Monday, October 28, 2002, Vol. 4, No. 213
APARTHEID LITIGATION: Lawyer Ed Fagan Talks About South African Lawsuit
AUCTION HOUSES: Sotheby's, Christie's Face Possible US$9.8M in Fines
BELLSOUTH CORPORATION: Consumers Sue For Antitrust Violations in FL
CANADA: Consumers File Suit V. Supermarket Over Hepatitis A Outbreak
CANNONDALE CORPORATION: Voluntarily Recalls 800 Bikes For Injury Hazard
CHARTER COMMUNICATIONS: Places COO On Leave Over Securities Fraud Probe
CHINA: Jiang Xemin Faces Suit Over Atrocities V. Falun Gong Movement
ENRON CORPORATION: Prosecution Wants Documents Available To The Public
ENTERTAINMENT INDUSTRY: Writer Commences Bias Suit V. Fox, WB Network
HARCOURT EDUCATION: Faces Suit For Scoring Errors in Proficiency Test
HAWAII: Attorney General Anzai Welcomes Ruling on Child Support Program
MARTHA STEWART: Investors Warn of More Suits Over New Securities Probe
MASSACHUSETTS: Seeks Dismissal of Discrimination Suit Over MCAS Exam
OXFORD HEALTH: Shareholder Suit Settlement Will Reduce Quarter Profits
TERRORIST ATTACK: Civil Rights Group Sue Over Increased Surveillance
TWIN MOUNTAIN: NAACP Not Satisfied With Finding About Discrimination
UNITED STATES: Forest Service to Hire More Latinos in Suit Settlement
New Securities Fraud Cases
ALLIED RISER: Beatie and Osborn Commences Securities Fraud Suit in NY
AMERICAN ELECTRIC: Lovell Stewart Commences Securities Suit in S.D. OH
ATLAS AIR: Cauley Geller Commences Securities Fraud Suit in S.D. NY
ATLAS WORLDWIDE: Abbey Gardy Commences Securities Fraud Suit in S.D. NY
COMERICA INC.: Glancy & Binkow Commences Securities Fraud Suit in MI
CONCORD EFS: Lockridge Grindal Commences Securities Suit in W.D. TN
ELECTRONIC DATA: Bernard M. Gross Lodges Securities Fraud Suit in TX
ELECTRONIC DATA: Dyer & Shuman Commences Securities Suit in E.D. Texas
KINDRED HEALTHCARE: Cauley Geller Commences Securities Suit in W.D. KY
MERRILL LYNCH: Much Shelist Launches Securities Fraud Suit in S.D. NY
SALOMON SMITH: Pomerantz Haudek Commences Securities Suit in S.D. NY
SEARS ROEBUCK: Schiffrin & Barroway Commences Securities Suit in IL
TXU CORPORATION: Federman & Sherwood Commences Securities Suit in TX
TXU CORPORATION: Wolf Popper Commences Securities Fraud Suit in N.D. TX
TXU CORPORATION: Marc S. Henzel Commences Securities Fraud Suit in TX
TXU CORPORATION: Much Shelist Launches Securities Fraud Suit in N.D. TX
TXU CORPORATION: Pomerantz Haudek Commences Securities Suit in N.D. TX
Ed Fagan recently appeared at the University of Connecticut, where he
was a speaker at that school's third annual Comparative Human Rights
conference, reported The Hartford Courant. The keynote speaker was
South Africa's High Court Judge Kikgang Moseneke, who helped write the
Country's new constitution and oversaw South Africa's first democratic
elections.
Ed Fagan spoke without a microphone in a large auditorium, an
indignant, righteous speaker "full of fire and brimstone." He told the
audience they were sitting in a room with activists from South Africa
who had sacrificed their families and themselves to fight for human
rights during apartheid, in a role they were thrust into.
Mr. Fagan, a lawyer from Livingston, New Jersey, has gained some
measure of fame for his class action battles to win compensation for
victims, including a US$10 billion settlement for Holocaust victims and
their heirs in a class action against Swiss banks.
In March, he and a team of lawyers launched civil lawsuits that seek
unspecified reparations for more than 35 million descendants of African
slaves. The lawsuit seeks reparations for more than 35 million
descendants of African slaves. The lawsuit seeks damages from
insurance, transportation and other corporations, including Hartford-
based Aetna and FleetBoston Financial Corp., which in their early forms
profited from slavery.
More recently, Mr. Fagan filed suit in June on behalf of more than
5,000 apartheid victims. He is claiming that 27 multinational
corporations violated a United Nations embargo against South Africa to
do business with the apartheid regime.
"It is real simple," Mr. Fagan told the audience. "You cannot allow
the corporations to get away with profiteering off individuals. People
were enslaved in South Africa because of corporations' decisions.
People died in South Africa because of corporations' decisions."
Mr. Fagan told the students to fight those who violate human rights.
"You can change the world," he said. "You can really stop it. But if
you sit by in silence, you are as guilty as the people who do it."
The world's largest auction houses Sotheby's and Christie's face a fine
that could amount to US$9.8 million each, to be imposed by European
Union antitrust regulators over charges of conspiring to fix prices,
FT.com reports.
The two auction houses have faced litigation in the US over the alleged
price-fixing conspiracy that they both engaged in. Sotheby's former
chairman Alfred Taubman is currently serving a one-year prison sentence
after a New York jury found him guilty last December of hatching the
price fixing conspiracy with his Christie's counterpart, Sir Anthony
Tennant. The two houses had also agreed to settle a class action for
more than US$512 million.
The Companies have cooperated with the Brussels authorities in the two
year probe, and this might help keep down the size of the fines, which
will be determined next week. There are hopes that the fines could
amount to no more than US$9.8 million each, but it is understood that
some within the commission would like to see much higher penalties
imposed, FT.com reports.
However, the European Union's 20 commissioners on Wednesday will make
the final decision on the amount the companies have to pay. When
imposing a fine, the commissioners consider a number of issues,
including the seriousness and duration of the cartel and whether the
companies co-operated with the investigation, FT.com reports.
Sotheby's, and the Commission declined to comment on Thursday and
Christie's was unavailable for comment, according to FT.com.
BellSouth Corporation faces a class action filed by customers who
charge the Company with monopolistic practices, in violation of the
Sherman Antitrust Act, the American Business Journal reports.
The suit, filed in the United States District Court for the Southern
District of Florida on behalf of local phone service customers who were
allegedly damaged by the Company's conduct, asserts that the Company's
control over use of its physical wires over which phone services are
delivered is designed to enhance or protect its dominant position as a
local phone service provider in its nine-state region.
The Company allegedly discriminates against users of its physical wires
who are customers of companies other than the Company, a violation of
the Federal Communications Act of 1934, the Business Journal reports.
The complaint also charges the Company with interfering with the
contracts of those customers, which the law firm says is a violation of
state law.
Company spokesman Spero Canton told the Business Journal he hasn't seen
the suit and plans to study it once the Company receives it. He says
he could not comment specifically on a suit he has not seen, and would
not usually comment on litigation, anyway, but did have statistics
ready to counter arguments of a Company monopoly, at least in Florida.
He says the Company has more than 160 competitors in the state.
"If we're not the most competitive state, we're one of the most
competitive in the country," says Canton. "Top competitors enjoy 1.5
million customers right now in the state.Saying we're a monopoly is
pass, - Florida has an 18.2 percent market share of competitive
carriers (for local phone service.)"
