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C L A S S A C T I O N R E P O R T E R
Thursday, July 1, 2004, Vol. 6, No. 128
Headlines
COLORADO: High Court Rules Voucher Program Unconstitutional
CRYO-CELL INTERNATIONAL: Reaches $7M Securities Settlement in FL
FINANCIAL WISDOM: Ruled Guilty Of Negligently Advising Investors
FITCH RATINGS: Court HMO Ruling Won't Affect Rulings, Outlook
FREDERICK WALL: NY District Judge Grants SEC Motion To Dismiss
GEORGIA: GA High Court Allows 1996 Olympic Bombing To File Suit
INTERMUNE INC.: Goodkind Labaton Appointed Lead Counsel in Suit
LEHMAN ABS: Barrack Rodos Lawsuit Only Involves NYSE Symbol JZG
MEASUREMENT SPECIALITIES: SEC Lodges Securities Fraud Suit in NJ
MEMBERWORKS INC.: AG Reaches Settlement Of Unfair Trade Lawsuit
MENORAH GARDENS: Opt-out Deadline in Desecration Suit Extended
MICROSOFT CORPORATION: Reaches $43M Settlement in MA, ND Suits
MISSOURI: Appeals Court Rules in Columbia Public Schools' Favor
MICROSOFT CORPORATION: Reaches $34M Settlement For MA Lawsuit
OHIO: Gov. Taft To Move Medicaid Rules in Line With Settlement
RITE AID: Vermont, Other States Recover $6.6M From Settlement
SURGUTNEFTEGAZ: Harvard Launches Suit Over Pension Fund Losses
TULLY'S COFFEE: Former Store Managers Launch CA Overtime Lawsuit
VILLAGE VOICE: Advertiser Lodges CA Antitrust Suit, Seeks Class
VIRGINIA: Coaching Jobs Threatened By Overtime Violations Suits
New Securities Fraud Cases
CENTRAL FREIGHT: Brodsky & Smith Lodges Securities Lawsuit in TX
CENTRAL FREIGHT: Schatz & Nobel Files Securities Suit in W.D. TX
DRUGSTORE.COM: Brian Felgoise Files Securities Suit in W.D. WA
DRUGSTORE.COM: Brodsky & Smith Lodges Securities Suit in W.D. WA
KEY ENERGY: Lerach Coughlin Lodges Securities Lawsuit in W.D. TX
LEXAR MEDIA: Bernstein Liebhard Lodges Securities Lawsuit in CA
NBTY INC.: Marc Henzel Lodges Securities Fraud Suit in E.D. NY
NBTY INC.: Brian M. Felgoise Lodges Securities Suit in E.D. NY
NBTY INC.: Brodsky & Smith Lodges Securities Lawsuit in E.D. NY
NBTY INC.: Geller Rudman Files Securities Fraud Suit in E.D. TX
NBTY INC.: Schatz & Nobel Lodges Securities Lawsuit in E.D. TX
NBTY, INC.: Schiffrin & Barroway Lodges Securities Suit in NY
OMNIVISION TECHNOLOGIES: Marc Henzel Lodges Stock Lawsuit in CA
POZEN INC.: Marc Henzel Lodges Securities Fraud Suit in M.D. NC
RYLAND GROUP: Marc Henzel Files Securities Fraud Suit in C.D. CA
SALTON INC.: Marc Henzel Commences Securities Lawsuit in N.D. IL
SHAW GROUP: Marc Henzel Lodges Securities Fraud Suit in E.D. LA
SPEAR & JACKSON: Marc Henzel Lodges Securities Suit in S.D. FL
SPX CORPORATION: Marc Henzel Lodges Securities Suit in W.D. NC
TITAN CORPORATION: Marc Henzel Lodges Securities Suit in S.D. CA
UNIVERSAL HEALTH: Marc Henzel Lodges Securities Suit in E.D. PA
VERDISYS INC.: Marc Henzel Lodges Securities Suit in S.D. Texas
WAVE SYSTEMS: Marc Henzel Lodges Securities Fraud Lawsuit in MA
WHITEHALL JEWELLERS: Marc Henzel Lodges Securities Lawsuit in IL
*********
COLORADO: High Court Rules Voucher Program Unconstitutional
-----------------------------------------------------------
The Colorado Supreme Court ruled in a 4-3 decision, that the
State's school voucher program is unconstitutional, because it
strips local school boards of control over education, the
Associated Press report.
The state's voucher law would have offered vouchers of $4,500 a
year to public school students to help cover their tuition at
private or parochial schools. The program was supposed to start
next fall. The law was the nation's first since the U.S.
Supreme Court said in 2002 that voucher programs are acceptable.
Teachers, education groups and religious organizations filed the
court challenge, asserting that the program could direct tax
money to private schools motivated by religious ideology.
According to the high court, the program required school
districts to turn over a portion of locally raised funds to
private schools, over which local school boards have no control,
violating the local-control provisions of the Colorado
Constitution.
Voucher supporters are likely to introduce a new version in the
2005 Legislature to conform to the ruling. "I think it would be
fairly easy to draft legislation that didn't use local dollars,"
Rep. Nancy Spence told AP.
CRYO-CELL INTERNATIONAL: Reaches $7M Securities Settlement in FL
----------------------------------------------------------------
The Counsel for lead plaintiffs in the suit against CRYO-CELL
International, Inc. (OTC Bulletin Board Symbol: CCEL) along with
the Company's counsel and counsel for CRYO-CELL'S former
auditors conducted mediation on May 24, 2004, at which the
parties all reached an agreement in principle to settle the
securities litigation, which is currently being formalized in a
Memorandum of Understanding. The settlement remains subject to
execution of definitive settlement documents by all parties and
approval by the United States District Court for the Middle
District of Florida.
The proposed settlement, which totals $7 million, includes a
payment of $4 million, which would be paid by the carrier of
CRYO-CELL's former auditors, subject to its applicable
deductible. In addition, CRYO-CELL's insurance carrier would pay
$3 million on the Company's behalf under its directors' and
officers' insurance policy, subject to its applicable deductible
of $175,000, of which the majority has been paid. The settlement
does not contemplate any admission of wrongdoing by any of the
parties.
CRYO-CELL believes the litigation is without merit and, in the
event a settlement agreement is not consummated or approved by
the court, CRYO-CELL intends to defend the litigation
vigorously.
Mercedes Walton, Chairman and interim CEO commented, "I am
pleased that the litigation appears to be settled. We look
forward to continuing our focus on the promising developments
and momentum in CRYO-CELL's core business."
FINANCIAL WISDOM: Ruled Guilty Of Negligently Advising Investors
----------------------------------------------------------------
The Victorian Supreme Court in Australian found Commonwealth
Bank securities licensee Financial Wisdom liable for giving a
group of investors negligent advice, causing them to lose up to
$30 million in investment schemes, The Financial Standard
reports.
The investors allege that they were advised on several
investment schemes, including film, theatrical, agricultural and
property projects. They were allegedly told that most of the
projects would be tax-deferred. However, the court was told,
the Australian Tax Office turned down their deduction claims,
with the result that the investors lost between $20 million and
$30 million. The plaintiffs claimed damages for actual
pecuniary losses and loss of opportunity.
Justice Phillip Mandie found the Company liable for negligent
advice, and adjourned the case until 23 July for a directions
hearing. Final submissions concerning damages, interest (if
any) and costs will be made at a later date.
FITCH RATINGS: Court HMO Ruling Won't Affect Rulings, Outlook
-------------------------------------------------------------
Fitch Ratings said that last week's U.S. Supreme Court ruling
that the state law is completely pre-empted by the Employee
Retirement Income Security Act of 1974 (ERISA) in disputes over
denial of benefits under ERISA-regulated benefit plans will not
affect its ratings on health insurance and managed care
companies or its overall stable outlook for the sector.
The Court's ruling reverses an earlier judgment by the Fifth
Circuit Court of Appeals and essentially insulates most managed
care plans from punitive damages related to denial of benefits.
While the two consolidated suits involved in the ruling were
filed against Aetna Health Inc. and CIGNA Corporation, the
potential outcome was much more far reaching, essentially
putting at risk the concept of utilization management, which is
widely practiced across the entire managed care industry in an
effort to control the rapidly escalating cost of health care.
From that perspective, the ruling was definitely good news for
the managed care industry.
"While this case is a victory for the sector, patients' rights
legislation continues to resurface occasionally. Congress and
the administration have thus far been unable to agree on a final
form for the legislation, but Fitch believes that at some point,
although not this year, patients' rights legislation will become
a reality, and it will likely provide for some level of right to
sue," the Company said in a statement.
Fitch notes that, in joining Justice Thomas in the delivery of
the Court's opinion, Justice Ginsburg called on Congress to
rectify the 'regulatory vacuum' that ERISA has helped to create.
Following the decision, Congressman John Dingell, with numerous
cosponsors, reintroduced the patients' rights legislation that
was passed by the U.S. Senate in 2001.
Although exposure to patients' rights legislation is important,
it is just one area of the overall regulatory and litigation
risk faced by participants in the sector and incorporated in
Fitch's ratings on sector participants. Also of great importance
is the multidistrict class action litigation currently on appeal
with the Eleventh Circuit Court of Appeals. These suits seek
injunctive, compensatory, and equitable relief as well as
restitution, costs, fees, and interest. A loss of this
litigation would likely not only expose a large part of the
industry to substantial monetary damages but would also further
restrict the industry's ability to manage the rapidly escalating
cost of health care.
FREDERICK WALL: NY District Judge Grants SEC Motion To Dismiss
--------------------------------------------------------------
New York Judge Kimba M. Wood granted the Commission's motion for
voluntary dismissal of its civil injunctive action against
Frederick W. Wall. The Commission's action was dismissed with
prejudice.
Wall was one of seven individuals and six entities sued by the
Commission on June 8, 2000, in connection with a series of
fraudulent securities offerings. On December 11, 2000, Wall
pleaded guilty to one count of conspiracy to commit securities
fraud, mail fraud and wire fraud, in a related criminal action.
Wall was sentenced to a prison term of 30 months followed by
three years of supervised release and ordered to make
restitution in the amount of $500,000 (U.S. v. Salvatore
Tavolacci, et al., 00 CR 554, SDNY, DC).
The suit is styled "SEC v. Frederick W. Wall, 00 Civ 4385 SDNY
KM."
GEORGIA: GA High Court Allows 1996 Olympic Bombing To File Suit
---------------------------------------------------------------
Georgia's Supreme Court allowed a lawsuit filed by victims of
the 1996 Olympic Park bombing to proceed against the organizers
of the games' organizers, the Associated Press reports.
