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196-d, notwithstanding that the customer might believe that the charge is meant to be so distributed." The Appellate Division granted the separate motions of the plaintiffs and defendants for leave to appeal to this Court and certified the question of whether the Appellate Division order was "properly made." CLUB CAR: Recalls Lynx Vehicles For Loose Steering Connections -------------------------------------------------------------- Club Car Inc., of Augusta, Georgia, in cooperation with the U.S. Consumer Product Safety Commission (CPSC), is voluntarily recalling 158 Lynx Hunting Vehicles since the steering connections on the front suspension rack can come loose, posing a risk of the operator losing control of the vehicle. Club Car has received one report of a hunting vehicle losing steering control, though no injuries have been reported. The Lynx is an off-road vehicle, shaped like a golf cart, but designed for hunters and sportsmen. The name "Club Car" appears on the front of the vehicle. The recalled vehicles have serial number prefix LX0344 through LX0353, and LX0401 through LX0409. The serial number is located on a decal just above and to the right of the accelerator pedal. The vehicles, manufactured in the U.S., were sold at Authorized Club Car dealers nationwide from May 2003 through September 2003 for between $4,000 and $5,000. Consumers should stop using these vehicles immediately and contact Club Car for a free inspection and repair. Most vehicle owners have already been contacted by Club Car. Any owners of recalled Lynx vehicles who have not been contacted, should call the retailer from whom they purchased their vehicle or call Club Car at (800) 227-0739 between 8 a.m. and 5 p.m. ET Monday through Friday. EXFO ELECTRO-OPTICAL: Reaches Settlement For NY Securities Suit --------------------------------------------------------------- EXFO Electro-Optical Engineering, Inc. reached a settlement for the consolidated securities class action filed in the United States District Court for the Southern District of New York, related to its initial public offering (IPO) in June 2000. The complaints allege that the prospectus and the registration statement for the IPO failed to disclose that the underwriters allegedly received excessive commissions and that the underwriters and some investors collaborated in order to inflate the price of Company stock in the aftermarket. On June 26, 2003, the Plaintiff's Executive Committee announced that a proposed settlement between the issuers and their directors and officers and the plaintiffs had been structured. A Memorandum of Understanding (MOU) to settle the plaintiffs' claims against the issuers and their directors and officers has now been approved as to form and the process of obtaining approval by all parties to the MOU is now underway. The parties will be required to prepare many complex documents necessary to consummate the settlement, which will be submitted to the court for preliminary approval. Final approval will be required by the Court following notice to class members and a fairness hearing. If this tentative settlement is successfully finalized, the company and the individual defendants will be released from the litigation. Any direct financial impact of the proposed settlement is will likely be covered by the Company's insurance carriers. Since the settlement process is subject to a fairness hearing and final court approval, it is possible that it could fail. Therefore, it is not possible to predict the final outcome of the case, nor determine the amount of any possible losses. If the settlement process fails, the company will continue to defend its position in this litigation that the claims against it, and its officers, are without merit. FAST FOOD: Candidate Lieberman Calls For FTC Junk Food Probe ------------------------------------------------------------ Connecticut Senator and Democratic presidential candidate Joe Lieberman is asking the Federal Trade Commission to initiate a probe into the connection between junk food advertising and the rise in obesity among youngsters, the Associated Press reports. "We're talking about how the government can get back on the side of parents and families and support them in raising healthy children and giving them good values," Dan Gerstein, deputy communications director for Sen. Lieberman's campaign told AP. "Governments can't raise children. That's the job of parents. But we can help to pull with them and pull for them." Sen. Lieberman also plans to push for three interim moves while the FTC conducts the investigation, the Associated Press reports. He said he would require junk food advertisements to include nutritional information that somehow issues a warning to parents, much like movie ads are accompanied by parental ratings. Sen. Lieberman also promised to ask Congress to require restaurants to include nutritional information on menus and mini-boards. He also proposed to allow the Agriculture Department to set standards for food sold in schools, primarily vending machines. Fast food chains and junk food have come under fire in the recent years, as obesity has become the top health issue in America. The Center for Disease Control and Prevention has estimated that 15% are overweight. Additionally, lawsuits have been filed against major food chains like McDonald's, alleging it caused people and teenagers to become addicted to its food and contributed to their obesity problem. The lawsuits have been dismissed. During the 2000 presidential campaign, Sen. Lieberman also asked for an FTC probe into marketing practices of movie, video game and music industries. His campaign officials say that he found a similar pattern with food advertising - he says that the firms are marketing unhealthy products for children too young to read. While parents can refuse to bring junk food into their homes, advertisements prompt demands from the youngest children and make it more likely that they will buy the products - sometimes in schools - as soon as they get enough money of their own, Lieberman aides said. Sen. Lieberman's campaign officials told AP the senator will not define what junk food is, leaving that to dietary and health care experts. FIRST UNION: Appeals Court Rules Favorably in Suit V. California ---------------------------------------------------------------- First Union Real Estate Equity and Mortgage Investments (NYSE:FUR) received a favorable decision from the California Court of Appeal, Third Appellate District, in "Paterno et al. v. State of California," a class action composed of numerous businesses and individuals as parties plaintiff, including First Union. First Union first learned of the unexpected ruling after the close of business on Wednesday, November 26, 2003. As a plaintiff in this case, First Union has pursued legal action against the State of California associated with the 1986 flood of Sutter Buttes Center, formerly Peach Tree Center, a property owned at the time by the Company. In September 1991, the court ruled in favor of the plaintiffs on the liability portion of the inverse condemnation suit, which the State of California appealed. In the third quarter of 1999, the 1991 ruling in favor of First Union and the other plaintiffs was reversed by the State of California Court of Appeal, which remanded the case to the trial court for further proceedings. After the remand, the retrial of the litigation commenced in February 2001 and was completed in July 2001. In November 2001, the trial court issued a decision that generally held in favor of the State of California. The plaintiffs appealed the ruling of the trial court to the California Court of Appeal. On November 26, 2003, the Court of Appeal issued its decision reversing the decision of the trial court. The appellate court held that the State was liable for the damages caused by the failure of the levee and remanded the case to the trial court for a determination of the plaintiffs' damages and for an award of attorney's fees and costs. The Company said in a statement that it understands that the State intends to pursue an appeal to the California Supreme Court, but cannot predict whether that court will accept such an appeal and, if accepted, what the outcome of the appeal will be. The Company has been informed by the consulting firm it previously retained to evaluate its claims that the amount of its potential damage claims is in the order of magnitude of $33 million, potentially subject to adjustment due to the subrogation rights of its insurance carrier, plus attorney's fees and compounded market-rate interest from 1986, the time that the