McShane Tapped to Fill Federal Court Vacancy

McShane Tapped to Fill Federal Court Vacancy

By DEE MOORE 

     (CN) - A Portland circuit court judge has been nominated to fill a federal court vacancy in Oregon.
     Circuit Court Judge Michael McShane was selected by the president to fill a vacancy in the US District Court of Oregon. McShane has served 11 years as a judge in the Multnomah County Circuit Court.
     If his confirmation is approved by the Senate, McShane will fill the position vacated by District Judge Michael Hogan who assumed senior status last year.
     McShane has "specialized in complex civil litigation" such as "class action lawsuits, medical negligence, contracts and general tort cases," according to press release issued by the public information office of the Ninth Circuit Court. He has also sat on the state's death penalty panel since 2003 presiding over 25 capital cases.
     He is a member of the faculty at his alma mater Lewis and Clark Law School where he teaches trial advocacy and criminal practice.
     Prior to serving as a circuit judge, McShane was member of the Multnomah Public Defenders Office.

Copyright by Courthouse News Service 2012

http://www.courthousenews.com/2012/09/24/50561.htm

Horrific Sepsis Case Described in Oregon

Horrific Sepsis Case Described in Oregon By DEE MOORE       (CN) - A woman who miscarried, lost the ability to ever have a child, and suffered several amputations says in court that negligent doctors and midwives are to blame.      Amaia Rennie says she was displaying signs of sepsis while she was pregnant in December 2011. The illness occurs when the body has a severe response to bacteria or other germs anywhere in the body, according to the U.S. National Library of Medicine.      "As a result of defendants negligence plaintiff suffered sepsis that required bilateral below the knee amputation and amputation of part of nine of her fingers, has greatly decreased kidney function and had dialysis and potentially has other organ damage and no longer can have a baby," according to her complaint in Multnomah County Circuit Court.      Rennie says she called Womens Healthcare Center and spoke to nurse midwife Jabke Buesseler about her symptoms: "a sudden loss of fluid when standing up ... flu-like symptoms with chills, achy and no cramping."      The staff allegedly took little action, however, telling Rennie to lie down, take her temperature and to go to the hospital if there was additional fluid loss or cramping. The next day another midwife, Jody Lindwall, told Rennie that she had most likely ruptured her membranes and that her unborn child would probably not survive, according to the complaint.      Rennie says she was told to go home and discuss her options with her husband. Later that evening her husband took her to the delivery room at Providence Health & Services - Oregon dba Providence St. Vincent Medical Center, according to the complaint.      Rennie learned that the fetus had died, and the hospital allegedly induced labor and moved her to the intensive care unit.      She says that her injuries were caused by the negligence of the Womens Health Care, Providence St. Vincent, Buesseler, Lindwall and and Dr. Shirley Fox.      She and her husband seek $77.1 million. They are represented by Jane Paulson of Paulson Coletti PC of Portland.  Copyright by Courthouse News Service 2012 http://www.courthousenews.com/2012/09/28/50758.htm

Investors Fight Complete Genomics Merger

Investors Fight Complete Genomics Merger

By DEE MOORE 

     (CN) - Shareholders claim in a class action that a merger between Complete Genomics and BGI-Shenzhen resulted from an "unfair and uninformed process."
     Investors claims the $3.15 per share is inadequate despite the offer representing a "54 percent premium to the $2.04 closing price on June 4, the last trading day prior" to Complete Genomics announcement that it was going to 'undertake an evaluation of strategic alternatives" to acquire the funds needed to' commercialize its technology," the complaint states.
     The transaction is valued at $117.6 million. At the same time Complete Genomics took out a $30 million loan with BGI for bridge financing until the merger is complete.
     Complete Genomics provides whole human genome sequencing which, according to the complaint, is used by medical researchers. The company is located in Mountain View, Calif. BGI also operates genome sequencing centers that support scientific research in agriculture, animal husbandry and human genetics.
     Investors claim that they are being denied the right to a "fair process" and that the price offered for their shares does not "reflect the true inherent value of the company." The complaint quotes a Bloomberg news interview with genetics "industry leader Jay Flatley" in which he states that genome sequencing is a highly lucrative venture.
     "It's a very attractive industry, it's growing fast, there's huge potential in so many areas of sequencing that I think it's drawn a lot of attention," Flatley told the news service.
     "While Complete Genomics did have a temporary run of weaker results that depressed its stock price," the complaint states, "the company's recent contract wins and positive publicity, forthcoming CLIA (Clinical Laboratory Improvement Amendments) license and most importantly its industry leading Long Fragment Read technology have created substantial future value prospects for Complete Genomics for which its shareholders will be grossly undercompensated in the proposed acquisition."
     Investors say "draconian" deal protection devices include a "top-up option" which requires the company to issue additional stock after the offer expires which will allow BGI to acquire the 90 percent threshold required to give them control of Complete Genomics. In addition, the merger deal includes a "no solicitation" clause giving a five day window to match any non-solicited offers as well as a termination fee of $4 million.
     Meanwhile, board members entered into a "tender and support agreement with BGI" which guarantees that "17.5 percent of the company's outstanding shares are committed to be tendered in the offer," the complaint states.
     To make sure that there is no opportunity for other potential buyers to step in Complete Genomics has "entered into an agreement with a subsidiary of BGI for a $30 million convertible note (loan agreement) for the company's use," according to the complaint.
     President, chairman and CEO Clifford Reid is named as defendant as is the rest of Complete Genomics board.
     Investors are represented by Brian Robbins, Stephen Oddo, Arshan Amiri, Edward Gerard and Justin Rieger of Robbins Umeda in San Diego.

Copyright by Courthouse News Service 2012

http://www.cnssecuritieslaw.com/2012/09/26/579.htm
    

ChinaHydro Electric Goes to Court to Fight Takeover By 'Insurgent' Group

ChinaHydro Electric Goes to Court to Fight Takeover By 'Insurgent' Group

By DEE MOORE 

     (CN) - ChinaHydro Electric Corporation is taking several companies to court for attempting a hostile takeover, calling defendants an "insurgent group in connection with its scheme to acquire control of the company."
     According to the complaint, all of the defendant companies were passive investors in ChinaHydro until last month when they made their intentions known. Defendants NewQuest Capital Management and CPI Ballpark Investments filed an amendment to its schedule, claiming in it that they now held a majority of shares in the ChinaHydro.
     "The filing disclosed, for the first time, the existence of the group and its plans to seek control of the company, namely to remove a majority of the directors on the company's board of directors and to replace them with a slate of their own nominees," the complaint states.
     "The insurgent group claims in their 13D filing that they beneficially own more than 40%o of the outstanding shares of the company, that they entered into a voting agreement dated August 21, 2012."
     But the "insurgent" group allgedly failed to make shareholders and the public aware of their "accumulation of blocks of stock."
     The group allegedly demanded a board meeting be called so that they could vote the five members they had targeted out and to be replaced with members handpicked by defendants. While the board responded, "the insurgent group decided to jump the gun on their own deadline" by calling an emergency meeting and "took action" and "amended the proxy materials" the complaint states.
     The Cayman Island company is seeking declaratory and injunctive relief to prevent the group from taking over the company. Defendants include CPI Ballpark Investments Ltd., a subsidiary of Newquest Capital Management (Cayman) Ltd., Swiss Re Financial Products Corp., China Environment Fund III, L.P., China Environment Fund III Management, L.P., China Environment Fund III Holdings Ltd., Aqua Resources Fund Limited, FourWinds Capital Management, Abrax, Abrax Limited and IWU International Ltd.
     They are represented by Theodore Altman, Timothy E. Hoeffner, Jonathan Siegfried and Michael P. McMahan DLA Piper LLP in New York and by Edward J. Fuhr and Joseph J. Saltarelli of Hunton & Williams LLP, also of New York.
Copyright by Courthouse News Service 2012
http://www.cnssecuritieslaw.com/2012/09/14/560.htm

