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C L A S S A C T I O N R E P O R T E R
Monday, October 13, 2003, Vol. 5, No. 201
Headlines
ARTHUR ANDERSEN: Denied Fair Trial in Enron Suit, Lawyer States
BALI BOMBING: NZ Families To Join Suit Against Bali Masterminds
BINGHAM HILL: Recalls Blue Cheese Due To Listeria Contamination
BORDEN CHEMICAL: Agrees To Halt Shipments Past NY Grade School
COMPUTER ASSOCIATES: Execs Resign Over Internal Accounting Probe
CONTINENTAL CARBON: AL Court To Decide on Certification For Suit
CREDIT SUISSE: Quattrone Defends Himself in NY Securities Trial
CYBEX INTERNATIONAL: Recalls 33T Treadmills Due To Fire Hazard
ENRON N.A.: SEC Launches TX Securities Fraud Suit V. Former Exec
HOLOCAUST LITIGATION: Bankers Group Denies Special Report Claims
JANUS CAPITAL: Investors Withdraw $4.4 Bil Due To AG, SEC Probe
KING IMPORT: NY Agriculture Head Warns V. Thelma Mayonnaise
MICROSOFT CORPORATION: FL Companies Urged To Take Part in Pact
NCI BUILDING: SEC Files Settled Civil Enforcement Lawsuit in DC
NEW HAMPSHIRE: Seabrook Plant's Leak Not Dangerous, NRC States
PREMIER MARKETING: CA Court Enters Judgment in SEC Stock Suit
QWEST COMMUNICATIONS: Agrees To Settle "IPO Spinning" Charges
SUPREME COURT: Debates States' Capacity To Break Approved Pacts
TENNCARE: Judge Signs Third Elderly Care Pact, Expects Another
TOBACCO FIRMS: Australian Watchdog Analyzing "Light" Cigarettes
New Securities Fraud Cases
BANK ONE: Rabin Murray Lodges Securities Fraud Suit in S.D. OH
BANK ONE: Schiffrin & Barroway Lodges Securities Suit in N.D. IL
CHECK POINT: Lasky & Rifkind Lodges Securities Suit in S.D. NY
CHECK POINT: Wolf Haldenstein Lodges Securities Suit in S.D. NY
CONSTAR INTERNATIONAL: Marc Henzel Lodges Securities Suit in PA
CONSTAR INTERNATIONAL: Charles Piven Lodges Stock Lawsuit in PA
CONSTAR INTERNATIONAL: Federman & Sherwood Files Securities Suit
FIRSTENERGY CORPORATION: Marc Henzel Files Securities Suit in OH
HEALTHTRONICS SURGICAL: Marc Henzel Lodges Securities Suit in GA
JANUS CAPITAL: Schiffrin & Barroway Files Securities Suit in CO
READ-RITE CORPORATION: Marc Henzel Lodges Securities Suit in CA
SPORTSLINE.COM: Marc Henzel Lodges Securities Lawsuit in S.D. FL
STRONG CAPITAL: Weiss & Yourman Files Securities Suit in S.D. NY
SUREBEAM CORPORATION: Rabin Murray Lodges Securities Suit in NY
SUREBEAM INC.: Weiss & Yourman Lodges Securities Suit in N.D. CA
*********
ARTHUR ANDERSEN: Denied Fair Trial in Enron Suit, Lawyer States
---------------------------------------------------------------
Arthur Andersen's lead appellate lawyer told a three-judge panel
of the United States Fifth Circuit Court of Appeals that the
investment firm was denied a fair trial over charges of
destroying documents related to Enron Corporation, the
Associated Press reports.
In June 2002, the former Big Five investment firm was convicted
of obstructing justice for shredding and doctoring Enron-related
documents.
Lawyer Maureen Mahoney told the appeals court United States
District Court in Houston, Texas Judge Melinda Harmon refused to
allow the firm to show jurors that many more documents were
preserved than destroyed. She added that Andersen partners
didn't have fair warning that an investigation was coming, and
prosecutors were allowed to present prejudicial evidence of
previous run-ins with the Securities and Exchange Commission.
Government appellate lawyer Elizabeth Collery countered that the
firm knew of the SEC probe and began shredding documents to
"beat the subpoena they knew was coming from the SEC."
One of the appeals judges, Patrick Higginbotham, noted that when
a felon dies while a criminal appeal is in progress, the case
dies too, AP stated. "In a practical sense, that's happened
here," Mr. Higginbotham said of the withered accounting firm,
left with just 250 of 28,000 U.S. employees on the payroll and
little more than a shattered reputation to save.
BALI BOMBING: NZ Families To Join Suit Against Bali Masterminds
---------------------------------------------------------------
New Zealand families of victims and survivors of the October 12,
2003 Bali bombing are thinking of joining the class action filed
in the United States District Court for the District of Columbia
against the financiers of terrorism, the NZCity reports.
Sixty-two New Zealand victims and family members will visit Bali
this weekend for the first anniversary of the attack, which
killed 202 people, 88 or which were Australians, Newstalk ZB
reports.
Lawyer Michael Hourigan, who is representing the Australians
involved, has spoken to interested New Zealanders and plans to
visit them shortly, NZCity states. Mr. Hourigan says the
families are not seeking damages for Bali, but want to help
fight terrorism by holding those behind the attack accountable.
Mr. Hourigan further asserted that there is strong evidence of a
link between Al Qaeda and Jemah Islamiyah, which was believed to
be behind the Bali attack.
BINGHAM HILL: Recalls Blue Cheese Due To Listeria Contamination
---------------------------------------------------------------
In an expansion of an earlier recall of September 12, 2003,
Bingham Hill Cheese Company of Fort Collins, Colorado is
voluntarily recalling approximately 2,000 lbs their cow's milk
Rustic Blue Cheese purchased since August 1, 2003.
The cheese is being recalled because it has the potential to be
contaminated with Listeria monocytogenes, an organism that can
cause serious and sometimes fatal infections in young children,
frail or elderly people, and others with weakened immune
systems. Although healthy individuals may suffer only short-
term symptoms such as high fever, severe headache, stiffness,
nausea, abdominal pain and diarrhea, L. monocytogenes infection
can cause miscarriages and stillbirths among pregnant women.
The cheese is being recalled hours after the USFDA alerted the
company to test results from two wheels that tested positive for
the microorganism. The wheels that tested positive were from
batches marked BL04-055 and BL04-069. This is an expansion of
an earlier recall of batch BL04-063. Other batches sold after
August 1, 2003 include BL04-041, BLO4-055, BL04-62, BL04-69,
BL04-090. There have been no reported illnesses to date.
All batches of Bingham Hill Rustic Blue cheese purchased since
August 1, 2003 are being recalled as a measure of safety. The
company is urging consumers to throw out the cheese (for added
safety) or return it to the place of purchase for a refund.
The cheese was distributed in Colorado, Manhattan (NY), San
Francisco Bay area (CA), Chicago (IL), Houston (TX), Minneapolis
(MN), Portland (OR), Santa Fe (NM), Miami (FL), Palm Springs
(CA), Iowa City (IA), Laramie (WY), Cheyenne (WY) and Atlanta
(GA).
The cheese was sold as: whole 5 pound wheels in gold wrap; cut
pieces in gold wrap; and cut pieces in plastic wrap. The
company name appears on gold wrapped wheels and gold wrapped
pieces and "Colorado Blue", "Bingham Blue" or "Rustic Blue"
would appear on plastic-wrapped pieces.
In Colorado, the cheese was distributed to farmers' markets in
Boulder, Fort Collins, Minturn, Dillon, Breckenridge and
Colorado Springs. In Wyoming, the cheese was distributed to
farmers' markets in Laramie and Cheyenne.
Bingham Hill Cheese Company is working closely with the FDA and
the Colorado Department of Public Health and Environment to
assure that the cheese in question is accounted for and
destroyed. It is important to the company that public health
remains the primary concern, and Bingham Hill Cheese Company
will continue to put customers' health as the top priority.
The 4-year old artisan cheese company voluntarily conducts
random batch sampling of Rustic Blue as part of its ongoing
quality assurance program. Over 100 batches of Rustic Blue have
been tested previously by an independent Wisconsin cheese
laboratory, Silliker Laboratories, and never found to contain
harmful bacteria.
For more details, contact cheesemakers/owners Kristi and Tom
Johnson by Phone: 1-970-227-8008.
BORDEN CHEMICAL: Agrees To Halt Shipments Past NY Grade School
--------------------------------------------------------------
New York Attorney General Eliot Spitzer reached an agreement
with Borden Chemical, Inc. that will halt truck shipments of
chemicals past Moreau Elementary School in Saratoga County, New
York, in order to reduce the risk to children. Attorney General
Spitzer also announced that the Town of Moreau has adopted a
local law explicitly restricting chemical trucks from driving
past the school, thus resolving a lawsuit he filed against
Borden and the town.
"The town and the company have taken steps that put the health
and safety of school children first, as it should be," said
Attorney General Spitzer in a statement. "From now on, trucks
loaded with toxic chemicals will no longer drive by the school."
The agreement was finalized October 8 when it was signed by
Saratoga County State Supreme Court Judge Frank Williams.
AG Spitzer had asked the town to enact such a law, and the
company to abide by such a traffic restriction, which was a
condition of the siting approval for the Borden plant in 1997.
Unfortunately, the company and town did not respond. The
Attorney General's office then sued the company and the town on
July 28, 2003. The lawsuit alleged that 15 to 20 trucks
carrying toxic chemicals pass by the school each day, creating
an environmental and public health hazard and violating state
law.
Borden Chemical has agreed to inform its truckers about their
obligation to comply with the town's new traffic restriction.
AG Spitzer's office was alerted to the traffic problem by
concerned local residents. State investigators found that
trucks that regularly drive past the school contain hazardous
chemicals such as sulfuric acid, caustic soda, phenol,
triethanolamine and methanol.
In 1997, the Town of Moreau approved the siting of the Borden
chemical plant with the condition that trucks driving to and
from the facility avoid the section of Bluebird Road west of
Fort Edward Road, where the school is located. As a condition
of the environmental review and approval under the state
Environmental Quality Review Act, this prohibition was binding
on the town and the company.
The case was handled by Assistant Attorneys General Lisa Feiner
and Norman Spiegel of the Attorney General's Environmental
Protection Bureau.
COMPUTER ASSOCIATES: Execs Resign Over Internal Accounting Probe
----------------------------------------------------------------
Three senior executives at Computer Associates (CA) tendered
their resignations, after an internal probe suggested they were
responsible for recording revenues in 2000, which should have
been deferred to a later period, infoconomy reports.
Chief Financial Officer Ira Zar, Senior Vice President for
Finance Lloyd Silverstein and David Rivard, vice president for
finance resigned as a result of the probe, which is being led by
former SEC Chief Accountant Walter Schuetze. The United States
Department of Justice and the Securities and Exchange Commission
(SEC) are also conducting a separate probe.
