Stock Lawsuit in N.D. GA ---------------------------------------------------------------- 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 Matria Healthcare, Inc. (NasdaqNM:MATR) between October 24, 2001 and June 25, 2002, inclusive. The case is pending in the United States District Court for the Northern District of Georgia against Matria Healthcare, Inc. and certain members of its current and/or former officers and/or 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, P.A. 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 MATRIA HEALTHCARE: Chitwood & Harley Lodges Stock Lawsuit in GA --------------------------------------------------------------- Chitwood & Harley, LLP initiated a securities class action against Matria Healthcare, Inc., Parker H. Petit, Jeffrey D. Koepsell, and George W. Dunaway, in the United States District Court for the Northern District of Georgia. The lawsuit was filed on behalf of all persons who purchased or otherwise acquired the securities of Matria Healthcare, Inc. (NASDAQ: MATR), between October 24, 2001 and June 25, 2002, inclusive. The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between October 24, 2001 and June 25, 2002. During the class period, the defendants touted the "strong performance" of all of its diabetes businesses and repeatedly bragged about the company's growth, noting the signing of new contracts and anticipated contracts. Defendants assured the market during this time that they were ramping up the company's infrastructure and implementing a major systems change that would help them fulfill their goal to be the most technologically advanced provider in their sector of the health industry and that would significantly increase their capabilities. Citing their growth, defendants explained that the reason expenses had exceeded anticipated revenues at certain times was that it was difficult to time the need for additional personnel and infrastructure with the receipt of large contracts because "contractual negotiations can delay the anticipated start dates for new disease management programs." Unbeknownst to the investors, however, the complaint alleges that the company was experiencing serious known problems that rendered defendants' Class Period statements false and misleading and that defendants had a duty to disclose under Item 303(a)(ii) to Regulation S-K. Specifically, the complaint alleges that the defendants failed to disclose until June 25, 2002, despite a duty to do so, the following adverse, known facts: (1) the company's Health Enhancement Segment was experiencing significant "information system constraints" which led to unfilled customer orders; (2) the company's Facet Technologies division was experiencing higher costs as a result of undisclosed inventory and supply chain management problems; (3) Facet's gross margins were materially and adversely affected by decreasing price concessions from its major suppliers; (4) Matria' s gross profit margins were being negatively impacted by an increase in the price of one of its key drugs; and (5) the company's Health Enhancement revenues would be negatively impacted by at least $800,000 due to the bankruptcy of a health plan whose deteriorating financial condition the defendants knew of or were severely reckless in disregarding. The complaint alleges that the defendants were motivated to conceal these problems in order to inflate the purchase price of Matria common stock because defendants negotiated two acquisitions during the Class Period, using Matria common stock as currency. On June 25, 2002, after the close of trading, defendants shocked the market by revising the company's financial outlook for fiscal 2002 and revealing the problems discussed above. In response to the Company's shocking news, the price of Matria's common stock plummeted on unusually heavy volume the next trading day, dropping from nearly $12 to $7 before closing at $8.95 per share. A chorus of Wall Street analysts also downgraded the stock as a result. For more details, contact Lauren S. Antonino by Phone: 888-873-3999/404-873-3900 ext. 6888 or contact Jennifer L. Morris by Phone: 888-873-3999/404-873-3900 ext.6883 by E-mail: jlm@classlaw.com MERRILL LYNCH: Pomerantz Haudek Files Securities Suit in S.D. NY ---------------------------------------------------------------- Pomerantz Haudek Block Grossman & Gross LLP initiated a securities class action against Merrill Lynch Pierce Fenner & Smith and Phua K. Young, a managing director of Merrill Lynch, on behalf of investors who purchased the securities of Tyco International Ltd. (NYSE:TYC) during the period from September 9, 1999 through May 28, 2003, inclusive, in the United States District Court in the Southern District of New York. The lawsuit alleges that defendants engaged in an illegal scheme to defraud Tyco investors in violation of Securities & Exchange Commission (SEC) Rule 10b-5. According to the complaint, Mr. Young wrote and publicly issued hundreds of research reports on Tyco representing that he was an ``independent'' Merrill Lynch analyst, when in fact, Mr. Young described himself in an internal email as a ``LOYAL TYCO EMPLOYEE.'' It is further alleged that Mr. Young regularly sent drafts of his research reports to Tyco's Investor Relations Department for review of his opinions and conclusions, flew on Tyco corporate jets for business trips, accepted unlawful gifts from Tyco CEO Dennis Kozlowski, and with respect to at least one published research report, asked Tyco Investor Relations ``did I not sound pumped up enough?'' On May 28, 2003, the National Association of Securities Dealers (NASD) filed a disciplinary proceeding against Mr. Young alleging numerous violations against him for issuing research opinions to the marketplace that he did not personally believe in and which had no reasonable basis. For more details, contact Andrew G. Tolan by Phone: 888-476-6529 ((888) 4-POMLAW) or by E-mail: agtolan@pomlaw.com SINGING MACHINE: Marc Henzel Lodges Securities Suit in S.D. FL -------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Southern District of Florida on behalf of purchasers of the securities of The Singing Machine, Inc. (AMEX:SMD) between August 9, 2001 and June 27, 2003, inclusive, seeking to pursue remedies under the Securities Exchange Act of 1934. The action, is pending against the Company and: (1) Salberg & Company, P.A (the Company's auditors), (2) Edward Steele, (3) John F. Klecha, and (4) April Green 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 February 14, 2001 and July 14, 2003. The complaint alleges that Singing Machine emerged from bankruptcy in 1998, and issued a series of press releases emphasizing "record" net income to foster the impression that the Company had profitably emerged from bankruptcy and had successfully completed its corporate turnaround. In response to the Company's barrage of press release and public filings reporting strong financial results, Singing Machine's stock price soared to over $26 per share in March 2002. On June 27, 2003, Singing Machine