Industry Group Raises Alarms Over Volcker Rule

Industry Group Raises Alarms Over Volcker Rule

By DEE MOORE 

     
     (CN) - The Securities Industry and Financial Markets Association has asked for a comprehensive review of the Volcker Rule.
     The industry group sent an open letter to Representative Spencer Bachus, the chairman of the House Financial Services Committee chairman, in response to his call for public comment on the rule.
     "We share the Chairman's concerns that the Volcker Rule ... could have substantial adverse effects on the U.S. and global economies, the competitiveness of U.S. financial institutions, the availability of capital and credit, market liquidity, job growth and a wide range of market participants and investors," the letter states.
     SIFMA asked Bachus for the evaluation in part because the approval process was "hampered by the absence of considered fact-finding and solicitation of informed viewpoints."
     According to the letter, this was because the rule was proposed after the House had already passed its financial reform bill. The goup wants the committee to consider the rule's impact on market liquidity.
     "We strongly believe that the Volcker Rule in its current form will result in costs and other burdens on market participants, including institutional and retail investors, and the wider economy that Congress could not have intended, and will, in fact, increase the likelihood of financial instability," the letter states.
     The agency points to a recent study made by the US Chamber of Commerce's Center for Capital Market's Comprehensiveness which states that the Volcker Rule "will have a significant negative effect on market making and liquidity provision for many securities" as well as making bank risk management less efficient.
     This, according to SIFMA, is supported by a study conducted by Oliver Wyamn, which was commissioned by the group in 2011.
     The Wyman report cites higher funding and debt costs for U.S. companies as a result of the rule which will, also according to the study, make it harder on the American public to "build wealth through participation in liquid, well-functioning securities markets."
     "In light of the risks to the economy, the agencies charged with implementing the Volcker Rule have responsibly proceeded in a very deliberate manner," the group states in its letter to Bachus.
     As an alternative to the Vocker Rule, the agency proposes that the government rely on already enacted or purposed legislation.
     "One wholesale alternative to the Volcker Rule that we urge Congress to explore is reliance on already proposed capital rules and regulations that are under consideration and being implemented," the letter says.
     If this is not an option, the association suggests dramatic modifications to the rule such as reversing "the presumption that all short-term principal trading is impermissible and provide a targeted definition of 'proprietary trading' and clear safe harbors ... should Congress determine to retain the Volcker Rule framework as enacted, we believe that several modifications to the existing statute are necessary to achieve its goals without harming the ability of banking entities to continue to provide client-oriented financial services," the letter states.
     By writing the letter, the group hopes to provide Bachus and the committee with not only criticisms of the rule but viable alternatives on how to proceed with or without it, according to a SIFMA spokesman.
     "Chairman Bachus called for the public comment on what legislative alternatives or revisions people thought would be necessary for the Volcker Rule. Since Dodd-Frank has passed, SIFMA has been a vocal participant in the rulemaking process surrounding the Volcker Rule. We've submitted studies and comment letters to regulators, all of which can be found on our website," SIFMA public affairs director Andrew DeSouza told Courthouse News. "We felt it would be incumbent for us to continue that engagement with offering our thoughts to Chairman Bachus."
Copyright by Courthouse News Service 2012

http://www.cnssecuritieslaw.com/2012/09/10/547.htm

Truckers Fight Oregon's Money Grab

Truckers Fight Oregon's Money Grab

By DEE MOORE

SALEM, Ore. (CN) - Trucking, construction and insurance groups sued Oregon, claiming it used road money to build websites instead - then jacked up the cost of driving records by nearly 400 percent to recoup some of the money it spent illegally.
     Oregon Trucking Associations Inc. and six other plaintiffs accuse the state's Department of Transportation and Department of Administrative Services of "diverting revenues from the Highway Trust Fund to build websites for state administrative agencies."
     The groups claim the agencies did this despite being advised they did not have the authority to do it - and that Oregon hiked the cost of obtaining public driving records by 384 percent to cover the cost of the websites.
     "The unauthorized increase in cost of driving records and the unconstitutional diversion of the revenues from the sale of the driving records sacrifice Oregonian's jobs and motoring safety so that the state agencies may have nicer websites," the complaint states.
     The nonprofit Oregon Trucking Associations is joined by plaintiffs Oregon-Idaho AAA, the Oregon-Columbia Chapter of the Associated General Contractors of America, Redmond Heavy Hauling, Gordon Wood Insurance and Financial Services, Property Casualty Insurers Association of America, and the National Association of Mutual Insurance Companies.
     The plaintiffs claim the Oregon Attorney General's Office already told the agencies they did not have the authority to take these actions on their own and advised them to ask the Legislature.
     The Oregon Constitution limits the use of the fund "to the construction, reconstruction, improvement, repair, maintenance, operation and use of the state's public highways, roads, streets and roadside rest areas," the complaint reads.
     The plaintiffs claim that the defendant Department of Administrative Services (DAS) asked the Legislature a year ago to authorize the state Department of Transportation to grant DAS an exclusive license to provide electronic access to state driving records and allow the DAS to use the money from selling of the records to build and maintain state agency websites. The Legislature refused to adopt the bill.
     Despite that, the Department of Transportation gave DAS a 10-year exclusive license to provide access to driving records, the complaint states. The DAS in turn entered into an agreement with Kansas corporation NICUSA, to would provide people electronic access to driving records; in exchange, NICUSA would provide DAS with website services.
     The current cost of driving records is $2, according to the complaint. The cost would increase to $9.68 per record: a 384 percent increase.
     As a result, the fund will receive less revenue, ODOT will build fewer roads and provide fewer repairs, at the possible cost of more accidents and lost lives: "a reduction in highway care that will result in a reduction in highway safety and increase adverse effects on the natural environment," the complaint states.
     The plaintiffs want the money from purchase of driving records returned to the Highway Trust Fund.
     They are represented in Marion County Court by Gregory Chaimov with Davis Wright Tremaine of Portland.