Mr. Zar was the one who was responsible for changing the
Company's revenue recognition policies in 2000. Instead of
reporting all the revenue from a multi-year contract up-front,
it would recognize it year-on-year in a manner more consistent
with the way in which customers actually pay, infoconomy
reports.
Several securities class actions are also pending against the
Company, charging it with artificially inflating financial
figures by persuading companies to renew their contracts halfway
through their commitments.
CONTINENTAL CARBON: AL Court To Decide on Certification For Suit
----------------------------------------------------------------
The United States District Court in Montgomery, Alabama will
decide whether the lawsuit filed against Continental Carbon will
receive class action status, the Ledger-Inquirer reports.
Action Marine, Inc. owner John Tharpe filed the suit in August
2001, alleging that the carbon black fall-out from the Company's
Phenix City facility fell on areas on south Columbus and damaged
residents' property. Mr. Tharpe alleges that the fallout
damaged his boats and equipment for years, forcing him to sell
products at a discount.
The city of Columbus joined the suit in December 2001, after
soot accumulating on top of the Columbus Civic Center caused the
city additional expense, and exposed residents to health
problems. South Columbus Concerned Citizens joined the lawsuit
in February 2002.
"We stated to the court Monday that the most important thing to
us is the same thing (former) Mayor Peters testified to, and
that is stopping the continued problem and repairing the plant
so that the problem doesn't continue," Jeff Friedman, a
Birmingham attorney who is spearheading the effort to broaden
the lawsuit to class-action status, told the Ledger-Enquirer.
"The people at Continental Carbon know what the problem is," Mr.
Friedman continued. "They know how much it's going to cost to
fix it, but they've been reluctant to make the repairs because
they can't get a quick enough return on their investment."
Continental Carbon, declined comment on the hearing Thursday,
saying its corporate office had not had time to review material
from Monday's proceeding, the Ledger Enquirer stated.
Spokesman Blake Lewis told the Ledger-Enquirer Continental
Carbon still denies its Phenix City plant is causing the black
pollution. "I would say that's a safe statement," Mr. Lewis
said. "I don't know that this is anything new. But until we see
the actual litigation, it's pretty difficult for us to talk
about it. I think the problem right now is there's all sorts of
people who want to speculate on things, and we've always tried
to deal in pure fact. Until we see what the allegations are
it's pretty tough for us to know whether this is old news or new
news or some combination thereof."
CREDIT SUISSE: Quattrone Defends Himself in NY Securities Trial
---------------------------------------------------------------
Credit Suisse First Boston's former star investment banker Frank
Quattrone took the witness stand in the trial for charges of
obstruction of justice and witness tampering against him,
Reuters reports.
Mr. Quattrone is accused of obstructing a federal and Securities
and Exchange Commission probe of hot stock allocations in late
2000. At the center of the charges is the controversial e-mail
he wrote to a subordinate urging employees to get rid of some
documents, an earlier Class Action Reporter story states.
Mr. Quattrone denied the charges when he took the stand,
answering defense attorney John Keker with a simple "No," when
Mr. Keker asked him two questions - "Were you intending to
obstruct justice on an SEC investigation?" and "Were you
intending to obstruct a grand jury investigation?"
Mr. Keker asked Mr. Quattrone about his background, CSFB's
organizational structure and the bank's e-mail system. He also
asked Mr. Quattrone whether he believed it was his duty to
comply with CSFB's document destruction policy, and whether he
had ever seen SEC and grand jury subpoenas, Reuters reports.
Two witnesses also testified to Mr. Quattrone's character,
before Mr. Quattrone took the stand. Rosario Lamberto, who had
known him since they were both six years old, told the court
that Mr. Quattrone was ". as honest, ethical, straightforward as
any human being I know."
"I would literally place my life and the life of my wife and
children in his hands." the friend told the court, according to
a Reuters report.
CYBEX INTERNATIONAL: Recalls 33T Treadmills Due To Fire Hazard
--------------------------------------------------------------
Cybex International, Inc. is cooperating with the United States
Consumer Product Safety Commission by voluntarily recalling
33,719 units Cybex or Trotter Treadmill.
The treadmill is a fire hazard because of overheating and
ignition of dust inside the treadmill's hood. The dust
accumulates because of lack of regular maintenance. The Company
and the CPSC have received five reports of fire resulting in
property damage to the treadmill and in some instances smoke-
related damage to the surrounding area. No injuries were
reported.
Treadmill is black with gray coloring and has rectangular
uprights. It is 69" in length and 30" in width. It has a small
display panel that is almost as wide as the treadmill. The
brands and models "Cybex 400T," "Cybex 410T," "Trotter 510,"
"Trotter 525," or "Trotter 535" are written on the display
panel. "CXT+" is another recalled model but does not bear the
brand Cybex or Trotter.
Cybex dealers and direct from Cybex International sold the
treadmill between September 1993 and October 2001, for about
$4,000.
For more details, contact the Company by Phone: (888) 678-3846
between 8 am and 5 pm ET Monday through Friday, or visit the
firm's Website: http://www.cybexintl.com.
ENRON N.A.: SEC Launches TX Securities Fraud Suit V. Former Exec
----------------------------------------------------------------
The Securities and Exchange Commission charged Wesley H.
Colwell, the former Chief Accounting Officer of Enron North
America, with violating the antifraud provisions of the federal
securities laws.
Without admitting or denying the allegations of the complaint,
Mr. Colwell has agreed to be enjoined permanently from violating
Sections 10(b) and 13(b)(5) of the Securities Exchange Act of
1934 and Exchange Act Rules 10b-5 and 13b2-1, and aiding and
abetting the violation of Sections 13(a), and 13(b)(2)(A) and
(B) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1 and
13a-13.
In addition, Mr. Colwell has agreed to be barred from acting as
an officer or director of a public company, and will pay
$300,000 in disgorgement and prejudgment interest and a civil
penalty of $200,000. As part of this settlement, Mr. Colwell
will continue to cooperate with on-going investigations into
Enron Corporation by the Securities and Exchange Commission and
the U.S. Department of Justice Enron Task Force.
As alleged in the complaint, Mr. Colwell, along with others at
Enron, engaged in a wide ranging scheme to defraud by
manipulating Enron's publicly reported earnings through a
variety of devices designed to produce materially false and
misleading financial results. This scheme included the misuse
of reserve accounts, concealment of losses, inflation of asset
values, and deliberate use of improper accounting treatment for
transactions.
For example, for year 2000, Mr. Colwell and others are alleged
to have deferred over $400 million in earnings into reserve
accounts within Enron North America (ENA). Subsequently, during
first and second quarter 2001, it is alleged that Mr. Colwell
and others used reserve accounts within ENA to mask over $1
billion in losses associated with Enron's retail energy
business, Enron Energy Services (EES).
It is further alleged that when Enron needed earnings in third
quarter 2001, Mr. Colwell and others released from ENA reserve
accounts over $200 million of previously deferred trading
profits. The complaint also alleges that Mr. Colwell and others
manipulated the value of Enron's largest private merchant asset,
Mariner Energy Inc., and improperly avoided a write-down
associated with the disposition of its subsidiary, Houston
Pipeline Co.
Specifically, the Commission's Complaint alleges the improper
use of reserves to manage earnings. Mr. Colwell and others
deliberately manipulated Enron reserve accounts to smooth the
volatility of earnings of its wholesale energy trading business;
to conceal losses of its retail energy business; and generally
to enable Enron to announce that it had met or exceeded
performance expectations. For example, when ENA generated
trading profits in the third and fourth quarters of 2000 that
greatly exceeded Enron's internal targets, Enron placed earnings
into a previously established reserve known as "Schedule C."
In these quarters and others, Mr. Colwell and others improperly
used amounts placed into Schedule C as necessary to fulfill
internal targets and satisfy external earnings expectations.
Earnings improperly reserved and improperly released by Mr.
Colwell and others significantly affected Enron's financial
reporting and related public disclosures. By the end of 2000,
over $400 million in earnings were improperly withheld from
Enron's reported earnings. When Enron later needed earnings in
the third quarter of 2001, it released over $200 million from
Schedule C. Mr. Colwell and others knew that Enron's use of
Schedule C to manipulate reported earnings was improper and did
not comply with applicable accounting standards.
The suit further alleges Mr. Colwell and the Company hid losses
Of Enron's retail business. Enron used reserve accounts within
ENA to hide hundreds of millions of losses associated with EES,
Enron's heavily touted retail energy trading business. By
various means, Mr. Colwell and others concealed within ENA a
significant portion of EES losses, which materially affected the
first and second quarter 2001 operating results of EES and of
Enron's largest business segment, Enron Wholesale Services
(Wholesale).
These means included transferring uncollectible EES receivables
to ENA, which then would establish the necessary reserves, and
by moving EES' "risk management activities" into ENA so that
significant EES contract write-downs and other EES related
losses would be charged against Enron's Wholesale business
segment. In first quarter 2001, EES losses hidden in ENA
exceeded $700 million. In second quarter 2001, additional EES
losses of over $300 million were hidden in ENA.
The defendants also fraudulently inflated Mariner Energy, Inc.
Enron, through Mr. Colwell and others, fraudulently inflated the
value of its largest private "merchant" asset, Mariner Energy,
Inc., an oil and gas exploration company. In the fourth quarter
of 2000, Enron needed an additional $100 million of earnings to
achieve budget targets that formed the basis of its earnings-
per-share objective for that quarter.
To meet this need, Mr. Colwell and others fraudulently increased
the recorded value of Mariner by approximately $100 million.
Mr. Colwell and others knew that Mariner's fourth quarter 2000
valuation was an amount arbitrarily selected to generate
fictitious mark-to-market earnings sufficient to meet Enron's
targets.
The suit also alleges improper avoidance of write-down of
Houston pipeline asset. In the second quarter of 2001, Enron
failed to recognize a material loss relating to the impairment
of assets of its subsidiary, Houston Pipeline Company (HPL). As
early as the summer of 2000, Enron knew that HPL's assets were
significantly impaired, i.e., their market value was
significantly below their recorded value in Enron's financial
statements.
In these circumstances, a conventional sale of HPL by Enron
would result in a significant loss. To avoid recognizing such a
loss, Enron structured a transaction with a third party buyer
such that certain HPL assets would be leased rather than sold.
However, before executing the lease, Enron agreed to accept a
single up-front prepayment rather than annual payments for the
initial lease term. This change lowered the total amount of the
cash payments due under the lease, reducing the lease's future
cash flows to a level insufficient to allow Enron to recover the
recorded value of the HPL assets.
Needing to justify not recognizing an impairment loss caused by
the change in the lease payments, Mr. Colwell and others
employed an impairment test using a series of future "deemed"
cash flows that were, in fact, never to be received. If the
actual cash flows as specified in the lease had been used in the
impairment test, Enron would have recorded an impairment loss of
approximately $1.4 billion.
In agreeing to this settlement, the Commission took into account
Mr. Colwell's continuing cooperation in the ongoing
investigations being conducted by the Commission and the US
Department of Justice Enron Task Force.
The suit is styled "SEC v. Wesley H. Colwell, Civil Action No.
