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C L A S S A C T I O N R E P O R T E R
Tuesday, January 18, 2005, Vol. 7, No. 12
Headlines
ALPHARMA INC.: Plaintiffs Appeal Dismissal of NJ Securities Suit
ALYON TECHNOLOGIES: MI AG Joins Settlement Over Consumer Fraud
CAMELOT DESSERTS: Recalls Mini Pies Due To Undeclared Allergens
ELI LILLY: Sued For Withholding Vital Prozac Info in Montreal
ERON MORTGAGE: Executives Fraud Trial To Proceed in Canada Court
FANNIE MAE: OH Gets Lead Plaintiff Status in Shareholders' Suit
GEMSTAR-TV GUIDE: Settlements Reached With Two Former Executives
ILLINOIS: Firms To Plead For Tort Reform in Committee Hearings
ILLINOIS: Judge Rules That Sex-Offender Lockups Are Acceptable
ILLINOIS: Judge Upholds Court's Ruling On Milk Price-Fixing Case
KENTUCKY: Fen-Phen Victims Sue Over Suit Settlement Distribution
MIRANT: Settles CA Claims Related 2000 and 2001 Energy Crisis
NATIONAL RESEARCH: Texas AG Announces Student Privacy Settlement
NORFOLK SOUTHERN: Residents Launch Lawsuits Over SC Train Crash
QWEST COMMUNICATIONS: Court Motion Filed Over Anschutz Materials
SONY PICTURES: CA Court Preliminary Approves Rezec Settlement
SWITZERLAND: Nazi Victim Compensation List Published Online
SYNOPSYS INC.: Plaintiffs To File Amended Securities Suit in CA
SYNOPSYS INC.: Faces DE Suit Over Nassda Corporation Agreement
UNITED STATES: Report Says More Gays Discharged Than Disclosed
XCEL ENERGY: Reaches Settlement For Three Securities Fraud Suits
New Securities Fraud Cases
APOLLO GROUP: Marc Henzel Lodges Securities Fraud Lawsuit in AZ
ATHEROGENICS, INC.: Lasky & Rifkind Lodges Securities Suit in NY
ATHEROGENICS INC.: Marc Henzel Lodges Securities Suit in S.D. NY
ATHEROGENICS INC.: Murray Frank Launches Securities Suit in NY
CHINA AVIATION: Marc Henzel Lodges Securities Lawsuit in S.D. NY
CITADEL SECURITY: Charles J. Piven Lodges Securities Suit in TX
CITADEL SECURITY: Federman & Sherwood Lodges Stock Fraud in TX
CITADEL SECURITY: Schatz & Nobel Lodges Securities Suit in TX
CITADEL SECURITY: Schiffrin & Barroway Lodges Stock Suit in TX
GEOPHARMA INC.: Pomerantz Haudek Sets Lead Plaintiff Deadline
IPASS INC.: Charles J. Piven Lodges Securities Fraud Suit in CA
IPASS INC.: Milberg Weiss Files Securities Suit Fraud in N.D. CA
IPASS INC.: Schatz & Nobel Lodges Securities Fraud Suit in CA
MEDQUIST INC.: Marc Henzel Launches Securities Fraud Suit in NJ
NEWS CORPORATION: Weiser Law Firm Lodges Securities Suit in NY
OFFICEMAX INC.: Charles J. Piven Lodges Securities Suit in IL
OFFICEMAX INC.: Much Shelist Lodges Securities Fraud Suit in IL
OFFICEMAX INC.: Schatz & Nobel Files Securities Fraud Suit in IL
PRAECIS PHARMACEUTICALS: Marc Henzel Lodges MA Securities Suit
TASER INTERNATIONAL: Chitwood & Harley Lodges Stock Suit in AZ
TASER INTERNATIONAL: Lasky & Rifkind Files Securities Suit in AZ
SILICON IMAGE: Marc Henzel Lodges Securities Lawsuit in N.D. CA
SIRVA INC.: Marc Henzel Lodges Securities Fraud Suit in N.D. IL
SWIFT TRANSPORTATION: Marc Henzel Lodges Securities Suit in AZ
TRIPATH TECHNOLOGY: Marc Henzel Files Securities Suit in N.D. CA
*********
ALPHARMA INC.: Plaintiffs Appeal Dismissal of NJ Securities Suit
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Plaintiffs filed an appeal of a lower court ruling upholding the
dismissal of the securities class action filed against Alpharma,
Inc., two of its board members, one of whom is an officer, and
two of its former officers.
The suit was initially filed in the United States District Court
for the District of New Jersey on behalf of all persons who
acquired the Company's securities between April 28, 1999 and
October 30, 2000. The class action complaint alleges that,
among other things, the plaintiffs were damaged when they
acquired the Company's securities because, as a result of
alleged irregularities in the Company's Animal Health business
in Brazil, allegedly improper revenue recognition practices and
the October 2000 revision of its financial results for 1999 and
2000, the Company's previously issued financial statements were
materially false and misleading, thereby artificially inflating
the price of the Company's securities.
The complaint alleges violations of Sections 10(b), 20(a) and
Rule 10b-5 of the Securities and Exchange Act of 1934. The
plaintiffs seek damages in unspecified amounts. The Company
moved to dismiss the complaint on legal grounds and the District
Court granted its motion with prejudice as to all defendants.
The plaintiffs filed a motion for reconsideration with the
District Court and the District Court affirmed its earlier
dismissal.
The plaintiffs have appealed the Court's decision to the Third
Circuit Court of Appeals. All permitted briefs have been filed
with the Third Circuit. Additionally, the Company has filed a
claim on its own behalf and on behalf of each of the named
individual defendants under its directors' and officers'
insurance policies and believes that insurance coverage exists
to the extent of the policy limits for the costs incurred in
defending the claims and any adverse judgment or settlement,
subject to the terms, conditions and exclusions of the relevant
insurance policy.
The suit is styled "KOLLANDER v. ALPHARMA INC., et al, case no.
2:00-cv-05508-JAG," filed in the United States District Court
for the District of New Jersey under Judge Joseph A. Greenaway.
Lawyer for the plaintiffs is Janette S. Levey, 1485 Teaneck Road
Suite 300, Teaneck, NJ 07666, Phone: (201) 837-1090
ALYON TECHNOLOGIES: MI AG Joins Settlement Over Consumer Fraud
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Acting on approximately 175 consumer complaints, Michigan
Attorney General Mike Cox has joined a multi-state settlement
requiring adult Web sites change their billing practices to keep
children from accessing the sites.
Consumers claimed they were billed $4.99 per minute by Alyon
Technologies for access to adult Web sites they neither visited
nor agreed to purchase. In some cases, clicking on an innocent
looking pop-up window triggered the download of adult material.
In others, children were exposed to adult sites without parental
permission, and parents were later billed.
"This case serves as a reminder to all Michigan parents that we
must be vigilant about our children's Internet use," said AG
Cox. "Unauthorized or inadvertent access to adult Web sites can
and does occur."
A consent order filed in Ingham County Circuit Court requires
Alyon Technologies, Inc., of Secaucus, New Jersey, Telcollect,
Inc. of Norcross, Georgia, and Alyon CEO Stephane Touboul to
make significant changes to their practices and to pay Michigan
and 22 other states $285,000 to settle claimed violations of
state consumer protection laws. The defendants deny all
allegations of wrongdoing.
The provisions contained in the settlement include:
(1) Improved procedures by Alyon to better ensure that only
adults authorized to incur charges are on the other end
of the modem before connecting them to adult material
or starting the clock on per- minute charges.
(2) Alyon will provide consumers with a free utility
program they can download to remove all modem dialer
software deposited by their clients, the adult Web site
operators.
(3) Alyon will require the adult Web site operators to
refrain from using potentially deceptive methods to
download modem dialer software onto consumers'
computers.
(4) Consumers billed by Alyon for videotext services used
on or before June 15, 2003, who disputed the bills with
Alyon before January 15, 2004, and did not pay them,
will receive credits for the full amount of the bill.
Alyon will provide cash refunds to eligible consumers
who previously paid disputed Alyon charges and filed a
written complaint with the Attorney General by January
15, 2004.
Consumers billed for charges allegedly incurred before June 15,
2003 who did not pay or dispute the charges with Alyon and who
do not qualify for an automatic bill credit will still have an
opportunity to request a credit of disputed charges. However,
they must follow a procedure for making such a request, which
includes returning a completed affidavit to Alyon. Alyon must
receive the affidavit no later than 45 days from the date
contained on the first bill sent by or on behalf of defendants
after entry of the consent order with the Court. The Michigan
consent order was filed on January 13, 2004 in Ingham County
Circuit Court.
Consumers may find additional information, including affidavits,
on the Attorney General's Web site: http://www.michigan.gov/ag.
Consumers may also call the Consumer Protection Division's
toll-free number, 1-877-765-8388.
CAMELOT DESSERTS: Recalls Mini Pies Due To Undeclared Allergens
---------------------------------------------------------------
Camelot Desserts, Sugar Land, Texas, has issued a voluntary
recall of all lots of Camelot Desserts Caramel Apple Cheese
Streusel Mini Pies, due to the presence of an undeclared
allergen. The product is made with a known allergen (eggs),
which is not included in the ingredient listing for the product.
Persons who have an allergy to eggs run the risk of a serious or
life-threatening allergenic reaction if they consume this
product.
The product being recalled is packed in single units of 8.5
ounces with a UPC of 7 15432 42571 9. "Mini Pies" without the
egg ingredient listed on the label and with no lot number are
the subject of this recall.
The product being recalled was shipped to retail stores in the
Northeastern part of the country including New York, New Jersey,
Pennsylvania, Maryland, and Connecticut. No illnesses or
allergenic reactions have been reported. Consumers who have
purchased this product should return it to the retailer for a
full refund. Consumers with questions about the recall may call
Camelot Desserts at 281-240-1200.
The problem was discovered through an internal audit. In the
future, the product will be distributed with the correct
ingredient listing and with an identifiable lot number on the
retail package.
Camelot Desserts is taking this voluntary action to ensure the
safety of its consumers and is working closely with the U.S.
Food & Drug Administration in the recall process. ; Camelot
Desserts is committed to the quality and safety of its products
and sincerely regrets any inconvenience that this incident may
have caused.
ELI LILLY: Sued For Withholding Vital Prozac Info in Montreal
-------------------------------------------------------------
A class action lawsuit was filed before the Superior Court in
Montreal alleging that Eli Lilly has withheld vital information
on the safety of Prozac, its flagship drug for years, the CNW
Telbec reports.
The Indianapolis based drug maker completely vindicated the
British Medical Journal, which it had charged earlier with
misleading its readers, when it posted a document on its website
called Annotations. Eli Lilly had been invited on numerous
occasions to answer whether a document called Summary of a
preliminary analysis of clusters of adverse events based on
pooling data from multiple studies was authentic and whether it
had been released to health authorities around the world.
Eli Lilly confirmed the authenticity of the document and
implicitly admitted that it had never been released to health
authorities, including the FDA, or anyone else. The document
consisted of data stemming from numerous studies conducted by
Eli Lilly and that showed that Prozac caused activation in 38%
of its users compared with 19% with placebo and 4% for
Tricyclic, a then well known drug in the treatment of
depression.
