The Securities Sleuth

BOARD DECISIONS AND PUBLIC SCRUTINY

May 9, 2007

Sometimes, when boards make decisions, not everyone is happy. Often, what boards do raise the ire of its employees and investors. But, generally, boards make decisions, even unpopular ones, publicly and let others comment or react as they desire.

Two board decisions have received a significant public response recently - the pay package that Northwest's CEO received and the retirement package that ATT's CEO received.

Northwest Airline's CEO will receive $26.6 million of restricted stock and options once the Company steps out bankruptcy next month. The airline's pilot union, as you would expect, condemned the arrangement. From their perspective, the reason that the Company was able to emerge from bankruptcy protection was because of sacrifices made by union workers. The unions believe their past concessions were excessive and they should share in any gain from the Company's turnaround.
The board for its part knew the CEO's package wouldn't be popular, but presumably felt it was necessary to recruit and retain key executives.

The other compensation arrangement that is in the news is the $158.5 million retirement package that ATT's Edward Whitacre will receive when he retires. Definitely better than just receiving a gold watch. Plus, he will receive other perks, such as a $24,000 per year automobile benefit and $25,000 for his country club dues for the next 3 years. During these three years, besides presumably playing golf, he will also receive $1 million per year to be a consultant for the company.
Some corporate activists have been shocked by the size of the retirement package. However, there has been little outrage from shareholders. ATT's stock performed very well while Mr. Whitacre has been running the company.

The compensation decisions by both Northwest and ATT were both clearly disseminated as soon as the decisions were made. No attempt was made to use improper gimmicks to mislead the public regarding the amounts that would be received. They knew they would receive some criticism.

This makes what some other companies did to backdate options they gave their executives all the more galling. In many of these cases, if the companies had decided to just raise the salaries of their executives, few shareholders would have complained. But instead, executives at some of the companies decided to mislead, not only the public, but often their boards about the options they received. It is little wonder that the stocks in these companies dropped when their improper backdating options practices were revealed. Such companies include Transaction Systems Architects, Inc. (NASDAQ:TSAI), Sonic Solutions (NASDAQ: SNIC), and Active Power, Inc. (NASDAQ: ACPW)

If you are an affected investor in any of the companies that were involved in improper backdating, you may wish to contact us at info@securitiessleuth.com or 877.511.4717.

Another situation we are investigating involves Allot Communications (NYSE: ALLT). On April 2, 2007, its stock declined precipitously - approximately 40% below its IPO price. This drop occurred after the Company lowered its previous guidance. It has been alleged, among other things, that the Company's Registration Statement and Prospectus were negligently prepared, contained untrue statements of material facts, and omitted facts necessary to make the states in the documents not misleading.

We are investigating the situations discussed above and if you are an affected investor in any of these cases or the other cases listed below under investigation, you may wish to contact us at info@securitiesleuth.com or 877 511 4717. More information is available securitiessleuth.typepad.com or at www.securitiessleuth.com.

Other cases under investigation are:

CTS Corporation (NYSE: CTS)
Cutera, Inc. (NASDAQ: CUTR)
Inphonic, Inc. (INPC)
Gaming Partners International Corp. (NASDAQ: GPIC)
Jackson Hewitt Tax Service Inc. (NYSE: JTX)
Fremont General Corporation (NYSE: FMT)
LCA-Vision (NASDAQ: LCAV)
Thor Industries, Inc.(THO)
U.S. Auto Parts Network, Inc. (NASDAQ: PRTS)

Now with respect to securities cases that have recently settled. If you are an affected investor - you purchased any of these stocks during the relevant class period, you may wish to contact the claims administrator to obtain additional information. Remember, if you don't submit your claim form, you won't receive your share of any settlement.

Catalina Marketing Corp. (POS)
Class Period: October 14, 1999 to August 25, 2003
Claim Deadline: May 21, 2007
Claims Administrator: Gilardi

Spear & Jackson, Inc. (SJCK)
Class Period: February 1, 2002 to April 1, 2003
Claims Deadline: June 26, 2007
Claims Administrator: Garden City

Information regarding other recent settled cases, including the cases listed below can be found at www.securitiessleuth.com.

Winstar Communications (WCII)
Ibis Technology Corp. (IBIS)
Astropower, Inc. (APWR)

Again, you should contact the claims administrator (rather than us). However, if you are an affected investor in any of the companies under investigation, you many wish to contact us so that you can consider your options.

Likewise, if you happen to be aware of corporate restatements or other financial fraud -- especially if you're a victim -- you're encouraged to contribute to the Sleuth by giving your own tip-offs at http://securitiessleuth.typepad.com or by e-mailing info@securitiessleuth.com.

You can also call Mark McNair at 877-511-4717. If you have a friend or colleague you think would benefit from The Sleuth, please pass along this issue and ask them to sign up at
http://www.cartville.com/app/join.asp?MerchantID=47994.

Warmest regards,

Mark McNair