/raid1/www/Hosts/bankrupt/CAR_Public/031008.mbx
C L A S S A C T I O N R E P O R T E R
Wednesday, October 8, 2003, Vol. 5, No. 199
Headlines
BERRY PACKING: Recalls Meat Products For Listeria Contamination
BOEING: Three 777s Experience Cracked Windshields Due To Wiring
BLUECROSS BLUESHIELD: MI Doctors Sue Due To Slow Reimbursement
CLICKFORMAIL.COM: Reaches Settlement For Consumer Fraud Lawsuit
DAIMLERCHRYSLER AG: Court OKs $300M Settlement With Shareholders
DELTA GROUP: Recalls Sun Dried Tomatoes For Undeclared Sulfites
DOREL JUVENILE: Reaches Settlement For Suit Over Defective Cribs
HEALTHTRONICS SURGICAL: Stands By OSOTRON Device Amidst Lawsuits
INSO CORPORATION: Ex-Officer Pleads Guilty To Securities Fraud
INTERSTATE BAKERIES: MO Court Orders Filing of Consolidated Suit
INTERSTATE BAKERIES: MO Derivative Lawsuit Stayed Due To Review
INTERSTATE BAKERIES: Settles Overtime Wage Lawsuit For $6.1 Mil
KPMG LLP: SEC Files Amended Lawsuit For Civil, Securities Fraud
LITARGIRIO: FDA Issues Warning V. Powder Over High Lead Content
LOUISIANA-PACIFIC CORPORATION: Agrees To Fund Inner Seal Pact
NEW HAMPSHIRE: Files Suit Against 22 Oil Firms Over Gas Additive
NEXTEL COMMUNICATIONS: Agrees To Settle Consumer Fraud Lawsuit
PHILIP MORRIS: High Court Rejects $80M Award To Oregon Smoker
ROCKIES FUND: SEC Imposes Sanctions For Securities Violations
SODEXHO MARRIOT: Allows African-American Bias Lawsuit To Proceed
TREECON RESOURCES: Settles Suit For Securities Fraud in NV Court
WASHINGTON MUTUAL: TX AG Examines Mortgage-Business Practices
WELLS FARGO: Faces Suit For Overcharging Home Equity Loan Fees
ZANDRIA CORPORATION: SEC Sues For Federal Securities Violations
ZANDRIA CORPORATION: SEC Files Lawsuit for Securities Violations
Meetings, Conferences & Seminars
* Scheduled Events for Class Action Professionals
* Online Teleconferences
New Securities Fraud Cases
ALLIANCE CAPITAL: Rabin Murray Lodges Securities Suit in S.D. NY
ALLOU HEALTHCARE: Marc Henzel Lodges Securities Suit in E.D. NY
ALSTOM SA: Bernstein Liebhard Lodges Securities Suit in S.D. NY
CATALINA MARKETING: Marc Henzel Files Securities Suit in M.D. FL
CONSTAR INTERNATIONAL: Milberg Weiss Files Stock Suit in E.D. PA
DVI INC.: Marc Henzel Lodges Securities Fraud Lawsuit in E.D. PA
FIFTH THIRD: Marc Henzel Commences Securities Suit in S.D. Ohio
FIRSTENERGY CORPORATION: Federman & Sherwood Files OH Stock Suit
FLOWSERVE CORPORATION: Chitwood & Harley Lodges Stock Suit in TX
FLOWSERVE CORPORATION: Marc Henzel Lodges Securities Suit in TX
IMPATH INC.: Marc Henzel Launches Securities Lawsuit in S.D. NY
JILL GROUP: Marc Henzel Lodges Securities Fraud Suit in MA Court
NOVEN PHARMACEUTICALS: Marc Henzel Lodges Securities Suit in FL
POLAROID CORPORATION: Marc Henzel Lodges Securities Suit in NY
QUEST SOFTWARE: Marc Henzel Commences Securities Suit in C.D. CA
READ-RITE CORPORATION: Wechsler Harwood Files Stock Suit in CA
STELLENT INC.: Marc Henzel Lodges Securities Lawsuit in MN Court
SUREBEAM, INC.: Bernstein Liebhard File Stock Lawsuit in S.D. CA
READ-RITE CORPORATION: Wechsler Harwood Files Stock Suit in CA
VERTEX PHARMACEUTICAL: Marc Henzel Lodges Stock Suit in MA Court
*********
BERRY PACKING: Recalls Meat Products For Listeria Contamination
---------------------------------------------------------------
The U. Food Safety and Inspection Service instituted the recall
of the following Berry Packing, Inc. products, following routine
Microbiological testing, that suggest they could be foci for the
growth of the bacteria Listeria monocytogenes.
The following products distributed to retail establishments:
(1) "BERRY, GARLIC HOT SAUSAGE LINKS" Each vacuum package
has a net weight of approximately 20 oz. and is stamped
with the code "4255"
(2) "BERRY, SUMMER SAUSAGE" Each vacuum package has a net
weight of approximately 10 - 14 oz. and is stamped with
the code "4245"
(3) "BERRY, SUGAR CURED - SMOKED HAM" with a box code of
"4245"
The products, which were distributed to establishments in
Arkansas, Mississippi and Louisiana, were all packaged on
September 26, 2003. Each package bears the establishment number
"2325" inside the USDA mark of inspection.
Consumption of food contaminated with Listeria monocytogenes can
cause listeriosis, an uncommon but potentially fatal disease.
Healthy people rarely contract listeriosis. However,
listeriosis can cause high fever, severe headache, neck
stiffness and nausea. Listeriosis can also cause miscarriages
and stillbirths, as well as serious and sometimes fatal
infections in those with weak immune systems - infants, the
frail or elderly and persons with chronic disease, HIV infection
or in chemotherapy.
FSIS has received no reports of illnesses associated with
consumption of the products.
For more details, contact Brad Davis, Manager, Berry Packing,
Inc. by Phone: (870) 364-4856, or contact the toll-free USDA
Meat and Poultry Hotline: 1-888-MPHotline. The hotline is
available in English and Spanish and can be reached from 10 a.m.
to 4 p.m. (Eastern Time) Monday through Friday. Recorded food
safety messages are available 24 hours a day.
BOEING: Three 777s Experience Cracked Windshields Due To Wiring
---------------------------------------------------------------
Three Boeing 777 aircraft have windshields covered with cracks,
a number that experts say is unusual for an aircraft, the
Associated Press reports. No passengers were hurt.
Alitalia Flight 610 on its Rome-to-New York flight made a safety
emergency landing in Shannon, Ireland in July, after it seemed
to shudder in mid-air. Passengers screamed and started to panic
after they smelled smoke. Bruce Northrup, a New York City
banker returning from a wedding with his wife and 15-year-old
son, told AP, "People were yelling, `Tell us what's going on."
The pilot told the 300 or so passengers that the airplane had
"serious technical problem" and told them to stay calm, as the
twin-engine jet made a U-turn and began descending gradually.
After the landing, passengers saw that the plane's windshield
was covered with cracks.
"That window looked like something out of an automobile
junkyard," Mr. Northrup told AP.
The Boeing 777 is the Company's newest and largest twin-engine
jet. It started its flights in 1995 and carries up to 550
people. 138 Boeing 777s are registered in the United States,
Federal Aviation Administration records state, according to AP.
Upon investigation, the problem was traced to faulty wiring in a
window heater. The 777s windshield, made of three layers of
glass, acrylic and epoxy, can get brittle in the cold, thin air
at cruising altitude seven miles up. A heater warms the
windshield to stay elastic, but the wires on the three planes
loosened and shorted out.
The wires on the Alitalia flight caused a a small fire and the
innermost layer of the window cracked, Boeing spokeswoman Liz
Verdier told AP.
The flight crew put out the fire with an extinguisher in three
seconds and then brought the plane down to 10,000 feet. That
reduced the difference between the pressurized cockpit and the
thin air outside, Bill Waldock, aviation safety professor at
Embry-Riddle Aeronautical University in Arizona, told AP. The
danger at high altitudes is that the windshield could shatter
and loose items or people could be sucked out, though that's
never happened on a commercial flight.
The Company has sent a directive to airlines instructing them
how to tighten the wire connections, and is developing circuit
breakers that will prevent sparking and the window from
overheating, Ms. Verdier told AP.
FAA officials told AP Boeing is taking appropriate action.
"Anytime there's a fire, there's a concern to us," FAA spokesman
Paul Takemoto said. "But cracked windshields rarely affect the
safety of the aircraft."
BLUECROSS BLUESHIELD: MI Doctors Sue Due To Slow Reimbursement
--------------------------------------------------------------
A group of doctors have filed a lawsuit against BlueCross
BlueShield of Michigan, claiming the insurance company takes too
long to reimburse them, the Associated Press Newswires reports.
In addition, the Oakland County Medical Society drafted
legislation aimed at forcing BlueCross and other health carriers
to pay reimbursement claims in a more timely fashion.
A number of doctors have had to take out loans to meet payroll
while they wait for reimbursement checks, according to the
medical society. In some cases, the delay has been as long as
18 months.
Linda Watson, a lawyer representing the doctors, said her
clients want their case to be certified as a class action, and
they hope other doctors will join. "We strongly feel these
doctors have been victimized," Ms. Watson told AP. "They
submitted clean claims that were routinely denied."
Spokeswoman Helen Stojic for BlueCross BlueShield told AP, "Our
average payment time is nine days for a physician claim. There
are situations that arise that can delay payments, but when you
look at the causes, there are multiple reasons . You shouldn't
file a lawsuit every time there is a snafu."
Ms. Stojic further added that complicating the situation was the
fact that doctors submitted claims that were not covered. She
made the charge that some doctors attempted to increase their
payments by billing for non-covered services. She added she was
not implying it was done in a "fraudulent manner."
Ms. Stojic also stated another element to the reimbursement
issue. She said it was her understanding that much of the
dispute centers on gynecological reimbursement, conceding that
there was a reduction in gynecological reimbursement; that the
payments now bring them more in line with what Medicare pays.
The Oakland County Medical Society is seeking support from
lawmakers for legislation it has drafted that would force
BluCross and other health insurers to be more prompt in their
payments.
The doctors' lawsuit against BlueCross BlueShield of Michigan
was filed in the US District Court for the Eastern District of
Michigan. Plaintiffs in this action are represented by attorney
Linda M. Watson of Cox Hodgman & Giarmarco PC, among others
CLICKFORMAIL.COM: Reaches Settlement For Consumer Fraud Lawsuit
---------------------------------------------------------------
The United States District Court for the Northern District of
Illinois approved a settlement between Texas-based
ClickForMail.com and thousands of people to resolve charges that
the company failed to deliver on its promises of providing major
credit cards for a fee, AP Newswire reports.
