/raid1/www/Hosts/bankrupt/CAR_Public/041202.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, December 2, 2004, Vol. 6, No. 239
Headlines
ACCREDO HEALTH: Asks TN Court To Dismiss Securities Fraud Suit
ACLARA BIOSCIENCES: Asks NY Court To Approve Securities Lawsuit
AMERICAN HOME: Law Firms Files NY Fraud, Breach Of Contract Suit
AMERICAN INTERNATIONAL: SEC Files Suit Over Subsidiary's Actions
ANNUITY & LIFE: Settlement Fairness Hearing Set For January 2005
ASIA MEDLABS: FDA Files Action For Supplement Containing Ephedra
AUSTRALIA: BHP Billiton Launches Suit V. Esso Over Lost Profits
AUSTRALIA: Farmers' Written Support Sought For Brushfire Lawsuit
AVANEX CORPORATION: Directors' Panel OKs Stock Suit Settlement
BROADCOM CORPORATION: Trial in CA Securities Suit Set Jan. 2005
BROADWING CORPORATION: Asks NY Court To Approve Suit Settlement
CAESARS ENTERTAINMENT: Plaintiffs Dismiss Fiduciary Duty Suit
CAESARS WORLD: Appeals Court Affirms Suit Certification Denial
COLUMBIA UNIVERSITY: Student Joins Lawsuit V. New York City PD
CORINTHIAN COLLEGES: Seeks Arbitration For FL Unfair Trade Suits
CORINTHIAN COLLEGES: CA Court Orders Stock Lawsuits Consolidated
COSTCO WHOLESALE: Judge Says Sex-Bias Suit Likely To Stay in CA
DIET SUPPLEMENTS: FTC Sues Firms Over False Weight Loss Claims
DIGITAL RIVER: Executes Settlement for NY Securities Fraud Suit
DOUBLECLICK INC.: Settlement Submitted To NY Court For Approval
GRIC COMMUNICATIONS: Presents Stock Suit Settlement To NY Court
HAVENS STEEL: Employees Commence Lawsuit Targeting Stock Plan
LEXAR MEDIA: Plaintiffs File Consolidated Securities Suit in CA
MERCK & CO.: NY Comptroller Launches Lawsuit Over Vioxx Recall
NETFLIX INC.: Shareholders Launch Securities Lawsuits in N.D. CA
NETFLIX INC.: CA Consumers Launch Suit Over DVD Delivery Times
NETWORK ASSOCIATES: SEC Lodges Complaint V. Former Officer in CA
NEW VALLEY: Seeks Summary Judgment For Claims in DE Stock Suit
PERINI CORPORATION: Settles Preferred Stockholder Lawsuit in MA
SOUTH KOREA: Lobbyists Petition For Law Revision
SUNOCO INC.: Pays $5.5M To Settle Race Discrimination Case in PA
TAMPA ELECTRIC: Plaintiffs To Press For Legal Fight Over Poles
TERAYON COMMUNICATION: Begins Discovery For CA Securities Suit
TURNSTONE SYSTEMS: Working on NY Securities Lawsuit Settlement
TYSON FOODS: Expands Chicken Recall Due To Undeclared Allergen
UNITED RENTALS: Shareholders Launch Securities Fraud Suits in CT
U.S. STEEL: City Of River Rouge Files Lawsuit Over Air Pollution
VITRIA TECHNOLOGY: Executes NY Securities Fraud Suit Settlement
WEST VIRGINIA: Child Support Case Chugging Through Court System
New Securities Fraud Cases
IMPAX LABORATORIES: Milberg Weiss Lodges Securities Suit in CA
MERCK & CO.: Landskroner Grieco Lodges Securities Lawsuit in NJ
RS INVESTMENT: Stull & Stull Lodges Securities Fraud Suit in MD
SIRVA INC.: Brian M. Felgoise Lodges Securities Fraud Suit in IL
*********
ACCREDO HEALTH: Asks TN Court To Dismiss Securities Fraud Suit
--------------------------------------------------------------
Accredo Health, Inc. asked the United States District Court for
the Western District of Tennessee to dismiss the consolidated
amended class action filed against it, David D. Stevens and Joel
R. Kimbrough.
The lawsuit alleges violations of Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10(b)(5) promulgated
thereunder, and Section 20 of the Securities Exchange Act of
1934. The putative class representatives seek to represent a
class of individuals and entities that purchased Company stock
during the period June 16, 2002 through April 7, 2003 and who
supposedly suffered damages from the alleged violations of the
securities laws.
ACLARA BIOSCIENCES: Asks NY Court To Approve Securities Lawsuit
---------------------------------------------------------------
ACLARA Biosciences, Inc. asked the United States District Court
for the Southern District of New York to grant preliminary
approval to the securities class action filed against it and
certain of its current or former officers and directors, styled
"ACLARA Biosciences, Inc. Initial Public Offering Securities
Litigation." The suit also names several of the underwriters
involved in the Company's initial public offering (IPO) as
defendants.
This class action is brought on behalf of a purported class of
purchasers of ACLARA common stock from the time of ACLARA's IPO
(March 20, 2000) through December 6, 2000. The central
allegation in this action is that the underwriters in the ACLARA
IPO solicited and received undisclosed commissions from, and
entered into undisclosed arrangements with, certain investors
who purchased ACLARA stock in the IPO and the after-market. The
complaint also alleges that the ACLARA defendants violated the
federal securities laws by failing to disclose in the IPO
prospectus that the underwriters had engaged in these allegedly
undisclosed arrangements.
More than 300 issuers who went public between 1998 and 2000 have
been named in similar lawsuits. In July 2002, an omnibus motion
to dismiss all complaints against issuers and individual
defendants affiliated with issuers (including ACLARA defendants)
was filed by the entire group of issuer defendants in these
similar actions. On February 19, 2003, the Court in this action
issued its decision on Defendant's omnibus motion to dismiss.
This decision dismissed the Section 10(b) claim as to ACLARA but
denied the motion to dismiss Section 11 claim as to ACLARA and
virtually all of the other defendants.
On June 26, 2003, the plaintiffs in the consolidated class
action lawsuits announced a proposed settlement with us and the
other issuer defendants. The proposed settlement, which has
been approved by ACLARA's board of directors, provides that the
insurers of all settling issuers will guarantee that the
plaintiffs recover $1 billion from non-settling defendants,
including the investment banks who acted as underwriters in
those offerings. In the event that the plaintiffs do not
recover $1 billion, the insurers for the settling issuers will
make up the difference. Under the proposed settlement, the
maximum amount that could be charged to ACLARA's insurance
policy in the event that the plaintiffs recovered nothing from
the investment banks would be approximately $3.9 million.
AMERICAN HOME: Law Firms Files NY Fraud, Breach Of Contract Suit
----------------------------------------------------------------
The law firms of Rosen Preminger & Bloom LLP, Clouse Dunn Hirsch
LLP and Lewis, Feinberg, Renaker & Jackson, P.C. on behalf of
employees of American Home Mortgage (NYSE: AHM) have initiated a
class action lawsuit against the Company, claiming American Home
failed to honor the promises it made when they came to work for
the Company last year. The complaint, filed in Suffolk County,
New York, accuses the Company of fraud, breach of contract and
misrepresentation.
The employees used to work for the Principal Financial Group, in
its residential mortgage lending business. In early 2003,
American Home bought the Principal residential group, and the
employees -- approximately 400 of them -- went to work for the
new Company.
At the time, American Home agreed to honor their years of
service with Principal towards the vesting requirement for their
new 401(k) plan. American Home also agreed to contribute extra
money to the new 401(k) to compensate the workers for an
additional retirement benefit they had with their old employer.
The Company put both promises in writing.
But the employees say neither of those promises was kept.
Instead, the Company lengthened the requirement for 401(k)
vesting and has yet to contribute the extra benefit money it
pledged, even though it promised to do so by spring 2004.
"They promised to keep our prior benefits in place and make us
whole if we joined American Home," says plaintiff Bill Williams.
"And then they reneged on their promise."
Plaintiffs in the case are represented by; David Preminger, of
Rosen Preminger & Bloom LLP in New York; Keith Clouse, of Clouse
Dunn Hirsch LLP in Dallas and; Jeffrey Lewis and Claire Kennedy-
Wilkins, of Lewis, Feinberg, Renaker & Jackson, P.C. in Oakland,
California.
"What makes this case unusual is that American Home's promises
are clear and in writing," says Mr. Lewis, who specializes in
representing employees in benefit disputes. "Often, these cases
are based on ambiguous statements or conflicting testimony as to
what was or was not said. But here, American Home wrote down its
promises in no uncertain terms and put them in boldface type.
It's very clear what they promised to do, and equally clear
they're not doing it."
For more details, contact Mark Annick by Phone: 800-559-4534 by
Pager: 214-967-2299 or by E-mail: mark@legalpr.com.
AMERICAN INTERNATIONAL: SEC Files Suit Over Subsidiary's Actions
----------------------------------------------------------------
The Securities and Exchange Commission filed a civil action
against American International Group, Inc. (AIG) for violating
antifraud provisions of the federal securities laws and for
aiding and abetting violations of reporting and record-keeping
provisions of those laws.
The Commission's action arises from AIG's conduct, primarily
through its wholly owned subsidiary AIG Financial Products
Corp., in developing, marketing, and entering into transactions
that purported to enable a public Company to remove certain
assets from its balance sheet. AIG, without admitting or
denying the allegations in the Commission's complaint has
consented to the issuance of a final judgment:
(1) permanently enjoining it from violating of Section
10(b) of the Securities Exchange Act of 1934 (Exchange
Act), Exchange Act Rule 10b-5, and Section 17(a) of the
Securities Act of 1933 and from aiding and abetting
violations of Sections 13(a) and 13(b)(2)(A) of the
Exchange Act and Exchange Act Rules 12b-1, 13a-1, and
13a-13,
(2) ordering it to disgorge the $39,821,000 in fees that it
received, plus prejudgment interest of $6,545,000,
which will be paid to the victim restitution fund
established in connection with the prior resolution of
criminal charges by the Department of Justice against a
subsidiary of The PNC Financial Services Group, Inc.
and
(3) ordering it to retain an independent consultant to
examine certain of its prior transactions and to
establish a Transaction Review Committee to review the
appropriateness of certain future transactions.
In consenting to settle the Commission's action and related,
criminal charges, AIG has agreed to pay disgorgement, plus
prejudgment interest, and penalties totaling $126,366,000. The
action is titled, SEC v. American International Group, Inc.,
Civil Action No. 1:04CV02070 (GK) D.D.C.]
ANNUITY & LIFE: Settlement Fairness Hearing Set For January 2005
----------------------------------------------------------------
Fairness hearing for the settlement of the consolidated
securities class action filed against Annuity & Life Re
Holdings, Ltd. is set for January 2005 in the United States
District Court for the District of Connecticut.
On and since December 4, 2002, certain of the Company's
shareholders, seeking to act as class representatives, filed
lawsuits against the Company and certain of its present and
former officers and directors seeking unspecified monetary
damages. The plaintiffs claim that the defendants violated
certain provisions of the United States securities laws by
making various alleged material misstatements and omissions in
public filings and press releases.
The plaintiffs filed a single consolidated amended complaint in
July 2003, adding as defendants XL Capital Ltd and two
additional directors. On October 1, 2003, the Company answered
the amended and consolidated complaint and denied liability on
the claims the plaintiffs have asserted. In January 2004, the
Court ordered that a related action that the plaintiffs filed
against KPMG LLP (United States) and KPMG in Bermuda be
consolidated with the action against the Company.
In February 2004, the Court denied certain individual
defendants' motions to dismiss the action. In March 2004, the
Court denied motions to dismiss filed by certain other
individual defendants and XL Capital Ltd. Also in March 2004,
KPMG LLP (United States) and KPMG in Bermuda filed motions to
dismiss the action. The Court has not yet ruled on KPMG LLP's
(United States), KPMG in Bermuda's and one individual
defendant's respective motions to dismiss. The individual
defendant's motion to dismiss will become moot if the settlement
is consummated.
