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Novartis Agrees to Settle Drug Rep Overtime Lawsuit

Thu, 26 Jan 2012 00:00:00 -0800

After six years of litigation, Novartis Pharmaceuticals Corp. has agreed to pay $99 million to settle a class action lawsuit brought on behalf of pharmaceutical sales reps who allegedly were illegally denied overtime pay for working more than 40 hours per week. The deal has been tentatively approved by U.S. District Judge Paul Crotty in Manhattan. However, the Novartis overtime settlement is still subject to final approval, and a fairness hearing has been scheduled for May 31.

The lawsuit is one of several filed in recent years by pharmaceutical sales reps, including those working for GlaxoSmithKline, Johnson & Johnson, Bristol-Myers Squibb Co. and a unit of Merck & Co. It has long been standard practice for drug makers to avoid paying overtime for pharmaceutical sales representatives by classifying them as commissioned outside sales people, or administrative personnel, both categories that are exempt from the Fair Labor Standards Act's (FLSA) overtime requirements.

The Novartis sales rep had argued in their lawsuit that they did not qualify as outside sales reps. The lawsuit was originally filed in 2006, but a New York trial judge had agreed with Novartis' contention that the sales representatives did fall under FLSA overtime exceptions for outside salespeople and administrative workers. But in July 2010, the Second Circuit Court of Appeals overturned that ruling. The lawsuit moved forward last year, after the U.S. Supreme Court refused to hear Novartis' appeal of the Second Circuit ruling.

According to a Reuters report, the sales reps impacted by the proposed Novartis settlement worked for the drug maker between 2002 and 2007, and from Jan. 25, 2009, to the present. Payouts will vary based on length of employment and compensation, and on how many plaintiffs choose to take part in the settlement

The U.S. Supreme Court is soon to take up another drug sales rep overtime case, this time involving some 90,000 current and former sales representative for GlaxoSmithKline. The Ninth Circuit Court of Appeals has already ruled that the Glaxo reps are exempt from FLSA overtime requirements.

Abercrombie Fitch, Hollister Hit with Gift Card Lawsuits

Thu, 29 Dec 2011 00:00:00 -0800

Two major clothing retailers face class-action lawsuits alleging they dishonored their own gift card promotions following the 2009 Christmas holiday season.

According to separate reports at TopClassActions.com, Hollister Co. and Abercrombie & Fitch each held promotions during the holiday shopping season of 2009, offering “free” $25 gift cards to customers who spent more than $100 at their stores during a given visit. In fact, a $25 gift card was offered to consumers for every $100 worth of merchandise they purchased. These gift cards had an extra perk, they purportedly had no expiration date.

For thousands of people who took advantage of the promotion, spending the money at the stores then receiving the $25 gift cards, they soon learned the promotion was mostly a scam. They were encouraged to spend more at the stores than they may have originally planned (for example, spending an extra $20 to reach a new $100 plateau just to receive the promoted gift card).

Presumably, the consumers who purchased enough merchandise at these stores would give these gift cards as an additional gift or as a gift to someone else.

In each case, the retailers voided those $25 gift cards after Jan. 30, 2010, about a month after they were likely given as gifts. The stores either eliminated the total worth of the card or the remaining balance on it, despite promoting the cards as having “no expiration date.”

The class-action lawsuit against Hollister is filed in Circuit Court of the 18th Judicial Circuit of Illinois but states no restrictions on who can be considered part of the class. The legal action accuses the retailer of breach of contract because it devalued the gift cards offered through the promotion. It seeks “actual damages, court costs, prejudgement interest and other relief” for consumers included in that class.

The lawsuit against Abercrombie & Fitch is currently limited to Ohio consumers who made purchases before the Christmas 2009 promotion expired. According to the report on this lawsuit, the gift cards offered at Ohio A&F stores specifically state they have “no expiration date” but because the retailer voided the credit included on the card after a specific date just a few months after they were awarded, it is “impossible for [Class Members] to receive the benefit of their bargain.”

Abercrombie & Fitch is accused of violating Ohio’s Consumer Sales Practices Act in the lawsuit and it seeks “compensatory damages, punitive damages, attorney fees and other relief” for those who took part in the promotion.

The lawsuit was filed in Ohio, where the retailer is located. It was filed initially by Beth Seaver, of Richfield, Ohio, who spent more than $300 at an A&F store in December 2009 and for her purchase she received three separate $25 gift cards.

The store’s gift card policy is printed on the back of each card and the last sentence in that policy on these specific cards indicates they have “no expiration date.”

Judge Grants Parker Waichman LLP Motion to Remand Marlboro Lights Cigarette Lawsuit

Tue, 13 Dec 2011 00:00:00 -0800

A federal judge has granted Parker Waichman LLP's motion to suggest that a light cigarette class action lawsuit it filed on behalf of a New York man be remanded back to U.S. District Court for the Eastern District of New York. The lawsuit, Bryant Tang vs. Philip Morris, USA, alleges purchasers of Marlboro Lights suffered economic damages as a result of misrepresentations made by Philip Morris and Altria Group about the cigarettes.

The Tang lawsuit was one of several consolidated in a multidistrict litigation before John A. Woodcock, Jr., Chief District Judge for the U.S. District Court, District of Maine. On November 24, 2010, Judge Woodcock denied class certification to four test cases submitted in the multidistrict litigation, finding non-commonality. Defendants then sought to apply Judge Woodcock's ruling to dismiss complaints remaining in the multidistrict litigation, including the Tang lawsuit.

Parker Waichman LLP opposed the dismissal and moved to have the Tang lawsuit remanded back to the Eastern District of New York, asserting that Section 349 of New York State's General Business Law provides a common element of damages applicable to all New York class members.

In an order issued yesterday, Judge Woodcock refused to dismiss any of the remaining lawsuits. He also granted the Parker Waichman LLP’s Motion to Suggest Remand of the Tang lawsuit to the Eastern District of New York. The final decision on whether to remand the complaint will be made by the U.S. Judicial Panel on Multidistrict Litigation.

85 Arrested in Orthodox Jewish Child Sexual Abuse Investigation

Mon, 12 Dec 2011 00:00:00 -0800

A three-year investigation into child sexual abuse in the Orthodox Jewish community is paying off, according to the Brooklyn District Attorneys office. Since the project, known as Kol Tzedek, was launched in 2009, 85 alleged child molesters have been arrested.

According to The New York Post, Kol Tzedek has also resulted in:

•    117 victims: 89 under age 17, the rest up to age 23, when the statute of limitations expires
•    47 cases pending; 38 closed
•    14 offenders sentenced to jail, from a month to 10-to-20 years
•    24 free—on probation, after pleading to lesser charges or after cases were dismissed.

Kol Tzedek is Hebrew for “voice of justice. The aim of the program is to convince child sexual abuse victims to come forward, even though the Orthodox Jewish community has long exerted pressure on victims to stay quiet about their abuse. Ultra-orthodox rabbis enforce a rule that prohibits reporting fellow Jews to secular authorities. Coming forward can result in an entire family being made outcasts.

“The first thing they say almost every time is, ‘Please don’t tell anybody. I don’t want to go public. Make sure this never goes to the press,’ ” Henna White, the Orthodox Jewish liaison for the Brooklyn DA's office, told The New York Post. “I can’t begin to tell you how important that is.”

Sadly, dismissals often came after victims and their parents bowed to immense community pressure to stop cooperating with law enforcement, White said.

New York Life Insurance Probe Yields $52 Million in Unpaid Benefits

Tue, 06 Dec 2011 00:00:00 -0800

Since being ordered by New York state regulators to use Social Security death data to identify deceased policyholders, life insurance companies doing business in New York have paid more than $52 million in previously unpaid death benefits to nearly 8,000 beneficiaries.   The order, issued over the summer, was part of an investigation launched by the state Department of Financial Services into the handling of unpaid death benefits.

"Our inquiry has already resulted in nearly 8,000 people receiving more than $52 million that was due them, and that is just the beginning. Our findings clearly show that matching life insurance policies against a comprehensive list of recent deaths is essential to ensure that all beneficiaries receive the benefits they are owed," Financial Services Superintendent Benjamin M. Lawsky said in a statement. "And the fact that some life insurers are already using the lists for this purpose and have paid out hundreds of millions of dollars proves it can and should be done. With the initial 8,000 matches resulting in $52 million for beneficiaries, even if a small percentage of the one million preliminary matches result in payments, the total amount of payments could be huge.”

The earliest year of death for which a benefit payment has been made thus far is 1970, and the largest benefit payment made thus far is $673,485. Insurers are required to pay interest on delayed payments. The payout figure includes 1,209 payments totaling $16.9 million made to New York payees, the statement said.

In addition to the payouts, life insurers have initiated claims processing for payments to 27,889 other matches, the statement said.

