/raid1/www/Hosts/bankrupt/CAR_Public/041019.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, October 19, 2004, Vol. 6, No. 207
Headlines
AMERITECH: Judge Dismisses CUB Motion, Payout Kept Under Wraps
BANK OF CANADA: Pensioners File Class Proceeding in Ontario
BRIDGESTONE-FIRESTONE: CA Court To Review Steeltex Tires Lawsuit
CAMBRIDGE INTEGRATED: CA Judge Certifies Claims Adjusters' Suit
CHISSO CORPORATION: Minamata Sufferers To Lodge Damage Suit
CIBC VISA: Ontario Judge Approves Foreign Exchange Settlement
CORNERSTONE PRODIGY: TX Jury Convicts Ponzi Scheme Operators
DELAWARE: Parents Lodge Suit in PA Over Usage Of Stent Implant
FORD MOTOR: IL Jury Rules Crown Victoria Police Cars Are Safe
IKEA HOME: Recalls 7,279 Children's Chairs Due To Choking Hazard
JIFFY LUBE: OK Judge Set To Approve Oil Surcharge Settlement
LEARN WATERHOUSE: SEC Obtains Order To Halt $24.5M Ponzi Scheme
MARSH & MCLENNAN: Emerson Poynter Initiates ERISA Investigation
NATIONAL COLLECTOR'S: NJ Resident Lodges Suit V. $1 Freedom Coin
NEW JERSEY: Opus East LLC Files Suit V. Evesham's Housing Fee
NEW YORK: Parents Sue Education Department Over Transfer Rights
PARAMOUNT CAPITAL: SEC Issues Findings V. Firm's Associates
SKY HIGH INTERNATIONAL: Recalls 13T Lunch Bags Due To Defect
SPRINT CORPORATION: Ex-Employees Join KS Age Discrimination Suit
STARLINK CORN: Judge Approves $9M Consumer Suit Settlement in IL
TENNESSEE: Mediation Sessions Set To Begin For Coster Shop Suit
TYCO INTERNATIONAL: NH Judge Allows Shareholder Suit To Proceed
UNITED PARCEL: Seeks Dismissal of ADA Suit, Cites Technicalities
UNITED STATES: Atoll Affected by 1950s Nuclear Tests Files Suit
New Securities Fraud Cases
AMERICAN INTERNATIONAL: Lerach Coughlin Files NY Securities Suit
AXT INC.: Glancy Binkow Lodges Securities Fraud Suit in N.D. CA
CONVERIUM HOLDING: Murray Frank Lodges Securities Lawsuit in NY
CONVERIUM HOLDING: Schiffrin & Barroway Files NY Securities Suit
FIRST VIRTUAL: Murray Frank Lodges Securities Fraud Suit in CA
HARTFORD FINANCIAL: Lerach Coughlin Lodges Securities Suit in CT
INTERACTIVECORP: Pomerantz Haudek Files Securities Lawsuit in NY
INTERACTIVECORP: Wolf Haldenstein Files Securities Lawsuit in NY
MARSH & MCLENNAN: Wolf Haldenstein Lodges Securities Suit in NY
*********
AMERITECH: Judge Dismisses CUB Motion, Payout Kept Under Wraps
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Madison County Circuit Judge Nicholas G. Byron dismissed a
motion by the Citizens Utility Board (CUB) to track how much of
the $12.4 million awarded to Ameritech customers in a class-
action suit actually gets paid out, the St. Louis Post-Dispatch
reports.
CUB, a consumer watchdog group that originally complained about
Ameritech's SimpliFive rate program, had argued that class
members typically get only a fraction of the amount awarded in
such cases.
In addition to seeking to have the total amount of the payout
tracked, the board, which is a Chicago-based nonprofit advocate
for Illinois utility customers that had filed its initial
complaint against Ameritech with the Illinois Commerce
Commission in 2000, also requested that the court require a
tally of the claims rejected, and the reason for the rejections.
Under the settlement, which was reported in the September 10,
2004 issue of the CAR Newsletter, Illinois customers who lost
money on SimpliFive are entitled to $25 refunds, while the trial
lawyers of the plaintiff firm of Korein Tillery are set to
receive $1.9 million in attorney's fees, which will be paid by
SBC, which now owns Ameritech.
According to Judge Byron, he rejected the Citizens Utility Board
motion due to the fact that the board had no standing in the
case. The ruling virtually keeps payout in Ameritech case under
wraps, thus the public will never know how much will be paid
out.
The Korein Tillery firm and SBC had opposed the board's motion,
which contends that tracking such claims could prove "useful and
relevant to determining the equity of future settlements" for
victims in other class actions. Korein Tillery argued that such
future potential victims constituted "nonparty entities" who had
no standing in the SimpliFive case.
BANK OF CANADA: Pensioners File Class Proceeding in Ontario
-----------------------------------------------------------
Pensioners of the Bank of Canada have issued a class proceeding
in the Ontario Superior Court against their former employer in
connection with the Bank of Canada Pension Plan.
The plaintiffs, who belong to the Bank of Canada Pensioners'
Association, allege the Bank has been misusing the assets of the
pension trust fund since at least 1993 by requiring some-$12
Million in expenses and costs associated with administering the
plan to be paid out of the pension fund. The pension plan was
established in 1936. Prior to 1993, the Bank directly paid for
these expenses, but changed its practice to direct the expenses
to be paid out of the fund after the pension plan began to
develop a considerable surplus.
Historically, the plan documentation required the Bank to assume
the responsibility for paying plan expenses. A 1988 version of
the plan by-law states that the Bank "will not charge to the
Fund any expenses incurred for the administration thereof". The
Bank replaced this provision in the 1990s to shift the burden of
paying plan expenses from the Bank to the fund. The plaintiffs
allege that the plan amendments were not permitted under the
terms of the trusts that govern the pension plan and, further,
the Bank's practice of paying the expenses out of the fund
instead of paying them directly were a breach of trust and
contract and contrary to the fiduciary duties owed by the Bank
to the plaintiffs and all other plan members. These allegations
have yet to be proven in Court.
The plaintiffs are asking the Court to certify the action as a
class proceeding and to appoint them as representatives for all
persons who, after January 1, 1993, were members, former
members, annuitants, spouses and other beneficiaries of the
pension plan. As of January 1, 2002 there were approximately
2,886 persons participating in the plan, including 1,127 active
employees, 900 pensioners, 669 "deferred" pensioners and 190
surviving spouses and beneficiaries.
The plaintiffs are seeking an order from the Court that the Bank
account for the $12 Million it has paid out of the fund to pay
for plan expenses and distribute this sum equitably among all
plan members. The plaintiffs are also seeking damages for the
class for breach of trust and contract, including punitive
damages, in the amount of $30 Million.
Lawyers Kirk Baert and Ari Kaplan of the Toronto law firm Koskie
Minsky LLP (www.koskieminsky.com) are representing the
plaintiffs. Mr. Kaplan said that employers often just assume
they may pay for expenses out of the pension fund, when the
legal requirements are more complex than that. "Some pensioners
of the Bank worked their entire careers with the expectation
that the Bank would cover the costs of the pension plan. This
case is a classic illustration of changing the rules midstream",
Mr. Kaplan added.
For more details, contact Ari Kaplan by Phone: (416) 595-2087 or
by Fax: (416) 204-2875 OR Kirk Baert by Phone: (416) 595-2117 or
by Fax: (416) 204-2889
BRIDGESTONE-FIRESTONE: CA Court To Review Steeltex Tires Lawsuit
----------------------------------------------------------------
The Riverside County Superior Court in Indio is set to review
the issue of whether a defective tire lawsuit filed against
Bridgestone-Firestone Inc. should be a national class action or
otherwise, the Desert Sun reports.
Yucca Valley resident Roger Littell and other plaintiffs in the
lawsuit will be pushing for reconsideration of their request to
have the suit certified as a class action.
Judge Christopher Sheldon had earlier denied without prejudice
attorney Joseph Lisoni's first motion in March, citing that the
evidence required for class-action certification was lacking,
thus the plaintiffs got another chance to make the request.
Legal experts point out that if certification is granted this
time around, the suit would represent people nationwide who have
experienced tire failures because of alleged defects in the
design and manufacture of Firestone Steeltex tires.
According to Mr. Littell, the tread on five tires on his motor
home peeled off and did considerable damage to it. He further
stated that Firestone did nothing when he complained thus he
sued. Mr. Littell was quick to point out though that he was not
after any huge compensation, he just wanted Firestone to take
the Steeltex tires off the road and reimburse him for damage to
his motor home.
Though unavailable for comment Mr. Lisoni stated in recently
filed court papers that he has provided substantial evidence in
support of class action certification. Evidence he has provided
includes more than 195 declarations from people across the
country that "document the failure of the Firestone Steeltex
tire, which came as original equipment on their vehicle."
He also contends that he does not have to prove his case at this
stage but instead only has to establish there is an easily
identifiable class and that there are common issues as to
whether those tires are defective.