The Federal Trade Commission said that ClickForMail.com Inc.,
doing business as AllPreApproved.com, sent e-mail "spam"
offering approved credit cards in exchange for an advance
payment of $49.95. Thousands of people who paid the fee did not
get the credit cards, the FTC said, according to an AP report.
Consumers who responded to the e-mail clicked on a link to the
company's Web site and had the fee deducted from their checking
accounts before they received the promised credit card.
The company agreed to repay customers $815,000 to resolve
federal charges. Under the settlement, the company is
prohibited from making false claims about credit cards and
selling its customer lists.
The company could not immediately be reached for comment, AP
stated. A message posted on the AllPreApproved.com Web site
said the company was cooperating with the FTC and had suspended
its sales and promotions.
The FTC approved the settlement with a 5-0 vote and announced it
Monday. By settling, the Austin-based company does not
acknowledge breaking any law. However, if the court finds that
ClickForMail.com misstated its financial condition, the company
could be made to pay $3.6 million, the FTC said.
The possible $3.6 million settlement in the Federal Trade
Commission's complaint titled FTC v. ClickForMail.com Inc., case
number 03C 3033 filed in May 2003 was approved on October 2,
2003 in the U.S. District Court for the Northern District of
Illinois by Judge Coar and Magistrate Judge Bobrick. Plaintiff
in this action is represented by attorney William J. Hodor and
defendant by Marimichael Skubel, Esq., Rachel Pernic, Esq. and
Joseph M. Graham, Esq. of Kirkland & Ellis.
DAIMLERCHRYSLER AG: Court OKs $300M Settlement With Shareholders
----------------------------------------------------------------
The US District Court in Delaware granted preliminary approval
for the proposed $300 million settlement of a shareholder class
action against DaimlerChrysler AG, Yahoo Newswire reports.
The lawsuit alleged the automaker misrepresented the nature of
Daimler-Benz's 1998 Chrysler acquisition as a merger of equals.
German-American car giant DaimlerChrysler denied the charge and
has said it settled to avoid risking a potentially larger award.
US District Judge Joseph J. Farnan determined earlier that the
class consists of everyone, except foreign investors, who
exchanged their shares of Chrysler Corporation for shares of
DaimlerChrysler in the November 1998 merger or bought shares of
DaimlerChrysler on the open market from the time of the merger
through November 17, 2000.
Barrack Rodos & Bacine, the plaintiff's counsel, said the final
hearing for the settlement is scheduled December 5, Yahoo
Newswire reports. The Policemen's Annuity & Benefit Fund of
Chicago, Municipal Employees Annuity & Benefit Fund of Chicago,
Denver Employees' Retirement Plan and Florida State Board of
Administration are the lead plaintiffs.
The investors' class action lawsuit against DaimlerChrysler AG
with the Policemen's Annuity & Benefit Fund of Chicago,
Municipal Employees Annuity & Benefit Fund of Chicago, Denver
Employees' Retirement Plan and Florida State Board of
Administration as lead plaintiffs reached a $300 million
settlement in the U.S. District Court for the District of
Delaware before Judge Joseph J. Farnan. Plaintiffs in this
action are represented by Barrack Rodos & Bacine.
DELTA GROUP: Recalls Sun Dried Tomatoes For Undeclared Sulfites
---------------------------------------------------------------
The Canadian Food Inspection Agency (CFIA) and The Delta Group
(Canada) are warning consumers with sensitivities to sulfites
not to consume Galil Sun Dried Tomatoes in Oil. This product,
which may contain sulphites not declared on the label, may cause
serious and life-threatening reactions in people who are
sensitive to it.
The affected product is packaged in glass bottles with Net
Weight 410 g (Drain Weight 240 g) bearing codes "L21121 USE BY
7/30/2004" and "L33713 USE BY 12/3/2003." Some bottles have
correction stickers on the lid which declare "CONTAIN
SULPHITES", therefore, only the bottles which do not mention the
presence of sulphites are affected by this alert.
Galil Sun Dried Tomatoes in Oil, a product of Turkey, with
importer name Galil Importing Corporation, NY, USA is being
voluntarily recalled from the marketplace by The Delta Group
(Canada), Markham. This product has been distributed in
Ontario. There have been no reported illnesses associated with
the consumption of this product.
For more details, contact Mr. Amir Nejatian by Phone:
(905) 474-9600 or contact The CFIA by Phone: 1-800-442-2342,
8:00 a.m. to 4:00 p.m. local time - Monday to Friday.
DOREL JUVENILE: Reaches Settlement For Suit Over Defective Cribs
----------------------------------------------------------------
Columbus, Indiana-based Dorel Juvenile Group, Inc. and Counsel
for a Class comprised of certain of Dorel Juvenile Group's
customers today announced that they have reached an agreement to
settle a class action lawsuit challenging the sale of full size
baby cribs with ten-spindle mattress platforms.
Plaintiffs allege that the crib design was unsafe for infant
use. The units in question were manufactured between 1994 and
1998.
The Company denied the allegations, but later agreed to settle
the suit. Under terms of the settlement, whose fairness was
preliminarily evaluated by the court on August 26, 2003,
purchasers of these cribs will be eligible to receive either a
crib repair kit or a manufacturer's rebate coupon of $55.00
redeemable with proof of purchase of any Dorel Juvenile Group
product. In addition, the Dorel Juvenile Group will donate $1
million in current juvenile inventory product to one or more yet
to be agreed upon children's charities.
For more details, contact the Chaney Settlement Administration
by Mail: P.O. Box 824, Columbus, IN 47202 or by Phone:
1-800-630-6735
HEALTHTRONICS SURGICAL: Stands By OSOTRON Device Amidst Lawsuits
----------------------------------------------------------------
HealthTronics Surgical Services, Inc. a leading provider of
minimally invasive urologic and orthopaedic services, denied the
charges in the purported shareholder class actions filed against
it and certain of its officers and directors in the US District
Court for the Northern District of Georgia, that allege
violations of the federal securities laws relating to
disclosures about the effectiveness of the Company's OssaTron(r)
device, used in the treatment of plantar fasciitis.
The complaints allegesthat 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 January 4, 2000 and
July 25, 2003, thereby artificially inflating the price
of HealthTronics' common stock, an earlier Class Action Reporter
story states (October 6,2003).
"The claims are without merit", Dr. Argil Wheelock, CEO of
HealthTronics, said in a statement. "The allegations in the
lawsuits are based on the clinical trial data reviewed by the
FDA in their approval of the OssaTron device. We firmly
stand behind the results of our clinical trial. As previously
disclosed, we have treated as of the end of the second quarter
of 2003 a cumulative total of approximately 12,000 patients with
the OssaTron, with very low re-treatment rates. We also
continue to sign additional contracts with insurance companies
for coverage of treatment with the OssaTron. We will
vigorously defend against these claims."
HealthTronics Surgical Services, Inc. is one of the nation's
leading providers of non-invasive and minimally invasive
surgical services for certain urologic and orthopaedic
conditions. The company provides technical and administrative
services to physicians, hospitals and ambulatory surgery centers
using extracorporeal shock wave devices.
The securities fraud suit titled Thomas v. HealthTronics
Surgical Services et al., civil action number 1:03-CV-2800 was
filed on September 16, 2003 in the U.S. District Court for the
Northern District of Georgia. Plaintiffs in this action are
represented by Chitwood & Harley.
INSO CORPORATION: Ex-Officer Pleads Guilty To Securities Fraud
--------------------------------------------------------------
The Securities and Exchange Commission announced that Richard P.
Vatcher, former officer of Inso Corporation, pleaded guilty to
five counts of securities fraud and causing false reports to be
filed with the Commission in connection with charges brought by
the US Attorney for the District of Massachusetts.
Inso Corporation, Inc. was later known as eBT International,
Inc., a now defunct software company headquartered in Boston,
Massachusetts. Mr. Vatcher is scheduled to be sentenced on
January 12, 2004. He faces a maximum penalty of 10 years in
prison, followed by a 3-year term of supervised release, and a
$1,000,000 fine on each count.
Mr. Vatcher, of Framingham, Massachusetts, was vice president of
international sales at Inso. Mr. Vatcher admitted during his
plea hearing before a Massachusetts federal court that on
multiple occasions in or about 1998, he made, and caused others
to make, false and misleading reports that his sales group had
completed certain agreements for the sale of Inso products
valued at more than $3.6 million.
In fact, Mr. Vatcher admitted that he had provided customers
with side agreements that gave the purported customers the right
to cancel or modify sales. Because the customers had the right
to cancel the sales, the revenue from these transactions should
not have been included in Inso's reported financial results.
Mr. Vatcher further admitted to deliberately concealing the side
agreements from Inso's finance department with the intention of
causing Inso to recognize revenue for the phony sales.
As a result of Mr. Vatcher's actions, Inso materially overstated
its revenues for the quarters ended March 31, 1998, June 30,
1998, and September 30, 1998, in press releases and in Forms 10-
Q filed with the Commission.
Previously, on June 21, 2002, the Commission filed a civil
enforcement action against Mr. Vatcher in the US District Court
for the District of Massachusetts based on the same conduct.
Simultaneous with the filing of the complaint, Mr. Vatcher
consented, without admitting or denying the allegations in the
complaint, to entry of a final judgment permanently enjoining
him from future violations of Section 17(a) of the Securities
Act, Sections 10(b), 13(a), 13(b)(2)(A), and 13(b)(5) of the
Exchange Act and Rules 10b-5, 12b-20, 13a-13, and 13b2-1
thereunder and ordering him to pay a $25,000 civil penalty.
For more information see Litigation Release No. 17578 (June 21,
2002). The suit is titled "SEC v. Richard P. Vatcher, Civil
Action No. 02-CV-11245 (REK) United States District Court in
Massachusetts."
INTERSTATE BAKERIES: MO Court Orders Filing of Consolidated Suit
----------------------------------------------------------------
The United States District Court for the Western District of
Missouri ordered plaintiffs in the securities class actions
filed against Interstate Bakeries Corporation and certain of its
current or former officers and directors to file a consolidated
amended suit by October 6,2003.