When Eli Lilly representatives attended the FDA hearings on the
safety of Prozac in 1991, they had known the existence of the
study for years but failed to disclose it to the FDA, in the
word of the lead plaintiff's attorney, "lest it should warrant a
much stringent warning on the label of the drug with regard to
its safety, thereby seriously hampering Eli Lilly's efforts to
market its new drug as effective and safe." In the words of
Serge Petit of the law firm Petit Desjardins based in Montreal,
Canada, that represents the lead plaintiff "such a likelihood
was looming large since Eli Lilly knew that if doctors had been
made aware that Prozac, back then being introduced as the new
kid on the block, caused activation in 38% of its users compared
with 19% of patients taking a placebo and 4% of those taking a
drug then well known to doctors, Tricyclic, they would certainly
have hesitated before prescribing Prozac. It was nearly a ten
folds increase in activation compared with the other drug they
could prescribe."
The lead plaintiff contends that the reason why Eli Lilly failed
to disclose the document to Health authorities was that it would
have placed another study, that consisted of a pooling of what
is called spontaneous reports and showed alarming increases in
suicide attempts and other violent acts in patient using Prozac
as compared with four other drugs, in a totally new perspective
and prevent it from being dismissed by FDA and Eli Lilly as
inconclusive. To Serge Petit "had the study on activation and
the one on spontaneous reports been put side by side before the
FDA, Eli Lilly would have faced an uphill battle as to the
safety of its drug".
The class action contends that Eli Lilly misled health
authorities around the world and therefore the millions of users
of its drug Prozac around the world as to the safety of its drug
by failing to disclose the said document.
To Serge Petit, "the passage of time cannot condone Eli Lilly's
behavior and it must be held accountable for circumventing the
safeguards that have been put in place to protect the public
health." The lead plaintiff is seeking $10,000 in punitive
damages and $5 000 for herself and each member of the group from
Eli Lilly for misrepresenting the safety of its drug.
For more details, contact Serge Petit by Phone: 514-842-5880 or
by E-mal: spetit@spetit.qc.ca.
ERON MORTGAGE: Executives Fraud Trial To Proceed in Canada Court
----------------------------------------------------------------
Vancouver-based Eron Mortgage Corporation's two top executives
are about to go on trial in B.C. Supreme Court before Justice
Mary Ellen Boyd, who is hearing the case without a jury, for
fraud, breach of trust and misappropriation of funds in a case
that's expected to last a year or more and which has also caused
investors losses estimated at around $170 million, CP Business
News reports.
Though Eron President Brian Slobogian and Vice-President Frank
Biller were initially charged with 33 counts each, the charge
sheet has been trimmed down and the evidence will cover only a
handful of Eron's 47 real estate developments in British
Columbia, Alberta and the United States.
Defense strategies aren't clear but Mr. Biller, who was just 23
when he teamed with Mr. Slobogian in 1993, argued before the
B.C. Securities Commission that he was unaware the projects he
was pitching enthusiastically to investors were over-mortgaged.
However, James Tindle, onetime head of the Eron Lenders'
Committee, whose once comfortable retirement plans, have been
pared down substantially after the mortgage investment company
collapsed, is cynical about whether he or Eron's other investors
will get justice now. He told the CP Business News, "It's
finally coming to trial, which is long overdue. It points out
the fact that our judicial system is very weak and very
convoluted."
Dr. Tindle criticized why has it taken seven years for the case
to come to trial. "It's ridiculous," he says, "They've already
been to trial and a whole bunch of people have been sentenced
and are serving their time in jail."
Dr. Tindle, who's likely on the Crown's 300-name witness list,
also doesn't expect Mr. Slobogian and Mr. Biller to be treated
harshly if they're convicted. He told the Business News the
justice system is soft on white-collar crime, saying "I don't
have a lot of confidence anything severe is going to happen to
them."
Eron Mortgage, which flourished for a half-dozen years in the
1990s by selling mortgages on large property developments as
investment instruments, is perhaps the largest, most complex
criminal fraud case in B.C. history and one of the biggest in
Canada. Its clients fronted cash for real estate projects and
ostensibly earned interest at rates up to 24 per cent a year.
The Crown alleges Mr. Slobogian and Mr. Biller essentially ran
Eron like a giant Ponzi scheme, remortgaging properties as many
as four times to make those interest payments, all the while
luring in more investors. Mr. Biller was Eron's chief salesman
and Mr. Slobogian was responsible for investing the money.
By the time the B.C. Registrar of Mortgage Brokers suspended the
company's license in October 1997 and its assets were frozen,
Eron collapsed into insolvency like a house of cards. Individual
investors lost as much as $1 million and Mr. Tindle says some
lost their homes too.
He told CP Business News, "One of the tricks the Eron sub-
mortgage brokers did was encourage people to take what equity
they had, refinance their home because the interest against that
loan could be written off against your income taxes, and they
could pay the loan back with the interest they were getting from
the Eron loan." He also adds, "Of course when Eron went down
that cut off their interest payments and they couldn't make
(mortgage) payments, so they lost their homes."
Mr. Biller and Mr. Slobogian eventually declared personal
bankruptcy and succeeded in getting the B.C. government to fund
their defense teams, something else that raises Dr. Tindle's
bile. Mr. Biller's $100,000 bail was posted by former NHL
enforcer Dave (Tiger) Williams, an early Eron investor.
With no chance of recovering their money from Eron or its
principals, investors filed a class-action suit against the B.C.
Registrar of Mortgage Brokers for failing to warn them about its
probe into the company. They won in B.C. Supreme Court, but the
government successfully appealed and the Supreme Court of Canada
finally quashed the suit. It ruled regulators have no
responsibility to warn investors about investigations into the
companies they monitor. Behind the shock of Eron's massive
losses, there was some whispering that its investors were partly
to blame for greedily accepting the company's inflated promises.
In its November 1999 report, however, the B.C. Securities
Commission put the responsibility entirely on the two defendants
after extensive hearings that included tales of lavish spending
and sloppy bookkeeping. The commission found them guilty of
fraud and levied a total of $1.8 million in fines. Mr. Slobogian
was issued a lifetime trading ban and Mr. Biller a 10-year ban.
The evidentiary burden will be higher in the criminal case,
which begins Monday with several weeks of legal arguments known
as voir dire. One element of the voir dire will look at whether
any evidence from the securities commission proceedings can be
admitted at the trial, since a 1995 Supreme Court of Canada
decision arising from another B.C. securities case placed
restrictions on how such evidence can be used in a criminal
trial.
The second issue in the voir dire stems from the Crown's desire
to get evidence from Eron's former real estate lawyers about
titles they registered and information connected with the
company's financings, information that might be covered by
solicitor-client confidentiality.
FANNIE MAE: OH Gets Lead Plaintiff Status in Shareholders' Suit
---------------------------------------------------------------
The state of Ohio has been named lead plaintiff in a class
action lawsuit on behalf of shareholders of the Federal National
Mortgage Association, better known as Fannie Mae, the American
City Business Journals Inc. reports.
According to Attorney General Jim Petro, being lead plaintiff
will give the state more control over the conduct of the
lawsuit, which claims that Fannie Mae's investors lost money
after the company's management used improper accounting
practices to inflate the company's stock.
The company said it would have to restate earnings since 2001,
which might lead to as much as $9 billion in losses. Fannie
Mae's stock tanked after losses came to light, Mr. Petro said.
The attorney general had filed the suit on behalf of Ohio's
public pension funds, which invested in Fannie Mae. The class
action suit is open to anyone who invested in Fannie Mae between
October 11, 2000 and September 22, 2004. He had launched an
investigation into Fannie Mae in September, after suing the
Federal Home Mortgage Co., or Freddie Mac, in 2003. Both
companies are federally chartered corporations that provide
money for home loans.
GEMSTAR-TV GUIDE: Settlements Reached With Two Former Executives
----------------------------------------------------------------
Documents filed in federal court revealed that two former
Gemstar-TV Guide executives charged with inflating the company's
revenues by nearly $250 million have reached proposed deals to
settle federal fraud charges though terms of the settlement were
not released, the Associated Press reports.
The Securities and Exchange Commission had accused Former CEO
Henry Yuen and ex-chief financial officer Elsie M. Leung of
fraud, the two had left Gemstar-TV Guide in November 2002 during
a restructuring that followed an audit showing some revenues
were overstated. U.S. District Judge Mariana Pfaelzer has
agreed to stay a trial for Mr. Yuen and Ms. Leung scheduled to
begin January 18 due to the proposed settlement.
The SEC in 2003 had charged both executives with overstating
revenues from March 2000 through September 2002 to meet
ambitious growth projections. Gemstar-TV Guide last year agreed
to pay $67.5 million in cash and stock to settle class-action
shareholder lawsuits stemming from the accounting scandal and
also agreed to pay $10 million to settle federal charges.
Former Gemstar-TV Guide co-president Peter Boylan in August 2004
agreed to pay $600,000 to settle a federal lawsuit over the
accounting irregularities. Mr. Boylan also agreed to an
injunction prohibiting him from committing future violations and
agreed to repay the SEC $300,000 and pay a $300,000 civil
penalty.
Gemstar-TV Guide licenses technology to cable television
companies and makers of TV sets and set-top boxes for
interactive program guides.
ILLINOIS: Firms To Plead For Tort Reform in Committee Hearings
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A group of Illinois' largest job providers including Allstate,
Bank One, Baxter, State Farm, and Walgreen Co. have joined
together to plead for a change in the way Illinois judges handle
class actions, which is scheduled to be heard in the state
Supreme Court Rules Committee hearing in Chicago next week,
Madison County Record reports.
Modeled after federal law, their proposal called Rule 225 would
require a judge to conclude that a class action lawsuit is the
best method for resolving a dispute before allowing it. That is
class action lawsuits must be an option of last resort for
judges, not first. They argue that there's no need for a legal
bazooka when a slap on the wrist will do.
In Rule 225's crosshairs are renegade courtrooms like that of
Third Circuit Court Judge Nicholas Byron. He and judges like
him, according to the report, are accountable for Illinois'
climb in class action lawsuits because they consistently dis
defendants, giving plaintiff's lawyers an unfair advantage.
However, courts and judges aside, it is really the anatomy of
most class action cases that's so disturbed so much of the
general public. Enterprising lawyers dream up a "wrong" that
gives them an angle to sue a deep-pocketed company, recruiting a
typically down-on-their-luck "victim" to serve as a "named
plaintiff" and represent the "class." Rather than risk getting
rung up by a jury, the company cuts its losses and settles. Then
the named plaintiff gets thousands, the class gets coupons, and
the rest of us get "justice," and the plaintiff's lawyers get
millions, the reports said.
Chicago attorneys Michael Pope and Steven Pflaum of McDermott
Will & Emery, who helped draft Rule 225, told the Record "Doing
nothing about that (class action) problem is not a viable
option. The (class action) problem is sufficiently pervasive
that it threatens to taint the national reputation of Illinois
courts."
ILLINOIS: Judge Rules That Sex-Offender Lockups Are Acceptable
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A federal judge in Illinois has ruled that conditions at the
state's lockup for violent sex offenders are now acceptable
after recent policy changes at the Joliet facility, the Chicago
Daily Southtown reports.
The changes were brought about by a class-action lawsuit that
was filed by the American Civil Liberties Union on behalf of the
facility's residents, the state's most dangerous sexual
predators who have been ordered held there after completing
their prison sentences, claimed security restrictions were too
harsh and treatment inadequate.
The ACLU, which claimed that residents were strip-searched after
every visit with family members and attorneys, and subjected to
severe lock-down procedures if they misbehaved, insists that the
facility should be run more like a residential mental-health
center than a maximum-security prison.
