/raid1/www/Hosts/bankrupt/CAR_Public/031020.mbx
C L A S S A C T I O N R E P O R T E R
Monday, October 20, 2003, Vol. 5, No. 206
Headlines
AEROJET-GENERAL: Discovery Yet to Start For CA Facilities Suits
AEROJET-GENERAL: Discovery Starts in Chino Hills Homeowner Suits
AEROJET-GENERAL: Reaches Settlement For San Gabriel BPOU Lawsuit
ALLAIRE CORPORATION: Fairness Hearing For Pact Set December 2003
ARABIAN AMERICAN: SEC Initiates Civil Action in TX Federal Court
AUSTRIAN REPARATIONS: Forced Labor Victims Receive Compensation
BAYER PHARMA: Pays $614 Million To Settle 1,683 Baycol Lawsuits
CELLSTAR CORPORATION: Faces Investors Suit Over Asia Transaction
CRACKER BARREL: Rulings For Overtime Suit Expected by Early 2004
CRACKER BARREL: Three Plaintiffs Remain in Civil Rights Act Suit
CRACKER BARREL: Court Denies Appeal of Suit Certification Denial
CRACKER BARREL: Plaintiffs Fail To Appeal Certification Denial
EMEX CORPORATION: Fairness Hearing For Settlement Set Dec. 2003
GENCORP INC.: Engages in Settlement Negotiations For OH Lawsuit
INTRAWARE INC.: Reaches Settlement For NY Securities Fraud Suit
INTRAWARE INC.: Dismissed as Defendant in CSFB Securities Suit
LIBERATE TECHNOLOGIES: Reaches Settlement For NY Securities Suit
LIBERATE TECHNOLOGIES: Faces Consolidated Securities Suit in CA
MERCK HEALTH: Reaches Settlement For ERISA Lawsuits in S.D. NY
MICRON TECHNOLOGIES: Faces Several CA Antitrust Suits Over DRAM
RAMP NETWORKS: Reaches Settlement for CA Securities Fraud Suit
RED HAT: Reaches Settlement For NY Consolidated Securities Suit
SIGNAL TECHNOLOGY: CA Court Enters Final Judgment V. Officers
TELSTRA: Considers Sending Customer Refunds Due To E-Mail Crisis
TRAFFIX INC.: Qwest Files Indemnification Claim Over MN Lawsuit
TRAFFIX INC.: Plaintiffs Appeal Dismissal of Consumer Fraud Suit
VANTAGEMED CORPORATION: SEC Launches Cease-And-Desist Proceeding
VERTEX PHARMACEUTICALS: Lawyer Pleads Guilty To Insider Trading
WASHINGTON: Catholic School Settles Wrongful Expulsion Lawsuit
New Securities Fraud Cases
ALLIANCE CAPITAL: Glancy Binkow Launches Securities Suit in NJ
BEARINGPOINT INC.: Deadline For Lead Plaintiff Motion Oct. 2003
LaBRANCHE & CO.: Cauley Gellar Lodges Securities Suit in S.D. NY
LABRANCHE & CO.: Schiffrin Barroway Lodges Securities Suit in NY
*********
AEROJET-GENERAL: Discovery Yet to Start For CA Facilities Suits
---------------------------------------------------------------
Discovery has yet to commence for the lawsuits filed against
Aerojet-General Corporation, along with other industrial
Potentially Responsible Parties (PRPs) and area water purveyors,
in Sacramento and Azusa, California.
The Company was sued in 17 cases by approximately 1,500 private
plaintiffs residing in the vicinity of the defendants'
facilities in Sacramento, California, and the Company's former
facility in Azusa, California. The individual plaintiffs
generally seek damages for illness, death, and economic injury
allegedly caused by their ingestion of groundwater contaminated
or served by defendants, without specifying actual damages.
The Company and other industrial defendants involved in the
litigation are the subject of certain investigations under the
Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA) and the Resource Conservation and
Recovery Act (RCRA).
The Azusa cases, coordinated for trial in Los Angeles,
California, are proceeding under two master complaints and
pretrial discovery is in process. Because California Public
Utilities Commission (PUC) regulated water purveyors cannot be
held liable if the water consumed met state and federal quality
standards, the Company expects the trial court in Los Angeles
will hold an evidentiary hearing to determine whether the PUC
regulated water entity defendants served water in violation of
state or federal drinking water standards.
If it is determined that the regulated water purveyors served
water not in violation of drinking water standards, the water
purveyor defendants will be dismissed from the litigation,
potentially leaving the Company and other defendants as
remaining parties to assert their defenses.
The long-standing stay in the Sacramento cases has been lifted
and the parties are addressing preliminary pleading issues.
Discovery is likely to commence in earnest in 2004.
AEROJET-GENERAL: Discovery Starts in Chino Hills Homeowner Suits
----------------------------------------------------------------
Discovery is proceeding in the suits filed against Aerojet-
General Corporation and several other defendants by private
homeowners residing in the vicinity of Chino and Chino Hills,
California. The cases have been consolidated and are pending in
the US District Court for the Central District of California,
namely:
(1) "Baier, et al. v. Aerojet-General Corporation, et al.,
Case No. EDCV 00 618VAP (RNBx) CA"
(2) "Kerr, et al. v. Aerojet-General Corporation, Case No.
EDCV 01-19VAP (SGLx)," and
(3) "Taylor, et al. v. Aerojet-General Corporation, et al.,
Case No. EDCV 01-106 VAP (RNBx)."
Plaintiffs generally allege that defendants released hazardous
chemicals into the air at their manufacturing facilities, which
allegedly caused illness, death, and economic injury. Various
motions have reduced the number of plaintiffs from 80 to 48.
Discovery is proceeding in the cases. The Company has notified
its insurers and is vigorously defending the actions.
AEROJET-GENERAL: Reaches Settlement For San Gabriel BPOU Lawsuit
----------------------------------------------------------------
Aerojet-General Corporation agreed to settle the lawsuits filed
between April 2000 and October 2001 by six local water agencies
and water purveyors against it and other defendants, seeking to
recover damages relating to alleged contamination of drinking
water wells in the Baldwin Park Operable Unit (BPOU) of the San
Gabriel Basin Superfund site. The plaintiffs included:
(1) the San Gabriel Basin Water Quality Authority,
(2) the Upper San Gabriel Valley Municipal Water District,
(3) the Valley County Water District,
(4) the California Domestic Water Co. and
(5) San Gabriel Valley Water Company
The plaintiffs were seeking, among other things, funding for a
water treatment plant at the La Puente Valley County Water
District (La Puente) well field. In January 2001, the Company
and certain other cooperating potentially responsible parties
(PRPs) reimbursed these plaintiffs and one other funding agency
$4 million for the cost of the treatment plant. Since that
time, the Company and the cooperating PRPs have continued to pay
all operating and related costs for treatment at the La Puente
site.
The plaintiffs also sued to recover past costs in placing
treatment facilities at the Big Dalton well site in the San
Gabriel Basin. Plaintiffs claimed that Aerojet was responsible
for contamination of their drinking water wells. While Aerojet
was served in the case filed by Valley, the case has been
inactive. The primary claim in these cases is for the recovery
of past and
future CERCLA response costs for treatment plants at plaintiffs'
well sites.
All of the BPOU drinking water well lawsuits were settled and
dismissed by the plaintiffs without prejudice on or about
September 16, 2002 in accordance with a settlement, which has
been approved by the United States Environmental Protection
Agency (EPA). The settlement agreement requires the cooperating
PRPs to fund the construction, maintenance and operation of
certain water treatment facilities and to reimburse certain
costs of the various water purveyors. As a consequence,
all the past cost claims in those actions were settled and
released. The Company and other cooperating PRPs intend to seek
recovery from those PRPs who did not participate in the
settlement.
ALLAIRE CORPORATION: Fairness Hearing For Pact Set December 2003
----------------------------------------------------------------
Fairness hearing for the settlement of a class action filed on
behalf of all purchasers of Allaire Corporation Common Stock
between December 7, 1999 and September 18, 2000, inclusive is
set for December 1,2003 in the United States District Court in
Massachusetts.
The above captioned action has been conditionally certified as a
class action and that a settlement for the benefit of the Class
has been proposed. A hearing will be held before the Honorable
Judge William C. Young, United States District Judge on December
1, 2003 at 2:00 pm in Courtroom 18 of the United States
Courthouse, One Courthouse Way, Boston, Massachusetts 02210, to
determine whether:
(1) The Class should be finally certified for settlement
purposes;
(2) A proposed settlement of the Action for $12,026,000,
plus interest, is fair, reasonable and adequate and
should be approved by the Court;
(3) An Order and Final Judgment should be entered
dismissing all claims against the Defendants with
prejudice, and without costs;
(4) A proposed Plan of Allocation of the settlment fund
should be approved; and
(5) To award attorney's fees and expenses requested by
Plaintiffs' Counsel.
For more details, contact Strategic Claims Services by Mail:
2710 Concord road, Suite 5, Aston, PA, 19014 or by Phone:
1-866-274-4004.
