CAR_Public/991216.MBX                 C L A S S   A C T I O N   R E P O R T E R

                Thursday, December 16, 1999, Vol. 1, No. 222

                                 Headlines

ALGOMA STEEL: Canadian Suit Charges Michipicoten Arsenic Contamination
AMWAY ASIA: Reports Filing of Lawsuit in CA Re New AAPís Tender Offer
AMWAY JAPAN: Reports Filing of Lawsuit in CA Re N.A.J.ís Tender Offer
CABLE TV: Cos Charged of Tying with Broadband Internet Access Providers
CALGENE INC: Sued in Delaware over Proposed Acquisition by Monsanto

GARGIULO INC.: CA Suit Alleges Violations of MSPA, Wage Order & Codes
HOLOCAUST VICTIMS: U.S. & German Negotiators Reach Deal; Details Dec 17
INTíL PRECIOUS: 11th Cir Says Settlement Claims Do Not Limit Atty. Fees
MICROSOFT CORP: Lawyers For New Suits Find Others Were Filed Months Ago
MONSANTO: Update on Lawsuit Filed in Washington on Biotech Crops

POKMON TRADING: CA Suit Charges Nintendo & 4Kids of Illegal Gambling
SMITHKLINE BEECHAM: PA. Suit Says Lyme Vaccine Can Cause Deadly Disease
TOBACCO LITIGATION: 8th Cir Rejects Appeal by Arkansas Nicotine Addicts
TYCO INTíL: Finkelstein, Thompson Files Securities Suit in N.H.
UCLA: CA Suit Seeks to Change Policy over Wheelchair Access To Arena

XEROX CORP: Fruchter & Twersky File Securities Suit in Connecticut

* SEC Seeks Fast Public Disclosure By Firms

                                *********

ALGOMA STEEL: Canadian Suit Charges Michipicoten Arsenic Contamination
----------------------------------------------------------------------
A proposed Canadian class action was filed Oct. 8 on behalf of certain
property owners and residents who have suffered property damages or
personal injuries as a result of arsenic contamination and exposure (The
Corp. of the Township of Michipicoten, et al. v. Algoma Steel Inc., No.
19265199, Ont. Super., Algoma Dist.). (Text of Complaint in Section E.
Mealey's Document # 15-991020-108.)

Plaintiffs The Corporation of the Township of Michipicoten and James
Aquino each claim damages of $ 50 million and punitive damages of $ 5
million. The complaint was filed in the Ontario Superior Court for the
District of Algoma.

The proposed class action was filed on behalf of all property owners
within Michipicoten Township and surrounding areas who have been
contaminated with arsenic, all residents of Michipicoten Township who
have been affected by arsenic contamination, and all current or past
township residents who have suffered injuries as a result of arsenic
exposure.

Defendant Algoma Steel Inc. and its predecessor companies have operated
a sinter plant near Michipicoten since approximately 1910. Stacks on the
plant exhaust sulfur dioxide and arsenic into the atmosphere, according
to the complaint, which alleges that the arsenic and sulfur dioxide were
deposited on properties surrounding the operation, including
Michipicoten Township.

                        Damages Alleged

As a result of the arsenic contamination, plaintiffs maintain that the
quality of the natural environment has been impaired, property values
have diminished, arsenic exposure caused personal injuries and
contamination has caused loss of enjoyment of property damage.
Plaintiffs also allege that the contamination has created a negative
stigma.

Plaintiffs further claim that Algoma breached its duty to warn of the
continuing contamination and is, therefore, negligent. Plaintiffs
maintain that they are entitled to punitive damages because Algoma was
aware of the risks associated with arsenic contamination and of the fact
that such contamination existed and was widespread.

"Furthermore, the Defendant's failure to make disclosure was such that
it attempted to secret a serious environmental problem. Its conduct is
totally contrary to its public declaration and commitment to the
environment and its duty to deal fairly with the Plaintiffs, the
residents, and property owners within the Township and surrounding
areas," the complaint alleges.

The plaintiffs continue that exposure to arsenic contamination caused
pain and suffering, loss of income, impairment of earning ability,
future care costs, medical costs, loss of amenities, anxiety, nervous
shock, mental distress, emotional upset, property damage and
out-of-pocket expenses. Plaintiffs are represented by Orlando M. Rosa of
Wishart & Partners in Sault Ste. Marie, Ontario. (Mealey's Litigation
Report: Emerging Toxic Torts, Vol. 8; No. 14, October 20, 1999) Website:
http://www.mealeys.com


AMWAY ASIA: Reports Filing of Lawsuit in CA Re New AAPís Tender Offer
---------------------------------------------------------------------
Amway Asia Pacific Ltd. (NYSE: AAP; ASX: AMW) reported on December 14
that a putative class action lawsuit was filed on or about December 9,
1999 in the Supreme Court of the State of California, County of San
Mateo, relating to New AAP Limited's cash tender offer to acquire all of
the common stock of Amway Asia Pacific for U.S. $18.00 per share. The
cash tender offer commenced on November 18, 1999, and is scheduled to
expire at 12:00 midnight New York City time on December 17, 1999.

The complaint names as defendants Amway Asia Pacific, certain of its
officers and directors and New AAP Limited. The complaint alleges that
the purchase price offered to Amway Asia Pacific's public shareholders
in the tender offer is unfair and alleges self-dealing and breaches of
fiduciary duty. The lawsuit seeks injunctive relief or, alternatively,
rescission, unspecified damages, costs and attorneys' fees and other
relief. Amway Asia Pacific, its officers and directors and New AAP
Limited believe that the lawsuit is without merit and plan to vigorously
defend against it.

Headquartered in Hong Kong, Amway Asia Pacific Ltd. is the exclusive
distribution vehicle for Amway Corporation in Australia, Brunei,
People's Republic of China, Macau, Malaysia, New Zealand, Taiwan and
Thailand. Amway Asia Pacific Ltd. is one of the largest direct selling
companies in the region, based on sales of Amway consumer products
offered through a core distributor force of approximately 601,000
independent distributors at August 31, 1999. Amway Asia Pacific Ltd. is
listed on the New York Stock Exchange (AAP) and the Australian Stock
Exchange (AMW). Contact: Holly A. Clemente, Director of Investor
Relations of Amway Asia Pacific Ltd, 616-787-8688. Current press
releases and SEC earnings filings are available through the Internet at
http://www.aap-amway.com


AMWAY JAPAN: Reports Filing of Lawsuit in CA Re N.A.J.ís Tender Offer
---------------------------------------------------------------------
Amway Japan Limited (NYSE: AJL; Tokyo OTC: 9821) reported on December 14
that a putative class action lawsuit was filed on December 10, 1999 in
the Superior Court of the State of California, County of Orange relating
to N.A.J. Co., Ltd.'s cash tender offer to acquire all of the common
stock of Amway Japan Limited and common stock underlying American
Depositary Shares ("ADSs"). The cash tender offer commenced on November
18, 1999. With respect to the common stock, the tender offer is schedule
to expire in Japan on December 17, 1999 and with respect to the ADSs,
the tender offer is scheduled to expire outside Japan at 12:00 midnight
New York City time on December 17, 1999.