However, Dan MacDonald, Bridgestone-Firestone spokesman, down
played Mr. Lisoni's new arguments, adding that presented nothing
substantial that would change the company's position, which is
opposition to class action status. He further cites that the
facts Mr. Lisoni is presenting doesn't meet the standard for
class action certification under California law.
Mr. MacDonald also cited a September decision by the National
Highway Traffic and Safety Administration denying Mr. Lisoni's
second petition to reopen an investigation into Firestone
Steeltex tires on ambulances and other emergency vehicles and
other model vehicles.
In reaction to Mr. Mac Donald's comments, Mr. Lisoni pointed out
the denial was a "political decision and not based on competent
evidence" and that the judge cannot deny class certification
merely because NHTSA denied his petition.
The tires Lisoni's lawsuit targets are Steeltex R4S, R4SII and
A/T tires commonly used on vans and recreational vehicles.
CAMBRIDGE INTEGRATED: CA Judge Certifies Claims Adjusters' Suit
---------------------------------------------------------------
Judge Teresa Sanchez-Gordon of the Superior Court of California,
the County of Los Angeles granted the plaintiffs' motion to
certify their lawsuit against the Cambridge Integrated Services
Group for overtime pay as a class action, which includes a class
of all present and past Claims Adjusters who have worked for the
company at any time since December 28, 1997. Plaintiffs expect
the class to include about 800 Claims Adjusters. The court's
decision comes just 10 days after The Quisenberry Law Firm
obtained class certification in an overtime case against Claim
Jumper Restaurants for Assistant Kitchen Managers and 1 month
after moving successfully to certify a class of Store Managers
employed by Abercrombie & Fitch.
The Claims Adjusters' suit against Cambridge and AON was filed
on December 28, 2001. Plaintiffs contend that they were mis-
classified as exempt employees and not paid overtime wages.
"These Claims Adjusters should receive overtime pay. Under
California law, all employees are entitled to overtime unless
the employer can show an exemption applies. We believe these
adjusters do not fall within any of the exemptions," said John
N. Quisenberry, co-counsel for the plaintiff class.
In a recent case involving Claims Adjusters employed by Farmers
Insurance Company, which settled for over $200 million dollars,
the appellate court found that Farmers' Claims Adjusters were
not administrative employees exempt from overtime pay under
California's labor laws. "AON and Cambridge are also arguing the
'administrative' exemption. Our class of adjusters are
performing essentially the same duties as the adjusters employed
by Farmers. There's no public policy reason to allow Cambridge
and AON to underpay its adjusters when insurance companies in
California are held to the law," commented Stan Salzman, co-
counsel for the class.
The court's ruling certifying the class does not decide whether
the class members are eligible for overtime or the amount of
overtime pay they will receive. In the next few weeks, the court
is expected to set a date for trial and the resolution of the
remaining issues.
For more details, contact The Quisenberry Law Firm by Mail: 2049
Century Park East, Suite #2200, Los Angeles, CA 90067 by Phone:
310-785-7966 by Fax: 310-785-0254 or by E-mail: info@quislaw.com
CHISSO CORPORATION: Minamata Sufferers To Lodge Damage Suit
-----------------------------------------------------------
Minamata disease sufferers in Izumi, Kagoshima Prefecture, are
set to file a class action damage suit against the central,
Kumamoto and Kagoshima prefectural governments and Chisso
Corporation in the Kagoshima District Court, the Daily Yomiuri
reports.
According to Toshio Onoue, 65, the chairman of an Izumi-based
group for those suffering from mercury-poisoning known as the
Minamatabyo Izumi no Kai, the decision to file the damage suit
follows a recent Supreme Court ruling that found the central and
Kumamoto prefectural governments responsible for failing to take
appropriate action to prevent the spread of industrial mercury
pollution by Chisso in the Minamata region in the two
prefectures that face the Shiranui Sea. He further states that
most of the plaintiffs in the case to be filed are all members
of the 520-strong group.
In 1995, Minamata disease sufferers who had never been
officially recognized as victims by the central government
accepted a redress plan under which Chisso was to extend a one-
time compensation payment to them in line with principle that
the polluter should pay.
The group is currently searching for disease sufferers and to
have vigorously campaigned to have authorities officially
recognize them as victims.
Under the 1995 agreement, the then-unrecognized patients agreed
to withdraw their applications to be officially recognized by
the central government as Minamata disease victims and to drop
any litigation related to their disease.
CIBC VISA: Ontario Judge Approves Foreign Exchange Settlement
-------------------------------------------------------------
Mr. Justice Warren Winkler of the Superior Court of Justice for
Ontario certified a class action lawsuit (CIBC VISA CARD FOREIGN
EXCHANGE CLASS ACTION) as a class proceeding, which was
commenced against CIBC alleging that it had charged its VISA
cardholders undisclosed, inadequately disclosed or unauthorized
fees or charges in respect of debits and credits incurred on
their CIBC VISA accounts in a foreign currency and approved the
settlement.
The class action lawsuit was filed on behalf of all persons,
anywhere in Canada, including corporations, who were issued one
or more CIBC VISA cards on or before June 30, 2004.
Under the settlement, CIBC will pay the sum of $16.5 million in
full and final settlement of all claims of the class members
against it including interest. CIBC will also pay $3 million to
plaintiffs' counsel in full settlement of the plaintiffs'
obligation to pay fees, disbursements and applicable taxes. In
addition CIBC will pay the costs of notification, administration
and distribution of the settlement funds. CIBC will distribute
the settlement funds in accordance with the terms of the
settlement under the supervision of the court.
The settlement funds of $16.5 million will be allocated as
follows:
(1) up to $13.85 million directly to class members;
(2) at least $1 million to the United Way on behalf of
class members who are not included in the Final
Distribution Group (as defined below); and
(3) $1.65 million to the Class Proceedings Fund of the Law
Foundation of Ontario on behalf of the class members.
For more details about the settlement visit: http://www.cibc.com
at the link titled "CIBC VISA Foreign Exchange Class Action
Settlement" or contact the settlement administrator by Phone:
1-800-465-4653 or, for the hearing impaired, 1-877-331-3338
(TTY). Contact them from Monday - Friday from 8:00 a.m. - 11:00
p.m. Eastern OR Saturday - Sunday from 8:00 a.m. - 7:00 p.m.
Eastern.
CORNERSTONE PRODIGY: TX Jury Convicts Ponzi Scheme Operators
------------------------------------------------------------
A federal jury presided over by U.S. District Judge Terry R.
Means, Northern District of Texas, Fort Worth Division, returned
a guilty verdict against Gary D. Reeder and Sandra M. Reeder on
14 counts of mail fraud and conspiracy to commit money
laundering in a Ponzi investment scam conducted by the Reeders
and their Ft. Worth, Tex., company, Cornerstone Prodigy Group,
Inc. A sentencing date is scheduled for Jan. 24, 2005.
The Reeders and Cornerstone were previously enjoined by the
Commission for their fraudulent conduct. During the course of
the lawsuit, a court-appointed receiver liquidated all of the
defendants' assets, including the Reeders' home, which had been
paid for with investor funds and distributed these liquidated
assets, totaling approximately $7 million, to the victims of the
Reeders' fraud.
The Commission's lawsuit, filed in November 1999, alleged that
the Reeders fraudulent operation, based in Forth Worth, Tex.,
raised over $16.5 million from over 600 investors, many of whom
were elderly, through internet postings and cold-call sales. The
complaint further alleged that the defendants promised investors
that their business operations would generate 120% annual
returns when, in reality, they had no significant business
revenue. Finally, the complaint alleged the Reeders were
operating a classic Ponzi scheme wherein the funds of new
investors were used to make promised payments to existing
investors.
On April 14, 2000, Judge Means, who also presided over the civil
lawsuit, entered a Permanent Injunction against Cornerstone
Prodigy Group, Inc. and its principals Gary Reeder, a convicted
felon, and Sandra Reeder, a licensed securities professional.
The Court's order enjoined Cornerstone and the Reeders, who
consented to the issuance of the order, from future violations
of the anti-fraud and securities registration provisions of the
federal securities laws, specifically, Sections 5(a), 5(c) and
17(a) of the Securities Act of 1933 and Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The
Court also ordered the Reeders to disgorge $16.5 million, less
the approximate $6 million of investor funds recovered, but
waived the balance based upon the Reeders demonstrated financial
inability to pay.
The Commission wishes to acknowledge the valuable assistance of
the Texas State Securities Board and the Federal Bureau of
Investigation.
The action is titled, U.S. v. Reeder, et al., Criminal Action
No. 4:02-CR-00128 USDC, NDTX, Ft. Worth Division; SEC v.
Cornerstone Prodigy Group, Inc., Gary D. Reeder, Sandra Reeder,
Case No. 4:99-CV-0978-Y USDC, NDTX, Ft. Worth Division.
