Cisco Systems, Inc. (NASDAQ: CSCO) today announced an agreement to settle the securities class action litigation pending against the company and certain current and former directors and officers. The litigation is pending before Judge James Ware in the United States District Court for the Northern District of California.
Cisco's press release indicates that the settlement is for $91.75 million and will be paid by the company's liability insurers.
Press reports regarding the settlement are available here, (AP via Yahoo!), here (TheStreet.com), and here (BizJournals.com via Yahoo!).
Lead plaintiffs in the Cisco litigation are the Plumbers & Pipefitters National Pension Fund, the Central States, Southeast and Southwest Area Pension Fund, the Carpenters Pension Fund of Illinois, and Alexander Nehring.
Lerach Coughlin Stoia Geller Rudman & Robbins LLP and Levin Papantonio Thomas Mitchell Echsner & Proctor, PA are co-lead counsel in the Cisco litigation.
Prior to the entry of this scheduling stipulation last month, the trial had been set to begin on October 4, 2006. Count Carton over at Securities Litigation Watch must be very disappointed.
Thanks to an anonymous reader for the tip.
Daily Trivia: One of the founding partners of Levin Papantonio was Reubin Askew, a two-term governor of Florida and candidate for President of the United States.
UPDATE: The 10b-5 Daily has a post on the settlement, here.
Friday, August 18, 2006
Thursday, August 17, 2006
Georgia on my Mind
Just when you thought I had exhausted every possible press release permutation that even tangentially related to securities litigation, this press release announcing the filing of an options backdating related securities class action against Witness Systems, Inc. (NASDAQ: WITS), provided a reminder of a peculiar quirk of the local rules in the United States District Court for the Northern District of Georgia.
But first, a brief detour.
Most securities practitioners are aware of the local rules of the United States District Court for the Northern District of California , which require the posting of virtually securities fraud class action litigation complaints and pleadings to a "Designated Internet Site."
Indeed, the enactment of those rules can be said to have spawned the creation of Stanford Law School's Securities Class Action Clearinghouse and its distant cousin, the Securities Class Action Designated Internet Site, operated by Lerach Coughlin Stoia Geller Rudman & Robbins LLP.
The Northern District of California's local rules have provided, as previously noted here, a veritable treasure trove of securities class action litigation related filings.
Now back to our regularly scheduled posting.
Far fewer securities practitioners are aware of the pertinent local rule in the Northern District of Georgia, Local Civil Rule 23.1(C)(4)(a), or, more properly, LR 23.1(C)(4)(a), NDGa. That rule was implemented in June 2003, and provides as follows:
In case you were wondering, the notice issued by the law firm of Motley Rice LLC in the Witness Systems litigation does conform with the local rules outlined above.
But, that should come as no surprise. As noted several months ago by The D & O Diary, the securities litigation group at Motley Rice was substantially enlarged in February 2006 with the addition of four seasoned Atlanta-based lawyers from Chitwood Harley Harnes LLP.
But first, a brief detour.
Most securities practitioners are aware of the local rules of the United States District Court for the Northern District of California , which require the posting of virtually securities fraud class action litigation complaints and pleadings to a "Designated Internet Site."
Indeed, the enactment of those rules can be said to have spawned the creation of Stanford Law School's Securities Class Action Clearinghouse and its distant cousin, the Securities Class Action Designated Internet Site, operated by Lerach Coughlin Stoia Geller Rudman & Robbins LLP.
The Northern District of California's local rules have provided, as previously noted here, a veritable treasure trove of securities class action litigation related filings.
Now back to our regularly scheduled posting.
Far fewer securities practitioners are aware of the pertinent local rule in the Northern District of Georgia, Local Civil Rule 23.1(C)(4)(a), or, more properly, LR 23.1(C)(4)(a), NDGa. That rule was implemented in June 2003, and provides as follows:
(i) Contents of the NoticeThe rule has further requirements:
. . . following the filing of any Reform Act class action in this District, each law firm on a complaint may choose to publish a notice. Such notice shall have as its headline "Notice of Filing Securities Class Action Against [Defendant or Defendants]" and shall provide the following information as required by the Reform Act:
1) the pendency of the action;
2) the claims asserted therein;
3) the purported class period;
4) that, not later than sixty (60) days after the date on which the first notice is published, any member of the purported class may move the court to serve as lead plaintiff of the purported class; and
5) contact information for the law firm issuing the notice, including the name of a contact person who is designated to discuss the lawsuit with putative class members, an address, a telephone number, and a website and e-mail address, if applicable. However, the notice shall not contain a promotional statement for any law firm.
(iii) Only One Notice Per Law FirmIn deciding to implement the rule, The Court found that:
Unless otherwise ordered by the court, there shall be only one notice per law firm regardless of the number of complaints filed in this Court arising out of the same or similar set of facts or circumstances.
No attorney seeking to represent the putative class shall initiate any other communication with putative class members unless approved in advance by the court. Such court approval will be granted if the communication is deemed by this Court to be reasonably necessary to achieve the purposes of the Reform Act.
This rule does not affect the rights or obligations of defendants to give notice of the pendency of the suit, nor does it preclude counsel for either party from contacting class members whom they believe to be fact witnesses or with whom they have an attorney-client relationship.
certain practices in Reform Act class actions have the potential to harm the interests of class members and/or defendants and can interfere with the orderly administration of justice.Arguably, the local rules would prohibit the use of "passive voice" press releases.
For example, the court finds that numerous notices of the same litigation have been released, thereby creating the potential for confusion for potential class members and potential damage to the interests of shareholders and businesses.
The court finds further that the measures adopted herein are reasonably necessary to protect the interests of class members, realize the goals of the Reform Act, and balance the rights of those who wish to prosecute a Reform Act class action or communicate about it.
In case you were wondering, the notice issued by the law firm of Motley Rice LLC in the Witness Systems litigation does conform with the local rules outlined above.
But, that should come as no surprise. As noted several months ago by The D & O Diary, the securities litigation group at Motley Rice was substantially enlarged in February 2006 with the addition of four seasoned Atlanta-based lawyers from Chitwood Harley Harnes LLP.
Keep Those Doggies Rolling
Central Freight Lines, Inc. (NASDAQ: CENF) has reached an oral agreement in principle to settle the securities class action litigation pending against the company and certain of Central Freight's officers and directors in the United States District Court for the Western District of Texas.
According to a 10-Q filed earlier this week by the company, the agreement also settles two derivative actions arising out of the company's December 2003 IPO, as well as a third derivative action related to the January 30, 2006 announcement of a merger between Central and North American Truck Lines, LLC and Green Acquisition Company.
Jerry Moyes, the owner of North American Truck Lines, LLC and Green Acquisition Company is also both a defendant in the litigation and the former chairman of Central.
The settlement is for $2.6 million, inclusive of fees and expenses, and will be funded from the proceeds of Central's directors' and officers' liability insurance policy.
The Oklahoma Firefighters Pension and Retirement System is the lead plaintiff in the federal securities class action. Schiffrin & Barroway, LLP is lead counsel in that litigation and the Austin based firm of Smith, Robertson, Elliott, Glen, Klein & Bell, L.L.P. is liaison counsel.
Daily Trivia: Defendant Jerry Moyes is the majority investor in the Phoenix Coyotes Hockey Club and a limited partner of the Arizona Diamondbacks. Mr. Moyes is also a a member of the Board of Directors and the retired Chairman and CEO of Swift Transportation Co., a company he helped start with a single truck that has grown into the largest truckload fleet operator in the United States.
According to a 10-Q filed earlier this week by the company, the agreement also settles two derivative actions arising out of the company's December 2003 IPO, as well as a third derivative action related to the January 30, 2006 announcement of a merger between Central and North American Truck Lines, LLC and Green Acquisition Company.
Jerry Moyes, the owner of North American Truck Lines, LLC and Green Acquisition Company is also both a defendant in the litigation and the former chairman of Central.
The settlement is for $2.6 million, inclusive of fees and expenses, and will be funded from the proceeds of Central's directors' and officers' liability insurance policy.
The Oklahoma Firefighters Pension and Retirement System is the lead plaintiff in the federal securities class action. Schiffrin & Barroway, LLP is lead counsel in that litigation and the Austin based firm of Smith, Robertson, Elliott, Glen, Klein & Bell, L.L.P. is liaison counsel.
Daily Trivia: Defendant Jerry Moyes is the majority investor in the Phoenix Coyotes Hockey Club and a limited partner of the Arizona Diamondbacks. Mr. Moyes is also a a member of the Board of Directors and the retired Chairman and CEO of Swift Transportation Co., a company he helped start with a single truck that has grown into the largest truckload fleet operator in the United States.
Institutional Investor Wire, No Longer Live
A number of readers have pointed out that in the short time between the post last night linking to Bernstein Litowitz Berger & Grossmann's new blog, the Institutional Investor Wire, and this morning, the blog has been removed.
No word on when (or if) Institutional Investor Wire will resume publishing.
Stay tuned.
No word on when (or if) Institutional Investor Wire will resume publishing.
Stay tuned.
Wednesday, August 16, 2006
Welcome To The New Kid On The Block
With little fanfare, a heavyweight from the securities litigation bar has arrived in the blogosphere.
Earlier this week, Bernstein Litowitz Berger & Grossmann LLP, a perpetual presence at the top of Bruce Carton's "SCAS 50," launched a blog, the Institutional Investor Wire, or iiWire.
Described as a "blog on current issues in securities litigation for institutional investors," the unnamed author indicates that their goal is:
Welcome to the blogosphere, BLBG!
Earlier this week, Bernstein Litowitz Berger & Grossmann LLP, a perpetual presence at the top of Bruce Carton's "SCAS 50," launched a blog, the Institutional Investor Wire, or iiWire.
Described as a "blog on current issues in securities litigation for institutional investors," the unnamed author indicates that their goal is:
to provide current news relating to institutional investors' involvement in securities litigation and corporate governance.Sounds good to me.
Welcome to the blogosphere, BLBG!
Largest Customer Buys Supplier, Gets a Class Action As a Bonus
Shareholders of Intermagnetics General Corp. (NASDAQ: IMGC), a leading designer and manufacturer of magnetic resonance imaging (MRI) medical devices, have filed two class action complaints challenging the proposed $1.3 billion sale of Intermagnetics to Philips Holding USA Inc., a subsidiary of Koninklijke Philips Electronics N.V. (NYSE: PHG).