Insurance companies use a Social Security database called the "Death Master File" to cut off payments to deceased policyholders, but do not utilize this tool to ensure that unclaimed death benefits go to their rightful beneficiaries. Over the summer, the New York Insurance Department ordered 172 companies to start cross-checking against lists of policyholders to determine when benefits are due.

Over the past year, life insurance companies have faced scrutiny from regulators in New York and elsewhere over their handling of unpaid death benefits. In November, the New York State Attorney General's Office and the State Comptroller announced the launch of a state investigation into such practices, after their offices uncovered data that indicated that millions in insurance death benefit funds may have been improperly withheld from beneficiaries.   The announcement came after Attorney General Eric Schneiderman subpoenaed nine large insurance companies, including AXA SA, Genworth Financial Inc, Guardian Life Insurance Co of America, Manulife Financial Corp, Massachusetts Mutual Life Insurance Co, MetLife Inc, New York Life Insurance Co, Prudential Financial Inc, and TIAA-CREF, over the summer.

Meanwhile, Florida is chair of a multi-state National Association of Insurance Commissioners (NAIC) task force investigating life and annuity claims practices. The primary charge of the task force is to coordinate the activities of state insurance regulators in pursuing investigations / settlements regarding possible unfair claims practices. Other states on the task force include California, Iowa, Louisiana, North Dakota, New Jersey, New Hampshire, Pennsylvania and West Virginia.

Parker Waichman LLP Representing Stranded JetBlue Passengers in Class Action Lawsuit

Mon, 28 Nov 2011 00:00:00 -0800

Parker Waichman LLP is representing three JetBlue passengers who were stranded on the tarmac for up to 7 1/2 hours when several JetBlue flights were diverted to Bradley International Airport in Hartford, Connecticut during a snowstorm that hit the Northeast on October 29. The JetBlue class action lawsuit, which was filed in U.S. District Court for the Northern District of New York, seeks to represent any JetBlue passenger who was stuck on the tarmac as a result of the airline's diversions that day.

According to the complaint, the three lead plaintiffs named in the lawsuit were subjected to intolerable and inhumane conditions, including rolling blackouts and malfunctioning toilets that backed up and would not flush. Crews on the affected flights also ran out of potable water and food for passengers. According to Syracuse.com, one of the lead plaintiffs claims to suffer "from anxiety, depression and claustrophobia," the lawsuit says. She was unable to get to anti-anxiety and anti-depression medications which were in her stowed luggage.

Six JetBlue flights were among roughly 23 diverted to Bradley on October 29. In some case, passengers were unable to deplane for up to 7 1/2 hours. The federal "Airline Passengers Bill of Rights" limits tarmac delays to 3 hours, and airlines can be fined $27,500 per passenger for a delay longer than that. The U.S. Department of Transportation (DOT) is currently investigating the JetBlue tarmac delays at Bradley, as well as some involving American Airlines.

The JetBlue lawsuit alleges violations of New York's Unfair and Deceptive Trade Practices Act, false imprisonment, negligence and negligence per se, and negligent infliction of emotional distress. The complaint seeks declaratory and injunctive relief on behalf of the plaintiffs and all members of the proposed Class.

True Facts in Penn State Sandusky Child Abuse Scandal Could be Revealed Through Victims' Lawsuits

Fri, 18 Nov 2011 00:00:00 -0800

With so many questions unanswered in the Jerry Sandusky Penn State child sexual abuse scandal, civil lawsuits may be the only way the full truth will ever come to light. According to a report from the Associated Press, the University, former head coach Joe Paterno and others involved in the Sandusky debacle could all face varying legal problems in civil court, depending on the evidence produced during discovery.

In civil litigation, discovery generates much more information than in a criminal trial, because defendants are not guaranteed a right against self incrimination. The broad discovery rules could reveal more about what Paterno and others at Penn State knew about Sandusky's alleged conduct, and exactly when they knew it.

Penn State already seems to be bracing for the coming legal onslaught. According to the Associated Press, the university Board of Trustees has hired a high-powered Pittsburgh law firm. But some legal experts contend that, considering the types of damning information that could be revealed by civil discovery, Penn State might be willing to discuss settlement with alleged Sandusky victims to avoid going to court.

"You're going to see everybody pointing at somebody else to try and get themselves out of it,", a Philadelphia lawyer who has who has represented victims of sexual abuse at the hands of Catholic Priests, told the Associated Press. "When you've got 19, 20 kids coming out, saying 'He did it, he did it,' I don't understand why anyone at Penn State in their right mind would say, 'Let's fight this."

"New facts are going to come out, I'm sure, in the civil litigation," a second attorney said. "It's one of the reasons that Penn State and the other potential defendants may decide to do whatever they can to prevent that from happening, and people going under oath. It's very dangerous."

Sandusky, a former assistant coach at Penn State, was indicted earlier this month on charges that he sexually abused 8 children over a period of 8 years. Two former Penn State officials were also arrested on charges of perjury and for failing to report on alleged incident of abuse that occurred on the university's main campus to authorities. Paterno, who served as Penn State head football coach for 46 years, was fired by the Board of Trustees last Wednesday, as was university president Graham Spanier.

According to a grand jury report released by Pennsylvania investigators earlier this week, Paterno, 84, heard a graphic retelling in 2002 from a then-graduate assistant coach of an alleged incident of child sexual abuse committed by Sandusky in the shower of the Penn State football building. Though Paterno reported the allegation to his superiors, he did not pursue the matter further. Those superiors spoke to Sandusky, and banned him from bringing children onto the Penn State main campus (though Sandusky himself was not banned from campus, and he was also allowed to run a youth football camp at a satellite campus for another six years).

Sandusky came into contact with the children through his Second Mile Foundation charity, and some of the alleged abuse incidents occurred on the Penn State campus.

Pennsylvania state law enforcement officials said that while Paterno had met his legal obligation in alerting his superiors, he failed on a moral level by not doing more. The same officials also charged that inaction on the part of Penn State University allowed more children to become victims of abuse at the hands of Sandusky.

Guatemala Research Victims Sue U.S. Government

Tue, 15 Nov 2011 00:00:00 -0800

Last week, a group of plaintiffs filed suit against the U.S. government in a bid to obtain compensation for allowing government-paid scientists to intentionally infect Guatemalan citizens with syphilis and other sexually transmitted diseases in the 1940s. According to The Washington Times, the lawsuit seeks to represent unknown numbers of other Guatemalans who have yet to be identified but were injured by the experiments, which ran from 1946 to 1948, and possibly to 1953.

The Guatemalan experiments came to light last October, prompting an apology from President Obama. Those experiments were conducted by doctors from the U.S. Public Health Services between 1946 and 1948. The research, the aim of which was to determine whether taking penicillin after exposure could prevent sexually transmitted diseases, was led by John C. Cutler, who also helped coordinate "Tuskegee Experiment." Dr. Cutler detailed the Guatemalan experiments in papers that were discovered last year in the University of Pittsburgh archives by a Wellesley College researcher.

Of 5,500 Guatemalan prison inmates, psychiatric patients, soldiers, commercial sex workers, orphans and school children involved in the research, researchers deliberately exposed about 1,300 inmates, psychiatric patients, soldiers and commercial sex workers to sexually transmitted diseases syphilis, gonorrhea or chancroid. At least 83 Guatemalan subjects died, although the exact relationship between the experimental procedures and the subject deaths remains unclear. Consent was never obtained from any of the research subjects, and in some instances, the illnesses with which they were infected were not treated.

A presidential commission has concluded that Dr. Cutler and his team must have been fully aware of the ethical implications of their Guatemalan studies. They pointed out that the same researchers had conducted similar experiments that involved intentionally exposing prison inmates to gonorrhea in Terre Haute, Indiana, in 1943. The scientists did take proper steps to obtain consent from those subjects.

The U.S. government must respond to the lawsuit by January 9, but so far, has not commented on the complaint.

"Just like Tuskegee, there was no remedy [for the victims] until they filed a class-action" lawsuit, attorney Piper Hendricks, of the law firm Parker Waichman LLP, told the Times. "We're following that pattern again, and hoping to have a positive response from the government sooner, rather than later."

Despite Promise to Retire, Penn State Fires Paterno for Handling of Sandusky Child Sex Abuse Scandal

Thu, 10 Nov 2011 00:00:00 -0800

Former Penn State head football coach Joe Paterno's much-vaunted career has come to an abrupt end. Last night, the Penn State University Board of Trustees made the stunning announcement that it had fired Paterno, along with university president, Graham Spanier, over their handling of child sex abuse allegations against former assistant coach Jerry Sandusky.

According to a grand jury report released by Pennsylvania investigators earlier this week, Paterno, 84, heard a graphic retelling in 2002 from a then-graduate assistant coach of an alleged incident of child sexual abuse committed by Sandusky in the shower of the Penn State football building. Though Paterno reported the allegation to his superiors, he did not pursue the matter further. Those superiors spoke to Sandusky, and banned him from bringing children onto the Penn State main campus (though Sandusky himself was not banned from campus, and he was also allowed to run a youth football camp at a satellite campus for another six years).