Canadian supermarket Capers faces a class action filed by several
customers, who contracted Hepatitis A after eating food from the
supermarket, www.canoe.ca reports.
The suit was filed on behalf of Helen Fakhri, one of seven people who
became ill with the potentially deadly viral disease. The suit alleges
that two of the supermarket's employees failed to handle food properly.
A Capers employee was also diagnosed in March with Hepatitis A, forcing
the store to pull out potentially contaminated products later on the
same day. About 6,400 people who bought food at Capers in February and
March were vaccinated against the illness.
David Klein, Ms. Fakhri's lawyer states that "There were salad
dressings and sauces that apparently were contaminated with Hep A." He
added that baked goods were also not handled with tongs.
Sonja Tuitele, a Denver-based spokeswoman for Wild Oats Markets Inc.,
which owns Capers, told canoe.com the store hasn't yet been served with
a formal complaint.
"Until we are actually served with a lawsuit and a formal complaint's
been filed, we don't know how far this is going to go or if this is
something we are going to be affected by," Ms. Tuitele said. "We
actually have been quite generous in paying medical fees and lost wages
. so eight months after the initial incident it comes as a bit of a
surprise."
The store has also taken precautions to prevent another Hepatitis A
outbreak, she said. "Immediately following the situation we mandated
that all food handlers receive a Hep A vaccine prior to employment with
us, and that's something that we've implemented across our entire
chain."
Cannondale Corporation is cooperating with the United States Consumer
Product Safety Commission (CPSC) by voluntarily recalling about 800
Gemini bicycles with medium and large frames. The frames on some of
these bicycles have been improperly manufactured, causing too much of
the thickest portion of the downtube to be removed. This could cause
the frame to break during use, resulting in falls and serious injury to
riders.
The Company has received three reports of frames breaking. One minor
injury was reported.
The recall involves the following bicycle models with medium and large-
sized frames:
(1) 2002 Gemini 1000,
(3) 2003 Gemini 900,
(4) 2003 Gemini 2000, and
(5) 2003 Gemini 1000
The bicycles have "Cannondale" written on the downtube, and "Gemini"
and the model number are written on the top tube. The bicycles were
sold in various colors.
Authorized Cannondale retailers nationwide sold these bicycles from
December 2001 through September 2002 for between $2,100 and $3,800.
For more details, contact the Company by Phone: (800) BIKEUSA or visit
its Website: http://www.cannondale.com.
Charter Communications Inc. placed its chief operating officer David
G. Barford on paid leave as a federal grand jury investigates the
Company's accounting practices, Associated Press Newswires reports.
Shareholders have been filing a series of class actions accusing the
Company of issuing false and misleading statements.
It was not clear what role Mr. Barford has played in the actions
leading up to the probe. However, the Company said in a recently
issued statement "that the company decided the most appropriate course
of action at this time is to place Mr. Barford on paid leave pending
the result of the investigation, after which this status would be
revealed."
The Company has said it believes its financial statements comply with
generally accepted accounting principles. Some analysts have raised
concerns about Charter's accounting practices, such as counting as
cable subscribers people who buy the Company's cable-modem Internet
access but not cable programming.
St. Louis-based Charter, controlled by Microsoft co-founder Paul Allen,
is the nation's fourth largest cable company, with 6.8 million
customers in 40 states.
Chinese President Jiang Xemin faces a class action filed on behalf of
members of the Falun Gong spiritual movement, seeking compensation for
atrocities committed against the group's members in China, Falun Gong
representatives said, according to an NZoom.com story.
The suit alleges President Jiang, 76, exploited his position to
persecute the followers in violation of international law. The suit
seeks unspecified punitive and compensatory damages for the "widespread
torture and genocide" of thousands of Chinese adherents of the
movement.
President Jiang, who is currently on his "farewell" tour of the United
States, authorized the creation of Office 6/10, an agency which has
orchestrated a "campaign of murder, torture, terrorism, rape, beatings
and genocide," against Falun Gong practitioners and their families,
Falun Gong said in a statement.
Terri Marsh, a Washington-based human rights lawyer who was
instrumental in filing the lawsuit, told AAP she "would welcome the
opportunity to cross examine Jiang in a court of law in the United
States where he would have to answer for all the atrocities and
violations he has perpetrated in China."
"This is an important step for us and a continuation of our
humanitarian efforts to expose and end the crimes against humanity
which are being committed in China," Adam Leining, a California-based
Falun Gong spokesman told reporters.
At a minimum, Falun Gong lawyers hope to get a favorable ruling in the
event that President Jiang chooses not to contest the case, which would
serve to bolster any further legal proceedings against him down the
road, when he no longer benefits from the immunity that is granted to
as president of China, NZoom.com reports.
Lawyers for shareholders suing Enron Corporation, its executives and
investment banks, want a federal judge to allow records used to prepare
for trial to be accessible to the public, Associated Press Newswires
reports. The case is set for trial in December 2003.
However, Enron says that would expose business secrets, particularly
those of pipelines and power plants that are not part of its
bankruptcy. Individual defendants, as well, including former chairman
Kenneth Lay and former chief executive Jeffrey Skilling, say public
access to such information as offshore account numbers, tax returns and
diaries would be oppressive and embarrassing.
The massive lawsuit, filed on behalf of large investors such as the
University of California and sever state pension funds that lost
millions of dollars in Enron's collapse, is essentially on hold as
parties await US District Judge Melinda Harmon's ruling on requests to
dismiss the case that were filed last summer.
Defendants include Enron, former executives, nine investment banks and
withered auditor Arthur Andersen LLP, convicted last June for trying to
thwart a Security and Exchange Commission probe into Enron's finances.
Last month, the lead law firm representing plaintiffs, San Diego-based
Milberg Weiss Bershad Hynes & Lerach, asked Judge Harmon to allow
public access to documents and records produced by both sides in
"discovery," or pretrial investigation, as it is more formally called.
"Secreting discovery documents produced in a securities class action as
high profile as this one will shroud in secrecy defendants' conduct in
the Enron debacle," plaintiffs' lawyers said in court documents.
Defendants, particularly Enron and Andersen, as well as Justice
Department and others, say in filing this month that Judge Harmon
should consider public access as discovery goes along, in order to
protect private and sensitive information.
"Plaintiffs fail to enunciate any legitimate reason why there is a need
for them to be the arbiter of what the public learns about what
happened at Enron," the company's lawyers said in court documents. "In
this unique case, the government has fulfilled that role and continues
to do so."
Several media organizations, including The New York Times and the
Houston Chronicle, have filed documents supporting the plaintiffs'
request. However, investment banks, added to the list of defendants in
April this year, say the issue is moot until Judge Harmon decides
whether all or part of the case will be thrown out.
Initial dismissal requests were filed in May, followed by responses in
June from the plaintiffs. Given the complexity of the case, it is not
unusual that four months have passed without a ruling, said Joel
Seligman, dean of the Washington University School of Law in St. Louis.
"There have been instances where it has been over a year," Dean
Seligman said.
A former writer for the WB network's television show "Reba" filed an
age discrimination complaint in Los Angeles Superior Court against the
network and Twentieth Century Fox Television, the studio that produces
the show, alleging that he was fired because he was deemed too old.
