/raid1/www/Hosts/bankrupt/CAR_Public/040715.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, July 15, 2004, Vol. 6, No. 139
Headlines
AMERICAN EQUITY: Securities Suit Settlement Hearing Set August 23, 2004
AMERICAN INVESTORS: Shernoff Bidart Lodges Annuities Suit in CA
AT & T WIRELESS: Consumer Lawsuit Settlement Hearing Set September 2004
BISYS GROUP: Scott + Scott Sets July 19 as Suit Lead Plaintiff Deadline
CACI INTERNATIONAL: Considers Sanctions V. Lawyers in Civil Rights Suit
DAIMLERCHRYSLER AG: Scott + Scott To Appear in DE Securities Fraud Suit
DE BEERS: Pleads Guilty, Fined $10 Million in OH Price Fixing Lawsuit
DUKE ENERGY: Reaches Settlement For 2001 Western Power Crisis Issues
ELKAY MANUFACTURING: Recalls 145,000 Coolers Due To Injury Hazard
FLORIDA POWER: FL Court Refuses To Dismiss Consumer Fraud Lawsuit
GE LIFE: Life Insurance Suit Settlement Hearing Set August 12, 2004
GRACO CHILDREN: Recalls 140,000 Lite Swings Due To Injury Hazard
HARRIS BALLOW: SEC Lodges Stock Manipulation Suit Against 13 Officers
HAYES LEMMERZ: Securities Suit Settlement Hearing Set September 9, 2004
JENKINS & GILCHRIST: Suit Settlement Hearing Set For January 24, 2005
LIVINE HUGHES: Reaches Settlement of SEC Securities Fraud Charges
LEXAR MEDIA: Scott + Scott Sets May 21 As Suit Lead Plaintiff Deadline
MICROSOFT CORPORATION: CA Firm Launches Game To Raise Awareness
MICROSOFT CORPORATION: NC Settlement Conference Call Set July 14
MONTANA POWER: Reaches $67 Million Shareholder Fraud Suit Settlement
NEVIS CAPITAL: SEC Orders Distribution of Funds To Settle Complaint
NORTEL NETWORKS: NY Court Consolidates 27 Securities Fraud Suits
RIVERSIDE DA: Defendants in SEC Securities Fraud Action Arrested
SEARS ROEBUCK: Law Firms Lodge Product Liability Lawsuit in Illinois
STAND-BY SYSTEMS: Texas Court Dismisses SEC Civil Injunctive Action
SHOPKO STORES: Stock Suit Settlement Hearing Set August 20, 2004
TELETECH: NY Workers Commence Overtime Wage Lawsuits V. Call Center
WEGENER CORPORATION: DE Court Dismisses Shareholder Fraud Lawsuit
WYETH: Court Extends National Diet Drugs Claims Processing in PA
New Securities Fraud Cases
CARDINAL HEALTH: Abbey Gardy Files Securities lawsuit in S.D. OH
CARDINAL HEALTH: Glancy Binkow Lodges Securities Suit in S.D. OH
CENTRAL FREIGHT: Lerach Coughlin Lodges Securities Lawsuit in TX
CORINTHIAN COLLEGES: Murray Frank Files Securities Lawsuit in CA
CORINTHIAN COLLEGES: Wechsler Harwood Lodges CA Securities Suit
*********
AMERICAN EQUITY: Securities Suit Settlement Hearing Set August 23, 2004
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The United States District Court for the Middle District of
Florida will hold a fairness hearing for the proposed settlement for
the class action filed against American Equity Investment Life
Insurance Company on behalf of all persons who bought an "equity
indexed annuity" from the Company from November 1, 1995 to May 20,
2004.
The Court has scheduled a fairness hearing on August 23, 2004 at
12:00pm.
For more details, contact Gordon Hargrove & James, PA by Mail: 500 E.
Broward Blvd., Suite 1000, Fort Lauderdale, FL 33394 by Phone:
954-527-2800 or by Fax: 954-524-9481 or contact the Settlement
Administrator by phone: 1-866-848-8052
AMERICAN INVESTORS: Shernoff Bidart Lodges Annuities Suit in CA
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American Investors Life Insurance Company faces a class action filed on
bhealf of Californian Patricia M. Westcott, Allin R. Westcott, her 83-
year-old husband and other senior citizens in California who have been
sold expensive annuity policies that offer no hope of benefit payouts
for at least ten years. In some cases, the senior owners are forced to
endure early withdrawal penalties.
The lawsuit, filed by Evangeline Fisher Garris of Shernoff Bidart &
Darras in Claremont, California, and her Co-Counsel, David M. Grossman
of Upland, California, alleges that American Investors Life Insurance
Company engages in unfair business practices by improperly targeting
the marketing and sale of its annuities to senior citizens.
"The annuity sold to Mr. Westcott had an age limit of 75 and will not
mature until the year 2015 at which time Westcott would be 95 years
old. American Investors made zero effort to verify the suitability of
its product and did nothing to protect the interests of the insured
over its own financial gain," said Garris
Filed in Los Angeles Superior Court, the lawsuit along with a cause of
action for elder abuse seeks an injunction against American Investors
and their agents from issuing age exceptions which enable them to sell
annuity policies that are inappropriate for seniors.
"We believe American Investors has in excess of 150,000 policyholders,
90% of which are believed to be seniors, who have been sold
inappropriate policies," says Grossman.
According to a 2002 California Department of Health and Human Service's
report, at 65 years of age, the average life expectancy of a male
living in California is 81 years.
"Mr. Westcott is the perfect example of someone who should've never
been sold a policy. The unfair business practices of marketing and
selling ``profitable annuities' to an unsuspecting public must be
stopped. With this litigation, we hope not only to change the practice
of American Investors, but shed some light on an industry-wide
problem," says Garris. "As baby boomers mature, we anticipate the sale
of inappropriate annuity products will only increase in the absence of
judicial intervention."
For more details, contact Evangeline Fisher Garris of Shernoff Bidart &
Darras by Mail: 600 South Indian Hill Blvd., Claremont, CA 91711 by
Phone: (909) 621-4935 by Fax: (909) 625-6915 or by E-mail:
info@sbd-law.com
AT & T WIRELESS: Consumer Lawsuit Settlement Hearing Set September 2004
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The United States District Court of Denver County, Colorado will hold a
fairness hearing for the proposed settlement for the class action
lawsuit entitled Vastano v. AT&T Wireless Services, Inc., Case No. 99-
CV-8267 on behalf of all AT&T Wireless customers who, before March 1,
1999, subscribed to an AT&T Digital One Rate calling plan ("DOR plan")
or a similar regional calling plan ("non-DOR plan") under which certain
roaming calls were part of the monthly included minutes.
The hearing on final settlement approval is currently scheduled for
September 22, 2004 at 10:30 a.m. before Judge Herbert Stern in the
District Court of Denver County, Colorado.
For more details, contact Robert F. Hill or Ronald L. Wilcox of
Hill & Robbins, P.C. by Mail: 1441 18th Street, Suite 100, Denver,
Colorado 88020 OR Michael L. Poindexter of The Law Offices of Michael
L. Poindexter by Mail: 602 Parkpoint Drive, Suite 280, Golden, CO 80401
OR Michael J. Kleinman by mail: 9490 S Aspen Hill Way, Lone Tree, CO
80124 OR Michael L. O'Donnell or Sean D. Baker of Wheeler Trigg Kennedy
LLP by Mail: 1801 California, Suite 3600, Denver, Colorado 80202 OR
Kelly Twiss Noonan or Bradford J. Axel of Stokes Lawrence, P.S. by
Mail: 800 Fifth Avenue, Suite 4000, Seattle, Washington 98104-3179 OR
visit the settlement Web site: www.dorplanclassaction.com
BISYS GROUP: Scott + Scott Sets July 19 as Suit Lead Plaintiff Deadline
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The law firm of Scott + Scott, LLC announces that the "lead plaintiff"
motion is due to be filed on July 19, 2004 for a class action commenced
on June 7, 2004 in the United States District Court for the Southern
District of New York on behalf of purchasers of Bisys Group, Inc.
("Bisys") (NYSE: BSG - News) securities during the period between
October 23, 2000 and May 17, 2004 (the "Class Period").
The complaint alleges that during the Class Period, defendants caused
BISYS's shares to trade at artificially inflated levels through the
issuance of false and misleading financial statements. As a result of
this inflation, BISYS was able to raise $250 million in a convertible
note offering while the individual defendants were able to reap more
than $25 million in insider trading proceeds.
