Charting the Class-Action Suits

The past several years have seen enough corporate scandal to fill up a nine-volume Dominic Dunne collection, and the ensuing civil litigation has become hard to keep track of. Here's a table listing the main cases.

The Lowdown on Blowups Here's a rundown of the most notable class-action lawsuits currently pending.
Company	Allegations
WorldCom	This could be one of the largest cases of securities fraud in American history. The suit alleges that WorldCom inflated its profit by $3.9 billion with improper accounting for routine expenses. As a result, the company's reported earnings of $1.4 billion in 2001 and $130 million in the first quarter of 2002 would be false.
Enron	This major class-action lawsuit, filed on Oct. 22, 2001, alleges that Enron executives used accounting tricks to artificially inflate earnings without disclosing these practices to shareholders, who suffered steep losses when the company filed for bankruptcy. The suit also maintains that company insiders sold their shares before the trouble hit.
Adelphia	This class-action lawsuit alleges that the cable company misled investors by not revealing billions of dollars in off-balance-sheet debt until shares had plunged.
Merrill Lynch and Henry Blodget	In at least three different cases, Merrill Lynch and star Internet analyst Henry Blodget have been sued for allegedly recommending stocks that both knew were bad investments. The suits allege that the recommendations weren't based on objective research, but on the pressure to gain banking business from companies, specifically eToys and Internet Capital Group.
Salomon Smith Barney and Jack Grubman	Salomon Smith Barney and influential telecommunications analyst Jack Grubman are faced with a number of class-action lawsuits alleging that Grubman's glowing ratings were motivated by a desire to generate banking business instead of accurately assessing the real situation at the companies he covered. Specifically, Global Crossing, AT&T, AT&T Wireless and WorldCom are cited in various complaints.
Vivendi	A suit alleges that Vivendi and Chief Executive Jean-Marie Messier misled investors by not revealing the severity of the company's cash crunch. The company is accused of issuing deceptive press releases just days before Messier was fired by Vivendi.
Tyco	A number of complaints have been filed against Tyco and CEO Dennis Kozlowski, including suits in New York, New Hampshire and Florida. The suits allege nondisclosure of aggressive accounting practices, inside payments to company execs, risks to a planned CIT Group public offering and major conflicts of interest involving board members and executives.
IPO Laddering	More than 300 companies and 55 Wall Street firms, including Goldman Sachs, Credit Suisse First Boston, Merrill Lynch, Morgan Stanley and Salomon Smith Barney, have been sued by shareholders who allege the firms "laddered" initial public offerings, meaning they promised larger allotments of shares to investors who agreed to buy shares at higher prices, thereby artificially inflating the IPO's value. Because of the number of defendants and sheer scope of the case, the settlement is expected to reach billions of dollars, according to lawyers pursuing the case.
Source: Stanford Law School Class Action Clearinghouse, News Reports, TSC Research