/raid1/www/Hosts/bankrupt/CAR_Public/040728.mbx
C L A S S A C T I O N R E P O R T E R
Wednesday, July 28, 2004, Vol. 6, No. 148
Headlines
BOSTON SCIENTIFIC: Recalls Coronary Stent Systems Due To Defects
BRUCE BERTMAN: SEC Declares Ruling V. Penny Stock Traders Final
CALLIDUS SOFTWARE: Shareholders Launch Stock Fraud Suits in CA
CASH LINK: SEC Obtains Temporary Order Halting Investment Scheme
CHURCH EXTENSION: SEC Wins Jury Verdict For IN Securities Suit
CORINTHIAN COLLEGES: Shareholders Launch Stock Fraud Suits in CA
ITT EDUCATIONAL: Shareholders Launch Stock Fraud Suits in DC, IN
JOSEPH ISAAC: CA Judge Grants SEC's Motion For Default Judgment
LANDRY'S RESTAURANT: CO Lawyer Leads Lawsuit V. Credit-Card Fees
METABOLIFE INTERNATIONAL: Indicted By CA Jury Over Diet Drugs
MICROSOFT CORPORATION: Reps Meet Judge To Discuss EU Sanctions
MICROSOFT CORPORATION: To Oppose Japanese Commission's Warning
NASH FINCH: MN Court Junks Lawsuit For Securities Act Violations
NBTY INC.: Schiffrin & Barroway Expands NY Lawsuit Class Period
NORTHSTAR NETWORKS: SEC Settles Fraud Suit V. Former Officers
SIG SPECIALISTS: SEC Institutes Enforcement Action V. NYSE Firms
SPIEGEL INC.: SEC Revokes Stock Registration, Settles SEC Suit
OHIO: ACLU Launches Suit Seeking To Remove Punch-Card Balloting
PHILIPS INTERNATIONAL: NY Liquidation Suit Voluntarily Dismissed
RED HAT: Shareholders Launch Securities Fraud Suits in E.D. NC
UNITED STATES: FDA Probing Salmonellosis Outbreak from Tomatoes
US ONCOLOGY: Reaches Settlement For Lawsuits V. Merger Agreement
VERITAS SOFTWARE: Shareholders Launch Securities Lawsuits in DE
WASHINGTON MUTUAL: Shareholders Launch Securities Lawsuits in WA
WELLCHOICE INC.: Plaintiffs File Amended Unfair Trade Suit in FL
WELLCHOICE INC.: Named in Medical Practitioners' Lawsuit in FL
Meetings, Conferences & Seminars
* Scheduled Events for Class Action Professionals
* Online Teleconferences
New Securities Fraud Cases
CALLIDUS SOFTWARE: Charles J. Piven Lodges Securities Suit in CA
CARDINAL HEALTH: Charles J. Piven Files Securities Lawsuit in OH
CENTRAL FREIGHT: Charles J. Piven Files Securities Lawsuit in TX
CORINTHIAN COLLEGES: Charles Piven Lodges Securities Suit in CA
CORINTHIAN COLLEGES: Milberg Weiss Lodges Securities Suit in CA
DRUGSTORE.COM: Marc S. Henzel Lodges Securities Suit in W.D. WA
INTRABIOTICS: Charles J. Piven Lodges Securities Suit in N.D. CA
NBTY INC.: Paskowitz & Associates Lodge Amended Suit in E.D. NY
RED HAT: Schiffrin & Barroway Lodges Securities Suit in E.D. NC
SALESFORCE.COM: Lerach Coughlin Files Securities Suit in N.D. CA
YUKOS OIL: Charles J. Piven Lodges Securities Lawsuit in S.D. NY
*********
BOSTON SCIENTIFIC: Recalls Coronary Stent Systems Due To Defects
----------------------------------------------------------------
The Boston Scientific Corporation of Maple Grove, Minnesota in
cooperation with the United States Food and Drug Administration
is initiating a Medical Device Class 1 Recall of the Company's
Boston Scientific Express2TM (bare metal) coronary stent system
The Express2T stent system consists of a stent (small metal
tube), which is mounted on a balloon catheter. The stent is
inserted into a blood vessel and advanced within the vessel to
the narrowed section of the coronary artery. When the stent is
correctly positioned, the balloon is inflated, causing the stent
to expand. Expansion of the stent pushes the plaque aside,
opening the narrowed section of the artery restoring normal blow
flow to the heart. The balloon on the stent delivery catheter is
then deflated and the delivery catheter is removed from the
patient. The stent remains permanently implanted supporting the
newly opened section of the vessel.
Characteristics in the design of this stent system resulted in
failure of the balloon to deflate and impeded removal of the
balloon after stent placement.
Impeded balloon deflation can result in significant patient
complications, including emergency coronary artery bypass graft
surgery and death. Hospitals should immediately discontinue use
of any affected units. Class I recalls are the most serious type
of recall and involve situations where there is a reasonable
probability that use of the product will cause serious injury or
death.
For more details, contact Boston Scientific Corporation by
Phone: 800-832-7822
BRUCE BERTMAN: SEC Declares Ruling V. Penny Stock Traders Final
---------------------------------------------------------------
The Securities and Exchange Commission declared final the
decision of an administrative judge barring Bruce Bertman and
Geoffrey W. Gazda from participating in any offer of a penny
stock. The law judge determined that Bertman was found guilty
of one count of conspiracy to commit wire-fraud, twelve counts
of wire fraud, one count of mail fraud, and one count of
securities fraud. The court sentenced Bertman to fifty-one
months in prison and three years of supervised release.
The law judge found that Gazda pled guilty to one count of
conspiracy to commit wire and securities fraud in two separate
criminal cases. The court sentenced Gazda to forty-six month of
incarceration and three years of supervised release on each
count, with both sentences running concurrently.
CALLIDUS SOFTWARE: Shareholders Launch Stock Fraud Suits in CA
--------------------------------------------------------------
Callidus Software, Inc. faces several securities class actions
filed in the United States District Court for the Northern
District of California.
The suits allege that the Company, a provider of enterprise
incentive management ('EIM') software systems, and certain of
its officers and directors issued materially false statements.
Specifically, Callidus failed to disclose:
(1) Callidus was suffering at the time of the IPO due to
competition from established enterprise software and
ERP vendors, who could bundle their EIM offerings with
other software products and therefore compete more
aggressively on prices;
(2) Callidus was, prior to its IPO, experiencing a material
adverse trend in license revenues;
(3) as a result of the adverse trend in 'license' revenue,
Callidus' future 'service' revenue would be adversely
impacted for future quarters;
(4) Callidus used as a barometer for its sales forecasts
its 18 quota-carrying sales representatives who were
severely behind on hitting their unrealistic quotas;
and
(5) prior to the IPO, Callidus had planned on bringing its
Cezanne software team 'in-house,' which would
dramatically impact the Company's earnings per share in
future quarters.
On June 24, 2004, before the market opened, Callidus issued a
press release announcing that its 'chairman and CEO resigned,
and it warned that second-quarter and full-year results would
not meet . . . financial targets.' On this news, shares of
Callidus fell to $5.01 per share, well below the Class Period
high and even the IPO price.
The suit was filed on behalf of purchasers of the Company's
stock from November 19,2003 to July 23,2004. The plaintiff
firms in the suits are:
(1) Brodsky & Smith, LLC, Mail: 11 Bala Avenue, Suite 39,
Bala Cynwyd, PA, 19004, Phone: 610-668-7987, Fax: 610-
660-0450, E-mail: esmith@Brodsky-Smith.com;
(2) Charles J. Piven, Mail: World Trade Center-
Baltimore,401 East Pratt Suite 2525, Baltimore, MD,
21202, Phone: 410-332-0030, E-mail: pivenlaw@erols.com;
(3) Schatz & Nobel, P.C., Mail: 330 Main Street, Hartford,
CT, 06106, Phone: 800-797-5499, Fax: 860-493-6290, E-
mail: sn06106@AOL.com
CASH LINK: SEC Obtains Temporary Order Halting Investment Scheme
----------------------------------------------------------------
The Securities and Exchange Commission filed an emergency action
in U.S. District Court in Dallas, Texas to halt a fraudulent
investment scheme and freeze assets for the benefit of
investors. The Commission charged Cash Link Systems Inc. and its
president, Alan Levine, with securities fraud in connection with
unregistered interstate securities offering involving "cashless"
automated teller machines (ATMs). The complaint alleges that
defendants used fraudulent means to raise over $10 million from
at least 680 investors nationwide.
At the request of the Commission, the Court entered a temporary
restraining order halting the offering, issued orders to
conserve assets for the benefit of the scheme's victims,
including an asset freeze, the appointment of a receiver, and an
accounting. The Commission also named, Alvin-L Consulting, Inc.,
VC Partners, Inc, and Kimberly M. Ferreiras, as relief
defendants, seeking return of investor funds unjustly received.
The action is titled, SEC v. Cash Link Systems Inc., et al.,
Civil Action No. 3:04-CV-1573 L, U.S.D.C./Northern District of
Texas (Dallas Division) (LR 18791)
CHURCH EXTENSION: SEC Wins Jury Verdict For IN Securities Suit
--------------------------------------------------------------
A federal jury found James Perry Grubbs (Grubbs) and Shearon
Louis Jackson (Jackson) liable for violating the antifraud
provisions of the federal securities laws. The jury found that
Grubbs and Jackson each, directly or indirectly, caused Church
Extension of the Church of God, Inc. (Church Extension) offering
circulars distributed to investors to contain false or
misleading information and acted with fraudulent intent and
negligence in doing so.
