Natural Health Trends Corp.
(NASDAQ: BHIP)
A class action lawsuit on behalf of purchasers of Natural Health Trends Corp.
("Natural Health" or the "Company") (NASDAQ: BHIP) common
stock during the period from March 31, 2003 through August 11, 2006 (the "Class
Period").
The complaint charges that Natural Health and certain of its officers and directors
violated Sections 10(b) and 20(a) of the Securities Exchange Act by issuing
materially false and misleading statements about key characteristics of the
Company's multi-level marketing business model, violations of GAAP, and the
Company's financial condition. In particular, the Complaint alleges that during
the Class Period the Company's: (1) reported revenues and earnings were artificially
inflated due to phantom sales; (2) internal controls and procedures were inadequate
and enabled and assisted the Defendants in engaging in improper transactions;
(3) earnings were significantly impacted from returns by its distributors which
reflected the true market penetration and acceptance of the Company's products;
and (4) the Company's financial statements filed with the SEC were not prepared
in accordance with GAAP.
Newpark Resources, Inc.
(NYSE:NR)
Class Action lawsuit was filed in the United States District Court for the
Eastern District of Louisiana on behalf of a class (the "Class") consisting
of all persons or entities who purchased or otherwise acquired securities of
Newpark Resources, Inc. ("Newpark" or the "Company") (NYSE:NR)
between February 28, 2005 and April 16, 2006 (the "Class Period").
The Complaint charges Newpark and certain of the Company's executive officers
with violations of federal securities laws. Among other things, plaintiff claims
that defendants' material omissions and dissemination of materially false and
misleading statements concerning Newpark's business and operations caused the
Company's stock price to become artificially inflated, inflicting damages on
investors. Newpark provides fluids management, environmental, and oilfield services,
including drilling fluids sales, engineering services and onsite drilling fluids
processing services, to the oil and gas exploration and production industry.
The Complaint alleges that defendants' Class Period representations regarding
Newpark were materially false and misleading when made because the Company failed
to disclose irregularities with the processing and payment of invoices by the
Company's subsidiary, Soloco Texas, LP. As a result, defendants' Class Period
statements concerning Newpark's operations and financial performance were materially
false and misleading.
On April 17, 2006, Newpark issued a press release announcing a Company investigation
into the processing and payment of invoices at Soloco Texas, LP, and that Newpark's
CFO and former CEO had been placed on administrative leave pending the completion
of the investigation. This news shocked the market, causing shares of Newpark
to plummet that same day by $1.28 per share, to close on April 17, 2006, at
$6.14 per share -- more than 17% below the previous day's close, which was before
disclosure of the invoice irregularities and consequent investigation.
Northfield Laboratories, Inc.
(NASDAQ: NFLD)
A securities class action lawsuit has been filed on behalf of shareholders
who purchased the common stock and other securities of Northfield Laboratories,
Inc. (NASDAQ: NFLD) ("Northfield" or the "Company") between
February 20, 2004 and February 21, 2006, inclusive (the "Class Period").
The class action lawsuit was filed in the United States District Court for the
Northern District of Illinois.
The Complaint alleges that defendants violated federal securities laws by issuing
a series of material misrepresentations to the market during the Class Period,
thereby artificially inflating the price of Northfield securities.
NPS Pharmaceuticals, Inc.
(NASDAQ:NPSP)
A class action has been commenced in the United States District Court for the District of Utah, Central Division on behalf of purchasers of NPS Pharmaceuticals, Inc. ("NPS") (NASDAQ:NPSP) publicly traded securities during the period between August 10, 2005 and May 2, 2006 (the "Class Period").
The complaint charges NPS and certain of its officers and directors with violations
of the Securities Exchange Act of 1934. NPS engages in the discovery, development,
and commercialization of small molecules and recombinant proteins.
The complaint alleges that during the Class Period, defendants made false and
misleading statements regarding the Company's business and prospects, including
the potential for success of PREOS, its full-length human parathyroid hormone
(PTH) drug candidate being developed for the treatment of osteoporosis. As a
result of these false statements, NPS stock traded at inflated levels during
the Class Period, whereby the Company was able to sell 7 million shares of NPS
stock for proceeds of more than $79 million.
According to the complaint, the true facts, which were known by each of the
defendants but concealed from the investing public during the Class Period,
were as follows: (a) contrary to defendants' positive claims concerning the
PaTH study on August 10, 2005, the results in fact evidenced that PREOS was
no different from Fosamax in bone density and fracture results; (b) there was
a very narrow market for PTH drugs (like PREOS and its competitor Forteo): namely,
patients with severe spinal osteoporosis who had also suffered a fracture; (c)
on or before August 2, 2005, defendants were notified that a major study performed
by a lead researcher in the field who had reviewed all PREOS study results had
concluded that further studies were necessary to determine the efficiency of
PREOS, if any, in humans; (d) unlike other bone density drugs/products which
can be used for hip fracture risk reduction, PREOS, assuming it received FDA
approval, could not be prescribed for this use - a key market for bone density
drugs; (e) the Center of Medicare Services of Health and Human Services had
ruled that injectable drugs for osteoporosis, like PREOS's competitor Forteo,
would be reimbursable only for patients who had suffered a fracture, which indicated
that the market for a drug like PREOS was limited to a small subgroup of osteoporosis
patients who had suffered a fracture while on an existing oral drug; (f) defendants
were also aware that physicians would never recommend PREOS except in all but
the rarest cases, since the Physician Desk Reference on drugs recommended Forteo
(and hence, injectable parathormone drugs like PREOS also) for second line use
in osteoporosis after failure of oral drugs like Fosamax and for a maximum of
24 months, which limitations on physician use narrow the medical indication
for parathormone drugs like PREOS; and (g) the combination of these facts added
up to a huge hurdle to market success for PREOS because the very drug that was
the baseline precursor drug for osteoporosis, Fosamax, had already been shown
to be as effective as PREOS in the PaTH studies. These facts about PREOS, including
the limited reimbursement for the family of parathormone drugs, were critical
to understanding the very difficult prospects for FDA approval and market success
for the drug.
NutriSystem, Inc.
(NASDAQ:NTRI)
A class action has been commenced in the United States District Court for
the Eastern District of Pennsylvania on behalf of a Class consisting of all
persons other than Defendants who purchased the common stock of NutriSystem,
Inc. ("NutriSystem") (NASDAQ:NTRI) between February 14, 2007 and October
4, 2007, inclusive (the "Class Period"), seeking to pursue remedies
under the Securities Exchange Act of 1934 (the "Exchange Act").
The complaint charges NutriSystem and certain of its officers and directors
with violations of the Exchange Act. The Company provides weight management
and fitness products and services in the United States.
According to the complaint, during the Class Period, defendants issued materially
false and misleading statements that misrepresented and failed to disclose:
(a) that the Company was signing up fewer new customers and was not performing
according to internal expectations; (b) that the Company's costs of acquiring
new customers were significantly increasing; (c) that the Company's performance
was being negatively impacted by competition from other weight loss products
on the market; and (d) as a result of the foregoing, Defendants lacked a reasonable
basis for their positive statements about the Company and its prospects.
Then, on October 3, 2007, after the markets closed, the Company announced its
preliminary third quarter 2007 results and revised earnings guidance for the
full year of 2007. In response to this announcement, the price of NutriSystem
common stock fell $15.98 per share, or approximately 34%, to close at $31.59
per share, on extremely heavy trading volume.
PainCare Holdings, Inc.
(AMEX: PRZ)
A class action on behalf of purchasers of the securities of PainCare Holdings,
Inc. (AMEX: PRZ), in the period between August 27, 2002, and March 15, 2006.
The lawsuit will be pending in the United States District Court for the Middle
District of Florida and names as defendants PainCare and certain of its ranking
executives.
The complaint alleges that PainCare and the individual defendants violated the
federal securities laws by overstating and exaggerating the company's financial
health. In particular, according to the complaint, PainCare went on a buying
spree, growing its business by corporate acquisition, but accounting for such
acquisitions in violation of Generally Accepted Accounting Principles ("GAAP").
Accordingly, the company overstated its earnings by failing to comply with GAAP
in recording its noncash growth. On March 15, 2006, the last day of the class
period, the company announced that it would have to restate its financial figures
going back to 2000--to its founding--in order to adjust for the improper accounting
of its corporate acquisitions.
