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C L A S S A C T I O N R E P O R T E R
Wednesday, July 7, 2004, Vol. 6, No. 133
Headlines
AMERITECH: IL Utility Regulator Challenges $12.4M SBC Settlement
AMF SECURITIES: Lawsuit Settlement Hearing Set September 9, 2004
AUSTRALIA: NSW Court Orders Aristocrat To Pay 90% In Legal Costs
BEST BUY: Shareholders Lodge Securities Fraud Suits in MN Court
BROWN-FORMAN CORPORATION: Sued Over Alcohol Beverage Advertising
CALIFORNIA: Judge Dismisses Lawsuit Over Unlicensed Contractors
CANADA: Retiree Lawsuit V. Toronto Granted Class Certification
CHATTEM INC.: Reaches Settlement For Dexatrim PPA Lawsuits in WA
GTECH HOLDINGS: Settlement Fairness Hearing Set Sept. 2004 in RI
H&R BLOCK: Continues To Defend V. Refund Anticipation Loan Suits
H&R BLOCK: Discovery Proceeds in Consumer Fraud Suit in IL Court
MORGAN STANLEY: EEOC Sex Discrimination Suit Proceeds To Trial
NEW HAMPSHIRE: Lawyers File Lawsuit V. Lenders, Insurance Firms
SOLECTRON CORPORATION: Plaintiffs Seek Stock Suit Certification
TRI-STATE CREMATORY: Fails To Reach Settlement, Trial to Proceed
Meetings, Conferences & Seminars
* Scheduled Events for Class Action Professionals
* Online Teleconferences
New Securities Fraud Cases
99 CENTS: Lerach Coughlin Lodges Securities Lawsuit in C.D. CA
ABATIX CORPORATION: Murray Frank Lodges Securities Suit in TX
BEA SYSTEMS: Geller Rudman Lodges Securities Lawsuit in N.D. CA
BEA SYSTEMS: Schiffrin & Barroway Lodges Securities Suit in CA
BUSINESS OBJECTS: Marc Henzel Lodges Securities Suit in S.D. CA
CENTRAL FREIGHT: Marc Henzel Lodges Securities Fraud suit in TX
DESCARTES SYSTEMS: Wolf Haldenstein Lodges Securities Suit in NY
GLOBAL CROSSING: Bernstein Liebhard Lodges Securities Suit in NY
HANGER ORTHOPEDIC: Schiffrin & Barroway Lodges NY Stock Suit
IBIS TECHNOLOGY: Marc Henzel Lodges Securities Suit in MA Court
ITT EDUCATIONAL: Marc Henzel Lodges Securities Fraud Suit in IN
LEXAR MEDIA: Murray Frank Launches Securities Lawsuit in N.D. CA
LIQUIDMETAL TECHNOLOGIES: Marc Henzel Lodges CA Securities Suit
MCDONALD'S CORPORATION: Marc Henzel Lodges Securities Suit in IL
MERIX CORPORATION: Stoll Stoll Lodges Securities Lawsuit in OR
MERIX CORPORATION: Schiffrin & Barroway Files Stock Suit in OR
POZEN INC.: Schiffrin & Barroway Files Amended Stock Suit in NC
SPSS INC.: Marc Henzel Lodges Securities Fraud Suit in N.D. IL
TOPAZ GROUP: Marc Henzel Commences Securities Suit in WA Court
UICI: Marc Henzel Lodges Securities Fraud Lawsuit in N.D. Texas
*********
AMERITECH: IL Utility Regulator Challenges $12.4M SBC Settlement
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The Illinois Citizens Utility Board succeeded at the June 28
hearing in postponing final approval of a $12.4 million class-
action settlement on behalf of Illinois residents who signed up
for Ameritech's "SimpliFive" local calling program, which ended
up costing more money for nearly half of those who participated,
the St. Louis Post-Dispatch reports.
SBC, which now owns Ameritech, struck the settlement in February
with the class-action firm of Korein Tillery in response to a
suit filed three years ago in Madison County. According to the
terms, class members who are still SBC customers would get a $25
credit on their phone bills. Former Ameritech customers would
get a $25 check. Korein Tillery would collect about $1.9 million
in fees and expenses.
The Citizens Utility Board has no gripe with the $25 offered to
class members. But the board's lawyers argued last week that the
settlement's claim form will probably deter most customers from
collecting their fair share. That's because the customers are
required to sign statements "under oath and penalty of perjury"
that they believe they were charged more under SimpliFive than
they would have been charged under Ameritech's basic rates.
The entire reason the program wasn't fair was that customers
couldn't tell if they were paying more or not, Robert Kelter,
the board's director of litigation told St. Louis Post-Dispatch.
Circuit Judge Nicholas Byron heard all arguments last week at
the hearing. He read out loud a letter he had received from the
chairman of the Illinois Commerce Commission, also stating
concerns about the settlement. Then Byron continued the hearing
until July 15.
According to a transcript of the June 28 hearing, Judge Byron
said, "I can see this person's concern," Byron said, "I mean,
for 25 bucks, to be that assertive in your claim I think is a
little too onerous." Judge Byron added later: "For 25 bucks, I
don't know that I would want to sign something like this."
On Friday, a spokeswoman for SBC, which took over Ameritech in
1999, defended the settlement as fair and the language in the
release statement as typical for class-action suits.
In settling the suit, the company denied any efforts to mislead
its customers. The company stopped selling the SimpliFive plan
in 2001 and discontinued it altogether the following year,
spokeswoman Blair Klein told the St. Louis Post-Dispatch.
AMF SECURITIES: Lawsuit Settlement Hearing Set September 9, 2004
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The United States District Court for the Southern District of
New York will hold a fairness hearing for the proposed
settlement for the In re AMF Bowling Securities Litigation on
behalf of all persons involved in the aforementioned litigation.
The proposed settlement amount is $12 million in cash.
Previously, Plaintiffs achieved a proposed $8 million settlement
with the two Individual Defendants. Together, these two proposed
settlement are referred to as the "Settlements."
The hearing on the first settlement, originally scheduled for
June 28, 2004, is adjourned to September 9, 2004 along with the
second settlement. The hearing will be held before the the
Honorable P. Kevin Castel in Courtroom 12C at the United States
District Courthouse, 500 Pearl St., New York, New York 10007, at
10:00am, September 9, 2004.
For more details, contact Todd S. Collins of Berger & Montague,
P.C. by Mail: 1622 Locus Street, Philadelphia, PA 19103 or by
Phone: (215) 875-3000 OR Deborah R. Gross of The Law Offices of
Bernard M. Gross by Mail: 1515 Locus Street, Second Floor,
Philadelphia, PA 10102 or by Phone: (215) 561-3600
AUSTRALIA: NSW Court Orders Aristocrat To Pay 90% In Legal Costs
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Aristocrat Leisure will pay up to 90% in legal expenses for the
case brought against it by former chief executive Des Randall,
the Sydney Morning Herald newspaper reports.
A spokeswoman for the poker machine maker confirmed that even
though Mr. Randall lost his claim of $12 million for breach of
contract, the NSW Supreme Court has ruled he only has to pay 10
per cent of Aristocrat's legal fees.
Judge Clifford Einstein has also ordered Mr. Randall to pay for
his own legal costs.
Mr. Randall lost his job in April last year, two months after a
shock profit warning caused Aristocrat shares to plunge, wiping
more than $1 billion off the company's value. Last month the
court found Aristocrat was right to fire him.
Justice Einstein ruled that Mr. Randall knew about the problems
that led to the profit warning as early as December 2002 and
should have disclosed this to the board. Justice Einstein also
ruled that Mr. Randall misrepresented his position to the media
and to analysts in regard to what he knew.
Though not awarded the $12 million claims, Mr. Randall was found
to be eligible for a $900,000 performance bonus for 2002 and
$400,000 to cover the cost of relocating to the United States.
The NSW court ruling though does not mean that the company is
out of harm's way in terms of legal issues since, 500
shareholders are seeking an estimated $100 million in a class
action against Aristocrat over last year's profit warning and
share price plunge, where the shares crashed from above $4.50 to
just 89 cents in just three months.
BEST BUY: Shareholders Lodge Securities Fraud Suits in MN Court
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Best Buy Co., Inc., its chairman and chief executive officer
faces several securities class actions filed in the United
States District Court for the District of Minnesota, on behalf
of persons who purchased the Company's securities between
January 9, 2002, and August 7, 2002.
The plaintiffs allege that the defendants violated Sections
10(b) and 20(a) of the Exchange Act, and Rule 10b-5 promulgated
thereunder, by making material misrepresentations between
January 9, 2002, and August 7, 2002, which resulted in
artificially inflated prices of the Company's common stock. The
plaintiffs seek compensatory damages, costs and expenses.