One woman was killed and more than 100 people were injured in
the bombing on July 27, 1996. The suit names as defendants the
Atlanta Committee for Olympic Games and Eric Rudolph, who has
been charged with the bombing. The suit alleges that inadequate
security contributed to the tragedy.
"We contend that negligent security at Centennial Olympic Park
allowed this tragedy to take place," Jay Sadd, attorney for the
victims, who are seeking compensation for their injuries, lost
wages and pain and suffering, told AP.
The high court upheld a state appeals court ruling, which found
that the Committee was not immune from liability under state
law. The case now goes back to the trial court.
"Obviously, we're disappointed," Ryan Mock, an attorney for the
Atlanta Committee for the Olympic Games, told AP. Mr. Mock said
security at Centennial Olympic Park was high on the day of the
murders and included 222 trained volunteers, 180 state law
enforcement officers and private security.
When trial begins, jurors must determine whether the park was
used for recreational or commercial purposes. If they decide the
park was commercial, the jury must determine whether the
committee provided inadequate security and can be held liable
for damages, AP reports.
INTERMUNE INC.: Goodkind Labaton Appointed Lead Counsel in Suit
---------------------------------------------------------------
The law firm of Goodkind Labaton Rudoff & Sucharow LLP was
appointed as lead counsel for the lawsuit filed in the United
States District Court for the Northern District of California,
on behalf of persons who purchased or otherwise acquired
publicly traded securities of InterMune Inc. (NASDAQ:ITMN)
between January 7, 2003 and June 11, 2003, inclusive.
By order dated November 26, 2003, (the "Order") Goodkind Labaton
was appointed by the Court to serve as lead counsel for the
Class in the now consolidated action In re InterMune Inc.
Securities Litigation, Civil Action No. 03-2954 SI (N.D. Cal).
On January 30, 2004 Goodkind Labaton filed a consolidated
amended complaint.
For more details, contact Ira A. Schochet of Goodkind Labaton
Rudoff & Sucharow LLP by Phone: (212) 907-0864 by Fax:
(212) 883-7064 or by E-mail: ischochet@glrslaw.com
LEHMAN ABS: Barrack Rodos Lawsuit Only Involves NYSE Symbol JZG
---------------------------------------------------------------
The law firm of Barrack, Rodos & Bacine announces that the class
action lawsuit it commenced on behalf of investors in Verizon
New York Debenture-Backed Series 2004-1 Trust Certificates
("Certificates") issued by Lehman ABS Corporation involves
securities with the symbol NYSE: JZG only while all other NYSE
symbols with similar asset-backed securities issued by Lehman
ABS Corp. are not involved in the lawsuit.
As noted earlier, a class action has been commenced in the
United States District Court for the Southern District of New
York charging defendants Lehman ABS Corp. ("LABS") and Lehman
Brothers, Inc. with violations of the Securities Act of 1933
(the "Securities Act"). The complaint alleges that in January
2004, LABS created the Verizon New York Debenture-Backed Series
2004-1 Trust by depositing $150,144,000 of 7-3/8% Debentures,
Series B, due 2032 issued by Verizon New York, Inc.
("Debentures") LABS had purchased on the open market. LABS
subsequently deposited an additional $55,144,000 of the
Debentures into the Trust later in January 2004. Pursuant to a
Registration Statement, Prospectus and Prospectus Supplement,
the Trust issued and offered to the investing public, through
LABS, 8,205,760 Certificates representing a proportionate
undivided beneficial ownership interest in the Trust. The
Certificates were sold for $25 per Certificate and paid a 6.20%
interest rate. The Securities and Exchange Commission maintains
rules governing sales of corporate debt backed trust
certificates such as the Certificates that are the subject of
this class action and permits the sale of such certificates only
where the issuer of the underlying securities files certain
periodic reports with the SEC. If the issuer of the underlying
securities decides not to file those reports, any corporate
backed trust relating to those securities must be liquidated.
On May 7, 2004, LABS announced that Verizon New York, Inc.
("Verizon NY"), the issuer of the Debentures underlying the
Certificates, had elected to suspend the required reports and
that the Trust must be terminated. This announcement triggered
an event of default under the terms of the Trust, requiring the
liquidation of the Trust assets. The price of the Certificates
closed at $22 on May 11, 2004, the day that the Trustee
announced that it would liquidate the Debentures and the last
day of trading for the Certificates.
The Complaint alleges that the Prospectus was materially false
and misleading because it omitted to state material information
that the defendants had an obligation to disclose, including the
material fact that Verizon, the parent of Verizon NY, had
previously elected to suspend filing period SEC reports for six
of its domestic operating telephone subsidiaries in February
2003; that Verizon NY, one of 16 operating companies owned by
Verizon that filed reports with the SEC; and that Verizon had
established a plan in early 2003 to change its funding
procedures, which plan included the possible deregistration of
the public debt of its domestic operating telephone
subsidiaries, including Verizon NY.
For more details, contact Maxine Goldman, Shareholder Relations
Manager of Barrack, Rodos & Bacine by Mail: 3300 Two Commerce
Square, 2001 Market Street, Philadelphia, PA 19103 by Phone:
215-963-0600 by Fax: 215-963-0838 or by E-mail:
mgoldman@barrack.com
MEASUREMENT SPECIALITIES: SEC Lodges Securities Fraud Suit in NJ
----------------------------------------------------------------
The Securities and Exchange Commission filed a civil injunctive
action in U.S. District Court for the District of New Jersey
charging Measurement Specialties, Inc. (MSI), a New Jersey-based
manufacturing company, with accounting fraud, and its former
chief financial officer, Kirk J. Dischino, with accounting fraud
and insider trading.
Both defendants have agreed to settle the Commission's charges,
without admitting or denying the allegations. MSI has agreed to
pay a penalty of $1 million. Dischino has agreed to pay
disgorgement and penalty totaling in excess of $450,000, and
agreed to be suspended from appearing or practicing before the
Commission as an accountant.
The Commission's complaint alleges that Dischino orchestrated
and carried out two separate accounting frauds at MSI. First,
the complaint alleges that, at Dischino's direction, MSI
materially overstated its earnings and its inventory in its
financial statements covering the periods ending June 30, 2000,
through Sept. 30, 2001, by capitalizing overhead expenses into
inventory in a manner that was clearly inconsistent with
generally accepted accounting principles (GAAP), and that
Dischino knew or was reckless in not knowing would mislead
investors about MSI's earnings and the value of its inventory.
Second, the complaint alleges that, from at least October 2001
until February 2002, Dischino concealed MSI's default under its
loan agreements. In connection with the preparation of the
company's quarterly report for the period ended Sept. 30, 2001 -
which did not disclose the default - Dischino allegedly falsely
represented to MSI's senior management, directors, and outside
auditors that the lenders had waived the default. To
substantiate his claim, Dischino allegedly fabricated a written
waiver by the lenders, which he provided to MSI's auditors.
The complaint further alleges that Dischino engaged in insider
trading by selling MSI stock in December 2001 while he was aware
of the true facts of MSI's overstated earnings and inventory,
and its default, thereby avoiding losses of $215,734.
Without admitting or denying the Commission's allegations, MSI
and Dischino have agreed to settle the charges by consenting to
permanent injunctions against further violations of the relevant
antifraud, reporting, books-and-records, and internal controls
provisions of the federal securities laws. In addition, MSI has
agreed to pay a civil penalty in the amount of $1 million, along
with nominal disgorgement of $1. Dischino has also agreed to pay
disgorgement of $215,734, plus prejudgment interest of $21,932,
and a civil penalty of $215,734. In addition, Dischino has also
agreed to consent to the entry of an administrative order
suspending him from appearing or practicing before the
Commission as an accountant.
The Commission acknowledges the assistance of the U.S.
Attorney's Office for the District of New Jersey, and Special
Agents of the Federal Bureau of Investigations and the United
States Postal Inspection Service in the investigation of this
matter.
The suit is styled "SEC v. Measurement Specialties, Inc. and
Kirk J. Dischino, Civil Action No. 04 Civ. 3000 (KSH), USDC,
DNJ."
MEMBERWORKS INC.: AG Reaches Settlement Of Unfair Trade Lawsuit
---------------------------------------------------------------
Florida Attorney General Charlie Crist reached a settlement with
MemberWorks, Inc. for violations of Florida's Unfair and
Deceptive Trade Practices Act, ending a four-year investigation
and recent litigation into MemberWorks' telemarketing practices.
The state had accused MemberWorks of using telemarketing
practices that caused unwanted credit card charges to be billed
to Florida consumers' accounts.
The Attorney General's Office filed a complaint in October 2003,
and more than 1,000 Floridians complained about receiving
unwanted credit card charges for MemberWorks' programs. The
company typically marketed its products in conjunction with
infomercial products, and consumers calling to order products
were told they would receive a MemberWorks membership as a
bonus for their purchase. The bonus actually resulted in a
credit card charge for MemberWorks' membership programs if the
consumer did not actively seek to cancel the purchase.
"The State of Florida will not tolerate deceptive telemarketing
practices," said AG Crist. "Those who seek to solicit
Floridians should know that the Attorney General's Office will
be vigilant in our efforts to protect consumers."
The settlement agreement, to be filed with the Hillsborough
County Circuit Court, requires MemberWorks to pay the state
$950,000 in fees and costs. In addition, the company must issue
double refunds to any Florida consumer who receives a credit
card charge for a MemberWorks program where MemberWorks cannot
provide documentation showing that the consumer consented to the
charge.
The agreement also requires MemberWorks to clearly disclose all
terms and conditions of its programs, to obtain consumers'
express consent to charge their credit cards for MemberWorks'
programs, and to report their compliance with the double refund
policy for a period of three years.
MENORAH GARDENS: Opt-out Deadline in Desecration Suit Extended
--------------------------------------------------------------
Potential class members in a class action against Menorah
Gardens can now wait until the outcome of an upcoming fairness
hearing determines various issues, including punitive damages,
before deciding whether to join the class.
Until now, the potential class had only until July 1, 2004 to
decide whether to opt-out of the class - despite the fact that
the final settlement would not be determined until September.
Because of uncertainty in the final details of the settlement,
and the issue of punitive damages still to be litigated,
attorneys for people pursuing individual claims in a separate
Palm Beach case, were able to obtain an extended or "back end"
opt-out date for deciding whether to be part of the class or
pursue individual claims.