shocked the market by announcing it would restate 2002 and possibly 2001 financial results, and would not be able to timely file its Annual Report on Form 10-K for the fiscal year ended March 31, 2003 in order to properly account for income tax provisions for fiscal 2003, and to report an inventory reserve for fiscal 2003. As a result, defendants revealed that net income for fiscal 2003 will be significantly below prior expectations. Singing Machine announced that the restatement will have the effect of reducing net income for fiscal 2002 and possibly fiscal 2001. On June 27, 2003, in late afternoon trading alone Singing Machine stock lost over 30% of its value on enormous trading volumes of over 460,000 shares traded -- in contrast to average trading volumes of around 50,000 shares. On July 14, 2003, defendants issued a press release revealing additional information about the restatement, and revealed that the Company's auditors had expressed "substantial doubt" about Singing Machine's ability to continue as a going concern. In response, on July 15, 2003, Singing Machine declined over 22% in morning trading alone. As now revealed, at all times during the Class Period, defendants issued false and misleading financial statements and press releases concerning Singing Machine's financial results. The financial statements of the Company made during the class Period, all of which implicitly and/or expressly were prepared in conformity with generally accepted accounting principles (GAAP), were materially false and misleading because the Company materially overstated its net income in its publicly issued financial statements. As a result of the Company's misrepresentations, Singing Machine investors have sustained tremendous losses. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave, Suite 202 Bala Cynwyd, PA 19004-2808, by Phone: 888-643-6735 or 610-660-8000, by Fax: 610-660-8080, by E-mail: Mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182. SINGING MACHINE: Schiffrin & Barroway Files Stock Lawsuit in FL --------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Southern District of Florida on behalf of all purchasers of the common stock of The Singing Machine, Inc. (AMEX:SMD) from February 14, 2001 through July 14, 2003, 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 February 14, 2001 and July 14, 2003, thereby artificially inflating the price of Singing Machine common stock. The complaint alleges that these statements were materially false and misleading because they failed to disclose and misrepresented the following adverse facts, among others: (1) that the Company had materially overstated its net income in violation of generally accepted accounting principles (GAAP); (2) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; (3) that the Company avoided taking sufficient changes to earnings in 2001 and 2002 to account for income tax liabilities; and (4) that as a result, the Company's financial results were materially overstated at all relevant times. On June 27, 2003, the Singing Machine announced that it would restate its fiscal 2002 financial statements and possibly fiscal 2001 financial statements to increase the accrual for income taxes. Moreover, the Company stated that the restatement will have the effect of reducing net income for fiscal 2002 and possibly fiscal 2001. Market reaction to the news was swift. The Singing Machine's shares fell 33%, or $1.80 per share, to close at $3.60 per share on June 27, 2003. On July 14, 2003, the Company announced further details about its restatement and also announced that ``its auditors have expressed 'substantial doubt' about Singing Machine's ability to continue as a going concern.'' News of this again shocked the market. Shares of the Singing Machine fell 19% percent to close at $3.03 per share on July 15, 2003. For more details, contact Marc A. Topaz or Stuart L. Berman by Phone: (888) 299-7706 (toll free) or (610) 667-7706 or by E- mail: info@sbclasslaw.com SINGING MACHINE: Cauley Geller Lodges Securities Suit in S.D. FL ---------------------------------------------------------------- The Law Firm of Cauley Geller Bowman & Rudman, LLP initiated a securities class action in the United States District Court for the Southern District of Florida on behalf of purchasers of The Singing Machine, Inc. (Amex: SMD) common stock during the period between August 9, 2001 and June 27, 2003, inclusive. The class period is being expanded to include purchases between February 14, 2001 and July 14, 2003. 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 February 14, 2001 and July 14, 2003, thereby artificially inflating the price of Singing Machine common stock. The complaint alleges that these statements were materially false and misleading because they failed to disclose and misrepresented the following adverse facts, among others: (1) that the Company had materially overstated its net income in violation of generally accepted accounting principles (GAAP); (2) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; (3) that the Company avoided taking sufficient changes to earnings in 2001 and 2002 to account for income tax liabilities; and (4) that as a result, the Company's financial results were materially overstated at all relevant times. On June 27, 2003, the Singing Machine announced that it would restate its fiscal 2002 financial statements and possibly fiscal 2001 financial statements to increase the accrual for income taxes. Moreover, the Company stated that the restatement will have the effect of reducing net income for fiscal 2002 and possibly fiscal 2001. Market reaction to the news was swift. The Singing Machine's shares fell 33%, or $1.80 per share, to close at $3.60 per share on June 27, 2003. On July 14, 2003, the Company announced further details about its restatement and also announced that "its auditors have expressed substantial doubt about Singing Machine's ability to continue as a going concern." News of this again shocked the market. Shares of the Singing Machine fell 19% percent to close at $3.03 per share on July 15, 2003. For more details, contact Samuel H. Rudman or David A. Rosenfeld, Jackie Addison, Heather Gann or Candace Randle by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 1-888-551-9944 by Fax: 1-501-312-8505 or by E-mail: info@cauleygeller.com ********* A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the Class Action Reporter. Submissions via e-mail to carconf@beard.com are encouraged. Each Friday's edition of the CAR includes a section featuring news on asbestos-related litigation and profiles of target asbestos defendants that, according to independent researches, collectively face billions of dollars in asbestos-related liabilities. The Asbestos Defendant Profiles is backed by an online database created to respond to custom searches. Go to http://litigationdatasource.com/asbestos_defendant_profiles.html ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2003. All rights reserved. ISSN 1525-2272. 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