ARABIAN AMERICAN: SEC Initiates Civil Action in TX Federal Court
----------------------------------------------------------------
The Securities and Exchange Commission filed a civil action in
the US District Court for the Northern District of Texas against
Hatem El-Khalidi, the CEO of Arabian American Development
Company (AADC), a Dallas-based oil refining and mining company.
Mr. El-Khalidi, who resides in Saudi Arabia, has agreed, without
admitting or denying the SEC's claims, to pay a $25,000 penalty
to settle the SEC's civil case. In a related action, the SEC
also announced today the issuance of a settled cease-and-desist
order against Mr. El-Khalidi and AADC.
The SEC's complaint alleges, and the SEC's cease-and-desist
order finds, that Mr. El-Khalidi failed to disclose material
information relating to AADC's largest asset to AADC's
shareholders, auditor, and other officers and directors.
Without admitting or denying the allegations in the SEC's
complaint, Mr. El-Khalidi has agreed to pay a $25,000 civil
penalty in the US district court action.
Without admitting or denying the findings in the SEC's
administrative order:
(1) AADC has agreed to cease and desist from violating
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, and comply with certain undertakings
designed to improve AADC's reporting and record keeping
practices and enhance its internal accounting controls;
and
(2) Mr. El-Khalidi has agreed to cease and desist from
violating Section 13(b)(5) of the Exchange Act and
Rules 13a-14 and 13b2-2 thereunder, and causing AADC's
violations of Sections 13(a) and 13(b)(2)(A) and
13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1
and 13a-13 thereunder.
The suit is styled, "SEC v. Hatem El-Khalidi, Case No.
3:03-CV-2452-D (ND Tex.)" (LR-18412).
AUSTRIAN REPARATIONS: Forced Labor Victims Receive Compensation
---------------------------------------------------------------
Five individuals recently made their way to the Austrian
Consulate to receive reparations checks from the government for
the forced labor they endured under the Nazi government in
Austria, The New York Times reports.
It was a somber scene as the Austrian government handed out
checks for $9,000, $3,000 and $1,700, in an effort to close a
dark period of history for Austria. It began in 1938, when Adolf
Hitler occupied the country and forced nearly one million people
to work in auto manufacturing, street cleaning, military
construction and other jobs to aid the German war effort.
The Consulate-hosted event's central focus was the reparation
checks' distribution, a critical step for Austria in the
reconciliation process. The event was also intended to heighten
awareness that the reparations application deadline of December
31, 2003, is rapidly approaching.
"This should help bring matters to a close," said Ludwig
Steiner, chairman of the Austrian Reconciliation Fund, which was
established to provide voluntary payments to former slave and
forced laborers. The fund draws on contributions from the
Austrian government as well as money provided by Austrian
businesses. The fund is endowed with almost $500 million and,
so far, has dispersed over $300 million to more than 100,000
applicants.
Payment by the Austrian government was divided into different
categories, depending on the type of hardship suffered. Former
slave laborers, or individuals who worked for the Nazis in
concentration camps or ghettos, qualify to receive a payment of
approximately $9,000. Former forced laborers, or individuals
who were forced to work in industry, will receive $3,000. Those
who labored in agriculture will receive $1,700.
To qualify for compensation, evidence must be presented to the
committee for assessment. Personal letters, postcards and
photographs have been accepted as evidence.
The fund began dispensing checks in July 2001, initially delayed
by a number of class actions against Austrian companies. The
Austrian government refused to begin paying reparations until
all lawsuits brought by victims were settled.
Mr. Steiner joined Richard Wotova, the secretary general of the
reconciliation fund, in flying to New York to personally deliver
payment checks to five former forced Jewish laborers who now
live in the New York area. Fred Hainbach, 82, a Holocaust
survivor, who now lives in Queens; and Alfred Paschkes, 78, also
a New York City resident - and both part of the group of five
recipients selected to receive their reparations checks at the
Austrian Consulate - declined to detail the work they did during
their time of forced labor.
"A lot of terrible things happened during those years, and
honestly, I do not care to talk about them," said Mr. Hainbach.
As the event at the Consulate wound to its close, Mr. Hainbach
stood up, however, to make a conciliatory statement. "In all
fairness to Austria, I must admit one thing is that I took a
priceless asset with me when I left the country," he said. "I
took with me a first-class education, and I am thankful for that
and all Austria is trying to do now."
BAYER PHARMA: Pays $614 Million To Settle 1,683 Baycol Lawsuits
---------------------------------------------------------------
Pharmaceutical giant Bayer AG has paid $614 million as of
October 2003 to settle 1,683 cases related to its former
cholesterol-lowering blockbuster drug Baycol, which was
withdrawn two years ago for patient health reasons, company
spokeswoman Annette Josten said, AFXNews.com reports. The
number of cases still pending has risen to about 11,300 from
11,200 in September.
Last month, the Federal District Court in Minneapolis ruled in
favor of Bayer by denying nationwide class action status to the
Baycol litigation. Ms. Josten said the payments are covered by
insurance. Bayer paid about $365,000 to settle each case.
CELLSTAR CORPORATION: Faces Investors Suit Over Asia Transaction
----------------------------------------------------------------
Cellstar Corporation faces a class action filed in the Court of
Chancery of the State of Delaware, New Castle County, styled
"Ruth Everson v. CellStar Corporation, James L. Johnson, John L.
Jackson, Jere W. Thompson, Dale V. Kesler and Terry S. Parker."
The suit alleges breach of fiduciary duty and corporate waste in
connection with the proposal to divest up to 70% of the equity
ownership of its operations in the People's Republic of China,
Hong Kong, and Taiwan. The suit seeks injunctive and other
equitable relief, rescissory and/or compensatory damages and
reimbursement of attorney's fees and costs.
The Company has obtained a temporary stay of the proceedings
until December 31, 2003, or earlier if the plaintiffs determine
that the transaction is likely to proceed prior to December 31,
2003. Defendants have 20 days following the expiration of the
stay to respond to plaintiff's complaint.
The Company believes it has meritorious defenses to these
claims, but stated the ultimate outcome is not currently
predictable.
CRACKER BARREL: Rulings For Overtime Suit Expected by Early 2004
----------------------------------------------------------------
Rulings on motions for class certification and other issues
relating to the collective action filed against Cracker Barrel
Old Country Store, Inc., styled "Serena McDermott and Jennifer
Gentry v. Cracker Barrel Old Country Store, Inc., 4:99-CV-0001-
HLM," is expected to be made in late 2003 or early calendar year
2004. The suit is pending in the United States District Court
for the Northern District of Georgia, Rome Division.
The suit, filed under the federal Fair Labor Standards Act
(FLSA), alleges that certain tipped hourly employees were
required to perform excessive non-serving duties without being
paid the minimum wage or overtime compensation for that work and
that certain hourly employees were required to wait "off the
clock," without pay for the wait. The case seeks recovery of
unpaid wages and overtime wages related to those claims.
On March 17, 2000, the court granted the plaintiffs' motion in
the suit to send notice to a provisional class of plaintiffs,
defined as all persons employed as servers and all second-shift
hourly employees at Cracker Barrel Old Country Store restaurants
since January 4, 1996. 10,838 potential plaintiffs filed "opt-
in" forms to the McDermott case.
The Court could subsequently amend the definition of the
collective group, and if amended, the scope of the collective
action could either be reduced or increased or, if appropriate,
the Court could dismiss the collective aspects of the case
entirely. In that last situation, each opt-in plaintiff would
have to decide whether or not to pursue an independent action.
Extensive discovery with respect to the merits of individual
claims has been conducted in the case.
CRACKER BARREL: Three Plaintiffs Remain in Civil Rights Act Suit
----------------------------------------------------------------
Three individuals remain in the collective action filed against
Cracker Barrel Old Country Store, Inc., styled "Kelvis Rhodes,
Maria Stokes et al. v. Cracker Barrel Old Country Store, Inc.,
4:99-CV-217-HLM," in the United States District Court for the
Northern District of Georgia, Rome Division.
The suit was filed under Title VII of the Civil Rights Act of
1964 and Section 1981 of the Civil Rights Act of 1866, and was
initially a purported collective action, but the plaintiffs did
not timely move the court for class certification.
This case was filed by current and former employees asserting
three claims based upon alleged violations of the FLSA:
(1) that Personal Achievement Responsibility (PAR) IV
level employees are routinely required to perform
quasi-managerial duties or duties related to training
without receiving minimum wage or overtime compensation
for that work,
(2) that employees classified as trainers routinely work
off the clock to prepare for training sessions at home
or on store premises and to conduct pre-training
activities, and
(3) that store opener employees were mis-classified as
salaried exempt and are due overtime compensation.
The individual plaintiffs in the suit seek unpaid compensation
and back pay, liquidated damages, prejudgment interest,
attorneys' fees and costs, and unspecified injunctive relief.
No express amount of monetary damages is claimed in the case and
no substantial discovery has taken place in that case.