Copyright by Courthouse News Service 2012

http://www.courthousenews.com/2012/06/15/47499.htm

 

Death Row Inmate Demands Execution

Death Row Inmate Demands Execution 

By DEE MOORE

SALEM, Ore. (CN) - A death row inmate sued Gov. John Kitzhaber in state court, demanding to be put to death.
     Kitzhaber "announced that he would refuse to permit any further executions to occur while he served as governor," Gary D. Haugen says in his complaint in Marion County Court.
     Kitzhaber issued a "temporary reprieve of plaintiff's death sentence" in November and then imposed the moratorium.
     Haugen, 50, seeks judicial intervention, calling his reprieve "invalid and ineffective" because he refuses to accept it. He claims that state law requires that the person receiving a reprieve accept it.
     "Plaintiff has rejected the reprieve and therefore it is legally ineffective to halt the execution of this sentence," the complaint states.
     Haugen also claims that the reprieve is "beyond the governor's constitutional authority" because it does not last for a definite time.
     He also questions the governor's reasons for issuing the reprieve. Rather than suspending the death penalty because it is inhumane, Kitzhaber suspended it "because of defendant's moral opposition," Haugen says.
     He claims that the Oregon Constitution "does not confer upon him [Kitzhaber] the power to suspend the operation of any Oregon law for the reason that he is opposed to it."
     Haugen claims that a governor may grant clemency, but it must be because it has been determined that the prisoner deserves mercy, which may come in the form of a pardon, a reduction in sentence or a reprieve based on the inhumanity or injustice of proceeding with the death penalty.
     Kitzhaber has called the death penalty ineffective and "morally wrong," and said he does not wish to "participate" in it.
     Haugen quotes the governor as saying, "Oregon's application of the death penalty is not fairly and consistently applied. [I do] not believe that state-sponsored executions bring justice."
     A death warrant hearing in September 2011 found Haugen competent to be executed. He accepted the finding and chose not to challenge it. He was scheduled to be executed on Dec. 6, 2011.
     Haugen asked the court to determine that the governor's reprieve is unconstitutional, and that the court "would become legally obligated to conduct a death warrant hearing" and "to issue a death warrant directing the plaintiff's sentence to be carried out."
     The complaint does not mention the nature of Haugen's crime, but Oregon media refer to him as a "two-time killer."
     The case resembles the famous case of Gary Gilmore, who demanded to be executed in Utah in 1977, and got his wish.
     Haugen is represented by Harrison Latto of Portland. 

Copyright Courthouse News Service 2012

http://www.courthousenews.com/2012/06/15/47501.htm

Knology Buyout Resulted From 'Tainted Process,' Shareholders Say

Knology Buyout Resulted From
'Tainted Process,' Shareholders Say

By DEE MOORE 

     (CN) - Knology Inc.'s shareholders claim in a class action that the proposed buyout of the company by WideOpenWest Finance is the "result of a tainted process."
     "The proposed transaction reflects an effort by the individual defendants to aggrandize their own financial position and interests at the expense of and to the detriment of Knology's public shareholders," the complaint states.
     WideOpenWest will acquire all of the outstanding shares of Knology for $19.75 per share in cash, according to the complaint, and the company is valued at approximately $1.5 billion, including debt.
     Knology's own financial adviser, Merrill Lynch valued shares as high as $22.25 each. Calling the proxy statement "false and misleading," the class claims that the company also failed to disclose important information to its stockholders and that the company's financial advisors, Credit Suisse Securities and Merrill Lynch, had "a material conflict of interest" when they were working with the board on the sale.
     "The proxy statement fails to provide the company's shareholders with material information and/or provides them with materially misleading information thereby rendering the shareholders unable to make an informed decision on whether to approve the proposed transaction," the complaint states.
     Shareholders question why the board decided to pursue the deal when the company was experiencing its biggest revenue gains in two years.
     WOW is a controlled affiliate of Avista Capital Partners, L.P. and both Merrill Lynch and Credit Suisse, according to the lawsuit, are invested in or have long term business relationships with Avista.
     "Credit Suisse had an incentive to ensure that WOW purchases the Company for the lowest price possible," the complaint states. "Credit Suisse will receive approximately $28.1 million in fees for providing a portion of the debt commitment and serving as joint lead arranger in the proposed transaction ... Merrill Lynch has a substantial business relationship with Avista Capital, having provided at least five substantial services to Avista Capital . . . and earning approximately $17.1 million for such services."
     The standard deal protection devices are attached to the sale including a "no solicitation" clause, a three day window to match any offer and a $25 million termination fee. There is also an amendment to the company's poison pill eliminating it as a barrier to the sale while leaving it in place as a barrier to any potential competing acquisition offer.
     According to the proxy statement, "Knology's directors and executive officers have interests in the merger that are different from, or are in addition to, the interests of (its) stockholders generally."
     The Delaware company is a provider of interactive communications and entertainment services to both residential and business customers in the Southeast, upper Midwest and Kansas and offers digital cable TV, local and long distance digital telephone service and high-speed Internet access. Its principal offices are in Georgia.
     "Our two companies have much in common. We share similar beliefs in how employees and customers should be treated, and we both know how to succeed in competitive environments," Knology Chairman and CEO Rodger L. Johnson said in a press release announcing the sale.
     The complaint, filed in Delaware Chancery Court names Johnson as well as the rest of the board members as well as WOW.
     Shareholders are represented by Seth D. Rigrodsky, Brian D. Long and Gina M. Serra of Rigrodsky & Long in Wilmington, Del. and Shannon L. Hopkins and Allen Schwartz of Levi & Korinsky LLP in New York.

Copyright Courthouse News Service 2012

http://www.cnssecuritieslaw.com/2012/06/14/404.htm

 

Regions Bank Dodges Suit For Actions of Rogue Adviser

Regions Bank Dodges Suit For Actions of Rogue Adviser

By DEE MOORE 

     (CN) - A federal appellate panel let Regions Bank off the hook in an ERISA action after a rogue investment adviser pillaged retirement funds depostited at the bank.
     The Sixth Circuit Court of Appeals affirmed the trial court's finding that neither the victims nor the bankruptcy trustee for the adviser who absconded with their savings can hold Regions Bank liable under state law for not preventing the theft.
     Investment adviser Barry Stokes "purloined millions of dollars from the employee-benefits plans that he managed" and left victims with little recourse to recover their money after he filed bankruptcy.
     Stokes' bankruptcy trustee and several victims sued Regions Bank for "negligently or knowingly allow(ing) Stokes to steal from the fiduciary accounts held at Regions."
     While the trustee was able to demonstrate to the court that Stokes indeed was an "Employee Retirement Income Security Act (ERISA) fiduciary representing the plans' rather than as a bankruptcy trustee suing to enlarge the debtor's estate interests," a point of contention in the appeal, the court dismissed his claims and those of the victims.
     A trial court had dismissed state claims stating that they were superseded by ERISA.
     "In dismissing plaintiffs' state-law claims, the district court found that Tennessee's Uniform Fiduciaries Act ("UFA") limited plaintiffs' claims to allegations of knowing or bad-faith conduct and that ERISA preempted any allegation that survived the UFA's bar," wrote Sixth Circuit Judge Deborah L. Cook who authored the opinion.
     "Under ERISA, a plan participant, beneficiary, or fiduciar" may seek an injunction against a non-fiduciary who knowingly participates in a fiduciary's violation of ERISA," the opinion states.
     When the ERISA claims were dismissed by a district court, the claims reappeared as state-law claims for unjust enrichment.
     "Peering through the state-law disguise, the district court rejected the claim as a reframing of the previously dismissed ERISA claim," Cook writes.
     "To the extent that plaintiffs' claims stem from Regions' negligence, the UFA bars them; to the extent they arise from Regions' knowledge of or bad-faith acquiescence in Stokes' scheme, ERISA preempts them."

