/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/050208.mbx C L A S S A C T I O N R E P O R T E R Tuesday, February 8, 2005, Vol. 7, No. 27 Headlines A.G. EDWARDS: Lawyers File Suit Over "Secret" Arrangements in CA AGROPUR COOPERATIVE: Consumers Lodge $11M Suit Over Tainted Milk AMERICAN HONDA: Recalls 486,659 Passenger Cars For Crash Hazard BANK OF AMERICA: FL Entrepreneur Sues Over Bank's "Negligence" BANK OF AMERICA: Settles CA Lawsuit Over $5 Check Cashing Fee BAY AREA: FTC Reaches Settlement Over Credit Card Fraud Scheme COLORADO: Group Lodges "Junk Fax" Suit Against 15 Firms CONTINENTAL TIRE: Recalls 143 Tires Due to Defect, Crash Hazard CREE INC.: NC Court Denies Summary Judgment For Securities Suit DOR CHEMICALS: Accountant Files Suit V. Firm, Officers in Israel ELECTRONIC ARTS: Plaintiffs Amend Employees' Lawsuit in CA Court ELI LILLY: Stevenson & Associates Lodges $900M Zyprexa Lawsuit GENERAL MOTORS: Recalls 87,000 Passenger Cars for Injury Hazard IDAHO: ID A.G. Wasden Releases Top Ten Consumer Complaints List KOMFORT CORPORATION: Recalls 18 Trailers Due To Crash Hazard MICHIGAN: Homeowners Refusing $1.2M Detroit Firm Settlement MICHIGAN SUGAR: Judge Gives Final Approval To $1.75M Settlement PHILIP MORRIS: Wins Appeal Of $280B RICO Suit Over Past Profits PHILIPPINES: Survivors Lose Suit Over Former Dictator's Estate QUANTUM CORPORATION: Suit Certification Hearing Set March 2005 STATE AND COUNTY: TX A.G. Forges Last Auto Repair Settlements UNITED STATES: LCCR Calls On Senators To Support S.5 Amendments VERIZON COMMUNICATIONS: Customers Sue Over Anti-Spamming Methods WET SEAL: Reports Receipt of Consolidated Class Action Complaint ZAMP CORPORATION: Recalls 4,824 Helmets For Injury, Death Hazard New Securities Fraud Cases A.G. EDWARDS: Finkelstein & Krinsk Lodges Securities Suit in CA CHINA AVIATION: Schiffrin & Barroway Files Securities Suit in NY DIRECT GENERAL: Schiffrin & Barroway Lodges TN Securities Suit DIRECT GENERAL: Wolf Popper Lodges Amended Securities Suit in TN INPUT/OUTPUT: Lerach Coughlin Lodges Securities Fraud Suit in TX PHARMOS CORPORATION: Stull Stull Lodges Securities Suit in NJ TOWER AUTOMOTIVE: Federman & Sherwood Lodges NY Securities Suit TOWER AUTOMOTIVE: Lerach Coughlin Files NY Securities Fraud Suit ********* A.G. EDWARDS: Lawyers File Suit Over "Secret" Arrangements in CA ---------------------------------------------------------------- A group of lawyers filed a lawsuit seeking class action status against A.G. Edwards & Sons Inc., accusing the securities broker of letting hidden compensation arrangements affect its investment recommendations, the UN Online News Service reports. Filed in the U.S. District Court in San Diego, California, the suit alleges that the securities broker failed to disclose material facts about financial interests with third-party suppliers of variable annuity contracts. According to the complaint for the case, Kathleen Mitton vs. A.G. Edwards, "The third parties paid monies and other incentives to have variable annuities steered to them by A.G. Edwards without properly disclosing the preexisting arrangement to its customers." The complaint further states that "Secret" arrangements with insurers for sharing contingent fees increased customers' costs. Ron Marron, a San Diego lawyer, is leading the team that filed the complaint. He along with the other lawyers are seeking court permission to represent a class that would include all consumers who bought variable annuities through A.G. Edwards between January 1, 1990, and February 3, 2005. AGROPUR COOPERATIVE: Consumers Lodge $11M Suit Over Tainted Milk ---------------------------------------------------------------- An $11 million class-action lawsuit has been filed on behalf of a Toronto-area man and others against Agropur cooperative, which owns the milk manufacturer Natrel, claiming that they became sick after drinking Sealtest brand chocolate milk that was contaminated with a cleaning chemical, The Toronto Star reports. Filed by Toronto-based firm McPhadden, Samac, Berner, Barry, the claim alleges that the people they are representing became ill and continued to be ill after drinking the milk. It specifically claims: (1) David Occhiuto suffered from vomiting, diarrhea, insomnia and extreme pain after drinking the tainted milk; (2) Mr. Occhiuto is still ill with stomach pains, insomnia, dehydration; (3) He is suffering psychologically and is experiencing economic losses for prescriptions and medications and; (4) Agropur Cooperative and Natrel should have known risks associated with the processing of chocolate milk. Nearly 12,000 one-litre Sealtest cartons of 1 percent chocolate milk were recalled February 2 after a Toronto man went to hospital feeling ill. According to a statement by Natrel, the drink had been contaminated with a cleaning chemical due to "human error." Natrel further states, "During sanitation, some food grade sanitizer was accidentally left over in the production lines at the time of filling." An evaluation of the sanitizer by Cantox Health Sciences International, who was commissioned by Natrel, revealed the solution is not toxic and does not pose a health hazard. The evaluation stated, "Under a worst-case scenario, the contaminated product is believed to contain 99.5 per cent water and 0.5 per cent of a 'soap and vinegar'-like cleanser that is comprised of several ingredients, all of which have been shown to be not acutely toxic." Furthermore, Natrel said that management would be reviewing procedures at the plant "to ensure that such an incident does not occur again." Acknowledging "several reported adverse reactions associated with this product," the Canadian Food Inspection Agency issued a warning, that the public should not consume Sealtest brand 1% Chocolate Milk bearing the UPC 0 64420 00170 2. The affected batch most of which was distributed in Ontario is stamped with a February 7 expiry date. AMERICAN HONDA: Recalls 486,659 Passenger Cars For Crash Hazard --------------------------------------------------------------- American Honda Motor Co. is cooperating with the National Highway Traffic Safety Administration by voluntarily recalling 486,659 passenger cars, namely: (1) ACURA / TL, models 1999-2000 (2) HONDA / ACCORD, models 1999-2002 (3) HONDA / PRELUDE, models 1997-2001 On certain passenger vehicles, the interlock operation of the ignition switch may not function properly, making it possible to turn the ignition key to the "off" position and remove the key without shifting the transmission to park. If the driver does not shift to park before removing the key and fails to engage the parking brake, the vehicle could roll and a crash could occur. Dealers will perform an inspection procedure that confirms interlock function. Vehicles will be updated with a redesigned interlock lever. The recall is expected to begin on February 2005. For more details, contact Honda by Phone: 1-800-999-1009 or Acura by Phone: 1-800-382-2238, or contact the NHTSA's auto safety hotline: 1-888-327-4236. BANK OF AMERICA: FL Entrepreneur Sues Over Bank's "Negligence" -------------------------------------------------------------- A Miami businessman initiated a lawsuit against the Bank of America, based on the question of who is responsible when a customer's computer is hacked into, the Sun-Sentinel.com reports. Joe Lopez, 42, filed the suit, alleging over $90,000 was stolen from his online banking account. The suit, filed in Circuit Court in Miami, states that Bank of America was negligent and failed to protect him from online banking risks it knew about. Mr. Lopez is asking to recover the money lost, plus interest and attorney fees. He told the Sun- Sentinel "For Bank of America, $90,000 is peanuts. For me, it's my world. The bank has turned its back on me." The complaint is believed to be the first legal action by a customer against a U.S. bank to recover money apparently stolen by cybercriminals. Avivah Litan, an expert on online fraud for Gartner Inc., a Stamford, Connecticut-based research firm, called it "a landmark case," the Sun-Sentinel reports. He states, "This exposes all the holes in the system. Banks technically aren't responsible for what happens on your PC. But banks can't reasonably expect consumers to protect themselves from cybercriminals." Mr. Litan expects that future cases like Mr. Lopez's will eventually pressure banks into adopting stricter security measures for online banking. What Mr. Lopez calls his "nightmare" began on April 6, when he logged on to check on a wire transfer he was expecting. As head of Ahlo Inc., a five-person company in the Doral area of Miami- Dade that buys and sells printer ink and toner, Mr. Lopez often wires money to and receives transfers from U.S. and Latin American companies. When he checked his account, Mr. Lopez found that $90,348.65 had been wired to Parex Bank in Riga, Latvia without his approval. According to the complaint, about $20,000 of the money was withdrawn by the fraudulent recipient in Latvia. Parex froze the rest, roughly $70,000. The U.S. Secret Service, which investigates computer-based attacks on banks, sent Mr. Lopez a letter in November