RenaissanceRe Sued
July 31, 2005
If you purchased stock in RenaissanceRe Holdings Ltd. (NYSE: RNR) between January 24, 2002 and July 25, 2005, you may be eligible to participate in a class action lawsuit brought in New York by the law offices of Brian M. Felgoise, P.C.
The case is pending in the United States District Court for the Southern District of New York, against the company and certain key officers and directors.
The action charges that defendants violated the federal securities laws by issuing a series of materially false and misleading statements to the market throughout the Class Period which statements had the effect of artificially inflating the market price of the Company’s securities.
No class has yet been certified in the above action. Until a class is certified, you are not represented by counsel unless you retain one. If you purchased the stock listed above during the class period, you have certain rights. To be a member of the class you need not take any action at this time, and you may retain counsel of your choice.
To find out more about this story, click on the link, or for more information about the lawsuit, contact the attorney at FelgoiseLaw@verizon.net or by calling (215) 886-1900.
Cyberonics Sued
July 31, 2005
Cyberonics, the medical device manufacturer trying to get FDA approval for its vagus nerve implant to be used to treat depression, was sued on June 17 in the United States District Court for the Southern District of Texas. If you bought Cyberonics stock between June 15, 2004, and October 1, 2004, you may be eligible to join in the class action. The Houston Business Journal reported that:
Meanwhile, on July 26, shares of Cyberonics (Nasdaq: CYBX) dropped more than 10 percent after the company revised its financial outlook.
In a July 28 filing with the U.S. Securities and Exchange Commission, Cyberonics said that board director Ronald A. Matricaria resigned on July 24 because he could not “support the direction of the governance practices of the Cyberonics board, in particular its practices regarding CEO compensation and succession.” Robert “Skip” Cummins is Cyberonics’ chairman and CEO.
You can read the story here.
Weiss Lawsuits Under Scrutiny
July 31, 2005
In a not so indirect manner, the many class action lawsuits filed by the Milberg Weiss law firm are under close scrutiny by the U. S. Attorney’s Office in Los Angeles. This comes as part of a 67-page indictment handed down June 23 against San Diego attorney Bill Lerach, once a prime pump for Weiss’s law firm. The “broad investigation into at least 50 class-action suits filed against U.S. companies between 1976 and 2004″ were reported in the San Diego Union-Tribune by staff writer Bruce V. Bigelow. He also wrote that the settlements and judgments of these suits have amounted to “tens of billions of dollars.”
The 17-count indictment names Seymour M. Lazar, a 78-year-old Palm Springs investor and former lawyer. The government alleges that Lazar got more than $2.4 million in illegal kickbacks by serving as the lead plaintiff in more than 50 class-action lawsuits against U.S. companies.
Also indicted was Paul T. Selzer, 64, a Palm Springs lawyer who allegedly handled the payments from the law firm that filed the fraud suits on behalf of Lazar or members of his family.
Both Lazar and Selzer pleaded not guilty to the charges.
The indictment does not identify the Milberg Weiss law firm by name. Rather, it says that a law firm “with principal offices in New York and California” made as much as $44 million in fees from Lazar’s cases.
Federal prosecutors contend that Lazar was promised a share of the legal fees generated by such cases if he agreed to serve as the first plaintiff named in class-action cases, including shareholder suits. In class-action cases, the lead plaintiff cannot have a special interest or hidden inducement beyond others in the class.
Until Congress reformed federal securities law in 1995, a number of law firms maintained close ties to plaintiffs such as Lazar. That’s because the first firm to file a shareholder suit usually was put in charge of cases where there were multiple suits filed.
Another Vioxx class action approved
July 30, 2005
From the Los Angeles Times:
A New Jersey judge ruled that health plans that paid for members’ Vioxx prescriptions can sue drug maker Merck & Co. as a class to recover billions of dollars they spent on the recalled painkiller.
Superior Court Judge Carol E. Higbee in Atlantic City granted a motion filed by a labor union health plan to allow a nationwide class-action lawsuit to proceed under the state’s consumer fraud act. Merck, based in Whitehouse Station, N.J., had opposed the motion.
The welfare fund of an engineers union had sued Merck in early 2003, arguing that its health plan would not have covered Vioxx prescriptions but for Merck’s deception about its risks. Merck voluntarily pulled Vioxx from the market in September 2004, when research showed that the drug increased risk of heart attack and stroke.
Ameriquest settlement of $325 million
July 29, 2005
Here’s the latest on Ameriquest:
Ameriquest Capital Corp. has set aside $325 million for potential settlement agreements with 30 states over investigations into its lending practices, the company announced Thursday.
Ameriquest, which lends to people with poor credit and modest incomes, has been dogged by consumer complaints and lawsuits accusing the company of fraud and falsification of documents.
The Orange County-based parent of Ameriquest Home Mortgages said in a statement it has set aside the money in connection with ongoing discussions with “representatives of the financial regulatory agencies or attorneys general of 30 states.”