In the wake of the revelation of the defendants' wrongful conduct, the company's
stock sunk to new lows, having recently traded at under $1.75 per share--down
from its class period high of $5.25 per share. In just the first day of trading
following the announced restatement, PainCare's stock dropped 12.6%, on extremely
heavy volume, down over 50% from its class period high.
Par Pharmaceutical Companies
Inc.
(NYSE:PRX)
A class action lawsuit has been commenced in the United States District Court
for the Southern District of New York on behalf of purchasers of Par Pharmaceutical
Companies Inc. ("Par" or the "Company") (NYSE:PRX) securities
during the period between April 29, 2004, and July 5, 2006 (the "Class
Period").
The complaint charges Par and certain of its officers and directors with violations
of the Securities Exchange Act of 1934. Par engages in the manufacture and distribution
of generic and branded drugs in the United States.
According to the complaint, throughout the Class Period, defendants issued materially
false and misleading statements that misrepresented the following adverse facts:
(i) that Par was materially overstating its financial performance by failing
to properly reserve for customer credits and uncollectible accounts. During
the Class Period, Par overstated its income by at least $55 million; (ii) that
Par was failing to timely write-down the value of impaired inventory. During
the Class Period, Par overstated the worth of its inventory by at least $15
million; and (iii) based on the foregoing, Par's Class Period financial statements
were materially false and misleading and not prepared in accordance with Generally
Accepted Accounting Principles ("GAAP").
The complaint further alleges that, on July 5, 2006, Par admitted that its previously
issued financial results and financial statements materially overstated the
Company's financial performance and that the Company's financial statements
were not prepared in accordance with GAAP. On that date, Par issued a press
release announcing that it would be restating its financial statements for fiscal
years 2004, 2005 and the first quarter of 2006 to correct for "an understatement
of accounts receivable reserves which resulted primarily from delays in recognizing
customer credits and uncollectible customer deductions." The Company reported
that the effect of the restatement over reported periods will be $55 million,
that the Company would also write down $15 million in inventory and that its
prior financial statements "should not be relied upon." In response
to the announcement of the restatement, the price of Par stock dropped from
$18.25 per share to $13.47 per share on extremely heavy trading volume.
Pegasus Wireless Corp.
(OTCBB: PGWC)
A class action lawsuit was filed in the United States District Court for the
Northern District of California, on behalf of shareholders who purchased, exchanged
or otherwise acquired the common stock of Pegasus Wireless Corp. ("Pegasus"
or the "Company'') (OTCBB: PGWC) between December 22, 2005 and September
5, 2006 (the "Class Period").
Pegasus and certain of its officers and directors are charged with issuing a
series of materially false and misleading statements in violation of Section
10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder. Beginning
with an August 24, 2006 report published by The MotleyFool.com, investors were
shocked and alarmed to learn a series of disturbing reports on Pegasus and its
management, including: (1) Pegasus failed to disclose CEO Jasper Knabb's and
CFO Stephen Durland's close business ties with convicted felons, securities
fraudsters and the like; (2) Pegasus failed to disclose a series of related
party transactions and the manner in which Knabb purchased more than $26 million
in Pegasus stock; (3) Pegasus withheld pertinent information involving Knabb's
history with penny stock companies with suspicious trading patterns. The revelation
of this news caused Pegasus shares to decline almost 25% on volume of almost
2 million shares from the closing price of $7.60 per share two days earlier.
At the close of the Class Period, over Labor Day weekend, a report by Barron's
revealed that: (1) Knabb had previously been arrested for possible insurance
fraud; (2) Two former Knabb companies -- BIFS Technologies, formerly Biofiltration
Systems, and Wireless Frontier -- evidenced suspected stock and market manipulation;
(3) Pegasus failed to disclose the truth concerning the novelty and uniqueness
of its products and the foreseeability to compete in the current marketplace.
Following the Barron's report, on September 5, 2006, the first day of trading
after the Labor Day weekend, shares of Pegasus plummeted to a trading low of
$1.10 per share, falling over 36.5% on huge volume of almost 18 million shares.
Pension Funds of America
(PFA)
A class action lawsuit was filed on behalf of all persons who purchased, sold,
held and/or retained investments in retirement trust plans offered by Pension
Funds of America ("PFA"), or its affiliated companies, during the
period commencing January 1999 through the present ("Class Period"),
seeking to pursue remedies under the Securities Exchange Act of 1934.
The action, civil action number 05-21169, is pending in the United States District
Court for the Southern District of Florida against defendants Lehman Brothers,
Inc., Merrill Lynch & Co., Inc., Raymond James Financial Services, Inc.,
Oliva Investment Group, Inc., Suntrust Banks, Inc., HSBC Bank, U.S.A., Luis
Cornide, and Robert A. de la Riva. According to the complaint, the defendants
violated Sections 12, 17(a), and 22(a) of the Securities Act of 1933 ("Securities
Act"), 15 U.S.C. ss. 77l, 77q(a), and 77v(a); and Sections 10(b) and 27
of the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C.
ss. 78j(b) and 78aa, and Section 12 and 15 of the Securities Act, 15 U.S.C.
ss. 77(l) and 77(o), in connection with the sale of unregistered securities
and the fraudulent scheme perpetrated by Defendants and PFA.
Pfizer Inc
(NYSE: PFE)
A class action lawsuit on behalf of the UniformedSanitationmen's Association
Local 831, IBT, against Pfizer Inc("Pfizer" or the "Company")
(NYSE: PFE) and certain key officersand/or directors in the United States District
Court for the SouthernDistrict of New York. This action has been brought on
behalf ofpersons who purchased or otherwise acquired Pfizer securities duringthe
period between July 20, 2006 and December 2, 2006 (the "ClassPeriod").
.
The complaint alleges that during the Class Period, defendantsviolated Sections
10(b) and 20(a) of the Securities Exchange Act of1934 and Rule 10b-5 promulgated
thereunder by making materially falseand misleading statements to artificially
inflate the value of Pfizerstock. Specifically, it is alleged that beginning
in July 2006, thedefendants repeatedly touted the safety and effectiveness of
anewly-developed drug, "torcetrapib," that, in combination withPfizer's
cholesterol-reducing Lipitor, purportedly would increase apatient's "good"
cholesterol, or HDL. However, unbeknownst to Pfizershareholders, the product
performed much worse than touted. Thesestatements were false and misleading
when made because the defendantsfailed to disclose or indicate that they knew
that the torcetrapibwas having adverse affects on patients' health, including
knowledgethat in clinical testing of 15,000 patients, 82 patients died takingtorcetrapib/Lipitor
combination as compared to only 51 patientstaking Lipitor alone, and patients
taking torcetrapib showed anincrease in angina, congestive heart failure and
procedures to clearclogged arteries.
Surprising the market, on December 2, 2006, a mere two days after theCompany
expressed optimism about prospects for torcetrapib, Pfizersuddenly announced
that it was immediately suspending development oftorcetrapib following clinical
testing of 15,000 patients found that82 patients taking torcetrapib/Lipitor
combination died as comparedto 51 patients taking Lipitor alone. These statements
were false andmisleading when made because the defendants failed to disclose
orindicate that they knew that the option grant process was deficientand could
cause the Company to restate its financial statements.
The market reacted quickly to these announcements. Pfizer's stockprice plummeted
to $24.90 per share from its prior trading day closeof $27.86 per share, a 10.62%
drop in one day, on massive volume of289,209,504 shares, more than seven times
more than the prior day'svolume of 40,177,600.
If you purchased Pfizer securities during the Class Period and eithersold those
securities at a loss or still hold them, you may requestthat the Court appoint
you as a lead plaintiff. However, you must doso no later than February 5, 2007.
PHH Corporation
(NYSE: PHH)
A class action lawsuit was filed today on behalf of purchasers of the securities
of PHH Corporation ("PHH" or the "Company") (NYSE: PHH),
between May 12, 2005 to March 1, 2006, inclusive (the "Class Period"),
seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange
Act").
The Complaint alleges that defendants' Class Period statements, made in press
releases and SEC filings, were materially false and misleading for the following
reasons: (i) the Company materially overstated its deferred tax assets, by tens
of millions of dollars; (ii) the Company's reported net income was materially
overstated; (iii) the Company's internal controls over financial reporting had
material weaknesses, were not effective and adversely affected the Company's
ability to record, process, summarize and report financial data; and (iv) as
a result of the foregoing, the Company's reported results were materially inflated
and deceived investors.