In the wake of the report's release, Paterno tried to calm the growing furor prompted by his role in the debacle by announcing his retirement at the end of this season. But the Board of Trustees, which was reportedly planning Paterno's exit, did not allow him to control the timing of his departure.

"The university is much larger than its athletic teams," board vice chair John Surma said during a packed press conference last night.

“I am disappointed with the Board of Trustees' decision, but I have to accept it. A tragedy occurred, and we all have to have patience to let the legal process proceed. I appreciate the outpouring of support but want to emphasize that everyone should remain calm and please respect the university, its property and all that we value," Paterno said in a statement reacting to the announcement.

Some of that "support" included rioting among some Penn State students in State College, Pennsylvania, last night. According to various media reports, angry students flipped over a television van, knocked a lamppost onto a car, threw toilet tissue and rocks at police and set off fireworks.

Sandusky, who retired from his position with Penn State at the end of the 1999 football season, but maintained an office at the university's main campus until 2007, was indicted last week for allegedly abusing 8 boys over a period of 15 years. Sandusky came into contact with the children through his Second Mile Foundation charity, and some of the alleged abuse incidents occurred on the Penn State campus.

Two Penn State officials, athletic director Tim Curley, and Gary Schultz, PSU's senior vice president for finance and business, were arrested this week and charged with perjury and failure to report to authorities what they knew of the allegations, as required by state law in Pennsylvania. Both have resigned their positions with the university.

Earlier this week, Pennsylvania state law enforcement officials said that while Paterno had met his legal obligation in alerting his superiors, he failed on a moral level by not doing more. The same officials also charged that inaction on the part of Penn State University allowed more children to become victims of abuse at the hands of Sandusky.

Paterno, the winningest coach in college football, had served as Nittany Lion's head coach for 46 years. Up until this point, he was among the most well-respected coaches in the sport, and had a reputation for upholding the highest in ethics and integrity.

Joe Paterno Announces Retirement, as Penn State Child Abuse Scandal Grows

Wed, 09 Nov 2011 00:00:00 -0800

Penn State head football coach Joe Paterno is on his way out. The venerated coach announced his retirement today, saying in a statement that his 46-year tenure as the Nittany Lions' head football coach would end at the close of this coming season

According to The New York Times, the Penn State University Board of Trustees was already planning Paterno's exit within days or weeks, after the Nittany Lions coach came under scathing criticism for his handling of child sexual abuse allegations against former assistant coach, Jerry Sandusky.

In his statement, Paterno appeared to be pleading with the board to allow him to stay on as head coach until the end of the 2011 season.

"At this moment the Board of Trustees should not spend a single minute discussing my status. They have far more important matters to address. I want to make this as easy for them as I possibly can," the statement read.

Sandusky, who left his position as an assistant coach with Penn State at the end of the 1999 season, but maintained an office at the university's main campus until 2007, was indicted last week for allegedly abusing 8 boys over a period of 15 years. Sandusky came into contact with the children through his Second Mile Foundation charity, and according to the report, some of the alleged abuse incidents occurred on the Penn State campus.

According to a grand jury report released by Pennsylvania investigators earlier this week, Paterno, 84, heard a graphic retelling in 2002 from a then-graduate assistant coach of an alleged incident of child sexual abuse committed by Sandusky in the shower of the Penn State football building. Though Paterno reported the allegation to his superiors, he did not pursue the matter further. Those superiors spoke to Sandusky, and banned him from bringing children onto the Penn State main campus (though Sandusky himself was not banned from campus, and he was also allowed to run a youth football camp at a satellite campus for another six years).

Two Penn State officials, athletic director Tim Curley, and Gary Schultz, PSU's senior vice president for finance and business, were arrested this week and charged with perjury and failure to report to authorities what they knew of the allegations, as required by state law in Pennsylvania. Both have resigned their positions with the university.

Earlier this week, Pennsylvania state law enforcement officials said that while Paterno had met his legal obligation in alerting his superiors, he failed on a moral level by not doing more. The same officials also charged that inaction on the part of Penn State University allowed more children to become victims of abuse at the hands of Sandusky.

Calls have been increasing for both Paterno, and Penn State University President Graham Spanier, to either resign or be fired. Last night, the Penn State University Board of Trustees held an emergency conference call that went late into the night, and later issued a statement saying it was "outraged by the horrifying details” in the grand jury’s report. The board promised “swift, decisive action, and will appoint a special committee during its regular meeting to conduct an investigation into the incident.

Paterno, the winningest coach in college football, has served as Nittany Lion's head coach for 46 years, and is practically worshipped at Penn State. Part of this, ironically, is because he is also regarded as one of the sports most ethical coaches, and the Nittany Lions football program has never been accused of committing any recruiting violations or cheating in any way during his tenure.

New York Officials Target Life Insurance Companies over Unpaid Death Benefits

Mon, 07 Nov 2011 00:00:00 -0800

New York State is intensifying its probe of life insurance companies and their handling of unpaid life insurance death benefits. Late last week, the New York Attorney General and Comptroller announced they would join investigations they started over the summer to make sure that life insurance companies keep promises to beneficiaries and to the state.

New York is just one of several states looking into this issue. Florida, for example, is chair of a multi-state National Association of Insurance Commissioners (NAIC) task force investigating life and annuity claims practices. The primary charge of the task force is to coordinate the activities of state insurance regulators in pursuing investigations / settlements regarding possible unfair claims practices. Other states on the task force include California, Iowa, Louisiana, North Dakota, New Jersey, New Hampshire, Pennsylvania and West Virginia.

Insurance companies use a Social Security database called the "Death Master File" to cut off payments to deceased policyholders, but do not utilize this tool to ensure that unclaimed death benefits go to their rightful beneficiaries. Death Master lists all Americans who have died. Life insurers are generally required to pay claims after being notified of a policyholder’s death and receiving a valid death certificate. In cases were they can't find a beneficiary, some states require payments be turned over to unclaimed property funds.

But in a statement released last week, New York Attorney General Eric T. Schneiderman and State Comptroller Thomas P. DiNapoli said their individual investigations uncovered data that indicated some live insurance death benefit funds may have been improperly withheld from beneficiaries. Over the summer, Scheiderman's office subpoenaed nine large insurance companies, including AXA SA, Genworth Financial Inc, Guardian Life Insurance Co of America, Manulife Financial Corp, Massachusetts Mutual Life Insurance Co, MetLife Inc, New York Life Insurance Co, Prudential Financial Inc, and TIAA-CREF. The Comptroller’s Office began an independent review of life insurance companies using new data-matching methods.

"Together, our offices will undertake the largest and most comprehensive investigation of life insurance practices in the country," Schneiderman said in a statement announcing the investigation.

Ground Zero Rescue, Recovery Workers to Begin Filing Zadroga Act Claims

Thu, 03 Nov 2011 00:00:00 -0700

Ground Zero rescue workers and others eligible for compensation under the Zadroga Act can now register with the 9/11 Victim Compensation Fund. The fund will remain open for five years to provide payment for job and economic losses suffered by World Trade Center first responders, those trapped in the buildings, and local residents who suffered illness or injures related to the toxic dust.

The 9/11 Victim Compensation Fund reopened for registration on October 3, and could begin accepting claims for compensation as early as the end of November. The Eligibility portion of the claim forms became available online at the end of October 2011 (paper form is also available for those without internet access). Sometime around the end of November 2011, the Compensation portion of the form will be available.

Claimants who currently suffer from a covered condition have until Oct. 3, 2013 to file a claim, and others will have two years from the date on which they know or should have known of the condition for which they seek compensation until the Fund stops accepting claims in 2016.

The Zadroga Act, which among other things provides funding for health care for sickened Ground Zero responders, was passed by the U.S. Congress last December. While disorders such asthma, interstitial lung disease and mental illnesses such as post-traumatic stress disorder are eligible for compensation, cancer is still not a covered ailment. Over the summer, the federal government decided exclude cancer victims for now, after a National Institute for Occupational Safety and Health (NIOSH) review of scientific evidence purportedly found “very little” evidence of a link between cancer and the toxic dust cloud that enveloped and then blanketed much of lower Manhattan in the wake of the attacks. The decision will stand until at least 2012, when NIOSH will conduct its next review.

Feds Launch Probes of Airline Tarmac Delays

Tue, 01 Nov 2011 00:00:00 -0700

Facing a federal investigation after his airline left 100 passengers stranded on the tarmac for at least 7 hours, JetBlue's CEO issued a public apology yesterday. The airline also said on Sunday it would refund its passengers' full fares on all six planes it diverted to Connecticut's Bradley International Airport during Saturday's snow storm.

According to The Wall Street Journal, the U.S. Department of Transportation’s tarmac delay regulation allows it to fine airlines as much as $27,500 per passenger if a domestic flight sits on the tarmac for more than three hours without letting the passengers disembark. The time limit is four hours for international flights.