The verdicts were returned after a seven-and-a-half day trial in
federal court in the Southern District of Indiana, presided over
by the Honorable David F. Hamilton. The trial resulted from a
complaint the Securities and Exchange Commission filed on July
22, 2002 charging Church Extension and United Management
Services, Inc. (UMS) and the former presidents of those
entities, Grubbs and Jackson with fraudulently raising $85
million from the sale of investment notes to thousands of
investors nationwide. Church Extension and UMS previously
settled the Commission's charges on July 31, 2002.
In its complaint, the Commission alleged that in connection with
the offer and sale of investment notes, defendants repeatedly
made material misrepresentations and omitted to state material
facts in Church Extension's solicitation and offering circulars,
concerning, among other things, the primary use of investment
note proceeds and the financial conditions of Church Extension
and UMS. Specifically, the complaint alleged that Grubbs and
Jackson, through Church Extension and UMS, embarked on a
fraudulent scheme to cover up financial difficulties suffered by
Church Extension and UMS from investors. The complaint also
alleged that instead of using investment note proceeds primarily
to fund church loans as stated in the offering circulars,
investor proceeds were used to fund speculative real estate
transactions and to make interest and principal payments to
prior investors.
At trial, the jury determined that Grubbs and Jackson each
violated Section 17(a) of the Securities Act of 1933 (Securities
Act), Section 10(b) of the Securities Exchange Act of 1934
(Exchange Act) and Rule 10b-5 thereunder. The Court will
determine at a later date the appropriate sanctions against
Grubb and Jackson. The Commission is seeking orders of permanent
injunction, disgorgement plus prejudgment interest and civil
monetary penalties against Grubbs and Jackson.
On July 31, 2002, Church Extension and UMS consented to the
entry of permanent injunctions prohibiting future violations of
Section 17(a) of the Securities Act, Section 10(b) of the
Exchange Act and Rule 10b-5 thereunder. Church Extension and
UMS also agreed to pay disgorgement of approximately $81
million. In consenting to the entry of the civil injunctions
and disgorgement, Church Extension and UMS neither admitted nor
denied the allegations of the Commission's Complaint.
Additionally, on July 31, 2002, the Court appointed Jeff J.
Marwil, a partner at the law firm of Jenner & Block in Chicago,
Illinois, as an independent Conservator in this case. The
Conservator's mandate is to protect the interest of investors
who invested or reinvested in the note program.
CORINTHIAN COLLEGES: Shareholders Launch Stock Fraud Suits in CA
----------------------------------------------------------------
Corinthian Colleges, Inc. and certain of its officers and
directors face several securities class actions filed in the
United States District Court for the Central District of
California.
The Complaints allege that Corinthian, and certain of its
officers and directors issued materially false statements.
Specifically, Corinthian knew but failed to disclose:
(1) that Corinthian manipulated financial aid documents to
boost loan amounts available to students, thereby
fraudulently receiving additional funds from the
federal government;
(2) that Corinthian used the fraudulently obtained funds to
boost its revenues and stock price; and
(3) that as result of the illegal practices, Corinthian's
earning 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 US
Department of Education ('USDE') had uncovered violations in
obtaining federal loans at Corinthian's Bryman College campus,
in San Jose, California. As a result, USDE revoked the school's
ability to receive advance payments on its student loans. On
this news, shares of Corinthian fell $2.55 or 10.18% to close at
$22.51 on June 24, 2004.
The suits were filed on behalf of purchasers of the Company's
common stock from August 27,2003 to June 23,2004. The plaintiff
firms in the suits are:
(1) Charles J. Piven, Mail: World Trade Center-
Baltimore,401 East Pratt Suite 2525, Baltimore, MD,
21202, Phone: 410-332-0030, E-mail: pivenlaw@erols.com;
(2) Schatz & Nobel, P.C., Mail: 330 Main Street, Hartford,
CT, 06106, Phone: 800-797-5499, Fax: 860-493-6290, E-
mail: sn06106@AOL.com;
(3) Weiss & Yourman (Los Angeles, CA) Mail: 10940 Wilshire
Blvd - 24th Floor, Los Angeles, CA, 90024, Phone: 310-
208-2800, Fax: 310-209-2348, E-mail: info@wyca.com
ITT EDUCATIONAL: Shareholders Launch Stock Fraud Suits in DC, IN
----------------------------------------------------------------
ITT Educational Services, Inc. and three of its executive
officers faces thirteen securities class actions filed in the
United States District Courts for the District of Columbia and
the Southern District of Indiana, alleging violations of federal
securities laws. The suits are:
(1) Richard Darquea, Individually and On Behalf of All
Others Similarly Situated v. ITT Educational Services,
Inc., et al.;
(2) Eastside Investors, Individually and On Behalf of All
Others Similarly Situated v. ITT Educational Services,
Inc., et al;
(3) Roger Segalla, on behalf of himself and all others
similarly situated v. ITT Educational Services, Inc.,
et al.;
(4) Allan Coffin, Individually and On Behalf of All Others
Similarly Situated v. ITT Educational Services, Inc.,
et al.;
(5) Muriel & Wilbur Shapiro, Individually and On Behalf Of
All Others Similarly Situated v. ITT Educational
Services, Inc., et al.;
(6) Linda A. Lowson, individually and on behalf of herself
and all others similarly situated v. ITT Educational
Services, Inc., et al.;
(7) Linda D. Dudek, Individually and On Behalf Of All
Others Similarly Situated v. ITT Educational Services,
Inc., et al.;
(8) Richard Murad, Individually and On Behalf Of All Others
Similarly Situated v. ITT Educational Services, Inc.,
et al.;
(9) Thomas D. and Cheryl K. Bejgrowicz, Individually and On
Behalf Of All Others Similarly Situated v. ITT
Educational Services, Inc., et al.;
(10) Irene Rosen, On Behalf of Herself and All Others
Similarly Situated v. ITT Educational Services, Inc.,
et al.;
(11) William E. Norton, Individually and On Behalf of All
Others Similarly Situated v. ITT Educational Services,
Inc., et al.;
(12) Barbara R. Ritchie, On Behalf of Herself and All Others
Similarly Situated v. ITT Educational Services, Inc.,
et al; and
(13) James Shanbrom, on behalf of himself and all others
similarly situated v. ITT Educational Services, Inc.,
et al.
Seven of those lawsuits were filed on February 26, 2004,
February 27, 2004, March 3, 2004, March 29, 2004, April 1, 2004,
April 16, 2004 and April 23, 2004, respectively, in the United
States District Court for the Southern District of Indiana, and
six were filed on March 9, 2004, March 24, 2004, March 29, 2004,
March 29, 2004, March 30, 2004 and March 31, 2004, respectively,
in the United States District Court for the District of
Columbia.
The complaints allege, among other things, that the defendants
violated Sections 10(b) and 20(a) of the 1934 Act, and Rule 10b-
5 promulgated thereunder, by employing devices, schemes and
artifices to defraud, making untrue statements of material fact
and/or omitting to state material facts necessary to make
statements not misleading and engaging in acts, practices and
a course of business which operated as a fraud and deceit on the
purchasers of Company securities in an effort to maintain
artificially high market prices for the Company's stock.
The putative class periods in such actions are from April 17,
2003 through February 24, 2004 in nine of the actions, from
October 16, 2003 through February 25, 2004 in two of the
actions, from October 17, 2002 through February 24, 2004 in one
of the actions and from October 17, 2002 through March 9, 2004
in one of the actions. The plaintiffs seek, among other things,
an award of unspecified compensatory damages, interest, costs
and attorney's fees and, in one of the actions, unspecified
extraordinary equitable and/or injunctive relief.
JOSEPH ISAAC: CA Judge Grants SEC's Motion For Default Judgment
---------------------------------------------------------------
The Honorable Nora M. Manella, U.S. District Court, Central
District of California granted the Securities and Exchange
Commission's Motion for Default Judgment Against Joseph M. Isaac
enjoining him from future violations of the 2000 and raised
approximately $17 million from investors by selling the stock
through a boiler room established by Johnson, Isaac and Carone
in Encino, California. The complaint alleged that in making the
offering the defendants failed to disclose the fact
that at least $5.1 million, or thirty percent, of the offering
proceeds were paid as commissions to the boiler room operations.
The complaint also alleged that the defendants made false
representations that a public offering of LinkNet stock was
imminent; LinkNet's stock would shortly be listed on NASDAQ;
investors could realize phenomenal returns on their investment
in a short time; and LinkNet and Latina had contracts for the
sale of long distance service in the United States and Mexico
which would generate millions of dollars in revenue to the
companies. The complaint further alleged that, while the
offerings were ongoing, Isaac sold personal shares of LinkNet
and Latina stock through the Encino boiler room and by other
means.
The order against Issac prohibits him from future violations of
Sections 5 and 17(a) of the Securities Act and Sections 10(b)
and 15(a) of the Securities Exchange Act and Rule 10b-5
promulgated thereunder. In addition, the Order bars Isaac from
participating in any offering of penny stock. The order also
provides for disgorgement in the amount of $1,819,201.94 along
with prejudgment interest of $498,393.77, and a civil penalty in
the amount of $110,000.00. The action is titled, SEC v. Carone,
et al., Docket No. CV03-374 NM (FMOx) USDC, C.D. Cal. (LR-18792)
LANDRY'S RESTAURANT: CO Lawyer Leads Lawsuit V. Credit-Card Fees
----------------------------------------------------------------
Attorney Tim Fox of Denver's Fox & Robertson is leading a class
action lawsuit against Houston restaurant chain, Landry's
Restaurants Inc., over a very controversial business practice of
deducting credit-card processing fees from food servers' tips,
The Denver Post reports.