For more details, contact Neil Rothstein by Phone: 800/404-7770 or
860/537-3818 (EDT) or 800/332-2259 or 619/233-4565 (PDT) or by E-mail:
nrothstein@scott-scott.com or BisysSecuritiesLitigation@scott-scott.com or
visit their Web
site: www.scott-scott.com
CACI INTERNATIONAL: Considers Sanctions V. Lawyers in Civil Rights Suit
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CACI International [CAI] is exploring its options for "sanctions"
against the lawyers who initiated a class action suit against it and
another contractor and certain individuals related to prisoner abuses
at a U.S. military-run prison in Iraq, the Defense Daily reports.
The California-based Company said that; "The suit alleges a plethora of
heinous acts that the company rejects and denies in their totality."
The suit, filed in federal court in San Diego by the Center for
Constitutional Rights and the Philadelphia law firm of Montgomery,
McCracken, Walker and Rhoads, accuses CACI, Titan [TTN] and three of
their employees with conspiring to violate the human rights of Iraqi
prisoners held at the Abu Ghraib prison near Baghdad.
"We believe that CACI and Titan engaged in a conspiracy to torture and
abuse detainees, and did so to make more money," Susan Burke, an
attorney with the Philadelphia law firm, said in a statement to the
Defense Daily. "It is patently clear that these corporations saw an
opportunity to build their businesses by roving they could extract
information from detainees in Iraq, by any means necessary."
CACI described the lawsuit as a "malicious recitation of false
statements and intentional distortions." The company also pointed out
that neither it, nor any of its employees, has been charged with
anything illegal related to work in Iraq. CACI also said that one of
the defendants, John Israel, has never been an employee of the company.
In May, after the scandal at Abu Ghraib broke, CACI said it expected a
minimal financial impact resulting from follow-on probes (Defense
Daily, May 6). Later in May, the General Services Administration
launched an investigation into the contract used by CACI to supply
interrogators to the Army, which is administered by the Department of
Interior (Defense Daily, May 28).
DAIMLERCHRYSLER AG: Scott + Scott To Appear in DE Securities Fraud Suit
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The law firm of Scott + Scott, LLC intends to make its appearance on a
class action lawsuit against DaimlerChrysler AG. This securities fraud
action is on behalf of all persons or entities who are NOT citizens or
residents of the United States and who purchased or acquired securities
of DaimlerChrysler AG between November 17, 1998 and November 17, 2000.
The action seeks to pursue remedies under Sections 10(b), 20(a) and
14(a) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14a-9
promulgated thereunder, and Sections 11, 12(a)(2) and 15 of the
Securities Act of 1933.
The action, which is pending in the United States District Court for
the District of Delaware, against defendants DaimlerChrysler, Daimler-
Benz AG, Jurgen E. Schrempp, Eckhard Cordes, Manfred Gentz, Jurgen
Hubbert, Manfred Bischoff, Kurt Lauk, Klaus Mangold, Heiner Tropitzsch,
Klaus-Dieter Vohringer, Dieter Zetsche and Thomas Sonennberg.
The complaint alleges that defendants issued a number of materially
false and misleading statements in order to get shareholder approval
for the proposed merger of Chrysler and Daimler-Benz. For example,
defendants misrepresented that the transaction would be structured as a
"merger-of-equals" that would result in a newly formed entity with dual
headquarters in the U.S. and Germany, whose officers and directors
would be comprised of the officers and directors of the former
constituent companies equally. Defendants characterized the transaction
as a merger-of-equals, as opposed to an "acquisition," because,
pursuant to applicable law, an acquisition requires the acquiror to pay
a sizable "control premium" for the shares of the company being
acquired whereas a merger-of-equals requires no such premium, or a much
smaller one. Defendants misrepresented that the transaction would be a
merger-of-equals in order to purchase Chrysler on the cheap. In fact,
as investors would learn only after the end of the Class Period, the
transaction was not a merger-of-equals, but rather, a takeover of
Chrysler by Daimler-Benz, with former Daimler-Benz executives taking
control, over time, of the newly formed DaimlerChrysler and Chrysler
relegated to the status of a subordinate division. In addition,
defendants continued to falsely tout the success of the merger and the
growth that the Company supposedly was experiencing. In fact,
defendants had artificially inflated the reported results by
prematurely recognizing revenues and understating costs in the quarter
preceding the merger. The truth was revealed on November 17, 2000, when
the Company reported financial results that fell well below defendants'
guidance. Then, on, March 5, 2001, a former Chrysler executive was
quoted in Forbes as stating that defendants had prematurely recognized
revenues in the quarter preceding the merger to drum up support. Class
members acquired their shares at artificially inflated prices and were
damaged by defendants' conduct.
For more details, contact Scott + Scott LLC by Phone: 800/404-7770 or
860/537-3818 (EDT) or 800/332-2259 or 619/233-4565 (PDT) by E-mail:
nrothstein@scott-scott.com or visit their Web site: www.scott-scott.com
DE BEERS: Pleads Guilty, Fined $10 Million in OH Price Fixing Lawsuit
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South Africa-based diamond giant, De Beers pleaded guilty to a decade
old price-fixing case and agreed to pay a maximum $10 million fine,
clearing the way for the diamond giant to resume selling diamonds
directly in the lucrative U.S. market, AP Online reports.
The company admitted conspiring to fix prices in the $500 million
industrial diamond market in 1991 and 1992. Industrial diamonds are
used to make cutting and polishing tools for a variety of manufacturing
and construction equipment.
De Beers has sold diamonds in the United States only through
intermediaries since shortly after World War II, when it was first
charged with price fixing. The company was charged along with General
Electric Co. in 1994. A judge dismissed the charges against GE, saying
the government had failed to prove its case.
U.S. District Judge George Smith accepted the plea in the case, in
which the Department of Justice charged De Beers with keeping prices in
the worldwide industrial diamond market artificially high. The case was
filed in Columbus because GE's industrial diamond business was based in
suburban Worthington. The judge though did not order any restitution,
saying a separate settlement of a civil case totaling $26 million
resolved that issue. He also did not put the company on probation.
Judge Smith in his ruling stated that; "The court is not inclined to
take upon itself the mantle of becoming a regulatory agency overseeing
the worldwide distribution of diamonds." He furthermore stated that the
company must operate under the regulations of the European Union and
will be subject to the jurisdiction of courts in the United States if
it decides to do business directly in the United States.
De Beers general counsel Glenn Turner entered the plea on behalf of the
company. He declined to make a statement in court but said afterward
that De Beers was happy to have the case resolved.
Mr. Turner said resolution of the case makes De Beers legally compliant
in all parts of the world where it operates. He said, however, that the
company has no plans to directly enter the U.S. retail market.
DUKE ENERGY: Reaches Settlement For 2001 Western Power Crisis Issues
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Duke Energy (NYSE: DUK) reached a settlement agreement in principle
with the states of California, Washington and Oregon; federal
regulators; California's three largest investor-owned utilities; and
other parties to resolve refund proceedings and other significant
litigation related to the western energy markets during 2000-2001.
As part of the agreement, Duke Energy will provide $207.5 million in
cash and credits. In exchange, the parties to the agreement will forego
all claims relating to refunds or other monetary damages for sales of
electricity during the settlement period, and claims alleging Duke
Energy received unjust or unreasonable rates for the sale of
electricity during the settlement period, January 2000 through June
2001.
The settlement resolves:
(1) All western refund proceedings pending before the
Federal Energy Regulatory Commission (FERC)
(2) Market price investigations by attorneys general in
California, Washington and Oregon
(3) Private electricity-related class action suits filed on
behalf of California, Washington, Oregon, Idaho and
Utah ratepayers
(4) Natural gas price issues raised by the California
attorney general, Pacific Gas and Electric Company,
Southern California Edison and San Diego Gas & Electric
Company.
Duke Energy will record an estimated $104.9 million pre-tax charge in
the second quarter of 2004 to reflect the settlement agreement.
FERC's refund proceedings stem from the commission's effort to correct
market prices it considered unreasonable during the western energy
crisis of 2000-2001. As part of these proceedings, all participants in
the western electricity markets -- including Duke Energy -- have refund
obligations, even though Duke Energy acted appropriately and within the
market rules.
"Today's announcement brings welcome closure to these protracted
proceedings, removing the associated risks and burdens of regulatory
and legal uncertainty," said Fred Fowler, Duke Energy president and
chief operating officer. "It also eliminates the time and costs
necessary to litigate these issues.
"Settlement is in the best interest of our shareholders, our company
and western energy consumers as we resolve these issues and focus on
meeting the current and future energy needs of California and other
western states," Fowler said.