H-03-4308," pending in the United States District Court for the
Southern District of Texas. (LR-18403; AAE Rel. 1894)
HOLOCAUST LITIGATION: Bankers Group Denies Special Report Claims
----------------------------------------------------------------
The Swiss Bankers Association (SBA) refuted claims that Swiss
banking secrecy laws are blocking the distribution of a $1.25
billion fund intended for victims of the Holocaust and their
heirs, swissinfo.com reports.
Holocaust victims and their relatives filed the class action,
styled "In re Holocaust Victim Assets Litigation, case number
CV-96-4849," in the US District Court of the Eastern District of
New York. The suit sought to recover the money deposited in
banks for safekeeping before or during World War II. The
plaintiffs alleged that the banks refused to release the money
after the war, saying they needed to provide detailed account
information or death certificates from Nazi concentration camps,
which were impossible to obtain.
In 1998, Swiss banks Credit Suisse and UBS signed a global
accord between Jewish plaintiff groups and Swiss banks Credit
Suisse and UBS. Under the settlement, $800 million will go to
those who made the deposits or their heirs. The remaining funds
were to compensate Holocaust survivors who had other claims, not
related to personal deposits.
A report by the fund's court-appointed Special Master Judah
Gribetz, submitted to Judge Edward Korman, stated that Swiss
bank secrecy could deprive victims and their heirs of their fair
share in the fund. The report said that $485 million has been
distributed so far, but only $131.5 million has gone to those
who had deposited the money in Swiss banks or their relatives.
"Lack of full access to existing documentation and the
unavailability of other data has interfered with the claims
process," Mr. Gribetz wrote in the report, according to an
earlier Class Action Reporter story (October 10, 2003).
The SBA said a committee under former Federal Reserve Board
chairman Paul Volcker had carried out a comprehensive audit of
all dormant Holocaust-era accounts. "Paul Volcker and his
committee conducted a very thorough investigation and had full
access to the bank accounts," SBA spokesman Thomas Sutter told
swissinfo.
Lead counsel for Jewish groups and Holocaust victims Burt
Neuborne also charged the Swiss banks and the government with
obstructing distribution of the money, swissinfo.com reports.
He said the Swiss authorities had placed "every conceivable
obstacle" in the way since the beginning of the class action.
"Swiss banking laws are hindering the examination of 4.1 million
accounts, which could contribute to a speedy distribution of the
money," he said.
Mr. Sutter denied the charges, saying that the vast majority of
Nazi-era accounts were totally unrelated to the Holocaust, and
it was never part of the settlement to provide access to all
accounts.
"In our opinion, it makes no sense to centralise all bank
accounts that were active during the Second World War," Mr.
Sutter told swissinfo.com. "The Volcker committee has already
had access and it makes no sense to repeat the procedure."
Hans B„r, a member of Volcker's team and a former bank chairman,
told swissinfo that Mr. Gribetz's comments were out of place.
"I think the most surprising thing (in the report) is the
acrimonious tone, for which there is absolutely no reason," he
said. "Gribetz complains in one part of his statement that the
documents aren't available. I would like to remind you that
this is material dating back 60 or 70 years . The law requires
documents to be retained for ten years. It is a miracle that
any documents are available at all. To complain that they are
not all there is ridiculous."
In re Holocaust Victim Assets Litigation, case number CV-96-4849
was initiated in October 1996 in the U.S. District Court of the
Eastern District of New York before Judge Edward R. Korman. It
consists of four separate amended and consolidated class
actions: Sonabend et al. v. Union Bank of Switzerland et al.,
Trilling-Grotch et al. v. Union Bank of Switzerland et al.,
Weisshaus et al. v. Union Bank of Switzerland et al. and World
Council of Orthodox Jewish Communities Inc. et al. v. Union Bank
of Switzerland et al. The settlement approval order was
released on July 26, 2000. Claimants are represented by Burt
Neuborne as senior counsel for the settlement class.
JANUS CAPITAL: Investors Withdraw $4.4 Bil Due To AG, SEC Probe
---------------------------------------------------------------
Investors in funds managed by the Janus Capital Group withdrew
US$4.4 billion, after the Company was included in an investment
fraud probe led by New York Attorney General Eliot Spitzer, the
Financial Times reports. The withdrawal was the biggest
withdrawal from any US fund group in the past year.
The probe implicates eight companies and spawned more than 20
lawsuits, over late-trading and market-timing transactions in
fund shares. Mr. Spitzer and the Securities and Exchange
Commission have widened the probe to big mutual fund groups,
brokerages, hedge funds and other institutions. This week, the
Securities and Exchange Commission said its staff was preparing
to draw up rules to combat trading abuses.
Janus' net assets fell by 3.6 per cent during September, to
$146.5 billion at September 30, FT.com reports. It reported a a
net outflow of $1 billion from institutional money-market funds,
which often see sizeable swings, and an outflow of $3.4 billion
from non-money-market funds.
FT.com reports that about $314 million of the outflows was the
result of ending its arrangements with so-called "market
timers", mainly hedge funds, with whom it had struck a deal to
allow arbitraging of its mutual funds in exchange for fees and
business, despite publicly stating it discouraged such
arbitrage.
The SEC is investigating charges that the investors illegally
bought mutual fund shares after 4 pm but at the 4 pm price. The
SEC said "it is clear that there are additional regulatory
actions that the Commission should consider in seeking to
eliminate or significantly curb late trading and market timing
abuses in the future."
Janus Capital also faces several class actions filed in the
United States District Court in New York. In a bid to put
damaging revelations behind it, it is engaging in settlement
talks with Mr. Spitzer.
KING IMPORT: NY Agriculture Head Warns V. Thelma Mayonnaise
-----------------------------------------------------------
New York Agriculture Commissioner Nathan L. Rudgers issued an
alert to consumers, who are sensitive to eggs, to not consume
"Thelma Mayonnaise" distributed by King Import, Inc., 98 12th
Street, Brooklyn, New York 11215 due to the presence of
undeclared eggs. People who have allergies to eggs run the risk
of serious or life threatening allergic reactions if they
consume these products.
"Thelma Mayonnaise" is packaged in a 500-gram plastic jar with a
plastic cap. The numbers 09/06/03 07:39 above 06/11/03 are
printed on the side of the container. All writing is in Hebrew.
The problem was discovered by New York State food inspectors
during a routine inspection of a retail store in Brooklyn. The
product was sold in the New York City area. No illnesses have
been reported to date. Consumers who have allergies to eggs and
purchased "Thelma Mayonnaise" are urged to return it to the
place of purchase.
MICROSOFT CORPORATION: FL Companies Urged To Take Part in Pact
--------------------------------------------------------------
Lawyers in a Florida class action filed against software giant
Microsoft Corporation urged business to take part in the suit
settlement, saying the businesses may not realize how much they
might lose if they don't file a claims, news-press.com reports.
Florida is one of nine states that did not sign off on a federal
antitrust settlement against Microsoft last year, allowing the
1999 suit, styled "In Re Florida Microsoft Antitrust
Litigation," to proceed in the 11th Judicial District Court of
Miami, Dade County, Florida.
The suit alleges that the Company unlawfully used
anticompetitive means to maintain a monopoly in markets for
certain software, and that as a result, it overcharged Florida
consumers who licensed its MS-DOS, Windows, Word, Excel and
Office software. On April 15, 2003, the parties settled the
case, and the court conditionally certified a settlement class
and approved a preliminary settlement agreement.
Under the settlement, home consumers and businesses can collect
$12 per operating system - Windows 95, Windows 98, Windows
Millennium Edition - and $5 for other Microsoft software
applications purchased between November 16, 1995, and December
31, 2002. Other applications include older versions of Windows
as well as Word and Excel.
The amount may be small to the average home computer user, but
it can add up quickly for businesses, Robin Graves, an attorney
with Lightfoot, Franklin & White, the lead plaintiff law firm
based in Birmingham, Alabama, told news-press.com. That's
because the settlement cost is per software license and
companies must license each version they use.
"If you have 1,000 employees who use a computer and, since the
class period is 7 years, you have probably upgraded at least
once. It really adds up," Ms. Graves told news-press.com.
"That's a good chunk of money that you can use to upgrade your
computer systems."
People have until December 24 to file a claim, but the attorneys
want to have as many claims on file as possible when a judge
gives final consideration on the settlement, now set for
November 24. "We want to be able to show the judge that people
are making claims in this case," Ms. Graves told news-press.com.
For more information on the Microsoft class-action settlement in
Florida, contact the Settlement Administrator by Mail:
Settlement Administrator, Microsoft Florida Settlement, P.O. Box
3019, Portland OR 97208-3019 or visit the Website:
http://www.microsoftproductssettlement.com/florida/home.htm
NCI BUILDING: SEC Files Settled Civil Enforcement Lawsuit in DC
---------------------------------------------------------------
The US Securities and Exchange Commission filed a settled civil
enforcement action in the United States District Court for the
District of Columbia against Gregory L. English, former
corporate controller of NCI Building Systems, Inc. (NCI), a
Houston-based manufacturer of metal products for the non-
residential building industry.
The complaint alleges:
(1) On June 8, 2001, NCI filed with the Commission a Form
10-K/A, restating its financial statements for fiscal
1999 and 2000 and a Form 10-Q/A, restating its
financial statements for the first quarter of fiscal
year 2001. According to these filings, NCI overstated
net earnings by $1.3 million during the third and
fourth quarters of fiscal 1999, $7.5 million for fiscal
2000 and $1.2 million for the first quarter of fiscal
2001.
(2) A number of accounting errors at NCI's Components
Division had resulted in material misstatement of NCI's
financial statements. The errors resulted primarily
from NCI's failure to update standard costs and scrap
metal factors following NCI's migration to a new
management information system in May 1999, and failed
attempts by NCI accounting personnel to manually
correct (via unsupported journal entries) for MIS
problems in a key inventory liability account.
The complaint further alleges that, in July 2000, following an
annual physical inventory at the company's components division,
an accounting employee informed Mr. English that a probable
"pick-up" of approximately $2.6 million would be made on the
books, resulting in an increase in recorded book inventory.
Soon after, the employee retracted this initial conclusion and
informed Mr. English that book inventory exceeded the physical
counts by more than $2 million, requiring that Mr. English
decrease the book inventory number. Despite this information,
in August 2000, Mr. English proceeded to authorize the erroneous
$2.6 million entry.
As NCI's corporate controller, Mr. English knew, or was reckless
in not knowing, that the inventory overstatement would have a
material effect on NCI's financial statements. In addition, Mr.
English knew or should have known of errors with NCI's new MIS
system and failed to correct them.
Without admitting or denying the allegations in the complaint,
Mr. English consented to the entry of a Final Judgment
permanently enjoining him from future violations of (or aiding
and abetting violations of) Sections 10(b), 13(a), 13(b)(2)(A),
13(b)(2)(B) and 13(b)(5) of the Securities Exchange Act of 1934
and Exchange Act Rules 10b-5, 12b-20, 13a-1, 13a-13 and 13b2-1.
The Final Judgment also imposes a $25,000 civil penalty and
prohibits English from serving as an officer or director of a
public company for five years.
