Have You Heard for, May 20, 2004
In This Issue:
•
Allos Therapeutics Inc. (NASDAQ:ALTH)
•
BISYS Group, Inc. (NYSE:BSG)
•
Descartes Systems Group Inc. (Nasdaq:DSGX)
•
Krispy Kreme Doughnuts, Inc. (NYSE:KKD)
•
Lancer Corporation (AMEX:LAN)
•
Liquidmetal Technologies Inc. (Nasdaq:LQMTE)
•
Minnesota Seniors Group Sues 9 Drug Makers
•
SPSS, Inc. (Nasdaq:SPSSE)
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Allos Therapeutics Inc. (NASDAQ:ALTH)
A class action lawsuit was filed on May 19, 2004 in the United States District Court
for the District of Colorado, on behalf of persons who purchased or otherwise
acquired publicly traded securities of Allos Therapeutics Inc. ("Allos" or the
"Company") (NASDAQ:ALTH) between May 29, 2003 and May 3, 2004, inclusive, (the
"Class Period"). The lawsuit was filed against Allos and Michael Hart
("Defendants").
The complaint alleges that Defendants violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
Specifically the complaint alleges that Allos misled the investing public by
issuing a series of materially false and misleading statements highlighting the
purported efficacy of the Company's radiation sensitizer RSR13 ("Efaproxiral")
for the treatment of brain metastases in patients with breast cancer, as well as
the likelihood that this drug would receive approval from the U.S. Food and Drug
Administration ("FDA").
On April 30, 2004 and May 3, 2004, it was announced by the Oncologic Drugs
Advisory Committee ("ODAC") of the FDA, that it concluded by a 16-1 vote, to
recommend that the FDA not approve Efaproxiral. In recommending rejection of
Efaproxiral, the ODAC found that "the evidence of drug efficacy needs to be much
stronger to be convincing." As a result of this announcement, the price of Allos
shares fell $2.09, or 45% to close at $2.55 on extraordinary volume.
Contact EndFraud.com for more information
BISYS Group, Inc. (NYSE:BSG)
A class action has been commenced in the United States District Court for the
Southern District of New York on behalf of purchasers of The BISYS Group, Inc.
("BISYS") (NYSE:BSG) publicly traded securities during the period between October
23, 2000 and May 17, 2004 (the "Class Period").
The complaint charges BISYS and certain of its officers and directors with
violations of the Securities Exchange Act of 1934. BISYS supports more than
20,000 financial institutions and corporate clients with products and services.
The complaint alleges that during the Class Period, defendants caused BISYS
shares to trade at artificially inflated levels through the issuance of false and
misleading financial statements. As a result of this inflation, BISYS was able to
raise $250 million in a convertible note offering while the individual defendants
were able to reap more than $25 million in insider trading proceeds.
On May 17, 2004, the Company issued a press release which stated that "(b)ased
upon a continuing review and analysis of commissions receivable in its Life
Insurance division, BISYS has determined that the previously reported adjustment
of $24.7 million ($15.5 million net of tax) to commissions receivable in its Life
Insurance division will be increased to approximately $70 million to $80 million
... BISYS has also determined that the adjustment requires a restatement of its
financial results for each of the fiscal years ended June 30, 2003, 2002 and
2001, as well as its interim results for fiscal 2004, to reflect the impact of
the adjustment on each of the periods presented." On this news, the Company's
share price dropped below $13.
Contact EndFraud.com for more information
Descartes Systems Group Inc. (Nasdaq:DSGX)
Notice is hereby given that a class action lawsuit was filed in the United States
District Court for the Southern District of New York on behalf of all purchasers of
securities of The Descartes Systems Group Inc. (Nasdaq:DSGX) ("Descartes" or the
"Company") from June 4, 2003 through May 6, 2004, inclusive (the "Class Period").