Mr. Fox and Illinois attorney Steven Greenberger originally
filed the lawsuit in 2002 in Illinois after a DePaul University
student questioned the practice of her managers at Chicago
restaurant, owned by Landry's, deducted a fee from her tips. The
class-action suit, which names six Joe's servers, alleges that
the parent company (Landry's) deducts at least 3 percent of the
servers' tips to cover credit-card processing fees. The case,
which was moved to the U.S. District Court for the Southern
District of Texas, has been pending since March 2003.
The Plaintiffs attorneys argue that the fee deduction is illegal
under the Fair Labor Standards Act, which reads, in part:
"Whether a tip is to be given, and its amount, are matters
determined solely by the customer, and generally he has the
right to determine who shall be the recipient. Only tips
actually received by an employee as money belonging to him which
he may use as he chooses free of any control by the employer,
may be counted in determining whether he is a 'tipped
employee'."
Mr. Fox also told The Denver Post that, credit-card processing
fees are a cost of doing business, and the act prohibits
employers from shifting costs of business to employees.
However, Landry's, in response to the lawsuit pointed out that a
U.S. Department of Labor fact sheet, written for employers about
tipped employees explicitly states, that credit-card processing
fees can be deducted from servers' tips. They further argued
that a tip isn't a tip until it's converted into cash and that
there's a cost to the restaurant to do that, which the tipped
employees should bear.
METABOLIFE INTERNATIONAL: Indicted By CA Jury Over Diet Drugs
-------------------------------------------------------------
A Grand Jury sitting in the United States District Court for the
Southern District of California returned an eight-count
indictment against San Diego-based Metabolife International,
Inc., and its founder, Michael J. Ellis, United States Attorney
Carol Lam announced in a statement.
The indictment charges both defendants with six counts of making
false, fictitious and fraudulent representations to the Food and
Drug Administration (FDA), and two counts of corruptly
endeavoring to influence, obstruct and impede proceedings
concerning the regulation of dietary supplements containing
ephedra being conducted by the FDA, an agency of the Department
of Health and Human Services.
Until FDA banned the sale of ephedra in the United States in
2003, Metabolife was one of the largest retailers of dietary
supplements in the United States, based largely on sales of its
ephedra-based product, Metabolife 356.
According to Assistant United States Attorneys Phillip L.B.
Halpern and Kyle W. Hoffman, who are prosecuting the case,
Metabolife and Ellis are charged with falsely representing a
number of different material facts to the FDA in letters dated
April 17, 1998 and February 9, 1999. These representations
included false statements by the Defendants that "Metabolife
ha(d) never received one notice from a consumer that any serious
adverse health event has occurred because of the ingestion of
Metabolife 356" and that the company had a "claims-free
history."
United States Attorney Lam said, "It is never acceptable for
corporations to lie to regulatory agencies, but it is
particularly egregious when those lies threaten the public
health."
"One of FDA's highest priorities involves our responsibility to
ensure that information about products we regulate is truthful
and not misleading, because people depend on that information to
make informed choices," said Acting FDA Commissioner Dr. Lester
M. Crawford. "We will pursue to the full extent of the law those
who would seek to mislead consumers by providing false
information or impeding investigations of risky products."
This case is being investigated by the FDA Office of Criminal
Investigations and the IRS Criminal Investigation Division.
United States Attorney Lam stated that the investigation is
continuing. The defendants are scheduled to be arraigned before
Magistrate Judge Louisa Porter in San Diego on Tuesday, July 27,
2004 at 10:30 a.m.
The suit's case number is 03 CR 1088-J. For more details,
contact Assistant U.S. Attorney Phillip L.B. Halpern by Phone:
(619) 557-5165 or Assistant U.S. Attorney Kyle W. Hoffman by
Phone: (619) 557-6157
MICROSOFT CORPORATION: Reps Meet Judge To Discuss EU Sanctions
--------------------------------------------------------------
Lawyers for Microsoft Corporation met with European judge Bo
Vesterdorf to discuss the sanctions imposed by the European
Union against the software giant, for alleged antitrust
violations, the Associated Press reports.
On March 24, the European Commission declared Microsoft guilty
of abusing its "near monopoly" with Windows software. It levied
a record fine of 497.2 million euros ($613 million) and demanded
changes in how the Washington-based software giant operates in
Europe to improve competition globally.
The 20-member commission ordered the Company to offer a version
of its Windows operating system without Windows Media Player and
to encourage computer makers to provide other audiovisual
software as it nears the end of its ten-year antitrust
investigation, an earlier Class Action Reporter story (March
25,2004) reports. The Commission also ordered the Company to
license information to make the servers of rivals more
compatible with Windows desktop machines. Windows runs more
than 95 percent of all personal computers.
The Company appealed the decision, asking the European Court of
First Instance in Luxembourg to annul the European Commission's
March 24 decision, an earlier Class Action Reporter story (June
10,2004) reports.
Company lawyers will meet with Bo Vesterdorf, the president of
the Court of First Instance, to discuss who will decide whether
to freeze sanctions imposed by the European Union pending the
company's appeal. Mr. Vesterdorf called the closed-door meeting
to discuss procedural issues, such as when to hold a hearing on
Microsoft's request for a stay. That hearing was likely to come
in September, after the court's summer break, according to
people familiar with the process. Lawyers for the commission as
well as Microsoft rivals, including the Washington-based
Computer & Communications Industry Association, also are
expected to attend Tuesday's meeting.
Microsoft has hired two of Brussels' best-known antitrust
lawyers to argue its case: Jean-Francois Bellis of the law firm
Van Bael & Bellis and Ian Forrester from White & Case. They are
expected to argue that the EU's remedies would cause
"irreparable harm" to Microsoft because once copyright-protected
secrets like software code are revealed, they cannot be made
secret again should the appeal ultimately prevail, the
Associated Press reports.
MICROSOFT CORPORATION: To Oppose Japanese Commission's Warning
--------------------------------------------------------------
Microsoft Corporation will fight against the warning issued by
Japan's Fair Trade Commission, over alleged antitrust law
violations in relation to licensing deals with manufacturers
using the Company's Windows software, the Associated Press
reports.
The Commission asked the software giant to remove a restrictive
clause from contracts with electronics makers, which prevents
Japanese computer makers from demanding damages or royalties
even when rivals violate patents for important technology. The
Commission also demanded that the Company drop the clause in
licensing agreements that it suspects helps Microsoft unlawfully
infringe patents. The clause prevents makers from suing
Microsoft or other licensees over suspected cases of patent and
copyright infringement in which elements of manufacturers' own
software technology may end up in the Windows system, an earlier
Class Action Reporter story (July 16,2004) states.
Microsoft has dropped the clause, although it believes the
wording is lawful, AP reports. "We do not believe there is any
violation of the anti-monopoly laws in our contractual
structure, and we have decided to reject the warning," Microsoft
Japan said, adding that it gave its rejection to the commission
Monday. "We plan to explain our view and continue to try to gain
understanding."
The contract clause, called the "non-assertion of patents
provision," says companies that sign Windows licensing
agreements will forgo the right to sue over suspected patent
infringements linked to the licensing, AP reports. The clause
is restrictive because it made it difficult for the Company's
rivals to obtain royalty fees even when rivals violate their
patents, the commission asserted.
The Commission did not specify what patents the Company violated
or who its partners are. However, several Japanese electronics
makers have complained since December 2000 about the Company's
suspected patent infringement, especially regarding multimedia
technologies that are increasingly vital in the industry as
audio and video become more widespread on the Internet. Major
Japanese consumer electronics companies that are partners with
Microsoft include Sony Corp., Toshiba Corp. and Matsushita
Electric Industrial Co., which makes Panasonic brand products.
Microsoft objected to the Fair Trade Commission's findings
within hours when they were announced. It had until Monday to
respond. The commission now holds hearings to listen to
Microsoft's view before issuing a ruling. If Microsoft decides
to appeal, the case would move to a Tokyo court.
NASH FINCH: MN Court Junks Lawsuit For Securities Act Violations
----------------------------------------------------------------
The United States District Court for the District of Minnesota
dismissed with prejudice the securities class action which had
been filed against Nash Finch Co. and certain of its executive
officers in June 2003, and which had consolidated eight separate
class actions previously filed in late 2002 and early 2003.
The consolidated action alleged that the defendants violated the
Securities Exchange Act of 1934 by purportedly issuing false
statements about the Company's business and financial results in
connection with vendor promotions.
On June 15, 2004, the consolidated shareholder derivative
actions that had been filed in Minnesota state court against the
Company's Board of Directors and certain officers were also
dismissed with prejudice. The derivative actions arose out of
the same set of allegations as the federal securities class
action. Plaintiffs in the securities class action have
subsequently moved to have the dismissal rescinded, and both
dismissals are subject to appeal.
NBTY INC.: Schiffrin & Barroway Expands NY Lawsuit Class Period
---------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP expanded the Class
Period for the class action lawsuit filed in the United States
District Court for the Eastern District of New York on behalf of
all purchasers of the common stock of NBTY, Inc. (NYSE: NTY)
("NBTY" or the "Company"). The new Class Period is April 22,
2004 through July 22, 2004 inclusive (the "Class Period").
The complaint charges that NBTY, Scott Rudolf, and Harvey Kamil
violated the Securities Exchange Act of 1934. More specifically,
the Complaint alleges that the Company failed to disclose and
misrepresented the following material adverse facts which were
known to defendants or recklessly disregarded by them:
(1) that the Company's increased financial results over the
prior year was attributable to a shift in the timing of
a promotional mailing and was not attributable to any
long-term improvement at the Company;
(2) that a significant number of customers had shifted to
purchasing supplements in the mass channel area such as
drug chains and deep discounters, thereby negatively
impacting the Company's retail sales at its Vitamin
World chain; and
(3) that as a result of the foregoing, defendants' positive
statements concerning the Company's prospects were
lacking in a reasonable basis at all relevant times.