Gary H. Miller, a 54-year-old former staff writer for the hit shows
"Laverne & Shirley" and "Bosom Buddies" and an executive producer for
"The Fresh Prince of Bel Air," was informed that the network decided to
retain "greener writers" instead of him, despite his work on the show
being submitted for Emmy Award consideration. Mr. Miller was the only
writer on staff older than 40 years of age initially hired to work on
the program, according to the complaint.
"This is just another example of the TV industry's unlawful bias in
favor of writers under the age of 40," Steve Sprenger, one of the
attorneys for the plaintiff and a partner in the Washington, D.C.
office of the nationally recognized class action law firm of Sprenger &
Lang, said in a statement. "This policy is unfortunately not new to
the WB or Twentieth Century Fox."
The firm had earlier filed separate class actions against all of the
major television networks and studios on behalf of more than 150
television writers alleging age discrimination. These cases are still
pending in Los Angeles Superior Court.
Mr. Miller's case is similar to the experience of the plaintiffs in the
broader class action lawsuits. The former writer was hired in the
middle of 2001 to work as a consulting producer on "Reba" even though
the show's executive producer repeatedly recommended that he be hired
as a co-executive producer. The network and studio proceeded to fill
numerous writing positions with individuals in their late 20s and early
to mid 30s.
Despite his title, Mr. Miller essentially functioned as a co-executive
producer, and one of the episodes he penned was submitted for Emmy
Award consideration.
In January 2002, the executive producer informed Mr. Miller that he
would be considered for a co-executive producer position, but the
network and studio not only refused to consider him for the position,
but later fired him from his consulting producer position.
According to the complaint, writers over the age of 50 account for only
3 percent of the writing staff and two percent of the credits on
evening shows broadcast by WB, whereas approximately 33 percent of the
Writer's Guild of America's membership during the same period was older
than 50 years of age. The statistics are nearly identical for shows
produced by Twentieth Century Fox, according to the complaint.
For more details, contact Steve Sprenger by Phone: 202-772-1160 (work)
or 301-656-6242 (home) or visit the firm's Website:
http://www.sprengerlang.com
Testing company Harcourt Education Measurement faces a class action
filed in the United States District Court in Nevada, after the Company
mistakenly reported that 736 Nevada students failed the math portion of
the proficiency exam needed to earn a diploma, the Las Vegas Journal
The Company mistakenly reported that the students failed the April 2002
test when in fact they passed. The suit alleges that the plaintiffs
were damaged in several ways including emotional distress and damage to
reputation.
The Company already has been fined by the state Board of Education,
which imposed $425,000 in penalties. In August, Company officials also
agreed to reimburse parents who decided to send their children to
summer school for remedial help.
Hawaii's state Attorney General, Earl Anzai, was pleased with Judge
Sabrina McKenna's decision giving the state's Child Support Enforcement
Agency until March 31 to account for more than US$3.5 million in
uncashed child support money, saying the ruling was "generally
favorable," according to the Honolulu Advertiser.
According to an earlier Class Action Reporter story, divorced mother
Anne Keep filed the suit in 1998 after her initial checks from the
agency were delayed for several months, even though child support
payments were being deducted from her ex-husband's paycheck by the
Ms. Kemp told the Advertiser that she hopes Judge McKenna's ruling will
spur the Legislature to finance more positions at the agency. "For the
vast majority of people receiving child support, if a check doesn't
come or is less than it's supposed to be and it's not a huge amount of
money, it's not worth their time to go down to the agency to try to
straighten things out . This kind of case is exactly what class-action
lawsuits were designed for."
Attorney General Anzai said the US$3.5 million was stored in the bank
all this time. He said the $3.5 million in checks that were sent to
child support recipients and never cashed or returned to the agency
because of bad mailing addresses was not money that the agency had lost
or could not account for.
He said the Child Support Enforcement Agency, which is a division of
the attorney general's department, will do its best to comply Judge
McKenna's ruling. He was skeptical, however, that Judge McKenna's
ruling would prod the Legislature to increase the agency's financing.
He told the Advertiser a study was done a few years ago and presented
to the Legislature, showing that with the federal government putting in
$2 for every $1 the state spent to increase the agency's financing,
there would be "a multiplier effect" resulting in a boost to the
state's economy.
Martha Stewart could face even more trouble from angry stockholders in
her own company, because she kept her new woes with the SEC a secret,
lawyers and experts said recently, according to a report by the New
York Daily News.
The investors have warned that Ms. Stewart might be liable for not
disclosing that government investigators informed her weeks ago that
they were likely to pursue civil fraud charges against her for insider
trading.
The law firm leading a shareholder revolt against Ms. Stewart told the
Daily News it already was looking into adding to the charges against
her and her company, Martha Stewart Living Omnimedia. "We may have to
expand the class," said lawyer Melvyn Weiss, whose firm has filed two
class actions against Ms. Stewart's empire, seeking millions of dollars
in damages.
Mr. Weiss said he is concerned that neither Ms. Stewart nor her Company
disclosed to investors that she had received a so-called Wells notice
from the SEC enforcement staff within the last few weeks, notifying her
that it would recommend to the five SEC commissioners that a civil
fraud suit be filed against Ms. Stewart for her involvement in the
ImClone insider-trading scandal, a source familiar with the matter told
the Daily News.
Mr. Weiss said the SEC notice to Ms. Stewart, if made public, might
have affected Martha Stewart Living Omnimedia's stock. By holding the
potential SEC charges, the company and Ms. Stewart could be held liable
for losses suffered from the time the notice was sent until it was
publicly disclosed.
The bad news mounted as prosecutors continued an aggressive criminal
probe into whether Ms. Steward committed securities fraud and
obstruction of justice.
In court filings, Manhattan federal prosecutors have implicated Ms.
Stewart in an insider-trading conspiracy involving her sale of nearly
4,000 shares of ImClone stock just before it collapsed. Her friend,
ImClone founder Samuel Waksal, pleaded guilty to insider trading and
other charges, and an assistant to her stockbroker is cooperating with
the FBI.
Ms. Stewart told the FBI she received no insider tip, but sold the
stock because of an existing stop-loss order. However, the assistant,
Douglas Faneuil, contradicts Ms. Stewart's story.
Massachusetts' education officials asked for the dismissal of a class
action filed on behalf of Holyoke and Springfield Students who failed
the Massachusetts Comprehensive Assessment System (MCAS) exam, the
Boston Herald reports.
The suit alleges that the test discriminates against the poor and
minorities. The lawsuit seeks class-action status, citing a Class
composed of black and Hispanic students, students with limited English,
students with disabilities, vocational students and students from the
Holyoke school district, according to an earlier Class Action Reporter
story.
The class action, which would be the first contesting the Massachusetts
Comprehensive Assessment System (MCAS), challenges the test as well as
a graduation requirement for the classes of 2003 and thereafter. The
lawsuit also claims that the exam is invalid under the equal protection
clauses of the state and federal constitutions, and that it is
unreliable and unfair.
The state asserted in its motion that it won't abandon students who
struggle to pass, and that that intensive math and English remedial
programs were in place to assist students. "Given these continuing
opportunities, those students will have ample chance to overcome the
'culture of low expectations' and to acquire the critical skills
measured by the MCAS," the filing read, according to the Boston Herald.
