/raid1/www/Hosts/bankrupt/CAR_Public/040920.mbx
C L A S S A C T I O N R E P O R T E R
Monday, September 20, 2004, Vol. 6, No. 186
Headlines
A.C.L.N. LTD.: NY Court Signs Final Judgment Over Stock Fraud
ABERCROMBIE & FITCH: Judge Grants Class Status To CA Wage Suit
AQUILA: Kansas Judge Resolves Class in Shareholder Fraud Lawsuit
ARKANSAS: Campaigners Request Taxpayers To Relinquish Refunds
ATLAS COLD: Income Trust Investors Launch Conspiracy, Fraud Suit
CALIFORNIA NATURAL: Recalls Products Due To Processing Failure
CALPINE CORPORATION: CA Court Appoints Lead Plaintiff in Lawsuit
CALPINE CORPORATION: Securities Lawsuit Moved To CA State Court
CALPINE CORPORATION: Plaintiffs File Consolidated CA ERISA Suit
CONVERGE GLOBAL: SEC Launches Lawsuit For Securities Fraud in FL
DAIMLERCHRYSLER AG: DE Court Approves Securities Suit Settlement
FINISAR CORPORATION: Accepts Settlement of NY Securities Lawsuit
IMPAC MEDICAL: Shareholders Launch Securities Suits in N.D. CA
IRELAND: State Confident of Winning Inmate "Slopping Out" Case
LATTICE SEMICONDUCTOR: Shareholders Launch Fraud Lawsuits in OR
LINCOLN NATIONAL: 800 Employees Entitled To $4.3M IN Settlement
MERL HOLDINGS: NJ Court Enters Injunction Against Former Exec
NATIONWIDE INSURANCE: Couple Files Suit V. Inflation Adjustments
NEKTAR THERAPEUTICS: Shareholders Launch Stock Fraud Suit in CA
NUTRASWEET: CA Resident Lodges RICO Suit, Seeks $350M in Damages
PROCOM TECHNOLOGY: NY Judge Approves Securities Suit Settlement
RESURRECTION HEALTH: Uninsured Lodge Suit in IL, Sets Press Meet
RIGGS BANK: Filing of Criminal Charges Urged on Pinochet Assets
ROYAL DUTCH: Justice Dept Seeks Documents on Oil Reserves Fraud
SECURITIES FRAUD: SEC Files Administrative Proceedings V. Trader
SECURITIES FRAUD: SEC Files Proceedings Against Stock Trader
SENETEK PLC: Settles SEC-Filed Securities Violations Complaint
SERVIER CANADA: Plaintiffs Seek Court Approval For Settlement
SEXUAL HARRASSMENT: More Men Launching Sexual Harassment Claims
SMURFIT-STONE CONTAINER: To Fully Pay Settlement in January 2005
STARWOOD HOTELS: Hotel Workers' Union Lodges Wage Suit in CA
TAGLICH BROTHERS: Settles Enforcement Action Over Stock Fraud
TEAM TELECOM: Shareholders Launch Securities Fraud Suits in NJ
UTAH: Couples Commence Suit Seeking Changes in Search Warrants
VERITAS SOFTWARE: Plaintiffs File Amended Securities Suit in CA
VERITAS SOFTWARE: Shareholders Launch Securities Lawsuits in DE
ZIX CORPORATION: Shareholders Lodge Stock Fraud Suits in N.D. CA
New Securities Fraud Cases
NETOPIA INC.: Lerach Coughlin Lodges Securities Fraud Suit in CA
TEAM TELECOM: Schatz & Nobel Lodges Securities Fraud Suit in NJ
*********
A.C.L.N. LTD.: NY Court Signs Final Judgment Over Stock Fraud
-------------------------------------------------------------
The U.S. District Court for the Southern District of New York
signed final judgments by consent against A.C.L.N. Ltd., its CEO
Abderrazak "Aldo" Labiad and Relief Defendant Scandinavian Car
Carriers requiring disgorgement of the balance of certain
accounts frozen in Europe.
The balance of these accounts totals approximately $27.6
million, money which the Commission intends to recommend be
distributed to defrauded investors. A.C.L.N. is a Cyprus
corporation headquartered in Antwerp, Belgium, which has ceased
doing business. A.C.L.N. formerly claimed to ship used vehicles
to North and West Africa and to sell new cars in that region.
Following the SEC's imposition of a trading suspension in March
2002, the New York Stock Exchange de-listed A.C.L.N.'s
securities, the first such action by the Exchange since 1975.
The SEC alleged, in its complaint filed October 8, 2002, that
from 1998 through the third quarter of 2001, A.C.L.N. operated
an elaborate financial fraud resulting in losses totaling
millions of dollars to investors in the U.S. and abroad.
Without admitting or denying the allegations of the Commission's
complaint, A.C.L.N., Labiad and Scandinavian Car Carriers
consented to the entry of an order that they disgorge the
balance of certain frozen bank accounts in Europe they
controlled. The Court ordered that Labiad disgorge the
equivalent of $332,222 (USD) held in bank accounts in Monaco;
that A.C.L.N. disgorge about $3.3 million that the Commission
successfully repatriated from the Netherlands to the United
States in 2003; and that Scandinavian Car Carriers disgorge
about $24 million in its bank account in Denmark.
Labiad also consented to an order permanently barring him from
acting as an officer or director of any public company whose
securities are registered with the Commission and permanently
enjoining him from further violations of the registration, anti-
fraud, internal controls, and beneficial ownership provisions of
the federal securities laws, Sections 5 and 17(a) of the
Securities Act of 1933 (Securities Act) and Sections 10(b),
13(b)(5) and 13(d) of the Securities Exchange Act of 1934
(Exchange Act) and Exchange Act Rules 10b-5, 13b2-1, 13d-1 and
13d-2, and from aiding and abetting violations of the periodic
reporting, books and records, and internal control provisions of
the Exchange Act, Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B)
and Exchange Act Rules 12b-20, 13a-1 and 13a-16.
A.C.L.N. consented to the entry of an order permanently
enjoining it from violating the antifraud, periodic reporting,
books and records, and internal controls provisions of the
federal securities laws, Section 17(a) of the Securities Act and
Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the
Exchange Act and Exchange Act Rules 10b-5, 12b-20, 13a-1 and
13a-16. A.C.L.N. also consented to the entry of a Commission
order revoking the registration of its securities.
The Commission earlier settled its case against A.C.L.N.'s
auditor, BDO International (Cyprus) (BDO Cyprus). Without
admitting or denying the allegations of the Commission's
complaint, BDO Cyprus consented to the entry of an order
permanently enjoining it against any future violations of the
anti-fraud provisions of the Exchange Act, and requiring it to
disgorge $62,196.71 in compensation it received for performing
its audit of ACLN. The Commission permanently barred BDO
Cyprus and its two principals from appearing or practicing
before the Commission as accountants.
This litigation continues against other Defendants named in the
complaint. The suit is styled "SEC v. A.C.L.N., LTD.; ABDERRAZAK
"ALDO" LABIAD; JOSEPH J.H. BISSCHOPS; ALEX DE RIDDER; PEARLROSE
HOLDINGS INTERNATIONAL S.A.; EMERALD SEA MARINE, INC.; SCOTT
INVESTMENTS S.A.; BDO INTERNATIONAL (CYPRUS); MINAS IOANNOU;
CHRISTAKIS IOANNOU (DEFENDANTS); AND SCANDINAVIAN CAR CARRIERS
A/S; PANDORA SHIPPING, S.A.; SERGUI, LTD.; WESTBOUND DEVELOPMENT
CORP.; MAVERICK COMMERCIAL, INC.; AND DCC LIMITED (RELIEF
DEFENDANTS), Case Number 02 CIV 7988 (LAP)(S.D.N.Y.)."
ABERCROMBIE & FITCH: Judge Grants Class Status To CA Wage Suit
--------------------------------------------------------------
Los Angeles Superior Court Judge Kenneth R. Freeman granted a
motion to certify a lawsuit on behalf of past and present
managers of Abercrombie & Fitch stores across California for
overtime pay as a class action.
"The lawsuit was filed in July 2002 and charges Abercrombie &
Fitch with improperly classifying its Store Managers and General
Managers as exempt to avoid paying overtime, even though their
duties are such that they are owed overtime," says John N.
Quisenberry, Director of The Quisenberry Law Firm, which
represents the Plaintiff class.
Now certified as a class action, the suit represents an
estimated 250 Managers who have worked in Abercrombie & Fitch
stores across California since July 1998.
"We know from our investigation that Managers are spending
significantly more than half of their day performing non-
managerial duties and they are working well in excess of a 40-
hour work week, yet they are not being paid overtime as required
under California law," says Robert J. Drexler, Jr., a lawyer
with The Quisenberry Law Firm.
The suit seeks an end to the practice of misclassifying workers
by Abercrombie & Fitch, and seeks compensation for the class
members.
The court's ruling does not decide whether the class members are
eligible for overtime or the amount of overtime pay they would
receive if they ultimately prevail in the class action lawsuit.
The court will determine eligibility and damages in the next
stages of the suit.
AQUILA: Kansas Judge Resolves Class in Shareholder Fraud Lawsuit
----------------------------------------------------------------
Judge Fernando Gaitan Jr. of the U.S. District Court in Kansas
City has ruled which 2001 stockholders in a short-lived Kansas
City-based Aquila (NYSE: ILA) spinoff would qualify for any
eventual winnings from a class-action suit against the company,
the Kansas City Business Journal reports.
In his ruling the federal judge stated the certified class of
plaintiffs includes anyone who held Class A common stock in the
Aquila spin-off company from April 25 to December 3, 2001, which
was still known as UtiliCorp United Inc. up until 2001.
The suit alleges that UtiliCorp made about $50 million off
unsuspecting shareholders by selling stock in a subsidiary
dubbed Aquila Inc. in April 2001 for $395 million before buying
it all back in January 2002 for $344 million.
The suit also alleges that company executives, including Aquila
Chairman Robert Green and former UtiliCorp Chairman Rick Green,
were able to pull off the scheme because no independent board
members that the brothers promised to appoint by about July 25,
2001 ever sat on the subsidiary's audit committee. Rather,
defendants wanted to re-acquire the company at an opportune time
without the interference of an independent audit committee, the
suit said.
Furthermore the suit states that only the promise to add
independent board members motivated many shareholders to buy the
subsidiary's stock at market prices in light of UtiliCorp's
control of Aquila and that the belief that it had an independent
audit committee acted to artificially inflate the value of
Aquila's stock during the class period.
UtiliCorp changed its name to Aquila after it had retained 98
percent of the voting power of stockholders by holding all of
the subsidiary's Class B stock. Robert Green then became CEO of
the new Aquila in January 2001 but accepted a $7.6 million
severance package from the company on October 1, 2002, after the
company's energy-trading operations imploded in the wake of
financial market jitters about Enron Inc.'s collapse.
ARKANSAS: Campaigners Request Taxpayers To Relinquish Refunds
-------------------------------------------------------------
Members of the Stand Up For Our Schools campaign, including Wal-
Mart executives, including parents, school officials and
business leaders in several northwest Arkansas cities staged a
rally at a Bentonville school asking taxpayers to drop out of a
class action lawsuit that seeks refunds for overpaid property
taxes, the Associated Press reports.