On June 17, 2004, the Company announced that its Direct Response
and Vitamin World operations had experienced lower sales for the
two-month period ending May 31, 2004. Specifically, for the two-
month period, sales from Puritan's Pride direct response
decreased 12% from the comparable period in the prior year to
$38 million and sales from Vitamin World retail stores decreased
1% from the comparable period in the prior year to $36 million.
When this information was belatedly disclosed to the market on
June 17, 2004, shares of NBTY common stock fell $9.51 per share,
or 26%, to close at $26.99 per share, on extremely high trading
volume.
On July 22, 2004, NBTY reported weaker-than-expected third-
quarter financial results. The nutritional supplements company
posted third-quarter earnings of 37 cents a share on sales of
$400 million. Analysts polled by Thomson First Call had expected
it to earn 48 cents a share on sales of $416.4 million. Weakness
in the company's Vitamin World unit contributed to the third-
quarter shortfall. A year ago, NBTY earned pro forma earnings of
37 cents a share on sales of $308 million. Shares of NBTY traded
down $4.82, or 19.7%, to $19.68.
For more details, contact Marc A. Topaz, Esq. or Darren J.
Check, Esq. of Schiffrin & Barroway, LLP by Phone:
1-888-299-7706 or 1-610-667-7706 or by E-mail:
info@sbclasslaw.com
NORTHSTAR NETWORKS: SEC Settles Fraud Suit V. Former Officers
-------------------------------------------------------------
Judge Barbara M. Lynn, U.S. District Judge for the Northern
District of Texas, permanently enjoined Texas residents Timothy
Buzzelli and David Dutton from future violations of the federal
securities laws and barred both from again serving as officers
or directors of public companies. Buzzelli and Dutton, formerly
officers of NorthStar Networks, Inc. (NorthStar), a Dallas-based
Internet service company, consented to the order. Buzzelli, a
CPA, also consented to the entry of an administrative order
suspending him from appearing or practicing before the
Securities and Exchange Commission as an accountant.
The Commission waived the payment of disgorgement and did not
impose civil penalties against the defendants in light of their
financial inability to pay.
In its civil action, the Commission alleged that Buzzelli and
Dutton raised over $1 million from approximately 250 investors
through the fraudulent offer and sale of NorthStar's common
stock, falsely representing to investors that NorthStar had over
$10 million in assets, that major defense contractors were
interested in its purportedly patent pending computer cooling
system, and that the company had multi-million dollar contracts
with large, publicly traded telecommunications companies.
Further, the Commission alleged that Buzzelli aided and abetted
NorthStar's filing of a misleading registration statement with
the Commission and its subsequent failure to file periodic
reports.
The defendants consented, without admitting or denying the
allegations in the complaint, to the entry of a final judgment
permanently enjoining each from future violations of 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 Rules 10b-5
thereunder. Buzzelli additionally consented to be enjoined from
future violations of Section 13(b)(5) of the Exchange Act and
from aiding and abetting violations of Section 13(a) and
13(b)(2)(A) of the Exchange Act and Rules 13a-1 and 13a-13
thereunder.
NorthStar previously settled the Commission's action against it,
consenting to an injunction against future violations of the
anti-fraud and reporting provisions of the federal securities
laws. Additionally, NorthStar consented to the entry of an
administrative order revoking the registration of its
securities. The action is titled, SEC v. NorthStar Networks,
Inc., et al., Civil Action No. 3:02-CV-1788M, USDC, NDTX (LR-
18793)
SIG SPECIALISTS: SEC Institutes Enforcement Action V. NYSE Firms
----------------------------------------------------------------
The Securities and Exchange Commission issued administrative and
cease-and-desist orders (Orders) against two specialist firms,
SIG Specialists, Inc (SSI) and Performance Specialist Group LLC
(PSG). Each firm consented to the Orders without admitting or
denying the findings contained therein. In the Orders, the
Commission finds that the specialist firms violated the federal
securities laws and NYSE rules through improper trading
practices. The Orders collectively impose a total of $5,205,521
in penalties and disgorgement, consisting of $1,668,779 in civil
money penalties and $3,536,742 in disgorgement. The Orders also
censure the firms, impose orders to cease-and-desist from future
violations, and implement steps to improve the firms' compliance
procedures and systems.
The Orders find that, between 1999 and 2003, the two firms,
through particular transactions by certain of their registered
specialists, violated federal securities laws by executing
orders for their dealer accounts ahead of executable public
customer or "agency" orders. Whether acting as brokers or
dealers, specialists are required to hold the public's interest
above their own and, as such, are prohibited from trading for
their dealers' accounts ahead of pre-existing customer buy
or sell orders that are executable against each other. Each
firm violated this basic obligation to match executable public
customer buy and sell orders and not to fill customer orders
through trades from the firm's own account when those customer
orders could be matched with other customer orders. Through
this conduct, the firms disadvantaged customer orders, which
either received inferior prices or went unexecuted altogether,
and breached their duty to serve as agents to public customer
orders.
At times from January 1999 through 2003, certain specialists at
the two firms bought stock for their firm's dealer account from
the customer sell order, and then filled the customer buy order
by selling from the dealer account at a higher price -thus
realizing a profit for the firm dealer account. Alternatively,
the specialists sometimes sold stock into the customer buy
order, and then filled the customer sell order by buying for the
dealer account at a lower price. This practice is called
"interpositioning."
In either case, those specialists participated on both sides of
trades, thereby capturing the spread between the purchase and
sale prices, disadvantaging the other parties to the
transaction. Between 1999 and 2003, interpositioning by
specialists disadvantaged customers at SSI by $282,983, and
customers at PSG by $140,488.
Moreover, at each firm, the interpositioning transactions were
heavily concentrated in a few stocks traded by a small number of
specialists at each firm. With certain interpositioning
transactions in six stocks at each firm, certain individual
specialists engaged in fraud by violating their implied
representations to public customers that they were limiting
dealer transactions to those "reasonably necessary to maintain a
fair and orderly market." Neither firm had in place reasonable
systems or procedures to monitor, detect, or prevent those
violations.
Additionally, specialists at the two firms sometimes filled one
agency order through a proprietary trade for the firm's account
- and thereby improperly "traded ahead" of the other agency
order. As a consequence, the customer order that was traded
ahead of was disadvantaged by being executed at a price that was
inferior to the price received by the dealer account. Unlike
"interpositioning," the "trading ahead" violations did not
necessarily involve a second specialist proprietary trade into
the opposite, disadvantaged agency order. From January 1999
through 2003, trading ahead by certain specialists at the two
firms resulted in customer disadvantage of $1,684,525 at SSI,
and $1,283,098 at PSG.
Sometimes, specialists at the two firms traded ahead of
executable limit orders -i.e., they improperly effected
proprietary trades with customer orders that they should have
paired with marketable limit orders. Unlike the "trading ahead"
violations described just above, in these instances, the
disadvantaged limit orders were never executed, but rather were
cancelled by the customer before receiving an execution.
Between 1999 and 2003, trading ahead of unexecuted limit orders
disadvantaged customers at SSI by $78,063, and at PSG by
$67,585.
The Orders provide that in addition to paying disgorgement for
each of the three types of illegal trading, SSI is to pay civil
monetary penalties of $988,018, and PSG is to pay civil monetary
penalties of $680,761, for a total of $1,668,779 in penalties.
The Orders provide that, pursuant to Section 308(a) of the
Sarbanes-Oxley Act of 2002, the penalties are to be added to the
disgorgement payment to create a Distribution Fund for the
benefit of injured customers. A fund administrator is to be
appointed to coordinate the return of funds to harmed customers.
Based on the above, the Commission finds that each firm
willfully committed violations of Section 11(b) of the Exchange
Act and Rule 11b-1 thereunder. Moreover, the Commission finds
that each firm failed reasonably to supervise certain of its
specialists who, through certain transactions in six stocks,
committed willful violations of Section 10(b) of the Exchange
Act and Rule 10b-5 thereunder, with a view toward preventing
violations of the federal securities laws within the meaning
of Section 15(b)(4)(E) of the Exchange Act. The Orders order
that:
(i) pursuant to Section 21C of the Exchange Act, each firm
cease and desist from committing or causing any
violations and any future violations of Section 11(b)
of the Exchange Act and Rule 11b-1 thereunder;
(ii) pursuant to Section 15(b)(4)(E) of the Exchange Act,
each firm is censured;
(iii) each firm shall pay disgorgement in the amounts
identified above;
(iv) each firm shall pay civil penalties in the amounts
identified above;
(v) the disgorgement and the civil penalties be added to a
Fair Fund which shall be maintained in an interest-
bearing account and shall be distributed pursuant to a
distribution plan drawn up by an administrator to be
chosen by the staff of the Commission and the NYSE; and
(vi) each firm shall comply with a series of undertakings to
improve compliance procedures and systems.
SPIEGEL INC.: SEC Revokes Stock Registration, Settles SEC Suit
--------------------------------------------------------------
The Securities and Exchange Commission instituted and
simultaneously settled administrative proceedings against
Spiegel, Inc. pursuant to Section 12(j) of the Securities
Exchange Act of 1934 (Exchange Act) revoking the registration of
the company's stock. The Commission's Order finds that Spiegel
Inc.'s stock had been registered with the Commission pursuant to
Section 12(g) of the Exchange Act since 1987. Spiegel has been
under investigation by the SEC since last year involving failure
to comply with federal securities laws. Since the SEC's filing
of a civil action, Spiegel has made attempts to come into
compliance with its reporting obligations, but failed to do so.