The class settlement previously provided that potential class
members had until July 1, 2004, at 4 p.m. to file their "opt-
out" forms. That also was the deadline for objections to the
settlement. Judge Leonard Fleet will review the forms and
filings related to the case (Broward County Case # 01-21376 CA
08).
The class lawsuit was filed in Broward County Circuit Court in
late 2001 against Menorah Gardens and Funeral Chapels and its
parent corporation, Service Corporation International (SCI). The
suit alleges that the division of the world's largest provider
of funeral and cemetery services desecrated and destroyed grave
sites and remains at Menorah Gardens' cemeteries in Fort
Lauderdale and West Palm Beach, Florida.
However, Gary M. Farmer, Jr., of Weston's Freedland, Farmer,
Russo & Sheller, and Ted Leopold of Ricci Leopold, filed a
separate suit on behalf of 72 family members of decedents buried
in the West Palm Beach cemetery owned and operated by SCI, in
which claims for desecration, incorrect burial and lack of
records confirming burial locations occurred.
Specifically, both the West Palm individual cases and the class
action allege that many cemetery plots at Menorah Gardens have
been used for the wrong person, or that decedents were buried in
the wrong plots, making plots unavailable to the person who
actually purchased them, among other things. Under a proposed
settlement in the class case, class members would share $65
million, while individual plaintiffs would divide $35 million,
minus legal fees and costs. However, SCI has argued in the Palm
Beach case that the award of punitive damages in the Broward
class case precludes recovery of punitive damages in the West
Palm cases.
"Ted Leopold and I have vigorously objected to any class
settlement that prevents our clients from pursuing in West Palm
the damage claims, both compensatory and punitive, to which they
are entitled," Mr. Farmer said.
"Whether they're members of the class or individuals seeking
compensation, it's imperative that the families of those
subjected to this disturbing and criminal behavior have their
options preserved," said Mr. Farmer, whose firm is recognized as
a vanguard in the area of consumer protection litigation.
Ultimately, Farmer is confident that both his individual clients
and the class members will recover punitive damages, which will
punish SCI for its reprehensible conduct and deter it - and
perhaps others - from similar conduct in the future.
For more details, contact Lisa Buyer of the Moxie Group,
Deerfield Beach, Florida by Phone: 954-354-1410 x 14 or by E-
mail: lbuyer@moxie-group.com or contact Alexandra Dearborn by
Phone: 954-354-1410 x 13 or by E-mail: adearborn@moxie-group.com
or contact Gary M. Farmer, Jr. of Freedland, Farmer, Russo &
Sheller, Weston by Phone: 954-467-6400 by Fax: 954-670-2530 or
by E-mail: gary@westonlawyers.com.
MICROSOFT CORPORATION: Reaches $43M Settlement in MA, ND Suits
--------------------------------------------------------------
The law firms of Mirick, O'Connell, DeMallie & Lougee LLP,
Gilman and Pastor LLP, and Mager White & Goldstein LLP, and
William A. Stibel, counsel for a proposed class of Massachusetts
consumers, and Microsoft Corp. jointly announced that a
settlement has been reached in a class action lawsuit alleging
that Microsoft Corp. violated Massachusetts' consumer protection
and unfair competition laws, while North Dakota consumers could
get as much as $9 million in separate, proposed settlements of a
similar antitrust case.
The settlement, which received preliminary approval on June 28
from Judge Judith Fabricant of the Massachusetts Superior Court,
Massachusetts will make vouchers available to class members that
may be used to buy any manufacturer's desktop, laptop and tablet
computers; any software available for sale to the general public
and used with those computer products; and specified peripheral
devices for use with computers. The total amount of vouchers
issued will depend on the number of class members who claims
vouchers, and the maximum value of the vouchers that may be
issued to class members will be $34 million.
Under the terms of the settlement agreement, Microsoft will
provide one- half of the difference between $34 million and the
value of vouchers issued to class members to Massachusetts's
public school districts in the form of vouchers that may be used
by the school districts to purchase a broad range of hardware
products, Microsoft(R) and non-Microsoft software, and
professional development services. The vouchers will be made
available to public school districts in which 50 percent or more
of the students are eligible for reduced-fee or free meals under
the National School Lunch Program.
Plaintiffs' lead counsel, Ann White, David Pastor, and William
Rogers, Jr., are pleased with both the excellent result for
Massachusetts consumers and the significant impact the
settlement will have on underprivileged schoolchildren
throughout the Commonwealth.
"We're pleased by the opportunity to help schools all across
Massachusetts get the computers and software they need," said
Brad Smith, general counsel for Microsoft. "This settlement
allows us to focus on the future and building great software,
and avoids the cost and uncertainty of litigation."
Details of the settlement are set forth in a settlement
agreement filed in the Middlesex County Superior Court,
Massachusetts. Under the settlement, consumers who, between
January 3, 1996 and December 31, 2002, resided in Massachusetts
and indirectly purchased certain Microsoft operating system,
productivity suite, spreadsheet or word processing software for
use in Massachusetts and not for resale will be eligible to
apply for the vouchers.
The North Dakota settlement is similar, involving vouchers for
computer software and other products as compensation for people
who allegedly paid higher prices because of Microsoft's business
practices. Only about 500 customers have sought the vouchers
since the preliminary settlement in November, but 43 school
districts are expected to ultimately benefit. In ordering final
approval of the settlement on Tuesday, Northeast Central
District Judge Bruce Bohlman called the deal "fair and
reasonable."
MISSOURI: Appeals Court Rules in Columbia Public Schools' Favor
---------------------------------------------------------------
The Missouri Court of Appeals ruled that it was too late for
most people to collect refunds from taxes overcharged by the
Columbia Public Schools in 2001, the Columbia Daily Tribune
reports. The news was released in a small footnote that judges
from the court in Kansas City added to the original decision
they handed down May.
The court's original ruling said the eight plaintiffs in the
suit were entitled to refunds, finding the Columbia Public
Schools guilty of violating law by setting its tax rate too
high. However, the lawyers for the plaintiffs and the school
district disagreed on whether other taxpayers had until the end
of the year to request their own refunds from the Boone County
collector.
The plaintiffs contended that if everyone had filed for such
refunds, the district would owe about $1 million, with his share
equal to about 53 cents. The amount Lane sought was about 1.8
percent of school taxes that were paid that year, the Daily
Tribune reports.
In its footnote, the court explained that the section of law at
the heart of the refund controversy was amended in 2003 to allow
taxpayers three years to seek refunds for taxes "mistakenly or
erroneously paid."
"Here, the District acquired a vested right to be free from suit
for its 2001 levy in 2002, one year before the 2003 amendment.
Consequently, any further refund claims based on the District's
2001 levy are now barred," the court said in its amendment to
the ruling.
Mr. Lane called the footnote discouraging. "That really shoots
us down," he told the Daily Tribune. "We wanted the class
action" status "and couldn't get that."
If the court had granted class action status to the suit, all
taxpayers would have received refunds without applying, but
neither the Boone County Circuit Court nor the appeals court
would grant that status.
Lane's attorney, Craig Johnson, said he had not seen the
amendment and could not comment until he had time to read it,
the Daily Tribune reports. Alex Bartlett, the attorney for the
school district, said that he hadn't received a copy of the
decision but that the footnote was helpful. "I think this
clarifies an issue that the court really didn't consider," he
said.
MICROSOFT CORPORATION: Reaches $34M Settlement For MA Lawsuit
-------------------------------------------------------------
Microsoft Corporation reached a $34 million settlement for the
class action filed against it in the Middlesex Superior Court in
Massachusetts, alleging the software giant overcharged the
state's residents for its software products, Boston.com reports.
In early 2000, three separate suits were filed under the state's
consumer protection act on behalf of thousands of consumers who
bought Windows or other Microsoft operating systems, or
Microsoft Office or spreadsheet software, from 1996 through
2002. In most of the cases, the Microsoft operating systems
came loaded into purchased computers. The suits were later
consolidated.
The suit is similar to several private suits filed against the
Company across the country, echoing the charges filed by the
United States Department of Justice against the Company. 13
suits have been settled, 18 have been dismissed, and five more
are pending, the company said, Boston.com reports.
Middlesex Superior Judge Judith Fabricant granted preliminary
approval to the settlement, under which the Company will
distribute to members of the class vouchers, worth $12 for each
Windows 95, Windows 98 and Millenium license, and for $5 for
each license for other operating systems, or for the Company's
office or excel software. The Company intends to contact
affected consumers through e-mail, newspaper ads, and a website
posting. Detailed instructions on how to claim vouchers will be
posted on a website hosted by a third-party claims
administrator.
Under the agreement, consumers will have the choice of applying
the vouchers toward the purchase of Microsoft products or
computer products by other manufacturers. The Company also
promised to donate a portion of the unclaimed vouchers for use
by Massachusetts public schools in the neediest districts.
This week, the Company also forged a $105 million settlement for
a similar antitrust suit in Arizona, a much larger settlement
amount compared to Massachusetts. However, Massachusetts
plaintiffs' attorney David Pastor, partner in the Saugus law
firm Gilman and Pastor LLP, told Boston.com, the settlement "was
excellent result given the fact that we were limited by state
law to consumers," while other states permit class-action suits
on behalf of businesses as well.
The software giant is working hard to settle the private class
actions against it, while awaiting a verdict in the appeal of
Justice Department's antitrust settlement and the remedies
approved by US District Judge Colleen Kollar-Kotelly for
antitrust violations. That decision, pending in the US Court of
Appeals in Washington, D.C., could come at any time.
"Over the last 18 months, we've been working very hard to
resolve the remaining class-action cases," Stacy Drake, a
Microsoft spokeswoman in Redmond, Washington, told Boston.com.
OHIO: Gov. Taft To Move Medicaid Rules in Line With Settlement
--------------------------------------------------------------
Ohio Governor Bob Taft intends to try to change the state's
Medicaid rules to hasten its compliance with a settlement
proposed for a class action filed on behalf of thousands of the
state's disabled and mentally retarded people, the Associated
Press reports.
The suit alleged that the state did not do enough for the
disabled and mentally retarded Ohioans who remained in state
institutions and nursing homes instead of being granted home-
based care covered by Medicaid. The fifteen-year-old suit was
finally settled in December 2003, and was submitted early this
week to US District Judge Edmund A. Sargus, Jr. for approval.
"The actions of the defendants since 1999 have given relief to
many in the class by providing them with choices in housing and
supports," the proposed settlement says. The settlement also
asked Gov. Taft to propose in his 2006-07 budget that people
with mental retardation be able to choose between an institution
and home-based care when covered by Medicaid, the joint state-
federal insurance program for the poor. Medicaid rules now only
set aside a certain number of slots for the home care. The
state and the disabled advocates also pledge to help persuade
lawmakers to approve the plan.