The complaint names as defendants Amway Japan Limited, certain of its
directors and N.A.J. The complaint alleges that the purchase price
offered to Amway Japan Limited's public shareholders in the tender offer
is unfair and alleges self-dealing and breaches of fiduciary duty. The
lawsuit seeks injunctive relief or, alternatively, rescission,
unspecified damages, costs and attorneys' fees and other relief. Amway
Japan Limited, its directors and N.A.J. believe that the lawsuit is
without merit and plan to vigorously defend against it.

Amway Japan Limited is the exclusive distribution vehicle in Japan for
Amway Corporation. A direct selling company, Amway Japan distributes
approximately 190 consumer products through a core distributor force
(distributors who renewed within fiscal 1999) of approximately 1,100,000
independent distributors. With total shareholders' equity at August 31,
1999 of Y57.0 billion, its fiscal 1999 net sales were Y143.8 billion and
net income was Y10.5 billion. Amway Japan is registered on the Tokyo OTC
market (securities code: 9821) and its ADSs (American Depositary
Shares), each representing one-half of one share of common stock, are
listed on the New York Stock Exchange (ticker symbol: AJL) and quoted on
SEAQ International.

Contact: Holly A. Clemente, Director of Investor Relations of Amway
Japan Limited, 616-787-8688. Current press releases and SEC earnings
filings are available through the Internet at http://www.ajl-amway.com


CABLE TV: Cos Charged of Tying with Broadband Internet Access Providers
-----------------------------------------------------------------------
The nation's largest cable television operators have been charged in a
class action lawsuit with violating antitrust laws by forcing customers
of their broadband Internet services to use service providers who have
contracts with the cable companies, plaintiffs' counsel said.

The suit was filed in U.S. District Court in Los Angeles. Folse, a
Seattle-based partner in Susman Godfrey, is handling the case along with
Marc Seltzer of the firm's Century City office. Defendants include AT&T,
Time Warner Cable, Arahova Communications, Inc.the parent company of
Century Communications Cox Communications, Inc., Comcast Corp.,
Cablevision Systems Corp., Garden State Cable Vision LP, Jones
Intercable, Inc., Tele-Communications, Inc. and MediaOne Group.

AT&T recently acquired TCI and is in the process of acquiring MediaOne,
which will make it the largest cable company in the country, surpassing
fellow defendant Time Warner, Folse said.

Also named were the owners of the cable defendants' preferred ISPs,
@Home and RoadRunner. "Consumers who access the Internet using 'Plain
Old Telephone Service' have a wide range of choices and the benefits of
competitive prices," Folse said. "But experts, educators and futurists
are all telling us that high-speed, broadband Internet service is our
future, and in that market, AT&T, Time Warner and the other cable
companies are telling us we have only one choice in the communities they
serve."

Broadband, cable modem internet service allows Internet access at speeds
many times that of narrowband, dialup modem service over telephone
lines.

At&T spokesman Burke Stinson said he hadn't seen the lawsuit, but that
efforts at pressuring the cable operators into allowing a choice of ISPs
weren't new. He particularly criticized the nation's largest ISP,
America Online. AOL, he said, "is looking for a free ride" on the
"billions of dollars" that AT&T has put into broadband, Stinson said.

Folse acknowledged that AOL is actively interested in the issue, said
there is no connection between the company and his clients' suit. "This
is a case filed on behalf of consumers," he said. "Whatever AOL chooses
to do in the future is not going to have any impact on our going forward
in the case."

Folse said the proposed nationwide class presently consists of 500,000
consumers. The complaint alleges that the defendants are adding about
2,000 customers per day under the assertedly illegal thing arrangements.

@Home and RoadRunner serve more than 90 percent of all cable modem
customers, the complaint alleges, citing an @Home press release. Other
companies cannot compete, the complaint says, because they cannot
"readily or practically" duplicate the cable companies' wire networks.
One result, the complaint says, is that customers who want to use AOL or
another provider must purchase that service in addition to @Home or
RoadRunner. The complaint alleges that 20 percent of the cable
defendants' customers do just that.

The complaint asks for damages in an unspecified amount, trebled under
the Clayton and Cartwright antitrust acts, along with injunctive relief
and attorney fees. Folse said the plaintiffs were unlikely to ask for a
preliminary injunction. (Metropolitan News-Enterprise; Capitol News
Service, November 15, 1999)


CALGENE INC: Sued in Delaware over Proposed Acquisition by Monsanto
-------------------------------------------------------------------
On or about January 29, 1997, Hanna Obstfeld filed suit in Delaware
Chancery Court against the Company and certain of its directors alleging
unfairness in connection with the proposed acquisition by Monsanto
Company of those shares of the Company's common stock which Monsanto
does not own. After Ms. Obstfeld brought her suit, other essentially
identical actions followed, none of which have as yet been served upon
the Company. It is anticipated that the complaints will shortly be
consolidated and the Company has no obligation to answer, move or
otherwise plead until such time as a consolidated complaint has been
filed and served. No discovery has occurred to date in this action.


GARGIULO INC.: CA Suit Alleges Violations of MSPA, Wage Order & Codes
---------------------------------------------------------------------
On February 11, 1997, three named Plaintiffs filed a Class Action
Complaint against Gargiulo, Inc. in the United States District Court for
the Northern District of California, San Jose Division. The Complaint
arose from the employment relationship between the named and unnamed
Plaintiffs and Gargiulo, Inc. The Plaintiffs allege certain violations
of the Migrant and Seasonal Agricultural Worker Protection Act ("MSPA"),
California's IWC Wage Order, the California Labor Code and the
California Business and Professions Code; and Breach of Contract. The
Plaintiffs seek damages including all unpaid wages, statutory damages
under the California Labor Code; a declaration that Gargiulo violated
MSPA, monetary damages pursuant to MSPA; and for an order enjoining
Gargiulo, Inc. from violations of MSPA.

Gargiulo's insurance carriers were contacted regarding this lawsuit. As
of March 27, 1997, Gargiulo has answered the Class Action Complaint, and
is initiating discovery regarding class certificaiton. Gargiulo, Inc. is
also waiting for the response from its insurance carrier. While the
results of the Class Action Complaint cannot be predicted, the Company
believes that the ultimate outcome will not have a material adverse
effect on the Company's consolidated financial position or results of
operations.