damage occurred; however, the Company is unable to predict at this time what amount, if any, it will recover of its damage claims in or as a result of this legal proceeding. For more information, contact Neil H. Koenig of First Union Real Estate Equity and Mortgage Investments by Phone: 212-949-1373 FREEDOM SURF: UT Judge Enters Permanent Injunction V. Trader ------------------------------------------------------------ The Honorable Tena Campbell, US District Judge for the District of Utah, Central Division, entered a Judgment of Permanent Injunction as to Robert H. Pozner of Ridgewood, New Jersey. Mr. Pozner consented to entry of the judgment. The Judgment against Mr. Pozner enjoins him from future violations of the antifraud provisions of the securities laws (Sections 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder). The Judgment also orders that the Court will retain jurisdiction to decide the appropriate amount, if any, of disgorgement, prejudgment interest and penalties against Mr. Pozner. The Commission's complaint alleged that Mr. Pozner, then a trader at a brokerage firm called Glenn Michael Financial Corporation, engaged in a scheme with other defendants from July through November 2000 to manipulate the public trading market for stock issued by Freedom Surf, Inc. The complaint alleged that Mr. Pozner, Allen Wolfson and other defendants participated in a scheme to artificially run up the price of Freedom Surf stock. Mr. Pozner and others advanced the bid quotation in Freedom Surf stock without relation to genuine market demand or worth of the company. The complaint alleged that in less than two months, Mr. Pozner, at Wolfson's direction, and without client orders, bid up the stock from $5 to $35. HEPATITIS OUTBREAK: Number of Infected People Increase To 635 ------------------------------------------------------------- The number of hepatitis A cases linked to eating green onions at a Chi-Chi's restaurant in Beaver County, Pennsylvania has risen to 635, 20 more than the number reported last week, the Associated Press reports. Green onions have been linked to an outbreak that sickened more than 600 people and killed three who ate at the Mexican restaurant in Monaca, about 25 miles northwest of Pittsburgh. "Last week, public health authorities determined that a shipment of contaminated green onions to a Chi-Chi's restaurant from an outside supplier was the source of this outbreak," attorney William Marler earlier told AP. "For that reason, we have decided to dismiss the lawsuits against Chi-Chi's, and instead have filed a lawsuit against suppliers." A class action has also been commenced against three California distributors - NewStar Fresh Foods in Salinas, Boskovich Farms in Oxnard, and Apio Fresh in Guadalupe in US District Court for the Western District of Pennsylvania. The Pennsylvania Health Department is no longer updating the number of new cases daily because the number is growing slowly. There are still no reported secondary cases, meaning all those confirmed to have the liver disease got it directly by eating or working at the restaurant, state officials said Wednesday, the Associated Press reports. The Food and Drug Administration now has a team in Mexico trying to figure out exactly how green onions were contaminated on their way to the restaurant about 25 miles northwest of Pittsburgh. The results of that investigation are expected to take at least two weeks, FDA spokesman Michael Herndon said Wednesday. HOME INTERIORS: Recalls Snow Play Candleholder for Fire Hazard ---------------------------------------------------------------- Home Interiors & Gifts, Inc. of Carrollton, Texas, in cooperation with the U.S. Consumer Product Safety Commission (CPSC) is recalling 14,338 Snow Play Candleholders since flames from the votive candle can set fire to the rope linking three "sledding" snowmen. There have been two reports of the rope on the candleholder catching fire, though no injuries were reported. The recalled candleholder is about 6 inches high and is packaged in a box with "Home Interiors" written on the top of the box. Each candleholder has three snowmen linked by a small rope, "sledding" down a hill around the votive candleholder. The snowmen are painted red, blue, and green. The candleholders, manufactured in China, were sold at Home Interiors' direct sales associates from July 2003 through October 2003 for $14.99. Customers are urged to stop using the candleholder immediately and return the candleholder to Home Interiors & Gifts, 2901 Trade Center, Suite 100, Carrollton, TX 75007, Attn: Snow Play Recall. Consumers should clearly mark the outside of the box with their name, return address, and total number of candleholders being returned, to receive a $20 gift certificate from Home Interiors for the full purchase price and shipping expense. For more information, contact Home Interiors toll-free on (800) 818-2062 between 9 am and 5 pm (CT) Monday through Friday. INVESCO FUNDS: Lawyers Eye Stock Lawsuits Ahead Of NY AG Charges ---------------------------------------------------------------- Within hours of prosecution announcements Tuesday by New York AG Spitzer and the Securities and Exchange Commission, an Indiana investor filed the first of what is likely to be many suits against Denver-based Invesco in U.S. District Court in Denver, Knight-Ridder / Tribune Business News reports. David Rosenfeld, a lawyer involved in the case, said Wednesday that his New York firm, Cauley Geller Bowman & Rudman, began considering a suit when it became clear recently that AG Spitzer's office was investigating Invesco. Critics argue that the quickness with which Cauley Geller and others follow government action with a lawsuit indicates they are vultures with little regard for justice. "What is driving them is the size of the potential claim, not the merits of the cases," said James Copland, director of the Center for Public Policy, a conservative think tank. Others say the class action lawyers not only help keep corporate malfeasance in check, they are the only hope that wronged investors have of recovering losses. "There is a place for class-action litigation where you have badly injured investors. Whenever the (Securities and Exchange Commission) or a U.S. attorney takes action, that generally does nothing to make the investors whole," said Carr Conway, a forensic accountant with Dickerson Financial Investigations Group in Lakewood and a former SEC investigator. The SEC and other authorities go after corporate wrongdoers in only the most egregious cases, said Kip Shuman, a Denver lawyer who specializes in securities cases. The lawsuit threat does more to keep corporate officers honest than fear of government action does, he said. Both sides of the argument have merit, said Ken Scott, a Stanford University law professor. "Class-action securities lawsuits have become a big and highly profitable business for the trial bar," he said. "It can also be true that they are a powerful mechanism for enforcing the laws." Firms like Cauley Geller, Dyer & Shuman and powerhouse Milberg Weiss Bershad Hynes & Lerach specialize in the suits, which in some cases bring together thousands of plaintiffs in one major legal action. Companies invariably settle the lawsuits rather than risk costly and lengthy litigation, said Bill Ballowe, an assistant vice president at San Francisco-based insurance broker Woodruff & Sawyer, which manages shareholder databases. Only once since 1995, when Congress passed the Private Securities Litigation Reform Act, has a company refused settlement, Mr. Ballowe said. In that 1998 case, the South Dakota-based company, Equisure, didn't bother to show up in court. A federal judge in Minnesota socked the Company with a $45.3 million default judgement. Such class action firms as Milberg and Cauley Geller have teams of forensic accountants and investigators looking for abuses. Cauley Geller began looking into possible abuses in the mutual- fund industry after AG Spitzer in September disclosed his office's investigation involving hedge fund Canary Capital Partners and a number of fund companies, including Denver-based Janus Capital. The firm is involved in suits against most of the mutual funds alleged to have misled investors. Invesco loomed larger in Cauley Geller's sights when it became clear in the weeks following the Janus allegations that Spitzer was investigating the firm, Mr. Rosenfeld told the Tribune Business News. In most cases, the amount of investigation that the class-action firms do before filing suit is minimal, Stanford's Scott told the Tribune Business News. "You can piggyback on the actions the public authorities bring," he