The state's lawyers rebutted plaintiff claims that the state's poorest
schools lack resources to prepare students for MCAS, pointing to $24
billion in increased state money spent since 1993 to assist those
schools. They also questioned the suit's premise, saying students are
entitled to an education, but not a diploma they haven't earned, the
Boston Herald reports. The state also argued the plaintiffs have no
standing to sue because they haven't been denied a diploma yet.
Roger Rice, an attorney for one of the plaintiffs, said he wasn't
surprised by the state's motion to dismiss the suit. "They don't want
to give these kids their day in court," Mr. Rice told The Boston Globe.
"The DOE looks the other way while they drop out of school."
More than 50 class actions were filed against Oxford Health Plans Inc.
and certain officers and directors after its stock price plunged on
news of computer system failures, backlogged claims and a billing
breakdown. These lawsuits have now been consolidated in US District
Court in New York, and the Company is offering US$161.3 million to
settle this massive litigation, the Hartford Courant reports. Judge
Charles L. Brieant has set a November 6 settlement conference.
The settlement offer is expected to lower third quarter net income to
26 cents a share. However, if plaintiffs' attorneys in the shareholder
litigation do not accept the offer, the Company might have to hand over
millions more or go to trial.
The settlement offer does not apply to a pending suit filed by the
State Board of Administration of Florida against the Company, nor does
it apply to the New York attorney general's investigation of the
The Company's announcements of its offer to settle the shareholders'
suits were described as a "non-event" by UBS Warburg health care
analyst William McKeever, because Oxford expects to beat earnings
estimates and it is well protected in the litigation by insurance.
"The company is trying to grandstand here, and trying to get plaintiffs
to settle," Mr. McKeever said. "Since they have insurance covering
$200 million, they can feel comfortable making this kind of an offer to
get it over and done with."
The United States Government faces a lawsuit from the American Civil
Liberties Union (ACLU) and three other rights groups, relating to the
expanded surveillance enforced by the US Department of Justice, after
the September 11 terrorist attacks, the Associated Press reports.
The suit, filed in federal court, comes a year after President George
W. Bush signed the USA Patriot Act, which increased the government's
surveillance power to prevent further attacks. The suit alleges that
the Justice Department failed to elaborate on the parts of the Act that
have "obvious and serious implications for individual privacy and the
freedom of speech."
The groups are now gathering information on all policy directives and
other guidance, which the Justice Department and the FBI issued to
their employees on:
(1) obtaining circulation records from libraries, purchase records
from bookstores or e-mail records from Internet service
providers; and
(2) the expanded use of pen registers and trap and trace devices.
Pen registers capture phone numbers dialed on outgoing calls,
while trap and trace devices capture numbers identifying
incoming phone calls
The groups also are demanding information about the number of times the
Justice Department has engaged in various types of surveillance in the
past year. The Justice Department says such data is classified, the
Associated Press reports.
"The Justice Department conceded in early September that the
information is of exceeding importance to the American public, but it
nonetheless continues to stonewall," ACLU attorney Jameel Jaffer said
in a statement.
Other groups joining the suit were the Electronic Privacy Information
Center, the American Booksellers Foundation for Free Expression and the
Freedom to Read Foundation.
The local National Association for the Advancement of Coloured People
(NAACP) in Albuquerque expressed dissatisfaction with the findings by
the US Department of Labor that there is insufficient evidence to show
that Twin Mountain Construction Co. violated federal nondiscrimination
and affirmative action provisions while hiring for the $293 million
rebuild of the Interstate 25 and I-40 interchange, according to a
report by the Albuquerque Journal.
The Labor Department initiated its inquiry when Harold Bailey,
president of the Albuquerque branch of the NAACP, filed a class action
charging discrimination by Twin Mountain.
Mr. Bailey has asked the Labor Department to reconsider its
determination. "I still do not feel that a fair review of the evidence
collected was given," he said. He questions the results of the probe,
(1) the report does not provide documented evidence that Twin
Mountain made a good faith effort to inform, recruit,
interview and hire qualified minorities and women;
(2) the report lacks specific information about jobs people were
hired for;
(3) the report fails to indicate whether the workforce was hired
locally;
(4) the report does not break down the number of women and ethnic
minorities, other than Hispanic, hired; and
(5) the report fails to include a review of the subcontractors'
hirings.
Mr. Bailey filed the class action in September 2001, on behalf of 15
people who sought jobs on the interchange project. Mr. Bailey charged
that a number of African-Americans were denied employment opportunities
with Twin Mountain and its sub-contractors. The Labor Department
investigated the allegations from January to May, 2002, and recently
issued the results.
"Based on the findings of this investigation, there was insufficient
evidence to conclude that TMC has violated its obligation under
nondiscrimination and affirmative action provisions of the executive
order," the department said in its notice of results.
"Our investigation found that TMC accepted applications from
individuals of all races and ethnic groups, including Hispanics,
throughout the hiring process of the Big I Project," the department
wrote.
Twin Mountain accepted more than 7,000 applications during the hiring
period February 1, 2000, through the end of the project, the Labor
Department stated. It hired about 500 people of all skill levels,
races and ethnic groups. Hispanics represented 62.5 percent of the
total hires, the department said.
The United States Forest Service in California was ordered to increase
the number of its Latino employees in a settlement for a class action
filed by the Mexican American Legal Defense and Educational Fund,
BayArea.com reports.
The suit alleges that the Forest Service, an agency of the Department
of Agriculture, maintains a hostile environment that discriminates
against Hispanics. The agency also did not promote them to important
positions and retaliated against those who report unfair practices,
according to an earlier Class Action Reporter story.
Lead plaintiff Joe Sedillo decided the file the suit after suffering
reprisals for reporting abuses of Hispanic employees, to the Equal
Employment Opportunity Commission (EEOC). Mr. Sedillo's attorney,
Dennis Montoya, told EFE news he had received many complaints of
discrimination in hiring and promotions, of the existence of a hostile
environment for Hispanics, and of retaliation and revenge when an
employee files a discrimination complaint.
The settlement states that Forest Service Region 5, which covers
California and Hawaii, must hire a regional recruitment coordinator,
and hire someone to oversee implementation of the agreement, according
to MALDEF and the Legal Aid Society Employment Law Center, BayArea.com
reports. The settlement does not include a hiring quota, said Forest
Service regional spokesman Dave Reider.
The Law Firm of Beatie and Osborn LLP initiated a securities class
action in the United States District Court for the Southern District of
New York on behalf of individuals who purchased Allied Riser
Communications Corp. (NASDAQ: ARCC) common stock during the period
between November 23, 1999 and July 11, 2001.
The suit charges the Company with issuing false and misleading
statements in violation of federal securities laws.
For more information, contact Eduard Korsinsky or Benjamin D. Coleman
by Mail: 521 Fifth Avenue, 34th Floor New York, New York 10175 by
Phone: 800-891-6305 by Fax: 212-888-9664 by E-mail:
clientrelations@bandolaw.com or visit the firm's Website:
http://www.bandolaw.com
Lovell Stewart Halebian LLP initiated a securities class action on
behalf of all persons who purchased, converted, exchanged or otherwise
acquired the common stock of American Electric Power Company, Inc.
(NYSE:AEP) between May 17, 1999 and October 9, 2002, inclusive.