"All those people who are living in big institutions can choose
to stay there" under the agreement, Michael Kirkman, legal
director of Ohio Legal Rights Service, an agency representing
disabled people who filed the lawsuit, told AP.
According to Robert Jennings, spokesman for the Ohio Department
of Mental Retardation and Developmental Disabilities, the state
had gradually been moving people out of institutions and into
their own apartments or group homes, but most of the changes
came in the last three to four years.
"It's pretty clear to me that Ohio would still be where it was,
or close to it, if there had not been the pressure from this
lawsuit and other advocacy groups," Mr. Kirkman told AP.
About 1,800 Ohioans with developmental disabilities such as
mental retardation remain in state institutions, down from 2,700
when the suit was filed in 1989. Since 2000, 12,000 spots have
been created in a program that helps people on Medicaid hire
home health aides and either stay at home or move out of nursing
homes, AP reports. "With that much change occurring in the
system, it was pretty much a slam dunk to say we're moving in
the right direction," Mr. Jennings told AP.
RITE AID: Vermont, Other States Recover $6.6M From Settlement
-------------------------------------------------------------
Vermont Attorney General William H. Sorrell announced Medicaid
programs in Vermont and 30 other states will recover over $6.6
million as a result of a settlement with Rite Aid Corporation.
Rite Aid, a national retail pharmacy chain, agreed to pay a
total of $7 million to the federal and state governments to
settle allegations under the federal False Claims Act.
From January 1, 1997 to December 31, 2001, Rite Aid is alleged
to have received full payment from government health insurance
programs for prescriptions that were only partially filled, for
prescriptions that were not picked up by customers, and for
prescriptions that were never delivered to customers.
Most of the settlement money goes to Medicaid, with a small
additional portion of the settlement for the federal Tricare
Program and Federal Employee Health Benefit Program. As part of
the settlement, Vermont's Medicaid Program recovers $31,872.85.
Attorney General Sorrell stated, "Drug pricing abuses are a
growing national problem. It is particularly disturbing when
publicly funded programs for the medically needy are billed for
drugs that were never delivered. This kind of conduct will not
go unchallenged."
Rite Aid also has entered into an agreement with the United
States Department of Health and Human Services Office of
Inspector General, called a "Corporate Integrity Agreement"
(CIA). The CIA requires the company to modify its pharmacy
billing operations to ensure future compliance with applicable
laws and Medicare and Medicaid regulations, to monitor these
practices for problems, and to suffer sanctions for any
violations.
For more details, contact the office of the Attorney General by
Mail: 109 State Street, Montpelier VT 05609-1001 by Phone:
(802) 828-3171 or by Fax: (802) 828-5341
SURGUTNEFTEGAZ: Harvard Launches Suit Over Pension Fund Losses
--------------------------------------------------------------
Harvard University filed a class action against Russian oil
company Surgutneftegaz, over the millions of dollars the
university's pension fund lost in dividends from the Company's
American Depositary Receipts (ADRs), The Moscow Times reports.
The university owns an estimated $130 million worth of preferred
shares of stock in the Company. The university alleged that the
Company paid holders of its preferred shares only 20% of the
dividends to which they were entitled.
Under the Company's charter, preferred shareholders are entitled
to receive 10 percent of annual net profits. The company met
that obligation, but only on a technicality, using its own
definition of net profits in order to artificially lower the
figure. The business world generally defines net profits as
profits after tax, but Surgut has included the additional
deduction of capital expenditures and other expenses under a
legal loophole.
William Browder, CEO of Hermitage Capital Management, another
minority shareholder, estimates that over four years, from 1999
to 2002, Surgut underpaid preferred share dividends by $397
million, the Moscow Times reports. In 2003, Surgut raised its
total payout to around $200 million from $60 million in 2002,
but still below what the market would like to see it paying.
The suit was filed on behalf of all those who hold preferred
shares in Surgut via ADRs, but it is not clear how many
potential claimants there are. The university is seeking $3.7
million in unpaid cash distributions.
The suit could end up costing the closely held oil company
hundreds of millions of dollars.
Minority investors have been concerned about the company's
opaque ownership structure and its Soviet-style attitude toward
shareholders. Surgut general director Vladimir Bogdanov
justified the modified calculation in a letter to then-Prime
Minister Mikhail Kasyanov in 2001, writing that if the dividends
were paid out in full, the company would be sending "a
considerable part" of its cash flow to shareholders abroad,
contributing to capital flight.
Alexander Branis, whose Prosperity Capital Management has sued
Surgut unsuccessfully in regional courts to recover unpaid
dividends, told the Moscow Times the Surgut management mentality
goes like this: "If you aren't investing money into the company,
you don't have the right to take money out. Portfolio investors
should be content to profit from share price appreciation, not
dividends."
Harvard told the Moscow Times any decision by the arbitration
panel in New York would be binding under international treaties
Moscow has signed, but Surgut counters that agreements covering
ADRs held by Harvard allow recourse to Russian courts.
Surgut brushed off the announcement of Harvard's claim. "News
of the latest minority shareholder suit is very likely no more
than a way of heating up the market," Surgut said in a statement
Tuesday, the Moscow Times states. "Our company acts, and has
always acted, within the law."
TULLY'S COFFEE: Former Store Managers Launch CA Overtime Lawsuit
----------------------------------------------------------------
Tully's Coffee Corporation faces a class action filed in
California State Court by two former store managers alleging
misclassification of employment position and seeking damages,
restitution, reclassification and attorneys' fees and costs.
The plaintiffs also seek class action certification of their
lawsuit. The Company is investigating in preparation to defend
against the litigation.
VILLAGE VOICE: Advertiser Lodges CA Antitrust Suit, Seeks Class
---------------------------------------------------------------
Attorney Scott Myer filed an antitrust class action against
Village Voice Media, after seeing his advertising rates in a Los
Angeles alternative weekly newspaper double when the Company
eliminated the competing weekly in a controversial market swap,
the New York Post Online reports.
The lawsuit alleges that Village Voice has circumvented a
consent decree and raised its advertising rates in the LA Weekly
by 100 percent. Mr. Myer, an LA Weekly advertiser since May of
2003, argued in his suit that despite government intervention to
prevent a monopoly, Village Voice remains the only newsweekly in
Los Angeles with a significant readership. The lawsuit claims
that one Village Voice executive conceded LA Weekly might lose
some advertisers temporarily, but said, "being the only game in
town, they will come back."
Mr. Myer's proposed class action, which could include "hundreds"
of advertisers, seeks to stop Village Voice from hiking its
advertising rates and asks for damages and court costs.
For more details, contact Scott D. Myer by Mail: P.O. Box 18019,
Beverly Hills, California (Los Angeles Co.) or visit:
http://www.myerlawfirm.com/scottmyer.htm
VIRGINIA: Coaching Jobs Threatened By Overtime Violations Suits
---------------------------------------------------------------
About 60 Virginia Beach coaches might be forced to leave their
jobs by fall, due to legal concerns about overtime pay,
PilotOnline.com reports.
A wave of class actions has started in Mississippi and is now
spreading throughout the Southern United States. The suits
allege claims under the federal Fair Labor Standards Act (FLSA),
and how school employees who are not teachers or administrators
are paid for coaching.
A coach's long hours teaching their teams and training them
could prove to be a violation of the FLSA. Generally, "non-
certified" workers receive a set stipend for a coaching season -
no matter how much time it takes. Lawyers are arguing that
these employees must be paid at an hourly rate, including
overtime, for coaching. The intent of the law is to ensure fair
compensation. Coaches who are full-time teachers or
administrators are not affected by the lawsuits.
Last week, a Chesapeake custodian filed a suit, seeking overtime
pay. She was backed by Newport News lawyers associated with the
School Litigation Group, a Mississippi-based firm which has
filed hundreds of similar suits against schools in nine Southern
states. The custodian's attorney emphasized that this was the
first of what is expected to be multiple cases in Virginia.
Superintendent Timothy R. Jenney will decide this week whether
to sign off on high school and middle school coaching
assignments to the division's non-certified employees,
PilotOnline.com reports. If he chooses to keep the coaches, he
could get rid of stipends and pay an hourly rate, potentially
straining the budget and creating salary inequities.
Mr. Jenney however said that it was also possible that he might
have to ask some workers to give up coaching, a choice that
could leave the city's athletic programs searching for leaders
and role models. "It's horrible. It's certainly not what I want
to do," Mr. Jenney told PilotOnline.com. "Some of them have
done it awhile. They're very good at it. They've developed a
program. They've developed relationships with parents and
students."
Officials in the Chesapeake, Norfolk, Suffolk and northeastern
North Carolina are also looking at ways to answer the emerging
suits, examining payroll records and searching for solutions.
Schools across the South, clamoring to stay in compliance with
the law, rather than face class-action lawsuits, have not
renewed hundreds of coaching contracts.
The Virgina Beach coaches are now awaiting their fate. "It's a
shame for the kids," Kempsville High's head football coach Jeff
McGowan told PilotOnline.com. "You get some people who are money
hungry and they ruin it for other people."
Shawn Wilson, an in-school suspension coordinator at Kempsville
High, spends another 30 hours a week after class as the
offensive coordinator for the school's football team for a
$4,850 stipend. He says he'd like to keep it that way. "I love
coaching, I love helping the kids," Mr. Wilson told
PilotOnline.com. "I loved my coaches in high school and wanted
to be like them."
Lawsuits in other states have contended that arrangements like
Wilson's violate the Fair Labor Standards Act because Mr. Wilson
works more than 40 hours a week and therefore deserves overtime.
However, the coaches says they do what they do not for the
money, but because they enjoy it.
"They do it so they can coach," Chris Beatty, Landstown High
School's football coach and a full-time teacher. His team could
lose two assistant coaches told PilotOnline.com. "They don't do
it for the money."
Mr. Jenney is now mulling switching "non-certified" coaches from
a stipend to an hourly rate. Other school divisions are still
investigating solutions, but without a deep bench, school
leaders are hesitant to turn away part-time coaches. "I would
hate to take that away - they love coaching," Thomas L. Mercer
Sr., vice chairman of the Chesapeake School Board told
PilotOnline.com.