FINANCIAL EFFECT OF SETTLEMENT
($ in millions)
Cash $85.1
Write-off of receivables and credits due Duke Energy $122.4
======
Settlement total $207.5
Previously announced reserve and associated offsets ($102.6)
2Q2004 estimated pre-tax earnings impact $104.9
The parties to the settlement agreement include FERC staff, the state
of California, the state of Washington, the state of Oregon, Pacific
Gas and Electric Company, Southern California Edison, San Diego Gas &
Electric Company, the California Department of Water Resources, private
plaintiffs in the electricity-related class action suits, and Duke
Energy. The settlement is subject to approval by FERC and the
California Public Utilities Commission, and the class action
settlements are subject to court approval.
ELKAY MANUFACTURING: Recalls 145,000 Coolers Due To Injury Hazard
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Elkay Manufacturing Company, of Oak Brook, Illinois is cooperating with
the United States Consumer Product Safety Commission by voluntarily
recalling about 145,000 units of Elkay hot/cold bottled water coolers.
These electric water coolers can overheat and present a fire hazard.
There have been 14 reports of overheating, but no injuries reported.
These 115-volt hot/cold bottled water coolers have both cold and hot
water faucets. Most of the coolers are white, but some are granite
colored. The water coolers have the name "Elkay" on the serial number
plate on the back of the unit. The five design names are: Classic,
Legend, Eclipse, Sentry and Legend Countertop. Consumers should go to
the Elkay recall Web site at www.coolerfix.com and type in their serial
number to determine if the water cooler is recalled. Consumers also can
call the firm at (800) 788-2499 to determine if their water cooler is
included in the recall. The recall also includes a small number of
point-of-use water coolers sold for commercial use. Commercial
customers are being directly notified of the recall. Point-of-use water
coolers have the water plumbed directly to the units.
Manufactured in the U.S.A. and Malaysia, the coolers were distributed
by various bottled water companies and other businesses in the U.S. and
Canada, who in turn sold or leased the recalled coolers from 1997
through 2002. Recalled coolers also were sold at BJs Wholesale Club and
Sam's Club stores nationwide from 1999 through October 2003. Prices
ranged from $139 to $149.
Consumers should unplug the recalled water coolers immediately.
Commercial customers who lease or own Elkay hot/cold bottled and point-
of-use water coolers also should check their cooler to see if it is
recalled, and unplug the cooler if it is recalled. Contact Elkay to get
information about a free repair of the recalled coolers.
For more details contact Elkay Manufacturing Company by Phone:
(800) 788-2499 from 8 a.m. to 6 p.m. CT Monday through Friday, or visit
Company's recall Web site: <http://www.coolerfix.com>
FLORIDA POWER: FL Court Refuses To Dismiss Consumer Fraud Lawsuit
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Miami-Dade Circuit Judge Jerald Bagley denied Florida Power & Light
Co.'s request to dismiss a class-action suit led by Miami framing
company, Albert Litter Studios Inc., the Palm Beach Post reports.
The utility division of FPL Group Inc. (NYS: FPL, $62.68) made
requested from the judge to let the Florida Public Service Commission
(PSC) settle the issue and not the courts.
The suit alleges that FPL knowingly utilized meters that gave false
readings.
"We're disappointed that that was the ruling. We still believe that the
proper jurisdiction for this issue was with the PSC," FPL spokesman
Bill Swank told the Palm Beach Post. The PSC filed a so-called amicus
brief in the case declaring it has rules that cover the meters,
customer complaints and refunds. Judge Bagley stated that he had taken
the brief into account.
"We're looking forward to addressing this very important consumer issue
here in Dade County," said Sarah Clasby Engel, an attorney with the
Miami law firm of Harke and Clasby, which is representing Albert
Litter. "We know there are a lot of consumers that this is a problem
for, and we are seeking to represent them in the class action."
FPL has been embroiled in the thermal-demand meter issue for two years,
after George Brown, a Bradenton-based utility consultant, told the
company that a particular type of meter it was using for its business
customers was giving faulty readings.
The PSC has scheduled a September 28 hearing on the issue.
GE LIFE: Life Insurance Suit Settlement Hearing Set August 12, 2004
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The United States District Court for the Middle District of
Georgia will hold a fairness hearing for the proposed settlement for
the class action filed against GE Life And Annuity Assurance Company
(Formerly know as The Life Insurance Company of Virginia)("GELAAC") on
behalf of all persons who are or were current or former owners of
certain flexible premium adjustable life insurance policies that were
issued by the Company form August 1, 1980 through May 20, 2004.
The Court has scheduled a fairness hearing on August 12, 2004 at 2:00pm
before the Honorable Duross Fitzpatrick, US Courthouse, 475 Mulberry
Street, Macon, Georgia 31202.
For more details, contact the Mcbride Settlement Administrator by Mail:
P.O. Box 9000 #6213, Merrick, NY 11566-9000 by Phone: 1 (866) 808-3582
or visit their Web site: www.mcbridesettlement.com
GRACO CHILDREN: Recalls 140,000 Lite Swings Due To Injury Hazard
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Graco Children's Products, of Exton, Pennsylvania is cooperating with
the United States Consumer Product Safety Commission by voluntarily
recalling about 140,000 units of Travel Lite Swings.
The swing's carrying handle can fail to stay in place properly and drop
or be pushed down, hitting a child in the head. Additionally, the 3-
point seatbelt can fail to prevent a child from leaning forward or to
either side, posing a risk that the child can fall forward and strike
his/her head on the floor or the swing's frame. Graco has received
about 28 reports of incidents involving the handle falling down on
young children; in addition, Graco has received 100 reports of children
falling forward or to the side. Injuries resulting from these incidents
include bloody or swollen lips, red marks, bumps and bruises.
The recalled Travel Lite portable swings have an adjustable reclining
seat, a rotating handle and a canopy and include model numbers 1850JJP,
1850JGB, and 1870DAL. The swings, which were manufactured between May
2003 and December 11, 2003, also have a serial number between 050503
and 121103. Both the model and serial numbers can be found on a white
label underneath the seat. The swings have the words, "Graco" and
Travel Lite swing" printed on each side, and have buttons on the handle
to activate lights and music. On the underside of the handle are
multicolored designs of the sun, moon, and stars that light up when the
light button is pressed.
Manufactured in the United States the swings were sold at all discount,
department and juvenile stores from June 2003 through June 2004 for
about $60.
Consumers who have a Travel Lite swing with a 3-point seatbelt (waist
belt and crotch strap only) or a Travel Lite swing without a red handle
release button should stop using it immediately and contact Graco for a
free repair kit.
For more details, contact Graco Children's Products by Phone:
(800) 345-4109 between 8 a.m. and 5 p.m. ET Monday through Friday or
visit the Company's Web site: www.gracobaby.com
HARRIS BALLOW: SEC Lodges Stock Manipulation Suit Against 13 Officers
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On July 9, the Commission filed a civil injunctive action in the
Southern District of Texas against Harris D. "Butch" Ballow and twelve
other individuals for manipulating the public markets for the stocks of
EpicEdge, Inc. and EVTC, Inc. The other defendants include three
associates of Ballow (Hector J. Garcia, Marvin M. "Mike" Barnwell, and
Frank H. Moss) two former officers of EVTC (George J. Cannan, Sr. and
David A. Keener), two former officers of EpicEdge (Charles H. Leaver
and Carl R. Rose), three registered representatives at securities
firms where Ballow and his associates traded the stocks (Mark K.
Menzel, Earl Shawn Casias, and George J. Cannan, Jr.) and two other
securities industry professionals (Lawrence A. Clasby, an investment
adviser, and Stacey J. Blake, a former registered representative).
According to the complaint, Ballow, acting largely through off-shore
corporations, engaged in heavy trading designed to create artificial
volume in the stocks and interfere with the true supply and demand for
the stocks. Both stocks rose sharply throughout most of 2000, then
simultaneously collapsed in September 2000 when Ballow was no longer
able to support the prices. The collapse not only hurt investors, but
also the broker-dealers who made large margin loans to Ballow's off-
shore companies and to Cannan, Sr.
The defendants are charged with violations of the antifraud provisions
of the securities laws, including Section 17(a) of the Securities Act
of 1933, Section 10(b) of the Securities Exchange Act of 1934, Rule
10b-5, and Regulation M, and other provisions. The civil injunctive
action is styled SEC v. Carl R. Rose, et al., Civil Action No. H-04-CV-
2799 (S.D. Tex.) (LR-18780).
