/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/040115.mbx C L A S S A C T I O N R E P O R T E R Thursday, January 15, 2004, Vol. 6, No. 10 Headlines 3COM CORPORATION: Plaintiffs Appeal CA Court's Dismissal of Suit CAL-MAINE FOODS: Plaintiffs Apply For Attorney Fees in DE Suit BAYER AG: Reaches Settlement For More than 2,000 Baycol Lawsuits FREMONT INVESTMENT: SEC Commences Probe of Mutual Fund Practices GO! NATURAL PET FOOD: Pet Owners File Suit Over Dog, Cat Deaths "GOT MILK" AD: Farmers Sue Over "Unconstitutional" Ad Campaign HARRON TRADING LTD: Recalls Scorpion Footwear For Product Defect INVESCO FUNDS: Deadline For Lead Plaintiff Motion Set February 2 LOCKHEED MARTIN: CA Court Dismisses Securities Violations Suit MARTHA STEWART: Sets Up Personal Website For Defense in Lawsuit MARTHA STEWART: Critics Worry Trial Won't Change Biotech Rules MICROSOFT CORPORATION: Judge Tosses Claims Processed Online PALM INC.: Court Grants Preliminary Approval To Suit Settlement PALM INC.: CA Court Grants Approval To Consumer Suit Settlement PALM INC.: Asks IL Court To Dismiss Amended Consumer Fraud Suit PALM INC.: CA, IL Courts Approve Deceptive Ads Suit Settlement PALM INC.: Parties Begin Discovery, Mediation in Consumer Suit PALM INC.: Reaches Settlement For Consolidated Stock Suit in DE PARMALAT FINANZIARIA: Prosecutors Question U.S., Italian Banks RHODE ISLAND: Supreme Court Refuses To Hear Strip-Search Lawsuit SOLECTRON CORPORATION: Plaintiffs File Amended Stock Suit in CA TRI-STATE CREMATORY: Judge To Rule On Status of Desecration Suit TYSON FOODS: Trial Opens In Suit Alleging Cattle Price-Fixing WEGENER CORPORATION: Plaintiffs To Dismiss DE Direct Stock Suit WISCONSIN: Marathon County Meet To Counter Discrimination Charge New Securities Fraud Cases AMERICAN PHYSICIANS: Brodsky & Smith Files Securities Suit in MI BIOPURE CORPORATION: Wechsler Harwood Files Stock Lawsuit in MA BIOPURE CORPORATION: Bernstein Litowitz Lodges Stock Suit in MA MARSH & MCLEENAN: Emerson Poynter Launches Securities Suit in NY SECURITY BROKERAGE: Schiffrin & Barroway Files Stock NV Lawsuit ********* 3COM CORPORATION: Plaintiffs Appeal CA Court's Dismissal of Suit ---------------------------------------------------------------- Plaintiffs appealed the California Superior Court's decision dismissing the second amended shareholder derivative and class action suit filed against 3Com Corporation, styled "Shaev v. Claflin, et al., No. CV794039." The complaint alleges that 3Com's directors and officers breached their fiduciary duties to the Company in connection with the adjustment of employee and director stock options in connection with the separation of 3Com and Palm. On May 13, 2003, the court dismissed the second amended suit. BAYER AG: Reaches Settlement For More than 2,000 Baycol Lawsuits ---------------------------------------------------------------- German pharmaceutical firm Bayer AG reached settlement to more than 2,000 suits related to its August 2001 recall of cholesterol drug Lipobay, paying out $782 million without admitting liability, AP/ Duluth New Tribune reports. The Company withdrew Lipobay, marketed as Baycol in the United States, after it was linked to a rare muscle-wasting syndrome and about 100 patient deaths. The Leverkusen-based company said in a regular update that it has settled 2,059 cases - up from 1,959 a month ago - while 10,494 are still pending. It has reportedly paid out $782 million - up from $747 million when it last reported on the issue December 9. In September, a federal judge in Minneapolis denied class action status to several thousand lawsuits against Bayer over Baycol. More than 800 lawsuits were filed in Minnesota over the drug, AP reports. CAL-MAINE FOODS: Plaintiffs Apply For Attorney Fees in DE Suit -------------------------------------------------------------- Plaintiffs in the consolidated shareholder class action filed against Cal-Maine Foods, Inc. filed an application for attorneys' fees and costs for defending the litigation, which is currently filed in the Court of Chancery of the State of Delaware in and for New Castle County On August 18, 2003, a complaint, styled "H. David Schneider v. Cal-Maine Foods Inc., et al. C.A. No. 20493-NC," was filed against the Company and its directors in Delaware Court. The suit seeks class action status and alleges the Company and its directors are attempting to freeze out the Company's public shareholders in connection with the proposed going private transaction announced by the Company on July 14, 2003, conflicts of interests, self-dealing and lack of good faith dealing. The suit asks for a preliminary and permanent injunction to enjoin the defendants from proceeding with the proposed going private transaction, damages in the event the transaction is consummated, and an accounting to class members for their damages. On August 25, 2003, a purported class action was filed in the Court of Chancery of the State of Delaware in and for New Castle County against the Company and its directors styled "Pyles v. Cal-Maine Foods, Inc., et al., C.A. No. 20507." The proposed class in the Pyles Action consists of all holders of the Company's common stock other than the directors of the Company, their affiliates and the Company's Employee Stock Options Plan (ESOP). The complaint in the Pyles Action generally alleges, among other things, that the directors breached their fiduciary duties in approving the reverse stock split, that the structure and timing of the reverse split is unfair to the holders of the Company's common stock other than the directors of the Company and the participants in the Company's ESOP and the price being paid for fractional shares in the reverse split is unfair. The complaint in the Pyles Action seeks preliminary and permanent injunctions to prevent consummation of the reverse stock split, rescission or rescissory damages in the event the reverse stock split is consummated and damages as a result of the alleged breaches of fiduciary duty. On August 26, 2003, the plaintiff in the Pyles Action filed a motion for expedited proceedings, motion for preliminary injunction and served discovery requests on the Company and its directors. As of the date of this report, the Court of Chancery has not scheduled a date and time to hear the plaintiff's request to expedite proceedings in the Pyles Action. On September 2, 2003, with the consent of the parties to each action the Court of Chancery entered an order consolidating the Schneider Action with the Pyles Action into one proceeding styled, "In re Cal-Maine Foods, Inc. Stockholders Litigation, C.A. No. 20507." That same day, the Court of Chancery agreed to hear plaintiffs' motion for preliminary injunction on October 1, 2003. On September 16, 2003, the parties to the Consolidated Action advised the Court that the Court did not need to hear plaintiffs' motion for preliminary injunction on October 1 as the date of the meeting to vote on the going private transaction had been delayed. The parties are attempting to reschedule the date for the hearing on plaintiffs' motion for preliminary injunction in advance of the new date for the stockholders' meeting to vote on the going private transaction. On September 25, 2003, a purported class action was filed in the Court of Chancery of the State of Delaware in and for New Castle County against the Company and its directors styled "Twin Valley Farms Exchange, Inc., Leon Eshelman, Valeria Eshelman, Gary Eshelman, Pamela Fredricks, and Terry Bixler v. Cal-Maine Foods, Inc., et al., C.A. No. 20576-NC." The proposed class in the Twin Valley Farms Action consists of all holders of the Company's common stock other than the directors of the Company, their affiliates and the Company's ESOP. All of the directors of the Company are named as defendants in the Twin Valley Farms Action. The complaint in the Twin Valley Farms Action generally alleges, among other things, that the proposed reverse split is the product of unfair dealing by the directors of the Company and that the price to be paid in lieu of fractional shares does not reflect the intrinsic value of the Company nor does it constitute "fair value" pursuant to the General Corporation Law of the State of Delaware. On September 25, 2003, the plaintiffs in the Twin Valley Farms Action also filed a motion to consolidate the Twin Valley Farms Action with the Consolidated Action. By order dated September 29, 2003, the Twin Valley Farms Action was consolidated with and into the