The suits allege that between September 17, 2002, and December
17, 2002, company officials made misleading statements to keep
the stock price artificially inflated so that various officers
would have time to sell some of their Interstate stock. Between
September 20 and October 16, seven company officers or directors
sold Interstate stock in blocks ranging from 1,700 shares to
75,000 shares, an earlier Class Action Reporter story states
(April 29, 2003 issue).
The defendants currently are scheduled to respond within 45 days
after the filing of the amended suit. The litigation is in its
preliminary stages and the amount of potential loss, if any,
cannot reasonably be estimated.
INTERSTATE BAKERIES: MO Derivative Lawsuit Stayed Due To Review
---------------------------------------------------------------
The shareholder derivative lawsuit filed against certain of
Interstate Bakeries Corporation's current and former officers
and directors in Missouri state court has been stayed due to
review being conducted by a special Review Committee to evaluate
the derivative demand.
The derivative suit seeks damages and other relief. Plaintiffs
allege that the defendants in this action breached their
fiduciary duties to the Company by using material non-public
information about the Company to sell IBC stock at prices higher
than they could have obtained had the market been aware of the
material non-public information.
The Company's board of directors previously had received a
shareholder derivative demand from the plaintiffs in the June
2003 derivative lawsuit, requesting legal action by the Company
against certain of its officers and directors.
The review is ongoing. While that review is underway, the
lawsuit is stayed until December 8, 2003.
INTERSTATE BAKERIES: Settles Overtime Wage Lawsuit For $6.1 Mil
---------------------------------------------------------------
Interstate Bakeries Corporation reached a settlement for a class
action filed on behalf of certain of its route sales
representatives (RSRs) in the State of Washington, alleging that
the Company had failed to pay required overtime wages under
state law.
The Company agreed to settle the suit for $6,100,000, and the
settlement is final. The Company revealed in a disclosure to
the Securities and Exchange Commission that it has reserves that
will sufficiently cover the costs of the settlement. The
settlement is expected to be paid by October 17, 2003.
KPMG LLP: SEC Files Amended Lawsuit For Civil, Securities Fraud
---------------------------------------------------------------
The Securities and Exchange Commission filed an amended
complaint in the civil fraud injunctive action pending in the US
District Court for the Southern District of New York against
KPMG LLP and four KPMG partners to include charges of fraud
against an additional KPMG partner, Thomas J. Yoho, in
connection with KPMG's audits of Xerox Corporation from 1997
through 2000. The SEC seeks injunctions, disgorgement of all
fees and civil money penalties against KPMG and the five KPMG
partners named as defendants.
The action was originally filed against KPMG and four of its
partners on January 29, 2003. As in the original complaint, the
amended complaint alleges that KPMG and its partners permitted
Xerox to manipulate its accounting practices to close a $3
billion "gap" between actual operating results and results
reported to the investing public.
Year after year, the KPMG partners falsely represented to the
public that their audits were conducted in accordance with
generally accepted auditing standards (GAAS) and that Xerox's
financial reports fairly represented the company's financial
condition and were prepared in accordance with generally
accepted accounting principles (GAAP).
The Commission's amended complaint also repeats allegations that
beginning at least as early as 1997, Xerox initiated or
increased reliance on various accounting devices to manipulate
its equipment revenues and earnings. Most of these "topside
accounting devices" violated GAAP and most improperly increased
the amount of equipment revenue from leased office equipment
products which Xerox recognized in its quarterly and annual
financial statements filed with the Commission and distributed
to investors and the public.
This improper revenue recognition had the effect of inflating
equipment revenues and earnings beyond what actual operating
results warranted. In addition, the amended complaint alleges
that the defendant KPMG partners fraudulently permitted Xerox to
manipulate reserves to boost the company's earnings.
Thomas J. Yoho, a resident of Greenwich, Connecticut and a
certified public accountant, was the Concurring Review partner
for KPMG on the Xerox audit from 1994 until after the 2000 audit
was completed and KPMG was replaced as Xerox's outside audit
firm. Among the responsibilities of the Concurring Review
partner are to review key audit workpapers and audit reports and
confer with the rest of the engagement team as necessary to give
additional assurance that financial statements conform to
accounting, reporting and regulatory requirements.
The amended complaint alleges that Mr. Yoho reviewed and
evaluated the work of the KPMG audit team, and in that capacity,
Mr. Yoho signed off on the Xerox audit team's audit despite his
knowledge of Xerox's fraudulent accounting practices. Mr. Yoho
signed audit workpapers year after year attesting that no
matters had come to his attention that caused him to believe
that the financial statements covered by the firm's audit
reports were not in conformity with GAAP. He further attested
that KPMG's audits of Xerox were performed in accordance with
GAAS.
However, the amended complaint alleges that from 1997 to 2001,
Mr. Yoho learned that Xerox used a series of non-GAAP accounting
practices and regularly made significant top-side accounting
adjustments in order to compensate for poor operational
performance.
After this fraudulent conduct was investigated and exposed,
Xerox, employing a new auditor, issued a $6.1 billion
restatement of its equipment revenues and a $1.9 billion
restatement of its pre-tax earnings for the years 1997 through
2000.
The Commission's amended complaint alleges that the KPMG
partner's fraudulent conduct allowed Xerox to inflate equipment
revenues by approximately $3 billion and inflate pre-tax
earnings by approximately $1.2 billion in the company's 1997
through 2000 financial results.
The amended complaint alleges that Mr. Yoho violated Section
17(a) of the Securities Act of 1933 and Sections 10(b) and 10A
of the Securities Exchange Act of 1934 (Exchange Act) and
Exchange Act Rule 10b-5, and aided and abetted violations of
Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the
Exchange Act, and Exchange Act Rules 10b-5, 13a-1, 13a-13, 12b-
20 and 13b2-1.
On April 11, 2002, the Commission brought an injunctive action
against Xerox based on the same allegations of accounting fraud
as are alleged against the KPMG defendants, as well as other
allegations. Without admitting or denying the allegations of
the complaint, Xerox consented to the entry of a Final Judgment
that permanently enjoined the company from violating the
antifraud, reporting and record keeping provisions of the
federal securities laws.
Xerox also paid a $10 million civil penalty, agreed to restate
its financial statements and agreed to hire a consultant to
review the company's internal accounting controls and policies.
The suit is titled SEC v. KPMG LLP, Joseph T. Boyle, Michael A.
Conway, Anthony P. Dolanski and Ronald A. Safran , Civil Action
No. 03 CV 0671 (DLC) (SDNY)] (LR-18389; AAE Rel. 1888)
LITARGIRIO: FDA Issues Warning V. Powder Over High Lead Content
---------------------------------------------------------------
The United States Food and Drug Administration (FDA) issued a
public warning against the use of "LITARGIRIO", a yellow- or
peach-colored powder manufactured by Roldan Ferreira, for any
health-related or personal purposes, because of its high lead
content, AP Newswire reports.
According to the report, Litargirio has no proven health
benefits and, because of its high lead content, poses health
risks when used in contact with the skin or ingested. These
risks are particularly serious for children.
FDA first learned about this product from the Rhode Island
Department of Health, which issued a health alert after
discovering that several children undergoing treatment for lead
poisoning had been using "LITARGIRIO" as a deodorant. Lab
reports showed that the children's' blood lead levels had
climbed to as high as four times the level known to cause
behavioral and cognitive problems even after abatement of
household lead sources and medical treatment. Their blood lead
levels began to decline only after use of "LITARGIRIO" was
discontinued.
The powder has been used as a deodorant, a foot fungicide, a
treatment for burns and wound healing, and for other purposes as
a traditional remedy, particularly by people from the Dominican
Republic. It contains up to 79 per cent lead - a highly toxic
substance that can cause permanent neurological damage in
children.
"LITARGIRIO" is sold in 2-inch by 3-inch clear packets by
convenience and specialty stores catering to Spanish-speaking
customers - particularly those from the Dominican Republic.
FDA advises the public to:
(1) Stop all personal use of "LITARGIRIO" immediately;
(2) Place unused product in a sealable container or plastic
bag and contact your local sanitation/waste department
regarding appropriate methods for disposal;
(3) Thoroughly wash hands and any other body parts that may
have come in contact with the powder. Wash affected
household surfaces with soap and hot water.
(4) Ask a health care provider to test children or
pregnant/nursing women for lead poisoning if they have
used "LITARGIRIO"
For more information about this recall, contact the National
Lead Information Center Hotline: 1-800-424-5323.
LOUISIANA-PACIFIC CORPORATION: Agrees To Fund Inner Seal Pact
-------------------------------------------------------------
Louisiana-Pacific Corporation (LP) LPX announced its intention
to fund the remaining claims under the Inner-Seal(R) siding
class action settlement.
As of August 6, 2003, approximately $18 million in claims
remained. As specified in the terms of the settlement
agreement, LP will provide the funds to satisfy these remaining
claims in the fall of 2004. Payments to claimants will follow
soon thereafter.
"Providing payments to the remaining claimants will bring to a
close our monetary obligations under the settlement agreement,"
stated Curt Stevens, LP Executive Vice President, Administration
and Chief Financial Officer. "We do not anticipate any future
charges to earnings from this decision as we believe our current
reserves are adequate."
In April 2003, LP implemented a Claimant Offer Program to speed
up payments to claimants. LP will continue to honor the offers
extended through this program, should homeowners prefer to
receive payments quicker. The program remains entirely
voluntary.
LP is a premier supplier of building materials, delivering
innovative, high-quality commodity and specialty products to its
retail, wholesale, homebuilding and industrial customers.
For more details, visit the firm's Website:
http://www.lpcorp.com.
In re Louisiana-Pacific Inner-Seal(R) Siding Products Liability
Litigation, case numbers 95-879-JE and 95-1453-JE was filed in
the U.S. District Court for the District of Oregon. Plaintiffs'
representation in this action includes Ness Motley Loadbolt
Richardson & Poole, Hagens & Berman, Tousley Brain and Foster
Pepper & Schefelman; defendant represented by Robert Schick of
Vinson & Elkins LLP.
NEW HAMPSHIRE: Files Suit Against 22 Oil Firms Over Gas Additive
----------------------------------------------------------------
The state of New Hampshire is suing 22 major oil companies
because of the gasoline additive MTBE (methyl tertiary-butyl
ether), which has been found to pollute water, Gov. Craig Benson
said Monday, AP Newswire reports.
The lawsuit, filed in Merrimack County Superior Court, claims
that the oil companies have been adding increasing amounts of
the additive to gasoline, knowing full well that it would end up
contaminating water supplies. MTBE was added to gasoline to cut
air pollution.