New Securities Fraud Cases
CENTRAL FREIGHT: Brodsky & Smith Lodges Securities Lawsuit in TX
----------------------------------------------------------------
The Law offices of Brodsky & Smith, LLC initiated a securities
class action lawsuit on behalf of shareholders who purchased
stock issued in connection with or traceable to Central Freight
Lines' ("Central Freight" or the "Company") (Nasdaq:CENF)
December 2003 Initial Public Offering ("IPO"). The class action
lawsuit was filed in the United States District Court for the
Western District of Texas.
The Complaint alleges that defendants violated federal
securities laws by issuing a series of material
misrepresentations to the market thereby artificially inflating
the price of Central Freight securities.
No class has yet been certified in the above action.
For more details, contact Marc L. Ackerman, Esq. or Evan J.
Smith, Esq. of Brodsky & Smith, LLC by Phone: Two Bala Plaza,
Suite 602, Bala Cynwyd, PA 19004 by Phone: 877-LEGAL-90 or by E-
mail: clients@brodsky-smith.com
CENTRAL FREIGHT: Schatz & Nobel Files Securities Suit in W.D. TX
----------------------------------------------------------------
The law firm of Schatz & Nobel, P.C. initiated a lawsuit seeking
class action status in the United States District Court for the
Western District of Texas on behalf of all persons who purchased
the publicly traded securities of Central Freight Lines, Inc.
(Nasdaq: CENF) ("Central Freight") issued in connection with or
traceable to its December 12, 2003 Initial Public Offering
("IPO").
The Complaint alleges that Central Freight, a regional freight
carrier, and certain of its officers and directors issued
materially false statements in the Prospectus/Registration
Statement. On December 12, 2003, Central Freight announced that
had completed an IPO of 8.5 million shares of stock pursuant to
a Prospectus/Registration Statement. The IPO was priced at
$15.00 per share for total net proceeds of $77.9 million after
underwriting discounts and commissions. In fact, the
Prospectus/Registration Statement was materially false and
misleading and failed to disclose, among other things:
(1) that the Company's dynamic resource planning process
implementation was going disastrously;
(2) that the Company's aggressive expansion projects were
negatively affecting the Company's margins;
(3) that the Company's insurance and claims accrual rate
was off because the Company failed to have sufficient
reverses for accident frequency; and
(4) that the Company was experiencing severe operational
issues. As this adverse information was disclosed, the
Company's shares eventually plummeted to $8.55 per
share.
For more details, contact Nancy A. Kulesa of Schatz & Nobel by
Phone: (800) 797-5499 by E-mail: sn06106@aol.com or visit their
Web site: http://www.snlaw.net
DRUGSTORE.COM: Brian Felgoise Files Securities Suit in W.D. WA
--------------------------------------------------------------
The Law Offices of Brian M. Felgoise, P.C. announces that a
securities class action has been commenced on behalf of
shareholders who acquired drugstore.com, inc. (NYSE: DSCM)
securities between January 20, 2004 and June 10, 2004, inclusive
(the Class Period).
The case is pending in the United States District Court for the
Western District of Washington at Seattle, against the company
and certain key officers and directors.
The action charges that defendants violated the 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.
No class has yet been certified in the above action.
For more details, contact Brian M. Felgoise, Esq. by Mail: 261
Old York Road, Suite 423, Jenkintown, Pennsylvania, 19046 by
Phone: (215) 886-1900 or by E-mail: FelgoiseLaw@aol.com
DRUGSTORE.COM: Brodsky & Smith Lodges Securities Suit in W.D. WA
----------------------------------------------------------------
The Law offices of Brodsky & Smith, LLC initiated a securities
class action lawsuit on behalf of shareholders who purchased the
common stock and other securities of Drugstore.com, Inc.
("Drugstore.com" or the "Company") (Nasdaq:DSCM), between
January 20, 2004 and June 10, 2004, inclusive (the "Class
Period"). The class action lawsuit was filed in the United
States District Court for the Western District of Washington.
The Complaint alleges that defendants violated federal
securities laws by issuing a series of material
misrepresentations to the market during the Class Period,
thereby artificially inflating the price of the stock.
No class has yet been certified in the above action.
For more details, contact Marc L. Ackerman, Esq. or Evan J.
Smith, Esq. of Brodsky & Smith, LLC by Phone: Two Bala Plaza,
Suite 602, Bala Cynwyd, PA 19004 by Phone: 877-LEGAL-90 or by E-
mail: clients@brodsky-smith.com
KEY ENERGY: Lerach Coughlin Lodges Securities Lawsuit in W.D. TX
----------------------------------------------------------------
The law firm of Lerach Coughlin Stoia & Robbins LLP commenced a
class action in the United States District Court for the Western
District of Texas on behalf of purchasers of Key Energy
Services, Inc. ("Key Energy") (NYSE:KEG) publicly traded
securities during the period between April 29, 2003 and June 4,
2004 (the "Class Period").
The complaint charges Key Energy and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Key Energy is the world's largest rig-based, onshore well
service company. The Company provides diversified energy
operations, including well servicing, contract drilling,
pressure pumping, fishing and rental tool services and other
oilfield services.
The complaint alleges that during the Class Period, defendants
misrepresented the strength of Key Energy's financial results.
Throughout the Class Period, defendants repeatedly stated that
Key Energy's financials were strong and improving and that it
had strengthened its competitive position to benefit once market
conditions improved. In fact, the Company's financial statements
were materially misstated and not nearly as favorable as
reported. As a result of defendants' misstatements, Key Energy's
securities traded at artificially inflated levels. Defendants
were thus able to complete a $150 million note offering in May
2003 and to exchange 542,477 shares of Key Energy stock in the
acquisition of Lea Fishing Tools, Inc. in September 2003.
On March 15, 2004, Key Energy announced it would delay filing
its 2003 Form 10-K so that it could review the classification of
fixed assets during 2003. Later, on March 29, 2004, Key Energy
announced it would be taking write-downs of $83 million to
reflect good will impairment and would restate its prior year's
financial statements.
Then on June 7, 2004, before the market opened, Key Energy
announced it was withdrawing earnings guidance for 2004. The
Company also disclosed that if it failed to obtain a waiver for
its default on its senior notes, it would be in default. On this
news, the Company's stock collapsed to as low as $7.00 per share
before closing at $8.67 on volume of 13.9 million shares. This
was a 37% drop from the Class Period high of $13.96.
For more details, contact William Lerach or Darren Robbins of
Lerach Coughlin Stoia & Robbins LLP by Phone: 800-449-4900 by E-
mail: wsl@lcsr.com or visit their Web site:
http://www.lcsr.com/cases/keyenergy/
LEXAR MEDIA: Bernstein Liebhard Lodges Securities Lawsuit in CA
---------------------------------------------------------------
The law firm of Bernstein Liebhard & Lifshitz, LLP initiated a
securities class action lawsuit on behalf of all persons who
acquired securities of Lexar Media Inc. ("Lexar" or the
"Company")(NASDAQ: LEXR) between July 17, 2003 and April 16,
2004, inclusive (the "Class Period").
The case is pending in the United States District Court for the
Northern District of California, against Defendants Lexar, Eric
Stang, and Brian McGee.
The Complaint charges that Lexar and certain officers and
directors violated Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by
issuing a series of material misrepresentations to the market
during the Class Period, thereby artificially inflating the
price of Lexar's securities. Specifically, the Complaint alleges
that the Company failed to disclose and misrepresented the
following material adverse facts:
(1) that the Company underestimated the impact and the
timing of competitive pricing moves in the flash memory
market;
(2) that the Company's preferential supply relationship
with Samsung failed to insulate Lexar from fluctuations
in pricing and availability of flash memory, which
negatively affected the Company's product margins; and
(3) the Company lacked sufficient royalty income to offset
product gross margins pressure.
The truth was revealed on April 15, 2004, when Lexar reported
financial results for the first quarter ended March 31, 2004.
After several quarters of relatively stable selling prices,
Lexar incurred sizeable second quarter price declines. On this
news, shares of Lexar fell $5.03 per share or 32.56 percent on
April 16, 2004, to close at $10.42 per share.
For more details, contact the Shareholder Relations Department
at Bernstein Liebhard & Lifshitz, LLP by Mail: 10 East 40th
Street, New York, New York 10016 by Phone: (800) 217-1522 or
(212) 779-1414 or by E-mail: LEXR@bernlieb.com or visit their
Web site: http://www.bernlieb.com
NBTY INC.: Marc Henzel Lodges Securities Fraud Suit in E.D. NY
--------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Eastern
District of New York on behalf of persons who purchased or
otherwise acquired publicly traded securities of NBTY, Inc.
(NYSE: NTY) between April 22, 2004 and June 16, 2004, inclusive,
(the "Class Period").
The lawsuit was filed against NBTY and its top executives, Scott
Rudolph and Harvey Kamil. 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 asserts that the Company issued false and
misleading statements concerning its financial results for the
quarter ending March 31, 2004. On April 22, 2004, NBTY announced
increased sales in that quarter for its various business
segments, including its Direct Response segment, which sells
products through catalogs and the Internet. The increased sales
were attributed to "the Company's ability to more effectively
target market its customer base." In truth, the results were due
to special sales promotions, and not any generalized improvement
in the Company's marketing abilities. Indeed, it is alleged that
in the month of April sales in this segment dropped off 14%
because the special promotion had ended. Before this decline was
revealed to the public, defendant Rudolph sold 400,000 shares
for proceeds of over $14 million, while defendant Kamil sold
157,000 shares for proceeds of over $6 million.
On June 17, 2004, NBTY shocked investors by announcing sales
declines in the Direct Response segment of 12% for the months of
April and May, sending shares plunging from a close of $36.50
the previous day to $26.99 on trading volume of 8.3 million
shares.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com.
NBTY INC.: Brian M. Felgoise Lodges Securities Suit in E.D. NY
--------------------------------------------------------------
The Law Offices of Brian M. Felgoise, P.C. initiated a
securities class action on behalf of shareholders who acquired
NBTY, Inc. (NYSE: NTY) securities between April 22, 2004 and
June 16, 2004, inclusive (the Class Period).
The case is pending in the United States District Court for the
Eastern District of New York, against the company and certain
key officers and directors.
The action charges that defendants violated the 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.
No class has yet been certified in the above action.
For more details, contact Brian M. Felgoise, Esq. by Mail: 261
Old York Road, Suite 423, Jenkintown, Pennsylvania, 19046 by
Phone: (215) 886-1900 or by E-mail: FelgoiseLaw@aol.com
NBTY INC.: Brodsky & Smith Lodges Securities Lawsuit in E.D. NY
---------------------------------------------------------------
The Law offices of Brodsky & Smith, LLC initiated a securities
class action lawsuit on behalf of shareholders who purchased the
common stock and other securities of NBTY, Inc. ("NBTY" or the
"Company") (NYSE:NTY) between April 22, 2004 and June 16, 2004
inclusive (the "Class Period"). The class action lawsuit was
filed in the United States District Court for the Eastern
District of New York.