According to a 10-K filed last week by Intermagnetics, the complaints, filed in the Supreme Court of the State of New York for Albany County, allege that:
The Albany Times Union has a story on the litigation here and The Business Review (Albany) has a story here.
The Times Union story indicates that the Albany law firm of O'Connell and Aronowitz is counsel for plaintiffs in both cases. Given the realities of securities litigation, it is likely that the firm is acting as local counsel for other more established members of the plaintiffs' bar. An attempt to review the dockets through the New York State Unified Court System's E.Court System proved fruitless.
Daily Trivia: Dr. Raymond V. Damadian is generally considered to be the father of MRI, though he was snubbed in 2003 when Paul Lauterbur and Sir Peter Mansfield were awarded the Nobel Prize in Medicine for their discoveries concerning MRI. Following the snub, Dr. Damadian took out this full-page advertisement in a number of newspapers, including the New York Times.
According to a 10-K filed last week by Intermagnetics, the complaints, filed in the Supreme Court of the State of New York for Albany County, allege that:
the directors of Intermagnetics breached their fiduciary duties, including by failing to publicly announce an open bidding process or otherwise seek additional offers to acquire Intermagnetics, and by failing to provide full disclosure of certain material financial information.The complaints also allege that:
Intermagnetics (and, in one of the complaints, Philips) aided and abetted these alleged fiduciary violations. The plaintiffs seek equitable relief, including an injunction preventing us from proceeding with or consummating the merger.Regular readers can guess what comes next:
Intermagnetics believes that these allegations are without merit and intends to contest them vigorously.That's right, a close cousin of the "vigorous defense," the "vigorous contest."
The Albany Times Union has a story on the litigation here and The Business Review (Albany) has a story here.
The Times Union story indicates that the Albany law firm of O'Connell and Aronowitz is counsel for plaintiffs in both cases. Given the realities of securities litigation, it is likely that the firm is acting as local counsel for other more established members of the plaintiffs' bar. An attempt to review the dockets through the New York State Unified Court System's E.Court System proved fruitless.
Daily Trivia: Dr. Raymond V. Damadian is generally considered to be the father of MRI, though he was snubbed in 2003 when Paul Lauterbur and Sir Peter Mansfield were awarded the Nobel Prize in Medicine for their discoveries concerning MRI. Following the snub, Dr. Damadian took out this full-page advertisement in a number of newspapers, including the New York Times.
Tuesday, August 15, 2006
Flash Gordon, err, Flash Memory
According to press reports, two class action lawsuits have been filed in the Santa Clara County Superior Court by shareholders of msystems Ltd. (NASDAQ: FLSH), challenging the proposed acquisition of msystems by SanDisk Corporation (NASDAQ: SNDK).
According to a 10-Q filed by SanDisk this week, the complaints:
A review of the dockets reveals that plaintiffs' counsel include Lerach Coughlin Stoia Geller Rudman & Robbins LLP and Robbins Umeda & Fink, LLP.
Daily Trivia: msystems created the first of the now ubiquitous USB flash drives, also known as "thumb drives".
According to a 10-Q filed by SanDisk this week, the complaints:
allege breaches of fiduciary duties by officers and directors of msystems relating to alleged option backdating and to allegedly furthering their own interests in connection with the merger, and that these alleged breaches were aided and abetted by the Company. The complaints further allege that the terms of the announced merger between the Company and msystems are not fair to msystems' shareholders.So, Kevin LaCroix at The D&O Diary has a new case to add to his burgeoning list of options-backdating related litigation, perhaps even a whole new subcategory - "Merger-Related Options Backdating Derivative Litigation."
A review of the dockets reveals that plaintiffs' counsel include Lerach Coughlin Stoia Geller Rudman & Robbins LLP and Robbins Umeda & Fink, LLP.
Daily Trivia: msystems created the first of the now ubiquitous USB flash drives, also known as "thumb drives".
Monday, August 14, 2006
Northwest Airlines Securities Litigation Voluntarily Dismissed
Airplane! (1980)
Ted Striker: Surely you can't be serious.
Rumack: I am serious . . . and don't call me Shirley.
According to this press release, last week, plaintiffs voluntarily dismissed the securities class action lawsuit pending against certain directors and officers of Northwest Airlines Corp. (OTC: NWACQ) Northwest was not named as a defendant in the litigation due to the company's chapter 11 bankruptcy filing in September 2005.
The litigation was pending in the United States District Court for the Southern District of New York before Judge Richard J. Holwell.
Lead counsel is Milberg Weiss Bershad & Schulman LLP.
Notably, the complaint was dismissed less than nine months after the initial complaint was filed and was done prior to the filing of an amended complaint or a motion to dismiss. The dismissal was without prejudice.
Daily Trivia: Of the 10 largest North American airlines (as of 2004), four (Northwest, US Airways, Continental, and America West) have been a defendant (or employed the defendants in the case of Northwest) in a securities class action.
Ted Striker: Surely you can't be serious.
Rumack: I am serious . . . and don't call me Shirley.
According to this press release, last week, plaintiffs voluntarily dismissed the securities class action lawsuit pending against certain directors and officers of Northwest Airlines Corp. (OTC: NWACQ) Northwest was not named as a defendant in the litigation due to the company's chapter 11 bankruptcy filing in September 2005.
The litigation was pending in the United States District Court for the Southern District of New York before Judge Richard J. Holwell.
Lead counsel is Milberg Weiss Bershad & Schulman LLP.
Notably, the complaint was dismissed less than nine months after the initial complaint was filed and was done prior to the filing of an amended complaint or a motion to dismiss. The dismissal was without prejudice.
Daily Trivia: Of the 10 largest North American airlines (as of 2004), four (Northwest, US Airways, Continental, and America West) have been a defendant (or employed the defendants in the case of Northwest) in a securities class action.
Sunday, August 13, 2006
The Time Value Of Money?
Dynacq Healthcare, Inc. (NASDAQ: DYII) has announced the settlement of a securities class action pending against the company and two of its executive officers in the United States District Court for the Southern District of Texas.
The total value of the settlement, including all administrative costs and attorneys fees for class counsel, is $1.5 million. The press release indicates an interesting twist regarding the timing of the company's payment of the settlement:
Dynacq's outside auditor, Ernst & Young, was previously dismissed from the litigation and is not a party to the settlement.
Chitwood Harley Harnes LLP and Milberg Weiss Bershad & Schulman LLP are lead counsel in the Dynacq litigation.
Daily Trivia: According to Forbes annual survey of the "Most Expensive Hotel Rooms," for $39,000, you could get one night in the penthouse suite at The Setai in South Beach, Miami and one night in the Presidential Suite at the Mandarin Oriental in New York.
The Setai's penthouse takes up the entire 40th floor of the hotel, with 6,500 square feet of interior space, and 3,000 square feet of balconies. Don't forget the private pool and your own butler, Andrew Marston, formerly of Buckingham Palace.
The total value of the settlement, including all administrative costs and attorneys fees for class counsel, is $1.5 million. The press release indicates an interesting twist regarding the timing of the company's payment of the settlement:
The $1.5 million will be paid $100,000 within 30 days of final approval of the settlement by the court and the balance in 36 equal monthly interest bearing installments beginning 30 days thereafter.That translates to a payment of just under $39,000 per month.
Dynacq's outside auditor, Ernst & Young, was previously dismissed from the litigation and is not a party to the settlement.
Chitwood Harley Harnes LLP and Milberg Weiss Bershad & Schulman LLP are lead counsel in the Dynacq litigation.
Daily Trivia: According to Forbes annual survey of the "Most Expensive Hotel Rooms," for $39,000, you could get one night in the penthouse suite at The Setai in South Beach, Miami and one night in the Presidential Suite at the Mandarin Oriental in New York.
The Setai's penthouse takes up the entire 40th floor of the hotel, with 6,500 square feet of interior space, and 3,000 square feet of balconies. Don't forget the private pool and your own butler, Andrew Marston, formerly of Buckingham Palace.
Thursday, August 10, 2006
Willbros Abandons Vigorous Defense
Today, Willbros Group Inc. (NYSE: WG), announced the settlement of the securities class action pending against the company and certain of its present and former officers and directors in the United States District Court for the Southern District of Texas. A copy of the company's announcement can be found in this 8-K.
Curiously, both the actual announcement and press reports regarding the announcement (AP and Reuters) do not mention the value of the settlement.
In another interesting sidenote, in the company's last 10-Q (filed yesterday), Willbros offered this description of the securities litigation:
Bernstein Liebhard & Lifshitz, LLP is lead counsel in the Willbros litigation and ADAR Investments, LLC is the lead plaintiff.
Daily Trivia: Ok, this one may not strictly be trivia, but the Willbros logo bears a healthy resemblance to another, more well recognized corporate logo:
Curiously, both the actual announcement and press reports regarding the announcement (AP and Reuters) do not mention the value of the settlement.
In another interesting sidenote, in the company's last 10-Q (filed yesterday), Willbros offered this description of the securities litigation:
While the outcome of such lawsuits cannot be predicted with certainty, the Company believes that it has meritorious defenses and is defending itself vigorously.That's right - the day before they announced a settlement, the company reiterated it's intent to offer the vaunted "vigorous defense."
Bernstein Liebhard & Lifshitz, LLP is lead counsel in the Willbros litigation and ADAR Investments, LLC is the lead plaintiff.
Daily Trivia: Ok, this one may not strictly be trivia, but the Willbros logo bears a healthy resemblance to another, more well recognized corporate logo:
Wednesday, August 09, 2006
Yet Another Press Release Permutation.
First, we explored the "premptive" press release.
Next, we had the "passive voice" press release.
Then we had the "vigorous defense" press release.
That is when things started to get fun, with hybrids emerging left and right, such as the "premptive vigorous defense" press release.
Now, we have a new style - the "encouraging" press release.
Earlier this week, the Denver based law firm of Dyer & Shuman, LLP, issued a press release, headlined as follows:
A hat tip to Kevin LaCroix, author of The D&O Diary, for encouraging us to explore this new (to us) press release style.
Next, we had the "passive voice" press release.
Then we had the "vigorous defense" press release.
That is when things started to get fun, with hybrids emerging left and right, such as the "premptive vigorous defense" press release.
Now, we have a new style - the "encouraging" press release.