The state is asking the court to hold the companies responsible
for all costs, including investigative and cleanup costs. The
suits were announced at a news conference by Gov. Benson and
Attorney General Peter Heed, AP reports.
New Hampshire's MTBE pollution lawsuit against 22 oil companies
including Exxon Mobil, Royal Dutch/Shell Group, ConocoPhillips,
Sunoco and ChevronTexaco was filed on October 6, 2003 in the
Superior Court of Merrimack County, New Hampshire. Plaintiff in
this action is represented by Attorney General Peter Heed.
NEXTEL COMMUNICATIONS: Agrees To Settle Consumer Fraud Lawsuit
--------------------------------------------------------------
Wireless telephone company Nextel Communications Inc. will offer
customers free minutes as part of a settlement of a class action
lawsuit filed by the US attorney general and counterparts in 22
states over a new fee posted by Nextel on their customers'
statements, Reuters News reports.
The $1.55 fee is being charged to recover costs incurred to meet
new government regulations that would allow people to retain
their phone numbers when switching carriers; allocating phone
numbers; and locating callers in an emergency, Christopher
Doherty, a spokesman at Reston, Virginia-based Nextel, told
Reuters.
The lawsuits challenged the legality of the fee and whether the
disclosure to customers was adequate. Under the settlement,
Nextel will offer free minutes to customers and will list the
fee on billing statements in a more prominent location than
where it was originally displayed.
Nextel already has made changes in how it notifies its
customers; so it will not have to make further changes to its
billing and advertising as a result of the settlement, added Mr.
Doherty.
The settlement still needs to be approved by a federal judge.
PHILIP MORRIS: High Court Rejects $80M Award To Oregon Smoker
-------------------------------------------------------------
The United States Supreme Court threw out an $80 million verdict
against cigarette-maker Philip Morris, saying that the judgment,
for the family of an Oregon janitor who died in 1997 of lung
cancer, should first be reviewed by lower courts to ensure it is
not unconstitutionally excessive, CBSNews.com reports.
It was the second victory for Philip Morris in its legal battles
with the family of Jesse D. Williams, of Portland, who accused
the company of concealing information about the dangers of
smoking.
Mr. Williams started smoking in the 1950s when serving in the
Army in Korea, gradually increasing this to three packs of
Marlboros a day. After a jury in 1999 ordered the company to
pay the Williams family $79.5 million in punitive damages, the
judge reduced the award to $32 million. A state appeals court
reinstated the punitive damages award last year, AP reports.
The Supreme Court ordered Oregon courts to review the judgment,
in light of their ruling earlier this year that a jury went too
far in ordering an insurance company to pay $145 million over
the way it handled claims from a car accident.
Andrew Frey of Washington, an attorney for Philip Morris, had
told the court that like the State Farm judgment, the verdict
against Philip Morris was out-of-line, CBS News reports.
Robert Peck of Washington, one of the Mr. Williams' lawyers,
told CBS News that by setting aside the judgment, the Supreme
Court would be "inviting every unhappy punitive damage
defendant" to file appeals. Jesse Williams' family said he kept
smoking because he did not believe a company would sell
something that was truly harmful.
ROCKIES FUND: SEC Imposes Sanctions For Securities Violations
-------------------------------------------------------------
The Securities and Exchange Commission imposed sanctions on the
Rockies Fund, Inc. (Fund), a closed-end investment company,
Stephen G. Calandrella, the Fund's president and director,
Charles M. Powell and Clifford C. Thygesen, independent
directors of the Fund and John C. Power, president of Redwood
MicroCap Fund, Inc., a closed end investment company not charged
in the proceeding.
The Commission found that it was in the public interest to:
(1) order all of the Respondents to cease and desist from
committing or being a cause of any further violations
of the provisions they were have found to have violated
or to have aided and abetted;
(2) order Mr. Calandrella to pay a civil penalty of
$500,000 and Mr. Thygesen and Mr. Powell each to pay a
civil penalty of $160,000; and
(3) bar Mr. Calandrella permanently, and Mr. Thygesen and
Mr. Powell, with the right to reapply after three
years, from associating with or acting as an affiliated
person of an investment company.
The Commission found that Mr. Calandrella and Mr. Power violated
Section 10(b) of the Securities Exchange Act of 1934 and Rule
10b-5 thereunder by manipulating the market for Premier
Concepts, Inc. (Premier) securities through the use of matched
orders and wash sales. The Commission further found that the
Fund, Mr. Calandrella, Mr. Powell, and Mr. Thygesen violated
Exchange Act Section 10(b) and Rule 10b-5 by making untrue
statements of material facts in the Fund's annual and quarterly
reports by misclassifying restricted shares and overvaluing such
shares, and that the Fund and Mr. Calandrella violated those
provisions also by overstating the number of shares in the
Fund's portfolio.
The Commission also found that, through these actions, the Fund
violated, and Mr. Calandrella, Mr. Powell, and Mr. Thygesen
aided and abetted the Fund's violations of, Section 13(a) of the
Exchange Act and Rules 12b-20, 13a-1, and 13a-13 by filing
reports that made untrue statements of material facts and that
did not comply with GAAP and Regulation S-X.
Finally, the Commission found that Mr. Calandrella violated
Section 57(k)(1) of the Investment Company Act of 1940 by
causing the Fund to purchase Premier stock to settle a legal
claim threatened against Mr. Calandrella personally, a form of
impermissible compensation, and that he violated Exchange Act
Section 10(b) and Rule 10b-5 by failing to disclose the
settlement to the Fund's independent board members.
SODEXHO MARRIOT: Allows African-American Bias Lawsuit To Proceed
----------------------------------------------------------------
The United States Supreme Court refused to prohibit about 2,600
current and former black managers from suing food services
company Sodexho Marriott Services Inc. in what the company
described as the largest employment discrimination case of its
kind, AP Newswire reports.
The black workers claim the company broke federal civil rights
laws, but the company said federal regulators have found no
evidence of discrimination. Company lawyer Todd J. Horn of
Baltimore told AP if the lawsuit is allowed, any company can
face a large class-action suit if a minority is underrepresented
in upper-level management positions.
"Until now, such allegations of glass-ceiling obstacles to
upper-level management positions have never been held to permit
a massive class action absent proof that the barriers to
promotion emanate from discriminatory policies," Mr. Horn told
the court in a filing.
Lawyers for the plaintiffs disputed the $1 billion amount that
the company maintains is at stake, and said that they have not
sought specific damages. They want the company to revise its
promotion procedures.
Kerry Alan Scanlon of Washington, representing the workers, told
AP that black managers "face a glass wall, as well as a glass
ceiling, because they have been shunted into dead-end `black'
accounts that serve and are supervised mostly by African-
Americans."
The justices had been asked to use the case to clarify when
judges should block large class actions. They declined, without
comment.
The employment discrimination lawsuit titled Cynthia McReynolds
v. Sodexho Marriott Services Inc., case number 208 FRD 428 (DDC
2002) was filed in 2001 and granted class action status in the
U.S. District Court of the District of Columbia by Judge Ellen
Huvelle in July 2002. Plaintiffs in this action are represented
by attorney Kerry Alan Scanlon of Kaye Scholer LLP and defendant
by attorney Todd J. Horn.
TREECON RESOURCES: Settles Suit For Securities Fraud in NV Court
----------------------------------------------------------------
Treecon Resources, Inc. has settled the consolidated class
action filed in the United States District Court for the
District of Nevada against it and certain of its officers and
directors. The suit asserts liability based on alleged
misrepresentations that the plaintiffs claimed resulted in the
market price of the Company's stock being artificially inflated.
In March 2000, the Court dismissed the plaintiffs' claims
against one of the Company's officers and directors and
restricted the plaintiffs from pursuing a number of their claims
against the other defendants. In November 2000, the Court
granted motions for summary judgment, disposing of all of the
claims asserted by the plaintiffs. The plaintiffs appealed
those decisions to the United States Court of Appeals for the
Ninth Circuit.
On June 5, 2002, the Ninth Circuit rendered a decision that
affirmed several of the trial court's rulings, but reversed
other rulings and remanded portions of the case for further
proceedings in the federal court.
On remand, the case was set for trial to commence in March 2003.
In the days immediately prior to the scheduled trial date, the
defendants offered to settle all claims advanced in the
litigation in consideration of an aggregate payment of $13,000.
In June 2003, the defendants paid $13,000 to the plaintiffs
collectively, and the lawsuit was dismissed with prejudice,
preventing the plaintiffs from re-filing or advancing similar
claims in the future.
WASHINGTON MUTUAL: TX AG Examines Mortgage-Business Practices
-------------------------------------------------------------
Washington Mutual's mortgage-business practices are being
examined by the Texas Attorney General's Office, the latest in a
series of customer-related issues dogging the bank's nationwide
growth, The Seattle Times reports. Texas officials are looking
into allegations of lost mortgage payments, improper
foreclosures, poor customer service, tardy insurance payments,
after receiving more than 200 consumer complaints, said Angela
Hale, a spokeswoman for Texas Attorney General Gregory Abbott.
While Washington Mutual has received increasing attention
recently as it has expanded nationwide, it also has been hit by
class actions. In Minnesota, customers recently brought a class
action, alleging that Washington Mutual charges customers
excessive fees for pre-paying mortgages. Last month, Washington
Mutual settled with three law firms in Seattle and San
Francisco, that were representing about 1,000 customers who
complained about lost paperwork, erroneous fees and mishandled
payment of property taxes.
Washington Mutual agreed to hear the individual complaints and
review any disputes. Washington Mutual said it will correct
account problems on a case-by-case basis, including refunding
fees mistakenly charged, one of the law firms said.
Washington Mutual said it is taking steps to improve customer
service and that most such problems are in the past.
The consumer lawsuit McDonnell et al. v. Washington Mutual Inc.
et al., Court File No. CT 03-5525 was filed on April 1, 2003 in
the U.S. District Court of the District of Minnesota in Hennepin
County. Plaintiffs Jimmy Timms, Bruce and Lori Yncera et al.
are represented by Aaron Biber of Mansfield Tanick & Cohen P.A.
WELLS FARGO: Faces Suit For Overcharging Home Equity Loan Fees
--------------------------------------------------------------
A class action has been filed against Wells Fargo Bank, the
nation's top home mortgage lender, alleging that the San
Francisco-based company fraudulently overcharged its customers
on home equity loans, The San Diego Union-Tribune reports.