The lawsuit asserts claims under Sections 11 and 15 of the Securities
Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act
of 1934 and Rule 10b-5 promulgated by the SEC thereunder and seeks to
recover damages. The action, is pending in the US District Court for
the Southern District of Ohio.
According to the complaint, defendants made misstatements of material
facts and omitted to state material facts in their public statements
and elsewhere, including failing to disclose that the Company was:
(1) engaging in electricity trades involving transactions
involving sequential trades with the same terms and
counterparties;
(2) overstating AEP's revenues in its SEC filings and elsewhere by
including in such revenues sums received in connection with
such sequential trades with the same terms and counterparties;
(3) failing to disclose that AEP's traders were falsely reporting
energy prices to Platt's, which publishes energy market
reports regarding power trading prices and volumes.
The complaint alleges that after Wall Street learned about widespread
practices in the power industry regarding so-called "round-trip" trades
and AEP admitted to having engaged in transactions involving sequential
trades with the same terms and counterparties, AEP stock tumbled to as
low as $22.74 following an earnings warning on July 18th, down 53% from
a 52-week high of $48.90.
The complaint alleges that following a disclosure on October 9th that
five AEP traders had been dismissed for reporting false and misleading
price information for use in indexes compiled by trade publications,
shares of AEP further declined to a 52-week low of $15.10.
The complaint further alleges that defendants Goldman Sachs & Co., J.P.
Morgan Securities, Inc. and Salomon Smith Barney Inc. violated Section
11 of the Securities Act in connection with misstatements and omissions
of material fact contained in the Prospectus for a secondary offering
of AEP stock in June 2002, of which they served as joint book-running
managers.
For more details, contact Christopher Lovell or Christopher J. Gray by
Mail: 500 Fifth Avenue New York, New York 10110 by Phone: 212-608-1900
or by E-mail: classaction@lshllp.com
Cauley Geller Bowman & Coates, LLP initiated a securities class action
in the United States District Court for the Southern District of New
York on behalf of purchasers of Atlas Air Worldwide Holdings, Inc.,
formerly known as Atlas Air, Inc. (NYSE: CGO) publicly traded
securities during the period between April 18, 2000 and October 15,
2002, inclusive. The suit names as defendants the Company and:
(1) Richard H. Shuyler,
(2) Brian H. Rowe,
(3) Douglas A. Carty,
(4) Stanley J. Gadek,
(5) James T. Matheny and
(6) Stuart G. Weinroth
The defendants allegedly violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder,
by issuing a series of material misrepresentations to the market
between April 18, 2000 and October 15, 2002, thereby artificially
inflating the price of Company securities.
Throughout the class period, as alleged in the complaint, defendants
issued numerous statements and filed quarterly and annual reports with
the SEC which described the Company's net income and financial
The complaint alleges that these statements were materially false and
misleading because they failed to disclose and/or misrepresented the
following adverse facts, among others:
(i) that, throughout the class period, the Company had materially
overstated its inventory, maintenance expense, and allowance
for bad debt;
(ii) that the Company lacked adequate internal controls and was
therefore unable to ascertain the true financial condition of
the Company; and
(iii) that as a result, the value of the Company's net income and
financial results were materially overstated at all relevant
On October 16, 2002, before the market opened for trading, the Company
shocked the market by announcing that it will be initiating a re-audit
of its financial results for fiscal years 2000 and 2001, which will
require the Company to restate its previously-issued financial reports.
The Company described the overstatement as being in "the areas of
inventory obsolescence, maintenance expense, and allowance for bad
debt."
The Company further stated that "preliminary indications are that the
cumulative impact through 2001 will reduce after-tax income by roughly
$60 million to $65 million." Following this report, shares of Atlas
Air fell $.79 per share, to close at $1.80 per share, on volume of more
than 1.7 million shares traded, or almost ten times the average daily
volume.
For more details, contact Jackie Addison, Heather Gann or Sue Null by
Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 888-551-9944
by E-mail: info@cauleygeller.com or visit the firm's Website:
http://www.cauleygeller.com
Abbey Gardy, LLP initiated a securities class action against Atlas
Worldwide Holdings, Inc. (NYSE:CGO) in the United States District Court
for the Southern District of New York, on behalf of all persons or
entities who purchased securities during the period from April 18 2000
and October 15, 2002, inclusive against the Company and certain of its
officers and directors.
The suit alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market during the class period thereby artificially inflating the price
of Company securities.
The complaint alleges that during the class period, defendants reported
materially false and misleading earnings. On October 16, 2002,
defendants disclosed that the Company would have to restate its
financial results for its fiscal years 2000 and 2001, in the areas of
obsolescence, maintenance expense and allowance for bad debt. On this
news the Company's stock price dropped to $1.80. Shares of Atlas
common stock had traded as high as $45.69.
For more details, contact Nancy Kaboolian by Phone: 800-889-3701 by E-
mail: Nkaboolian@abbeygardy.com or visit the firm's Website:
http://www.abbeygardy.com
Glancy & Binkow LLP initiated a securities class action in the United
States District Court for the Eastern District of Michigan on behalf of
all persons who received shares of Comerica, Inc. (NYSE:CMA) on or
about January 30, 2001, as a result of the Company's acquisition of
Imperial Bancorp, and who sold those shares at a loss or retained their
Comerica holdings through October 1, 2002, inclusive.
The suit charges the Company and certain of its executive officers with
violations of federal securities laws. Among other things, plaintiff
claims that defendants' material omissions and the dissemination of
materially false and misleading statements regarding the Company's
financial performance caused the Company's stock price to become
artificially inflated, inflicting damages on investors.
The suit alleges that defendants artificially inflated the Company's
revenue by overstating the value of its Munder Capital Management
subsidiary and under-accruing Comerica's loan loss reserves.
Defendants' material misrepresentations and omissions were revealed on
October 2, 2002, when the Company disclosed that Comerica would reduce
its second- and third-quarter 2002 earnings, reflecting a $213 million
after-tax charge for additional loan loss reserves and the decline in
the Munder subsidiary's value.
For more details, contact Lionel Z. Glancy or Dale MacDiarmid by Mail:
1801 Avenue of the Stars, Suite 311, Los Angeles, California 90067 by
Phone: 310-201-9150 or 888-773-9224 or by E-mail: info@glancylaw.com.
Lockridge Grindal Nauen PLLP initiated a securities class action in the
United States District Court for the Western District of Tennessee on
behalf of purchasers of Concord EFS, Inc. (NYSE:CEFT) publicly traded
securities during the period between October 30, 2001 and September 4,
2002, inclusive.
The complaint charges the Company and certain of its officers and
directors with issuing false and misleading statements concerning its
business and financial condition. Specifically, the complaint alleges
that during the class period, Concord and its top officers issued false
and misleading statements and concealed the truth about the Company's
results and business in order to allow Concord stock to trade at
artificially inflated levels.
Defendants repeatedly misrepresented the strength of Concord's
operating performance and its ability to post 30%-35% earnings per
share growth in order to prop up the price of Concord stock so that
defendants could complete acquisitions using Concord's stock as
currency and sell off 5.4 million of their own Concord shares at prices
as high as $32.07 per share, for over $160 million in proceeds.
The truth, however, was that the Company's business was not growing as
represented, but rather was suffering from increased costs and
declining margins. The "record" growth and profits defendant reported
were false, resulting from the inclusion of non-operating gains in its
results and the exclusion of operating expenses from its reported
results. These manipulations allowed Concord to report favorable
results despite the fact that its business operations were not as
strong as represented.