Earlier this week, the Denver based law firm of Dyer & Shuman, LLP, issued a press release, headlined as follows:
Dyer & Shuman, LLP Encourages Persons Who Currently Own Blue Coat Systems Common Stock to Consider Their Legal Options Concerning Alleged Stock Option Backdating by the Company -- BCSIA review of the PrimeZone website reveals that Dyer & Shuman has been issuing this style of press release since at least this June 2005 advisory to StockerYale, Inc. shareholders.
A hat tip to Kevin LaCroix, author of The D&O Diary, for encouraging us to explore this new (to us) press release style.
TASERs on Stun!
Today, TASER International, Inc. (NASDAQ: TASR) announced an agreement to settle the shareholder class action and derivative lawsuits pending in the U.S. District Court for the District of Arizona. The settlement will also resolve additional derivative lawsuits pending in both the Superior Court of Arizona for Maricopa County and the Delaware Court of Chancery, as well as a Section 220 lawsuit for production of documents also pending in the Delaware Court of Chancery.
TASER will pay $20 million to settle the federal securities class action litigation, consisting of approximately $4.1 million from insurance proceeds, $7.9 million in cash from the company, and $8 million in company stock or cash.
TASER also agreed to pay $1.75 million in stock for plaintiffs' attorney fees and to adopt certain corporate governance provisions consisting of the designation of a lead independent director who will be chosen from one of three independent directors now serving on the board, to settle the federal derivative lawsuit. As part of the settlement of that case, the two other derivative actions and the Section 220 action will also be dismissed.
Bernstein Liebhard & Lifshitz, LLP is lead counsel in the federal securities class action. The Weiser Law Firm, P.C. is lead counsel in the federal derivative litigation.
The good folks at TASER have been kind enough to post a whole page of actual police videos showing their products in action, here.
Daily Trivia: According to TASER's last 10-K at least 14 states and the District of Columbia restrict the possession and use of TASER weapons in some manner. Seven of those states (Hawaii, Massachusetts, Michigan, New Jersey, New York, Rhode Island, and Wisconsin) prohibit the use of TASER weapons by private citizens and one (New Jersey) prohibits their use by everyone, including law enforcement personnel.
TASER will pay $20 million to settle the federal securities class action litigation, consisting of approximately $4.1 million from insurance proceeds, $7.9 million in cash from the company, and $8 million in company stock or cash.
TASER also agreed to pay $1.75 million in stock for plaintiffs' attorney fees and to adopt certain corporate governance provisions consisting of the designation of a lead independent director who will be chosen from one of three independent directors now serving on the board, to settle the federal derivative lawsuit. As part of the settlement of that case, the two other derivative actions and the Section 220 action will also be dismissed.
Bernstein Liebhard & Lifshitz, LLP is lead counsel in the federal securities class action. The Weiser Law Firm, P.C. is lead counsel in the federal derivative litigation.
The good folks at TASER have been kind enough to post a whole page of actual police videos showing their products in action, here.
Daily Trivia: According to TASER's last 10-K at least 14 states and the District of Columbia restrict the possession and use of TASER weapons in some manner. Seven of those states (Hawaii, Massachusetts, Michigan, New Jersey, New York, Rhode Island, and Wisconsin) prohibit the use of TASER weapons by private citizens and one (New Jersey) prohibits their use by everyone, including law enforcement personnel.
Tuesday, August 08, 2006
But Do They Take American Express?
Earlier this week, the United States Court of Appeals for the Second Circuit reversed the March 2004 dismissal of the consolidated amended complaint in the In re American Express Co. Sec. Litig.
The Second Circuit's opinion is available here.
Judge Ralph K. Winter writing for the Court, found that certain claims in the amended complaint that were not alleged in the initial complaint nonetheless related back to the original complaint, and thus were not time-barred.
Noting that the there was some confusion as to the proper standard for appellate review of a district court's determination regarding relation back under Fed. R. Civ. P. 15, the Court held:
The District Court's original opinion is available here.
The Second Circuit's opinion is available here.
Judge Ralph K. Winter writing for the Court, found that certain claims in the amended complaint that were not alleged in the initial complaint nonetheless related back to the original complaint, and thus were not time-barred.
Noting that the there was some confusion as to the proper standard for appellate review of a district court's determination regarding relation back under Fed. R. Civ. P. 15, the Court held:
In our view, the relation back issue is more analogous to a dismissal on the pleadings than a balancing of factors involving the conduct of a lawsuit. If facts provable under the amended complaint arose out of the conduct alleged in the original complaint, relation back is mandatory. The proper standard of review of Rule 15(c)(2) decisions is therefore de novo and we so hold.Milberg Weiss Bershad & Schulman LLP and Lovell Stewart & Halebian LLP are co-lead counsel in the American Express litigation. Milberg Weiss issued this press release regarding the Second Circuit's decision.
The District Court's original opinion is available here.
Catch Up Round Up - Part II
Today is the second installment of our roundup of news items that slipped through the cracks during the last few weeks.
Motion to Dismiss Largely Denied in Marsh & McLennan Securities Litigation
According to press reports, on July 20, Judge Shirley Wohl Kram has denied, in substantial part the motion to dismiss filed in the Marsh & McLennan Companies, Inc. Sec. Litig. pending in the United States District Court for the Southern District of New York. According to the article, Judge Kram dismissed the claims against Marsh's outside auditor, Deloitte & Touche LLP.
The Marsh & McLennan litigation arose after an investigation by the New York State Attorney General revealed the company was allegedly engaging in price-fixing, bid-rigging and accepting improper payments from other insurance companies for steering business without regard to the companies' clients interests. According to this press release from Ohio Attorney General Jim Petro, "[i]n the two days following the announcement of the investigation, Marsh & McLennan lost $9 billion in market capital as the company's stock dropped 50 percent."
The Ohio Bureau of Workers' Compensation (OBWC), State Teachers Retirement System of Ohio (STRS) and the Ohio Public Employees Retirement System (OPERS) were appointed as co-lead plaintiffs with the State of New Jersey - Department of Treasury - Division of Investment on behalf of the Common Pension Fund A, the DCP Equity Fund, and the Supplemental Annuity Fund.
Bernstein Liebhard & Lifshitz, LLP and Grant & Eisenhofer, P.A. are co-lead counsel in the Marsh litigation. The order appointing lead plaintiffs and lead counsel is available here.
A copy of the consolidate class action complaint is available here.
Motion to Dismiss Largely Granted in Ramp Corporation Securities Litigation
On July 21, Judge Denise Cote largely granted the motions to dismiss filed in the In re Ramp Corp. Sec. Litig., pending in the United States District Court for the Southern District of New York, for failure to allege loss causation.
As any discussion of loss causation these days invariably involves a discussion of Dura, and Chris Jones over at The PSLRA Nugget has cornered the market on such discussions, I'll defer to him for a substantive review of the opinion.
But there is something that caught my eye. Footnote 1, which reads in pertinent part:
A copy of Judge Cote's opinion is available here.
Daily Trivia: According to this corporate description on the American Stock Exchange website, Ramp Corp., "is exploring the feasibility of using LifeRamp to commence a new business, making non-recourse loans to terminally ill cancer patients secured by their life insurance policies." If Ramp ever does enter that particular line of business, I would remind readers that the SEC believes that viatical settlements are not for everyone.
Underwriters Settle in Global Crossing for $99 million
According to news reports (InvestmentNews.com - registration required) underwriters for Global Crossing Ltd., agreed to settled claims in the securities class action pending in the United States District Court for the Southern District of New York for a total of $99 million.
Goldman Sachs Group Inc. will pay $42.1 million as part of the settlement, while Merrill Lynch & Co. Inc. will contribute $19.2 million and the Canadian Imperial Bank of Commerce (CIBC) will pay $17.3 million.
The rest of the underwriting syndicate, which included JPMorgan Chase & Co., Credit Suisse Group, Morgan Stanley, Bear Stearns Cos., Deutsche Bank AG, Lehman Brothers Holdings and ABN Amro Holding NV, agreed to contribute a total of $6.68 million to the settlement.
The lead plaintiffs in the Global Crossing litigation are the Public Employees' Retirement System of Ohio (OPERS) and the State Teachers' Retirement System of Ohio (STRS). Lead counsel is Grant & Eisenhofer P.A.
I previously blogged about the CIBC settlement, here.
Motion to Dismiss Largely Denied in Marsh & McLennan Securities Litigation
According to press reports, on July 20, Judge Shirley Wohl Kram has denied, in substantial part the motion to dismiss filed in the Marsh & McLennan Companies, Inc. Sec. Litig. pending in the United States District Court for the Southern District of New York. According to the article, Judge Kram dismissed the claims against Marsh's outside auditor, Deloitte & Touche LLP.
The Marsh & McLennan litigation arose after an investigation by the New York State Attorney General revealed the company was allegedly engaging in price-fixing, bid-rigging and accepting improper payments from other insurance companies for steering business without regard to the companies' clients interests. According to this press release from Ohio Attorney General Jim Petro, "[i]n the two days following the announcement of the investigation, Marsh & McLennan lost $9 billion in market capital as the company's stock dropped 50 percent."
The Ohio Bureau of Workers' Compensation (OBWC), State Teachers Retirement System of Ohio (STRS) and the Ohio Public Employees Retirement System (OPERS) were appointed as co-lead plaintiffs with the State of New Jersey - Department of Treasury - Division of Investment on behalf of the Common Pension Fund A, the DCP Equity Fund, and the Supplemental Annuity Fund.
Bernstein Liebhard & Lifshitz, LLP and Grant & Eisenhofer, P.A. are co-lead counsel in the Marsh litigation. The order appointing lead plaintiffs and lead counsel is available here.
A copy of the consolidate class action complaint is available here.
Motion to Dismiss Largely Granted in Ramp Corporation Securities Litigation
On July 21, Judge Denise Cote largely granted the motions to dismiss filed in the In re Ramp Corp. Sec. Litig., pending in the United States District Court for the Southern District of New York, for failure to allege loss causation.
As any discussion of loss causation these days invariably involves a discussion of Dura, and Chris Jones over at The PSLRA Nugget has cornered the market on such discussions, I'll defer to him for a substantive review of the opinion.