Hundreds of flights were cancelled and others diverted on Saturday when an early nor'easter hit the East Coast. JetBlue flight 504, Fort Lauderdale-to-Newark, was one of several diverted to Bradley, where it landed around 1:00 p.m. Passengers were stuck on the idle plane for more than seven hours, as food and water ran out and toilets stopped functioning. At one point, the pilot called airport officials and pleaded with them to send police, telling them he “can’t seem to get any help from our own company," ABC News said.

The transportation department is also investigating an American Airlines flight that was also diverted to Bradley. That flight, which had originally been headed to JFK after taking off from Charles de Gaulle airport in Paris, landed in Hartford around 2:30 p.m. It sat for seven and a half hours before U.S. Customs and Border Protection agents allowed the passengers to deplane, according to The Wall Street Journal.

According to ABC News, Rob Maruster, Jet Blue’s chief operating officer, made the apology in a video message posted on blog.jetblue.com. According to Maruster, JetBlue diverted a total of six flights to Hartford's Bradley International Airport on Saturday due to "various runway congestion and other operational issues at Newark and JFK airports.”

“We did not deplane those aircraft in our target time allotted,” Maruster says. “At no point this weekend was safety ever compromised in our decision making — whether it was our customers and our crew members — in fact, safety was their No. 1 concern.”

Feds Launch Probes of Airline Tarmac Delays

Orthodox Jewish Youth Worker Arrested on Child Sexual Abuse Charges in Australia

Tue, 18 Oct 2011 00:00:00 -0700

An Orthodox Jewish youth leader who once worked at an Australian school already at the center of a child sexual abuse scandal has been arrested for molesting a child. According to theage.com, Aron Ezriel Kestecher, 26, was arrested on four counts of indecent acts on a child under the age of 16. He served as a substitute teacher at the Yeshivah College, a school for Orthodox Jewish Boys in Melbourne.

This is just the latest child sexual abuse scandal to hit the school. Earlier this year, parents complained that former teacher, David Kramer, had abused boys at Yeshiva College in the 1990s. Parents in Australia have said their children were threatened with being thrown out of Yeshivah College if they reported Kramer’s conduct to secular authorities. The revelations prompted the Melbourne police to write to former students of Yeshivah College earlier this year, asking them to make a police report if they were assaulted or witnessed an assault between 1989 and 1993.

Kramer is currently in the U.S., where he is serving a seven-year sentence for molesting a 12-year-old boy at a synagogue in St Louis, Missiouri. Melbourne police are planning on having him extradited when he is released, theage.com said.

Just last month, Yeshivah College security guard David Samuel Cyprys was charged with multiple counts of indecent assault and gross indecency after he allegedly repeatedly molested boys from the school between 1984 and 1991.

Theage.com didn't provide many specifics on Kestecher's alleged conduct. He has been released on bail and will appear in the Moorabbin Magistrates Court on November 29.

Ohio Lawsuit Targets Unpaid Life Insurance Death Benefit Payments

Fri, 30 Sep 2011 00:00:00 -0700

A lawsuit is pending before U.S. District Judge Dan Polster of the Northern District of Ohio that slams two life insurance companies over the way they allegedly handle the payment of unclaimed death benefits. Policyholder Rita Koenig, 85, alleges that while Western & Southern Mutual Holding Co. and Columbus Life Insurance Co. use a Social Security database called the "Death Master File" to cut off payments to deceased policyholders, it does not utilize this tool to ensure that unclaimed death benefits go to their rightful beneficiaries.

Death Master lists all Americans who have died. She is seeking an injunction ordering the two companies to scan the Death Master File annually for the names of all policyholders who have a mortality probability of 70% or higher to ensure that there aren't benefits that ought to have been paid.

According to insuancenewsnet.com, Koenig is seeking class action status for her lawsuit. While she is still alive, actuarial tables predict that her mortality is greater than 91% and her complaint contends that there are many other similarly aged policyholders who have died and have beneficiaries who are owed money.

The issue of unclaimed death benefits has also attracted the attention of state insurance regulators. Florida, for example, is chair of a multi-state National Association of Insurance Commissioners (NAIC) task force investigating life and annuity claims practices. The primary charge of the task force is to coordinate the activities of state insurance regulators in pursuing investigations / settlements regarding possible unfair claims practices. Other states on the task force include California, Iowa, Louisiana, North Dakota, New Jersey, New Hampshire, Pennsylvania and West Virginia.

In May, John Hancock agreed to pay $3 million to the Florida Office of Insurance Regulation and other state agencies to cover investigative costs and attorney fees stemming from the investigation, and to establish a $10 million fund for paying beneficiaries who can’t be contacted.

In July, it was learned that the New York Attorney General's office subpoenaed nine large insurance companies over similar issues.

Unpaid Internship Practices Targeted by "Black Swan" Lawsuit

Thu, 29 Sep 2011 00:00:00 -0700

Two interns who worked on the blockbuster hit movie "Black Swan" are out to change the way the movie industry treats unpaid interns. According to a lawsuit filed in federal court in Manhattan against Fox Searchlight Pictures, the studio's treatment of unpaid interns violates federal and state labor laws.

Plaintiff Eric Glatt of Brooklyn, New York, was supposed to be an accounting intern for "Black Swan", while Alexander Footman of Takoma Park, Maryland, came aboard as a production intern. But both claim they didn't learn much about the movie business, and instead were assigned menial tasks that should have been given to paid employees like janitors and secretaries.

According to a report from The New York Times, federal labor law requires that unpaid interns receive training similar to what would be given in an educational institution, and that companies that utilize such interns gain no immediate advantage from the intern’s activities. Their work also may not displace paid employees.

“The only thing I learned on this internship was to be more picky in choosing employment opportunities,” Footman told the Times.

Footman's and Glatt's lawsuit alleges that Fox Searchlight’s practices with respect to unpaid interns violate the federal Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL). The lawsuit seeks minimum wage rate for all hours worked, overtime for the hours that they work over 40 in a workweek, and spread of hours pay on days on which they work more than 10 hours. It also seeks an injunction against the studio for improperly using unpaid interns on future projects, as well as class action status on behalf of more than 100 unpaid interns on various Fox Searchlight productions.

Glatt's and Footman's lawyer told the Times that their lawsuit would be the first of several that seek to fight these internship practices.

California Investigating MetLife, Nine Other Life Insurance Companies

Thu, 29 Sep 2011 00:00:00 -0700

California is among several states investigating the way life insurance companies handle unpaid death benefits. On May 23, California Insurance Commissioner Dave Jones held a hearing on the issue, and vowed to conduct examinations of 10 of the biggest carriers.

The insurers targeted by Jones include Prudential Insurance, Nationwide Life Insurance, Hartford Financial Services, Sun Life Financial, Metropolitan Life Insurance, New York Life Insurance, Pacific Life Insurance, John Hancock Life Insurance, The Lincoln National Life Insurance, and the Aegon Group.

The goal is to determine whether the insurance industry has engaged in unfair practices,” Jones said in a statement.

California subpoenaed MetLife, the largest U.S. life insurance company, to testify at the hearing. Jones said he has already uncovered evidence that for two decades MetLife failed to pay benefits to beneficiaries or the state after learning that an insured had died

According to the California Department of Insurance, early findings indicate that life insurers receive information about the death of their policyholders from a database prepared by the Social Security Administration called Death Master. They use Death Master to cut off payments on annuities when an annuity owner dies but do not use that information to identify life insurance policyholders who died and pay their beneficiaries.

In July, it was learned that the New York Attorney General's office subpoenaed nine large insurance companies over similar issues.

Florida is chair of a multi-state National Association of Insurance Commissioners (NAIC) task force investigating life and annuity claims practices. The primary charge of the task force is to coordinate the activities of state insurance regulators in pursuing investigations / settlements regarding possible unfair claims practices. Other states on the task force include California, Iowa, Louisiana, North Dakota, New Jersey, New Hampshire, Pennsylvania and West Virginia.

In May, John Hancock agreed to pay $3 million to the Florida Office of Insurance Regulation and other state agencies to cover investigative costs and attorney fees stemming from the investigation, and to establish a $10 million fund for paying beneficiaries who can’t be contacted.

Florida Insurance Regulator Reaches Agreement with John Hancock

Wed, 28 Sep 2011 00:00:00 -0700

Florida's ongoing probe into the way life insurance companies handle unpaid death benefits resulted in a settlement with the John Hancock Insurance Company in May. Among other things, John Hancock agreed to do a better job of identifying policyholders who have died and notifying their beneficiaries that they are due death benefits.

"Companies are using the Death Master File to stop company payments for annuities—but do not use this same list to pay beneficiaries of people who have life insurance policies,” Florida Insurance Commissioner Kevin McCarty said in a statement issued in May. “Unfortunately, this appears to be a pervasive industry practice. The Office appreciates that John Hancock stepped-up and agreed to change its processes before any other company. The agreement with John Hancock will send a strong signal to other companies to audit and modify their practices.”