According to campaign organizers, if individual property owners
do not waive their participation by signing legal notices that
will be mailed next week they will be considered plaintiffs in
the lawsuit.
The lawsuit, filed in 1997, affects the cities of Rogers and
Lowell, Northwest Arkansas Community College and school
districts in Rogers, Bentonville, Siloam Springs and Gravette.
The action, which could cost schools up to $30 million, claims
that local school districts and governments wrongly collected
property taxes from 1990 through 1996 or 1997.
ATLAS COLD: Income Trust Investors Launch Conspiracy, Fraud Suit
----------------------------------------------------------------
Atlas Cold Storage Holdings, Inc. faces a shareholder class
action by investors in the Atlas Cold Storage Income Trust. The
suit also names as defendants:
(1) certain former directors and officers of Atlas
Holdings,
(2) certain former trustees of the Trust,
(3) the Trust's former auditors, and
(4) the lead underwriter of various public equity offerings
of the Trust's Trust units between 2001 and 2002, by
Notice of Action issued February 5, 2004 and amended on
February 25, 2004
In the Statement of Claim, the plaintiffs assert that they are
bringing the action on behalf of all persons in Canada who
purchased or acquired units of the Trust in the period from
August 11, 2000 to August 29, 2003 and held them at the close of
business on August 29, 2003, except for certain excepted
persons.
In the class action, the plaintiffs claim, on behalf of the
putative class, damages in the amount of $353,000, plus $5,000
in punitive damages, as well as other relief, alleging negligent
and fraudulent misrepresentation, conspiracy, negligence, and
statutory oppression relating to the restatement of financial
statements in respect of the Trust for 2002 and 2001.
CALIFORNIA NATURAL: Recalls Products Due To Processing Failure
--------------------------------------------------------------
California Natural Products, Lathrop, California, is recalling
various Imagine Foods Rice Dream and Soy Dream, White Wave Silk
Soy Milk, and Blue Diamond Almond Breeze beverage products
because of a processing failure and the remote possibility that
the product could become contaminated with harmful
microorganisms.
Product was distributed via distributors and retail centers
nationwide.
All products are in 32 FL OZ (1 QT) TetraPak paper containers
produced between March 8 and March 22, 2004, with lot codes and
expiration dates as follows:
Brand Name/Product Description; Lot Code(s); Expiration Date(s)
(Blue Diamond)
Almond Breeze Original; L0407701; 17/MAR/05
Almond Breeze Vanilla; L0407701; 17/MAR/05
Almond Breeze Chocolate; L0407701 & L0407801; 17/MAR/05 &
18/MAR/05
(Imagine Foods)
Rice Dream Original; L0407501; 15/MAR/05
Rice Dream Original Enriched; L0406901, L0407001, L0407501,
L0407601 & L0408201; 9/MAR/05, 10/MAR/05, 15/MAR/05, 16/MAR/05 &
22/MAR/05
Rice Dream Vanilla Enriched; L0407601; 16/MAR/05
Rice Dream Vanilla Canadian (Bilingual English and French);
L0406801 & L0408201; 8/MAR/05 & 22/MAR/05
Soy Dream Vanilla Enriched; L0406901; 9/MAR/05
(White Wave Silk Soy Milks)
Kirkland Signature by Silk Vanilla Soymilk; L0408101; 03/21/05
Starbucks Brand "Vanilla Silk Soymilk Organic"; 4078-01, 4079-01
& 4080-01; 14SEP2004 LCNP; 15SEP2004 LCNP & 16SEP2004 LCNP
Starbucks Brand "Plain Silk Soy Beverage" Canadian (Bilingual
English and French); 4072-01, 4073-01, 4076-01 & 4077-01;
08SEP2004 LCNP, 09SEP2004 LCNP, 12SEP2004 LCNP & 13SEP2004 LCNP
This recall extends only to the specified products and specified
lot numbers identified.
It is important to emphasize that the affected products have
been sampled and tested for an array of harmful microorganisms.
No harmful organisms have been detected in the 60 samples
tested. Moreover, no consumer illnesses have been reported to
the Company or to its customers. The Company has, however,
received complaints regarding product spoilage resulting, in all
likelihood, from low pH and non-pathogenic microbial growth due
to the processing deviation. The Company has thoroughly
investigated the cause of the problem and actively taken steps
to correct it.
Consumers may return product to the place of purchase and/or
call California Natural Products at 1-800-946-1615 during normal
business hours PST.
CALPINE CORPORATION: CA Court Appoints Lead Plaintiff in Lawsuit
----------------------------------------------------------------
The United States District Court for the Northern District of
California appointed the Police and Firemen Retirement System of
Detroit as lead plaintiff in the consolidated securities class
action filed against Calpine Corporation and certain of its
officers.
Since March 11, 2002, fourteen shareholder lawsuits have been
filed against Calpine and certain of its officers in the United
States District Court for the Northern District of California.
The actions captioned "Weisz v. Calpine Corp., et al.," filed
March 11, 2002, and "Labyrinth Technologies, Inc. v. Calpine
Corp., et al.," filed March 28, 2002, are purported class
actions on behalf of purchasers of Calpine stock between March
15, 2001 and December 13, 2001. "Gustaferro v. Calpine Corp.,"
filed April 18, 2002, is a purported class action on behalf of
purchasers of Calpine stock between February 6, 2001 and
December 13, 2001.
Eleven other actions were filed between March 18, 2002 and April
23, 2002, captioned:
(1) Local 144 Nursing Home Pension Fund v. Calpine Corp.,
(2) Lukowski v. Calpine Corp.,
(3) Hart v. Calpine Corp.,
(4) Atchison v. Calpine Corp.,
(5) Laborers Local 1298 v. Calpine Corp.,
(6) Bell v. Calpine Corp.,
(7) Nowicki v. Calpine Corp.,
(8) Pallotta v. Calpine Corp.,
(9) Knepell v. Calpine Corp.,
(10) Staub v. Calpine Corp., and
(12) Rose v. Calpine Corp.
The complaints in these eleven actions are virtually identical.
All eleven lawsuits are purported class actions on behalf of
purchasers of Calpine's securities between January 5, 2001 and
December 13, 2001.
The complaints in these fourteen actions allege that, during the
purported class periods, certain Calpine executives issued false
and misleading statements about Calpine's financial condition in
violation of Sections 10(b) and 20(1) of the Securities Exchange
Act of 1934, as well as Rule 10b-5. These actions seek an
unspecified amount of damages, in addition to other forms of
relief.
In addition, a fifteenth securities class action, "Ser v.
Calpine, et al.," was filed on May 13, 2002. The underlying
allegations in the Ser action are substantially the same as
those in the above-referenced actions. However, the Ser action
is brought on behalf of a purported class of purchasers of
Calpine's 8.5% Senior Notes Due February 15, 2011 ("2011 Notes")
and the alleged class period is October 15, 2001 through
December 13, 2001.
The Ser complaint alleges that, in violation of Sections 11 and
15 of the Securities Act of 1933, the Supplemental Prospectus
for the 2011 Notes contained false and misleading statements
regarding Calpine's financial condition. This action names
Calpine, certain of its officers and directors, and the
underwriters of the 2011 Notes offering as defendants, and seeks
an unspecified amount of damages, in addition to other forms of
relief.
All fifteen of these securities class action lawsuits were
consolidated in the United States District Court for the
Northern District of California. Plaintiffs filed a first
amended complaint in October 2002. The amended complaint did
not include the 1933 Act complaints raised in the bondholders'
complaint, and the number of defendants named was reduced.
On January 16, 2003, before the Company's response was due to
this amended complaint, plaintiffs filed a further second
complaint. This second amended complaint added three additional
Calpine executives and Arthur Andersen LLP as defendants. The
second amended complaint set forth additional alleged violations
of Section 10 of the Securities Exchange Act of 1934 relating to
allegedly false and misleading statements made regarding
Calpine's role in the California energy crisis, the long term
power contracts with the California Department of Water
Resources, and Calpine's dealings with Enron, and additional
claims under Section 11 and Section 15 of the Securities Act of
1933 relating to statements regarding the causes of the
California energy crisis.
The Company filed a motion to dismiss this consolidated action
in early April 2003. On August 29, 2003, the judge issued an
order dismissing, with leave to amend, all of the allegations
set forth in the second amended complaint except for a claim
under Section 11 of the Securities Act relating to statements
relating to the causes of the California energy crisis and the
related increase in wholesale prices contained in the
Supplemental Prospectuses for the 2011 Notes.
The judge instructed plaintiff, Julies Ser, to file a third
amended complaint, which he did on October 17, 2003. The third
amended complaint names Calpine and three executives as
defendants and alleges the Section 11 claim that survived the
judge's August 29, 2003 order.
On November 21, 2003, Calpine and the individual defendants
moved to dismiss the third amended complaint on the grounds that
plaintiff's Section 11 claim was barred by the applicable one-
year statute of limitations. On February 4, 2004, the judge
denied the Company's motion to dismiss but has asked the parties
to be prepared to file summary judgment motions to address the
statute of limitations issue. The Company filed its answer to
the third amended complaint on February 28, 2004.
In a separate order dated February 4, 2004, the court denied
without prejudice Julies Ser's motion to be appointed lead
plaintiff. Mr. Ser subsequently stated he no longer desired to
serve as lead plaintiff. On April 4, 2004, the Policemen and
Firemen Retirement System of the City of Detroit ("P&F") moved
to be appointed lead plaintiff, which motion was granted on May
14, 2004.
CALPINE CORPORATION: Securities Lawsuit Moved To CA State Court
---------------------------------------------------------------
The securities class action filed against Calpine Corporation,
styled "Hawaii Structural Ironworkers Pension Fund v. Calpine,
et al.," has been transferred to the Santa Clara County Court in
California.
The suit was originally filed on March 11, 2003, against the
Company, its directors and certain investment banks in state
superior court of San Diego County, California. The suit is
brought on behalf of a purported class of purchasers of
Calpine's equity securities sold to public investors in its
April 2002 equity offering.
The action alleges that the Registration Statement and
Prospectus filed by Calpine which became effective on April 24,
2002, contained false and misleading statements regarding
Calpine's financial condition in violation of Sections 11, 12
and 15 of the Securities Act of 1933. The Hawaii action relies
in part on Calpine's restatement of certain past financial
results, announced on March 3, 2003, to support its allegations.
The Hawaii action seeks an unspecified amount of damages, in
addition to other forms of relief.
The Company removed the Hawaii action to federal court in April
2003 and filed a motion to transfer the case for consolidation
with the other securities class action lawsuits in the United
States District Court for the Northern District of California in
May 2003. Plaintiff sought to have the action remanded to state
court, and on August 27, 2003, the United States District Court
for the Southern District of California granted plaintiff's
motion to remand the action to state court.
In early October 2003 plaintiff agreed to dismiss the claims it
has against three of the outside directors. On November 5,
2003, Calpine, the individual defendants and the underwriter
defendants filed motions to dismiss this complaint on numerous
grounds. On February 6, 2004, the court issued a tentative
ruling sustaining the Company's motion to dismiss on the issue
of plaintiff's standing. The court found that plaintiff had not
shown that it had purchased Calpine stock "traceable" to the
April 2002 equity offering. The court overruled the Company's
motion to dismiss on all other grounds.