The Commission also issued a settled cease-and-desist order
today (Order) against NCI. The findings in the Order involved a
number of accounting errors at the company, many of which were
caused by the implementation of the MIS system in May 1999. The
Order notes that the Commission took into account remedial acts
promptly undertaken by the respondent and cooperation afforded
the Commission staff.
NCI neither admitted nor denied the findings in the Order. In
the Order, the Commission Ordered that NCI cease and desist from
committing or causing any violations and any future violations
of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange
Act and Rules 12b-20, 13a-1 and 13a-13 thereunder. NCI common
stock trades on the New York Stock Exchange under the symbol
NCS.
The suit is styled "SEC v. Gregory L. English, No. 1:03-CV-
02061, USDC, D.D.C., COLLYER] (LR-18402; AAE Rel. 1893)."
NEW HAMPSHIRE: Seabrook Plant's Leak Not Dangerous, NRC States
--------------------------------------------------------------
The Seabrook Station nuclear plant in New Hampshire is sporting
a coolant leak, similar to a leak that caused an expensive and
lengthy shutdown of an Ohio plant, the Associated Press reports.
Inspectors discovered the leak early this week, in a weld on a
pipe that surrounds a mechanism that moves fuel rods in and out
of the reactor. This will allow coolant, which contains
corrosive particles, to escape from the pipe. If allowed to
accumulate for months or years, the coolant can eat through
steel. Inspectors promptly reported it to the Nuclear
Regulatory Commission (NRC).
However, a spokesman for the plant and NRC downplayed the
dangers of the leak, saying it was caught in time to prevent
costly damage and poses no danger.
"It's a very small and recent leak," plant spokesman Alan
Griffith told AP. He added that plant technicians think the
leak started in the last two to three weeks.
A leak at Ohio's Davis-Besse plant was undetected for years,
causing the coolant to nearly eat through a 6-inch steel cap
protecting the reactor. The leak cost the plant's operator more
than $500 million for repairs and the purchase of power from
other sources.
PREMIER MARKETING: CA Court Enters Judgment in SEC Stock Suit
-------------------------------------------------------------
United States District Court for the Central District of
California R. Gary Klausner granted the Securities and Exchange
Commission's motion for entry of default judgment and entered a
Final Judgment Of Permanent Injunction And Other Relief Against
Premier Marketing and Investments, Inc.
Premier is enjoined from violating the registration and
antifraud provisions of the federal securities laws,
specifically Sections 5(a), 5(c) and 17(a) of the Securities Act
of 1933 and Section 10(b) of the Securities Exchange Act of 1934
and Rule 10b-5 thereunder. Under the terms of the Final
Judgment, Premier is also required to pay disgorgement in the
amount of $4,497,451, plus prejudgment interest.
In January 2003, the Commission charged Los Angeles-based
Premier and its president, Nicholas Roblee, a/k/a Nicholas
Richmond, 34, of Encino, California, with fraudulently raising
at least $4.5 million from dozens of investors nationwide,
purportedly for the purpose of investing in a variety of "high-
yield" investment programs. The defendants represented that
investors could earn returns of up to 200% per month through
various programs, including high-yield promissory notes, bridge
loans and the purchase and sale of precious metals.
In fact, Mr. Richmond and Premier operated a "prime-bank" scheme
and misappropriated investor funds between November 2000 and
January 2003. On January 15, 2003, the court granted the
Commission's request for a temporary restraining order against
Mr. Richmond and Premier, which, among other things, imposed a
freeze on defendants' assets and halted the ongoing fraud.
In April 2003, Mr. Richmond was indicted in a criminal
proceeding before the US District Court for the Central District
of California, arising out of the same facts as the Commission's
case. He is currently in custody and awaiting trial, which is
currently set for January 13, 2004 .
The federal suit is titled "U.S. v. Nicholas Roblee, Case No.
03cr00322," filed in the United States District Court for the
Central District of California, while the SEC complaint is
styled, "SEC v. Premier Marketing and Investments and Nicholas
Roblee a/k/a Nicholas Richmond, Civil Action No. 03-342 RGK
(JTLx)," filed in the United States District Court for the
Central District of California. (LR-18399)
QWEST COMMUNICATIONS: Agrees To Settle "IPO Spinning" Charges
-------------------------------------------------------------
New York Attorney General Eliot Spitzer reached an agreement
which resolves allegations that a leading telecommunications
executive improperly received lucrative shares of Initial Public
Offerings (IPOs).
Under the agreement, Joseph P. Nacchio, former Chief Executive
Officer of Qwest Communications International, Inc., will
disgorge $400,000 in profits from the controversial practice
know as "IPO spinning."
"IPO spinning is no longer permitted under the accord negotiated
with Wall Street investment firms," AG Spitzer said in a
statement. "But we continue to pursue appropriate remedies
against individuals who were enriched unjustly by the practices
revealed in the course of our investigation."
AG Spitzer sued Mr. Nacchio, and four other telecom executives
in September 2002, alleging that each had received millions of
dollars in hot IPO offerings from the Salomon Smith Barney (SSB)
division of Citigroup. According to the complaint, SSB doled
out lucrative IPO shares as an inducement and reward for
investment banking business from Denver-based Qwest and other
telecom companies. The complaint also alleged that Mr. Nacchio,
and the other named officials, failed to disclose receipt of
such shares from SSB.
Without admitting or denying liability, Mr. Nacchio has agreed
to contribute $400,000 to two New York law schools. The
clinics, to be established at New York Law School and St. John's
School of Law, will help qualified small investors bring claims
before securities arbitration panels.
AG Spitzer commended Mr. Nacchio for working with his office to
resolve the matter. Earlier this year, AG Spitzer announced a
settlement with Phillip F. Anschutz, the former Chairman of
Qwest. The case against the three other executives named in the
original suit - Bernard Ebbers of WorldCom, Stephen Garafolo of
Metromedia and Clark McLeod of McLeodUSA - is pending.
The agreement was negotiated by Assistant Attorney General,
Harriet Rosen, and Assistant Deputy Attorney General, Gary
Connor.
SUPREME COURT: Debates States' Capacity To Break Approved Pacts
---------------------------------------------------------------
The Supreme Court heard the arguments this week as to whether
Texas made an unbreakable promise to provide better health care
to poor children - an issue that asks a critical and fundamental
question: what can federal judges do to states that don't live
up to deals to end "mass" lawsuits, The Bradenton Herald
reports.
The case immediately affects about 1.5 million Texas children
who rely on the state government for health and dental care.
More broadly, it has implications for states that settle class-
action lawsuits over such matters as health care, education and
prison conditions, and then are charged with violating the
agreements, the Herald asserts.
The issues are technical ones that give the Supreme Court a
chance to further develop its recent line of states' rights
rulings that have increased state powers at the expense of
individuals and the federal government.
During arguments in the Texas case, the justices - even usual
states' rights advocates - repeatedly expressed concern about
allowing states to break agreements when they agree to federal
court orders.
The 1996 court-approved settlement, or consent decree, ended a
class action over Texas's services for children in the Medicaid
program. The state, while not admitting to any wrongdoing,
agreed to make improvements in the program as it was executed.
Two years later, a group of poor children returned to federal
court to complain that the state had violated the agreement.
The Texas attorney general claimed the state was immune from the
challenges under the Constitution.
The case titled Linda Frew on Behalf of Her Daughter Carla Frew
et al. v. Albert Hawkins, Commissioner, Texas Health and Human
Services Commission et al., Case No. 02-628 is pending in the
U.S. Supreme Court. Petitioner is represented by attorney Susan
Finkelstein Zinn and respondent by Solicitor General Rafael
Edward Cruz.
TENNCARE: Judge Signs Third Elderly Care Pact, Expects Another
--------------------------------------------------------------
US District Court Judge Robert Echols recently approved the
settlement of a class-action lawsuit against TennCare that
challenged the way the state provides home- and community-based
health care for the poor, the disabled and elderly, the
Associated Press Newswires reports.
The signing of this third settlement, arising out of four major
class actions, leaves only one of the suits pending. The fourth
lawsuit, called "Rosen," concerns the eligibility of the
enrollees dropped from TennCare.
In December, US District Judge William Haynes ordered that
TennCare reinstate 160,000 people who were purged from the
public-funded health insurance program. The state appealed that
order, but under an agreement negotiated by state attorneys and
lawyers with the Tennessee Justice Center, which represented the
enrollees, the dropped enrollees will have one year to reapply
for TennCare and show they are eligible. Judge Haynes already
has promised approval of the proposed settlement of the fourth
class action, the Rosen case, when he gets it back from the 6th
US Circuit Court of Appeals.
The third agreement, already approved by Judge Echols, calls for
Tennessee's government to pursue a "budget neutral" stay-at-home
program for the elderly. The settlement also requires the state
to ensure that TennCare pay more home health costs.
Advocates for the elderly and disabled have tried for years to
institute a system that offered care options besides becoming an
undue burden on the family or going into a nursing home.
Tennessee is near the bottom among states in its expenditures
for home- and community-based services for the elderly and
disabled, AP reports.
The four settlements are expected to save tens of millions of
dollars a year for the $7.1 billion TennCare health care program
for the poor, uninsured and uninsurable. These settlements give
the governor flexibility and time to make changes in TennCare
that will save money and keep the programs viable.
Michele Johnson, an attorney with the Tennessee Justice Center,
told AP the settlements are "very promising that we may be able
to fix problems before they reach the crisis point. That does
not mean there will be no problems, but that this administration
(referring to the administration of Governor Philip Bredesen)
recognizes problems as an opportunity to serve people on
TennCare better and fulfill its mission."
CAR readers desiring to learn more about details of the
settlements put forward to save the TennCare program can refer
to an earlier story in CAR of October 9, 2003.
The settlement for the health care lawsuit titled Newberry v.
Menke a/k/a Newberry v. Goetz, Civil Action No. 3-98-1127 filed
on December 7, 1998 was approved in the U.S. District Court for
the Middle District of Tennessee by Judge Robert Echols. State
defendants in this action are represented by Deputy Attorney
General Linda A. Ross, defendant-intervenor by attorney
Christopher Puri, and Reed Smith Shaw & McClay LLP.
Rosen v. Commissioner of Finance and Administration, case number
3:98-cv-00627 dated July 8, 1998 is pending in the U.S. District
Court for the Middle District of Tennessee before Judge William
Haynes. Grier v. Wadley a/k/a Grier v. Goetz, case number 79-
3107 and John B. v. Menke a/k/a John B. v. Goetz, case number
3:98-0168 were settled in the U.S. District Court for the Middle
District of Tennessee before Judge John T. Nixon. Plaintiffs in
all four lawsuits are represented by the Tennessee Justice
Center with Gordon Bonnyman as lead attorney.