On September 5, 2002, Concord shocked that market with news that its
CEO was stepping down and that its 2002 and 2003 earnings would be much
lower than represented. On this news, Concord's stock dropped to $12.60
per share. In the wake of the announcement, Concord's stock price has
fallen more than 60% from its Class Period high of more than $35 per
For more details, contact Karen M. Hanson by Mail: 100 Washington
Avenue South Suite 2200 Minneapolis, MN 55401 by Phone: 612-339-6900 or
by E-mail: kmhanson@locklaw.com
The Law Offices of Bernard M. Gross initiated a securities class action
in the United States District Court for the Eastern District of Texas,
on behalf of all persons and entities who purchased or otherwise
acquired the common stock of Electronic Data Systems (NYSE:EDS) between
September 7, 1999 and September 24, 2002, inclusive or received shares
of EDS through EDS' stock dividend reinvestment plan.
The action, is pending in the United States District Court, Eastern
District of Texas against the Company and:
(1) Richard H. Brown,
(2) Paul Chiapparone and
(3) James Daley
The complaint charges the defendants with violations of Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5, by
issuing a series of materially false and misleading statements to the
market during the class period.
As alleged in the suit, defendants made misrepresentations and/or
omissions of material fact, including:
(i) failing to disclose that EDS' backbone revenue for its
information solutions IT outsourcing business is highly
susceptible to interruptions due to terms in EDS' service
contract that enables EDS' customers to unilaterally suspend
discretionary spending on IT outsourcing;
(ii) affirmatively misrepresenting the predictability of EDS'
future cash flows by counting the anticipated revenue that EDS
would supposedly receive from its IT outsourcing service
contracts with customers without disclosing that payment under
such contracts were not guaranteed;
(iii) failing to disclose the risk that EDS' airline infrastructure
outsourcing assets that it acquired in its acquisition of
Sabre Holding Corp. were subject to a drastic decrease in
value if US Airways declared bankruptcy; and
(iv) failing to disclose that EDS faced significant potential
threats to its liquidity if its share price fell out because
of put-option and other obligations that ultimately obligated
EDS to in effect buy back a total of 5.44 million shares of
EDS stock at fixed prices averaging over $60 per share.
On September 18, 2002 after executives of EDS warned that a lack of new
revenues would wipe out more than $.60 per share of its third quarter
fiscal year 2002 earnings target of $.74, the price of EDS stock
plummeted to a 52-week low of $20, down from a class period high of
After further revelations regarding EDS' put-option and other
liabilities emerged in the wake of the foregoing disclosures, EDS'
share price tumbled even further, reaching an intra-day low of $10.09
on September 24, 2002.
For more details, contact Deborah R. Gross or Susan Gross by Phone:
866-561-3600 (toll-free) or 215-561-3600 by E-mail:
susang@bernardmgross.com or debbie@bernardmgross.com or visit the
firm's Website: http://www.bernardmgross.com
Dyer & Shuman, LLP initiated a securities class action in the United
States District Court for the Eastern District of Texas on behalf of
purchasers of Electronic Data Systems Corp. (NYSE: EDS) publicly traded
securities during the period between September 7, 1999 and September
24, 2002, inclusive against the Company and:
(1) Richard Brown,
(2) Paul Chiapparone, and
The complaint charges that defendants made misstatements of material
facts and omitted material facts in their public statements and
elsewhere, including failing to disclose that the Company's backbone
revenue from its Information Solutions IT outsourcing business is
highly susceptible to interruption.
This susceptibility was largely due to terms in EDS's service
contracts, which enabled EDS customers to unilaterally suspend
discretionary spending on IT outsourcing. Thus, the defendants
affirmatively misrepresenting the predictability of EDS's future cash
flows by touting anticipated revenues that EDS would receive from its
IT outsourcing service contracts with customers without disclosing that
payments under such contracts were not guaranteed.
The complaint alleges that the defendants failed to disclose that EDS
faced significant potential threats to its liquidity if its share price
fell because of put-option and other obligations that ultimately
obligated EDS to buy back a total of 5.44 million shares of EDS stock
at fixed prices averaging over $60.00 per share.
The complaint further alleges that when Wall Street learned of the
foregoing on September 18, 2002, and after executives of EDS warned
that a lack of new revenues would wipe out more than $0.60 per share of
its 3Q 2002 earnings target of $0.74, the price of EDS stock plummeted
to a 52-week low of $20.
The complaint alleges that when subsequent revelations regarding EDS's
put-option and other liabilities emerged shortly after September 18,
2002, EDS's share price buckled again, falling to $10.09 on September
For Trig R. Smith by Mail: 801 E. 17th Avenue, Denver, CO 80218 by
in the United States District Court for the Western District of
Kentucky on behalf of purchasers of Kindred Healthcare, Inc. (Nasdaq:
KIND) publicly traded securities during the period between August 14,
2001 and October 10, 2002, inclusive.
directors with violations of the Securities Exchange Act of 1934. The
complaint alleges that during the class period, defendants issued a
series of statements to the public indicating that the Company was
successfully emerging from bankruptcy and implementing a growth plan.
As part of the Plan, the Company filed a Prospectus with the SEC in
preparation for a stock offering.
However, though the defendants reported improved financial results and
acquisitions each quarter during the class period, the defendants did
not disclose that because of a large increase in professional liability
claims, especially in Florida, defendants did not have proper reserves
for the increased volumes of claims spawned by this change in the law.
Consequently, the Company was facing a tremendous increase in liability
and had not adequately prepared themselves financially to handle the
increase in claims. Therefore, any representations contained in public
filings or statements claiming that the reserves were adequate were
false and misleading, according to the complaint. Moreover, as a
result of the Company's misrepresentations, Company investors have
sustained significant losses.
Much Shelist Freed Denenberg Ament & Rubinstein initiated a securities
class action on behalf of purchasers of CMGI Inc. (Nasdaq:CMGI)
publicly traded securities between March 23,1999 and October 6,2000
against Henry Blodget and Merrill Lynch & Co., Inc. in the United
States District Court for the Southern District of New York.
The suit charges Merrill Lynch and its former star Internet research
analyst, First Vice President Henry M. Blodget with knowingly issuing
false and misleading analyst reports regarding CMGI during the class
Based on e-mails and other internal Merrill Lynch communications, which
were made public as a result of the investigation conducted by the New
York State Attorney General, the Complaint alleges that Defendants
failed to disclose a significant conflict of interest between their
investment banking and research departments.
Specifically, the suit alleges that Henry Blodget and other Merrill
Lynch analysts issued very favorable analyst reports regarding CMGI to
the public when they allegedly knew that the positive recommendations
were unwarranted and false.
The suit further alleges that, unbeknownst to the investing public,
Merrill Lynch's buy recommendations and price targets were driven by
its efforts to attract lucrative investment banking business rather
than by the companies' fundamental merits.
For more details, contact Carol V. Gilden by Phone: 800-470-6824 by E-
mail: investorhelp@muchshelist.com or visit the firm's Website:
http://www.muchshelist.com
Pomerantz Haudek Block Grossman & Gross LLP initiated a securities
class action in the United States District Court for the Southern
District of New York against Salomon Smith Barney, Inc. and its former
telecommunications research analyst Jack B. Grubman on behalf of
investors who purchased or otherwise acquired the securities of Level 3
Communications, Inc. during the period from January 4, 1999 through
June 18, 2001, inclusive.