The Death Master File is a database used by the U.S. Social Security Administration that lists all American's who die.

Without admitting any wrongdoing, John Hancock agreed to:

•    Pay $3 million to three agencies for settlement -- $600,000 of this settlement has been waived due to the company’s ongoing cooperation.
•    Return monies to beneficiaries, which includes interest payments owed since the date of death.
•    If a beneficiary cannot be identified, the amount due will be reported to the Unclaimed Property Division of the DFS.
•    Establish a $10 million fund to facilitate payment to beneficiaries that cannot be contacted.
•    Provide quarterly reports to the Office, to the DFS and to the Attorney General for the next three years, updating information specific to Hancock’s implementation of the agreement.

Florida is chair of a multi-state National Association of Insurance Commissioners (NAIC) task force investigating life and annuity claims practices. The primary charge of the task force is to coordinate the activities of state insurance regulators in pursuing investigations / settlements regarding possible unfair claims practices. Other states on the task force include California, Iowa, Louisiana, North Dakota, New Jersey, New Hampshire, Pennsylvania and West Virginia.

In July, it was revealed that the New York Attorney General's office subpoenaed nine large insurance companies, including AXA SA, Genworth Financial Inc, Guardian Life Insurance Co of America, Manulife Financial Corp, Massachusetts Mutual Life Insurance Co, MetLife Inc, New York Life Insurance Co, Prudential Financial Inc, and TIAA-CREF as part of a similar investigation.

New York Insurance Regulator Directs Life Insurers to Pay Unclaimed Death Benefits

Tue, 27 Sep 2011 00:00:00 -0700

Insurance regulators in New York took steps over the summer to make sure life insurance companies pay out death benefits in a timely manner to beneficiaries. Among other things, the New York State Insurance Department required insurers to immediately begin using reliable available data - including the U.S. Social Security Administration’s "Death Master" database - to identify when policyholders have died and death benefits are due but unpaid. Meanwhile, the Department is working on a regulation to make this requirement permanent.

“The department is concerned that life insurers may not be adopting and implementing reasonable standards for investigating claims and locating beneficiaries,” the New York insurance regulator said in a statement announcing the action.

The Social Security Death Master database lists all Americans who die. Life insurance companies regularly use this database when it will save them money, such as determining when an annuity holder has died so they can terminate payments. But they don't always make use of this database to determine when life insurance death benefits should be paid.

In a letter sent to all 172 life insurers and fraternal benefit societies licensed in New York, the Insurance Department directed them to use the available data to find where payments are due, locate beneficiaries, and make payments. The letter recipients must report on the results beginning September 2011 and continuing for six months.

The Insurance Department said it was also proceeding with efforts to amend the unfair claims practices regulations to require life insurers to perform regular Death Master cross-checks and to require life insurers to request more detailed policyholder and beneficiary information, such as social security number and address, to facilitate identifying deceased policyholders and locating and making payments to beneficiaries in the future.

The Insurance Department sent its letter shortly after it was revealed that the New York Attorney General's office subpoenaed nine large insurance companies, including AXA SA, Genworth Financial Inc, Guardian Life Insurance Co of America, Manulife Financial Corp, Massachusetts Mutual Life Insurance Co, MetLife Inc, New York Life Insurance Co, Prudential Financial Inc, and TIAA-CREF as part of its probe into the payment of unclaimed death benefits. New York is just one of several states, including Florida, California, and Connecticut, investigating the payment of unclaimed death benefits. The National Association of Insurance Commissioners, an alliance of the states’ top insurance officials, has also formed a task force to look into such practices.

All of the investigations are focused on whether or not life insurance companies are doing enough to identify deceased insureds and make payments to beneficiaries. The investigations are also looking into whether insurance companies are turning over unclaimed policy proceeds that are supposed to be turned over to state unclaimed property funds when they are unable to locate a beneficiary.

Boy Scouts Hit with New Oregon Child Sexual Abuse Lawsuit

Wed, 14 Sep 2011 00:00:00 -0700

Four Oregon men have filed a child sexual abuse lawsuit against the Boy Scouts of America and its Portland branch alleging the organization was negligent in allowing an accused pedophile to become a scoutmaster in the 1970s. All of the plaintiffs in the lawsuit claim they were sexually abused by Steven T. Hill in 1976 and 1977, when they were between the ages of 12 and 15.

According to the Associated Press, Hill just finished serving a 20-year-sentence on an unrelated child sexual abuse charge. The Oregon lawsuit claims that when Hill moved to the state in 1976, Boy Scout officials in Portland were informed by the California counterparts that Hill had been accused of molesting another boy while he was a scoutmaster in that state. In spite of this information, he became a scoutmaster in Oregon. Among the evidence the plaintiffs plan to present is a deposition taken while Hill was in prison that they say shows Portland officials were contacted by the California branch about the previous allegation.

Hill was acquitted in the late 1970s of sex abuse charges related to the Boy Scouts in Portland, according to a Reuters report.

The lawyer representing the four Oregon men told the Associated Press that the plaintiffs are just some of the scores of people who have come forward with sexual abuse claims since the Boy Scouts were ordered to pay $18.5 million last year in another lawsuit involving a former assistant scoutmaster. In that lawsuit, a former Boy Scout had alleged that he was sexually abused by Timur Dykes in the 1980s. Dykes was allowed to continue in his position as an assistant scoutmaster even after a 1983 admission to a bishop with the from the Church of Jesus Christ of Latter-day Saints - sponsor of the Boy Scouts -that he had molested 17 Scouts. Dykes was eventually convicted of various abuse charges and spent time in prison.

According to the Associated Press, the Dykes case was also cited as a "memory trigger" by a plaintiff in a Montana lawsuit that was filed against the Boy Scouts just last week. That lawsuit was filed by five women who say they were sexually abused by the leader of a Montana coed Scouting program in the 1980s.

Presidential Commission Details

Wed, 14 Sep 2011 00:00:00 -0700

The Presidential Commission investigating the U.S. Public Health Department's syphilis experiments on hundreds of Guatemalan citizens - including children - has called the conduct of American researchers "unconscionable." The Guatemalan research involved intentionally exposing and infecting vulnerable populations to sexually transmitted disease, including syphilis, without the subjects’ consent.

“In the Commission’s view, the Guatemala experiments involved unconscionable basic violations of ethics, even as judged against the researchers’ own recognition of the requirements of the medical ethics of the day,” Amy Gutmann, Ph.D., Chair of the Presidential Commission for the Study of Bioethical Issues, said in a statement issued yesterday. “The individuals who approved, conducted, facilitated and funded these experiments are morally culpable to various degrees for these wrongs.”

The Guatemalan experiments came to light last October, prompting an apology from President Obama. Those experiments were conducted by doctors from the U.S. Public Health Services between 1946 and 1948. The research, the aim of which was to determine whether taking penicillin after exposure could prevent sexually transmitted diseases, was led by John C. Cutler, who also helped coordinate "Tuskegee Experiment." Dr. Cutler detailed the Guatemalan experiments in papers that were discovered last year in the University of Pittsburgh archives by a Wellesley College researches.

In March, a group of victims filed suit against the U.S. Department of Health and Human Services and other government agencies seeking reparations for human rights abuses. Attorneys representing the Guatemalan syphilis experiment victims, including Parker Waichman LLP, had asked the Obama Administration to set up a claims process for reparations, but the federal government failed to respond to their request.

The Commission is scheduled to deliver a final report in December, but briefed the White House on their findings yesterday. In conducting their investigation, Commission members reviewed 125,000 documents from public and private archives around the country and conducted a fact-finding trip to the Central American nation.

The Commission concluded that researchers conducted diagnostic tests including blood draws and spinal taps on as many as 5,500 Guatemalan prison inmates, psychiatric patients, soldiers, commercial sex workers, orphans and school children. Of those, researchers deliberately exposed about 1,300 inmates, psychiatric patients, soldiers and commercial sex workers to sexually transmitted diseases syphilis, gonorrhea or chancroid.

The Commission also concluded that at least 83 Guatemalan subjects died, although the exact relationship between the experimental procedures and the subject deaths remains unclear.

The Commission concluded that Dr. Cutler and his team must have been fully aware of the ethical implications of their Guatemalan studies. They pointed out that the same researchers had conducted similar experiments that involved intentionally exposing prison inmates to gonorrhea in Terre Haute, Indiana, in 1943. "In the Terre Haute experiments, the researchers went to some lengths to obtain consent of their subjects: they fully briefed the prisoners who, in turn, volunteered and gave informed consent. A few years later, the same researchers in Guatemala did not seek their subjects’ consent," the Commission's statement says.

"The double standard is shocking," Dr. Gutmann said. "The researchers in Guatemala treated the rules of the day as obstacles to be overcome."