TOBACCO FIRMS: Australian Watchdog Analyzing "Light" Cigarettes
---------------------------------------------------------------
The Australian Competition and Consumer Commission (ACCC) is
investigating three multinational tobacco companies for
deceptive and misleading conduct over the sale of cigarettes
labeled "light" and "mild," The Australian reports. Included in
the investigation are:
(1) Philip Morris,
(2) British America Tobacco, and
(3) WD&HO Wills
The consumer group charges the firms with violating the Trade
Practices Act by duping smokers into believing the products were
safer than other cigarettes. The investigation was conducted
after federal Democrats senator Lyn Allison complained about the
inadequacy of a prior ACCC report on the issue in June last
year.
The ACCC confirmed the investigation to The Australian yesterday
but refused to provide any information. Newly appointed ACCC
head Graeme Samuel has told Sen. Allison that he would be
releasing a report on a further investigation soon, Sen. Allison
stated.
"There is plenty of evidence the industry has acted outside the
Trade Practices Act," Senator Allison told the Australian. "We
have already heard evidence from a whistleblower (former BAT in-
house lawyer Fred Gulson) about the destruction of documents, so
it is important the ACCC is tough on them."
A prosecution from the ACCC could cause the companies to pay
multimillion-dollar penalties and cause the filing of legal
action by smokers, claiming to have been deceived by cigarettes
promoted as "light" or "mild."
The news of the ACCC investigation is a boost for anti-tobacco
activists and tobacco litigation lawyers. "We welcome any
investigation which draws attention to the way these companies
do business," Anne Jones, from Action on Smoking and Health,
told the Australian.
New Securities Fraud Cases
BANK ONE: Rabin Murray Lodges Securities Fraud Suit in S.D. OH
--------------------------------------------------------------
Rabin Murray & Frank LLP initiated a securities class action in
United States District Court for the Southern District of Ohio,
case number 03-CV-916, on behalf of all persons or entities who
purchased or otherwise acquired One Group Balanced
(Nasdaq:OAMAX) (Nasdaq:OAMBX) (Nasdaq:OGAFX), One Group
Diversified Equity (Nasdaq:OVBGX) (Nasdaq:ODECX) (Nasdaq:OGVFX),
One Group Diversified International (Nasdaq:ONIBX)
(Nasdaq:OGDCX) (Nasdaq:WOIEX), One Group Diversified Mid Cap
(Nasdaq:ODMBX) (Nasdaq:ODMCX) (Nasdaq:WOOPX), and the One Group
family of funds owned and operated by Banc One. (NYSE:ONE), and
its subsidiaries and affiliates, between October 1, 1998 and
July 3, 2003, inclusive.
The complaint names Bank One Corp.; Banc One Investment
Advisers; One Group (r) Mutual Funds; Canary Capital Partners,
LLC; Canary Investment Management, LLC; Canary Capital Partners,
Ltd; each of the Funds; and John Does 1-100.
The Funds, and the symbols for the respective Funds named below,
are as follows:
(1) One Group Technology Fund (Nasdaq:OGTAX),
(Nasdaq:OGTBX), (Nasdaq:OGTCX), (Nasdaq:OGTIX);
(2) One Group Health Sciences Fund (Nasdaq:OHSAX),
(Nasdaq:OHSBX), (Nasdaq:OHSCX), (Nasdaq:OHSIX);
(3) One Group Diversified International Fund
(Nasdaq:PGIEX), (Nasdaq:ONIBX), (Nasdaq:OGDCX),
(Nasdaq:WOIEX);
(4) One Group International Equity Index Fund
(Nasdaq:OEIAX), (Nasdaq:OGEBX), (Nasdaq:OIICX),
(Nasdaq:OIEAX);
(5) One Group Small Cap Growth Fund (Nasdaq:PGSCX),
(Nasdaq:OGFBX), (Nasdaq:OSGCX), (Nasdaq:OGGFX);
(6) One Group Small Cap Value Fund (Nasdaq:PSOAX),
(Nasdaq:PSOBX), (Nasdaq:OSVCX), (Nasdaq:PSOPX);
(7) One Group Market Expansion Index Fund (Nasdaq:OMEAX),
(Nasdaq:OMEBX), (Nasdaq:OMECX), (Nasdaq:PGMIX);
(8) One Group Mid Cap Growth Fund (Nasdaq:OSGIX),
(Nasdaq:OGOBX), (Nasdaq:OMGCX), (Nasdaq:HLGEX);
(9) One Group Mid Cap Value Fund (Nasdaq:OGDIX),
(Nasdaq:OGDBX), (Nasdaq:OMVCX), (Nasdaq:HLDEX);
(10) One Group Diversified Mid Cap Fund (Nasdaq:PECAX),
(Nasdaq:ODMBX), (Nasdaq:ODMCX), (Nasdaq:WOOPX);
(11) One Group Large Cap Growth Fund (Nasdaq:OLGAX),
(Nasdaq:OGLGX), (Nasdaq:OLGCX);
(12) One Group Large Cap Value Fund (Nasdaq:OLVAX),
(Nasdaq:OLVBX), (Nasdaq:OLVCX), (Nasdaq:HLQVX);
(13) One Group Diversified Equity Fund (Nasdaq:PAVGX),
(Nasdaq:OVBGX), (Nasdaq:ODECX), (Nasdaq:OGVFX);
(14) One Group Equity Index Fund (Nasdaq:OGEAX),
(Nasdaq:OGEIX), (Nasdaq:OEICX), (Nasdaq:HLEIX);
(15) One Group Equity Income Fund (Nasdaq:OIEIX),
(Nasdaq:OGIBX), (Nasdaq:OINCX), (Nasdaq:HLIEX);
(16) One Group Balanced Fund (Nasdaq:OGASX), (Nasdaq:OAMAX),
(Nasdaq:OAMBX), (Nasdaq:OGAFX);
(17) One Group Investor Growth Fund (Nasdaq:ONGAX),
(Nasdaq:OGIGX), (Nasdaq:OGGCX), (Nasdaq:ONIFX);
(18) One Group Investor Growth & Income Fund (Nasdaq:ONGIX),
(Nasdaq:ONEBX), (Nasdaq:ONECX), (Nasdaq:ONGFX);
(19) One Group Investor Balanced Fund (Nasdaq:OGIAX),
(Nasdaq:OGBBX), (Nasdaq:OGBCX), (Nasdaq:OIBFX);
(20) One Group Investor Conservative Growth Fund
(Nasdaq:OICAX), (Nasdaq:OICGX), (Nasdaq:OCGCX),
(Nasdaq:ONCFX);
(21) One Group Tax-Free Bond Fund (Nasdaq:PMBAX),
(Nasdaq:PUBBX), (Nasdaq:PRBIX);
(22) One Group Arizona Municipal Bond Fund (Nasdaq:OAMAX),
(Nasdaq:OAMBX), (Nasdaq:OGAFX);
(23) One Group Kentucky Municipal Bond Fund (Nasdaq:OKYAX),
(Nasdaq:ONKBX), (Nasdaq:TRKMX);
(24) One Group Louisiana Municipal Bond Fund (Nasdaq:PGLAX),
(Nasdaq:ONLBX), (Nasdaq:OGLFX);
(25) One Group Michigan Municipal Bond Fund (Nasdaq:PEIAX),
(Nasdaq:OMIBX), (Nasdaq:WOMBX);
(26) One Group Ohio Municipal Bond Fund (Nasdaq:ONOHX),
(Nasdaq:OOHBX), (Nasdaq:HLOMX);
(27) One Group West Virginia Municipal Bond Fund
(Nasdaq:OQWAX), (Nasdaq:OGWBX), (Nasdaq:OGWFX);
(28) One Group Municipal Income Fund (Nasdaq:OTBAX),
(Nasdaq:OTBBX), (Nasdaq:OMICX), (Nasdaq:HLTAX);
(29) One Group Intermediate Tax-Free Bond Fund
(Nasdaq:ONTAX), (Nasdaq:ONFBX), (Nasdaq:HLTIX);
(30) One Group Short-term Municipal Bond Fund
(Nasdaq:OGLUX), (OVBXB), (Nasdaq:OSTCX),
(Nasdaq:HLLVX);
(31) One Group High Yield Bond Fund (Nasdaq:OHYAX),
(Nasdaq:OGHBX), (Nasdaq:OGHGX), (Nasdaq:OHYFX);
(32) One Group Income Bond Fund (Nasdaq:ONIAX),
(Nasdaq:OINBX), (Nasdaq:OBDCX), (Nasdaq:HLIPX);
(33) One Group Bond Fund (Nasdaq:PGBOX), (Nasdaq:OBOBX),
(Nasdaq:OBOCX), (Nasdaq:WOBDX);
(34) One Group Government Bond Fund (Nasdaq:OGGAX),
(Nasdaq:OGGBX), (Nasdaq:OGVCX), (Nasdaq:HLGAX);
(35) One Group Mortgage Backed Securities Fund
(Nasdaq:OMBAX), (Nasdaq:OMBIX);
(36) One Group Intermediate Bond Fund (Nasdaq:OGBAX),
(Nasdaq:OBDBX), (Nasdaq:OIMCX), (Nasdaq:SEIFX);
(37) One Group Treasury & Agency Fund (Nasdaq:OTABX),
(Nasdaq:ONTBX), (Nasdaq:OGTFX);
(38) One Group Short-Term Bond Fund (Nasdaq:OGLVX), (OVBXB),
(Nasdaq:OSTCX), (Nasdaq:HLLVX);
(39) One Group Ultra Short-Term Bond Fund (Nasdaq:ONUAX),
(Nasdaq:ONUBX), (Nasdaq:OGUCX), (Nasdaq:HLGFX);
(40) One Group Market Neutral Fund (Nasdaq:OGNAX);
(41) One Group Ohio Municipal Money Market Fund
(Nasdaq:HLOMX), (Nasdaq:ONOHX), (Nasdaq:OOHBX);
(42) One Group Michigan Municipal Money Market Fund
(Nasdaq:WMIXX), (Nasdaq:PEMXX);
(43) One Group Municipal Money Market Fund (Nasdaq:HTOXX),
(Nasdaq:OGIXX);
(44) One Group Prime Money Market Fund (Nasdaq:HLPXX),
(Nasdaq:HPIXX), (Nasdaq:OPBXX), (Nasdaq:OPCXX);
(45) One Group U.S. Government Securities Money Market Fund
(Nasdaq:OMAXX), (Nasdaq:OMIXX); and
(46) One Group U.S. Treasury Securities Money Market Fund
(Nasdaq:HGOXX), (Nasdaq:HTIXX), (Nasdaq:OTBXX),
(Nasdaq:OTCXX).
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,
defendants failed to disclose that they improperly allowed
certain hedge funds, such as Canary, 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 4:00 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,
Bank One Corporation 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-4:00 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
Phone: (800) 497-8076, (212) 682-1818 or (212) 682-1892 or by E-
mail: info@rabinlaw.com
BANK ONE: Schiffrin & Barroway Lodges Securities Suit in N.D. IL
----------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in
the United States District Court for the Northern District of
Illinois on behalf of all purchasers, redeemers and holders of
shares of the One Group Funds managed by wholly-owned
subsidiaries of Bank One Corporation (NYSE: ONE) collectively,
between October 1, 1998 and July 3, 2003.