saying its "initial examination" had determined that a variant of a virus called coreflood had existed on his computer systems. The federal agency explained in its letter that coreflood is malicious software code that can give an attacker remote access to the infected system, but it did not explicitly say coreflood was the cause of the loss. The allegations in Mr. Lopez's complaint against the bank include breach of contract, negligence, breach of fiduciary duty, fraud and deceit, and intentional misrepresentation. "Bank of America knew of the coreflood virus," Mr. Lopez's lawyer, Ralph Patino of Coral Gables told the Sun-Sentinel. "Why not tell their customers?" He even cites a letter from Bank of America to customers in July recommending that they strengthen their security measures as further proof that the bank knew online banking was risky. He and Mr. Lopez say a large wire transfer to Latvia, which is known in financial circles for its problems with cybercriminals, should have raised a red flag. Since then, to keep his company running, Mr. Lopez has taken out a home equity loan of $30,000 and put $20,000 of his savings into the company. And he no longer does wire transfers online. "Online banking is here to stay," he said. "But the banks have to step up to the plate." Mr. Patino, believes that the complaint could become a class- action suit to include others who have had smaller amounts of money vanish from their online banking accounts and may have little recourse. BANK OF AMERICA: Settles CA Lawsuit Over $5 Check Cashing Fee ------------------------------------------------------------- Bank of America reached a settlement of a California class action lawsuit over its $5 check cashing fee. The suit was brought last April by Karis House, Inc. on behalf of California employers who claimed that the bank's check cashing fee, charged to employees, could place employers in violation of the California Labor Code. Under the terms of the settlement, Bank of America offered 12 months of direct deposit payroll services at no charge for a promotional period. By having their payroll checks deposited directly into an account, employees of small businesses will be able to avoid check cashing fees. They will also have access to other banking services as relationship customers that previously were not available to them. "Bank of America has a long-standing commitment to small businesses and offering banking services to those without access to financial services," said Percy Simpson, Senior Vice President, Bank of America. "This settlement is in keeping with our commitment." "This is a good settlement for both the employer community and those employees, who for whatever reason don't have checking accounts. This settlement basically accomplishes what we had hoped for -- awareness in the employer community of Labor Code Section 212 and free check cashing for more of those employees who previously had to pay a fee," said Nick Roxborough, a partner of Los Angeles based Roxborough, Pomerance & Nye LLP, who filed the lawsuit. The bank mailed approximately 350,000 letters to small business customers in California, educating them on direct deposit payroll services and extending the 12-months of direct deposit payroll services at no additional charge for a promotional period. BAY AREA: FTC Reaches Settlement Over Credit Card Fraud Scheme -------------------------------------------------------------- Christopher Tomasulo, a defendant named in a Federal Trade Commission lawsuit against an operation that sold bogus credit cards through telemarketing, is banned from selling credit- related products. In 2002, the FTC filed charges against Bay Area Business Council, Inc., Peter J. Porcelli, II, and others for offering consumers a low-interest unsecured MasterCard credit card for a one-time processing fee. The defendants requested and debited the fee, $199 or more, from consumers' bank accounts, but no consumers received credit cards. Instead, they received a package containing a non-functional "dummy" card with a MasterCard logo and the name "Bay Area Business Council" or "1st American Leisure Card" on the front, and a non-magnetic black strip on the back. After receiving the defendants' package, consumers learned for the first time that, for additional fees, they could obtain a debit card, but never a credit card. The settlement announced with Christopher Tomasulo, alleged in the FTC's amended complaint to be an officer of the defendant corporations, covers his supervision of the defendants' customer service and sales operations. The settlement bans Tomasulo from selling credit-related products, and prohibits him from misrepresenting any fact material to a consumer's decision to purchase any product or service. In August 2002, the FTC filed a complaint against Bay Area Business Council, Inc.; Bay Area Business Council Customer Service Corp.; American Leisure Card Corp.; Peter J. Porcelli, II; Christopher Tomasulo; and Bonnie A. Harris, as part of the "Operation No-Credit" law enforcement sweep. The FTC amended its complaint in October 2002 to include: Bay Memberships, Inc.; Bay Vacations, Inc.; Sr. Marketing Consultants, Inc.; and Special Technologies, Inc. In April 2004, a federal district court granted the FTC's motion for summary judgment and issued a permanent injunction against the other defendants in the case. The Court's final order bans the defendants from telemarketing and from selling credit- related products. The order also prohibits the defendants from making the types of misrepresentations cited in the FTC's Amended Complaint, and from misrepresenting any fact material to a consumer's decision to purchase the defendants' products or services. In addition, the order requires the defendants to pay more than $12 million in consumer redress. The settlement pertains only to Mr. Tomasulo. In addition to the ban against selling credit-related products, the settlement contains a judgment for more than $12 million, which is suspended based on his inability to pay. The judgment will become payable in full if it is found that Mr. Tomasulo misrepresented his financial condition. The Commission vote authorizing staff to file the proposed stipulated final judgment and order as to Christopher Tomasulo was 5-0. It was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division, on January 26, 2005. The judge entered the stipulated final judgment and order on February 2, 2005. For more details, contact the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580, Phone: 1-877-FTC-HELP (1-877-382-4357), or visit the Website: http://www.ftc.gov. Also contact, Brenda Mack, Office of Public Affairs by Phone: 202-326-2182 or contact C. Steven Baker or David A. O'Toole, FTC's Midwest Region - Chicago by Phone: 312-960-5634 or 312-960-5601. COLORADO: Group Lodges "Junk Fax" Suit Against 15 Firms ------------------------------------------------------- Consumer Crusade Inc., a consumer advocacy group that was founded by nationally syndicated radio talk show host Tom Martino, has filed 15 federal lawsuits against out-of-state companies it says are major offenders in sending junk faxes to Colorado residents and businesses, the Associated Press reports. The group is suing businesses from Delaware to California, accusing them of sending the unsolicited advertisements by fax in violation of the Telephone Consumer Protection Act. The anti- telemarketing law prohibits the sending of advertisement faxes without the permission of the recipient, said Jim Demirali, a Denver attorney working with Consumer Crusade. Though hundreds of complaints have been filed in state and county courts against smaller operations, the group is now going after larger companies that cross state lines, Mr. Demirali told AP. He also states, "The federal actions are designed to go after the major offenders. This is a preliminary step to shutting them off from the access they need to the marketplace. These are all clever people, very sophisticated when it comes to evading an enforcement of the act." The lawsuits request at least $500 for each violation and ask a federal judge to force the faxing companies to stop sending their advertisements. More federal lawsuits though would be filed seeking class-action status, which would allow more people who had received such faxes to be added to the suits, Mr. Demirali told AP. Most of the companies being sued are those in the business of sending faxes on behalf of other companies peddling mortgages, travel, health insurance and stock alerts. According to Mr. Demirali, Consumer Crusade has collected about 300,000 unwanted faxes from people across the country. The faxes were entered into a computer database to identify similar advertisements, phone numbers and other indicators linking the faxes to a specific company. He told the Associated Press that if the group reaches a settlement with the company or people sending the unwanted faxes, $25 per fax is given to the individual who gave the original faxes to Consumer Crusade. The lawsuits were filed in U.S. District Court in Denver against: Tennessee-based Glaco, Inc.; Midas Entertainment, Inc. and IHire