BROWN-FORMAN CORPORATION: Sued Over Alcohol Beverage Advertising
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Brown-Forman Corporation and many other manufacturers of
spirits, wine and beer are defendants in a series of essentially
similar class action lawsuits seeking damages and injunctive
relief over alleged marketing of beverage alcohol to underage
consumers. Five lawsuits have been filed to date, the first
three against eight defendants, including the Company:
(1) "Hakki v. Adolph Coors Company, et al.," U.S. District
Court for the District of Columbia, No. 1:03cv02621
(GK), filed November 2003;
(2) "Kreft v. Zima Beverage Co., et al.," District Court,
Jefferson County, Colorado, No. 04cv1827, filed
December 2003; and
(3) "Wilson v. Zima Company, et.al.," U.S. District Court
for the Western District of North Carolina, Charlotte
Division, No. 3:04cv141, filed January 2004
Two virtually identical suits with allegations similar to those
in the first three lawsuits were filed in Cleveland, Ohio, in
April and June 2004, respectively, against the original eight
defendants as well as an additional nine manufacturers of
spirits and beer, styled "Eisenberg v. Anheuser-Busch, U.S.
District Court for the District of Northern Ohio, No.
1:04cv1081," and "Tully v. Anheuser-Busch, U.S. District Court
for the District of Northern Ohio, No. 1:04cv1101.
In addition, the Company has received a pre-lawsuit notice under
the California Consumer Protection Act indicating that the same
lawyers intend to file a lawsuit there against many industry
defendants, including the Company, presumably on the same facts
and legal theories.
The suits allege that the defendants have engaged in deceptive
marketing practices and schemes targeted at underage consumers,
negligently marketed their products to the underage, and
fraudulently concealed their alleged misconduct. Plaintiffs
seek class action certification on behalf of:
(i) a guardian class consisting of all persons who were or
are parents of children whose funds were used to
purchase beverage alcohol marketed by the defendants
which were consumed without their prior knowledge by
their children under the age of 21 during the period
1982 to present; and
(ii) an injunctive class consisting of the parents
and guardians of all children currently under the age
of 21.
The lawsuits seek:
(a) a finding that defendants engaged in a deceptive
scheme to market alcoholic beverages to underage
persons and an injunction against such alleged
practices;
(b) disgorgement and refund to the guardian class of all
proceeds resulting from sales to the underage since
1982; and
(c) judgment to each guardian class member for a trebled
award of actual damages, punitive damages, and
attorneys fees
The lawsuits, either collectively or individually, if ultimately
successful, represent significant financial exposure. The
Company denies that it intentionally markets its beverage
alcohol products to minors and denies that its advertising is
illegal, the Company said in a disclosure to the Securities and
Exchange Commission.
CALIFORNIA: Judge Dismisses Lawsuit Over Unlicensed Contractors
---------------------------------------------------------------
A federal judge in San Diego has dismissed a class action
lawsuit initiated by drunken-driving suspects, who alleged that
law enforcement authorities improperly used unlicensed
contractors to draw blood samples, the AP Wire reports.
The drivers claimed authorities violated state laws and that the
cases against them should be thrown out. Lawyers for the drivers
also claimed that authorities violated the rights of more than
10,000 suspects by using licensed workers to draw the blood
samples.
Government lawyers said last week's ruling by U.S. District
Judge William Q. Hayes should end the legal battle over blood
drawn by the contractors. But Mary Frances Prevost, a lawyer for
the drunken-driving suspects, told AP Wire that she would
continue fighting.
Officials conceded the workers were not licensed but said that
was a technical violation that didn't affect the validity of the
charges.
CANADA: Retiree Lawsuit V. Toronto Granted Class Certification
--------------------------------------------------------------
Last year, retired Metro management employees initiated a
lawsuit against the City of Toronto regarding the level of
prescription drug coverage and out-of-province medical coverage
available to retirees over the age of 65.
Under the Class Proceedings Act, the plaintiffs, John Markle and
Jack Horsley along with the City of Toronto have agreed that the
lawsuit should proceed as a class proceeding. Lawyers for the
City and the plaintiffs appeared before Justice Nordheimer in
court and the class of former Metro management employees was
formally certified on consent pursuant to the class proceedings
legislation. The certification order is not a decision about the
merits of the case. The matter will now proceed as a civil
action.
In the plaintiffs' action they claim that a by-law passed by the
Council of the former Municipality of Metropolitan Toronto
created a benefit plan for retirees post age-65 that included
drug coverage costs not covered by the Ontario Drug Benefit Plan
and health coverage outside of Canada.
The City of Toronto states that these benefits are not now and
never have been covered under the post age-65-retiree benefits
plan.
All affected retirees will receive a detailed notice telling
them about the class action and how it may affect them. All
individuals will be bound by the ultimate decision of the Court
on the merits of the case except those who opt out between now
and October 31, 2004.
CHATTEM INC.: Reaches Settlement For Dexatrim PPA Lawsuits in WA
----------------------------------------------------------------
Final fairness hearing for the settlement of the class action
filed against Chattem, Inc. in the United States District Court
for the Western District of Washington, styled IN RE
PHENYLPROPANOLAMINE (PPA) PRODUCTS LIABILITY LITIGATION, MDL
1407, is scheduled for August 26,2004.
As of June 30, 2004, the Company has been named as a defendant
in approximately 345 lawsuits involving claims by approximately
680 plaintiffs alleging that the plaintiffs were injured as a
result of ingestion of products containing phenylpropanolamine
(PPA), which was an active ingredient in most of the Company's
DEXATRIM products until November 2000. Most of the lawsuits
seek an unspecified amount of compensatory and exemplary damages
or punitive damages.
The lawsuits that are federal cases were later consolidated into
the present lawsuit and filed before United States District
Judge Barbara Jacobs Rothstein. The remaining cases are state
court cases that have been filed in a number of different
states.
The Company believes that approximately 203 or approximately 59%
of the existing lawsuits in which it is named as a defendant
represent cases involving alleged injuries by products
manufactured and sold prior to its acquisition of DEXATRIM in
December 1998. The Company has been defended in these lawsuits
on the basis of indemnification obligations assumed by The
DELACO Company, Inc., successor to Thompson Medical Company,
Inc., which owned DEXATRIM prior to December 1998.
DELACO maintains product liability insurance coverage for
products manufactured and sold prior to December 1998 with
annual limits of coverage and has an excess liability policy but
otherwise has only nominal assets. The Company stated in a
regulatory filing that it understands that DELACO's insurance
carriers are disputing their responsibility for such coverage
and are engaged in settlement discussions with DELACO.
On February 12, 2004, DELACO filed a Chapter 11 bankruptcy
petition in the United States Bankruptcy Court for the Southern
District of New York. Accordingly, it is uncertain whether
DELACO will be able to indemnify the Company for claims arising
from products manufactured and sold prior to the Company's
acquisition of DEXATRIM in December 1998 and even if it is able
to do so, it is unlikely that DELACO will be able to indemnify
the Company beyond its insurance coverage.
In the approximately 203 cases that have been filed against the
Company for products manufactured and sold prior to December
1998, approximately half of the plaintiffs are in cases filed in
states that the Company believes do not under current law impose
liability upon a successor. The remaining plaintiffs are in
cases filed in states that may in some circumstances permit
liability against a successor. However, although there can be
no assurances, the Company does not believe that successor
liability would be imposed against it in these cases.
As of June 30, 2004, in the approximately 142 lawsuits the
Company is defending, approximately 173 plaintiffs specifically
allege ingestion of DEXATRIM. The remaining plaintiffs either
do not specifically allege ingestion of DEXATRIM or have sued
multiple manufacturers or sellers of products containing PPA
without identifying the products they ingested.
On December 19, 2003, the Company entered into a memorandum of
understanding with the Plaintiffs' Steering Committee (PSC) in
IN RE PHENYLPROPANOLAMINE ("PPA") PRODUCTS LIABILITY LITIGATION,
MDL 1407. The Memorandum of Understanding memorialized certain
settlement terms concerning lawsuits relating to DEXATRIM
products containing PPA.
On April 13, 2004, the Company entered into a class action
settlement agreement with representatives of the plaintiffs'
settlement class. The court granted preliminary approval of the
class action settlement on April 23, 2004. The class action
settlement agreement is generally consistent with the terms of
and supercedes the Memorandum of Understanding and provides for
a national class action settlement of all DEXATRIM PPA claims.
The class action settlement is subject to final approval by the
court at a fairness hearing currently scheduled for August 26,
2004.
In accordance with the terms of the DEXATRIM class action
settlement agreement, $60,885 has been funded into an initial
settlement trust from the Company's first three layers of
insurance coverage. The Company has published notice of the
final settlement and details as to the manner in which claims
can be submitted. The deadline for submission of all claims is
July 7, 2004. If the final settlement is approved by the court,
claims submitted in the class settlement would be valued
pursuant to an agreed upon settlement matrix that is designed to
evaluate and determine the settlement value of each claim. To
the extent the amount in the initial settlement trust is
ultimately insufficient to fully fund the settlement, the
Company will be required to make additional contributions to the
settlement trust in the future.