On March 12, 2004, after oral argument on the issues, the court
confirmed its February 2, 2004 ruling. On February 20, 2004,
plaintiff filed an amended complaint, and in late March 2004 the
Company and the individual defendants filed answers to this
complaint. On April 9, 2004, the Company and the individual
defendants filed motions to transfer the lawsuit to Santa Clara
County Superior Court.
CALPINE CORPORATION: Plaintiffs File Consolidated CA ERISA Suit
---------------------------------------------------------------
Plaintiffs filed an amended consolidated class action against
Calpine Corporation in the United States District Court for the
Northern District of California, alleging violations of the
Employee Retirement Income Security Act (ERISA).
On April 17, 2003, a participant in the Calpine Corporation
Retirement Savings Plan filed a class action lawsuit in the
United States District Court for the Northern District of
California. The suit is brought on behalf of a purported class
of participants in the 401(k) Plan.
The action alleges that various filings and statements made by
Calpine during the class period were materially false and
misleading, and that defendants failed to fulfill their
fiduciary obligations as fiduciaries of the 401(k) Plan by
allowing the 401(k) Plan to invest in Calpine common stock. The
action seeks an unspecified amount of damages, in addition to
other forms of relief.
In May 2003 Lennette Poor-Herena, another participant in the
401(k) Plan, filed a substantially similar class action lawsuit
as the Phelps action also in the Northern District of
California. Plaintiffs' counsel is the same in both of these
actions, and they have agreed to consolidate these two cases and
to coordinate them with the consolidated federal securities
class actions pending in the same court.
On January 20, 2004, plaintiff James Phelps filed a consolidated
ERISA complaint naming Calpine and numerous individual current
and former Calpine Board members and employees as defendants.
Pursuant to a stipulated agreement with plaintiff, Calpine's
response to the amended complaint is due August 13, 2004.
CONVERGE GLOBAL: SEC Launches Lawsuit For Securities Fraud in FL
----------------------------------------------------------------
The Securities and Exchange Commission filed a civil fraud
action in federal court in Florida against Converge Global,
Inc., a Boca Raton-based telecommunications company, and Michael
P. Brown, also of Boca Raton and its CEO. Also named as
defendants in the action were TeleWrx, Inc., Converge's sole
subsidiary, Jonathan G. Fink, of Los Angeles and a purported
consultant to Converge and Keith B. Laggos, of Homer Glen,
Illinois and the owner and publisher of Money Maker's Monthly,
an Illinois-based magazine.
The complaint alleges, among other things, that Converge and
TeleWrx jointly issued a press release on Monday, June 24, 2002,
which falsely claimed that, as the result of its recent weekend
"national launch," TeleWrx had raised "over $1 million." The
release also falsely claimed that, as a result of the weekend
"launch," TeleWrx had signed up "nearly 1,000 distributors."
The Complaint further alleges that Brown and Fink were
responsible for drafting and issuing the false June 24 press
release. The complaint also alleges that, on June 10 and June
25, 2002, and in the July 2002 issue of Money Maker's Monthly,
Laggos published laudatory pieces concerning TeleWrx, without
disclosing that he had been compensated by Converge and/or
TeleWrx for doing so.
The Commission charged Converge, TeleWrx, Brown and Fink with
violating Section 10(b) of the Securities Exchange Act of 1934
and Rule 10b-5 thereunder and Laggos with violating Section
17(b) of the Securities Act of 1933. The Commission seeks:
(1) permanent injunctions and civil monetary penalties
against all of the proposed defendants;
(2) disgorgement against Laggos;
(3) penny stock bars against Brown, Fink and Laggos; and
(4) an officer and director bar against Brown.
The suit is styled "SEC v. Converge Global, Inc., et al., No.
04-80841 (CIV-Middlebrooks) D. So. Fla."
DAIMLERCHRYSLER AG: DE Court Approves Securities Suit Settlement
----------------------------------------------------------------
The United States District Court for the District of Delaware
approved the settlement of the shareholder class action filed
against DaimlerChrysler AG and some of the members of its
supervisory board and board of management.
In the fourth quarter of 2000, Tracinda Corporation filed a
lawsuit in the same court against the Company some of the
members of its Supervisory Board and Board of Management.
Shortly thereafter, other plaintiffs filed a number of actions
against the same defendants, making claims similar to those in
the Tracinda complaint. Two individual lawsuits and one
consolidated class action lawsuit were originally pending.
The plaintiffs, current or former DaimlerChrysler shareholders,
alleged that the defendants violated U.S. securities law and
committed fraud in obtaining approval from Chrysler stockholders
of the business combination between Chrysler and Daimler-Benz in
1998.
In March 2003, the Court granted one of the individual
defendant's motion to dismiss each of the complaints against him
on the ground that the Court lacked jurisdiction over him. In
August 2003, DaimlerChrysler agreed to settle the consolidated
class action case for $300 million (approximately A230 million
adjusted for currency effects), and shortly thereafter,
DaimlerChrysler concluded a settlement with Glickenhaus, one of
the two individual plaintiffs. The Court later issued a final
order approving the settlement of the consolidated class action
case and ordering its dismissal.
The settlements did not affect the case brought by Tracinda,
which claims to have suffered damages of approximately $1.35
billion. The Tracinda trial was completed on February 11, 2004.
FINISAR CORPORATION: Accepts Settlement of NY Securities Lawsuit
----------------------------------------------------------------
Finisar Corporation has accepted the settlement proposal for the
securities class action filed in the United States District
Court for the Southern District of New York, purportedly on
behalf of all persons who purchased the Company's common stock
from November 17, 1999 through December 6, 2000. The complaint
named as defendants the Company and:
(1) Jerry S. Rawls, President and Chief Executive Officer,
(2) Frank H. Levinson, s Chairman of the Board and Chief
Technical Officer,
(3) Stephen K. Workman, Senior Vice President and Chief
Financial Officer, and
(4) an investment banking firm that served as an
underwriter for the Company's initial public offering
in November 1999 and a secondary offering in April 2000
The complaint, as subsequently amended, alleges violations of
Sections 11 and 15 of the Securities Act of 1933 and Sections
10(b) and 20(a) of the Securities Exchange Act of 1934, on the
grounds that the prospectuses incorporated in the registration
statements for the offerings failed to disclose, among other
things, that:
(i) the underwriter had solicited and received excessive
and undisclosed commissions from certain investors in
exchange for which the underwriter allocated to those
investors material portions of the shares of the
Company's stock sold in the offerings and
(ii) the underwriter had entered into agreements with
customers whereby the underwriter agreed to allocate
shares of the Company's stock sold in the offerings to
those customers in exchange for which the customers
agreed to purchase additional shares of the Company's
stock in the aftermarket at pre-determined prices
Similar allegations have been made in lawsuits relating to more
than 300 other initial public offerings conducted in 1999 and
2000, which were consolidated for pretrial purposes.
In October 2002, all claims against the individual defendants
were dismissed without prejudice. On February 19, 2003, the
Court denied Finisar's motion to dismiss the complaint.
In July 2004, Finisar and the individual defendants accepted a
settlement proposal made to all of the issuer defendants. Under
the terms of the settlement, the plaintiffs will dismiss and
release all claims against participating defendants in exchange
for a contingent payment guaranty by the insurance companies
collectively responsible for insuring the issuers in all the
related cases, and the assignment or surrender to the plaintiffs
of certain claims the issuer defendants may have against the
underwriters.
Under the guaranty, the insurers will be required to pay the
amount, if any, by which $1 billion exceeds the aggregate amount
ultimately collected by the plaintiffs from the underwriter
defendants in all the cases. If the plaintiffs fail to recover
$1 billion and payment is required under the guaranty, the
Company would be responsible to pay its pro rata portion of the
shortfall, up to the amount of the self-insured retention under
its insurance policy, which may be up to $2 million.
The timing and amount of payments that the Company could be
required to make under the proposed settlement will depend on
several factors, principally the timing and amount of any
payment required by the insurers pursuant to the $1 billion
guaranty. The settlement is subject to approval of the Court,
which cannot be assured.
IMPAC MEDICAL: Shareholders Launch Securities Suits in N.D. CA
--------------------------------------------------------------
IMPAC Medical Systems, Inc. faces several securities class
actions filed in the United States District Court for the
Northern District of California on behalf of purchasers of IMPAC
Medical Systems, Inc. (NASDAQ:IMPCE) publicly traded securities
during the period between November 20, 2002 and May 13, 2004.
The complaints charge IMPAC and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. IMPAC provides information technology systems for cancer
care.
The complaints allege that during the Class Period, defendants
caused IMPAC's shares to trade at artificially inflated levels
through the issuance of false and misleading statements about
demand for and order bookings and false financial statements.
As a result of this inflation, IMPAC was able to complete two
public offerings of 4.5 million shares, raising total proceeds
of $77.9 million.
On March 1, 2004, the Company announced that it intended to
restate its financial statements for fiscal years 2003-2003.
Then, on May 13, 2004, IMPAC announced disappointing second
quarter of fiscal year 2004 results, and reduced its outlook for
fiscal 2004. On this news, IMPAC's stock collapsed to $14.62 per
share, compared to the prior day's close of $24.85.
Later, on June 4, 2004, the Company filed an 8-K with the SEC
which stated that the Company had dismissed
PricewaterhouseCoopers LLP as the Company's registered public
accounting firm and, on August 17, 2004, IMPAC announced the
resignation of the Company's independent auditor, Deloitte &
Touche LLP 'due to a disagreement with management concerning its
application of Statement of Position (SOP) 97-2, 'Software
Revenue Recognition,' with respect to the timing of its
recognition of certain revenues in its restated financial
statements for the fiscal years ended September 30, 2001 through
2003 filed in April 2004.' The Company's stock has dropped even
farther to the $12 per share range.
The plaintiff firms in this litigation 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) Lerach Coughlin Stoia Geller Rudman & Robbins
(Philadelphia), Mail: 1845 Walnut St., Suite 945,
Philadelphia, CA, 19103, Phone: 215.988.9546, Fax:
215.988.9885, E-mail: info@lerachlaw.com;
(3) Lerach Coughlin Stoia Geller Rudman & Robbin (San
Francisco), Mail: 100 Pine Street, Suite 2600, San
Francisco, CA, 94111, Phone: 415.288.4545, Fax:
415.288.4534, E-mail: info@lerachlaw.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
IRELAND: State Confident of Winning Inmate "Slopping Out" Case
--------------------------------------------------------------
The state of Ireland is confident that it can successfully
defend against a rash of compensation claims by around 800
prisoners and former inmates, over the condition of the state's
jails, the Belfast Telegraph reports
The claimants say they have been traumatized and damaged as a
result of being detained in cells that have no flush toilets,
according to an earlier Class Action Reporter story (September
17,2004). 35 prison officers also filed a class action, seeking
damages, for "slopping-out," - or the practice of using chamber
pots, if they needed the toilet at night. The claimants allege
that the practice violated their human rights.
The number of prisoners and former inmate seeking compensation
for the practice has increased steadily since the decision to
sue for "slopping out" was first revealed in the Irish
Independent last May. Solicitor John Devane told the Telegraph
he was taking on clients at a rate of up to 40 a week. If the
claims are approved in the courts, taxpayers will be faced with
a multi-million euro bill.