HOLOCAUST VICTIMS: U.S. & German Negotiators Reach Deal; Details Dec 17
-----------------------------------------------------------------------
After months of urgent talks, U.S. and German negotiators have reached a
breakthrough deal to compensate former Nazi slave and forced laborers,
long-ignored victims of Hitler's war machine. The deal, announced by
victims' lawyers December 14, will establish a 10 billion mark ($ 5.2
billion) fund to compensate hundreds of thousands of people forced to
work for the Nazis and German companies during World War II.

The agreement was reached after the German government said it would
raise its $ 1.6 billion offer, augmenting 5 billion marks ($ 2.6
billion) already pledged by industry.

German Chancellor Gerhard Schroeder said December 15 that details of the
agreement will be made public December 17 when all sides meet in Berlin.
He refused to tell reporters how much the government was raising its
offer. U.S. Secretary of State Madeleine Albright and the U.S. envoy to
the talks, Deputy Treasury Secretary Stuart Eizenstat, will attend the
meeting, chief German negotiator Otto Lambsdorff told Berlin's Inforadio
on December 15.

Schroeder said he has exchanged letters with U.S. President Bill Clinton
where they discussed German firms' legal immunity from lawsuits in the
United States for forming the fund. Schroeder said he was ''truly
satisfied'' with the full scope of the guarantees given to industry.

The U.S. government has backed up that part of the deal, promising to
ask courts to refer pending cases to a foundation that will be
established by the German parliament.

The 10 billion mark offer matches demands made by lawyers earlier this
week including the establishment of a 1 billion mark ($ 520 million)
fund by U.S. companies that had German operations during the war, U.S.
attorney Michael Hausfeld said in a conference call.

To finance the deal, the German government will sell off parts of
government-owned businesses, Finance Minister Hans Eichel told German
ZDF television Wednesday. He said money would not come from the budget,
but that the government-run businesses should ''properly participate''
in the fund because they also used forced labor during World War II.

Lambsdorff said forced laborers would be paid between 5,000 marks and
6,000 marks (about $ 2,600-$ 3,125), while slave laborers who were held
in concentration camps would receive about 15,000 marks (about $ 7,800).

The spokesman for the industry fund, Wolfgang Gibowski, said he hoped
the agreement would spur more companies to join the approximately 60
which are already participating.

Thousands of the survivors are dying each year, and all sides agreed
that any agreement would need to come quickly. Mel Urbach, lawyer for
the World Council of Orthodox Jews, said lawyers came down from their
original demand of $ 25 billion because the survivors ''are really tired
of the long protracted process.'' ''They've waited for 50 years,'' he
said.

Lambsdorff told the Berliner Zeitung that Chancellor Gerhard Schroeder
agreed to raise the government's offer because ''industry cannot and
should not bear a higher sum'' than already on the table. ''The firms
also took part, but the state's responsibility is higher,'' Lambsdorff
said. (AP Worldstream December 15, 1999)

According to Chicago Tribune of December 15, 1999, most of the laborers
were deportees from Nazi-occupied Europe who staffed German factories
hard-pressed for a labor force when German workers were being drafted
into military service. In contrast with other recent high-profile
settlements to Nazi Holocaust victims for wartime damages, most forced
laborers were not Jews.

Both sides are to draft a letter of understanding when in their meeting
in Berlin on December 17, though it is expected to take several months
to work out the agreement's details.

"Until I actually see exactly what it is that German government and
industry have agreed to, I don't want to say we've reached the end,"
said Michael Hausfeld, a New York lawyer who represents former slave
laborers and who will attend the Berlin meeting. "For the first time,
I'm cautiously optimistic."

Hausfeld and the other American lawyers had sent a letter to the chief
German negotiator, Otto Lambsdorff, earlier this week asking that, as
part of the settlement, "German and non-German companies" make their
archives publicly available.

Hausfeld noted that the reparation figure, divided by the estimated
number of claimants, still would yield survivors at most a few thousand
dollars each-- hardly full compensation for years of labor and abuse.
Still, he and his fellow lawyers felt compelled to accept the offer,
given the current mortality rates of survivors.

"Most are in their 80s now," said Urbach, speaking by phone from Israel
where he was conducting other legal business arising out of World War
II. "Many are in declining health, and we had to wonder how many would
still be around to enjoy any greater sum we might get after years more
of a court battle against the German companies."

Les Kuczynski, national executive director of the Polish American
Congress, noted that many other details of the plan to compensate
workers, many of whom were Polish, won't be known until Friday's meeting
at the earliest. Plans must be devised for identifying and distributing
the money to survivors. Indeed, many have yet to be found.

Although some 70 companies represented in the current negotiations are
German-owned, the agreement also shed light on the lesser-known role of
American businesses whose German subsidiaries exploited slave labor
during the war.

Hausfeld said he had been informed that General Motors Corp. had agreed
to participate in a separate fund for former forced laborers who worked
at its Opel plant in Germany.

Robert Weinbaum, a member of GM's legal staff, denied that the company
had made that decision, though he did say that it was "inclined to
participate" in such an effort through its Opel subsidiary. Lydia
Cisaruk, a spokeswoman for Ford Motor Co., said that company was
similarly moving toward some sort of "humanitarian effort" for survivors
of the slave-labor force at its German plant, which produced trucks for
the Nazi war effort. "We want to do something to help out these
unfortunate people," Cisaruk said.

The U.S. companies have argued that they had no control over their
German subsidiaries during the war. Their apparently new stances on
compensation seem to represent an about-face. Both Ford and GM had
declined to participate in the negotiations, despite intense pressure
from survivor groups, and both have vigorously defended lawsuits brought
on behalf of former forced laborers.


INTíL PRECIOUS: 11th Cir Says Settlement Claims Do Not Limit Atty. Fees
----------------------------------------------------------------------
The Eleven th Circuit U.S. Court of Appeals has ruled that $13.3 million
in attorneys' fees based on a $40 million settlement in a securities
fraud class action is not excessive, even though the claims on the fund
only amounted to $6.5 million. Waters et al. v. International Precious
Metals Corp. et al., No. 97-5074 (11th Cir., Sept. 30, 1999).

"This opinion makes it clear that the district court has the discretion
to award fees based on, among other factors, the total amount of the
fund rather than just the claims against it," according to plaintiffs'
attorney Neil A. Goteiner of Farella Braun & Martel LLP in San
Francisco.

The dispute over attorneys' fees and costs culminated after seven years
of protracted litigation and five months of trial generating 134 volumes
of record.