DELAWARE: Parents Lodge Suit in PA Over Usage Of Stent Implant
--------------------------------------------------------------
The parents of three children treated for a heart defects
initiated a lawsuit seeking class action status against the
Delaware-based Alfred I. duPont Hospital for Children and its
doctors claiming that they had implanted an experimental device
in their children without informing them of the procedure's
dangers, the Philadelphia Inquirer reports.
The parents, who filed the suit in U.S. District Court in
Philadelphia contends that they were not told that the stent
lacked federal approval and were misled into thinking that it
was safer than standard surgery. They further contend that a
medical consent form was forged to indicate that a parent had
signed for the procedure.
Named in the suit were world-renowned cardiac surgeon William I.
Norwood, who directed the Wilmington hospital's cardiac center,
and chief cardiologist John D. Murphy, who were both dismissed
from the hospital in February in light of the allegations about
the stent's use. Aside from the hospital and the doctors the
stent's manufacturer, NuMED Inc. of Hopkinton, N.Y, was also
named as a defendant.
The three children, Teague Conway of Wayne, Molly Guinan of
Vineland, N.J., and Mark Aaron Hess of Bridgeton, N.J.,
underwent the procedure in 2002 and 2003, were all born with a
deadly heart defect that normally is treated with three stages
of surgery.
The suit, which was filed by attorneys James E. Beasley Jr. and
Andrew J. Stern alleges that the doctors did not tell parents
that the second-phase surgery might be modified, preparing the
way for a stent instead of a third surgery. Furthermore, the
suit alleges that the stent, which was not approved by the U.S.
Food and Drug Administration, was used by the doctors without
the approval of the hospital's Institutional Review Board, the
overseer of hospital research.
FORD MOTOR: IL Jury Rules Crown Victoria Police Cars Are Safe
-------------------------------------------------------------
An Illinois jury in the first class-action lawsuit filed against
the Ford Motor Company over the safety it's Crown Victoria
police cruisers ruled that the cars are safe, however a judge
must now decide if the automaker violated state consumer fraud
laws, the Associated Press reports.
Class action lawsuits are pending in at least 12 states over the
Crown Victoria Police Interceptor, a specially built police
cruiser that accounts for the majority of police cars on U.S.
streets.
According to the suits, since 1983, at least 15 officers
nationwide have died in fiery crashes after their Crown
Victorias were rear-ended including one crash in Texas last
month. But, Ford contends that the deaths reflect officers'
risky work rather than a design flaw.
Though none of the fatal crashes occurred in Illinois, the
departments accuse Ford of failing to disclose alleged problems
with the car to law enforcement agencies, seeking to force the
company to retrofit cruisers with safety equipment.
Jurors agreed that the car was safe and thus dismissed a fraud
claim filed in 2002 by the St. Clair County Sheriff's Office and
nearby Centreville Police Department.
Judy Burgess, one of the jurors told the Belleville News-
Democrat, "It's a terrible thing that someone has to die, but
their cars are no more dangerous than other Crown Victorias on
the road now."
After the jury ruling, an elated Jim Feeney, the company's
attorney, stated, "To have 12 folks unanimously agree that the
Number One police vehicle in the U.S. is safe is very important
and significant to Ford." He however pointed out that state law
still requires the presiding judge to rule on three remaining
counts: whether Ford engaged in deceptive trade practices,
violated Illinois consumer fraud laws, and unjustly enriched the
company by the fraud. Mr. Feeney stated that he is expecting a
ruling in about two weeks regarding these issues.
During the trial, lawyers for the Dearborn, Michigan-based
automaker argued that the vehicle is safe, and that officers are
at higher risk for serious accidents because they are more
likely to travel at high speeds and park at the sides of
highways.
IKEA HOME: Recalls 7,279 Children's Chairs Due To Choking Hazard
----------------------------------------------------------------
IKEA Home Furnishings of Plymouth Meeting, Pennsylvania is
cooperating with the United States Consumer Product Safety
Commission by voluntarily recalling about 7,279 Fargglad multi-
color children's chair.
The chair poses a choking hazard due to a red plastic foot that
can detach from chair legs.
Fargglad multi-color children's chairs have the article number
400.548.40 and the supplier number (either 16592 or 17128) on a
label on one of the chair's rear legs, or on the underside of
the chair seat. The chair has a tubular steel frame with woven
multi-color solid plastic piping used for the chair's seat and
back. The plastic feet are red.
Manufactured in either Vietnam (supplier number 17128) or China
(supplier number 16592), the recalled children's chair were sold
at IKEA stores from May 2003 through September 18, 2004, for
about $15.
Consumers should take the Fargglad multi-color children's chair
away from young children immediately and return it to the
"Returns and Exchanges" department at any IKEA U.S. store for a
full refund.
Consumer Contact: Call IKEA at (888) 966-4532 anytime, or visit
the IKEA web site at http://www.ikea-usa.com
JIFFY LUBE: OK Judge Set To Approve Oil Surcharge Settlement
------------------------------------------------------------
An Oklahoma judge is set to approve a nationwide settlement of
class action lawsuits by drivers who accuse Jiffy Lube
International Inc., a subsidiary of Shell Oil Co. of adding
surcharges to their oil-change bills over the past five years,
NewsOK.com reports.
The settlement, which would close at least nine pending class
action cases from California to New Jersey, will give customers
a $5 discount on their next oil change, while the three law
firms that negotiated with Houston-based Jiffy Lube would split
$2.75 million.
However, some attorneys are trying to kill the nationwide deal
describing at it as a sham that would shortchange millions of
customers and are now planning to ask a state district judge in
Tahlequah to reject the deal at a hearing Nov. 17.
According to the Company, the added charge in question is the
"environmental surcharge" that ranged from 80 cents to $1.25
added to the price of an oil change at Jiffy Lube's 400 company-
owned stores from late 1999 until April.
Jiffy Lube refused to reveal how many customers paid the charge,
which the company stopped imposing after customer complaints and
several lawsuits and instead stated that the company performed
about 30 million oil changes last year at Jiffy Lube shops,
including franchise stores.
In accordance with the settlement, the company has mailed around
7.3 million coupons to customers of company-owned stores, who
were identified from a database, and promised not to charge a
similar fee again.
Critics say the company called the fee an environmental
surcharge to fool customers into thinking it was a tax. But,
according to Scott R. Shepherd, a Pennsylvania attorney who sued
the company "It was just a straight rip-off for $1.25 every time
someone came in. They were hiding a price increase."
According to Mike Lawrence, a publicist hired by Jiffy Lube to
answer questions related to the lawsuits, the company began
charging the fee to recover the costs of environmental
regulations designed to prevent and clean up oil spills,
The lawyers who are attacking the settlement complain that
customers who went to one of the 1,800 stores run by franchisees
will get nothing. Marc A. Wites, a Florida lawyer, said it would
only cover eight million of the 34 million people who paid the
surcharge. He further adds that consumers would only get just a
$5 coupon, which is less than what Jiffy Lube's advertised deals
state.
LEARN WATERHOUSE: SEC Obtains Order To Halt $24.5M Ponzi Scheme
---------------------------------------------------------------
The Securities and Exchange Commission filed an emergency action
to halt an ongoing fraudulent Ponzi scheme perpetrated by five
defendants in Florida, Georgia, and Texas in which at least
$24.5 million was invested in fictitious "prime bank"
instruments. The Commission's complaint charged Learn
Waterhouse, Inc. (LWI), a Texas corporation based in
Jacksonville, Fla., and Tyler, Tex., Randall T. Treadwell,
46, of Savannah, Ga., Rick D. Sluder, 47, of Tyler, Tex., Larry
C. Saturday, 57, of Savannah, Ga., and Arnulfo M. Acosta, 41, of
Pasadena, Tex. The Honorable Irma E. Gonzalez, United States
District Judge for the Southern District of California granted
the emergency application for a temporary restraining order;
froze the defendants' assets; prohibited the destruction of
documents; appointed a temporary receiver over LWI; ordered
accountings from the defendants; and ordered the repatriation of
defendants' assets held in foreign locations.
The Commission's complaint alleges that, from December 2003
through August 2004, the defendants raised at least $24.5
million from 1700 investors nationwide by conducting a
fraudulent prime bank scheme. According to the complaint, LWI
pooled investor funds to engage in "buy/sell" transactions in a
"secret," "invitation only" bank trading program that generated
investor returns ranging from 5% to 50% per month. The
defendants represented that one such trading program purportedly
earned investors 500% in just 60 days. The defendants also
represented that an investor's principal was secured by a "pre-
funded, cash-back instrument" issued by a top U.S. bank, which
purportedly restricted LWI's bank trading program to completely
risk-free transactions.
The complaint alleges that, contrary to the defendants'
representations, they were instead promoting a fictitious prime
bank trading program and operating a Ponzi scheme. The
defendants paid investors and sales agents $17.5 million, but at
least $8.2 million, or 46.9%, of those investor returns came
from investor funds. The defendants also misappropriated at
least $2.5 million in investor funds to support themselves and
finance other businesses.