The following One Group Funds are subject to the above class
action lawsuit:
(1) One Group Technology Fund (Nasdaq:OGTAX),
(Nasdaq:OGTBX), (Nasdaq:OGTCX), (Nasdaq:OGTIX);
(2) One Group Health Sciences Fund (Nasdaq:OHSAX),
(Nasdaq:OHSBX), (Nasdaq:OHSCX), (Nasdaq:OHSIX);
(3) One Group Diversified International Fund
(Nasdaq:PGIEX), (Nasdaq:ONIBX), (Nasdaq:OGDCX),
(Nasdaq:WOIEX);
(4) One Group International Equity Index Fund
(Nasdaq:OEIAX), (Nasdaq:OGEBX), (Nasdaq:OIICX),
(Nasdaq:OIEAX);
(5) One Group Small Cap Growth Fund (Nasdaq:PGSCX),
(Nasdaq:OGFBX), (Nasdaq:OSGCX), (Nasdaq:OGGFX);
(6) One Group Small Cap Value Fund (Nasdaq:PSOAX),
(Nasdaq:PSOBX), (Nasdaq:OSVCX), (Nasdaq:PSOPX);
(7) One Group Market Expansion Index Fund (Nasdaq:OMEAX),
(Nasdaq:OMEBX), (Nasdaq:OMECX), (Nasdaq:PGMIX);
(8) One Group Mid Cap Growth Fund (Nasdaq:OSGIX),
(Nasdaq:OGOBX), (Nasdaq:OMGCX), (Nasdaq:HLGEX);
(9) One Group Mid Cap Value Fund (Nasdaq:OGDIX),
(Nasdaq:OGDBX), (Nasdaq:OMVCX), (Nasdaq:HLDEX);
(10) One Group Diversified Mid Cap Fund (Nasdaq:PECAX),
(Nasdaq:ODMBX), (Nasdaq:ODMCX), (Nasdaq:WOOPX);
(11) One Group Large Cap Growth Fund (Nasdaq:OLGAX),
(Nasdaq:OGLGX), (Nasdaq:OLGCX);
(12) One Group Large Cap Value Fund (Nasdaq:OLVAX),
(Nasdaq:OLVBX), (Nasdaq:OLVCX), (Nasdaq:HLQVX);
(13) One Group Diversified Equity Fund (Nasdaq:PAVGX),
(Nasdaq:OVBGX), (Nasdaq:ODECX), (Nasdaq:OGVFX);
(14) One Group Equity Index Fund (Nasdaq:OGEAX),
(Nasdaq:OGEIX), (Nasdaq:OEICX), (Nasdaq:HLEIX);
(15) One Group Equity Income Fund (Nasdaq:OIEIX),
(Nasdaq:OGIBX), (Nasdaq:OINCX), (Nasdaq:HLIEX);
(16) One Group Balanced Fund (Nasdaq:OGASX), (Nasdaq:OAMAX),
(Nasdaq:OAMBX), (Nasdaq:OGAFX);
(17) One Group Investor Growth Fund (Nasdaq:ONGAX),
(Nasdaq:OGIGX), (Nasdaq:OGGCX), (Nasdaq:ONIFX);
(18) One Group Investor Growth & Income Fund (Nasdaq:ONGIX),
(Nasdaq:ONEBX), (Nasdaq:ONECX), (Nasdaq:ONGFX);
(19) One Group Investor Balanced Fund (Nasdaq:OGIAX),
(Nasdaq:OGBBX), (Nasdaq:OGBCX), (Nasdaq:OIBFX);
(20) One Group Investor Conservative Growth Fund
(Nasdaq:OICAX), (Nasdaq:OICGX), (Nasdaq:OCGCX),
(Nasdaq:ONCFX);
(21) One Group Tax-Free Bond Fund (Nasdaq:PMBAX),
(Nasdaq:PUBBX), (Nasdaq:PRBIX);
(22) One Group Arizona Municipal Bond Fund (Nasdaq:OAMAX),
(Nasdaq:OAMBX), (Nasdaq:OGAFX);
(23) One Group Kentucky Municipal Bond Fund (Nasdaq:OKYAX),
(Nasdaq:ONKBX), (Nasdaq:TRKMX);
(24) One Group Louisiana Municipal Bond Fund (Nasdaq:PGLAX),
(Nasdaq:ONLBX), (Nasdaq:OGLFX);
(25) One Group Michigan Municipal Bond Fund (Nasdaq:PEIAX),
(Nasdaq:OMIBX), (Nasdaq:WOMBX);
(26) One Group Ohio Municipal Bond Fund (Nasdaq:ONOHX),
(Nasdaq:OOHBX), (Nasdaq:HLOMX);
(27) One Group West Virginia Municipal Bond Fund
(Nasdaq:OQWAX), (Nasdaq:OGWBX), (Nasdaq:OGWFX);
(28) One Group Municipal Income Fund (Nasdaq:OTBAX),
(Nasdaq:OTBBX), (Nasdaq:OMICX), (Nasdaq:HLTAX);
(29) One Group Intermediate Tax-Free Bond Fund
(Nasdaq:ONTAX), (Nasdaq:ONFBX), (Nasdaq:HLTIX);
(30) One Group Short-term Municipal Bond Fund
(Nasdaq:OGLUX), (OVBXB), (Nasdaq:OSTCX),
(Nasdaq:HLLVX);
(31) One Group High Yield Bond Fund (Nasdaq:OHYAX),
(Nasdaq:OGHBX), (Nasdaq:OGHGX), (Nasdaq:OHYFX);
(32) One Group Income Bond Fund (Nasdaq:ONIAX),
(Nasdaq:OINBX), (Nasdaq:OBDCX), (Nasdaq:HLIPX);
(33) One Group Bond Fund (Nasdaq:PGBOX), (Nasdaq:OBOBX),
(Nasdaq:OBOCX), (Nasdaq:WOBDX);
(34) One Group Government Bond Fund (Nasdaq:OGGAX),
(Nasdaq:OGGBX), (Nasdaq:OGVCX), (Nasdaq:HLGAX);
(35) One Group Mortgage Backed Securities Fund
(Nasdaq:OMBAX), (Nasdaq:OMBIX);
(36) One Group Intermediate Bond Fund (Nasdaq:OGBAX),
(Nasdaq:OBDBX), (Nasdaq:OIMCX), (Nasdaq:SEIFX);
(37) One Group Treasury & Agency Fund (Nasdaq:OTABX),
(Nasdaq:ONTBX), (Nasdaq:OGTFX);
(38) One Group Short-Term Bond Fund (Nasdaq:OGLVX), (OVBXB),
(Nasdaq:OSTCX), (Nasdaq:HLLVX);
(39) One Group Ultra Short-Term Bond Fund (Nasdaq:ONUAX),
(Nasdaq:ONUBX), (Nasdaq:OGUCX), (Nasdaq:HLGFX);
(40) One Group Market Neutral Fund (Nasdaq:OGNAX);
(41) One Group Ohio Municipal Money Market Fund
(Nasdaq:HLOMX), (Nasdaq:ONOHX), (Nasdaq:OOHBX);
(42) One Group Michigan Municipal Money Market Fund
(Nasdaq:WMIXX), (Nasdaq:PEMXX);
(43) One Group Municipal Money Market Fund (Nasdaq:HTOXX),
(Nasdaq:OGIXX);
(44) One Group Prime Money Market Fund (Nasdaq:HLPXX),
(Nasdaq:HPIXX), (Nasdaq:OPBXX), (Nasdaq:OPCXX);
(45) One Group U.S. Government Securities Money Market Fund
(Nasdaq:OMAXX), (Nasdaq:OMIXX); and
(46) One Group U.S. Treasury Securities Money Market Fund
(Nasdaq:HGOXX), (Nasdaq:HTIXX), (Nasdaq:OTBXX),
(Nasdaq:OTCXX).
The complaint charges Bank One Corporation, One Groupr Mutual
Funds, the One Group Funds, Mark Beeson, Richard R. Jandrain
III, Clyde L. Carter, Karen Johnson-Grunst, Edward J. Stern,
Canary Investment Management, LLC, Canary Capital Partners, LLC,
and Canary Capital Partners, LTD. with violations of the
Securities Act of 1933, the Securities Exchange Act of 1934, the
Investment Company Act of 1940, and for common law breach of
fiduciary duties. The Complaint alleges that the One Group
Funds and the other defendants engaged in a fraudulent scheme to
defraud and cause financial injury to the shareholders of the
One Group Funds.
According to the Complaint, the One Group Funds, Defendants
Canary Capital Partners, LLC and Canary Investment Management,
LLC (collectively, the "Canary Defendants"), and other
defendants engaged in illegal and improper trading practices, in
concert with certain institutional traders, which caused
financial injury to all shareholders of the One Group Funds.
In particular, the Defendants surreptitiously permitted certain
favored investors, including the Canary Defendants to illegally
receive the prior day's price for orders placed after 4 p.m.
This allowed Canary and other mutual fund investors who engaged
in the same wrongful course of conduct to capitalize on post-
4:00 p.m. information, while those who bought their mutual fund
shares lawfully could not.
The complaint further alleges that defendants permitted the
Canary Defendants and other favored investors to engage in
"timing" of the One Group Funds whereby these favored investors
were permitted to conduct short-term, "in and out" trading of
mutual fund shares, despite explicit restrictions on such
activity in the One Group Funds' prospectuses.
For more details, contact Marc A. Topaz or Stuart L. Berman by
Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by
Phone: 1-888-299-7706 (toll free) or 1-610-667-7706 or by E-
mail: info@sbclasslaw.com
CHECK POINT: Lasky & Rifkind Lodges Securities Suit in S.D. NY
--------------------------------------------------------------
Lasky & Rifkind, Ltd. initiated a securities class action filed
in the United States District Court for the Southern District of
New York, on behalf of persons who purchased or otherwise
acquired publicly traded securities of Check Point Software
Technologies Ltd. (NASDAQ:CHKP) between July 10, 2001 and April
4, 2002, inclusive. The lawsuit was filed against Check Point
and certain officers of the Company.
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 false and misleading
statements concerning the Company's business. Specifically, the
complaint alleges that defendants issued numerous statements
concerning Check Point's revenue growth, product and marketing
initiatives, and increasing revenues and profits while failing
to disclose that demand for the Company's products was
materially declining.
According to the complaint, when this information was belatedly
disclosed to the market on April 4, 2002, shares of Check Point
fell more than 24% on extremely heavy trading volume.
For more details, contact Leigh Lasky by Phone: 800-321-0476
CHECK POINT: Wolf Haldenstein Lodges Securities Suit in S.D. NY
---------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities
class action in the United States District Court for the
Southern District of New York, on behalf of all persons who
purchased securities of Check Point Software Technologies, Ltd.
(Nasdaq: CHKP) between July 10, 2001 and April 4, 2002,
inclusive, against Check Point Software and certain officers and
directors of the Company.