Clients of MultiVest Options Inc. (MOI) originally brought suit against
the commodities futures broker alleging it defrauded them by soliciting
and stimulating excessive trading in options. The owner of MOI's parent
company, James Grosfeld, was the primary defendant in the case since the
commodities firm is now insolvent. Prior to closing arguments at trial,
a settlement was reached between the parties.

The settlement created a $40 million fund, consisting of cash and
promissory notes, to pay both class members and their attorneys. The
fund was reversionary and any moneys not claimed would be returned to
Grosfeld.

As part of the stipulation, plaintiffs' class counsel agreed its fee
applications would not exceed 33.3 percent of the total fund, and
Grosfeld agreed not to contest it in a "clear- sailing" clause. However,
Grosfeld subsequently challenged the $13.3 million fee award as an abuse
of discretion. In addition, he asserted the $2.4 million in approved
costs was too high, and that he was not prohibited from disputing either
under the terms of the settlement. Grosfeld also argued the district
court's order allowing plaintiffs' counsel to assign their award was
reversible error.

Citing Boeing Co. v. Van Gemert (U.S., 1980), the Eleventh Circuit said
that the high court has rejected the argument that an attorneys' fee
award could only be based on the portion of the common fund actually
claimed by class members and not from the unclaimed portion of the fund.
Moreover, in Williams v. MGM-Pathe Communications Co. (1997), a class
action reversionary fund case, the Ninth Circuit held that the district
court abused its discretion by basing the fee on the class members'
claims rather than on a percentage of the entire fund.

Although the majority of fee awards are between 20 and 30 percent, the
Southern District of Florida adjusted this award to 33.3 percent due to
the length of the proceedings. The lower court also found the case
served an unusual public policy by highlighting the potential for
boiler-room tactics in the commodities industry.

Unlike many other class actions, the total fund amount of $40 million
was not illusory or meaningless, stated the court. Each class claimant
benefited from the total amount because each member recovered from the
fund in the same proportion that his or her losses bore to the total
customer losses.

Even if the fee was reduced, stated the court, 90 percent of the
reduction would benefit the defendant rather than the class due to the
reversionary nature of the settlement. "Defense counsel's claimed
interest in protecting the class thus, seen in this light, strains
credulity," the court said.

The court ruled the attorney fee award was not an abuse of discretion
and, therefore, it did not have to address the ramifications of the
"clear sailing" agreement.

The panel also concluded the district court did not "rubber stamp"
plaintiffs' class counsel expense submission as it did not approve over
$200,000 of the original request.

Regarding assignability of the award, the court noted all contractual
rights are assignable under Florida law unless prohibited under the
terms of the agreement. As there was no such language in the stipulation
of settlement or proposed order, the court affirmed the lower court's
decision.

Plaintiff-appellees were also represented by Gary S. Anderson, C.
Brandon Wisoff, and Karen P. Kimmey of Farella Braun & Martel, and by
Eric G. Lipoff of Raring & Lipoff in Costa Mesa, CA.

Defendant was represented by Paul M. Dodyk of Cravath, Swaine & Moore in
New York; R. Lawrence Bonner of Homer & Bonner in Miami; and Martin J.
Kaminsky of Pollack & Kaminsky in New York. (Corporate Officers and
Directors Liability Litigation Reporter, November 22, 1999)


MICROSOFT CORP: Lawyers For New Suits Find Others Were Filed Months Ago
-----------------------------------------------------------------------
It didn't take long for class action lawyers to circle overhead after
U.S. District Judge Thomas Penfield Jackson found Microsoft Corp. to be
a predatory monopolist that had caused consumers harm. Judge Jackson
issued his findings at 6:30 p.m. on Nov. 5, a Friday. By the next
Tuesday, Christopher Lovell, of New York's Lovell & Stewart, had filed a
complaint against Microsoft in New York state court seeking class action
status on behalf of thousands of New York customers. Mr. Lovell was a
lead lawyer in a massive class action charging that Wall Street's
largest firms had conspired to fix prices of stocks traded on Nasdaq.
The case settled for $ 1.01 billion in December 1997.

But Mr. Lovell and a cast of both familiar and unknown law firms in the
class action barmay be late to the party as they pursue their claims.
Class actions claiming antitrust violations have been pending in state
and federal court since February, and the lawyers who put together those
cases aren't about to yield ground to newcomers.

In February, R. Stephen Berry, of Washington, D.C.'s Berry & Leftwich,
put together a consortium of four law firms to pursue antitrust cases
against Microsoft. One of the firms he contacted was San Francisco's
Townsend and Townsend and Crew, which filed a class action in California
state court on Feb. 17 on behalf of Charles J. Lingo, a member of the
Linux "open source" movement and an anti-Microsoft protester.

The Townsend firm has been sparring with Microsoft's lawyers ever since.
Microsoft tried to get the case dismissed, failing last spring. It
objected when Townsend lawyers asked that the case be assigned to one
judge before trial, to keep abreast of the complex issues. And the
parties are in the middle of a fight over discovery.

The case was proceeding in relative obscurity until Judge Jackson's
findings, when a horde of plaintiffs' lawyers began filing class actions
in California state court. "I can't keep up with them, basically," said
Townsend name partner Eugene Crew. "They're just coming out of the
woodwork."

Lawsuits have also been filed in Alabama and Louisiana, but the
California state courts are the hub of the action. On Nov. 15, New
York's Milberg Weiss Bershad Hynes & Lerach L.L.P., known as the king of
class action law firms, filed a complaint in Orange County. Two San
Francisco law firms, Furth, Fahrner & Mason and Saveri and Saveri, are
working together on cases that Mr. Crew described as "essentially
identical."

The suit that got the most attention was a Nov. 22 complaint filed by
two solo practitioners and tiny Gross & Belsky L.L.P., of San Francisco.
It was featured on the front page of the New York Times on the day it
was filed in state superior court in San Francisco. The complaint
attaches Judge Jackson's findings as Exhibit A. "We didn't expect this!
It was really, really, really wild," said the secretary to name partner
Terry Gross.

Mr. Crew said that his firm has already won the race to the courthouse:
"Our case is 9 months old, and we've gone way down the track.....It
renders all the other cases redundant." Mr. Crew has been busy
protecting his lead. On Nov. 24, the court called to inform him that the
case had been assigned to a single judge, Stuart Pollack, of San
Francisco. That day, he filed a "petition for coordination" of the
Microsoft lawsuits, six in all, and moved to certify the class of
consumers who could recover.