CRACKER BARREL: Court Denies Appeal of Suit Certification Denial
----------------------------------------------------------------
The 11th Circuit Court of Appeals denied the plaintiffs appeal
of a lower court's ruling refusing class certification for the
collective action filed against Cracker Barrel Old Country
Store, Inc., styled "Flounice Stanley, Calvin Slack et al. v.
Cracker Barrel Old Country Store, Inc., 4:01-CV-326-HLM."
The suit, initially filed in the United States District Court
for the Northern District of Georgia, brings claims under the
federal Fair Labor Standards Act. The suit sought certification
as a company-wide class action, a declaratory judgment to
redress an alleged systemic pattern and practice of racial
discrimination in employment opportunities, an order to effect
certain hiring and promotion goals and back pay and other
related monetary damages.
In May 2002, the Rhodes plaintiffs filed a motion for class
certification proposing a class of all current and former
employees and applicants for employment who might have suffered
discrimination in hiring, promotion, job assignment and cross-
training. The court denied certification of a class in the
suit. The plaintiffs' appeal of this ruling was then denied.
There are now 13 individual plaintiffs continuing the claims
asserted in the Rhodes case.
CRACKER BARREL: Plaintiffs Fail To Appeal Certification Denial
--------------------------------------------------------------
The National Association for the Advancement of Colored People
(NAACP) and the other plaintiffs in the class action filed
against Cracker Barrel Old Country Store, Inc., styled "the
National Association of the Advancement of Colored People
(NAACP), Betty Thomas et al. v. Cracker Barrel Old Country
Store, Inc., 4:01-CV-325-HLM," opted not to appeal the United
States District Court for the Northern District of Georgia, Rome
Division's ruling denying certification for the suit.
The suit was filed under Title II of the Civil Rights Act of
1964 and Section 1981 of the Civil Rights Act of 1866. The suit
is an alleged race discrimination class action filed by the
NAACP and customers of Cracker Barrel alleging that Cracker
Barrel has a pattern and practice of race-based discriminatory
treatment of African-American customers and white customers when
accompanied by African-American customers.
Plaintiffs and their counsel have denied that they seek to
recover compensatory damages, instead claiming to seek only
nominal, actual and punitive damages. Plaintiffs also seek
unspecified declaratory and injunctive relief and demanded
an award of punitive and nominal damages in the amount of
$100,000, plus reasonable attorneys' fees and costs.
On October 1, 2002, the court granted defendant's Rule 23 (c)
Motion and denied class certification. The plaintiffs did not
appeal this ruling. There are now 34 individual plaintiffs
continuing the claims they asserted in the case.
EMEX CORPORATION: Fairness Hearing For Settlement Set Dec. 2003
---------------------------------------------------------------
Fairness hearing for the settlement of a class action filed on
behalf of all persons and entities who purchased shares of Emex
Corporation stock during the period from April 9, 2001 through
May 23, 2001, inclusive and who suffered damages thereby is set
for December 10, 2003 in the United States District Court in New
York.
The suit has been conditionally certified as a class action and
that a settlement for $1,300,00 has been proposed. A hearing
will be held before the Honorable Judge Shirley Wohl Kram in the
United States Courthouse, 40 Centre Street, New York, New York
10007, Room 210, at 10:30 am to determine whether the proposed
settlement should be approved by the Court as fair, reasonable
and accurate, and to consider the application of Plaintiffs'
Counsel for attorneys' fees and reimbursement of expenses.
For more details, contact the settlement administrator by Mail:
Emex Securities Litigation, c/o Berdon Claims Administration
LLC, PO Box 9014, Jericho NY 11753-8914 by Phone: (800) 766-3330
by Fax: (516)931-0810, or visit the firm's Website:
http://www.berdonllp.com/claims
GENCORP INC.: Engages in Settlement Negotiations For OH Lawsuit
---------------------------------------------------------------
Gencorp, Inc. is working to settle the class action filed by a
group of hourly retirees against it and OMNOVA Solutions Inc.
(OMNOVA) disputing certain retiree medical benefits. The suit
is styled "Wotus, et al. v. GenCorp Inc., et al., U.S.D.C., N.D.
OH (Cleveland, OH), Case No. 5:00-CV-2604" and is pending in the
United States District Court for the Northern District of Ohio.
The retirees seek rescission of the then current Hourly Retiree
Medical Plan established in the Spring of 1994, and the
reinstatement of the prior plan terms. The crux of the dispute
relates to union and GenCorp negotiated modifications to retiree
benefits that, in exchange for other consideration, now require
retirees to make benefit contributions as a result of caps on
Company-paid retiree medical costs implemented in the Fall of
1993. A retiree's failure to pay contributions results in a
termination of benefits.
The plaintiffs are seeking class action certification by motion
and the briefs have been filed before the trial court. The
trial court has not yet ruled on the plaintiffs' motion for
class action certification; however, a decision by the court is
expected before the end of the second quarter 2004.
The putative class representatives currently consist of four
hourly retirees from the Jeannette, Pennsylvania facility of
OMNOVA, the company spun-off from GenCorp on October 1, 1999,
two hourly retirees from OMNOVA's former Newcomerstown, Ohio
facility, and three hourly retirees from GenCorp's former tire
plants in Akron, Ohio, Mayfield, Kentucky, and Waco, Texas.
The putative class encompasses all eligible hourly retirees
formerly represented by the unions URW or USWA. The unions,
however, are not party to the suit and have agreed not to
support such litigation pursuant to an agreement negotiated with
GenCorp.
GenCorp prevailed in a similar class action filed in 1995
involving salaried employees and arising at its Wabash, Indiana
location. The suit was styled "Divine, et al. v. GenCorp Inc.,
U.S.D.C., N.D. IN (South Bend, IN), Case No. 96-CV-0394-AS," and
was filed in the United States District Court in the Northern
District of Indiana.
Plaintiff retirees and the defendants filed cross-motions for
summary judgment which were denied on December 20, 2002. In
February 2003, the court approved a case management plan and
discovery will proceed throughout most of 2003.
The Company has given notice to its insurance carriers and
intends to vigorously defend against the retirees' claims.
OMNOVA has requested defense and indemnification from GenCorp
regarding this matter. GenCorp has denied this request and the
party-defendants are now engaged in alternative dispute
resolution (ADR) proceedings under their agreements entered into
during the GenCorp-OMNOVA spin-off in 1999. GenCorp initiated
the arbitration and the parties are in the process of meeting
with the selected arbitrator to determining briefing and hearing
procedures. Under the ADR process, it is expected that the
dispute will be resolved by a ruling of the arbitrator before
the end of the second quarter 2004.
INTRAWARE INC.: Reaches Settlement For NY Securities Fraud Suit
---------------------------------------------------------------
Intraware, Inc. reached a settlement for the consolidated
securities class action, styled "In re Intraware, Inc. Initial
Public Offering Securities Litigation, Civ. No. 01-9349 (SAS)
(S.D.N.Y.)," related to "In re Initial Public Offering
Securities Litigation, 21 MC 92 (SAS) (S.D.N.Y.)," filed in the
United States District Court for the Southern District of New
York on behalf of all persons who purchased the Company's common
stock from February 25, 1999 (the date of their initial public
offering) through December 6, 2000.
The suit names as defendants the Company, three of its present
and former officers and directors, and several investment
banking firms that served as underwriters of its initial public
offering. The complaint alleges liability under Sections 11 and
15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, on the grounds that the
registration statement for the offerings did not disclose that:
(1) the underwriters had agreed to allow certain customers
to purchase shares in the offerings in exchange for
excess commissions paid to the underwriters; and
(2) the underwriters had arranged for certain customers to
purchase additional shares in the aftermarket at
predetermined prices.
The amended complaint also alleges that the underwriters misused
their securities analysts to manipulate the price of Company
stock. No specific damages are claimed.
Lawsuits containing similar allegations have been filed in the
Southern District of New York challenging over 300 other initial
public offerings and secondary offerings conducted in 1999
and 2000. All of these lawsuits have been consolidated for
pretrial purposes before United States District Court Judge
Shira Scheindlin of the Southern District of New York.
On July 15, 2002, an omnibus motion to dismiss was filed in the
coordinated litigation on behalf of the issuer defendants, of
which Intraware and its three named current and former officers
and directors are a part, on common pleadings issues. On
October 9, 2002, the court entered and ordered a Stipulation of
Dismissal, which dismissed the three named current and former
officers and directors from the litigation without prejudice.
On February 19, 2003, the Court entered an order denying in part
the issuer defendants' omnibus motion to dismiss, including
those portions of the motion to dismiss relating to Intraware.
No discovery has been served on us to date.
A special committee of the Company Board recently approved a
tentative settlement proposal from plaintiffs. There is no
guarantee that the settlement will become final, as it is
subject to a number of conditions, including court approval.
However, based on this proposed settlement, the Company does not
believe it will suffer material future losses related to this
lawsuit and therefore have not accrued for any losses, it stated
in a disclosure to the Securities and Exchange Commission.
INTRAWARE INC.: Dismissed as Defendant in CSFB Securities Suit
--------------------------------------------------------------
Intraware, Inc. has been dismissed as a defendant in the
securities class action lawsuit, styled "Liu v. Credit Suisse
First Boston et al.," filed in the United States District Court,
Southern District of Florida.