Prison officials said they had taken considerable steps over the
past decade to eliminate the "slopping out" in jails but
admitted it would take time before the practice ended
everywhere. Plans by the Department of Justice to end the
practice in Mountjoy, Cork and Portlaoise jails are well
advanced but will not be completed for some time.
"It's not something that can be stopped overnight but
significant progress has been made in recent years to end a
practice that has been described by successive justice ministers
as unacceptable," one told the Telegraph.
In the late 1990s, a prison building program and refurbishment
was started, resulting in proper facilities in many jails.
However, around 500 inmates at Mountjoy, 200 in Cork and 100 in
Portlaoise still have to "slop out" in the mornings. Justice
Minister Michael McDowell is preparing plans to demolish
existing jails at Mountjoy and Cork and to replace them with new
prisons. Refurbishment is ongoing in Portlaoise.
Progressive Democrats chairman John Minihan told the Telegraph
the compensation claims by prisoners were "an absolute scam" and
a "blatant attempt to rip off the Irish taxpayer." He said the
action by the criminals was ludicrous and intolerable.
"Prison is meant to be a punishment, not a holiday. The Irish
taxpayer should not be forced to accept what can only be
described as a ready-up by a group of criminals, some of whom
have committed very serious offences," he stated. "This action
should be resisted at every turn. At a time when we are cracking
the awful 'compo culture' in this country, this is rip-off
Ireland at its worst."
LATTICE SEMICONDUCTOR: Shareholders Launch Fraud Lawsuits in OR
---------------------------------------------------------------
Lattice Semiconductor Corporation faces several securities class
actions filed in the United States District Court for the
Southern District of Oregon, on behalf of persons who purchased
or otherwise acquired its publicly traded securities
(Nasdaq:LSCC) between April 22, 2003 and April 19, 2004,
inclusive. The lawsuit also names as defendants certain of the
Company's officers and directors.
The complaints allege that Defendants violated Sections 10(b)
and 20(a) of the Securities Act of 1934 and Rule 10b-5
promulgated thereunder. Specifically, the complaints allege
that in knowing or reckless disregard of the truth and/or as
part of their ongoing efforts to continue the illusion of
Lattice's growth in the semiconductor industry, Defendants
issued and or participated in the issuance of materially false
and misleading statements and financial information. More
specifically, the complaints allege that during the Class Period
Defendants:
(1) materially understated its accounts payable balance;
(2) overstated earnings by a material amount;
(3) falsely represented that the Company's financial
results during the Class Period had complied with
Generally Accepted Accounting Principles ('GAAP').
Beginning on January 22, 2004, Lattice began to issue press
releases indicating that it had potentially overstated its
deferred income account. Shares began to tumble in reaction to
the news, falling from $12.36 on January 22, 2004 to close at
$11.73 the following day. Shares traded as low as $10 the
following week.
Then on March 18, 2004, Lattice issued a press release
indicating that it anticipated restating its first, second and
third quarters of its 2003 financial statements as it had likely
overstated the Company's Deferred Income Account, an account
that represents the Company's judgment as to the potential gross
margin on inventory held by the Company's distributors. On March
24, 2004, Lattice finally released its financial results for the
fourth quarter and year ended December 31, 2003. The restatement
reduced 2003 revenue by approximately 7% over the nine-month
period and increased the Company's net loss by an additional $9
million.
In its March 24, 2004 press release the Company attributed the
restatement to 'inappropriate accounting entries made, by an
individual in the Company's finance department and deficiencies
in the design and operation of internal accounting controls
related to the deferred income account.' Shares of Lattice
continued to sink, falling to $8.95 on April 19, 2004 when it
finally amended its Form 10-Q, representing a decline of
approximately 27.5% since the overstatement was first announced.
The plaintiff firms in this litigation are:
(i) 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;
(ii) Paskowitz & Associates, Phone: 800.705.9529 E-mail:
classattorney@aol.com
LINCOLN NATIONAL: 800 Employees Entitled To $4.3M IN Settlement
---------------------------------------------------------------
An estimated 800 former employees of Lincoln National
Corporation's Lincoln Re division may be entitled to a share of
a proposed $4.3 million class-action settlement, The News-
Sentinel reports.
The proposed settlement, approved by Allen Superior Court Judge
Nancy Boyer, affects all persons who worked for the reinsurance
operations of Lincoln National Corporation or its affiliates
under the Lincoln Re name in 2001 and who were covered by
certain 2001 incentive compensation plans (specifically the
Value Incentive Plan or Individual Value Contributor Plan) and
who would have been eligible to receive payment under such a
2001 incentive compensation plan had it been determined that a
15% return on equity trigger had been met.
According to Indianapolis attorney Henry Price, who represented
plaintiffs Ned Bade, Walter Pugh Jr. and others about half of
the 700 to 800 workers due to receive compensation worked at
Lincoln Re's Fort Wayne operations.
The settlement stems form a dispute over the Lincoln Re
compensation and severance packages in place when it was about
to be purchased by Swiss Re, wherein employees would have
received incentive pay if the company achieved a 15 percent
return on equity. But before the deal closed in December,
Lincoln Re said the return on equity fell short, at 14.7
percent, and the employees were not entitled to the incentive
pay.
In concurrence with the sale to Swiss Re, about 325 Lincoln
employees lost their jobs, including about 225 in Fort Wayne,
who later sued both Lincoln Re and Swiss Re in 2002.
The lawsuit, which was filed in Allen Superior Court in Fort
Wayne, Indiana, alleges that before Swiss Re purchased Lincoln
Re in 2001 there were no specific, over-arching financial
performance goals set to trigger the incentive pay. But when
Lincoln National decided to sell Lincoln Re in early 2001, the
company set the 15 percent return-on-equity trigger. The lawsuit
further alleges that after the sale closed in December 2001,
Swiss Re required terminated employees to sign releases waiving
their right to incentive pay to obtain their severance packages.
Although the lawsuit was denied class-action status earlier this
year, attorneys had renewed their motion for class-action status
when Lincoln suddenly agreed to settle the case as a class
action, thereby covering all employees involved in the two
incentive pay plans by default.
The proposed settlement on the state court case will also
resolve a federal lawsuit over the compensation and severance
packages.
A hearing on the final approval of the settlement and attorneys'
fees is October 28, 2004.
For more details, contact Price Waicukauski & Mellowitz, P.C. by
Mail: The Hammond Block Building, 301 Massachusetts Avenue,
Indianapolis, Indiana 46204 by Phone: (317) 633-8787 by Fax:
(317) 633-8797 or by E-Mail: pricelaw@price-law.com
MERL HOLDINGS: NJ Court Enters Injunction Against Former Exec
-------------------------------------------------------------
The Honorable Garrett E. Brown, Jr. of the U.S. District Court
for the District of New Jersey entered a final judgment of
permanent injunction against Ed Johnson, the former Chief
Executive Officer, Chairman of the Board, and President of MERL
Holdings Inc.com (MERL), in an accounting fraud, insider trading
and false filing case.
The Final Judgment permanently enjoins Mr. Johnson from
violating the antifraud provisions of the federal securities
laws, permanently bars him from acting as an officer or director
of any public company, permanently bars him from participating
in any offering of penny stock, orders him to pay disgorgement
in the amount of $42,262, plus prejudgment and postjudgment
interest to be determined, orders him to pay a civil insider
trading penalty of $42,262, plus postjudgment interest to be
determined, and orders Johnson to pay a civil monetary penalty
in the amount of $120,000, plus postjudgment interest to be
determined.
On March 8, 2004, following a two-week trial, a federal jury in
Trenton, New Jersey found for the Commission on all counts of
its complaint against Mr. Johnson. In its complaint, the
Commission alleged that Johnson inflated the assets and
financial results of MERL in two registration statements filed
by the company with the Commission and disseminated to the
public. The jury found that Johnson violated Section 17(a) of
the Securities Act of 1933, Section 10(b) of the Securities
Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, in
connection with a multi-faceted fraud designed to raise $25
million in the public securities markets.
The suit is styled "SEC v. Ed Johnson and MERL Holdings,
Inc.com, Civ. No. 02-5490 (D.N.J.) Brown, J."
NATIONWIDE INSURANCE: Couple Files Suit V. Inflation Adjustments
----------------------------------------------------------------
A central Florida couple initiated a lawsuit seeking class
action status against Nationwide Insurance in state Circuit
Court in Orlando for improperly raising the value of the
couple's home and, in doing so, boosting their out-of-pocket
costs for repairing damage from hurricanes Charley and Frances,
the Orlando Sentinel reports.
According to the couple's lawyer Gus Benitez, while the added
cost in their case amounts to only a couple of hundred dollars,
the company's methods could be saving it millions of dollars
statewide at policyholders' expense.
Jose and Elizabeth Benitez of Longwood, who are seeking damages
in excess of $15,000, allege that Nationwide violated the terms
of their homeowners' policy by misrepresenting and
miscalculating the deductible they must meet before their
coverage takes effect.
The couple's suit further alleges that the company's conduct
constitutes an obvious attempt to take advantage of the
plaintiffs and other members of the class at a time when they
need the Nationwide's help the most.
Mr. Benitez stated that when the couple filed their claim,
Nationwide applied an inflation adjustment to raise the insured
value of their home before calculating how much of a deductible
they would have to meet. Because the couple's deductible is a
percentage of the home's insured value, raising the structure's
value increased the couple's deductible.
However, Mr. Benitez pointed out that the company was not
supposed to apply the inflation adjustment until the policy was
renewed next March.
Mr. Benitez reiterates that if one multiplies the inflation
adjustment by the tens of thousands of hurricane claims that
Nationwide is receiving in the wake of Charley and Frances the
maneuver could save the company millions. He even adds, "It is
just a sneaky, deceitful way Nationwide is using to minimize its
financial exposure."
NEKTAR THERAPEUTICS: Shareholders Launch Stock Fraud Suit in CA
---------------------------------------------------------------
Nektar Therapeutics faces several securities class actions filed
on behalf of all securities purchasers of Nektar Therapeutics
from March 4, 2004 through August 4, 2004 inclusive, in the
United States District Court for the Northern District of
California.
The complaints allege that defendants Nektar, and certain of its
officers and directors violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations
to the market between March 5, 2004 and August 4, 2004.
More specifically, the complaint alleges that the defendants'
statements were materially false and misleading because they
failed to disclose and/or misrepresented the following adverse
facts, among others:
(1) that the defendants knew or recklessly disregarded the
fact that Aventis, one of its main partners in Exubera,
prematurely filed an application for marketing approval
of Exubera in the European Union with the European
Medicines Agency for the sole purpose of fending off a
takeover bid;
(2) that the defendants knew or recklessly disregarded the
fact that Exubera was plagued by ongoing safety
concerns, including decreases in lung function and
build-up of antibodies that could potentially affect
drug absorption;
(3) that as a result of these safety concerns, the
application for marketing approval of Exubera in the
European Union was likely to be rejected; and
(4) that despite knowing these facts, defendants approved
of the filing because Nektar's revenues and growth
prospectuses, which are largely based on royalties and
manufacturing payments, are entirely dependent on the
success of its partners, who are responsible for
clinical development and marketing and because the
Company was highly leveraged and needed the European
Union filing in order to complete a $199.5 million
offering.