                       Microsoft disdainful

Microsoft, meanwhile, has dismissed the rash of new complaints. "None of
the court's findings have any legal weight in any other cases, unless
and until the court issues an actual ruling," said Microsoft spokesman
Mark Murray. He dismissed as "idle speculation" the notion that the new
cases, subjecting Microsoft to billions in potential treble damages,
will put pressure on Microsoft to settle before a final ruling.

On Nov. 18, Judge Jackson appointed Richard A. Posner, chief judge of
the U.S. Court of Appeals for the 7th Circuit and brainy Chicago
Schooler, to mediate a potential settlement. (The National Law Journal
December 6, 1999)


MONSANTO: Update on Lawsuit Filed in Washington Re Biotech Crops
----------------------------------------------------------------
Opponents of genetically engineered food are trying a new tactic in
their battle to curb the spread of biotech crops a lawsuit that accuses
Monsanto Co. of conspiring to control the world's seed trade, a report
on AP Online, December 15 says.

The class-action suit, filed December 14 on behalf of six farmers, also
accuses Monsanto and other seed companies of rushing the crops to market
without adequately studying their effects on health and the environment.

The suit alleges that Monsanto, using its biotechnology patents,
coordinated with other biotech companies such as DuPont to fix prices
and force farmers into using genetically engineered seed. The lawsuit
also alleges there is ''substantial uncertainty'' as to whether the
crops are safe.

The companies control the spread of the technology by patenting the
seeds and then leasing them to growers, rather than selling them, to
prevent the farmers from reproducing the seeds. Farmers are charged a
special fee to cover the cost of developing the technology.

Five farmers in Indiana and Iowa, including a husband and wife, and one
in France are listed as plaintiffs, but the lawsuit was filed on behalf
of all farmers who have bought biotech seed. The National Farm
Coalition, a left-leaning group opposed to biotechnology, helped develop
the suit.

Jeremy Rifkin, a prominent anti-biotech activist who recruited a team of
nine law firms to handle the suit, said he wants to ''refocus the global
debate'' over genetic engineering to ''corporate abuse of power'' by the
companies that developed the crops.

Corn and soybeans genetically designed to kill pests or withstand
herbicides have become widely popular in the United States, but have met
consumer resistance in Europe and Asia. Genetic engineering involves
splicing a single gene from one organism to another. Until now, biotech
opponents have focused their efforts on persuading food manufacturers
not to buy genetically modified crops and getting governments to require
the labeling of altered foods.

Monsanto officials denounced the lawsuit as a political stunt and
predicted it would be thrown out of court. ''This technology has been
tested for many years and it's subject to intense regulation. ...We
would not put into commerce anything that we're not absolutely confident
is safe and effective,'' Monsanto attorney Dan Snively said.

An estimated 57 percent of the soybeans grown this year contain a gene
that allows it to tolerate use of Monsanto's popular Roundup weed
killer. And 30 percent of the corn grown this year was engineered to
make it toxic to the European corn borer, a chronic problem for farmers.

The government insists that the crops are essentially the same as
conventionally bred varieties and pose no threat to humans or the
environment.

Advocates say biotechnology has vast potential for developing crops that
are more nutritious, need less water and have a variety of new uses,
such as bananas that would inoculate children in developing countries
against diseases. For example, a new variety of corn feed under
development would cut down on pollution from hog farms by reducing the
phosphorus content of manure.

Critics of the technology say there isn't enough known about possible
allergens and its impact on the environment, including the emergence of
''superweeds'' from genetically engineered crops.

Major farm organizations have been strong defenders of the technology.
If anything, Monsanto has been too timid in trying to build public
support for the crops, said Nathan Johnson, president of the Minnesota
Corn Growers Association. ''I still see them advertising for the
farmers' business a lot. If they would put some of that money toward
educating the public, we'd be a lot better off,'' said Johnson, who says
the crops have saved him time and money.

Farmers ''like the product or they wouldn't spend the money for it,''
said Bob Callanan, a spokesman for the American Soybean Association.

Companion lawsuits are being considered in several foreign countries,
including Britain and India, said Michael Hausfeld, the lead attorney in
the case. (AP Online December 15, 1999)

The St. Louis Post-Dispatch said the legal action was initiated by the
Foundation in Economic Trends - headed by longtime biotechnology gadfly
Jeremy Rifkin - and the National Family Farm Coalition.

The suit alleges Monsanto has formed a cartel ''through which it has
attempted to monopolize the GM (genetically modified) corn and soybean
markets.'' The company was also accused of fixing the prices of its
products.

Monsanto is the only defendant, but the 62-page lawsuit also named
several ''co-conspirators,'' including such seed companies as Novartis
International, Dupont, Pioneer Hi-Bred International and others.

The New York Times of December 15 says the lawsuit, which was filed in
Federal District Court in Washington on behalf of six farmers, is the
latest skirmish in the debate over the use of bioengineered seeds, which
are popular among American farmers but troubling to consumers in Europe
and environmental groups who contend that they are potentially dangerous
to humans and the environment.

Some of the nation's largest farm groups criticized the suit, saying
that American farmers have largely benefited from new technologies in
the seed market, which have reduced the use of herbicides and pesticides
and increased crop yields.

The real force behind the suit is a coalition of environmental groups,
including Greenpeace, that are serving as advisers in the case. The
initiator of the lawsuit is Jeremy Rifkin, the environmental activist
who has repeatedly criticized biotech crops as potentially dangerous and
likely to lead to "genetic pollution" and the creation of "superweeds"
that could drastically alter the environment.

Mr. Rifkin, a longtime critic of Monsanto, said that about a year ago he
hired what he called a "Dream Team of the Green movement" -- a group of
antitrust lawyers from 10 firms who are now using words reminiscent of
the Justice Department's case against Microsoft, such as contentions
that Monsanto has gained monopoly status through the use of bully
tactics, intimidation, deceptive business practices and restrictive
technology deals with small farmers.

Heading the case is Michael D. Hausfeld, the Washington lawyer who is
best known for defending Alaskan natives in the Exxon Valdez oil spill,
and more recently helping win a $1.1 billion price-fixing settlement
against the world's largest vitamin makers. Mr. Hausfeld is also
representing victims forced by Nazis to work during World War II. Also
considering a lead role in the suit is David Boies, the New York lawyer
who is leading the Justice Department's prosecution of Microsoft. Mr.
Boies was a lead lawyer in the class-action suit against the vitamin
makers and is said to be interested in the case because of concerns
about farmers. "This is the beginning of a new chapter in the debate
over genetically modified foods," Mr. Rifkin said at a news conference
yesterday in Washington.

In filing the suit in Federal court, Mr. Hausfeld said that he was
seeking class-action status for the case. Nine other companies,
including DuPont and Novartis, were named as co-conspirators.