Home Builders Target of U.S. Wage Theft Investigation

Fri, 09 Sep 2011 00:00:00 -0700

PulteGroup Inc., Lennar Corp., D.R. Horton Inc., KB Home and other home builders around the country are targets of a wage theft investigation being conducted by the U.S. Department of Labor. The Department wants to know if the home builders have been complying with the Fair Labor Standards Act, especially in the areas of minimum wage and overtime pay.

According to The Wall Street Journal, builders have received letters from the Department of Labor demanding that they immediately turn over the names, addresses, Social Security numbers, pay rates and hours worked for all employees over the past two years. The letters also seek names of contractors they've worked with.

Wage practices in the home construction industry have been the bane of unions for years. The Laborers International Union of North America in 2008 issued a study that called employees at home builders the "newest victims" of the housing market crisis because of "underpayment," according to the Journal. Often, home builders rely on vulnerable immigrant labor and layers of subcontractors to keep wage costs low. A Labor Department official told The New York Times that builders also often misclassify workers and independent contractors to avoid paying them properly.

Wage theft in the home building industry is nothing new. According to the Times, last year, the Labor Department's investigation of individual wage theft complaints in the industry netted $7 million in fines and involved 4,000 employees.

The problem is bad enough that the Labor Department has decided not to wait for more individual complaints. The home builder wage theft probe is part of the department's plans to target industries that have a track record of exploiting vulnerable workers, the Associated Press said. In recent years, similar wage theft investigations have scrutinized the hotel, restaurant, janitorial, health care and day care industries.

"We are actively looking at those industries that employ the most vulnerable workers and that engage in business practices, such as misclassifying employees as independent contractors that result in violations of minimum-wage and overtime laws," Department of Labor spokesman Carl Fillichio told the Associated Press.

Since 2009, the Labor Department has hired about 300 additional investigators to probe complaints of unpaid work, lack of overtime pay and minimum-wage violations, the Associated Press said.

Two Investor Lawsuits Target Google, Executives over AdWords Settlement

Wed, 07 Sep 2011 00:00:00 -0700

So far, Google's recent $500 million settlement with the federal government over allegedly illegal AdWords sales has spawned two shareholder lawsuits that name the company, as well as some of its executives and officers, as defendants. The lawsuits, both of which were filed in federal court in San Jose, California, claim Google and the other defendants breached their fiduciary duties by facilitating illegal imports of prescription drugs.

"The breadth and scope of the wrongdoing was astonishing," claims one of the lawsuits. "From 2003 to 2009, Google knowingly assisted Canadian pharmacies in advertising the illegal sale of prescription drugs."

Defendants named in the lawsuits include CEO Larry Page, Chairman Eric Schmidt, and co-founder Sergey Brin.

The lawsuits were filed just days after Google agreed to pay $500 million to settle charges it allowed online Canadian pharmacies to place advertisements through its AdWords program targeting consumers in the U.S. Because of Google's sale of these internet ads, many U.S. consumers then went on to import prescription drugs from Canada, which according to the U.S. Justice Department "is almost always unlawful."

Like the Justice Department, the investors filing the Google shareholder lawsuits allege the company knew as early as 2003 that shipping drugs from Canada into the U.S. was illegal in most cases. While Google was warned about the sales in 2003 and 2008 by U.S. pharmaceutical drug regulators, it allowed ads from Canadian online pharmacies to target U.S. consumers until 2009, when it became aware of the government investigation. Google directors and executives could have acted much sooner and perhaps prevented the $500 billion forfeiture, the investors claim.

Both lawsuits seek to recover the $500 million that was forfeited in the settlement. They are also asking for additional damages to be decided by a jury to "punish defendants and to make an example of defendants."

According to a statement from the Justice Department, the $500 million settlement represented the gross revenue received by Google as a result of Canadian pharmacies advertising through Google's AdWords program, plus gross revenue made by Canadian pharmacies from their sales to U.S. consumers.

Lancet Study Sees Higher Cancer Risk among 9/11 Firefighters

Tue, 06 Sep 2011 00:00:00 -0700

New York City firefighters exposed to toxic dust and smoke at Ground Zero in the wake of the September 11, 2001 terror attacks face a higher risk of developing any type cancer, according to an important new study. The lead author of study, which appears in a special issue of The Lancet, told Reuters that the research ''clearly shows World Trade Center exposure" caused the spike in cancer rates among the Ground Zero first responders.

According to the Lancet report, firefighters responding to the World Trade Center disaster would have been exposed to potentially hazardous aerosolized dust consisting of pulverized cement, glass fibers, asbestos, lead, polycyclic aromatic hydrocarbons, polychlorinated biphenyls, and polychlorinated furans and dioxins produced as combustion byproducts from the collapsed and burning buildings. They were also exposed to potentially toxic fumes -- initially from burning jet fuel and, during the 10-month recovery effort, from diesel smoke emitted by heavy equipment.

The study found that male firefighters exposed to Ground Zero faced a 19 percent higher risk of getting cancer of all kinds than colleagues who were not exposed. The study looked at nearly 10,000 male firefighters, and limited the cancers it examined to those that developed within seven years of exposure. The researchers adjusted for factors such as age and prior cancer diagnosis that could have skewed results.

The study's results "support the need to continue monitoring firefighters and others who responded to the World Trade Center disaster or participated in recovery and cleanup at the site,’ said Dr. David Prezant of the Fire Department of the City of New York, the report’s lead author. "This monitoring should include cancer screening and efforts to prevent cancer from developing in exposed individuals."

Like other studies, this research did not see an increase risk of lung cancer among exposed firefighters. This did not surprise the researchers, however, as it can many years for lung cancer to develop after toxic exposure.

To date, only a handful of smaller studies have shown increased rates of cancer among Ground Zero first rsponders. The Lancet study was the first effort to assess the incidence of cancer among an entire cohort exposed to dust and fumes at Ground Zero.

The studies findings come just two months after the National Institute for Occupational Safety and Health (NIOSH) determined that Ground Zero responders suffering from cancer would not be eligible for compensation under the James Zadroga 9/11 Health and Compensation Act. NIOSH made the decision to exclude cancer because, "Insufficient evidence exists at this time to propose a rule to add cancer, or a certain type of cancer." Of course, cancer can take decades to develop, so it’s not surprising that concrete evidence has been slow to surface.

The Lancet study authors said they expect their new study will feature prominently in the next NIOSH WTC cancer report scheduled for 2012. According to a Reuters report, Dr. Prezant said Dr. John Howard, director of NIOSH, was aware of the study's findings.

According to a report from The Wall Street Journal, James Melius of the New York State Laborers' Health Fund, who reviewed the research, acknowledged that the new study has limitations. But he pointed out that it could 40 years or more after exposure for cancer to appear, by which time many Ground Zero responders will have already died.

“We ought to give responders the benefit of the doubt,'' he said.

Panel Investigating Guatemalan Syphilis Experiments Calls for Compensation of Medical Research Victims

Wed, 31 Aug 2011 00:00:00 -0700

The panel investigating the unethical Guatemalen syphilis experiments conducted by U.S-funded researchers in the 1940s has called on the U.S. government devise a system of compensation for people injured as a result of medical research. It seems the U.S. is one of the few nations without such a system.

"The panel felt strongly that it was wrong and a mistake that the United States was an outlier in not specifying any system for compensation for research subjects other than, 'You get a lawyer and sue,'" Amy Gutmann, president of the University of Pennsylvania, and chair of the Presidential Commission for the Study of Bioethical Issues, said, according to The Washington Post.

Gutmann made the remarks on Monday, the first of a two-day hearing convened to discuss key findings of the panel's investigation of the Guatemalan syphilis experiments. Those experiments, which were conducted by doctors from the U.S. Public Health Services between 1946 and 1948, involved the intentional infection of hundreds, possibly upwards of 1,500, soldiers, prisoners and mental patients in Guatemala with gonorrhea and syphilis without their knowledge or permission. The experiments, which were conducted to determine whether taking penicillin after exposure could prevent sexually transmitted diseases, were led by John C. Cutler, who also helped coordinate "Tuskegee Experiment."

The Guatemalan experiments came to light last October, prompting an apology from President Obama. In March, a group of victims filed suit against the U.S. Department of Health and Human Services and other government agencies seeking reparations for human rights abuses. Attorneys representing the Guatemalan syphilis experiment victims, including Parker Waichman LLP, had asked the Obama Administration to set up a claims process for reparations, but the federal government failed to respond to their request.

On Monday, Gutmann announced that the panel had concluded that U.S. Scientists must have known the Guatemalan experiments were unethical.

"The people who were in the know, did want to keep it secret because if it would become more widely known, it would become the subject of public criticism," she said, according to Reuters.