The Commission obtained an order temporarily restraining LWI,
Treadwell, Sluder, Saturday, and Acosta from committing
securities fraud in violation of Section 17(a) of the Securities
Act and Section 10(b) of the Securities Exchange Act and Rule
10b-5 thereunder. The order also temporarily restrains the
defendants from violating the securities registration provisions
of Section 5(a) and 5(c) of the Securities Act.
The Court's order provided that the temporary restraining order
and asset freeze would remain in effect until November 1, at
which time the Court scheduled a hearing on the Commission's
motion for a preliminary injunction. In addition to the interim
relief already granted by the Court, the Commission seeks a
final judgment against the defendants enjoining them from future
violations of the foregoing antifraud and securities
registration laws, ordering them to disgorge all ill-gotten
gains, and assessing civil penalties.
The Commission would like to acknowledge the substantial
assistance of the United States Attorney's Office for the
Southern District of California, the Federal Bureau of
Investigation, the Arizona Corporation Commission, Alabama
Securities Commission, the Florida Department of Financial
Services, the Texas State Securities Board, and the Iowa
Insurance Division's Securities Bureau.
The action is titled, SEC v. Learn Waterhouse, Inc.; Randall T.
Treadwell; Rick D. Sluder; Larry C. Saturday; and Arnulfo M.
Acosta, Civil Action No. 04-CV-2037 W, LSP, S.D. Cal.
MARSH & MCLENNAN: Emerson Poynter Initiates ERISA Investigation
---------------------------------------------------------------
The law firm of Emerson Poynter LLP commenced an investigation
regarding Marsh & McLennan ("Marsh" or the "Company") (NYSE:MMC)
for violations of Federal and State securities laws and the
Employee Retirement Income Security Act of 1974 ("ERISA").
Indeed, class action complaints have previously been filed again
Marsh for such violations.
Emerson Poynter's investigation focuses on concerns that Marsh
and other Company executives has violated securities laws and
may have breached their ERISA-mandated fiduciary duties of
loyalty and prudence by failing, among other issues, to disclose
that hundreds of millions of dollars of the Company's profits
derive from illegal activities, namely "contingent commissions,"
special payments received from insurance companies that were far
beyond normal sales commissions. These payments were
compensation for the business that Marsh and its independent
brokers steered and allocated to the insurance companies,
distinguished by Marsh as compensation for "market services."
Additionally, previously filed actions allege that Marsh
occasionally solicited bogus bids, in order to mislead its
customers into believing that true competition had taken place.
Marsh allegedly did this while it asserted in public statements
that its "guiding principle" was to always regard its client's
best interests.
For more details, contact Charles Gastineau, Tanya Autry or
Michelle Raggio of Emerson Poynter LLP by Phone: (800) 663-9817
by E-mail: epllp@emersonpoynter.com or visit their Web site:
http://www.emersonpoynter.com
NATIONAL COLLECTOR'S: NJ Resident Lodges Suit V. $1 Freedom Coin
----------------------------------------------------------------
Adam DeMarco, a Burlington County resident initiated a civil
suit seeking class action status against the National
Collector's Mint Inc., and two of its officers, Sidney Nachman
and Avram C. Freedberg over the advertising campaign of the
commemorative 9/11 $1 Freedom Coin, the Cherry Hill Courier Post
reports.
Advertised as the first "legally authorized government issued
silver dollar . . . to commemorate the World Trade Center and
the new Freedom Tower, the $1 Freedom Coin, which is made of
.999 pure silver recovered from a vault at ground zero, is
engraved with the phrase, "We Will Never Forget," with one side
of the coin showing the Freedom Tower planned for ground zero
and bears the phrase "In God We Trust." The other side shows the
old Manhattan skyline, with the World Trade Center still
standing and the phrase "One dollar."
Filed in Superior Court in Burlington County, Mr. DeMarco's suit
states that the coin at a costs $23.45, including shipping and
handling, is a "shameless attempt to profit from a national
tragedy through an advertising campaign."
Aside form class action status, the suit is also seeking a jury
trial and unspecified damages to the more than 10,000 people who
are known to have purchased the coin and others who might have
purchased the coin.
The suit claims that the National Collector's Mint, a Delaware
corporation, with its principal business located in Port
Chester, N.Y., and the two officers engaged in a "pattern of
unconscionable business practices, including knowing omissions
and affirmation misstatements of fact in connection with the
advertising, marketing, and sale" of the coin.
According to Mr. DeMarco's attorney Stephen P. DeNittis of
Marlton, the National Collector's Mint is advertising the coins
as products of the U.S. Commonwealth of the Northern Mariana
Islands.
Furthermore, the Marlton attorney stated that the suit claims
among other things that the coin is not legal tender, that the
coin was not issued by the U.S. Mint, that it is not pure
silver, but silver-plated and manufactured in Wyoming and that
it is not the equivalent of $1 in U.S. currency and was never
authorized by the U.S. government.
The suit also claims that the mint has failed its "guarantee"
that if the customer is not satisfied, the coin can be returned
for a full refund "no questions asked."
NEW JERSEY: Opus East LLC Files Suit V. Evesham's Housing Fee
-------------------------------------------------------------
Opus East LLC of Plymouth Meeting, Pennsylvania initiated a
Superior Court lawsuit in Mount Holly that challenges an Evesham
ordinance that assesses mandatory fees for developers to help
fund the township's affordable housing obligations, the Cherry
Hill Courier Post reports.
The suit, which is seeking class action status to include other
developers, claims the fees are illegal and is seeking
reimbursement of its $55,970 assessment. Named, as defendants in
the suit are the township's planning and zoning boards.
The Cherry Hill law firm of Flaster Greenberg PC is representing
Opus, which has proposed two office buildings on Lake Center
Drive near Route 73 that are at issue in the suit.
The suit contends that the state Council on Affordable Housing
has never approved the ordinance, that the Opus development
applications were approved before the ordinance was adopted in
1994 and that fees should never have been assessed.
The suit further contends that the collection of the fees is
unlawful and members of the class have suffered damages due to
it.
However, Evesham solicitor John Gillespie disagreed with that
contention and stated, "I am confident the ordinance has the
approvals it needs from the court as part of the builder's
remedy set up by the Mount Laurel affordable housing decision."
NEW YORK: Parents Sue Education Department Over Transfer Rights
---------------------------------------------------------------
Parents of students in failing city schools initiated a class
action lawsuit against the Education Department, alleging the
City plans to illegally deny transfers, the New York Daily News
reports.
One of the parents, Jessica Lopez, a mother of 5-year-old twin
boys who has been trying to get them out of Public School 225 in
Far Rockaway, Queens angrily stated, "My kids deserve an
education and they aren't getting one where they are."
Filed in Manhattan Supreme Court, the suit seeks to stop the
City from denying any transfers under the federal "No Child Left
Behind" law. Nearly 5,000 students who requested transfers under
the law will begin learning by next week whether they will be
allowed to leave under-performing schools.
According to plaintiff's attorney Charlie King, "This suit asks
Chancellor Joel Klein to do what he would expect of any public
school child under his jurisdiction: follow the law, follow the
rules."
The Department has been warning parents that their transfer
requests may not be approved because there's not enough room in
good schools. Recently school officials announced they plan to
ban all high school student transfers due to the aforementioned
circumstance.
PARAMOUNT CAPITAL: SEC Issues Findings V. Firm's Associates
-----------------------------------------------------------
The Securities and Exchange Commission issued an Order imposing
remedial sanctions against six individuals associated with a
Columbus, Ohio-based Ponzi scheme and named as Defendants in the
civil action entitled SEC v. Von Christopher Cummings, et al.,
Civil Action Number C2 02 629, in the United States District
Court for the Southern District of Ohio. The Commission Order,
which institutes Administrative Proceedings pursuant to Section
15(b) of the Securities Exchange Act of 1934 and Section 203(f)
of the Investment Advisors Act, finds that:
Von Christopher Cummings, John A. Ryan, Kevin L. Grandy and
James Curtis Conley were associated with Paramount Financial
Partners, L.P. and Paramount Capital Management, LLC, Investment
Advisers (collectively, Paramount). On September 27, final
judgments were entered against Cummings, Ryan, Grandy and
Conley, permanently enjoining them from future violations of
Section 17(a) of the Securities Act, Section 10(b) of the
Exchange Act and Rule 10b-5 thereunder, and Sections 206(1) and
206(2) of the Advisers Act in SEC v. Cummings, et al. Based on
the injunctions, the Commission's Order bars Cummings, Ryan,
Grandy and Conley from association with any investment adviser.
The Order also bars Conley from association with any broker or
dealer.
Michael L. Vogt and John E. Hawley, Jr. were licensed brokers
who referred clients who participated in Paramount investments.
On September 27, final judgments were entered against Vogt and
Hawley, permanently enjoining them from future violations of
Section 15(a) of the Exchange Act. Based on the injunctions,
the Commission's Order bars Vogt and Hawley from association
with any broker or dealer for one year.