The lawsuit charges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934 by issuing false and misleading
analyst reports on Level 3 in a bid to win or maintain lucrative
banking and advisory work from the Company.
The complaint alleges that Salomon and Mr. Grubman urged investors to
purchase Level 3 stock by issuing false and misleading analyst reports
rather than providing independent objective analysis. By April 2001,
Salomon had received approximately $136 million in investment banking
fees from Level 3. As a result of defendants' false and misleading
statements, the market price of Level 3 securities was artificially
inflated, maintained or stabilized during the class period.
On September 30, 2002, New York State Attorney General Eliot Spitzer
sued five current and former executives from four different
telecommunication companies for repayment of proceeds realized through
"profiteering in Initial Public Offerings (IPOs) and phony stock
ratings."
In addition to allegations of "spinning," the complaint charges that
defendants issued favorable but false ratings on existing or potential
banking clients, including Level 3, in order to earn lucrative fees
involved in underwriting and advisory work.
The complaint details how analysts were pressured to issue positive
ratings and avoided the bottom two ratings in Salomon's five category
rating system. Salomon employees, especially the retail brokers,
allegedly understood the fraud being perpetrated on individual
investors and called Mr. Grubman a "disgrace" and "investment banking
whore."
Similarly, on September 23, 2002, NASD issued a press release
announcing that it had fined Salomon $5 million for issuing materially
misleading research reports on Winstar Communications, Inc. in 2001
that were neither objective nor independent, but instead were the
biased, overly-optimistic and uncritical product of collaboration
between defendants and Winstar management.
In addition to the specific investigations above, Salomon is also the
target of broader investigations by NASD, the Securities and Exchange
Commission, the House Financial Services Committee and the New York
State Attorney General concerning research practices and analyst
conflicts; the allocation of hot initial public stock offerings to
banking clients, including WorldCom, Inc. executives; and Mr. Grubman's
surprise upgrade on AT&T Corp. in November, 1999 after years of bearish
reports on the company and only months before Salomon was named one of
three top underwriters in the $10 billion spin-off of the company's
wireless-phone unit.
For more details, contact Andrew G. Tolan by Phone: 888-476-6529,
888-4-POMLAW by E-mail: agtolan@pomlaw.com or visit the firm's Website:
http://www.pomlaw.com
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Northern District of Illinois,
Eastern Division on behalf of all purchasers of the common stock of
Sears, Roebuck & Co. (NYSE: S) from January 17, 2002 to October 17,
The complaint charges Sears, Roebuck & Co. and certain of its officers
and directors with issuing false statements concerning its business and
financial condition. Specifically, the complaint alleges that
defendants, throughout the class period, represented that Sears was
growing its earnings strongly, driven by its Credit and Financial
Products segment and that it would achieve earnings growth of 22% in
2002 over 2001.
In addition, in each of its press releases and SEC reports filed during
the class period, Sears reported its provisions for uncollectible
accounts and in its 2001 annual report represented that such reserves
were "adequate."
These, and other statements detailed in the complaint, were allegedly
false and misleading because, according to the complaint, they did not
disclose that the Company's risk for uncollectible accounts had
increased materially throughout the class period and, in addition, that
Sears was under-reserving for its uncollectible accounts which inflated
its earnings and balance sheet.
On October 17, 2002, the Company reported in a press release that it
will grow its 2002 earnings by 15%, rather than the 22% it reaffirmed
as recently as ten days previously, because of a "$222 million increase
in the domestic provision for uncollectible accounts."
In addition, according to the press release, earnings for the third
quarter were 26% less than the previous year. In reaction to the press
release, the price of the Company's common stock plummeted, falling
32%, from an October 16 close of $33.95 per share to close at $23.15
per share on October 17, on extremely heavy trading volume.
For more details, contact Marc A. Topaz or Stuart L. Berman by Mail:
Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone:
888-299-7706 (toll free) or 610-667-7706 or by E-mail:
info@sbclasslaw.com
Federman & Sherwood initiated a securities class action in the United
States District Court for the Northern District of Texas on behalf of
purchasers of the securities of TXU Corp. (NYSE: TXU) between April 25,
The suit alleges defendants violated Section 10(b) of the Securities
Exchange Act of 1934 by issuing a series of materially false and
misleading statements and omitting to disclose material adverse
information about the Company's operations and prospects during the
Specifically, the suit alleges that defendants issued several
statements that the dividend was stable and they saw nothing that would
reduce the amount of the dividend.
For more details, contact William B. Federman by Mail: 120 N. Robinson,
Suite 2720, Oklahoma City, OK 73102 by Phone: 405-235-1560 by Fax:
405-239-2112 or by E-mail: Wfederman@aol.com
Wolf Popper LLP initiated a securities class action against TXU Corp.
(NYSE:TXU), its CEO, Erle Nye and CFO, Michael J. McNally, on behalf of
purchasers of Company securities from January 31, 2002 through October
11, 2002, in the US District Court for the Northern District of Texas -
Dallas Division.
The plaintiff alleges in this class action that during the class period
defendants falsely represented that TXU's European operations,
particularly its operations in the UK, were improving, and that TXU was
on track to report EPS of $4.35 to $4.45 per share of common stock in
2002 with continued 9 to 11% growth thereafter. As a result of these
allegedly false statements, TXU's securities traded at artificially
inflated levels during the class period.
In addition, this false and misleading portrayal of TXU's business and
operations allowed the Company to complete a secondary offering of 11.8
million shares of common stock, priced at $51.15 per share, and 8.8
million units of FELINE PRIDES (equity linked debt securities), raising
nearly a billion dollars in much needed financing.
The truth about TXU's business was revealed beginning on October 4,
2002, when the Company said it was revising its earnings expectations
for fiscal 2002 to a range of $3.20 to $3.25 per share of common stock,
and its guidance for 2003 to a range of $3.45 to $3.55 per share of
common stock. In response, TXU's stock price plummeted, falling from a
close of $32.90 per share on October 3, 2002 to $13.85 on October 8,
However, the price per share of TXU's securities remained inflated as
defendants concealed the extreme liquidity problems from which the
Company was suffering, and continued to assure the market that the
Company was financially sound and that the Company's dividend would not
be cut.
Then, on October 14, 2002, before the market opened, TXU announced that
it was cutting its dividend 80%, to $0.125 per share and would no
longer support its European operations. The Company's stock price
collapsed on this news to as low as $10.10 per share before closing at
$12.94, a one day drop of 31%, on volume of 39 million shares.
For more details, contact Michael A. Schwartz by Mail: 845 Third
Avenue, New York, NY 10022-6689 by Phone: 212-451-9668 or 877-370-7703
by Fax: 212-486-2093 or 877-370-7704 by E-mail: irrep@wolfpopper.com or
visit the firm's Website: http://www.wolfpopper.com
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Northern District of Texas
on behalf of purchasers of TXU Corp. (NYSE:TXU) publicly traded
Company provides electric and natural gas services, merchant energy
trading, energy marketing, telecommunications and energy-related
represented that the Company could succeed in the competition created
by deregulation. Defendants then represented that the Company's
European operations were improving, it would succeed competition in the
U.K. market and it was on track to report EPS of $4.35+ and $4.60+ in
2002 and 2003, respectively. As a result of these allegedly false
statements, Company stock traded at artificially inflated levels, as
high as $56 per share.