On March 1, 2006, the Company issued a press release revealing that the Company's
reported results were materially overstated, for the reasons discussed above,
and that an ongoing accounting review would prevent it from timely filing with
the SEC its annual report on Form 10-K. The Company also announced that it had
replaced its Chief Financial Officer, defendant Neil J. Cashen. In response
to this announcement, the price of PHH common stock dropped from $28.73 per
share on March 1, 2006 to $26 per share on March 2, 2006, on unusually heavy
trading volume.
Pixelplus Co., Ltd.
(Nasdaq:PXPL)
A class action lawsuit was filed on behalf of all purchasers of Pixelplus Co.,
Ltd. ("Pixelplus" or the "Company") (Nasdaq:PXPL) American
Depositary Shares during the period from December 21, 2005 through April 11,
2006, including purchasers in the Company's Initial Public Offering.
This case is pending in the United District Court for the Southern District
of New York and has been assigned to the Honorable Thomas P. Griesa, under case
no. 06-CV-2951. If you are a member of the class, you can view a copy of the
complaint or join the class action online at http://www.rosenlegal.com. Any
member of the purported class may move the Court to serve as lead plaintiff
through counsel of their choice, or may choose to do nothing and remain an absent
class member.
The Complaint charges that defendants violated the Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934 and Sections 11 and 15 of the Securities
Act of 1933 by issuing materially false and misleading financial information.
The Complaint alleges that the during the Class Period, the Company reported
materially false and misleading revenues for each reporting period in 2005.
In particular, the Complaint alleges that the Company violated Generally Accepted
Accounting Principles and the Federal Securities Laws, by failing to recognize
sales to one of its affiliates, PTI, on a consolidated basis and recognizing
sales that were uncollectible, which resulted in the Company overstating its
revenues for 2005.
On April 11, 2006, the Company shocked the market when it announced, among other
things, that its financial statements for 2005 should no longer be relied upon
because the Company improperly recognized sales to PTI because the Company failed
to consolidate PTI's results and accounted for sales that had uncertain collectibility.
The Company admitted that it controls PTI as it has the ability to elect two-thirds
of PTI's Board. As a result, the Company announced that revenues would be reduced
by approximately $3.6 million and $2.5 million, for the fourth quarter of 2005
and fiscal year 2005, respectively. Following these adverse disclosures, the
Company's stock price dropped nearly 37.2%.
ProQuest Company
(NYSE:PQE)
A class action has been commenced in the United States District Court for the
Eastern District of Michigan on behalf of purchasers of ProQuest Company ("ProQuest")
(NYSE:PQE) common stock during the period between January 9, 2003 and February
8, 2006 (the "Class Period").
The complaint charges ProQuest and certain of its officers and directors with
violations of the Securities Exchange Act of 1934. ProQuest publishes solutions
for the education, automotive, and power equipment markets.
The complaint alleges that during the Class Period, defendants issued materially
false and misleading statements regarding the Company's business and financial
results. As a result of defendants' false statements, ProQuest stock traded
at artificially inflated prices during the Class period, reaching a high of
$37.89 per share on April 12, 2005.
Then, on February 9, 2006, prior to the market opening, the Company announced
that it had discovered material irregularities in its accounting and would have
to restate certain of its previously issued financial statements. As a result
of the irregularities, the Company's deferred income and accrued royalty accounts
were materially understated in previously issued financial statements and its
prepaid royalty account was materially overstated. On this news, ProQuest's
stock collapsed to as low as $21.90 per share, before closing at $24.19 per
share on volume of 3 million shares, 13 times the average volume.
According to the complaint, the true facts, which were known by the defendants
but concealed from the investing public during the Class Period, were as follows:
(a) the Company lacked requisite internal controls, and, as a result, the Company's
projections and reported results were based upon defective assumptions and/or
manipulated facts; and (b) the Company's financial statements were materially
misstated due to its failure to properly defer income and royalty payments and
its improper capitalization of royalty expenses, thereby overstating its revenue
and income from at least 1999 to 2005.
PXRE Group Ltd.
(NYSE:PXT)
A lawsuit seeking class action status has been filed on behalf of shareholders
who purchased or otherwise acquired the securities of PXRE Group Ltd. ("PXRE"
or the "Company") (NYSE:PXT) during the period July 28, 2005 through
February 16, 2006, inclusive (the "Class Period"). Also included are
those who purchased their securities in a secondary offering on October 3, 2005.
The matter is pending in the United States District Court for the Southern District
of New York.
The complaint alleges in part that defendants violated federal securities laws
by making false and misleading statements concerning the true financial condition
of PXRE. Specifically, the complaint alleges that defendants failed to disclose:
(i) the full financial impact on the Company's insurance business concerning
hurricanes Katrina, Rita, and Wilma; (ii) that the financial cost to PXRE concerning
these hurricanes had doubled to an estimated $758 million to $788 million; (iii)
that the magnitude of the loss would seriously effect PXRE's financial condition
and that it would lose key credit ratings from A.M. Best; (iv) that the Company
concealed the losses in order to complete a $114 million secondary offering
and raise more than $350 million from an offering of perpetual preferred shares;
and (v) that as a result of the foregoing, defendants' statements during the
Class Period with respect to its loss estimates for the 2005 hurricane season
were unreasonable when made. It is also alleged that when the true financial
condition of the Company was revealed on February 16, 2006, shares of PXRE fell
approximately 65%, from $7.85 to $4.05 per share.
Since a class has not yet been certified, you are not represented by counsel
in this matter. If you purchased or acquired PXRE securities from July 28, 2005
through February 16, 2006 inclusive, and suffered a loss, the deadline to move
for appointment as Lead Plaintiff is July 3, 2006. A Lead Plaintiff is a representative
party that acts on behalf of other class members in directing the litigation.
The securities laws require the Court to consider the class member(s) with the
largest financial interest, i.e. the largest financial loss, as presumptively
the most adequate Lead Plaintiff(s). In order to serve as a Lead Plaintiff,
you must meet certain legal requirements. While your ability to share in any
recovery is not affected by your decision of whether or not to seek appointment
as a Lead Plaintiff, Lead Plaintiffs are responsible for making important decisions
which could affect the overall recovery for class members, including decisions
concerning settlement. If you are only concerned with your ability to participate
as a class member, you do not need to take any action at this time.
Qiao Xing Universal Telephone,
Inc.
(NASDAQ: XING)
A class action lawsuit in the United States District Court for the Southern
District of New York on behalf of a class (the "Class") of all persons
who purchased securities of Qiao Xing Universal Telephone, Inc. ("Xing"
or the "Company") (NASDAQ: XING), including purchasers of both Xing
common stock and call options, between June 30, 2004 and July 16, 2007, inclusive
and alleges violations of the federal securities laws by Xing and certain of
its executives.
As alleged in the Complaint, on July 17, 2007, before the opening of trading,
Xing disclosed, among other things, that in connection with the audit of the
financial statements of a Company subsidiary, certain misstatements for the
years 2005, 2004 and 2003 were identified that were not initially detected through
the Company's internal control over financial reporting and that, as a result,
management has decided to restate the Company's consolidated financial statements
for the years ended December 31, 2005, 2004 and 2003. As further alleged, during
the Class Period, Xing overstated its reported net income for the years ended
December 31, 2005 and 2004 by 2% and 93%, respectively, and for the year ended
December 31, 2003, Xing understated its reported net loss by 210%.
The complaint further alleges that on July 17, 2007, the Company filed its annual
report for the year ended December 31, 2006 on Form 20-F with the SEC that stated
that the misstatements in the financial statements resulted from certain deficiencies
in the Company's system of internal controls over financial reporting.
In response to these announcements, on July 17, 2007, the price of Xing stock
declined from $13.97 per share at the close of trading on July 16, 2007, to
close at $11.04 per share, a decline of approximately 21%, on extremely heavy
trading volume.
Quanta Capital Holdings, Ltd.
(NASDAQ: QNTA)
Class action lawsuits filed by certain law firms on behalf of investors in
Quanta Capital Holdings, Ltd. ("Quanta" or the "Company")
(NASDAQ: QNTA) who purchased the common stock and/or preferred stock of Quanta
between May 14, 2004 and March 2, 2006, inclusive (the "Class Period"),
including those who purchased common stock and/or preferred stock pursuant and/or
traceable to the Secondary Offering on or about December 14, 2005.
The class actions are pending in the United States District Court for the Southern
District of New York against Quanta and certain of its officers and directors.