On July 20, 2004, the Company announced that it had reached an
agreement in principle with the plaintiffs, subject to full
documentation by the parties to the settlement, notice to the
class, Court approval and other steps required to consummate a
class action settlement, to settle the lawsuit. In August 2004,
the parties to the settlement executed and filed a Stipulation
setting forth their settlement agreement, and sought Court
approval. The parties to the settlement are the plaintiffs and
the class (which consists, subject to certain exclusions, of
persons who purchased the Company's common shares between March
15, 2000 and November 19, 2002), the Company, all individual
defendants and XL Capital, Ltd. The settlement is without any
admission of liability or wrongdoing.
The Company, along with its directors and officers' liability
carrier and XL Capital Ltd., has agreed to pay an aggregate of
$16.5 million. The Company's share of the settlement is $2.5
million in cash, which it paid into escrow in August 2004, and
an additional $2.5 million in common shares (subject to a cap of
19.9% of its outstanding shares), although the Company has
reserved the right to elect to pay this portion in cash.
In October 2004, the Court ordered that notice of the settlement
be given to class members, set deadlines for class members to
exclude themselves from the class or file objections to the
settlement. The settlement cannot be consummated until and
unless the Court approves it.
The suits are styled:
(1) Schnall v. Annuity & Life, et al, case no. 3:02-cv-
02133-EBB, filed 12/04/02, under Judge Ellen Bree Burns
(2) Bird v. Annuity & Life, et al, case no. 3:02-cv-02210-
GLG, filed 12/13/02 under Judge Gerald L. Goettel
(3) Hertzl v. Annuity & Life, et al, case no. 3:02-cv-
02211-GLG, filed 12/13/02 under Judge Gerald L. Goettel
(4) Feldbaum v. Annuity & Life, et al, case no. 3:02-cv-
02223-GLG, filed 12/16/02 under Judge Gerald L. Goettel
(5) Nadoff v. Annuity & Life, et al, 3:02-cv-02224-GLG
filed 12/16/02, under Judge Gerald L. Goettel
(6) Madsen v. Annuity & Life, et al, 3:02-cv-02269-GLG,
filed 12/20/02 under Judge Gerald L. Goettel
(7) Huff v. Annuity & Life, et al, 3:03-cv-00022-GLG filed
01/06/03 under Judge Gerald L. Goettel
(8) Bernard v. Annuity & Life, et al 3:03-cv-00043-GLG
filed 01/07/03 under Judge Gerald L. Goettel
(9) Lassoff v. Annuity & Life, et al 3:03-cv-00211-GLG
filed 01/31/03 under Judge Gerald L. Goettel
ASIA MEDLABS: FDA Files Action For Supplement Containing Ephedra
----------------------------------------------------------------
The Food and Drug Administration (FDA) is intensifying its
efforts to protect consumers against harmful products and their
sometimes fatal side effects by taking enforcement action
against dietary supplements with ephedrine alkaloids marketed as
a treatment for serious diseases and conditions, the agency said
in a statement.
"We are once again sending a message that HHS and the FDA will
not tolerate the marketing of dietary supplements that are more
likely to harm health than help it," said HHS Secretary Tommy G.
Thompson.
The complaint, filed by the United States Attorney for the
Southern District of Texas in U.S. District Court in Houston,
charges that VITERA-XT, an ephedra-containing dietary supplement
marketed by Houston-based Asia MedLabs, Inc., is an adulterated
food as well as an unapproved and misbranded drug, which present
an unreasonable risk of illness or injury.
At FDA's request, Asia MedLabs' supply of VITERA-XT was
embargoed by the Texas Department of State Health Services prior
to the filing of today's enforcement action. This morning the
U.S. Marshalls armed with a warrant seized more than 2.1 million
VITERA-XT capsules in the possession of Asia MedLabs, Inc.
located on the 9100 block of Winkler Drive in Houston, Texas. Of
the total, one million were yet unpackaged capsules; the
remainder were contained in more than 14,000 labeled bottles.
"We've issued a rule banning ephedra-containing products and
we're sparing no effort to stop their manufacture and
distribution. If any of these dietary supplements are still on
the store shelves, I urge the retailers to stop selling them
immediately," said Acting Commissioner of the Food and Drug
Administration, Dr. Lester M. Crawford.
In December 2003, the FDA informed manufacturers of dietary
supplements containing ephedra, including MaxLabs, Inc., located
at the same address and under the same ownership as Asia
MedLabs, that products would be considered adulterated under a
forthcoming rule banning ephedra-containing dietary supplements.
FDA's ephedra ban was published in February and took effect in
April of this year.
Although the product, VITERA-XT, is labeled as a "traditional
Asian herbal formulation," the product is still considered a
dietary supplement, based on FDA regulations, because its label
included a panel with "Supplement Facts" and the dietary
supplement disclaimer. In addition, the civil complaint alleges,
that VITERA-XT, contains ephedrine alkaloids, thereby making it
an adulterated food. Moreover, Asia MedLabs's Internet website
has made medical claims, including "treat(s)... persistent flu,
fevers, and [may be used] for poison release ..., treat[s]
allergies, especially, allergic rhinitis ..., treat[s] heart
muscle ailments ..., [and] expands cardiac vessels to prevent
the ischemic injury of myocardium and relieves the symptoms of
angina pectoris." In making these medical claims the civil
complaint alleges VITERA-XT is considered an unapproved new and
misbranded drug.
Ephedra, also called Ma Huang, is a source of ephedrine
alkaloids that, when chemically synthesized, are regulated as
drugs. FDA has warned consumers against the use of dietary
supplements containing ephedra since June, 1997, and banned
these products after research confirmed that ephedrine alkaloids
raise blood pressure and otherwise stress the circulatory
system.
FDA's enforcement efforts have focused on manufacturers and
major distributors of ephedra-containing dietary supplements. As
a result, two firms have voluntarily destroyed more than a
quarter of a million dollars worth of these dietary supplements
and several others have removed ephedra products from the
market. FDA continues to warn consumers to avoid consumption of
products containing ephedra as they pose an unreasonable risk to
health.
For details, call 301-827-6242 (for media inquiries) and 888-
INFO-FDA (for consumer inquiries).
AUSTRALIA: BHP Billiton Launches Suit V. Esso Over Lost Profits
---------------------------------------------------------------
International mining Company BHP Billiton is reluctant to
comment on its legal action against its joint venture partner in
Bass Strait, Esso, which is set to go before the Supreme Court
looks and is being billed to be a battle of the multinational
titans as well as raise questions about the future of the 34-
year partnership between the two companies, the ABC Regional
Online reports.
BHP Billiton is suing Esso for lost profits after the 1998
Longford gas explosion in Victoria's southeast, and for its
share of the plant restoration costs. Esso has spent $500
million on Longford since the explosion. BHP will only say that
Esso was responsible for the operation of the plant at the time
of the explosion. But Esso argues that joint venture partners
should share responsibility as well as profits.
Meanwhile, the lawyers who won a class action against Esso over
the 1998 Longford gas explosion and the subsequent two-week gas
shutdown are confident a rift between Esso and BHP Billiton will
not affect their clients even though BHP Billiton is refusing to
supply half the class action payout.
As previously reported in the November 9, 2004 edition of the
Class Action Reporter, the Supreme Court had approved a $32
million package for 500 businesses to be compensated for
property damage during the two-week gas shutdown, which would
officially end more or less six years of Court action against
Esso.
According to Slater and Gordon solicitor Lisa Nicholls, she
expects the members of the class action to be paid in full.
"Under the settlement of the class action, which was approved by
the Supreme Court last month, Esso's obliged to pay moneys...for
that settlement to class members and that will occur and we're
not concerned in the slightest about the separate spat between
Esso and BHP," she said.
AUSTRALIA: Farmers' Written Support Sought For Brushfire Lawsuit
----------------------------------------------------------------
The Stretton Group, an organization leading a class action
against the Victorian Government over last year's bushfires,
will wait for farmers to commit in writing before the case
proceeds, the ABC Regional Online reports. The group is
claiming that the government was ill prepared and responded
inadequately to the bushfires in the state's northeast and
Gippsland.
According to the group, the Victorian Farmers Federation (VFF)
called for a meeting recently at Tallangatta and that gatherings
were also held at Buchan and Omeo to discuss the legal action.
Furthermore, Stretton Group member and Mitta Mitta farmer Simon
Paton, said that the VFF members now understand what is involved
in the action.
"It's a matter of waiting and seeing, I think, people have got
the opportunity to proceed with the class action and they're
busy thinking about it and cogitating over it and talking to
other people about it and that's what we set out to achieve," he
said. "We've just got to sit back now and see who wants to write
down and get in touch with the solicitors, it's all in front of
them," he adds.
AVANEX CORPORATION: Directors' Panel OKs Stock Suit Settlement
--------------------------------------------------------------
A special committee of Avanex Corporation's board of directors
approved the settlement for the consolidated securities class
action filed against the Company, certain of its officers and
directors, and various underwriters in its initial public
offering (IPO).
Several suits were initially filed and later consolidated into
"In re Avanex Corp. Initial Public Offering Securities
Litigation, Civil Action No. 01 Civ. 6890." The consolidated
amended complaint in the action generally alleges that various
investment bank underwriters engaged in improper and undisclosed
activities related to the allocation of shares in Avanex's IPO.
Plaintiffs have brought claims for violation of several
provisions of the federal securities laws against those
underwriters, and also against Avanex and certain of its
directors and officers, seeking unspecified damages on behalf of
a purported class of purchasers of Avanex's common stock between
February 3, 2000, and December 6, 2000.
Various plaintiffs have filed similar actions asserting
virtually identical allegations against more than 40 investment
banks and 250 other companies. All of these "IPO allocation"
securities class actions currently pending in the Southern
District of New York have been assigned to Judge Shira A.
Scheindlin for coordinated pretrial proceedings as "In re
Initial Public Offering Securities Litigation, 21 MC 92."
On October 9, 2002, the claims against Avanex's directors and
officers were dismissed without prejudice pursuant to a tolling
agreement. The issuer defendants filed a coordinated motion to
dismiss all common pleading issues, which the Court granted in
part and denied in part in an order dated February 19, 2003.
The Court's order did not dismiss the Section 10(b) or Section
11 claims against Avanex. The settlement is subject to a number
of conditions, including approval of the proposed settling
parties and the Court.
The suit is styled, "In re Avanex Corporation Initial Public
Offering Securities Litigation, Case No. 01 Civ. 1890 (Sas)"
related to "In re Initial Public Offering Securities Litigation,
No. 21 MC 92 (SAS)," filed in the United States District Court
for the Southern District of New York, under Judge Shira
Scheindlin. The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) 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
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
BROADCOM CORPORATION: Trial in CA Securities Suit Set Jan. 2005
---------------------------------------------------------------
Trial in the consolidated securities class action filed against
BroadCom Corporation and three of its executive officers is set
for January 2005 in the United States District Court for the
Central District of California.
From March through May 2001 the Company and three of its
executive officers were served with a number of shareholder
class action complaints alleging violations of the Securities
Exchange Act of 1934, as amended. The essence of the
allegations was that the defendants intentionally failed to
disclose and properly account for the financial impact of
performance-based warrants assumed in connection with five
acquisitions consummated in 2000-2001, which plaintiffs allege
had the effect of materially overstating the Company's reported
and future financial performance.
In June 2001 the lawsuits were consolidated before the United
States District Court for the Central District of California
into a single action entitled "In re Broadcom Corp. Securities
Litigation." After denying the Company's motion to dismiss the
complaint and a motion for partial summary judgment as to some
of the challenged disclosures, in October 2003 the Court issued
an order certifying a class of all persons or entities who
purchased or otherwise acquired publicly traded securities of
the Company, or bought or sold options on the Company's stock,
between July 31, 2000 and February 26, 2001, with certain
exceptions.