On August 5, 2004, Reuters published an article entitled 'EU
experts have concerns over Exubera drug-report.' Citing a French
medical online news service, Reuters stated an unnamed source
heard that European regulatory officials wondered whether the
drug could win approval. The original story, from Agence de
Presse Medicale, also points to official notes from an April
meeting of British regulators that mentioned a certain unnamed
diabetes drug up for approval was being met with objections. It
is believed that drug is Exubera. News of this shocked the
market. Shares of Nektar fell $6.14 per share or 37.01 percent
on August 5, 2004, to close at $10.45 per share on unusually
high trading volume of over 25 million shares.
The plaintiff firms in this litigation are:
(i) 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;
(ii) Green & Jigarjian LLP, Mail: 235 Pine Street, 15th
Floor, San Francisco, CA, 94104, Phone: 415.477.6700,
Fax: 415.477.6710;
(iii) Schatz & Nobel, P.C., Mail: 330 Main Street, Hartford,
CT, 06106, Phone: 800.797.5499, Fax: 860.493.6290, E-
mail: sn06106@AOL.com;
(iv) 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
NUTRASWEET: CA Resident Lodges RICO Suit, Seeks $350M in Damages
----------------------------------------------------------------
California resident Joe Bellon, individually and as a
representative of a class of plaintiffs filed a Racketeer
Influenced & Corrupt Organizations (RICO) complaint in U.S.
District Court for the Northern District of California against
NutraSweet, Dr. Robert Moser of NS, American Diabetes
Association and Monsanto.
The suit, which seeks damages of up to $350,000,000 charges the
defendants with manufacturing and marketing a deadly neurotoxin
unfit for human consumption, while they assured the pubic that
aspartame (also known as NutraSweet / Equal) contaminated
products are safe and healthful, even for children and pregnant
women. Present Secretary of Defense Donald Rumsfeld is mentioned
throughout the lawsuit.
As evidence, an explosive affidavit from a former translator for
the G.D. Searle Company, the developer of aspartame was made
public at a National Press Conference that was held last
Thursday, September 16 at 11:00 a.m. at the Sheraton Grand
Sacramento Hotel, 1230 J Street, Sacramento, California 95814,
phone (916) 447-1700.
For 16 years, the FDA denied approval of aspartame because of
compelling evidence of its contributing to brain tumors and
other serious disabilities. Donald Rumsfeld, present Secretary
of Defense in the Bush Administration, left President Ford's
administration as Chief of Staff to become the CEO of aspartame
producer G.D. Searle Company in 1981. Shortly after, Mr.
Rumsfeld became the CEO, and the day after President Reagan took
office, FDA Commissioner Arthur Hayes, who had been recently
appointed by the Reagan Administration over the objections of
the FDA's Public Board of Inquiry, quickly approved aspartame.
Shortly after aspartame's approval by the FDA, Mr. Hayes joined
NutraSweet's public relations firm under a ten-year contract at
$1,000 a day.
Aspartame/NutraSweet was the product of the G.D. Searle Company
In January 1977, the FDA wrote a 33-page letter to U.S. Justice
Department Attorney Sam Skinner: "We request that your office
convene a Grand Jury investigation into apparent violations of
the Federal Food, Drug and Cosmetic Act." Mr. Skinner allowed
the Statute of Limitations to run.
Three FDA Commissioners and eight other officers and Mr. Skinner
took jobs in the aspartame industry.
The Food and Drug Administration once listed 92 adverse
reactions from 10,000 consumer complaints and would send the
list to all inquirers. In 1996 the FDA stopped taking complaints
and now denies existence of the report. Seizures, blindness,
sexual dysfunction, obesity, testicular, mammary and brain
tumors and death, plus dozens of other dread diseases named in
the suit arise from the consumption of this neurotoxin.
Dr. Moser, past CEO of NutraSweet, is cited for misrepresenting
facts to public and commercial users with full knowledge of the
deceptions. The toxin is sold to Bayer, Con Agra Foods, Dannon,
Smucker, Kellogg, Wrigley, PepsiCo, Kraft Foods (Crystal Light),
Conopco (Slim-Fast), Coke, Pfizer, Wal-Mart and Wyeth (to name a
few), who use it in some of their products, including children's
vitamins. These entities are named in other suits now in
California Courts.
Defendant American Diabetes Association's mission is to care for
diabetics. A 35-year ADA member, world famous diabetic
specialist H.J. Roberts, M.D., discovered aspartame could
precipitate diabetes and reacts harmfully with insulin. ADA
rejected his report, which was then published in a prestigious
medical journal.
The seven count indictment includes charges for violation of
California Consumers Legal Remedies Act, Fraud, violations of
California Civil Code '1780-1784 and Injunctive Relief: that
Defendants be enjoined from future use/sale of aspartame.
For more details, contact Britt Groom, Attorney at Law and
Spokesperson for National Justice League by Mail: 2205 Hilltop
Drive #2022, Redding, CA 96002 by Fax: (530) 248-3483 (CA. No.)
by E-mail: info@nationaljusticeleague.net or visit the following
Web sites: http://www.nationaljusticeleague.com/or
http://www.wnho.net/nutrasweet_company_lawsuit.htm
PROCOM TECHNOLOGY: NY Judge Approves Securities Suit Settlement
---------------------------------------------------------------
Procom Technology, Inc. (OTC: PRCM), which was earlier reported
to be nearing a full settlement of a securities class-action
suit filed against the company and its officers on behalf of all
persons who purchased or acquired the common stock of the
Company from December 9, 1999 to June 25, 2001 in the August 9,
2004 issue of the CAR Newsletter stated that the presiding judge
in the case gave final approval to the proposed settlement.
The original complaints allege violations of Section 10(b) and
20(a) and Rule 10b-5 of the Securities Exchange Act of 1934.
Specifically, plaintiffs allege that the Company violated
federal securities laws by:
(1) failing to fully and timely disclose purported problems
with the Company's 'alliance' with Hewlett-Packard
along with the effect of such problems on the Company's
business prospects, and
(2) overstating the Company's receivables during the class
period.
For relief, plaintiffs seek compensatory damages and/or
rescission from the Company as well as an award of the costs and
disbursements of the suit.
The amended complaint adds additional allegations of violations
of Sections 10(b) and 20(a) and Rule 10b-5 of the Securities Act
of 1934. The amended complaint includes allegations that, during
the period from December 9, 1999 to June 25, 2001, the Company
falsely and recklessly overstated revenues in violation of
generally accepted accounting principles.
The Honorable John G. Koeltl, a U.S. District Court judge for
the Southern District of New York, approved the settlement on
September 10, 2004.
The parties to the litigation had reached a settlement in
principle nearly eight months ago, and Judge Koeltl's approval
of the settlement's primary terms will cause the action to now
be dismissed with prejudice.
RESURRECTION HEALTH: Uninsured Lodge Suit in IL, Sets Press Meet
----------------------------------------------------------------
According to the law firm of Mehri & Skalet, PLLC, Resurrection
Health Care Corporation ("Resurrection") has been charged in a
class action lawsuit brought by uninsured patients with
violating Illinois fair business practices laws by charging
uninsured patients inflated rates that are substantially higher
than rates for insured patients; using aggressive and abusive
collection tactics; and dissuading poor uninsured patients from
applying for charitable care. Resurrection's policies, which are
in violation of both Illinois law and the hospital's stated
charitable mission, disproportionately hurt immigrants and
Latinos, groups who are less likely to have health insurance.
The lawsuit was filed in the Circuit Court of Cook County.
A press conference will be held to announce the class action
lawsuit against Resurrection. Present in the conference will
Lieutenant Governor Pat Quinn, U.S. Congressman Luis Gutierrez,
Attorney Cyrus Mehri and plaintiffs in the lawsuit. The press
conference itself will be held on Thursday, September 16, 2 p.m.
at 120 North La Salle Street, 8th Floor, Chicago, Illinois.
Violation of Illinois Law
The plaintiffs allege that Resurrection charges uninsured
patients unreasonable rates that substantially exceed the amount
charged to other patient groups, and then when poor uninsured
patients can't pay, Resurrection harasses them through
aggressive collection tactics such as suing them for the full
amount of the unreasonable charges and garnishing their wages.
Resurrection-controlled hospitals have filed more than 2,000
collection suits between January 1, 2000 and June 1, 2004. In
over 100 of these lawsuits, the court granted indigency
petitions to patients too poor to even pay the court appearance
fee. Resurrection's unlawful conduct also includes its efforts
to dissuade uninsured patients from applying for financial
assistance to pay their hospital bills. The lawsuit claims that
the price gouging and the abusive collection efforts have
financially crippled many patients of Resurrection. This
overcharging is done in "flagrant disregard of Resurrection's
own stated mission to provide 'compassionate and holistic care
responsive to individual needs,' and to be 'proactive in
addressing the needs of the poor and marginalized,'" said Cyrus
Mehri, lead attorney in the case.
Aixa Reyes, one of the uninsured plaintiffs in the case, is a
40-year-old mother of four who suffers from diabetes and high-
blood pressure. In 1999, she was brought to the emergency room
at St. Elizabeth, a Resurrection hospital, for a diabetic
episode and was billed for over $3,000. At the time, she earned
approximately $1,200 a month and had no health insurance.
Resurrection never informed her of the availability of charity
care, but instead pressured her with aggressive phone calls and
letters to make payments that equaled her weekly take-home pay.
Because she could not afford to do so, St. Elizabeth sued her
even after she was deemed indigent by the judge. Aixa began
making $50 monthly payments to Resurrection until she was laid
off, at times even going without the insulin and syringes that
she pays for out-of-pocket. When she had to stop making
payments, the hospital initiated wage garnishment proceedings.
Carol Niewinski, the other named plaintiff, was admitted to the
emergency room of one of Resurrection's hospitals in 2001 for
emergency gallbladder surgery. Seven days later, she was
discharged with a bill for $25,116. She had no health insurance
and was five years away from qualifying for Medicare. At the
time of her gallbladder surgery, Carol and her husband Frank's
income was $1,700 per month. In 2002, she visited another
Resurrection hospital several times for severe post-menopausal
bleeding, resulting in additional bills totaling $30,000. The
Niewinskis were denied charity care for this bill by the
hospital after a lengthy application process. After Resurrection
brought suit against them for the initial bill and collection
lawyers began calling to pressure them, the Niewinskis agreed to
a steep $300 per month payment -- more than a quarter of their
monthly income.
The suit alleges that because Resurrection receives
approximately $50 million in tax exemptions per year, it is
required to offer affordable care to the uninsured. In fact,
the amount of charitable care that Resurrection has provided in
recent years has declined dramatically -- a 59% overall
reduction since 2001. According to the claim, in 2003, only one
half of one percent (.53%) of Resurrection's total charges for
services provided to Illinois patients in eight of its hospitals
consisted of charitable care. In addition, Resurrection
implemented an out-of-service area policy in 2002, the only one
in Cook County to do so, that placed limitations on whom could
receive healthcare at Resurrection hospitals-a policy that
disproportionately excludes immigrants and Latinos. According
to the suit, the 2002 policy also made it more difficult for
uninsured patients to apply for charity care by imposing onerous
documentation requirements, including demanding as many as nine
different forms of required identification and proof of income.
In addition to making it easier to deny qualified patients for
charity care, this policy dissuades poor uninsured patients from
even applying for financial assistance. Moreover, until January
2004, Resurrection failed to adequately notify uninsured
patients that charity care was available.
The lawsuit points out that while this decline in charity care
has been taking place, Resurrection has only grown wealthier.