Based upon the Memorandum of Understanding and the settlement
matrix, Judge Rothstein entered a stay of discovery in all
federal court DEXATRIM PPA cases which allowed the Company to
negotiate the class action settlement agreement and file its
class action settlement. Approximately 70% of its cases are
included in the multi-district litigation, or MDL. The Company
expects most of its cases pending in state courts will join in
the settlement.
GTECH HOLDINGS: Settlement Fairness Hearing Set Sept. 2004 in RI
----------------------------------------------------------------
Final fairness hearing for the settlement of the securities
class action filed against GTECH Holdings Corporation is set for
September 2004 in the United States District Court of Rhode
Island. The suit, styled "Sandra Kafenbaum and Steven Schulman,
individually and on behalf of all others similar situated v.
GTECH Holdings Corporation, et al.," also names as defendants:
(1) William Y. O'Connor, former Chairman and Chief
Executive Officer,
(2) Steven P. Nowick, former President and Chief Operating
Officer, and
(3) W. Bruce Turner, former Chairman and current President
and Chief Executive Officer
The Company has recently entered into an agreement with
plaintiffs to settle this class action on terms that would
require payment by us of amounts that, after taking into account
certain insurance proceeds that the Company expects to receive,
will not be material to its financial condition or results of
operation. Final settlement is subject to court approval after
a fairness hearing at which any objectors to the settlement will
be provided the opportunity to present their views.
H&R BLOCK: Continues To Defend V. Refund Anticipation Loan Suits
----------------------------------------------------------------
H&R Block, Inc. continues to face several lawsuits throughout
the country regarding its refund anticipation loan (RAL)
programs. Plaintiffs in the RAL Cases have alleged, among
other things:
(1) that disclosures in the RAL applications were
inadequate, misleading and untimely;
(2) that the RAL interest rates were usurious and
unconscionable;
(3) that the Company did not disclose that it would receive
part of the finance charges paid by the customer for
such loans;
(4) breach of state laws on credit service organizations;
(5) breach of contract;
(6) unjust enrichment;
(7) unfair and deceptive acts or practices;
(8) violations of the Racketeer Influenced and Corrupt
Organizations act;
(9) violations of the Fair Debt Collection Practices Act;
and
(10) that the Company owes, and breached, a fiduciary duty
to its customers in connection with the RAL program.
In many of the RAL Cases, the plaintiffs seek to proceed on
behalf of a class of similarly situated RAL customers, and in
certain instances the courts have allowed the cases to proceed
as class actions. In other cases, courts have held that
plaintiffs must pursue their claims on an individual basis, and
may not proceed as a class action. The amounts claimed in the
RAL Cases have been very substantial in some instances, the
Company said in a disclosure to the Securities and Exchange
Commission.
The Company has successfully defended against numerous RAL
Cases. Of these RAL Cases, some were dismissed on the Company's
motions for dismissal or summary judgment and others were
dismissed voluntarily by the plaintiffs after denial of class
certification. Other cases were settled, with one settlement
resulting in a pretax expense of $43.5 million in fiscal year
2003.
A suit, styled "Lynne A. Carnegie, et al. v. Household
International, Inc., H&R Block, Inc., et al.," (formerly Joel E.
Zawikowski, et al. v. Beneficial National Bank, H&R Block, Inc.,
Block Financial Corporation, et al.) Case No. 98 C 2178, was
filed in the United States District Court for the Northern
District of Illinois, Eastern Division, on April 18, 1998. On
April 15, 2003, the Court declined to approve a $25.0 million
settlement of this matter, finding that counsel for the
settlement plaintiffs had been inadequate representatives of the
plaintiff class and failed to sustain their burden of showing
that the settlement was fair.
The judge subsequently appointed new counsel for the plaintiffs
who filed an amended complaint and a motion for partial summary
judgment. On March 29, 2004, the court either dismissed or
decertified all of the plaintiffs' claims other than part of one
count alleging violations of the racketeering and conspiracy
provisions of the Racketeer Influenced and Corrupt Organizations
act.
Another suit, styled "Sandra J. Basile, et al. v. H&R Block,
Inc., et al, April Term 1992 Civil Action No. 3246," is pending
in the Court of Common Pleas, First Judicial District of
Pennsylvania, Philadelphia County. The court decertified the
class on December 31, 2003. Plaintiffs have appealed the
decertification.
Another suit, styled "Levon and Geral Mitchell, et al. v. H&R
Block and Ruth R. Wren, Case No. CV-95-2067," was filed in the
Circuit Court of Mobile County, Alabama, on June 13, 1995.
Plaintiffs' motion for class certification was granted, and
defendants have filed a notice of appeal of the certification.
The suit, styled "Deandra D. Cummins, et al. v. H&R Block, Inc.,
et al., Case No. 03-C-134," was filed in the Circuit Court of
Kanawha County, West Virginia, on January 22, 2003. Defendants'
motions to dismiss and to compel arbitration were heard in part
in December 2003, during which the judge discontinued the
hearing and ordered the parties to mediation. Mediation
occurred in February 2004 during which the parties were unable
to reach agreement. Defendants' motion to dismiss and compel
arbitration was subsequently denied.
Another suit, styled "Roy Carbahal, et al. v. Household
International, H&R Block Tax Services, Inc. et al., Case No.
00C0626," is pending in the United States District Court for the
Northern District of Illinois. Defendants' motion to compel
arbitration was granted and the case was dismissed. Plaintiffs
appealed such dismissal. On June 24, 2004, the Seventh Circuit
Court of Appeals affirmed such dismissal.
The suit, styled "Abby Thomas, et al. v. Beneficial National
Bank, H&R Block, Inc., et al., Case No. 4:03-CV-00775 GTE," is
pending in the United States District Court for the Eastern
District of Arkansas, Western Division. Defendants moved to
dismiss and compel arbitration, and plaintiffs thereafter filed
an amended complaint and a motion to remand the case to state
court. On December 8, 2003, the federal court denied
plaintiffs' motion to remand.
Another suit, styled "Lynn Becker v. H&R Block, Case No. CV-
2004-03-1680," was filed on April 15,2004 in the Court of Common
Pleas, Summit County, Ohio. Plaintiffs filed an amended
complaint on May 3, 2004, containing class allegations.
H&R BLOCK: Discovery Proceeds in Consumer Fraud Suit in IL Court
----------------------------------------------------------------
Discovery is proceeding in the class action filed against H&R
Block Tax Services, Inc. in the Circuit Court of Madison County,
Illinois, styled "Lorie J. Marshall, et al. v. H&R Block Tax
Services, Inc., et al., Civil Action 2002L000004.
The suit's claims consist of five counts relating to the
defendants' Peace of Mind program under which the applicable tax
return preparation subsidiary assumes liability for the cost of
additional tax assessments attributable to tax return
preparation error. The plaintiffs allege that defendants' sale
of its Peace of Mind guarantee constitutes statutory fraud by
selling insurance without a license, an unfair trade practice,
by omission and by "cramming" (i.e., charging customers for the
guarantee even though they did not request it and/or did not
want it), and constitutes a breach of fiduciary duty.
In August 2003, the court certified the plaintiff classes as:
(1) all persons who were charged a separate fee for Peace
of Mind by H&R Block; or a defendant H&R Block class
member from January 1, 1997 to final judgment;
(2) all persons who reside in certain class states and who
were charged a separate fee for Peace of Mind by H&R
Block, or a defendant H&R Block class member, and that
was not licensed to sell insurance, from January 1,
1997 to final judgment; and
(3) all persons who had an unsolicited charge for Peace of
Mind posted to their bills by H&R Block or a defendant
H&R Block class member from January 1, 1997, to final
judgment.
Among those excluded from the plaintiff classes are all persons
who received the Peace of Mind guarantee through an H&R Block
Premium office and all persons who reside in Texas and Alabama.
The court also certified a defendant class consisting of any
entity with the names H&R Block or HRB in its name, or otherwise
affiliated or associated with H&R Block Tax Services, Inc., and
which sold or sells the Peace of Mind product. The trial court
subsequently denied the defendants' motion asking the trial
court to certify the class certification issues for
interlocutory appeal.
There is one other putative class action pending against the
Company in Texas that involves the Peace of Mind guarantee.
This case is being tried before the same judge that presided
over the Texas RAL Settlement and involves the same plaintiffs
attorneys that are involved in the Marshall litigation in
Illinois and substantially similar allegations. No class has
been certified in this case.
MORGAN STANLEY: EEOC Sex Discrimination Suit Proceeds To Trial
--------------------------------------------------------------
As a lawsuit brought by the Equal Employment Opportunity
Commission (EEOC) goes to trial, Morgan Stanley may become the
first Wall Street firm to defend itself in court against
allegations of sexual bias, the Bloomberg Online reports.