In the days leading up to the bench trial in the case last year,
facility officials made several policy changes including: an
expensive screening machine was installed that won't require
residents to undress, and the lock-down procedures have been
eased.
Though the ACLU wanted a court order to ensure the new policies
stayed in place, U.S. District Judge Harry Leinenweber ruled
that facility officials, "albeit under the specter of litigation
and an impending trial," made an honest effort to improve
conditions and would likely stick to the changes, thus he did
not issue such a court order. The judge, however ruled against
further relaxing security, and cited the case of former facility
resident and alleged serial killer Paul Runge, who briefly
escaped custody while being transported between Joliet and a
Chicago courthouse. Mr. Runge, an Oak Forest native, is now back
in regular jail awaiting trial on charges he killed six women
and a young girl before he was admitted to the sex offender
facility.
Upon the issuance of the court decision, ACLU attorney Benjamin
Wolf said in a statement, "We are disappointed that the court
appears to accept the notion that patients housed at the
(facility) can continue to be held in conditions that are
demonstrably more harsh than the conditions they experienced
while incarcerated - even though the individuals have completed
their criminal sentences."
The ACLU also had charged that lockup psychologists provided
inadequate treatment and shrugged off the state-law goal that
residents deemed safe should ultimately be released. Since the
program started five years ago, only 10 residents have been
deemed unlikely to re-offend and won release - and some of them
got out only by securing court orders that trumped the
recommendations of the facility's doctors.
However, Judge Leinenweber concluded that sex offenders are
"notoriously difficult to treat" and that clinicians at the
facility are faced with the "unenviable task" of trying to treat
the residents so they may be released, while at the same time
trying to be completely certain they are no longer dangerous.
"The latter task is not to be taken lightly," Judge Leinenweber
wrote, "as the recidivism rates of sex offenders are tragically
high."
ILLINOIS: Judge Upholds Court's Ruling On Milk Price-Fixing Case
----------------------------------------------------------------
An Illinois appellate court has upheld a Cook County Circuit
Court decision that Jewel and Dominick's did not fix the price
of milk at artificially high prices, the Chicago Tribune
reports.
The Court ruled that Circuit Judge John Morrissey was correct
when he ruled that the two grocery store chains "competed, not
conspired" in the sale of milk. The class-action suit, which was
filed on behalf of 12 milk drinkers and their families, alleged
that the two chains conspired to fix milk prices between 1996
and 2000, cheating customers of up to $125 million. They had
sought $400 million in damages.
KENTUCKY: Fen-Phen Victims Sue Over Suit Settlement Distribution
----------------------------------------------------------------
Thirty-four Kentuckians who shared in a multimillion-dollar,
class-action settlement against the maker of the diet drug fen-
phen say their former lawyers deceived them, the Cincinnati
Enquirer reports.
The group alleges that the lawyers who handled the settlement in
May 2001 didn't tell them that at least $18 million was given to
The Kentucky Fund for Healthy Living, a nonprofit corporation
chartered and controlled by the lawyers. The plaintiffs say they
didn't know that millions of dollars had been siphoned into the
nonprofit corporation until last year, since a Boone County
judge ordered the settlement sealed.
Fen-phen was a weight-reduction drug combination popular in the
1990s, which was withdrawn from the market after research showed
that it caused heart-valve problems, since then the manufacturer
has settled claims nationwide.
Victims in the 2001 case want to know why they weren't told of
all of the money and why so much went to the fund. To that
effect, Attorney Angela Ford of Lexington filed a lawsuit in
Fayette Circuit Court on the Kentuckians behalf against four
lawyers including Cincinnati's Stan Chesley, who represented
them in the class-action settlement.
Mr. Chesley, told the Cincinnati Enquirer everything was done
correctly, as the Boone County judge ordered in 2001. He adds,
"In my view, it is a spite suit. (Ford) can bring a lawsuit
anywhere for $37. It is a spite suit looking for some kind of
settlement. There is no merit." He, however, if the case moves
forward, he thinks that it should be in Boone County, where the
fen-phen claims were settled. "Am I concerned? No," he said.
"This suit was brought by someone who wants to feel important."
The other defendants, Lexington lawyers Shirley Cunningham Jr.,
William Gallion and Melbourne Mills Jr., were still unavailable
for comment.
Court papers do not say who asked Boone Circuit Judge Jay
Bamberger, now retired, to seal the settlement or why. Ms. Ford
says her clients from Paducah to London were told that the
settlement was sealed because the makers of fen-phen didn't want
"bad publicity." Lowell Weiner, a spokesman for Wyeth, the
company that manufactured the weight-loss product, would not
comment.
The only indication of the purpose of the Kentucky Fund for
Healthy Living is a court record saying it is to "make
charitable and other philanthropic contributions to causes which
benefit citizens of ... Kentucky consistent with the purpose and
spirit of the litigation giving rise to the establishment of the
said trust."
The same court document says the fund's trustees shall have
complete discretion with regard to management of the assets of
the trust. The only exception was that no more than 30 percent
of the assets available for distribution on an annual basis
should be used to pay fees and expenses incurred by the
trustees.
Officers and directors of the fund are Mr. Cunningham, Mr.
Mills, Mr. Gallion and Mark Modlin, a Northern Kentucky trial
consultant who was not a defendant in the suit. There is no
phone listing for the non-profit group, and its address is
listed as the law offices of Mills and Gallion.
MIRANT: Settles CA Claims Related 2000 and 2001 Energy Crisis
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Mirant (OTC Pink Sheets: MIRKQ) has entered into a settlement
agreement with California electric utilities and public
agencies, including the state's Attorney General, to resolve
various claims against Mirant and its subsidiaries related to
California's energy crisis in 2000 and 2001.
The settlement agreement was approved on January 13, 2005 by the
California Public Utilities Commission (the "CPUC"). It still
must be approved by the Federal Energy Regulatory Commission
(the "FERC"), and the two respective bankruptcy courts
overseeing the Chapter 11 proceedings of Mirant, and Pacific Gas
& Electric Co. ("PG&E"), one of the utilities involved in the
settlement.
"We are pleased to reach this comprehensive settlement and put
these matters behind us. It is important for Mirant to focus on
its future as we progress toward emerging from bankruptcy as a
new company," said Curt Morgan, Executive Vice President and
Chief Operating Officer, Mirant. "We expect this settlement will
provide the foundation for a positive relationship between
Mirant and the State of California. Importantly, the settlement
maintains our current operations in California and preserves the
potential for future expansion. Mirant is confident that
California will continue on its path to developing a vibrant and
fair wholesale energy market, and we look forward to
participating in these markets to meet the growing needs of
California consumers."
Added Morgan, "All parties worked diligently to reach this
settlement, including the FERC staff who were instrumental in
bringing the parties together."
Mirant expects to file its plan of reorganization with the U.S.
Bankruptcy Court later this month and has set a timetable to
emerge from Chapter 11 in mid-2005.
"Mirant continues to believe that it did not violate any laws in
its power sales transactions in California. However, the parties
with whom Mirant has entered into this settlement were asserting
claims against Mirant and its subsidiaries for billions of
dollars. By settling those claims on an equitable basis --
similar in scale to settlements agreed to by other energy
providers in California -- we have removed significant financial
uncertainty from Mirant's economic future and thus eliminated a
potential obstacle to achieving an acceptable plan of
reorganization in our Chapter 11 proceeding," said Doug Miller,
Mirant's Senior Vice President and General Counsel.
The settlement agreement states that Mirant's subsidiary Mirant
Americas Energy Marketing, LP ("MAEM") will assign $283 million
of unpaid receivables ($320 million before adjustments directed
by the FERC) to the California parties, which consist of PG&E,
Southern California Edison Co., San Diego Gas & Electric Co.,
the California Attorney General, the CPUC, the California
Department of Water Resources (the "DWR") and the California
Electricity Oversight Board. These unpaid MAEM receivables are
to be divided among the California parties and any other market
participants that choose to opt into the settlement.
In addition to the transferred receivables, the California
parties will receive an allowed, unsecured claim of $175 million
against MAEM. The DWR will receive an additional allowed
unsecured claim against MAEM of $2.25 million. When Mirant
emerges from Chapter 11, those claims will be compensated on the
same basis as other pre-petition claims against MAEM.
The California settlement also resolves all claims asserted by
PG&E against Mirant relating to refunds potentially owed with
respect to sales by Mirant under reliability-must-run
agreements. Pursuant to the settlement, PG&E will receive
allowed, unsecured claims against Mirant that will result in a
distribution of proceeds of $63 million under Mirant's plan of
reorganization. In addition, either Mirant's subsidiaries will
transfer ownership of the partially completed 530-megawatt gas-
fired Contra Costa Unit 8 power plant and associated turbines to
PG&E or PG&E will receive an additional amount of as much as $85
million. Mirant and PG&E also agreed to enter into long-term
power purchase agreements that will allow PG&E to dispatch and
receive the output of certain electric generating units owned by
Mirant's subsidiaries in Northern California.
Under the settlement agreement, once it is fully approved, the
California parties joining in the settlement will release
Mirant, MAEM and Mirant's California subsidiaries from liability
for claims related to transactions in the western energy markets
from January 1, 1998 to July 14, 2003, including all claims for
refunds asserted by the California parties in proceedings
pending before the FERC. The California parties also release the
Mirant parties from all claims, including claims filed at the
FERC seeking refunds, related to a 19-month power supply
contract between MAEM and the DWR that expired in December 2002.
In addition, the California parties receiving the MAEM
receivables will assume MAEM's obligation to pay refunds
determined by the FERC to be owed by MAEM to other parties for
transactions in the California Independent System Operator
("CALISO") and the California Power Exchange ("CALPX") markets
during the period from October 2, 2000 to June 20, 2001 (the
"refund period"). MAEM will retain liability for refunds
determined by the FERC to be owed to parties other than the
California parties for transactions in the CALISO and CALPX
markets outside the refund period. The California Attorney
General also will dismiss four lawsuits filed against Mirant and
its subsidiaries in the California state and federal courts.
Mirant's subsidiaries retain ownership of all the operational
power plants they own in California.
While resolving all claims made by the California parties, the
settlement does not cover ratepayer class action suits against
Mirant, or claims by the CALISO, the CALPX or other market
participants that are not parties to the settlement for periods
outside the refund period. However, it is expected that the
FERC's approval of the settlement will cause the CALISO and the
CALPX to modify their books to reflect the terms of the
settlement, which should significantly reduce their claims in
Mirant's bankruptcy proceedings. Furthermore, in December 2004,
the court in Mirant's bankruptcy proceedings orally ruled that
it would deny class status with respect to the claims filed in
the bankruptcy proceedings by the plaintiffs in the ratepayer
suits, which would substantially reduce the potential exposure
of Mirant and its subsidiaries with respect to those claims by
limiting the claims to the damages, if any, incurred by the
individual plaintiffs.
Mirant is a competitive energy company that produces and sells
electricity in the United States, the Caribbean, and the
Philippines. Mirant owns or leases more than 17,000 megawatts of
electric generating capacity globally. The company operates an
asset management and energy marketing organization from its
headquarters in Atlanta. For more information, please visit
http://www.mirant.com.
NATIONAL RESEARCH: Texas AG Announces Student Privacy Settlement
----------------------------------------------------------------
Texas Attorney General Greg Abbott announced an agreement with a
national student survey organization that will protect Texas
high school students' privacy by informing them the personal
information collected may be sold for commercial solicitation
purposes, and giving them and their parents the opportunity to
opt out of the survey.