The lawsuit was filed in Baltimore County Circuit Court, in the
state of Maryland, and claims that the lender collected
recordation fees from its customers even though refinancing
loans are exempt from such fees. The complaint alleges
negligence, breach of contract and violations of Maryland's
Consumer Protection Act.
Attorney Matthew H. Azrael of Towson told the Daily Record of
Baltimore that he is unsure how many Maryland residents may be
affected by the overcharges, but he said that a study in
Frederick County, Maryland, found 97 similar transactions
related to Wells Fargo customers.
"If the sampling in Frederick County is any indication, we
believe it is a very large class of consumers who are affected
by this (the overcharges due to recordation fees," Mr. Azrael
said.
The named plaintiffs, Lawrence and Karen Adashek of Pikesville,
Maryland, refinanced their home equity loan with Wells Fargo in
May. Their settlement statement reflects a charge of $613 for
"mortgage registration." However, the state's Tax-Property
article exempts refinancing from that fee, Mr. Azrael said.
Instead, he said, the Adasheks should have paid only $292 to
record the deed.
ZANDRIA CORPORATION: SEC Sues For Federal Securities Violations
---------------------------------------------------------------
The United States Securities and Exchange Commission filed suit
in the US District Court for the Southern District of California
against Brian Lee, Todd DiRoberto, Lonnie Dragon and Trevor
Watson, all from San Diego, California, for violations of the
antifraud, securities registration, and broker-dealer
registration provisions of the federal securities laws. Each of
the defendants had previously been associated with Zandria
Corporation, a defunct Internet company previously located in
San Diego.
In the suit, the Commission alleges that between November 1998
and September 2000, Mr. Lee, Mr. DiRoberto, Mr. Dragon and Mr.
Watson offered more than $10 million in securities and raised
approximately $6 million from more than 200 investors nationwide
in two purported private placement offerings of stock in Zandria
Entertainment Networks, Inc. (ZEN) and LevelRed Investments,
Inc.
The Commission further alleges that the ZEN and LevelRed
Investments offerings were fraudulent because, among other
things, the defendants failed to disclose that Mr. Lee and Mr.
DiRoberto, both convicted felons, owned and controlled ZEN.
In addition, the complaint alleges that the defendants used
high-pressure, "boiler-room" sales tactics and failed to
disclose to investors the full extent of their commissions and
other fees, which exceeded forty percent.
The complaint alleges that Mr. Lee, Mr. DiRoberto, Mr. Dragon
and Mr. Watson violated the antifraud, securities registration
and broker-dealer registration provisions of the federal
securities laws.
The suit is entitled "SEC v. Brian Lee, Todd DiRoberto, Lonnie
Dragon and Trevor Watson, Civ. Action No. 03CV - 1957" filed in
the United States District Court for the Southern District of
California. (LR-18390)
ZANDRIA CORPORATION: SEC Files Lawsuit for Securities Violations
----------------------------------------------------------------
The Securities and Exchange Commission filed suit in the US
District Court for the Southern District of California against
B. Roland Frasier, III and Richard May, both of San Diego,
California, for violations of the antifraud and securities
registration provisions of the federal securities laws.
Mr. Frasier and Mr. May had previously been associated with
Zandria Corporation, a defunct Internet company previously
located in San Diego. In the suit, the Commission alleges that
between October 1999 and November 2000, Mr. Frasier and Mr. May
orchestrated a fraudulent scheme regarding the trading of
Zandria stock on the Over-The-Counter bulletin board.
The Commission alleges that Mr. Frasier and Mr. May obtained
control over more than 90 percent of Zandria's free-trading
stock through a series of sham transactions. The Commission
further alleges that Mr. Frasier and Mr. May then paid a network
of sales agents undisclosed commissions to tout Zandria stock to
investors, while they sold Zandria stock, splitting the
proceeds.
The Commission has further agreed to a settlement with Mr.
Frasier wherein he consents to a judgment:
(1) permanently enjoining him from violating Section 10(b)
of the Exchange Act and Rule 10b-5 thereunder;
(2) barring him from participating in any penny stock
offering;
(3) ordering him to pay $280,000 disgorgement plus
$65,898.43 in prejudgment interest; and
(4) ordering him to pay a $110,000 civil money penalty
The complaint alleges that Mr. Frasier and Mr. May violated the
antifraud and securities registration provisions of the federal
securities laws. The complaint is titled "SEC v. Roland
Frasier, III and Richard A. May, Civ. Action No. 03CV - 1958
BTM (JFS)" pending in the United States District Court For the
Southern District of California. (LR-18391)
Meetings, Conferences & Seminars
* Scheduled Events for Class Action Professionals
-------------------------------------------------
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November 10-11, 2003
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November 17, 2003
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December 8-9, 2003
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CONSTRUCTION DEFECT AND MOLD LITIGATION CONFERENCE
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MOLD LITIGATION 101 CONFERENCE
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January 29, 2004
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February 02, 2004
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February 23-24, 2004
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February 23-24, 2004
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THE IMPACT OF LORILLAR ON STATE AND LOCAL REGULATION OF TOBACCO
SALES
AND ADVERSTISING
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New Securities Fraud Cases
ALLIANCE CAPITAL: Rabin Murray Lodges Securities Suit in S.D. NY
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Rabin, Murray & Frank LLP initiated a securities class action in
the United States District Court for the Southern District of
New York, on behalf of all persons or entities who purchased or
otherwise acquired AllianceBernstein Growth & Income Fund
(Nasdaq:CBBDX) (Nasdaq:CBBCX), AllianceBernstein Health Care
Fund (Nasdaq:CBBDX) (Nasdaq:CBBCX), AllianceBernstein
Disciplined Value Fund (Nasdaq:ADGBX) (Nasdaq:ADGCX),
AllianceBernstein Mid-Cap Growth (Nasdaq: CHCBX) (Nasdaq:CHCCX),
and other AllianceBernstein family of funds owned and operated
by Alliance Capital Management Holding L.P. (NYSE:AC), and its
subsidiaries and other affiliates, between October 2, 1998 and
September 29, 2003.
The complaint names:
(1) Alliance Capital Management Holding L.P.,
(2) Alliance Capital Management Corporation,
(3) Alliance Capital Management, L.P.,
(4) AXA Financial, Inc.,
(5) Gerald Malone,
(6) Charles Schaffran,
(7) Edward J. Stern,
(8) Canary Capital Partners, LLC,
(9) Canary Investment Management, LLC,
(10) Canary Capital Partners, Ltd,
(11) each of the Funds, and
(12) John Does 1-100.
The Complaint alleges that defendants violated Sections 11 and
15 of the Securities Act of 1933; Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder; and Section 206 of the Investment Advisers Act of
1940. The complaint charges that, throughout the Class Period,
certain of the defendants failed to disclose that they
improperly allowed certain hedge funds, including Canary and
certain Alliance hedge funds, to engage in "late trading" and
"timing" of the Funds' securities.
Late trades are trades received after 4:00 p.m. EST that are
filled based on that day's net asset value, as opposed to being
filled based on the next day's net asset value, which is the
proper procedure under SEC regulations. Late trading allows
favored investors to make use of market-moving information that
only becomes available after 4 P.M and has been compared to
betting on a horse race that already has been run.
Timing is excessive, arbitrage trading undertaken to turn a
quick profit and which ordinary investors are told that the
funds police. Late trading and timing injure ordinary mutual
fund investors -- who are not allowed to engage in such
practices -- and are acknowledged as improper practices by the
Funds.
In return for receiving extra fees from Canary and other favored
investors, Alliance Capital Management Holding and its
subsidiaries allowed and facilitated Canary's timing and late
trading activities, to the detriment of class members, who paid,
dollar for dollar, for Canary's improper profits.
These practices were undisclosed in the prospectuses of the
Funds, which falsely represented that the Funds actively police
against timing and represented that post-4 P.M. EST trades will
be priced based on the next day's net asset value and that
premature redemptions will be assessed a charge.
For more details, contact Eric J. Belfi or Gregory Linkh by
Mail: 275 Madison Avenue, New York, New York 10016, by Phone:
(800) 497-8076 or (212) 682-1818, by Fax: (212) 682-1892, or by
E-mail: email@rabinlaw.com.
ALLOU HEALTHCARE: Marc Henzel Lodges Securities Suit in E.D. NY
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The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Eastern
District of New York, on behalf of purchasers of Allou
Healthcare, Inc. (Amex: ALU) publicly traded securities during
the period between June 22, 1998 and April 9, 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 June 28, 1998 and April
9, 2003, thereby artificially inflating the price of Allou
securities.
The Complaint alleges that defendants issued a series of
materially false and misleading statements concerning the
Company's financial results. In particular, the Complaint
alleges:
(1) that Allou was materially overstating its accounts
receivables by at least $78 million, thereby
overstating its revenues and earnings;
(2) that Allou was materially overstating its inventory,
thereby overstating its net worth; and
(3) as a result of the foregoing, Allou's financial
statements were not prepared in accordance with GAAP
and were therefore materially false and misleading.
On April 9, 2003, Allou announced that "its lenders have filed
an involuntary petition for bankruptcy in the Eastern District
of New York under the provisions of chapter 11, title 11, of the
United States Code." Following this news, on April 9, 2003,
AMEX suspended trading in Allou's common stock.
Thereafter, press reports revealed that an outside restructuring
expert that had been retained to run Allou discovered, among
other things, that "only $30 million of $108 million in accounts
receivable reported by Allou to its banks seemed to be valid."
Furthermore, on April 24, 2003, Allou announced that it
"believes that the levels of assets collateralizing loans were
substantially overstated in recent reports submitted by the
Company to its senior lenders. The preliminary results of the
Company's investigation indicate that inventory was overstated
by approximately $35,000,000 and that accounts receivable may be
overstated by $75,000,000 to $80,000,000, for a total
overstatement of $110,000,000 to $115,000,000. The Company has
retained a forensic accounting firm to assist with the
continuing investigation of this matter."
For more details, 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
ALSTOM SA: Bernstein Liebhard Lodges Securities Suit in S.D. NY
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Bernstein Liebhard & Lifshitz LLP initiated a securities class
action on behalf of all persons who acquired securities of
Alstom SA (NYSE:ALS) between May 26, 1999 to June 29, 2003,
inclusive. The case is pending in the United States District
Court for the Southern District of New York against the Company
and:
(1) Pierre Bilger,
(2) Patrick Kron, and
(3) Philippe Jaffre
The complaint charges that Alstom and certain of its officers
and directors violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations
to the market during the Class Period.