One of two above-referenced actions alleges that Quanta and certain of its officers
and directors violated Section 10(b) and 20(a) of the Securities Exchange Act
of 1934 and Rule 10b-5 promulgated thereunder. The Company is said to have misrepresented
that it failed to properly account for losses and to set aside adequate reserves
to account for specific, weather-related claims in order to maintain a favorable
rating from A.M. Best Company.
In addition, the other action seeks to pursue remedies under the Securities
Act of 1933. Specifically, the action alleges that during the Class Period,
Quanta and certain of its officers and directors made misleading statements
in two prospectuses (the "Prospectuses"); both issued in connection
with a Secondary Offering on December 14, 2005, of 11,423,340 common shares
valued at $4.75 per share, and 3,000,000 10.25% Series A preferred shares valued
at $25 per share. These Prospectuses stated that Quanta's estimated net losses
related for 2005 were $68.5 million. However, on March 2, 2006, it was revealed
that net losses were $78.7 million, an additional $10.2 million -- 15% more
than previously stated by the Company. On this news, Quanta common stock plunged
40% from $4.73 per share to $2.83 per share.
Rambus Inc.
(NASDAQ:RMBS)
A Class Action lawsuit in the United States District Court for the Northern
District of California on behalf of a class (the "Class") of all persons
who purchased or acquired securities of Rambus Inc. ("Rambus" or the
"Company")(NASDAQ:RMBS)(NASDAQ:-)(NASDAQ:News) between January 14,
2004 and July 18, 2006 (the "Class Period").
The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing
a series of material misrepresentations to the market during the Class Period
thereby artificially inflating the price of Rambus securities. Defendants include
Rambus and certain of its top officers and directors. The complaint alleges
that the defendants made false and misleading statements and omissions concerning
Rambus' improper and undisclosed practice of backdating options given to Rambus
executives. The practice of manipulating stock option dates not only benefits
the pockets of the executives, but here resulted in the overstatement of Rambus'
earnings between 2003 and 2005. As a result, Rambus has been forced to restate
its previously issued financial statements for the fiscal years 2003-2005. In
addition, the Company has stated that the Quarterly Reports on Form 10-Q filed
with respect to each of these fiscal years, and the financial statements included
in the Company's Quarterly Report on Form 10-Q for the first quarter of fiscal
year 2006, should no longer be relied upon, and will be restated.
RelationServe Media, Inc.
(OTCBB:RSVM)
A securities fraud class action was filed in the United States District Court
for the Southern District of Florida against RelationServe Media, Inc. (OTCBB:RSVM),
also known as SendTec, Inc., (OTCBB:SNDN), and individual defendants. The proposed
class is defined in the complaint as all persons who purchased RelationServe
shares between May 24, 2005 and August 28, 2006, inclusive (the "Class
Period"). On July 27, 2006, RelationServe Media, Inc. ("RelationServe")
announced that it had completed the change of its name and symbol to SendTec,
Inc., (OTCBB:SNDN). For purposes of the complaint, RelationServe Media, Inc.
and SendTec, Inc. (collectively the "Company") are now one and the
same entity.
The Company provides direct marketing services, including Internet customer
and lead acquisition, DRTV advertising, and offline marketing. The Complaint
alleges that RelationServe and the individual Defendants violated United States
securities laws, and the securities laws of the states of Florida and Indiana,
causing an artificial inflation of RelationServe's stock process. According
to the Complaint, RelationServe made false and misleading statements by failing
to disclose that it was selling its securities through unregistered and commissioned
agents and broker/dealers in violation of state and federal law, thereby creating
a substantial risk of civil liability for damages and/or the rescission of stock
purchases.
SafeNet, Inc.
(NASDAQ: SFNT)
A class action lawsuit has been commenced in the United States District Court
for the Southern District of New York on behalf of plaintiff Police & Fire
Retirement System of the City of Detroit ("Plaintiff") and all similarly
situated purchasers of SafeNet, Inc. ("SafeNet" or the "Company")
(NASDAQ: SFNT) common stock during the period between March 31, 2003 to May
18, 2006 (the "Class Period"). The case is captioned Police &
Fire Retirement System of the City of Detroit v. SafeNet, Inc., et al., Case
No., 06-CV-5797, and has been assigned to the Honorable Paul A. Crotty.
The Complaint alleges that during the Class Period, SafeNet and the individual
defendants violated the federal securities laws by issuing false and misleading
proxy statements and periodic SEC filings. The Complaint alleges that, throughout
the Class Period, Defendants manipulated SafeNet's granting of stock options
to provide themselves with unlawful benefits and, during the second and third
quarters of 2005, Defendants also engaged in improper accounting of revenues
and costs relating to certain long-term delivery contracts. In three separate
recent disclosures, SafeNet has announced: (1) the need to restate financial
results for the second and third quarters of 2005 arising from improper booking
of costs and revenues related to its long term contracts; (2) the termination
of its CFO; and (3) pending investigations by the SEC and the Office of the
United States Attorney for the Southern District of New York. The price of SafeNet
stock declined in response to each disclosure. On July 26, 2006, SafeNet confirmed
that it would be restating its financial results for the fourth quarter of 2002,
that its financial statements for the year ended 2002 should no longer be relied
upon, and that it may restate other periods as well.
The Complaint alleges that all Defendants violated Section 14(a) of the Securities
Exchange Act of 1934 (the "Exchange Act") and Rule 14a-9 promulgated
thereunder; that Defendants SafeNet, Anthony A. Caputo, Kenneth A. Mueller,
Carole D. Argo, Thomas A. Brooks, Ira A. Hunt, Jr., Bruce R. Thaw and Arthur
L. Money violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated
thereunder; that all of the Individual Defendants violated Section 20(a) of
the Exchange Act.
Scholastic Corporation
(NASDAQ:SCHL)
Notice is hereby given that a class action lawsuit was filed in the United
States District Court for the Southern District of New York on behalf of all
purchasers of common stock of Scholastic Corporation(NASDAQ:SCHL)("Scholastic"
or the "Company") from March 18, 2005 through March 23, 2006, inclusive
(the "Class Period").
The Complaint charges Scholastic and certain of its officers and directors with
violations of the Securities Exchange Act of 1934. Scholastic is a global children's
publishing, education and media company. The Company is a publisher and distributor
of children's books, and a developer of educational technology products. More
specifically, the Complaint alleges that the Company failed to disclose and
misrepresented the following material adverse facts which were known to defendants
or recklessly disregarded by them: (1) that the Company had failed to timely
write-down the value of certain print reference set assets; (2) that the Company
had failed to adequately reserve for certain bad debts; (3) that, as a result
of the above, the Company's financial statements were materially overstated;
(4) that the Company's Educational Publishing division was experiencing declining
results; (5) that the Company's United Kingdom operations would have to be reorganized
due to poor performance; (6) that the Company lacked adequate internal and financial
controls; and (7) that, as a result of the foregoing, the Company's statements
about its financial well-being and future prospects were lacking in any reasonable
basis when made.
On December 16, 2005, the Company announced disappointing results for the Company's
second quarter 2006. The Company assured investors that its management team
was "implementing plans to improve performance in the second half of the
year." The Company reaffirmed that it expected to achieve revenues of $2.3
to $2.4 billion for the year, and free cash flow of $85 -- $95 million. Additionally,
the Company lowered its earnings guidance to "the bottom end of the previously
announced range of $2.30 to $2.50" per share. On this news, shares of the
Company's stock fell $3.80 per share, or 11.5 percent, to close on December
16, 2005 at $29.30 per share, on unusually heavy trading volume.
Then on March 23, 2006, the Company shocked investors when it reported a net
loss of $0.37 per share for the third quarter 2006 versus a loss of $0.02 per
share in the prior year's quarter. Additionally, due to the Company's admittedly
disappointing quarterly results, increased expenses, and "greater seasonality,"
the Company significantly reduced its outlook for the remainder of the year,
down to earnings of between $1.70 and $1.80 per share, and lowered its free
cash flow expectation to between $70 -- $80 million. On this news, the Company's
shares fell an additional $3.38 per share, or 11.5 percent, to close on March
23, 2006 at $26.04 per share, again on unusually heavy trading volume.
Scottish Re Group Ltd.
(NYSE: SCT)
A class action lawsuit in the United States District Court for the Southern District of New York on behalf of purchasers of the common stock and other securities of Scottish Re Group Ltd. ("Scottish Re" or the "Company") (NYSE: SCT) who purchased during the period from December 16, 2005 through July 28, 2006 (the "Class Period").