The Commission's complaint in the district court action alleged,
among other things, that Cummings, Ryan, Grandy, Conley and
others defrauded dozens of investors by conducting a Ponzi
scheme through a purported hedge fund, Paramount Financial
Partners, L.P. The complaint alleged that Cummings and various
marketers induced investors to pay at least $15 million into the
hedge fund from at least May 2000 through March 2001, but that
Cummings and others misappropriated or diverted those funds to
pay earlier investors and pay personal and business expenses.
The Commission's complaint further alleged that Vogt and Hawley
violated Section 15(a) of the Exchange Act by accepting
compensation from Paramount and "selling away" from their
employer, a brokerage firm.
Each of the defendants consented to the issuance of the Order
without admitting or denying any of the allegations in the civil
injunctive action.
SKY HIGH INTERNATIONAL: Recalls 13T Lunch Bags Due To Defect
------------------------------------------------------------
Sky High International LLC, of New York, N.Y. is cooperating
with the United States Consumer Product Safety Commission by
voluntarily recalling about 13,000 Care Bears Lunch Kits with
Water Bottles.
The pull-up drinking spout can detach from the bottle, posing a
choking hazard to young children. The firm has received two
reports of the drinking spouts detaching. No injuries have been
reported.
The recalled purple and blue lunch bags are about 9-inches tall
and have a rainbow strap. A multi-colored, shiny-plastic front
displays Care Bears characters and the name "Care Bears." The
lunch bags are insulated and have a netted side pocket used to
hold a 6 oz. water bottle.
Manufactured in China, the lunch bags were sold at all Kohl's
Department Stores nationwide from July 2004 through September
2004 for about $13.
Consumers are advised to stop using the water bottles
immediately and contact Sky High International for a refund of
the water bottle.
Consumer Contact: Call Sky High International at (800) 868-7870
between 9 a.m. and 5 p.m. ET Monday through Friday. Consumers
can also visit Kohl's Web site at http://www.kohls.com
SPRINT CORPORATION: Ex-Employees Join KS Age Discrimination Suit
----------------------------------------------------------------
About 2,300 former Sprint Corporation employees have joined in a
collective-action age discrimination suit against the company,
the Kansas City Star reports.
The suit, which was originally filed in April 2003 accuses
Sprint of engaging in a "pattern and practice of age
discrimination" by lowering performance evaluations of over-40
workers or moving them into positions slated for elimination. It
also contends that Sprint wrongly used age information in making
performance rankings and job assignments in advance of impending
mass layoffs.
According to Dennis Egan, a plaintiffs' attorney, eligible
plaintiffs were those who were over 40 when they were dismissed
during the telecommunication company's workforce reductions
between October 2001 and March 2003.
Sprint has until June 16, 2005, to file any motion to decertify
the class, followed by a 30-day response period for the
plaintiffs.
The case is assigned to Judge John Lungstrum of the U.S.
District Court in Kansas City, Kansas. It will be up to the
court to determine whether the case will proceed with a class
action trial on the liability issue.
STARLINK CORN: Judge Approves $9M Consumer Suit Settlement in IL
----------------------------------------------------------------
United States Senior District Judge James Moran in the U.S.
District Court in Chicago approved the distribution of a $9
million settlement of consumer class action litigation over the
genetically engineered (tm) corn, Starlink, according to the
Krislov & Associates, Ltd.
Starlink, a strain of genetically modified corn, which had not
been approved for use in human food products, was the subject of
lawsuits by consumers and farmers, in 2000, when the corn began
appearing in consumer food products and grain elevators.
In a settlement approved in February 2002, a total of $6 million
in instantly-redeemable coupons were issued, attached to
products sold nationwide. During the redemption period, through
September 1, 2003, a total of $3,628,145 in coupons were
redeemed by consumers. Under the settlement, the remaining
$2,371,855 settlement proceeds will be distributed by cash
contributions to some thirty food depositories, charities,
schools and other institutions, in amounts varying between
$40,000 and $200,000.
The food companies involved in the case are: Kraft Foods Inc.,
Kellogg Co., Azteca Foods Inc., and Mission Foods Co. The
lawsuit also includes Aventis CropScience USA Holding Inc.,
which developed and marketed the corn, and Garst Seed Co., which
sold seed contaminated with StarLink corn. "Defendants deny
liability to the Plaintiffs and members of the proposed class,"
said a preliminary version of the settlement that is the same as
the final version according to a lawyer in the case.
Co-Class counsel Clint Krislov, of Chicago, Illinois, was
quoted: "We are proud that we have successfully protected
consumer safety in the market place, recovered millions of
dollars in real benefits for consumers, and produced millions of
dollars, as well, for organizations who will help consumers in
need of food, legal assistance, eye care, college, law schools
and help in general. We hope that others will follow this
example showing that class actions can be real tools in the
protection of the market place and achieve real benefits for
consumers."
"We combed a national list and chose food banks and food
depositories that are well-established and effective at
distributing meals to those in need," Krislov explained. "We
also added some other important, well respected agencies and
organizations that contribute continually to community well
being. We are very pleased to announce this list of recipients
because giving back over $2.3 million to the community after
having protected the integrity of the market place, and achieved
a settlement for the class, demonstrates the good that this kind
of consumer action can accomplish."
List of Organizations:
Organization Contribution = Amount
America's Second Harvest = $ 176,855.00
Greater Chicago Food Depository = $ 200,000.00
City Harvest = $65,000.00
Capital Area Food Bank = $ 65,000.00
Capital Area Food Bank of Texas, Inc. = $ 65,000.00
Cleveland Foodbank, Inc. = $ 65,000.00
The Community Food Bank = $ 65,000.00
Food Bank of North Carolina = $ 65,000.00
The Houston Food Bank = $ 65,000.00
St. Mary's Food Bank = $ 65,000.00
Manna Food Bank = $ 65,000.00
Feed the Children = $ 65,000.00
Windows of Opportunity = $ 65,000.00
St. Sabina's Food Pantry = $ 65,000.00
St. Vincent DePaul Society = $ 65,000.00
Mesa United Food Bank = $ 50,000.00
Iowa Food Bank = $ 50,000.00
Chicago Bar Foundation = $ 100,000.00
Illinois Bar Foundation = $ 40,000.00
Test Positive Aware Network = $ 60,000.00
Lions Foundation of Fellsmere, Florida = $ 50,000.00
Good Shepherd Center for Homeless Women and Children =$50,000.00
Mercy Home for Boys & Girls = $ 50,000.00
National Relief Charities = $ 50,000.00
Friends of the Earth = $ 100,000.00
FairyGodmother Foundation = $ 50,000.00
Canavan Research Illinois = $ 40,000.00
Legal Assistance Foundation of Metropolitan Chicago = $45,000.00
Chicago-Kent College of Law = $ 50,000.00
Quincy College = $ 50,000.00
Notre Dame Law School = $ 50,000.00
National FFA = $ 100,000.00
Friends of the Orphans = $ 100,000.00
For more details, contact Clinton A. Krislov of Krislov &
Associates, Ltd. by Mail: 20 N. Wacker Drive - Suite 1350,
Chicago, Illinois 60606 by Phone: 312-606-0500 by Fax:
312-606-0207 or by E-mail: clint@krislovlaw.com
TENNESSEE: Mediation Sessions Set To Begin For Coster Shop Suit
---------------------------------------------------------------
Mediation sessions is set to begin in the class-action lawsuit
against the city of Knoxville and its Coster Shop redevelopment
project contractors over dumping contaminants in South Knox
County, the Knoxville News Sentinel reports.
According to the attorneys of both parties the sessions could
result in settlements between Burnett Creek residents and the
entities they believe are responsible for polluting their wells
and lowering property values by dumping contaminated dirt into a
nearby sinkhole.
The suit, which was originally filed in April 2003 involving 72
plaintiffs that has since ballooned, alleges that the defendants
handled hazardous materials with negligence, violated state and
federal environmental laws and devalued their property. A trial
date has been set for 2006 in Knox County Circuit Court.
The plaintiffs in the class are each suing for $1 million in
compensatory damages and $2 million in punitive damages. In
addition, the suit is also seeking $20 million in compensatory
damages and $20 million in punitive damages for others who may
join in the lawsuit.
Named as defendants in the suit are the city of Knoxville,
Norfolk Southern Railway Co., Burnett Demolition & Salvage Co.,
S&ME Inc., The Development Corp. of Knox County, Barge Waggoner
Sumner & Cannon Inc. and sinkhole owner Phil Reagan.
Knoxville Law Director Morris Kizer stated that the mediation
sessions, which will be held in the City County Building and are
closed to the public, would be unusual because of the number of
plaintiffs and multiple defendants. Typically, he said, the
lawyers for both sides present their cases to the mediator, who
then acts as a go-between with settlement demands, mediation
continues until a settlement results or the talks fall apart.