said. "You can have a standard complaint form and then fill in specifics when they bring enforcement action." A second law firm, Schiffrin & Barroway of Bala Cynwyd, Pennsylvania, is working with Cauley Geller on the Denver Invesco suit. Along with a local counsel, Denver's Allen & Vellone, the two filed the suit on behalf of Richard Raver. Mr. Rosenfeld said none of the lawyers recruited Mr. Raver, who approached Schiffrin & Barroway about filing suit. IOWA: Father Wins First Round In U. Iowa Parental-Leave Lawsuit --------------------------------------------------------------- David Johnson, a University of Iowa employee, is eager to garner support for a class action against the university for what he calls a discriminatory parental-leave policy now that a federal judge has given the go-ahead for litigation, the Daily Iowan reports. A November 19 consolidation approval of two cases into a federal class action suit allows other UI employees to join Mr. Johnson in his case against the university. Mr. Johnson, an employee in the Registrar's Office, was not allowed to use two-weeks paid sick leave to care for his wife after the birth of their daughter in the fall of 2002. He contends that the University of Iowa's parental-leave policy discriminated against him because it grants paid leave to mothers of newborns and adoptive parents of either sex, but it does not allow biological fathers the same benefits. UI's policy is the only one of its kind in the Big Ten. "The case is a wonderful example of the way discrimination in one case affects everyone," Mr. Johnson says. "They are taking away from the father bonding with the child, but it also takes away from helping out the mother in those two weeks." UI attorneys were unsuccessful in attempting to dismiss the lawsuits Mr. Johnson filed in federal and state courts in June, which seek damages for emotional distress and the 40 hours of pay he did not receive during his leave of absence. Marc Mills, a University of Iowa senior associate counsel, says he could not comment on the reasons biological fathers are not given benefits equivalent to mothers and adoptive parents, indicating that the university would wait to present its rationale. Mr. Johnson says he believes the university established the parental-leave policy to lower the cost of employee benefits. UI is the only Big Ten school that does not grant biological fathers the use of accumulated sick days to care for newborn or adopted children. The University of Illinois grants two weeks of paid leave for both parents after the birth or adoption of a child. "Both parents are important. They both need bonding time with the child," says Mary Ellen O'Schaughnessey, an associate director of academic human resources at Illinois. "It's a matter of equity; that's why it is called parental leave, not maternity leave." U.S. District Court Judge Ronald Longstaff opened the class action to all University of Iowa employees who are or may become biological fathers. Mr. Johnson says he was prompted to file a class action after receiving support from other fathers in like situations. "There are many similarly situated persons who are affected by the same application by the same employer," says his attorney, James Larew. Mr. Larew adds that class-action suits are a more efficient way to arbitrate disputes that affect many people. "Historically, the federal courts have been champions of civil- rights claims," he says. "They can be used as persuasive authority in other places around the country." Interested employees have until January 18 to enter the suit; to date, none have formally joined. LEAPFROG ENTERPRISES: Shares Fall Due To Suit, FAO Bankruptcy -------------------------------------------------------------- Shares of electronic educational toy firm Leapfrog Enterprises, Inc. (LF) fell last week, after shareholders filed a class action and one of its customers filed for bankruptcy, the Reuters reports. In October, the Company revealed an upcoming earnings and revenue shortfall, after reporting that several major retailers had deferred third-quarter orders to keep inventories down. The revelation caused Company shares to drop by 7.2% in trading at the New York Stock Exchange. Prominent law firm Milberg Weiss then initiated a securities class action against the Company and some of its officers, over its failure to warn investors of the shortfall. The suit was filed in the United States District Court for the Northern District of California on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the Company's common stock between August 20, 2003 and October 21, 2003, inclusive. 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. "We have seen in the past companies miss quarters and class- action lawsuits crop up," Natalie Walrond, an analyst with Pacific Growth Equities, told Reuters. "Usually they go on for long periods of time and not much comes from it, it's more of an annoyance and a distraction . we're not overly concerned." LeapFrog said in a statement that it believes the lawsuit is without merit, and it intends to vigorously defend itself, Reuters reports. One of LeapFrog's customers, FAO Inc.(FAOO), said on Thursday that it filed for bankruptcy. FAO runs FAO Schwarz, Right Start and Zany Brainy chains. FAO said on Tuesday it would liquidate Zany Brainy, which specializes in educational toys, Reuters reports. LeapFrog said sales to FAO account for a very small percentage of its revenue, and the bankruptcy and liquidation will not have a material impact on the company. MONTANA: ACLU Sues Over Inadequate Representation For Prisoners --------------------------------------------------------------- The American Civil Liberties Union (ACLU) filed a class action against Flathead District Court, Montana judges and officials, on behalf of eight criminal defendants and other potential plaintiffs, the Daily Inter Lake reports. The suit names 14 judges, Montana Gov. Judy Martz, Supreme Court Administrator James Oppedahl, judges who sit on a state District Court Council and members of the Appellate Defender Commission as defendants. The ACLU recently added three more judges to the suit - Ted Lympus, Stewart Stadler and Kitty Curtis. The suit concerns the state's method of providing legal defense to poor Montanans. The suit alleges that the plaintiff's constitutional rights to free and adequate legal representation were violated, and applies to plaintiffs in Butte-Silver Bow, Missoula, Glacier, Teton, Flathead, Lake and Ravalli counties. The suit charges the state with failing to adequately budget legal representation costs - a $2 million shortfall in legal defense funding is reportedly expected this biennium. Because of the state's failure to supervise and fund indigent defense, poor people suffer a number of potentially dire consequences, the suit says. "Appointment of counsel is unnecessarily delayed. Persons who might otherwise be eligible for bail remain in (jail) unnecessarily. They cannot challenge the evidence against them. Innocent persons plead guilty. Those who have meritorious defenses cannot present them. They receive harsher sentences than the facts of their case warrant. They do not learn of sentencing alternatives. Indigent clients waive their due process rights, the right to a fair and speedy trial, and their right to appeal their convictions," the suit stated, the Daily Inter Lake reports. The suit further asserted that Montana has been known for its failure in public defense for decades. The suit cites the case of Robert Armstrong, a Flathead County criminal defendant who was recently a key witness in a murder trial, as an example of inadequate legal representation. Mr. Armstrong charged with DUI and bail jumping. The suit alleges that after Mr. Armstrong missed an arraignment, his lawyer failed to inform the court of the misunderstanding and to inform Mr. Armstrong that a bench warrant was issued for him. While certain standards are expected for prosecutors in criminal cases, there are no such standards required for public defenders, giving prosecutors an advantage over people charged with crimes, the suit says. It alleges, "Hampered by a lack of experience, excessive workloads, inadequate compensation, the lack of support services, and the absence of meaningful administrative oversight and technical assistance, indigent defense counsel do not or are unable to perform even the most basic tasks necessary to provide adequate representation to their clients." Local officials wondered whether judges were immune from such a suit, the Daily Inter Lake reports. Judges cannot be sued for damages for actions they take. MUSIC RETAILERS: ME Court Approves $8M CD Antitrust