But there is something that caught my eye. Footnote 1, which reads in pertinent part:
The Consolidation Order appointed Murray, Frank & Sailer LLP as Lead Counsel. Among the responsibilities given to Lead Counsel was the responsibility to "[b]rief and argue motions." Despite the clear terms of the Consolidation Order, the plaintiffs' briefs list the following additional counsel . . . Adhering to the Consolidation Order, the only appearance of counsel for lead plaintiffs that will be recognized is that of counsel from Murray, Frank & Sailer LLP."It is an interesting point, and one that in theory goes further than the Third Circuit's decision in Cendant from April 2005 (available here), which upheld the denial of an award of attorneys fees to certain law firms that had not been specifically asked by lead counsel to work on the case.
A copy of Judge Cote's opinion is available here.
Daily Trivia: According to this corporate description on the American Stock Exchange website, Ramp Corp., "is exploring the feasibility of using LifeRamp to commence a new business, making non-recourse loans to terminally ill cancer patients secured by their life insurance policies." If Ramp ever does enter that particular line of business, I would remind readers that the SEC believes that viatical settlements are not for everyone.
Underwriters Settle in Global Crossing for $99 million
According to news reports (InvestmentNews.com - registration required) underwriters for Global Crossing Ltd., agreed to settled claims in the securities class action pending in the United States District Court for the Southern District of New York for a total of $99 million.
Goldman Sachs Group Inc. will pay $42.1 million as part of the settlement, while Merrill Lynch & Co. Inc. will contribute $19.2 million and the Canadian Imperial Bank of Commerce (CIBC) will pay $17.3 million.
The rest of the underwriting syndicate, which included JPMorgan Chase & Co., Credit Suisse Group, Morgan Stanley, Bear Stearns Cos., Deutsche Bank AG, Lehman Brothers Holdings and ABN Amro Holding NV, agreed to contribute a total of $6.68 million to the settlement.
The lead plaintiffs in the Global Crossing litigation are the Public Employees' Retirement System of Ohio (OPERS) and the State Teachers' Retirement System of Ohio (STRS). Lead counsel is Grant & Eisenhofer P.A.
I previously blogged about the CIBC settlement, here.
Monday, August 07, 2006
Catch Up Round Up - Part I
Today's post is the first of several roundups of news items that slipped through the cracks during the last few weeks.
Class Certification Granted in SupportSoft Litigation
According to this press release, Judge Susan Illston of the United States District Court for the Northern District of California has certified the class in the securities litigation pending against SupportSoft, Inc. (NASDAQ: SPRT) and the company's CEO and CFO.
According to the release, the parties actually stipulated to certification of the class.
Lead counsel in the SupportSoft litigation are Labaton Sucharow & Rudoff LLP and Schatz & Nobel, P.C. and liaison counsel is Glancy Binkow & Goldberg LLP.
A full copy of the class notice can be found here and a copy of the corrected amended consolidated class action complaint can be found here.
Complaint Dismissed in Cyberonics Litigation
According to this press release, the securities class action pending against Cyberonics, Inc. (NASDAQ: CYBX) and certain of its officers and directors, was dismissed on July 20. The case was pending before Judge Gray H. Miller in the United States District Court for the Southern District of Texas.
According to the release, Judge Miller granted plaintiffs the right to amend their complaint within thirty days, but noted that "the deficiencies in Plaintiffs' complaint might well extend beyond the point of cure."
Scott+Scott LLC and Finkelstein & Krinsk are lead counsel and Emerson Poynter LLP is liaison counsel.
Daily Trivia #1: Finkelstein & Krinsk appears to remain of the very few plaintiff class action firms without a website.
Daily Trivia #2: Cyberonics has its worldwide headquarters in "The Cyberonics Building" which, you guessed it, is located on "Cyberonics Boulevard."
Van der Moolen Settles Securities Litigation
Van der Moolen Holding N.V. (NYSE: VDM) and Van der Moolen Specialists USA, LLC, its majority owned subsidiary, announced on July 24 that they have agreed to settle the securities class action pending against them before Judge Robert Sweet of the United States District Court for the Southern District of New York.
The Van der Moolen litigation was filed in the wake of the specialist scandal, in which numerous specialists on the New York Stock Exchange were accused of engaging in front-running or trading ahead of their clients, and interpositioning their trades between buyers and sellers, among other allegations.
Labaton Sucharow & Rudoff LLP and Schiffrin & Barroway, LLP are co-lead counsel in the Van der Moolen litigation.
The settlement is for $8 million, and, according to news reports, insurance will cover 60% of that amount. According to this blurb on the Labaton website, the settlement "represents a recovery of over one third of the damages suffered by the Class."
The investor education website, Investopedia.com, has an interesting article here on the differences (or lack thereof) between NASDAQ market makers and NYSE specialists.
Class Certification Granted in SupportSoft Litigation
According to this press release, Judge Susan Illston of the United States District Court for the Northern District of California has certified the class in the securities litigation pending against SupportSoft, Inc. (NASDAQ: SPRT) and the company's CEO and CFO.
According to the release, the parties actually stipulated to certification of the class.
Lead counsel in the SupportSoft litigation are Labaton Sucharow & Rudoff LLP and Schatz & Nobel, P.C. and liaison counsel is Glancy Binkow & Goldberg LLP.
A full copy of the class notice can be found here and a copy of the corrected amended consolidated class action complaint can be found here.
Complaint Dismissed in Cyberonics Litigation
According to this press release, the securities class action pending against Cyberonics, Inc. (NASDAQ: CYBX) and certain of its officers and directors, was dismissed on July 20. The case was pending before Judge Gray H. Miller in the United States District Court for the Southern District of Texas.
According to the release, Judge Miller granted plaintiffs the right to amend their complaint within thirty days, but noted that "the deficiencies in Plaintiffs' complaint might well extend beyond the point of cure."
Scott+Scott LLC and Finkelstein & Krinsk are lead counsel and Emerson Poynter LLP is liaison counsel.
Daily Trivia #1: Finkelstein & Krinsk appears to remain of the very few plaintiff class action firms without a website.
Daily Trivia #2: Cyberonics has its worldwide headquarters in "The Cyberonics Building" which, you guessed it, is located on "Cyberonics Boulevard."
Van der Moolen Settles Securities Litigation
Van der Moolen Holding N.V. (NYSE: VDM) and Van der Moolen Specialists USA, LLC, its majority owned subsidiary, announced on July 24 that they have agreed to settle the securities class action pending against them before Judge Robert Sweet of the United States District Court for the Southern District of New York.
The Van der Moolen litigation was filed in the wake of the specialist scandal, in which numerous specialists on the New York Stock Exchange were accused of engaging in front-running or trading ahead of their clients, and interpositioning their trades between buyers and sellers, among other allegations.
Labaton Sucharow & Rudoff LLP and Schiffrin & Barroway, LLP are co-lead counsel in the Van der Moolen litigation.
The settlement is for $8 million, and, according to news reports, insurance will cover 60% of that amount. According to this blurb on the Labaton website, the settlement "represents a recovery of over one third of the damages suffered by the Class."
The investor education website, Investopedia.com, has an interesting article here on the differences (or lack thereof) between NASDAQ market makers and NYSE specialists.
Sunday, August 06, 2006
Predicting Securities Class Actions
Last month, The Corporate Library (the "leading independent source for U.S. corporate governance and executive & director compensation information and analysis") released the 2006 update to their continuing study of the correlation between corporate governance ratings and the probability that a particular company will be the subject of a securities class action lawsuit.
While it isn't quite the "Pre-Crime Unit" that Bruce Carton has blogged about here and here over at Securities Litigation Watch, the study does present some interesting findings.
They include:
Hat tip to Broc Romanek at TheCorporateCounsel.net.
While it isn't quite the "Pre-Crime Unit" that Bruce Carton has blogged about here and here over at Securities Litigation Watch, the study does present some interesting findings.
They include:
- Companies rated in the bottom two categories ("D" or "F") are more than three times as likely to be the target of a securities class action lawsuit than those rated in the top three categories ("A," "B" or "C");
- Excessive CEO compensation appears to be the single most predictive factor of being sued; and
- Other predictive factors include director age, tenure, over-commitment and lack of independence.
- more than $485 million in market capitalization; and
- average daily trading volume for target companies in the 52 weeks before being sued was between 2 and 25 million shares
Hat tip to Broc Romanek at TheCorporateCounsel.net.
"Positive Political Theory" and the PSLRA
In a still unfinished draft paper, Professors Emerson H. Tiller and Albert Yoon (both from Northwestern University School of Law) attempt to "examine the role of legislative reform on judicially created legal doctrines relating to private securities litigation."
The paper is titled Private Securities Litigation and the Courts: Positive Political Theory and Evidence and is available here.
The study examines "the effect of the Private Securities Litigation Reform Act of 1995 on the use of the "Group Pleading Doctrine" and "Fraud on the Market" theory. It does so in the context of the so called "Positive Political Theory," which according to the authors examines "the general question of how Congress can influence the use of legal doctrines within a judicial hierarchy."
The authors suggest:
The paper is titled Private Securities Litigation and the Courts: Positive Political Theory and Evidence and is available here.
The study examines "the effect of the Private Securities Litigation Reform Act of 1995 on the use of the "Group Pleading Doctrine" and "Fraud on the Market" theory. It does so in the context of the so called "Positive Political Theory," which according to the authors examines "the general question of how Congress can influence the use of legal doctrines within a judicial hierarchy."
The authors suggest:
Positive political theory is a useful lens to analyze private securities litigation and the effects of the PSLRA. In the context of private securities litigation, the theory suggests that federal district court judges (1) are influenced by their policy preferences in deciding on a defendant's motion to dismiss as to whether the plaintiff-investors have met the pleading requirements of Rule 9(b) and the PSLRA - essentially a decision about whether the plaintiffs will be given the leverage to force a large financial settlement with the defendant; and (2) make summary motion decisions on pleading requirements in anticipation of the likely response of the overseeing circuit court of appeals.They have some interesting statistical interpretations regarding the impact that the political party of the president that nominated a particular judge may have on typical securities litigation motion practice at the end of the article, though they appear to be works in progress.
Thursday, August 03, 2006
Planes, Trains, and Efficient Markets
Earlier this week, in the Bombardier class action, Judge Shira A. Scheindlin denied plaintiff's motion for class certification, finding that the putative class was not entitled to the efficient markets presumption, and as a result, common issues did not predominate the litigation.
A copy of the opinion is available here.
The lead plaintiff in the Bombardier litigation is the Teamsters Local 445 Freight Division Pension Fund and lead counsel is Schoengold Sporn Laitman & Lometti, P.C.