LLC in Delaware; Nevada-based Global Vending Services, Inc., Everycontractor.com and Novinger, Brinkley, Spears, Leyva and Associates, Inc.; Club Resort Intervals in New Hampshire; Florida-based Vacation Showroom, Inc., The West Group of Companies, Global Vacations USA, Inc., Public Telephone Corporation of America and Internet Payphone Corp.; United Home Savings in Maryland; and California-based Vacation Centers Inc. and JD&T Enterprises Inc. CONTINENTAL TIRE: Recalls 143 Tires Due to Defect, Crash Hazard --------------------------------------------------------------- Continental Tire North America, Inc. is cooperating with the National Highway Traffic Safety Administration (NHTSA) by voluntarily recalling 143 tires, namely: (1) CONTINENTAL / HDL (2) CONTINENTAL / HSL (3) CONTINENTAL / HSR (4) CONTINENTAL / HTL (5) GENERAL / S380A (6) GENERAL / ST250 (7) TOYO / M122 (8) TOYO / M127 (9) YOKOHAMA / RY023 (10) YOKOHAMA / RY587 (11) YOKOHAMA / RY617 (12) YOKOHAMA / TY517 A variety of Continental, Toyo, General and Yokohama Tires, which the rubber compound used in the shoulder pad component of the tire is not the specified rubber compound as detailed in the tire specification. The overall durability of the tire is reduced, which if driven unchecked, the tire could degrade, possibly resulting in a vehicle crash. Continental Tire will notify its customers to replace the tires free of charge. The recall is expected to begin during February 2005. Owners who do not receive the free remedy within a reasonable time should contact the Company or contact the NHTSA's auto safety hotline: 1-888-DASH-2-DOT (1-888-327-4236). CREE INC.: NC Court Denies Summary Judgment For Securities Suit --------------------------------------------------------------- The United States District Court for the Middle District of North Carolina denied Cree, Inc.'s motion for summary judgment for the consolidated class action filed against it, seeking damages for alleged violations of securities laws by the Company and certain of its officers and current and former directors. A consolidated class action was initially filed, asserting, among other claims, violations of federal securities laws, including violations of Section 10(b) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5, and violations of Section 20(a) and Section 18 of the Exchange Act against the individual defendants and also asserts claims against certain of the Company's officers under Section 304 of the Sarbanes-Oxley Act of 2002. The suit alleged that the Company made false and misleading statements concerning its investments in certain public and privately held companies, the Company's acquisition of the UltraRF division of Spectrian, its supply agreement with Spectrian, its agreements with C&C, and its employment relationship with Eric Hunter and that the Company's financial statements did not comply with the requirements of the securities laws during the class period, an earlier Class Action Reporter story (August 28,2004) states. The suit was filed on behalf of a plaintiff class consisting of purchasers of Cree stock between August 12, 1998 and June 13, 2003 and seeks, among other relief, unspecified damages and disgorgement of profits by the individual defendants, plus costs and expenses, including attorneys' accountants' and experts' fees. In February 2004, the Company moved that the court dismiss the consolidated amended complaint on the grounds that it failed to state a claim upon which relief can be granted and did not satisfy the pleading requirements under applicable law. On August 30, 2004, the court entered an order granting the motion to dismiss without prejudice and allotting 45 days for the plaintiffs to file an amended consolidated complaint. The plaintiffs filed a First Amended Consolidated Class Action Complaint on October 14, 2004, asserting essentially the same claims and seeking the same relief as in their prior complaint. The Company has filed a motion to dismiss the Amended Complaint, which currently is pending. The Company also filed an early motion for summary judgment based on the statute of limitations. The court denied the motion without prejudice to the Company's ability to re-file the motion, if necessary, at a later point in the litigation. The suit is styled "In re Cree, Inc. Securities Litigation, case no. 03-CV-549," filed in the United States District Court for the Middle District of North Carolina, under Judge Frank W. Bullock, Jr. Lawyers for the Company are: (1) Donald Hugh Tucker, Jr., Michael W. Mitchell, Smith Anderson, Blount, Dorsett, Mitchell & Jernigan, Pob 2611, Raleigh NC 27602-2611, Phone: 919-821-1220 (2) Bruce G. Vanyo, Wilson, Sonsini Goodrich & Rosati, 650 Page Mill Road, Palo Alto, CA 94304-1050, Phone: 650- 493-9300 (3) Gregory A. Harris, Nicholas I. Porritt, Wilson, Sonsini, Goodrich & Rosati, P.C., 11921 Freedom Dr., Ste. 500 Reston, VA 20190-5634, Phone: 703-734-3100 Lawyers for the plaintiffs are: (i) Abbey Gardy, LLP, 212 East 39th Street, New York, NY, 10016, Phone: 212.889.3700, E-mail: info@abbeygardy.com (ii) Bernstein Litowitz Berger & Grossmann LLP (New York, NY), 1285 Avenue of the Americas, 33rd Floor, New York, NY, 10019, Phone: 212.554.1400, Fax: 212.554.1444, E- mail: blbg@blbglaw.com (iii) Cauley Geller Bowman Coates & Rudman, LLP (New York), 200 Broadhollow, Suite 406, Melville, NY, 11747, Phone: 631.367.7100, Fax: 631.367.1173, (iv) Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (Washington, DC), 1100 New York Avenue, N.W., Suite 500, West Tower, Washington, DC, 20005, Phone: 202.408.4600, Fax: 202.408.4699, E-mail: lawinfo@cmht.com (v) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd, PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E- mail: info@sbclasslaw.com (vi) Stull, Stull & Brody (New York), 6 East 45th Street, New York, NY, 10017, phone: 310.209.2468, Fax: 310.209.2087, E-mail: SSBNY@aol.com (vii) Wechsler Harwood LLP, 488 Madison Avenue 8th Floor, New York, NY, 10022, Phone: 212.935.7400, E-mail: info@whhf.com DOR CHEMICALS: Accountant Files Suit V. Firm, Officers in Israel ---------------------------------------------------------------- Mario Gilman, an accountant by trade who had bought shares in Dor Chemicals back in January 2004, filed a class-action motion at the Tel Aviv District Court against the Company, its managers (who all quit just recently) chairman Zvi Mor, CEO Michaek Yanovski and CFO Yossi Dayan, its directors, all members of the Dankner clan who had owned the company - David Dankner, Avraham Dankner, Shmuel Dankner, Leah Dankner and Yitzhak Dankner; accountants Kesselman and Kesselman and internal auditors of the firm Yaakov Avital, claiming that they all "fell asleep on the job," the Ha'aretz reports. Mr. Gilman specifically claims in his suit that the managers were negligent, deceitful and falsely represented Dor's financial condition and that their conduct caused the share price to crash, costing minority shareholders NIS 107 million in losses. That suit also states that "According to the [external auditor's] report, the controlling shareholders on one side, the directors on the other, the management on the third, each acted in turn either together or with the others who turned a blind eye, to rob the till." The suit is also claiming that in early 2003, Dor Chemicals had presented its results for 2002, reporting tremendous profits of more than NIS 200 million, however the profits later turned out to be a figment of accounting imagination that had nothing to do with the company's actual operations. Mr. Gilman explains that what really happened is that Dor bought Moplefan at a fraction of its book price. Until the end of 2003, Dor Chemicals presented its business as barreling along rosily. Though it did admit to losing a piffling NIS 7.4 million for the year, it still declared a NIS 75 million dividend to shareholders. Mr. Gilman charges, a dividend like that is a significant indication that the company is succeeding and that it also served to hide the company's true condition. In utter contradiction to its report mentioning a minor loss in 2003, the company in fact had lost a tremendous amount more than NIS 40 million. The defendants knew of it, yet they issued no warning when publishing a report in November 2003, Mr. Gilman declares. When the company's true 2003 financial statement was released, the share price dived 20 percent. By year's end, Dor Chemicals had lost 80 percent of its value. The suit referred to an external auditor's report on the shenanigans at Dor Chemicals, which raised serious questions over the management of the firm. That report uncovered a slew of payments to senior executives that had not been approved, which were all retroactively approved by Dor's board, upon the release of the report. Chairman of the Israel Securities Authority Moshe Terry, who since last week has been waiting for the public to act on the report and to file a class-action lawsuit, called the behavior that was revealed by the report as "indescribable" though he noted, "the worse deeds were committed by those who have already left like Mr. Mor, Mr. Yanovski and Mr. Dayan." ELECTRONIC