The complaint charges that Descartes, Manuel Pietra and Colley Clarke violated
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material misrepresentations to the
market between June 4, 2003 and May 6, 2004, about its financial condition, thereby
artificially inflating the price of Descartes' stock. More specifically, the
Complaint alleges that the Company failed to disclose and misrepresented the
following material adverse facts which were known to defendants or recklessly
disregarded by them: (1) that the Company had materially inflated its financial
results; (2) that the Company maintained insufficient reserves for doubtful
accounts, in light of the fact that the Company knew and/or recklessly disregarded
the fact that it was having extreme difficulties in collecting receivables
especially in the Asia-Pacific Region; (3) that the Company had overstated its
revenues by at least $1.1 million by recognizing revenues from a significant
contract with a customer in China that was impaired by regulatory action of the
Chinese Government, a fact the Company knew and/or recklessly disregarded; (4) that
the Company had failed to take sufficient write downs of assets that it had
determined to be impaired; (5) that the Company lacked adequate internal controls
and was therefore unable to ascertain the true financial condition of the Company;
and (6) that as a result, the value of the Company's net income and financial
results were materially overstated at all relevant times.
On May 6, 2004, after the markets had closed, Descartes announced that its revenues
and loss per share for the three months ended April 30, 2004 will be materially
below the expectations set forth in its March 10, 2004 press release. News of this
shocked the market. Shares of Descartes fell $0.76 per share, or 38.97 percent, to
close at $1.19 per share on May 7, 2004.
Contact EndFraud.com for more information
Krispy Kreme Doughnuts, Inc. (NYSE:KKD)
A class action lawsuit was filed on May 12, 2004 on behalf of purchasers of the
securities of Krispy Kreme Doughnuts, Inc. ("Krispy Kreme" or the "Company")
(NYSE:KKD) between August 21, 2003 and May 7, 2004, inclusive (the "Class Period"),
seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange
Act").
The action is pending in the United States District Court for the Middle District
of North Carolina against defendants Krispy Kreme, Randy S. Casstevens, Scott A.
Livengood, Michael C. Phalen and John W. Tate.
The complaint alleges that Krispy Kreme is a specialty retailer of doughnuts and
charges Krispy Kreme and certain of its officers and directors of violating the
Securities Exchange Act of 1934. The complaint alleges that, during the Class
Period, Krispy Kreme touted its strong operational growth, reporting substantial
increases in revenues, income and earnings per share and representing that the
Company would continue to grow. The complaint further alleges that, unbeknownst
to investors, defendants failed to disclose that, as a result of the trend toward
low-fat, low carbohydrate diets, such as the South Beach and Atkins diets, Krispy
Kreme had been suffering from increasingly poor sales performance. The complaint
alleges that there were other undisclosed reasons for the Company's poor
performance: While the opening of new Krispy Kreme stores created initial
consumer excitement and a corresponding surge in sales, sales at those
newly-opened stores quickly tapered off. This was especially damaging to the
Company in smaller markets with a limited number of potential new customers.
Rather than cultivate a base of steady customers, the Company instead attempted
to capitalize on Krispy Kreme's "fad appeal" and adopted a business model and
strategy for increasing sales that was predicated on the perpetual addition of
new stores and the hyping of the Company's entry into new markets ---- a tactic
that resulted in unsustainable surges in sales that fell off once the hype ceased
and the novelty of the new store wore off. The complaint further alleges that the
Company's strategy of offsetting slowing retail sales with wholesale shipments to
supermarkets was not working because the Company's wholesale business was more
expensive to operate and, therefore, resulted in a lower profit margin than
in-store sales and because the Company's wholesale business was saturating the
market with Krispy Kreme products, cannibalizing the company's retail operations,
perhaps undermining them as well, and decreasing the Company's overall profit
margin.
On May 7, 2004, defendants issued a news release in which they announced that
Krispy Kreme's expected fiscal 2005 diluted earnings per share from continuing
operations, excluding charges, to be 10% lower than previously announced, and
that Krispy Kreme was closing certain company-owned stores and reducing plans to
open new ones. Krispy Kreme also announced that it was closing its Montana Mills
bread stores, an operation that it had bought a year ago, and that it was going
to write-off as much as $40 million on the venture; as recently as mid-April,
defendants had said they intended to refine and expand the operation.
On this news, shares of Krispy Kreme fell $9.29, or 29%, to close at $22.51, a
new 52-week low and more than 50% below Krispy Kreme's 52-week high of $49.74.
The trading volume was 20.5 million shares, the largest ever for Krispy Kreme and
amounting to a third of the shares outstanding.