The commission is pressing claims by former Morgan Stanley bond
seller Allison Schieffelin and more than 300 other women who say
they were paid and promoted less than men at the world's second-
largest securities firm. The EEOC, which spent six years on the
Morgan Stanley case, further claims that conditions for women
have gotten worse at the firm since Schieffelin was fired in
2000 after seeking promotion. Of the 8,731 officials and
managers in Morgan Stanley's U.S. workforce, 35 percent were
women last year, according to its Web site.
According to the Securities Industry Association (SIA), Wall
Street's trade group in Washington, since the EEOC sued New
York-based Morgan Stanley in 2001, the percentage of women
managing directors at Wall Street firms has increased to 19% of
the total from 14 percent. Morgan Stanley, which declined to
provide data on its female managing directors, said women
accounted for 48% of its U.S. workforce last year. That compares
with 37% industry wide.
"There has been an improvement," said Sheila Wellington, former
president of Catalyst, a New York-based research organization
focusing on women in the securities industry. Wellington is now
a professor of management at New York University's Stern School
of Business.
Morgan Stanley faces allegations by the EEOC that women in its
institutional equity division were paid less than men and denied
job opportunities.
NEW HAMPSHIRE: Lawyers File Lawsuit V. Lenders, Insurance Firms
---------------------------------------------------------------
More than a dozen lenders and credit insurance companies have
been targeted by a lawsuit filed by two attorneys, who claim
that they failed to refund insurance premiums to car buyers, as
required by state law, the Union Leader reports.
Edward O'Brien, one of the lawyers who filed the lawsuit told
the Union Leader that, "These cases are going to go away
quickly, and people are going to get their money back and I
think the average person is going to get $150 to $200." He
further stated that, "When people buy cars, the dealership makes
its profit not so much by the price of the car itself but by the
products that the finance and insurance department can sell to
the borrower."
Dealers used to sell credit insurance with about 90 percent of
all vehicle loans. Now only about 20 percent of vehicle loans
are insured.
Credit insurance covers only the amount of the loan. The policy
remains in effect for the life of the loan, usually five years,
and is supposed to pay off the loan if the buyer dies or becomes
disabled during that time. Buyers pay the entire premium in
advance, and the cost is folded into the loan. Sometimes, buyers
don't even know they've bought insurance. Most people pay off
their car loans early, often through refinancing. The borrower
has paid in advance for coverage for the full term of the loan.
Once the loan is paid, the insurance is moot.
According to Mr. O'Brien, state law requires insurance carriers
to refund the balance, called "unearned premiums." Insurance
carriers and car dealers, however, have tended not to go out of
their way to offer refunds, and most customers don't think to
demand it. He also added that even if they remember, people are
likely to assume the matter will be settled as part of their
final balance.
Insurance companies would have no way of knowing when a loan was
paid off unless someone told them. Since 1997, however, New
Hampshire law has required lenders to notify credit insurance
companies when a loan is paid off.
SOLECTRON CORPORATION: Plaintiffs Seek Stock Suit Certification
---------------------------------------------------------------
Plaintiffs asked the United States District Court for the
Northern District of California to grant class certification to
a securities lawsuit filed against Solectron Corporation and
certain of its officers, alleging claims under Section 10(b) and
20(a) of the Securities Exchange Act of 1934, as amended and
Rule 10b-5 promulgated thereunder. The case is entitled "Abrams
v. Solectron Corporation et al., Case No. C-03-0986 CRB."
The complaint alleged that the defendants issued false and
misleading statements in certain press releases and SEC filings
issued between September 17, 2001 and September 26, 2002. In
particular, plaintiff alleged that the defendants failed to
disclose and to properly account for excess and obsolete
inventory in the former Technology Solutions business unit
during the relevant time period.
The Consolidated Amended Complaint, filed September 8, 2003,
alleges an expanded class period of June 18, 2001 through
September 26, 2002, and purports to add a claim for violation of
Section 11 of the Securities Act of 1933, as amended, on behalf
of a putative class of former shareholders of C-MAC Industries,
Inc., who acquired Solectron stock pursuant to the October 19,
2001 Registration Statement filed in connection with Solectron's
acquisition of C-MAC Industries, Inc.
In addition, while the initial complaints focused on alleged
inventory issues at the former Technology Solutions business
unit, the Consolidated Amended Complaint adds allegations of
inadequate disclosure and failure to properly account for excess
and obsolete inventory at Solectron's other business units. The
complaint seeks an unspecified amount of damages on behalf of
the putative class.
On June 14, 2004 the lead plaintiffs filed a Motion for Class
Certification seeking to have the court declare this matter a
class action litigation. The hearing for the Motion for Class
Certification is set for October 1, 2004.
TRI-STATE CREMATORY: Fails To Reach Settlement, Trial to Proceed
----------------------------------------------------------------
A proposed settlement in Rome, Georgia between crematory
operator Ray Brent Marsh, who is accused of stashing hundreds of
bodies instead of cremating them and as many as 1,600 plaintiffs
has ended in failure, the Associated Press reports.
Plaintiff's lawyers told the Associated Press that the recent
development only means that a civil trial for Marsh is to
proceed.
According to Marsh's attorneys, "The $3.5 million settlement,
proposed in March, would not have been valid because the Marsh
family's insurance company will not cover it."
Stuart James, an attorney for the Marsh family also told the
Associated Press that, "I am not surprised that this happened
because it became obvious during negotiations that the
settlement was not workable, I am disappointed and frustrated,
but this was not unexpected."
The trial in the class-action lawsuit against Marsh is now set
for Aug. 23 in U.S. District Court.
Another Marsh attorney McCracken "Ken" Poston told Associated
Press that the insurance company, Georgia Farm Bureau, had
agreed to pay the settlement until the Marsh family's lack of
specific coverage was determined in court.
A criminal trial is scheduled to begin in October for Marsh, who
faces 787 felony counts, including theft by deception, abuse of
a corpse, making false statements and burial service fraud.
More than 330 sets of uncremated human remains from Georgia,
Tennessee and Alabama were found on Marsh's property in Noble in
February 2002.
Meetings, Conferences & Seminars
* Scheduled Events for Class Action Professionals
-------------------------------------------------
July 16, 2004
PRODUCTS LIABILITY
ALI-ABA
Chicago
Contact: 215-243-1614; 800-CLE-NEWS x1614
July 22-23, 2004
ASBESTOS LITIGATION 101 CONFERENCE
Mealey Publications
The Westin Chicago River North, Chicago
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
September 20-21, 2004
REINSURANCE SUMMIT
Mealey Publications
The Ritz-Carlton Boston Common, Boston
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
September 20-21, 2004
NATIONAL ASBESTOS LITIGATION CONFERENCE
Mealey Publications
The Westin Hotel, Philadelphia
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
September 21, 2004
E-DISCOVERY CONFERENCE
Mealey Publications
The Westin Hotel, Philadelphia
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
September 21, 2004
PARALEGALS CONFERENCE
Mealey Publications
The Westin City Center, Dallas
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
September 27-28, 2004
BAD FAITH CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel, Philadelphia
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
September 27-28, 2004
REINSURANCE ARBITRATIONS
American Conferences
New York
Contact: http://www.americanconference.com
September 29-30, 2004
CONSUMER FINANCE CLASS ACTIONS
American Conferences
New York
Contact: http://www.americanconference.com
October 4-5, 2004
INSURANCE COVERAGE DISPUTES CONCERNING CONSTRUCTION DEFECTS
CONFERENCE
Mealey Publications
The Westin Chicago River North, Chicago
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
October 7-8, 2004
WELDING ROD LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel, West Palm Beach
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
October 21, 2004
PARALEGALS CONFERENCE
Mealey Publications
The Westin Peachtree Plaza, Atlanta
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
October 25-26, 2004
SILICA LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel, New Orleans
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
October 26, 2004
PVC LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel, New Orleans
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
November 4-5, 2004
CK039
CONFERENCE ON LIFE INSURANCE COMPANY PRODUCTS: CURRENT
SECURITIES,
TAX, ERISA, AND STATE REGULATORY ISSUES
ALI-ABA
Washington, D.C.