ARTS: Plaintiffs Amend Employees' Lawsuit in CA Court ---------------------------------------------------------------- Electronic Arts, Inc. faces an amended class action filed in the Superior Court in San Mateo, California, styled "Kirschenbaum v. Electronic Arts Inc." The complaint alleges that the Company improperly classified "Image Production Employees" in California as exempt employees and seeks injunctive relief, unspecified monetary damages, interest and attorneys' fees. The complaint was first amended on or about November 30, 2004 to add two former employees as named-plaintiffs, and amended again on or about January 5, 2005 to add another former employee as a named-plaintiff. The allegations in the complaint were not materially changed by the amendments. The suit is styled "Kirschenbaum v. Electronic Arts, Inc., case no. CIV-440876," filed in the San Mateo County Superior Court in California. Plaintiffs Jamie Kirschenbaum, Mark West, Eric Kearns and Gianni Aliotti are represented by Attorney Miranda P. Kolbe. Representing the Company is Jessica R. Perry, 1000 Marsh Road, Menlo Park, CA 94025, Phone: (650) 614-7400 ELI LILLY: Stevenson & Associates Lodges $900M Zyprexa Lawsuit -------------------------------------------------------------- The firm of Stevenson & Associates commenced a class action in the Ontario Superior Court against Eli Lilly & Company and Eli Lilly Canada Inc., the makers and distributors of Zyprexa, for damages claiming $900,000,000.00. The action has been brought on behalf of all persons in Canada who were prescribed Zyprexa and who became diabetic as a result of taking that drug. The claim has been brought on behalf of the plaintiff, Andrea Heward who was prescribed Zyprexa and subsequently was diagnosed as diabetic. It is alleged that she became diabetic as a result of having been prescribed Zyprexa. She is now unable to work and is under constant medical care. The lawyers for the plaintiff, Harvin Pitch, counsel to Stevenson & Associates and Colin Stevenson intend to work with law firms across Canada and the United States in pursuing this claim and other similar claims against the manufacturers and distributors of Zyprexa, Eli Lilly & Company and Eli Lilly Canada Inc. A copy of the statement of claim can be seen on the website http://www.classproceedings.ca.Any further questions or inquiries can be addressed to Harvin Pitch at hpitch@teplitskycolson.com and Colin Stevenson at cstevenson@stevensonlaw.net. GENERAL MOTORS: Recalls 87,000 Passenger Cars for Injury Hazard --------------------------------------------------------------- General Motors Corporation is cooperating with the National Highway Traffic Safety Administration by voluntarily recalling 87,000 passenger cars, namely: (1) CADILLAC / CTS, model 2004 (2) CADILLAC / SRX, model 2004 On certain passenger vehicles, an interaction between the sensing and diagnostic module and vehicle electrical system may cause the driver's frontal air bag and roof rail air bag to deploy when the ignition key is turned to the "on" position. Inadvertent deployment of driver's frontal air bag and roof rail air bag will occur. A person positioned for driving may receive minor injuries such as abrasions, from contact with the air bag. Dealers will replace the sensing and diagnostic module. The recall is expected to begin during May 2005. For more details, contact the Company by Phone: 1-866-982-2339 or the NHTSA's auto safety hotline: 1-888-327-4236. IDAHO: ID A.G. Wasden Releases Top Ten Consumer Complaints List --------------------------------------------------------------- The Idaho Attorney General's Office recovered a record $5,777,643 for Idaho consumers in 2004, Attorney General Lawrence Wasden said in a statement. A.G. Wasden released his office's annual report on consumer protection during a news conference in Boise. The Attorney General said the office's consumer protection enforcement efforts also collected $528,318 in civil penalties, fines and fees. "The restitution recovered and distributed to Idaho residents and businesses equates to $10.30 for each taxpayer dollar appropriated for consumer protection staff," Attorney General Wasden said. "Additionally, money from civil penalties, fees and reimbursed costs is deposited into the consumer protection account and, pursuant to appropriation by the legislature, used to fund consumer education. This year we transferred nearly three quarters of a million dollars in surplus funds from the consumer protection account to the state's general fund." A.G. Wasden also released the annual Attorney General's Top Ten List of Consumer Complaints for 2004. The office handled 4,078 complaints last year, the highest number since 1998. "The top ten list gives us an indication of what is on the minds of Idaho consumers," Wasden said. " What seems most to be on their minds this year is faxes, unsolicited faxes containing ads, to be more specific." The telecommunications category moved to the number one position, with 2,726 complaints, Wasden said. This category accounted for two-thirds of the complaints received by the Attorney General's Office. Although this category includes all complaints about telephone service, such as billing issues, cramming and slamming, Wasden said the majority of telecommunications complaints in 2004 related to fax advertising. "I hope that this will get better with Fax.com barred from sending faxes into Idaho, but only time will tell," the Attorney General said, referring to a settlement this year prohibiting the nation's largest fax-spammer from operating in Idaho. "In the meantime, we will continue to enforce the law as best we can, and I encourage Idaho consumers, including businesses, to file complaints with us regarding unsolicited fax advertisements. As a side note, I want to remind everyone that simply sending an unsolicited ad by fax is a violation of state law. There is nothing in the law that permits sending these faxes until the consumer tells you to stop." The telephone solicitations category contains complaints about telemarketers, including violations of the No Call Law. Telephone solicitation complaints plummeted 48% in 2004, moving this category to number two on the list. This is the third straight year that complaints about telemarketers have fallen. "I attribute this to a combination of our enforcement efforts with regard to the No Call Law and to improved compliance by telemarketers," Wasden said. "It is worth noting that there are now more than 360,000 Idaho telephone numbers registered on the Attorney General's No Call List." The Top Ten Complaint categories for 2004 are: (1) Telecommunications - 2,726 complaints (2) Telephone solicitations - 326 complaints (3) Motor vehicles - 229 complaints (4) The Internet - 111 complaints (5) Mail order sales - 92 complaints (6) Credit cards - 69 complaints (7) Electronic equipment and service - 66 complaints (8) Construction - 58 complaints (9) Retail store sales and service - 57 complaints (10) Finance and lending - 50 complaints The complete Consumer Protection Annual report is available on the Attorney General's web site: http://www.ag.idaho.gov. For more details, contact Bob Cooper by Phone: (208) 334-4112 KOMFORT CORPORATION: Recalls 18 Trailers Due To Crash Hazard ------------------------------------------------------------ Komfort Corporation is cooperating with the National Highway Traffic Safety Administration by voluntarily recalling 18 Fifth Wheel Trailers, namely: (1) KOMFORT / 28FS, model 2004 (2) KOMFORT / 29FS, model 2004 On certain fifth wheel trailers equipped with aluminum wheels, the thickness of the wheel may not allow for enough thread engagement of the lug nuts. Lack of thread engagement could allow the wheel to separate from the trailer and a crash could occur without prior notice. Dealers will replace the wheels. The recall began Janaury 4,2005. For more details, contact the Company by Phone: 800-554-2711 or the NHTSA's auto safety hotline: 1-888-327-4236. MICHIGAN: Homeowners Refusing $1.2M Detroit Firm Settlement ----------------------------------------------------------- Some Michigan homeowners are actually turning down money from a $1.2 million settlement of a class-action lawsuit with a Detroit-area company that leaked toxic chemicals after a 2001 explosion, the Associated Press reports. Though hundreds of people could share in a $1.2 million settlement, some eligible residents said they don't deserve any money because they weren't exposed to fumes. While others said they don't support the lawsuit and one woman even said she shouldn't get any money because she "did not suffer." Still another said she wasn't home, and taking the money wouldn't be honest. She added at age 86, "you have to think about the hereafter," AP reports. About 25-hundred residents of Riverview, Trenton, Wyandotte and Grosse Ile were evacuated from their homes after a railcar exploded. Three ATOFINA Chemicals employees were killed and nine got hurt. The lead plaintiffs in the class-action suit get $1,000 each, while others get $550. MICHIGAN SUGAR: Judge Gives Final Approval To $1.75M Settlement --------------------------------------------------------------- Bay County Circuit, Michigan Judge Lawrence M. Bielawski given final approval to the settlement of a class-action lawsuit filed by neighbors of Michigan Sugar Co.'s Monitor Township plant, ultimately paving the way for payments to about 3,500 households later this year, The Bay City Times reports. Judge Bielawski deemed the terms of the settlement, which puts an end to the lawsuit filed in 2003, "fair, reasonable and in the public interest." The settlement calls for the former Monitor Sugar factory to reduce or eliminate dust and odor emanating from the plant and to pay out $1.75 million to people who live near the facility. It also grants $3,500 to each of seven named plaintiffs in the case and $1,500 to others who complained to state environmental officials about the pollution or showed written interest in joining the lawsuit, even if they live outside the designated boundaries. Checks are expected to be sent out sometime in the early fall. "This is a settlement, without admission of fault," Charles M. Denton, attorney for Michigan Sugar told the Bay City Times. "It is a substantial settlement, but will allow our Euclid Avenue plant to continue to be a significant employer in Bay City." PHILIP MORRIS: Wins Appeal Of $280B RICO Suit Over Past Profits --------------------------------------------------------------- Altria Group Inc.'s Philip Morris USA and other U.S. cigarette makers can't be forced to forfeit $280 billion in past profits as the U.S. government demanded in a civil racketeering lawsuit, according to a recent ruling by an appeals court in Washington, Bloomberg reports. In its ruling, which eliminated one of the biggest concerns for the tobacco industry, the court pointed out that the racketeering law was aimed at preventing future violations and doesn't allow the U.S. to seek recovery of alleged "prior ill- gotten gains." Thomas Russo, a partner at Gardner, Russo & Gardner in Lancaster, Pennsylvania, told Bloomberg "This is a big deal." Its assets of $3 billion include 3.3 million Altria shares, the firm's largest holding. "It is gratifying to see the rule of law fairly applied to facts and circumstances even though it involves tobacco." The Justice Department, which sued the companies for violating federal racketeering law in 1999, has been pursuing its claims at a trial in Washington. The recent decision though doesn't end the trial, which has been under way since September 21 in front of U.S. District Judge Gladys Kessler. The government may still seek restrictions on the companies, including new limits on how they market and advertise cigarettes. In their appeal of a ruling by the trial judge, the companies had argued that forfeiture of past profits wasn't authorized under the law. A three-judge panel of the U.S. Circuit Court of Appeals for the District of Columbia in Washington agreed, thus they ruled 2-1 in the companies' favor. The government had claimed the tobacco industry engaged in a five-decade conspiracy to mislead the public about the dangers of smoking, in violation of the federal Racketeer Influenced and Corrupt Organizations Act, or RICO. RICO, passed in 1970, was originally intended to target organized crime. The U.S. case against the tobacco industry includes only civil claims. Circuit Judge David Sentelle in writing for the court, "The language of the statute explicitly provides three alternative ways to deprive RICO defendants of control over the enterprise and protect against future violations: divestment, injunction, and dissolution. We need not twist the language to create a new remedy not contemplated by the statute," Bloomberg reports. PHILIPPINES: Survivors Lose Suit Over Former Dictator's Estate -------------------------------------------------------------- Filipinos seeking compensation from the regime of former dictator Ferdinand Marcos lost a major legal battle in their quest to recover a $2 billion jury verdict to settle human- rights abuses, the Associated Press reports. A three-judge panel of the San Francisco-based 9th U.S. Circuit Court of Appeals ruled that the 9,500 plaintiffs, most of them still living in the Philippines, have no right to recover $683 million in Marcos assets that were transferred from a Swiss account to the Philippine government, which claims ownership of the money. The plaintiffs filed a class-action lawsuit against the Marcos estate in 1986, the year he was deposed as president after ruling for 20 years. He and his family fled to Hawaii, where he died in exile in 1989. In 1995, using a two-century-old U.S. law, a Honolulu jury awarded plaintiffs $2 billion after finding the former Philippine strongman responsible for summary executions, disappearances and torture. The plaintiffs though have not collected from that judgment, which is nearing $4 billion with interest, and have been awarded a combined $40 million from Marcos assets found in a New York bank, which is currently on appeal. Robert Swift, an attorney for the plaintiffs and others had argued the $683 million transferred from the Swiss account to the Philippine National Bank should have been awarded to their clients. However, the Philippine government asserted that the money was part of the national treasury, a decision the country's highest court agreed with in 2003 when it ordered the national bank to forward the money to the government. In it's ruling, the U.S. appeals court explained that that American courts have no legal right to overturn a foreign country's supreme court despite the plaintiffs' 1995 jury award in Honolulu. In this case, the decision applies to the Philippine Supreme Court's order that the funds be forwarded to the national treasury. Jay Ziegler, an attorney for Philippine National Bank, said the institution was gratified by the decision. He told AP, "We think it is the correct result in this case. The Philippine Supreme Court in 2003 ordered the funds forfeited to the government, and the bank complied with the Supreme Court." QUANTUM CORPORATION: Suit Certification Hearing Set March 2005 -------------------------------------------------------------- Hearing on class certification for an antitrust lawsuit filed against Quantum Corporation and other photographic film companies is set for March 2005 in the Superior Court of the State of California for the County of San Francisco. Hitachi Maxell, Ltd., Maxell Corporation of America, Fuji Photo Film Co., Ltd., and Fuji Photo Film U.S.A., Inc. are named in the lawsuit as codefendants. The plaintiff, Franz Inc., alleges violation of California antitrust law, violation of California unfair competition law, and unjust enrichment. Franz Inc. charges, among other things, that the defendants entered into agreements and conspired to monopolize the market and fix prices for data storage tape compatible with DLT tape drives. Franz seeks an order that the lawsuit be maintained as a class action and that defendants be enjoined from continuing the violations alleged in the complaint. Franz also seeks compensatory damages, treble damages, statutory damages, attorneys' fees, costs, and interest. The suit is styled "Franz, Inc., Individually, on behalf of all others v. Quantum Corporation, et al, Case Number: CGC-03- 423301," filed in the Superior Court of San Francisco California, under Judge Richard A. Kramer. Attorneys for plaintiff Franz, Inc. are: (1) David Lorie, 555 12th Street, Suite 1450, Oakland, CA 94607 USA, Phone: (510) 452-2000 (2) Raymond W. Morganti, Siemion, Huckabay, Bodary, Padilla, Morganti & Bowerman, P.C., One Towne Square, Suite 1400, P.O. Box 5068, Southfield, MI 40808-6506, Phone: (248) 357-1400 (3) Robert C. Schubert, Schubert & Reed LLP, Two Embarcadero Center, Suite 1660, San Francisco CA 94111, Phone: (415) 788-4220 Defending the Company are: (i) Loren Kieve, Oliver & Hedges, LLP, 50 California, 22nd Floor, San Francisco CA 94111 (ii) Robert P. Mallory, McDermott, Will & Emery, 2049 Century Park East. 34th, Los Angeles CA 90067, Phone: (310) 277-4110 (iii) Charles H. Samel, Howrey Simon Arnold & White LLP, 550 South Hope Street, Suite 110, Los Angeles, CA 90071, Phone: (213) 892-1800 STATE AND COUNTY: TX A.G. Forges Last Auto Repair Settlements ------------------------------------------------------------- Texas Attorney General Greg Abbott reached the last two in a five-year series of settlements with various insurance companies to give refunds to Texas policyholders who paid more out of pocket on claims for auto repairs than their policies required. State and County Mutual Fire Insurance Co. agreed to pay $952,000, including interest, in refunds to about 2,900 policyholders who had auto repair claims from January 1996 through February 2003. In November the Attorney General filed a settlement with Maryland Casualty Co., which requires the company to make refunds totaling $53,000 to about 185 Texas policyholders who filed claims between January 1996 and September 1999. "Consumers who make valid claims following traffic accidents expect to be treated fairly by insurance companies," Attorney General Abbott said. "They also deserve refunds from companies that used deceptive means