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To: ~digs who wrote (6789)	1/18/2002 1:01:32 PM
From: Bucky Katt	Respond to of 48461

I agree, I guess the last suit they avoided was an indication that where there is smoke, there is fire, and in the current cooked books environment it is best to cut & run. NASD findings are almost impossible to rightly appeal, so their best hope is to settle with the plaintiff. And even then, they will carry the smell of "is there more to come"?

To: ~digs who wrote (6789)	1/18/2002 1:53:01 PM
From: Bucky Katt	Read Replies (1) \| Respond to of 48461

On that note, insurance scores huge increases, again.. BTW, did you know that Benjamin Franklin started the first fire insurance company in the US? And more importantly, Mr. Franklin also founded the first fire department, obviously to cover his exposure. Insurance Rates Are Soaring For Officer Liability Coverage By CHRISTOPHER OSTER Staff Reporter of THE WALL STREET JOURNAL It's getting more expensive to insure businesses against the boss's gaffes. Insurance-premium rates are jumping for directors-and-officers liability coverage, a commonly sold insurance line that protects companies in the event that their executives commit negligent acts or make misleading statements that result in lawsuits. Rates are up more than 100% in some cases. One big reason is that there are simply more cases being brought by shareholders. Last year, there were a record 487 federal securities-fraud class-action lawsuits filed, up from 216 in the year 2000 and more than double the previous high of 236 in 1998, according to the Stanford Law School in Stanford, Calif. Securities-fraud lawsuits dot the high-tech landscape, with suits filed against Homestore.com Inc., Infonet Services Corp., Silicon Laboratories Inc., and Daleen Technologies Inc. in the final week of 2001 alone. There also is the mounting litigation against Enron Corp. Analysts say Enron carried about $300 million in directors-and-officers insurance, and every bit of it is expected to be tapped. Already, Enron faces multiple shareholder-driven lawsuits because of the steep drop in the company's stock price as it neared a filing for bankruptcy-court protection late last year. A rash of IPOs and mergers in the 1990s, together with increasingly creative accounting methods, will keep courts full of such cases in coming years, says Cary Meiners, underwriting director for professional services at St. Paul Cos., a leading writer of directors-and-officers coverage. "If you put those three together," he says, "that's wicked chemistry." The increases are big across most industries. "It's as high as 50% to 100%," says Pat Gallagher, chief executive of insurance broker Arthur J. Gallagher & Co. "If you're a great account that's been clean, it may be lower, but across the board you're seeing huge rate increases, and it's accelerating monthly." A recent report on directors-and-officers coverage by Willis Group Holdings Ltd. concludes that companies with healthy balance sheets are experiencing increases of 25% to 40%. "For financially strapped companies," the report adds, "the sky may be the limit. ... Increases of upwards of 300% to 400% are possible." Insurers see such companies as more likely to get hit with lawsuits. It isn't just high-tech companies getting hit with insurance-rate increases. Fremont General Corp., an insurance company that writes mainly workers' compensation insurance, is paying 140% more for its own directors-and-officers coverage premium, adding $700,000 to Fremont's annual insurance bill. Fremont's deductible for the coverage doubled, climbing to $500,000.