Contact EndFraud.com for more information
Lancer Corporation (AMEX:LAN)
A class action lawsuit was filed on May 14, 2004 in the United States District Court
for the Western District of Texas, on behalf of persons who purchased or otherwise
acquired publicly traded securities of Lancer Corporation ("Lancer" or the
"Company") (AMEX:LAN) between October 26, 2000 and February 4, 2004, inclusive, (the
"Class Period"). The lawsuit was filed against Lancer and George F. Schroeder, David
F. Green and the Coca-Cola Company (NYSE:KO)("Defendants").
The complaint alleges that Defendants violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
Specifically, the complaint alleges that during the Class Period, Defendants
engaged in a pattern of fraudulent conduct involving the issuance of a series of
false and misleading statements. The complaint additionally alleges that these
statements were materially false and misleading because they materially described
inaccurately the nature of Lancer's revenue by saying it was derived from
legitimate business transactions, when in reality, substantial revenues were
derived as a result of a scheme to artificially set the sales prices of Lancer's
products to its customers. The goal of the scheme, the complaint further asserts,
was to manipulate the sales of fountain products. In addition, the complaint
alleges that Lancer's public statements failed to fully reveal that it had major
manufacturing problems, which resulted in a high defect rate in its products.
Lastly, the complaint alleges that Lancer engaged in a fraudulent scheme with its
largest customer, Coca-Cola Co. to artificially create demand for a new line of
soda machine dispensers that Lancer was manufacturing for Coca-Cola to sell to
its commercial customers.
On January 14, 2004, Lancer announced that the Securities & Exchange Commission
had launched a formal investigation into Lancer's reporting of its financial
statements, revenue and cost recognition, and internal financial and accounting
controls. On February 2, 2004, Lancer announced that the Company's longstanding
auditor KPMG LLP ("KPMG"), had resigned. Lancer also disclosed that KPMG
indicated that the reason for its resignation was that Lancer had not taken
timely and appropriate remedial actions with respect to "likely illegal acts."
KPMG's comments were in stark contrast to Lancer's statements on January 30,
2004, that its audit committee did not find sufficient evidence of "intentional
misconduct" or "accounting irregularities." Trading of Lancer shares has been
halted since February 2, 2004. When and if trading resumes, it is virtually
certain that Lancer common stock will trade far below the $7.50 trading price at
which it was halted.
Contact EndFraud.com for more information
Liquidmetal Technologies Inc. (Nasdaq:LQMTE)
Notice is hereby given that a class action lawsuit was filed in the United States
District Court for the Middle District of Florida on behalf of all purchasers of the
common stock of Liquidmetal Technologies Inc. (Nasdaq:LQMTE) ("LQMT" or the
"Company") from May 22, 2002 through March 30, 2004, inclusive (the "Class Period").
The complaint charges that LQMT, John Kang, and Brian McDougal violated Sections
10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b- 5 promulgated
thereunder, by issuing a series of material misrepresentations to the market between
May 22, 2002 through March 30, 2004, about its financial results. More
specifically, the Complaint alleges that the Company failed to disclose and
misrepresented the following material adverse facts which were known to the
defendants or recklessly disregarded by them; (1) that LQMT failed to make its
product commercially feasible due to its high manufacturing cost; (2) that LQMT,
struggling with the lack of market acceptance for the product, attempted to boost
revenues through fraudulent means via a deal with a South Korean metals processing
company; (3) that LQMT's improving financial results were only made possible though
improper revenue recognition practices in violation of Generally Accepted Accounting
Principles ("GAAP").
On February 20, 2004, the Company disclosed that it would have to restate revenues
for the third and fourth quarters of 2002 and the first quarter of 2003 due to
improper revenue recognition. On March 30, 2004, defendants revealed that the
Company's 10-K has been indefinitely delayed due to its inability to complete the
audit of prior years' financial results. On April 29, 2004, LQMT announced that it
received a Nasdaq Staff Determination indicating that because the company has not
timely filed a Form 10-K with the SEC for the period ended December 31, 2003, LQMT
faces delisting from NASDAQ. In response to the news, the price of LQMT stock
declined during the class period to close at slightly over $3 per share on March 30,
2004, a drop of over 80% from the stock's Class Period high.