to take money from them through such schemes as this." The companies, along with others in the industry, engaged in a systematic, unlawful practice known as "betterment," in which they claimed the use of better or newer parts to repair the vehicle increased its value. Companies then charged the amount of this supposed "increased value" to the policyholders, thus reducing the amount the company paid for the repairs. Policyholders were then forced to make up the difference, in addition to their deductible, to the repair shop. Under the terms of the agreement announced today, most eligible policyholders will automatically receive a check reflecting the total amount of overcharges, plus interest, to customers who had auto repair claims involving betterment. However, many policyholders have not yet been identified, and these individuals must submit a claim form to the settlement administrator. Any consumer who believes he or she may be entitled to a refund should call (817)-732-2111 (ext. 3025), or mail an inquiry to Robert Hudson, Claims Administrator, c/o Wellington Financial Services Inc., P.O. Box 230, Fort Worth, TX 76101. Since 2000, the Attorney General has settled 19 betterment case for an estimated $17.4 million in refunds, alleging that insurance companies merely increased the value of the replaced part, and not the entire vehicle. Texas law does not permit such a charge or deduction, and auto insurance policies require that the companies fully pay for the repair, less the deductible, even if the parts used were better than the ones they replaced. For more details, contact Angela Hale, Paco Felici, Jerry Strickland, or Tom Kelley by Phone: (512) 463-2050 UNITED STATES: LCCR Calls On Senators To Support S.5 Amendments --------------------------------------------------------------- Saying it is vital to protect the workplace and civil rights of ordinary Americans, the Leadership Conference on Civil Rights (LCCR), the nation's oldest, largest, and most diverse civil and human rights coalition, called on U.S. Senators to support an amendment to be offered by Senators Ted Kennedy and Maria Cantwell to pending class action legislation (S. 5). "The United States Senate should not throw out the baby of worker and minority rights with the bathwater of curtailing class-action lawsuits," said Nancy Zirkin, LCCR deputy director. "There is absolutely no evidence that lawsuits brought by workers seeking justice in state courts on issues ranging from overtime pay to working off the clock are abusing the system. To the contrary, failure to exempt such lawsuits in this legislation is an abusive act against every hard-working American seeking fair pay and a better life." LCCR explained that state courts are the correct venue to litigate wage-and-hour issues. Different states have different laws. Forcing all wage-and-hour lawsuits into federal court will not work because of the extraordinary difficulty of reconciling so many different state laws. "Nearly all of the wage-and-hour and anti-discrimination lawsuits brought in state courts are brought by in-state workers against companies operating in that state," continued Ms. Zirkin. "Furthermore," said Ms. Zirkin, "I am truly shocked that so many Senators who are avowed advocates of state's rights would so cavalierly turn on their own states and constituents to support a bill that will eviscerate state employment and civil rights laws." "The Senate should demonstrate that it is not anti-worker and not anti-state. The fact is that many state labor laws provide greater protections for workers such as broader overtime rights and benefits for part-time workers. Furthermore, many states have stronger laws that prohibit discrimination on the basis of disability, ancestry, genetic information, parenthood, sexual orientation, or familial status," said Ms. Zirkin. "And although there are strong federal civil rights laws, many states have stronger civil rights laws on the books. Without an exemption, passage of S. 5 would have a chilling effect on other states considering stronger civil rights legislation." "To protect the civil rights of workers and minorities, the Senate should exempt state wage-and-hour and civil rights actions from the Class Action Fairness Act by passing the amendment offered by Senators Kennedy and Cantwell," Ms. Zirkin urged. VERIZON COMMUNICATIONS: Customers Sue Over Anti-Spamming Methods ---------------------------------------------------------------- Verizon Communications is facing two class-action complaints by its U.S. customers, who claim the Internet provider's anti- spamming methods are interfering with legitimate e-mail, the NorthJersey.com reports. According to one complaint that was instigated by a law firm with offices in Gloucester County and Philadelphia, "Like killing a cockroach with an atom bomb ... Verizon's desperate action caused massive disruption of its customers' communications with foreign business partners, governmental agencies, family and friends." In keeping with Verizon's contracts with business customers, the complaint demands binding arbitration through the American Arbitration Association. Meanwhile, the other complaint, a conventional lawsuit filed in California state court, involves five residential customers. A Philadelphia law firm, Kohn, Swift & Graf, which specializes in class-action lawsuits, is handling both cases. The firm is currently inviting Verizon customers to become plaintiffs, and dozens of people have responded so far, according to Michael J. Boni, the lawyer handling the case. Verizon customers began complaining in online forums in late December that they weren't receiving e-mail from Europe. A leaked company memo confirmed that Verizon had stepped up it's blocking of foreign e-mail around that time. That memo also said that unblocking e-mail from particular senders would take two weeks. Michael Kleeman, a Philadelphia lawyer who instigated the arbitration complaint, told NorthJersey.com his firm was receiving case referrals by e-mail from Great Britain and Ireland. However, the referrals stopped coming December 6, and a month later, the firm switched to another Internet provider. The complaint alleges that Verizon, by blocking legitimate e- mail without notice, breached its contract with customers and thus seeks unspecified damages and an end to "unlawful blocking." Internet providers have become increasingly aggressive in preventing spam from hitting their customers' inboxes. In addition to using increasingly sophisticated filters, they "blacklist" some servers, even servers of well-known Internet providers that send out a lot of spam. WET SEAL: Reports Receipt of Consolidated Class Action Complaint ---------------------------------------------------------------- Specialty retailer The Wet Seal, Inc. (NASDAQ:WTSLA), which had previously reported that various class actions had been brought against the Company, as well as certain former directors, and former and current officers of the Company is now reporting that it has received the court appointed, lead plaintiffs' Consolidated Class Action Complaint, filed in the United States District Court for the Central District of California, which consolidates all of the previously reported class actions. In summary, the complaint alleges that the defendants, including the Company, violated the federal securities laws by making material misstatements of fact or failing to disclose material facts during the class period concerning its prospects to stem ongoing losses in its Wet Seal division and return that business to profitability. The complaint also alleges that certain former directors and La Senza Corporation, a Canadian company controlled by them, unlawfully utilized material non-public information in connection with the sale of the Company's stock by La Senza. The complaint seeks class certification, compensatory damages, interest, costs, attorney's fees and injunctive relief. At the appropriate time, the Company intends to move to dismiss the consolidated complaint. Headquartered in Foothill Ranch, California, The Wet Seal, Inc. is a leading specialty retailer of fashionable and contemporary apparel and accessory items. The company currently operates a total of 453 stores in 47 states, the District of Columbia and Puerto Rico, including 359 Wet Seal stores and 94 Arden B. stores. ZAMP CORPORATION: Recalls 4,824 Helmets For Injury, Death Hazard ---------------------------------------------------------------- Zamp Sports Corporation is cooperating with the National Highway Traffic Safety Administration (NHTSA) by voluntarily recalling 4,824 motorcycle helmets, namely: (1) ZAMP S-1 SHORTY / H011003L (2) ZAMP S-1 SHORTY / H011003M (3) ZAMP S-1 SHORTY / H011003S (4) ZAMP S-1 SHORTY / H011003XL (5) ZAMP S-1 SHORTY / H011003XS (6) ZAMP S-1 SHORTY / H011003XXL (7) ZAMP S-1 SHORTY / H011015L (8) ZAMP S-1 SHORTY / H011015M (9) ZAMP S-1 SHORTY / H011015S (10) ZAMP S-1 SHORTY / H011015XL (11) ZAMP S-1 SHORTY / H011015XS (12) ZAMP S-1 SHORTY / H011015XXL (13) ZAMP S-1 SHORTY / H01103FL (14) ZAMP S-1 SHORTY / H01103FM (15) ZAMP S-1 SHORTY / H01103FS (16) ZAMP S-1 SHORTY / H01103FXL (17) ZAMP S-1 SHORTY / H01103FXS (18) ZAMP S-1 SHORTY / H01103FXXL (19) ZAMP S-1 SHORTY / H01115FL (20) ZAMP S-1 SHORTY / H01115FM (21) ZAMP S-1 SHORTY / H01115FS (22) ZAMP S-1 SHORTY / H01115FXL (23) ZAMP S-1 SHORTY / H01115FXS (24) ZAMP S-1 SHORTY / H0113FLL (25) ZAMP S-1 SHORTY / H0113FLM (26) ZAMP S-1 SHORTY / H0113FLS (27) ZAMP S-1 SHORTY / H0113FLXL (28) ZAMP S-1 SHORTY / H0113FLXS Certain Zamp S-1 Sporty motorcycle Helmets imported between February 1 and July 31,2003 fail the penetration, retention elongation, g-forces and labeling requirements of federal motor vehicle safety standard no. 218, motorcycle helmets. In event of a vehicle crash, the helmet will not adequately protect the user, possibly resulting in serious injury or death. Zamp Sports will notify its customers and replace these helmets with an equivalent compliant helmet. The recall is expected to begin February 2005. Owners who do not receive the free remedy within a reasonable time should contact the Company by Phone: 916-861-0066 for NHTSA's auto safety hotline: 1-888-DASH-2-DOT (1-888-327-4236). New Securities Fraud Cases A.G. EDWARDS: Finkelstein & Krinsk Lodges Securities Suit in CA --------------------------------------------------------------- The law firm of Finkelstein & Krinsk, LLP, initiated a class action in the United States District Court for the Southern District of California on behalf of purchasers of Variable Annuity Insurance Products ("Variable Annuities") from A.G. Edwards & Sons, Inc. ("A.G. Edwards") between January 1, 1990 and February 3, 2005 (the "Class Period"). The complaint alleges that during the Class Period, A.G. Edwards made false and misleading statements and omitted material facts concerning its undisclosed financial interests with third party suppliers of annuity contracts. The third parties paid monies and other incentives to have Variable Annuities steered to them by A.G. Edwards without properly disclosing the preexisting arrangement to its customers. A variable annuity is an insurance contract with characteristics causing it to be treated as an "investment" under the Securities Act of 1933. A Variable Annuity contract generally provides that the purchaser agree to a simple "lump sum" premium or scheduled fixed premiums for a pre-set number of years. The premiums are deposited into a separate account after deducting expenses, fees and charges specified in the contract. The premiums thus collected in the annuitant's separate account are available for tax deferred investment in one or more portfolios (called sub- accounts). Upon maturity of the annuity, the annuitant receives payment from the accumulated value in such amounts and upon the terms specified in the underlying investment contract. Rather than providing independent and unbiased services for clients wanting to purchase Variable Annuities, A.G. Edwards maintained secret contingent fee sharing agreements with a number of insurance company underwriters of annuity contracts. These activities cause insurance companies to collect higher premiums than would be paid absent these arrangements and result in A.G. Edwards customers paying inflated premiums for the Variable Annuities. For more details, contact Amy Lepine, Esq. of Finkelstein & Krinsk, LLP by Phone: 877-493-5366 by Fax: 619-238-5425 or by E- mail: ajl@classactionlaw.com OR Ronald A. Marron, Esq. of the Law Office of Ronald A. Marron, APLC by Phone: 619-685-6969 by Fax: 619-690-0983 or by E-mail: Ron.Marron@cox.net OR Frederick Schenk, Esq. of Casey, Gerry, Reed & Schenk by Phone: 619-238- 1811 by Fax: 619-544-9232 or by E-mail: fschenk@cglaw.com and Stephen Basser, Esq. of Barrack, Rodos & Bacine by Phone: 619- 230-0800 by Fax: 619-230-1874 or by E-mail: sbasser@barrack.com. CHINA AVIATION: Schiffrin & Barroway Files Securities Suit in NY ---------------------------------------------------------------- The law firm of Schiffrin & Barroway, LLP initiated a class action lawsuit in the United States District Court for the Southern District of New York on behalf of all securities purchasers of China Aviation Oil (Singapore) Corporation LTD (OTC: CAOLF) ("China Avitaion" or the "Company") between March 27, 2003 and November 30, 2004 inclusive (the "Class Period"). The complaint charges China Aviation, Jia Changbin and Chen Jiulin 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 lacked adequate internal controls and risk management procedures; (2) that as a consequence the Company engaged in speculative derivative trading, forcing controlling shareholders to raise funds to cover margin calls on massive derivative losses; and (3) that the Company kept $550 million in derivative trading losses of the books, thereby artificially inflating its financial results. On November 30, 2004, China Oil announced that the Company had suffered significant losses from speculative oil derivative trading. As of November 29, 2004, the Company estimated that the total cumulative losses (both realized and unrealized) incurred by the Company were approximately US$550 million. On this news, trading in the Company's shares was suspended after the shares dropped to below S$1.00 per share, compared to prices as high as S$1.70 per share, at which the shares traded during the Class Period. For more details, contact Marc A. Topaz, Esq. or Darren J. Check, Esq. of Schiffrin & Barroway, LLP by Phone: 1-888-299-7706 or 1-610-667-7706 or by E-mail; info@sbclasslaw.com. DIRECT GENERAL: Schiffrin & Barroway Lodges TN Securities Suit -------------------------------------------------------------- The law firm of Schiffrin & Barroway, LLP initiated a class action lawsuit in the United States District Court for the Middle District of Tennessee on behalf of all securities purchasers of Direct General Corp. (NASDAQ: DRCT) ("Direct General" or the "Company") between August 11, 2003, and January 26, 2005 inclusive (the "Class Period"). The complaint charges Direct General, William Adair, Jr., Barry Elkins, Brian Moore, Jacqueline Adair, and Tammy Adair 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 defendants concealed the negative effect that a chance in the law related to personal injury protection coverage in Florida had on its business; (2) that the Company maintained inadequate loss reserves and failed to adjust for loss reserves with respect to a change in the law related to personal injury protection coverage in Florida. Beginning with policies issued on or after October 1, 2003, Florida mandated that the maximum personal injury protection coverage deductible be reduced from $2,000 per occurrence to $1,000 and that the limit be increased to $10,000 in excess of the deductible as opposed to $10,000 less the deductible; (3) that as result of this, the Company had to further increase its reserves by approximately $2.2 million; and (4) as a consequence of the foregoing, the Company's income was materially overstated at all relevant times. On January 26, 2005, Direct General announced that it had completed its analysis of loss reserves as of December 31, 2004, and had determined that it was necessary to strengthen its loss reserves for an estimated 2.1 point increase in the expected ultimate loss ratio for the 2004 accident year and to further increase its reserves for prior accident years by approximately $2.2 million. The news shocked the market. Shares of fell $8.88 per share, or 31.17 percent, on January 27, 2005, to close at $19.61 per share. For more details, contact Marc A. Topaz, Esq. or Darren J. Check, Esq. of Schiffrin & Barroway, LLP by Phone: 1-888-299-7706 or 1-610-667-7706 or by E-mail; info@sbclasslaw.com. DIRECT GENERAL: Wolf Popper Lodges Amended Securities Suit in TN ---------------------------------------------------------------- The law firm of Wolf Popper LLP lodged an amended complaint in a securities class action against Direct General Corporation (Nasdaq: DRCT) expanding the Class Period to August 11, 2003 through January 26, 2005. The action includes investors in the open market and on Direct General's two stock offerings. The action was filed in the U.S. District Court for the Middle District of Tennessee. The amended complaint is based on Wolf Popper's continuing investigation and includes allegations that insiders, including the named defendants, sold approximately 2.4 million shares of Direct General stock during the Class Period for total proceeds of over $80 million. In the amended complaint, plaintiff alleges that defendants materially misrepresented on numerous occasions that Direct General was performing extremely well, when in fact Direct General had understated its loss reserves in light of Florida legislation that was signed into law on July 11, 2003. Direct General shocked investors when it disclosed on January 26, 2005 -- over 15 months after the passage of the Florida law -- that it had not previously increased its reserves in light of its exposure under Florida law during previous quarters, and that it would consequently be required to increase its reserves by $11 million pre-tax. As a result of the news, Direct General shares plummeted nearly 31% to close on January 27, 2005 at $19.67 per share. For