Specifically, the Complaint alleges that Defendants made
numerous false and misleading public statements concerning the
financial performance of its transportation subsidiary, Alstom
Transportation Inc. (ATI). For example, Defendants did not
properly recognize costs incurred in a rolling -- stock supply
railcar contract at ATI and lacked the internal controls needed
to ascertain its true financial condition.
As a result, Defendants reported inflated financial results,
which inflated the price of Alstom securities during the Class
Period. The truth was revealed at the end of the Class Period
when Alstom announced that it was conducting an internal review
following notice of accounting improprieties on a railcar
contract by ATI. As part of the review, the Company found that
"losses have been significantly understated in ATI's accounts,
"in substantial part due to accounting improprieties by the
understatement of actual costs incurred, including "the non-
recognition of costs incurred in anticipation of shifting them
to other contracts, and by the understatement of forecast costs
to completion."
As a result, the Company announced that it would record an
additional net after-tax charge of 51 million euros ($58
million) for the year ended March 31, 2003. The Company also
announced that the SEC and the FBI had begun informal inquiries
into the issues related to ATI and that both the Senior Vice
President and the Vice President of Finance of ATI were
suspended pending the completion of the review.
In response to this announcement, the price of Alstom securities
closed at $3.41 per share, less than 10% of the Class Period
high of $34.98 per share.
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: ALS@bernlieb.com or visit the firm's Website:
http://www.bernlieb.com.
CATALINA MARKETING: Marc Henzel Files Securities Suit in M.D. FL
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The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Middle
District of Florida, Tampa Divistion, on behalf of purchasers of
the securities of Catalina Marketing Corporation (NASD: POS)
between January 17, 2002 and June 30, 2003, inclusive, seeking
to pursue remedies under the Securities Exchange Act of 1934.
The action, is pending against the Company and:
(1) Daniel D. Granger,
(2) Michael G. Bechtol,
(3) David M. Diamond, and
(4) Christopher W. Wolf
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 numerous positive statements
concerning the Company's ability to grow its revenues and
earnings at a rapid pace and the strong demand that existed for
the Company's products, especially at its Health Resource
division.
Throughout the Class Period, defendants issued highly positive
statements regarding in an effort to create the impression that
Catalina' revenues were growing and the Company was well
positioned to generate strong profitability. In response,
Catalina stock traded at over $36 per share during April 2002.
In particular, defendants repeatedly emphasized the success of
the Company's Health Resource division, which defendants touted
as a strong revenue contributor. On April 13, 2003, defendants
partially disclosed material problems at Health Resource,
including the fact that Catalina would miss revenue and earnings
targets because of "disappointing" results for the Health
Resource division. Prior to revealing this information,
defendants sold over $10,000,000 worth of their Catalina
holdings.
The magnitude of the problems within Health Resource again came
partially to light on June 30, 2003. After the close of
trading, defendants revealed that the Company would not be able
to timely file its Annual Report on Form 10-K, because of
certain "revenue recognition issues" at Health Resource.
As a result of defendants improper revenue recognition, the
press release revealed that it will have to restate financial
results for fiscal 2003. As a result, Catalina stock dropped to
slightly over $16 per share on unusually large trading volumes -
- a far cry from the stock's Class Period high of over $39.
On July 15, 2003, defendants revealed that the accounting issues
were not limited to solely Health Resource. In a July 15, 2003
press release, defendants announced that "(t)he company is now
also reviewing certain other revenue recognition timing matters
in its core domestic business as well as with Catalina Health
Resources."
For more details, 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
CONSTAR INTERNATIONAL: Milberg Weiss Files Stock Suit in E.D. PA
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Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities
class action filed in the United States District Court for the
Eastern District of Pennsylvania on behalf of purchasers of
Constar International, Inc. (NASDAQ:CNST) stock pursuant to
Constar's November 2002 Initial Public Offering.
The complaint charges Constar and certain of its officers and
directors with violations of the Securities Act of 1933.
Constar is a wholly owned subsidiary of Crown Cork & Seal Co.
(Crown). Crown is a leading supplier of packaging products to
consumer marketing companies around the world.
In November 2002, Constar completed an IPO of 10.5 million
shares of stock pursuant to a Prospectus/Registration Statement.
The IPO, which was solely comprised of shares sold by Crown, was
priced at $12 per share for total proceeds of $117 million after
underwriting discounts and commissions.
The complaint alleges that the Prospectus/Registration Statement
was materially false and misleading and failed to disclose,
among other things, that:
(1) The Company was then experiencing an unseasonably low
demand in its carbonated soft drink bottle business;
(2) The Company was then experiencing an adverse impact in
the Company's revenue stream due to the "pass-through"
of lower resin costs;
(3) The Company was then experiencing an adverse trend in
the Company's conventional PET container shipments;
(4) The Company's management had changed its focus just
prior to the IPO and purposely reduced its higher
volume performs, causing a Q4 revenue shortfall; and
(5) The Company's goodwill was impaired and defendants
failed to timely take an impairment charge.
As this adverse information was disclosed, the Company's shares
eventually plummeted to $5.00 per share. Public investors who
purchased shares traceable to the IPO based on Constar's
representations, paying $12 per share for Constar stock, have
suffered tens of millions of dollars in damages.
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
DVI INC.: Marc Henzel Lodges Securities Fraud Lawsuit in E.D. PA
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The Law Offices of Marc S. Henzel initiated a securities class
action on behalf of purchasers of the securities of DVI, Inc.
(OTC: DVIX.PK) between November 7, 2001 and August 13, 2003,
inclusive seeking to pursue remedies under the Securities
Exchange Act of 1934. The action is pending in the United
States District Court for the Eastern District of Pennsylvania,
against:
(1) Michael A. O'Hanlon, former President and Chief
Executive Officer and Director of DVI, and
(2) Steven R. Garfinkel, DVI's former Chief Financial
Officer
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 November 7, 2001 and
August 13, 2003.
According to the complaint, throughout the Class Period,
Defendants engaged in a fraudulent scheme to deceive the public
as to DVI's true financial condition. Defendants allegedly
issued positive statements regarding DVI's business and
operations, and overall growth in publicly disseminated press
releases and SEC filings and claimed that they were a fair
presentation of DVI's business.
According to the complaint, Defendants failed to disclose
material adverse facts, including, but not limited to, the
Company's failure to write down the value of certain impaired
assets; its failure to properly account for and report non-
recurring transactions; its failure to adopt adequate internal
controls; and its material overstatement of its assets and
earnings.
As a result of Defendants' fraudulent scheme, DVI stock became
artificially inflated during the Class Period, trading as high
as $20.99 per share on June 17, 2002, thereby causing damages to
Class Period purchasers of DVI securities.
On August 13, 2003, after the market closed, Defendants issued a
press release revealing DVI's intention to file for Chapter 11
Bankruptcy protection and that the Company had not yet secured
debtor-in-possession financing. The Company blamed its dire
situation on the "recent discovery of apparent improprieties in
its prior dealings with lenders involving misrepresentations as
to the amount and nature of collateral pledged to lenders."
In the same release, Defendants announced that DVI's Chief
Financial Officer, Defendant Steven Garfinkel, had been placed
on administrative leave. This revelation came after Defendants
announced that DVI's auditor, Deloitte & Touche LLP, had
resigned over a dispute concerning the Company's accounting for
certain transactions; that the Company had depleted all
availability on its credit facilities; that DVI failed make
interest payments on its 9 7/8 percent Senior Notes due to
severe liquidity constraints; and that the SEC had rejected the
Company's filing of its quarterly report for the third quarter
of 2003.
Immediately following the Company's announcement that it would
file for bankruptcy, on August 14, 2003, the New York Stock
Exchange suspended trading of DVI stock and Senior Notes,
pending delisting. On the same day, DVI stock closed at $0.30
per share, representing a one-day decline of 62.50 percent.
For more details, 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
FIFTH THIRD: Marc Henzel Commences Securities Suit in S.D. Ohio
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The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Southern
District of Ohio, Western Division, on behalf of purchasers of
the securities of Fifth Third Bancorp (Nasdaq: FITB) between
September 21, 2001 to January 31, 2003 inclusive who have been
damaged thereby. The action, is pending against the Company
and:
(1) George A. Schaefer, Jr. (CEO and President),
(2) Neal E. Arnold (CFO) and
(3) David J. DeBrunner (Controller)
The Honorable Sandra S. Beckwith is the Judge presiding over the
action.
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 September 21,
2001 to January 31, 2003.
The Complaint alleges, among other things, that Fifth Third
issued press releases and filed financial reports with the SEC
which represented that the Company had successfully and
seamlessly integrated a large corporate acquisition (Old Kent)
into its operations and further represented that its business
was stronger than ever and that the Company would continue to
grow and provide investment-safety.
According to the complaint, these statements were materially
false and misleading because they failed to disclose that the
Old Kent (and other) merger(s) seriously strained the Company's
infrastructure, causing deficiencies in its internal controls
and other business-critical systems. The alleged motive in this
action was the Company's plan to acquire a Tennessee-based bank
using FifthThird stock as currency.
On September 10, 2002, the Company announced that it would be
taking a $54 million after-tax ($81.8 million pre-tax) charge
for impaired funds, resulting from a botched accounting
reconciliation. According to the complaint, the Company played
down the incident as a one-time immaterial event, which was
false and misleading because, according to the complaint, it was
symptomatic of material, company-wide infrastructure
deficiencies.
On November 14, 2002 the Company revealed that the write-off had
triggered investigations by banking regulators and the SEC.
According to the Complaint, the Company continued to insist,
falsely, that its controls were adequate. On January 31, 2003,
the Company reported that banking regulators would likely take
formal action against the Company, which would likely require
Fifth Third to improve its internal controls by, among other
things, adding personnel and processes.
On February 3, 2003, the first trading day following the
announcement, the price of Fifth Third common stock closed at
$52.21 per share, a decline of 15% from the closing price on
November 14, 2002 close of $62.53, the day that Fifth Third
first revealed that it was being investigated by banking
regulators and the SEC.
For more details, 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
FIRSTENERGY CORPORATION: Federman & Sherwood Files OH Stock Suit
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Federman & Sherwood initiated a securities class action against
FirstEnergy Corporation (NYSE: FE) in the United States District
Court for the Northern District of Ohio against the Company,
certain current and former officers and directors of the
Company.
The complaint alleges violations of federal securities laws,
including allegations of issuing a series of material
misrepresentations to the market between the dates of the class
period, April 24, 2002 and August 5, 2003, whereby artificially
inflating the price of the securities.