The civil action alleges that Spiegel intentionally withheld
information from the public regarding its deteriorating
financial condition. The SEC investigation into this matter is
still ongoing.
The order further finds that since April of 2002, Spiegel has
been out of compliance with its reporting requirements under
Section 13 of the Exchange Act and that it is unclear when, if
ever, Spiegel could fully come into compliance with its
reporting obligations. Spiegel Inc. consented, without admitting
or denying the Order's findings, to the Order revoking the
registration of its stock pursuant to Section 12(j) of the
Exchange Act.
OHIO: ACLU Launches Suit Seeking To Remove Punch-Card Balloting
----------------------------------------------------------------
The State of Ohio faces a lawsuit filed by the American Civil
Liberties Union (ACLU), over its use of the much-maligned punch-
card voting machines, the same technology that bewildered many
Americans during the 2000 presidential election, the Associated
Press.
Ohio is one of the few states left that still use the system,
which gained notoriety during the 2000 presidential election in
Florida. Problems with the ballots led to 36 days of legal
wrangling and recounts, until George W. Bush was declared the
winner of the state, and thus the White House, by just 537
votes. After the elections, Congress appropriated $3.9 billion
for an overhaul of the voting system.
The system is used in 69 of Ohio's 88 counties, representing
nearly 73 percent of registered voters. In the 2000
presidential election, nearly 94,000 Ohioans had their ballots
rejected.
The ACLU seeks to remove all punch-card ballots in the state,
alleging that the system causes errors that lead to
undercounting of minority group votes. The suit asserts that
the ballots are more likely to go uncounted because of problems
such as partly punched or "hanging" ballots than votes cast with
other systems. The suit also alleges that the system violated
the voting rights of African-Americans, who mostly live in
punch-card counties. The system allegedly violates the 14th
Amendment, which guarantees due process and equal protection.
The ACLU is seeking the removal of the punch-card ballots in
Ohio before November, but it might be too late to bring change
before this year's election. Ohio officials say they are
working as fast as it can to replace punch-cards - but problems
with electronic voting technology have stalled the effort.
Secretary of State Kenneth Blackwell led Ohio's efforts to get
$133 million from that program, but he told AP earlier this
month that three counties that were considering Diebold
equipment cannot switch by November because tests revealed
security problems. Blackwell spokesman Carlo LoParo said Friday
the agency hopes to have electronic voting that meets security
requirements in place by 2005.
"They're claiming that the state has been denying the right to
vote to African-Americans," Rich Coglianese, an attorney
defending the state, told AP. "It's our position that the state
has not denied the right to vote to anybody, and the evidence
will never be able to show that."
The ACLU filed similar claims against Florida, Georgia,
Illinois, Maryland and California. All but the Georgia cases
were settled when the states agreed to stop using punch-card
voting. The court ruled the Georgia case moot after state
officials adopted statewide touch-screen voting. Trial in the
Ohio suit begins Monday, next week.
PHILIPS INTERNATIONAL: NY Liquidation Suit Voluntarily Dismissed
----------------------------------------------------------------
Philips International Realty Corporation, its directors entered
a stipulation of voluntary dismissal with plaintiffs in the
class action filed against them in the United States District
Court for the Southern District of New York, alleging a number
of improprieties concerning the pending plan of liquidation of
the Company.
On November 9, 2000, the Court, ruling from the bench, denied
the plaintiff's motion for a preliminary injunction. This bench
ruling was followed by a written order dated November 30, 2000
wherein the Court concluded that the plaintiff had failed to
demonstrate either that it was likely to succeed on the merits
of its case or that there were sufficiently serious questions
going to the merits of its case to make it fair ground for
litigation.
On February 5, 2002, the Court denied the plaintiff's motion for
class action certification. The plaintiff may elect to proceed
with its claims on its own now that class certification has been
denied. The plaintiff also has asserted derivative claims for
alleged breaches of fiduciary duty by the directors of the
Company.
On February 28, 2002, the Company announced that the plaintiff
had sought permission from the Court of Appeals for the Second
Circuit to appeal the denial of class certification. In order
for plaintiff to have obtained permission to appeal, it had to
demonstrate that the denial of class certification effectively
terminated the litigation and that the District Court's decision
was an abuse of its discretion. The Company opposed plaintiff's
application. If the Court of Appeals granted plaintiff's
request, plaintiff would then have been able to appeal the
District Court's denial of class certification. On May 28,
2002, the United States Court of Appeals for the Second Circuit
ordered that the plaintiff's petition to appeal the District
Court's denial of class certification also be denied.
On July 22, 2004, the Company, its directors and the plaintiff
entered into a stipulation voluntarily dismissing the class
action with prejudice and without cost to the Company or its
directors. The stipulation will be submitted to the court for
signature. The Company believes that it is highly likely that
such signature will be obtained shortly.
RED HAT: Shareholders Launch Securities Fraud Suits in E.D. NC
--------------------------------------------------------------
Red Hat, Inc. faces several securities class actions filed in
the United States District Court for the Eastern District of
North Carolina, alleging violations of federal securities class
laws.
The complaints charge that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder. Throughout the Class Period, in each
Form 10-Q and Form 10-K filed with the SEC, Defendants falsely
reported that they 'ratably' recognized revenue from
subscriptions. In fact, as the market learned on July 13, it
did not. Instead, Defendants recognized revenue from
subscriptions on a monthly basis, rather than on a daily basis.
For example, if a subscription was signed on the last day of a
month, a full month's revenue would have been recognized on that
day, rather than a day's worth of revenue. After the auditor
within PriceWaterhouse Cooper rotated, the new auditor required
recognition of revenue from subscriptions on a daily basis as
Generally Accepted Accounting Principles ('GAAP') requires.
This change in accounting practice resulted in Red Hat's having
to restate its financial results for fiscal years 2002, 2003 and
the first quarter of 2004. The restatement, Defendants have
admitted, 'is expected to result in significant percentage
differences in certain items such as quarterly operating profit
and net income.' During the short seven month class period,
Defendants Buckley and Szulik sold over $34 million and $37
million respectively, while the other defendants collectively
sold an additional $8 million in Red hat securities. As a result
of defendants' allegedly fraudulent scheme, the price of Red
Hat's securities was artificially inflated, allowing insiders to
sell Red Hat's securities for millions of dollars in proceeds,
and causing plaintiff and other class members to suffer damages.
The Company also announced that the SEC has made an inquiry into
the Company's results as filed in their Form 10-K. On Monday,
June 14, 2004, Red Hat announced unexpectedly that its Chief
Financial Officer ('CFO') was resigning 'to pursue other
interests.' The Company claims that its restatement is unrelated
to its former CFO's resignation. Red Hat stock plummeted $4.62
or 22.7% per share, losing $600 million in market capitalization
to close at $15.73 per share.
The suits are filed on behalf of purchasers of the Company's
stock from December 19,2003 to July 13,2004. The plaintiff
firms in the suits are:
(1) Berger & Montague, P.C., Mail: 1622 Locust Street,
Philadelphia, PA, 19103, Phone: 800-424-6690, Fax: 215-
875-4604, E-mail: investorprotect@bm.net;
(2) Brian Felgoise, Mail: 230 South Broad Street, Suite
404, Philadelphia, PA, 19102, Phone: 215-735-6810, Fax:
215-735-5185;
(3) Brodsky & Smith, LLC, Mail: 11 Bala Avenue, Suite 39,
Bala Cynwyd, PA, 19004, Phone: 610-668-7987, Fax: 610-
660-0450, E-mail: esmith@Brodsky-Smith.com;
(4) Lerach Coughlin Stoia & Robbins LLP (Washington D.C.),
Mail: 1100 Connecticut Avenue, N.W., Suite 730,
Washington, DC, 20036, Phone: 202-822-6762, Fax: 202-
828-8528, E-mail: info@lcsr.com;
(5) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), Mail: One Pennsylvania Plaza, New York, NY, 10119-
1065, Phone: 212-594-5300;
(6) Wechsler Harwood LLP, Mail: 488 Madison Avenue 8th
Floor, New York, NY, 10022, Phone: 212-935-7400, E-
mail: info@whhf.com
UNITED STATES: FDA Probing Salmonellosis Outbreak from Tomatoes
---------------------------------------------------------------
The Food and Drug Administration (FDA), working closely with the
Centers for Disease Control and Prevention (CDC) and several
state health and agricultural agencies, is focusing on certain
pre-sliced tomatoes as the likely source of Salmonellosis in
Pennsylvania, Ohio, Maryland, Virginia, and West Virginia.
Since July 2, 2004, 289 cases of Salmonella have been reported
in these states. Many appear to be related to pre-sliced Roma
tomatoes purchased at deli counters in Sheetz Gas Stations
between July 2nd through July 9th based on epidemiological
investigation of the Salmonella cases.
Salmonella is an organism which causes serious and sometimes
fatal infections in young children, frail or elderly people, and
others with weakened immune systems. Healthy persons infected
with Salmonella often experience fever, diarrhea (which may be
bloody), nausea, vomiting, and abdominal pain. In rare
circumstances, infection with Salmonella can result in the
organism getting into the bloodstream and producing more severe
illnesses such as arterial infections (i.e. infected aneurysms),
endocarditis, and arthritis.
FDA continues its close collaboration with the CDC, the
Pennsylvania Department of Agriculture, the Pennsylvania
Department of Health, and other authorities to identify the
source of the current outbreak of Salmonella and help prevent
any further spread of these outbreaks.