Settlement -------------------------------------------------------------- The United States District Court in Portland, Maine granted approval to the US$8 million settlement proposed by several music distributors and retailers for the consumer antitrust suit filed against them, Reuters reports. The suit names as defendants Bertelsmann's BMG Music Club, Columbia House and several other CD manufacturers and distributors. The suit alleged that they conspired to set prices of compact discs sold to music club members. A similar suit was filed in the same court in October 2000 that was signed by the attorneys general of 43 states and territories. The suit charged major record labels and large music retailers of conspiring to set minimum music prices. Judge D. Brock Hornby approved a $143 million settlement of that case last June. Defendants common to both suits include: (1) Sony Music Entertainment, (2) EMI Group's EMI Music Distribution, (3) Time Warner's Warner-Elektra-Atlantic, (4) Vivendi Universal's Universal Music Group and (5) the Bertelsmann Music Group. Under the settlement, members will receive vouchers providing for 75% discounts on regular CD club prices. Under the settlement, members will receive up to three discount vouchers, Michael Jaffe, an attorney for the plaintiffs, told Reuters. Anyone with a voucher will pay about $4.50 per CD, based on the typical music club price of about $18. Individuals buying CDs with the vouchers will not have to pay the usual extra shipping and handling charges of $2.80. BMG declined comment, while officials of Columbia House were not immediately available, Reuters reports. In agreeing to the settlement Wednesday, the music clubs and distributors denied any wrongdoing. "This is a reasonable settlement for an extremely complex and difficult case. We encourage all class members to take advantage of the voucher program, which will be in place for the next six months," Mr. Jaffe said. MUTUALS.COM: SEC Launches Civil Suit Over Late Trading Practices ---------------------------------------------------------------- The Securities and Exchange Commission filed a civil securities fraud action in the United States District Court for the Northern District of Texas, against Mutuals.com, Inc., its CEO, its president, and its compliance officer, as well as two affiliated broker-dealer firms. According to the SEC's complaint, the defendants fraudulently helped institutional brokerage customers and advisory clients to carry out and conceal thousands of market timing trades and illegal late trades in shares of hundreds of mutual funds. The SEC asked the court to enjoin the defendants from further securities law violations, and also sought civil money penalties and disgorgement of illicit profits plus prejudgment interest. The Commission also sought, and the defendants consented to, the appointment of a Special Monitor to oversee the defendants' business operations, including the management of the Mutuals.com Trust mutual funds (formerly known as 1-800 MUTUALS Advisor Series), pending resolution of the civil litigation. The SEC named the following individuals and entities as defendants in the action: (1) Mutuals.com, Inc., (2) affiliated broker-dealer Connely Dowd Management, Inc., (3) affiliated broker-dealer MTT Fundcorp, Inc., (4) CEO Richard Sapio, (5) president Eric McDonald and (6) compliance officer Michele Leftwich According to the Commission's complaint, Mr. Sapio, Mr. McDonald and Ms. Leftwich devised and perpetrated a number of deceptive acts and practices to conceal their clients' market timing activities, such as: (i) formation and registration of two affiliated broker- dealers (CDM and MTT) through which they could continue to market time undetected; (ii) changing account numbers for blocked customer accounts; (iii) use of alternative registered representative numbers for registered representatives who were blocked from trading by mutual funds; (iv) use of different branch identification numbers; (v) switching clearing firms; and (vi) suggesting that their customers use third party tax identification numbers or social security numbers to disguise their identities, so that they could continue to trade in funds from which they had been banned. The SEC further alleges that, at least during 2003, Mutuals.com and its affiliated broker dealers routinely received trading instructions from customers after 4:00 p.m. EST and executed those trades as if the instructions had been received prior to that time. According to the SEC, Mutuals.com and its affiliates attempted to conceal late trading activities by omitting portions of the trading information they were required to provide to clearing agents. The SEC alleges that, by way of that conduct, each of the proposed defendants violated Section 17(a) of the Securities Act of 1933. Each of the proposed defendants also allegedly violated, and aided and abetted their customers' and clients' violations of Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder. The suit further alleges that Mutuals.com, CDM and MTT violated Section 15(c)(1) of the Exchange Act, and that Sapio, McDonald and Leftwich aided and abetted those violations of Section 15(c)(1) of the Exchange Act. Mutuals.com, CDM and MTT also allegedly violated Rule 22c-1 of the Investment Company Act of 1940 (which prohibits the purchase or sale of mutual fund shares except at a price based on the current NAV of such shares that is next calculated after receipt of a buy or sell order). The suit is styled "Securities and Exchange Commission v. Mutuals.com, Inc., Connely Dowd Management, Inc., MTT Fundcorp, Inc., Richard Sapio, Eric McDonald, and Michele Leftwich, Civil Action No. 303 CV 2912D." NORTHWEST GOLD: Faces MP3 Players Product Fraud Suit in CA Court ---------------------------------------------------------------- Northwest Gold, Inc. faces a class action filed in California state court against all MP3 marketers, advertisers, and manufacturers in the state of California for misrepresenting the file storage capabilities of MP3 players. The Company retained an outside attorney to represent and defend it. The outcome of the lawsuit cannot be determined as the case is still in its early stage of discovery. Any unfavorable outcome arises from the case will adversely affect the Company's operations. PIPER JAFFRAY: Discovery Proceeds in NY IPO Allocations Lawsuit --------------------------------------------------------------- Discovery is proceeding in the consolidated securities class action filed against Piper Jaffray Companies and other leading securities firms, in the U.S. District Court for the Southern District of New York involving the allocation of securities in certain initial public offerings. The suit is styled "In re Initial Public Offering Allocation Securities Litigation, Master File No.21 MC 92 (SAS)." The consolidated suits assert claims pursuant to Section11 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The claims are based, in part, upon allegations that between 1998 and 2000, in connection with acting as an underwriter of certain initial public offerings of technology and Internet-related companies, the Company obtained excessive compensation by allocating shares in these initial public offerings to preferred customers who, in return, purportedly agreed to pay additional compensation to the Company in the form of excess commissions that it failed to disclose. The complaints also allege that the customers who received favorable allocations of shares in initial public offerings agreed to purchase additional shares of the same issuer in the secondary market at pre-determined prices. These complaints seek unspecified damages. The defendants' motions to dismiss the complaints were filed on July 1, 2002, and oral argument on the motions to dismiss was heard on November 14, 2002. The court entered its order largely denying the motions to dismiss on February 19, 2003. A status conference was held with the Court on July 11, 2003 for purposes of establishing a case management plan setting forth discovery deadlines, selecting focus cases and briefing class certification. With respect to certain claims, the Company and the other underwriter defendants have now submitted our request that the Court set a schedule for filing motion for reconsideration or motion for judgment on the pleadings based upon the argument that the complaints fail to sufficiently allege loss causation as recently articulated by the Second Circuit Court of Appeals. PIPER JAFFRAY: NY Court To Rule on Dismissal of IPO Fees Lawsuit ---------------------------------------------------------------- The United States District Court for the Southern