Contact EndFraud.com for more information
Minnesota Seniors Group Sues 9 Drug Makers
ST. PAUL, Minn. (AP) - A Minnesota seniors group sued nine major pharmaceutical
manufacturers on Wednesday, alleging the companies have conspired to keep U.S.
medicine prices artificially high by blocking Canadian imports.
Peter Wyckoff, executive director of the Minnesota Senior Federation's metropolitan
region office, said the lawsuit - which the organization hopes will be awarded
class-action status - represents a new phase in the group's efforts to make it
easier to import drugs at lower Canadian prices.
``We have three branches of government that can change things,'' he said. ``This is
the third.''
The lawsuit in U.S. District Court in Minneapolis alleges Pfizer, GlaxoSmithKline,
Abbott Laboratories, AstraZeneca, Boehringer Ingelheim, Eli Lilly, Merck, Novartis
and Wyeth Pharmaceuticals have acted in concert to block the supply of name-brand
drugs to Canadian pharmacists that sell to U.S. citizens.
GlaxoSmithKline spokeswoman Nancy Pekarek said the company acted independently of
the other companies, in an effort to preserve supplies of its medicines in Canada
for that country.
In a statement, Pfizer said its practices comply with U.S. law and federal regulations.
``The simple truth is that the importation of pharmaceutical products into the U.S.
from Canada is not only illegal, but also dangerous because it increases the
opportunity to introduce counterfeit or unapproved pharmaceutical products into the
market,'' said the statement from spokesman Bryant Haskins.
Representatives for the remaining companies either did not immediately respond to
calls for comment or said they could not respond because they had not yet seen the
lawsuit.
Merck spokeswoman Anita Larsen declined to comment on the suit, but said Merck ``has
not announced any plans to restrict or otherwise limit the availability of our
medicines in Canada.''
It was brought on behalf of the federation, which runs a program that helps its
members to import from Canadian pharmacies, as well as three individual members who
buy brand name drugs in the U.S. and ``all others similarly situated.''
``I think they're harmed because they have to pay a higher price here,'' said
attorney Marvin Miller of the Chicago-based firm Miller Faucher and Cafferty, which
is handling the case.
The lawsuit seeks attorneys' fees, unspecified damages and a stop to the companies'
anti-import efforts. It's premised on federal antitrust laws as well as specific
state consumer protection laws.
Contact EndFraud.com for more information
SPSS, Inc. (Nasdaq:SPSSE)
A class action lawsuit has been filed in the United States District Court for the
Northern District of Illinois on behalf of purchasers of SPSS, Inc. (Nasdaq:SPSSE)
("SPSS" or the "Company") publicly traded securities during the period between May
2, 2001 and March 30, 2004, inclusive
The complaint charges that SPSS, Jack Noonan, and Edward Hamburg, violated Sections
10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b- 5 promulgated
thereunder, by issuing a series of material misrepresentations to the market between
May 2, 2001 and March 30, 2004, about the Company's revenues, thereby artificially
inflating the price of SPSS common stock. More specifically, the Complaint alleges
that the Company failed to disclose and misrepresented the following material
adverse facts which were known to defendants or recklessly disregarded by them: (1)
that the Company overstated its revenue by between $3 million and $6 million; (2)
that the Company accomplished this through improper recognition of revenue in
violation of Generally Accepted Accounting Principles ("GAAP") and the Company's own
accounting interpretations on revenue recognition; (3) the Company's earnings per
share were materially inflated; and (4) that as a result of the above, the Company's
financial results were inflated at all relevant times.
On March 30, 2004, SPSS announced that it would delay the filing of its annual
report on Form 10-K with the United States Securities and Exchange Commission to
complete an additional review initiated by the Company. News of this shocked the
market. Shares of SPSS fell $2.55 per share or 12.17 percent on March 31, 2004 to
close at $18.40 per share.
Contact EndFraud.com for more information
If you have any questions regarding the content of this newsletter,
please send an e-mail to mdb@endfraud.com.
Sincerely,
EndFraud.com
** The material contained in this newsletter is for general informational purposes
only, is not intended as advice and should not be relied upon in any manner
**
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