Bombardier, Inc. (TSE: BBD) is a Canadian based manufacturer of regional aircraft, business jets, and rail transportation equipment.
True to form, Judge Scheindlin has provided a thorough analysis of the standards for class certification and a detailed review of the efficient markets theory. I have previously blogged about Judge Scheindlin's thorough securities litigation opinions, here.
Alert readers may recall that earlier in the Bombardier litigation, Judge Scheindlin required the lead plaintiff, after filing an amended complaint that both expanded the class period and added additional securities to the class definition, to issue a new press release and restart the 60 day period for investors to move for appointment as a lead plaintiff.
The PSLRA Nugget had previously blogged about the reopened lead plaintiff period, here.
Daily trivia - Bombardier was founded by Joseph-Armand Bombardier, the inventor of the snowmobile.
A copy of the opinion is available here.
The lead plaintiff in the Bombardier litigation is the Teamsters Local 445 Freight Division Pension Fund and lead counsel is Schoengold Sporn Laitman & Lometti, P.C.
Bombardier, Inc. (TSE: BBD) is a Canadian based manufacturer of regional aircraft, business jets, and rail transportation equipment.
True to form, Judge Scheindlin has provided a thorough analysis of the standards for class certification and a detailed review of the efficient markets theory. I have previously blogged about Judge Scheindlin's thorough securities litigation opinions, here.
Alert readers may recall that earlier in the Bombardier litigation, Judge Scheindlin required the lead plaintiff, after filing an amended complaint that both expanded the class period and added additional securities to the class definition, to issue a new press release and restart the 60 day period for investors to move for appointment as a lead plaintiff.
The PSLRA Nugget had previously blogged about the reopened lead plaintiff period, here.
Daily trivia - Bombardier was founded by Joseph-Armand Bombardier, the inventor of the snowmobile.
Wednesday, August 02, 2006
The End is Nigh?
Want to have your article reviewed (torn apart) in this blog?
Start with an eye catching title:
His thesis:
Additionally, though he does not define "insiders," a fair interpretation would exclude auditors, underwriters, and others that are proper defendants under the current statutory scheme.
Prof. Booth goes on to state:
A third premise:
Prof. Booth's article appears in the Summer 2006 issue of Regulation, a publication of the Cato Institute. The think tank describes that publication as:
Start with an eye catching title:
The End of Securities Fraud Class Action?Then add a provocative subtitle:
Diversified investors lose more than they gain from securities class actions.That identifies this recent article (also available from SSRN, here) from Prof. Richard A. Booth of the University of Maryland School of Law.
His thesis:
a securities fraud class action should be dismissed for failure to state a claim unless it appears that insiders (including the company itself) have captured gains from trading during the fraud period.I think that the shareholders of any number of scandal ridden companies would take pause with Prof. Booth's central idea.
Only those actions that involve insider trading or the equivalent entail genuine financial harm to the plaintiff class because only those actions involve an extraction of wealth from the public market.
Additionally, though he does not define "insiders," a fair interpretation would exclude auditors, underwriters, and others that are proper defendants under the current statutory scheme.
Prof. Booth goes on to state:
At best, an award from [a securities fraud class action] is nothing more than an expensive rearrangement of wealth from one pocket to another (minus a cut for the lawyers). Diversified investors are equally likely to sell an overpriced stock as to buy one. For diversified investors, gains and losses wash out.This second premise, which is detailed in substantial depth, in effect suggests inflicting a double penalty on investors that are unfortunate enough to have bought artificially inflated shares of a publicly traded company if those shares are part of a portfolio that does NOT contain at least 20 different stocks.
A third premise:
The prospect of payout by the defendant company causes its stock price to fall by more than it otherwise would-even in a perfectly efficient market-and triggers a positive feedback mechanism that has the effect of magnifying the potential payout, sometimes with devastating effects. Indeed, about 30 percent of target companies end up bankrupt.I think this premise is a bit flawed. Companies that are in serious financial trouble already are potentially more likely to resort to conduct that would be considered securities fraud to prop up their stock price. When the truth emerges, the bottom falls out and all sorts of ills may befall that company, including a death spiral into bankruptcy, as institutional investors bail out, debt obligations may be in default, and credit may be cut off. This will happen with or without the filing of a securities fraud class action. Though Ken Lay and Jeff Skilling suggested in their defense a number of other factors that caused Enron to spiral into bankruptcy, they did not blame the class action lawyers.
Prof. Booth's article appears in the Summer 2006 issue of Regulation, a publication of the Cato Institute. The think tank describes that publication as:
the only magazine accessible to the intelligent layman that brings together the latest academic research on the nature and effects of regulation. It offers cutting-edge analysis of the industries that affect your livelihood, covering nearly every sector of the economy, from agriculture and banking to legal reform and transportation.
Tuesday, August 01, 2006
The Scarlet Letter
Yesterday, the law firm of Klafter & Olsen LLP issued a press release announcing the filing of a securities class action against Rambus, Inc. (NASDAQ: RMBS).
Several class actions had already been filed against Rambus, following the May 30 and June 27 announcements that Rambus was investigating (and had found problems with) historical option granting practices at the company.
This was no ordinary press release though. The title screamed:
I'm looking forward to future press releases colorfully announcing the filing of complaints against admitted "GAAP Violators" and "Premature Revenue Recognizers," among others.
The Rambus litigation is pending in the United States District Court for the Northern District of California.
Several class actions had already been filed against Rambus, following the May 30 and June 27 announcements that Rambus was investigating (and had found problems with) historical option granting practices at the company.
This was no ordinary press release though. The title screamed:
Klafter & Olsen LLP Files Class Action Lawsuit Against Options Backdater Rambus, Inc.The choice of language leapt out as most PSLRA press releases tend to sprinkle the word "allegedly" before any factual allegations are presented. As an example, see this earlier press release from another firm that filed a complaint against Rambus. The necessity of the introductory "allegedly" was negated for the Klafter & Olsen release however, as Rambus had already admitted to the conduct with their June 27 announcement.
I'm looking forward to future press releases colorfully announcing the filing of complaints against admitted "GAAP Violators" and "Premature Revenue Recognizers," among others.
The Rambus litigation is pending in the United States District Court for the Northern District of California.
Monday, July 31, 2006
We're Back
Regular posting will now resume.
As my first official act, let me extend a hearty thank you to Kevin LaCroix at The D&O Diary for attempting to compile a comprehensive list (here) of the options backdating related litigation, and to Bruce Carton at Securities Litigation Watch for agreeing to help shoulder the load (here).
The options backdating litigation explosion will almost certainly be the next group of cases that the annual Stanford University /Cornerstone Research, NERA Economic Consulting, and PricewaterhouseCoopers studies exclude from their yearly totals or include with an asterisk, a practice that started back in 2001, with the IPO Allocation cases. The next few years all had their own breed of "atypical" case, except 2005:
2001 - IPO Allocation cases
2002 - Research Analyst cases
2003 - Research Analyst cases and Mutual fund "market-timing" cases
2004 - Mutual fund "market-timing" cases
2005 - ???
2006 - Options backdating cases
When these "atypical" cases have been excluded from the yearly count, the number of new federal securities class action filings has remained fairly steady since the enactment of the PSLRA ten years ago, as explained by Bruce Carton, here.
The "drop" in new case filings that was detailed in a recently released report from Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse. The report has generated a bit of buzz in the blogosphere, with posts on The 10b-5 Daily here, and The D&O Diary here.
I think a more interesting (and to the best of my knowledge unanswered) question is what happened to the "atypical" cases in 2005?
As my first official act, let me extend a hearty thank you to Kevin LaCroix at The D&O Diary for attempting to compile a comprehensive list (here) of the options backdating related litigation, and to Bruce Carton at Securities Litigation Watch for agreeing to help shoulder the load (here).
The options backdating litigation explosion will almost certainly be the next group of cases that the annual Stanford University /Cornerstone Research, NERA Economic Consulting, and PricewaterhouseCoopers studies exclude from their yearly totals or include with an asterisk, a practice that started back in 2001, with the IPO Allocation cases. The next few years all had their own breed of "atypical" case, except 2005:
2001 - IPO Allocation cases
2002 - Research Analyst cases
2003 - Research Analyst cases and Mutual fund "market-timing" cases
2004 - Mutual fund "market-timing" cases
2005 - ???
2006 - Options backdating cases
When these "atypical" cases have been excluded from the yearly count, the number of new federal securities class action filings has remained fairly steady since the enactment of the PSLRA ten years ago, as explained by Bruce Carton, here.
The "drop" in new case filings that was detailed in a recently released report from Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse. The report has generated a bit of buzz in the blogosphere, with posts on The 10b-5 Daily here, and The D&O Diary here.
I think a more interesting (and to the best of my knowledge unanswered) question is what happened to the "atypical" cases in 2005?
Thursday, July 20, 2006
Tuesday, July 18, 2006
ECtel Ltd. - Proud Of Their Successful "Vigorous Defense"
ECtel Ltd. (NASDAQ: ECTX) today announced the dismissal of the securities class action lawsuit pending against the company and certain of its directors and officers in the United States District Court for the District of Maryland.
The release quotes ECtel's President and CEO, Eitan Naor, as stating:
Also named as a defendant (and separately announcing their dismissal from the litigation, here) was ECI Telecom Ltd., a major shareholder of ECtel during the class period. Sadly, ECI's press release contains no similar justification, but presumably, they also mounted a vigorous defense.
Judge Roger W. Titus previously appointed Leumi Gemel Ltd. as lead plaintiff and Glancy Binkow & Goldberg LLP and the Law Offices of Jacob Sabo as appointed lead counsel. Cohen, Milstein, Hausfeld & Toll, P.L.L.C. was appointed as liaison counsel.
According to Bank Leumi's 2004 Annual Report, Leumi Gemel Ltd. is a wholly owned subsidiary and:
Thanks to an anonymous reader for sending in the ECtel press release.
The release quotes ECtel's President and CEO, Eitan Naor, as stating:
We're pleased with this confirmation of our earlier statements that we believe this case was filed without merit. This justifies our vigorous defense of this matter.According to their website, one of ECtel's products is known as FraudView and "is the leading and most complete fraud management solution for telecom operators." Hmm, that doesn't sound very good. I wonder if the finance folks at WorldCom were early adopters?
Also named as a defendant (and separately announcing their dismissal from the litigation, here) was ECI Telecom Ltd., a major shareholder of ECtel during the class period. Sadly, ECI's press release contains no similar justification, but presumably, they also mounted a vigorous defense.