District of New York has yet to decide on the motion to dismiss the consolidated class action filed against Piper Jaffray Companies and other leading securities firms, styled "In re Public Offering Fee Antitrust Litigation, Case No.98 CV 7890 (LMM)." The consolidated amended complaint seeks unspecified compensatory damages, treble damages and injunctive relief. The consolidated amended complaint was filed on behalf of purchasers of shares issued in certain initial public offerings for U.S. companies and alleges that defendants conspired in offerings of an amount between $20 and $80 million to fix the underwriters' discount at 7.0 percent of the offering amount in violation of Section1 of the Sherman Act. The court dismissed this consolidated action with prejudice and denied plaintiffs' motion to amend the complaint and include an issuer plaintiff. The court stated that its decision did not affect any class actions filed on behalf of issuer plaintiffs. The Second Circuit Court of Appeals reversed the district court's decision on December 13, 2002 and remanded the action to the district court. A motion to dismiss was filed with the district court on March 26, 2003 seeking dismissal of this action in its entirety, based upon the argument that the determination of underwriting fees is implicitly immune from the antitrust laws because of the extensive federal regulation of the securities markets. Plaintiffs filed their opposition to the motion to dismiss on April 25, 2003. The underwriter defendants filed a motion for leave to file a supplemental memorandum of law in further support of their motion to dismiss on June 10, 2003. The court denied the motion to dismiss based upon implied immunity in its memorandum and order dated June 26, 2003. A supplemental memorandum in support of motion to dismiss, applicable only to this action because the purported class consists of indirect purchasers, was filed on June 24, 2003 and seeks dismissal based upon the argument that the proposed class members cannot state claims upon which relief can be granted. Plaintiffs filed a supplemental memorandum in opposition to defendants' motion to dismiss on July 9, 2003. Defendants filed a reply in further support of the motion to dismiss on July 25, 2003. Discovery is proceeding at this time. POSTAL SERVICE: CO Court Approves Discrimination Suit Settlement ---------------------------------------------------------------- The United States District Court in Colorado granted approval to the settlement of a class action filed against the United States Postal Service, alleging that it discriminated against injured employees, the Associated Press reports. Chandler Glover, 65, filed the suit in 1992, alleging that postal officials in Denver denied him advancement opportunities after he was injured on the job in 1991. "I got to keep the same salary, but I was denied any promotions, any transfers or anything of that nature," Mr. Glover, who retired in 1999, told AP. "I wasn't given those opportunities. I couldn't even apply for (them)." Under the settlement, employees who can show they were discriminated against because of their rehabilitation status will be offered $25,000. An estimated 25,000 postal employees are expected to take part in the deal, which will cost the government millions of dollars, according to attorneys. "Whether it is single-digit or double-digit, we won't really know until we see how many claims are filed," Brad Seligman, an attorney with the nonprofit Impact Fund, which helped represent the plaintiffs, told AP. Officials for the Postal Service in Denver and in Washington said they could not comment on the settlement, which includes no admission of wrongdoing, the Associated Press reports. RESPIRONICS INC.: Recalls ComfortGelr Mask For Production Defect ---------------------------------------------------------------- Respironics, Inc., in cooperation with the U.S. Food and Drug Administration (FDA), has voluntarily recalled 5,293 ComfortGelr nasal masks distributed from September 5, 2003 through September 15, 2003, because the company discovered that some masks shipped to Home Health Care Providers or distributors did not contain a built-in exhalation port. The exhalation port is required to allow exhaled air to properly exhaust. The masks were shipped without the exhaust port used to exhaust all of the exhaled CO2, which potentially could result in patients re-breathing CO2, associated decreased oxygen levels and increased CO2 levels in the blood. The ComfortGel nasal mask can only be obtained through a physician prescription. Respironics self-reported the exhalation port issue to the Food and Drug Administration District in Philadelphia, Pennsylvania on September 26, 2003, when the issue came to the company's attention. There have been no patient injuries to date. The ComfortGel masks are used in the treatment of Obstructive Sleep Apnea (OSA) in conjunction with a Continuous Positive Airway Pressure (CPAP) or Bi-Level Positive Airway Pressure (Bi- PAP) device which supplies a continuous stream of air which keeps the patient's airway open during sleep to diminish apnea, or awakening, episodes. A corrective action was begun immediately in which Respironics contacted all customers who were shipped masks during the September 5 to September 15 timeframe. The company has completed contact with all customers who received shipments of the masks and will continue inspection and replacement efforts until all suspected masks are returned by customers. As of today, 82% of the recalled masks have been returned to Respironics and less than 3% have been determined to be affected. Respironics will work closely with the FDA to ensure that all masks in question are returned to the company for thorough inspection and repair or replacement. Respironics, Inc. is notifying its distributors and customers by telephone and written communication and is arranging for return of all recalled products. Consumers with questions may contact the company at 1-800-345-6443. SAVE THE WORLD: Consultant Enjoined From Securities Violations -------------------------------------------------------------- The Honorable George B. Daniels of the US District Court for the Southern District of New York permanently enjoined defendant Billy Blackwelder from violating the antifraud, anti-touting and other provisions of the federal securities laws, barred him from participating in an offer of penny stock, and ordered him to disgorge his illicit profits. Mr. Blackwelder, without admitting or denying the allegations in the Commission's complaint, consented to the entry of the final judgment against him. Mr. Blackwelder was a freelance consultant who, in July 2000, became a marketing consultant for Save the World Air, Inc. (STWA), a company that purported to have successfully developed and marketed a pollution control device for automobiles called the "zero emission fuel saver device." The complaint alleges that Mr. Blackwelder prepared and arranged to have issued at least one false press release announcing a major licensing deal for STWA that, in fact, did not exist. Mr. Blackwelder also posted positive messages about STWA on an Internet stock message board without disclosing, as required, that he received shares of STWA as payment for the promotion. Mr. Blackwelder's postings were materially misleading because they created the impression that he was expressing unbiased views about STWA and its stock, when he was actually a paid promoter. The complaint charged Mr. Blackwelder with violations of Section 17(b) of the Securities Act of 1933 (Securities Act), Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint also charged STWA and Jeffrey Muller, the company's former president, with violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder. In addition, STWA and Muller, as a control person of STWA pursuant to Section 20(a) of the Exchange Act, were charged with violations of Sections 13(a) and 13(b) of the Exchange Act, and Rules 12b-20, 13a-1, 13a-13 and 13b2-1 thereunder. The complaint further charged Mr. Muller with violations of Section 16(a) of the Exchange Act, and Rules 16a-2 and 16a-3 thereunder. On June 25, 2002, the Court ordered a final judgment of permanent injunction against STWA. STWA consented to a permanent injunction prohibiting it from violating the antifraud and reporting provisions of the securities laws. The litigation is ongoing with respect to Mr. Muller. The suit is styled "SEC v. Save the World Air, Inc., et al., 01 CV 11586." STYLING TECHNOLOGY: SEC Lodges Civil Suit V. Principal Officers --------------------------------------------------------------- The Securities and Exchange Commission