The Complaint alleges that defendants violated federal
securities laws by issuing a series of material
misrepresentations to the market during the Class Period,
thereby artificially inflating the price of NBTY securities.
No class has yet been certified in the above action.
For more details, contact Marc L. Ackerman, Esq. or Evan J.
Smith, Esq. of Brodsky & Smith, LLC by Phone: Two Bala Plaza,
Suite 602, Bala Cynwyd, PA 19004 by Phone: 877-LEGAL-90 or by E-
mail: clients@brodsky-smith.com
NBTY INC.: Geller Rudman Files Securities Fraud Suit in E.D. TX
---------------------------------------------------------------
The Law Firm of Geller Rudman, initiated a class action lawsuit
in the United States District Court for the Eastern District of
New York on behalf of purchasers of NBTY, Inc. (NYSE: NTY)
("NBTY" or the "Company") publicly traded securities during the
period between April 22, 2004 and June 16, 2004, inclusive (the
"Class Period").
The complaint charges NBTY and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. NBTY is a vertically integrated manufacturer, marketer and
retailer of nutritional supplements in the United States, the
United Kingdom, Ireland, the Netherlands and worldwide.
The complaint alleges that at the start of the Class Period,
defendants announced that the Company had experienced a "record"
quarter, in which its financial results exceeded analyst
expectations, causing the price of the Company's stock to rise
almost 5%. Defendants attributed the increased revenues, in
part, to "the Company's ability to more effectively target
market its customer base." As part of the same announcement,
defendants advised investors that they were confident that the
Company would continue to grow its revenue and market share.
Unbeknownst to investors, however, the financial results were
the result of a shift in the timing of a promotional mailing and
were not attributable to any long-term improvement at the
Company. As was ultimately disclosed by defendants at the end of
the Class Period, the Company's financial results in the third
quarter, which did not include this promotional campaign,
suffered from a slowdown in sales. Moreover, by at least the
start of the Class Period, defendants knew, but failed to
disclose, that sales at the Company's Vitamin World stores were
declining because customers were increasingly purchasing their
vitamins and other health supplements at mass market merchants,
such as drugstores and deep discounters, and not at specialty
health stores such as Vitamin World.
When this information was belatedly disclosed to the market on
June 17, 2004, shares of NBTY common stock fell $9.51 per share,
or 26%, to close at $26.99 per share, on extremely high trading
volume. Prior to the disclosure of this information, certain
defendants and other NBTY insiders sold 727,200 shares of their
personally held stock at artificially inflated prices for gross
proceeds of $26 million.
For more details, contact Samuel H. Rudman, Esq. or David A.
Rosenfeld, Esq. of GELLER RUDMAN, PLLC by Mail: Client Relations
Department - 200 Broadhollow, Suite 406, Melville, NY 11747 by
Phone: 631-367-7100 or 1-877-992-2555 by Fax: 1-631-367-1173 by
E-mail: info@geller-rudman.com or visit their Web site:
http://www.geller-rudman.com/case_signup_sec.asp?cID=309
NBTY INC.: Schatz & Nobel Lodges Securities Lawsuit in E.D. TX
--------------------------------------------------------------
The law firm of Schatz & Nobel, P.C. initiated a lawsuit seeking
class action status in the United States District Court for the
Eastern District of New York on behalf of all persons who
purchased the publicly traded securities of NBTY, Inc. (NYSE:
NTY) ("NBTY") between April 22, 2004 and June 16, 2004,
inclusive (the "Class Period").
The Complaint alleges that NBTY, a manufacturer, marketer and
retailer of nutritional supplements, and certain of its officers
and directors issued materially false statements concerning
NBTY's financial condition. Specifically, defendants failed to
disclose:
(1) that the Company's increased financial results over the
prior year were attributable to a shift in the timing
of a promotional mailing, not to any long term
improvement at NBTY; and
(2) that a significant number of customers had shifted to
purchasing supplements in the mass channel area such as
drug chains and deep discounters, thereby negatively
impacting the Company's retail sales at its Vitamin
World chain.
As a result of the foregoing, defendants' positive statements
concerning the Company's prospects were lacking in a reasonable
basis at all relevant times.
When this information was belatedly disclosed to the market on
June 17, 2004, shares of NBTY common stock fell $9.51 per share,
or 26%, to close at $26.99 per share. Prior to the disclosure of
this information, NBTY insiders and other defendants sold
727,200 shares of their personal stock at artificially inflated
prices.
For more details, contact Nancy A. Kulesa of Schatz & Nobel by
Phone: (800) 797-5499 by E-mail: sn06106@aol.com or visit their
Web site: http://www.snlaw.net
NBTY, INC.: Schiffrin & Barroway Lodges Securities Suit in NY
-------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP has initiated a class
action lawsuit in the United States District Court for the
Eastern District of New York on behalf of all purchasers of the
common stock of NBTY, Inc. (NYSE: NTY) ("NBTY" or the "Company")
from April 22, 2004 through June 16, 2004 inclusive (the "Class
Period").
The complaint charges that NBTY, Scott Rudolf, and Harvey Kamil
violated the Securities Exchange Act of 1934. More specifically,
the Complaint alleges that the Company failed to disclose and
misrepresented the following material adverse facts, which were
known to defendants or recklessly disregarded by them:
(1) that the Company's increased financial results over the
prior year was attributable to a shift in the timing of
a promotional mailing and was not attributable to any
long term improvement at the Company;
(2) that a significant number of customers had shifted to
purchasing supplements in the mass channel area such as
drug chains and deep discounters, thereby negatively
impacting the Company's retail sales at its Vitamin
World chain; and
(3) that as a result of the foregoing, defendants' positive
statements concerning the Company's prospects were
lacking in a reasonable basis at all relevant times.
On June 17, 2004, the Company announced that its Direct Response
and Vitamin World operations had experienced lower sales for the
two-month period ending May 31, 2004. Specifically, for the two-
month period, sales from Puritan's Pride direct response
decreased 12% from the comparable period in the prior year to
$38 million and sales from Vitamin World retail stores decreased
1% from the comparable period in the prior year to $36 million.
When this information was belatedly disclosed to the market on
June 17, 2004, shares of NBTY common stock fell $9.51 per share,
or 26%, to close at $26.99 per share, on extremely high trading
volume.
For more details, contact Marc A. Topaz, Esq. or Stuart L.
Berman, Esq. of Schiffrin & Barroway, LLP by Mail: Three Bala
Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone:
1-888-299-7706 or 1-610-667-7706 or by E-mail:
info@sbclasslaw.com
OMNIVISION TECHNOLOGIES: Marc Henzel Lodges Stock Lawsuit in CA
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Northern
District of California on behalf of purchasers of OmniVision
Technologies, Inc. (NASDAQ:OVTI) publicly traded securities
during the period between February 19, 2003 and June 8, 2004,
inclusive.
The complaint charges OmniVision and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. OmniVision designs, develops and markets high-performance,
cost-efficient semiconductor image sensor devices.
The complaint alleges that during the Class Period, defendants
caused OmniVision's shares to trade at artificially inflated
levels through the issuance of false and misleading financial
statements. As a result of this inflation, OmniVision was able
to complete a secondary offering of its stock raising $113
million in net proceeds and the three individual defendants were
able to sell 1,322,950 shares of their OmniVision stock for
proceeds exceeding $30 million.
On June 9, 2004, OmniVision delayed the release of its 4thQ FY
2004 results and admitted it may have to restate results due to
the timing of revenue recognition during the first three
quarters of FY 2004, and possibly FY 2003. The Company also
reduced earnings guidance for the 1stQ FY 2005. In response to
this announcement, the Company's shares plummeted to as low as
$17.34 per share, before closing at $17.63 on enormous volume of
40.1 million shares. This was a reduction in OmniVision's stock
price of nearly 50% from the Class Period high of $33.39 per
share.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
POZEN INC.: Marc Henzel Lodges Securities Fraud Suit in M.D. NC
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Middle
District of North Carolina on behalf of purchasers of POZEN,
Inc. (Nasdaq: POZN) publicly traded securities during the period
between July 31, 2003 and May 28, 2004, inclusive.
The complaint charges POZEN, John R. Plachetka, Matthew E.
Czajkowski, and John R. Barnhardt with violations of Sections
10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule
10b-5 promulgated thereunder. According to the complaint, POZEN
is a pharmaceutical development company focused on developing a
portfolio of drugs for the global migraine market. The
Company's lead product candidates included MT 100, a proprietary
formulation containing metoclopramide hydrochloride and naproxen
sodium; MT 300, a proprietary formulation of dihydroergotamine
mesylate in a pre- filled syringe; and MT 400, which is being
developed as a co-active acute migraine therapy.
The complaint charges the Company with issuing false and
misleading statements concerning its migraine drugs MT 100 and
MT 300. More specifically, the complaint alleges that the
Company failed to disclose the following adverse facts:
(1) that defendants knew or recklessly disregarded the fact
that its drugs MT 100 and MT 300 were unsafe and
ineffective;
(2) that despite knowing these facts, the Company entered
into various licensing agreements in order to book
revenues and achieve positive cash flows;
(3) that as a result of booking revenues and achieving
positive cash flows, the defendants were able to
manipulate the Company's stock price in order to attain
large bonuses, which were tied to the Company's stock
price, not the success of the Company's product
pipeline;
(4) with respect to the drug MT 300, defendants knew or
recklessly disregarded the fact that the drug resulted
in higher incidences of nausea and vomiting as compared
to placebo in two Phase III trials and that the drug
failed to show statistical superiority as compared with
placebo with regard to controlling symptoms of
migraines;
(5) with respect to the drug MT 100, defendants knew or
recklessly disregarded the fact that MT 100's chances
of being approved by the FDA were less than 50% because
of concerns about several primary end points,
particularly pain response to migraines at two hours,
lack of data showing consistent two-hour pain response
and symptom relief, and worries about the drug's
carcinogenicity; and
(6) that MT 100 failed to show superiority to a placebo as
measured by a two-hour response and two-hour symptom
migraine relief.