The complaint alleges that Scottish Re and some of its officers and directors
violated the federal securities laws by making false and misleading statements
and omissions concerning Scottish Re's financial health and business prospects,
and covered up serious operational and financial problems. In February 2006,
the Company reported robust earnings for the fourth quarter of 2005, announcing
that this positive momentum would continue going forward. In early May 2006
the Company announced that it had refinanced, at favorable rates, all of its
regulatory reserves for the business acquired in its acquisition of ING Re's
reinsurance business. While the Company also reported reduced earnings for the
first quarter of 2006, this was dismissed as temporary, and not a cause for
concern.
Then on July 28, 2006, the defendants shocked the market by announcing that
CEO Scott Willkomm had resigned, and that for the second quarter, the Company
would report a huge loss of $130 million, and that results for the remainder
of the year would be negatively affected. On this news the Company's share prices
declined an astounding 75%, from $16.00 to $3.99, wiping out millions in shareholder
value.
Secure Computing Corp.
(NASDAQ:SCUR)
A class action lawsuit was filed in the United States District Court for the Northern District of California against Secure Computing Corp. (NASDAQ:SCUR). The complaint alleges violations of federal securities laws, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, including allegations of issuing a series of material misrepresentations to the market which had the effect of artificially inflating the market price. The class period is from May 4, 2006 through July 11, 2006.
SeraCare Life Sciences, Inc.
(NYSE:SRZ)
A class action has been commenced on behalf of two institutional investors
in the United States District Court for the District of Columbia on behalf of
purchasers of Sunrise Senior Living, Inc. ("Sunrise") (NYSE:SRZ) publicly
traded securities during the period between August 4, 2005 and June 15, 2006
(the "Class Period"), including those who owned Sunrise common stock
from 2000 through 2006 at the time Sunrise's 2000-2006 Proxy Statements were
circulated to shareholders to solicit their votes on various matters.
The complaint charges Sunrise and certain of its officers and directors with
violations of the Securities Exchange Act of 1934. Sunrise provides residential
and other services to retirees and elderly persons through facilities it develops
and constructs and then manages, often through joint ventures.
The complaint alleges that during the Class Period, defendants issued materially
false and misleading statements regarding the Company's business, its stock
option plans, its compensation practices and its financial results. As a result
of these false statements, Sunrise's common stock traded at artificially inflated
prices during the Class Period, reaching a high of $39.68 per share on March
29, 2006. The individual defendants took advantage of Sunrise's falsified financial
results, the artificial inflation of Sunrise's stock and the manipulation of
its stock option plans by selling shares of their Sunrise stock for illegal
insider trading proceeds of over $34 million, while Sunrise's top officers pocketed
millions more in unjustified bonus payments enhanced in part by Sunrise's falsified
profits. The complaint alleges that defendants had previously manipulated the
Company's stock option plans so as to enrich themselves by "backdating"
or "spring-loading" the stock options they were granted.
Then on May 9, 2006, Sunrise disclosed a delay in reporting its first quarter
2006 results to allow a review of its financial statements, and on July 31,
2006, Sunrise revealed it would be forced to restate its financial statements
going back several years - at least to 1999 - and that its prior financial statements
could no longer be relied upon. Sunrise also admitted it could not file current
period financial statements for the first, second and third quarters of 2006
and that when it restated its financial results, at least $100 million of previously
reported profits from its joint ventures and real estate sales would be eliminated.
As these revelations unfolded, Sunrise's stock fell from $39.62 on May 8, 2006
to as low as $24.40 on July 31, 2006.
Sterling Financial Corporation
(NASDAQ: SLFI)
A class action lawsuit was filed on behalf purchasers of Sterling Financial
Corporation (Lancaster, PA) ("Sterling" or the "Company")
(NASDAQ: SLFI) common stock during the period from April 27, 2004 through May
24, 2007, inclusive (the "Class Period").
The Complaint charges that certain present and former officers, employees, and
directors of Sterling's wholly owned subsidiaries Equipment Finance LLC ("EFI")
and Bank of Lancaster County, N.A. violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, by engaging in a scheme to defraud the investing
public and to artificially inflate the stock price of Sterling.
The Complaint alleges that certain officers and employees of EFI engaged in
a sophisticated loan scheme to cause Sterling to issue materially false and
misleading financial information to the investing public in order to artificially
inflate Sterling's stock price in violation of federal securities laws.
The Complaint asserts that on April 30, 2007 Sterling announced that it expected
to restate its previously issued financial statements for FY 2004 through and
including FY 2006 in connection with certain accounting irregularities at its
EFI wholly owned subsidiary. The Company announced that EFI's CEO and President
had voluntarily relinquished his positions. This adverse announcement caused
to Company's stock to fall nearly 19%.
After market-close on May 24, 2007, Sterling announced preliminary results from
its ongoing investigation. According to the Complaint, the investigation revealed
evidence of a sophisticated loan scheme, orchestrated deliberately by certain
EFI officers and employees over an extended period of time to conceal credit
delinquencies, falsify financing contracts and related documents, and subvert
established internal controls established by Sterling. As a result the Company
announced it terminated 5 employees at EFI and expected to take a cumulative
after-tax charge of $145 million to $160 million to the Company's FY 2006 results.
Further announcements on May 24, 2007 revealed the Company was halting its dividend.
This announcement caused the Company's stock to fall nearly 40% on May 25, 2007.
Sunterra Corporation
(PINKSHEETS: SNRR)
A securities class action was commenced on behalf of shareholders who purchased,
converted, exchanged or otherwise acquired the common stock of Sunterra Corporation
(PINKSHEETS: SNRR) between April 15, 2003 and June 22, 2006, inclusive (the
"Class Period").
The case is pending in the United States District Court for the District of
Nevada against defendant Sunterra and one or more of its officers and/or directors.
The action charges that defendants violated federal securities laws by issuing
a series of materially false and misleading statements to the market throughout
the Class Period, which statements had the effect of artificially inflating
the market price of the Company's securities.
No class has yet been certified in the above action. Until a class is certified,
you are not represented by counsel unless you retain one. If you are a member
of the proposed class, you may move the court no later than September 11, 2006
to serve as a lead plaintiff for the proposed class. In order to serve as a
lead plaintiff, you must meet certain legal requirements. To be a member of
the proposed class you need not take any action at this time, and you may retain
counsel of your choice.
The Children's Place Retail
Stores, Inc.
(NASDAQ:PLCE)
A class action lawsuit has been commenced in the United States District Court
for the Southern District of New York on behalf of purchasers of the common
stock of The Children's Place Retail Stores, Inc. ("The Children's Place"
or the "Company") (NASDAQ:PLCE) between August 3, 2006 to August 23,
2007, inclusive (the "Class Period"), seeking to pursue remedies under
the Securities Exchange Act of 1934 (the "Exchange Act").
The complaint charges The Children's Place and certain of its officers and directors
with violations of the Exchange Act. The Children's Place, through its subsidiaries,
operates as a specialty retailer of merchandise for children from newborn to
ten years of age. The Company designs, contracts to manufacture, and sells apparel
and accessories, and other children's-oriented merchandise under The Children's
Place and Disney Store brand names.
The complaint alleges that, during the Class Period, defendants issued materially
false and misleading statements that misrepresented and failed to disclose:
(i) that the Company was experiencing difficulties meeting certain deadlines
for the remodeling and maintenance of its Disney stores and Disney was not satisfied
with the Company's performance under their agreement; (ii) that, as a result
of the Company's performance issues, the Company's exclusive ability to contract,
manufacture, source, offer and sell merchandise featuring Disney-branded characters,
past, present and future was at risk of being materially altered and/or lost
completely; and (iii) as a result of the foregoing, Defendants lacked a reasonable
basis for their positive statements about the Company, its prospects and revenue
growth.
According to the complaint, on August 23, 2007, the Company announced, among
other things, its preliminary fiscal 2007 second quarter financial results,
the Company's revised earnings guidance and an update regarding its license
agreement with The Walt Disney Company. Specifically, the Company revealed that
it will no longer have an exclusive license agreement with Disney and that certain
executives violated Company policies and procedures with regard to the Company's
stock option granting process. In response to this announcement, shares of the
Company's common stock fell $5.59 per share, or 17%, to close at $27.43 per
share, on heavy trading volume.