For more details, contact William B. Federman by Mail: 120 N.
Robinson, Suite 2720, Oklahoma City, OK 73102 by Phone:
(405) 235-1560 by Fax: (405) 239-2112 or by E-mail:
wfederman@aol.com
FLOWSERVE CORPORATION: Chitwood & Harley Lodges Stock Suit in TX
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Chitwood & Harley filed a securities class action in the United
States District Court for the Northern District of Texas, Dallas
Division, on behalf of all purchasers of securities of Flowserve
Corporation (NYSE:FLS), between October 23, 2001, and September
27, 2002, inclusive. The suit is brought against the Company,
C. Scott Greer, and Renee J. Hornbaker.
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 October 23, 2001 and
September 27, 2002, thereby artificially inflating the price of
Flowserve securities.
During the class period, the Company alleges that Defendants,
among other things:
(1) misrepresented that the Company's aftermarket sales
(the Company's "quick turnaround" business) were
steady, stable and consistent streams of revenue;
(2) misrepresented that the Company's growth made it less
dependent upon the chemical and industrial segments,
which had historically been very sensitive to economic
downturn;
(3) failed to disclose that the Company had instructed one
or more of its plants to stop building inventory as a
result of the projected (albeit undisclosed) continuing
decline in sales; and
(4) without any reasonable basis, projected full year 2002
earnings at ranges that were unattainable due to the
declines the Company was experiencing in critical
business segments.
On September 27, 2002, the Company warned of a 21% earnings
shortfall for the quarter ending September 30, 2002, and cut its
full year 2002 earnings guidance by over 60%, to $1.45 per
share, from the $2.30 per share earnings guidance shared with
investors during road show presentations promoting Flowserve's
public offerings less than six months prior.
Market reaction to the Company's announcement was swift and
severe. Flowserve shares fell over 38% to close at $8.70 on
September 27, 2002, a decline of more than 75% from the Class
Period high of $34.90 reached on May 2, 2002.
Prior to disclosure of the true facts, Flowserve completed two
public offerings of its common stock, thereby raising more than
$430 million, and Flowserve insiders sold their personally held
Flowserve common stock for substantial profit.
For more details, contact Lauren Antonino or Jennifer Morris by
Mail: 1230 Peachtree Street, Suite 2300, Atlanta, Georgia 30309
by Phone: 1-888-873-3999 or 404-873-3900 ext. 6883 by E-mail:
jlm@classlaw.com or visit the firm's Website:
http://www.classlaw.com
FLOWSERVE CORPORATION: Marc Henzel Lodges Securities Suit in TX
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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 all purchasers of the common
stock of Flowserve Corporation (NYSE: FLS) from October 23, 2001
through September 27, 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 October 23, 2001 and
September 27, 2002, thereby artificially inflating the price of
Flowserve securities.
During the Class Period, as alleged in the complaint, the
Company issued statements that failed to disclose and/or
misrepresented the following adverse facts, among others:
(1) that the Company's declining revenues and earnings
during 2001 and 2002 would have caused the Company to
violate its loan covenants but for its public stock
offerings, which enabled the Company to reduce its
debt, obtain favorable interest rates and debt
refinancings from lenders, and enable Flowserve to fund
the acquisition of the Flow Control Division (IFC) of
Invensys plc, among other things;
(2) that demand for the Company's products had materially
declined, especially its aftermarket sales or ``quick-
turnaround business'' resulting in revenue and earnings
shortfalls;
(3) that the Company's recent acquisitions, including
Ingersoll-Dresser Pump Co. (IDP) and IFC, had not
materially altered the Company's dependence on revenue
streams from the Chemical industry, or further
stabilized its aftermarket revenue streams for its pump
and valve business through significant cross-selling
opportunities, among other things;
(4) that the Company's reorganizations, downsizing and
facility closures, following its acquisition of
Innovative Valve Technologies, Inc. (``Invatec''), IDP
and IFC had failed to eliminate excess manufacturing
capacity resulting in the material erosion of the
Company's gross margins and earnings;
(5) that the Company had severe and continuing integration
problems following the acquisition of Invatec,
resulting in a disruption of the Company's service and
maintenance operations and contributing to the decline
in Flowserve's high margin service revenues, eventually
necessitating the reorganization of the Company's
service business segment; and
(6) based on the foregoing, defendants' opinions,
projections and forecasts concerning the Company and
its operations were lacking in a reasonable basis at
all times.
On September 27, 2002, the Company warned of a 21% earnings
shortfall for the quarter ending September 30, 2002, and cut its
full year 2002 earnings guidance by over 60%, to $1.45 per
share, from the $2.30 per share earnings guidance shared with
investors during roadshow presentations promoting Flowserve's
public offerings less than six months prior.
Market reaction to the Company's announcement was swift and
severe. Flowserve shares fell over 38% to close at $8.70 on
September 27, 2002, a decline of more than 75% from the Class
Period high of $34.90 reached on May 2, 2002.
For more details, 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
IMPATH INC.: Marc Henzel Launches Securities Lawsuit in S.D. NY
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The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Southern
District of New York, on behalf of purchasers of the securities
of IMPATH, Inc. (NasdaqNM: IMPH) between April 25, 2001 and July
29, 2003, inclusive, seeking to pursue remedies under the
Securities Exchange Act of 1934. The action is pending against
the Company and:
(1) Carter Eckert,
(2) James Agnello,
(3) David Cammarata,
(4) Richard P. Adelson, and
(5) Anu D. Saad
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 April 25, 2001 and July
29, 2003.
The complaint alleges that IMPATH's quarterly press releases and
SEC filings were materially false and misleading because they
failed to disclose that the Company had materially overstated
its accounts receivables and improperly capitalized a material
asset, thereby artificially inflating the Company's reported
Class Period results and financial condition.
On July 30, 2003, before the open regular trading, IMPATH issued
a press release announcing that its audit committee had begun an
investigation into possible "accounting irregularities" by the
Company and that the Company believes it has overstated its
accounts receivable had been improperly capitalizing its
GeneBank asset.
As a result of these developments, IMPATH warned that a
restatement of previously filed financial reports was "likely,"
and that the Company has advised its creditors that its
financial reports "may have been inaccurate as a result of these
issues."
In response to this announcement, the NASDAQ Stock Market halted
trading in the Company's common stock and announced that the
stock will not resume trading until IMPATH provides NASDAQ with
additional information.
For more details, 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
JILL GROUP: Marc Henzel Lodges Securities Fraud Suit in MA Court
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The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the District of
Massachusetts on behalf of all purchasers of the common stock of
J. Jill Group, Inc. (NasdaqNM: JILL) from February 12, 2002
through December 4, 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 February 12, 2002 and
December 4, 2002, thereby artificially inflating the price of J.
Jill Group securities.
The Complaint alleges that defendants issued a series of
materially false and misleading statements concerning the
Company's operations and financial results. In particular, the
Complaint alleges that defendants' statements were materially
false and misleading because defendants failed to disclose and
misrepresented:
(1) that the Company's same-store sales growth -- a
operating metric that is important to investors in
retailing stocks but which was not highlighted by the
Company during the Class Period -- was declining as
demand for the Company's products weakened;
(2) that the Company was amassing a material amount of
product which was of diminishing value and would have
to be discounted in promotional campaigns, thereby
causing the Company to experience declining financial
results;
(3) that the Company was not collecting taxes in certain
States where it made Internet sales and also had a
retail store. As a result, the Company was exposed to
the heightened risk that it would be subject to
regulatory scrutiny; and
(4) as a result of the foregoing, defendants' earnings
projections and positive statements about the Company
were lacking in a reasonable basis and were therefore
materially false and misleading.
On December 5, 2002, prior to the open of the market, J. Jill
Group shocked the market by announcing that it was revising its
earnings for the fourth quarter of 2002. The Company reported
that it expects fourth quarter diluted earnings per share to
range between $0.25 and $0.30.
In response to this announcement, the price of J. Jill common
stock declined from $23.01 per share to $16.52 per share, a
decline of 28%, on extremely heavy volume. Prior to the end of
the Class Period, J. Jill insiders sold more than $17 million of
their personally-held stock to the unsuspecting public.
For more details, 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
NOVEN PHARMACEUTICALS: Marc Henzel Lodges Securities Suit in 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 Noven
Pharmaceuticals, Inc. (NASDAQ: NOVN) common stock during the
period between October 29, 2001 and April 28, 2003.
The complaint charges Noven and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Noven develops, manufactures and markets transdermal drug
delivery systems. The Company is currently developing a
methylphenidate transdermal drug delivery system for attention-
deficit/hyperactivity disorder (ADHD) called MethyPatchr.
During the Class Period, Noven was engaged in the development
and testing of MethyPatchr. Noven began screening and
enrollment for a repetition of a Phase III clinical study of the
drug on October 29, 2001.
The complaint alleges that defendants' false and misleading
statements regarding the rationale and marketing strategies for
approval of MethyPatchr permitted Noven to artificially inflate
the value of its technology to shareholders and thereby minimize
the impact of financial uncertainties relating to serious
marketed product issues during the Class Period. Moreover, it
allowed defendants to reap bonuses and insider trading proceeds.
The true facts, which were known by each of the defendants but
concealed from the investing public during the Class Period,
were as follows:
(1) MethyPatchr did not possess the safety and efficacy of
immediate release oral methylphenidate products;
(2) The utility and advantages for MethyPatchr had been
misrepresented by pointing to unmet needs and product
advantages that did not and would not exist by the time
Noven expected NDA approval;
(3) The FDA was aware of the reasons why MethyPatchr would
not be considered as safe or efficacious as Noven had
claimed;
(4) Transdermal drug delivery systems have been the source
of serious medication errors that would complicate the
product's contemplated use; and
(5) For one or more reasons related to the safety or
efficacy of the product, the MethyPatchr NDA submitted
on June 27, 2002 would not be "approvable" as submitted.
As a result of the defendants' false and misleading statements,
Noven's stock traded at inflated prices during the Class Period,
increasing to as high as $27.45 on June 17, 2002, whereby the
Company's top officers and directors reaped bonuses and insider
trading proceeds, selling more than $500,000 worth of their own
shares.
For more details, 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
POLAROID CORPORATION: Marc Henzel Lodges Securities Suit in NY
--------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Southern
District of New York on behalf of purchasers of Polaroid
Corporation (OTC Pink Sheets: PRDCQ) publicly traded securities
during the period between January 26, 2000 and August 9, 2001,
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 numerous statements and
filing quarterly and annual reports with the SEC describing the
Company's financial performance. The Company's auditor,
defendant KPMG, also issued unqualified audit opinions regarding
the Company's financial statements during the class period.