Individuals who believe they may have experienced the same
symptoms of illness after consuming sandwiches from this company
are urged to contact their local health department.
US ONCOLOGY: Reaches Settlement For Lawsuits V. Merger Agreement
----------------------------------------------------------------
US Oncology, Inc. reached a tentative settlement for the
shareholder class actions filed in Delaware and Texas courts
against it and its directors, relating to its merger with US
Oncology Holdings, Inc. and its wholly-owned subsidiary Oiler
Acquisition Corporation.
Seven purported class actions were initially filed against the
Company and each of its directors as defendants. Four of the
lawsuits also name Welsh, Carson, Anderson & Stowe) as a
defendant and two also name Acquisition Corp. The complaints
allege, among other things, that the defendants have breached
their fiduciary duties to the stockholders of the Company by
entering into the merger agreement. Among other things, the
consideration offered in the merger is alleged to be inadequate
and a result of unfair dealing.
One of the lawsuits alleges that two of the three directors on
the special committee, and several other directors, are not
independent, and that certain facts were not disclosed. Boone
Powell, Jr. was alleged not to be an independent director on
account of an alleged "close connection" between the Company and
Baylor University of which the Baylor University Medical Center
in Dallas is a part. Baylor is alleged to have certain
relationships with the Company and Mr. Powell is a former
director and Chairman of the Baylor Health Care System.
Burton S. Schwartz, M.D., is President and Medical Director of
Minnesota Oncology Hematology, PA, which has a service agreement
with the Company, and is alleged not to be an independent
director because of amounts paid under such service agreement by
such entity to the Company. Mr. Powell and Mr. Schwartz are
also alleged to be "beholden" to Russell L. Carson, a principal
of Welsh Carson, and R. Dale Ross, the Company's President and
Chief Executive Officer.
The complaints seek an injunction against the proposed
transaction or, if it is consummated, rescission of the
transaction and imposition of a constructive trust, as well as
money damages, attorneys' fees, expenses and other relief.
Three of the lawsuits were filed in the Court of Chancery of the
State of Delaware and four of the lawsuits were filed in state
District Courts in Harris County, Texas by purported
stockholders of the Company on behalf of all similarly situated
stockholders. On April 15, 2004, the Delaware Court of Chancery
consolidated the Delaware lawsuits. On May 21, 2004, the 234th
Texas District Court consolidated the Texas lawsuits.
On May 21, 2004, plaintiffs in the consolidated Delaware lawsuit
moved for expedited proceedings, and those plaintiffs moved for
a preliminary injunction against consummation of the merger due
to alleged failures to disclose material facts in the
preliminary proxy statement that had been filed by the Company,
which alleged failures were described in an amended complaint
filed by those plaintiffs. On May 25, 2004, the Delaware Court
of Chancery scheduled a preliminary injunction hearing in the
Delaware consolidated lawsuit, to commence on June 30, 2004.
The defendants in the Delaware consolidated lawsuit, and in the
Texas consolidated lawsuit, made substantial production of
documents in response to requests by the plaintiffs.
As a result of arm's-length settlement negotiations among
counsel in the lawsuits, the parties entered into an agreement
providing for settlement of the consolidated Delaware lawsuit on
behalf of the purported class, and for dismissal with prejudice
of the consolidated Texas lawsuit. The agreement contemplated
that, among other things, the Company would make disclosures in
the proxy statement to address the disclosure claims raised in
the Delaware consolidated lawsuit.
Following confirmatory discovery by the parties, the parties
then executed a stipulation of settlement, the substance of
which is consistent with that of the agreement. The proposed
settlement is subject to final approval by the Delaware Court of
Chancery, so any settlement may not be final at the time of the
special meeting.
VERITAS SOFTWARE: Shareholders Launch Securities Lawsuits in DE
---------------------------------------------------------------
Veritas Software Corporation faces several securities class
actions filed in the United States District Court for the
District of Delaware, alleging that during the class period
Defendants had actual knowledge of or recklessly disregarded the
fact that although the Company was involved in negotiations for
significant contracts, those negotiations had not advanced far
enough to reasonably conclude they would close.
Despite the Defendants having no reasonable basis to do so,
Defendants caused the Company to confirm expectations that its
revenue for second-quarter 2004 would be $490 to $505 million
and earnings per share for the quarter would be $0.21 to $0.23.
The complaint also alleges that Defendants confirmed these
earnings expectations without reasonable basis and in order to
maintain the Company's share price and avoid the negative
fallout that would occur as a result of an accurate disclosure
of the Company's contractual prospects and financial condition.
Only three weeks after Defendants confirmed their second quarter
2004 expectations, on July 6, 2004, the Defendants shocked the
market by suddenly announcing that the Company's second quarter
2004 revenues would actually be 'in the range of $475 million to
$485 million' and that its GAAP earnings per share would, in
fact, 'be in the range of $0.17 to $0.19.' As a result of this
news, the Company's share price plunged from $26.55 to $17.00,
or 36% in heavy trading volume.
The suits are filed on behalf of purchasers of the Company's
stock from April 21,2004 to July 6,2004. The plaintiff firms in
the cases are:
(1) Charles J. Piven, Mail: World Trade Center-
Baltimore,401 East Pratt Suite 2525, Baltimore, MD,
21202, Phone: 410-332-0030, E-mail: pivenlaw@erols.com;
(2) Goodkind Labaton Rudoff & Sucharow LLP, Mail: 100 Park
Avenue, New York, NY, 10017, Phone: 212-907-0700 Fax:
212-818-0477, E-mail: info@glrslaw.com;
(3) Schatz & Nobel, P.C., Mail: 330 Main Street, Hartford,
CT, 06106, Phone: 800-797-5499, Fax: 860-493-6290, E-
mail: sn06106@AOL.com;
(4) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610-667-7706, Fax: 610-667-
7056, E-mail: info@sbclasslaw.com
WASHINGTON MUTUAL: Shareholders Launch Securities Lawsuits in WA
----------------------------------------------------------------
Washington Mutual, Inc. faces several securities class actions
filed in the United States District Court for the Western
District of Washington, alleging violations of federal
securities laws. The suit also names as defendants:
(1) Kerry K. Killinger,
(2) Thomas W. Casey,
(3) Deanna W. Oppenheimer,
(4) William W. Longbrake,
(5) Craig J. Chapman,
(6) James G. Vanasek, and
(7) Michelle McCarthy
The suit alleges violations of Section 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder.
The complaint alleges that throughout the Class Period,
Defendants issued false and misleading statements regarding the
Company's ability to grow in the face of any expected interest
rate increases, as well as the Company's purported financial
hedging strategies. On June 29, 2004, investors learned the
truth about the Company after Defendants issued a press release
announcing a very significant earnings and net income shortfall
which far exceeded any guidance previously sponsored and
endorsed by Defendants.
According to this release, increases in interest rates had, in
fact, impacted the Company's mortgage banking business to such
an extent that earnings for the full year were revised to as low
as $3.00 per share, compared to the up to $4.80 per share
guidance provided at the inception of the Class Period. In
addition, Defendants had not properly hedged the Company's
interest rate risk such that is was now having a material
adverse impact on Washington Mutual, Inc.
Following the publication of this surprising and belated news,
the Company's common shares fell to $36.50 per share, from a
closing price of $41.31 per share on June 29, 2004; a decline of
nearly 12%.
The suits are filed on behalf of purchasers of the Company's
common stock from April 15,2003 to June 28, 2004. The plaintiff
firms in the suits are:
(1) Brian Felgoise, Mail: 230 South Broad Street, Suite
404, Philadelphia, PA, 19102, Phone: 215-735-6810, Fax:
215/735-5185;
(2) Milberg Weiss Bershad & Schulman LLP (Seattle), Mail:
1001 4th Avenue, Suite 2550, Seattle, WA, 98154, Phone:
206-839-0730, Fax: 206-839-0728, E-mail:
info@milbergweiss.com;
(3) Murray, Frank & Sailer LLP, Mail: 275 Madison Ave 34th
Flr, New York, NY, 10016, Phone: 212-682-1818, Fax:
212-682-1892, E-mail: email@rabinlaw.com;
(4) Schatz & Nobel, P.C., Mail: 330 Main Street, Hartford,
CT, 06106, Phone: 800-797-5499, Fax: 860-493-6290, E-
mail: sn06106@AOL.com;
(5) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610-667-7706, Fax: 610-667-
7056, E-mail: info@sbclasslaw.com
WELLCHOICE INC.: Plaintiffs File Amended Unfair Trade Suit in FL
----------------------------------------------------------------
Plaintiffs filed a second amended class action against
Wellchoice, Inc. and two of its subsidiaries, WellChoice
Insurance of New Jersey, Inc. and Empire HealthChoice HMO, Inc.
in the United States District Court for the Southern District of
Florida, Miami Division.
The suit, styled "Thomas, et al. v. Empire, et al.," was
initially filed against Empire HealthChoice Assurance, Inc., the
Blue Cross Blue Shield Association and substantially all of the
other Blue plans in the country. The named plaintiffs, Drs.
Thomas and Michael Kutell and the Connecticut State Medical
Society, bring this case on their own behalf and also purport to
bring it on behalf of similarly situated physicians and seek
damages and injunctive relief to redress their claim of economic
losses which they allege is the result of defendants, on their
own and as part of a common scheme, systemically denying,
delaying and diminishing claim payments.
More specifically, plaintiffs allege that the defendants deny
payment based upon cost or actuarial criteria rather than
medical necessity or coverage, improperly downcode and bundle
claims, refuse to recognize modifiers, intentionally delay
payment by pending otherwise payable claims and through
calculated understaffing, use explanation of benefits, or EOBs,
that fraudulently conceal the true nature of what was processed
and paid and, finally, by use of capitation agreements which
they allege are structured to frustrate a provider's ability to
maximize reimbursement under the capitated agreement.