During the Class Period, Defendants made public statements
regarding Check Point's increasing profits and revenue growth,
and various product marketing initiatives. The complaint
alleges that these statements were issued despite the fact that
demand for Check Point's products was in sharp decline. Several
Individual Defendants engaged in significant insider selling
during the Class Period, selling approximately 228,000 shares
and realizing $8.8 million in illegal proceeds.
On April 4, 2002, the truth was revealed. Check Point announced
a revenue shortfall of approximately $15 million for the first
quarter 2002, and lowered its revenue and earnings guidance by
approximately 10% for fiscal year 2002. The Company further
disclosed that a number of its customers had delayed purchase
decisions and/or reduced the dollar amount of their purchases.
Market reaction to Check Point's announcement was swift and
severe. Check Point shares dropped over 19% in heavy trading,
closing at $22.07 on April 4, 2002.
For more details, contact Fred Taylor Isquith, Michael J. Miske,
George Peters, or Derek Behnke by Mail: 270 Madison Avenue, New
York, New York 10016, by Phone: (800) 575-0735 or by E-mail:
classmember@whafh.com or visit the firm's Website:
http://www.whafh.com. All e-mail correspondence should make
reference to Check Point.
CONSTAR INTERNATIONAL: Marc Henzel Lodges Securities Suit in PA
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Eastern
District of Pennsylvania on behalf of all purchasers of Constar
International, Inc. (Nasdaq: CNST) stock issued in connection
with or traceable to its November 2002 Initial Public Offering
(IPO).
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 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 preforms, causing a fourth quarter 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 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 or by E-Mail:
mhenzel182@aol.com
CONSTAR INTERNATIONAL: Federman & Sherwood Files Securities Suit
----------------------------------------------------------------
Federman & Sherwood initiated a securities class action on
behalf of shareholders of Constar International, Inc. (Nasdaq:
CNST) pursuant to Contar's November 2002 Initial Public
Offering.
The lawsuit alleges that Constar's Prospectus/ Registration
Statement was materially false and misleading in that the
Company failed to disclose unseasonably low demand for its soft
drink bottle products and managements' changed focus just prior
to the IPO purposely reduced the Company's higher volume
preforms, causing a Q-4 revenue shortfall.
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
CONSTAR INTERNATIONAL: Charles Piven Lodges Stock Lawsuit in PA
---------------------------------------------------------------
The Law Offices Of Charles J. Piven, PA initiated a securities
class action on behalf of shareholders who purchased the common
stock of Constar International, Inc. (NasdaqNM:CNST) traceable
to its November 2002 Initial Public Offering. The case is
pending in the United States District Court for the Eastern
District of Pennsylvania against Constar and certain of its
officers and directors.
The action charges that defendants violated federal securities
laws by issuing a series of materially false and misleading
statements to the market throughout the Class Period which
statements had the effect of artificially inflating the market
price of the Company's securities.
For more details, contact Charles J. Piven by Mail: The World
Trade Center-Baltimore, 401 East Pratt Street, Suite 2525,
Baltimore, Maryland 21202, by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
FIRSTENERGY CORPORATION: Marc Henzel Files Securities Suit in OH
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Northern
District of Ohio on behalf of purchasers of the common stock of
FirstEnergy, Corporation (NYSE: FE) between April 24, 2002 and
August 5, 2003, inclusive.
The complaint charges FirstEnergy and certain of its officers
and directors with violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. More specifically, the complaint alleges that
defendants issued a series of material misrepresentations to the
market during the Class Period, thereby artificially inflating
the price of FirstEnergy's common stock.
The Complaint alleges that these statements were materially
false and misleading because they failed to disclose and
misrepresented the following adverse facts, among others:
(1) that the Company materially overstated its earnings,
revenues, net income, and earnings per share;
(2) that the Company had improperly accounted for costs
incurred in connection with the deregulation of certain
of its businesses by employing an inappropriately long
amortization schedule, thereby understating costs and
materially and artificially inflating earnings during
the Class Period;
(3) that the Company had materially overvalued certain
leased power generation facilities that were carried as
assets on the Company's balance sheet;
(4) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company; and
(5) that as a result, the value of the Company's net income
and financial results were materially overstated at all
relevant times.
On August 5, 2003, the Company reported that it would have to
restate its financial results for fiscal year 2002 and the first
quarter of 2003 due to its improper accounting for its annual
amortization expenses and for above- market leases. News of this
shocked the market.
Shares of FirstEnergy fell 8.5 percent to close at $31.33 per
share on extremely heaving trading volume.
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 or by E-Mail:
mhenzel182@aol.com
HEALTHTRONICS SURGICAL: Marc Henzel Lodges Securities Suit in GA
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Northern
District of Georgia on behalf of all persons who purchased or
otherwise acquired the securities of HealthTronics Surgical
Services, Inc., (NASDAQ: HTRN) HealthTronics Surgical Services,
Inc., between January 4, 2000 and July 25, 2003, inclusive.
The complaint charges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of materially false
and misleading statements to the market, and by failing to
disclose material information that plaintiffs contend defendants
had a duty to disclose, between January 4, 2000 and July 25,
2003.
More specifically, the complaint alleges that defendants made
material misrepresentations and/or omitted to make material
disclosures during the Class Period concerning the efficacy,
testing and market acceptance of OssaTronr, its leading product
for the treatment of heel pain.
Among other things, the complaint charges, defendants failed to
disclose that some of the Company's own tests failed to support
defendants' statements that OssaTronr was more effective, safer
and less costly than alternative, non-surgical treatments for
heel pain.
In addition, the complaint alleges that defendants
misrepresented the market acceptance of OssaTronr because
Defendants knew, or were severely reckless in disregarding at
the time these statements were made, that serious questions
existed among the medical community concerning the effectiveness
of extracorporeal shock wave treatment (ESWT) for heel pain,
which in turn raised serious issues as to whether insurance
carriers and other third party payors would cover OssaTronr
procedures.
As a result, and because the Company was experiencing difficulty
in its billing and collection department, which further made
insurance reimbursement difficult to obtain, the complaint
claims, the company's January 28, 2003 earnings projections
lacked any reasonable basis in fact when made.
When defendants finally acknowledged that the OssaTronr product
was not being absorbed by the market as they had previously
claimed, the market's reaction to the disclosures was swift and
severe. On July 28, 2003, the market price of HealthTronics
common stock tumbled over 26% in unusually heavy trading.
Indeed, the price of HealthTronics common stock dropped from a
high of $17.60 per share during the Class Period to as low as
$7.76 per share on July 28, 2003.
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 or by E-Mail:
mhenzel182@aol.com
JANUS CAPITAL: Schiffrin & Barroway Files Securities Suit in CO
---------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in
the United States District Court for the District of Colorado on
behalf of all purchasers, redeemers and holders of shares of the
Janus Funds listed below, which are managed by wholly owned
subsidiaries of Janus Capital Group Inc. (NYSE: JNS) between
October 1, 1998 and July 3, 2003.
The following Janus Funds are subject to the above class action
lawsuit:
(1) Janus Fund (Nasdaq:JANSX)
(2) Janus Enterprise Fund (Nasdaq:JAENX)
(3) Janus Olympus Fund (Nasdaq:JAOLX)
(4) Janus Global Technology Fund (Nasdaq:JAGTX)
(5) Janus Orion Fund (Nasdaq:JORNX)
(6) Janus Twenty Fund (Nasdaq:JAVLX)
(7) Janus Venture Fund (Nasdaq:JAVTX)
(8) Janus Global Life Sciences Fund (Nasdaq:JAGLX)
(9) Janus Global Value Fund (Nasdaq:JGVAX)
(10) Janus Overseas Fund (Nasdaq:JAOSX)
(11) Janus Worldwide Fund (Nasdaq:JAWWX)
(12) Janus Balanced Fund (Nasdaq:JABAX)
(13) Janus Core Equity Fund (Nasdaq:JAEIX)
(14) Janus Growth and Income Fund (JAGIX)
(15) Janus Special Equity Fund (Nasdaq:JSVAX)
(16) Janus Risk-Managed Stock Fund (Nasdaq:JRMSX)
(17) Janus Mid Cap Value Fund (NASDAQ: JMCVX, JMIVX)
(18) Janus Small CapValue Fund (NASDAQ: JSCVX, JSIVX)
(19) Janus Federal Tax-Exempt Fund (Nasdaq:JATEX)
(20) Janus Flexible Income Fund (Nasdaq:JAFIX)
(21) Janus Short-Term Bond Fund (Nasdaq:JASBX)
(22) Janus Money Market Fund (Nasdaq:JAMXX)
(23) Janus Government Money Market Fund (Nasdaq:JAGXX)
(24) Janus Tax-Exempt Money Market Fund (JATXX)
The Complaint charges the Janus Mutual Funds, Janus Capital
Group, Janus Capital Corporation, Janus Capital Management, LLC,
Janus Investment Fund, Edward J. Stern, Canary Investment
Management, LLC, Canary Capital Partners, LLC, and Canary
Capital Partners, LTD. with violations of the Securities Act of
1933, the Securities Exchange Act of 1934, the Investment
Company Act of 1940, and for common law breach of fiduciary
duties. The Complaint alleges that the Janus Funds and the
other defendants engaged in a fraudulent scheme to defraud and
cause financial injury to the shareholders of the Janus Funds.
According to the Complaint, the Janus Funds, Defendants Canary
Capital Partners, LLC and Canary Investment Management, LLC and
other defendants engaged in illegal and improper trading
practices, in concert with certain institutional traders, which
caused financial injury to all shareholders of the Janus Funds.
In particular, the Defendants surreptitiously permitted certain
favored investors, including the Canary Defendants to engage in
"timing" of the Janus Mutual Funds whereby these favored
investors were permitted to conduct short-term, "in and out"
trading of mutual fund shares, despite explicit restrictions on
such activity in the Janus Mutual Funds' prospectuses.
For more details, contact Marc A. Topaz or Stuart L. Berman by
Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by
Phone: 1-888-299-7706 (toll free) or 1-610-667-7706 or by E-
mail: info@sbclasslaw.com
READ-RITE CORPORATION: Marc Henzel Lodges Securities Suit in CA
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Northern
District of California on behalf of purchasers of Read-Rite
Corporation (OTC Bulletin Board: RDRTQ; formerly Nasdaq: RDRT)
publicly traded securities during the period between October 30,
2001 and June 6, 2003, inclusive.
The complaint charges certain of Read-Rite's officers and
directors with violations of the Securities Exchange Act of
1934. Read-Rite is an independent supplier of magnetic
recording heads for the hard disk drive (HDD) and tape drive
markets. The Company designs, manufactures and markets magnetic
recording heads as head gimbal assemblies ("HGAs") and
incorporates multiple HGAs into head stack assemblies.
Read-Rite's products are sold primarily for use in 3.5-inch HDDs
for desktop computer devices, for high-performance enterprise
HDDs used in network and mainframe applications, as well as for
consumer electronic devices such as game stations or personal
video recorders.
The complaint alleges that during the Class Period defendants
issued a series of false and misleading statements about the
Company, and as a result Read-Rite's stock traded at inflated
prices during the Class Period, increasing to as high as $39 on
January 9, 2002, before the Company announced it would file for
bankruptcy.