The defendants were Credit Suisse Group, several of Credit
Suisse Group's current and former directors and officers, and
several public companies and certain of their current and former
directors and officers, including Intraware and its chief
executive officer and former chief financial officer.
The suit alleged that the defendants engaged in a scheme to
under-price initial public offerings and then artificially
inflate prices of those stocks in the aftermarket, in violation
of Florida blue sky law, Sections 11, 12 and 15 of the
Securities Act of 1933, Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and the common law of fraud and
negligence. The suit sought unspecified damages, restitution,
and injunctive relief.
On June 19, 2003, the plaintiffs filed an amended complaint,
dismissing Intraware and its chief executive officer and former
chief financial officer from this lawsuit without prejudice.
Based on this dismissal, the Company does not believe it will
suffer material future losses related to this lawsuit and
therefore have not accrued for any losses.
LIBERATE TECHNOLOGIES: Reaches Settlement For NY Securities Suit
----------------------------------------------------------------
Liberate Technologies, Inc. agreed to settle the consolidated
securities class action filed in the United States District
Court for the Southern District of New York against it, several
of the firms that underwrote its initial public offering, and
certain of the Company's officers and directors as co-
defendants.
The suit, which has since been consolidated with hundreds of
similar suits filed against underwriters and issuers, allege
that the underwriters received excessive and improper
commissions that were not disclosed in the Company's prospectus
and that the underwriters artificially increased the price of
the Company's stock.
The plaintiffs subsequently added allegations regarding the
Company's secondary offering, and named additional officers and
directors as co-defendants. While the Company denied
allegations of wrongdoing, the Company agreed to enter into a
global settlement of these claims, and expects its insurers to
cover amounts in excess of its deductible.
A suit making similar allegations based on the same facts has
also been filed in California state court.
LIBERATE TECHNOLOGIES: Faces Consolidated Securities Suit in CA
---------------------------------------------------------------
Liberate Technologies, Inc. faces a consolidated securities
class action filed in the United States District Court for the
Northern District of California. The suit also names as
defendants certain of its officers and directors,
The suit is based on the Company's announcements in October and
November 2002 that it would restate its financial results for
fiscal 2002 and that it was investigating other periods. The
suit generally alleges, among other things, that members of the
purported class were damaged when they acquired the Company's
securities because, as a result of accounting irregularities,
its previously issued financial statements were materially false
and misleading, and caused the prices of its securities to be
inflated artificially.
The suit further alleges that, as a result of this conduct, the
Class Action Defendants violated Section 10(b) and 20(a) of the
Securities Exchange Act of 1934, and SEC Rule 10b-5, promulgated
thereunder. The class action seeks unspecified monetary damages
and other relief from all defendants.
MERCK HEALTH: Reaches Settlement For ERISA Lawsuits in S.D. NY
--------------------------------------------------------------
A settlement has been reached in several class actions pending
in the United States District Court for the Southern District of
New York against Medco and Merck Co., Inc., on behalf of all
employees welfare benefit plans that have or have had contracts
with Medco, whether directly or indirectly (including through
third party administrators, HMO's insurance companies, Blue
Cross Blue Shield entities or other intermediaries
(collectively, "TPAs"), where the contract with Medco were both:
(1) in force at any time between December 17, 1994, and the
date of the final approval of the Settlement, and
(2) subject to the Employment Retirement Security Act of
1974, as amended (ERISA).
The Class includes ERISA plans for which Medco (and/or its
predecessors and subsidiaries) administered a pharmacy benefit,
either directly or through a TPA, during this period. Medco's
predecessors include Merck-Medco Managed care and Medco
Containment Services. Its principal subsidiaries for this
purpose include PAID Prescriptions, Systemed, ProVantage, and
its Merck-Medco Rx Services and National Rx Services (NRx) home
delivery/ mail service pharmacies.
As further disclosed in the Notice, the claims arise out of
alleged breaches of fiduciary duty and other violations under
ERISA by Medco and Merck. The Settlement provides for
significant modifications to, and disclosure of, Medco's
business practices, as well as a monetary payment to Plans
within the Class.
For more details, contact Medco ERISA Settlement by Mail: c/o
Complete Claim Solutions, Inc., P.O. Box 24612, West Palm Beach,
FL 33416 by Phone: 1-877-267-9449 (Toll-Free) or visit the
Website: http://www.erisasettlement.com
MICRON TECHNOLOGIES: Faces Several CA Antitrust Suits Over DRAM
---------------------------------------------------------------
Micron Technologies faces several class actions filed in
relation to the Department of Justice Antitrust Division's
investigation of its activities in the "Dynamic Random Access
Memory" (DRAM) industry.
On June 17, 2002, the Company received a grand jury subpoena
from the US District Court for the Northern District of
California seeking information regarding an investigation by
the Antitrust Division of the Department of Justice (the "DOJ")
into possible antitrust violations in the DRAM industry.
Subsequent to the commencement of the DOJ investigation, a
number of purported class actions were filed against the Company
and other DRAM suppliers. Sixteen cases were filed between June
21, 2002, and September 19, 2002, in the following federal
district courts:
(1) one in the Southern District of New York,
(2) five in the District of Idaho and
(3) ten in the Northern District of California
Each of the federal district court cases purports to be on
behalf of a class of individuals and entities who purchased DRAM
directly from the various DRAM suppliers during a specified time
period commencing on or after October1, 2001.
The complaints allege price-fixing in violation of the Sherman
Act and seek treble monetary damages, costs, attorneys' fees,
and an injunction against the allegedly unlawful conduct. The
foregoing federal district court cases have been transferred to
the US District Court for the Northern District of California
(San Francisco) for coordinated or consolidated pretrial
proceedings.
Eight additional cases were filed between August 2, 2002, and
March 11, 2003, in the following California state superior
courts:
(i) five in San Francisco County,
(ii) one in Santa Clara County,
(iii) one in Los Angeles County and
(iv) one in Humbolt County
Each of the California state cases purports to be on behalf of a
class of individuals and entities who indirectly purchased DRAM
during a specified time period commencing December 1, 2001. The
complaints allege violations of California's Cartwright Act and
state unfair competition law and unjust enrichment and seek
treble monetary damages, restitution, costs, attorneys' fees,
and an injunction against the allegedly unlawful conduct.
The foregoing California state cases have been transferred to
San Francisco County Superior Court for coordinated or
consolidated pretrial proceedings. The Company is unable to
predict the outcome of these suits.
Based upon the Company's analysis of the claims made and the
nature of the DRAM industry, the Company believes that class
treatment of these cases is not appropriate and that any
purported injury alleged by plaintiffs would be more
appropriately resolved on a customer-by-customer basis. The
Company can give no assurance that the final resolution will
not result in significant liability and will not have a material
adverse effect on the Company's business, results of operations
or financial condition.
RAMP NETWORKS: Reaches Settlement for CA Securities Fraud Suit
--------------------------------------------------------------
Ramp Networks, Inc. reached a settlement for the class action
filed on behalf of all persons who purchased its common stock
during the period of January 24, 2000 through September 29,
2000, in the United States District Court for the Northern
District of California.
A hearing will be held on November 14, 2003 at 9:30am before the
Honorable Joseph C. Spero, United States District Judge, at the
United States Courthouse, Northern District of California, San
Francisco Division, 450 Golden Gate Avenue, San Francisco,
California 94102, to determine:
(1) whether the proposed settlement of the claims in the
Litigation for the sum of $6,900,000 in cash, plus
accrued interest should be approved by the Court as
fair, just, reasonable, and adequate;
(2) whether, thereafter the Litigation should be dismissed
with prejudice as set forth in the Stipulation of
Settlement dated as August 7, 2003;
(3) whether the proposed Plan of Allocation is fair, just,
reasonable, and adequate and therefore should be
approved; and
(4) whether the application of plaintiffs counsel for the
payment of attorneys' fees and reimbursement of costs
and expenses incurred in connection with this
Litigation should be approved.
For more details, contact Glancy & Binkow LLP by Mail: 1801 Ave.
of the Stars, Suite 311, Los Angeles, California 90067 or
contact Kirby Mcinerney & Squire, LLP by Mail: 830 Third Ave.,
New York, New York 10022
RED HAT: Reaches Settlement For NY Consolidated Securities Suit
---------------------------------------------------------------
Red Hat, Inc. reached a settlement for the consolidated
securities class action filed against it and certain of its
officers and directors in the United States District Court for
the Southern District of New York.
The plaintiffs contend that the defendants violated federal
securities laws by issuing registration statements and
prospectuses that contained materially false and misleading
information and failed to disclose material information.
Plaintiffs also challenge certain IPO allocation practices by
underwriters and the lack of disclosure thereof in initial
public offering documents.
On April 19, 2002, plaintiffs filed amended complaints in each
of the 310 consolidated actions, including the Red Hat action.
The relief sought consists of unspecified damages. No discovery
has occurred to date. The individual director and officer
defendants have been dismissed from the case without prejudice.