HAYES LEMMERZ: Securities Suit Settlement Hearing Set September 9, 2004
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The United States District Court for the Eastern District of
Michigan - Southern Division will hold a fairness hearing for the
proposed settlement for the class action filed against Hayes Lemmerz
International, Inc. on behalf of all persons or entities who purchased
or otherwise acquired the equity securities of the Company during the
period from June 3, 1999 through and including September 5, 2001, and
who were damaged thereby.
The Court has scheduled a fairness hearing to approve the
proposed settlement, which will be held before the Honorable Arthur J.
Tarnow in the United States District Court for the Eastern District of
Michigan, Southern Division, at 3:00pm, on September 9, 2004.
For more details, contact Hayes Lemmerz Equity Securities Litigation by
Mail: c/o The Garden City Group, Inc. - P.O. Box 9000 #6236, Merrick,
NY 11566-9000 or James P. McEvilly, III, Esq. of Grant & Eisenhofer, PA
by Mail: 1201 N. Market Street, Suite 2100, Wilmington, DE 19801 or by
Phone: (302) 622-7000
JENKINS & GILCHRIST: Suit Settlement Hearing Set For January 24, 2005
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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 of
the Jenkins & Gilchrist Litigation.
The Court has scheduled a fairness hearing on January 24, 2005 at
4:00pm, before the Honorable Shira A. Scheindlin, Courtroom 12C, Daniel
Patrick Moynihan United States Courthouse, 500 Pearl Street, New York,
NY 10007-1312.
For more details, contact Deary Montgomery DeFeo & Canada, LLP by Mail:
Chateau Plaza, Suite 1565, 2515 McKinney Ave., Dallas, TX 75201 by
Phone: (800) 497-6444 or (214) 360-9622 or by Fax: (214) 739-3879 OR
Rod Phelan of Baker Botts, LLP by Mail: 2001 Ross Ave., Suite 700,
Dallas, TX 75201 by Phone: (214) 953-6503 or by Fax: (214) 953-6503
LIVINE HUGHES: Reaches Settlement of SEC Securities Fraud Charges
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The Securities and Exchange Commission issued an Order Instituting
Public Administrative and Cease-and-Desist Proceedings Pursuant to
Section 8A of the Securities Act of 1933, Section 21C of the Securities
Exchange Act of 1934, and Rule 102(e) of the Commission's Rules of
Practice, Making Findings, and Imposing Remedial Sanctions, and a
Cease-and-Desist Order charges against Levine, Hughes, and Mithuen,
Inc., (LHM), an accounting firm based in Denver, Colorado. In addition,
the Commission filed a related action for civil penalties against LHM
in the U.S. District Court for the District of Colorado. LHM audited
Sport-Haley, Inc.'s financial statements from 1992 until Sport-Haley
dismissed them in July 2000.
The Commission found that during Sport-Haley's 1998, 1999, and 2000
fiscal years, LHM caused Sport-Haley to file materially false and
misleading quarterly and annual reports with the Commission that
materially misrepresented the company's income, WIP inventory, period
costs, and discontinued headwear operations. The Commission found that
LHM knew or were reckless in not knowing that certain financial
accounting and reporting practices were improper and assisted in
carrying out those practices. The Commission also found that LHM issued
audit reports containing unqualified opinions on Sport-Haley's
financial statements even though they knew or were reckless in not
knowing the company's 1998 and 1999 financial statements were
materially misstated. The Commission also found that, after LHM learned
of the investigation of Sport-Haley and had received requests from the
Commission for documents relating to LHM's audit of Sport-Haley's
financial statements, LHM personnel added information to the audit
workpapers, improperly altered some of the original audit workpapers,
disposed of some Sport-Haley documents in LHM's office, and destroyed
review notes that had been created as part of LHM's review of past
Sport-Haley audits.
Without admitting or denying the findings in the Commission's order,
LHM consented to the issuance of an order requiring that it cease and
desist from committing or causing any violations and any future
violations of Section 17(a) of the Securities Act, Section 10(b) of the
Exchange Act and Rule 10b-5 promulgated thereunder; and from causing
any violations and any future violations of Section 15(d) of the
Exchange Act. The order denies LHM the privilege of appearing or
practicing before the Commission as an accounting firm based on a
finding that LHM willfully violated, and willfully aided and abetted
the violation of Federal securities laws within the meaning of Rule
102(e)(1)(iii) of the Commission's Rules of Practice. LHM may request
that the Commission consider its reinstatement after three years.
The Commission's complaint in the district court action filed today
alleges the same conduct set forth in the settled order. In settling
the action, LHM agreed to pay civil penalties of $50,000 and submitted
a sworn statement of financial condition demonstrating an inability to
pay a larger civil penalty.
LEXAR MEDIA: Scott + Scott Sets May 21 As Suit Lead Plaintiff Deadline
----------------------------------------------------------------------
The law firm of Scott + Scott, LLC commenced a class action in the
United States District Court for the Northern District of California on
behalf of purchasers of Lexar Media, Inc. ("Lexar") (Nasdaq: LEXR)
publicly traded securities during the period between July 17, 2003 and
April 16, 2004 (the "Class Period"). The firm advises all parties
involved that May 21, 2004 is the deadline to move for appointment of
"lead plaintiff."
The law firm of Scott + Scott has actually filed a complaint in this
matter at the direction and on behalf of shareholders and is not merely
announcing that another firm has filed a complaint.
The complaint charges Lexar and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. Lexar designs,
develops, manufactures and markets high-performance digital media that
the Company markets as digital film, as well as other flash-based
storage products for consumer markets that utilize flash memory for the
capture and retrieval of digital content for the digital photography,
consumer electronics, industrial and communications markets.
The complaint alleges that during the Class Period, defendants issued a
series of materially false and misleading statements to the investing
public regarding Lexar's business prospects. On April 15, 2004, the
Company issued a press release reporting its financial statements for
the first quarter of 2004 and stating that "after several quarters of
relatively stable average selling prices, second quarter price declines
will be sizeable. These declines are occurring a quarter sooner than
anticipated given the current supply environment in the flash
industry." On this revelation, the Company's shares plummeted by nearly
a third to close at $10.42 per share on April 16, 2004.
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 the Company was experiencing widespread and
massive gross margin declines, and in fact, between
December 31, 2003 and March 31, 2004, the Company's
gross margin declined from 23.9% to 17.6%;
(2) that at the retail end, retailers had been stuffed with
inventory which would result in future decreasing sales
making defendants' projections unachievable; and
(3) that the cost of "price protection" associated with
Lexar's Asia and European sales together with a
material decline in the Company's average selling
prices would drastically erode the Company's margins
and EPS.
As a result of the defendants' false statements, Lexar's stock traded
at inflated levels during the Class Period, increasing to as high as
$23.99 per share on November 6, 2003, whereby the Company's top
officers and directors sold more than $16 million worth of their own
shares. On July 1, 2004, the Company's stock took a beating the night
before after the Company reduced its estimate of the upcoming second
quarter's final revenue numbers and said it expected a loss.
For more details, contact Neil Rothstein of Scott + Scott, LLC by Mail:
108 Norwich Avenue, Colchester, CT 06415 by Phone: 1-800-332-2259 or
860/537-3818 by Fax: 860/537-4432 by E-mail: nrothstein@scott-scott.com or
LexarMediaSecuritiesLitigation@scott-scott.com or visit their Web site
www.scott-scott.com
MICROSOFT CORPORATION: CA Firm Launches Game To Raise Awareness
---------------------------------------------------------------
The California Microsoft anti-trust settlement case owe millions of
computer users up to $1.1 billion in refunds, yet most of the estimated
14 million people eligible have not filed claims.
The deadline for filing is only weeks away and critics charge that the
process is too confusing, time consuming, and thus discourages people
from filing.
Microsoft agreed to refund up to $1.1 billion to California consumers
and businesses, settling class-action lawsuits that alleged the
software giant overcharged for products.
Although the Settlement Recovery Center, a Bay Area firm debuted a
website to help individuals conveniently file their claims, only a
small percentage of the millions eligible have done so. With the filing
deadline fast approaching, the company has decided to get the word out
through a new game located at www.RedmondRaid.com
"What people don't realize is that this is their money and they are
owed a refund," said Howard Yellen, CEO for Settlement Recovery Center
in San Francisco. "With the deadline only a few weeks away there is
still hundreds of millions of dollars sitting on the table. If no one
claims the money, hundreds of millions of dollars will go back to
Microsoft."
"The best way to get the attention of those that are actually owed the
money is to entertain and educate at the same time," said SRC's VP of
Marketing Scott Hunter. "We are hoping that the game gets passed around
to millions of Internet users who may be due money from Microsoft."
The object of Redmond Raid is to get your money back from Microsoft.