Contact: 215-243-1614; 800-CLE-NEWS x1614
November 8, 2004
ALL SUMS: REALLOCATION & SETTLEMENT CREDITS CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel, Boston
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
November 8, 2004
HRT LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel Huntington Hotel & Spa, Pasadena, CA
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
November 8-9, 2004
CALIFORNIA SECTION 17200 CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel Huntington Hotel & Spa, Pasadena, CA
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
November 9, 2004
ZYPREXA LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel Huntington Hotel & Spa, Pasadena, CA
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
November 9, 2004
ARTHRITIS DRUG LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel Huntington Hotel & Spa, Pasadena, CA
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
November 9, 2004
ANTI-SLAPP CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel Huntington Hotel & Spa, Pasadena, CA
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
November 11-12, 2004
ASBESTOS LITIGATION IN THE 21ST CENTURY
ALI-ABA
New Orleans
Contact: 215-243-1614; 800-CLE-NEWS x1614
December 2-3, 2004
TRIAL EVIDENCE IN THE FEDERAL COURTS: PROBLEMS AND SOLUTIONS
ALI-ABA
New York
Contact: 215-243-1614; 800-CLE-NEWS x1614
December 9-10, 2004
ASBESTOS PREMISES LIABILITY CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel Huntington Hotel & Spa, Pasadena, CA
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
December 9-10, 2004
CONSTRUCTION DEFECT & MOLD LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Lake Las Vegas, Las Vegas
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
January 19-21, 2005
CIVIL PRACTICE AND LITIGATION TECHNIQUES IN FEDERAL AND STATE
COURTS
ALI-ABA
San Juan, Puerto Rico
Contact: 215-243-1614; 800-CLE-NEWS x1614
March 3-5, 2005
LITIGATING MEDICAL MALPRACTICE CLAIMS
ALI-ABA
Scottsdale, Arizona
Contact: 215-243-1614; 800-CLE-NEWS x1614
March 9-11, 2005
CIVIL PRACTICE AND LITIGATION TECHNIQUES IN FEDERAL AND STATE
COURTS
ALI-ABA
Maui, Hawaii
Contact: 215-243-1614; 800-CLE-NEWS x1614
May 12-13, 2005
OPINION AND EXPERT TESTIMONY IN FEDERAL AND STATE COURTS
ALI-ABA
Boston Tuition
Contact: 215-243-1614; 800-CLE-NEWS x1614
May 19-20, 2005
DIGITAL DISCOVERY AND ELECTRONIC EVIDENCE
ALI-ABA
Chicago Tuition $
Contact: 215-243-1614; 800-CLE-NEWS x1614
TBA
FAIR LABOR STANDARDS CONFERENCE
Mealey Publications
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
TBA
AIRLINE BANKRUPTCY LITIGATION CONFERENCE
Mealey Publications
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
TBA
FASTFOOD INDUSTRY LIABILITY CONFERENCE
Mealey Publications
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
* Online Teleconferences
------------------------
July 05-30, 2004
DAMAGES IN TEXAS INSURANCE LITIGATION:
EVALUATING, PLEADING, AND PROVING
CLEOnline.Com
Contact: 512-778-5665; info@cleonline.com
July 05-30, 2004
NBI PRESENTS "EMERGING ISSUES IN CALIFORNIA
INDOOR AIR QUALITY AND TOXIC MOLD LITIGATION
CLEOnline.Com
Contact: 512-778-5665; info@cleonline.com
July 05-30, 2004
NBI PRESENTS "LITIGATING THE CLASS ACTION LAWSUIT IN FLORIDA
CLEOnline.Com
Contact: 512-778-5665; info@cleonline.com
ADVERSARIAL PROCEEDINGS IN ASBESTOS BANKRUPTCIES
LawCommerce.Com/Mealey's
Online Streaming Video
Contact: customerservice@lawcommerce.com
ASBESTOS BANKRUPTCY - PANEL OF CREDITORS COMMITTEE MEMBERS
LawCommerce.Com/Mealey's
Online Streaming Video
Contact: customerservice@lawcommerce.com
EXPERT WITNESS ADMISSIBILITY IN MOLD CASES
LawCommerce.Com/Mealey's
Online Streaming Video
Contact: customerservice@lawcommerce.com
INTRODUCTION TO CLASS ACTIONS AND LARGE RECOVERIES
Big Class Action
Contact: seminars@bigclassaction.com
NON-TRADITIONAL DEFENDANTS IN ASBESTOS LITIGATION
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
PAXIL LITIGATION
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
RECENT DEVELOPMENTS INVOLVING BAYCOL
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
RECOVERIES
Big Class Action
Contact: seminars@bigclassaction.com
SELECTION OF MOLD LITIGATION EXPERTS: WHO YOU NEED ON YOUR TEAM
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
SHOULD I FILE A CLASS ACTION?
LawCommerce.Com / Law Education Institute
Contact: customerservice@lawcommerce.com
THE EFFECTS OF ASBESTOS ON THE PULMONARY SYSTEM
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
THE STATE OF ASBESTOS LITIGATION: JUDICIAL PANEL DISCUSSION
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
TRYING AN ASBESTOS CASE
LawCommerce.Com
Contact: customerservice@lawcommerce.com
THE IMPACT OF LORILLAR ON STATE AND LOCAL REGULATION OF TOBACCO
SALES
AND ADVERSTISING
American Bar Association
Contact: 800-285-2221; abacle@abanet.org
________________________________________________________________
The Meetings, Conferences and Seminars column appears in the
Class Action Reporter each Wednesday. Submissions via e-mail to
carconf@beard.com are encouraged.
New Securities Fraud Cases
99 CENTS: Lerach Coughlin Lodges Securities Lawsuit in C.D. CA
--------------------------------------------------------------
Lerach Coughlin Stoia & Robbins LLP initiated a class action in
the United States District Court for the Central District of
California on behalf of purchasers of 99 Cents Only Stores ("99
Cents") (NYSE:NDN) common stock during the period between March
11, 2004 and June 10, 2004 (the "Class Period").
The complaint charges 99 Cents and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. 99 Cents is a deep-discount retailer of primarily name
brand and consumable general merchandise in the United States.
As of March 12, 2004, the Company operated 194 retail stores
with 150 in California, 19 in Texas, 15 in Arizona and 10 in
Nevada.
The complaint alleges that during the Class Period, defendants
issued materially false and misleading statements regarding the
Company's business and prospects. As a result of the defendants'
false statements, 99 Cents stock traded at artificially inflated
prices during the Class Period, trading in the mid to high $20
range.
According to the complaint, defendants concealed from the
investing public that:
(1) in order to inflate the Company's margins, especially
to show success in the Company's newer markets, i.e.,
Texas, defendants created the appearance of
profitability and success by, among other things, not
accruing for proper expenses (the roll-out of the
Company's advertising implementation and distribution
costs);
(2) the Company's margins were being eroded by a mix-shift
tied to lower margin grocery items, freight costs,
higher dairy costs, and a higher mark-down and shrink
provision (up to $10 million);
(3) the defendants had knowingly tolerated very weak
internal controls;
(4) the Company's inventory was artificially inflated and
in fact, the Company had carried $10 million worth of
deli products on its books as an asset when they were
inedible due to expiration and other objective factors;
(5) the Company's Southern California distribution center
was in shambles;
(6) the Company's workers' compensation problems were far
from over and, in fact, contrary to declining,
defendants had forecast these expenses as increasing;
and
(7) as a result of the above, the Company was not on track
to achieve EPS for Q2 04 of $0.19-$0.20.
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/99cents/
ABATIX CORPORATION: Murray Frank Lodges Securities Suit in TX
-------------------------------------------------------------
The law firm of Murray, Frank & Sailer LLP reminds investors
that a class action complaint has been filed in the United
States District Court for the Northern District of Texas, 4-
04CV-297-Y, on behalf of all persons or entities who purchased
or otherwise acquired Abatix Corporation ("Abatix" or the
"Company") securities (Nasdaq:ABIX) between April 14, 2004 at
5:05 p.m. EST to April 16, 2004, at 9:27 a.m. EST, both times
inclusive (the "Class Period"). The Complaint names Terry
Shaver, Frank Cinatl IV, and the Company as defendants.
The Complaint alleges that defendants violated the Securities
Exchange Act of 1934 by making a series of materially false and
misleading statements concerning the Abatix's business agreement
with Goodwin Group LLC during the Class Period. Specifically,
the Complaint alleges that Abatix knew but failed to disclose
certain material facts, including that:
(1) the Company had not verified the proprietary nature of
RapidCool or that the Company had in fact, obtained the
"exclusive worldwide rights to distribute RapidCool;"
(2) that Abatix had not verified that Goodwin Group LLC was
the assignee of patents relating to RapidCool products,
nor had defendants verified the ownership of any patent
applications filed with respect to the product line;
and
(3) defendants knew but failed to disclose that they had
only been permitted to perform limited due diligence on
the proprietary nature of RapidCool products before
signing the distributorship agreement.
As a result, the price of the Company's securities was
artificially inflated during the Class Period. On April 21,
2004, the Company admitted that Abatix's April 14, 2004 press
release announcing the signing of an agreement with Goodwin
Group LLC to distribute the RapidCool (TM) product line created
a significant increase in the price and volume of shares traded,
"which the Abatix believes was not warranted by Company
developments."
As a result of defendants' false and misleading statements the
price of Abatix securities was artificially inflated throughout
the Class Period, causing plaintiff and the other members of the
Class to suffer damages.