The Company believes these complaints are without merit and will
defend itself vigorously in this matter. No assurance can be
given, however, that this matter will be resolved in the
Company's favor.
The Company, among other issuers, the plaintiffs, and the
insurers have agreed, in concept, to a proposed settlement
whereby the Company would be released from this litigation.
That proposed settlement has not been submitted to the court for
its consideration, and there is no certainty that the court
will approve the settlement.
SIGNAL TECHNOLOGY: CA Court Enters Final Judgment V. Officers
-------------------------------------------------------------
The Honorable Patricia V. Trumbull, of the United States
District Court for the Northern District of California, entered
final judgments against seven former senior officers of Signal
Technology Corporation, a Danvers, Massachusetts defense
contractor formerly located in Sunnyvale, California.
The court entered injunctions against all defendants, ordered
that six of the seven defendants pay civil monetary penalties,
and barred the four defendants who had been the most senior
officers of the company from serving as officers or directors of
public companies. The defendants consented to the judgments,
without admitting or denying the allegations in the Commission's
lawsuit.
In the suit, the Commission alleged that defendants caused
Signal Tech to inflate its reported earnings by over $9 million
from January 1996 through June 1998. According to the
Complaint, each of the individual defendants personally directed
or participated in the company's improper accounting practices
at its Florida-based Keltec division, when it failed to record
known losses on major contracts, prematurely recognized revenue,
and failed to write off worthless inventory.
As a result of the defendants' accounting fraud, the Complaint
alleged, Signal Tech misstated its net income by amounts ranging
from 8% to 294% in financial statements filed for reporting
periods during January 1996 through March 1998 and reported a
profit, rather than its actual loss, for the year 1997.
The Commission alleged that the defendants' conduct violated the
antifraud, periodic reporting, record keeping, internal controls
and lying to auditors provisions of the federal securities laws.
Dale Peterson, Signal Tech's Chief Executive Officer and
Chairman of the Board from 1994 to mid-1998, was ordered to pay
a civil monetary penalty of $100,000, was barred from serving as
an officer or director of a public company, and was permanently
enjoined from violating Sections 10(b), 13(a), 13(b)(2)(A),
13(b)(2)(B), and 13(b)(5) of the Securities Exchange Act of 1934
(Exchange Act) and Exchange Act Rules 10b-5, 12b-20, 13a-1, 13a-
13, 13b2-1 and 13b2-2.
Russell Kinsch, Signal Tech's Chief Financial Officer from
February 1996 through June 1997, was ordered to pay a civil
monetary penalty of $50,000, was barred from serving as an
officer or director of a public company, and was permanently
enjoined from violating Sections 10(b), 13(a), 13(b)(2)(A),
13(b)(2)(B), and 13(b)(5) of the Exchange Act and Exchange Act
Rules 10b-5, 12b-20, 13a-1, 13a-13, 13b2-1 and 13b2-2.
James Walsh, president of Signal Tech from May 1993 until August
1997 and vice chairman and chief technical officer from August
1997 until December 1997, who also served as Keltec's de facto
president during the third quarter of 1997, was ordered to pay a
civil monetary penalty of $75,000, was barred from serving as an
officer or director of a public company, and was permanently
enjoined from violating Sections 10(b), 13(a), 13(b)(2)(A),
13(b)(2)(B), and 13(b)(5) of the Exchange Act and Exchange Act
Rules 10b-5, 12b-20, 13a-1, 13a-13 and 13b2-1.
Richard Nabozny, vice president of operations of Signal Tech
from 1992 through June 1998 and Keltec's president from January
through June 1998, was ordered to pay a civil monetary penalty
of $75,000, was barred from serving as an officer or director of
a public company, and was permanently enjoined from violating
Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B), and 13(b)(5) of
the Exchange Act and Exchange Act Rules 10b-5, 12b-20, 13a-1,
13a-13 and 13b2-1.
Michael Smith, president of the company's Keltec division from
February 1996 until March 1997, was ordered to pay a civil
monetary penalty of $50,000 and was permanently enjoined from
violating Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B), and
13(b)(5) of the Exchange Act and Exchange Act Rules 10b-5, 12b-
20, 13a-1, 13a-13 and 13b2-1.
Charles Balentine, controller of the Keltec division from
February 1996 to March 1998, was permanently enjoined from
violating Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B), and
13(b)(5) of the Exchange Act and Exchange Act Rules 10b-5, 12b-
20, 13a-1, 13a-13 and 13b2-1.
Wayne Armstrong, president of Keltec from March 1997 through
December 1997, was ordered to pay a civil monetary penalty of
$25,000 and was permanently enjoined from violating Sections
10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B), and 13(b)(5) of the
Exchange Act and Exchange Act Rules 10b-5, 12b-20, 13a-1, 13a-13
and 13b2-1.
The suit is styled, "SEC v. Dale Peterson, et al., USDC, NDCA,
Civil Action No. C02-01467" (LR-18410; AAE Rel. 1896)
TELSTRA: Considers Sending Customer Refunds Due To E-Mail Crisis
----------------------------------------------------------------
Amid threats of possible class action from furious BigPond
customers, Australia's biggest telecommunications company
TELSTRA may be forced to offer cash refunds to many of its 1.2
million internet customers as its e-mail crisis enters another
week without signs of abating, News.com.au reports.
The crisis began on September 24, when Telstra began an upgrade
of its e-mail software, a process usually unseen by customers.
"About halfway through the process we discovered that the
software had a bug," Telstar spokesperson Kerrina Lawrence told
News.com.au.
A week later the company experienced what Ms Lawrence described
as "an unprecedented surge in email." "We are used to growth of
about 4 per cent every month but we saw a spike of between 20
and 50 per cent," she stated.
Ms Lawrence said Telstra had not built enough spare capacity to
cope with the extra messages. "We are working day and night to
increase the capacity of our email servers by 50 per cent," she
added.
The email delays have been blamed on a new virus called WORM-
SWEN. Like the earlier Blaster worm, the new virus is designed
to attack the kind of Microsoft software widely used by most
computer users, including BigPond customers.
Telstra claimed last night that it had finally pinpointed the
problem but offered little indication of when the service would
return to normal. A senior Telstra source said the company was
"open to considering compensation, but as yet there is no
blanket policy". Another company official said Telstra was
dealing with complaints on a case-by-case basis.
However, by yesterday afternoon, Telstra representatives were
offering callers up to 50 per cent off their internet bills -
which range from $25 to more than $1000 each month - with no
questions asked. A 50 per cent refund for all home and business
customers - some of whom claim to have lost business as a result
of the email delays could translate to refunds of up to millions
of dollars for the company.
Telstra does not offer its BigPond customers a guaranteed level
of service but a Sydney man who is organizing the class action
said he had spoken to a solicitor who had indicated such an
action may be possible under the Trade Practices Act. The man,
who requested anonymity, told news.com.au the solicitor had
informed him that the internet service had to be of
"merchantable quality", and it was arguable that delayed email
was a defective product.
It is not the first time problems with the BigPond internet
service have forced Telstra to hand out mass refunds. In July
2002, problems with its fast internet service - known as ADSL -
prompted the company to offer automatic refunds for customers
who were unable to connect for more than 7.2 hours a month.
Since then, Telstra has paid significantly more than $500,000 in
similar rebates.
TRAFFIX INC.: Qwest Files Indemnification Claim Over MN Lawsuit
---------------------------------------------------------------
Traffix, Inc. was informed by Qwest Communications, Inc. of an
indemnification claim relating to a class action filed against
Qwest, styled "Bindner v. LCI International Telecom Corp. et
al.," pending in the District Court of Minnesota, County of
Sibley (Case No. C0-00-242).
In that action, plaintiffs claim that in late 1999 into mid-
2000, they were misled when they were solicited to change their
long distance carrier to Qwest. They assert that they were not
told that they would have to stay at certain hotels and pay
their regular rates as part of a promotion, which offered them
free airline tickets.
Traffix introduced the promotion, Fly Free America, to Qwest,
and had been retained by Qwest to operate the telemarketing
campaign. In May 2000, the Company and Qwest entered into an
agreement terminating its contract and settling the amount due
the Company. The May 2000 Agreement contained language which
Qwest claims obligates the Company to indemnify Qwest for any
loss it may sustain by reason of this class action.
The Company maintains that we have no liability in the matter.
Fraud claims in the class action have been dismissed, leaving
breach of contract and false advertising claims. The court has
recently certified the class and Qwest is defending the action.
TRAFFIX INC.: Plaintiffs Appeal Dismissal of Consumer Fraud Suit
----------------------------------------------------------------
Plaintiffs appealed the Circuit Court of Cook County, Illinois'
decision dismissing the class action filed against Traffix, Inc.
and Columbia House, styled "Rydel v. Comtrad Industries, Inc. et
al.," in the Circuit Court of Cook County, Illinois. The
plaintiff claims to have received unsolicited commercial e-mail
from, among others, Columbia House, in violation of Illinois
law.