Texas joined 41 other states in the agreement with the National
Research Center for College and University Admissions (NRCCUA).
The company, which administers surveys in high schools across
the country, collected certain personal information from
students nationwide and promised the data would be used only for
college or career recruitment purposes. In fact, NRCCUA sold the
information to for-profit entities that in turn tried to sell
students educational and non-educational products and services.
Texas investigated the actions as a violation of the Texas
Deceptive Trade Practices Act.
"Students and their parents have a right to know how their
personal information will be used, especially when it is
collected in a school setting," said Attorney General Abbott.
"This agreement will provide Texas high school students with
greater protection and will affirm the rights of parents as they
seek to safeguard their children."
NRCCUA, a not-for-profit corporation headquartered in Lee?s
Summit, Mo., also stated or implied to students the survey was
funded solely by educational institutions. It was, however, also
funded by two for-profit companies - American Student List and
Educational Communications, Inc. - which used the data for
commercial solicitations. As part of the agreement, the company
agreed to stop misrepresenting how the survey is funded. NRCCUA
also agreed to pay participating states $300,000 to cover
attorneys' fees, investigative costs, consumer education and
other expenses. Texas will receive $10,000 of that amount.
NRCCUA provides surveys to U.S. high school teachers and
guidance counselors and requests they be given to students to
complete. In 2001, NRCCUA collected personal data from more than
2 million high school students nationwide. That information
could include a student's name, address, gender, grade point
average, date of birth, racial and ethnic background, and
religious preference.
NORFOLK SOUTHERN: Residents Launch Lawsuits Over SC Train Crash
---------------------------------------------------------------
Evacuated Graniteville, South Carolina residents filed lawsuits
against railroad company Norfolk Southern, a week after a train
crash spilled a toxic chemical, killing nine people and injuring
hundreds in South Carolina, the Associated Press reports. The
evacuated residents, some not yet able to returns to their
homes, allege negligence and nuisance, the Associated Press
reports.
About 5,400 residents were evacuated from a one-mile radius of
the crash site after deadly chlorine gas was released from a
tanker and seeped into the neighborhoods, businesses and schools
near the site of the wreck. The residents who live along the
outer edges of that zone were allowed to return Thursday, and
about 1,500 more went home Friday. Aiken County Sheriff's Lt.
Michael Frank said about 1,900 residents were still displaced,
but some of those can return.
Attorney Lew Garrison told AP, "This tragedy was avoidable, and
the community should have been spared the profound grief of nine
fatalities and massive personal losses. The thousands of
citizens bearing this grief and loss should have their fair and
prompt day in court."
At least two lawsuits are seeking class action status, which
needs a judge's approval. One of the lawsuits says Norfolk
Southern failed to properly train its employees, conduct a
timely evacuation and inspect a switch on the track.
Company Chief Executive Officer David Goode refused to comment
directly on the suit, according to AP, but issued a statement
saying, "The site of the January 6 accident has been
substantially cleared, and remediation and restoration are under
way. On behalf of all of the Norfolk Southern family, I want to
restate our commitment to the citizens of Graniteville and Aiken
County to do everything in our power to help them recover. We
again offer our deepest sympathy to the families of those who
lost their lives."
Investigators have preliminarily determined that a three-man
crew that parked a two-car train on a spur rail failed to switch
the tracks back to the main rail, which sent an oncoming train
into the parked train.
Attorney Michael Leizerman said many residents started
contacting lawyers after Norfolk Southern required signatures on
expense checks that waived any future claims. He said residents
were concerned that if they signed the check they wouldn't get
any more money.
Norfolk Southern has since removed the language from the checks,
but Mr. Leizerman, whose firm handles railroad litigation and
has represented many clients in lawsuits against Norfolk
Southern, said some residents distrust the company. He adds, "At
first they were happy to be alive, but then they started really
questioning things." Furthermore, Mr. Leizerman, stated that
residents are concerned about lower property value, property
damage, other losses and emotional distress.
Mr. Garrison said there's no way to know how much a lawsuit
would seek in damages because several people still are
hospitalized and many haven't returned home. "There's a lot more
to this disaster, both in terms of economic and environmental
impact, that are just not known at this point," he said.
QWEST COMMUNICATIONS: Court Motion Filed Over Anschutz Materials
----------------------------------------------------------------
In a motion filed in Denver Federal Court, plaintiffs in a class
action securities fraud lawsuit against Qwest Communications
alleged that founder Phil Anschutz and director Craig Slater
have repeatedly refused to produce documents initially requested
11 months ago, the Rocky Mountain News reports.
A lawyer for the shareholders have asked a judge to order the
Colorado billionaire and his associate to produce the materials
requested, which include diaries, notes and all communications
with other defendants, outside counsel and Qwest's former
auditor Arthur Andersen.
However, Anschutz officials downplayed the dispute, saying that
around the same day the plaintiffs filed their motion, Mr.
Anschutz attorneys had mailed a letter saying the documents
would be forthcoming. According to Anschutz attorney Bruce
Black, "We told them we were producing all but a couple of
documents that we view as personal, irrelevant or harassment."
Documents not being turned over include personal tax returns,
Mr. Black adds.
The document issue comes as the Denver telco is trying
desperately to reach a "global settlement" that would resolve
all shareholder lawsuits stemming from the accounting scandal
under former Chief Executive Joe Nacchio, who along with Mr.
Anschutz and others are also accused of misleading investors
about the firm's financial condition, allegations they
vehemently deny.
Qwest agreed last fall to pay $250 million to settle accounting
fraud allegations with the Securities and Exchange Commission,
but the shareholder lawsuits linger. Though erasing $2.5 billion
worth of inflated revenues and profits from its 2000 and 2001
books, the telco is still under criminal investigation, and the
SEC and Justice Department still are investigating former Qwest
executives, including Mr. Nacchio.
Federal court records show the civil class-action plaintiffs,
represented by Lerach Coughlin Stoia Geller Rudman & Robbins of
San Diego, sent letters to an Anschutz attorney last December 8,
16 and 20 requesting documents or a meeting. Mr. Anschutz only
produced materials related to one of 23 categories of requests.
In the December 20 letter, Lerach attorney Ray Mandlekar warned
the "unjustified refusal" to produce the additional documents
left him little course but to file a motion in court to compel
such production.
However, an Anschutz spokesman Jim Monaghan said that officials
weren't trying to stall and noted that a freeze on discovery had
been lifted only November 30, and then Anschutz attorneys had to
decide which information was legitimate to disclose.
SONY PICTURES: CA Court Preliminary Approves Rezec Settlement
-------------------------------------------------------------
The Los Angeles County Superior Court preliminarily approved
settlement of a pending class action captioned as Rezec v. Sony
Pictures Entertainment Inc. (Case No. BC 251923) regarding
allegations that Defendant advertised motion pictures using
quotations erroneously attributed to "David Manning" of The
Ridgefield (Connecticut) Press and endorsements by persons who
were Defendant's employees. Defendant has denied liability, but
has agreed to settle this action to avoid the cost and
uncertainty of litigation in exchange for Settlement Class
Members' release of claims as provided in the Settlement
Agreement and payments up to $1,500,000.
The Settlement Class includes all persons who, between August 3,
2000 and October 31, 2001, purchased a ticket to the theatrical
exhibition of Hollow Man, Vertical Limit, A Knight's Tale, The
Animal, or The Patriot in the United States. To receive a more
detailed summary of the terms and conditions of the settlement,
a claim form, an exclusion request form, or to learn how and
when to lodge an objection to the settlement, visit the Motion
Picture Advertising Class Settlement website at
www.gilardi.com/rezec. Claims must be submitted on a Claim Form
downloaded from the website located at www.gilardi.com/rezec and
must be filed by July 15, 2005.
To be excluded, you must submit a request for exclusion that
includes your name, address, telephone number and your desire to
be excluded from the Settlement Class, and references "Motion
Picture Advertising Litigation" to Gilardi & Co., LLC, P.O. Box
8060, San Rafael, California 94912-8060, postmarked by March 15,
2005, or it will not be accepted or visit their Web site:
http://www.gilardi.com/rezec.
A hearing to determine whether the settlement should be granted
final approval and the award of attorneys' fees and costs will
be held before Judge Charles W. McCoy, in Department 323,
Central Civil West Courthouse, 600 S. Commonwealth Avenue, Los
Angeles, California 90005, at 9:45 a.m. on April 15, 2005.
SWITZERLAND: Nazi Victim Compensation List Published Online
-----------------------------------------------------------
The Switzerland-based international team of lawyers representing
the Nazi victims' Claims Resolution Tribunal has published
online a revised list of Swiss bank account owners in a bid to
compensate victims of the Nazis before or during World War II,
the PC Authority reports.
The international claims resolution tribunal had published on
the January 13, a new list of 3100 Swiss bank account owners who
may have been persecuted by the Nazis subsequently losing their
savings.
According to the tribunal, "Individuals who believe that they
are owners or heirs of owners of any of these accounts, and
these accounts only may file a claim and that those listed have
six months from January 13 to make a claim."
The claims process, which is part of a Holocaust Victim Assets
class action in the US District Court that was first, began in
2001 was intended give Nazi victims and any heirs a chance to
claim for assets deposited in Swiss banks in the period before
or during World War II.
In 2000, some 36,000 accounts were identified as being
"probably" or "possibly" owned by victims of the Nazis. A list
was published in 2001 of some 21,000 of those account owners. So
far, a total of some US$230 million has been awarded to about
2800 claimants who could prove they or their family were owed
funds deposited in Swiss banks between 1933 and 1945, when the
war ended.
The tribunal also wrote in the online list, "The 2005 List that
follows presents the names of approximately 2700 account owners
and 400 Power of Attorney holders that were specified in the
Second Memorandum to File and whose publication has now been
approved."
The 2400 account holders were not included in the 2001 list of
names released. The new list also included names of owners of
accounts previously identified in a survey of dormant bank
accounts following a 1962 Swiss decree on assets belonging to
victims of racial, religious or political persecution, the
tribunal said. Certain Polish and Hungarian account owners with
accounts subject to post-war international agreements between
Switzerland, Poland, and Hungary were also included.
Some names had been removed, where account owners were believed
not to be Nazi victims or if the accounts had already been paid,
the tribunal said.
SYNOPSYS INC.: Plaintiffs To File Amended Securities Suit in CA
---------------------------------------------------------------
Plaintiffs are expected to file an amended securities class
action against Synopsys, Inc. in the United States District
Court for the Northern District of California this month.
On August 25, 2004, a class action complaint entitled "Kanekal
v. Synopsys, Inc., et al., No. C-04-3580," was filed against the
Company and certain of its officers alleging violations of the
Exchange Act. The complaint purports to be a class action
lawsuit brought on behalf of persons who acquired Synopsys stock
during the period of December 3, 2003 through August 18, 2004.
The complaint alleges that the individual defendants caused
Synopsys to make false and misleading statements about Synopsys'
business, forecasts, and financial performance, and that certain
Synopsys officers or employees sold portions of their stock
holdings while in the possession of adverse, non-public
information. The complaint does not specify the amount of
damages sought.
In November 2004, the Court appointed a lead plaintiff in the
case. Discovery has not commenced in the case and no trial date
has been established.