Although Resurrection enjoys the full tax advantages of a non-
profit hospital system, it is in reality, quite profitable.
Resurrection is now the second-largest healthcare system in the
metropolitan Chicago area, with over $1.2 billion in annual
revenue. For the year ending June 30, 2003, Resurrection
reported over $47 million in excess income with total net assets
over $1.6 billion, nearly double its reported assets in 1998.
"Resurrection Health Care has lost its moral compass. For
decades, Resurrection was a hospital known for treating all
patients, including immigrants and the needy, with compassion,
respect, and dignity-regardless of their ability to pay or where
they lived. Resurrection has become the poster child in a
national crisis in which charitable hospitals defraud and
overcharge the uninsured," said attorney Cyrus Mehri.
RIGGS BANK: Filing of Criminal Charges Urged On Pinochet Assets
---------------------------------------------------------------
A Spanish judge issued an order requesting United States
authorities to filed criminal charges against the Riggs Bank of
Washington, D.C. and its officers for concealing millions of
dollars belonging to former Chilean dictator Augusto Pinochet,
according to an attorney for the alleged victims of Pinochet's
regime, CNN reports.
Attorney Juan Garces told CNN that Judge Baltazar Garzon also
asked the United States to embargo $10.3 million that the bank
may be holding. Judge Garzon was acting on a request filed with
his court by Atty. Garces on behalf of the victims.
Mr. Garces represents plaintiffs in a class action, which
alleges criminal and civil charges against Mr. Pinochet and
about 100 individuals or organizations with specific claims
against him, an earlier Class Action Reporter story (July
29,2004) states.
Mr. Pinochet came to power in Chile in 1973 via a coup and ruled
for 27 years. In October 1998, Judge Garzon issued a warrant
against him, for genocide, terrorism and torture in the deaths
and disappearance of thousands of people, including some
Spaniards, during his regime. Mr. Pinochet was arrested in
London in October 1998 on the warrant.
Judge Garzon also issued an order in October 1998 to freeze the
dictator's assets as a guarantee that victims would receive
indemnity payments if Pinochet were ever convicted in court,
Atty. Garces told CNN.
After a lengthy legal battle, Britain permitted Mr. Pinochet to
return home to Chile in 2000, rather than face extradition to
Spain, on the grounds that he was unfit to stand trial. In
July, the U.S. Senate's Permanent Subcommittee on Investigations
issued a report saying Pinochet's accounts at Riggs from 1994 to
2002 contained between $4 million and $8 million.
The new order informs U.S. officials if they do not act, Spanish
officials will press charges of money laundering and concealing
assets against the bank and its executives, Atty Garces told
CNN. "Pinochet - one - was about torture and crimes against
humanity," he said, referring to earlier unsuccessful efforts to
try Pinochet for genocide and torture. "Pinochet - two - is
about the money the criminal made and hid. It's the same case,
in two facets, and in both, the key is international judicial
cooperation."
According to the Senate report, the Riggs Bank resisted
regulatory oversight of the Pinochet accounts, "despite red
flags involving the source of Mr. Pinochet's wealth, pending
legal proceedings to freeze his assets and public allegations of
serious wrongdoing by this client."
The Senate report also described other Riggs accounts under
scrutiny that had been held by the Saudi Arabian Embassy in
Washington and, separately, by the leader of the small oil-rich
African nation of Equatorial Guinea, CNN reports. President
George Bush has promised a full investigation into the
allegations of wrongdoing involving Riggs Bank and Pinochet's
accounts.
ROYAL DUTCH: Justice Dept Seeks Documents on Oil Reserves Fraud
---------------------------------------------------------------
United States Department of Justice Officials demanded documents
related to the alleged oil reserves fraud at Royal Dutch Shell,
as lawyers for plaintiffs in a securities class action filed
against the Company appeared before a New Jersey court to update
their claim, The Herald reports.
The oil giant faces charges of misleading investors by
overstating its reserves between 1998 and last year. The class
action also names accounting firms PricewaterhouseCoopers UK and
KPMG, who were allegedly responsible for for compiling the
accounts that contained misleading information about the amount
of oil Shell had in its reserves.
The request for documents widened probes into the accounting
activities in the company. According to a newspaper report, the
US attorney's office in New York is now looking into the
activities of individual Shell directors who are named in class
action lawsuits, instead of prosecuting the company as a whole.
Among them are believed to be Sir Philip Watts, the former
chairman, and Walter van de Vijver, Shell's former head of
exploration and production. The Company also faces
investigations by market watchdogs the UK Financial Services
Authority and the US Securities and Exchange Commission.
A spokeswoman for Shell said the company would continue to
pursue a strategy of full cooperation, the Herald reports. She
added, "Shell has kept the US attorney's office informed of the
reserves recategorisation issue throughout the relevant times,
has fully co-operated with the investigation, has provided
access to all relevant documents, and has facilitated interviews
with directors, officers and/or employees."
The oil giant declined to comment further but claimed it was not
uncommon for the US department of justice to request that
certain documents be excluded from discovery in a civil
litigation while a department of justice investigation is
pending, the Herald reports.
SECURITIES FRAUD: SEC Files Administrative Proceedings V. Trader
----------------------------------------------------------------
The Securities and Exchange Commission instituted administrative
proceedings against Robert Cord Beatty pursuant to Section 15(b)
of the Securities Exchange Act of 1934. The proceedings are
based on an injunction entered against Mr. Beatty on August 26,
2004, which enjoined Mr. Beatty from future violations of the
antifraud and lying to auditors' provisions of the federal
securities laws.
In the underlying civil action, the Division of Enforcement
alleged, among other matters, that in or about December 1993,
Mr. Beatty entered into a financing agreement to provide funding
for AutoCorp Equities, Inc., a company of which he was an
officer, to promote a live stage production of the American
Gladiators television show in Las Vegas, Nevada.
The Division of Enforcement also alleged that the financing
transaction involved AutoCorp's acquisition of $5 million in
certificates of deposit, ostensibly issued by a Russian bank.
The Division of Enforcement further alleged that while the CDs
had a face value of $5 million, Mr. Beatty knew the CDs were
worthless because the CDs were not, in fact, issued by the
Russian bank, but were instead printed at a Florida Kinko's copy
center by one of Beatty's co-defendants in the civil case.
Finally, the Division of Enforcement alleged that Chariot
included the Russian CDs as assets on its financial statements,
which were included a Form 10-Q filed with the Commission.
A hearing will be scheduled before an administrative law judge
to determine whether the allegations contained in the Order are
true, to provide Beatty an opportunity to dispute these
allegations, and to determine what remedial sanctions, if any,
are appropriate and in the public interest with respect to
Beatty's participation in offerings of penny stock.
The Commission directed that the Administrative Law Judge issue
an initial decision no later than 210 days from the date of
service of the Order, pursuant to Rule 360(a)(2) of the
Commission's Rules of Practice.
SECURITIES FRAUD: SEC Files Proceedings Against Stock Trader
------------------------------------------------------------
The Securities and Exchange Commission issued an Order
Instituting Administrative Proceedings Pursuant to Section 15(b)
of the Securities Exchange Act of 1934 and Section 203(f) of the
Investment Advisers Act of 1940, Making Findings, and Imposing
Remedial Sanctions against William Barney Thomas.
The Order finds that on August 26, 1997, an Order of Permanent
Injunction (Reserving the Issues of Disgorgement and Civil
Penalties) was entered against Thomas by the United States
District Court for the Western District of Pennsylvania, in
"Securities and Exchange Commission v. William Barney Thomas, et
al., Civil Action No. 96-1775."
The Order of Permanent Injunction enjoins Mr. Thomas from future
violations of Section 17(a) of the Securities Act of 1933,
Sections 10(b) and 15(a)(1) of the Exchange Act and Rule 10b-5
thereunder, and Sections 204, 206(1), 206(2) and 206(4) of the
Advisers Act and Rules 204-2(a), 204-2(b) and 206(4)-2
thereunder.
The Commission's complaint alleged that Thomas orchestrated a
scheme wherein he solicited 23 individuals to become advisory
clients of Pension & Retirement Services Company (Pension &
Retirement), a sole proprietorship that he owned and controlled,
by falsely representing Pension & Retirement as a legitimate,
registered investment adviser.
The complaint further accused Thomas of fraudulently inducing
the clients to invest over $418,000 in Pension & Retirement
investment programs. It was also alleged that Thomas ultimately
liquidated over $300,000 of client assets, which he
misappropriated for his personal use. The complaint further
alleged that, in connection with the aforementioned conduct,
Thomas acted as an unregistered investment adviser, failed to
keep appropriate books and records, and acted as an unregistered
broker-dealer.
The Order also finds that on December 3, 1996, Thomas pleaded
guilty to thirteen counts of third degree felony theft filed
against him by the Commonwealth of Pennsylvania in "Commonwealth
of Pennsylvania v. William B. Thomas, CR-62-95." Thomas was
sentenced to house arrest for a period of six months, and was
ordered to pay restitution in the amount of $50,000. The
criminal charges to which Thomas pled guilty were based,
essentially, on the conduct described above.
Based on the above, the Order barred Thomas from association
with any broker, dealer, or investment adviser. Thomas
consented to the issuance of the Order without admitting or
denying any of the allegations in the Order, except he admitted
the entry of the injunction and the conviction.
SENETEK PLC: Settles SEC-Filed Securities Violations Complaint
--------------------------------------------------------------
The Securities and Exchange Commission settled enforcement
action against Senetek PLC. Senetek provided revenue and
earnings projections to two research analysts without
simultaneously or promptly disseminating these projections to
the public. By virtue of this conduct, Senetek violated Section
13(a) of the Securities Exchange Act of 1934 (Exchange Act) and
Regulation FD.
The Commission's Order finds that prior to December 2001, there
were no analysts who were actively providing research
information about Senetek to the marketplace. To increase its
visibility with investors, Senetek established relationships
with two research firms in December 2001 and March 2002.
While preparing their respective research reports, these
research firms provided Senetek with draft versions for
Senetek's review. After reviewing the drafts, Senetek provided
both research firms with nonpublic information about the
company's projected revenues and earnings. Senetek failed to
simultaneously or promptly release the same projections to the
public. After receiving this nonpublic information, both firms
changed the estimates in their final reports, which were
publicly released in mid-2002.
Senetek has agreed to settle this matter, without admitting or
denying the findings in the Commission's Order. The
Commission's Order orders Senetek to cease-and-desist from
committing or causing any violations and any future violations
of Section 13(a) of the Exchange Act and Regulation FD.
SERVIER CANADA: Plaintiffs Seek Court Approval For Settlement
-------------------------------------------------------------
On October 18 and 19, 2004, lawyers representing Canadians
(excluding those residing in Quebec) who ingested the diet
drugs, Ponderal and Redux, will be seeking Court Approval for a
national class action with the Defendants Servier Canada Inc.
and related companies. If the settlement were approved,
settlement funds of $25,000,000 would be made available for the
payment of benefits, health insurer costs and legal fees, with
an additional amount of up to $15,000,000 being made available
should the initial fund be insufficient.
The settlement, if approved, will pay benefits to individuals
who took these drugs and suffered from Valvular Heart Disease
("VHD") or Primary Pulmonary Hypertension ("PPH"), both of which
have allegedly been associated with ingestion of the drugs. A
parallel settlement was reached in proceedings brought on behalf
of residents of Quebec where Court Approval is pending.