Consolidated Action. On November 6, 2003, the Company's Board of Directors voted to terminate consideration of a going-private transaction. As a result of the Company's actions the claims asserted in the Consolidated Action are moot. On November 21,2003, plaintiffs filed an application for an award of attorney's fees and expenses to be paid by the Company. On November 26, 2003, plaintiffs filed their opening brief and other materials in support of their application. The Company and its directors believe the application for attorney's fees and expenses is without merit and are contesting it vigorously. FREMONT INVESTMENT: SEC Commences Probe of Mutual Fund Practices ---------------------------------------------------------------- The United States Securities and Exchange Commission has launched a formal investigation of San Francisco-based mutual fund manager Fremont Investment Advisors, over its trading activities, the Associated Press reports. Additionally, the United States Attorney General for the Northern District of California and the New York attorney general have also requested information from the Company. The Company is the latest of several mutual fund firms being investigated for "late trading" and "market timing," the practice of quickly trading in and out of funds to take advantage of discrepancies between the fund's share price and the value of its holdings. It is not illegal per se, though regulators have alleged it amounts to civil fraud if practiced by companies that have promised their customers they don't allow it. The Company, which runs the Fremont Funds, told AP it is cooperating fully with the inquiries. Its board has established a special committee of independent directors to oversee a review of the funds' trading practices. The review hasn't turned up any evidence of late trading but it has found evidence of past market-timing arrangements with a few clients. According to a filing with the SEC, the last market-timing arrangement at the Company ended in the fourth quarter of 2002. For each client that actually traded under the market-timing arrangements, the trading activity resulted in a net loss to the client in each fund in which the client had an arrangement. The Company further said managers that were believed to have initiated, negotiated or approved the arrangements left the firm for unrelated reasons. Fremont hasn't finished its internal review, and the impact to the funds hasn't yet been determined, the filing said, AP reports. GO! NATURAL PET FOOD: Pet Owners File Suit Over Dog, Cat Deaths --------------------------------------------------------------- The law firm of Lieff Cabraser Heimann & Bernstein, LLP, announced the filing of a lawsuit that seeks to represent dog and cat owners throughout California whose pets died or suffered serious injuries after eating Go! Natural pet food, Business Wire reports. The suit was filed against Petcurean Pet Nutrition, Inc., the Canadian manufacturer of the pet food, and Pet Food Express, Ltd., a major U.S. distributor of the product. Plaintiffs allege that Go! Natural pet food contained substances toxic to pets. The complaint, entitled Hanrahan et al. v. Petcurean Pet Nutrition, Inc., et al., was filed today in California Superior Court, Alameda County. Plaintiff Lisa Hanrahan fed her healthy four-year old dog, Gus, Go! Natural pet food, purchased from a Pet Food Express store in Livermore, California. As alleged in the complaint, after being fed Go! Natural pet food over the course of several months, in October 2003, Gus suddenly began to vomit and developed diarrhea. Within a week, Gus became so sick that Hanrahan rushed Gus to an emergency veterinary clinic. Less than twenty-four hours later Gus died on October 25, 2003, from liver failure. "Gus was a beloved member of our family," stated Hanrahan. "He bonded with my baby Brody in a way that was unique. Gus loved Brody, and we loved Gus too." Discussing the importance of the lawsuit, Hanrahan added, "No one should see their dog suffer and needlessly die. I want the defendants to explain in court why my dog died after eating their pet food that they claimed was superior to other brands and of 'human grade.'" "Petcurean and Pet Food Express touted the high-priced Go! Natural pet food as a premium product that was one of 'healthiest pet foods in the world,'" explained Lieff Cabraser partner Heather A. Foster. "We believe the evidence will show, as alleged in the complaint, that Go! Natural contained substances toxic to animals and this is why so many pets have died." The class action lawsuit is on behalf of pet food owners with dogs or cats that became ill or died after consuming Go! Natural pet food. Plaintiffs allege that defendants were negligent in the manufacture, quality assurance, sale and distribution of Go! Natural pet food. In addition to the bills for their pets' medical care and burial related costs, plaintiffs seek compensation for the emotional distress and loss of companionship they suffered due to the illnesses and/or deaths of their pets. For more information, contact Heather A. Foster, by Mail: 275 Battery Street, 30th Floor, San Francisco, CA 94111, by Phone: 415-956-1000, Fax: 415-956-1008, or E-mail: hfoster@lchb.com. "GOT MILK" AD: Farmers Sue Over "Unconstitutional" Ad Campaign -------------------------------------------------------------- The United States Third Circuit Court of Appeals heard arguments on whether the popular "Got Milk?" campaign was unconstitutional for forcing dairy farmers to pay for them, even if they disagreed, the Associated Press reports. Dairy farmers Joseph and Brenda Cochran filed the suit against the campaign, known for putting milk mustaches on celebrities. They allege that their small farm in Pennsylvania is different from many of the nation's largest milk producers because they let their cows graze naturally over 200 acres and do not use growth hormones to stimulate milk production. However, a lower court had earlier ruled against the couple. "The message is that all milk is the same and that the industry speaks with one voice, and that is clearly not the case," their attorney, Steve Simpson, told AP. The suit is one of a number of challenges to government marketing programs that produce ads for agricultural products. In July, a St. Louis, Missouri appeals court ruled that ranchers could not be forced to pay a $1-per-head fee on cattle to support the marketing campaign that spawned the slogan "Beef: It's what's for dinner." An appeals court in Cincinnati struck down a similar fee in October that had supported the advertisements calling pork, "the other white meat." In both cases the judges said federal regulations requiring farmers to pay for the marketing efforts violated their right to free speech, AP reports. Lawyers defending the law on behalf of the U.S. Department of Agriculture said it is necessary because of the collective nature of dairy production. "No man is an island ... no cow is an island either," Richard Rossier, a lawyer for dairy farmers who support the marketing program, told AP. HARRON TRADING LTD: Recalls Scorpion Footwear For Product Defect ---------------------------------------------------------------- Harron Trading Ltd., of Marham, ON, in cooperation with CSA International, announced the voluntary recall of approximately 2,020 pairs of Scorpion safety footwear since testing of the affected safety footwear indicates it fails to meet the Grade 1 Toe Impact and Sole Penetration Resistance test requirements of CSA Standard Z195, Protective Footwear, and may pose a threat of serious injury to the user. In addition, the affected safety footwear bears unauthorized or counterfeit CSA trademarks. Harron Trading Ltd. and CSA International have not received any reports of injury or death related to these products. The Scorpion safety footwear has been sold at safety footwear stores throughout Ontario from September 2003 to December 2003 for about $90.00 to $110.00. The safety footwear affected by this recall are style numbers S- 818-H, S-828-H, S-914-L, S-916-M, S-918-H, S-926-M, S-928-H and S-936-M. All affected safety footwear have "LM 1265389" marked on the label sewn on the inside of the footwear's tongue and bear green triangles and Omega tags sewn onto the outside of the footwear that incorporate unauthorized or counterfeit CSA trademarks. The affected footwear has the Scorpion trademark on the outer tongue of the footwear. The affected safety footwear may be constructed