Plaintiff seeks to recover damages on behalf of a Class consisting of all persons
other than Defendants who purchased the common stock of The Children's Place
between August 3, 2006 to August 23, 2007. The plaintiff is represented by Coughlin
Stoia, which has expertise in prosecuting investor class actions and extensive
experience in actions involving financial fraud.
The Tube Media Corp.
(PINKSHEETS: TUBM)
A class action lawsuit was filed on September 19, 2007 on behalf of purchasers
of the securities of The Tube Media Corp. ("Tube Media") (PINKSHEETS:
TUBM) between August 19, 2005 and May 10, 2007. The complaint alleges that Tube
Media, and certain of its officers and directors, violated the Securities Exchange
Act of 1934. During the class period, defendants made false public statements
and omitted material information about Tube Media's failure to pay employee
payroll taxes to the government. The Company also failed to account properly
on its financial statements for compensation expense. Tube Media currently trades
at $0.015.
Threshold Pharmaceuticals,
Inc.
(NASDAQ:THLD)
A class action has been commenced in the United States District Court for
the Southern District of New York on behalf of purchasers of Threshold Pharmaceuticals,
Inc. ("Threshold") (NASDAQ:THLD) common stock during the period between
February 4, 2005 and July 14, 2006 (the "Class Period"), including
purchasers in Threshold's February 4, 2005 $37 million initial public offering
("IPO") and its October 12, 2005 $65 million follow-on offering.
The complaint charges Threshold and certain of its officers and directors with
violations of the Securities Exchange Act of 1934 and the Securities Act of
1933. Threshold discovers, develops, and commercializes small molecule therapeutics
based on "Metabolic Targeting." During the Class Period, the Company's
lead product candidate for the treatment of symptomatic benign prostatic hyperplasia
("BPH") was TH-070, a drug which utilized Threshold's patented Metabolic
Targeting process.
The complaint alleges that in preparation for the Company's February 2005 IPO,
defendants conducted a so-called "Phase II" study of TH-070 on 30
men at Bari University in Italy. Based on the purported success achieved in
the Bari Phase II study, the Company completed its $37 million IPO in February
2005, conducted additional clinical trials, filed a new drug application with
the FDA in late 2005, and completed the $65 million follow-on offering in October
2005. However, on May 11, 2006, defendants were forced to disclose that the
FDA had placed the TH-070 program on partial clinical hold as a result of abnormalities
observed in liver enzyme levels in six subjects in ongoing clinical trials and
had requested that the Company provide additional information related to the
drug's acceptable dose and duration of treatment in BPH patients. According
to the complaint, while defendants had known for years of TH-070's propensity
to cause liver toxicity, the IPO and follow-on offering prospectuses concealed
it.
Then, on July 17, 2006, the Company was forced to concede that TH-070 provided
no benefit whatsoever in the alleviation of prostate enlargement and that Threshold
planned to discontinue development of TH-070 for BPH altogether. The complaint
alleges that as a result of the defendants' false and misleading statements
issued during the Class Period, Threshold stock traded as high as $16.52 per
share. After the Company's July 17, 2006 announcement, however, Threshold stock
fell to $1.55 per share.
Tier Technologies, Inc.
(PINKSHEETS: TIER)
A class action lawsuit was filed on behalf of purchasers of Tier Technologies,
Inc. ("Tier" or the "Company") (PINKSHEETS: TIER) (formerly
NASDAQ: TIER & TIERE - News) common stock during the period from November
29, 2001 through and including October 25, 2006 (the "Class Period").
The case is pending in the United States District Court for the Eastern District
of Virginia as case no. 1:06-CV-1276. The complaint charges that Tier and certain
of its present and former officers and directors violated Sections 10(b) and
20(a) of the Securities Exchange Act of 1934 by issuing materially false and
misleading financial statements filed with the SEC during the Class Period by
overstating Company earnings and underreporting Company losses.
On December 14, 2005, the Company announced that its financial statements for
fiscal years ended September 30, 2002 through September 30, 2004 and quarterly
periods through June 30, 2005, should no longer be relied upon and announced
that a restatement of those financial statements would be required.
On April 19, 2006, the Company announced that an internal investigation revealed
a "number of serious new allegations relevant to the restatement-related
issues." On May 24, 2006, the Company announced that its stock would be
de-listed from NASDAQ. On October 25, 2006, the Company finally issued its long
awaited restatement. The complaint alleges that the Company had over-reported
its net income and underreported its net losses for almost five years. For example,
the Company previously reported diluted per share net income for fiscal 2004,
rather than the true restated net loss for fiscal 2004. The complaint asserts
that these adverse disclosures have caused the Company's stock price to decline.
TOP Tankers Inc.
(Nasdaq:TOPT)
A class action was filed in States District Court for the Southern District
of New York on behalf of purchasers of TOP Tankers Inc. ("TOP Tankers")
(Nasdaq:TOPT) common stock during the period between November 2, 2004 and November
28, 2006, inclusive (the "Class Period").
The complaint charges TOP Tankers and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. The complaint alleges
that TOP Tankers went public in 2004 in a 12 million share offering purportedly
to raise money to purchase additional vessels. During the Class Period, defendants
made false statements about the Company's finances and business, which concealed
important information about the Company's acquisitions. As a result of defendants'
false statements during the Class Period, TOP Tankers stock increased to as
high as $24.14 per share. In June 2006, the Company announced a Securities and
Exchange Commission inquiry into its acquisitions going back to 2004 and the
sale and leaseback of 13 vessels, which the Company announced in March 2006.
Then, on November 29, 2006, TOP Tankers announced that its independent auditor,
Ernst & Young, had resigned because of disagreements over the Company's
accounting treatment of certain aspects of the sale and leaseback of 13 vessels
that closed in March and April 2006. After this news, TOP Tankers' stock price
dropped to as low as $4.85 per share before closing at $5.04 per share, some
80% below the Class Period high of $24.14 per share.
According to the complaint, the true facts, which were known by each of the
defendants but concealed from the investing public during the Class Period,
were as follows: (a) TOP Tankers was improperly accounting for the sale and
leaseback of vessels, including for 13 vessels that closed in March and April
2006; (b) TOP Tankers' acquisitions had been manipulated to benefit insiders;
(c) TOP Tankers had inadequate and deficient internal controls and systems;
and (d) as a result of the above, TOP Tankers' financial statements were grossly
inflated and materially misleading.
TXU Corp.
(NYSE:TXU)
A class action lawsuit was filed in the United States District Court, Northen
District of Texas, on behalf of all persons who held the common stock of TXU
Corp. ("TXU" or the "Company") (NYSE:TXU) at the close of
business on July 19, 2007, against defendants TXU and certain of its officers
and directors, alleging violations under Section 14(a) of the Securities Exchange
Act of 1934, 15 U.S.C. Section 78n(a), and the rules and regulations of the
Securities and Exchange Commission ("SEC") promulgated thereunder,
in connection with the solicitation of proxies in favor of a proposed management-led
$45 billion leveraged buy-out (the "LBO") of TXU to take it private
at $69.25 cash per share to be accomplished by means of a proposed merger (the
"Merger"). The action was filed in connection with a proposed settlement
of the claims asserted herein and in related litigation pending in Texas state
and federal courts.
The complaint alleges that the LBO and the Merger were negotiated and approved
by the Board of Directors of TXU by means of a biased and flawed bidding process
that did not represent the intrinsic value of the Company or its value going-forward
premised on its ability to generate strong earnings and expand to meet growing
energy demand in the southwest. The complaint further alleges that shareholder
proxies in favor of the LBO and the Merger are being sought pursuant to a materially
false and misleading proxy statement filed with the SEC on or about June 14,
2007.
As alleged in detail in the complaint, the proxy statement is materially false
and misleading in violation of Section 14(a) of the Exchange Act, 15 U.S.C.
§ 78n(a), and Rule 14a-9 promulgated by the SEC thereunder, in that, among
other things, the proxy statement does not truthfully or adequately describe
among other things (a) material background information regarding the transaction,
(b) the Director Defendants' consideration of the transaction, (c) their efforts,
if any, to obtain an alternate transaction or alternative strategic opportunity
on terms more favorable to plaintiff and the Company's other public shareholders,
(d) the financial analysis supporting the fairness of the transaction to TXU's
public shareholders, and (e) the Director Defendants' consideration of or response
to certain derivative litigation currently pending against them in the District
Court of Dallas County, Texas, captionedIn re TXU Corp. Derivative Litigation,
No. 07-01779 (44th Judicial District).