For more details, contact Eric J. Belfi or Aaron D. Patton of
Murray, Frank & Sailer LLP by Mail: 275 Madison Avenue, Suite
801, New York, NY 10016 by Phone: (800) 497-8076 or
(212) 682-1818 by Fax: (212) 682-1892 or by E-mail:
info@murrayfrank.com
BEA SYSTEMS: Geller Rudman Lodges Securities Lawsuit in N.D. CA
---------------------------------------------------------------
The Law Firm of Geller Rudman, PLLC initiated a class action
lawsuit in the United States District Court for the Northern
District of California on behalf of purchasers of BEA Systems,
Inc. (Nasdaq: BEAS) ("BEA" or the "Company") publicly traded
securities during the period between November 13, 2003 and May
13, 2004, inclusive (the "Class Period").
The complaint charges BEA and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. BEA is a provider of application infrastructure software
and related services that help companies build distributed
systems that extend investments in existing computer systems and
provide the foundation for running an integrated business.
The complaint alleges that during the Class Period, defendants
issued materially false and misleading statements to the
investing public regarding BEA's business and prospects. As a
result of these false statements, BEA's stock price traded at
inflated levels during the Class Period, increasing to as high
as $14 in early 2004, whereby the Company's top officers and
directors sold more than $13 million worth of their own shares.
Then on May 13, 2004, BEA reported disappointing first quarter
results, citing the difficult selling environment and sales
execution issues as the primary reasons. On this news, the
Company's shares fell 30% to $8 per share.
According to the complaint, the true facts, which were known to
the defendants but actively concealed from the public, were as
follows:
(1) that the Company was experiencing material sales
execution problems in its licensing division, resulting
in license reserve being down in the comparable quarter
and in the sequential quarter;
(2) that during the preceding quarter, the Company's sales
staff and management were attempting to reorganize;
however, in doing so, the Company's sales were actually
disrupted;
(3) that the Company's WebLogic 8.1 Platform was far from
"revolutionary" and was not selling as defendants
claimed;
(4) that the coverage of small and medium- sized businesses
was transferred to the General Accounts Team, which
disrupted the Company's North American reserves; and
(5) that the Company was experiencing weakness in its
telecom vertical business, not strength.
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 or
by E-mail: info@geller-rudman.com
BEA SYSTEMS: Schiffrin & Barroway Lodges Securities Suit in CA
----------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a securities
class action lawsuit in the United States District Court for the
Northern District of California on behalf of all securities
purchasers of BEA Systems, Inc. (Nasdaq: BEAS) ("BEA" or the
"Company") from November 13, 2003 through May 13, 2004,
inclusive (the "Class Period").
The complaint charges BEA, Alfred S. Chuang, William Klein,
Charles L. Ill, III, and Thomas M. Ashburn with violations of
the Securities Exchange Act of 1934. The complaint alleges that
defendants failed to disclose or indicate the following:
(1) that the Company's sales execution strategy, due to
structural changes to its sales organization, was
flawed causing a substantial decline in BEA's licensing
revenue;
(2) that Company failed to appreciate the weakness from its
Americas region, as its sales reorganization around
general accounts coverage introduced some execution
risks, which centered around certain mid-sized and
large-sized transactions; and
(3) that the Company knew or recklessly disregarded that
anticipated product transition to its WebLogic 8.1
Platform would take substantially longer than BEA
represented and that the market for WebLogic 8.1 did
not significantly broaden.
On May 13, 2004, BEA reported disappointing first quarter
results, citing the difficult selling environment and sales
execution issues as the primary reasons. On news of this, shares
of BEA fell $2.43 or 22.54 percent, on May 14, 2004, to close at
$8.35.
For more details, contact Marc A. Topaz, Esq. or Stuart L.
Berman, Esq. of Schiffrin & Barroway by Phone: 1-888-299-7706 or
1-610-667-7706 or by E-mail: info@sbclasslaw.com
BUSINESS OBJECTS: 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 the Southern
District of California on behalf of purchasers of Business
Objects S.A. (NASDAQ: BOBJ) publicly traded securities during
the period between April 23, 2003 and April 30, 2004.
The complaint charges Business Objects and certain of its
officers and directors with violations of the Securities
Exchange Act of 1934. Business Objects is a worldwide provider
of business intelligence solutions.
The complaint alleges that during the Class Period, defendants
caused Business Objects shares to trade at artificially inflated
levels through the issuance of false and misleading financial
statements. The true facts, which were known to the defendants
but actively concealed by defendants from shareholders, were as
follows:
(1) the Company's integration of the Crystal Decisions
acquisition was a disaster and the defendants were
struggling to hide the integration problems in order to
save face;
(2) many of the Company's customers/partners were confused
about the synchronization of pricing and new solution
bundles and delaying their purchases, or foregoing them
all together, in favor of Business Objects'
competition;
(4) the Company was internally projecting poor demand for
the Company's Enterprise 6 products, a material drop in
European orders and losing significant sales to
Microsoft and Cognos;
(5) the Company's software license revenue growth was not
as robust as defendants projected for the first quarter
of 2004, and in fact, half of the gain ($12-$13
million) was attributable to currency gains associated
with the Euro vs. the dollar;
(6) the acquisition costs of Crystal Decisions far exceeded
the Company's projections resulting in an erosion of
the Company's growth margins; and
(7) the Company's balance in deferred revenue was inflated
due to manipulations in the deferred revenue balance of
Crystal Decisions upon acquisition.
On April 30, 2004, shares of Business Objects plunged as much as
22% after its first-quarter profit fell, coming in at the lower
end of its target range and missing analyst forecasts. Then on
May 5, 2004, it was reported that the Securities and Exchange
Commission was looking into the Company's "practices with
respect to backlog."
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
CENTRAL FREIGHT: Marc Henzel Lodges Securities Fraud suit in TX
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Eastern
District of Western District of Texas on behalf of all persons
who purchased the publicly traded securities of Central Freight
Lines, Inc. (Nasdaq: CENF) issued in connection with or
traceable to its December 12, 2003 Initial Public Offering.
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 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
DESCARTES SYSTEMS: Wolf Haldenstein Lodges Securities Suit in NY
----------------------------------------------------------------
The law firm of Wolf Haldenstein Adler Freeman & Herz LLP filed
a class action lawsuit in the United States District Court for
the Southern District of New York, on behalf of all persons who
purchased the securities of Descartes Systems Group, Inc.
("Descartes" or the "Company") (Nasdaq: DSGX) between June 4,
2003 and May 6, 2004, inclusive, (the "Class Period") against
defendants Descartes and certain officers of the Company.
The case name is Van Fraassen v. Descartes Systems Group, Inc.,
et al.
The complaint alleges that defendants violated the federal
securities laws by issuing materially false and misleading
statements throughout the Class Period that had the effect of
artificially inflating the market price of the Company's
securities.
The Complaint alleges that statements made by the defendants
during the class period were each materially false and
misleading because they failed to disclose and misrepresented
the following adverse facts:
(1) that Descartes' financial statements were materially
false and misleading;
(2) that the Company was recording revenue on contingent
contracts where contingencies were unfulfilled and in
violation of generally accepted accounting principles
and SAB 101;
(3) that the Company lacked adequate internal controls to
ensure the accuracy of its financial statements;
(4) and that, as a result of the foregoing, defendants
lacked a reasonable basis for their positive statements
about the Company and their earnings projections.
For more details, contact Fred Taylor Isquith, Esq., Gregory M.
Nespole, Esq., Christopher S. Hinton, Esq., George Peters, or
Derek Behnke of Wolf Haldenstein Adler Freeman & Herz LLP by
Mail: 270 Madison Avenue, New York, New York 10016 by Phone:
(800) 575-0735 by E-mail: classmember@whafh.com or visit their
Web site: http://www.whafh.com/cases/descartes.htm
GLOBAL CROSSING: Bernstein Liebhard Lodges Securities Suit in NY
----------------------------------------------------------------
The law firm of Bernstein Liebhard & Lifshitz, LLP initiated
securities class action lawsuit on behalf of all persons who
acquired securities of Global Crossing Ltd. ("Global Crossing"
or the "Company")(NASDAQ: GLBCE) between December 9, 2003 and
April 26, 2004, inclusive (the "Class Period").
The case is pending in the United States District Court for the
Southern District of New York, against Global Crossing, John
Legere, and Daniel O'Brien.
The Complaint charges that Global Crossing 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 Global Crossing's securities.
Specifically, the Complaint alleges that throughout the Class
Period, Global Crossing reported positive results in publicly
disseminated press releases and SEC filings. Defendants,
however, knew or recklessly disregarded that:
(1) Global Crossing lacked adequate internal controls,
(2) Global Crossing's costs of access were materially
understated in Global Crossing's financial statements,
and, as a result,
(3) Global Crossing's reported earnings were at all
relevant times, artificially inflated.
The truth was revealed on April 27, 2004, minutes after the
market opened, when defendants disclosed that Global Crossing
would restate its previously issued financial statements as far
back as fiscal 2002 because defendants had understated the
accrued cost of access liability by $50 million to $80 million.