Copyright Courthouse News Service 2012

http://www.cnssecuritieslaw.com/2012/06/14/406.htm

Shareholders Fight Bidz.com Bid To Go Private

Shareholders Fight Bidz.com Bid To Go Private

By DEE MOORE 

(CN) - Shareholders of Bidz.com are up in arms over what they believe to be "unlawful" corporate shenanigans involving the online retailer's sale to the Glendon Group for $14.3 million.
     Shareholders are set to receive $0.78 per share in cash, but "Bidz's stock has been trading as high as $1.79 as recently as last year. Bidz's current book value per share is $1.17, significantly in excess of the paltry price offered by Glendon," the complaint states.
     The complaint says that the board agreed to the merger because it owns over a third of the common stock.
     "Moreover, in connection with the proposed transaction, certain of Bidz's directors and executive officers, who collectively own approximately 36.6% of Bidz's common stock, have entered into voting agreements to vote in favor of the proposed transaction with Glendon ... essentially requiring that the competing bidder agree to pay a naked premium for the right to provide the shareholders with a superior offer."
     Though the company had seen its sales drop in 2011 from the prior year, it was re-establishing itself with an online retail site for designer products and consumer goods, which was seeing a steady increase in revenue. Shareholders say that "the significant 145% year-over-year increase in net revenues for Modnique.com reflects the strong growth in demand for its affordable brand name merchandise," according to a company press release.
     The lawsuit names Bidz's CEO David Zinberg, CFO Lawrence Kong as well as other directors.
     "The individual defendants have exacerbated their breaches of fiduciary duty by agreeing to lock up the proposed transaction with deal protection devices that preclude other bidders from making a successful competing offer for the company," the complaint states.
     This includes a termination fee of $500,000, as well as "no-shop" provision and a 72 hour price match provision if other offers are made.
     "These provisions substantially and improperly limit the board's ability to act with respect to investigating and pursuing superior proposals and alternatives including a sale of all or part of Bidz," the complaint states. "Ultimately, these preclusive deal protection provisions illegally restrain the company's ability to solicit or engage in negotiations with any third party regarding a proposal to acquire all or a significant interest in the company."
     The class accuses the board of "knowingly or recklessly violating their fiduciary duties, including their duties of care, loyalty, good faith, and independence owed to plaintiff and other public shareholders of Bidz" when they agreed to accept the offer in which Glendon will merge with Bidz Acquisition Company, Inc. and will then take the company private.
     Shareholders are represented by Brian Long, Seth Rigrodsky and Gina Serra of Rigrodsky & Long in Wilmington, Del. and by Donald Enright of Levi & Korsinsky in Washington. 

Copyright Courthouse News Service 2012

http://www.cnssecuritieslaw.com/2012/06/11/399.htm

NASDAQ 'Grossly Mishandled' Facebook IPO, Class Claims

NASDAQ 'Grossly Mishandled' Facebook IPO, Class Claims

By DEE MOORE 

     (CN) - Potential Facebook investors found nothing to "Like" when they tried to purchase shares of the social networking site's stock on the first day of its initial offering, claiming in a class action that the NASDAQ "grossly mishandled Facebook's IPO."
     According to the lawsuit, defendants failed to accurately and promptly process purchase and cancelation orders and delayed the opening by half an hour.
     "The massive amount of trading in FB stock overwhelmed Nasdaq's trading system causing a backlog of unfilled orders. Confirmations weren't sent in a timely manner," the complaint states."Investors and brokers could not tell if their orders went through and if they did at what price ... hours passed before some trade orders were processed leaving investors unable to figure out if or when they should sell stock or if they even owned stock.
     "Nasdaq was so overwhelmed that it failed to cancel other orders despite timely customer requests to do so."
     In the end, investors were being stuck with shares they had bought at inflated prices only to see the value of the stock fall dramatically or were unable to realize the full potential of re-sale thanks to the glitches in Nasdaq's system.
     Shares initially began trading at $38 a piece and one point dropping as low as $27 each only to increase in price again this time to $45. Purchasers had no idea at the time what they bought or sold their shares for, according to the lawsuit.
     The complaint quotes a Reuters article stating, "behind the scenes the massive order volume was overwhelming Nasdaq's systems." Purchases were held up for hours, and trading dropped off as investors backed away from the stock unsure if they owned shares or not, the story goes on to say.
     The Wall Street Journal reported that share purchase orders "never made it through."
     The class is represented by Thomas Aman in New York, Brian Robbins and Gregory Del Gaizo of Robbins Umeda LLP in San Diego and William C. Wright in West Plam Beach, Fla. 

Copyright Courthouse News Service 2012

http://www.cnssecuritieslaw.com/2012/06/11/398.htm

 

Routine FINRA Probe Nets Florida Firm $1M Fine

Routine FINRA Probe Nets Florida Firm $1M Fine

By DEE MOORE

CN) - The Financial Industry Regulatory fined Brookstone Securities of Lakeland, Fla. $1 million for committing fraud against the elderly.

The company, its CEO, one of its brokers and the former compliance officer were found by a hearing panel to have sold collateralized mortgage obligations (CMOs) to "unsophisticated, elderly and retired investors." The company was ordered to pay restitution in addition to the fine.

CEO Anthony Lee Turbeville, broker Christopher D. Kline and former compliance officer, David Locy were all called out on their conduct and the panel noted that Locy as compliance officer should have been the customer's first line of defense against improper practices by Brookstone brokers.

According to the investigators, the securities firm "preyed on their elderly customers greatest fears." They "made negligent misrepresentations and omissions of material fact" and were told that the CMOs were "government guaranteed bonds"

Two of Kline's customers were elderly widows with very limited investment knowledge, the report stated, and were very vulnerable after their husbands' deaths when they were approached and convinced to invest their retirement savings in CMOs, the panel found.

It was discovered that Kline told the widows that they could not lose money in CMOs because they were government-guaranteed bonds. He then further increased their risk by trading on margin.

The company was also accused of sending letters which contained misleading statements to customers who had invested in CMOs.

The investigation determined that the firm's supervision of its personnel was lacking since there were no written procedures for due diligence requirements for third party private placements and that brokers failed to attend compliance meetings. It also found that they failed to update forms, failed to report customer complaints, failed to report transactions to TRACE (Trade Reporting and Compliance Engine) and failed to complete tickets for transactions involving corporate bonds.

"The hearing panel did not find Turbeville's testimony credible," the decision states. They didn't believe his claims that he fully explained the CMOs risks to his clients.

Also, the panel noted that Locy completely ignored his responsibility as chief compliance officer and "should have been a line of defense against Turbeville's and Kline's egregious conduct," but instead "he looked the other way while Turbeville and Kline traded CMO accounts that were unsuitable for their customers."

Enforcement called nine witnesses which included five customers and two family members of customers. There were 324 exhibits submitted to the panel by the investigators and 185 by customers at the hearing.

Both Kline and Turbeville now permanently barred from the securities industry and they must pay $440,600 of the $1 million fine imposed jointly and severally with Turbeville, and the remaining $1,179,500 imposed jointly and severally with Kline. Locy is barred from acting in any supervisory or principal capacity, was suspended in all capacities for two years and fined $25,000.

The investigation began as a routine examination of the company by FINRA.