The parties have completed fact discovery and are currently
engaged in expert discovery. Defendants have filed five motions
for partial summary judgment. Those motions were heard November
22, 2004. Plaintiffs have asserted that, if liability is found,
damages may exceed $5 billion, which the Company vigorously
disputes and believes to be substantially inflated. The Court
has scheduled a pre-trial conference in December 2004 and a
trial beginning in January 2005.
In February 2002 an additional complaint, entitled "Arenson, et
al. v. Broadcom Corp., et al.," was filed by 47 persons and
entities in the Superior Court of the State of California for
the County of Orange, against the Company and three of its
executive officers. The Company removed the lawsuit to the
United States District Court for the Central District of
California.
The plaintiffs subsequently filed an amended complaint in that
Court that tracks the allegations of the federal class action
complaint. The parties have completed fact discovery and are
currently engaged in expert discovery. In September 2004
Defendants filed two motions for summary judgment arguing that
the plaintiffs had no damages or could not adequately prove
their damages. The Court denied one of those two motions,
granted the other motion as to five plaintiffs, and sought
additional briefing concerning the latter motion as to twenty-
six plaintiffs. The parties have submitted that additional
briefing, and the Court has not set a further hearing on the
motion. The parties have agreed that the Court's ruling
granting or denying Defendants' five motions for partial summary
judgment pending in the "In re Broadcom Corp. Securities
Litigation" class action will be binding in the "Arenson" matter
as well. The Court has scheduled a pre-trial conference in
December 2004 and a trial beginning in January 2005.
The suit is styled, "In re BroadCom Corporation Initial Public
Offering Securities Litigation," related to "In re Initial
Public Offering Securities Litigation, No. 21 MC 92 (SAS),"
filed in the United States District Court for the Southern
District of New York, under Judge Shira Scheindlin. The
plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) 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
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
BROADWING CORPORATION: Asks NY Court To Approve Suit Settlement
---------------------------------------------------------------
Broadwing Corporation asked the United States District Court for
the Southern District of New York to grant preliminary approval
to the settlement of the securities class action filed against
it, certain of its officers and directors, and certain of its
underwriters that participated in the Company's initial public
offering (IPO).
Between May 7, 2001 and June 15, 2001, nine class action
lawsuits were filed relating to the Company's initial public
offering on behalf of all persons who purchased the Company's
stock between July 28, 2000 and the filing of the complaints.
The Company's directors and officers have since been dismissed
from the case, without prejudice.
The complaints allege that the registration statement and
prospectus relating to the Company's initial public offering
contained material misrepresentations and/or omissions in that
those documents did not disclose:
(1) that certain of the underwriters had solicited and
received undisclosed fees and commissions and other
economic benefits from some investors in connection
with the distribution of the Company's common stock in
the initial public offering and
(2) that certain of the underwriters had entered into
arrangements with some investors that were designed
to distort and/or inflate the market price for the
Company's common stock in the aftermarket following the
initial public offering.
The complaints ask the Court to award to members of the class
the right to rescind their purchases of the Company's common
stock (or to be awarded rescissory damages if the class member
has sold the Company's stock) and prejudgment and post-judgment
interest, reasonable attorneys' and experts witness' fees and
other costs.
By order dated October 12, 2001, the Court appointed an
executive committee of six plaintiffs' law firms to coordinate
their claims and function as lead counsel. Lead plaintiffs have
been appointed in almost all of the IPO allocation actions,
including the Company's action. On October 17, 2001, a group of
underwriter defendants moved for Judge Scheindlin's recusal.
Judge Scheindlin denied that application. On December 13, 2001,
the moving underwriter defendants filed a petition for writ of
mandamus seeking the disqualification of Judge Scheindlin in the
United States Court of Appeals for the Second Circuit. On April
1, 2002, the Second Circuit denied the moving underwriter
defendants' application for a writ of mandamus seeking Judge
Scheindlin's recusal from this action.
On April 19, 2002, plaintiffs filed amended complaints in each
of the actions, including the Company's action. On May 23, 2002,
a conference was held at which the Court set a briefing schedule
for the filing of motions to dismiss the amended complaints. On
July 1, 2002, the underwriter defendants filed their motion to
dismiss the amended complaints. On July 15, 2002, the issuer
defendants filed their motion to dismiss the amended complaints.
The briefing on the motions to dismiss has been completed, and
the judge heard oral arguments on the motions on November 1,
2002. On February 19, 2003, the issuer defendants' motion to
dismiss was granted with regard to certain claims and denied
with regard to certain other claims.
As to the Company, the Section 10(b) and Rule 10b-5 claims,
alleging that the Company participated in a scheme to defraud
investors by artificially driving up the price of the
securities, were dismissed with prejudice, but the Section 11
claims, alleging that the registration statement contained a
material misstatement of, or omitted, a material fact at the
time it became effective, survived the motion to dismiss.
On June 14, 2004, the plaintiffs and issuer defendants presented
the executed settlement agreement to Judge Scheindlin during a
Court conference. Subsequently, the plaintiffs and issuer
defendants made a motion for preliminary approval of the
settlement agreement. On July 14, 2004, the underwriter
defendants filed a memorandum of law in opposition to
plaintiffs' motion for preliminary approval of the settlement
agreement. Reply briefs have been submitted and the parties are
awaiting the Court's decision on the motion. The settlement
agreement is subject to the approval of the district Court.
The suit is styled, "In re Broadwing Corporation Initial Public
Offering Securities Litigation," related to "In re Initial
Public Offering Securities Litigation, No. 21 MC 92 (SAS),"
filed in the United States District Court for the Southern
District of New York, under Judge Shira Scheindlin. The
plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) 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
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
CAESARS ENTERTAINMENT: Plaintiffs Dismiss Fiduciary Duty Suit
--------------------------------------------------------------
Plaintiffs dismissed without prejudice the class action filed
against Caesars Entertainment, Inc. in the District Court for
Clark County, Nevada, styled "Derasmo v. Caesars Entertainment,
Inc. et al."
The suit was filed on behalf of the owners of Caesars
Entertainment, Inc. shares of common stock against the Company
and its directors. The lawsuit alleges breach of fiduciary
duties and that the proposed transaction involving the
acquisition of Caesars by Harrah's Entertainment, Inc.
(Harrah's) provides benefits to Harrah's and to the members of
the board of directors not available to the Company
stockholders. The lawsuit seeks an injunction and a declaration
that the proposed transaction is unlawful.
On October 20, 2004, the plaintiff dismissed the complaint
without prejudice; however, the Company expects that the
plaintiff will file a new complaint based on the proposed
transaction with Harrah's.
CAESARS WORLD: Appeals Court Affirms Suit Certification Denial
--------------------------------------------------------------
The United States Ninth Circuit Court of Appeals affirmed the
denial of class certification for a lawsuit filed against
Caesars World, Inc. and 40 other manufacturers, distributors and
casino operators of video poker and electronic slot machines.
In April 1994, William H. Poulos brought a purported class
action in the United States District Court for the Middle
District of Florida, Orlando Division captioned "William H.
Poulos, et al. v. Caesars World, Inc., et al." In May 1994,
another plaintiff filed a class action complaint in the United
States District Court for the Middle District of Florida
captioned "William Ahern, et al. v. Caesars World, Inc. et al."
alleging substantially the same allegations against 48
defendants, including the Company. In September 1995, a third
action was filed against 45 defendants, including the Company,
in the United States District Court for the District of Nevada
captioned "Larry Schreier, et al. v. Caesars World, Inc., et
al." The Court consolidated the three actions in the United
States District Court for the District of Nevada under the case
caption "William H. Poulos, et al. v. Caesars World, Inc. et
al."
The consolidated complaints allege that the defendants are
involved in a scheme to induce people to play electronic video
poker and slot machines based on the false beliefs regarding how
such machines operate and the extent to which a player is likely
to win on any given play. The actions included claims under the
federal Racketeering Influence and Corrupt Organizations Act,
fraud, unjust enrichment and negligent misrepresentation and
seek unspecific compensatory damages. In July 2002, the United
States District Court denied the plaintiff's motion to certify
the case as a class action.
COLUMBIA UNIVERSITY: Student Joins Lawsuit V. New York City PD
--------------------------------------------------------------
Minou Arjomand, CC '05, a Columbia student, who was arrested at
the Republican National Convention earlier this year, has added
her name to a class action civil lawsuit against New York City
for unlawful arrests and detainment during protests, the
Columbia Daily Spectator reports.
The lawsuit suit, which names 27 specific plaintiffs, was filed
on November 22 by the New York chapter of the National Lawyers
Guild and the Center for Constitutional Rights. According to
Bruce Bentley, an attorney for the case, "This lawsuit is on
behalf of almost 2,000 people who were wrongfully detained and
held under filthy and unhealthy conditions for prolonged periods
of time. It is our position that the city and the police
department took this position to punish them for engaging in
political protest during the Republican National Convention."
Protestors and bystanders were arrested on Tuesday night and
held overnight in Pier 57, where complaints of asbestos and
smells of petroleum surfaced, according to Mr. Bentley. Numerous
detainees claimed that the conditions of Pier 57 caused health
problems, including skin irritations and respiratory difficulty.
Arrested on Wednesday afternoon, Arjomand was held in the pier
for only a few hours. Despite the short duration of her
detainment, she said that she smelled chemicals and fuel,
although she believed that the pier had been cleaned since the
bulk of the arrests the previous night. The NYPD has vehemently
maintained that the location was prepared in advance and was
safe and clean.
"We are looking for some measure of justice, which we will not
be able to get for all the people, some of who lost 50 hours of
their lives, some of them who were swept up literally in nets,
not just protestors, but people who were trying to go out for
dinner or go to a show," Mr. Bentley said.
Meanwhile, the two other Columbia students arrested and
detained, Mary Bruch, BC '05 and Kim Sue, CC '06, decided not to
follow Arjomand in signing the lawsuit. "Although I strongly
believe in the suits against the city for illegal arrest and
imprisonment, as well as the denial of fundamental civil rights,
I am sick of being shuffled around in the legal system," Ms.
Bruch said. "I'm going to direct my resentment towards getting
Mr. Bloomberg out of office."
Ms. Bruch also said that charges against the three, which
originally included a felony count of inciting a riot, have been
reduced to disorderly conduct. In addition, she believes that at
their next Court appearances in January, all charges will be
dropped.
CORINTHIAN COLLEGES: Seeks Arbitration For FL Unfair Trade Suits
----------------------------------------------------------------
Corinthian Colleges, Inc. filed motions to compel arbitration in
three virtually identical class actions filed against them in
Florida state Court.
On March 8, 2004, the Company was served with two virtually
identical putative class action complaints entitled "Travis v.
Rhodes Colleges, Inc., Corinthian Colleges, Inc., and Florida
Metropolitan University," and "Satz v. Rhodes Colleges, Inc.,
Corinthian Colleges, Inc., and Florida Metropolitan University."
Additionally, on May 7, 2004, the Company was served with
another putative class action complaint entitled "Jennifer Baker
et al. v. Corinthian Colleges, Inc. and Florida Metropolitan
University, Inc."
The named plaintiffs in these lawsuits are current and former
students in the Company's Florida Metropolitan University (FMU)
campuses in Florida and online. The plaintiffs allege that FMU
concealed the fact that it is not accredited by the Commission
on Colleges of the Southern Association of Colleges and Schools
(SACS) and that FMU credits are not transferable to other
institutions. Plaintiffs seek certification of the lawsuits as
a class action and recovery of compensatory damages and
attorneys' fees under Florida's Deceptive and Unfair Trade
Practices Act for themselves and all similarly situated people.
The Company has filed motions to compel arbitration in all three
cases, and the Court has granted the Company's motion in the
Satz case. The motions in the other two cases are pending.
CORINTHIAN COLLEGES: CA Court Orders Stock Lawsuits Consolidated
----------------------------------------------------------------
The United States District Court for the Central District of
California ordered consolidated several shareholder class
actions filed against Corinthian Colleges, Inc. and certain of
its current and former executive officers, David Moore, Dennis
Beal, Paul St. Pierre and Anthony Digiovanni.