In March it agreed to pay $50 million to settle a class action lawsuit alleging the company cheated thousands of borrowers in four states: Alabama, Alaska, California and Texas. The settlement, finalized in June, did not include any admission of liability.
The $325 million represents the company’s best estimate of “its maximum financial liability,” Thursday’s statement said.
Ironically, “The announcement came the same day that President Bush nominated Ameriquest Chairman Roland Arnall as U.S. ambassador to the Netherlands.” Hm…
HealthSouth settles class action
July 29, 2005
HealthSouth, “working to recover from massive accounting fraud,” is accountable now for a$25 million settlement:
Under the terms of the settlement, HealthSouth will contribute $7 million and its insurance carriers will pay $18 million to its employee stock benefit plan to settle the dispute.
Neither HealthSouth, nor its insurance carriers, have admitted or denied the claims.
Reliant Energy pays $68 million
July 29, 2005
Reliant Energy today agreed to pay $68 million to settle a shareholder class action:
HOUSTON (AP) — Electricity provider Reliant Energy Inc. said Friday it agreed to settle all shareholder class action lawsuits related to alleged securities laws violations for certain trading activities that took place between 1991 and 2001.
The suits were consolidated in the U.S. District Court in Houston. Under terms of the settlement, which is subject to court approval, Reliant will pay $68 million, of which $61.5 million is covered by Reliant’s director and officer insurance policies.
The company said it will make a $6.5 million cash payment and pay certain legal costs. In addition, Deloitte & Touche LLP — another defendant in the litigation — has agreed to pay $7 million, bringing the total value of the settlement to $75 million.
U. of Minnesota doctor at center of Vioxx suits
July 28, 2005
Jeremy Olson of the St. Paul Pioneer Press is reporting that a “University of Minnesota physician may be key to the more than 4,200 lawsuits against the maker of Vioxx, because court records suggest the company retaliated when he offered early warnings of the drug’s danger.”
Dr. M. Thomas Stillman was warning of potential cardiac risks associated with Vioxx in 1999, but Merck didn’t pull the prescription drug from the marketplace until late 2004 after additional research verified the risks.
Prior to that decision, Merck pressured physicians who it said were presenting unproven information about the popular painkiller.
The first trial of a Vioxx lawsuit started earlier this month in Texas. Stillman has not been asked to testify in that one, but Merck’s strategy to “neutralize” Stillman and other physicians critical of Vioxx has come up frequently in the first week of testimony. Merck’s actions against Stillman also are spelled out in lawsuits filed in New Jersey, where the company is based.
Here’s the irony:
…Stillman is among the doctors who believe Vioxx should still be on the market because it causes fewer stomach ulcers than other painkillers.
The drug simply needs to come with clearer labeling so patients can weigh the benefit against the risk, Stillman said.
“There isn’t a drug we give that doesn’t have a risk,” he said.
Sen. Specter says no asbestos vote soon
July 28, 2005
The latest on the asbestos bill…
WASHINGTON (Reuters) - A bill to create a $140 billion asbestos compensation fund is not expected to come up on the Senate floor before the August recess, the legislation’s co-author, Sen. Arlen Specter, said on Wednesday.
“It does not look at this point as if the majority leader is going to find time for it,” Specter said, referring to Sen. Bill Frist, a Tennessee Republican. Specter, chairman of the Senate Judiciary Committee, spoke at a news conference that was called to discuss President Bush’s nomination to the Supreme Court, Judge John Roberts.
The Senate’s month-long August recess begins “at the end of next week.”
Settlements at All Time High!
July 28, 2005
According to the New York-based NERA Economic Consulting, a New York-based international firm of economists that tracks securities class action cases, settlements in shareholder class action lawsuits have reached an all-time high level. However, new filings are down by 17% for the first half of 2005, according to a NERA study. The economists also predict that the high settlement levels will continue as the glut of lawsuits filed during the 2000-2002 bear market are resolved.
Topping $6.1 billion, the WorldCom shareholder class action settlement is close to double the previous record of $3.5 billion established five years ago in the Cendant Corp. settlement. The record-breaking settlement with WorldCom, which was formerly based in Clinton, compensates record-breaking investor losses far larger than in any other settled case filed since 1991. The case is also striking in that it was financed almost entirely by outside co-defendants, including 10 investment banks and former auditor Arthur Andersen. Company directors also contributed to the settlement from their personal assets, a rare outcome, in addition to a contribution by their D&O insurers.
Meanwhile, the settlement expected at the conclusion of Enron’s shareholder class action may be even larger, with preliminary settlement agreements already approaching $5 billion, according to the NERA Economic Consulting study “Recent Trends in Shareholder Class Action Litigation: Are WorldCom and Enron the New Standard?”
You can read the full story in the Mississippi Business Journal Online.