In August 2002, Columbia House, one of Traffix's clients,
notified it of an indemnification claim relating to a class
action filed against Columbia House. Columbia House advised
Traffix that it believes that Columbia House did not approve the
email in question when it was sent, and asserted a claim for
indemnification against Traffix pursuant to their contract. The
Company and Columbia House agreed to defer resolution of the
indemnification claim (and reserved each of their respective
rights).
Columbia House is defending against the class action. Its motion
to dismiss the complaint has been denied. In January 2003,
Traffix was named as a defendant in the suit. In an additional
count in the complaint, the plaintiff asserted that Traffix
violated the Illinois Consumer Fraud and Deceptive Business
Practices Act by providing to a co-defendant a list of consumers
who had consented to receive commercial e-mails when, the
complaint alleges, they had not. The complaint sought
injunctive relief and unspecified damages. The Company's motion
to dismiss the complaint was granted in June 2003, and the
plaintiff has filed an appeal.
VANTAGEMED CORPORATION: SEC Launches Cease-And-Desist Proceeding
----------------------------------------------------------------
The United States Securities and Exchange Commission instituted
and simultaneously settled a cease-and-desist proceeding against
VantageMed Corporation (VantageMed) of Rancho Cordova,
California.
The Order Instituting Cease-And-Desist Proceedings, Making
Findings, And Imposing A Cease-And-Desist Order Pursuant To
Section 21C Of The Securities Exchange Act Of 1934 finds that
VantageMed materially misstated its financial results for its
third quarter ended September 30, 2001, and directs VantageMed
to cease and desist from violations of the periodic reporting
and books and records provisions of the federal securities laws.
VantageMed consented to the issuance of the Order without
admitting or denying its findings.
According to the Commission's Order, VantageMed improperly
recognized a gain on the sale of a business line. By recording
the gain on the sale of a business line, the Company reduced its
expenses, net loss and diluted loss per share for the quarter
ended September 30, 2001.
The Order finds that in May 2002, following an internal
investigation by its audit committee, VantageMed restated its
financial results for the quarter ended September 30, 2001. The
primary component of the restated quarter was the reversal of
the previously recognized $429,000 gain on the sale of a
business line (including $30,000 of previously deferred revenue)
because by the time the financial statements were filed with the
Commission, it was uncertain the buyers of the business line
would be able to pay for the business line.
The restatement revealed that as originally reported,
VantageMed's expenses were overstated by 4.9%, net loss by
20.5%, and diluted earnings per share by 20.8%, as a result of
recording the gain on the sale of the business line.
The Order directs VantageMed to cease and desist from committing
or causing any violation and any future violation of Sections
13(a) and 13(b)(2)(A) of the Securities Exchange Act of 1934,
and Rules 12b-20 and 13a-13 thereunder.
In a related matter, the Commission announced that it has filed
an action in US District Court against the former Chief
Financial Officer of VantageMed, Joel M. Harris and the former
Chief Accounting Officer of VantageMed, Anne H. Long for their
alleged role in the events that are the subject of the Order
concerning VantageMed. The Commission simultaneously settled
the action resulting in a judgment imposing an injunction
against future violations and payment of civil monetary
penalties.
VERTEX PHARMACEUTICALS: Lawyer Pleads Guilty To Insider Trading
---------------------------------------------------------------
Vertex Pharmaceuticals, Inc. lawyer, Andrew S. Marks, of
Wayland, Massachusetts, pled guilty to a one-count information
filed by the US Attorney for the District of Massachusetts
charging him with unlawful insider trading in connection with
his September 2001 sale of stock in the Cambridge-based
biotechnology company.
The criminal information alleged that Mr. Marks, who at the time
was Vertex's highest-ranking attorney, learned on September 20,
2001, that Vertex planned to announce the suspension of clinical
trials of one of its promising drugs on September 24.
According to the information, on September 21, Mr. Marks
liquidated all of his Vertex stock despite having previously
acknowledged in writing that the impending release would not be
viewed favorably by Wall Street and that he should not sell his
Vertex shares. Sentencing has been scheduled for December 16,
2003.
According to the criminal information, at the time he traded,
Mr. Marks was the designated attorney for employees to contact
regarding compliance with Vertex's employee securities trading
policy. In that capacity, the information alleged, Mr. Marks
wrote Vertex's CEO an email on September 20, advising him to
make sure that an employee who had requested permission to trade
had no knowledge of the impending press release.
According to the information, Mr. Marks' email went on to say,
"I guess I am troubled about any employee trading prior to that
release because it is likely to have an effect on the stock
(looks like I can't sell any shares) and, depending on the
degree of that effect, could create the perception of insider
trading."
The criminal information alleged that, on September 21, less
than 24 hours after writing this email to the CEO, Mr. Marks
sold 20,900 shares of Vertex at an average price of $22.81 per
share, receiving $476,765. According to the information, Mr.
Marks traded in breach of a fiduciary duty not to trade in
Vertex's stock while in possession of material, nonpublic
information regarding the Company.
As a result of the conduct described in the information, the US
Attorney charged Mr. Marks with criminal violations of the
antifraud provisions of federal securities laws, Section 10(b)
of the Securities Exchange Act of 1934 and Rule 10b-5
thereunder.
The Commission previously filed a complaint against Mr. Marks in
connection with the same conduct in Massachusetts federal court
on December 3, 2002, alleging that Mr. Marks violated Section
10(b) of the Securities Exchange Act of 1934 and Rule 10b-5
thereunder, and Section 17(a) of the Securities Act of 1933. In
that action, which is still pending, the Commission seeks
injunctive relief, disgorgement plus prejudgment interest, and
civil penalties, and further seeks an order barring Mr. Marks
from acting as an officer or director of any publicly-traded
company. That litigation is currently pending.
The suit is styled, "U.S. v. Andrew S. Marks, USDC, District of
Massachusetts, No. 03-10297 (DPW) D. Mass." (LR-18409)
WASHINGTON: Catholic School Settles Wrongful Expulsion Lawsuit
--------------------------------------------------------------
Officials at St. Joseph Catholic School have agreed to pay
$10,000 to a former student whose mother sued the private school
in 2000 after claiming her son was taunted by his seventh-grade
classmates in the winter and then wrongfully expelled, the
Columbian.com reports.
When she filed the lawsuit in August 2000, Rosemere resident Jan
Panfilio said her son was expelled because of her contact with
school officials over the alleged taunts. Ms. Panfilio, a
single mother and a non-Catholic, also claimed the school
officials didn't like her "lifestyle." However, the school
maintains Ms. Panfilio withdrew her son.
Seattle attorney Patricia Buchanan, who represented St. Joseph,
said the school's staff members "remained steadfast that they
didn't do anything wrong . This was a defensible case."
Ms. Buchanan added that the school opted to settle so the boy
could move on with his life. "The real conflict was between the
school and boy's mother," she continued.
Ms. Buchanan told the Columbian school officials had asked the
mother to refrain from calling parents of her son's classmates
while the school did its own investigation of the alleged
harassment. The mother wouldn't cooperate.
In the lawsuit, Ms. Panfilio asked for her son's readmission to
the school, $2,480 in tuition reimbursements and an unspecified
amount for emotional distress. The boy transferred to a
Vancouver public school after he left St. Joseph and never
returned. The $10,000 was placed in an account, which her son
can draw upon when he turns 18 in 2005.
Vancouver attorney Bill Montecucco, who represented Ms. Panfilio
and representatives of the school told the Columbian they could
not discuss the settlement, which was supposed to be
confidential but nevertheless was mentioned several times in
papers filed in Clark County Superior Court. The lawsuit was
dismissed Tuesday by Judge Roger Bennett after the out-of-court
settlement was reached.
New Securities Fraud Cases
ALLIANCE CAPITAL: Glancy Binkow Launches Securities Suit in NJ
--------------------------------------------------------------
Glancy & Binkow LLP commenced a securities class action in the
United States District Court for the District of New Jersey on
behalf of all persons who purchased or otherwise acquired the
AllianceBernstein family of funds owned and operated by Alliance
Capital Management Holding L.P. (NYSE: AC) and its subsidiaries
and other affiliates, between October 2, 1998 and September 29,
2003, inclusive.
