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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?


To: mmmary who wrote (10992)1/24/2003 10:27:15 AM
From: StockDung  Respond to of 19428
 
Pre-Paid denies report of inquiry
2003-01-24
By Don Mecoy
The Oklahoman

Pre-Paid Legal Services Inc. on Thursday denied a published report that the company's business practices and stock market activity were under scrutiny from the U.S. Securities and Exchange Commission and the New York Attorney General's office.
"We certainly haven't heard from the SEC ... or from the New York Attorney General's office at all," Pre-Paid Chief Executive Harland Stonecipher said. "Would it concern me if they called? No, it wouldn't concern me. We don't have any problems or anything that we're concerned about."

New York Attorney General Eliot Spitzer and the SEC are investigating the activities of hedge fund Gotham Partners Management Co., which in late November issued a report on touting Pre-Paid's stock, posted it on the Internet and then published it on the Business Wire, a news service. Within a week, Pre-Paid shares had risen 16 percent.

On Dec. 4, Randy Harp, Pre-Paid's chief operating officer, sold 55,000 shares. Gotham Partners sold 200,000 shares later in December. The hedge fund's Web site research vanished after the New York Times reported that Gotham Partners had sold 20 percent of its stake in Ada-based Pre-Paid well below its target price of $67.

The New York Post, without attributing the information to any named sources, reported Thursday that the probe of Gotham Partners had widened to include Pre-Paid and likely will involve other companies on which Gotham Partners issued reports.

Pre-Paid's stock dropped 5.7 percent Thursday, intensifying a January dip that began after the company issued a quarterly report that raised concerns about its ability to retain customers. The company's stock is down nearly 30 percent since the beginning of the month.

Stonecipher rejected any notion that Pre-Paid acted in concert with Gotham Partners, or that Harp sold his shares in anticipation of bad news about the company's membership growth.

"He didn't know that Gotham Partners was going to publish research, (he) didn't know the price was going to go up. If anything, he just happened to be lucky that it did," Stonecipher said.

Stonecipher said Harp sold his shares to repay a loan to the company, and couldn't have known that the company's membership quarterly retention numbers were going to drop for the first time in nearly 10 years. That drop, announced after market close on Jan. 3, triggered a 25 percent slump in the company's stock price on Jan 6.

"The slowdown came right at the last part of the month, which is normally a good time for us," Stonecipher said. "Even though I had some concern about how big of a month we were going to close out, I never actually thought we were going to close out below what we did a year ago."

Stonecipher said he supports Spitzer's investigation of Gotham Partners, which also issued negative reports on companies that it was betting would suffer stock price losses. Pre-Paid has long battled such short sellers, who borrow shares and sell them in the hope they can replace the shares later when the price falls.

"They've been able to hide in the shadows. Well, we can't do that. We're regulated," he said, "but I think that's going to change. They're going to start bringing them out of the shadows and they're not going to like that."

In November, Oklahoma Attorney General Drew Edmondson wrote a letter on Pre-Paid's behalf to the SEC seeking an investigation into alleged manipulation by investors who profit when the company's stock price falls. More than half of Pre- Paid's stock is in the hands of short sellers.

Pre-Paid uses multilevel marketing to sell plans that provide access to lawyers for such things as will preparation and traffic violations for a monthly fee. Critics have questioned the value of the product, the company's marketing methods and the reputation of the people it employs.

The company has been targeted by several lawsuits from former customers who claim the legal coverage falls far short of what was promised and from former associates who claim the company has misrepresented its business opportunity.

Archives: More information on this topic from The Oklahoman.
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To: mmmary who wrote (10992)1/24/2003 11:36:56 AM
From: StockDung  Read Replies (1) | Respond to of 19428
 
WEILL ON GRILL IN $500M BROKERS SUIT

By PAUL THARP

January 24, 2003 -- Sandy Weill has been ordered to undergo grilling by former brokers around the U.S. who claim he stiffed them for as much as $500 million.
Despite a three-year effort by Weill's legion of lawyers to shield the Citigroup chief from the lawsuit, Weill must undergo questioning by lawyers for the angry former brokers at Citigroup's Salomon Smith Barney.