If the LBO and the Merger are approved, the TXU public shareholders' valuable
interest in the Company will be acquired by private equity investors Texas Pacific
Group and Kohlberg Kravis Roberts & Co. for inadequate consideration following
a flawed process and their right to participate in TXU's profitable business
will cease.
The case name is styled Schipper v. TXU Corp., et al. A copy of the complaint
filed in this action is available from the Court, or can be viewed on the Wolf
Haldenstein Adler Freeman & Herz LLP website atwww.whafh.com.
If you currently hold TXU common stock during the Class Period, you may request
that the Court appoint you as lead plaintiff by October 8, 2007.
U.S. Auto Parts Network, Inc.
(NASDAQ: PRTS)
A securities class action lawsuit has been filed on behalf of shareholders
who purchased the common stock of U.S. Auto Parts Network, Inc. ("U.S.
Auto Parts" or the "Company") (NASDAQ: PRTS) pursuant to the
Company's Registration Statement and Prospectus issued in connection with the
Company's February 9, 2007 Initial Public Offering ("IPO") or who
purchased shares thereafter on the open market (the "Class Period").
The class action lawsuit was filed in the United States District Court for the
Central District of California.
The Complaint alleges that defendants violated federal securities laws by issuing
a series of material misrepresentations to the market, thereby artificially
inflating the price of U.S. Auto Parts.
UnitedHealth Group, Inc.
(NYSE: UNH)
A securities class action lawsuit has been filed on behalf of shareholders
who purchased the common stock and other securities UnitedHealth Group, Inc.
(NYSE: UNH) ("UnitedHealth" or the "Company") between December
27, 2004 and May 23, 2006, inclusive (the "Class Period"). The class
action lawsuit was filed in the United States District Court for the District
of Minnesota.
The complaint charges UnitedHealth and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. More specifically, the
Complaint alleges that the Company failed to disclose and misrepresented the
following material adverse facts which were known to defendants or recklessly
disregarded by them: (1) that the Company purposely concealed the true dates
of stock option grants; (2) that the Company failed to properly record its stock-based
compensation expenses; (3) specifically, that the Company improperly treated
stock option expenses as deductible, thereby failing to comply with Section
162(m) of the U.S. Internal Revenue Code, overstated its earnings, and understated
its expenses; (4) that the Company's financial statements were presented in
violation of Generally Accepted Accounting Principles; (5) that the Company
lacked the necessary personnel and controls to issue accurate financial reports
and projections; and (6) that, as a result of the foregoing, the Company's financial
results were materially overstated at all relevant times.
On April 7, 2006, UnitedHealth stunned investors when it announced that the
Company had received an inquiry from the SEC. Specifically, the Company reported
that its Board of Directors had formed a Committee comprised of independent
directors to retain and work with outside legal counsel to review the Company's
current and historic stock option grant practices. On this news, shares of the
Company's stock dropped $2.96, or 5.43 percent over the course of several days,
from $54.51, on April 6, 2006, to close, on April 11, 2006, at $51.55.
On April 26, 2006, after the market closed, UnitedHealth announced that the
Company had adopted enhanced corporate governance policies, including share
ownership guidelines for officers and directors.
On May 22, 2006, Moody's Investors Service revised its outlook on the Company
to negative from stable, citing increased uncertainty over the outcome of investigations
into the Company's practices of granting stock options. On this news, shares
of the Company's stock dropped 90 cents, or 2.1 percent, to close, on May 23,
2006, at $42.82 per share.
W Holding Company, Inc.
(NYSE:WHI)
A class action lawsuit has been commenced in the United States District Court
for the District of Puerto Rico on behalf of purchasers of the publicly traded
securities of W Holding Company, Inc. ("W Holding" or the "Company")
(NYSE:WHI) between April 24, 2006 and June 26, 2007, inclusive (the "Class
Period"), seeking to pursue remedies under the Securities Exchange Act
of 1934 (the "Exchange Act").
The complaint charges W Holding and certain of its officers and directors with
violations of the Exchange Act. W Holding operates as the holding company for
Westernbank, a commercial bank operating in Puerto Rico that offers an array
of business and consumer financial products and services including banking and
trust and brokerage services.
The complaint alleges that, during the Class Period, defendants issued materially
false and misleading statements that misrepresented and failed to disclose:
(i) that the Company's financial results during the Class Period were artificially
inflated due to the Company's failure to write-down the Inyx loans which were
impaired. W Holding has now admitted that it is not likely to collect on the
Inyx loans and that it will be toting a charge of at least $80 million; (ii)
that the Company was improperly delayed the recognition of its impaired assets
in order to inflate its reported income and asset quality; (iii) that the Company's
"regulatory capital" it claimed throughout the Class Period was similarly
overstated; and (iv) that the Company's "book value" per share was
materially overstated; and as more fully described in the complaint, the Company's
published financial statements violated U.S. Generally Accepted Accounting Principles.
According to the complaint, on June 26, 2007, W Holding filed a Form 8-K with
the SEC which reported that the Company had determined that "one of its
larger asset-based loans" is impaired. In response to the Company's announcement,
the price of W Holdings stock dropped from $5.01 per share to $3.14 per share
on extremely heavy trading volume and continued to decline, falling to $2.64
per share on June 29, 2007.
Warner Chilcott, Limited
(Nasdaq:WCRX)
A class action lawsuit was commenced in the United States District Court for
the Southern District of New York, on behalf of purchasers of the common stock
of Warner Chilcott, Limited ("Warner" or the "Company")
(Nasdaq:WCRX) on the Company's Initial Public Offering effective September 20,
2006 ("IPO") and on the open market between September 20, 2006 and
September 25, 2006, inclusive (the "Class Period"). The case is pending
before the Honorable William H. Pauley, III.
The Complaint charges Warner, Roger Boissonneault and Paul Herendeen with violations
of Section 11,12(a)(2) and 15 of the Securities Act by issuing a series of materially
false and misleading statements to the market during the Class Period concerning
Ovcon 35 pill. Specifically, the complaint alleges that in the prospectus for
the IPO, defendants made false and misleading statements about the Company's
determination, made prior to the date of the prospectus, to discontinue immediately
shipments of Ovcon 35 when it commenced shipments and sale, in September 2006,
prior to the date of the prospectus, of its generic chewable version of Ovcon
35 (the "Ovcon Chewable") and the negative impact that determination
would have on the Company's sales revenues for the remainder of 2006 and thereafter.
When the Company disclosed on September 26, 2006 that it would not be shipping
the Ovcon 35 pill anymore since it started selling the Ovcon Chewable, the market
price for Warner's newly issued common stock dropped $1.90 per share, 12.7%,
to close $13.06.
Whitney Information Network
(OTCBB: RUSS)
A suit was filed on behalf of shareholders against Whitney Information Network
("Whitney" or the "Company") (OTCBB: RUSS) in the United
States District Court for the Middle District of Florida, accusing the Company
of securities law violations.
The complaint seeks damages for violations of federal securities laws on behalf
of all investors who acquired Whitney stock from November 18, 2003 through and
including December 15, 2006 (the "Class Period"). Based in Cape Coral,
Florida, Whitney is a post secondary education company that offers financial
and real estate investing courses.
The lawsuit claims that Whitney, its Chief Executive Officer Russell Whitney
and its former Chief Operating Officer, Nicholas S. Maturo, violated Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing false and
misleading statements to the investing public. Specifically, the lawsuit alleges
that defendants issued a series of false and misleading statements, emphasizing
the success of numerous acquisitions of related companies, as well as the efficacy
of the Company's marketing programs. Capitalizing on the rapid increase in the
Company's stock price resulting from these positive announcements, defendants
completed a private placement of Whitney stock in December 2005, in which defendant
Whitney sold 1.25 million of his own holdings for proceeds of over $5.6 million.
Between November 21, 2006 and December 15, 2006, the truth concerning the Company
and its fraudulent business practices began to surface. On November 21, 2006,
defendants revealed that the Securities and Exchange Commission had begun an
investigation to determine whether the Company violated any securities laws
in connection with: (a) the efficacy or trading success of the Company's stock
market education programs; and (b) the Company's acquisition of certain other
companies. Then, on December 15, 2006, it was revealed that the United States
Attorney for the Eastern District of Virginia had launched a grand jury investigation
into the marketing activities of the Company, stretching back to 2002. A few
days later, it was announced that defendant Maturo as well as Whitney's Vice
President of Sales had "departed" from the Company. In response to
the news, Whitney stock plunged from $8.20 per share to less than $4 per share
on December 18, 2006 on unusually heavy trading volumes.