SYNOPSYS INC.: Faces DE Suit Over Nassda Corporation Agreement
--------------------------------------------------------------
Synopsys, Inc. was named as a defendant in a class action filed
in the Court of Chancery of the State of Delaware, after the end
of fiscal 2004, and in connection with the Company's December 1,
2004 announcement that we have signed agreements to acquire
Nassda Corporation (Nassda) and to settle all outstanding
litigation between the two companies.
The suit, captioned "Robert Israel v. Nassda Corporation, et.
al., No. 4705695," also named as defendants Nassda and its
directors. The complaint purports to be a class action lawsuit
brought on behalf of shareholders of Nassda, other than the
defendant directors and their affiliates, who allegedly would be
injured or threatened with injury if the proposed acquisition of
Nassda by Synopsys proceeded forward on the terms announced.
The purported class action seeks to enjoin the transaction, or
alternatively, damages. The complaint does not specify the
amount of damages sought.
UNITED STATES: Report Says More Gays Discharged Than Disclosed
--------------------------------------------------------------
The United States military reportedly discharged a higher number
of gay Arabic linguists under its "don't ask, don't tell"
policy, as previously reported, records obtained by the Center
for the Study of Sexual Minorities in the Military asserted,
according to the Associated Press.
The military's "don't ask, don't tell" policy allows gays and
lesbians to serve in the military as long as they keep their
sexual orientation private and do not engage in homosexual acts.
The records reportedly show that the military discharged 20
Arabic and six Farsi speakers between 1998 and 2004. Initially
the military confirmed that 7 translators were discharged from
1988 to 2003 because they were gay. The military did not break
down the discharges by year, but said some, but not all, of the
additional 13 discharges of Arabic speakers occurred in 2004.
The group contends the records show that the military - at a
time when it and U.S. intelligence agencies don't have enough
Arabic speakers - is putting its anti-gay stance ahead of
national security. Aaron Belkin, the center's director, said he
wants the public to see the real costs of "don't ask, don't
tell." "We had a language problem after 9/11 and we still have
a language problem," Belkin said Wednesday.
"The military is placing homophobia well ahead of national
security," Steve Ralls, spokesman for the Servicemembers Legal
Defense Network, a nonprofit group that advocates for the rights
of gay military members, told AP. "It's rather appalling that
in the weeks leading up to 9/11 messages were coming in, waiting
to be translated ... and at the same time they were firing
people who could've done that job."
However, others, like Elaine Donnelly of the Center for Military
Readiness, a conservative advocacy group that opposes gays
serving in the military, said the discharged linguists never
should have been accepted at the elite Defense Language
Institute in Monterey in the first place, AP reports.
"Resources unfortunately were used to train young people who
were not eligible to be in the military," she said.
In the fiscal year ended September 30, 543 Arabic linguists and
166 Farsi linguists graduated from their 63-week courses,
according to a DLI spokesman. That was up from 377 and 139,
respectively, in the previous year. Experts have identified the
shortage of Arabic linguists as contributing to the government's
failure to thwart the Sept. 11 attacks. The independent Sept. 11
commission made similar conclusions.
Ian Finkenbinder, an Army Arabic linguist who graduated from the
Defense Language Institute in 2002, was discharged from the
military last month after announcing to his superiors that he's
gay. Finkenbinder, who said his close friends in the Army
already knew he was gay, served eight months in Iraq and was
about to return for a second tour when he made the revelation
official.
"I looked at myself and said, `Are you willing to go to war with
an institution that won't recognize that you have the right to
live as you want to,'" Finkenbinder, 22, who now lives in
Baltimore, told AP. "It just got to be tiresome to deal with
that - to constantly have such a significant part of your life
under scrutiny."
The Servicemembers Legal Defense Network last month sued the
government on behalf of 12 other gay former military members
seeking reinstatement. They argue that "don't ask, don't tell"
violates their constitutional rights.
XCEL ENERGY: Reaches Settlement For Three Securities Fraud Suits
----------------------------------------------------------------
Xcel Energy Inc. has reached a settlement in three lawsuits,
namely:
(1) The purported class action securities lawsuits that
were brought in U.S. District Court for the District of
Minnesota on behalf of persons who purchased Xcel
Energy's common stock and/or certain series of Senior
Notes of its former subsidiary NRG Energy, Inc.,
between Jan. 31, 2001, and July 25, 2002;
(2) Actions brought on behalf of participants in Xcel
Energy's and its predecessor companies' 401(k) and
Employee Stock Ownership Plans, which alleged
violations of the federal Employee Retirement Income
Security Act of 1974 (ERISA) and which were based on
the same general allegations underlying the securities
litigation; and
(3) A shareholder derivative action - purportedly on behalf
of Xcel Energy and against the directors and certain
present and former officers - which cited essentially
the same circumstances as the securities litigation and
asserted breach of fiduciary duty.
Under terms of the settlements of the securities and ERISA
claims, Xcel Energy's insurance carriers have agreed to pay
$70.5 million and Xcel Energy will pay $17.5 million. Settlement
of the derivative lawsuit involves Xcel Energy's adoption of
certain corporate governance measures and payment of plaintiff's
attorneys' fees and expenses, of which $125,000 will be paid by
Xcel Energy.
"While we continue to believe that the company and the other
defendants acted appropriately, the settlements are the prudent
course for us, considering the inherent risks and substantial
expense of further litigation. We are pleased to have resolved
this issue," stated Richard C. Kelly, president and chief
operating officer of Xcel Energy.
As a result of the three settlements, Xcel Energy will record a
charge to earnings of approximately 3 cents per share for the
fourth quarter of 2004. "Although we haven't completed our year-
end accounting close, we expect our 2004 earnings from
continuing operations to be approximately $1.20 to $1.25 per
share, including the impact of these settlements. In addition,
we have completed five tax audit cycles and are in the process
of finalizing the income statement impact. As a result, we
expect to realize incremental tax benefits, which could cause us
to potentially exceed the high end of our earnings guidance
range," said Kelly.
The securities settlement is dependent upon successful
completion of both other settlements, and all three are subject
to various conditions, including final approval by the U.S.
District Court following notice and hearing. There are no
guarantees that the conditions will be met, including that final
court approval will be obtained. The settlements include no
admission of liability by Xcel Energy or any individual
defendants.
The lawsuits had been consolidated for pretrial purposes as In
Re Xcel Energy Inc., Securities, Derivative and "ERISA"
Litigation, Master File No. C 02-2677.
Shareholders will be mailed settlement information, and members
of the securities class will also be mailed claim instructions,
beginning in January or February 2005. To view the securities
and derivative settlements on the Internet, go to
http://www.xcelenergysettlement.com.All shareholder inquiries
regarding claims should be directed to (866) 890-4859.
New Securities Fraud Cases
APOLLO GROUP: Marc Henzel Lodges Securities Fraud Lawsuit in AZ
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the District of
Arizona on behalf of all who purchased or otherwise acquired
securities of Apollo Group, Inc. (Nasdaq: APOL) from March 12,
2004 through September 14, 2004, inclusive.
The complaint charges Apollo, Todd S. Nelson, Kenda B. Gonzales,
and Daniel E. Bachus with violations of Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. More specifically, the Complaint
alleges that the Company failed to disclose and misrepresented
the following material adverse facts which were known to
defendants or recklessly disregarded by them:
(1) that the Company improperly based recruiter's
compensation on enrollment figures, in violation of
U.S. regulations that forbid schools whose students
receive federal financial aid from tying pay directly
to enrollments;
(2) that as a consequence of the foregoing, defendants were
able to demonstrate dazzling growth at schools such as
the University of Phoenix, even though recruiters
bolstered their numbers by signing up unqualified
students; and
(3) that as a result of the illegal practices, the
Company's earnings and net income were materially
inflated at all relevant times.
On September 15, 2004, the Wall Street Journal published an
article entitled "Will Apollo's Bad Report Card Get Its Shares
Grounded?" The article stated that Apollo engaged in a "culture
of duplicity" in which supervisors improperly lavished money on
sales employees for signing up scores of new students, including
those unable to cut it. This news shocked the market. Shares of
Apollo fell $1.41 per share, or 1.76 percent on September 15,
2004, to close at $78.68 per share.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
ATHEROGENICS, INC.: Lasky & Rifkind Lodges Securities Suit in NY
----------------------------------------------------------------
The law firm of Lasky & Rifkind, Ltd., initiated a lawsuit in
the United States District Court for the Southern District of
New York, on behalf of persons who purchased or otherwise
acquired publicly traded securities of Atherogenics, Inc.
("Atherogenics" or the "Company") (NASDAQ:AGIX) between
September 28, 2004 and December 31, 2004, inclusive, (the "Class
Period"). The lawsuit was filed against Atherogenics, Russell
Medford, Mark Colonnese and Robert Scott ("Defendants").
The complaint alleges that Defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. Specifically, the complaint alleges that
the Company failed to disclose that it had hyped the results of
an inconclusive study of AGI-1067, that the levels of plaque
reduction described by the Company in its original announcement
differed meaningfully from the results achieved by the Cleveland
Clinic, that the Company was rapidly burning cash and that it
would need to raise additional funds, and that the Company
manipulated the study's results in order to enter into a
strategic partnership with a major pharmaceutical company to
complete the commercialization of AGI-1067. When the truth was
revealed the price of Atherogenics shares fell from a close of
$23.56 per share on December 31, 2004 to close at $18.72 on
January 3, 2005.
For more details, contact Lasky & Rifkind, Ltd. by Phone:
(800) 495-1868 or by E-mail: investorrelations@laskyrifkind.com.
ATHEROGENICS INC.: Marc Henzel Lodges Securities Suit in S.D. NY
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the United States
District Court for the Southern District of New York on behalf
of all securities purchasers of the Atherogenics, Inc. (Nasdaq:
AGIX) from September 28, 2004 and December 31, 2004 inclusive.
The complaint charges AGIX, Russell Medford, Mark Colonnese, and
Robert Scott with violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. More specifically, the Complaint alleges that the
Company failed to disclose and misrepresented the following
material adverse facts known to defendants or recklessly
disregarded by them:
(1) that the Company hyped the results of an inconclusive
and limited study of AGI-1067;
(2) that the statistically impressive levels of plaque
reduction, described by AGIX in the initial
announcement, varied significantly from the results
achieved by the Cleveland Clinic;
(3) that the Company was burning cash at a high rate; and
(4) that the Company manipulated the study's results in
order to enter into a strategic partnership with a
major pharmaceutical company to complete the
development and commercialization of AGI-1067.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
ATHEROGENICS INC.: Murray Frank Launches Securities Suit in NY
--------------------------------------------------------------
The law firm of Murray, Frank & Sailer LLP initiated a class
action lawsuit in the United States District Court for the
Southern District of New York, civil action number 05-cv-61, on
behalf of shareholders who purchased or otherwise acquired the
securities of Atherogenics, Inc. ("AGIX" or the "Company")
(Nasdaq:AGIX) between September 28, 2004 and December 31, 2004,
inclusive (the "Class Period").
The complaint charges AGIX, Russell Medford, Mark Colonnese, and
Robert Scott with violations of United States securities laws.
More specifically, the Complaint alleges that the Company failed
to disclose and misrepresented the following material adverse
facts known to defendants or recklessly disregarded by them:
(1) that the Company hyped the results of an inconclusive
and limited study of AGI-1067;
(2) that the statistically impressive levels of plaque
reduction, described by AGIX in the initial
announcement, varied significantly from the results
achieved by the Cleveland Clinic;
(3) that the Company was burning cash at a high rate; and
(4) that the Company manipulated the study's results in
order to enter into a strategic partnership with a
major pharmaceutical company to complete the
development and commercialization of AGI-1067.