with black leather or beige "nuskin" uppers and be sold in styles ranging from oxford shoes to full-length construction boots. Consumers are urged to stop using the affected safety footwear immediately, return them to their retailer directly or call Harron Trading Ltd. to obtain a replacement / refund. Harron Trading Ltd. may be reached at (905) 940-8880 between the hours of 9:00 am to 5:00 pm EST or you may write to Harron Trading Ltd. at 250 Don Park Road, Unit 3, Markham, ON L3R 2V1. INVESCO FUNDS: Deadline For Lead Plaintiff Motion Set February 2 ---------------------------------------------------------------- The law firm of Schiffrin & Barroway, LLP announced that Invesco Mutual Fund investors have until February 2, 2004, to move for lead plaintiff in a securities fraud class action recently filed in the United States District Court for the District of Colorado, against the Invesco Mutual Funds that are managed by Invesco Funds Group, Inc., a subsidiary of Amvescap PLC, on behalf of purchasers of any of the Invesco Funds listed below between November 1, 1998 and September 3, 2003, inclusive. The Class Period for this case is from December 5, 1998 through November 24, 2003, inclusive. These Invesco Mutual Funds are subject to this suit: 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) INVESCO Gold & Precious Metals Fund (NASDAQ: IGDAX), (NASDAQ: IGDBX) (NASDAQ: IGDCX) (NASDAQ: FGLDX) INVESCO Health Sciences Fund (NASDAQ: IAHSX) (NASDAQ: IBHSX) (NASDAQ: IHSCX) (NASDAQ: FHLSX), (NASDAQ: IHSKX) INVESCO International Core Equity Fund (NASDAQ: IBVAX) (NASDAQ: IBVBX) (NASDAQ: IBVCX), (NASDAQ: IIBCX) INVESCO Leisure Fund (NASDAQ: ILSAX) (NASDAQ: ILSBX), (NASDAQ: IVLCX) (NASDAQ: FLISX), (NASDAQ: ILEKX) INVESCO Mid-Cap Growth Fund (NASDAQ: IMGAX) (NASDAQ: IMGBX) (NASDAQ: IMGCX), (NASDAQ: IVMIX) INVESCO Multi-Sector Fund (NASDAQ: IAMSX), (NASDAQ: IBMSX), (NASDAQ: ICMSX) INVESCO S&P 500 Index Fund (NASDAQ: ISPIX) INVESCO Small Company Growth Fund (NASDAQ: ISGAX), (NASDAQ: ISGBX) (NASDAQ: ISGCX), (NASDAQ: FIEGX) INVESCO Technology Fund (NASDAQ: ITYAX) (NASDAQ: ITYBX) (NASDAQ: ITHCX), (NASDAQ: FTCHX), (NASDAQ:ITHKX) INVESCO Total Return Fund (NASDAQ: IATRX), (NASDAQ: IBTRX), (NASDAQ: ITRCX), (NASDAQ: FSFLX) INVESCO Utilities Fund (NASDAQ: IAUTX), (NASDAQ: IBUTX), (NASDAQ: IUTCX), (NASDAQ: FSTUX) INVESCO Advantage Fund (NASDAQ: IADAX), (NASDAQ: IADBX), (NASDAQ: IADCX) INVESCO Balanced Fund (NASDAQ: IBLAX),(NASDAQ: IBLBX), (NASDAQ: IBNCX), (NASDAQ: IBFIX), (NASDAQ: IMABX), (NASDAQ: IBLKX) INVESCO European Fund (NASDAQ: IEUAX), (NASDAQ: IEUBX), (NASDAQ: FEURX), (NASDAQ: IEUKX) INVESCO Growth Fund (NASDAQ: IAGWX), (NASDAQ: IBGWX), (NASDAQ: IBGCX), (NASDAQ: FLRFX), (NASDAQ: IGWKX) INVESCO High-Yield Fund (NASDAQ: IAHYX), (NASDAQ: IBHYX), (NASDAQ: IHYCX), (NASDAQ: FHYPX), (NASDAQ: IHYKX) INVESCO Growth & Income Fund, (NASDAQ: IGIAX), (NASDAQ: IGIBX), (NASDAQ: IGRCX) (NASDAQ: IVGIX), (NASDAQ: IGIKX) INVESCO International Blue Chip Value Fund (NASDAQ: IBVAX), (NASDAQ: IBVBX), (NASDAQ: IBVCX) (NASDAQ: IIBCX) INVESCO Real Estate Opportunity Fund (NASDAQ: IAREX), (NASDAQ: IBREX), (NASDAQ: IRECX), (NASDAQ: IVSRX) INVESCO Select Income Fund (NASDAQ: IASIX), (NASDAQ: IBSIX), (NASDAQ: ISICX), (NASDAQ: FBDSX) INVESCO Tax-Free Bond Fund (NASDAQ: IXBAX), (NASDAQ: IXBBX), (NASDAQ: ITFCX), (NASDAQ: FTIFX) INVESCO Telecommunications Fund (NASDAQ: ITLAX), (NASDAQ: ITLBX) (NASDAQ: INTCX), (NASDAQ: ISWCX), (NASDAQ: ITEKX) INVESCO U.S. Government Securities Fund (NASDAQ: IGVAX), (NASDAQ: IGVBX), (NASDAQ: IUGCX), (NASDAQ: FBDGX) INVESCO Value Fund (NASDAQ: IAVEX), (NASDAQ: IBVEX), (NASDAQ: IVACX), (NASDAQ: FSEQX) The complaint charges Invesco, Amvescap, AIM Management Group, Inc., AIM Stock Funds, AIM Stock Funds, Inc., Invesco Stock Funds, Inc., Edward Stern, Canary Investment Management, LLC, Canary Partners Ltd., Canary Partners, LLC, and Doe Defendants with violations of the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, and for common law breach of fiduciary duties. The Complaint alleges that during the Class Period the defendants engaged in illegal and improper trading practices, in concert with certain institutional traders, which caused financial injury to the shareholders of the Invesco Mutual Funds. According to the Complaint, the Defendants surreptitiously permitted certain favored investors, including Canary and the Doe Defendants, to illegally engage in "timing" of the Invesco Mutual Funds whereby these favored investors were permitted to conduct short-term, "in and out" trading of mutual fund shares, despite explicit restrictions on such activity in the Invesco Mutual Funds' prospectuses. For more information, contact Marc A. Topaz, or Stuart L. Berman, by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004, by Phone: (888) 299-7706 (toll free) or (610) 667-7706, or by E-mail: info@sbclasslaw.com. LOCKHEED MARTIN: CA Court Dismisses Securities Violations Suit -------------------------------------------------------------- The United States District Court in Los Angeles, California dismissed a securities class action filed against Bethesda defense contractor Lockheed Martin, the Associated Press reports. The suit, filed in 1999, alleged the company misrepresented its financial condition from January 28, 1999, to June 9, 1999. The lawsuit was dismissed after the plaintiffs' lawyer decided not to pursue the lawsuit. The plaintiffs folded after reviewing documents produced by Lockheed Martin and stock analysts who followed Lockheed Martin, as well as publicly available information, and after consulting with experts, the company said. Lockheed Martin employs about 130,000 people worldwide and researches, designs and manufactures advanced technology systems, products and services, AP states. MARTHA STEWART: Sets Up Personal Website For Defense in Lawsuit --------------------------------------------------------------- Martha Stewart has set up a website to tell her side of the story as her high-stakes "insider trading" trial approaches, the Associated Press reports. Ms. Stewart faces charges of stock fraud and insider trading after she sold her ImClone Systems, Inc. shares in 2001, just before it dropped sharply over the FDA's rejection of the company's key drug, Erbitux. Imclone founder Samuel Waksal is a close friend of Ms. Stewart, and the government believes Ms. Stewart acted on "privileged" information. Ms. Stewart has countered that she had a standing order with her broker to sell if the stock went below $60. A guilty verdict could land the domestic maven behind bars and severely damage the brand she has stamped on thousands of books, magazine covers and home products. In response, Ms. Stewart has set up Marthatalks.com, which crisis-management experts say is remarkably thorough. It is updated almost daily with letters from fans, supportive newspaper editorials and new pictures of Ms. Stewart. The site, adorned in tasteful muted-green and light-blue type, however, makes plain that it speaks only for Ms. Stewart herself - not her media company, Martha Stewart Living Omnimedia Inc - an important distinction because the government has also charged Ms. Stewart with securities fraud, saying she meant to deceive her own shareholders when she said in 2002 that she was innocent and cooperating fully with investigators, the Associated Press reports. People close to Stewart, speaking on condition of anonymity, told AP she is heavily involved with the site even in her final days of intense pretrial preparation. "She's essentially the photo editor," carefully selecting which pictures are seen by her fans, one source told AP. The source said Ms. Stewart has also been "very involved" with the design and updating of the site. Last week, Ms. Stewart released a statement to fans on the site, saying that she was "hopefully optimistic that I will be exonerated." The site also put up a new section called Trial Update where her publicists hope to post same-day trial transcripts. She also has used the site to explain her version of events - "I simply returned a call from my stockbroker" - and to say the government's prosecution "makes no sense to me." Image consultants say the site is an attempt to retain that support - an online sermon to the choir. It's also an end run around press coverage and the story advanced by prosecutors who can use press conferences and court papers to tell their version, consultants say. "In a crisis situation, the media have a crucifixion bias," Eric