Wireless Facilities, Inc.
(Nasdaq:WFII)
A class action lawsuit was filed on behalf of plaintiff and a proposed class
of purchasers of securities of Wireless Facilities, Inc. (Nasdaq:WFII) ("WFI"
or "Company") during the period March 29, 2001 to March 12, 2007 inclusive
(the "Class Period").
The Complaint alleges that WFI and certain officers and directors violated Sections
10(b), 14(a) and 20(a) of the Securities Exchange Act of 1934 by making false
and misleading statements and omissions concerning WFI's improper and undisclosed
practice of backdating options conferred on certain executives, which made it
appear that such options were issued upon dates when the market price of WFI
stock was lower than actual market price on the actual grant dates, thereby
masking the profits the option recipients obtained. Under generally accepted
accounting principles, these profits were required to be recognized as an expense
in the Company's financial statements for the appropriate period, but were not.
This backdating of options also violated provisions of the Internal Revenue
Code relating to deduction of option payments. Thus, the Complaint alleges,
the Company's financial statements in Form 10-K filings for the years 2000,
2001, 2002, 2003, 2004 and 2005 and Form 10-Q quarterly filings were materially
false and misleading.
WorldSpace, Inc.
(Nasdaq:WRSP)
A class action lawsuit was filed on March 15, 2007 in the United States District Court for the Southern District of New York, on behalf of persons who purchased or otherwise acquired publicly traded securities of WorldSpace, Inc. ("WorldSpace" or the "Company") (Nasdaq:WRSP) pursuant to the initial public offering (the "IPO") of WorldSpace commencing on or about August 4, 2005, (the "Class Period"). The lawsuit was filed against WorldSpace, Noah A. Samaram, Sridhar Ganesan, and UBS Securities LLC ("Defendants").
The complaint alleges that Defendants violated Section 11, 12(a)2, and 15 of
the Securities Act of 1933. The Complaint alleges that the representations made
in connection with the sale of WorldSpace common stock in the IPO were materially
false and misleading because the Company's share price was artificially inflated
because subscribers who had purchased a three-month, pre-paid subscription to
the WorldSpace "access control system" pursuant to a promotional offer,
but who declined to continue or to pay for a subscription following the end
of the promotional period were not timely removed from the Company's subscriber
count. Rather than report these expired subscriptions as "churned,"
Defendants continued to include these expired subscriptions in the Company's
subscriber count for an additional 90-days following the expiration of the initial
three-month promotional period. At the time these facts and their effects on
the Company's operating results were fully disclosed, the price of the Company's
common stock declined.
On March 16, 2006, on a conference call with investors, WorldSpace revealed
that service to subscribers was not immediately discontinued when a customer
failed to renew its subscriptions. This news shocked the market, causing WorldSpace
share to plummet the next day, March 17, 2006, by $2.63 per share, a more than
22% drop from the previous day's closing price of $11.52 per share.
Xerium Technologies, Inc.
(NYSE:XRM)
A lawsuit has been filed in the United States District Court for the District
of Massachusetts, on behalf of persons who purchased the common stock of Xerium
Technologies Inc. ("Xerium" or the "Company") (NYSE:XRM)
pursuant and/or traceable to the Company's initial public offerings on or about
May 16, 2005 and November 15, 2005, inclusive, (the "Class Period").
The lawsuit was filed against Xerium and certain officers and directors ("Defendants").
The complaint alleges that Defendants violated the Securities Act of 1933. Specifically,
the complaint alleges that the Prospectus and Registration Statement (the "Prospectus")
issued in connection with the Company's Initial Public offering ("IPO")
on or about May 16, 2005, contained untrue statements of material facts and
omitted to state other facts necessary to make the statements made not misleading
as was not prepared in accordance with the rules and regulations governing its
preparation. More specifically, the complaint alleges that at the time of the
IPO, Xerium was dealing with a "Cost Reduction Program" which was
dramatically impacting its business and forcing it to shift its customers to
competitors to meet their needs. While the Company purported to warn about the
potential impact of these programs, it failed to disclose that its business
was then being negatively impacted by the "Cost Reduction Programs"
and the loss of associated business.
On November 14, 2005, Xerium issued a press release detailing its financial
results for the third-quarter of 2005. The Company reported that the "Cost
Reduction Programs" had dramatically impacted its business, causing the
Company to experience a large decline in net income. In reaction to this news,
Xerium shares fell from $9.51 per share to $6.85 per share, a one-day decline
of 27.9%.
If you bought Xerium securities pursuant to its IPO and between May 16, 2005
and November 15, 2005, inclusive,
Xinhua Finance Media Ltd.
(NASDAQ: XFML)
A securities class action lawsuit was commenced in the United States District
Court for the Southern District of New York, on behalf of all persons who purchased
or acquired American Depositary Shares ("ADSs") of Xinhua Finance
Media Ltd. ("Xinhua") (NASDAQ: XFML) pursuant or traceable to Xinhua's
initial public offering, dated March 8, 2007 (the "IPO"). The lawsuit
is also on behalf of all persons who purchased or acquired ADSs of Xinhua between
March 8, 2007 and May 21, 2007, inclusive (the "Class Period"). The
Complaint charges that Defendants Xinhua, Fredy Bush, Shelly Singhal, J.P. Morgan
Securities Inc., UBS AG, CIBC World Markets Corp., and WR Hambrecht & Co.,
LLC made, or facilitated, misleading statements in the Company's March 8, 2007
prospectus (the "Prospectus"), issued in connection with the offering
of 23,076,932 ADSs, representing 46,153,846 common shares at $13 per share.
The Complaint alleges that the Prospectus failed to disclose material information
that since April 2006, prior to the Company's IPO, Shelly Singhal, the Company's
CFO at the time of the IPO, was simultaneously an investment banker and stockbroker
in charge of Bedrock Securities ("Bedrock"). Since April 2006, prior
to the Company's IPO, Bedrock had been under a Nasdaq cease-and-desist order
for violating SEC regulations. Moreover, reports also surfaced that Singhal
had been fighting a private civil racketeering lawsuit in California and had
previously been a major investor in AremisSoft and ACLN, companies previously
sued for fraud by the SEC. This information was never disclosed in the Prospectus.
Zale Corporation
(NYSE:ZLC)
A lawsuit seeking class action status has been filed in the United States
District Court for the Southern District of New York on behalf of all persons
who purchased or otherwise acquired the publicly traded securities of Zale Corporation
("Zale" or the "Company") (NYSE:ZLC) between February 18,
2005 and May 5, 2006, inclusive, (the "Class Period").
The Complaint alleges that Defendants violated federal securities laws by issuing
a series of materially false statements. Specifically, the representations in
the Company's reported results of operations materially overstated Zale's net
cash flows and free operating cash flows. In addition, the Company improperly
accounted for extended service agreements, leases and accrued payroll.
On April 10, 2006, before the open of regular trading, the truth began to emerge
as Zale announced that the SEC had initiated a broad investigation into many
aspects of the Company's accounting, operations and disclosure practices, including
Zale's accounting for extended service agreements, leases and accrued payroll,
executive compensation and severance, earnings guidance, stock trading and the
timing of vendor payments. In reaction to this announcement, the price of Zale
stock fell from $27.80 per share on April 7, 2006 to $25.16 per share on April
10, 2006. Then on Friday, May 5, 2006, after the market closed, Zale announced
that it had replaced its Chief Financial Officer, Defendant Lenz, after discovering
that the Company improperly inflated its reported net cash flows and free cash
flows. On this news, the price of Zale stock dropped by $0.44 per share to close
at $24.18 on May 8, 2006.
Zoran Corporation
(NASDAQ:ZRAN)
A class action lawsuit was filed in the United States District Court for the
Northern District of California against Zoran Corporation (NASDAQ:ZRAN). The
complaint alleges violations of federal securities laws, Sections 10(b) and
20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, including allegations
of issuing a series of material misrepresentations to the market which had the
effect of artificially inflating the market price. The class period is from
July 1, 1998 through September 30, 2001.
Plaintiff seeks to recover damages on behalf of the Class. If you are a member
of the Class as described above, you may move the Court no later than Monday,
October 9, 2006, to serve as a lead plaintiff for the Class. However, in order
to do so, you must meet certain legal requirements pursuant to the Private Securities
Litigation Reform Act of 1995.
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