The lawsuit contends that since 1996 Monsanto has been using its
influence in the agriculture market to gain control over the corn and
soybean markets and to prepare for the widespread introduction of
genetically modified seeds.

The lawsuit contends that as a leader in the field of agricultural
biotechnology, Monsanto initiated an effort to neutralize competition
through licensing agreements with its competitors and the misuse of
intellectual property rights.

The company, which spent more than $8 billion to acquire large seed
companies in the last few years, also conspired with other large seed
companies to inflate prices and force small farmers to pay excessive
"technology fees" and agree to restrictive planting contracts that
sometimes forced them to buy package deals of Monsanto products,
according to the suit.

In the news conference in Washington, Mr. Hausfeld also said there was a
significant amount of uncertainty about whether genetically modified
seeds were safe, and that farm exports were being harmed by growing
scientific and political concerns that have arisen despite Monsanto's
claims that the products are safe.

Several farm groups, however, defended Monsanto and its use of
biotechnology. "Soybean farmers strongly support the technology," said
Bob Callanan, a spokesman for the American Soybean Association in St.
Louis. "They see it as a trend; they're using safer chemicals and less
chemicals. We also believe in the regulatory process."

Mr. Callanan said that biotech seeds are now used on about 40 million
acres in the United States, up from about 8 million acres in 1997.
"Monsanto is being singled out because they're the only one with the
Roundup Ready soybean product in the market," he said referring to the
company's genetically engineered seeds. "It's not their fault there
aren't competitors."

Wall Street analysts, who have been consistently behind the company's
move into biotechnology, also defended Monsanto. "This is a very
different situation from Microsoft making every computer company pay for
Windows," said Nicholas Redfield, an analyst at Banc One Investment
Advisors. "On some of its products, Monsanto has a monopoly but it's a
legal monopoly; they have the patent."

Robert B. Shapiro, the chief executive at Monsanto, said in an interview
that one reason the case might have been centered on Monsanto alone,
rather than the entire agricultural biotechnology industry, which was
the initial plan, was simple: "Public relations," he said.

Monsanto, which has been under fire here and in Europe over its
development of biotechnology products, has been attacked for trying to
"play God" with the world's food supply. Advocates of biotechnology say
a "hysterical" campaign has been waged against the company in recent
months, putting pressure on its stock price, which fell 25 cents
yesterday, to $41.875.

But Mr. Hausfeld said Monsanto aimed to control not just the seed
market, but the world's food chain, even the water rights in some
countries. He said related lawsuits were planned outside the United
States.


POKMON TRADING: CA Suit Charges Nintendo & 4Kids of Illegal Gambling
--------------------------------------------------------------------
The complaint states that the defendants participate in the conduct of
an illegal gambling enterprise by manufacturing, marketing, distributing
and selling Pokmon trading card packages, some of which contain randomly
inserted "chase" or "premium" cards. Defendants encourage prospective
purchasers to build Pokmon trading card decks from packages with
randomly inserted cards, including "chase" cards and "premium" cards
with "super attacks." The wrapping of the Pokmon trading card packages
states that the odds of obtaining a premium card are 1:33. In fact, says
the complaint, the odds vary greatly and the chances of getting a
first-edition holographic foil "Charizard" card, for example, is
believed to be 1 in 66.

As an integral part of the defendants' efforts to encourage the purchase
of multiple packages of Pokmon trading cards, alleges the complaint,
defendants have created a card game that can be played using the trading
cards. In this game, the more powerful cards, which increase the
player's chances of winning, are the "chase" or "premium" cards.

Pokmon started in Japan in 1995 as a Nintendo Game Boy cartridge. The
trading cards and a Japanese television series followed. In September
1998, defendant 4Kids imported the Pokmon television series into the
United States and dubbed the episodes into English. Defendant Nintendo
allegedly mailed 1.2 million Pokmon videos to their Game Boy customers
located in the United States.

Within a few months, Pokmon was the top-rated syndicated kids TV show.
Thereafter, the Pokmon video game and the trading cards were released in
the United States.

The complaint alleges that plaintiffs and members of the class, which
includes millions of children, are encouraged to watch the animated
Pokmon television show and play the Pokmon Game Boy cartridge to learn
the basic ideas and goals of the trading card game.

According to the complaint, the three basic elements of illegal gambling
- consideration, chance and prize - are all present.

    * The purchaser must pay between 3 to 11 for the packages of 11
      cards (consideration).

    * The "chase" or "premium" cards are things of value (prize). (In
      fact, some individual cards have a cash value of 70 in the
      secondary market that has grown up at Pokmon trading card conven
      tions, retail stores and on the Internet, according to the
      complaint.)

    * Finally, the valuable cards are obtained by chance.

The complaint alleges that the gambling scheme is targeted at children
under 12 years of age, who may spend up to 50 a month to purchase
packages of Pokmon trading cards.

The complaint seeks to enjoin defendants from marketing their Pokmon
trading cards in ways that violate RICO, the California Unfair
Competition Law and federal gambling laws and to recover compensatory
and treble damages for all original end-use purchasers of Pokmon trading
cards in packages with randomly inserted "chase" or "premium" cards.
(Civil RICO Report, Gambling; Vol. 15, No. 13, November 24, 1999)


SMITHKLINE BEECHAM: PA. Suit Says Lyme Vaccine Can Cause Deadly Disease
-----------------------------------------------------------------------
A class action lawsuit filed on December 14 in Pennsylvania claims the
vaccine that prevents Lyme Disease causes an incurable form of
autoimmune arthritis and, for some, could produce symptoms far worse
than those brought on by the illness. "Mealey's Litigation Report: Drug
and Medical Devices" informed subscribers about the complaint.

The complaint, filed in Chester County Court of Common Pleas, alleges
SmithKline Beecham (NYSE: SBH), manufacturers of the widely touted
LYMErix vaccine, failed to warn doctors and the general public that
nearly 30 percent of the population was pre-disposed to a degenerative
autoimmune syndrome, which the lawsuit says is triggered by contents of
the inoculation. "Once this autoimmune reaction is triggered, it cannot
be cured and can only be treated symptomatically for the remainder of
the vaccine recipient's life," the complaint says.

According to the class action, SmithKline (SBH) used high concentrations
of a surface protein called OspA as the foundation for its vaccine. When
bitten by a Lyme infected parasite, humans are not exposed to OspA
protein. The levels of OspA that enter the bloodstream at any phase of
the three-dose LYMErix vaccine, however, place patients classified by
genetic type HLA-DR4+ at risk of developing a condition referred to as
"treatment-resistant" Lyme Arthritis, the lawsuit says.