Redmond Raid features a disgruntled penguin flying a bomber over
Redmond, Washington. Using actual satellite photograph images of the
Microsoft campus, players get a realistic sense of where their money
has gone. There are a variety of enemies to keep trigger fingers busy
including nerdy engineers on flying scooters, helicopters and enemy
jets. Game play involves dropping "Happy Bombs" on Microsoft targets to
recover gold coins and money.
Upon completion of the game, players are sent to
http://www.ClassActionMoney.comwhere they can complete their refund
claim against Microsoft. Up to $100 can be claimed with no
documentation required.
"It's a win-win situation," said SRC's Hunter. "Consumers need to take
advantage of this once-in-a-lifetime opportunity. After all, when else
does one have the opportunity to pluck their $100 back, right out of
Bill Gates' wallet?"
When asked, why go after Microsoft? Hunter responded, "It's like Willie
Sutton's answer to why he robbed banks...it's where the money is."
For more details, contact Scott Hunter, VP Marketing of the Settlement
Recovery Center by Phone: 1-877-633-6227 Ext. 292 or visit their Web
sites: www.ClassActionMoney.com or www.RedmondRaid.com or
www.profnet.com/ud_public.jsp?userid=478755
MICROSOFT CORPORATION: NC Settlement Conference Call Set July 14
----------------------------------------------------------------
The Shanahan Law Group, of Raleigh, N.C., announced that a media
conference call that will provide information about how North Carolina
businesses can file a claim in the $89 million settlement of a class-
action lawsuit against Microsoft. Because the current deadline for
filing claims is July 26, 2004, businesses are being urged to file
their claim as soon as possible so as not to leave money on the table.
"The Microsoft Product Settlement gives companies in North Carolina an
opportunity to defray the cost of upgrading their existing hardware and
software through the use of claimed vouchers," said Reef Ivey of the
Raleigh-based Shanahan Law Group, lead counsel in the North Carolina
suit. "For example, by choosing to file a claim, businesses can take
advantage of the opportunity to add thousands to next year's technology
budget."
Businesses and individuals that purchased stand alone Microsoft
software or computers loaded with Microsoft Operating Systems (i.e.,
Windows or DOS) and/or Microsoft Applications (i.e., Office, Word or
Excel) between December 1995 and December 2002 are eligible to submit
claims by July 26, 2004. Claims will be paid on a "per license" basis,
meaning that businesses with large numbers of computers can benefit
greatly by participating in the settlement. Help for filing a claim is
available via the internet and a toll-free number. Qualifying
businesses may have claims worth thousands, tens of thousands, or even
hundreds of thousands of dollars.
David Stellings, a partner in the law firm of Lieff Cabraser Heimann &
Bernstein of New York and San Francisco explained, "If an eligible
business with 1,000 employees in North Carolina replaced their computer
operating systems and two software applications twice during the class
period, it would have a $40,000 claim in the settlement." The law firm
also is involved in anti-trust cases against Microsoft in several other
states.
The law firms representing plaintiffs in the proceeding will conduct a
conference call on Wednesday, July 14, 2004, to update North Carolina
business media with a detailed overview of the settlement, including
background of the case, settlement terms and benefits, eligibility
requirements, and the process for joining the settlement. The media
conference call will begin at 10:30 a.m., Eastern Time, on Wednesday,
July 14; the dial-in number and other instructions for participating in
the conference call are provided below.
Representatives of the law firms Shanahan Law Group, of Raleigh, North
Carolina: Lieff Cabraser Heimann & Bernstein, of New York and San
Francisco: and Lerach Coughlin Stoia & Robbins, of San Diego will
provide the settlement overview and answer questions from members of
the North Carolina business media. The attorneys also will be available
for one-on-one follow-up interviews via telephone. The conference call,
and scheduling for subsequent one-on-one interviews, will be
coordinated by Panorama Public Relations, of Birmingham, AL.
The proposed $89 million settlement of the proceeding titled In Re
North Carolina Microsoft Litigation Settlement is the result of class
action lawsuit alleging that Microsoft violated North Carolina's
antitrust and unfair competition laws. On October 30, 2003, the parties
settled the case, and the court gave preliminary approval of a
Settlement Agreement. The court granted final approval of the
settlement on May 27, 2004.
CONFERENCE CALL INSTRUCTIONS
For logistical purposes, and to ensure that all participating media are
accommodated adequately, participation in the July 14 conference call
will be limited to the first 25 media representatives who confirm their
intention to participate by calling Sonja Lother at Panorama Public
Relations, (205) 328-9334 ext. 3, prior to 4:00 p.m. Eastern Time (3:00
p.m. Central Time) on Tuesday, July 13, 2004. Any preliminary questions
regarding other aspects of the call should be directed to either
Darlene Rotch or Stacey Strawn at Panorama.
To participate in the conference call on July 14, dial 1-888-273-9890,
and respond "North Carolina Microsoft Settlement" when asked which call
you are joining. You then will be placed on hold until all participants
are on line. The attorneys will begin the conference call promptly at
10:30 a.m. Eastern Time with a brief overview of the proceeding and
settlement, with Q & A to follow, so participants are urged to call in
as early as 10-15 minutes prior to the scheduled start time.
For more details, contact Darlene Rotch or Stacey Strawn of Panorama
Public Relations by Mail: 2829 2nd Avenue S., Suite 200
Birmingham, AL 35233 by Phone: 205-328-9334 or by Fax: 205-323-0897 or
by E-mail: darlene@prview.com or stacey@prview.com
MONTANA POWER: Reaches $67 Million Shareholder Fraud Suit Settlement
--------------------------------------------------------------------
Montana Power Co., Touch America Holdings Inc., NorthWestern Corp., and
their respective insurance companies reached a $67M settlement in a
shareholder action suit, the Montana News reports.
The shareholder class-action lawsuit, which was filed in August 2001,
sought for nullification of Montana Power's 1999 sale of its generating
plants to PPL Montana because the shareholders didn't get to vote on
the deal, which ultimately left the company's successor, Touch America,
in financial ruin and cost shareholders $3 billion in lost stock value.
In exchange, the shareholders would drop their claims against the
officers and directors of Defendants and also dismiss their cases
against the insurance companies for the utilities.
Officers and directors of Montana Power and Touch America were covered
by $75 million in insurance coverage from three insurance companies,
Morrison told the Montana News. They were: Associated Electric and Gas
Insurance Ltd., $35 million; the Hartford, $25 million; and Chubb
Insurance, $15 million.
The settlement though still require the approval of the U.S. Bankruptcy
courts handling Touch America and NorthWestern bankruptcies and by U.S.
District Judge Sam Haddon of Great Falls.
According to legal experts the settlement is the second largest in
Montana legal history, trailing only the $97 million settlement that
employees won against Columbia Falls Aluminum Co. in 1998 over a broken
profit-sharing agreement.
Set to be approved by the courts, Frank Morrison Jr. of Whitefish, a
former Montana Supreme Court justice and one of the shareholders'
lawyers in the class-action lawsuit told the Montana News there may be
more money yet to come for shareholders besides the settlement.
According to Mr. Morrison the agreement does not affect the
shareholders' pending, separate lawsuit against Goldman Sachs, the New
York investment bank, and Milbank, Tweed, Hadley & McCloy, the Wall
Street law firm, that advised Montana Power officers and directors on
its business strategies. Mr. Morrison called Goldman Sachs "the evil-
doers" because it advised Montana Power's board how it could to sell
the company's dams and coal-fired power plants without shareholder
approval.
With the help of a professional mediator, attorneys for various sides
in the Montana Power-Touch America case hammered out the agreement in
San Francisco, which required the involvement of around 20 to 30
lawyers.
NEVIS CAPITAL: SEC Orders Distribution of Funds To Settle Complaint
-------------------------------------------------------------------
The Securites and Exchnage Commission ordered that distributions be
paid to investors pursuant to a plan for the distribution of monies
placed in a Fair Fund, pursuant to Section 308(a) of the Sarbanes Oxley
Act of 2002 (Plan), previously approved in the Matter of Nevis Capital
Management, LLC, (Nevis Capital), David R. Wilmerding, III
(Wilmerding), and Jon C. Baker (Baker). On Feb. 9, 2004, the Commission
found that Respondents Nevis Capital, Wilmerding, and Baker violated
Sections 206(1), 206(2), and 206(4) of the Investment Company Act of
1940, and Rule 206(4)-(1)(a)(5) thereunder. The Commission censured
Nevis Capital, Wilmerding, and Baker for their conduct, and ordered
each to cease and desist from committing or causing any violations or
future violations of Sections 206(1), 206(2), and 206(4) of the
Investment Company Act, and Rule 206(4)-(1)(a)(5) thereunder. In
addition, the Commission ordered each Respondent to pay disgorgement
and prejudgment interest in the amount of $10,000, ordered Nevis
Capital to pay civil penalties in the amount of $1,690,000, and ordered
Wilmerding and Baker to pay civil penalties in the amount of $140,000
each. On April 26, 2004, the Commission issued an order approving
publication of notice of the proposed Plan, and notice was published.