The plaintiffs allege that the co-conspirators include not only
the named defendants but also other insurance companies, trade
associations and related entities such as Milliman and Robertson
(actuarial firm), McKesson (claims processing software company),
National Committee for Quality Assurance, Health Insurance
Association of America, the American Association of Health Plans
and the Coalition for Quality Healthcare. In addition to
asserting a claim for declaratory and injunctive relief to
prevent future damages, plaintiffs assert several causes of
action based upon civil Racketeer Influenced and Corrupt
Organizations Act (RICO) and mail fraud.
On August 13, 2003, plaintiffs served an amended complaint,
adding several medical societies as additional plaintiffs and a
cause of action based upon an assignment of benefits. On
September 2, 2003, defendants, including Empire, filed a joint
motion to dismiss on various grounds, including failure to state
a claim, failure to allege fraud with the requisite
particularity, and, with respect to certain plaintiffs, lack of
standing.
In October 2003, the action was transferred to District Court
Judge Federico Moreno, who also presides over "Shane v. Humana,
et al.," a class-action lawsuit brought against other insurers
and HMOs on behalf of health care providers nationwide. The
Thomas case involves allegations similar to those made in the
Shane action.
On October 20, 2003, plaintiffs served their Memorandum of Law
in Opposition to Defendants' Joint Motion to Dismiss.
Thereafter, on November 19, 2003, the defendants served their
joint reply brief. No date has been set yet for oral argument
on the motion.
On June 14, 2004, the court ordered the commencement of
discovery. On June 22, 2004, plaintiffs served their Second
Amended Complaint, in which several new parties were added,
including the Company and WellChoice Insurance of New Jersey,
Inc. The defendants anticipate filing a motion to dismiss
the Second Amended Complaint in the near future.
WELLCHOICE INC.: Named in Medical Practitioners' Lawsuit in FL
--------------------------------------------------------------
Wellchoice, Inc. and two of its subsidiaries have been added as
defendants in the amended class action filed in the United
States District Court for the Southern District of Florida,
Miami Division, styled "Solomon, et al. v. Empire, et al."
The suit was initially filed against Empire HealthChoice
Assurance, Inc. and other named defendants the Blue Cross Blue
Shield Association and substantially all other Blue plans in the
country. This case is similar to "Thomas, et al. v. Empire, et
al," a putative class action brought on behalf of physicians
against Empire, the Blue Cross Blue Shield Association and
substantially all of the other Blue plans in the country, except
that this case is brought on behalf of ancillary providers, such
as podiatrists, psychologists, chiropractors and physical
therapists.
Like the Thomas plaintiffs, the Solomon plaintiffs allege the
defendants, on their own and as part of a common scheme,
systematically deny, delay and diminish payments to these
providers. The plaintiffs' allegations are similar to those set
forth in Thomas but also include an allegation that defendants
have subjected plaintiffs claims for reimbursement to stricter
scrutiny than claims submitted by medical doctors and doctors of
osteopathy. Plaintiffs are seeking compensatory and monetary
damages and injunctive relief.
Plaintiffs also served a motion seeking to transfer this case to
Judge Moreno, the same judge handling the Thomas case and other
similar litigation, and to consolidate this case with the
others. Empire and the other defendants did not object to the
transfer but opposed the consolidation. By an Order dated
January 7, 2004, the case was transferred to Judge Moreno, but
not consolidated with the other pending actions. The Court, on
its own initiative, deemed this action a "tag along" action to
the Shane litigation, and ordered the case closed for
statistical purposes and placed the matter in a civil suspense
file.
On February 23, 2004, plaintiffs moved for an order to restore
this case to the court's active docket. The Company opposed
this motion and oral argument was held on March 5, 2004. On
March 9, 2004, the judge granted the motion and restored this
case to the active docket.
On June 14, 2004, the court ordered the commencement of
discovery. On June 29, 2004, as in Thomas, plaintiffs served
their First Amended Complaint, in which several new parties were
added, including the Company and two of its subsidiaries:
WellChoice Insurance of New Jersey, Inc. and Empire HealthChoice
HMO, Inc. The defendants anticipate filing a motion to dismiss
the First Amended Complaint in the near future.
Meetings, Conferences & Seminars
* Scheduled Events for Class Action Professionals
-------------------------------------------------
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
CALLIDUS SOFTWARE: Charles J. Piven Lodges Securities Suit in CA
----------------------------------------------------------------
The law offices of Charles J. Piven, P.A. initiated a securities
class action on behalf of shareholders who purchased, converted,
exchanged or otherwise acquired the common stock of Callidus
Software, Inc. (Nasdaq:CALD) between November 19, 2003 and June
23, 2004, inclusive (the "Class Period").
The case is pending in the United States District Court for the
Northern District of California against defendant Callidus and
one or more of its officers and/or directors.
The action charges that defendants violated federal securities
laws by issuing a series of materially false and misleading
statements to the market throughout the Class Period which
statements had the effect of artificially inflating the market
price of the Company's securities. No class has yet been
certified in the above action.
For more details, contact the law offices of Charles J. Piven,
P.A. by Mail: The World Trade Center-Baltimore, 401 East Pratt
Street, Suite 2525, Baltimore, MD 21202 by Phone: 410/986-0036
or by E-mail: hoffman@pivenlaw.com
CARDINAL HEALTH: Charles J. Piven Files Securities Lawsuit in OH
----------------------------------------------------------------
The law offices of Charles J. Piven, P.A. initiated a securities
class action on behalf of shareholders who purchased, converted,
exchanged or otherwise acquired the common stock of Cardinal
Health, Inc. (NYSE:CAH) between October 24, 2000 through June
30, 2004, inclusive (the "Class Period").
The case is pending in the United States District Court for the
Southern District of Ohio. The action charges that defendants
violated federal securities laws by issuing a series of
materially false and misleading statements to the market
throughout the Class Period which statements had the effect of
artificially inflating the market price of the Company's
securities. No class has yet been certified in the above action.
For more details, contact the law offices of Charles J. Piven,
P.A. by Mail: The World Trade Center-Baltimore, 401 East Pratt
Street, Suite 2525, Baltimore, MD 21202 by Phone: 410/986-0036
or by E-mail: hoffman@pivenlaw.com
CENTRAL FREIGHT: Charles J. Piven Files Securities Lawsuit in TX
----------------------------------------------------------------
The law offices of Charles J. Piven, P.A. initiated a securities
class action on behalf of shareholders who purchased the common
stock of Central Freight Lines, Inc. (Nasdaq:CENF) ("Central
Freight" or the "Company") issued in connection with or
traceable to its December 12, 2003 Initial Public Offering.
The case is pending in the United States District Court for the
Western District of Texas against defendant Central Freight and
certain of its officers and/or directors.
The action charges that defendants violated federal securities
laws by issuing a series of materially misleading and/or
incomplete statements in the prospectus and/or registration
statement for the initial public offering of the Company's
shares to the public. No class has yet been certified in the
above action.
For more details, contact the law offices of Charles J. Piven,
P.A. by Mail: The World Trade Center-Baltimore, 401 East Pratt
Street, Suite 2525, Baltimore, MD 21202 by Phone: 410/986-0036
or by E-mail: hoffman@pivenlaw.com
CORINTHIAN COLLEGES: Charles Piven Lodges Securities Suit in CA
---------------------------------------------------------------
The law offices of Charles J. Piven, P.A. initiated a securities
class action on behalf of shareholders who purchased, converted,
exchanged or otherwise acquired the common stock of Corinthian
Colleges, Inc. (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 defendant Corinthian,
Anthony Digiovanni, David Moore and Dennis Beal.
The action charges that defendants violated federal securities
laws by issuing a series of materially false and misleading
statements to the market throughout the Class Period which
statements had the effect of artificially inflating the market
price of the Company's securities. No class has yet been
certified in the above action.
CORINTHIAN COLLEGES: Milberg Weiss Lodges Securities Suit in CA
---------------------------------------------------------------
The law firm of Milberg Weiss Bershad & Schulman LLP initiated a
class action lawsuit on behalf of purchasers of the securities
of Corinthian Colleges, Inc. ("Corinthian" or the "Company")
(NASDAQ: COCO) between August 27, 2003 and June 23, 2004,
inclusive (the "Class Period"), seeking to pursue remedies under
the Securities Exchange Act of 1934 (the "Exchange Act").
The action, numbered CV-04-6057, is pending in the United States
District Court for the Central District of California against
defendants Corinthian, David Moore, Anthony Digiovanni and
Dennis Beal.
The Complaint alleges Corinthian is a for-profit post-secondary
education company and that, throughout the Class Period, the
Company publicly touted its business and financial performance,
the performance of its stock price and its industry-leading
position as reasons for why investors should purchase its stock.
The complaint further alleges that, unbeknownst to investors,
defendants submitted false and misleading financial aid
applications to the U.S. Department of Education ("DOE") for the
purpose of improperly boosting the Company's reported revenue
and earnings. The truth began to emerge on June 24, 2004. On
that date, the Financial Times published an article under the
headline, "College Fee Probe Extends to Corinthian," that stated
that a division of the DOE had discovered that school officials
at Corinthian Bryman campus had helped students manipulate
financial aid documents to obtain the maximum possible towards
tuition fees by claiming extra dependents to obtain additional
financial aid and that, as a consequence, the DOE had revoked
Corinthian's ability to receive advance payments on its students
loans. On this news, shares of Corinthian fell $2.55, or 10.18%
on June 24, 2004, to close at $22.51.