The true facts which were known to each of the defendants, but
concealed from the investing public during the Class Period,
were as follows:
(1) the Company's 40 GB/platter inventory was overstated by
$16.7 million;
(2) the Company's Philippine real estate holdings were
overstated by approximately $6.8 million;
(3) the Company needed to restructure its operations and
the associated charges would cost the Company in excess
of $20 million and would cause an earnings shortfall in
coming quarters;
(4) the Company's Q2 FY03 loss was grossly understated;
(5) the Company was experiencing massive technical problems
associated with its 40GB/per platter programs.
Moreover, the Company was experiencing these problems
well before January 2002 and beyond April 2002 when
defendants claimed such problems were fixed; and
(6) the Company was underfunded and could not complete the
production of its 80GB programs.
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 or by E-Mail:
mhenzel182@aol.com
SPORTSLINE.COM: Marc Henzel Lodges Securities Lawsuit in S.D. FL
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action against Sportsline.com Inc., Kenneth W. Sanders and
Michael Levy in the United States District Court for the
Southern District of Florida, on behalf of purchasers of
Sportsline.Com Incorporated (NASDAQNM:SPLN) common stock during
the period between May 15, 2001 and September 25, 2003.
The complaint charges Sportsline and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. The complaint alleges that defendants issued a series of
false and misleading statements regarding Sportsline's:
(1) advertising base and its ability to mitigate overall
diminished media spending;
(2) ability to reach positive EBITDA in the fourth quarter
of 2002;
(3) successful integration of its fantasy products and
their positive impact on the Company's overall growth
and presence in the Internet sports media industry; and
(4) ability to increase the Company's value through the
acquisition of the MVP.com store.
In fact, according to the complaint, defendants knew and failed
to disclose:
(i) the Company's fantasy sports business was not as
significant a revenue source as the Company portrayed
it to be;
(ii) revenue derived from advertising sales was diminishing
and CBS was contributing significantly less advertising
revenue than disclosed;
(iv) a positive EBITDA could only be achieved by hiding
expenses and improperly classifying discontinued
operations; and
(v) MVP.com's assets did not yield promised value.
As a result of the defendants' false and misleading statements,
Sportsline's stock traded at inflated prices during the Class
Period, increasing to as high as $3.85 on November 27, 2001.
On September 26, 2003, Sportsline shocked the market by
revealing that the Company was reducing its previous revenue and
earnings forecasts for the third quarter and full year 2003 and
that it is restating its reported financial results for the past
two and a half years. In response to the Company's devastating
news concerning the financial restatements, Sportsline's stock
price plummeted by more than 30% on volumes of about eight times
the daily average.
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 or by E-Mail:
mhenzel182@aol.com
STRONG CAPITAL: Weiss & Yourman Files Securities Suit in S.D. NY
----------------------------------------------------------------
Weiss & Yourman initiated a securities class action in the
United States District Court for the Southern District of New
York against Strong Capital Management, Inc. (NASDAQ:SGROX),
(NASDAQ:STRFX), (NASDAQ:SMDCX), (NASDAQ:SDVIX) on behalf of
purchasers of shares of mutual funds managed by Strong from
October 16, 2002 through September 3, 2003, including the
following:
(1) Strong Advisor Bond Fund (SVBDX, SADBX, SABCX, SIBNX,
F008W1, SBDIX)
(2) Strong Advisor Municipal Bond Fund (SAMAX, SMBBX,
F00BH8)
(3) Strong Advisor Municipal Select Fund (SMUIX, STAEX,
F005LZ, F005M9)
(4) Strong Advisor Short Duration Bond A Fund (STSDX,
SSDKX, SSHCX, STGBX)
(5) Strong Advisor Common Stock Fund (SCSAX, SCSKX, STSAX,
STCSX)
(6) Strong Advisor Endeavor Large Cap Fund (STALX, F008GO)
(7) Strong Advisor Focus Fund (F005MO, F005M7, F005LT)
(8) Strong Advisor International Core Fund (F008GQ, F008GR,
F008GS)
(9) Strong Advisor Large Company Core Fund (SLGAX, F00AO2,
F00AO3, SLCKX)
(10) Strong Advisor Mid-Cap Growth Fund (F005LQ, F005M1,
F005LO, SMDCX)
(11) Strong Advisor Small Cap Value Fund (SMVAX, SMVBX,
SMVCX, SSMVX)
(12) Strong Advisor Strategic Income Fund (SASAX, F005L7,
SASCX)
(13) Strong Advisor Technology Fund (SASCX, F005LM, F005LM)
(14) Strong Advisor U.S. Small/Mid Cap Growth Fund (F009D0,
F009D1)
(15) Strong Advisor U.S. Value (F005M2, F005M5, F005MA,
SEQKX, SEQIX)
(16) Strong Advisor Utilities and Energy Fund (SUEAX,
F00AED, F00AEE, F009D5)
(17) Strong All Cap Value Fund (F009D5)
(18) Strong Asia Pacific Fund (SASPX)
(19) Strong Balanced Fund (STAAX)
(20) Strong Blue Chip Fund (SBCHX)
(21) Strong Discovery Fund (STDIX)
(22) Strong Dividend Income Fund (SDVIX, F008VY)
(23) Strong Dow 30 Value Fund (SDOWX)
(24) Strong Endeavor Fund (SENDX)
(25) Strong Energy Fund (SENGX)
(26) Strong Enterprise Fund (SENAX, F04ANX, SENTX, SEPKX)
(27) Strong Growth & Income Fund (SGNAX, SGNIX, SGRIX,
SGIKX)
(28) Strong Growth 20 Fund (SGTWX, SGRTX, SGRAX, F00B67,
SGRNX)
(29) Strong Growth Fund (SGROX, SGRKX)
(30) Strong Index 500 Fund (SINEX)
(31) Strong Large Cap Core Fund (SLCRX)
(32) Strong Large Cap Growth Fund (STRFX)
(33) Strong Large Company Growth Fund (SLGIX, F04ANY)
(34) Strong Mid Cap Disciplined Fund (SMCDX)
(35) Strong Multi-Cap Value Fund (SMTVX)
(36) Strong Opportunity Fund (SOPVX, SOPFX, F00AH2)
(37) Strong Overseas Fund (F00B4I, SOVRX)
(38) Strong Small Company Value Fund (F009D3)
(39) Strong Technology 100 Fund (STEKX)
(40) Strong U.S. Emerging Growth Fund (SEMRX)
(41) Strong Value Fund (STVAX)
(42) Strong Life Stages - Aggressive Portfolio Fund (SAGGX)
(43) Strong Life Stages - Conservative Portfolio Fund
(SCONX)
(44) Strong Life Stages - Moderate Portfolio Fund (SMDPX)
(45) Strong Corporate Bond Fund (SCBDX, SCBNX, STCBX)
(46) Strong Corporate Income Fund (SCORX)
(47) Strong High-Yield Bond Fund (SHBAX, SHYYX, STHYX)
(48) Strong Government Securities Fund (SGVDX, F00B66,
SGVIX, STVSX)
(49) Strong High-Yield Municipal Bond Fund (SHYLX)
(50) Strong Intermediate Municipal Bond Fund (SIMBX)
(51) Strong Municipal Bond Fund (SXFIX)
(52) Strong Minnesota Tax-Free Fund (F00B64, F00B65, F00B63)
(53) Strong Wisconsin Tax-Free Fund (F0068K)
(54) Strong Short-Term High-Yield Municipal Bond Fund
(SSHMX, SSTHX, STHBX)
(55) Strong Short-Term Municipal Bond Fund (F00B62, STSMX)
(56) Strong Short-Term Income Fund (F00B1K)
(57) Strong Short-Term Bond Fund (SSTVX, SSHIX, SSTBX)
(58) Strong Ultra Short-Term Income Fund (SADAX, SADIX,
STADX)
(59) Strong Ultra Short-Term Municipal Income Fund (SMAVX,
SMAIX, SMUAX)
(60) Strong Florida Municipal Money Market Fund (SLFXX)
(61) Strong Heritage Money Fund (SHMXX)
(62) Strong Money Market Fund (SMNXX)
(63) Strong Municipal Money Market Fund (SXFXX)
(64) Strong Tax-Free Money Fund (STMXX)
The complaint charges defendants with violations of the
Securities Act of 1933 and the Securities Exchange Act of 1934.
It alleges that defendants issued false and misleading
statements in Strong's registration statements and prospectuses
and, as a result, plaintiff and the Class were damaged.
For more details, contact David C. Katz, Mark D. Smilow, or
James E. Tullman by Mail: Weiss & Yourman, 551 Fifth Avenue, New
York, New York 10176 by Phone: 888-593-4771 or 212-682-3025 or
by E-mail: info@wynyc.com
SUREBEAM CORPORATION: Rabin Murray Lodges Securities Suit in NY
---------------------------------------------------------------
Rabin Murray & Frank LLP initiated a securities class action in
the United States District Court for the Southern District of
California, on behalf of all persons or entities who purchased
or otherwise acquired SureBeam Corporation securities
(NasdaqNM:SUREE) during the period between March 16, 2001 and
August 25, 2003, both dates inclusive. The complaint names as
defendants the Company, Lawrence A. Oberkfell, and David A.
Rane.
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.
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.
For more details, contact Eric J. Belfi or Gregory Linkh by
Phone: (800) 497-8076, (212) 682-1818 by Fax: (212) 682-1892 or
by E-mail: email@rabinlaw.com
SUREBEAM INC.: Weiss & Yourman Lodges Securities Suit in N.D. CA
----------------------------------------------------------------
Weiss & Yourman initiated a securities class action in the
United States District Court for the Northern District of
California on behalf of purchasers of SureBeam, Inc.
(Nasdaq:SUREE) stock between March 16, 2001 and August 20, 2003.
The complaint charges that the Company and certain of its
officers violated federal securities laws by issuing a series of
false and misleading statements to the investing public which
materially misstated the Company's financials, thereby
artificially inflating the price of SureBeam's stock.
Specifically, the Complaint alleges that defendants violated
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
by issuing press releases and SEC filings which failed to
disclose that the Company's reported earnings and profits were
materially overstated because they were in violation of
Generally Accepted Accounting Procedures (GAAP).
The Company launched a successful IPO on March 16, 2001, based
on a prospectus containing alleged misrepresentations.
Throughout the class period, defendants continued to disseminate
false and misleading statements to the public, thereby keeping
the stock trading at artificially high levels.
However, on June 10, 2003, SureBeam announced that it was
terminating KPMG LLP as its auditor and replacing it with
Deloitte & Touche LLP. On August 21, 2003, the Company
announced that it was then dismissing Deloitte & Touche due to
issues Deloitte had with the Company's revenue recognition
policy. As a result, SureBeam twice delayed filing its 10-Q and
eventually missed the deadline.
For more details, contact Jennifer Williams by Phone:
800-437-7918 by E-mail: info@wyca.com or visit the firm's
Website: http://www.wyca.com
*********
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news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
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*********
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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