The Commission subsequently approved the Plan on June 4, 2004. The Plan
provides that the total distribution fund of $2,000,000, paid by Nevis
Capital, Wilmerding, and Baker, be distributed pro rata to clients of
Nevis Capital as of Dec. 1, 1998, who were otherwise eligible but were
not given the opportunity to participate in IPO investments.
NORTEL NETWORKS: NY Court Consolidates 27 Securities Fraud Suits
----------------------------------------------------------------
The United States District Court in the Southern District of New York
has consolidated the 27 class action complaints that have been filed
against Nortel Networks, and certain former officers, in the Southern
District of New York and appointed lead counsel and lead plaintiffs in
respect of the consolidated action.
As previously announced, the 27 class action complaints variously
allege that, in connection with the comprehensive review and analysis
of Nortel Networks assets and liabilities, the named defendants made
materially false and misleading statements in violation of U.S.
securities laws.
On July 12, 2004, the Company received a letter purporting to be on
behalf of a class of shareholders of Nortel Networks. The letter claims
that certain directors and officers, and certain former directors and
officers, of Nortel Networks breached fiduciary duties owed to the
Company during the period from 2000 to 2003 including by
(1) causing the Company to engage in unlawful conduct or
failing to prevent such conduct;
(2) causing the Company to issue false statements; and
(3) violating law.
The letter requires that the Company seek to recover its damages
arising from the alleged breaches. The letter demands that the Company
commence a proposed action against the listed individuals within 14
days or the class of shareholders will do so.
RIVERSIDE DA: Defendants in SEC Securities Fraud Action Arrested
----------------------------------------------------------------
The Riverside County District Attorney's Office (Riverside DA) arrested
four defendants in an ongoing multi-million dollar securities fraud
scheme. Arrested were Daniel William Heath, 47, of Chino Hills, his
father, John William Heath, 77, of Covina, Denis Timothy O'Brien, 50,
of Yorba Linda, and Larre Jaye Schlarmann, 46, of Carlsbad.
All four men have been charged by the Riverside DA with 233 felony
counts, including selling unqualified securities, selling securities by
misrepresentation, violating a court order to desist and refrain from
selling securities, elder abuse, grand theft, burglary, and money
laundering. All four men have been booked and are in custody. Bail is
set at $144 million for each individual. Two of the men arrested, Mr.
Heath and Mr. O'Brien, were named in an emergency civil injunctive
action filed by the Commission on April 28, 2004, in federal court in
Los Angeles.
The Securities and Exchange Commission's complaint alleges Mr. Heath
and Mr. O'Brien lured elderly victims to workshops with the promise of
a free lunch and then bilked them out of their retirement money by
purporting to sell them safe, guaranteed notes.
According to the Riverside DA's criminal complaint, the men operated
D.W. Heath & Associates, Inc., Private Capital Management, Inc. (PCM),
Private Collateral Management, Inc., and the PCM Fixed Income Fund I,
LLC (PCM Fund), as well as other investment entities with offices in
Hemet, Brea, Pasadena, and Big Bear. The defendants raised at least
$144 million from hundreds of elderly investors. The Riverside County
DA conducted the arrests and executed criminal search warrants at the
homes of Mr. Schlarmann and Mr. Heath. The Riverside DA had previously
executed criminal search warrants at the offices of Heath & Associates
offices and at Daniel Heath's home at the time the Commission filed its
complaint, and shortly thereafter, at O'Brien's home. The Riverside
County DA also sought asset freezes against defendants Mr. Schlarmann,
Mr. Heath, and Mr. O'Brien.
The Commission's complaint alleges that Mr. Heath, Mr. O'Brien, Heath &
Associates, PCM, Private Collateral Management, Inc., and the PCM Fund
fraudulently induced at least 803 elderly investors nationwide to
invest in notes in PCM and the PCM Fund (PCM notes) that purportedly
paid a "guaranteed" return of 5.5% to 8% per year. The defendants
claimed that investor funds would be used to make secured loans to
businesses. The defendants also represented that independent IRA
administrators conducted "due diligence" on the PCM notes, and that
investors would be repaid their principal at maturity, or that they
could redeem all or part of their investment before maturity, subject
to a penalty. Finally, the defendants claimed that PCM and the PCM Fund
were California entities.
According to the Commission's complaint, these representations were
false. There was no evidence that the loans were secured. Further, the
PCM notes were not liquid because the defendants failed to promptly
return investor funds. According to the SEC complaint, some investors
had to threaten to file, or actually file, lawsuits against the
defendants to get back their money. Nor was it true that IRA
administrators conducted due diligence. Finally, there was no record
that either PCM or the PCM Fund was a California legal entity.
In its lawsuit, the Commission obtained an order freezing the assets of
all defendants, except Mr. O'Brien, an accounting, an order preventing
destruction of documents, an order expediting discovery, and an order
temporarily enjoining all of the defendants from future violations of
the securities registration and antifraud provisions of the federal
securities laws, Sections 5(a), 5(c) and 17(a) of the Securities Act of
1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule
10b-5 thereunder. At a hearing on May 3, 2004, the court appointed Robb
Evans and Associates as temporary receiver over Heath & Associates,
PCM, Private Collateral Management, Inc., and the PCM Fund. On May 6,
2004, the court entered preliminary injunctions against all the
defendants. On May 18, 2004, the court appointed Robb Evan and
Associates as permanent receiver.
In its action, the Commission is seeking permanent injunctions, and
other relief, including disgorgement and civil penalties against all
defendants. The action is styled SEC v. D.W. Heath & Associates, Inc.,
Private Capital Management, Inc., Private Collateral Management, Inc.,
PCM Fixed Income Fund I, LLC, Daniel William Heath, and Denis Timothy
O'Brien, (Case No. CV 04-02949JFW(Ex))(C.D. Cal.)] (LR-18777)
SEARS ROEBUCK: Law Firms Lodge Product Liability Lawsuit in Illinois
--------------------------------------------------------------------
The law firms of Kershaw, Cutter, Ratinoff & York, LLP, with co-counsel
of Finkelstein, Thompson & Loughran and The Wexler Firm, LLP initiated
a class action complaint was filed against Sears Roebuck & Co.
("Sears") and Whirlpool Corporation ("Whirlpool") in the Circuit Court
of Cook County, Illinois, by, alleging that Whirlpool and Sears
manufactured, promoted and sold defective Calypso washers ("Calypso")
to consumers throughout the United States.
The class action suit alleges that there are inherent defects in
Calypso washers. The action alleges that despite many complaints from
consumers, Whirlpool and Sears have refused to notify consumers of the
defect, repair the defect or recall the Calypsos. Instead, they have
continued to sell the defective machines nationwide.
According to the lawsuit, the Calypsos suffer from problems, such as U-
Joint Failure, Circuit Board Malfunction, and filtration problems that
cause streaking and poor quality washes. The suit seeks repair,
replacement or compensation for all purchasers of the affected washers.
For ore details, contact Mark J. Tamblyn of Kershaw, Cutter, Ratinoff &
York LLP by Mail: 980 9th Street 19th Floor, Sacramento, CA 95814 by
Phone: (916) 448-9800 or 888-285-3333 by Fax: 916-669-4499 or by E-
mail: mtamblyn@kcrylaw.com or mtamblyn@kcrylaw.com
STAND-BY SYSTEMS: Texas Court Dismisses SEC Civil Injunctive Action
----------------------------------------------------------------
Judge Barefoot Sanders, U.S. District Judge for the Northern District
of Texas, entered an order dismissing the Securities and Exchange
Commission's civil injunctive action against defendants Stand-By
Systems, Inc. (Stand-By) and Kenneth J. Palmer (Palmer).
In a joint motion to dismiss the litigation, the parties advised the
Court that the Commission had determined that in light of developments
since the filing of its lawsuit, it should not continue to advance its
claims against the defendants. The parties also advised the Court that
in making its decision to seek the dismissal of the case, the
Commission relied upon the representations of the defendants concerning
their willingness, prior to any future offering of securities:
(1) to adopt accounting procedures and policies recommended
by a CPA to be retained by Standby, not unacceptable to
the Commission staff; and
(2) to submit all offering materials for review by
securities counsel, not unacceptable to the Commission
staff.