The Funds, and the symbols for the respective Funds named below,
are as follows:
(1) AllianceBernstein Growth & Income Fund (Sym: CABDX,
CBBDX, CBBCX)
(2) AllianceBernstein Health Care Fund (Sym: AHLAX, AHLBX,
AHLCX)
(3) AllianceBernstein Disciplined Value Fund (Sym: ADGAX,
ADGBX, ADGCX)
(4) AllianceBernstein Mid-Cap Growth (Sym: CHCAX, CHCBX,
CHCCX)
(5) AllianceBernstein Real Estate Investment Fund (Sym:
AREAX, AREBX, ARECX)
(6) AllianceBernstein Growth Fund (Sym: AGRFX, AGBBX,
AGRCX)
(7) AllianceBernstein Select Investor Series Biotechnology
Portfolio (Sym: ASBAX, AIBBX, ASBCX)
(8) AllianceBernstein Small CapValue Fund (Sym: ABASX,
ABBSX, ABCSX)
(9) AllianceBernstein Premier Growth Fund (Sym: APGAX,
APGBX APGCX)
(10) AllianceBernstein Select Investor Series Technology
Portfolio (Sym AITAX, AITBX, AITCX)
(11) AllianceBernstein Value Fund (Sym: ABVAX, ABVBX,
ABVCX)
(12) AllianceBernstein Quasar Fund (Sym: QUASX, QUABX,
QUACX)
(13) AllianceBernstein Technology Fund (Sym: ALTFX, ATEBX,
ATECX)
(14) AllianceBernstein Select Investor Series Premier
Portfolio (Sym: ASPAX, ASPBX, ASPCX)
(15) AllianceBernstein Utility Income Fund (Sym: AUIAX,
AUIBX, AUICX)
(16) AllianceBernstein Balanced Shares (Sym: CABNX, CABBX,
CBACX)
(17) AllianceBernstein Disciplined Value Fund (Sym: ADGAX,
ADGBX, ADGCX)
(18) AllianceBernstein Global Value Fund (Sym: ABAGX, ABBGX,
ABCGX)
(19) AllianceBernstein International Value Fund (Sym: ABIAX,
ABIBX, ABICX)
(20) AllianceBernstein Real Estate Investment Fund (Sym:
AREAX, AREBX, ARECX)
(21) AllianceBernstein Small Cap Value Fund (Sym: ABASX,
ABBSX, ABCSX)
(22) AllianceBernstein Utility Income Fund (Sym: AUIAX,
AUIBX, AUICX)
(23) AllianceBernstein Value Fund (Sym: ABVAX, ABVBX, AVBCX)
(24) AllianceBernstein Blended Style Series - U.S. Large Cap
Portfolio (Sym: ABBAX, ABBAX, ABBCX)
(25) AllianceBernstein All-Asia Investment Fund (Sym: AALAX,
AAABX, AAACX)
(26) AllianceBernstein Global Value Fund (Sym: ABAGX, ABBGX,
ABCGX)
(27) AllianceBernstein Greater China '97 Fund (Sym: GCHAX,
GCHBX, GCHCX)
(28) AllianceBernstein International Premier Growth Fund
(Sym: AIPAX, AIPBX, AIPCX)
(29) AllianceBernstein International Value Fund (Sym: ABIAX,
ABIBX, ABICX)
(30) AllianceBernstein Global Small Cap Fund (Sym: GSCAX,
AGCBX, GSCCX)
(31) AllianceBernstein New Europe Fund (Sym: ANEAX, ANEBX,
ANECX)
(32) AllianceBernstein Worldwide Privatization Fund (Sym:
AWPAX, AWPBX, AWPCX)
(33) AllianceBernstein Select Investor Series Biotechnology
Portfolio (Sym: ASBAX, AIBBX, ASBCX)
(34) AllianceBernstein Select Investor Series Premier
Portfolio (Sym: ASPAX, ASPBX, ASPCX)
(35) AllianceBernstein Select Investor Series Technology
Portfolio (Sym: AITAX, AITBX, AITCX)
(36) AllianceBernstein Americas Government Income Trust
(Sym: ANAGX, ANABX, ANACX)
(37) AllianceBernstein Bond Fund Corporate Bond Portfolio
(Sym: CBFAX, CBFBX, CBFCX)
(38) AllianceBernstein Bond Fund Quality Bond Portfolio
(Sym: ABQUX, ABQBX, ABQCX)
(39) AllianceBernstein Bond Fund U.S. Government Portfolio
(Sym: ABUSX, ABUBX ABUCX)
(40) AllianceBernstein Emerging Market Debt Fund (Sym:
AGDAX, AGDBX, AGDCX)
(41) AllianceBernstein Global Strategic Income Trust
(Sym: AGSAX, AGSBX, AGCCX)
(42) AllianceBernstein High Yield Fund (Sym: AHYAX, AHHBX,
AHHCX)
(43) AllianceBernstein Multi-Market Strategy Trust (Sym:
AMMSX, AMMBX, AMMCX)
(44) AllianceBernstein Short Duration (Sym: ADPAX, ADPBX,
ADPCX)
(45) AllianceBernstein Intermediate California Muni
Portfolio (Sym: AICBX, ACLBX, ACMCX)
(46) AllianceBernstein Intermediate Diversified Muni
Portfolio (Sym: AIDAX, AIDBX, AIMCX)
(47) AllianceBernstein Intermediate New York Muni Portfolio:
(Sym: ANIAX, ANYBX, ANMCX)
(48) AllianceBernstein Muni Income Fund National Portfolio
(Sym: ALTHX, ALTBX, ALNCX)
(49) AllianceBernstein Muni Income Fund Arizona Portfolio
(Sym: AAZAX, AAZBX, AAZCX)
(50) AllianceBernstein Muni Income Fund California Portfolio
(Sym: ALCAX, ALCBX, ACACX)
(51) AllianceBernstein Muni Income Fund Insured California
Portfolio (Sym: BUICX, BUIBX, BUCCX)
(52) AllianceBernstein Muni Income Fund Insured National
Portfolio (Sym: CABTX, CBBBX, CACCX)
(53) AllianceBernstein Muni Income Fund Florida Portfolio
(Sym: AFLAX, AFLBX, AFLCX)
(54) AllianceBernstein Muni Income Fund Massachusetts
Portfolio (Sym: AMAAX, AMABX)
(55) AllianceBernstein Muni Income Fund Michigan Portfolio
(Sym: AMIAX, AMIBX, AMICX)
(56) AllianceBernstein Muni Income Fund Minnesota Portfolio
(Sym: AMNAX, AMNBX, AMNCX)
(57) AllianceBernstein Muni Income Fund New Jersey Portfolio
(Sym: ANJAX, ANJBX, ANJCX)
(58) AllianceBernstein Muni Income Fund New York Portfolio
(Sym: ALNYX, ALNBX, ANYCX)
(59) AllianceBernstein Muni Income Fund Ohio Portfolio
(Sym: AOHAX, AOHBX, AOHCX)
(60) AllianceBernstein Muni Income Fund Pennsylvania
Portfolio (Sym: APAAX, APABX, APACX)
(61) AllianceBernstein Muni Income Fund Virginia Portfolio
(Sym: AVAAX, AVABX, AVACX)
Investors in the State of Rhode Island 529 Plan, known as the
CollegeBoundfund(SM), may have invested in one or more of the
funds listed below:
(i) AllianceBernstein Growth & Income Fund
(ii) AllianceBernstein Mid-Cap Growth Fund
(iii) AllianceBernstein Premier Growth Fund
(iv) AllianceBernstein Quasar Fund
(v) AllianceBernstein Technology Fund
(vi) AllianceBernstein Quality Bond Portfolio
(vii) AllianceBernstein International Value Fund
(viii) AllianceBernstein Small Cap Value Fund
(ix) AllianceBernstein Value Fund
The Complaint charges Alliance Capital Management Holding L.P.,
Alliance Capital Management Corporation, Alliance Capital
Management, L.P., AXA Financial, Inc., each of the registrants
for the Funds, Gerald Malone, Charles Schaffran, Edward J.
Stern, Canary Capital Partners, LLC, Canary Investment
Management, LLC, Canary Capital Partners, Ltd, each of the
Funds, and John Does 1-100 with violations of Sections 11 and 15
of the Securities Act of 1933; Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder; and Section 206 of the Investment Advisers Act of
1940.
The Complaint charges that, throughout the Class Period, certain
of the defendants failed to disclose that they improperly
allowed certain hedge funds, including Canary and certain
Alliance hedge funds, to engage in "late trading" and "timing"
of the Funds' securities.
Late trades are trades received after 4:00 p.m. EST that are
filled based on that day's net asset value, as opposed to being
filled based on the next day's net asset value, which is the
proper procedure under SEC regulations. Late trading allows
favored investors to make use of market-moving information that
only becomes available after 4 p.m. and has been compared to
betting on a horse race that already has been run. Late trading
and timing injure ordinary mutual fund investors - who are not
allowed to engage in such practices - and are acknowledged as
improper practices by the Funds.
In return for receiving extra fees from Canary and other favored
investors, Alliance Capital Management Holding and its
subsidiaries allowed and facilitated Canary's timing and late
trading activities, to the detriment of class members, who paid,
dollar for dollar, for Canary's improper profits. These
practices were undisclosed in the prospectuses of the Funds,
which falsely represented that the Funds actively police against
timing and represented that post-4 p.m. EST trades will be
priced based on the next day's net asset value and that
premature redemptions will be assessed a charge.
For more details, contact Michael Goldberg, Esquire, by Mail:
1801 Avenue of the Stars, Suite 311, Los Angeles, California
90067, by Phone: (310) 201-9161 or (888) 773-9224 by E-mail:
info@glancylaw.com or visit the firm's Website:
http://www.glancylaw.com
BEARINGPOINT INC.: Deadline For Lead Plaintiff Motion Oct. 2003
----------------------------------------------------------------
The deadline for purchasers of BearingPoint, Inc. (NYSE:BE)
publicly traded securities to move for lead plaintiff in a
securities fraud class action recently brought against the
Company is rapidly approaching.