Despite this "well documented relationship" between OspA and
treatment-resistant Lyme Arthritis, SmithKline neglected to include the
information in its widely disseminated promotional literature and
insisted LYMErix was safe and generally well tolerated, the class action
says. About one-third of the general population is HLA-DR4+ and risks
contracting the arthritic condition when exposed to the vaccine,
according to the complaint. The HLA-DR4+ trait is easily detected by a
routine blood test; however, SmithKline never recommended that doctors
screen for the trait before administering the vaccine, the lawsuit
alleges.

The complaint further alleges that patients who are infected with Lyme
bacteria when they receive LYMErix -- whether asymptomatic or in the
early stages of infection -- could suffer symptoms more progressive and
enhanced than if they had not received the vaccine.

SmithKline, the class action says, also neglected to inform doctors and
the general public that periodic booster shots beyond the series of
three vaccinations would be necessary to maintain immunity to the
disease.

The class action includes counts of negligence, unfair trade practices
and a bid for medical monitoring of those who are placed at risk of
developing autoimmune arthritis but have not yet been diagnosed with the
condition.

The class action complaint was filed by Stephen A. Sheller and Albert J.
Brooks Jr. of Sheller, Ludwig & Badey in Philadelphia. Sheller said that
in the wake of filing the class action, he expects to file claims on
behalf of individuals who received the LYMErix vaccine and are now
suffering from the autoimmune arthritis.


TOBACCO LITIGATION: 8th Cir Rejects Appeal by Arkansas Nicotine Addicts
-----------------------------------------------------------------------
Hansen v. American Tobacco Co. Inc.

The Eighth Circuit U.S. Court of Appeals has denied a petition by 20
Arkansas smokers for permission to appeal a trial court order rejecting
their motion to certify a state-wide class of nicotine addicted smokers.
Hansen et al. v. The American Tobacco Company Inc. et al., No. 99-8016
(8th Cir., Oct. 6, 1999).

The ruling leaves intact a July 21 order by U.S. District Court Judge
Stephen M. Reasoner in Little Rock denying the smokers' class
certification. The judge ruled that the wide variety of issues peculiar
to the claims of individual members of the proposed class makes class
treatment unsuitable.

"Questions of addiction and causation, as well as the defenses of
comparative and contributory negligence and the statute of limitations
present too many individual problems and preclude certification," the
judge wrote.

He noted that the plaintiffs had not submitted any federal cases to
support their request for class certification, while the defendant
tobacco companies had submitted "a plethora" of federal rulings which
denied class certification motions in suits against tobacco companies.

Judge Reasoner ruled in a suit alleging that tobacco companies have
conspired with one another to manipulate nicotine levels in their
products and to systematically deny the addictive nature of cigarettes.
The suit asserts claims of negligence, strict product liability, breach
of express and implied warranties, and fraud. It proposes a class of
plaintiffs consisting of all nicotine-addicted Arkansas residents who
smoke cigarettes made by the defendant companies and who do not have a
smoking-related disease or illness other than addiction. For relief, the
suit seeks the establishment of a medical monitoring fund, plus punitive
damages, attorneys' fees and costs.

Since the Eighth Circuit's ruling, the named plaintiffs have indicated
that they intend to proceed through discovery and trial with their
claims. Some of the defendants have indicated that they will move to
sever the 20 individual cases.

The plaintiffs in the case are represented by Gary L. Eubanks and
William Gary Holt with Gary Eubanks & Associates of Little Rock, AR.

American Tobacco, American Brands Inc., Brown & Williamson Tobacco
Corp., Batus Inc. and Batus Holdings Inc. are represented by Mike Russ
with King & Spalding of Atlanta. R.J. Reynolds Tobacco co. is
represented by Hugh R. Whiting with Jones, Day, Reavis & Pogue of
Cleveland and by Jerome R. Doak and Margaret I. Lyle with the firm's
Dallas office. Philip Morris Inc. is represented by Laura Clark Fey,
Gary Ray Long, and James P. Muehlberger with Shook, Hardy & Bacon of
Kansas City, MO. Lorillard is represented by John S. Cherry Jr. and
Robert L. Henry III with Barber, McCaskill, Jones & Hale, P.A., of
Little Rock. Liggett Group Inc. is represented by Marie V. Santacroce
and Michael M. Fay with Kasowitz, Benson, Torres, Friedman, L.L.P., of
New York. (Consumer Product Litigation Reporter, Vol. 10; No. 8; Pg. 16,
November 1999)


TYCO INTíL: Finkelstein, Thompson Files Securities Suit in N.H.
---------------------------------------------------------------
Finkelstein, Thompson & Loughran announces that on December 13, 1999 it
filed an expanded class action lawsuit in the United States District
Court for the District of New Hampshire on behalf of investors who
bought Tyco International Ltd. (NYSE: TYC) ("Tyco" or the "Company")
stock between October 1, 1998 and December 8, 1999 (the "Class Period").

The lawsuit charges Tyco and executive officers, Dennis Kozlowski and
Mark H. Swartz, with violations of the securities laws and regulations
of the United States. The lawsuit alleges that defendants issued a
series of false and misleading statements during the Class Period
concerning the Company's revenue growth rate. The Complaint further
alleges that defendants used deceptive and overly aggressive accounting
practices to give the market a false and misleading impression of the
Company's revenue growth rate. Meanwhile defendants Kozlowski and Swartz
used their inside knowledge regarding the Company's revenues to sell
over 2.8 million shares of their own stock at prices close to the Class
Period high for proceeds of over $281,000,000.

Between October 13, 1999 and October 29, 1999, several analysts and
financial reporters revealed that the Company was engaging in overly
aggressive and deceptive accounting practices concerning its
acquisitions. Upon the release of these revelations the Company's stock
price plummeted from a Class Period high of $52.96 to as low as $35.5625
on November 1, 1999.

On December 9, 1999, the market was further rocked by the announcement
that the Securities and Exchange Commission was mounting an
investigation of the Company's accounting practices. Upon the release of
this announcement the Company's stock sank to as low as $25 1/2 on
extraordinarily heavy trading volume.

Contact: Donald J. Enright with Finkelstein, Thompson & Loughran, Web
page at http://www.FTLLAW.com Toll-free at 888-333-4409, or at
202-337-8000, E-mail: DJE@FTLLAW.com


UCLA: CA Suit Seeks to Change Policy over Wheelchair Access To Arena
--------------------------------------------------------------------
Claiming to have been "humiliated" at a UCLA basketball game last year,
two Los Angeles men filed a lawsuit on December 13 alleging that the
wheelchair seating policy at Pauley Pavilion violates the federal
Americans With Disabilities Act.