As was recently disclosed in a Report issued by Perry M.
Mandarino, the Court-appointed Examiner in the Polaroid
bankruptcy proceeding, defendants' statements issued throughout
the Class Period were materially false and misleading because
defendants knew or should have known that the Company's
financial condition had significantly deteriorated and was much
more severe than was being represented to the public.
For more details, 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
QUEST SOFTWARE: Marc Henzel Commences Securities Suit in C.D. CA
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Central
District of California on behalf of purchasers of Quest
Software, Inc. (NASDAQ: QSFT) publicly traded securities during
the period between April 30, 2002 and July 23, 2003.
The complaint charges Quest and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Quest provides application and information availability
software solutions that enhance the performance and reliability
of e-business, enterprise and custom applications and enable the
delivery of information across the enterprise.
The complaint alleges that during the Class Period, defendants
caused Quest's shares to trade at artificially inflated levels
through the issuance of false and misleading financial
statements.
On July 23, 2003, Quest revealed that its 2002 and Q1 03 results
were false when issued due to a "computational error" in revenue
recognition. The stock dropped below $9 per share on this news.
For more details, 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
READ-RITE CORPORATION: Wechsler Harwood Files Stock Suit in CA
--------------------------------------------------------------
Wechsler Harwood LLP initiated a securities class action against
Alan S. Lowe and Andrew C. Holcomb, respectively the Chief
Executive Officer and Chief Financial Officer of Read-Rite
Corporation (NasdaqNM:RDRTQ) in the United States District Court
for the Northern California on behalf of all persons or entities
who purchased Read-Rite stock between October 30, 2001 and June
17, 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 the Securities and Exchange Commission
by issuing a series of material misrepresentations about the
financial condition of Read-Rite in order to materially inflate
the stock price, obtain a stream of capital to keep the Company
operational, and maintain the lucrative salaries received by
defendants.
The complaint alleges that the defendants released financial
statements that were in violation of Generally Accepted
Accounting Principles (GAAP). On June 17, 2003, Read-Rite
stunned the market when it disclosed that it would seek
bankruptcy protection under Chapter 7.
For more details, contact Craig Lowther by Mail: 488 Madison
Avenue, 8th Floor, New York, New York 10022 by Phone:
(877) 935-7400 x-283 or by E-mail: clowther@whesq.com
STELLENT INC.: Marc Henzel Lodges Securities Lawsuit in MN Court
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the District of
Minnesota, on behalf of purchasers of Stellent, Inc. (Nasdaq:
STEL) publicly traded securities during the period between
October 2, 2001 and April 1, 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 materially false
and misleading statements concerning the Company's revenue
growth and its financial performance.
As alleged in the complaint, these statements were materially
false and misleading because they failed to disclose and/or
misrepresented the following adverse facts, among others:
(1) that significant amounts of the Company's sales were to
affiliates that were financed by the Company itself;
and
(2) that the Company's customer base was beginning to defer
purchases and the expected revenue growth which the
Company touted in press releases would no longer occur.
When these facts were belatedly disclosed to the market, the
price of Stellent common stock declined precipitously.
For more details, 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
SUREBEAM, INC.: Bernstein Liebhard File Stock Lawsuit in S.D. CA
----------------------------------------------------------------
Bernstein, Liebhard & Lifshitz, LLP initiated a securities class
action lawsuit in the United States District Court for the
Southern District of California on behalf of all persons who
acquired securities of Blue Rhino Corporation (NASDAQ: SUREE)
between March 16, 2001 and August 20, 2003, inclusive.
The complaint alleges the 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 improperly recognizing revenue in
violation of GAAP;
(2) that the Company's improper revenue recognition was
done through its recognition of revenue from non-
affiliated parties when the Company knew that such
parties could not pay and for which SureBeam would
forgive those receivables;
(3) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company; and
(4) that as a result, the values of the Company's earnings,
net income and earnings per share were materially
overstated at all relevant times.
The Class Period begins on March 16, 2001, after SureBeam
successfully launched an Initial Public Offering ("IPO"),
wherein it obtained net proceeds of $60 million. Prior to the
IPO, on March 15, 2001, the Company issued its prospectus, which
contained alleged misrepresentations regarding SureBeam's
revenue recognition.
The truth began to emerge on June 10, 2003, when SureBeam filed
a current report with the SEC on Form 8-K, and disclosed that it
was terminating KPMG LLP as its independent auditor and that it
was naming Deloitte & Touche LLP as its new auditor. Moreover,
the Company issued a press release on July 30, 2003, announcing
that it was going to delay the release of its second quarter
earnings from the planned date of July 31, 2003 until August 12,
2003.
On August 12, 2003, the Company announced that it was going to
further delay the release of its second quarter earnings until
after the Company's Form 10-Q for the second quarter had been
filed. SureBeam's accounting difficulties continued, and on
August 21, 2003, the Company announced that it was dismissing
Deloitte & Touche due to issues that had not been resolved to
the auditor's satisfaction. Specifically, Deloitte & Touche was
not satisfied with certain aspects of the Company's revenue
recognition policies and certain contracts entered into in 2000
and affecting subsequent periods.
The Class Period ends on August 25, 2003. On that date,
SureBeam shocked the investing public when it announced that the
Company would now trade under the ticker symbol "SUREE" because
it had missed the deadline to file its Form 10-Q in accordance
with NASDAQ Marketplace Rule 4310(c)(14). Investor reaction was
swift and negative, with SureBeam stock falling from a close of
$1.82 on Friday, August 22, 2003, to a close of $1.59 on Monday,
August 25, 2003, or a single-day decline of more than 12% on a
very high trade volume.
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 by E-
mail: SUREE@bernlieb.com or visit the firm's Website:
http://www.bernlieb.com.
READ-RITE CORPORATION: Wechsler Harwood Files Stock Suit in CA
--------------------------------------------------------------
Wechsler Harwood LLP initiated a securities class action against
Alan S. Lowe and Andrew C. Holcomb, respectively the Chief
Executive Officer and Chief Financial Officer of Read-Rite
Corporation (NasdaqNM:RDRTQ) in the United States District Court
for the Northern California on behalf of all persons or entities
who purchased Read-Rite stock between October 30, 2001 and June
17, 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 the Securities and Exchange Commission
by issuing a series of material misrepresentations about the
financial condition of Read-Rite in order to materially inflate
the stock price, obtain a stream of capital to keep the Company
operational, and maintain the lucrative salaries received by
defendants.
The complaint alleges that the defendants released financial
statements that were in violation of Generally Accepted
Accounting Principles (GAAP). On June 17, 2003, Read-Rite
stunned the market when it disclosed that it would seek
bankruptcy protection under Chapter 7.
For more details, contact Craig Lowther by Mail: 488 Madison
Avenue, 8th Floor, New York, New York 10022 by Phone:
(877) 935-7400 x-283 or by E-mail: clowther@whesq.com
VERTEX PHARMACEUTICAL: Marc Henzel Lodges Stock Suit in MA Court
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the District of
Massachusetts on behalf of purchasers of Vertex Pharmaceuticals
Inc. (NASDAQ: VRTX) publicly traded securities during the period
between March 27, 2000 and September 24, 2001.
The complaint charges Vertex and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Vertex is a global biotechnology company focused on the
discovery, development and commercialization of breakthrough
drugs for a range of serious diseases.
The complaint alleges that during the Class Period, defendants
artificially inflated the price of Vertex stock by concealing
critical material information regarding its p38 mitogen-
activated protein kinase (MAPK) program, for Vertex development
compound VX-745.
The following facts which were known by each of the defendants
during the Class Period, but were concealed from the investing
public, were as follows:
(1) That p38 MAPK has a varied tissue distribution and is
implicated not only in inflammation and arthritis, but
also in cellular models for neuronal differentiation
and effects, presenting multiple targets and
significant drug design challenges, which defendants
knew from well before the beginning of the Class
Period;
(2) That small, highly lipophilic molecules designed as
inhibitors of p38 MAPK are at great risk of crossing
the blood-brain barrier and of causing neuronal
effects;
(3) That defendants already knew or should have known what
constituted an acceptable absorption, distribution,
metabolism and excretion (ADME) profile for p38 MAPK
inhibitors targeting inflammation and arthritis, as
opposed to inhibitor targets for neuronal effects,
particularly the desired molecular weight and
lipophilicity, as well as the correlation of
lipophilicity with the potential for p38 MAPK related
neuronal effects;
(4) That defendants knew or should have known, as early as
1998, of the importance of lipophilicity in the design
of p38 MAPK inhibitors, since they had designed at
least one other class of potential inhibitory molecules
targeting p38 MAPK, possessing significantly lower
lipophilicity;
(5) That VX-745, a potential p38 MAPK inhibitor intended to
target inflammatory disease, asthma, crohn's disease
and rheumatoid arthritis, was exceptionally lipophilic
and thus would be predicted to cross the blood-brain
barrier and thus to cause neuronal effects;
(6) That once clinical testing of VX-745 had commenced,
defendants quietly continued the preclinical testing of
VX-745 in secret, despite public assurances that they
would not commence clinical development until all pre-
clinical studies were completed;
(7) That defendants purposefully delayed the announcement
of renewed long-term preclinical studies of VX-745 in
animals until announcement of study results to avoid
connection of the need for the renewed studies with the
October 2000 disclosure of defendants' problems with
the Vertex first-generation drug candidate selection
process;
(8) That the announcement of the unsuitability of VX-745 as
a drug candidate was similarly delayed until two months
after completion of the merger with Aurora Biosciences
Corporation; and
(9) That the failure to disclose the defective nature of
the VX-745 program, including but not limited to
physical and chemical properties, ADME profile, tests,
experiments and pre-clinical and clinical studies,
would prevent investors and Aurora Biosciences
Corporation shareholders from learning the extent of
the misrepresentations made to them during the Class
Period.
The announcement on Sept. 24, 2001 of the termination of the VX-
745 drug development program caused Vertex's stock price to drop
to as low as $17.74 from its Class Period high of $97.25, on
record volume of over 9.8 million shares, causing hundreds of
millions of dollars in damages to members of the Class.
For more details, 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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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, Roberto
Amor, Aurora Fatima Antonio and Lyndsey Resnick, Editors.
Copyright 2003. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
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