According to the panel, its probe had revealed that the same scientists had obtained consent first before conducting earlier, similar experiments on inmates in Terre Haute, Ind., and hid what they were doing in Guatemala. In Guatemala, doctors tried to infect some subjects by giving them prostitutes who were carrying the diseases or were infected by the researchers. The researchers also scraped sensitive parts of subjects' anatomy to expose wounds to disease-causing bacteria, poured infectious pus into subjects' eyes, and injected some victims' spines, The Washington Post said.

According to the Post, the panel determined that about 700 of the Guatemalan subjects were treated for the diseases they obtained, but it remains unclear whether their care was adequate. Another 83 died, but it is not clear if the research caused their deaths.

Investor Sues Google over AdWords Sales to Canadian Pharmacies

Tue, 30 Aug 2011 00:00:00 -0700

The first of what could be many Google shareholder lawsuits stemming from last week's record-setting settlement with the U.S. Department of Justice (DOJ) was filed in federal court in San Jose, California yesterday. The derivative lawsuit, filed by a Google investor from Pennsylvania, seeks unspecified damages on behalf of the company and its investors.

The lawsuit alleges that Google's board and CEO Larry Page knew or should have known it was illegal for pharmacies outside the U.S. to ship prescription drugs into the country. It further alleges that Google's annual reports from 2003 to 2009 were false and misleading because the company didn't disclose revenue from the improper advertising.

The lawsuit came just days after the DOJ announced that Google had agreed to pay $500 million to settle charges it allowed online Canadian pharmacies to place advertisements through its AdWords program targeting consumers in the U.S. Because of Google's sale of these internet ads, many U.S. consumers then went on to import prescription drugs from Canada, which the Justice Department said "is almost always unlawful."

By agreeing to the settlement, Google was able to avoid criminal charges. According to a statement from the DOJ, the $500 million settlement represents the gross revenue received by Google as a result of Canadian pharmacies advertising through Google's AdWords program, plus gross revenue made by Canadian pharmacies from their sales to U.S. consumers.

Google was aware as early as 2003, that generally, it was illegal for pharmacies to ship controlled and non-controlled prescription drugs into the United States from Canada, the DOJ said. Lead prosecutor, Peter Neronha, the U.S. Attorney in Rhode Island, told The Wall Street Journal that Google's efforts to prevent such advertising in the years leading up to the probe - including the use of third-party services to screen out sites that didn't comply with U.S. law - were mere "window dressing." Neronha also told the Journal that the illegal AdWords sales were not the result of "two or three rogue employees at the customer service level doing this on their own," and represented a "corporate decision to engage in this conduct."

Google was warned in 2003 and 2008 by U.S. pharmaceutical drug regulators that importation of drugs from abroad was illegal, the Journal said. According to the DOJ, Google allowed ads from Canadian online pharmacies to target U.S. consumers until 2009, when it became aware of the government investigation.

Appalachian Kids Loosing their Teeth to Mountain Dew Mouth

Wed, 24 Aug 2011 00:00:00 -0700

Mountain Dew Mouth is destroying the dental health of countless children in Appalachia. The disorder, which is marked by severe tooth decay, is associated with excessive consumption of the high-caffeine, high-sugar soft drink, coupled with a lack of accessible dental care. In some cases, children and teens with Mountain Dew Mouth exhibit levels of tooth decay and tooth loss usually only seen in senior citizens.

The grinding poverty that plagues so many of Appalachia's children plays a role in the Mountain Dew Mouth phenomena as well. Soft drinks are a cheaper alternative to more nutritious beverages, which according to a 2009 ABC News report, makes them attractive to financially-stressed families. Filling baby bottles with Mountain Dew and feeding it to young babies was also found to be a common practice in Appalachia, the report said.

Mountain Dew contains a higher amount of caffeine than most soft drinks, which some experts say make it addictive. There is some speculation that the caffeine in Mountain Dew also provides a legal - and less expensive - alternative to caffeine pills or anti-depressants.

To cover up the bitter taste of so much caffeine, Mountain Dew contains an astonishing amount of sugar - 11.5 teaspoons per 12 ounce can. That much sugar, along with the addictive caffeine, means excessive amounts of Mountain Dew are fatal to good dental health.

According to the ABC News, some children in Appalachia reported routinely purchasing large bottles of Mountain Dew, which they drink throughout the day. These kids are basically soaking their teeth in sugar all day, dentists say.

Poverty makes everything worse, as many Appalachian families can't afford routine dental care for their kids. The pain caused by their untreated rotting teeth often causes many of these kids to avoid brushing and flossing their teeth.

FDA Still Dragging Feet on Triclosan

Mon, 22 Aug 2011 00:00:00 -0700

Nearly 30 years since it first proposed regulating triclosan, the U.S. Food & Drug Administration (FDA) is still far from reaching a decision. The agency was expected to release the findings of its triclosan review several months ago, but according to a New York Times report, is delaying the release until 2012.

Triclosan, developed 40 years ago as a surgical scrub, can now be found in a host of consumer products, from hand wash, to toothpaste, to cutting boards. It can also be found in human beings: A survey by the Centers for Disease Control and Prevention found the chemical present in the urine of 75 percent of Americans over the age of 5.

Dial Complete Antibacterial Foaming Antibacterial Handwash is among the many consumer products that contain triclosan.   The makers of that handwash claim that triclosan enables it to kill more germs than similar products. But some consumers have taken issue with those claims, alleging in lawsuits that they are not backed by any serious scientific studies. Those lawsuits also allege that triclosan has been linked to antibiotic resistance. Just last week, 10 Dial Complete lawsuits filed in federal courts around the country were consolidated in a multidistrict litigation and transferred to U.S. District Court, District of New Hampshire.

Consumer advocates say fears about triclosan are well-founded. According to the Times, several studies have indicated that the chemical may alter hormone regulation in laboratory animals or cause antibiotic resistance. Last year, Representative Edward J. Markey (D-Mass.) pressured the FDA to write regulations for antiseptic products like hand soap, including those that use triclosan, and pushed the agency to ban its use in consumer products. That same year, the National Resources Defense Council sued the FDA, in an attempt to force it to finish its triclosan review.

But it appears the agency has not been moved by that pressure. Since it first proposed regulating triclosan in 1972, it has done little other than issue statements that indicate triclosan is not all its promoters claim it should be.   In 1978, for example, the FDA proposed eliminating triclosan as an active ingredient in hospital scrubs and in hand soaps, and it issued a similar proposal in 1994. But on both occassions, nothing happened.

In 2005, the FDA concluded that antimicrobial soaps and sanitizers do not reduce the risk of illness and infection in the home. Then, in an April 8, 2010 “Consumer Update”, the FDA stated that it does not have evidence that triclosan-containing antibacterial soaps and body washes provide any extra health benefit over soap and water alone.

In the 2010 Consumer Update, the FDA said it would communicate its findings by spring of 2011.   So far, it's said nothing. According to a report on the National Resources Defense Council's staff blog, Switchboard, the FDA recently edited its triclosan page on its website to say that it would communicate its findings in the winter, 2012 (here’s a link to the page last year, and here’s a link to the webpage from today.)

The agency has not given any reason for the delay, Switchboard said, or provided any type of update about its ongoing triclosan review.

Consolidation Ordered for Dial Complete Lawsuits

Fri, 19 Aug 2011 00:00:00 -0700

A panel of federal judges has ordered that consumer lawsuits involving marketing claims for Dial Corporation’s Dial Complete Antibacterial Foaming Handwash be consolidated in a multidistrict litigation in U.S. District Court for the District of New Hampshire. There are currently 10 such lawsuits pending in seven federal districts throughout the country.

Dial Complete Antibacterial Foaming Handwash is made with the controversial ingredient Triclosan. Advertising and promotional materials for Dial Complete claim Triclosan enabled Dial Complete to outperform other soap products. For example, one promotional video for Dial Complete that targets janitorial product suppliers claims the product has the “highest level of germ killing action,” “is the “#1 antibacterial foaming hand soap”, and its “patented activated Triclosan formula” allows it to be “25x more effective than other antibacterial soaps.”

The U.S. Food & Drug Administration (FDA), the Canadian Pediatric Society and the American Medical Association have all concluded in recent years that antimicrobial soaps and sanitizers do not reduce the risk of illness and infection in the home.

Triclosan was originally developed as a surgical scrub, but is now widely used in consumer products such as soap and body washes, toothpaste, clothing, kitchenware, furniture and toys. Though companies that market Triclosan products, including Dial Corporation, claim they are safe, the Environmental Protection Agency (EPA) has registered it as a pesticide and has rated it high for human health risk and environmental risk. In April 2010, the FDA issued a “Consumer Update” stating it did not have evidence that Triclosan-containing antibacterial soaps and body washes provide any extra health benefit over soap and water alone.

In consolidating the Dial Complete lawsuits, the U.S. Judicial Panel on Mutidistrict Litigation found that all of the pending actions share common factual questions arising from the marketing and sale of Dial Complete Foaming Antibacterial Handwash. Plaintiffs allege that Dial made unsubstantiated health claims in its promotion of Dial Compete to consumers and further allege that Triclosan, the active antibacterial ingredient in Dial Complete, may lead to bacterial resistance.