The blow to the Company occurred on October 20, 2003, when POZEN
announced that it had received a not-approvable letter from the
U.S. Food and Drug Administration ("FDA") related to its New
Drug Application ("NDA") for MT 300. The letter was issued based
on the FDA's conclusion that while MT 300 achieved its primary
end point, it failed to achieve statistical significance versus
placebo for the relief at two hours of the secondary symptoms of
migraine (nausea, sensitivity to light, and sensitivity to
sound).
On news of this, shares of POZEN fell $5.83 per share, or 32.8
percent, to close at $11.94 per share on unusually high trading
volume on October 20, 2003.
The complaint alleges that the final blow to the Company's
manipulative scheme occurred on June 1, 2004. Then, POZEN
announced that the FDA issued a not-approvable letter on Friday,
May 28, 2004 concerning the Company's NDA for MT 100 for the
acute treatment of migraine. In the FDA letter, the FDA cited
the apparent lack of superiority of MT 100 over naproxen for
sustained pain relief, which was the primary end point for the
two component studies.
Additionally, for the first time the FDA raised an approvability
issue concerning the risk of tardive dyskinesia ("TD") presented
by the use of metoclopramide, one of the components of MT 100.
In this regard, the FDA stated in their letter, "given the
number of patients exposed to MT 100 for at least one year in
your database (about 300), the absence of any detected cases is
consistent with a true rate of TD of about 1%, an unacceptably
high risk in the absence of any demonstrated advantage of the
product." Further, the FDA mentioned that based on animal
studies, there may be a potential risk of carcinogenicity,
presumably due to metoclopramide.
News of this shocked the market. Shares of POZEN fell $3.69 per
share, or 37.2 percent, to close at $6.23 per share on unusually
high volume.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
RYLAND GROUP: Marc Henzel Files Securities Fraud Suit in C.D. CA
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Central
District of California on behalf of purchasers of Ryland Group,
Inc. (NYSE: RYL) publicly traded securities during the period
between October 22, 2003 through January 7, 2004, inclusive.
The complaint charges Ryland Group, R. Chad Dreier, and Gordon
Milne with violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder. Between October 22, 2003 and January 7, 2004, the
defendants issued a series of material misrepresentations to the
market concerning the Company's financial results.
More specifically, the defendants' statements during the Class
Period were materially false and misleading because they failed
to disclose and/or misrepresented the following adverse facts,
among others:
(1) that the Texas market (and particularly Dallas) was in
a freefall;
(2) that Texas buyers were proving highly resistant to the
entry level homes that Ryland Group was offering; and
(3) that the defendants knew or recklessly disregarded that
offerings of "move up" properties would be better
received in that market, but that Ryland Group was not
in a position to offer these types of properties.
On January 8, 2004, Ryland Group shocked the market by
announcing that new orders for the fourth quarter had decreased
8.9%, largely due to an astounding 33% decline in Texas orders.
Indeed, only 344 new homes were sold by Ryland Group in that
quarter, as contrasted with sales of 770 new units in the third
quarter of 2003. This development stood in stark contrast to the
positive statements issued during the Class Period by
defendants. Ryland Group stock dived $10.16, to $72.89 per
share, after closing at $83.05 per share on January 7, 2004 on
heavy trading volume.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
SALTON INC.: Marc Henzel Commences Securities Lawsuit in N.D. IL
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Northern
District of Illinois on behalf of purchasers of Salton, Inc.
(NYSE: SFP) publicly traded securities during the period between
November 11, 2002 and May 11, 2004, inclusive (the "Class
Period").
The complaint charges that Salton, Leonhard Dreimann and David
M. Mulder violated Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by
issuing a series of material misrepresentations to the market
between November 11, 2002 and May 11, 2004, about the Company's
financial outlook, thereby artificially inflating the price of
Salton stock.
More specifically, the Complaint alleges that the Company failed
to disclose and misrepresented the following material adverse
facts which were known to defendants or recklessly disregarded
by them:
(1) the Company's core competency, the marketing and
distribution of grills under the Foreman brand name,
was severely undermined by the antitrust lawsuits that
precluded the Company from continuing with its
profitable, but illegal, pricing scheme;
(2) as a result of the foregoing the Company's historically
profitable domestic business continued to erode,
forcing Salton to incur an additional $8 million in
retailer advertising and promotional expenses, which
were required to secure and regain shelf space; and
(3) due to the deterioration of its business model Salton
violated the Company's debt agreements.
On May 10, 2004, Salton, after the close of trading, announced
its results for the third fiscal quarter ended March 27, 2004.
Salton reported a loss of $58.0 million or ($5.14 per share),
versus a loss of $12.1 million or ($1.08 per share) for the
third quarter of fiscal 2003. News of this shocked the market.
Shares of Salton fell $3.34 per share or 49.93 percent on May
10, 2004 to close at $3.35 per share.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
SHAW GROUP: Marc Henzel Lodges Securities Fraud Suit in E.D. LA
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Eastern
District of Louisiana on behalf of purchasers of the securities
of The Shaw Group, Inc. (NYSE: SGR) between October 19, 2000 and
June 10, 2004, inclusive, seeking to pursue remedies under the
Securities Exchange Act of 1934.
Shaw describes itself as a provider of complete piping systems
and comprehensive engineering procurement and construction
services to the power industry. The complaint alleges that,
during the Class Period, defendants' publicly disseminated
results of Shaw's operations and financial condition contained
artificially inflated earnings and revenues, assets and income.
Such results were not prepared or reported in accordance with
Generally Accepted Accounting Principles and deceived investors
as to the Company's true performance, thereby artificially
inflating the price of Shaw securities during the Class Period.
Specifically, the complaint alleges that the defendants
artificially inflated the Company's reported revenues and
earnings by improperly establishing and drawing on reserve
accounts established in connection with a series of large
acquisitions, including the acquisition of Stone & Webster Inc.
in July 2000 and the acquisition of The IT Group in May 2002.
The complaint further alleges that defendants prematurely
recognized revenue in violation of Shaw's own purported policies
and Generally Accepted Accounting Principles, and that
defendants failed to disclose the extent to which Shaw was
vulnerable to changes in power generation market conditions.
The truth emerged after the market closed on June 10, 2004 when
Shaw announced that it had been notified by the SEC that the SEC
was conducting an inquiry that appeared to focus on the
Company's accounting for acquisitions. On this news, Shaw stock,
which had traded at a class period high of $62.37, fell 12.4%
from a closing price of $12.28 on June 10, 2004 to a closing
price of $10.75 on the next trading day (June 14, 2004) on more
than four times normal volume. During the class period, Company
insiders sold Shaw shares at prices artificially inflated by
defendants' materially false and misleading statements, for
proceeds in excess of $80 million. Additionally, during the
Class Period, Shaw sold $490 million convertible zero coupon,
liquid yield option notes.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
SPEAR & JACKSON: Marc Henzel Lodges Securities Suit in S.D. FL
--------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Southern
District of Florida on behalf of purchasers of Spear & Jackson,
Inc. (OTC:SJCK.OB) publicly traded securities during the period
between July 14, 2003 and April 15, 2004 (the "Class Period").
The complaint charges SJCK and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. SJCK manufactures and distributes tools, garden tools,
metrology equipment, woodworking tools and magnetic equipment.
The complaint alleges that during the Class Period defendants
disseminated materially false and misleading information to the
investing public that artificially inflated SJCK's share price.
According to the complaint, the true facts which were known by
each of the defendants, but concealed from the investing public
during the Class Period, were as follows:
(1) that defendants orchestrated a "pump-and dump" scheme
to manipulate the share price of SJCK stock by issuing
false information to tout SJCK stock to registered
representatives and broker-dealers around the country;
(2) that defendants used nominee companies based in the
British Virgin Islands illegally to obtain over 1.2
million shares of SJCK stock during 2002, some of which
was obtained through the filing of a fraudulent Form S-
8 registration statement;
(3) that the Company's repurchase of shares was not in
compliance with applicable rules;
(4) that the Company never had any intention of making open
market purchases as suggested in its January 16, 2004
release; and
(5) that the Company was not on track to achieve earnings
of $0.50 to $0.55 per share for 2004.
As a result of the defendants' false statements, SJCK's stock
price traded at inflated levels during the Class Period,
increasing to as high as $9.55 on July 15, 2003, whereby the
Company's top officers and directors sold more than $3 million
worth of their own shares.
On April 16, 2004, it was announced that U.S. securities
regulators had sued SJCK Chief Executive Dennis Crowley,
alleging he used false information to boost the Company's stock
price while secretly selling $3 million in shares. SJCK shares
fell $0.52 to $1.85 on this news.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
SPX CORPORATION: Marc Henzel Lodges Securities Suit in W.D. NC
--------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Western
District of North Carolina on behalf of purchasers of the
securities of SPX Corporation (NYSE: SPW) between July 28, 2003
and February 26, 2004, inclusive (the "Class Period"), seeking
to pursue remedies under the Securities Exchange Act of 1934.
The complaint charges SPX, John B. Blystone, Patrick J. O'leary,
Ronald L. Winowieck, Christopher J. Kearney, and Lewis M. Kling
with violations of Section 10(b) and 20(a) of the Securities
Exchange Act of 1934, and Rule 10b-5 promulgated thereunder.
Throughout the Class Period, defendants issued false and
misleading projections of the Company's fiscal year 2003
earnings per share. Defendants emphasized increased free cash
flow and earnings per share throughout the Class Period.
Defendants failed to disclose that these results were only made
possible through a last minute one-time gain resulting from a
legal settlement, and were not reflective of the deteriorating
underlying business operations of the Company. As a result,
defendants' Class Period statements were materially false and
misleading as to the profitability of its current organic
operations and the Company's future earnings. SPX stock
plummeted 21%, on usually high trading volume of 16 million
shares, from its February 26, 2004 close of $53.30 per share to
a close of $42.00 on February 27, 2004.
Throughout the Class Period, defendants issued public statements
assuring investors that SPX was on track to meet its earnings
per share projections, when in fact, defendants knew the
Company's financial growth had materially declined. While the
investing public was shielded from the truth of the Company's
poor earnings prospects, in January and February 2004 Defendant
and CEO Blystone sold significant portions of his own SPX
holdings, amounting to over $41 million in SPX stock. On
February 27, 2004 defendants filed the 2003 Form 10-K with the
SEC, revealing the true financial condition of SPX, and that the
Company was only able to meet its EPS projections through
inclusion of a one-time gain.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
TITAN CORPORATION: Marc Henzel Lodges Securities Suit in S.D. CA
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for Southern District
of California on behalf of all purchasers of the common stock of
The Titan Corporation (NYSE: TTN) from July 24, 2003 through
March 22, 2004, inclusive (the "Class Period").