For more details, contact Steven G. Schulman, Peter E. Seidman
or Andrei V. Rado of Milberg Weiss Bershad & Schulman LLP by
Mail: One Pennsylvania Plaza, 49th fl., New York, NY, 10119-0165
by Phone: (800) 320-5081 or E-mail: sfeerick@milbergweiss.com or
visit their Web site: http://www.milbergweiss.com
DRUGSTORE.COM: Marc S. Henzel Lodges Securities Suit in W.D. WA
---------------------------------------------------------------
The law offices of Marc S. Henzel initiated a class action
lawsuit in the United States District Court for the Western
District of Washington, on behalf of all persons who purchased
or otherwise acquired the common stock of drugstore.com, Inc.
(NASDAQ: DSCM) between January 14, 2004 and June 10, 2004,
inclusive (the "Class Period"), against defendants drugstore.com
and certain officers of the Company.
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 further alleges that defendants knew, but
concealed from the investing public during the Class Period, the
following facts:
(1) drugstore.com's gross margins were being negatively
impacted due to its implementation of a free 3-day
shipping promotion;
(2) the integration of Vision Direct was eroding the
Company's margins;
(3) the Company's sales growth was being negatively
impacted by cancellations resulting from expired
prescriptions;
(4) drugstore.com was not on track to "break even," but
rather to incur massive losses; and
(5) as a result of the foregoing, defendants lacked a
reasonable basis for their positive statements about
the Company and its earnings projections.
For more details, contact Marc S. Henzel, Esq. of The Law
Offices of Marc S. Henzel by Mail: 273 Montgomery Ave, Suite 202
Bala Cynwyd, PA 19004-2808 by Phone: (888) 643-6735 or
(610) 660-8000 by Fax: (610) 660-8080 by E-mail:
Mhenzel182@aol.com or visit their Web site:
http://members.aol.com/mhenzel182
INTRABIOTICS: Charles J. Piven Lodges Securities Suit in N.D. CA
----------------------------------------------------------------
The law offices of Charles J. Piven, P.A. initiated a securities
class action on behalf of shareholders who purchased, converted,
exchanged or otherwise acquired the common stock of IntraBiotics
Pharmaceuticals, Inc. (Nasdaq:IBPI) between September 5, 2003
through June 22, 2004, inclusive (the "Class Period").
The case is pending in the United States District Court for the
Northern District of California. The action charges that
defendants violated federal securities laws by issuing a series
of materially false and misleading statements to the market
throughout the Class Period which statements had the effect of
artificially inflating the market price of the Company's
securities. No class has yet been certified in the above action.
For more details, contact the law offices of Charles J. Piven,
P.A. by Mail: The World Trade Center-Baltimore, 401 East Pratt
Street, Suite 2525, Baltimore, MD 21202 by Phone: 410/986-0036
or by E-mail: hoffman@pivenlaw.com
NBTY INC.: Paskowitz & Associates Lodge Amended Suit in E.D. NY
---------------------------------------------------------------
The law firm of Paskowitz & Associates filed an amended class
action complaint in the United States District Court for the
Eastern District of New York on behalf of all persons who
purchased or otherwise acquired publicly traded securities of
NBTY, Inc. ("NBTY" or the "Company") (NYSE:NTY) between April
22, 2004 and July 22, 2004, inclusive, (the "Class Period"). The
amended complaint now expands the lawsuit to cover purchasers
between June 17, 2004 and July 22, 2004, and continues to assert
claims against NBTY and its top executives, Scott Rudolph and
Harvey Kamil.
The amended complaint alleges that Defendants violated Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule
10b-5 promulgated thereunder. It asserts that the Company issued
false and misleading statements concerning its financial results
for the quarter ending March 31, 2004. On April 22, 2004, NBTY
announced increased sales in that quarter for its various
business segments, including its Direct Response segment, which
sells products through catalogs and the Internet. The increased
sales were attributed to "the Company's ability to more
effectively target market its customer base." In truth, the
results were due to special sales promotions, and not any
generalized improvement in the Company's marketing abilities.
Indeed, it is alleged that in the month of April sales in this
segment dropped off 14% because the special promotion had ended.
Before this decline was revealed to the public, defendant
Rudolph sold 400,000 shares for proceeds of over $14 million,
while defendant Kamil sold 157,000 shares for proceeds of over
$6 million.
On June 17, 2004, NBTY shocked investors by announcing sales
declines in the Direct Response segment of 12% for the months of
April and May, sending shares plunging from a close of $36.50
the previous day to $26.99 on trading volume of 8.3 million
shares. On that date, NBTY repeatedly said it could not address
questions relating to the financial impact of its Rexall
acquisition, purportedly because that acquisition had been fully
integrated. On July 22, 2004, however, shareholders were
surprised to learn that NBTY's third quarter results were
adversely impacted by issues relating to the Rexall acquisition,
including poor margins. NBTY shares dropped to approximately $19
per share on this news.
For more details, contact Paskowitz & Associates by Phone:
800-705-9529 or by E-mail: classattorney@aol.com
RED HAT: Schiffrin & Barroway Lodges Securities Suit in E.D. NC
---------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a class
action lawsuit in the United States District Court for the
Eastern District of North Carolina on behalf of all purchasers
of securities of Red Hat, Inc. (Nasdaq: RHAT) ("Red Hat" or the
"Company") from December 18, 2003 through July 12, 2004,
inclusive (the "Class Period").
The complaint charges that Red Hat, Matthew Szulik, and Kevin
Thompson 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 inappropriately recognized revenues
from its subscriptions;
(2) that as a consequence of the aforementioned practice,
the Company manipulated its quarterly earnings as its
net income and operating income were, at all relative
times, materially overstated;
(3) that the Company's financial results were in violation
of Generally Accepted Accounting Principles ("GAAP");
(4) that the Company lacked adequate internal controls; and
(5) that the Company's financial results were materially
and artificially inflated at all relevant times.
On July 13, 2004, Red Hat announced that it had corrected the
manner in which it recognized revenues for certain of its
subscription agreements and, as a result, would restate its
audited financial statements for the fiscal years ended February
29, 2004, February 28, 2003, and February 28, 2002, and its
unaudited financial statements for the fiscal quarter ended May
31, 2004. The news shocked the market. Shares of Red Hat fell
$4.62 or 22.70 percent per share, on July 13, 2004, to close at
$15.73 per share.
For more details, contact Marc A. Topaz, Esq. or Darren J.
Check, Esq. of Schiffrin & Barroway, LLP by Phone:
1-888-299-7706 or 1-610-667-7706 or by E-mail:
info@sbclasslaw.com
SALESFORCE.COM: Lerach Coughlin Files Securities Suit in N.D. CA
----------------------------------------------------------------
The law firm of Lerach Coughlin Stoia & Robbins LLP initiated a
class action in the United States District Court for the
Northern District of California on behalf of purchasers of
salesforce.com, inc. ("salesforce.com") (NYSE:CRM) common stock
during the period between June 21, 2004 and July 21, 2004 (the
"Class Period").
The complaint charges salesforce.com and certain of its officers
and directors with violations of the Securities Exchange Act of
1934. salesforce.com is engaged in the provision of on-demand
customer relationship management ("CRM") solutions. The Company
delivers integrated and scalable enterprise applications for
companies of all sizes.
According to the complaint, the Company went public on June 21,
2004 in one of the "hottest" initial public offerings ("IPO") of
2004, with its price increasing to $17.20 on the first day of
trading from the offering price of $11.00 per share. This
offering had been delayed due to an interview salesforce.com's
CEO had given to The New York Times entitled, "It's Not Google.
It's That Other Big I.P.O." While salesforce.com delayed the IPO
after this article, it did not retract statements in the
article. Nor did it tell investors that salesforce.com
management was expecting earnings to decline in FY2005. Then, on
July 21, 2004, salesforce.com disclosed that FY2005 would be
much worse than market expectations. On this news, the Company's
stock price declined to as low as $11.05 per share from the
prior day close of $16.06.
The complaint alleges that defendants knew but concealed from
the investing public during the Class Period that: in the
Company's Prospectus, there was a clear trend in the Company's
diluted (and basic) earnings per share which defendants knew
investors would price into the Company's IPO price; and secretly
defendants actually knew that this upward trend in diluted EPS
had reversed itself long before the IPO. As a result of the
defendants' false statements, salesforce.com's stock traded at
inflated prices during the Class Period, increasing to as high
as $17.20 per share shortly after the Company sold more than
$117 million worth of its own shares via a false and defective
Registration Statement.
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/salesforce/
YUKOS OIL: Charles J. Piven Lodges Securities Lawsuit in S.D. NY
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The law offices of Charles J. Piven, P.A. initiated a securities
class action on behalf of shareholders who purchased, converted,
exchanged or otherwise acquired ADRs of Yukos Oil Company (Other
OTC: YUKOY) (Other OTC: YUKOF) (Russia: YUKO.RTS) between
February 13, 2003 and October 25, 2003, inclusive (the "Class
Period").
The case is pending in the United States District Court for the
Southern District of New York against defendant Yukos and one or
more of its officers and/or directors.
The action charges that defendants violated federal securities
laws by issuing a series of materially false and misleading
statements to the market throughout the Class Period which
statements had the effect of artificially inflating the market
price of the Company's securities. No class has yet been
certified in the above action.
For more details, contact the law offices of Charles J. Piven,
P.A. by Mail: The World Trade Center-Baltimore, 401 East Pratt
Street, Suite 2525, Baltimore, MD 21202 by Phone: 410/986-0036
or by E-mail: hoffman@pivenlaw.com
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Copyright 2004. All rights reserved. ISSN 1525-2272.
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