He also points out that even if an agreement isn't reached in
mediation, the gap often closes far enough for a settlement to
be reached later on.
Dan Stanley, one of the lawyers representing Burnett Creek
residents in the lawsuit, predicted that at least a few of his
clients would come to terms with the city and its contractors
instead of waiting two more years for the lawsuit to go to
trial.
Under a $1 million contract with the city, Burnett Demolition &
Salvage Co. dumped more than 800 truckloads of debris from the
Coster Shop site to Reagan's sinkhole off Sevierville Pike and
at least six other locations in late 2001 and early 2002.
Subsequent tests showed the soils in the sinkhole are laced with
diesel fuel, arsenic, lead, polychlorinated biphenyls (PCBs) and
other contaminants. The same compounds later showed up in area
wells.
TYCO INTERNATIONAL: NH Judge Allows Shareholder Suit To Proceed
---------------------------------------------------------------
U.S. District Judge Paul Barbadoro allowed Tyco International
Ltd. shareholders to go forward with a class action lawsuit
against the company and others, the Associated Press reports.
However, the federal judge dismissed a related claim that sought
damages on behalf of Tyco stemming from allegations of fraud and
corporate looting.
Former top executives L. Dennis Kozlowski and Mark Swartz are
awaiting retrial in federal court in New York on charges of
stealing $600 million from the company. Their first trial had
resulted in a hung jury.
In the class action lawsuit, shareholders seek damages against
the company, Mr. Kozlowski, Mr. Swartz, Mark Belnick, former
director Frank Walsh and the company's auditor
PricewaterhouseCoopers.
Judge Barbadoro dismissed the claim seeking damages on behalf of
Tyco against most of its current directors and several of its
former directors and officers, which the judge pointed out was
barred under Bermuda law. Tyco, managed from West Windsor, New
Jersey, is registered in Bermuda.
Jay Eisenhofer, the plaintiffs' lawyer, said in that the judge's
decision represents a big shareholder win and a major step
forward in the case.
The judge rejected the defendants' attempt to separate the
accounting fraud allegations from the looting allegations,
finding "both interrelated and interdependent."
UNITED PARCEL: Seeks Dismissal of ADA Suit, Cites Technicalities
----------------------------------------------------------------
Recent court papers filed by United Parcel Service, Inc. have
asked a federal judge in Pittsburgh to dismiss an ADA class
action lawsuit arguing that it is not qualified to enforce
disability discrimination laws.
"It was expected," said Pittsburgh attorney Charles Lamberton,
one of the lawyers representing the Plaintiffs. "When companies
know they broke the law, they try to get the case dismissed on
technicalities."
One UPS argument in particular has raised eyebrows among legal
experts. UPS has asked U.S. District Court Judge Joy Flowers
Conti to strike the American Association of People with
Disabilties off the case because "AAPD has not been injured" by
UPS's discrimination. "That's like saying the Steelers don't
suffer when Jerome Bettis gets hurt," Mr. Lamberton said.
In addition to seeking dismissal, court filings also show UPS
wants the case to be assigned to another judge. "That move took
guts. Judge Conti's employment opinions have been thoughtful,
well-reasoned and balanced," Lamberton said. "She is deeply
devoted to the law and is one of smartest judges on the court.
It just boggles the mind why UPS would want a different judge on
the case."
Aside from UPS's procedural manuevers, the merits of the case
are getting stronger. "We've talked to people in Florida, New
Jersey, Washington, California, Minnesota, Illinois and
Pennsylvania." "It's very clear UPS is forcing employees off
their prescription medications all over the country," Mr.
Lamberton said.
The case is Darlene Veltri and the American Association of
People with Disabilities vs. United Parcel Service, Inc., Civil
Action No. 04-1177 (W.D.Pa. 2004).
For more details, contact the Lamberton Law Firm, LLC by Mail:
The Gulf Tower, Suite 1705, Pittsburgh, Pennsylvania 15219 by
Phone: (412) 258-2250 or (412) 498-4120 (cell phone) by Fax:
(412) 258-2249 by E-mail: cal@lambertonlaw.com or visit their
Web site: http://www.lambertonlaw.com/CaseFilings.htm
UNITED STATES: Atoll Affected by 1950s Nuclear Tests Files Suit
---------------------------------------------------------------
Likiep, a very remote atoll in the Pacific Ocean that was
peppered with fallout from nuclear tests in the 1950s initiated
a lawsuit for compensation, according to officials in the
Marshall Islands, the ABC Online, Australia reports.
The Likiep suit claims that the prosperous economic, employment
and educational status enjoyed by the island's residents fell
abruptly following the US testing between 1946 and 1958.
The suit was filed just after the Nuclear Claims Tribunal set a
30 November deadline for additional class action suits. The
tribunal has already granted awards to both Bikini and Enewetak
and is currently reviewing three other claims.
Though not seeking a specific amount, the suit cites a 1948 US
Navy report describing the economic status of the atoll, part of
a string of 1,200 islands just north of the equator, as
"outstanding".
It further adds that following the 1954 Bravo hydrogen bomb
test, and dozens of other large bombs that deposited hazardous
radioactive fallout in the area, the "level of wealth and
economic activity on Likiep materially diminished."
However, Tribunal Chairman James Plasman points out that its
funding is limited and says that the inability of the tribunal
to pay off existing awards and new claims demonstrates the
inadequacy of the existing funding to fully compensate people
for injuries suffered as a result of the nuclear testing
program.
New Securities Fraud Cases
AMERICAN INTERNATIONAL: Lerach Coughlin Files NY Securities Suit
----------------------------------------------------------------
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 Southern District of New York on
behalf of purchasers of American International Group, Inc.
("AIG") (NYSE:AIG) publicly traded securities during the period
between October 28, 1999 and October 13, 2004 (the "Class
Period").
The complaint charges AIG and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. AIG is a holding company that, through its subsidiaries,
is engaged in a range of insurance and insurance-related
activities in the United States and abroad.
The complaint alleges that during the Class Period, defendants
disseminated false and misleading financial statements to the
investing public. The facts, known by each of the defendants
but concealed from the investing public during the Class Period,
were as follows:
(1) that the Company was paying illegal and concealed
"contingent commissions" pursuant to illegal
"contingent commission agreements;"
(2) that by concealing these "contingent commissions" and
such "contingent commission agreements" the defendants
violated applicable principles of fiduciary law,
subjecting the Company to enormous fines and penalties
totaling potentially tens, if not hundreds, of millions
of dollars;
(3) that defendants had concealed the fact that AIG had
engaged in illegal transactions using PNC-style
structures with at least five additional insurers (in
addition to PNC), contrary to defendants' claims on
January 30, 2002; and
(4) that as a result, the Company's prior reported revenue
and income was grossly overstated.
On October 14, 2004, Elliot Spitzer announced he had charged
several of the nation's largest insurance companies and the
largest broker with bid rigging and pay-offs he claimed violated
fraud and competition laws. On this news, AIG shares fell $6.80
to $60.19 on unusually heavy trading volume of approximately 50
million shares.
For more details, contact Samuel H. Rudman or David A. Rosenfeld
of Lerach Coughlin by Phone: 800-449-4900 by E-mail:
wsl@lerachlaw.com or visit their Web site:
http://www.lerachlaw.com/cases/americaninternational/
AXT INC.: Glancy Binkow Lodges Securities Fraud Suit in N.D. CA
---------------------------------------------------------------
The law firm of Glancy Binkow & Goldberg LLP initiated a class
action lawsuit in the United States District Court for the
Northern District of California on behalf of a class (the
"Class") consisting all persons or entities who purchased or
otherwise acquired securities of AXT, Inc. ("AXT" or the
"Company") (Nasdaq: AXTI) between February 6, 2001 and April 27,
2004, inclusive (the "Class Period").
The Complaint charges AXT and the Company's CEO with violations
of federal securities laws. Plaintiff claims defendants'
omissions and material misrepresentations concerning AXT's
operations and performance during the Class Period artificially
inflated the Company's stock price, inflicting damages on
investors. AXT manufactures semiconductor parts known as
substrates for a variety of electronic products including
wireless and fiber optic telecommunications, lasers, light
emitting diodes and consumer electronics. The Complaint alleges
defendants knew or recklessly disregarded that their statements
were materially false and misleading when made because AXT:
(1) did not follow requirements for testing of products
(and provision of testing data and information)
relating to customer requirements; and, as a
consequence of this conduct,
(2) failed to accrue adequate reserves;
(3) falsely stated its reported reserves, revenue and
income; and
(4) issued false statements about the Company meeting
customer requirements.
On April 27, 2004, the Company disclosed that the "first
quarter's financial review and verification process has been
delayed due to an investigation by AXT's Audit Committee of
certain product testing practices and policies." News of this
investigation shocked the market, and the next day, April 28,
2004, AXT common stock dropped 13.64% on heavy trading. One day
later, AXT stock plummeted even further, falling nearly 23% in
one day, to close at $2.20 on April 29, 2004, on even heavier
trading than the previous day.