Purchasers of BearingPoint publicly traded securities between
October 30, 2002 and August 13, 2003, inclusive have until
October 20, 2003 to file a motion for lead plaintiff in the suit
in the United States District Court for the Eastern District
of Virginia.
The complaint alleges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing numerous positive statements
throughout the Class Period regarding the Company's financial
performance. As alleged in the complaint, these statements were
each materially false and misleading when made as they failed to
disclose and misrepresented the following material adverse facts
which were then known to defendants or recklessly disregarded by
them:
(1) that the Company had materially overstated its net
income and earnings per share and undervalued its
identifiable intangibles (goodwill) by approximately
$20 million;
(2) that the Company had inflated its earnings by
improperly accounting for restructuring charges
relating to acquisitions;
(3) that the Company's financial statements were not
prepared in accordance with Generally Accepted
Accounting Principles (GAAP);
(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 14, 2003, prior to the opening of the financial
markets, the Company announced in a press release and in a
concurrently filed Form 8-K that it would restate its financial
results for the first three quarters of fiscal year 2003 due to
certain acquisition related and other accounting adjustments.
News of this shocked the market. Shares of BearingPoint fell 23
percent, or $2.41 per share, to close at $7.90, on unusually
heavy trading volume on August 14, 2003.
For more details, contact Samuel H. Rudman, David A. Rosenfeld,
Jackie Addison or Heather Gann, P.O. Box 25438 by Mail: Little
Rock, AR 72221 5438 by Phone: 1-888-551-9944 by Fax:
1-501-312-8505 by E mail: info@cauleygeller.com, or visit the
firm's Website: http://www.cauleygeller.com
LaBRANCHE & CO.: Cauley Gellar Lodges Securities Suit in S.D. NY
----------------------------------------------------------------
Cauley Geller Bowman & Rudman, LLP initiated a securities class
action in the United States District Court for the Southern
District of New York on behalf of purchasers of LaBranche & Co.,
Inc. (NYSE: LAB) common stock during the period between January
25, 2000 and October 15, 2003, inclusive.
The complaint charges LaBranche, G. Michael LaBranche, Robert
Murphy, Alfred O. Haywood, Jr., William J. Burke, III, and
Harvey S. Traison with violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder.
LaBranche is a specialty firm on the New York Stock Exchange
(NYSE). As a specialist on the NYSE, LaBranche is required to
uphold the rules and requirements of the NYSE. Rather than
uphold its duties, LaBranche, during the class period,
repeatedly violated its duties by engaging in an illegal scheme
to drive up the Company's financial results.
More specifically, the Complaint alleges that the Company's
statements concerning its financial results during the class
period were materially false and misleading because they failed
to disclose and misrepresented the following adverse facts,
among others:
(1) that LaBranche engaged in the illegal practice of
"front-running" trades at the NYSE, which allowed
LaBranche to act on nonpublic information to trade
ahead of customers lacking that knowledge and pocket a
profit on each trade;
(2) that LaBranche illegally "traded ahead" of customer
orders by causing or allowing its traders to put
LaBranche's own interest ahead of investors by ignoring
one investor order while in the process of interacting
with another investor, thereby creating more illegal
profits for the Company;
(3) that LaBranche, throughout the Class Period, improperly
recognized revenue from its illegal scheme in violation
of Generally Accepted Accounting Principles (GAAP); and
(4) as a result of this illegal scheme, LaBranche
materially overstated and artificially inflated its
earnings, net income, and earnings per share.
On April 17, 2003, the NYSE issued a statement wherein it
disclosed that it had begun an investigation of the specialist
firms of the NYSE. On news of this shares of LaBranche fell
7.8% or $1.41 per share to close at $16.49 per share. On April
18, 2003, The Wall Street Journal reported that LaBranche and
others were the subject of an investigation by the NYSE into
illegal trading practices on the floor of the NYSE.
Additionally on April 18, 2003, Bloomberg reported that the SEC
had also begun an investigation into illegal trading practices
by specialist firms, such as LaBranche. On news of this, shares
of LaBranche fell another 1.21% or $.20 per share to close at
$16.29 per share on April 21, 2003.
On September 22, 2003, The Wall Street Journal reported that the
SEC had intensified its inquiry into the NYSE specialist firms,
like LaBranche. On news of this, shares of LaBranche fell 9.8%
or $1.76 per share, on extremely high volume, to close at $16.05
per share.
Lastly, on October 16, 2003, the NYSE announced that the NYSE
Enforcement Division had decided to bring disciplinary action
against LaBranche and the other specialist firms. The actions
will allege that the specialist firms (LaBranche) failed to
comply with fundamental Exchange auction market rules and
policies and applicable securities regulations during a three-
year period from January 1, 2000 through December 31, 2002.
Additionally, the NYSE stated that it will also seek substantial
fines and improvements in the self-monitoring and compliance
practices of specialist firms, as well as reimbursement of
potential investor losses.
News of the disciplinary action being taken against LaBranche by
the NYSE shocked the market. Shares of LaBranche fell 10.3% or
$1.29 per share on extremely heavy trading volume to close at
$11.26 on October 16, 2003.
For more details, contact Samuel H. Rudman, David A. Rosenfeld,
Jackie Addison or Heather Gann by Mail: P.O. Box 25438, Little
Rock, AR 72221-5438 by Phone: 1-888-551-9944 by Fax:
1-501-312-8505 by E-mail: info@cauleygeller.com
LABRANCHE & CO.: Schiffrin Barroway Lodges Securities Suit in NY
----------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a class action in the United
States District Court for the Southern District of New York on
behalf of all purchasers of the common stock of LaBranche & Co.,
Inc. (NYSE: LAB) from January 25, 2000 through October 15, 2003,
inclusive.
The complaint charges LaBranche, G. Michael LaBranche, Robert
Murphy, Alfred O. Haywood, Jr., William J. Burke, III, and
Harvey S. Traison with violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder.
LaBranche is a specialty firm on the New York Stock Exchange
(NYSE). As a specialist on the NYSE, LaBranche is required to
uphold the rules and requirements of the NYSE. Rather than
uphold its duties, LaBranche, during the class period,
repeatedly violated its duties by engaging in an illegal scheme
to drive up the Company's financial results.
More specifically, the Complaint alleges that the Company's
statements concerning its financial results during the class
period were materially false and misleading because they failed
to disclose and misrepresented the following adverse facts,
among others:
(1) that LaBranche engaged in the illegal practice of
"front-running" trades at the NYSE, which allowed
LaBranche to act on nonpublic information to trade
ahead of customers lacking that knowledge and pocket a
profit on each trade;
(2) that LaBranche illegally "traded ahead" of customer
orders by causing or allowing its traders to put
LaBranche's own interest ahead of investors by ignoring
one investor order while in the process of interacting
with another investor, thereby creating more illegal
profits for the Company;
(3) that LaBranche, throughout the Class Period, improperly
recognized revenue from its illegal scheme in violation
of Generally Accepted Accounting Principles (GAAP); and
(4) as a result of this illegal scheme, LaBranche
materially overstated and artificially inflated its
earnings, net income, and earnings per share.
On April 17, 2003, the NYSE issued a statement wherein it
disclosed that it had begun an investigation of the specialist
firms of the NYSE. On news of this shares of LaBranche fell
7.8% or $1.41 per share to close at $16.49 per share. On April
18, 2003, The Wall Street Journal reported that LaBranche and
others were the subject of an investigation by the NYSE into
illegal trading practices on the floor of the NYSE.
Additionally on April 18, 2003, Bloomberg reported that the SEC
had also begun an investigation into illegal trading practices
by specialist firms, such as LaBranche. On news of this, shares
of LaBranche fell another 1.21% or $.20 per share to close at
$16.29 per share on April 21, 2003. On September 22, 2003, The
Wall Street Journal reported that the SEC had intensified its
inquiry into the NYSE specialist firms, like LaBranche. On news
of this, shares of LaBranche fell 9.8% or $1.76 per share, on
extremely high volume, to close at $16.05 per share.
Lastly, on October 16, 2003, the NYSE announced that the NYSE
Enforcement Division had decided to bring disciplinary action
against LaBranche and the other specialist firms. The actions
will allege that the specialist firms (LaBranche) failed to
comply with fundamental Exchange auction market rules and
policies and applicable securities regulations during a three-
year period from January 1, 2000 through December 31, 2002.
Additionally, the NYSE stated that it will also seek substantial
fines and improvements in the self-monitoring and compliance
practices of specialist firms, as well as reimbursement of
potential investor losses.
News of the disciplinary action being taken against LaBranche by
the NYSE shocked the market. Shares of LaBranche fell 10.3% or
$1.29 per share on extremely heavy trading volume to close at
$11.26 on October 16, 2003.
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
*********
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities. The Asbestos Defendant Profiles is backed by an
online database created to respond to custom searches. Go to
http://litigationdatasource.com/asbestos_defendant_profiles.html
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and
Beard Group, Inc., Washington, D.C. Enid Sterling, 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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