Dezenhall, who runs a public-relations firm told AP. "The Internet gives you the freedom to talk right to your audience without filtered interpretation." Ms. Stewart's prominent Internet defense is unusual, image consultants say. "It's certainly going further than most," Mr. Dezenhall said of the Stewart site. Still, if Ms. Stewart is acquitted at trial, her spade work on the Web site may help her retain the support of customers who became wary of the Martha Stewart brand when the name became associated with financial scandal. "I don't think it's going to make a decisive difference," Fordham University media studies chair Paul Levinson told AP. "But it certainly can't hurt." MARTHA STEWART: Critics Worry Trial Won't Change Biotech Rules -------------------------------------------------------------- Some congressional critics are worried that Martha Stewart's upcoming trial over her handling of Imclone Systems, Inc.'s stock might not actually have a big effect in how biotechnology companies are regulated, the Knight-Ridder/ Tribune Business News reports. The fashion, decorating and media maven faces charges for securities fraud, obstruction of justice, conspiracy and making false statements to investigators, after she sold nearly 4,000 ImClone shares a day before ImClone announced that it's key drug application had been rejected, triggering a massive sell-off in the stock, an earlier Class Action Reporter story (October 25,2003) states. Ms. Stewart is a close friend of ImClone founder Samuel Waksal, who is now serving a seven-year prison term for insider trading. U.S. prosecutors have settled on obstruction of justice charges for Ms. Stewart. Ms. Stewart has contended that she had a standing order with her broker to sell if the stock fell below $60. She sold her Imclone stock for $58 per share on December 27,2001. Mr. Waksal was sentenced to seven years in prison last year after admitting he tried to sell shares ahead of the news. Now, some congressmen are concerned that the biotechnology company had enough leeway to hide the news about the Food and Drug Administration's rejection of its application for its key drug, Erbitux. The lawmakers have earlier pressed the FDA to work with the Securities and Exchange Commission (SEC) to ensure that biotechnology companies don't mislead investors about their progress in getting drugs through the FDA's long approval process. Since the ImClone case, several other firms have revealed SEC investigations whether they said enough about their discussions with the FDA. The two agencies are in talks to develop new guidelines on cooperation. SEC chairman William H. Donaldson and FDA Commissioner Mark B. McClellan allegedly spoke by phone December 19, but neither agency will talk about what specific changes might be in store, and some outsiders worry that means little is coming of the effort. How the FDA and the SEC should coordinate efforts has been a controversial issue for biotechnology companies, as they depend mainly on showing investors they are making progress getting approvals for drugs that can cost hundreds of millions of dollars to research. However, many executives believe that the two agencies work at cross-purposes. While securities rules require wide disclosure, repeating all of the technical detail the FDA conveys about an experimental drug can make a stock extremely volatile, Carl B. Feldbaum, president of the Biotechnology Industry Organization, a trade group in Washington told the Tribune Business News. "I think we need to come up with a coherent system where biotech CEOs aren't cross-cut, like logs, between the FDA and the SEC," he said. "Our investigation of ImClone prompted an important dialogue between the agencies. But clearly, it appears they are still struggling on how to implement certain procedures and safeguards," Ken Johnson, a spokesman for the House Energy and Commerce Committee chaired by Billy Tauzin, a Louisiana Republican, told the Tribune Business News. Mr. Johnson added that the two agencies may have made some progress, but FDA officials were more willing to say what the agency won't do. For instance, one type of document at the center of the ImClone storm still probably won't be passed along to the SEC in the future: the "refuse-to-file" notices similar to the one ImClone got from the FDA in late 2001. The FDA's associate commissioner for external relations Peter Pitts asserted that "refuse-to-file letters" are considered part of the new drug applications that companies make to the FDA, and are considered confidential company information under the agency's rules. Making them available to the SEC would require changes to these statutes, and the agencies don't envision sweeping changes, he added. "This isn't about changing the rules, this is about clarifying the rules," he told the Tribune Business News. John Heine, a spokesman for the SEC, wouldn't discuss the talks. Others have raised the concern that biotechnology companies might soon face too many securities class actions, similar to the ones levied against technology companies in the 1990s, before reforms. In a speech last summer the FDA's McClellan said his agency had begun "making referrals to the SEC when we see companies misrepresenting our discussions with them to the public markets." Mr. Pitts and others wouldn't say how many referrals have been made or whether new openness by the FDA was at the heart of several recent steps the SEC has taken against biotechnology companies who may not have disclosed enough. Whatever the cause, the SEC has stepped up its enforcement actions in the area. For instance, Biopure Corporation, a Cambridge developer of artificial blood, disclosed on Christmas Eve that the FDA had put it on notice it might bring legal action against the company, its chief executive, Thomas A. Moore, and a former executive. Another local case involves Transkaryotic Therapies Inc. The company said last May it faces an SEC investigation related to its disclosures and public filings regarding its work to gain approvals for Replagel, meant to treat the rare genetic disorder Fabry disease. The company says it is cooperating with the investigation, but that no charges have been filed to date. On December 19, Amylin Pharmaceuticals Inc. of San Diego said it faces an informal inquiry from the SEC related to its communications about Symlin, a diabetes treatment. MICROSOFT CORPORATION: Judge Tosses Claims Processed Online ----------------------------------------------------------- San Francisco, California Superior Court Judge Paul Alvarado rejected claims processed from Web-based program MsfreePC.com, a Lindows.com Inc. site, for a piece of the $1.1 billion class action settlement proposed by Microsoft Corporation for California consumers, the Associated Press reports. The consumer settlement was forged in January 2003, for a lawsuit charging the software giant with violating the state's antitrust and unfair competition laws. Eligible California consumers could stand to claim vouchers redeemable for computers that run on the operating system of their choice as well as other peripherals or software from any provider. Anyone who bought certain versions of Microsoft's programs to use in California between 1995 and 2001 is entitled to a voucher. The MsfreePC.com site promised to simplify the process and provide instant gratification, as users, after answering a few questions, were given Lindows' Linux operating system or other open-source software instantly rather than having to wait six months for paper claims to be processed, AP reports. Microsoft protested against the site's usage, saying the claims were invalid as MSfreePC violated the integrity of the claims process. Lindows asserted that Microsoft did not want to simplify the process so that it could collect a bigger portion of any unclaimed money. "Microsoft's claim that digital signatures are valid when used to sell their software but not when it costs them money is pure hypocrisy," Michael Robertson, Lindows' chief executive, told AP. "Their true intentions are not to remedy their abusive pricing policies but simply to escape financial redress to Californians." In his ruling, Judge Alvarado sided with the software giant. "Both Microsoft and the plaintiffs' attorneys worked together for months to develop a claims process that's very straightforward and clear," Microsoft spokeswoman Stacy Drake told AP. "The only complication was created by Lindows' inappropriate attempt to use the settlement