On May 24, 2004, AXT disclosed to the SEC that the investigation
confirmed that, for an undisclosed period of years, AXT had "not
followed requirements for testing of products and provision of
testing data and information relating to customer requirements
for certain shipments made over the past several years." The
Company further disclosed that during first-quarter 2004, AXT
increased its reserve for sales returns "related to our failure
to follow certain testing requirements and provision of testing
data and information to certain customers."
For more details, contact Glancy Binkow & Goldberg LLP by Phone:
(310) 201-9150 or (888) 773-9224 by E-mail: info@glancylaw.com
or visit their Web site: http://www.glancylaw.com
CONVERIUM HOLDING: Murray Frank Lodges Securities Lawsuit in NY
---------------------------------------------------------------
The law firm of Murray, Frank & Sailer LLP initiated a class
action lawsuit in the United States District Court for the
Southern District of New York on behalf of all purchasers of
Converium Holding AG securities ("Converium") (ZURICH:CHRN) on
any world financial market during the period between December
11, 2001 through July 20, 2004 (the "Class Period").
The complaint charges Converium, Dirk Lohmann, and Martin Kauer
with violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. More
specifically, the complaint alleges that the Company failed to
disclose and misrepresented the following material adverse facts
which were known to defendants or recklessly disregarded by
them:
(1) that Converium maintained inadequate loss reserves in
its Converium North America subsidiary;
(2) that the Company, contrary to representations, did not
establish adequate loss reserves to cover claims by
Converium North America policy holders;
(3) that reserve increases announced by the Company during
the Class Period were materially insufficient; and
(4) as a consequence of the understatement of loss
reserves, Converium's earnings and assets were
materially overstated at all relevant times.
On July 20, 2004, Converium announced that second quarter
results would be impacted by a reserve strengthening for US
casualty business and subsequent asset impairments on the
balance sheet of Converium Reinsurance. News of this shocked the
market. Shares of Converium fell $11.12 per share, or 44.44
percent, on July 20, 2004, to close at $13.90 per share. On
August 31, 2004, Converium announced that the Company had
completed external actuarial review of Converium's reserves. On
September 2, 2004, Converium announced that following the
announcement of the external reserve review's outcome and
resulting capital measures, Standard & Poor's and A.M. Best have
lowered their ratings on Converium and its subsidiaries. On this
news, shares of Converium fell an additional $1.04 per share, or
10.51 percent, to close at $8.86 per share.
For more details, contact Eric J. Belfi or Aaron D. Patton of
Murray, Frank & Sailer LLP by Phone: (800) 497-8076 or
(212) 682-1818 by Fax: (212) 682-1892 by E-mail:
info@murrayfrank.com
CONVERIUM HOLDING: Schiffrin & Barroway Files NY Securities Suit
----------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a
shareholder class action in the United States District Court for
the Southern District of New York on behalf of all securities
purchasers of Converium Holding AG (NYSE: CHR) (SWX: CHRN)
("Converium" or the "Company") with a new class period of
December 11, 2001 through August 30, 2004, inclusive (the "Class
Period").
The complaint charges Converium, Zurich Financial Services
Group, Dirk Lohmann, and Martin Kauer with violations of
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10b-5 promulgated thereunder. More specifically, the
complaint alleges that the Company failed to disclose and
misrepresented the following material adverse facts which were
known to defendants or recklessly disregarded by them:
(1) that Converium maintained inadequate loss reserves in
its Converium North America subsidiary;
(2) that the Company, contrary to its previous
representations, did not establish adequate loss
reserves to cover claims by Converium North America
policy holders;
(3) that reserve increases announced by the Company during
the Class Period were materially insufficient; and
(4) as a consequence of the understatement of loss
reserves, Converium's earnings and assets were
materially overstated at all relevant times.
On July 20, 2004, Converium announced that second quarter
results would be impacted by a reserve strengthening for US
casualty business and subsequent asset impairments on the
balance sheet of Converium Reinsurance. News of this shocked the
market. Shares of Converium fell $11.12 per share, or 44.44
percent, on July 20, 2004, to close at $13.90 per share. On
August 31, 2004, Converium announced that the Company had
completed external actuarial review of Converium's reserves. On
September 2, 2004, Converium announced that following the
announcement of the external reserve review's outcome and
resulting capital measures, Standard & Poor's and A.M. Best have
lowered their ratings on Converium and its subsidiaries. On this
news, shares of Converium fell an additional $1.04 per share, or
10.51 percent, to close at $8.86 per share.
For more details, contact Marc A. Topaz, Esq. or Darren J.
Check, Esq. of Schiffrin & Barroway, LLP by Phone:
1-888-299-7706 or 1-610-667-7706 or by E-mail:
info@sbclasslaw.com
FIRST VIRTUAL: Murray Frank Lodges Securities Fraud Suit in CA
--------------------------------------------------------------
The law firm of Murray, Frank & Sailer LLP initiated a class
action lawsuit in the United States District Court for the
Northern District of California on behalf of all purchasers of
First Virtual Communications, Inc. securities ("First Virtual"
or the "Company") (Pink Sheets:FVCC) during the period between
March 29, 2004 and August 23, 2004 (the "Class Period").
The complaint alleges that defendants engaged in a "pump and
dump" scheme that enabled Company insiders to profit at the
expense of class members by selling over a million shares of
their personally held First Virtual securities at artificially
inflated prices. Specifically, defendants issued materially
false and misleading statements about the Company's financial
condition and sales of its real-time rich media communications
software and services and specialized networking hardware
equipment worldwide, and a contract to provide the United States
Air Force with the Company's proprietary Click to Meet(TM) web
communications infrastructure and solutions. In reaction to
these statements, the price of First Virtual stock skyrocketed
161% between February 5, 2004 and April 6, 2004, allowing
certain Company insiders to sell over 1.98 million shares of
their personally held First Virtual stock for proceeds of more
than $8.5 million.
On April 30, 2004, the truth about the Company's financial
condition began to emerge. On that day, defendants announced
that the Company's audit committee had commenced an
investigation into certain irregular sales transactions, and
that until the review was completed, the Company would not be
able to release its first-quarter earnings or file its Form 10-Q
with the SEC. In reaction to this news, the price of First
Virtual stock fell 37% from its previous day's closing price. As
a result of its failure to comply with the SEC's filing
requirements, First Virtual's securities were subject to
delisting by the Nasdaq SmallCap market. On August 5, 2004,
defendants announced that the Company had received a letter from
Nasdaq which granted the Company a conditional temporary
extension to file its first quarter 2004 report. On August 17,
2004, defendants disclosed that
(1) the Company could not meet the conditions of its
temporary filing extension;
(2) the Company had incurred $2.1 million in expenses
directly related to the investigation;
(3) the Company was in danger of defaulting on a $3.0
million credit facility agreement; and
(4) based on the Company's profit and loss projections for
the remainder of 2004, its stockholder equity would
fall below Nasdaq's listing requirements.
On August 24, 2004, before the market opened, defendants
disclosed that the Company's request for an extension to comply
with Nasdaq's listing and filing requirements had been denied,
and that the Company's securities would be delisted from the
Nasdaq SmallCap at the commencement of trading on August 25,
2004. In reaction to that news, the price of First Virtual stock
fell 47 percent from its previous trading day's closing price,
to close at $0.37 per share.
For more details, contact Eric J. Belfi or Aaron D. Patton of
Murray, Frank & Sailer LLP by Mail: (800) 497-8076 or
(212) 682-1818 by Fax: (212) 682-1892 by E-mail:
info@murrayfrank.com
HARTFORD FINANCIAL: Lerach Coughlin Lodges Securities Suit in CT
----------------------------------------------------------------
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 District of Connecticut on behalf
of purchasers of The Hartford Financial Services Group, Inc.
("Hartford Financial") (NYSE:HIG) publicly traded securities
during the period between November 5, 2003 and October 13, 2004
(the "Class Period").
The complaint charges Hartford Financial and certain of its
officers and directors with violations of the Securities
Exchange Act of 1934. Hartford Financial is a diversified
insurance and financial services company. Through its
subsidiaries, the Company provides investment products and life
and property and casualty insurance to both individual and
business customers in the United States and internationally.
The complaint alleges that during the Class Period defendants
disseminated materially false and misleading financial
statements. The true facts, which were known by each of the
defendants but concealed from the investing public during the
Class Period, were as follows:
(1) that the Company was paying illegal and concealed
"contingent commissions" pursuant to illegal
"contingent commission agreements;"
(2) that by concealing these "contingent commissions" and
such "contingent commission agreements" the defendants
violated applicable principles of fiduciary law,
subjecting the Company to enormous fines and penalties
totaling potentially tens, if not hundreds, of millions
of dollars; and
(3) that as a result, the Company's prior reported revenue
and income was grossly overstated.