Judge Roger W. Titus previously appointed Leumi Gemel Ltd. as lead plaintiff and Glancy Binkow & Goldberg LLP and the Law Offices of Jacob Sabo as appointed lead counsel. Cohen, Milstein, Hausfeld & Toll, P.L.L.C. was appointed as liaison counsel.
According to Bank Leumi's 2004 Annual Report, Leumi Gemel Ltd. is a wholly owned subsidiary and:
manages provident funds for the self-employed, provident funds for salaried employees, central funds for severance pay and a fund for the payment of sick pay and Psagot Ofek [Israel's leading investment house]As an aside, ECI Telecom, Ltd. (NASDAQ: ECIL), the ECtel shareholder named as a defendant in this litigation, settled a prior securities class action alleging that the company fraudulently engaged in a premature revenue recognition scheme, which violated both Generally Accepted Accounting Principles and ECI's own accounting policies. That case settled in 2002 for $21.75 million.
Thanks to an anonymous reader for sending in the ECtel press release.
Monday, July 17, 2006
Bally Total Fitness Securities Class Action Dismissed
Bally Total Fitness Holding Corporation (NYSE: BFT), the largest commercial operator of fitness centers, announced today that the consolidated securities class action pending against the company and several of its current and former officers in the United States District Court of the Northern District of Illinois, was dismissed last week.
The dismissal was without prejudice, and Senior District Judge John F. Grady gave the plaintiffs until August 14, 2006 to file an amended complaint.
A copy of the court's opinion is available here.
The company's former outside auditor, Ernst & Young, LLP, was also a defendant in the litigation. E&Y's motion to dismiss was also granted.
Cosmos Investment Company, LLC was previously appointed the lead plaintiff and Berger & Montague, P.C. and Much Shelist, Freed, Denenberg, Ament & Rubenstein P.C. were appointed lead and liaison counsel, respectively. The Court's order appointing Cosmos as lead plaintiff is available here.
The individual defendants in the litigation were Lee S. Hillman Bally's Chief Executive Officer, President, and Chairman of the Board until December 2002, John W. Dwyer, Bally's former Chief Financial Officer, Executive Vice President, and a member of Bally's Board of Directors, and Paul A. Toback, Bally's current Chief Executive Officer, President, and Chairman of the Board.
Bally's operates more than 400 company owned and franchised facilities in 29 states, Mexico, Canada, Korea, China and the Caribbean.
The dismissal was without prejudice, and Senior District Judge John F. Grady gave the plaintiffs until August 14, 2006 to file an amended complaint.
A copy of the court's opinion is available here.
The company's former outside auditor, Ernst & Young, LLP, was also a defendant in the litigation. E&Y's motion to dismiss was also granted.
Cosmos Investment Company, LLC was previously appointed the lead plaintiff and Berger & Montague, P.C. and Much Shelist, Freed, Denenberg, Ament & Rubenstein P.C. were appointed lead and liaison counsel, respectively. The Court's order appointing Cosmos as lead plaintiff is available here.
The individual defendants in the litigation were Lee S. Hillman Bally's Chief Executive Officer, President, and Chairman of the Board until December 2002, John W. Dwyer, Bally's former Chief Financial Officer, Executive Vice President, and a member of Bally's Board of Directors, and Paul A. Toback, Bally's current Chief Executive Officer, President, and Chairman of the Board.
Bally's operates more than 400 company owned and franchised facilities in 29 states, Mexico, Canada, Korea, China and the Caribbean.
Options Backdating Revelations - Far from Over
An article in today's New York Times reports that "[m]ore than 2,000 companies appear to have used backdated stock options to sweeten their top executives' pay packages."
The article is based on a newly released study, What Fraction Of Stock Option Grants To Top Executives Have Been Backdated Or Manipulated?, by Professors Erik Lie (Henry B. Tippie College of Business, University of Iowa) and Randall A. Heron (Kelley School of Business, Indiana University - Indianapolis).
According to the Times, the study's authors used information from the Thomson Financial Insider Filing database of insider transactions reported to the Securities and Exchange Commission, to examine nearly 40,000 stock option grants from January 1, 1996 through December 1, 2005 to top executives at more than 7,700 companies.
The article goes on to note:
On that day, revisions to Rules 16a-3, 16a-6 and 16a-8 under the Securities Exchange Act of 1934 took effect, and the SEC began requiring executives to report stock option grants they receive within two business days.
According to the study, after the enactment of the enhanced reporting requirements, "the backdating figure declined to 10 percent of unscheduled grants."
While approximately 5 dozen companies have already disclosed that they: 1) are the targets of government investigations; 2) are the subject of investor lawsuits; or 3) have conducted internal audits involving the practice, this new study estimates:
The article is based on a newly released study, What Fraction Of Stock Option Grants To Top Executives Have Been Backdated Or Manipulated?, by Professors Erik Lie (Henry B. Tippie College of Business, University of Iowa) and Randall A. Heron (Kelley School of Business, Indiana University - Indianapolis).
According to the Times, the study's authors used information from the Thomson Financial Insider Filing database of insider transactions reported to the Securities and Exchange Commission, to examine nearly 40,000 stock option grants from January 1, 1996 through December 1, 2005 to top executives at more than 7,700 companies.
The article goes on to note:
The findings were based on an analysis of whether share values increased or declined after option grant dates. "Half should be negative and half should be positive," said Professor Lie. "That's the underlying logic."The study concluded that before Aug. 29, 2002, 23% of unscheduled grants - as distinguished from grants that companies routinely schedule annually - were backdated.
But the analysis revealed that the distribution was shifted upward.
"This is not random chance. It's something that's manipulated, clearly," said Professor Lie.
On that day, revisions to Rules 16a-3, 16a-6 and 16a-8 under the Securities Exchange Act of 1934 took effect, and the SEC began requiring executives to report stock option grants they receive within two business days.
According to the study, after the enactment of the enhanced reporting requirements, "the backdating figure declined to 10 percent of unscheduled grants."
While approximately 5 dozen companies have already disclosed that they: 1) are the targets of government investigations; 2) are the subject of investor lawsuits; or 3) have conducted internal audits involving the practice, this new study estimates:
that 29.2 percent of companies have used backdated options and 13.6 percent of options granted to top executives from 1996 to 2005 were backdated or otherwise manipulatedIt appears that all of the options backdating taskforces will have their hands full.
Sunday, July 16, 2006
Vigorous Defense, Again
According to news reports here (Austin Business Journal) and here (Austin American-Statesman), a class action lawsuit has been filed in Travis County District Court challenging the proposed acquisition of Encore Medical Corporation (NASDAQ: ENMC) by a subsidiary of Blackstone Capital Partners V L.P.
The American-Statesman article has a quote from Harry L. Zimmerman, Encore's Executive Vice President and General Counsel. Regular readers can guess what Mr. Zimmerman said:
The deal, valued at approximately $870 million, was announced on June 30.
Encore Medical is a diversified orthopedic device company that develops, manufactures and distributes a range of orthopedic devices, including surgical implants, sports medicine equipment and products for orthopedic rehabilitation, pain management and physical therapy.
Blackstone Capital Partners V is one of the world's largest private equity funds, having raised over $15.6 billion in 2006.
The American-Statesman article indicates that Willie C. Briscoe of Provost Umphrey Law Firm LLP is counsel for plaintiff Louis Dudas in the litigation. According to the firm's website:
The American-Statesman article has a quote from Harry L. Zimmerman, Encore's Executive Vice President and General Counsel. Regular readers can guess what Mr. Zimmerman said:
The lawsuit is baseless and without merit, and we will vigorously defend it.If only it was in a press release. . .
The deal, valued at approximately $870 million, was announced on June 30.
Encore Medical is a diversified orthopedic device company that develops, manufactures and distributes a range of orthopedic devices, including surgical implants, sports medicine equipment and products for orthopedic rehabilitation, pain management and physical therapy.
Blackstone Capital Partners V is one of the world's largest private equity funds, having raised over $15.6 billion in 2006.
The American-Statesman article indicates that Willie C. Briscoe of Provost Umphrey Law Firm LLP is counsel for plaintiff Louis Dudas in the litigation. According to the firm's website:
Although the Texas Board of Legal Specialization has certified only 10% of lawyers in Texas, every Senior Partner at Provost Umphrey Law Firm is Board Certified in Personal Injury Trial Law.We can only assume that they will vigorously prosecute the litigation.
Friday, July 14, 2006
Parlux, Part Deux
According to a press release and an 8-K filed by the company this week, the offer to acquire all of the outstanding shares of common stock of Parlux Fragrances, Inc. (NASDAQ: PARL) by the company's CEO, Ilia Lekach, has been withdrawn.
This will likely largely moot the controversy raised in the class and derivative cases discussed in my prior post on Parlux here, so in all likelihood, we will never know if Parlux intended to raise a vigorous defense. I have posted about the vigorous defense phenomenon (and some interesting permutations) here, here, and here.
But our story doesn't end there. According to this post from the WSJ Law Blog:
As an aside, Parlux has posted on their website the following policies:
This will likely largely moot the controversy raised in the class and derivative cases discussed in my prior post on Parlux here, so in all likelihood, we will never know if Parlux intended to raise a vigorous defense. I have posted about the vigorous defense phenomenon (and some interesting permutations) here, here, and here.
But our story doesn't end there. According to this post from the WSJ Law Blog:
Yesterday . . . the Miami Herald reported that six of the seven company directors, including the CEO and CFO, sold Parlux stock in big chunks back in February, when the stock was at or near its all-time high. Since then, the stock price has been cut in halfIf the prior cases did not include allegations relating to this unusual trading foresight (and given the timing of the company's disclosure, they probably did not), it is likely that they will soon be amended. So as one controversy subsides without a vigorous defense, another rises in its place.
As an aside, Parlux has posted on their website the following policies:
- Code of Business Conduct and Ethics (here);
- Code of Ethics For Executive And Financial Officers (here)
- Insider Information And Trading policy (here)
Thursday, July 13, 2006
DHB Settles Class and Derivative Litigation for $40 Million
DHB Industries, Inc. (OTC: DHBT) has announced the settlement of both the securities class action and derivative suits pending in the United States District Court for the Eastern District of New York before Judge Joanna Seybert.