Ponderal and Redux were withdrawn from the Canadian market in
September 1997.
The national class is represented by the Toronto law firm of
Rochon Genova LLP and residents of British Columbia are
represented by the Vancouver law firm of Klein Lyons.
The settlement, which is subject to court approval, was reached
under the supervision of the Mr. Justice Warren K. Winkler of
the Ontario Superior Court of Justice and was made without
admission of liability on the part of the Defendants. A hearing
will be held in Toronto before Mr. Justice Peter A. Cumming on
October 18 and 19, 2004 to determine whether the Class Action
settlement should receive approval.
Notices of the Settlement Approval Hearing are to be published
throughout the country in the coming days. Steps are being taken
to give effect to the settlement of similar litigation in
Quebec.
SEXUAL HARRASSMENT: More Men Launching Sexual Harassment Claims
---------------------------------------------------------------
More men are claiming they're victims of sexual harassment, as
claims filed by men with the Equal Employment Opportunity
Commission (EEOC) grew from 9% of all charges in 1992 to 15% in
2003, USA Today reports.
Just recently, New Jersey Governor James McGreevey resigned amid
claims of sexual harassment lodged by a former male aid.
According to legal experts, many of men's sexual harassment
claims with the EEOC involve male-on-male harassment, and that
harassment of men by women is rarer.
"There are more people complaining about it because there's more
attention to it," Caroline Wheeler, assistant general counsel
with the EEOC, told USA Today. "It's often the men who are not
gay who pick on someone. They pick on men who seem effeminate
or not aggressive enough."
In 1998, the Supreme Court ruled that same-sex harassment by men
may violate federal civil rights law prohibiting sex
discrimination. Before the historic ruling, courts had been
divided about the legal standing of such claims.
The issue has garnered more attention since the ruling, as
federal officials claim they have filed more same-sex harassment
lawsuits and seen more claims - more than 2,000 such EEOC claims
a year, compared with fewer than 1,000 a year from fiscal 1990
to 1992, USA Today reports. The increase is attributed to the
court ruling, a greater awareness by men of their workplace
rights and the possibility that same-sex harassment is more
prevalent.
"The macho society we live in has put a stigma on sexual
harassment of men," says Alan Kopit, legal editor of Web site
lawyers.com, according to USA Today. "It doesn't have to be
male to female."
In an August study by lawyers.com and Glamour magazine,
seventeen percent of men said they had experienced sexual
harassment, vs. 35% of women. In recent years, major employers
have faced lawsuits alleging same-sex harassment by men, with
some settlements topping $1 million.
According to USA Today, among the EEOC cases are:
(1) A suit filed by a male employee of Babies R Us in New
Jersey, alleging he was mocked and made the target of
derogatory comments by other men. The Company settled
the suit last year for $205,000;
(2) Male meatpacking employees of Long Prairie Packing in
Long Prairie, Minnesota filed a suit alleging they were
subjected to harassment and retaliation. The Company
settled the suit for $1.9 million in 1999;
(3) Burt Chevrolet and LGC Management, an auto chain in
Colorado, paid $500,000 in 2000 to settle a claim by 10
former salesmen who said they were harassed by male
managers. The salesmen said their genitals were
grabbed, they were subjected to crude sex jokes and a
manager exposed himself.
SMURFIT-STONE CONTAINER: To Fully Pay Settlement in January 2005
----------------------------------------------------------------
Smurfit-Stone Container Corporation is scheduled to make the
remaining payments for the settlement of the consolidated
securities class action filed against it in the United States
District Court for the Eastern District of Pennsylvania by
January 2005.
In 1998, seven putative class action complaints were filed in
the United States District Court for the Northern District of
Illinois and in the United States District Court for the Eastern
District of Pennsylvania. These complaints alleged that the
Company reached agreements in restraint of trade that affected
the manufacture, sale and pricing of corrugated products in
violation of antitrust laws. The complaints were amended to
name several other defendants, including Jefferson Smurfit
Corporation [JSC(U.S.)] and Smurfit-Stone. The suits sought an
unspecified amount of damages arising out of the sale of
corrugated products for a period during 1993-95.
The complaints were transferred to and consolidated in the
United States District Court for the Eastern District of
Pennsylvania, which certified two plaintiff classes. In
November 2003, Smurfit-Stone reached an agreement to settle the
antitrust class action cases pending against the Company, Stone
Container and JSC(U.S.).
The companies will make an aggregate settlement payment of $92.5
million, one-half of which 23 was paid in December 2003 and the
remainder of which will be paid in January 2005. All of the
other defendants have also entered into agreements to settle
these class actions; however, all of the defendants in the class
actions continue to be defendants in 12 lawsuits brought on
behalf of numerous parties that have opted out of the class
actions to seek their own recovery. All of these cases have
been transferred to the same United States District Court for
the Eastern District of Pennsylvania for pretrial proceedings.
STARWOOD HOTELS: Hotel Workers' Union Lodges Wage Suit in CA
------------------------------------------------------------
Southern California hotel workers' union filed a lawsuit seeking
class action status against White Plains, New York-based
Starwood Hotels & Resorts Worldwide Inc. chain, claiming workers
at two of its hotels were denied meal and rest breaks and are
now entitled to back pay, the Associated Press reports.
Filed in Los Angeles Superior Court, the suit also seeks damages
equaling one hour's pay for each missed break as well as to
cover roughly 1,000 current and past housekeepers, waiters,
cooks and other employees of the Westin Century Plaza Hotel &
Spa and the St. Regis Los Angeles both part of a consortium of
Los Angeles-area hotels currently embroiled in a labor dispute
with the workers' union, Unite Here Local 11.
The other hotels involved in the labor negotiations are the
Hyatt Regency Los Angeles, Hyatt West Hollywood, Millennium
Biltmore, Regent Beverly Wilshire, Sheraton Universal, Westin
Bonaventure and Wilshire Grand.
The 12-page complaint names four employees, who have worked for
the hotels since at least 2001 namely, Edgar Bonilla, Ronald
Chiaravalle, Elisa Benavidez and Marina Bushmeloff. All of them
are claiming that they did not receive meal or rest breaks, and
were not compensated for those missed breaks. Failure to grant
such breaks violates the California labor code and state
Industrial Welfare Commission orders, the union said.
The lawsuit comes amid preparations by the union to threaten a
strike, which recently became a reality when a majority of its
membership voted to authorize a walkout in a bid to pressure an
agreement with the hotel operators, though no date was set for
such action.
TAGLICH BROTHERS: Settles Enforcement Action Over Stock Fraud
-------------------------------------------------------------
The Securities and Exchange Commission settled an enforcement
action against Taglich Brothers, Inc. and Richard C. Oh. The
Company and Mr. Oh failed to disclose that the Company received
compensation, and the amount thereof, for providing research
coverage of certain public companies, in violation of Section
17(b) of the Securities Act of 1933.
As part of the settlement, the Company and Mr. Oh will pay civil
penalties in the amounts of $50,000 and $25,000, respectively.
The Company and Mr. Oh have agreed to settle this matter,
without admitting or denying the findings in the Commission's
Order. The Commission's Order censures Taglich Brothers and Mr.
Oh and orders them to cease and desist from committing or
causing any violations of Section 17(b) of the Securities Act.
The Commission's Order finds that since at least January 2000,
Taglich Brothers, a registered broker-dealer, has maintained a
website on which it posts its research reports, authored by the
firm's research analysts, of approximately fifty small publicly-
traded companies (Covered Issuers). Some of the Covered Issuers
paid Taglich Brothers a non-refundable retainer of up to $5,000,
and all of the Covered Issuers paid Taglich Brothers between
$1,000 and $2,000 a month in exchange for Taglich Brothers
writing and posting its research of the Covered Issuers on
Taglich Brothers' website.
Until October 2001, Taglich Brothers did not disclose in its
research reports that it received compensation for the creation
and dissemination of such reports and until November 2003,
Taglich Brothers did not disclose the amount of such
compensation.
The Commission's Order also finds that, as the Director of Legal
and Compliance, Mr. Oh has been responsible for ensuring that
Taglich Brothers' research reports contain adequate disclosures.
Mr. Oh has also been responsible for ensuring that the
disclaimers in Taglich Brothers' research reports comply with
the federal securities laws.
TEAM TELECOM: Shareholders Launch Securities Fraud Suits in NJ
--------------------------------------------------------------
Team Telecom International Ltd. (TTI) faces several securities
class actions filed on behalf of a class consisting of all
persons who purchased or otherwise acquired securities of Team
Telecom International Ltd. from May 15,2001 to November 14,2002
in the United States District Court in New Jersey.
The Complaints charge, among others, TTI and certain of the
Company's executive officers with violations of federal
securities laws. Plaintiffs claim that defendants' omissions
and material misrepresentations concerning TTI's operations and
performance artificially inflated the Company's stock price,
inflicting damages on investors.
The Complaints allege that throughout the Class Period TTI
engaged in a systematic scheme of accounting fraud to maintain
the facade of a steadily growing enterprise. In order to
facilitate this appearance, the Company engaged in a series of
flagrant violations of generally accepted accounting principals
('GAAP'), including, but not limited to, improperly classifying
assets and liabilities, improperly failing to report its
subsidiary's earnings on a consolidated basis and prematurely
and improperly recognizing revenues.
On November 12, 2002, a Company press release announced TTI's
third quarter 2002 financial results. The press release
announced revenues for the quarter of $10.3 million, compared
with $16.0 million for the third quarter of 2001, and an
operating loss of $6.8 million for the quarter, versus an
operating profit of $3.3 million in the year-ago quarter. Net
loss for the quarter was $6.1 million, or a loss of $0.51 per
diluted share, versus a net profit of $3.7 million, or $0.32 per
diluted share, in the prior year. This news shocked the market,
causing TTI shares to plummet more than 28% on the same day the
financial results were announced, November 12, 2002, and an
additional 7% on heavy trading for the two days following the
announcement.
The plaintiff firms in this litigation are:
(1) Squitieri & Fearon, LLP, Mail: 420 5th Avenue, 18th
Floor, New York, NY, 10018, Phone: 212.575.2092, Fax:
212.575.2184, E-mail: lee@sfclasslaw.com;
(2) Glancy Binkow & Goldberg LLP (LA), Mail: 1801 Ave. of
the Stars, Suite 311, Los Angeles, CA, 90067, Phone:
(310) 201-915, Fax: (310) 201-916, E-mail:
info@glancylaw.com
UTAH: Couples Commence Suit Seeking Changes in Search Warrants
--------------------------------------------------------------
Attorney Brian Barnard initiated a class action lawsuit against
three clerks and all 29 judges in the 3rd District Court in Salt
Lake City on behalf of two couples that seeks to expand public
access to affidavit material officers submit, the Salt Lake
Tribune reports.
According to the couples' suit, which specifically seeks to
expand public access to the justification police use to search a
person's property, the 3rd District Court's (including the
counties of Salt Lake, Summit and Tooele) handling of search
warrants is ripe for abuse and violates the Constitution.