On October 14, 2004, New York Attorney General Elliot Spitzer
announced that he had charged several of the nation's largest
insurance companies and the largest broker with bid rigging and
pay-offs that he claimed violated fraud and competition laws. On
these revelations, the Company's shares fell to $56 per share, a
drop of 9%.
For more details, contact Samuel H. Rudman or David A. Rosenfeld
of Lerach Coughlin by Phone: 800-449-4900 by E-mail:
wsl@lerachlaw.com or visit their Web site:
http://www.lerachlaw.com/cases/hartford/
INTERACTIVECORP: Pomerantz Haudek Files Securities Lawsuit in NY
----------------------------------------------------------------
The law firm of Pomerantz Haudek Block Grossman & Gross LLP
initiated a class action lawsuit against IAC/Interactivecorp
("IAC" or the "Company") (Nasdaq:IACI) and five of the Company's
senior officers, on behalf of all persons or entities who
purchased the securities of IAC during the period between March
19, 2003 through August 4, 2004, inclusive (the "Class Period").
The case was filed in the United States District Court for the
Southern District of New York.
The complaint alleges that IAC, a multi-brand interactive
commerce company, consisting of the following segments: Travel
(Expedia, Hotels.com, Hotwire, Interval International, and TV
Travel Shop), Electronic Retailing (HSN, a home shopping
service), Ticketing (Ticketmaster and ReserveAmerica), Personals
(Match.com), Financial Services and Real Estate
(LendingTree.com), Teleservices (Precision Response
Corporation), Local and Media Services (Citysearch, Evite,
Entertainment Publications, Inc. and TripAdvisor, Inc.) and
Interactive Development (ZeroDegrees), and the Company's
Chairman Barry Diller, CFO Dara Khosrowshahi, Executive Vice
President Julius Genachowski, Director Richard N. Barton, and
Vice Chairman Victor Kaufman, violated the federal securities
laws arising out of defendants' dissemination of false and
misleading statements concerning the Company's operations,
business model, financial results and growth prospects.
According to the Complaint, the Company failed to disclose
material adverse facts about the Company's operations, prospects
and financial performance, including
(1) that the Company knew or recklessly disregarded that
its profits were being adversely impacted by the
decreases in available discounted inventory, such as
discount hotel rooms and airline tickets;
(2) that IAC had to expend additional resources in order to
market its products and brands in the maturing Internet
industry and was facing increased Internet competition;
(3) that the favorable performance of IAC's Expedia and the
Hotels.com division were largely dependent on the
Company's improper recognition of revenue; and
(4) as a result of the foregoing, that defendants lacked a
reasonable basis for their positive statements about
the Company's growth and progress.
On August 4, 2004, the Company reported its second quarter 2004
earnings release disclosing that its Q2 2004 net income fell 24%
from the same quarter in 2003 and that it was cutting its
forecast for full-year operating profits dues to increased
Internet competition, which was impacting the Company's
performance. As a result of this news, shares of IAC fell
dramatically from its Class Period high of $42.74 per share on
July 7, 2003 to close at $22.80 per share on August 4, 2004,
erasing over $10 billion in market capitalization.
For more details, contact Andrew G. Tolan, Esq. of the Pomerantz
firm by Phone: 888-476-6529 (or (888) 4-POMLAW) by E-mail:
agtolan@pomlaw.com
INTERACTIVECORP: Wolf Haldenstein Files Securities Lawsuit in NY
----------------------------------------------------------------
The law firm of Wolf Haldenstein Adler Freeman & Herz LLP
initiated a class action lawsuit in the United States District
Court for the Southern District of New York, on behalf of all
persons who purchased or acquired the securities of
IAC/INTERACTIVECORP ("IAC" or the "Company") (Nasdaq: IACI)
between July 16, 2001 and August 3, 2004, inclusive, (the "Class
Period") against defendants IAC and certain officers and
directors of the Company.
The case name and index number are Stewart v. IAC /
INTERACTIVECORP, et al and 04cv7718.
The complaint alleges that defendants violated the federal
securities laws by issuing materially false and misleading
statements throughout the Class Period that had the effect of
artificially inflating the market price of the Company's
securities.
The Class Period commences on July 16, 2001 when USA Networks
("USA"), predecessor in interests to IAC, announced plans to
become, "the leader in interactive travel" by acquiring
privately held National Leisure Group and a majority interest in
publicly traded Expedia. USA announced that with these
acquisitions it would handle 16% of all online travel
transactions and was predicting 40% year over year growth. The
complaint alleges that these numbers were false and misleading
because they did not account for the Company's improper booking
of revenues and lacked a reasonable basis for the positive
statements about the Company's true growth and progress.
The complaint also alleges that the statements made by
defendants during the class period were materially false and
misleading when made because failed to disclose or indicate the
following:
(1) that the Company knew or recklessly disregarded the
fact that its profits were being adversely impacted by
the decreases in available discounted inventory, such
as discount hotel rooms and airline tickets;
(2) that IAC had to expend additional resources in order to
market its products and brands in the maturing Internet
industry;
(3) that the favorable performance of the Expedia and the
Hotels.com divisions were largely dependent on the
improper booking of revenue; and
(4) that as a result of the foregoing, the defendants
lacked a reasonable basis for their positive statements
about the Company's growth and progress.
For more details, contact Fred Taylor Isquith, Esq., Gregory M.
Nespole, Esq., Gustavo Bruckner, Esq., or Derek Behnke of Wolf
Haldenstein Adler Freeman & Herz LLP by Mail: 270 Madison
Avenue, New York, NY 10016 by Phone: (800) 575-0735 by E-mail:
classmember@whafh.com or visit their Web site:
http://www.whafh.com
MARSH & MCLENNAN: Wolf Haldenstein Lodges Securities Suit in NY
---------------------------------------------------------------
The law firm of Wolf Haldenstein Adler Freeman & Herz LLP
initiated a class action lawsuit in the United States District
Court for the Southern District of New York, on behalf of all
persons who purchased the securities of Marsh & McLennan
Companies, Inc. ("Marsh" or the "Company") (NYSE: MMC) between
October 15, 1999, through 10:58a.m., Eastern Standard Time and
October 14, 2004, inclusive, (the "Class Period") against
defendants Marsh and certain officers and directors of the
Company.
The Complaint alleges that defendants violated the federal
securities laws by issuing materially false and misleading
statements and failing to disclose material facts regarding the
Company's financial performance throughout the Class Period that
had the effect of artificially inflating the market price of the
Company's securities.
The Complaint specifically alleges that during the class period
Marsh failed to disclose that hundreds of millions of dollars of
the Company's profits derive from illegal activities, namely
"contingent commissions," special payments received from
insurance companies that were far beyond normal sales
commissions. As alleged, these payments were compensation for
the business that Marsh and its independent brokers steered and
allocated to the insurance companies, distinguished by Marsh as
compensation for "market services." Additionally, the Complaint
alleges that Marsh occasionally solicited bogus bids, in order
to mislead its customers into believing that true competition
had taken place. Marsh allegedly did this while it asserted in
public statements that its "guiding principle" was to always
regard its client's best interests.
The Complaint also alleges that during the Class Period,
statements made by the defendants were each materially false and
misleading because they failed to disclose and misrepresented
the following adverse facts:
(1) the Company had implemented and executed an
unsustainable business practice whereby the Company
designed and executed a business plan under which
insurance companies agreed to pay so-called "contingent
commissions" in return for Marsh to steer them business
and shield them from competition;
(2) the defendants have described only that revenue
attributable to MMC's risk and insurance business
consists primarily of fees paid by clients, commissions
and fees paid by insurance and reinsurance companies,
interest income on funds held in a fiduciary capacity
for others, and compensation for services provided in
connection with the organization, structuring, and
management of insurance. In particular, the defendants
stated the revenue generated by MMC's risk and
insurance business is fundamentally derived from the
value of the service provided to clients and insurance
markets. Although the defendants stated that
commissions vary in amount depending upon the type of
insurance or reinsurance coverage provided, the
particular insurer or reinsurer, the capacity in which
the broker acts, and negotiations with clients, the
Company failed to disclose the kick-backs or the bid-
rigging scheme;
(3) the Company's illicit scheme exposed the Company to
significant regulatory penalties and threatened loss of
consumer goodwill jeopardizing the Company's ability to
sustain any performance in its legitimate business
practices;
(4) the Company's revenues and earnings would have been
significantly less had the Company not engaged in such
unlawful practices.
For more details, contact Mark C. Rifkin, Esq., Christopher
Hinton, Esq., or Derek Behnke of Wolf Haldenstein Adler Freeman
& Herz LLP by Mail: 270 Madison Avenue, New York, NY 10016 by
Phone: (800) 575-0735 by E-mail: classmember@whafh.com or visit
their Web site: http://www.whafh.com/cases/marsh.htm
*********
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*********
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Class Action Reporter is a daily newsletter, co-published by
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Copyright 2004. All rights reserved. ISSN 1525-2272.
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