Due to this inflation, defendants were able to complete a secondary
offering of 11.8 million shares of common stock, priced at $51.15 per
share and 8.8 million units of FELINE PRIDES (equity linked debt
securities), raising nearly a billion dollars in much needed financing.
Subsequent to the offering, defendants needed to maintain a high stock
price to avoid triggering additional debt and the conversion of
preferred stock into common stock pursuant to a partnership agreement.
On October 4,2002, the Company issued an earnings warning, indicating
that due to customer attrition and ongoing problems in Europe the
Company would report 2002 EPS of only $3.25. On this news, the
Company's stock price declined to $27 per share, from more than $40 per
share the prior week.
However, the stock continued to be inflated as defendants concealed the
extreme liquidity problems from which the Company was suffering.
Defendants even assured the market that the Company was strong
financially and that the dividend was "sound and secure."
Then, on October 14,2002, before the market opened, TXU stunned the
market with news that it was cutting its dividend 80%, to $0.125 per
share and would no longer support its European operations. The
Company's stock price immediately collapsed on this news to as low as
$10.10 per share before closing at $12.94, a one day drop of 31%, on
volume of 39 million shares.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave,
Suite 202 Bala Cynwyd, PA 19004-2808 by Phone: 888-643-6735 or
610-660-8000 by Fax: 610-660-8080 by E-mail: Mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182.
TXU CORPORATION: Schoengold & Sporn Commences Securities Suit in TX
Schoengold & Sporn, PC initiated a securities class action against TXU
Corporation (NYSE:TXU) and certain key officers and directors in the
United States District Court for the Northern District of Texas, Dallas
Divison on behalf of all purchasers of Company securities during the
period between January 31, 2002 and October 11, 2002.
thereunder, by issuing a series of material misrepresentations about
the Company's business, operating performance and prospects to the
market during the class period, thereby artificially inflating the
price of Company securities.
misrepresented, among other things, that the Company's European
operations were improving, that it would succeed in competition in the
U.K. market and that it was on track to report EPS of $4.35+ and $4.60+
in 2002 and 2003, respectively. As a result of these allegedly false
After the offering, defendants needed to maintain a high stock price to
avoid triggering additional debt and the conversion of preferred stock
into common stock pursuant to a partnership agreement.
On October 4, 2002, the Company issued an earnings warning that the
Company would report 2002 EPS of only $3.25 as a result of customer
attrition and ongoing problems in Europe. On this news, the Company's
stock price declined to $27 per share, from more than $40 per share the
prior week.
However, the stock remained inflated as defendants concealed the
Then, on October 14, 2002, before the market opened, the Company
shocked the investing public with news that it was cutting its dividend
80%, to $0.125 per share, and would no longer support its European
operations. The Company's stock price immediately plummeted on this
news to as low as $10.10 per share before closing at $12.94, a one day
drop of 31% on volume of 39 million shares.
For more details, contact Jay P. Saltzman or Ashley Kim by Mail: 19
Fulton Street, Suite 406, New York, New York 10038 by Phone:
212-964-0046 by Fax: 212-267-8137 or 866-348-7700 by E-mail:
shareholderrelations@spornlaw.com or visit the firm's Website:
http://www.spornlaw.com
Much Shelist Freed Denenberg Ament & Rubenstein, PC initiated a
securities class action in the United States District Court for the
Northern District of Texas, Dallas Division, on behalf of purchasers of
the securities of TXU Corporation. (NYSE:TXU) between April 25, 2002
and October 11, 2002, inclusive.
It has been alleged that the Company and certain of its officers and
directors violated the federal securities laws by issuing a series of
materially false and misleading statements to the market, causing the
market price of Company securities to be artificially inflated.
directors with violations of the federal securities laws arising out of
defendants' issuance of false and misleading statements about the
Company's business, operating performance and prospects.
by deregulation. Defendants then represented that:
(1) TXU's European operations were improving; and
(2) TXU would succeed its competition in the U.K. market and TXU
was on track to report EPS of $4.35+ and $4.60+ in 2002 and
2003, respectively.
As a result of these allegedly false statements, Company stock traded
at artificially inflated levels, as high as $56 per share.
Because of the Company's inflated stock price, defendants were able to
complete a secondary offering of 11.8 million shares of common stock,
priced at $51.15 per share and 8.8 million units of FELINE PRIDES
(equity linked debt securities), raising nearly a billion dollars in
much needed financing. Subsequent to the offering, defendants needed
to maintain a high stock price to avoid triggering additional debt and
the conversion of preferred stock into common stock under a partnership
agreement.
On October 4, 2002, the Company issued an earnings warning, indicating
The stock, however, continued to be inflated as defendants concealed
the extreme liquidity problems plaguing the Company. Defendants even
assured the market that the Company was strong financially and that the
dividend was "sound and secure."
Then, on October 14, 2002, before the market opened, TXU stunned the
share, and would no longer support its European operations. The
class action in the United States District Court for the Northern
District of Texas (Dallas Division) against TXU Corp. (NYSE:TXU) and
two of the Company's senior officers on behalf of all persons or
entities who purchased or otherwise acquired the securities of the
Company during the period between April 25, 2002 and October 11, 2002.
statements concerning the Company's operations and prospects, all of
which served to artificially inflate the Company's stock price.
The suit alleges that, throughout the Class Period, defendants
represented that the Company was on track to earn $4.35 to $4.45 per
share for 2002 and $4.80 to $4.90 per share for 2003; that despite
difficult conditions in its British operations, the Company was
positioning itself for future growth in the U.K. energy trading and
retail markets; and that the Company's $0.60 quarterly dividend was
Defendants made these representations despite having no reasonable
basis to do so in that the Company lacked adequate internal controls
and had deficiencies in its planning and budgeting systems, rendering
it incapable of ascertaining the true extent of the deteriorating
condition of its operations in the U.K.
As a result of these misrepresentations, the market price of the
Company's securities was artificially inflated during the class period.
Due to this, defendants were allegedly able to take advantage of the
artificial inflation in the price of the Company's securities by
selling over $1 billion of common stock and equity-like securities
known as FELINE PRIDES.
Before the market opened on October 4, 2002, TXU issued a statement
disclosing the seriousness of the problems in the U.K. business,
including customer attrition and lower wholesale electricity prices,
and significantly lowering its earnings guidance for 2002 and 2003. On
this news, the Company's stock price declined to $27 per share, from
more than $40 per share the prior week.
However, the Company's stock continued to trade at artificially
inflated prices as defendants concealed the severe liquidity and credit
problems it was experiencing due to the U.K. situation. Defendants even
assured the market that the Company was strong financially and that its
dividend was "secure."
it was slashing its dividend by 80%, to $0.125 per share and would no
plunged $5.81, or 31%, to close at $12.94 on volume of 39 million
For more details, contact Andrew G. Tolan by Phone: 888-476-6529
(888-4-POMLAW) by E-mail: agtolan@pomlaw.com or visit the firm's
Website: http://www.pomerantzlaw.com
Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and
Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima
Antonio and Lyndsey Resnick, Editors.
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