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NO
GOOD DEED GOES UNPUNISHED
Wednesday, September
28, 2005 |
Besides Enron and WorldCom, perhaps the most costly
fraud for investors, was HealthSouth.
How costly? Around $3 billion.
The individual who first brought the fraud at HealthSouth
to light was former Chief Financial Officer, Weston Smith.
Last week, Weston was sentenced to 27 months in prison.
Sounds reasonable - except his sentence is the longest
that anyone who was involved at the debacle at HealthSouth
has received to date.
For example, Emery Harris, the former assistant controller,
received only 5 months, and Aaron Beam, HealthSouth's
first finance chief, only received 3 months. Of course, the
main culprit former, CEO Richard Scrushy, was acquitted.
It is unfortunate that the prosecutors still smarting from
their inability to convict Mr. Scrushy pushed for a
comparatively long sentence for Weston Smith. This
27-month sentence really doesn't serve public policy.
It makes it less likely that, in the future, individuals like
Mr. Smith will step forward, plead guilty to charges and
provide evidence of corporate wrongdoing.
Now, on to Case and Situations Under Investigation.
If you are an affected investor in any of the following,
you may wish to contact Mark McNair at
info@securitiessleuth.com or 877.511.4717 to discuss
your options.
You can really make a difference. As a result of your
contacts, actions are being pursued against Symbol
Technologies, American Italian Pasta Company and OCA.
Cases Under Investigation
Abercrombie and Fitch (NYSE: ANF)
An insider makes massive sales before bad news comes
out, specifically selling 1.6 million shares and reaping a
profit of $118 million. Investors who purchased ANF
between June 2, 2005 and August 16, 2005 are affected.
Hutchinson Technology, Inc. (NASDAQ: HTCH)
On August 30, 2005, the Company disclosed its true
condition and announced, among other things, that its
gross margins were much lower than previously estimated.
Unbeknownst to investors, while the Company was touting
its prospects and future, corporate insiders sold more than
$12.1 million in Hutchinson stock. Investors who purchased
HTCH between October 4, 2004 and August 29, 2005 are
affected.
Arbinet–Thexchange, Inc. (NASDAQ: ARBX)
Arbinet painted a very rosy picture in its December 16, 2004
initial public offering (IPO). But in view of a series of recent
disclosures regarding the Company’s true financial condition
and the resultant drop in its stock price, it has been alleged
that the Company issued a materially false and misleading
Registration Statement and Prospectus. Investors who
purchased ARBX pursuant or traceable to Arbinet’s
December 16, 2004 IPO are affected.
TXU Corp. (NYSE: TXU)
It is alleged that the Company violated Federal securities
laws and common law fiduciary duties by purchasing certain
Corporate Units (NYSE:TXU PrC and PRIDES (NYSE: TXU PrD)
without disclosing its plan to dramatically increase the
dividend payout on TXU common stock upon completion of
the Tender Offer. Specifically, only nine days after the
Tender Offer expired, TXU adopted a 350%% increase in
its common stock dividend, resulting in a 20% increase in
the common stock price.
Immucor Inc. (BLUD)
On August 26, 2005, the Company announced that the SEC
had launched a formal investigation into payments made
by its Italian unit and its president, and three days later
the Company revealed that its CFO had resigned and
Immucor would be revising its previously issued results
for at least two quarters.
Class Period: January 7, 2005 to August 29, 2005,
Mannatech, Inc. (NASDAQ: MTEX)
The company develops nutritional supplements. After a
May 9 Barron’s article disclosed that many of the
Company’s independent sales associates pushed products
by disseminating misleading information, its stock dropped
26% that day and another 19% the following day.
Class Period: August 10, 2004 to May 8, 2005
World Health Alternatives, Inc. (OTC BB: WHAI)
After the Company announced a restatement and other
bad news on August 19, 2005, its stock plummeted 86%
trading as low as $0.25 per share after closing on
August 18, 2005 at $1.85 per share.
Class Period: June 26, 2003 to August 18, 2005.
Situations Under Investigation
Dana Corporation (NYSE: DCN), an Ohio-based
manufacturer, announced that it is likely to restate its
second-quarter financial statements. The market has
reacted strongly to this news and Dana plummeted 21%.
Investors who have purchased Dana stock since
April 20, 2005 are particularly affected.
Now with respect to settled cases. 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
proportionate share of recovery.
Blue Rhino Corp. (RINO)
Class Period: November 25, 2002 to December 16, 2002
Claims Deadline: October 5, 2005
Claims Administrator: Gilardi
Caminus Corp. (CAMZ)
Class Period: February 12, 2002 to July 8, 2002
Claims Deadline: October 26, 2005
Claims Administrator: Garden City
Contact info: info@gardencitygroup.com or 800.327.3664
Canadian Superior Energy (SNG)
Class Period: November 1, 2003 to March 11, 2004
Claims Deadline: November 15, 2005
Claims Administrator: Gilardi
Comerica, Inc. (CMA)
Class Period: July 17, 2002 to October 1, 2002
Claims Deadline: November 23, 2005
Claims Administrator: Garden City
Contact info: info@gardencitygroup.com or 800.327.3664
Quality Distributions, Inc. (QLTY)
Class Period: November 6, 2003 to January 18, 2005
Claims Deadline: December 23, 2005
Claims Administrator: Garden City
Contact info: info@gardencitygroup.com or 800.327.3664
Again, if you are affected by a settled case, then 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 www.securitiessleuth.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
www.cartville.com/app/join.asp?MerchantID=47994.
Warmest regards,
Mark McNair
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©2005, ALL RIGHTS RESERVED, SECURITIES
SLEUTH
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