The Company stated that the understatement of its cost of access
liability was due to "incorrect estimates of cost of access
expenses and the failure to reconcile these expenses to vendor
invoices," that there were material weaknesses in its internal
controls, and that investors should disregard the Company's
financial statements for fiscal 2002 and 2003, including interim
periods. The Company further stated that investors should
disregard defendants' previous guidance with respect to Global
Crossing's 2004 results. In reaction to this news, the price of
Global Crossing common stock fell $5.00, or 27.4%, from its
previous day's closing price of $18.20 per share, to close on
April 27, 2004 at $13.20.
For more details, contact Bernstein Liebhard & Lifshitz, LLP by
Phone: (800) 217-1522 by E-mail: GLBCE@bernlieb.com or visit
their Web site: http://www.bernlieb.com
HANGER ORTHOPEDIC: Schiffrin & Barroway Lodges NY Stock Suit
------------------------------------------------------------
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 Hanger Orthopedic Group (NYSE: HGR) ("Hanger" or
the "Company") from July 29, 2003 through June 18, 2004,
inclusive (the "Class Period").
The complaint charges that Hanger, Ivan R. Sabel, Thomas Kirk,
and George E. McHenry 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 improperly booked sales at its Long
Island, New York branches, by allowing employees to
forge prescriptions and record sales for patients who
did not exist;
(2) that the Company, through its illegal billing
practices, defrauded Medicare, Medicaid and Insurance
Companies; and
(3) as a result of this illegal scheme, Hanger, throughout
the Class Period, materially overstated and
artificially inflated Hanger's financial results
through improper recognition of revenue in violation of
Generally Accepted Accounting Principles ("GAAP").
In the evening of June 14, 2004, a New York City television
station news broadcast alleged billing improprieties at the
Company's West Hempstead, New York facility. On June 15, 2004,
Hanger announced that it had been made aware of alleged billing
irregularities. An employee in the West Hempstead office
reported the alleged irregularities on the Company's Compliance
Hot Line. The market reacted swiftly to the news. On June 15,
2004, shares of Hanger fell $1.66 per share or 11.52 percent to
close at $12.75 per share on unusually high trading volume. The
Company's stock continued its decline throughout the week. By
June 17, 2004, shares of Hanger closed at $12.00 per share. On
June 18, 2004, Hanger, in a press release, stated that on June
17, 2004 the Company received a subpoena from the U.S.
Attorney's Office for the Eastern District of New York
requesting that the Company produce documents relating to these
allegations, and seeking information concerning 14 of the
Company's patient care centers located in downstate New York.
The SEC also has requested information from the Company relating
to the allegations. This news shocked the market. Shares of
Hanger fell $2.47 per share or 20.91 percent on June 18, 2004,
to close at $9.34 per share.
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
IBIS TECHNOLOGY: Marc Henzel Lodges Securities Suit in MA Court
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for District of
Massachusetts on behalf of all purchasers of the common stock of
Ibis Technology Corporation (NasdaqNM: IBIS) between October 2,
2003 and December 12, 2003.
The Complaint alleges that defendants violated the Exchange Act
by issuing material misrepresentations between October 2, 2003
and December 12, 2003 concerning Ibis' new generation SIMOX-SOI
implanter, including that Ibis had orders from Japanese wafer
manufacturers which would close prior to December 31, 2003.
Defendants also misrepresented the carrying value of the smaller
size wafers production line on Ibis' financial statements.
On December 15, 2003, defendants filed a Form 8-K with the SEC
admitting that there would be no sales of i2000 implanters in Q4
2003 from the Japanese wafer manufacturers and that they now
expected to receive order(s) for one to three i2000 implanters
sometime in 2004 but that the timing of the orders ``is very
difficult to predict because the sales require the purchaser to
enter into a license agreement with a third party.'' Defendants
further admitted that Ibis would record a ``material charge''
due to the impairment of its smaller size production equipment.
In reaction to the announcement, the price of Ibis' common stock
fell from a $15.40 per share close on December 12, 2003 to a
close of $13.20 per share on December 15, 2003 and a closing
price of $10.37 on December 16, 2003, on extraordinary high
combined volume of 4.4 million shares, almost 50% of the
outstanding shares of Ibis common stock.
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
ITT EDUCATIONAL: Marc Henzel Lodges Securities Fraud Suit in IN
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the District
Indiana on behalf of purchasers of the securities of ITT
Educational Services, Inc. (NYSE: ESI) between April 17, 2003
and February 24, 2004, inclusive (the "Class Period"), seeking
to pursue remedies under the Securities Exchange Act of 1934.
The Complaint alleges defendants violated sections 10(b) and
20(a) of the Exchange Act, and Rule 10b-5 promulgated thereunder
by the Securities and Exchange Commission, by issuing a series
of material misrepresentations to the market during the Class
Period.
The complaint alleges that the Company's Class Period
representations regarding its quarterly performance, made in
press releases and SEC filings, were each materially false and
misleading because they failed to disclose that:
(1) ITT Educational had systematically falsified records,
such as those relating to enrollment, graduation and
job placement rates, in order to artificially inflate
its reported operational and financial performance;
(2) a material portion of the Company's reported revenues
were derived through fraudulent business practices,
such as federal grants and financial aid payments that
were secured through falsified records;
(3) the Company's reported results did not accurately
portray the Company's operations because a material
portion of those results were attributable to
prohibited practices; and
(4) that the Company's results were not prepared and
reported in accordance with generally accepted
accounting principles and did not fairly present its
actual financial results or condition.
On February 25, 2004, before the opening of ordinary trading,
the Company issued a press release announcing that it had been
served with a search warrant and related grand jury subpoenas at
its corporate headquarters and several of its schools. In
reaction to this announcement, the price of ITT Educational
common stock plummeted, falling from $57.40 per share on
February 24, 2004 to close at $38.50 on February 25, 2004 -- a
one-day drop of 33% on unusually 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
LEXAR MEDIA: Murray Frank Launches Securities Lawsuit in N.D. CA
----------------------------------------------------------------
The law firm of Murray, Frank & Sailer LLP initiated a class
action lawsuit in the United States District Court for the
Northern District of California on behalf of all shareholders
who purchased or acquired the common stock of Lexar Media, Inc.
(Nasdaq:LEXR) ("Lexar" or the "Company") between July 17, 2003
through April 16, 2004 inclusive (the "Class Period").
The complaint alleges that Lexar, Eric Stang, and Brian McGee
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 July
17, 2003 and April 16, 2004. More specifically, the Complaint
charges 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 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) that the Company lacked sufficient royalty income to
offset product gross margins pressure.
On April 15, 2004, Lexar reported financial results for the
first quarter ended March 31, 2004. After several quarters of
relatively stable average selling prices, second-quarter price
declines were sizeable. These declines were occurring sooner
than Lexar had previously anticipated. News of this shocked the
market. 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 Eric J. Belfi or Aaron D. Patton of
Murray, Frank & Sailer LLP by Phone: (800) 497-8076 or
(212) 682-1818 by Fax: (212) 682-1892 or by E-Mail:
info@murrayfrank.com
LIQUIDMETAL TECHNOLOGIES: Marc Henzel Lodges CA Securities Suit
---------------------------------------------------------------
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 Liquidmetal
Technologies, Inc. (NASDAQ:LQMTE) common stock during the period
between May 21, 2002 and March 30, 2004, including those who
acquired shares pursuant to the Company's May 21, 2002 initial
public offering ("IPO").
The complaint charges Liquidmetal and certain of its officers
and directors with violations of the Securities Exchange Act of
1934 and the Securities Act of 1933. Liquidmetal is in the
business of developing, manufacturing and marketing products
made from amorphous alloys.
The complaint alleges that during the Class Period, defendants
caused Liquidmetal stock to trade at artificially inflated
levels through the issuance of false and misleading financial
statements. The true facts which were known to each of the
defendants, but actively concealed from plaintiff, included the
following:
(1) that the Company was recording revenue on "contingent"
contracts where contingencies were unfulfilled;
(2) that the Company lacked the proper internal controls
and oversight to ensure the Company's subsidiary
operations complied with applicable regulations;
(3) that even prior to the IPO the Company was experiencing
adverse trends in the Company's electronic casings
business; and
(4) that the Company was actually manufacturing its own
revenue by infusing capital in customers in return for
the customers' orders.
On February 20, 2004, the Company announced that it will be
required to restate its financial statements for 3Q 2002 to 1Q
2003 and reverse reported income attributable to one of its
former suppliers of alloy ingots, Growell Metal. Then on March
30, 2004, Liquidmetal announced it would delay the filing of its
2003 Form 10-K due to the additional time required to complete
the previously announced review and analysis relating to the
Company's restatement of results for prior periods.
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
MCDONALD'S CORPORATION: Marc Henzel Lodges Securities Suit in IL
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United Stated District Court for the Northern
District of Illinois, Eastern Division on behalf of purchasers
of McDonald's Corporation (NYSE: MCD) publicly traded securities
during the period between December 14, 2001 and January 22,
2003, inclusive.