Copyright Courthouse News Service 2012

http://www.cnssecuritieslaw.com/2012/06/08/392.htm

Oregon Pipeline Could Harm Butterfly, Flowers

Oregon Pipeline Could Harm Butterfly, Flowers

By DEE MOORE

EUGENE, Ore., (CN) - A pipeline project for a water-strapped Oregonian city will harm endangered species of flower and butterfly, an environmental group claims in Federal Court.
"The effects of the project will result in urban, suburban, commercial, and industrial development and conversion of native prairie habitat, and the Fender's blue butterfly, the Bradshaw's lomatium, the Willamette daisy and the Kincaid's lupine will be adversely affected," the complaint states.
Development will also increase traffic in, around and through the Eugene wetlands, where the government plans to lay a pipeline that carries water from the Eugene Water and Electric Board source main.
Once completed, the 9.7 miles of 24-inch diameter water pipe will carry water to the Veneta reservoir.
But LandWatch Lane County claims that the United States Fish and Wildlife Service violated federal law by not preparing supplemental analysis for the pipeline project.
"Urban, suburban, commercial and industrial development and agricultural conversion are a significant threat to the viability and recovery of the" these endangered species," according to the complaint.
The nonprofit claims that the agency violated the Administrative Procedures Act by "issuing a concurrence letter that is arbitrary, capricious, an abuse of discretion, and contrary to law."
That letter said the project "would not likely adversely affect" endangered species that inhabit the area, but LandWatch says this is untrue.
The project and the urban growth that it will facilitate will indeed adversely affect the butterfly and two plants, according to the complaint.
Failure to account for this expansion constituted a violation of the National Environmental Policy Act, the group says.
"The cumulative effect of the reasonably foreseeable Urban Growth Boundary expansion in the city of Eugene and the project will jeopardize the aforementioned endangered species in addition to other environmental impacts," the complaint states.
Fish and Wildlife guidelines define harm as "significant habitat modification or degradation which actually kills or injures fish or wildlife by significantly impairing essential behavioral patterns, including breeding, spawning, rearing, migrating, feeding, or sheltering," according to the complaint.
Helping Veneta to expand with an increased water supply allegedly violates this rule.
LandWatch wants the court set aside the letter as "arbitrary, capricious, an abuse of discretion, and contrary to law."
It is represented by attorney Sean Malone.

Copyright Courthouse News Service 2012
http://www.courthousenews.com/2012/06/05/47129.htm

Stepmom Faces Demand Over 2010 Kidnapping

Stepmom Faces Demand Over 2010 Kidnapping

By DEE MOORE

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PORTLAND, Ore. (CN) - The biological mother of a 7-year-old child who went missing from two years ago pointed blame at her ex-husband's new wife in a civil lawsuit.
Stepmother Terri Horman brought 7-year-old Kyron to school on June 4, 2010, and the child was never seen again, Kyron's biological mother Desiree Young claims in Multnomah County Circuit Court.
"Desiree Young, Kyron's mother, brings this claim against Terri Horman, asserting that Terri Horman is responsible for the disappearance of Kyron," the complaint states.
Young says she shared joint custody of Kyron with her ex-husband, Kaine Horman, but that Terri deliberately sought to deprive her of her parental rights.
"Ms. Young claims that Terri Horman intentionally interfered with her parental rights, and that Terri Horman intentionally inflicted severe emotional distress," according to the complaint. "Ms. Young seeks the return of her son, and seeks compensatory damages."
Claiming that Terri knows where her son is, Young wants the court to order an injunction for his return.
"Assuming that Kyron is alive, plaintiff is entitled to the return of her son," the complaint states. "If Kyron is dead, plaintiff is entitled to the return of his remains. Terri Horman knows whether Kyron is alive or dead, and knows his present whereabouts or the location of his remains."
Young says her son's disappearance has caused her to suffer serious mental health issues and ongoing trauma.
"Plaintiff is suffering ongoing fear, anxiety and grief on a daily basis, and has no other adequate remedy except for the issuance of an injunction compelling Terri Horman to return Kyron to his parents, or, alternatively, if Kyron is dead, an injunction compelling Terri Horman to reveal the whereabouts of Kyron's body so that his parents may properly care for his remains," the complaint states.
In addition to the return of her son, Young wants $10 million in damages for grief and suffering. She is represented by Elden Rosenthal of Rosenthal Greene & Devlin.

Copyright Courthouse News Service 2012
http://www.courthousenews.com/2012/06/05/47143.htm

Class Challenges Deal For EDGAR Online

Class Challenges Deal For EDGAR Online

By DEE MOORE

(CN) - Shareholders sued EDGAR Online over R.R. Donelley & Sons Co.'s plan to buyout the company for $1.09 per share.
"The Individual Defendants have knowingly and recklessly and in bad faith violated fiduciary duties of care, loyalty, good faith, and independence owed to the public shareholders of EDGAR and have acted to put their personal interests ahead of the interests of EDGAR shareholders," the complaint states.
According to the complaint, the offer is well below NASDAQ's 52 week high of $1.30.
Plaintiffs claim the sale will prevent them from reaping the benefits of EDGAR's two year investment and focus on its XBRL (eXtensible Business Reporting Language) software. Though the company reported losses associated with its focus on XBRL, financial data from the company's 2011 fourth quarter statement showed this was beginning to turn around.
"I am pleased to report that EDGAR Online experienced tremendous growth in 2011 . . . In addition to generating record revenues for the year, we implemented the infrastructure and added the human talent necessary to support future growth and product evolution. The value propositions embodied in our data and analytics products, disclosure management solutions, and software businesses position EDGAR Online to expand and gain market share," CEO Robert Farrell said in March 2012, according to the lawsuit.
In addition to the inadequate price, the board also agreed to a no solicitation provision and a $2.75 million termination fee.
The class is represented by Brian D. Long, Seth Rigrodsky and Gina Serra of Rigrodsky & Long in Wilmington, Del. and Eduard Korsinsky of Levi & Korsinsky LLP in New York.

Copyright Courthouse News Service 2012

http://www.cnssecuritieslaw.com/2012/06/04/382.htm

SEC Takes Phoenix Adviser To Task For Misleading Clients To Fund Lavish Lifestyle

SEC Takes Phoenix Adviser To Task For Misleading Clients To Fund Lavish Lifestyle

By DEE MOORE

(CN) - A Phoenix area investment adviser has been charged by the Securities and Exchange Commission with withholding information about his stake in investments he recommended to his clients.
According to the Securities and Exchange Commission's complaint, Oxford Investment Partners LLC principal Walther J. Clark advised his clients to invest in two businesses without divulging that he owned one of the businesses and had financial ties to the other. Oxford's website describes the company as a "boutique wealth-management firm that offers financial, retirement, tax and investment planning."
"In late 2007, Clarke faced severe financial problems and decided to obtain money to address his difficulties by exploiting an Oxford client," the complaint states. "Specifically, in March 2008, Clarke sold 7.5% of his ownership interest in Oxford to a client at a fraudulently inflated price ($750,000). Indeed, in connection with this transaction, Clarke employed several devices to artificially inflate the value of Oxford by at least $1.5 million, thereby causing the client to overpay for the 7.5% interest in the firm by at least $112,000."
Clark also recommended his own company, Cornerstone Lending Group, to several of his clients without informing them that he was the owner. The clients funded loans for Cornerstone which were later defaulted on causing investors to lose more than $300,000.
Later that year, according to the commission, "Clarke convinced four clients to invest approximately $10,000 each in a privately-held company called HotStix, without first disclosing that the owners of HotStix had ownership interests in Oxford and were paid consultants to Oxford," the complaint states.
Not long after the investments were made, HotStix failed and filed for bankruptcy, once again leaving Clark's clients high and dry.
According to the complaint, Clark was paying the mortgage on two houses, one of which is valued at $3.5 million. He was also paying for private schools for his children, professional private tennis lessons and interior designers. In addition, he was dealing with a financial strain caused by a $400,000 settlement he was paying to this former employer, Wachovia, and the financial burden his business was creating because his partner was facing severe health issues.
"Investment advisers have a fiduciary duty to be forthcoming with their clients and act in their best interests," said Marshall S. Sprung, Deputy Chief of the SEC Enforcement Division's Asset Management Unit. "Clarke breached that duty by deliberately overvaluing the firm and staying mum on his personal ties to the recommended investments."