The civil injunctive action is Styled, SEC v. Stand-By-Systems, Inc.,
et al., Civil Action Number 3:02-0642-H, USDC NDTX, Dallas Division
(LR-18781).
SHOPKO STORES: Stock Suit Settlement Hearing Set August 20, 2004
----------------------------------------------------------------
The United States District Court for the Eastern District of
Wisconsin will hold a fairness hearing for the proposed $4,900,000
settlement of In Re Shopko Securities Litigation on behalf of all
persons or entities who purchased or otherwise acquired the common
stock of Shopko Stores, Inc. during the period from August 10, 200
through and including November 9, 2000 and who were damaged thereby.
The Court will hold a fairness hearing on August 20, 2004, at 11:00am,
before the Honorable Lynn Adelman, Court Room 390, 517 E. Wisconsin
Ave., Milwaukee, WI 53202.
For more details, contact Berger & Montague, PC by Mail: 1622 Locust
Street, Philadelphia, PA 19103 by Phone: 215-875-3000 or by E-mail:
info@bm.net OR Lowey Dannenberg Bemporad &
Selinger, PC by Mail: The Gateway, One North Lexington Ave., White
Plains, NY 10601 by Phone: 914-997-0500 or by E-mail: ldbs@westnet.com OR
visit the Settlement Claims Administrator Web site: www.heffler.com
TELETECH: NY Workers Commence Overtime Wage Lawsuits V. Call Center
-------------------------------------------------------------------
According to class action attorney Adam T. Klein more than ninety-three
workers or ex-workers of Teletech's Niagara Falls call center have
joined a class action lawsuit filed in May 2004 for back wages, the
Buffalo News reports.
Filed in Western New York, Denver-based Teletech is the target of the
purported class action under the Fair Labor Standards Act. Hundreds of
current and former workers of the company are receiving letters now,
asking if they want to join the lawsuits, attorneys told the Buffalo
News.
The local case is part of a boom in class actions brought under the
Fair Labor Standards Act, the law that sets minimum wage and overtime
rules. There were 102 class actions in federal courts last year, about
double the number of five years ago, according to the federal courts
administration office. When non-class actions are included, the number
of lawsuits under the fair labor act rises to 2,751, up 76 percent
since 1998.
New regulations that take effect Aug. 23 may turn aside some lawsuits
by clarifying jobs that are eligible for overtime, according to a
regulatory filing by the U.S. Labor Department. The new rules define
exemptions for managers and professionals.
But Adam Klein, the lawyer for the class action against Teletech, said
civil cases are often workers' only leverage against employers and
unclear rules aren't the problem. Low penalties for violating wage laws
makes it profitable for employers to cut corners.
In one of his cases at Outten & Golden in New York, Klein said he won
back wages for about 60 immigrant delivery workers who were paid $1 an
hour by companies in New York City. The minimum wage is $5.15.
"Immigrants are especially vulnerable," Klein told the Buffalo News.
"Lots of employers are violating the statute at will."
WEGENER CORPORATION: DE Court Dismisses Shareholder Fraud Lawsuit
-----------------------------------------------------------------
The Court of Chancery of the State of Delaware, for New Castle County
dismissed without prejudice of an action styled as a direct class
action and a derivative action filed against The Wegener Corporation by
Jerry Leuch on June 20, 2003. The suit also names as defendants Robert
A. Placek, Thomas G. Elliot, Joe K. Parks, C. Troy Woodbury, Jr.,
Wendell Bailey, Ned Mountain.
The Plaintiff alleged that the individual defendants violated their
fiduciary duties due to him and other shareholders, the members of the
alleged class, as well as Wegener.
The relief sought by Plaintiff included:
(1) a declaration that the Defendants must consider and
evaluate all bona fide offers to purchase all of the
outstanding shares of Wegener consistent with their
fiduciary duties;
(2) a declaration that this action is properly styled as a
class action;
(3) an injunction against proceeding with any business
combination which benefited the individual defendants
and an injunction requiring that any conflicts of
interest be resolved in favor of the Wegener
shareholders;
(4) and a declaration removing the anti-takeover measures
enacted by Wegener's Board of Directors.
The Complaint sought an award of Plaintiff's costs and attorneys' and
other fees. An answer was filed by Wegener, denying all substantive
allegations in the complaint.
WYETH: Court Extends National Diet Drugs Claims Processing in PA
----------------------------------------------------------------
Pharmaceutical giant Wyeth announced that U.S. District Judge Harvey
Bartle III of the Eastern District of Pennsylvania extended the stay of
national diet drug claims processing through July 21 in order to allow
the Madison, New Jersey based company and the National Class Counsel
and counsel representing individual class members to continue
negotiating terms of a proposed Seventh Amendment to the National Diet
Drug Class Action Settlement.
For more details, contact Lowell Weiner of Wyeth Media by Phone:
973-660-5013 OR Douglas Petkus of Wyeth Pharmaceuticals by Phone:
484-865-5140 or Justin Victoria - Wyeth Investor by Phone: 973-660-5340
New Securities Fraud Cases
CARDINAL HEALTH: Abbey Gardy Files Securities lawsuit in S.D. OH
----------------------------------------------------------------
The law offices of Abbey Gardy, LLP commenced a Class Action lawsuit in
the United States District Court for the Southern District of Ohio (C2-
04-598) on behalf of all purchasers of securities of Cardinal Health,
Inc. ("Cardinal" or the "Company") (NYSE: CAH) between October 24, 2000
and June 30, 2004, inclusive (the "Class Period").
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 names as defendants Cardinal Health, Inc.,
Robert D. Walter and Richard J. Miller. The Complaint alleges that
defendants issued a series of materially false statements starting on
October 24, 2002 when Cardinal announced its revenues and earnings for
its first quarter ended September 20, 2000 and continuing to June 30,
2004 concerning Cardinal's financial condition. More specifically, the
complaint alleges that defendants failed to disclose that Cardinal:
(1) manipulated aspects of its accounting practices to be
able to continuously portray profitability to market;
(2) held inventory for an average of two months, and reaped
exorbitant profits from price inflation;
(3) improperly accounted for the $22 million recovered from
Vitamin makers accused of overcharging Cardinal by
booking such recoveries as revenue when the antitrust
cases had not been resolved;
(4) that Cardinal's pharmaceutical distribution business
improperly classified revenues by reporting the
revenues as either operating revenue or revenues form
bulk deliveries to consumer warehouses when revenues
were not derived from such; and
(5) that as a consequence of these aforementioned practices,
the Company's financial results were in violations of
Generally Accepted Accounting Principles ("GAAP") and
the Company's own revenue recognition policies.
On June 30, 2004, Cardinal announced expected earnings of approximately
11% per share for the fiscal year 2004, which were below prior
guidance. In this same press release Cardinal announced that it had
received a Securities Exchange Commission ("SEC") subpoena on June 21,
2004 as part of a formal investigation. The subpoena requested, among
other things, documents relating to revenue classification, and the
methods used for such classification. On this news, Cardinal fell
$17.19 per share or 24.54% on July 1, 2004 to close at $52.86 per
share.
For more details, contact Nancy Kaboolian, Esq. of Abbey Gardy, LLP by
Phone: (212) 889-3700 or (800) 889-3701 or by E-mail:
Nkaboolian@AbbeyGardy.com
CARDINAL HEALTH: Glancy Binkow Lodges Securities Suit in S.D. OH
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The law firm of Glancy Binkow & Goldberg LLP initiated a class action
lawsuit in the United States District Court for the Southern District
of Ohio on behalf of a class (the "Class") consisting of all persons
who purchased or otherwise acquired securities of Cardinal Health, Inc.
("Cardinal" or the "Company") (NYSE:CAH) between October 24, 2000 and
June 30, 2004, inclusive (the "Class Period").
The Complaint charges Cardinal and certain of the Company's executive
officers with violations of federal securities laws. Plaintiff claims
that defendants' omissions and material misrepresentations concerning
Cardinal's operations and financial performance artificially inflated
the Company's stock price, inflicting damages on investors. The
complaint alleges that defendants failed to disclose and/or
misrepresented that:
(1) the Company manipulated aspects of its accounting
practices to continuously portray profitability to the
market;
(2) the Company held inventory for an average of two
months, and reaped exorbitant profits from price
inflation;
(3) the Company improperly accounted for $22 million
recovered from vitamin makers accused of overcharging
Cardinal by booking such recoveries as revenue when the
antitrust cases had not been resolved;
(4) the Company's pharmaceutical distribution business
falsely classified certain revenues as either operating
revenue or revenues from bulk deliveries to consumer
warehouses;
(5) the Company's financial results were in violation of
Generally Accepted Accounting Principles and the
Company's own accounting interpretations on revenue
recognition, as a consequence of the aforementioned
practices;
(6) the Company lacked adequate internal controls;
(7) the Company's earnings per share were materially
inflated; and
(8) as a result of the above, the Company's financial
results were artificially inflated at all relevant
times.