The cases purportedly are brought on behalf of all persons who
acquired shares of the Company's common stock during a specified
class period from August 27, 2003 through either June 23, 2004
or July 30, 2004, depending on the complaint. The complaints
allege that, in violation of Section 10(b) of the Securities
Exchange Act of 1934 (the "Act") and Rule 10b-5 promulgated
thereunder by the SEC, the defendants made certain material
misrepresentations and failed to disclose certain material facts
about the condition of the Company's business and prospects
during the putative class period, causing the respective
plaintiffs to purchase the Company's common stock at
artificially inflated prices. The plaintiffs further claim that
Messrs. Moore, Beal, St. Pierre and Digiovanni are liable under
Section 20(a) of the Act. The plaintiffs seek unspecified
amounts in damages, interest, and costs, as well as other
relief.
COSTCO WHOLESALE: Judge Says Sex-Bias Suit Likely To Stay in CA
---------------------------------------------------------------
U.S. District Court Judge Marilyn Patel in San Francisco,
California indicated that she would likely reject a request by
Costco Wholesale to transfer to Colorado a lawsuit filed by two
women who claim the Company failed to promote female workers to
management positions, Bloomberg News reports.
The federal judge had tentatively sided with attorneys for a
current Costco worker who lives in Colorado and a former
employee, who have argued that the case should stay in
California because one-third of Costco's 326 warehouses are in
the state and the managers who made decisions affecting one of
the women are located in California. Judge Patel said she would
issue a final opinion after both sides submit additional written
arguments.
Costco's attorneys have accused the plaintiffs of "forum
shopping" for the convenience of their attorneys citing that
Brad Seligman, the Berkeley, California-based attorney for the
workers, had won class-action status in San Francisco federal
Court for a similar discrimination case, Dukes v. Wal-Mart
Stores.
As previously reported in the August 19, 2004 issue of the Class
Action Reporter, the lawsuit, which is captioned Ellis v. Costco
Wholesale Corporation, Case No. C-04 3341 MHP accuses Issaquah-
based Costco, the largest U.S. wholesale-club operator, of
discriminating against female employees by failing to post or
advertise management positions when they became available. The
two plaintiffs are seeking class-action status for the suit,
which would allow as many as 650 workers to sue as a group.
Costco operates approximately 324 warehouses in the United
States employing over 78,000 workers. The proposed class
consists of current and former female Costco workers across
America who have been subjected to gender discrimination. Less
than 1 in 6 of Costco's senior store managers are women, yet its
workforce is nearly 50% female. The suit seeks lost pay and
benefits, damages and injunctive relief for the class.
"There is no clearer example of a glass ceiling than how Costco
promotes workers into assistant manager and general manager
positions," said Brad Seligman, executive director of the Impact
Fund, lead counsel for the plaintiffs. "There is no promotion
system at Costco - women must rely on the subjective and
arbitrary decisions of Costco's all male senior management. Not
surprisingly, the men at Costco get a better deal when it comes
to promotions."
The complaint charges that Costco has no job posting or
application procedure for assistant manager and general manager
positions, nor any written promotion standards or criteria for
these jobs, in contrast to lower level jobs. The suit alleges
that under this "non-system," discriminatory conduct is allowed
to flourish. Higher-level management at Costco is virtually all
male - all of Costco's operations vice presidents are male, and
only 2 of its 33 executive and senior officers are female. It is
believed that over 650 current and former Costco female
employees were eligible for promotion to the assistant and
general manager positions over the preceding three years.
"The best paying jobs at Costco are for general managers, who
are typically paid $100,000 or more in salary and bonuses and
are eligible for stock options worth many times this amount,"
explained Bill Lann Lee, a Lieff Cabraser partner and the former
Assistant Attorney General for Civil Rights, U.S. Department of
Justice, whose firm is also involved in the suit. "Even though
women hold nearly half of the lower level jobs at Costco, women
hold less than one in six of the senior store manager
positions."
"Costco generates $42 billion in annual revenues," stated Steven
Stemerman of Davis, Cowell & Bowe, LLP, another law frim
involved in the suit. "Much of these revenues are attributable
to the hard work performed by its female warehouse employees.
These workers deserve the same opportunity as their male
counterparts for promotion into management positions at Costco."
The suit was filed by Shirley "Rae" Ellis, an assistant manager
in Costco's Douglas County, Colorado warehouse. Ms. Ellis, a
former general manager at a Sam's Club, was promised rapid
promotion at Costco when she joined it in 1998. Despite these
assurances and a record of excellent performance reviews, Ms.
Ellis was repeatedly denied promotion to warehouse manager
positions, including many openings in California that she only
learned about after they were filled.
After Ms. Ellis filed her charge of discrimination with the U.S.
Equal Employment Opportunity Commission (EEOC), the complaint
alleges that Costco retaliated against her by transferring to
new warehouse far from her residence, requiring a multi-hour
commute.
DIET SUPPLEMENTS: FTC Sues Firms Over False Weight Loss Claims
--------------------------------------------------------------
The Federal Trade Commission has charged three related dietary
supplement companies located in Norcross, Georgia, their
corporate officers, and a physician with deceiving consumers
through deceptive advertising for their weight-loss and erectile
dysfunction products. The case is part of the agency's on-going
effort to combat deceptive claims for dietary supplements that
purport to enable obese or overweight consumers to lose
substantial amounts of weight safely.
The FTC filed charges against:
(1) National Urological Group, Inc.;
(2) National Institute for Clinical Weight Loss, Inc.;
(3) Hi-Tech Pharmaceuticals, Inc.;
(4) Jared Wheat;
(5) Thomasz Holda;
(6) Stephen Smith;
(7) Michael Howell; and
(8) Dr. Terrill Mark Wright
The Commission's complaint alleges that the defendants made
deceptive claims about the effectiveness and safety of
"Thermalean" and "Lipodrene," purported weight-loss products
with ephedra, and "Spontane-ES," a purported erectile
dysfunction product with yohimbine.
According to the FTC's complaint, the defendants' direct mail
and Internet advertisements contained false and unsubstantiated
efficacy and safety claims for the weight-loss products
Thermalean and Lipodrene. The central theme of the Thermalean
advertising campaign was that the product was an effective
treatment for obesity, and that it combined the weight-loss
benefits of three different prescription drugs. Consumers paid
$80 for a two-month supply of Thermalean.
The defendants promoted Lipodrene as a dietary supplement that
had undergone substantial clinical testing proving that it
enabled consumers to lose large amounts of weight safely.
Consumers paid about $30 for a one-month supply of Lipodrene.
The active ingredient in Thermalean and Lipodrene was ephedra.
The FTC has alleged that, contrary to the defendants' claims,
dietary supplements with ephedra do not cause substantial, long-
term weight loss, and create safety risks because they increase
blood pressure and stress the circulatory system. In April 2004,
the U.S. Food and Drug Administration (FDA) banned sales of
dietary supplements with ephedra because they pose an
unreasonable risk of illness or injury. The defendants have not
advertised or sold Thermalean or Lipodrene containing ephedra
since the FDA prohibited the sale of dietary supplements
containing ephedra.
The FTC's complaint also alleges that the defendants represented
that Spontane-ES, a dietary supplement with yohimbine, was
effective in treating erectile dysfunction in 90 percent of
users and Spontane-ES was safe. Consumers paid about $100 for a
60-count bottle of Spontane-ES. The Commission challenged the
defendants' specific 90 percent efficacy claims as
unsubstantiated. The FTC also alleged that their safety claim
for Spontane-ES was unsubstantiated, because yohimbine creates
safety risks by significantly raising blood pressure and
interacting adversely with certain medications, such as beta-
blockers that are used to treat heart disease.
The defendants, according to the FTC, made further deceptive
claims to reinforce the efficacy and safety claims they were
making for their products. The FTC also alleged that ads for
Thermalean contained several deceptive claims made by Dr.
Wright, who is named in the complaint. In addition, the
defendants allegedly made the false claim in ads that Warner
Laboratories and the National Institute for Clinical Weight Loss
were legitimate research or medical facilities engaged in the
scientific or medical research and testing of their products.
The FTC complaint seeks injunctive and other equitable relief
including, but not limited to, consumer redress, restitution,
and disgorgement of ill-gotten gains.
The Commission vote authorizing the staff to file the complaint
was 5-0. The complaint was filed in the U.S. District Court for
the Northern District of Georgia on November 10, 2004.
For more details, contact the FTC's Consumer Response Center,
Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580
or visit the Website: http://www.ftc.gov. Also contact Brenda
Mack, Office of Public Affairs, by Phone: 202-326-2182 or Tawana
Davis, Bureau of Consumer Protection by Phone: 202-326-2755
DIGITAL RIVER: Executes Settlement for NY Securities Fraud Suit
---------------------------------------------------------------
Digital River, Inc. executed a formal settlement agreement for
the consolidated securities class action filed in the United
States District Court for the Southern District of New York
against it and certain of its officers and directors.
Beginning in August 2001, the Company and certain of its
officers and directors were named as defendants in several class
action shareholder complaints, which were later consolidated as
"In re Digital River, Inc. Initial Public Offering Securities
Litigation, Case No. 01-CV-7355." Similar complaints, referred
to as the IPO Lawsuits, were filed in the same Court against
hundreds of other public companies, referred to as the Issuers.
In the consolidated amended complaint against the Company, the
plaintiffs allege that the Company, certain of its officers and
directors and the underwriters of its initial public offering,
or IPO, violated Section 11 of the Securities Act of 1933 based
on allegations that the Company's IPO registration statement and
prospectus failed to disclose material facts regarding the
compensation to be received by, and the stock allocation
practices of, the IPO underwriters.
The complaint also contains a claim for violation of Section
10(b) of the Securities Exchange Act of 1934 based on
allegations that this omission constituted a deceit on
investors. The plaintiffs seek unspecified monetary damages and
other relief.
In July 2002, the Company joined in a global motion to dismiss
the IPO Lawsuits filed by all of the Issuers (among others).
In October 2002, the parties agreed to toll the statute of
limitations with respect to certain of the named officers and
directors until September 30, 2003 and on the basis of this
agreement, the Company's officers and directors were dismissed
from the lawsuit without prejudice. In February 2003, the Court
issued a decision denying the motion to dismiss the Section 11
claims against the Company and almost all of the other Issuers
and denying the motion to dismiss the Section 10(b) claims
against the Company and many of the Issuers.
During the summer of 2003,the Company, along with a substantial
majority of Issuers, indirectly participated in discussions with
the plaintiffs and the Issuers' respective insurers regarding a
tentative settlement of the IPO Lawsuits. The terms of the
tentative settlement would provide for, among other things, a
release of the Issuers and their officers and directors from all
further liability resulting from plaintiffs' claims, and the
assignment to plaintiffs of certain potential claims that the
Issuers may have against their IPO underwriters. The tentative
settlement also provides that, in the event that plaintiffs
ultimately recover less than a guaranteed sum of $1 billion from
the IPO underwriters, plaintiffs would be entitled to payment by
each participating Issuer's insurer of a pro rata share of any
shortfall in the plaintiffs' guaranteed recovery.
In June 2003, pursuant to the authorization of a special
litigation committee of the Company's board of directors, the
Company entered into a non-binding memorandum of understanding
reflecting the settlement terms. In September 2003, in
connection with the possible settlement, the Company's officers
and directors who had entered tolling agreements with plaintiffs
agreed to extend those agreements so that they would not expire
prior to any settlement being finalized.
In June 2004, the Company executed a final settlement agreement
with the plaintiffs consistent with the terms of the memorandum
of understanding. The settlement is still subject to a number
of conditions, including action by the Court certifying a class
action for settlement purposes and formally approving the
settlement. The underwriters have opposed both the
certification of the class and the judicial approval of the
settlement.