The Complaint alleges that Titan, Gene Ray, Mark Sopp, and
Deanna Lund violated Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The
Complaint alleges that defendants made material misstatements
with respect to the Company's financial results.
More specifically, the Complaint alleges that defendants failed
to disclose and indicate the following in defendants' effort to
get its merger with Lockheed Martin Corporation ("Lockheed
Martin") approved by shareholders and various regulators:
(1) that foreign consultants for Titan were engaging in
questionable and potentially illegal activities;
(2) that foreign consultants for Titan made improper
payments to foreign government officials in violation
of Foreign Corrupt Practices Act;
(3) that Titan improperly accounted for the funds used in
these payments; and
(4) as a result, Titan's improper accounting for such
payments allowed Titan to enter into a definitive
merger agreement with Lockheed Martin.
On February 13, 2004, Titan announced that representatives of
Lockheed Martin and Titan recently initiated meetings with the
Department of Justice and the Securities and Exchange Commission
to advise of an internal review relating to certain agreements
between Titan and international consultants and related payments
in foreign countries.
On March 5, 2004, Lockheed Martin announced that it had learned
of allegations that improper payments were made, or items of
value were provided, by consultants for Titan or its
subsidiaries to foreign officials. Also on March 5, 2004, Titan
confirmed that it had learned of allegations that improper
payments were made, or items of value were provided, by
consultants for the company or its subsidiaries to foreign
officials. The allegations were identified as part of an
ongoing review conducted with Lockheed Martin of payments to
Titan's international consultants in connection with the
proposed acquisition of Titan by Lockheed Martin.
News of this shocked the market with shares of Titan falling
$1.82 per share to close at $19.11 per share.
On March 22, 2004, The Wall Street Journal reported that
internal investigators of both Titan and Lockheed Martin had
found that Titan had made potentially improper payments
oversees. According to the article, Titan made millions of
dollars in suspicious payments, some as recently as last year,
while competing for business in Africa, the Middle East, and
Asia. Moreover, the article reported that the Company was
scheduled to hold talks with the Department of Justice about a
possible plea agreement. On news of this shares of Titan fell
$0.43 per share to close at $19.73 per share.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
UNIVERSAL HEALTH: Marc Henzel Lodges Securities Suit in E.D. PA
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Eastern
District of Pennsylvania on behalf of purchasers of the
securities of Universal Health Services, Inc. (NYSE: UHS)
between July 21, 2003 and February 27, 2004, inclusive, seeking
to pursue remedies under the Securities Exchange Act of 1934.
The action, numbered 04 cv 1233 is pending in the United States
District Court for the Eastern District of Pennsylvania against
defendants Universal Health and certain of its senior executive
officers. According to the complaint, defendants violated
sections 10(b) and 20(a) of the Securities Exchange Act of 1934,
and Rule 10b-5 promulgated thereunder, by issuing a series of
material misrepresentations to the market during the Class
Period.
The complaint alleges that defendants materially misled the
investing public, thereby inflating the price of UHS stock, by
publicly issuing false and misleading statements and omitting to
disclose material facts necessary to make defendants' statements
as set forth herein, not false and misleading. These statements
and omissions were materially false and misleading in that they
failed to disclose material adverse information and
misrepresented the truth about the Company, its financial
performance, earnings momentum, and future business prospects,
including:
(1) UHS was unable to compete effectively in key markets;
(2) UHS hospitals were losing better-paying patients to
their competitors and the proportion of uninsured
patients, who constitute a greater credit risk, was
increasing;
(3) due to poor case management, certain UHS hospitals were
unable to effectively manage their caseloads and, as a
consequence, had experienced an increase in the number
of patients who remained hospitalized at UHS facilities
beyond the period reimbursable by Medicaid and Medicare
and that, therefore, the hospitals were not receiving
full payments for the services provided;
(4) defendants failed to properly write-off uncollectible
receivables, and materially overstated UHS's financial
results by maintaining known uncollectible accounts as
assets during the Class Period;
(5) the Company's allowance for doubtful accounts was
insufficient and, as a result, the Company's reported
operating income was artificially inflated; and
(6) the Company's reported operating income was not a true
measure of the Company's operating performance because
defendants failed to properly deduct from operating
income the appropriate allowance for doubtful accounts.
On March 1, 2004, before the markets opened, defendants shocked
investors by withdrawing their guidance for 2004 and announcing
that earnings per diluted share for the three-month period
ending March 31, 2004 could be as much as 25% lower than the
$0.84 per diluted share recorded in the same period in the prior
year. Defendants attributed the decline in substantial part to
UHS's inability to compete effectively in two key markets in
Nevada and Texas, erosion of UHS's market share, poor case
management resulting in an increase in the length of patient
stays beyond the period reimbursable by Medicaid or Medicare,
and a pronounced increase in bad debt from uninsured patients.
The Company which had already increased its provision for
doubtful accounts in the fourth quarter of 2003 to $74.3
million, or 7.8% of revenues, as compared to $58 million, or
6.9% of revenues, during the prior year's fourth quarter, said
that bad debt in 2004 was likely to exceed the Company's
previously reported expectation of 9.5% of revenues. On this
news, the price of UHS shares fell $9.05, or 17%, to $44.88.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com.
VERDISYS INC.: Marc Henzel Lodges Securities Suit in S.D. Texas
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Southern
District of Texas, Houston Division, on behalf of purchasers of
the securities of Verdisys, Inc. (OTC: VDYS.PK) between August
20, 2003 and March 9, 2004, inclusive.
The complaint charges Verdisys and its former Chief Executive
Officer, Dan Williams, and the Company's former Chief Financial
Officer, Andrew Wilson, 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 defendants
made materially misstatements with respect to the Company's
financial results.
More specifically, the Complaint alleges that defendants failed
to disclose and indicate:
(1) that the Company had materially overstated its net
income and earnings per share;
(2) that defendants prematurely recognized revenue from
contracts between the Company, Edge Capital Group, Inc.
and Energy 2000 in violation of GAAP and its own
revenue recognition policy;
(3) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company; and
(4) that as result of recognizing revenue prematurely, the
Company's financial results were inflated at all
relevant times.
On March 10, 2004, the United States Securities and Exchange
Commission ("SEC") announced the temporary suspension of trading
of the securities of Verdisys at 9:30 a.m. on March 10, 2004,
and terminating at 11:59 p.m. on March 23, 2004. The SEC further
stated that temporarily suspending trading in the securities of
Verdisys was because of questions that had been raised about the
accuracy and adequacy of publicly disseminated information,
including assertions made in Commission filings, concerning,
among other things, the company's business operations related to
its lateral drilling services and the company's anticipated and
actual revenues.
On March 15, 2004, the Company announced that it was conducting
an ongoing internal investigation that began in December 2003
into the Company's activities in the second and third quarters
of 2003. The Company had thus far been unable to determine
whether certain radial drilling services were actually provided
to two of Verdisys' customers, Edge Capital Group, Inc. and
Energy 2000 NGC, Inc. in the Monroe field in Louisiana.
Accordingly, the Company expected to restate its interim 2003
financial statements to reverse $230,000 of revenue in the
quarter ended June 30, 2003, and $605,000 of revenue in the
quarter ended September 30, 2003, until such a time that it
could confirm such services were performed.
When shares of Verdisys resumed trading on March 24, 2004, they
plummeted $2.10 per share, or 35.9%, on unusually high volume to
close at $3.75 per share.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
WAVE SYSTEMS: Marc Henzel Lodges Securities Fraud Lawsuit in MA
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the District of
Massachusetts on behalf of purchasers of Wave Systems
Corporation (NASDAQ: WAVX) common stock during the period
between July 31, 2003 and February 2, 2004.
The complaint charges Wave and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Wave creates technologies and services to secure and sell
digital information. The Company's EMBASSY technology is a
hardware and software-based device that enables secure
transaction processing and distributed information metering in
users' personal computers.
The complaint alleges that during the Class Period, defendants
issued materially false and misleading statements to the
investing public to inflate the Company's shares by associating
the Company "publicly" with two of the World's biggest
technology companies -- Intel and IBM. With the "appearance" of
two new separate revenue streams, defendants sought to, and did,
raise monies via a private placement for the Company, and
certain of the Company's officers and directors pocketed over
$1.5 million in insider trading proceeds.
On December 18, 2003, the Company issued a press release in
which it announced that the SEC was investigating certain public
statements made by Wave in August 2003, as well as certain
insider selling that occurred around the same time. Defendants'
public statements during the Class Period failed to disclose
that:
(1) the Company's IBM announcement dated August 4, 2003
would result in no direct revenue to the Company;
(2) the Company's Intel announcement dated July 31, 2003
was actually immaterial and would not generate any
revenue to the Company until 2004, if ever;
(3) the so-called Intel contract did not require Intel to
purchase even one piece of software; and
(4) the number of Trusted Platform Module-enabled
motherboards shipped over the course of 2003 and 2004
would be de minimis.
The complaint alleges that, as a result of the defendants' false
statements, Wave stock traded at inflated levels during the
Class Period, increasing to as high as $4.53 per share on August
5, 2003, whereby the Company and the Company's top officers and
directors sold more than $8.6 million worth of their own shares.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
WHITEHALL JEWELLERS: Marc Henzel Lodges Securities Lawsuit in IL
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action filed in the United States District Court for the
Northern District of Illinois on behalf of purchasers of
Whitehall Jewellers, Inc. (NYSE:JWL) common stock during the
period between November 19, 2001 and December 10, 2003.
The complaint charges Whitehall and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Whitehall is a specialty retailer of fine jewelry offering
an in-depth selection in the following key categories: diamond,
gold, precious and semi-precious jewelry.
The complaint alleges that during the Class Period, defendants
caused Whitehall's shares to trade at artificially inflated
levels through the issuance of false and misleading financial
statements. As a result of this inflation, defendants were able
to complete an insider trading scheme, raising proceeds of $5.3
million.
On November 6, 2003, it was announced that Whitehall had
received "a subpoena from the U.S. Securities and Exchange
Commission as part of a formal investigation into a complaint
that Whitehall aided a former supplier in an accounting fraud."
On December 11, 2003, it was announced that Whitehall had fired
its Chief Financial Officer and would delay reporting results
for its fiscal third quarter, and later that month that
Whitehall would be restating its "financial statements for
fiscal 2000, 2001 and 2002, including the 2002 quarters then
ended, and the first two quarters ended July 31, 2003."
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
*********
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Copyright 2004. All rights reserved. ISSN 1525-2272.
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