filed a civil injunctive action in the United States District Court for the District of Columbia, alleging that the principal executive officers of Styling Technology Corporation, including its former chairman and CEO, Sam Leopold, and its former CFO, Richard R. Ross, engaged in an extensive financial fraud between 1997 and 1999 by inflating the company's reported earnings in its filings with the Commission. The Commission's complaint also alleges that two of the company's auditors engaged in the fraud by recklessly causing their accounting firm, Arthur Andersen LLP, to issue an unqualified audit report on Styling's 1998 year-end financial statements and by failing to object to false and misleading statements in the Company's 1999 first and second quarter reports. The Commission's complaint alleges that, beginning in 1997, the Company began to record false revenue from certain sales transactions, including ones that involved nothing more than the transfer of product to an overseas warehouse. It also alleges that the fraudulent booking of sales increased significantly during 1998, when the manager of Styling's Body Drench division, Phillip D. Teal, began systematically booking projected sales for the entire year in the current quarter - a practice that culminated at year-end in the recording of revenue from the mere shipment of millions of dollars of product between two company- controlled warehouses. According to the complaint, Styling's vice president of operations, Norman B. Cowgill, approved these year-end transactions. The Commission's complaint alleges that, at least one month prior to the filing of Styling's 1998 annual report on Form 10-K, Leopold, Ross, Cowgill and James T. Montrose, the company's former chief accounting officer, knew, or were reckless in not knowing, the nature and extent of the fraudulent sales at Body Drench, yet took no steps to correct the company's improperly recorded accounts receivable. Leopold, Ross and Montrose, have consented to the entry of permanent injunctions on all of the legal violations alleged against them, without admitting or denying the allegations of the Commission's complaint. The Commission also alleges that Styling's fraudulent accounting practices continued through the first two quarters of 1999, when the company improperly booked millions of dollars of sales. In June 1999, it charges, Styling attempted to cover up its fraud by writing off $5.1 million of uncollectible accounts receivable and attributing the lost revenue to a strategic business decision. The Commission further alleges that two former Arthur Andersen auditors, Jay S. Ozer and Bradley J. Schmidt, recklessly failed to detect the fraudulent sales at Styling during 1998. It alleges that, despite encountering a number of red flags at Styling, Ozer, the engagement partner on the audit, and Schmidt, the audit manager, failed to ensure that the audit was conducted in accordance with generally accepted auditing standards and recklessly caused Arthur Andersen to render an unqualified audit report on Styling's 1998 financial statements. Ozer and Schmidt, the Commission alleges, also knew or were reckless in not knowing that Styling's statements concerning the $5.1 million write-off in its second quarter report were false and misleading. The complaint alleges that all of the defendants violated or aided and abetted violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and aided and abetted violations of Section 13(a) of the Exchange Act and the rules thereunder, and that defendants Leopold, Ross, Teal, Montrose, Cowgill and Schmidt violated or aided and abetted violations of the internal control provisions of the Exchange Act, Section 13(b), and various rules thereunder. It seeks permanent injunctions and civil penalties from each defendant and seeks disgorgement of certain bonuses paid to Leopold and Ross and an order barring each of them from serving as officers and directors of any public company. Three of Styling's officers, Leopold, Ross and Montrose, have consented to the entry of permanent injunctions on all of the legal violations alleged against them, without admitting or denying the allegations of the Commission's complaint. In addition, Leopold has agreed to pay $225,000 in disgorgement and pre-judgment interest and $100,000 as a civil penalty. Ross has agreed to pay $100,000 in disgorgement. Both Leopold and Ross have consented to the entry of orders barring them from serving as officers and directors of any public company. Montrose was not ordered to pay any penalty, based on sworn financial statements and other documents submitted to the Commission. The suit is styled "SEC v. Sam Leopold, Richard R. Ross, Phillip D. Teal, James T. Montrose, Norman B. Cowgill, Jay S. Ozer, and Bradley J. Schmidt, Civil Action No. 03 CV 02491, RMU." TOSHIBA CORPORATION: Faces Lawsuit For Computer Design Defect ------------------------------------------------------------- The law firm of Sutts, Strosberg, LLP initiated a class action lawsuit against Toshiba of Canada Limited and Toshiba Corporation, one of the world's largest developers and manufacturers of advanced electronic devices, components and systems, on behalf of plaintiffs Jeffrey Bondy of Amherstburg, Ontario, and Nicolas MacPherson of Windsor, Ontario, who allege that the company negligently designed and marketed a faulty Satellite 5000 series notebook computer that contained a design flaw, causing the computer to overheat, perform poorly and shut down. According to plaintiff lawyer Harvey T. Strosberg, a class action permits persons with common claims to join in a single court proceeding rather than each bringing an individual lawsuit. The plaintiffs are claiming damages in the amount of $15 million and punitive, aggravated and exemplary damages in the amount of $1 million on behalf of all persons in Canada (excluding British Columbia) who purchased a Toshiba Satellite 5000 series notebook computer. The Toshiba computers in question were promoted as "the ultimate multimedia machine" and as offering 1.1 GHz Pentium III processing power to handle an array of gaming and multimedia presentations. The lawsuit alleges that the notebook actually fails to perform at its advertised speed because it inadequately dissipates heat generated by the Pentium III processor, causing sluggish performance and unexpected shut-downs. "This is a classic case of faulty design. We allege that Toshiba knew or ought to have known that the notebooks suffered from a design defect," said Mr. Strosberg. "These computers were not capable of handling the high levels of processing power that Toshiba advertised." Toshiba began marketing and selling the Satellite 5000 model XIZ in 2001 and model Z59 in early 2002. The computers were sold in Canada for a retail price of approximately $3,000. Canadians who purchased a Toshiba Satellite 5000 series notebook computer may register with counsel by calling 1-800-229-5323. The notice of action and statement of claim, which detail particulars of the allegations in the class action, may be downloaded or reviewed at http://www.toshibaclassaction.com. VERIZON PHONE: PA Inmate Commences Lawsuit For Consumer Fraud ------------------------------------------------------------- The Commonwealth Court of Pennsylvania dismissed a pro se petition for review, filed by Plaintiff Donald Bowers, alleging that a contract entered into by the Pennsylvania Department of Corrections with T-Netix and Verizon Phone Service violates the federal Telecommunications Act of 1996 and the Pennsylvania Unfair Trade Practices and Consumer Protection Law. According to Mr. Bowers, the contract at issue names Verizon as the exclusive provider of long-distance and local telephone service for inmates of the Department's correctional facilities. As such, inmates are restricted to using only Verizon services when making telephone calls. Mr. Bowers alleges in his petition that the contract violates federal and state law because: (1) as an inmate, he is prevented from using any third- party long- distance providers other than Verizon, (2) Verizon refuses to reimburse him for telephone calls that are disconnected, interrupted or have bad connections and (3) Verizon charges long-distance rates for local area calls. Specifically, Mr. Bowers asserts that Verizon charged him $2.60 for a fifteen-minute local telephone call which should have been free and that he was denied reimbursement from Verizon for a telephone call that he made on February 10, 2003 which was disconnected. On May 2, 2003, the Department filed preliminary objections, arguing that Mr. Bowers' petition should be dismissed for failure to state a claim. Mr. Bowers