The suit is styled, "In re Digital River, Inc. Initial Public
Offering Securities Litigation, Case No. 01-CV-7355," related to
"In re Initial Public Offering Securities Litigation, No. 21 MC
92 (SAS)," filed in the United States District Court for the
Southern District of New York, under Judge Shira Scheindlin.
The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) 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
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
DOUBLECLICK INC.: Settlement Submitted To NY Court For Approval
---------------------------------------------------------------
The settlement of the consolidated securities class action field
against DoubleClick, Inc., certain of its officers and directors
and certain underwriters of the Company's follow-on offerings
has been submitted to the United States District Court for the
Southern District of New York for preliminary approval.
The class action alleges violation of the federal securities
laws in connection with the Company's follow-on offerings.
Approximately 300 other issuers and their underwriters have had
similar suits filed against them, all of which are included in a
single coordinated proceeding in the Southern District of New
York.
In October 2002, the action was dismissed against the named
officers and directors without prejudice. However, claims
against the Company remain. In July 2002, the Company and the
other issuers in the consolidated cases filed motions to dismiss
the amended complaint for failure to state a claim, which was
denied as to DoubleClick in February 2003.
In September 2003, the Company's Board of Directors
conditionally approved a proposed partial settlement with the
plaintiffs in this matter. In September 2004, an agreement of
settlement was submitted to the Court for preliminary approval,
and the underwriter defendants have opposed that motion.
The settlement would provide, among other things, a release of
DoubleClick and of the individual defendants for the conduct
alleged in the action to be wrongful in the amended complaint.
DoubleClick would agree to undertake other responsibilities
under the partial settlement, including agreeing to assign away,
not assert, or release certain potential claims it may have
against its underwriters. The settlement is subject to a
hearing on fairness and approval by the Court overseeing the IPO
litigations.
The suit is styled, "In re DoubleClick, Inc. Initial Public
Offering Securities Litigation, Case No. 01 Civ. 3980 (Sas)
(Dc)" related to "In re Initial Public Offering Securities
Litigation, No. 21 MC 92 (SAS)," filed in the United States
District Court for the Southern District of New York, under
Judge Shira Scheindlin. The plaintiff firms in this litigation
are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) 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
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
GRIC COMMUNICATIONS: Presents Stock Suit Settlement To NY Court
---------------------------------------------------------------
GRIC Communications, Inc. (now known as GoRemote Internet
Communications, Inc.) presented the settlement of the
consolidated securities class action to the United States
District Court for the Southern District of New York for
approval.
In July and August2001, the Company and certain of its officers
were named as defendants in five purported securities class
action lawsuits filed in the United States District Court,
Southern District of New York, captioned as "In re GRIC
Communications, Inc. Initial Public Offering Securities
Litigation, No.01 Civ6771 (SAS)," and consolidated with
more than three hundred substantially identical proceedings as
"In re Initial Public Offering Securities Litigation, Master
File No.21 MC92 (SAS)."
The Consolidated Amended Class Action Complaint for Violation of
the Federal Securities Laws was filed on April 19, 2002, and
alleges claims against certain of the Company's officers and
against CIBC World Markets Corp., Prudential Securities
Incorporated, DB Alex. Brown, as successor to Deutsche Bank, and
U.S. Bancorp Piper Jaffray, Inc., underwriters of the Company's
December 14, 1999 initial public offering, under Sections 11 and
15 of the Securities Act of 1933, as amended, and under Section
10(b) and 20(a) of the Securities Exchange Act of 1934, as
amended.
Citing several press articles, the Consolidated Complaint
alleges that the underwriter defendants used improper methods in
allocating shares in initial public offerings, and claim the
underwriter defendants entered into improper commission
agreements regarding aftermarket trading in the Company's common
stock purportedly issued pursuant to the registration statement
for the initial public offering.
The Consolidated Complaint also alleges market manipulation
claims against the underwriter defendants based on the
activities of their respective analysts, who were allegedly
compromised by conflicts of interest. The plaintiffs in the
Consolidated Complaint seek damages as measured under Section 11
and Section 10(b) of the Securities Act of 1933, pre-judgment
and post-judgment interest, and reasonable attorneys' and expert
witnesses' fees and other costs; no specific amount is claimed
in the plaintiffs' prayer in the Consolidated Complaint. By
Order of the Court, no responsive pleading is yet due, although
motions to dismiss on global issues affecting all of the issuers
have been filed.
In October 2002, certain of the Company's officers and directors
who had been named as defendants in the In re Initial Public
Offering Securities Litigation were dismissed without prejudice
upon order of the presiding judge. In February 2003,7 the
presiding judge dismissed the Section 10(b) claims against the
Company and its named officers and directors with prejudice.
From September 2002 through June 2003, the Company participated
in settlement negotiations with a committee of Issuers'
litigation counsel, plaintiffs' executive committee and
representatives of various insurance companies (the "Insurers").
The Company's Insurers were actively involved in the settlement
negotiations, and strongly supported a settlement proposal
presented to the Company for consideration in early June 2003.
The settlement proposed by the plaintiffs would be paid for by
the Insurers and would dispose of all remaining claims against
the Company.
After careful consideration, the Company approved the settlement
proposal in July 2003. Although the Company believes that
plaintiffs' claims are without merit, it decided to accept the
settlement proposal (which does not admit wrongdoing) to avoid
the cost and distraction of continued litigation. Because the
settlement will be funded entirely by its Insurers, the Company
does not believe that the settlement will have any effect on the
Company's consolidated financial condition, results of
operations or cash flows. While the Court is expected to
approve or disapprove the settlement in the coming months, there
can be no guarantee that the settlement will be judicially
approved.
The suit is styled, "In re GRIC Communications, Inc. Initial
Public Offering Securities Litigation, Case No. 01 Civ. 6771
(Sas)" related to "In re Initial Public Offering Securities
Litigation, No. 21 MC 92 (SAS)," filed in the United States
District Court for the Southern District of New York, under
Judge Shira Scheindlin. The plaintiff firms in this litigation
are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) 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
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
HAVENS STEEL: Employees Commence Lawsuit Targeting Stock Plan
-------------------------------------------------------------
Eight current and former employees of Havens Steel Co. have
initiated a lawsuit against the administrators of Havens'
employee stock ownership plan after their investments were wiped
out by the Company's bankruptcy, the Kansas City Star reports.
Filed recently in federal Court in Kansas City, the lawsuit
seeks class-action status on behalf of some 500 current and
former Havens employees who participated in the plan, or ESOP,
which two years ago was worth nearly $40 million as well as
unspecified damages.
Named as defendants are Havens' former president and chief
executive officer, Kenneth McCullough, and three other former
Havens executives: Jesse Bechtold, Don Price and Thomas Collins.
All four were members of Havens' ESOP Committee and served on
the Company's board.
The suit alleges that the four breached their fiduciary duties
by paying themselves large bonuses and by concentrating the
ESOP's investments in Havens stock "even after they knew that it
was not a prudent investment."
The suit contends that shortly after Mr. McCullough informed
plan participants of the Company's record $228 million in
revenue in 2001, he and other Company executives awarded
themselves bonuses of more than $2.3 million, including $513,060
for Mr. McCullough.
After that, the suit says, the defendants directed that the
$2.67 million the Company contributed to the ESOP in early 2002
be used to buy Company stock. This was done, the plaintiffs
allege, even though the defendants knew the Company's 2002
performance "was going to be in stark contrast with the results
they had announced in 2001."
Some members of the ESOP Committee suggested finding a buyer for
the Company's stock, "but this idea was discouraged by the
defendants, who were more interested in preserving their
positions than in protecting the interests of Plan
participants," according to the suit. Instead, the plaintiffs
allege, Mr. McCullough authorized "substantial personal loans"
to Company executives and approved executive account spending,
"including thousands of dollars in ATM cash withdrawals and
payments for expensive meals and strip clubs."
The suit also says the defendants borrowed money from Commerce
Bank to make "phantom stock" payments to themselves. Phantom
stock is a form of bonus based on the market appreciation of a
Company's stock over time.
Only in January 2004 did the defendants consider naming an
independent trustee for the ESOP and only in March 2004 did they
consider allowing non-executive ESOP Committee members to
participate in talks about selling Havens' stock, the suit
alleges.
Even after Havens filed for bankruptcy and Mr. McCullough
stepped down as chief executive, he continued to draw a six-
figure salary, according to the suit. Meanwhile, it says, other
executives continued their lavish spending, sought forgiveness
of their debts to the Company and did nothing to protect the
interests of the stock plan. "The Plan was left without a
trustee, without direction, and without funds," the suit
contends.
LEXAR MEDIA: Plaintiffs File Consolidated Securities Suit in CA
---------------------------------------------------------------
Plaintiffs filed a consolidated securities class action against
Lexar Media, Inc., its Chief Executive Officer and Chief
Financial Officer in the United States District Court for the
Northern District of California.
On May 21, 2004, several suits were filed on behalf of a class
of plaintiffs who purchased the Company's common stock between
July 17, 2003 and April 16, 2004, inclusive, and asserted claims
under Sections 10(b) and 20(a) of the Exchange Act, as well as
Rule 10b-5 promulgated thereunder, based principally on
allegations that the Company made misrepresentations regarding
its business. Six similar class actions have since been filed
in the Northern District of California.
The Court has appointed a lead plaintiff and ordered that those
actions to be consolidated. In October 2004, plaintiffs filed a
consolidated amended complaint.
On June 4, 2004, a stockholder derivative lawsuit was filed in
the Superior Court of the State of California, Alameda County,
in which the Company is a nominal defendant and certain of the
Company's officers and directors are defendants. A
substantially identical derivative action was filed thereafter
in the same Court. The derivative actions are based on
allegations substantially similar to those in the federal class
actions. The Company has filed a motion to stay the state Court
derivative actions pending disposition of the federal class
actions as well as a demurrer requesting that the judge dismiss
the case on the basis of demand futility.
The suit is styled "In Re Lexar Media, Inc. Securities
Litigation, case no. 3:04-cv-02013-SC," filed in the United
States District Court for the Northern District of California,
under Judge Samuel Conti.
Lawyer for the Company is Kevin P. Muck, Fenwick & West LLP, 275
Battery Street, Suite 1500, San Francisco, CA 94111, Phone:
415/875-2387, Fax: 415-281-1350 or E-mail: kmuck@fenwick.com.
The plaintiff firms in this litigation are:
(1) Charles J. Piven, World Trade Center-Baltimore,401 East
Pratt Suite 2525, Baltimore, MD, 21202, Phone:
410.332.0030, E-mail: pivenlaw@erols.com
(2) Geller Rudman, PLLC, 197 South Federal Highway, Suite
200, Boca Raton, FL, 33432, Phone: 561.750.3000, Fax:
888.262.3131, E-mail: info@geller-rudman.com
(3) Green & Jigarjian LLP, 235 Pine Street, 15th Floor, San
Francisco, CA, 94104, Phone: 415.477.6700, Fax:
415.477.6710,
(4) Marc S. Henzel, 210 West Washington Square, Third
Floor, Philadelphia, PA, 19106, Phone: 215.625.9999,
Fax: 215.440.9475, E-mail: Mhenzel182@aol.com
(5) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(6) Scott & Scott LLC, P.O. Box 192, 108 Norwich Avenue,
Colchester, CT, 06415, Phone: 860.537.5537, Fax:
860.537.4432, E-mail: scottlaw@scott-scott.com
MERCK & CO.: NY Comptroller Launches Lawsuit Over Vioxx Recall
--------------------------------------------------------------
New York state comptroller Alan G. Hevesi initiated a lawsuit
seeking class action status against Whitehouse Station, N.J.-
based Merck & Co., claiming that the drug maker hid certain
risks associated with the painkiller Vioxx, the Associated Press
reports.
Merck had pulled out its Vioxx pain medication from the market
on September 30 after a clinical trial showed patients taking
the drug showed an increased risk for heart attacks and strokes
after 18 months. The move came after several physicians and
other studies raised concerns about the drug's potential health
risks. The Company has been the subject of several investor
lawsuits since it pulled Vioxx off the market, mostly because
its stock has lost well over a third of its value since the
recall.