For more details, contact Eric J. Belfi or Aaron Patton of
Murray, Frank & Sailer LLP by Phone: (800) 497-8076 or
(212) 682-1818 by Fax: (212) 682-1892 or by E-mail:
info@murrayfrank.com.
CHINA AVIATION: Marc Henzel Lodges Securities Lawsuit in S.D. NY
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the United States
District Court for the Southern District of New York on behalf
of purchasers of China Aviation Oil (Singapore) Corporation Ltd.
(Pink Sheets: CAOLF) publicly traded securities during the
period between February 5, 2004 and November 30, 2004.
The complaint charges China Aviation and certain of its officers
and directors with violations of the Securities Exchange Act of
1934. China Aviation trades in petroleum products, including jet
fuel, gas oil, fuel oil, crude oil, plastics and oil
derivatives.
The complaint alleges that during the Class Period, defendants
issued false and misleading statements regarding the Company's
business and prospects. As a result of the defendants' false
statements, China Aviation shares traded at inflated levels
during the Class Period, whereby the Company's top officers and
directors assisted the Company's parent company/controlling
shareholder in the sale of $120 million worth of its own shares.
The true facts, which were known by each of the defendants but
concealed from the investing public during the Class Period,
were as follows:
(1) that contrary to the Company's prospectus, the Company
did not have the necessary risk management controls in
place for hedging and trading;
(2) that contrary to the private placement offering
documents, the funds raised were not to fund an
acquisition of the controlling shareholders but rather
to meet margin calls for massive derivative losses; and
(3) that the Company's financial statements were grossly
overstated or the Company was hiding liabilities
totaling in excess of $550 million in derivative
trading losses.
On November 30, 2004, Bloomberg reported that China Aviation was
seeking court protection after losing $550 million from bad bets
on oil prices. On this news, trading in the Company's shares was
suspended after the shares dropped to below $.60 per share
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
CITADEL SECURITY: Charles J. Piven Lodges Securities Suit in TX
---------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. initiated a securities
class action on behalf of shareholders who purchased, converted,
exchanged or otherwise acquired the common stock of Citadel
Security Software, Inc. (Nasdaq:CDSS) between February 12, 2004
and December 16, 2004, inclusive (the "Class Period").
The case is pending in the United States District Court for the
Northern District of Texas. The action charges that defendants
violated federal securities laws by issuing a series of
materially false and misleading statements to the market
throughout the Class Period, which statements had the effect of
artificially inflating the market price of the Company's
securities.
For more details, contact the Law Offices Of Charles J. Piven,
P.A. by Mail: The World Trade Center-Baltimore, 401 East Pratt
Street, Suite 2525, Baltimore, MD 21202 by Phone: 410/986-0036
by E-mail: hoffman@pivenlaw.com.
CITADEL SECURITY: Federman & Sherwood Lodges Stock Fraud in TX
--------------------------------------------------------------
The law firm of Federman & Sherwood initiated a class action
lawsuit in the United States District Court for the Northern
District of Texas against Citadel Security Software, Inc.
(Nasdaq: CDSS).
The complaint alleges violations of federal securities laws,
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10b-5, including allegations of issuing a series of
material misrepresentations to the market which had the effect
of artificially inflating the market price. The class period is
from February 12, 2004 through December 16, 2004.
Plaintiff seeks to recover damages on behalf of the Class. If
you are a member of the Class as described above, you may move
the Court no later than March 15, 2005, to serve as a lead
plaintiff for the Class. However, in order to do so, you must
meet certain legal requirements pursuant to the Private
Securities Litigation Reform Act of 1995.
For more details, contact William B. Federman of FEDERMAN &
SHERWOOD by Mail: 120 N. Robinson, Suite 2720, Oklahoma City, OK
73102 by Phone: (405) 235-1560 by Fax: (405) 239-2112 by E-mail:
wfederman@aol.com or visit their Web site:
http://www.federmanlaw.com.
CITADEL SECURITY: Schatz & Nobel Lodges Securities Suit in TX
-------------------------------------------------------------
The law firm of Schatz & Nobel, P.C., initiated a lawsuit
seeking class action status in the United States District Court
for the Northern District of Texas on behalf of all persons who
purchased the publicly traded securities of Citadel Security
Software, Inc. (Nasdaq: CDSS) ("Citadel Security") between
February 12, 2004 and December 16, 2004 (the "Class Period").
The Complaint alleges that Citadel Security violated federal
securities laws by issuing false or misleading public
statements. Specifically, the Complaint alleges that Citadel
Security's financial guidance was improper given undisclosed
adverse facts that were known or recklessly disregarded when
such statements were made. On December 17, 2004, Citadel
Security provided a financial update for the year ending
December 31, 2004, stating that it now expects 2004 revenue to
be between $15.2 million and $16.0 million, compared to previous
guidance of $18.5 to $21 million. On this news, shares of
Citadel Security stock fell from a close of $4.29 per share in
December 16, 2004, to close at $2.49 per share on December 17,
2004.
For more details, contact Wayne T. Boulton by Phone:
(800) 797-5499 by E-mail: sn06106@aol.com or visit their Web
site: http://www.snlaw.net.
CITADEL SECURITY: Schiffrin & Barroway Lodges Stock Suit in TX
--------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a class
action lawsuit in the United States District Court for the
Northern District of Texas on behalf of all securities
purchasers of Citadel Security Software, Inc. (Nasdaq: CDSS)
("Citadel Security" or the "Company") from February 12, 2004
through December 16, 2004 inclusive (the "Class Period").
The complaint charges Citadel Security, Steven B. Solomon, and
Richard Connelly with violations of the Securities Exchange Act
of 1934. Citadel Security Software Inc. develops and markets
computer security and privacy software. Its information
technology ("IT") security computer software products include
security and management solutions for networks and personal
workstations designed to secure and manage personal computers
and local area networks. According to the complaint, the Company
failed to disclose and misrepresented the following material
adverse facts which were known to defendants or recklessly
disregarded by them:
(1) that customer demand in the commercial portion of the
Company's business was slowing;
(2) that the much touted, sizable pipeline of potential
contracts failed to materialize due to poor management
execution;
(3) that as a consequence of the above the Company's growth
was lagging; and
(4) therefore, the defendants' statements about the Company
were lacking in any reasonable basis when made.
Additionally, the complaint alleges that during the Class
Period, defendants sold a total of 754,500 shares for proceeds
totaling more than $3 million.
On December 17, 2004, Citadel Security provided a financial
update for its year-ended December 31, 2004. More specifically,
the Company stated that based upon preliminary estimates,
Citadel now expects its revenue for the full year 2004 to be
between $15.2 million and $16.0 million, compared to previous
guidance of full-year revenue of $18.5 million to $21 million.
As a result, the Company will not meet its previously released
net income guidance for the second half of 2004 which was for
net income of $1.0 million to $2.0 million. The Company expects
to end 2004 with approximately $4.9 million of deferred
revenues, most of which will be earned in 2005.
News of this shocked the market. Shares of Citadel Security fell
$1.80 per share, or 41.96 percent, to close at $2.49 per share
on unusually high trading volume.
For more details, contact the law firm Marc A. Topaz, Esq. or
Darren J. Check, Esq. of Schiffrin & Barroway, LLP by Mail:
Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by
Phone: 1-888-299-7706 or 1-610-667-7706 Or by E-mail:
info@sbclasslaw.com.
GEOPHARMA INC.: Pomerantz Haudek Sets Lead Plaintiff Deadline
-------------------------------------------------------------
The law firm of Pomerantz Haudek Block Grossman & Gross LLP
(www.pomerantzlaw.com) reminds investors that the Lead Plaintiff
deadline in the GeoPharma, Inc. (Nasdaq:GORX) case is January
31, 2005. The Firm has filed a class action lawsuit against the
company and two of the Company's senior officers. The case was
filed in the United States District Court, Southern District of
New York. There are three separate class periods in this case.
The first class period is December 1, 2004. The second is
December 1 - December 2, 2004, and the third class period is
July 13, 2004 - December 2, 2004. The court has not decided
whether the class period will be extended or pushed back.
According to the complaint, the Company and certain of its top
officials issued material misstatements about FDA approval of
Mucotrol, a product which is manufactured by the Company's
wholly owned subsidiary, Belcher Pharmaceuticals, Inc., which
manufactures both prescription and over-the-counter drugs. In a
press release issued on December 1, 2004, the Company and its
top officials created the impression that the Federal Food and
Drug Administration ("FDA") had approved Mucotrol for marketing
in this country as a prescription drug. At this announcement,
GeoPharma's stock jumped up 153% to $11.25 per share. The volume
of shares traded was extraordinary -- 42 million shares, for a
stock whose average daily volume was 22,000. In the afternoon of
December 1, 2004, the stock price dropped and trading was halted
at $6.81, after it was disclosed that the FDA had told the press
that it had no record of Mucotrol. The FDA later stated that it
had cleared Mucotrol for marketing but only as a device, not a
prescription drug. Apparently, this approval was granted because
of Mucotrol's similarity with a product already on the market.
On December 2, 2004, in a conference call with investors after
the close of the markets, the defendants finally acknowledged
that Mucotrol was a device, not a prescription drug. On this
disclosure, the Company's stock fell as low as $5.37 on December
3, 2004.
The complaint alleges that GeoPharma and the Company's Chief
Executive Officer, Secretary and director, Mihir K. Taneja, and
Kotha Sekharam, President, principal spokesman and director of
the company, were privy to non-public information concerning the
Company's business, finances, products, markets and present and
future business prospects through their access to internal
corporate documents, conversations with and reports from other
corporate officers and employees, and attendance at management
and Board of Directors meetings and committees thereof. These
defendants knew or but for their recklessness would have known
that Mucotrol had been approved by the FDA as a device, not a
drug.
GeoPharma manufactures, packages and/or distributes private
label dietary supplements, overt-the-counter ("OTC") drugs,
pharmaceuticals and health and beauty care products for
companies under two related entitles: Innovative Health
Products, Inc. and Belcher Pharmaceuticals, Inc. Innovative
Health Products specializes in the development and manufacture
of nutritional supplements. According to the Company, Belcher
Pharmaceuticals is a FDA-registered drug development and
manufacturing facility for generic and OTC drugs. On May 18,
2004, the Company changed its name from Innovative Companies,
Inc., to GeoPharma, Inc.
For more details, contact Teresa Webb of the Pomerantz Haudek
Block Grossman & Gross LLP by Phone: (888) 476-6529 or by
E-mail: tlwebb@pomlaw.com.
IPASS INC.: Charles J. Piven Lodges Securities Fraud Suit in CA
---------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. initiated a securities
class action on behalf of shareholders who purchased, converted,
exchanged or otherwise acquired the common stock of iPass, Inc.
(Nasdaq:IPAS) between April 22, 2004 and June 30, 2004,
inclusive (the "Class Period").
The case is pending in the United States District Court for the
Northern District of California against defendant iPass and one
or more of its officers and/or directors. The action charges
that defendants violated federal securities laws by issuing a
series of materially false and misleading statements to the
market throughout the Class Period, which statements had the
effect of artificially inflating the market price of the
Company's securities.