as a marketing tool." San Diego-based Lindows said anyone who received software for their claims will be allowed to keep the products. Those consumers also can file the old-fashioned way, by submitting a paper form to a claims administrator by March 15, AP reports. PALM INC.: Court Grants Preliminary Approval To Suit Settlement --------------------------------------------------------------- The California Superior Court, San Francisco County granted preliminary approval to the settlement proposed by Palm, Inc. for a consumer class action filed against it and 3Com Corporation, styled "Connelly et al v. Palm, Inc., 3Com Corp et al, Case No. 323587." The suit alleges breach of warranty and violation of California's Unfair Competition Law was filed and served on Palm on August 15, 2001. The mended complaint, filed on behalf of purchasers of Palm III, IIIc, V and Vx handhelds, alleges that certain Palm handhelds may cause damage to PC motherboards by permitting an electrical charge, or "floating voltage," from either the handheld or the cradle to be introduced into the PC via the serial and/or USB port on the PC. The plaintiffs allege that this damage is the result of a design defect in one or more of the following: HotSync software, handheld, cradle and/or the connection cable. The complaint seeks restitution, rescission, damages, an injunction mandating corrective measures to protect against future damage as well as notifying users of potential harm. Discovery is closed. The parties engaged in mediation and reached settlement, which received preliminary Court approval in December 2003. PALM INC.: CA Court Grants Approval To Consumer Suit Settlement --------------------------------------------------------------- The California Superior Court, San Francisco County granted preliminary approval to the settlement of a consumer class action filed against Palm, Inc., styled "Eley et al v. Palm, Inc., Case No. 403768." The unverified complaint, filed on behalf of purchasers of Palm m500 and m505 handhelds, alleges that the HotSync function in certain Palm handhelds does not perform as advertised and the products are therefore defective. The suit also alleges that upon learning of the problem, Palm did not perform proper corrective measures for individual customers as set forth in the product warranty. The complaint alleges the Company's actions are a violation of California's Unfair Competition Law and a breach of express warranty. The complaint seeks alternative relief including an injunction to have Palm desist from selling and advertising the handhelds, to recall the defective handhelds, to restore the units to their advertised functionality, to pay restitution or disgorgement of the purchase price of the units and/or damages and attorneys' fees. The Company filed its answer denying the allegations and the parties engaged in document and deposition discovery. Plaintiff and the Company engaged in mediation and reached a settlement that received preliminary Court approval in October 2003. PALM INC.: Asks IL Court To Dismiss Amended Consumer Fraud Suit --------------------------------------------------------------- Palm, Inc. asked the Illinois Circuit Court, Cook County to dismiss the amended consumer class action filed against it, styled "Goldstein v. Palm, Inc., Case No. 02CH19678." The case alleges consumer fraud regarding Palm's representations that its m100, III, V, and VII handheld personal digital assistant, as sold, would provide wireless access to the Internet and email accounts, and would perform common business functions including data base management, custom form creation and viewing Microsoft Word and Excel documents, among other tasks. The case seeks unspecified actual damages and indemnification of certain costs. In September 2003, the Court granted Palm's motion to dismiss the complaint, but allowed the plaintiff the opportunity to amend and re-file which plaintiff did in October 2003. PALM INC.: CA, IL Courts Approve Deceptive Ads Suit Settlement -------------------------------------------------------------- The California and Illinois Superior Courts granted preliminary approval to the settlement proposed by Palm, Inc. for four consumer class actions filed against them, styled: (1) "Lipner and Ouyang v. Palm, Inc., Case No. CV-810533," filed in the California Superior Court, Santa Clara County; (2) "Veltman v. Palm, Inc., Case No. 02CH16143," filed in the California Superior Court, San Diego County; (3) "Wireless Consumer's Alliance, Inc. v. Palm, Inc., Case No. GIC-794940," filed in the Illinois Circuit Court, Cook County; and (4) "Cokenour v. Palm, Inc., Case No. 02L0592" filed in the Illinois Circuit Court, St. Clair County All four cases allege consumer fraud regarding Palm's representations that its m130 handheld personal digital assistant supported more than 65,000 colors. Certain of the cases also allege breach of express warranty and unfair competition. In general, the cases seek unspecified damages and/or to enjoin Palm from continuing it's allegedly misleading advertising. The parties have agreed to a settlement, which received preliminary Court approval in October 2003. PALM INC.: Parties Begin Discovery, Mediation in Consumer Suit -------------------------------------------------------------- Parties have begun discovery and engaged in mediation of the claims in a consumer class action filed against Palm, Inc. in the California Superior Court, Santa Clara County. The case is captioned "Hemmingsen et al v. Palm, Inc., Case No. CV815074." The unverified complaint, filed on behalf of purchasers of Palm m515 handhelds, alleges that such handhelds fail at unacceptably high rates, and in particular that instant updating and synchronization of data with PCs often will not occur. The complaint further alleges that, upon learning of the problem, Palm did not perform proper corrective measures for individual customers as set forth in the product warranty, among other things. The complaint alleges that Palm's actions violate California's Unfair Competition Law and constitute a breach of warranty. The complaint seeks restitution, disgorgement, damages, an injunction mandating corrective measures including a full replacement program for all allegedly defective m515s or, alternatively mandating a refund to all purported class members of the full purchase price for their m515s, and attorneys' fees. PALM INC.: Reaches Settlement For Consolidated Stock Suit in DE --------------------------------------------------------------- Palm, Inc. reached a tentative settlement for the consolidated securities class action filed in the Court of Chancery in the State of Delaware in and for the County of New Castle against it, Handspring, Inc. and various officers and directors of Handspring. Two suits were initially filed, captioned "Goldhirsch v. Handspring, Inc., et. al, Civil Action No. 20376-NC" and "Majarian v. Handspring, Inc., et. al, Civil Action No. 20381- NC." The Majarian complaint was amended on June 23, 2003 to, among other things, delete certain previously named officer defendants. Both complaints allege that the officers and directors of Handspring breached their fiduciary duties to Handspring stockholders by, among other things, failing to undertake an appropriate evaluation of Handspring's net worth as a merger or acquisition candidate and failing to maximize Handspring stockholder value by not engaging in a meaningful auction of Handspring. The Majarian complaint also alleges, among other things, that the officers and directors of Handspring breached their fiduciary duties by failing to act independently so that the interests of Handspring's public stockholders would be protected and enhanced. Both complaints allege that Palm aided and abetted the alleged breaches of fiduciary duty of Handspring's officers and directors. Both complaints seek, among other things, a preliminary and permanent injunction against the transaction, a rescission of the transaction if it is consummated and unspecified damages. The Goldhirsch complaint also requests, among other things, that the Court order Handspring's officers and directors to take all necessary steps to maximize stockholder value, including open bidding and/or a market check. The cases were consolidated and a tentative settlement was reached in October 2003 subject to appropriate documentation and Court approval. PARMALAT FINANZIARIA: Prosecutors Question U.S., Italian Banks -------------------------------------------------------------- Prosecutors are continuing the investigation into several American and Italian banks regarding their role in the Parmalat Finanziaria SpA financial scandal, Reuters reports. One of the world's biggest corporate scandals unraveled last month after the Bank of America declared false a document which showed the Company's Cayman Islands unit Bonlat Financing Corporation as having EUR4 billion in cash with the Bank. The SEC labeled the scandal "one of the largest and most brazen corporate financial frauds in history," as it accused the Company of fraud and misleading investors who bought $1.5 billion of its bonds. Authorities have arrested nine people in the fraud case, including founder Calisto Tanzi and two outside auditors. The former head of Parmalat's operations in Venezuela and a Cayman Islands unit at the heart of the scandal on Friday turned himself in to justice authorities in the northern city of Parma, Reuters stated. No charges have yet been filed, although authorities are investigating suspected fraud, market rigging and false accounting and say the hole in Parmalat's accounts could surpass EUR10 billion euros ($12.83 billion). Authorities in Italy, the United States and Luxembourg have launched investigations into suspected crimes that Italian prosecutors say stretched back more than a decade. Earlier this week, Italian prosecutors questioned major bank, Deutsche, about its participation in underwriting a Parmalat bond sale in September last year. In Milan, 25 people, including former Bank of America executive Luca Sala and two executives of auditors Deloitte & Touche SpA have been questioned. Mr. Sala worked for Bank of America until mid-2003 when he became a Parmalat consultant, a judicial source told Reuters. Investigators say he was linked to a $500-million Parmalat bond placed by Bank of America. Early this week, prosecutors questioned another Bank of America employee and asked Citigroup and other banks about bond sales they carried out for the group before it became insolvent. Prosecutors in Milan also summoned Antonio Luzzi, who had worked in Mr. Sala's team and asked him about the role of an Irish unit of Parmalat, Eurofood IFSC, in issuing bonds sold on U.S. markets, a judicial source told Reuters. Italian and foreign banks have come under growing scrutiny in the Parmalat scandal after former managers told prosecutors how they used a web of shell companies in tax havens and forged documents to cover up losses and support bond issues. The judicial source told Reuters the prosecutors had contacted banks, "above all foreign ones and above all about their role in the placement of bonds." Citigroup was among the banks being contacted, the source said. In Italy, the spotlight on Monday was mainly on Capitalia SpA, he domestic bank with the largest Parmalat exposure, Reuters states. Parmalat founder Calisto Tanzi once sat on Capitalia's board and his links to the bank's Chairman, Cesare Geronzi, have added to worries about Geronzi, already under investigation over the collapse of the Cirio food group in 2002. Newspapers have said Geronzi and Corrado Passera, the chief executive of Banca Intesa -- Italy's biggest bank by assets -- might be called before prosecutors this week. There was no confirmation from prosecutors or the banks on the reports, published on Sunday and Monday, Reuters reports. RHODE ISLAND: Supreme Court Refuses To Hear Strip-Search Lawsuit ---------------------------------------------------------------- The United States Supreme Court refused without comment on Monday to consider an appeal in a class action lawsuit brought by 18 people strip-searched at a Rhode Island prison, AP/ turnto10newws.com reports. The suit was brought over policies at the Adult Correctional Institutions in Cranston. Under those policies, which have since been changed, people who were arrested for misdemeanors were subjected to strip and body cavity searches. In 1999, Craig Roberts was mistakenly arrested and was taken to ACI. He underwent a strip and body cavity search, which turned up no weapons, drugs or other contraband. After a sheriff verified that Mr. Roberts was not supposed to be in custody, he was released. Mr. Roberts then sued, claiming the search violated his constitutional rights. The US District Court agreed, and an Appeals Court upheld the ruling. The ACI dropped the policy the day of the District Court ruling in March 2000. After that, 18 people who had been arrested for nonviolent, non-drug offenses and had undergone the searches, filed suit against the state and prison officials, seeking damages. US District Judge Mary M. Lisi ruled in favor of the state, saying prison officials had immunity from prosecution, essentially tossing out the claims of the 18 plaintiffs, the Associated Press reports. The plaintiffs then appealed. In August, four members of the 1st U.S. Circuit Court of Appeals agreed with Judge Lisi's decision and four members disagreed, thus allowing the District Court ruling to stand. The case was then appealed to the Supreme Court. A phone message left after office hours with the Department of Corrections was not immediately returned Monday, AP reports. Messages left with the attorney general's office and with attorneys for the 18 people who brought suit were not immediately returned. SOLECTRON CORPORATION: Plaintiffs File Amended Stock Suit in CA --------------------------------------------------------------- Plaintiffs filed a consolidated amended securities class action against Solectron Corporation and certain of its officers in the United States District Court for the Northern District of California alleging claims under Section 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The complaint alleged that the defendants issued false and misleading statements in certain press releases and SEC filings issued between September 17, 2001 and September 26, 2002. In particular, plaintiff alleged that the defendants failed to disclose and to properly account for excess and obsolete inventory in the Technology Solutions business unit during the relevant time period. The amended complaint alleges an expanded class period of June 18, 2001 through September 26, 2002, and purports to add a claim for violation of Section 11 of the Securities Act of 1933 on behalf of a putative class of former shareholders of C-MAC Industries, Inc., who acquired Solectron stock pursuant to the October 19, 2001 Registration Statement filed in connection with Solectron's acquisition of C-MAC Industries, Inc. In addition, while the initial complaints focused on alleged inventory issues at the Technology Solutions business unit, the consolidated amended complaint adds allegations of inadequate disclosure and failure to properly account for excess and obsolete inventory at the Company's other business units. The complaint seeks an unspecified amount of damages on behalf of the putative class. The Company denies the consolidated lawsuit's allegations and stated Solectron may be forced to incur substantial litigation expenses in defending this litigation. TRI-STATE CREMATORY: Judge To Rule On Status of Desecration Suit ---------------------------------------------------------------- Georgia Circuit Court judge Neil Thomas is set to rule within a week, on whether class action status should be granted to the lawsuit filed against Tri-State Crematory, theChattanoogan.com reports. The suit involves the discovery of 339 uncremated bodies in mid- February 2001 at the crematory, owned by Brent Marsh and his family at Noble, Georgia, near LaFayette. A number of the bodies were sent by Chattanooga funeral homes. Earlier, Judge Thomas set a class action involving five different funeral homes. Judge Harold Murphy of the United States District Court in Rome, Georgia set a class action there as well. The class action in Georgia has a longer time period than the one set by Judge Thomas, but it allows fewer claims for action. Judge Murphy plans to go to trial on March 1. Judge Thomas agreed, saying, "We've got to get this steam engine cranked back up," the Chattanoogan.com reports Crematory operator Brent Marsh faces 787 felony counts. His trial is scheduled in LaFayette sometime this year using a jury from another county. TYSON FOODS: Trial Opens In Suit Alleging Cattle Price-Fixing ------------------------------------------------------------- The trial in the antitrust class action filed against Tyson Foods, Inc. and IBP, Inc. is set to