filed a brief in opposition to the Department's preliminary objections. WASHINGTON MUTUAL: Settles Seattle Mortgage Lawsuit for $50,000 ---------------------------------------------------------------- Washington Mutual has paid roughly $50,000 to settle a lawsuit brought by Timothy and Penny Cook, of Seattle, who almost lost their home as a result of a series of mistakes WaMu allegedly made servicing their mortgage, Knight-Ridder / Tribune Business News reports. The settlement, finalized in late October, includes a confidentiality clause. A source familiar with the litigation said that in addition to paying the Cooks the $50,000, WaMu agreed to straighten out credit problems the couple suffered due to the lender's incompetence. An official with Seattle-based WaMu said she could not comment on the settlement. "It's important to note that the allegations in that case relate to events that happened nearly two years ago," WaMu's Libby Hutchinson told the Tribune Business News. "We've certainly acknowledged that we faced some challenges during that time frame, as we integrated a number of mortgage companies in the midst of the largest refinance boom in American history. Having said that, we've worked successfully over the last year to improve processes and service for our mortgage customers." The Cooks' lawsuit, filed last year in King County Superior Court, said their problems began after WaMu acquired their loan from Fleet Mortgage in summer 2001. The suit accused WaMu of repeatedly losing track of mortgage payments they made on their Seattle condominium. Even after the couple repeatedly presented copies of canceled checks proving the lender had received payments, WaMu insisted they were behind, according to the suit. WaMu also told credit agencies the Cooks were delinquent on their payments, which harmed their credit rating, the suit stated. The lawsuit also accused the lender of hiring a company to initiate foreclosure proceedings against them, putting the Cooks and their infant son in imminent danger of losing their home. In court documents filed before the settlement was reached, WaMu admitted the Cooks supplied copies of canceled checks. However, it alleged they sent their payments to the wrong post-office box. In a November 2002 article, SmartMoney magazine quoted Tim Cook, a network engineer at Microsoft, saying of WaMu, "It was shocking and insulting how they treated us." Through their Seattle lawyer, David Leen, the Cooks declined comment for this article, citing the settlement's confidentiality clause. Mr. Leen, too, was guarded. "Without commenting on the terms of the settlement, it fully and finally resolved the matter to the complete satisfaction of the Cooks," Mr. Leen told the Tribune Business News. Last spring, WaMu Chief Executive Kerry Killinger said the customer-service snafus are in the past. He and other WaMu officials have attributed the problems in part to the lender's rapid growth, which involved managing a variety of information systems that are being integrated. Mr. Leen and other attorneys said they continue to hear from clients experiencing problems much like the Cooks', including a Fox Island woman who last month said she found a foreclosure notice on her door, even though she has been making timely payments to WaMu. A New Jersey judge could rule as soon as tomorrow whether to confer class action status in a case against WaMu that alleges violations of the New Jersey Consumer Fraud Act. It includes claims that WaMu failed to properly service mortgages, falsely sent negative information about borrowers to credit agencies and hounded borrowers for payments already made. Three months ago, in a separate case in King County Superior Court, WaMu agreed to help fix the account problems of customers who said the lender lost mortgage payments, charged erroneous fees and mishandled payments of property taxes. In that settlement, with three law firms representing about 1,000 customers, WaMu agreed to hear the individual complaints and review any disputes. WaMu said it would take steps to correct account problems on a case-by-case basis, including refunding fees that were mistakenly charged, according to one of the law firms. WISCONSIN: ST. Croix Forges $7M Settlement For Strip Search Suit ---------------------------------------------------------------- St. Croix County, Wisconsin reached a $7 million settlement for the class action filed in the United States District Court in Madison, Wisconsin on behalf of prisoners who were strip- searched in the county's jail between 1996 and 2001, county officials said, the Duluth News Tribune reports. The suit charged that the County's strip-search policy violated the Fourth Amendment of the U.S. Constitution, which protects against unreasonable searches. The suit states that until February 2001, those booked into the county jail were subjected to a search of their genitals and buttocks, and for women, a search of their breasts. The searches were instituted under then-Sheriff Paul Burch and ended in February 2001 when current Sheriff Dennis Hillstead revised the policy to comply with state law, which does not allow searches for people suspected of misdemeanors, but only for detainees convicted of weapons offenses or who are believed to be carrying contraband, such as drugs. Under the settlement, about 2,900 people will be eligible to receive about $5.5 million. An additional $1.5 million will go toward legal fees and other court costs. The two lead plaintiffs would receive $35,000, while others would receive about $3,000 to $3,500, depending on several factors, including whether the claimant was a juvenile when searched. U.S. District Judge Barbara Crabb still has to approve the settlement. New Securities Fraud Cases AEROSONIC CORPORATION: Kirby McInerney Launches Stock Suit in FL ---------------------------------------------------------------- Kirby McInerney & Squire, LLP initiated a securities class action in the United States District Court for the Middle District of Florida, on behalf of all purchasers of Aerosonic Corporation securities during the period from November 13, 1998 through March 17, 2003, inclusive. The action charges Aerosonic and certain of its senior officers with violations of Sections 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934. The alleged violations stem from the dissemination of false and misleading statements, which had the effect - during the Class Period - of artificially inflating the price of Aerosonic's shares. On March 17, 2003, Defendants announced that they had discovered what appeared to be certain discrepancies in previously-reported financial information concerning inventory accounting and revenue recognition. The market reacted swiftly and severely to this news, with the Company's stock falling 24%, or $3.32 per share from a high of $13.32 per share on March 17, 2003 to close at $10.10 per share on March 18, 2003. For more information, contact Pamela E. Kulsrud, or Elaine Mui, by Mail: 830 Third Avenue, 10th Floor, New York, New York 10022, by Phone: (212) 317-2300 or Toll Free (888) 529-4787, or by E- mail: emui@kmslaw.com. ALKERMES INC: Goodkind Labaton Commences Securities Suit in MA -------------------------------------------------------------- Goodkind Labaton Rudoff & Sucharow LLP initiated a securities class action in the United States District Court for the District of Massachusetts, on behalf of persons who purchased or otherwise acquired publicly traded securities of Alkermes Inc. between April 22, 1999 and July 1, 2002, inclusive. During the Class Period, Defendants artificially inflated the price of Alkermes shares by issuing a series of false and misleading statements about the Company's new drug application for Risperdal Consta. The true facts, which were known by Defendants but were concealed from the investing public, include that the company in an attempt to lessen development expenses and speed the product to market, concealed the deficient nature of the manufacturing process for Medisorb polylactide-glycolide polymer used to manufacture Risperdal Consta, which resulted in quality management issues and delays in the product's development program. As a result of the Defendants false statements, Alkermes stock traded at inflated prices during the Class Period, increasing to a high of $70.06 on February 16, 2000, whereby the company issued $200 million worth of its own securities. On July 1, 2002, Defendants announced that they received a non-approvable letter from the FDA. As a result of this announcement, Alkermes' share price dropped significantly over the following two days to $4.04, losing 93% of their value. For more information, contact