The complaint charges McDonald's and certain of its officers and
directors with violations of the Securities Exchange Act of 1934
(the "Exchange Act"). The complaint alleges that during the
Class Period, defendants issued false and misleading statements
to the marketplace that artificially inflated the price of
McDonald's shares. In particular, the Company misrepresented its
business and future prospects by failing to disclose and
misrepresenting that hundreds of its restaurants were
underperforming and that the Company had incurred hundreds of
millions of dollars in unrecorded asset impairment and other
charges.
Defendants' scheme began to unravel when in September 2002, the
Company reported that "comparable sales" (i.e., year-over-year
sales comparisons for restaurants that had been open for more
than thirteen months) had continued to decline, especially in
U.S. and European markets, making it impossible for the Company
to meet its 2002 earnings guidance.
Then on January 23, 2003, defendants announced that the Company
had incurred losses of more than $810 million related,
primarily, to the closure of over 700 underperforming
restaurants and the write-off of hundreds of millions of dollars
of previously capitalized technology costs.
Prior to the disclosure of the adverse facts described above,
the Company completed fixed-rate debt offerings of at least $900
million at highly favorable interest rates. In addition, the
Individual Defendants, as well as other McDonald's insiders,
sold over 939,000 shares of McDonald's common shares, at or near
market highs, generating proceeds of more than $26 million.
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
MERIX CORPORATION: Stoll Stoll Lodges Securities Lawsuit in OR
--------------------------------------------------------------
The law firm of Stoll Stoll Berne Lokting & Shlachter P.C.
initiated a class action lawsuit in the United States District
Court for the District of Oregon on behalf of all purchasers of
the common stock of Merix Corporation (Nasdaq: MERX) between
July 1, 2003 and May 13, 2004, inclusive (the "Class Period").
The complaint charges Merix and certain of its officers and
directors with issuing false and misleading statements,
including overly optimistic earnings and revenue projections,
statements regarding increasing demand for its premium priced
and quick-turn products. Specifically, the complaint alleges
that, during the Class Period, the Company issued materially
false statements that demand for its premium-priced and quick-
turn products was increasing, when it knew that demand was in
fact softening for its product, especially with regard to a
major networking customer. These statements had the effect of
artificially raising the price of Merix stock so that Merix
could complete a public offering generating more than $100
million, and so insiders could sell more than $3.2 million of
Merix stock during the Class Period. Investors who purchased
Merix shares during the Class Period did so at inflated prices
and were thereby damaged. On May 14, 2004, Merix stunned
investors by announcing that it was not going to meet its
previously issued earnings guidance for the quarter ending May
29, 2004 of $0.19 to $0.22 per share, and the company would
actually post a loss of $0.03 to $0.06 per share.
For more details, contact David F. Rees of Stoll Stoll Berne
Lokting & Shlachter P.C. by Phone: 1-503-227-1600 or by E-mail:
drees@ssbls.com
MERIX CORPORATION: Schiffrin & Barroway Files Stock Suit in OR
--------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a class
action lawsuit in the United States District Court for the
District of Oregon on behalf of all purchasers of the common
stock of Merix Corporation (Nasdaq: MERX) ("Merix" or the
"Company") from July 1, 2003 through May 13, 2004, inclusive
(the "Class Period").
The complaint charges Merix, Mark Hollinger and Jamie S. Brown
with violations of the Securities Exchange Act of 1934. The
complaint alleges that defendants failed to disclose or indicate
the following:
(1) that the Company over relied, in their financial
projections, on the customers' future demand for
premium-priced and reduced-lead-time products, which
had previously accounted for 50% of the Company sales;
(2) that the Company failed to adequately insulate itself
from the softening demand, specifically with regard to
supply needs of a major networking customer;
(3) that the Company failed to appreciate the market
conditions, which did not support the Company's
aggressive growth; and
(4) that, as a result of the foregoing, defendants lacked a
reasonable basis for their positive statements about
the Company and their earnings projections.
On May 13, 2004, after the close of the market, Merix revised
guidance for the fourth quarter of fiscal 2004, ending May 29,
2004. News of this shocked the market. Shares of Merix fell
$4.64 per share or 30.29 percent on May 14, 2004, to close at
$10.68 per share.
For more details, contact Marc A. Topaz, Esq. or Stuart L.
Berman, Esq. 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
POZEN INC.: Schiffrin & Barroway Files Amended Stock Suit in NC
---------------------------------------------------------------
Schiffrin & Barroway LLP initiated an amended securities class
action lawsuit in the United States District Court for the
Middle District of North Carolina on behalf of all securities
purchasers of POZEN, Inc. (Nasdaq: POZN) from October 10, 2000
through May 28, 2004.
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. 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.
This action centers around the Company's false and misleading
statements concerning its migraine drugs MT 100 and MT 300. More
specifically, 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, defendant 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
endpoint, it failed to achieve statistical significance versus
placebo for the relief at two hours of the secondary symptoms of
migraines (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 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 migraines.
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 endpoint 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 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
SPSS INC.: Marc Henzel Lodges Securities Fraud Suit 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 all purchasers of securities
of SPSS Inc. (Nasdaq: SPSSE) from May 2, 2001 through March 30,
2004 inclusive.
The complaint charges that SPSS, Jack Noonan, and Edward
Hamburg, 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 May 2, 2001 and March 30, 2004, about the Company's
revenues, thereby artificially inflating the price of SPSS
common 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) that the Company overstated its revenue by between $3
million and $6 million;
(2) that the Company accomplished this through improper
recognition of revenue in violation of Generally
Accepted Accounting Principles ("GAAP") and the
Company's own accounting interpretations on revenue
recognition;
(3) the Company's earnings per share were materially
inflated; and
(4) that as a result of the above, the Company's financial
results were inflated at all relevant times.
On March 30, 2004, SPSS announced that it would delay the filing
of its annual report on Form 10-K with the United States
Securities and Exchange Commission to complete an additional
review initiated by the company. News of this shocked the
market. Shares of SPSS fell $2.55 per share or 12.17 percent on
March 31, 2004 to close at $18.40 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.
TOPAZ GROUP: Marc Henzel Commences Securities Suit in WA Court
--------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the District of
Washington on behalf of purchasers of Topaz Group, Inc. (AMEX:
TPZ) between March 21, 2002 and August 20, 2003, inclusive.
Defendant Topaz is a vertically integrated manufacturer and
seller of fine jewelry and gemstones. Defendants include Topaz,
Aphichart Fufuangvanich, George Pfeifer, Peter Brongers and
Timothy Matula.
The Complaint charges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10-
b(5). The Complaint alleges that Defendants issued a series of
false and misleading financial statements which did not comply
with generally accepted accounting principles.
Specifically, Defendants incorrectly reported Topaz' financial
position by, inter alia: overstating inventory, understating
allowances for doubtful accounts and improperly recognizing
revenue. As a result of defendants' conduct, plaintiff and
Class members purchased Topaz shares at artificially inflated
prices and were damaged thereby.
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
UICI: Marc Henzel Lodges Securities Fraud Lawsuit in N.D. Texas
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Northern
District of Texas, Dallas Division on behalf of purchasers of
UICI (NYSE: UCI) common stock during the period between January
17, 2000 and July 21, 2003.
The complaint charges UICI and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. UICI is a diversified financial services company offering
financial services, health administrative services and insurance
through its various subsidiaries and divisions to niche consumer
and institutional markets.
The complaint alleges that during the Class Period, the
defendants who controlled and were senior officers of UICI,
engaged in a scheme to conceal UICI's badly flagging Academic
Management Services Corporation (AMS) division to prevent the
decline in the price. UICI's actual financial results and the
true status of its operations were concealed by defendants,
which operated to artificially inflate or maintain the market
price of UICI shares during the Class Period.
Each of the statements issued during the Class Period was false
and misleading and misrepresented and/or failed to disclose the
following material adverse information:
(1) that defendants knowingly tolerated UICI's inadequate
internal accounting controls and consequently lacked
any reasonable basis for the financial results reported
by them;
(2) that UICI's reported income was materially overstated
by in excess of $65 million;
(3) that only through UICI's accounting fraud had UICI
achieved the earnings reported by defendants;
(4) that the AMS division was not successful and its
fundamentals and prospects were deteriorating; and
(5) that UICI had failed to account for costs associated
with liabilities resulting from its AMS program and its
reserves were materially understated.
On July 21, 2003, UICI revealed that it would record a charge of
at least $65 million. This revelation caused trading in UICI
stock to be halted on the New York Stock Exchange and ultimately
to plummet to less than $12 per share, a decline of 45% from its
Class Period high of $21.22 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
*********
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.
*********
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Class Action Reporter is a daily newsletter, co-published by
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Resnick, Editors.
Copyright 2004. All rights reserved. ISSN 1525-2272.
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