start this week in the United States District Court in Montgomery, Alabama, the Associated Press reports. The suit alleges violations of the Packers and Stockyards Act of 1921, charging the Company with using illegal cattle-buying practices to help manipulate beef prices. The Company allegedly paid higher prices to producers who enter exclusive agreements and conspired to fix prices paid on the open market. The suit was filed on behalf of all ranchers who sold cattle to IBP or Tyson Fresh Meats, Inc. from February 1994 to October 2002. The Company has asserted that their marketing agreements are legitimate business practices, which do not subvert the market principles of supply and demand, AP stated. Twelve jurors from across central Alabama were chosen on Monday, with attorneys paying close attention to whether candidates had experience with the beef- or chicken-processing industry. Opening arguments for both sides were set for Tuesday morning. Federal judge Lyle e. Strom is expected to rule on whether defense attorneys can present data showing cattle prices reached an all-time high in October 2003, driven upward by factors such as mad cow disease outbreaks and a surge in red meat's popularity thanks to the Atkins diet. Defense attorney Thomas C. Green said such evidence is necessary because it is "a linchpin of the overall approach IBP takes in this case, that the forces of supply and demand are at work here" despite what he described as a record number of marketing agreements in use, AP reports. Plaintiffs attorney Joe Whatley of Birmingham said the parties should stick to an earlier agreement limiting data to the end of the suit period, October 2002. "We're not saying that supply and demand have no impact," Mr. Whatley told AP. "What we are saying is that ... their use of captive supply has changed the outcome of what supply and demand would normally result." Judge Strom, a Nebraska judge who has heard several cases in Alabama, said he would rule on Tyson's motion Tuesday. He decided last week that the plaintiffs cannot seek punitive damages in the case, a ruling that Tyson officials say could substantially limit the amount of any potential award in the case. WEGENER CORPORATION: Plaintiffs To Dismiss DE Direct Stock Suit --------------------------------------------------------------- Plaintiffs intend to dismiss the direct class action and the derivative action filed in the Court of Chancery of the State of Delaware, in and for New Castle County against Wegener Corporation and: (1) Robert A. Placek, (2) Thomas G. Elliot, (3) Joe K. Parks, (4) C. Troy Woodbury, Jr., (5) Wendell Bailey, and (6) Ned Mountain The Plaintiff alleges that the individual defendants violated their fiduciary duties due to him and other shareholders, the members of the alleged class, as well as the Company. The plaintiff seeks: (i) a declaration that the Defendants must consider and evaluate all bona fide offers to purchase all of the outstanding shares of Wegener consistent with their fiduciary duties; (ii) a declaration that this action is properly styled as a class action; (iii) an injunction against proceeding with any business combination which benefited the individual defendants and an injunction requiring that any conflicts of interest be resolved in favor of the Wegener shareholders; and (iv) a declaration removing the anti-takeover measures enacted by Wegener's Board of Directors. The Complaint also seeks an award of Plaintiff's costs and attorneys' and other fees. An answer has been filed by the Company, denying all substantive allegations in the complaint. On January 8, 2004, the Company was informed that the Plaintiff intends to file a dismissal of the Complaint without prejudice. As a result, management does not believe that the ultimate outcome of this litigation will have a material adverse effect on its financial condition or results of operations. WISCONSIN: Marathon County Meet To Counter Discrimination Charge ---------------------------------------------------------------- Marathon County officials met Monday in closed session to discuss how to respond to a county employee's charges that the county discriminates against women by not paying for birth control prescriptions through its insurance, Wausau Daily Herald reports. The unnamed female employee filed a complaint last month with the state Equal Rights Division of the Department of Workforce Development and with the federal Equal Employment Opportunity Commission. The complaint follows a push in recent months by state family planning advocates and a non-binding legal opinion from state Attorney General Peg Lautenschlager in support of employers including contraceptives in their insurance programs. Lautenschlager said that employers who fail to do so risk violating the state's Fair Employment Act. Family Planning Health Services in Wausau, a proponent of contraceptive benefits, said in November that it would assist employees who wish to file complaints against their employers. Its first two targets were Marathon County and Wal-Mart, neither of which offers full contraceptive benefits. "Why Marathon County is so absolutely stubborn about refusing to provide these benefits completely escapes me," Lon Newman, executive director of Family Planning Health Services told the Daily Herald. He and other proponents argue that it isn't expensive and would save money in the long run by preventing unplanned pregnancies. The law clearly is on the employees' side, Mr. Newman said. Marathon County Employee Resources Director Frank Matel told the Herald that the state notified the county of the employee's complaint in a letter sent last month. The county's personnel committee met Monday to discuss the matter with an attorney, but Mr. Matel would not elaborate on those discussions. A month's supply of birth control pills can cost up to $60. The county typically offers its 750 employees prescriptions for birth control only if a doctor deems it medically necessary. It now faces a number of possible scenarios ranging from granting the benefits to employees to becoming the target of a class action. New Securities Fraud Cases AMERICAN PHYSICIANS: Brodsky & Smith Files Securities Suit in MI ---------------------------------------------------------------- Brodsky & Smith, LLC initiated a securities class action lawsuit in the United States District Court for the Western District of Michigan, on behalf of shareholders who purchased the common stock and other securities of American Physicians Capital, Inc., between February 13, 2003 and November 6, 2003, inclusive, against American Physicians Capital and: (1) William B. Cheeseman, and (2) Frank H. Freund According to the lawsuit, the defendants are charged with violating federal securities laws by issuing a series of material misrepresentations to the market during the Class Period, thereby artificially inflating the price of AP Capital securities. For more information, contact Marc L. Ackerman, by Phone: (877) LEGAL-90, or by E-mail: clients@brodsky-smith.com. BIOPURE CORPORATION: Wechsler Harwood Files Stock Lawsuit in MA --------------------------------------------------------------- Wechsler Harwood LLP initiated a class action lawsuit in the United States District Court for the District of Massachusetts, on behalf of purchasers of Biopure Corporation publicly traded securities during the period between March 17, 2003 and December 24, 2003, inclusive, against the Company and: (1) Thomas A. Moore, (2) Carl W. Rausch, and (3) Ronald F. Richards The lawsuit charges the defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The Complaint alleges that, throughout the Class Period, defendants issued numerous positive statements concerning the progress of its application to the U.S. Food and Drug Administration seeking regulatory approval to market Hemopure in the United States for patients undergoing orthopedic surgery. In truth and in fact, however, by the beginning of the Class Period, the FDA had informed defendants of flaws in the Hemopure application, citing "safety concerns" arising from adverse clinical data submitted as part of the Company's application, making FDA approval highly unlikely. Prior to the disclosure of these adverse facts, defendants conducted at least two offerings of Biopure common stock generating millions of dollars in proceeds and certain high-level Biopure insiders sold hundreds of thousands of Biopure common shares to the unsuspecting investing public at artificially