For more details, contact the Law Offices Of Charles J. Piven,
P.A. by Mail: The World Trade Center-Baltimore, 401 East Pratt
Street, Suite 2525, Baltimore, MD 21202 by Phone: 410/986-0036
by E-mail: hoffman@pivenlaw.com.
IPASS INC.: Milberg Weiss Files Securities Suit Fraud in N.D. CA
----------------------------------------------------------------
The law firm of Milberg Weiss Bershad & Schulman LLP initiated a
class action lawsuit on behalf of purchasers of the securities
of iPass, Inc. ("iPass" or the "Company") (Nasdaq: IPAS) between
April 22, 2004 and June 30, 2004, inclusive (the "Class Period")
seeking to pursue remedies under the Securities Exchange Act of
1934 (the "Exchange Act").
The action, case number 05-CV-0228, is pending in the United
States District Court for the Northern District of California
against defendants iPass, Kenneth D. Denman (CEO, President and
Chairman) and Donald C. McCauley (CFO).
The complaint alleges that at all relevant times, iPass
purported to provide "simple, secure and manageable connectivity
services" by connecting mobile workers' computers to the Web
through partnerships with local Internet service providers using
"narrowband" telephone dial-up access. With high-speed broadband
access to the Internet getting cheaper and more common among
consumers, it was vitally important to iPass that it make the
transition from "narrow band" dial-up service to broadband
service, and that the transition be executed properly. This
complaint alleges that defendants failed to disclose a major
operational snafu that occurred in connection with defendants'
attempt to expand the Company's broadband service offerings and
that this snafu, which hindered access to the iPass service,
resulted in the loss of a material number of customers, and a
concomitant decline in the Company's revenue, earnings, and
growth prospects. Before investors found out about the snafu,
and its effect on iPass's business, Company insiders, who knew
of the snafu and its materially adverse effects on the Company's
business but did not let on, sold more than 170,000 shares of
their personally held iPass securities at prices within a one-
week period between $10.94 to $12.16 for proceeds well in excess
of $2 million. Upon disclosure of the snafu, on June 30, 2004,
iPass shares fell to $6.91.
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.
IPASS INC.: Schatz & Nobel Lodges Securities Fraud Suit in CA
-------------------------------------------------------------
The law firm of Schatz & Nobel, P.C., initiated a lawsuit
seeking class action status in the United States District Court
for the Northern District of California on behalf of all persons
who purchased the publicly traded securities of iPass, Inc.
(NasdaqNM: IPAS) ("iPass") between April 22, 2004 and June 30,
2004 (the "Class Period").
The Complaint alleges that iPass violated federal securities
laws by issuing false or misleading public statements and/or by
failing to disclose material information it had an obligation to
disclose. Specifically, the Complaint alleges that during the
Class Period iPass suffered a major operational problem that
resulted in the loss of customers and threatened the company's
future growth prospects. Before this problem was made public,
certain company insiders sold personal holdings of iPass stock.
When the disclosure was belatedly made, iPass stock fell from a
close of $10.59 per share on June 30, 2004, to close at $6.91
per share on July 1, 2004.
For more details, contact Wayne T. Boulton by Phone:
(800) 797-5499 by E-mail: sn06106@aol.com or visit their Web
site: http://www.snlaw.net.
MEDQUIST INC.: Marc Henzel Launches Securities Fraud Suit in NJ
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the United States
District Court for the District of New Jersey, on behalf of
persons who purchased or otherwise acquired publicly traded
securities of MedQuist Inc. (Other OTC:MEDQ.PK) between April
23, 2002 and November 2, 2004, inclusive. The lawsuit was filed
against MedQuist, Brian J. Kearns and Davis A. Cohen.
The complaint alleges that Defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. Specifically, the complaint alleges that
Defendants issued a series of materially false and misleading
statements regarding the financial condition of the Company.
More specifically, the complaint alleges that Defendants
statements were materially false and misleading because the
Company's financial statements for 2002 and 2003 were the result
of fraudulent financial manipulations, including ambiguous
billing to clients which resulted in the overstatement of the
Company's revenue and earnings by a material amount. Moreover,
the complaint alleges that the Defendants indicated that
Company's financial statements complied with Generally Accepted
Accounting Principles (``GAAP'') when they did not.
On November 2, 2004, MedQuist announced that on October 29,
2004, the Company's Board of Directors concluded that the
Company's previously issued financial statements, including the
10-K reports for 2002 and 2003, as well as the encompassed Forms
10-Q for the corresponding periods, and all earnings releases
and communications should no longer be relied upon. These
statements by the Company followed the conclusion of Debevoise &
Plimpton LLP and PricewaterhouseCoopers LLP, that the way
MedQuist billed for services created ambiguities in how client
accounts were calculated. This in turn led to incorrect billing
and inflated revenues. Shares of MedQuist traded to
approximately $13.00 per share in reaction to the news, nearly
53% below the Class Period high of $29.13 per share.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
NEWS CORPORATION: Weiser Law Firm Lodges Securities Suit in NY
--------------------------------------------------------------
The Weiser Law Firm, Ltd. initiated a class action lawsuit in
the Supreme Court of New York, challenging the fairness of the
recent offer made by the News Corporation (NYSE:NWS; "News
Corp.") to purchase the remaining 18% of Fox Entertainment
Group, Inc. (NYSE:FOX; "Fox" or the "Company") that it does not
already own, on behalf of its client and all persons or
institutions who held shares of Fox.
The complaint alleges that the consideration offered by News
Corp., representing a meager 7.4% premium, is wholly inadequate
and fails to offer fair value to the Company's shareholders for
their equity interests in Fox. Additionally, the Complaint
alleges that News Corp. timed the offer to freeze out Fox's
public shareholders in order to capture for itself Fox's future
potential without paying an adequate or fair price to the
Company's public shareholders. The Complaint also alleges that
the defendants have breached their duty of loyalty to the
Company's stockholders in connection with the News Corp. offer
and seeks to enjoin the offer unless and until the Company's
minority shareholders' interests are protected.
For more details, contact Patricia C. Weiser, Esq. of The Weiser
Law Firm, Ltd. by Phone: 610-225-2677 or by E-mail:
pw@weiserlawfirm.com.
OFFICEMAX INC.: Charles J. Piven Lodges Securities Suit in IL
-------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. initiated a securities
class action on behalf of shareholders who purchased, converted,
exchanged or otherwise acquired the common stock of OfficeMax
Inc. (NYSE:OMX) between November 9, 2004 and January 11, 2005,
inclusive (the "Class Period").
The case is pending in the United States District Court for the
Northern District of Illinois against defendant Office Max and
one or more of its officers and/or directors. The action charges
that defendants violated federal securities laws by issuing a
series of materially false and misleading statements to the
market throughout the Class Period, which statements had the
effect of artificially inflating the market price of the
Company's securities.
For more details, contact the Law Offices Of Charles J. Piven,
P.A. by Mail: The World Trade Center-Baltimore, 401 East Pratt
Street, Suite 2525, Baltimore, MD 21202 by Phone: 410/986-0036
by E-mail: hoffman@pivenlaw.com.
OFFICEMAX INC.: Much Shelist Lodges Securities Fraud Suit in IL
---------------------------------------------------------------
The law firm of Much Shelist Freed Denenberg Ament & Rubenstein,
P.C. initiated a class action lawsuit in the United States
District Court for the Northern District of Illinois on behalf
of purchasers of the securities of OfficeMax, Inc. (NYSE:OMX)
("OfficeMax" or the "Company") between January 22, 2004 and
January 11, 2005, inclusive ("Class Period").
It has been alleged that OfficeMax, along with George Harad,
Christopher Milliken and Theodore Crumley ("Individual
Defendants"), violated the federal securities laws by issuing a
series of materially false and misleading statements to the
market. These misstatements have had the effect of artificially
inflating the market price of OfficeMax's securities.
It has been further alleged that the Company failed to disclose
and misrepresented the following material adverse facts which
were known to defendants or recklessly disregarded by them:
(1) that certain employees of the Company fabricated
supporting documentation for approximately $3.3 million
in claims billed to a vendor of OfficeMax during 2003
and 2004;
(2) that the Company improperly timed the recognition of
recorded rebates and other such payments from vendors;
(3) that the Company's financial results were in violation
of Generally Accepted Accounting Principles ("GAAP");
(4) that the Company lacked adequate internal controls; and
(5) that as a result of the above, the Company's financial
results were materially inflated at all relevant times.
On January 12, 2005, OfficeMax announced that Brian Anderson,
executive vice president and chief financial officer, had
resigned. Theodore Crumley, the former chief financial officer
of OfficeMax, will return to that position on an interim basis.
Furthermore, OfficeMax announced that it would postpone the
release of its earnings for the fourth quarter and full year
2004, pending the conclusion of an internal investigation into
issues relating to its accounting for vendor income.
For more details, contact Carol V. Gilden, Esq. of Much Shelist
Freed Denenberg Ament & Rubenstein, P.C. by Phone:
(800) 470-6824 or by E-mail: investorhelp@muchshelist.com.
OFFICEMAX INC.: Schatz & Nobel Files Securities Fraud Suit in IL
----------------------------------------------------------------
The law firm of Schatz & Nobel, P.C., initiated a lawsuit
seeking class action status in the United States District Court
for the Northern District of Illinois on behalf of all persons
who purchased the publicly traded securities of OfficeMax, Inc.
(NYSE: OMX) ("OfficeMax") between November 9, 2004 and January
11, 2005 (the "Class Period").
The Complaint alleges that OfficeMax violated federal securities
laws by issuing false or misleading public statements.
Specifically, the Complaint alleges that during the Class Period
OfficeMax manipulated its reported financial results by using
"vendor allowances" to improperly time the recognition of
revenue and inflate its earnings. On January 12, 2005, OfficeMax
announced that its chief financial officer had resigned and that
it would postpone the release of its earnings for the fourth
quarter and full year 2004, pending the conclusion of an
internal investigation into issues relating to its accounting
for vendor income.
For more details, contact Wayne T. Boulton by Phone:
(800) 797-5499 by E-mail: sn06106@aol.com or visit their Web
site: http://www.snlaw.net.
PRAECIS PHARMACEUTICALS: Marc Henzel Lodges MA Securities Suit
--------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the District of
Massachusetts on behalf of all securities purchasers of Praecis
Pharmaceuticals Inc. (Nasdaq: PRCS) from November 25, 2003
through December 6, 2004, inclusive.
The complaint charges Praecis, Malcolm Gefter, Kevin McLaughlin,
Edward English and William K. Heiden with violations of Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule
10b-5 promulgated thereunder. More specifically, the Complaint
alleges that the Company failed to disclose and misrepresented
the following material adverse facts known to defendants or
recklessly disregarded by them:
(1) that the distribution of the Company's flagship drug,
Plenaxis, had been severely restricted by the FDA,
which significantly reduced the potential market for
the therapy;
(2) that the Company failed to establish effective
messaging to educate physicians about the product's
indication and the appropriate patient population;
(3) that the Company, despite impressive enrollment numbers
in the PLUS program, had difficulties convincing
physicians to prescribe the product due to uncertainty
over use and concerns over reimbursement;
(4) that the Company lacked adequate internal control; and
(5) that as a result of the above, the defendants' fiscal
2004 projections were lacking in any reasonable basis
when made.