more details, contact Robert C. Finkel, Esq. of WOLF POPPER LLP by Mail: 845 Third Avenue, New York, NY 10022 by Phone: 212-451-9620 or 877-370-7704 by E-mail: irrep@wolfpopper.com or visit their Web site: http://www.wolfpopper.com. INPUT/OUTPUT: Lerach Coughlin Lodges Securities Fraud Suit in TX ---------------------------------------------------------------- The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins LLP ("Lerach Coughlin") initiated a class action in the United States District Court for the Southern District of Texas on behalf of purchasers of Input/Output, Inc. ("Input/Output") (NYSE:IO) publicly traded securities during the period between May 10, 2004 and January 4, 2005 (the "Class Period"), including those who acquired their shares pursuant to the Company's June 2004 Secondary Stock Offering. The complaint charges Input/Output and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Input/Output is a provider of seismic acquisition imaging technology for exploration, production and reservoir monitoring in land and marine, as well as shallow water and marsh environments. The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company's financial results and its business and prospects. According to the complaint, during the Class Period defendants failed to disclose and misrepresented the following material adverse facts known to defendants or recklessly disregarded by them: (1) that the Company's products were defective; (2) that customers were wrongfully induced into buying the Company's products; (3) that the integration of GX Technology ("GXT"), acquired by the Company in May 2004, and Input/Output was suffering from massive problems, preventing the acquisition from being as accretive as claimed; (4) that the GXT project pipeline was not on track, as defendants had claimed; and (5) that as a result of the above, the defendants' statements about the Company were lacking in any reasonable basis when made. On January 4, 2005, Input/Output issued a press release wherein it announced that fourth quarter results would be significantly below the low end of the Company's guidance of $0.08 per share, primarily because two high margin GXT data library sales were not completed as expected. On this news, shares of Input/Output fell $1.41 per share, or about 17%, to close at $6.90 per share, on unusually high trading volume. For more details, contact Samuel H. Rudman or David A. Rosenfeld of Lerach Coughlin by Phone: 800/449-4900 or 619/231-1058 or by E-mail: wsl@lerachlaw.com or visit their Web site: http://www.lerachlaw.com/cases/inputoutput/. PHARMOS CORPORATION: Stull Stull Lodges Securities Suit in NJ ------------------------------------------------------------- The law firm of Stull, Stull & Brody initiated a class action lawsuit in the United States District Court for the District of New Jersey, on behalf of all persons who purchased the publicly traded securities of Pharmos Corp. ("Pharmos") (Nasdaq:PARS) between August 23, 2004 and December 17, 2004, inclusive (the "Class Period"). The Complaint alleges that Pharmos violated federal securities laws by issuing false or misleading public statements. Specifically, the Complaint alleges that Dexanabinol, the Company's flagship drug product, in Phase III trials for Traumatic Brain Injury ("TBI"), was not exhibiting a materially favorable reaction. However, prior to disclosing this information to the public, Pharmos sold $16.75 million worth of stock in a private placement. Furthermore, the Company's CEO sold 20% of his holdings and its President sold almost 50% of his holdings. Such sales occurred after the close of Phase III enrollment and after the six month post-enrollment period had concluded. On December 20, 2004, just weeks after insiders sold 400,000 shares of stock, Pharmos announced that Dexanabinol was not found to be materially effective in Phase III testing. Furthermore, after years of touting the effectiveness of Dexanabinol, Pharmos abruptly ceased its effort to gain approval for Dexanabinol for TBI. For more details, contact Tzivia Brody, Esq. of Stull, Stull & Brody by by Mail: 6 East 45th Street, New York, NY 10017 by Phone: 1-800-337-4983 by Fax: 212/490-2022 or by E-mail: SSBNY@aol.com or visit their Web site: http://www.ssbny.com. TOWER AUTOMOTIVE: Federman & Sherwood Lodges NY Securities Suit --------------------------------------------------------------- The law firm of Federman & Sherwood initiated a securities class action lawsuit in the Southern District of New York against certain officers and directors of Tower Automotive, Inc. (NYSE: TWR). 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 complaint further alleges that the officers and directors of Tower Automotive, Inc. actively concealed true facts that the Company's liquidity issues were so poor that bankruptcy was imminent. The class period is from February 14, 2003 through January 21, 2005. 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 Mail: wfederman@aol.com or visit their Web site: http://www.federmanlaw.com. TOWER AUTOMOTIVE: Lerach Coughlin Files NY Securities Fraud Suit ---------------------------------------------------------------- The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins LLP ("Lerach Coughlin") initiated a class action lawsuit in the United States District Court for the Southern District of New York on behalf of purchasers of Tower Automotive, Inc. ("Tower Automotive") (NYSE: TWR) common stock during the period between February 14, 2003, and January 21, 2005 (the "Class Period"). The complaint charges certain of Tower Automotive's officers and directors with violations of the Securities Exchange Act of 1934. Tower Automotive is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer. On February 2, 2005, the Company filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code in the Southern District of New York and, therefore, the Company is not named as a defendant. The complaint alleges that, during the Class Period, defendants failed to disclose and/or misrepresented the following adverse facts, which were known to defendants, or recklessly disregarded by them, at all relevant times: (1) that the Company was facing increasing pressure from automakers to dramatically lower its prices in order to offset incentives that automakers were having to provide in order to remain competitive; (2) that the costs of steel and other raw materials were continuing to rise and would do so in the future, thereby increasing expenses and, when combined with the squeeze being placed on the Company by automakers, dramatically decreasing the Company's earnings ability. To the extent that Tower purported to warn of the impact of rising materials' prices, those warnings were generic in nature and did not advise investors of the full extent of the risks and uncertainties faced by the Company as a result of rising materials' prices; (3) that early pay programs that had been instituted by automakers in 2001 which enabled automakers to pay suppliers early for products and therefore get a discount were going to be terminated, thereby depriving the Company of a primary source of its liquidity; (4) based on the foregoing, contrary to Defendants' representations, the Company's financial condition was declining precipitously such that the Company was nearing insolvency and would have to file for bankruptcy; and (5) based on the foregoing, defendants had no reasonable basis for their positive statements regarding the Company's ability to control its liquidity issues. Then, on January 20, 2005, the Company issued a press release announcing that longer-than-anticipated holiday shutdowns at certain key customers will reduce liquidity by $40 million during the first quarter of 2005. On the following trading day, Standard & Poor's ("S&P") slashed its rating on Tower Automotive saying that the Company may have to restructure its finances unless business improves over the next two quarters. S&P cut Tower Automotive's corporate credit rating by three notches to the deeply speculative "CCC" level from "B." Market reaction to these announcements was swift and severe. On January 21, 2005, shares of Tower Automotive common stock closed at $0.75 per share, a decline of $1.61 per share, or almost 70%, from its close on January 19, 2005. For more details, contact Samuel H. Rudman or David A. Rosenfeld of Lerach Coughlin by Phone: 800/449-4900 or 619/231-1058 or by E-mail: wsl@lerachlaw.com or visit their Web site: http://www.lerachlaw.com/cases/towerautomotive/. ********* A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the Class Action Reporter. Submissions via e-mail to carconf@beard.com are encouraged. Each Friday's edition of the CAR includes a section featuring news on asbestos-related litigation and profiles of target asbestos defendants that, according to independent researches, collectively face billions of dollars in asbestos-related liabilities. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Glenn Ruel Se�orin, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2005. All rights reserved. ISSN 1525-2272. 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