Copyright Courthouse News Service 2012
http://www.cnssecuritieslaw.com/2012/06/03/378.htm

Quantek Settles With SEC For Misleading Investors

Quantek Settles With SEC For Misleading Investors

By DEE MOORE

(CN) - Miami-based Quantek Asset Management LLC agreed to pay $3.1 million in fines, total disgorgement and penalties, to the Securities and Exchange Commission for deceiving investors about whether its managers had invested in a Latin America-focused hedge fund or not.
"Quantek misled investors about three important attributes of funds that it managed: management "skin in the game", the funds' investment process and certain related-party transactions.
"At its peak, Quantek managed over $1 billion in assets, primarily through the Quantek Master Fund, SPC Ltd. and its two feeder funds, Quantek Opportunity Fund, L.P. and Quantek Opportunity Fund, Ltd.," the SEC states.
According to the commission, fund managers made various misrepresentations to investors about company executives having personally made investments in the $1 billion Quantek Opportunity Fund when in fact executives had never invested their own money in the fund.
Quantek misled investors about the rigor of the Opportunity Funds' investment process. The funds used an asset-based lending strategy, with a focus on industrial and real estate ventures in Latin America.
The SEC alleges that Quantek officials told investors that investments required approval by a committee of principals who reviewed formal memoranda explaining each proposed investment before it was made and that the principals would then sign the memo if the investment met their approval.
"In reality, Quantek failed to prepare investment committee memos for numerous transactions," the commission says. "[E]mployees prepared and backdated the missing loan documents. Quantek employees also created investment memos designed to appear as if they were drafted before the funds made the loans."
The company "made these misstatements in due diligence questionnaires and in side letter agreements executed with certain institutional investors."
"These materials inaccurately described key terms of the related-party loans and gave the impression that the loans had been sufficiently documented and secured at all times."
The SEC's investigation also found that Quantek misled investors related-party transactions involving its lead executive Javier Guerra and its former parent company, Bulltick Capital Markets Holdings LP.
"The related-party transactions were problematic to begin with, and the false deal documents left investors in the dark about the adviser's conflicts of interest," said Scott Weisman, SEC Assistant Director of the Enforcement Division's Asset Management Unit.
Bulltick, Guerra and former Quantek operations director Ralph Patino were also charged.
"Quantek's investors deserved better than the misleading information they received in marketing materials, side letters, and other fund documents.

Copyright Courthouse News Service 2012

http://www.cnssecuritieslaw.com/2012/06/03/377.htm

China-Biotics Duped Investors With Fake Bank Statements and Contracts, Class Claims

China-Biotics Duped Investors With Fake Bank Statements and Contracts, Class Claims

By DEE MOORE 

     (CN) - A class action claims China-Biotics Inc. was infected with a toxic desire to artificially inflate its stock price and manipulate investors using a fake website and falsified bank statements and sales contracts.
     "It is clear from the above that the company fabricated a false sales contract; a false bank website and a false bank advice in furtherance of its scheme to fraudulently create the appearance of having achieved a 50% growth in 2011 revenue as announced on Feb. 9, 2011," the complaint states, citing information from the company's former independent auditor, BDO Limited.
     The auditors allegedly found gross irregularities that included a banking notice indicating math errors in the company's interest income because the company used different interest rates for deposits than those used by the national bank, and sales contracts with other companies that had the wrong purchaser's signatures affixed to them. While performing the audit, BDO claims that they were sent to a banking website created by the company to mislead them.
     According to the company website, China-Bionics is headquartered in Shanghi and is one of that country's "largest suppliers of probiotics. Probiotics are beneficial, live bacteria used as dietary supplements and food additives to improve intestinal health and digestion."
     However, when the company issued a press release announcing that it expected an incredible 50% increase in net sales for the 2011 fiscal year, things began to unravel. 
     "With our efforts and market prospects we are confident to achieve our full year sales target," the complaint states, quoting CEO Jinan Song.
     The company, however, was unable to file its annual 10-K form because irregularities and "serious issues" were found by the audit firm that would require the company "to take certain actions and provide additional information."
     China-Bionics filed a NT 10-K on June 10, 2011, explaining that it could not file a 10-K in a timely fashion and requested an extension for filing the 10-K.
     "The company cannot predict at this time when it will be in a position to take all the actions and provide all the information requested," China-Biotics stated in its NT 10-K.
     Plaintiffs claim that the company never intended to file a Form 10-K, and not "working to take all the actions and to provide the requested information" to its audit firm "as promptly as reasonably practical" as it claimed but rather "knew and concealed the fact that any bona fide earnings statement for the fiscal year ended March 31, 2011, would reflect a significant adverse change in the company's results of operations from the corresponding period for the previous fiscal year."
     On June 15, the NASDAQ halted trading of China-Biotics while waiting "for additional information." At the close of the day, shares were listed at $3.46. NASDAQ then sent a letter to the company five days later stating that because China-Biotics had yet to comply and file a 10-K, the company would no longer be listed, at which poing shares dropped to a $1.
     Though the company replied by filing a form 8-K and announced that it would be submitting a plan for compliance on or before July 15, 2011, the complaint states that this was never the board's intention because on June 23, they had "unanimously voted to voluntarily delist the company's common stock from the Nasdaq Global Stock Market." The company then received a letter from their audit firm resigning its position as independent auditor for China-Biotics.
     The suit names CEO Song Jinan, CFO Travis Tao Cai, COO Hui Chang and executive vice president Yan Li as well as numerous company board directors.
     The class is represented by Gregory Egleston in New York and Thomas McKenna of Gainey & McKenna also in New York.

Copyright Courthouse News Service 2012.

http://www.cnssecuritieslaw.com/2012/05/29/373.htm

GeoResources Accepted Bum $1 Billion Offer from Halcón Resources, Shareholders Claim

GeoResources Accepted Bum $1 Billion Offer from Halcón Resources, Shareholders Claim

By DEE MOORE 

     

      (CN) - GeoResources Inc. failed to "shop the company around" before accepting the $1 billion merger agreement proposed by Halcón Resources Corp., shareholders claim in a class action.
     "The Proposed Transaction is the product of a hopelessly flawed process designed to ensure the sale of GeoResources to Halcón. Primary beneficiaries of this deal are the company's largest shareholders who will be able to monetize their large otherwise illiquid GeoResources' holdings.
     "Additionally, management stands to gain extremely lucrative 'change of control payments' just for negotiating the proposed transaction and selling out the company's public shareholders," the complaint states.
     GeoResources and Halcón are independent oil and gas companies that develope and the acquire oil and gas reserves.
     The suit also names GeoResource president and CEO Frank A. Lodzinski as well as several members of the company's board and Halcón subsidiaries.
     "GeoResources stockholders will receive $20.00 in cash and 1.932 shares of Halcón Resources common stock for each share of GeoResources common stock they hold, representing consideration to GeoResources stockholders of $37.97 per share based on the closing price of Halcón Resources common stock on April 24, 2012," according to the complaint, citing the press release announcing the deal. .
     Last year, Geo saw a 43 percent increase in its adjusted net income over 2010 and "several analysts recently announced target price ranges for GeoResources of $39.00-$43.00."
     According to the complaint, the deal includes "onerous, preclusive deal protection devices that act collectively to prevent other bidders from making successful topping bids for the company," including a $27.8 million termination fee, a no shop/no talk clause and a matching rights provision.
     The suit was filed by Kip B. Shuman and Rusty E. Glenn of The Shuman Law Firm in Boulder, Colo. and Juan E. Monteverde and Shane T. Rowley of Faruqi & Faruqi LLP in New York.