inflated prices. Then, on December 24, 2003, under the threat of civil litigation by the SEC, defendants stunned the market by announcing that, in fact, the FDA had halted further clinical trials of Hemopure due to safety concerns. Defendants also disclosed that the commercial release of Hemopure in the United States would be delayed beyond mid-2004. Market reaction to defendants belated disclosures was swift and severe. On December 26, 2003, Biopure common shares lost over 16% of their value to close at $2.43 per share, representing a decline of more than 70% from a Class Period high of $8.25 per share, reached on or about August 21, 2003. For more information, contact Craig Lowther, Wechsler Harwood Shareholder Relations Department, by Mail: 488 Madison Avenue, 8th Floor New York, New York 10022, by Phone: (877) 935-7400 toll free, or by E-mail: clowther@whesq.com. BIOPURE CORPORATION: Bernstein Litowitz Lodges Stock Suit in MA --------------------------------------------------------------- Bernstein Litowitz Berger & Grossmann LLP, initiated a Class Action lawsuit in the U.S. District Court for the District of Massachusetts, on behalf of all investors who purchased Biopure securities from March 5, 2003 through and including December 24, 2003, against the Company and: (1) Thomas Morre, and (2) Carl W. Rausch The lawsuit claims that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder, including U.S. Securities and Exchange Commission Rule 10b-5. According to the complaint, Biopure artificially inflated its stock price by misrepresenting the prospects for U.S. Food and Drug Administration approval of the marketing of the Company's main product, Hemopure. The lawsuit alleges that the Company knew, by virtue of its ongoing communications with the FDA, that regulators had strong reservations about Hemopure's safety but nevertheless continued to publicly hype the product throughout the Class Period. Hemopure is an investigational product for the treatment of acutely anemic surgical patients and for the elimination, delay or reduction of red blood cell transfusions in these patients. Hemopure is a human blood substitute derived from cow's blood, which acts like red blood cells to deliver oxygen to the body. Unlike donated blood, Hemopure does not have to be matched to a patient's blood type. The truth about Hemopure began to emerge on December 24, 2003 when, after the close of the markets on Christmas Eve, Biopure announced a potential SEC inquiry for securities fraud and, for the first time, disclosed substantial problems with its Hemopure product and the FDA approval process. In response to this announcement, Biopure's common stock fell 14 percent, from a closing price of $2.82 per share on December 24, 2003 to a closing price of $2.43 per share on December 26, 2003. Biopure's stock continued its decline on Monday, December 29, 2003, closing at $2.43 per share, far below the Class Period high of $8.25 per share. For more information, contact Eitan Misulovin, by Mail: 1285 Avenue of the Americas, 38th Floor, New York, NY, 10019, by Phone: 800-380-8496, or by E-mail: eitan@blbglaw.com. MARSH & MCLEENAN: Emerson Poynter Launches Securities Suit in NY ---------------------------------------------------------------- The Law Firm of Emerson Poynter LLP initiated a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of purchasers of Marsh & McLennan Companies, Inc. publicly traded securities during the period between January 3, 2000 and November 3, 2003, inclusive. The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The Complaint charges Marsh & McLennan and certain of the Company's executive officers with violations of federal securities laws. Among other things, the plaintiff claims that defendants' dissemination of materially false and misleading statements concerning the Company's subsidiary, Putnam Investments, LLC, caused Marsh & McLennan's stock price to become artificially inflated, inflicting damages on investors. Marsh & McLennan is a global professional services firm and the parent company of various subsidiaries and affiliates, including Putnam, that provide clients with analysis, advice and transactional capabilities in the fields of risk and insurance services, investment management and consulting. The complaint alleges that during the Class Period defendants failed to disclose and/or misrepresented the following adverse facts, among others: (1) that Putnam entered into an illegal agreement with its own fund managers and favored investors wherein Putnam permitted its own fund managers and the favored investors to "market time" the Putnam mutual funds; (2) that in exchange for permitting the favored investors to time the Putnam mutual funds, they deposited "sticky assets" with Putnam; (3) that the "sticky assets" deposited with Putnam permitted Putnam to materially overstate its assets under management and thus permitted Marsh & McLennan to receive a steady flow of fees from such "sticky assets;" and (4) as a result of this illegal scheme, defendants, throughout the Class Period, materially overstated and artificially inflated Marsh & McLennan's earnings, income and earning per share. For more information, contact John G. Emerson, by Phone: (800) 663-9817 or (501) 907-2555, or by E-mail: shareholder@emersonfirm.com. SECURITY BROKERAGE: Schiffrin & Barroway Files Stock NV Lawsuit --------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a class action lawsuit in the United States District Court for the District of Nevada, on behalf of all who purchased or otherwise acquired shares or other ownership units of Alliance Capital Management's AllianceBernstein Family of Mutual Funds and Massachusetts Financial Services' Family of Mutual Funds, which is a subsidiary of Sun Life Financial, Inc. from January 1, 2001 through September 30, 2003, inclusive, against Security Brokerage, Inc., and Daniel G. Calugar According to the lawsuit, the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, and aided and abetted in the breach of fiduciary duties. More specifically, the complaint alleges that from at least 2001 to September 2003, Calugar, trading through Security Brokerage, engaged in a scheme involving market timing of various mutual funds using investments totaling between $400- $500 million. Market timing refers to the practice of short term buying and selling of mutual fund shares in order to exploit inefficiencies in mutual fund pricing. Most of Calugar's market timing trades were through two mutual fund families: Alliance Capital Management, LP and Massachusetts Financial Services. Calugar also engaged in late trading of MFS and Alliance funds. Late trading refers to the practice of placing orders to buy or sell mutual fund shares after close of market at 4:00 p.m. EST, but at the mutual fund's Net Asset Value, or price, determined at the market close. Late trading enables the trader to profit from market events that occur after 4:00 p.m. EST but that are not reflected in that day's price. Because of Security Brokerage's status as a broker-dealer, it was permitted to submit trades received from its clients before 4:00 pm EST to the National Securities Clearing Corporation after 4:00 p.m. EST. Calugar and Security Brokerage thus participated in a scheme with Alliance and MFS to engage in market timing that most other fund investors were not permitted to do. The Mutual Funds as well as Calugar profited at the expense of such investors. Calugar and Security Brokerage made trading profits of $175 million from their market timing and late trading at Alliance and MFS. The Mutual Funds profited by way of increased advisory and other fees. On December 22, 2003, the SEC filed civil fraud charges against Security Brokerage, and its president and majority owner, Calugar, for their participation in a scheme to defraud mutual fund shareholders through improper late trading and market timing. On December 24, 2003, the SEC announced that United States District Judge Robert Clive Jones of the District of Nevada issued a temporary restraining order freezing the assets of the defendants, prohibiting the destruction of documents, and granting expedited discovery. For more information, 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., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Roberto Amor, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2004. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. 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