Brokers Mel Rosen and James Fox, along with 118 other high-earners in New Jersey, claim they were cheated out of stock-plan money they plowed into Smith Barney when they worked at its New Jersey offices.

The lawsuit has been certified as a class action with six other similar lawsuits around the nation involving former Smith Barney employees who are seeking return of their stock plan investments.

Claims involve more than $500 million.

A Superior Court Judge in Newark ordered Weill to appear at his deposition and set a trial date for April 28.



To: mmmary who wrote (10992)1/25/2003 6:08:40 PM
From: StockDung  Respond to of 19428
 
Microsoft Says Virus Attacked Web Server Computers (Update4)
By Erik Schatzker and Theresa Ebden

Redmond, Washington, Jan. 25 (Bloomberg) -- Microsoft Corp., the world's biggest software maker, said a computer virus is slowing access to some Internet sites by attacking servers that use versions of its SQL database software to operate Web pages.

The ``Slammer'' worm, similar to ``Code Red'' that struck about 300,000 computers in a week in July 2001, slows Web access by exploiting a vulnerability in the SQL software to make servers request data from each other. The spread is slowing and the glitch doesn't harm computers, computer security experts said.

``It increases the amount of electronic traffic on the Internet and that is causing access issue for customers,'' said Microsoft spokesman Matt Pilla. A ``wide variety'' of Microsoft customers have called the Redmond, Washington-based company to complain, Pilla said. He declined to elaborate.

Microsoft Chairman Bill Gates last year directed all employees to review the security of the company's products. Programmers were required to attend workshops on writing code that is less vulnerable to hacking and freezing without warning as part of Microsoft's effort to sell more programs for running the busiest corporate networks and Web sites.

`Non-Event'

Operators of some of the most visited Web sites in the U.S. and Europe said they have not been disrupted.

EBay Inc. spokesman Kevin Pursglove said there was no impact on the largest Internet auctioneer's traffic or operations. AOL Time Warner Inc. spokesman Nicholas Graham said ``the AOL service and network has not been affected whatsoever, across any of the properties we provide or host.'' America Online has 35 million subscribers.

The worm was a ``non-event'' for Amazon.Com Inc., the world's largest Internet retailer, said spokesman Bill Curry. ``It was just a normal day.''

Verizon Communications Inc. the second-largest U.S. provider of fast Internet access over phone lines, had some internal systems slow and they are coming back up, spokesman Mark Marchand said. ``We're using a patch that was developed this morning.'' Verizon's phone system and customers were unaffected, he said.

Glitch

Spokespeople for Deutsche Telekom AG, France Telecom SA, TeliaSonera AB, the Nordic region's biggest phone company, and Internet providers in the U.K. said there has been little impact. ``I'm not aware of any problem,'' said France Telecom spokeswoman Nilou du Castel. France Telecom owns Wanadoo SA, Europe's second- largest Internet-service provider.

The glitch spread to about 25,000 computers and the rate of infections has slowed, said Oliver Friedrichs, a senior manager of Symantec Corp.'s security response group. Symantec, the largest seller of anti-virus software, began receiving reports about the worm at 3:30 a.m. New York time.

The virus began rapidly spreading to servers running the Microsoft software by creating copies of itself, in some cases overwhelming business networks, slowing Internet service and making some Web pages inaccessible, Friedrichs said. It exploits a vulnerability for which Microsoft issued a fix about six months ago, he said. ``Right now, we're seeing more of a drop off.''

Marty Lindner, a team leader at the CERT Coordination Center at Carnegie Mellon University in Pittsburgh, said Internet service providers have done a good job of filtering the worm out.

``It isn't having a major impact globally -- at this point, it's being controlled,'' Lindner said. ``The infection has probably stopped globally.'' The federally funded CERT was created in 1988 as the Computer Emergency Response Team, shortly after a computer virus crippled much of the Internet.