Copyright Courthouse News Service 2012

http://www.cnssecuritieslaw.com/2012/05/22/361.htm

JP Morgan Faces Suit Over $2 Billion Loss

JP Morgan Faces Suit Over $2 Billion Loss

By DEE MOORE 

     (CN) - Shareholders hit JP Morgan Chase & Co. with a class action after the financial holding giant's announced $2 billion in losses during the first quarter of this fiscal year.
     The class claims JP Morgan failed to disclose risky trades while telling shareholders that its derivatives were "hedges" that would help offset overall portfolio risk.
     "Every bank has a portfolio; in those portfolios you make investments that you think are wise to offset your expenditures. Obviously, it's a big portfolio . . . but at the end of the day that is our job to invest that portfolio wisely, intelligently over a long period of time to earn income and to offset other exposures that we have," the complaint states, quoting CEO James Dimon. The bank failed to disclose just how much money it had lost before it held an investor conference call on April 13, after the release of the bank's first quarter earnings statement earlier the same day.
     "We invest those securities in high grade, low risk securities," CFO Douglas Braunstein said during the call. "The vast majority of those are government or government backed and very high grade in nature.
     "We invest those in order to hedge the interest rate risk of the firm as a function of that liability and asset mismatch."
     Shareholders claim the statements made during the call were "materially false and misleading" because they failed to reveal the truly dangerous nature of the company's speculative trades and the enormous losses it had already experienced.
     A month later when JP Morgan filed its 10-Q, it was déjà vu. When the company held another conference call with analysts and investors to reveal that it had sustained "a multi-billion dollar trading loss" Dimon stated that "the synthetic credit portfolio was a strategy to hedge the firm's overall credit exposure, which is our largest risk overall in a stressed credit environment. We are reducing that hedge, but in hindsight the new strategy was flawed, complex, poorly reviewed, poorly executed and poorly monitored."
     After the information was released, the company's stock fell $40.74 to $36.96 per share, according to the suit.
     Additionally, the Washington Post reported that the Justice Department has begun a probe into the bank's losses and the actions of its CEO. The investigation is supposedly in its early stages but sources told the Post that the feds are attempting to determine whether the losses were a result of a poorly executed hedge fund or if the bank was betting for its own profit.
     Regulators will be looking at the company to determine if it violated security laws by not writing down losses that resulted from trades.
     Lead plaintiff David Smith is represented by Samuel H. Rudman and David Rosenfeld of Robbins Geller Rudman and Dowd LLP of Melville, N.Y. and Darren J. Robbins and Dave Walton of Robbins Geller Rudman and Dowd LLP of San Diego.

Copyright Courthouse News Service 2012

http://www.cnssecuritieslaw.com/2012/05/21/353.htm

Imperial Sugar Buyout Deal Not So Sweet, Shareholders Claim

Imperial Sugar Buyout Deal Not So Sweet, Shareholders Claim

By DEE MOORE 

          (CN) - Imperial Sugar shareholders don't think Louis Dreyfus Commodities' $6.35 per share buyout offer is a very sweet deal since the company's shares were trading well above the offer price in the recent past while analysts have pegged Imperial shares at as much as $20.
     Louis Dreyfus Commodities wants to buy ouststanding Imperial stock for $6.35 per share, a 57% premium on the closing price the day before the sale was announced, but plaintiff claims that the company is worth much more.
     The sugar company's stocks sold for $7.03 just two months before the sale was announced and one analyst has valued the stock as worth as much as $20 a share.
     The all cash sale will cost the buyers $203 million. The agreement requires LD Commodities to pick up the company's tab for any outstanding debt or pension liabilities. The sale was approved by a unanimous vote of the board who agreed to recommend that all shareholders sell their common stock holdings, the complaint states..
     "In approving the proposed acquisition, however, the individual defendants have breached their fiduciary duties of loyalty, good faith, due care and disclosure by, inter alia, agreeing to sell without first taking steps to ensure that plaintiff and class members would obtain adequate, fair and maximum consideration under the circumstances and locking up the proposed acquisition with deal protective mechanisms which ensures a rival bidder is not likely to emerge with the cards stacked so much in favor of LD Commodities."
     Imperial has had a financially difficult time recently. For the six-month period ending March 31, 2012, the Company reported a net loss of $10 million, or $0.83 per diluted share, compared to a net loss of $4.8 million, or $0.40 per diluted share, for the same period last year. The company announced that its fiscal quarter losses totaled $6.5 million.
     The class is represented by Michael Ridulfo Kane Russell Coleman & Logan in Houston and Evan Smith and Marc Ackerman of Brodsky & Smith LLC in Bala Cynwyd, Pa. 

Copyright Courthouse News Service 2012

http://www.cnssecuritieslaw.com/2012/05/10/338.htm

Magna International Made Bogus Claims About European Profit Margins, Class Says

Magna International Made Bogus Claims About European Profit Margins, Class Says

By DEE MOORE 

     
     (CN) - Magna International made "materially false and misleading statements" and failed to disclose the company's true financial condition which resulted in weak European margins, pricing and operational issues, shareholders claim in a class action.
     Magna is one of the largest and most diversified suppliers of automotive components, systems and modules world-wide, the complaint states, and has manufacturing, engineering and sales operations in 26 countries. Its principal offices are in Ontario, Canada.
     Lead plaintiff City of Taylor General Employees Retirement Fund filed the action in the U.S. District Court Southern District of New York and named founder and former chairman of the board Frank Stronach, CEO Donald Walker and CFO Vincent Galifi as defendants.
     According to the complaint, while Magna's European market was floundering, company operatives continued to make positive and optimistic statements about the company's financial status, but "lacked a reasonable basis for their positive statements about the Company's European operations and business prospects."
     The complaint cites numerous examples of the company issuing mixed messages claiming that these "presented a misleading picture of Magna's business and prospects."
     Magna issued a press release in which Walker stated that, "As 2011 begins vehicle production is poised for future growth in a number of important markets for us . . . Accordingly our outlook reflects significant sales growth including expansion in high growth markets in the next few years ... We also have the balance sheet, cash flow generation, engineering and manufacturing, technologies and motivated workforce to support out growth initiatives around the world."
     Meanwhile that same day, CFO Galifi, who spoke at the January 2011 Deutsche Bank Securities Global Auto Industry Conference, had a very different message.
     "Our European segment has - underperformed recently and we're taking some actions to improve results there and we're going to see improvements in '11 and in the coming years ... In Europe, while we have returned to profitability margins in total have not met our expectations."
     When Magna's financial situation finally came to light, shares which had traded at $61.55 in January 2011 fell to $39.42 by August 2011.
     The class is represented by Samuel Rudman and David Rosenfeld of Robbins Geller Rudman & Dowd LLP of Melville, N.Y. and Thomas Michaud of VanOverbeke Michaud & Timmony of Detroit.