For more details, contact Michael Goldberg, Esq. of Glancy Binkow &
Goldberg LLP by Mail: 1801 Avenue of the Stars, Suite 311, Los Angeles,
California 90067 by Phone: (310) 201-9150 or (888) 773-9224 by E-mail:
info@glancylaw.com or visit their Web site: www.glancylaw.com
CENTRAL FREIGHT: Lerach Coughlin Lodges Securities Lawsuit in TX
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The law firm of Lerach Coughlin Stoia & Robbins LLP initiated a class
action lawsuit in the United States District Court for the Western
District of Texas on behalf of purchasers of Central Freight Lines,
Inc. ("Central") (NASDAQ:CENF) common stock during the period between
December 12, 2003 and June 16, 2004 (the "Class Period"), including
those who acquired shares pursuant to the Company's December 2003
initial public offering ("IPO").
The complaint charges Central Freight and certain of its officers and
directors with violations of the federal securities laws. Central
Freight is a non-union, regional less-than-truckload ("LTL") carrier
based in the southwestern United States. As an LTL carrier, the Company
picks up multiple freight shipments from multiple customers on a single
truck and then routes that freight for delivery.
The complaint alleges that during the Class Period, defendants caused
Central Freight stock to trade at artificially inflated levels through
the issuance of false and misleading statements regarding the Company's
business and prospects. According to the complaint, the defendants knew
but actively concealed the following adverse information:
(1) prior to the IPO, the Company was staging a massive
move into the Pacific Northwest to maintain market
share which would erode the Company's margins for
future quarters;
(2) by Fall 2003, the Company was experiencing an adverse
trend in its interlining capacity business (partnering
to move freight beyond a carrier's territory) as
competitors were seeing the September 24, 2003
announcement of the Company's planned IPO as an
encroachment on their territory and as a competitive
threat;
(3) prior to the IPO, the Company's Chairman, defendant
Jerry C. Moyes, pledged his post-IPO 40% stake in the
Company as collateral for a loan, however, it was
concealed that defendant Moyes' shares were and are not
subject to the 180-day lock-up agreement the rest of
management is tied to, and thus, there is still a risk
that as much as 40% of the entire Company's shares
could flood the market at any moment and without
warning;
(4) the Company's attempts to integrate its acquisition of
East Oregon Fast Freight, Inc. was in shambles and the
costs associated with this integration were grossly
understated, which would cause the Company's debt level
and number of employees to materially soar;
(5) the Company's Dynamic Resource Planning process was not
streamlining the Company's business and was not on
track to be integrated by Q2 04 as defendants claimed;
(6) the Company was experiencing an adverse trend in its
labor and purchased transportation costs together with
higher self-insured claims, all of which was, at the
time of the Company's IPO, eroding the Company's
margins; and
(7) even defendants' post-IPO statements, including
defendants' April 28, 2004 guidance, were not genuinely
believed.
On June 16, 2004, the Company issued a press release announcing that it
expected "its financial results for the second quarter of 2004 to be
substantially lower than the guidance of $.04 to $.08 per diluted share
the company had previously announced. Based on current trends, the
company expect(ed) a loss of approximately $.09 to $.14 per basic
share, including an anticipated one-time benefit of approximately $.11
per share from the reversal of a tax accrual resulting from a favorable
IRS settlement. Excluding the one-time benefit, the expected loss would
be in the range of $.20 to $.25 per basic share."
On this news, Central Freight common stock fell from $12.54 per share
on June 16, 2004 to $8.55 per share on June 17, 2004, or 31%.
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 the their Web site:
www.lcsr.com/cases/centralfreight
CORINTHIAN COLLEGES: Murray Frank Files Securities Lawsuit in CA
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The law firm of Murray, Frank & Sailer LLP initiated a class action
lawsuit in the United States District Court for the Central District of
California on behalf of all shareholders who purchased or acquired the
common stock of Corinthian Colleges, Inc. (Nasdaq:COCO) ("Corinthian"
or the "Company") between August 27, 2003 through July 23, 2004,
inclusive (the "Class Period").
The complaint alleges that Corinthian, David Moore, Anthony Digiovanni,
and Dennis Beal 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 August
27, 2003 through July 23, 2004. More specifically, Corinthian reported
record fourth quarter revenues of $138.9 million, record fourth quarter
diluted earnings per share of $0.39, and record results for its fiscal
year ended June 30, 2003. For its 2003 fiscal year that ended on June
30, 2003, Corinthian posted record revenues of $517.3 million, 53%
higher than fiscal 2002 revenues of $338.1 million. In the fourth
quarter of fiscal 2003, Corinthian's revenues rose 47% to a record
$138.9 million, up from $94.6 million in the corresponding year-earlier
period.
Moreover, Corinthian reported record revenues and set new records in
net income, operating profits and student population for the second
quarter and six-month year-to-date period ended December 31, 2003.
Revenues for the second quarter rose 57.8% to $200.6 million, compared
with revenues of $127.2 million posted in the second quarter of the
previous year. For the six-month period, revenues increased 52.3% to
$369.8 million, up from $242.8 million for the comparable period the
previous year. Net income for the second quarter advanced 35.9% to
$21.9 million, or $0.47 per diluted share, up from $16.1 million, or
$0.35 per diluted share, in the second quarter a year ago. Net income
for the first half of fiscal 2004 rose 38.3% to $41.3 million, or $0.88
per diluted share, compared with $29.9 million, or $0.65 per diluted
share, for the same period last year.
On June 24, 2004, THE FINANCIAL TIMES reported, in a story entitled
"College Fee Probe Extends to Corinthian," that a division of the US
Department of Education ("USDE") had uncovered violations in obtaining
federal loans at Corinthian's Bryman College campus, in San Jose,
California. Consequently, USDE revoked the school's ability to receive
advance payments on its student loans. The price of Corinthian
Colleges' shares fell $2.55, or 10.18 percent, as a result of the news,
closing at $22.51.
For more details, contact Eric J. Belfi or Aaron D. Patton Murray,
Frank & Sailer LLP by Phone: (800) 497-8076 or (212) 682-1818 by Fax:
(212) 682-1892 by E-mail: info@murrayfrank.com or visit their Web site:
www.murrayfrank.com/newcases_213.htm
CORINTHIAN COLLEGES: Wechsler Harwood Lodges CA Securities Suit
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The law firm of Wechsler Harwood LLP initiated a securities class
action on behalf of persons or entities who purchased or otherwise
acquired the securities of Corinthian Colleges, Inc. ("Corinthian" or
the "Company") (Nasdaq:COCO) between August 27, 2003 and June 23, 2004,
inclusive, (the "Class Period").
The case is pending in the United States District Court for the Central
District of California against defendants Corinthian and certain of its
officers.
The Complaint alleges that defendants made false and misleading
statements concerning its business and financial performance in
violation of the Securities Exchange Act of 1934. Such representations
were materially false and misleading because, unbeknownst to investors,
they failed to disclose and/or misrepresented that
(1) the Company manipulated financial aid documents to
boost loan amounts available to students, thereby
fraudulently receiving additional funds from the
federal government;
(2) the Company used the fraudulently obtained funds to
boost its revenues and stock price;
(3) the Company lacked adequate internal controls; and
(4) as a result of the illegal practices, the Company's
earnings and net income were materially inflated and in
violation of Generally Accepted Accounting Principles
("GAAP").
On June 24, 2004, Corinthian announced that a division of the United
States Department of Education ("USDE") had uncovered violations in
obtaining federal loans at Corinthian's Bryman College campus in San
Jose, California. Consequently, the USDE revoked the school's ability
to receive advance payments on its student loans. News of this shocked
the market. Shares of Corinthian fell $2.55 or 10.18 percent, on June
24, 2004, to close at $22.51.
For more details, contact Virgilio Soler, Jr. of Wechsler Harwood -
Shareholder Relations Department by Mail: 488 Madison Avenue, 8th
Floor, New York, New York 10022 by Phone: (877) 935-7400 by E-mail:
vsoler@whesq.com or visit their Web site: www.whesq.com
*********
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Copyright 2004. All rights reserved. ISSN 1525-2272.
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