On December 6, 2004, Praecis provided an update on the Company's
commercialization of Plenaxis in the United States. In the
update, the Company stated that its had decided to remove its
previous short- and long- term sales and earnings guidance, and
that it did not anticipate providing further guidance until a
consistent trend for Plenaxis sales emerges. News of this
shocked the market. Shares of Praecis fell $.56 per share, or
25.8 percent on December 6, 2004, to close at $1.61 per share.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com.
TASER INTERNATIONAL: Chitwood & Harley Lodges Stock Suit in AZ
--------------------------------------------------------------
The law firm of Chitwood & Harley LLP initiated a securities
fraud class action complaint in the United States District Court
for Arizona against Taser International, Inc. ("Taser" or the
"Company") (NASDAQ: TASR), Dr. Phillips W. Smith, Patrick W.
Smith, Thomas P. Smith, Kathleen Hanrahan and Daniel Behrendt on
behalf of purchasers of Taser securities during the period
between April 6, 2004 and January 10, 2005 (the "Class Period").
The complaint charges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of materially false
and misleading statements to the market concerning the safety of
its Taser guns between April 6, 2004 and January 10, 2005,
inclusive. The complaint also alleges that defendants engaged in
channel stuffing at the end of the fourth quarter of 2004 in
order to meet sales projections and analyst's expectations.
The truth began to emerge on January 6, 2005 when Taser stunned
the public by announcing that it had received an informal
inquiry letter from the SEC regarding the Company's statements
concerning the safety of its products and a $1.5 million order
of Taser devices received from one of the Company's
distributors, which was booked in late December 2004. As a
result of the January 6 announcement, shares of the Company's
common stock fell $4.90, or 18%, to close at $22.72 per share.
Then, on January 11, 2005, Taser further shocked investors when
it announced that orders for the first half of 2005 may be
delayed while law enforcement agencies test competitors'
products. In the wake of this announcement, shares of the
Company's common stock fell an additional $5.95, or 30%, to
close at $14.10 per share. During the Class Period, Defendants
engaged in massive insider trading.
For more details, contact Lauren S. Antonino, Esq. of Chitwood &
Harley by Phone: 1-888-873-3999 ext. 6888 by E-mail:
lsa@classlaw.com or visit their Web site:
http://www.classlaw.com.
TASER INTERNATIONAL: Lasky & Rifkind Files Securities Suit in AZ
----------------------------------------------------------------
The law firm of Lasky & Rifkind, Ltd., initiated a lawsuit in
the United States District Court for the District of Arizona, on
behalf of persons who purchased or otherwise acquired publicly
traded securities of TASER International Inc. ("TASER" or the
"Company") (NASDAQ:TASR) between November 4, 2004 and January 6,
2005, inclusive, (the "Class Period"). The lawsuit was filed
against TASER and certain officers and directors ("Defendants").
The complaint alleges that Defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. Specifically, the complaint alleges
Defendants issued a series of materially false and misleading
statements because they failed to disclose that contrary to
Defendants' representations, studies conducted on the Company's
TASER devices were inconclusive as to the safety of the devices,
that the Company's revenues and earnings would be negatively
impacted once the truth became known, that the "last minute"
order of TASER devices the Company received from one of its
distributors was done to help the Company meet sales goals.
On January 6, 2004, after the market closed, Defendants
indicated that they had received a letter from the Securities &
Exchange Commission announcing that the regulator had begun an
informal inquiry regarding the Company's statements concerning
the safety of its weapons as well as a recent order received
from one of its distributors. Shares of TASER fell dramatically,
shedding $4.90 per share, or 18% in very heavy trading.
For more details, contact Lasky & Rifkind, Ltd. by Phone:
(800) 495-1868 or by E-mail: investorrelations@laskyrifkind.com.
SILICON IMAGE: Marc Henzel Lodges Securities Lawsuit in N.D. CA
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Northern
District of California, on behalf of a class of all persons who
purchased or acquired securities of Silicon Image, Inc.
(NasdaqNM: SIMGE) between April 15, 2002, the day the Company
announced its financial results for its first quarter ended
March 31, 2002 and November 15, 2003, the day the Company
announced an investigation into its revenue recognition
practices associated with its licensing transactions.
The Complaint alleges that Defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market during the Class Period thereby
artificially inflating the price of Silicon securities.
The Complaint alleges that Defendants made a series of false and
misleading statements starting on April 15, 2002. The Complaint
alleges that the press releases issued on April 15, 2002, June
13, 2002, July 23, 2002, October 15, 2002, January 15, 2003,
April 15, 2003, July 22, 2003, September 30, 2003 and October
19, 2003 were materially false and misleading. In additions, the
Complaint alleges that the Company's Form 10-Q's and Form 10-K
filed with the Securities and Exchange Commission (``SEC'') on
May 12, 2002, July 30, 2002, November 8, 2002, March 27, 2003,
May 8, 2003, and August 14, 2003 were materially false and
misleading.
The Complaint alleges that each of these above referenced press
releases and SEC filings were materially false and misleading
because, during the Class Period defendants, had overstated
Silicon's license revenue by improperly recognizing revenue that
did not satisfy revenue recognition criteria. The Complaint also
alleges that, as a result of the improper revenue recognition,
the Company's net income and earnings were overstated and its
financial statements were prepared in violation of General
Accepted Accounting Principles (``GAAP''). In addition, the
Complaint alleges that while in possession of material non
public information that defendants Lee, Gargus and Tirado sold
thousands of shares of their personally held Silicon stock. On
November 14, 2003, Silicon announced that its Form 10-Q for the
quarter ended September 30, 2003 would not be timely filed
because an investigation into the Company revenue recognition
practices associated with its licensing transaction. On this
news, Silicon's shares fell more than 27.7% to close at $6.40.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
SIRVA INC.: Marc Henzel Lodges Securities Fraud Suit in N.D. IL
---------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the United States
District Court for the Northern District of Illinois on behalf
of all of the common stock of SIRVA, Inc. (NYSE: SIR) between
November 24, 2003 and November 9, 2004, inclusive (the "Class
Period") and on behalf of purchasers who bought SIRVA common
stock pursuant to and/or traceable to the Company's June 8, 2004
Registration Statement.
The complaint charges SIRVA and certain of its officers and
directors with violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. SIRVA is in the global relocation industry,
providing its solutions to a diverse customer base, including
transferring corporate and government employees and moving
individual consumers.
According to the Complaint, the Company failed to disclose and
misrepresented the following material adverse facts known to
defendants or recklessly disregarded by them:
(1) that the Company maintained inadequate reserves in the
Network Services division;
(2) that the growth and profitability of the Network
Services division was being adversely affected;
(3) that SIRVA failed to rationalize capacity, reduce fixed
costs, and generate a more meaningful relocation volume
growth in its European division; and
(4) that the profitability of the European operations was
suffering.
Additionally, during the Class Period and with the Company's
stock trading at artificially inflated prices, Company insiders
embarked on an insider trading scheme. As a result of the
insider trading scheme, Company insiders reaped more than $336
million in gross proceeds.
On November 9, 2004, SIRVA reported third-quarter profit fell
from the year-ago period as the Company booked a $15.2 million
charge to increase insurance loss reserves. The Company said due
to higher reserves for U.S. insurance claims and continued poor
market conditions in Europe, 2004 earnings from continuing
operations are now projected to be between 86 cents and 87
cents. For 2005, it expects to post earnings in the range of
$1.25 to $1.30 per share.
News of this shocked the market. Shares of SIRVA fell $5.83 per
share, or 24.52 percent, to close at $17.95 per share.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com.
SWIFT TRANSPORTATION: Marc Henzel Lodges Securities Suit in AZ
--------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the United States
District Court for the Southern District of Arizona on behalf of
all securities purchasers of Swift Transportation Co., Inc.
(Nasdaq: SWFT) from October 16, 2003 through October 1, 2004,
inclusive.
The complaint charges Swift, Gary R. Enzor, Patrick J. Farley,
Jerry C. Moyes, and William F. Riley III with violations of
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10b-5 promulgated thereunder. More specifically, the
complaint alleges that the Company failed to disclose and
misrepresented the following material adverse facts known to
defendants or recklessly disregarded by them:
(1) that the conditional safety rating given to the Company
by the FMSCA was not an error, but rather a true
representation of Swift's performance;
(2) that making the internal changes necessary to improve
the rating was fiscally prohibitive;
(3) that the Company had to absorb the cost of the new
Department of Transportation regulations requiring that
drivers be paid for loading time and time waiting to
load;
(4) that as a consequence of the foregoing, the Company was
losing its competitive position and revenue, however,
in order to maintain the appearance of financial well-
being, for the benefit of defendant Moyes' personal
finances, the Company systematically under-depreciating
its capital assets thereby artificially inflating its
revenues;
(5) that as a result of this, the Company's financial
results were in violation of Generally Accepted
Accounting Principles ("GAAP");
(6) the Company lacked adequate internal controls; and
(7) the Company's financial results were materially
inflated at all relevant times.
On September 15, 2004, Swift announced that it had adopted a new
repurchase program, under which it may acquire up to $150
million of its common stock over the next several months.
Additionally, Swift also announced that it expects Q3 earnings
to range between 26 cents and 31 cents per share. This news
shocked the market. Shares of Swift fell $2.18 per share, or
14.9 percent, on September 15, 2004, to close at $16.09 per
share. On October 1, 2004, Swift announced that the previously
disclosed informal inquiry by the SEC into certain stock trades
by the company and insiders, including defendant Moyes, had
become a formal investigation. The investigation centers around
certain stock trades made by defendant Moyes as well as selected
the Company repurchases. On this news, shares of Swift tumbled
an additional $.95 per share, or 5.4 percent, on October 4,
2004, to close at $16.54 per share.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com
TRIPATH TECHNOLOGY: Marc Henzel Files Securities Suit in N.D. CA
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the United States
District Court for the Northern District of California on behalf
of all securities purchasers of Tripath Technology Inc. (Nasdaq:
TRPH) from January 29, 2004 through October 22, 2004, inclusive
(the "Class Period").
The complaint charges Tripath, Adya Tripathi, and David Eichler
with violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. More
specifically, the Complaint alleges that the Company failed to
disclose and misrepresented the following material adverse facts
known to defendants or recklessly disregarded by them:
(1) that the Company improperly recognized revenue from
sales of product that was eventually returned to the
distributor;
(2) that as a result of this, the Company had to increase
its sales return reserve for the third quarter and had
to take a charge of approximately $4.0 - $4.5 million
for excess inventory;
(3) that the Company's financial results were in violation
of Generally Accepted Accounting Principles ("GAAP");
(4) that the Company lacked adequate internal controls,
especially the ability to adequately estimate
distributor sales returns in accordance with SFAS no.
48; and
(5) that as a result of the above, the Company's financial
results were materially inflated at all relevant times
and the defendants lacked a reasonable basis for their
statements regarding the Company.
On October 22, 2004, Tripath announced that net revenues for the
third quarter of 2004 would be significantly below prior
guidance of $4 - $4.5 million. Moreover, Tripath announced that
it may have to restate its revenue for the quarter ended June
30, 2004. In addition, Tripath planed to take a charge of
approximately $4.0 - $4.5 million for excess inventory. News of
this shocked the market. Shares of Tripath fell $.75 per share,
or 49.34 percent, on October 25, 2004, to close at $.77 per
share.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com.
*********
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
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Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA. Glenn Ruel Se¤orin, Aurora Fatima Antonio and Lyndsey
Resnick, Editors.
Copyright 2005. All rights reserved. ISSN 1525-2272.
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