The class action will be settled for $34.9 million in cash, plus 3,184,713 shares of DHB common stock. The derivative action will be settled in consideration of DHB adopting certain corporate governance provisions and paying $300,000, as attorneys' fees and expenses to lead counsel in the derivative action.
According to this Reuters article, "the settlement also includes the removal of Chief Executive David Brooks and other executives from the company's board." It is not clear if these removals are the "corporate governance" changes that result from the settlement of the derivative action.
Brooks was placed on leave earlier this week and according to the Reuters article "is expected to help fund DHB's payments by exercising 3 million warrants. Additionally, DHB can require Brooks to purchase 3 million shares of its common stock to finance the remaining portion of the company's cash settlement."
Lead plaintiffs in the class action are RS Holdings, the NECA-IBEW Pension Trust Fund, and George Baciu. Co-Lead Counsel in the class action are Labaton Sucharow & Rudoff LLP and Lerach Coughlin Stoia Geller Rudman & Robbins LLP.
From a review of the docket, it appears that the settlement comes after the motions to dismiss were fully briefed, but before the Court had ruled on those motions.
DHB is a manufacturer of:
ADDITION: An alert reader (is there any other type?) pointed out this article which dubs Mr. Brooks a "War Profiteer" and indicates that the bat mitzvah Mr. Brooks threw for his daughter in late 2005 cost an estimated $10 million. Flown in by private jet to perform for the affair - Aerosmith, Tom Petty, Don Henley and Joe Walsh, who performed with Fleetwood Mac's Stevie Nicks, Kenny G, 50 Cent, and Ciara. He apparently can afford it, having received more than $70 million in compensation in 2004 alone.
ADDITION: The 10b-5 Daily and the WSJ Law Blog have posts on the settlement, here and here, respectively.
The class action will be settled for $34.9 million in cash, plus 3,184,713 shares of DHB common stock. The derivative action will be settled in consideration of DHB adopting certain corporate governance provisions and paying $300,000, as attorneys' fees and expenses to lead counsel in the derivative action.
According to this Reuters article, "the settlement also includes the removal of Chief Executive David Brooks and other executives from the company's board." It is not clear if these removals are the "corporate governance" changes that result from the settlement of the derivative action.
Brooks was placed on leave earlier this week and according to the Reuters article "is expected to help fund DHB's payments by exercising 3 million warrants. Additionally, DHB can require Brooks to purchase 3 million shares of its common stock to finance the remaining portion of the company's cash settlement."
Lead plaintiffs in the class action are RS Holdings, the NECA-IBEW Pension Trust Fund, and George Baciu. Co-Lead Counsel in the class action are Labaton Sucharow & Rudoff LLP and Lerach Coughlin Stoia Geller Rudman & Robbins LLP.
From a review of the docket, it appears that the settlement comes after the motions to dismiss were fully briefed, but before the Court had ruled on those motions.
DHB is a manufacturer of:
technically advanced bullet and projectile resistant garments, bullet resistant and fragmentation vests, bomb projectile blankets, and related ballistic accessories and technologies for the United States Military and Law Enforcement Agencies.Wearing them instead of selling them might have been a good idea for Mr. Brooks, if you ask me.
ADDITION: An alert reader (is there any other type?) pointed out this article which dubs Mr. Brooks a "War Profiteer" and indicates that the bat mitzvah Mr. Brooks threw for his daughter in late 2005 cost an estimated $10 million. Flown in by private jet to perform for the affair - Aerosmith, Tom Petty, Don Henley and Joe Walsh, who performed with Fleetwood Mac's Stevie Nicks, Kenny G, 50 Cent, and Ciara. He apparently can afford it, having received more than $70 million in compensation in 2004 alone.
ADDITION: The 10b-5 Daily and the WSJ Law Blog have posts on the settlement, here and here, respectively.
Showdown at the Options Backdating Taskforce Corral
According to a post today from WSJ Law Blog, Proskauer Rose LLP has announced the creation of a "Stock Options Task Force." The "special, multi-disciplinary" group of lawyers will work with companies in all matters relating to stock option-related issues.
While it probably wouldn't qualify as a replacement for professional wrestling, now we have the makings of a showdown.
As noted here last month, the plaintiff-side firm of Kahn Gauthier Swick, LLC announced the creation of their own "Options Pricing Investigations Division."
As an aside, I had forgotten that the former "World Wrestling Federation" had been forced to change their name to "World Wrestling Entertainment" after losing an intellectual property case earlier this decade to the World Wildlife Fund.
ADDITION: The D&O Diary also has a post on this showdown.
While it probably wouldn't qualify as a replacement for professional wrestling, now we have the makings of a showdown.
As noted here last month, the plaintiff-side firm of Kahn Gauthier Swick, LLC announced the creation of their own "Options Pricing Investigations Division."
As an aside, I had forgotten that the former "World Wrestling Federation" had been forced to change their name to "World Wrestling Entertainment" after losing an intellectual property case earlier this decade to the World Wildlife Fund.
ADDITION: The D&O Diary also has a post on this showdown.
Wednesday, July 12, 2006
Securities Litigation and Its Lawyers, Perfect Together
Professors Stephen J. Choi (New York University School of Law) and Robert B. Thompson (Vanderbilt University School of Law) have authored a paper Securities Litigation and Its Lawyers: Changes During the First Decade After PSLRA that contains a fairly interesting analysis of the post-PSLRA behavior of class action firms and their institutional investor clients.
Dividing the decade since the PSLRA went into effect, the article bisects the intervening years into two periods:
Their hypothesis:
One last note, though. The article states:
Listen up academia - Mutual funds can and do serve as lead plaintiffs in private securities litigation. You've been warned.
As an aside, Choi and Thompson provide a cogent analysis of one of the potential disincentives for private institutional investors to serve as lead plaintiffs, noting:
Apologies for the title to former New Jersey Governor Tom Kean.
Dividing the decade since the PSLRA went into effect, the article bisects the intervening years into two periods:
the immediate several years right after the enactment of the PSLRA, where law firm behavior likely reflected the need to find a plaintiff or group of plaintiff with the largest financial stake, likely outside the group of institutional investors who initially remained on the sidelines (the "initial" post-PSLRA period)and
the years after the initial several years (2000 and beyond) where plaintiff law firm behavior reflected the need to respond to institutional investors as they came to play a greater role as lead plaintiffs (the "mature" post-PSLRA period).In the former period, the authors found that so-called "top plaintiff law firms" (as determined by settlement values obtained in a sampling of pre- and post-PSLRA cases) were more likely to join together with lower ranked law firms compared with the pre-PSLRA period.
Their hypothesis:
First, the need to create a large group of lead plaintiffs (at least where institutional investors do not act as lead plaintiffs) may lead law firms to join with lower ranked law firms that bring specific lead plaintiffs to the group . . . Second, severe limits on discovery prior to the hearing on the motion to dismiss in the post-PSLRA period increased the importance of diversification as a motive in joining with other law firms. To the extent diversification simply requires other firms willing to help pay the costs of pursuing any particular litigation, we predict that an increased diversification motivation will lead to less discriminate pairing among plaintiffs law firms.There is much more in this draft article, but it will have to wait for another day.
One last note, though. The article states:
There has been a substantial increase in participation of public pension firms, a group that includes well-known public employees' funds such as Calpers, NYCERS and funds related to various unions. At the same time, there has not been any substantial involvement by private investors, such as mutual funds, banks, and insurance companies.This is the same fallacy that I have been on a quixotic quest to banish from the kingdom, as detailed in prior posts here, here, and here.
Listen up academia - Mutual funds can and do serve as lead plaintiffs in private securities litigation. You've been warned.
As an aside, Choi and Thompson provide a cogent analysis of one of the potential disincentives for private institutional investors to serve as lead plaintiffs, noting:
In a world where investment manager performance is regularly measured by relative returns, the possibility of competing managers' free riding on your efforts, or the comparative option of your free riding on other investors operates as a disincentive to participate as a lead investor.Food for thought.
Apologies for the title to former New Jersey Governor Tom Kean.
Tuesday, July 11, 2006
Diversity Training
Late last month, Magistrate Judge Franklin Noel ordered counsel in the UnitedHealth Group Inc. (NYSE: UNH) derivative litigation to provide:
While a number of firms had filed motions seeking appointment as lead counsel, only two groups of firms filed a response to Judge Noel's order. They took slightly different tacks, though.
As an aside, neither response took issue with the use of the term "gender" as opposed to "sex" to describe the information the Court sought. There is a difference, as noted in Encyclopædia Britannica's definition of gender identity. Gender is:
The firms of Chestnut & Cambronne, P.A. and Shapiro Haber & Urmy LLP comprise one group, and represent Jan Brandin, the first plaintiff to file a derivative complaint.
Having been given little guidance by Magistrate Noel as to how inclusive the response was to be, the response filed by Chestnut & Cambronne and Shapiro Haber & Urmy, categorized and specifically identified the attorneys working on the litigation in a number of ways, including their gender and sexual orientation.
The other group to file a response to Magistrate Noel's order, represents the "Pension Fund Group" and includes the firms of Bernstein Litowitz Berger & Grossmann LLP and Grant & Eisenhofer, P.A.
The Pension Fund Group's response included statistical information on all of the employees at both firms as well as a breakdown of the attorneys, noting the number and percentage of each group that "identify themselves as members of racial or ethnic groups commonly described as 'minorities' in the United States." While noting that certain attorneys at Bernstein Litowitz are openly homosexual, the Pension Fund Group's response did not specifically identify those attorneys.
Another interesting note.
Judge Noel's order also requested information on the "makeup of previous steering committees to which [the firms] have been assigned."
Both Bernstein Litowitz and Grant & Eisenhofer indicated in their response that they had not served in any capacity on a "steering committee," as they regularly serve only in the capacity of either lead or co-lead counsel.
For those lead plaintiff junkies out there (all three of you), the Pension Fund Group is composed of:
information concerning the minority and gender membership in your respective law firms, and on the proposed leadership team.and:
a statement advising the Court of any legal-ethical issues raised concerning each individual attorney, and that attorney's law firm in the past ten years.The AP has a story on the Judge Noel's order, here and The Volokh Conspiracy has a post here.
While a number of firms had filed motions seeking appointment as lead counsel, only two groups of firms filed a response to Judge Noel's order. They took slightly different tacks, though.