Christopher Keller, by Phone: 800-321-0476, or by E-mail: investorrelations@glrslaw.com. INVESCO FUNDS: Charles Piven Lodges Securities Fraud Suit in CO --------------------------------------------------------------- The Law Offices Of Charles J. Piven, P.A. initiated a class action lawsuit in the United States District Court for the District of Colorado on behalf of all purchasers of INVESCO Advantage Health Sciences Fund (Nasdaq:IAGHX), (Nasdaq:IGHBX), (Nasdaq:IGHCX); INVESCO Core Equity Fund (Nasdaq:ICEAX), (Nasdaq:ICEBX), (Nasdaq:IINCX), (Nasdaq:FIIIX), (Nasdaq:IEIKX); INVESCO Dynamics Fund (Nasdaq:IDYAX), (Nasdaq:IDYBX), (Nasdaq:IFDCX; Nasdaq:FIDYX; Nasdaq:IDYKX); INVESCO Energy Fund (Nasdaq:IENAX; Nasdaq:IENBX), (Nasdaq:IEFCX; Nasdaq:FSTEX; Nasdaq:IENKX); INVESCO Financial Services Fund (Nasdaq:IFSAX; Nasdaq:IFSBX; Nasdaq:IFSCX), (Nasdaq:FSFSX), (Nasdaq:FSFKX); and other Invesco Mutual Funds that are managed by Invesco Funds Group, Inc., which is a subsidiary of Amvescap PLC from December 5, 1998 through November 24, 2003, inclusive, seeking to pursue remedies under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940. The Funds and the symbols for the respective Funds subject to the lawsuit are: (1) INVESCO Advantage Health Sciences Fund (Nasdaq:IAGHX), (Nasdaq:IGHBX), (Nasdaq:IGHCX) (2) INVESCO Core Equity Fund (Nasdaq:ICEAX), (Nasdaq:ICEBX), (Nasdaq:IINCX), (Nasdaq:FIIIX), (Nasdaq:IEIKX) (3) INVESCO Dynamics Fund (Nasdaq:IDYAX), (Nasdaq:IDYBX), (Nasdaq:IFDCX; Nasdaq:FIDYX; Nasdaq:IDYKX) (4) INVESCO Energy Fund (Nasdaq:IENAX; Nasdaq:IENBX), (Nasdaq:IEFCX; Nasdaq:FSTEX; Nasdaq:IENKX) (5) INVESCO Financial Services Fund (Nasdaq:IFSAX; Nasdaq:IFSBX; Nasdaq:IFSCX), (Nasdaq:FSFSX), (Nasdaq:FSFKX) (6) INVESCO Gold & Precious Metals Fund (Nasdaq:IGDAX), (Nasdaq:IGDBX; Nasdaq:IGDCX; Nasdaq:FGLDX) (7) INVESCO Health Sciences Fund (Nasdaq:IAHSX; Nasdaq:IBHSX; Nasdaq:IHSCX; Nasdaq:FHLSX), (Nasdaq:IHSKX) (8) INVESCO International Core Equity Fund (Nasdaq:IBVAX; Nasdaq:IBVBX; Nasdaq:IBVCX), (Nasdaq:IIBCX) (9) INVESCO Leisure Fund (Nasdaq:ILSAX; Nasdaq:ILSBX), (Nasdaq:IVLCX; Nasdaq:FLISX), (Nasdaq:ILEKX) (10) INVESCO Mid-Cap Growth Fund (Nasdaq:IMGAX; Nasdaq:IMGBX; Nasdaq:IMGCX), (Nasdaq:IVMIX) (11) INVESCO Multi-Sector Fund (Nasdaq:IAMSX), (Nasdaq:IBMSX), (Nasdaq:ICMSX) (12) INVESCO S&P 500 Index Fund (Nasdaq:ISPIX) (13) INVESCO Small Company Growth Fund (Nasdaq:ISGAX), (Nasdaq:ISGBX; Nasdaq:ISGCX), (Nasdaq:FIEGX) (14) INVESCO Technology Fund (Nasdaq:ITYAX; Nasdaq:ITYBX; Nasdaq:ITHCX), (Nasdaq:FTCHX), (Nasdaq:ITHKX) (15) INVESCO Total Return Fund (Nasdaq:IATRX), (Nasdaq:IBTRX), (Nasdaq:ITRCX), (Nasdaq:FSFLX) (16) INVESCO Utilities Fund (Nasdaq:IAUTX), (Nasdaq:IBUTX), (Nasdaq:IUTCX), (Nasdaq:FSTUX) (17) INVESCO Advantage Fund (Nasdaq:IADAX), (Nasdaq:IADBX), (Nasdaq:IADCX) (18) INVESCO Balanced Fund (Nasdaq:IBLAX),(Nasdaq:IBLBX), (Nasdaq:IBNCX), (Nasdaq:IBFIX), (Nasdaq:IMABX), (Nasdaq:IBLKX) (19) INVESCO European Fund (Nasdaq:IEUAX), (Nasdaq:IEUBX), (Nasdaq:FEURX), (Nasdaq:IEUKX) (20) INVESCO Growth Fund (Nasdaq:IAGWX), (Nasdaq:IBGWX), (Nasdaq:IBGCX), (Nasdaq:FLRFX), (Nasdaq:IGWKX) (21) INVESCO High-Yield Fund (Nasdaq:IAHYX), (Nasdaq:IBHYX), (Nasdaq:IHYCX), (Nasdaq:FHYPX), (Nasdaq:IHYKX) (22) INVESCO Growth & Income Fund, (Nasdaq:IGIAX), (Nasdaq:IGIBX), (Nasdaq:IGRCX; Nasdaq:IVGIX), (Nasdaq:IGIKX) (23) INVESCO International Blue Chip Value Fund (Nasdaq:IBVAX), (Nasdaq:IBVBX), (Nasdaq:IBVCX; Nasdaq:IIBCX) (24) INVESCO Real Estate Opportunity Fund (Nasdaq:IAREX), (Nasdaq:IBREX), (Nasdaq:IRECX), (Nasdaq:IVSRX) (25) INVESCO Select Income Fund (Nasdaq:IASIX), (Nasdaq:IBSIX), (Nasdaq:ISICX), (Nasdaq:FBDSX) (26) INVESCO Tax-Free Bond Fund (Nasdaq:IXBAX), (Nasdaq:IXBBX), (Nasdaq:ITFCX), (Nasdaq:FTIFX) (27) INVESCO Telecommunications Fund (Nasdaq:ITLAX), (Nasdaq:ITLBX; Nasdaq:INTCX), (Nasdaq:ISWCX), (Nasdaq:ITEKX) (28) INVESCO U.S. Government Securities Fund (Nasdaq:IGVAX), (Nasdaq:IGVBX), (Nasdaq:IUGCX), (Nasdaq:FBDGX) (29) INVESCO Value Fund (Nasdaq:IAVEX), (Nasdaq:IBVEX), (Nasdaq:IVACX), (Nasdaq:FSEQX) The wrongful conduct alleged in and which is the subject of the lawsuit relates to "timing." The lawsuit alleges that timing injures ordinary mutual fund investors who are not allowed to engage in such practices and benefits the mutual fund companies. For more information, 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. PORTAL SOFTWARE: Kirby McInerney Launches Securities Suit in CA --------------------------------------------------------------- Kirby McInerney & Squire, LLP initiated a securities class action in the United States District Court for the Northern District of California, on behalf of all purchasers of Portal Software, Inc. securities during the period from May 20, 2003 through November 13, 2003, inclusive. The action charges Portal and certain of its senior officers with violations of Sections 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934. The alleged violations stem from the Defendants' dissemination of false and misleading statements, which had the effect - during the Class Period - of artificially inflating the price of Portal's shares. Defendants issued a series of material misrepresentations to the market between May 20, 2003 and November 13, 2003, thereby artificially inflating the price of Portal Software common stock. Defendants also issued numerous public statements concerning Portal'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. Prior to disclosure of this adverse information to the market, the Company completed a public offering of Portal common stock, raising over $56 million in net proceeds, and certain executives sold their personally-held Portal common stock to the unsuspecting public, reaping proceeds of more than $4.8 million. On November 13, 2003, Portal issued a press release announcing earnings expectations $0.32 - 0.36 below previous guidance of $0.04 per share. Market reaction to the belated disclosures was swift and severe. In after-hours trading on November 13, 2003, the price of Portal common shares fell more than 42.5% to open at $8.77 per share on November 14, 2003, and have decreased more than 51% from a Class Period high of $17.93 per share reached less than a month before on October 15, 2003. For more information, contact Pamela E. Kulsrud, or Elaine Mui, by Mail: 830 Third Avenue, 10th Floor, New York, New York 10022, by Phone: (212) 317-2300 or Toll Free (888) 529-4787, or by E- mail: emui@kmslaw.com. PRICESMART: Scott + Scott Lodges Securities Fraud Suit in CA ------------------------------------------------------------ Scott + Scott, LLC initiated a securities fraud action in the United States District Court for the Southern District of California against PriceSmart and certain of its officers and directors, on behalf of purchasers of PriceSmart, Inc. publicly traded securities during the period between December 20, 2001 and November 17, 2003. The complaint alleges that during the Class Period, defendants made or approved of false statements about the business and economic future of the Company. The complaint further alleges that they knew or recklessly disregarded statements that were materially false and misleading. A statement is considered material if it is one of a higher degree or significant importance (this is NOT a legal definition of "materiality"). PriceSmart has admitted that it inappropriately recorded transactions included in its 2002 to 2003 results, and will have to restate those results to remove millions in improperly reported revenues. Therefore, these accounting/financial statements made were not a fair presentation of PriceSmart's results (hence in violation of Generally Accepted Accounting Principles and SEC rules). On November 10, 2003, the Company issued a press release entitled "PriceSmart to Restate Financial Statements for Fiscal 2002 and the First Three Quarters of Fiscal 2003." The press release stated in part: "PriceSmart, Inc. today announced that it will restate its financial statements for fiscal year 2002 and the first three quarters of fiscal year 2003 . Regarding the fourth quarter and fiscal year 2003 results, the Company is expecting to report a significant loss in the fourth quarter. The anticipated fourth quarter loss could exceed $20 million." The stock dropped below $8 per share on this news, an 80% decline from its Class Period high of more than $42.00 per share. For more information, contact Neil Rothstein, or David Scott, by Mail: 108 Norwich Avenue, Colchester, Connecticut 06415, or by Phone: 800/404-7770 (fax: 860/537-4432). ********* 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. 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