According to state Comptroller Alan G. Hevesi, one of the losers
has been New York State's pension fund, which has recorded $171
million in paper losses related to Merck. The majority of the
state's Merck stock was held by the pension fund in an
internally managed index fund. A spokesman for the New York
comptroller said, as of September 30, the fund held a total of
9.4 million Merck shares, with 7.8 million in the index account.
Mr. Hevesi, who has been considered an activist comptroller,
filed the suit in a federal district Court in New Jersey, as
well as related federal motions in Louisiana. He also is seeking
to consolidate all other purported class actions into one case
in New Jersey.
Legal experts point out that the comptroller's suit against
Merck is similar to the one filed in 2003 against German drug
and chemicals maker Bayer that is still pending and had centered
around Baycol, a cholesterol-lowering drug that was pulled from
the market in 2001 amid safety concerns. That suit claims Bayer
had knowledge about problems with Baycol that it didn't
disclose.
NETFLIX INC.: Shareholders Launch Securities Lawsuits in N.D. CA
----------------------------------------------------------------
Netflix, Inc. faces seven purported securities class action
suits filed in the United States District Court for the Northern
District of California against the Company and, in the
aggregate, Reed Hastings, W. Barry McCarthy, Jr., and Leslie J.
Kilgore.
Specifically, the suits were filed by the following named
plaintiffs, in each case individually and on behalf of others
similarly situated, on the following dates:
(1) Todd Noel, July 22, 2004;
(2) Eugene Rausch, July 26, 2004;
(3) Zoe Myerson, August 6, 2004;
(4) Shay Crawford, August 9, 2004;
(5) Jan B. Martin, August 16, 2004;
(6) Charles K. Lee, September 8, 2004; and
(7) Crayton D. Leavitt, September 9, 2004
The complaints allege violations of certain federal securities
laws and seek unspecified damages on behalf of a class of
purchasers of the Company's common stock between October 1,
2003 and July 15, 2004. The plaintiffs allege that the Company
made false and misleading statements and omissions of material
facts based on the Company's disclosure regarding subscriber
churn, claiming alleged violations by each named defendant of
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10b-5 promulgated thereunder and alleged violations by
certain of the Company's officers of Section 20A of Securities
Exchange Act of 1934.
On October 15, 2004, the plaintiff in one of the actions amended
his complaint to extend the class period to October 14, 2004.
The Company anticipates that all of the pending class actions
will be consolidated and that an amended consolidated complaint
will be filed.
NETFLIX INC.: CA Consumers Launch Suit Over DVD Delivery Times
--------------------------------------------------------------
Netflix, Inc. faces a consumer fraud and unfair trade practices
class action filed in California Superior Court, City and County
of San Francisco, over the Company's statements regarding its
DVD delivery times.
On September 23, 2004, Frank Chavez, individually and on behalf
of others similarly situated, filed a class action lawsuit
against the Company, alleging claims under false advertising,
unfair and deceptive trade practices, breach of contract and
other claims. The complaint seeks restitution, disgorgement,
damages, and injunction and specific performance and other
relief.
NETWORK ASSOCIATES: SEC Lodges Complaint V. Former Officer in CA
----------------------------------------------------------------
The Securities and Exchange Commission filed a complaint in the
U.S. District Court for the Northern District of California
against Evan S. Collins, a former senior financial officer for
Network Associates, Inc., now known as McAfee, Inc. The
complaint charges that Collins traded in the securities of
Network Associates while in possession of material, nonpublic
information concerning fraudulent accounting practices at
Network Associates and that his profits from the illegal trading
were approximately $253,000.
The U.S. Attorney for the Northern District of California also
filed criminal charges against Collins in connection with the
same conduct.
Simultaneously with the filing of the complaint, Collins has
consented, without admitting or denying the allegations of the
complaint, to the entry of an order permanently enjoining him
from violating, directly or indirectly, Section 17(a) of the
Securities Act of 1933, Section 10(b) of the Securities Exchange
Act of 1934, and Rule 10b-5 thereunder, which are antifraud
provisions of the federal securities laws. Collins also has
consented to the entry of an order that bars him for five years
from serving as an officer or director of a public Company.
Collins has further consented to disgorge his unlawful trading
profits of $253,125, together with prejudgment interest thereon
in the amount of $63,336, for a total disgorgement of $316,461,
and to pay a civil penalty of $253,125.
The Commission's complaint alleges that, in September 2000,
Collins, who formerly had served as Network Associates'
Controller, was serving as Vice President and Chief Financial
Officer of a Network Associates majority-owned subsidiary,
McAfee.com. At about that time, Collins learned that his
successor at Network Associates, Terry Davis, had made journal
entries in Network Associates' general ledger that improperly
inflated the Company's accounts receivable reserve. By
accessing the Network Associates accounting system from his
computer at work, Collins confirmed this information and
determined that Davis had transferred $15 million from the
Company's tax reserve account to an accounts receivable reserve
account. Collins knew that Davis's $15 million transfer was not
in conformity with Generally Accepted Accounting Principles
(GAAP), which provide that accounts receivable reserves should
only be increased by a corresponding reduction to Network
Associates' revenue.
The complaint further alleges that, in October 2000, Collins
learned that Davis was warning certain colleagues that they
should sell their Network Associates stock. Based on this and
his knowledge of the material, nonpublic information concerning
the improper accounting entries, Collins concluded that Network
Associates had misstated its financial statements and, as a
result, was in danger of not meeting its publicly announced
revenue targets for the fourth quarter ending December 31, 2000.
The complaint further alleges that on or about Nov. 1, 2000,
Collins exercised options on 30,000 shares of Network Associates
stock and sold the shares in advance of Network Associates'
fourth quarter earnings announcement. On Dec. 26, 2000, Network
Associates stated in a press release that its sales for the
fourth quarter 2000 would be only $55 million, dramatically
lower than the Company's earlier prediction of $245 million.
The news sent Network Associates' stock price down sharply and
slashed more than $1 billion from the Company's market
capitalization. By trading in advance of the fourth quarter 2000
earnings announcement, Collins realized unlawful profits of
$253,125.
The Commission's action against Collins is its third civil
enforcement action related to the accounting fraud at Network
Associates. Previously, the Commission filed civil actions
against Network Associates' former Controller Terry Davis
(Litigation Release No. 18189) and former Chief Financial
Officer Prabhat Goyal (Litigation Release No. 18748). Both of
these actions are pending.
The Commission acknowledges the assistance and cooperation of
the U.S. Attorney's Office for the Northern District of
California and the Federal Bureau of Investigation.
The Commission's investigation into matters related to the fraud
at Network Associates, now known as McAfee, Inc., is continuing.
The action is titled, SEC v. Evan S. Collins, Civil Action No. C
04-5030 (FMS), N.D. Cal.].
NEW VALLEY: Seeks Summary Judgment For Claims in DE Stock Suit
--------------------------------------------------------------
New Valley Corporation asked the Delaware Chancery Court to
grant summary judgment for the remaining claims in the class
action filed on behalf of the Company's former Class B preferred
shareholders. The suit also names as defendants Brooke Group
Holding and certain of the Company's directors and officers.
The complaint alleges that the recapitalization, approved by a
majority of each class of the Company's stockholders in May
1999, was fundamentally unfair to the Class B preferred
shareholders, the proxy statement relating to the
recapitalization was materially deficient and the defendants
breached their fiduciary duties to the Class B preferred
shareholders in approving the transaction. The plaintiffs seek
class certification of the action and an award of compensatory
damages as well as all costs and fees.
The Court has dismissed six of plaintiff's nine claims alleging
inadequate disclosure in the proxy statement. Brooke Group
Holding and the Company believe that the remaining allegations
are without merit and filed a motion for summary judgment on the
remaining three claims.
PERINI CORPORATION: Settles Preferred Stockholder Lawsuit in MA
---------------------------------------------------------------
Perini Corporation (NYSE:PCR), a leading construction services
Company offering diversified general contracting, construction
management and design-build services to private clients and
public agencies throughout the world, recently executed a
memorandum of understanding to settle the class action lawsuit
filed by holders of Perini's $2.125 Depositary Convertible
Exchangeable Preferred Shares.
The proposed settlement would resolve the action pending in the
United States District Court for the District of Massachusetts
brought against current and former directors of Perini.
Plaintiffs, including two current directors of Perini, Frederick
Doppelt and Martin Shubik, claim that the defendants breached
their fiduciary duties to the holders of Depositary Shares. The
proposed settlement is subject to approval of the Court.
Under the terms of the settlement, Perini would purchase all of
the Depositary Shares tendered in the settlement for
consideration per share of $19.00 in cash and one share of
Perini common stock. The named plaintiffs have agreed to support
the settlement. There are currently 559,000 Depositary Shares
outstanding. In the event that fewer than 200,000 Depositary
Shares are tendered in the settlement, Perini may terminate the
settlement agreement and the parties will revert to their
previous positions in the litigation. Frederick Doppelt would
resign from his position as a director of Perini upon Court
approval of the settlement.
SOUTH KOREA: Lobbyists Petition For Law Revision
------------------------------------------------
Lobbyists for South Korea's family-owned conglomerates, or
chaebol, submitted a petition to the National Assembly to revise
a securities class action law that will take effect next year,
The Asia Pulse reports.
Once enacted, the law would allow shareholders to pursue class
action suits against businesses with more than 2 trillion won
(US$1.91 billion) in assets for accounting irregularities.
Companies with less than 2 trillion won will be subject to the
law from 2007.
The Federation of Korean Industries and the Korea Chamber of
Commerce & Industry said in the petition that false accounting
discovered before the law's proclamation should be exempted from
class action lawsuits. According to them, "The law should
specify in supplementary provisions that accounting fraud before
Jan. 20, 2004, when the law was proclaimed, should be exempt
from any lawsuit."
Some lawmakers, including Kim Ae-sil of the opposition Grand
National Party, proposed postponing enforcement of the law for
two more years. The government has strengthened laws to secure
transparency in conglomerates' financial statements since the
financial crisis in 1997-98. However, some chaebol are still
suspected of having committed deceptive accounting. SK Group,
the nation's second-largest conglomerate, was found to have been
involved in a $2 billion accounting fraud last year. Chaebol's
poor corporate governance has been cited as one of the factors
behind the "Korea discount" in the Seoul stock market, or
undervaluation of local stocks.
SUNOCO INC.: Pays $5.5M To Settle Race Discrimination Case in PA
----------------------------------------------------------------
Sunoco, Inc. attempted to settle a race discrimination class
action filed by current and former employees, who said that they
were denied promotions because they were black, by agreeing to
pay up to $5.5 million, the Associated Press reports.
Filed in 2001, the suit had claimed that black managers,
administrators, accountants and other white collar workers had a
harder time advancing at Sunoco than white workers with similar
skills and experience. According to the lead plaintiff, DeWayne
Ketchum, he had spent 30 years in various financial jobs for
Sunoco, but never made it into an upper-level management job.
Although opting to settle, Sunoco spokesman Gerald Davis was
quick to point out that Company officials still believe that the
lawsuit was without merit, and the Company did not discriminate,
but felt it was in the Company's best interest to settle before
the case got to trial. "Sunoco is committed to providing equal
employment opportunities to all qualified candidates," Mr. Davis
said. "We feel good about the progress the Company has made in
the representation of African Americans in both supervisory and
management positions," he adds.
Under the term of the settlement, which has been given
preliminary approval by a federal judge and is currently being
heard in a fairness hearing, as many as 200 current and former
employees at the oil refiner's Philadelphia headquarters and its
facilities around the city would be paid varying amounts.
TAMPA ELECTRIC: Plaintiffs To Press For Legal Fight Over Poles
--------------------------------------------------------------
About 15 residents from Egypt Lake marched around TECO Plaza, to
call attention to their situation and an ongoing legal battle
against the Tampa Electric Co. over the energy firm's giant
electric poles throughout the lake, the Tampa Tribune reports.