Copyright Courthouse News Service 2012 

http://www.cnssecuritieslaw.com/2012/05/10/337.htm

Logging Poses Risk to Owl and Salmon, Groups Say

Logging Poses Risk to Owl and Salmon, Groups Say

By DEE MOORE 

     EUGENE, Ore. (CN) - A Willamette National Forest logging plan will harm the already threatened northern spotted owl and Chinook salmon, two environmental groups claim.
     The U.S. Forest Service failed to "analyze the environmental effects," or address "the scientific controversy," of the Goose Logging Project in the McKenzie River Watershed, according to the federal complaint.
     Cascadia Wildlands and Oregon Wild say logging the 2,100-acre logging area, which includes the 9,700-acre Lookout Mountain area above McKenzie Bridge, would cause serious harm and ecosystem damage within streamside buffers and endangered species habitat.
     Any activity within the renowned McKenzie River basin should be for restorative purposes only, according to Cascadia Wildlands, which focuses on the forests along the Pacific Coast from northern California to south-central Alaska.
     Harvesting old growth trees in the forest could also harm the northern spotted owl, a threatened species that calls the area home, according to the groups.
     The U.S. Fish and Wildlife Service found that the northern spotted owl "occupies late-successional and old-growth forest habitat from southern British Columbia through Washington, Oregon and California," because these forests usually contain a moderate to high canopy which allow the birds to fly and have hollow trees or trees with cavities which makes for optimal roosting, according to the complaint.
     Its study allegedly found that the removal of old growth forests severely impacts these already threatened animals.
     "Logging, road building, and fuel treatments authorized by the Goose Project will remove or downgrade 454 acres of suitable nesting, roosting, and foraging habitat for the threatened spotted owl," the lawsuit states. "The Goose project would also remove 371 acres of spotted owl dispersal habitat."
     "The Forest Service acknowledges that seven spotted owl nest sites would be harmed by Goose Project activities," the complaint states.
     Since the spotted owl competes with the more aggressive barred owl for food, the threat is even greater, according to the groups.
     Barred owls are a fairly new addition to the Pacific Northwest, the complaint says. They are more adaptable, more aggressive, have a wider variety in diet, and will even attack and kill their cousins.
     "Northern spotted owl populations have declined at the greatest rate in the north where barred owls have been present the longest," the complaint states. "Although northern spotted owl populations have been declining for many years, the presence of barred owls likely exacerbates the decline."
     The proposed clearing of streamside buffers in the McKenzie River could also decrease the population of Chinook salmon, another threatened species, according to the groups.
     "The McKenzie River is the only waterway in the Upper Willamette Basin to sustain any significant level of spring Chinook salmon," the complaint states.
     Work on the Goose project began three years ago, according to the Fish and Wildlife Service.
     Promising that the Goose project will reduce fire risk, provide timber, create jobs and improve wildlife forage, the agency says it has "responded to the concerns raised by residents and made numerous adjustments to the project; including modifying the project near private property boundaries."
     "The harvest plans purposely exclude cutting larger, older trees that are present within the larger planning area," according to the agency's website. "Harvest will occur of trees that are from 40-120 years, with the bulk of the harvest occurring of trees that are 60-80 years old. While definitions of Old Growth vary by region and the scientist making the analysis, generally in the McKenzie Bridge area a tree is not considered Old Growth until it is 200 years old. Some people have told us they are not in favor of any logging or would prefer we only thin plantations under the age of 80."
     The agency says it launched the project after conducting an environmental assessment, but the preservation groups want a more thorough look.
     "The Forest Service's failure to disclose and analyze scientific information counseling against the activities proposed by the agency, or that call into question the expected environmental effects of the proposed action, and to insure that the proposed alternative supports the purpose and need, is arbitrary, capricious, and not in accordance with law," according to the complaint.
     Claiming violations of the National Environmental Protection Act (NEPA), the groups want an environmental impact statement and an injunction.
     "NEPA procedures must insure that environmental information is available to public officials and citizens before decisions are made and before actions are taken," the complaint states.
     Though the groups say some residents of the McKenzie Bridge area learned about the project only after seeing timber sale flagging near their properties, the government says it ran numerous notices in the local newspaper, The Register-Guard, held a public meeting, and made information available to interested parties.
     The groups are represented by Susan Jane M. Brown with Western Environmental Law Center in Portland. 

Copyright Courthouse News 2012

http://www.cnsenvironmentallaw.com/2012/05/10/808.htm

Allscripts Health Care Solutions Execs Failed to Warn of Post-Merger Growing Pains, Suit Says

Allscripts Health Care Solutions Execs Failed to Warn of Post-Merger Growing Pains, Suit Says

By DEE MOORE 

     (CN) - Allscripts Health Care Solutions Inc. faces a shareholder class action for allegedly misrepresenting the progress of its merger with Eclypsis Corp.
     Lead plaintiff Bristol County Retirement System claims company officials withheld information and deceived the investing public and artificially inflated its stock price.
     "Specifically, defendants made misleading statements regarding the company's progress in integrating AMHS' and Eclipsys' disparate systems and its ability to translate its fragmented product lines into revenues," the complaint states.
     The Delaware company provides healthcare-related information technology services and has its principal offices in Chicago. The complaint names current CEO Glen E. Tullman and CFO William J. Davis CFO as defendants.
     The company's chairman and CFO werdly e allegeaware of the problem but concealed it from shareholders and that there was in-fighting among various senior level management members following the merger.
     When Allscripts announced its First Quarter 2012 financial results on April 26 it delivered an unsettling blow to its investors. It then followed it up with additional bad news that the company's CFO had quit and its Chairman of the Board had been fired.
     "Allscripts filed a Form 8-K with the SEC previewing its operating results for the three months ending March 31, 2012. The Company reported non-GAAP diluted EPS of $0.12 - sharply below the trend implied by the Company's guidance of full-year EPS of between $1.06 and $1.12 for 2012 issued on February 16," the complaint states.
     The company held a conference call Q & A session later that day with traders and corporate officials hoping to mitigate the problems. It was at this time, according to the complaint that, the CEO finally let the cat out of the bag and revealed just how dire the situation is for investors.
     "Our overall results were primarily driven by lower than expected sales and an unfavorable sales mix. This directly impacted both revenue and profit," the complaint states. "In reaction to this news ... Allscripts' share price fell by $5.72 per share, or 35.70 percent, to close at $10.30 per share on volume more than 30 times greater than the average during the Class Period and six times greater than that of any other day during the Class Period."
     The company reported that its total revenues climbed from $548.44 million prior to May 31, 2009 to $1.44 billion as of Dec. 31, 2011.
     The complaint was filed in the Northern District of Illinois. Bristol County Retirement System is represented by John Tangren of Wolf Haldenstein Adler Freeman & Herz LLC in Chicago and Christopher J. Keller, Michael W. Stocker and Rachel A. Avan of Labaton Sucharow LLP in New York.

Copyright Courthouse News Service 2012

http://www.cnssecuritieslaw.com/2012/05/09/327.htm