As an aside, neither response took issue with the use of the term "gender" as opposed to "sex" to describe the information the Court sought. There is a difference, as noted in Encyclopædia Britannica's definition of gender identity. Gender is:
an individual's self-conception as being male or female, as distinguished from actual biological sex. For most persons, gender identity and biological characteristics are the same. There are, however, circumstances in which an individual experiences little or no connection between sex and gender.Back to the business at hand.
The firms of Chestnut & Cambronne, P.A. and Shapiro Haber & Urmy LLP comprise one group, and represent Jan Brandin, the first plaintiff to file a derivative complaint.
Having been given little guidance by Magistrate Noel as to how inclusive the response was to be, the response filed by Chestnut & Cambronne and Shapiro Haber & Urmy, categorized and specifically identified the attorneys working on the litigation in a number of ways, including their gender and sexual orientation.
The other group to file a response to Magistrate Noel's order, represents the "Pension Fund Group" and includes the firms of Bernstein Litowitz Berger & Grossmann LLP and Grant & Eisenhofer, P.A.
The Pension Fund Group's response included statistical information on all of the employees at both firms as well as a breakdown of the attorneys, noting the number and percentage of each group that "identify themselves as members of racial or ethnic groups commonly described as 'minorities' in the United States." While noting that certain attorneys at Bernstein Litowitz are openly homosexual, the Pension Fund Group's response did not specifically identify those attorneys.
Another interesting note.
Judge Noel's order also requested information on the "makeup of previous steering committees to which [the firms] have been assigned."
Both Bernstein Litowitz and Grant & Eisenhofer indicated in their response that they had not served in any capacity on a "steering committee," as they regularly serve only in the capacity of either lead or co-lead counsel.
For those lead plaintiff junkies out there (all three of you), the Pension Fund Group is composed of:
- St. Paul Teachers' Retirement Fund Association
- Public Employees' Retirement System of Ohio
- State Teachers' Retirement System of Ohio
- Public Employees' Retirement System of Mississippi
- Jacksonville Police & Fire Pension Fund
- Louisiana Municipal Police Employees' Retirement System
- Louisiana Sheriffs' Pension & Relief Fund
- Fire & Police Pension Association of Colorado
- The Connecticut Retirement Plans And Trust Funds
Monday, July 10, 2006
Sarbanes-Oxley For Dummies - Really!
While catching up on some long overdue reading, an article in the May 2006 issue of CFO Magazine alerted me to the availability of a laugh-out-loud book title, Sarbanes-Oxley For Dummies.
I was further delighted to see that it is the best selling Sarbanes-Oxley related book on Amazon.
The author, Jill Gilbert Welytok, is a CPA and a practicing attorney, and is the author of a host of other books, including the QuickBooks Bible and The Online Investing Bible.
And Welytok's Amazon profile lists another laugh-out-loud book as one of her favorites - Captain Underpants and the Wrath of the Wicked Wedgie Woman.
All joking aside, her Sarbanes-Oxley book has received excellent reviews at Amazon.
ADDITION - If you intend to buy this book (and I won't judge you), I urge you to visit Amazon through the following link:
This benefits, OBG Cocker Spaniel Rescue, an all-volunteer non-profit animal rescue organization based in Washington DC that is dedicated to the rescue, medical care, rehabilitation and placement by adoption of homeless and/or abandoned cocker spaniels and cocker spaniel mixes to good homes in the Mid-Atlantic region.
We adopted Norm, our 4 year-old cocker spaniel last July through OBG.
Sunday, July 09, 2006
International Institutional Investor "Arms Race"
One of the newer trends in the securities class action arena is a rise in the profile of foreign plaintiffs in US litigation.
Adding to this trend is the increasing emphasis that plaintiff side firms have placed on solidifying their relationships with foreign institutional investors and outside counsel for those investors.
Earlier this year, Labaton Sucharow & Rudoff LLP issued a press release announcing a joint alliance with the TILP Group, a German based firm with offices in Europe and the Middle East that represents private and institutional investors in Germany, Austria, Ireland and Luxembourg. A related announcement by TILP is available here.
The European invasion is being led by Labaton partner Eric J. Belfi, a recent addition to the firm, according to this release.
Other firms certainly represent international clients in securities class actions in the United States, but none have so publicly indicated that they are working together with foreign attorneys to prosecute securities class actions.
For example, Bernstein Litowitz Berger & Grossmann LLP represents the Ontario Teachers' Pension Plan Board in The Williams Cos. securities litigation and the Nortel Corp. securities litigation.
Lerach Coughlin Stoia Geller Rudman & Robbins LLP provides a list on their website of foreign institutional investors they represent, including The London Pensions Fund Authority, and UniSuper - a fund dedicated "exclusively to all who work in Australia's higher education and research sector."
Schiffrin & Barroway, LLP makes their website available in 17 languages (well 15 and two Chinese versions, but I'm not counting) and dedicates a specific part of their website and firm brochure to foreign institutional investors.
Not to be outdone, Cohen, Milstein, Hausfeld & Toll, P.L.L.C. also has an international practice area portion of their website and boasts that they have "affiliated offices in the United Kingdom, Italy, South Africa, Panama, Australia and China." Sadly though, the "International Securities Case" page is "Coming Soon."
Cohen Milstein is also among the growing group of American class action firms that sponsor, speak at, and attend international pension fund summits such as the European Pension Investment Forum and the UK & Irish Pension Summit.
Adding to this trend is the increasing emphasis that plaintiff side firms have placed on solidifying their relationships with foreign institutional investors and outside counsel for those investors.
Earlier this year, Labaton Sucharow & Rudoff LLP issued a press release announcing a joint alliance with the TILP Group, a German based firm with offices in Europe and the Middle East that represents private and institutional investors in Germany, Austria, Ireland and Luxembourg. A related announcement by TILP is available here.
The European invasion is being led by Labaton partner Eric J. Belfi, a recent addition to the firm, according to this release.
Other firms certainly represent international clients in securities class actions in the United States, but none have so publicly indicated that they are working together with foreign attorneys to prosecute securities class actions.
For example, Bernstein Litowitz Berger & Grossmann LLP represents the Ontario Teachers' Pension Plan Board in The Williams Cos. securities litigation and the Nortel Corp. securities litigation.
Lerach Coughlin Stoia Geller Rudman & Robbins LLP provides a list on their website of foreign institutional investors they represent, including The London Pensions Fund Authority, and UniSuper - a fund dedicated "exclusively to all who work in Australia's higher education and research sector."
Schiffrin & Barroway, LLP makes their website available in 17 languages (well 15 and two Chinese versions, but I'm not counting) and dedicates a specific part of their website and firm brochure to foreign institutional investors.
Not to be outdone, Cohen, Milstein, Hausfeld & Toll, P.L.L.C. also has an international practice area portion of their website and boasts that they have "affiliated offices in the United Kingdom, Italy, South Africa, Panama, Australia and China." Sadly though, the "International Securities Case" page is "Coming Soon."
Cohen Milstein is also among the growing group of American class action firms that sponsor, speak at, and attend international pension fund summits such as the European Pension Investment Forum and the UK & Irish Pension Summit.
Friday, July 07, 2006
Hypercom Complaint Dismissed (Again)
Today, Hypercom announced the dismissal with prejudice of the Second Consolidated Amended Class Action Complaint filed against the company and its former Chief Financial Officer, John W. Smolak. The litigation was pending in the District of Arizona.
A copy of the second amended complaint is available here.
According to another release from the company, the prior complaint was dismissed with leave to amend, back on January 25, 2006.
Co-lead counsel are Schiffrin & Barroway, LLP and Cohen Milstein Hausfeld & Toll, P.L.L.C.
A copy of the second amended complaint is available here.
According to another release from the company, the prior complaint was dismissed with leave to amend, back on January 25, 2006.
Co-lead counsel are Schiffrin & Barroway, LLP and Cohen Milstein Hausfeld & Toll, P.L.L.C.
Yet Another Press Release Permutation
It appears that someone forgot to send the vigorous defense memo to Parlux Fragrances, Inc.
According to a press release issued by the Fort Lauderdale-based fragrance maker and distributor, the company was recently served with both a shareholder's class action complaint and a derivative complaint, both filed in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida. The derivative complaint was filed by the NECA-IBEW Pension Fund.
Both the derivative and class cases relate to a proposal, detailed in Parlux's June 14, 2006 Form 8-K, ) from the company's CEO, Ilia Lekach, to acquire all of the outstanding shares of common stock of Parlux. As noted here, this is not the first time that Lekach has attempted to take the company private.
Parlux's release goes on to state that:
As an aside, it is with some sadness that I note, according to Wikipedia, the National Enquirer has dropped that famous catchphrase.
According to a press release issued by the Fort Lauderdale-based fragrance maker and distributor, the company was recently served with both a shareholder's class action complaint and a derivative complaint, both filed in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida. The derivative complaint was filed by the NECA-IBEW Pension Fund.
Both the derivative and class cases relate to a proposal, detailed in Parlux's June 14, 2006 Form 8-K, ) from the company's CEO, Ilia Lekach, to acquire all of the outstanding shares of common stock of Parlux. As noted here, this is not the first time that Lekach has attempted to take the company private.
Parlux's release goes on to state that:
Parlux and the other named defendants have engaged experienced Florida securities counsel and intend to respond to the Class Action and the Derivative Action in a timely manner, but Parlux believes that the Class Action and the Derivative Action are without merit.Be that as it may, enquiring minds want to know if the defendants will mount a vigorous defense?
As an aside, it is with some sadness that I note, according to Wikipedia, the National Enquirer has dropped that famous catchphrase.
Thursday, July 06, 2006
Merrill Lynch Settles Enron Bankruptcy Claims
According to press reports here (AP via Yahoo! Finance) and here (MarketWatch) Merrill Lynch & Co. will pay $29.5 million to settle claims asserted against it by Enron Corp. as part of the so-called MegaClaims litigation in the bankruptcy court.
In addition, Merrill Lynch agreed to drop approximately $74 million of claims that it had asserted in the bankruptcy proceeding against the Enron estate.
Merrill Lynch remains a defendant in the Enron securities class action, currently pending in the Southern District of Texas and set for trial on October 16, 2006.
In addition, Merrill Lynch agreed to drop approximately $74 million of claims that it had asserted in the bankruptcy proceeding against the Enron estate.
Merrill Lynch remains a defendant in the Enron securities class action, currently pending in the Southern District of Texas and set for trial on October 16, 2006.
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