According to event organizer Lynn Smelt, the affected residents
will face TECO in Court on Thursday to ask for class-action
status in their case, which dates to October 2003.
"We've got our upcoming hearing, and TECO is trying to dismiss,"
Ms. Smelt said. "We want to show them that this is not just a
few people with poles in their yard, but the entire neighborhood
is impacted."
The poles, which measure as much as 125-feet tall and 3 feet in
diameter, were installed with little warning along several
residential streets in 2003. Residents had objected, saying that
the poles were unsightly and a possible health risk from
electromagnetic fields from the high voltage lines.
As previously reported in the September 23, 2003 issue of the
Class Action reporter, John W. Dill of Attorneys Trial Group of
Orlando along with the law firm of Prieto, Prieto & Goan are
filing the suit on behalf of Egypt Lake residents.
TERAYON COMMUNICATION: Begins Discovery For CA Securities Suit
--------------------------------------------------------------
Terayon Communication Systems, Inc. initiated discovery in the
consolidated securities class action filed against it and
certain of its officers and directors in the United States
District Court, Northern District of California as "In re
Terayon Communication Systems, Inc. Securities Litigation."
The Court then appointed lead plaintiffs who filed an amended
complaint. In 2001, the Court granted in part and denied in
part defendants' motion to dismiss, and plaintiffs filed a new
complaint. In 2002, the Court denied defendants' motion to
dismiss that complaint, which, like the earlier complaints,
alleges that the defendants violated the federal securities laws
by issuing materially false and misleading statements and
failing to disclose material information regarding the Company's
technology.
On February 24, 2003, the Court certified a plaintiff class
consisting of those who purchased or otherwise acquired the
Company's securities between November 15, 1999 and April 11,
2000. On September 8, 2003, the Court heard defendants' motion
to disqualify two of the lead plaintiffs and to modify the
definition of the plaintiff class. On September 10, 2003, the
Court issued an order vacating the hearing date for the parties'
summary judgment motions, and, on September 22, 2003, the Court
issued another order staying all discovery until further notice
and vacating the trial date, which had been November 4, 2003.
On February 23, 2004, the Court issued an order disqualifying
two of the lead plaintiffs. The order also states that
plaintiffs' counsel must provide certain information to the
Court about counsel's relationship with the disqualified lead
plaintiffs, and it provides that defendants may serve certain
additional discovery. On March 24, 2004, plaintiffs submitted
certain documents to the Court in response to its order, and, on
April 16, 2004, the Company responded to this submission.
The suit is styled "Mohtadi et al v. Terayon Communications
Systems, Inc. et al, 3:01-cv-01721," filed in the United States
District Court for the Northern District of California under
Judge Marilyn H. Patel.
Lawyers for the defendants are Jordan David Eth, Dorothy
Fernandez, Melvin R. Goldman and Christopher A. Patz of Morrison
& Foerster, 425 Market Street, San Francisco, CA 94105-2482,
Phone: 415-268-7000, Fax: 415-268-7522, E-mail: jeth@mofo.com,
dfernandez@mofo.com, mgoldman@mofo.com or cpatz@mofo.com.
Lawyers for the plaintiffs are Gregory A. Hartlett and Jeffrey
R. Krinsk of Finkelstein & Krinsk, 501 West Broadway, Suite
1250, San Diego, CA 92101-3593, Phone: (619) 238-1333
TURNSTONE SYSTEMS: Working on NY Securities Lawsuit Settlement
--------------------------------------------------------------
Turnstone Systems, Inc. is working to resolve the consolidated
securities class action filed in the United States District
Court for the Southern District of New York against it and
certain of its current and former officers and directors.
On November 9, 2001, Arthur Mendoza filed a securities class
action lawsuit alleging claims against the Company, certain of
its current and former officers and directors, and the
underwriters of the Company's initial public offering of stock
as well as the Company's secondary offering of stock. The
complaint is purportedly brought on behalf of a class of
individuals who purchased common stock in the Company's initial
public offering and secondary stock offering between January 31
and December 6, 2000.
The complaint alleges generally that the prospectuses under
which such securities were sold contained false and misleading
statements with respect to discounts and commissions received by
the underwriters. The case has been coordinated for pre-trial
purposes with over 300 cases raising the same or similar issues
and also currently pending in the Southern District of New York.
On April 18, 2002, Michael Szymanowski was appointed lead
plaintiff in the action. On April 22, 2002, an amended
complaint was filed. On July 1, 2002, the underwriter
defendants filed an omnibus motion to dismiss. On July 15,
2002, the Company, collectively with the other issuer
defendants, also filed an omnibus motion to dismiss. The lead
plaintiff filed an opposition to the underwriters' motion to
dismiss on August 15, 2002 and to the issuers' motion to dismiss
on August 27, 2002. The underwriters' reply to the opposition
was filed on September 13, 2002, and the Company's reply to the
opposition was filed on September 27, 2002.
On February 19, 2003, the Court issued an order denying the
motions to dismiss with respect to substantially all of the
plaintiffs' claims, including those against the Company. A
proposal has been made for the settlement and release of claims
against the issuer defendants, including Turnstone. The
settlement is subject to a number of conditions, including
approval of the proposed settling parties and the Court. The
underwriter defendants have opposed both the certification of a
settlement class action and judicial approval of the settlement.
The suit is styled, "In re Turnstone Systems, Inc. Initial
Public Offering Securities Litigation, 01 Civ. 9981 (Sas)"
related to "In re Initial Public Offering Securities Litigation,
No. 21 MC 92 (SAS)," filed in the United States District Court
for the Southern District of New York, under Judge Shira
Scheindlin. The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) 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
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
TYSON FOODS: Expands Chicken Recall Due To Undeclared Allergen
--------------------------------------------------------------
Tyson Foods, Inc., a Rogers, Arkansas, firm, is voluntarily
expanding its November 12 recall of approximately 420 pounds of
frozen chicken products due to an undeclared allergen, (whey),
the U.S. Department of Agriculture's Food Safety and Inspection
Service announced. The product could cause an allergic reaction
for people who are milk-sensitive.
The expanded recall includes 784 pounds of additional product
that was distributed to retail stores in Louisiana and Texas.
The original recall included distribution to stores in Ohio,
Michigan and West Virginia. Subject to recall are 28 oz.
packages of "Tyson FULLY COOKED CRISPY CHICKEN STRIPS, CHICKEN
BREAST STRIP FRITTERS WITH RIB MEAT." Each package bears one of
the following production codes: "3024CNQ0216," "3024CNQ0217,"
"3024CNQ0218," "3024CNQ0219," "3024CNQ0220" or "3024CNQ0221."
Each package also bears the establishment number "P-7221"
printed adjacent to the code on the back of the package.
The chicken strips were produced on October 28, 2004. The
problem was discovered by the Company. FSIS has received no
reports of allergic reactions associated with consumption of
this product. Anyone concerned about an allergic reaction
should contact a physician.
Media with questions may contact Company representative Gary
Mickelson 1-479-290-6111. Consumers with questions about the
recall should contact Tyson's Consumer Information Hotline at 1-
866-328-3156.
Consumers with other food safety questions can phone the toll-
free USDA Meat and Poultry Hotline at 1-888-MPHotline
(1-888-674-6854). The hotline is available in English and
Spanish and can be reached from 10 a.m. to 4 p.m. (Eastern
Time), Monday through Friday. Recorded food safety messages are
available 24 hours a day.
UNITED RENTALS: Shareholders Launch Securities Fraud Suits in CT
----------------------------------------------------------------
United Rentals, Inc. faces several shareholder class actions
filed in the United States District Court for the District of
Connecticut on behalf of all purchasers of the Company's
securities (NYSE:URI) from October 23, 2003 through August 30,
2004 inclusive. The lawsuit names as the defendants the Company
and:
(1) Wayland R. Hicks
(2) Bradley S. Jacobs
(3) Joseph B. Sherk
(4) John N. Milne
The complaint seeks unspecified compensatory damages, costs and
expenses. The complaint alleges, among other things, that:
(1) certain of the Company's SEC filings and other public
statements contained false and misleading statements
which resulted in damages to the plaintiff and the
members of the purported class when they purchased the
Company's securities and
(2) the conduct in connection therewith violated Section
10(b) of the Securities Exchange Act of 1934 and Rule
10b-5 promulgated thereunder and, in the case of the
individual defendants, Section 20(a) of such Act.
The suits are styled:
(1) Ritch V. United Rentals, Inc., Case No. 3:04-cv-01894-
SRU, pending under Judge Stefan R. Underhill. Lawyers
for the plaintiffs are Andrew M. Schatz, Justin Scott
Kudler and Nancy A. Kulesa of Schatz & Nobel-Htfd, One
Corporate Center, 20 Church St., Suite 1700, Hartford,
CT 06103, Phone: 860-493-6292, Fax: 860-493-6290, E-
mail: aschatz@snlaw.net, justin@snlaw.net,
nancy@snlaw.net
(2) Schimmel v. United Rentals, Inc., et al., Case No.
3:04-cv-01615-CFD, under Judge Christopher F. Droney.
Lawyers for the plaintiffs are James E. Miller and
Patrick A. Klingman of Sheperd Finkelman Miller & Shah-
Chester, 65 Main St., Chester, CT 06412, Phone: 860-
526-1100, Fax: 860-526-1120, E-mail:
jmiller@sfmslaw.com or pklingman@sfmslaw.com.
(3) City of Pontiac Policeman's & Fireman's Retirement
System v. United Rentals, Inc., Case No. 3:04-cv-01891-
MRK, under Judge Mark R. Kravitz. Lawyer for the
plaintiffs is David Randell Scott of Scott + Scott,
Phone: 860-537-5537, Fax: 860-537-4432, E-mail:
drscott@scott-scott.com
U.S. STEEL: City Of River Rouge Files Lawsuit Over Air Pollution
----------------------------------------------------------------
The city of River Rouge recently filed a class-action lawsuit
against U.S. Steel Corp. demanding increased pollution controls
and unspecified damages for residents whose health has been
affected by emissions from the Company's Great Lakes Works on
the Detroit River, the DetNews.com reports.
The suit was filed in Federal District Court on behalf of
residents in Ecorse, River Rouge and southwest Detroit, areas
where River Rouge city officials said homes are often clouded in
crimson or orange smoke and asthma rates are outrageously high.
"You can't swim in the pool unless you clean it every day,
because it's filled with metal," said Karen Ward, 41, who lives
half a mile from the plant and has two children with asthma.
As previously reported in December 1, 2004 issue of the Class
Action Reporter, the plaintiffs have been planning to file the
suit ever since the 1,100-acre facility in River Rouge and
Ecorse, one of U.S. Steel's five main steel producing factories,
was cited numerous times by the Michigan Department of
Environmental Quality for emitting large amounts of manganese
and other toxic elements.
According to Tim McGarry, civil enforcement coordination chief
for DEQ, the city's action surprised state officials, who made a
soon-to-be-announced deal with U.S. Steel requiring the Company
to install new air pollution controls and pay a "significant
penalty."
Pittsburgh-based U.S. Steel, which bought the plant from
bankrupt National Steel Corp. in 2003, has shown signs of trying
to cut down on pollution. "It's an old plant, so you can't do it
overnight," McGarry said. "But we're holding their feet to the
fire."
However, River Rouge Mayor Greg Joseph said that the city
couldn't wait any longer for action. That's why they have opted
to take legal action to force the Company to make some changes.
VITRIA TECHNOLOGY: Executes NY Securities Fraud Suit Settlement
---------------------------------------------------------------
Vitria Technology, Inc. executed the formal settlement agreement
for the consolidated securities class action filed against it,
certain of its officers and directors and the underwriters of
the Company's initial public offering (IPO).
In November 2001, the Company and certain of its officers and
directors were named as defendants in a class action shareholder
complaint filed in the United States District Court for the
Southern District of New York, and captioned Kideys, et al., v.