No Accident

Vincent Gullotto, a senior research director for Network Associates Inc.'s Antivirus Response Team, said his team hasn't identified the cause. ``It was definitely not by accident.'' The transmission of some e-mail also was slowed, he said.

The virus has infected servers running the Service Pack 1, or SP1, and SP2 versions of Microsoft's SQL Server 2000 software, Microsoft's Pilla said. Microsoft is conducting tests to confirm that the newer SP3 update is immune.

International Business Machines Corp.'s DB2 program and Oracle Corp.'s database software compete with Microsoft's SQL.

The virus is not harmful to computers, said Howard Schmidt, a computer-security adviser to President George W. Bush, according to AP. Schmidt said the disruption to U.S. government computers was minimal

The Federal Bureau of Investigation said it is monitoring the virus and trying to identify the cause, said White House spokeswoman Tiffany Olson.

The type of virus had been detected as early as May 2002, and ``the onus has been on the ISPs and company systems administrators to take preventative action to keep this from happening,'' Olson said.



To: mmmary who wrote (10992)1/26/2003 12:40:11 PM
From: Sir Auric Goldfinger  Read Replies (2) | Respond to of 19428
 
NY Times: "If Short Sellers Take Heat, Maybe It's Time to Bail Out By GRETCHEN MORGENSON [Grub]

IF you own shares in a company that declares war on short sellers, there is only one thing to do: sell your stake.[several names come to mind, ZCrap at the top of the list, LOL]

That's the message in a new study by Owen A. Lamont, associate professor of finance at the University of Chicago's graduate school of business. He analyzed returns at 270 companies that waged public battles with short sellers, investors who bet on a stock's fall. He found that their stocks lagged the market by 2.34 percent in each of the 12 months after the battles began.

The study, which covers 1977 to 2002, shows not only that the stocks of companies who try to thwart short sellers are generally overpriced, but also that short sellers are often dead right.

The study divides the tactics used against short sellers into three types: belligerent statements, which include claims of a short seller's conspiracies or of lies spread by the pessimists; taking legal or regulatory action against short sellers; and making technical moves to prevent short selling, like urging shareholders to register stock in their names rather than in those of their brokerage firms, so that shares cannot be lent to short sellers. Companies also try to get big stakes into friendly hands, so short sellers cannot borrow them.

The negative returns varied depending on the strategy, the study showed. Companies that urged shareholders to take delivery of their stock lagged the market by 3.17 percent a month in the following year. Those that worked to get their stock into friendly hands underperformed the market by almost 5 percent a month.

During the 25 years that Mr. Lamont tracked, he found 326 incidents at some 270 companies. Among them were Conseco, the insurance giant that filed for bankruptcy protection last month, and Samsonite, the luggage maker, whose shares traded at 38 cents last Friday. MicroStrategy Inc., a software company whose chairman settled accounting fraud accusations brought by regulators in December 2000, also figured in the study. Its shares peaked at $333 a share in 2000, but closed Friday at $1.55, adjusted for a reverse split.

In recent months, executives at Allied Capital, a small business lender, MBIA Inc., a securities guarantor, Farmer Mac, a maker of agriculture loans, and Pre-Paid Legal Services, a provider of legal assistance plans, have whined about short sellers or tried to instigate action against them.

When stock prices fall, Mr. Lamont said, companies, investors and even regulators often attack short sellers. "You tend to see when stock prices go down a wave of harassment and government suppression of short selling," he said. It's irrational, he added, and an example of the limited good concept, where someone's success is seen as having come at the expense of others.

But short sellers are not the enemy of investors — they are often right about their targets. And Mr. Lamont noted, "Many firms accuse short sellers of fraud, but are in fact themselves guilty of fraud."

The fact is, short sellers actually reduce volatility in the market. Their selling helps keep stocks from flying too high, and when they close out their trades, the buying often gives beleaguered stocks support. "If there had been more short selling of tech stocks in 1999, the market wouldn't have gone up so much," Mr. Lamont said. "And it wouldn't have gone down so much because short sellers would have provided a floor."

When companies rail against short sellers, it makes one wonder: why don't they stick to running their businesses rather than trying to run their stock price?