John Punongbayan, who uses a wheelchair, and Bill Choi, who does not,
filed the suit, claiming the school violated their civil rights during a
celebrity basketball game last December by refusing to sell them tickets
to the arena level. Instead, they said, Pauley Pavilion officials would
only sell them tickets to the more remote concourse level, explaining
that it was safer for wheelchair users. That policy apparently violates
the federal law, which calls for all public buildings to be accessible
to people with disabilities, said Eve Hill, executive director of the
Western Law Center for Disability Rights. The center is handling the
case, which it has filed as a class action.

The lawsuit seeks to force UCLA to change its policy and demands damages
of $ 1,000 for every person in a wheelchair who was denied access to
prime areas of Pauley Pavilion. Hill said the total could be "in the
millions of dollars."

Patricia Jasper, UCLA campus counsel, said she could not comment on the
lawsuit because she had not seen it. But Jasper added that it is UCLA's
contention that Pauley Pavilion meets all the requirements of the
Americans With Disabilities Act. She said not all areas of the building
have to be accessible, because the pavilion was built more more than 30
years ago and has not undergone substantial renovations. As long as fans
in wheelchairs are able to attend sporting events, the arena satisfies
the federal law, she said. Despite that, Jasper added that university
officials are "reviewing what might be able to be done for the arena
level to make it safe for wheelchair access." (Los Angeles Times,
December 14, 1999)


XEROX CORP: Fruchter & Twersky File Securities Suit in Connecticut
------------------------------------------------------------------
The law firm of Fruchter & Twersky gives notice on December 14 that a
class action lawsuit has been filed in the United States District Court
for the District of Connecticut on behalf of all persons who purchased
the common stock of Xerox Corporation ("Xerox" or the "Company")
(NYSE:XRX) between January 25, 1999 through October 7, 1999, inclusive
(the "Class Period").

The complaint charges Xerox and certain senior officers and directors
(the "Individual Defendants") with violations of the securities laws and
regulations of the United States. The complaint alleges, among other
things, that Xerox and the Individual Defendants issued a series of
materially false and misleading statements concerning the declining
demand for the Company's products and services and engaged in a number
of deceptive practices to conceal these trends. The complaint further
alleges that prior to the disclosure of these adverse facts, insiders
sold hundreds of thousands of shares of Xerox common stock to the
investing public at artificially inflated prices, realizing a profit of
$ 51.7 million in proceeds from these insider trading activities.

Contact, at Fruchter & Twersky, Jack G. Fruchter or Mitchell Twersky, by
toll free telephone number 1-877-549-1709.


* SEC Seeks Fast Public Disclosure By Firms
-------------------------------------------
Earlier this month, the elite of the technology world--people such as
Yahoo Inc.'s Tim Koogle, Hewlett-Packard Co.'s Carly Fiorina and Compaq
Computer Corp.'s new chief executive, Michael Capellas--gathered in a
plush resort in Scottsdale, Ariz., so that big-money investors could get
up close and personal.

Ordinary investors, however, were nowhere to be seen. Credit Suisse
First Boston, the sponsor of the conference, did provide an Internet
broadcast and let six reporters attend, throwing a few morsels to
individual investors. But reporters had to agree to wait a day before
publishing anything, giving conference attendees a one-day advantage.
And the small breakout meetings--where executives really let their hair
down--were off limits to both the Internet and reporters.

But such private gatherings may soon be trickier. The Securities and
Exchange Commission is expected to propose a rule designed to clamp down
on practices that have divided the investing world between the In Crowd
and those out of the loop.

"The goal is to prevent intentional selective disclosure of material
nonpublic information, which is a serious impediment to the fairness and
integrity of the market, but without reducing the flow of appropriate
information to analysts," said Harvey J. Goldschmid, SEC general
counsel.

In this new era of stock market trading, where individual investors are
pouring online, where computer trading has increased the appetite for
instant information, and where ordinary investors track stock moves and
want in with the pros--not a day later, when they reach their
broker--the expectations for disclosures are changing.

Last year, SEC Chairman Arthur Levitt Jr. signaled he was frustrated by
corporate America's apparent habit of giving a nod or nudge to a favored
analyst or otherwise selectively disclosing information to a special
group.

Although the SEC has told Wall Street repeatedly that it is unhappy with
selective disclosure, until today it has done little about it. That's
because the rules of the game are murky, making enforcement actions
difficult, according to lawyers.

"It isn't like there is a selective-disclosure section of the law," said
John Halebian, a New York lawyer specializing in class-action securities
lawsuits. "There is a whole body of case law that goes off in all kinds
of directions."

Historically, selective disclosure has been treated as a kind of
insider-trading fraud. Thus executives must have benefited personally to
be convicted. "The insider-trading argument works in a scenario where
one person inside the company warns friends and family about an earnings
surprise," said Karl A. Groskaufmanis, a Washington lawyer with Fried,
Frank, Harris, Shriver & Jacobson.

But that is a rather high threshold for selective-disclosure cases.
Indeed, a federal judge dismissed a lawsuit against Rational Software,
whose chairman allegedly privately advised analysts to lower their
estimates, because of insufficient evidence that he personally
benefited. And Halebian's class-action lawsuit against Abercrombie &
Fitch Co.--which is under investigation by the SEC after news reports
that it tipped an analyst before publicly disclosing its sales
forecasts--is using a different legal argument because of the difficulty
of selective-disclosure cases. Courts have set high hurdles because they
fear stifling the flow of information between companies and analysts.

The SEC plans to try a new strategy, according to sources. It is taking
a more straightforward and narrow approach, requiring that market-moving
information be made available to the general public at the same time
it's available to analysts.

That could require, for instance, that a news release be issued before
analysts are briefed on important news. If key information is
inadvertently issued during the meetings, then a news release would have
to be issued within a day.

The SEC will have a 90-day comment period before adopting a permanent
rule.

This proposal is similar to the guidelines already set by the National
Investor Relations Institute, an association of investor relations
professionals. "We're pretty comfortable with the direction they are
heading," said Louis M. Thompson Jr., the association president. Still
the proposed rule could be controversial. "The devil is in the detail,"
said one lawyer. For instance, a Credit Suisse First Boston spokesman
said there was no violations of rules at the Scottsdale conference,
because no new information was discussed in the small breakout groups.
Major announcements were preceded by news releases. But information some
companies consider minor clarifications may in fact move stock prices.
And sometimes a chairman's downcast face or jaunty confidence can
influence investors as well. (The Washington Post December 15, 1999)

                               *********


S U B S C R I P T I O N  I N F O R M A T I O N

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Washington, DC.  Theresa Cheuk and Peter A. Chapman, editors.

Copyright 1999.  All rights reserved.  ISSN 1525-2272.

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