Vitria Technology, Inc., et al., Case No. 01-CV-10092. The
plaintiffs allege that the defendants violated federal
securities laws because the Company's IPO registration statement
and prospectus contained untrue statements of material fact or
omitted material facts regarding the compensation to be received
by, and the stock allocation practices of, the IPO underwriters.
The plaintiffs seek unspecified monetary damages and other
relief.
Similar complaints were filed in the same Court beginning in
January 2001 against numerous public companies that first sold
their common stock since the mid-1990s. All of the IPO-related
lawsuits were consolidated for pretrial purposes before United
States Judge Shira Scheindlin of the Southern District of New
York. Defendants filed a global motion to dismiss the IPO-
related lawsuits on July 15, 2002. In October 2002, Vitria's
officers and directors were dismissed without prejudice pursuant
to a stipulated dismissal and tolling agreement with the
plaintiffs. On February 19, 2003, Judge Scheindlin issued
a ruling denying in part and granting in part the Defendants'
motions to dismiss.
In June 2003, Vitria's Board of Directors approved a resolution
tentatively accepting a settlement offer from the plaintiffs
according to the terms and conditions of a comprehensive
Memorandum of Understanding negotiated between the plaintiffs
and the issuer defendants. Under the terms of the settlement,
the plaintiff class will dismiss with prejudice all claims
against Vitria and its current and former directors and
officers, and Vitria will assign to the plaintiff class or its
designee certain claims that Vitria may have against the
underwriters of its IPO.
In addition, the tentative settlement guarantees that, in the
event that the plaintiffs recover less than $1.0 billion in
settlement or judgment against the underwriter defendants in the
IPO-related lawsuits, the plaintiffs will be entitled to recover
the difference between the actual recovery and $1.0 billion from
the insurers for the Issuers.
The Company executed a final settlement agreement with the
plaintiffs consistent with the terms of the Memorandum of
Understanding. The settlement is still subject to a number of
conditions, including action by the Court certifying a class
action for settlement purposes and formally approving the
settlement. The underwriters have opposed both the
certification of the class and the judicial approval of the
settlement.
The suit is styled, "In re Vitria Technology, Inc. Initial
Public Offering Securities Litigation, 01 Civ. 10092 (Sas)"
related to "In re Initial Public Offering Securities Litigation,
No. 21 MC 92 (SAS)," filed in the United States District Court
for the Southern District of New York, under Judge Shira
Scheindlin. The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) 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
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
WEST VIRGINIA: Child Support Case Chugging Through Court System
---------------------------------------------------------------
A lawsuit that was filed earlier this year regarding equal
custody rights for non-custodial parents is moving through the
Court system, the Parkersburg News reports.
According to Tim Fittro, a local coordinator for Men Against
Discrimination's Men United, the state recently responded to the
case that was filed in federal Court in Parkersburg. The
organization, on behalf of the plaintiff, has also responded to
the state's response.
Filed in West Virginia and 40 other states on September 17,
during the 217th anniversary of the U.S. Constitution, the
federal class action lawsuit, which is the is the result of
three years' work, was brought on behalf of an estimated 25
million non-custodial parents, demanding equal custody of their
children be restored by the federal Courts.
The state responded with a motion to dismiss, claiming the state
is immune from such cases and that federal Courts have no
jurisdiction over the case, Mr. Fittro said. "That motion was
expected; the same has been done in a number of jurisdictions
across the country," he said.
Mr. Fittro said a scheduling and status conference has been set
for 1 p.m. Dec. 10 at the Robert C. Byrd Federal Courthouse in
Charleston with a group of 50 to 100 people from across the
state will be working to support the suit and educate the public
and the media about its cause.
After the state's response, the group wrote to the federal judge
urging him to deny the state's motion. According to Mr. Fittro,
the motion calls for the case to be dismissed under the 11th
amendment to the U. S. Constitution, the Domestic Relations
Exception and the Younger Abstention and the Rooker-Feldman
Doctrine, which he and his group argues to be inapplicable. In
the group's response it states a jury must determine if they
apply. "There is no immunity from a case filed in federal Court
based on federal law," Mr. Fittro said.
Furthermore, Mr. Fittro said the case has not challenged a state
Court decision. The group is addressing what it alleges to be
"unlawful and unconstitutional practices and policies committed
by the states," since the group sees child support as a forced
contract.
"Child support is based on the non-custodial parent's income,
not the child's needs," he said. "There is no regard for the
debt load that was voluntarily assumed. It pushes some beyond
their capacity to pay."
To strengthen his claims and tha of his group Mr. Fittro pointed
out to a study in Michigan, which found that 87 percent of
fathers classified as deadbeats earned less then $10,000 a year.
"There is no accountability on how the money is used," he said.
It takes a father to raise a child, not money."
The group has seen success in other states in the introduction
and passage of legislation on the presumption of joint custody
and paternity fraud, said Mr. Fittro.
New Securities Fraud Cases
IMPAX LABORATORIES: Milberg Weiss Lodges Securities Suit in CA
--------------------------------------------------------------
The law firm of Milberg Weiss Bershad & Schulman LLP initiated a
class action lawsuit on behalf of purchasers of the securities
of IMPAX Laboratories, Inc. ("IMPAX" or the "Company") (Nasdaq:
IPXL) between May 5, 2004 and November 3, 2004 inclusive (the
"Class Period") seeking to pursue remedies under the Securities
Exchange Act of 1934 (the "Exchange Act").
The action is pending in the United States District Court for
the Northern District of California against defendants IMPAX,
Barry R. Edwards, Charles Hsiao, Larry Hsu, and Cornel C.
Spiegler, David S. Doll and David J. Edwards.
The complaint alleges that IMPAX is a pharmaceutical Company
focused on the development and commercialization of generic and
brand name products and that IMPAX overstated reported earnings
and revenue during the first two quarters of 2004. The Class
Period ends on November 3, 2004, when the Company announced that
it was postponing release of its third-quarter financial
results. On this news, the Company's share price fell 23% to
$10.07 on relatively high trading volume of 4.2 million shares.
On November 9, 2004, the Company announced that it was restating
its reported revenues and earnings for the first and second
quarters of 2004. During the Class Period, insiders sold their
personally held IMPAX shares for proceeds in excess of $32
million.
For more details, contact Steven G. Schulman, Peter E. Seidman
or Andrei V. Rado by Mail: One Pennsylvania Plaza, 49th fl., New
York, NY 10119-0165 by Phone: (800) 320-5081 by E-mail:
sfeerick@milbergweiss.com or visit their Web site:
http://www.milbergweiss.com.
MERCK & CO.: Landskroner Grieco Lodges Securities Lawsuit in NJ
---------------------------------------------------------------
The law firm of Landskroner Grieco Madden, Ltd. initiated a
class action lawsuit in the United States District Court for the
District of New Jersey, on behalf of purchasers of securities of
Merck & Co., Inc. ("Merck" or the "Company") (NYSE:MRK), between
October 22, 2003 and September 30, 2004, inclusive (the "Class
Period").
The lawsuit is captioned Charles Rosen, on behalf of himself and
all others similarly situated v. Merck & Co., Inc., Raymond V.
Gilmartin, Judy C. Lewent and David W. Anstice. The deadline for
filing lead plaintiff papers is November 30, 2004.
The Complaint alleges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule
10(b)(5) promulgated thereunder. Specifically, the Complaint
states that, throughout the Class Period, defendants issued
numerous statements concerning Merck's profits, business
operations and prospects; artificially inflated the prices of
Merck's publicly traded securities; allowed defendants to obtain
larger bonuses which were directly tied to the performance of
Merck shares; allowed defendants to arrange to sell and actually
sell in excess of $40 million worth of their personally-held
Merck shares at artificially-inflated prices; and caused members
of the class to purchase Merck publicly traded securities at
inflated prices. The Complaint also alleges that throughout the
Class Period, defendants knew that Vioxx, Merck's popular
arthritis and acute pain medication, was unsafe and presented an
intolerable risk of heart attack and stroke. Thus, defendants
knew that their projections for earnings of $3.11 - $3.17 per
share for fiscal 2004 were false and could not be attained as
Vioxx-related revenue could not be counted upon. On September
30, 2004, the last day of the Class Period, defendants withdrew
Vioxx from the U.S. market and Merck common stock experienced
more than a 25% drop in price.
For more details, contact Jack Landskroner, Esq. or Debra
Spaller, Paralegal of Landskroner Grieco Madden, Ltd. by Mail:
1360 West 9th Street, Suite 200, Cleveland, Ohio 44113 by Phone:
1-866-522-9500 or 216-522-9000 by E-mail:
jack@landskronerlaw.com or visit their Web site:
http://www.landskronerlaw.com.
RS INVESTMENT: Stull & Stull Lodges Securities Fraud Suit in MD
---------------------------------------------------------------
The law firm of Stull, Stull & Brody initiated a class action
lawsuit in the United States District Court for the District of
Maryland, on behalf of all purchasers, redeemers and holders of
shares of the RS family of mutual funds (collectively, the "RS
Funds"), which are managed by RS Investment Management, L.P.,
between October 6, 1999 and October 5, 2004 (the "Class
Period").
The following RS Funds are subject to this lawsuit:
(1) RS Diversified Growth Fund (Nasdaq: RSDGX)
(2) RS Emerging Growth Fund (Nasdaq: RSEGX)
(3) RS Growth Fund (Nasdaq: RSVPX)
(4) RS Information Age Fund (Nasdaq: RSIFX)
(5) RS Internet Age Fund (Nasdaq: RIAFX)
(6) RS Midcap Opportunities Fund (Nasdaq: RSMOX)
(7) RS Smaller Company Growth Fund (Nasdaq: RSSGX)
(8) RS Contrarian Value Fund (Nasdaq: RSCOX)
(9) RS Global Natural Resources Fund (Nasdaq: RSNRX)
(10) RS Partner Fund (Nasdaq: RSPFX)
The complaint charges defendants RS Investment Trust, RS
Investment Management, L.P., G. Randall Hecht, Steven M. Cohen,
James L. Callinan, and the John Doe Defendants with violations
of the Securities Act of 1933 (the "Securities Act")and the
Securities Exchange Act of 1934 (the "Exchange Act"). The
Complaint alleges that during the Class Period the defendants
engaged in illegal and improper trading practices, in concert
with certain institutional traders, which caused financial
injury to the shareholders of the RS Funds. According to the
Complaint, the Defendants surreptitiously permitted certain
favored investors, including the John Doe Defendants, to
illegally engage in "timing" of the RS Funds whereby these
favored investors were permitted to conduct short-term, "in and
out" trading of mutual fund shares, despite explicit
restrictions on such activity in the RS Funds' prospectuses.
For more details, contact Tzivia Brody, Esq. at Stull, Stull &
Brody by Mail: 6 East 45th Street, New York, NY 10017 by Phone:
1-800-337-4983 or by E-mail: 212/490-2022 or by E-mail:
SSBNY@aol.com or visit their Web site: http://www.ssbny.com.
SIRVA INC.: Brian M. Felgoise Lodges Securities Fraud Suit in IL
----------------------------------------------------------------
The law offices of Brian M. Felgoise, PC initiated a securities
class action on behalf of shareholders who acquired Sirva, Inc.
(NYSE: SIR) securities between November 25, 2003 and November 9,
2004, inclusive (the Class Period).
The case is pending in the United States District Court for the
Northern District of Illinois, against the Company and certain
key officers and directors.
The action charges that defendants violated the federal
securities laws by issuing a series of materially false and
misleading statements to the market throughout the Class Period
which statements had the effect of artificially inflating the
market price of the Company's securities. No class has yet been
certified in the above action.
For more details, contact Brian M. Felgoise, Esq. by Mail: 261
Old York Road, Suite 423, Jenkintown, PA 19046 by Phone:
(215) 886-1900 by E-mail: securitiesfraud@comcast.net.
*********
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA. Glenn Ruel Se¤orin, Aurora Fatima Antonio and Lyndsey
Resnick, Editors.
Copyright 2004. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
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