State law explicitly specifies that when seeking a search
warrant, police must convince a judge it is necessary, usually
with a signed affidavit. The affidavit stays with the officer,
who must return it to the court "promptly" after the search
warrant is served, according to state law. The court does not
keep a copy and only makes search warrants public when an
officer returns them. Sometimes, however, the warrants are not
returned for weeks. In the event that they are returned the
search warrants are then filed by address, car or person
searched rather than as part of a criminal case against an
individual.
Furthermore, Mr. Barnard claims that the Fourth and 14th
Amendment rights of Salt Lake City residents Shane Montoya and
Ramona Oldman and West Valley City residents Jeffery and Lavon
Giles were ignored by the court. The Fourth Amendment protects
against "unreasonable searches and seizures," while the 14th
guarantees due process of law.
The suit came after Salt Lake City officers searched the home of
Mr. Montoya and Mrs. Oldman on April 15 looking for drugs as
part of an investigation of Oldman's daughter. While State Motor
Vehicle Enforcement Division officers raided the Giles' home on
August 19, seizing eight slot machines, one gun and several car
titles. Mr. Giles however has not yet been charged with a crime.
The suit alleges that in both searches the residents were unable
to receive the affidavits from the court because the documents
remain in law-enforcement hands.
However, the court's attorney, Brent Johnson countered such
allegations saying the time frame and how the documents are
accessed are not constitutional issues. He also adds that the
court will most certainly review the procedure and would change
it, if they find a better way to operate.
The two couples are not seeking any financial reward beyond
legal fees, but are instead asking the court to keep copies of
all search warrants and provide a way to make them public after
police execute the search.
VERITAS SOFTWARE: Plaintiffs File Amended Securities Suit in CA
---------------------------------------------------------------
Plaintiffs filed an amended securities class action against
VERITAS Software Corporation and certain of its officers and
directors in the United States District Court for the Northern
District of California.
Several suits were filed after the Company announced in January
2003 that it would restate its financial results as a result of
transactions entered into with AOL in September 2000. The suits
alleged that the Company and some of its officers and directors
violated provisions of the Securities Exchange Act of 1934. The
complaints contain varying allegations, including that the
Company made materially false and misleading statements with
respect to its 2000, 2001 and 2002 financial results included in
its filings with the SEC, press releases and other public
disclosures.
On May 2, 2003, a lead plaintiff and lead counsel were
appointed. A consolidated complaint entitled "In Re VERITAS
Software Corporation Securities Litigation" was filed by the
lead plaintiff on July 18, 2003. On December 10, 2003, the
District Court granted the defendants' motion to dismiss the
consolidated complaint, with leave to amend. On May 19, 2004,
the District Court granted the defendants' motion to dismiss the
plaintiffs' first amended complaint, with leave to amend. On
June 30, 2004, an amended complaint was filed with the Court in
this matter.
In addition, in 2003 several complaints purporting to be
derivative actions were filed in California state court against
some of the Company's directors and officers. These complaints
are based on the same facts and circumstances as the class
actions and generally allege that the named directors and
officers breached their fiduciary duties by failing to oversee
adequately the Company's financial reporting.
The state court complaints have been consolidated into the
action "In Re VERITAS Software Corporation Derivative
Litigation," which was filed on May 8, 2003 in the Superior
Court of Santa Clara County and is currently pending. All of
the complaints generally seek an unspecified amount of damages.
VERITAS SOFTWARE: Shareholders Launch Securities Lawsuits in DE
---------------------------------------------------------------
VERITAS Software Corporation faces a class action filed in the
United States District Court for the District of Delaware,
styled "Paul Kuck, et al. v. VERITAS Software Corporation, et
al."
The suit alleges violations of federal securities laws in
connection with the Company's announcement on July 6, 2004 that
it expected its results of operations for the fiscal quarter
ended June 30, 2004 to fall below estimates that it earlier
provided. The complaint generally seeks an unspecified amount
of damages.
Subsequently, additional purported class action complaints have
been filed in Delaware federal court against the same defendants
named in the Kuck lawsuit. These complaints are based on
the same facts and circumstances as the Kuck lawsuit.
ZIX CORPORATION: Shareholders Lodge Stock Fraud Suits in N.D. CA
----------------------------------------------------------------
Zix Corporation faces several shareholder class actions filed in
the United States District Court for the Northern District of
Texas on behalf of purchasers of Zix Corporation common stock
during the period between October 30, 2003 and May 4, 2004. The
complaint charges Zix and certain of its officers and directors
with violations of the Securities Exchange Act of 1934.
The complaint alleges that during the Class Period, defendants
disseminated materially false and misleading statements
regarding the Company's business and prospects. The defendants
concealed from the investing public the following facts during
the Class Period:
(1) the Company was experiencing sluggish doctor adoption
to e-prescribing;
(2) the Company's claim that it would achieve 1,000
deployed active doctors by the end of Q4 2003 was false
and misleading because physicians would be required to
reconfigure their patient data, obtain wireless
coverage and implement a wireless LAN, which were
severely undercutting physician acceptance and
deployment;
(3) the Company's claim it had 4,000 deployments already on
order was false because, at the time of claim, the
physicians' sites had not even been surveyed to
evaluate wireless/LAN needs, all of which would
drastically impact not only the timing of these
"ordered" deployments but also whether these so-called
ordered deployments would ever be truthfully ordered
and deployed; and
(4) new offerings from its Elron acquisition were delayed
as a result of integration problems.
As a result of the defendants' false statements, Zix's stock
traded at inflated levels during the Class Period, increasing to
as high as $17.33 on April 12, 2004, whereby the Company's top
officers and directors sold more than $4.6 million worth of
their own shares and raised an additional $10 million through
the conversion of warrants.
On May 4, 2004, the Company announced its results for Q1 2004,
including larger loss than market expectations. On this news,
the Company's shares were sent into a freefall, tumbling 50% in
the following trading days to below $7 per share.
The plaintiff firms in this litigation are:
(1) Brian Felgoise, Mail: 230 South Broad Street, Suite
404, Philadelphia, PA, 19102, Phone: 215.735.6810,
Fax: 215/735.5185;
(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) Lerach Coughlin Stoia Geller Rudman & Robbins (San
Diego), Mail: 401 B Street, Suite 1700, San Diego, CA,
92101, Phone: 619.231.1058, Fax: 619.231.7423, E-mail:
info@lerachlaw.com;
(4) Provost & Umphrey Law Firm, LLP, Mail: 3232 McKinney
Avenue, Suite 700, Dallas, TX 75204, Phone:
214.744.3000, Fax: 214.744.3015, E-mail:
info@provostumphrey.com;
(5) Schatz & Nobel, P.C., Mail: 330 Main Street, Hartford,
CT, 06106, Phone: 800.797.5499, Fax: 860.493.6290, E-
mail: sn06106@AOL.com;
(6) 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
New Securities Fraud Cases
NETOPIA INC.: Lerach Coughlin Lodges Securities Fraud Suit in CA
----------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP ("Lerach Coughlin") initiated a class action in the United
States District Court for the Northern District of California on
behalf of purchasers of Netopia, Inc. ("Netopia") (NASDAQ:NTPAE)
common stock during the period between November 5, 2003 and
August 16, 2004 (the "Class Period").
The complaint charges Netopia and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Netopia develops, markets and supports broadband and
wireless products and services.
The complaint alleges that during the Class Period, defendants
caused Netopia's shares to trade at artificially inflated levels
through the issuance of false and misleading financial
statements. Specifically, the complaint alleges that during the
Class Period, defendants knew, but concealed from the investing
public, the following material adverse facts:
(1) the Company was experiencing weaker than claimed gross
margins due to higher component costs (including
shipping and surcharges);
(2) the Company was actually experiencing decreases in
average selling prices to its key carrier customers;
(3) certain of the Company's top customers were declining
to participate in the Company's roll out of its 802.11g
launch;
(4) the Company's receivables (and earnings) were
overstated by virtue of the fact that the Company's
clients were not even capable of paying for prior
shipments;
(5) the Company's largest customers were, early on,
altering their purchasing mix, which defendants were
keenly aware would result in dramatically lower average
selling prices;
(6) the Company's European customers had changed delivery
standards resulting in a pushing out of potential
revenue into future quarters; and
(7) as a result of the above, the Company was not on track
to achieve stated projections and, moreover, the
Company's accounting was false and misleading.
On August 17, 2004, the Company issued a press release
announcing "that it will file today a Form 12b-25 with the
United States Securities and Exchange Commission with notice of
late filing of the Report on Form 10-Q for the third fiscal
quarter ended June 30, 2004. As Netopia previously announced on
July 22, 2004, Netopia's Audit Committee has initiated an
inquiry into Netopia's accounting and reporting practices,
including the appropriateness and timing of revenue recognition
of software license fees in two transactions with a single
software reseller customer."
Then on September 16, 2004, Netopia announced that its auditor
KPMG LLP resigned, and that it will restate two years of results
and revise the results in its most recent fiscal quarter.
Netopia said the restatements will cover the two years ended
March 30, and the revision will cover the following quarter. The
Company said it does not know when it will be able to complete
the restatements, or file any future quarterly or annual reports
with the SEC. Therefore, it believes it is "likely" the NASDAQ
will delist its common stock in the near future. KPMG's
resignation was effective September 10, 2004. Netopia shares
fell 30% on this news.
For more details, contact William Lerach or Darren Robbins of
Lerach Coughlin by Phone: 800-449-4900 by E-mail:
wsl@lerachlaw.com or visit their Web site:
http://www.lerachlaw.com/cases/netopia/
TEAM TELECOM: Schatz & Nobel Lodges Securities Fraud Suit in NJ
---------------------------------------------------------------
The law firm of Schatz & Nobel, P.C., which has significant
experience representing investors in prosecuting claims of
securities fraud, announces that a lawsuit seeking class action
status has been filed in the United States District Court for
the District of New Jersey on behalf of all persons who
purchased the publicly traded securities of Team Telecom
International Ltd. (Nasdaq: TTIL) ("TTI") between May 15, 2001
and November 14, 2002, inclusive (the "Class Period").
The Complaint alleges that TTI, an Israeli corporation and
provider of network management systems, operations support
systems and business support systems for communications service
providers, and certain of its officers and directors issued
material misrepresentations concerning TTI's business condition.
Specifically, TTI engaged in a systematic scheme of accounting
fraud to maintain the facade of a steadily growing enterprise.
In order to facilitate this appearance, the Company engaged in a
series of flagrant violations of generally accepted accounting
principals ("GAAP"), including, but not limited to, improperly
classifying assets and liabilities, improperly failing to report
its subsidiary's earnings on a consolidated basis and
prematurely and improperly recognizing revenues.
On November 12, 2002, TTI announced its third quarter 2002
financial results. The announced revenues for the third quarter
were $10.3 million, compared with $16.0 million for the third
quarter of 2001, and an operating loss of $6.8 million for the
quarter, versus an operating profit of $3.3 million in the year-
ago quarter. Net loss for the quarter was $6.1 million, or a
loss of $0.51 per diluted share, versus a net profit of $3.7
million, or $0.32 per diluted share, in the prior year. On this
news, TTI shares fell more than 28% on the same day the
financial results were announced, November 12, 2002, and an
additional 7% for the two days following the announcement.
For more details, contact Nancy A. Kulesa by Phone:
(800) 797-5499 by E-mail: sn06106@aol.com or visit their Web
site: http://www.snlaw.net
*********
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Copyright 2004. All rights reserved. ISSN 1525-2272.
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