According to a Transfer Order dated August 18, the Dial Complete litigation will be presided over by Judge Steven J. McAuliffe.

Diocese of Trenton Settles Priest Sexual Abuse Claims with Five Former Altar Boys

Wed, 17 Aug 2011 00:00:00 -0700

Acknowledging their claims were credible, the Roman Catholic Diocese of Trenton, New Jersey, confirmed that it has reached a settlement with five former altar boys who said they were molested by a priest. All five ex-altar servers - now middle-aged adults- had alleged that they were molested by Rev. Ronald Becker in the 1970s and 1980s, while he served at Incarnation Church in Ewing, New Jersey.

Becker, the priest at the center of the Trenton settlement, was arrested for abusing his own niece four years ago, but died in 2009 before he could come to trial. The men involved in this settlement decided to go public with their allegations after Becker's niece came forward.

Becker, who was officially removed from active ministry in 2002, was named in an abuse allegation made to the Trenton Diocese in 1989, The Washington Post reported. But instead of filing a police report, the Diocese sent him away for treatment. When he returned, he was given a job that did not involve interaction with children, church officials claim.

One of the men involved in this lawsuit said he was abused by Becker on 150 occasions. According to their lawyer, Becker told the boys the abuse “was a physical act that would show the love of God."

According to the Diocese of Trenton, each victim will receive $200,000, plus an additional $25,000 to cover therapy costs incurred over the next two years.

Despite acknowledging that the men's claims of sexual abuse were credible and urging other victims to come forward, the Diocese's statement did not express remorse or offer Becker's victims any type of apology.

This is just the latest sad chapter in the priest sexual abuse scandals that have rocked the U.S. Catholic Church over the past few decades. According to a report from the Philadelphia Inquirer, following the arrest of four current and former priests on molestation charges, the Archdiocese o Philadelphia was hit with six lawsuits. A recent grand jury report accused church leaders there of failing in their pledge to remove abusive clergy and respond to their victims.

Priest molestation scandals forced the Diocese of Wilmington in Delaware into bankruptcy, and it has set aside millions to fund settlements for 150 victims. Recently, sexual abuse settlements with victims of priest abuse were announced in Corpus Christi, Texas; Pueblo, Colorado, and Kansas City, Missouri. The Delaware-based Oblates of St. Francis de Sales agreed to pay $24 million to end 39 claims by alleged sex-abuse victims earlier this month, according to the Inquirer.

Life Partners Faces Texas Lawsuit over Subpoenas

Mon, 01 Aug 2011 00:00:00 -0700

For the first time, the Texas State Securities Board has publicly disclosed that it is investigating Life Partners Holdings of Waco, Texas. The disclosure came in a statement announcing the regulator had filed suit against Life Partners for failing to comply with subpoenas issued as part of the investigation.

According to The Wall Street Journal, Texas is investigating possible wrongdoing in the underlying investments in life policies that Life Partners sold to thousands of retail investors. Such investment are called life, or viatical, settlements. An investor purchases an existing life insurance policy - with Life Partners acting as a broker - from an insured individual who no longer wants or needs the policy. The investor must pay premiums on the policy while the insured is alive, and collects the proceeds once the insured dies.

A life expectancy estimate plays a key role in determining the value of such an investment, with a shorter expectancy promising a higher return. Brokers like Life Partners charge the most for policies with the shortest life expectancy estimates. Earlier this year, a Wall Street Journal investigation reported a significant portion of insured individuals were outliving Life Partners’ life expectancy estimates, a factor that would cut investors’ returns. The Journal raised serious questions about the way Life Partners’ was estimating life expectancies.

The Texas State Securities Board has apparently been investigating Life Partners since mid-2010. According to the Journal, the regulator issued fresh subpoenas to Life Partners in June 2011 seeking a "broad array" of documents." In a letter from outside counsel, the company declined to respond to the subpoenas stating the securities board had no jurisdiction over its activities, citing a prior Texas court ruling that its insurance products weren't securities. The regulator’s lawsuit, filed last Thursday, seeks to force Life Partners to comply with the subpoenas.

This is just the latest bit of bad news we've reported regarding Life Partners. Earlier this year, the company acknowledged that it was being investigated by the U.S. Securities and Exchange Commission (SEC). In May, the company said the SEC has issued it a "Wells Notice", a formal warning that regulators intend to file civil charges against it and said two of its executive officers and directors, CEO Brian D. Pardo and general counsel and President R. Scott Peden. The proposed civil action "relates to our knowledge of and disclosures about the accuracy of the estimates of the life expectancies of settlors.”

In June, Life Partners received an amended Wells notice which said the SEC had expanded its focus to include accounting issues, and also to include another executive, according to The Wall Street Journal.

Montreal Rabbinical Court Alerts Parents to Child Sexual Abuse. But is that Enough?

Wed, 27 Jul 2011 00:00:00 -0700

The decision of a Rabbinical court in Montreal to broach the subject of child sexual abuse with Orthodox Jewish parents is being touted as a huge step for a community that has for years been reticent about addressing the issue openly. But critics aren't impressed, and argue that an advisory on sexual abuse released this summer by the Montreal Beit Din, a religious court, doesn't go far enough.

Apparently, the Beit Din advisory told parents to teach children about inappropriate touching, whether it's by another child, a relative or an authority figure, according to a report on Canada.com. The advisory also parents should explain to children it's an obligation — not a sin — to tell a parent or rabbi if an incident occurs.

“That already is a huge step for the Orthodox community,” Diane Sasson, executive director of Auberge Shalom, a centre for women and children affected by domestic violence, told Canada.com.

But the advisory is being criticized in some quarters because it doesn't urge parents to report incidents to police or youth-protection authorities.

"I'm impressed they're informing their community in this way," Howard Nadler, a liaison manager at Batshaw Youth and Family Centres, said. "But they should be reporting it to Youth Protection"

Others agreed, including Amy Neustein, editor of Tempest in the Temple: Jewish Communities and Child Sex Scandals.

"The Beit Din have become very proficient at obstructing justice," said Neustein, who lost custody of her six-year-old daughter in 1986 after she alleged her ex-husband molested the child.

According to Canada.com, Rabbi Saul Emanuel, executive director of the rabbinical court, disputed the idea that the advisory should have told parents to contact authorities, stating that its up to families to decide whether or not to involve secular authorities.

Some Orthodox Rabbis, however, have gone on record urging Orthodox parents to report incidents of sexual abuse only to Rabbis, who will then determine if a police report should be made. Earlier this month, for example, Rabbi Shmuel Kamenetsky, the vice-president of Agudath Israel of America's Supreme Council of Rabbinic Sages, made such a pronouncement in Flatbush, Brooklyn. Even worse, the speech was made as members of the New York Orthodox Jewish community were frantically searching for 8-year-old Leiby Kletzky, whose dismembered body was found the following day in a dumpster and in the apartment of Levi Aron, a suspected child predator.

News of Rabbi Kamenetsky's pronouncement, along with speculation that some in the New York Haisidic community may have kept a list of suspected child molesters that was not forwarded to police, resulted in an outcry. Since then, the Rabbinical Council of America stated that those with reasonable suspicion or first-hand knowledge of abuse or endangerment have a religious obligation to report that abuse to the secular legal authorities without delay, Canada.com said.

Parker Waichman LLP Files Imprelis Class Action Lawsuit on Behalf of Ohio Property Owner

Mon, 25 Jul 2011 00:00:00 -0700

Parker Waichman LLP is one of several firms representing plaintiffs in an Imprelis class action lawsuit. The lawsuit, filed in U.S. District Court of the Northern District of Ohio, Eastern Division, seeks to represent anyone who has sustained significant damage to mature landscape trees, especially Norway spruce and others with shallow roots systems, including willows, poplars and conifers.

Luanne Miller, a property owner in Seven Hills, Ohio, is lead plaintiff in the Imprelis class action lawsuit. The complaint accuses DuPont, the maker of Imprelis, of fraud and negligence.

According to the lawsuit, Imprelis was applied to Miller’s property on several separate occasions in accordance with directions and instructions supplied by DuPont. The complaint alleges that as a result of the Imprelis applications, Miller suffered significant damage and harm to trees, and will continue to suffer even further damage to her lawn and garden because of Imprelis. The lawsuit further alleges that rather than being isolated incidents, thousands of trees have been reported as being infected by Imprelis, and tens of thousands more reports are expected in the future.

Imprelis, brought to market by DuPont in 2010, is designed to kill broadleaf weeds, including dandelion, clover and wild violet. Imprelis is only available to landscapers and professional gardeners, and is touted by DuPont as an environmentally-friendly herbicide and an "innovative solution to control a wide spectrum of broadleaf weeds."

Property owners and landscapers from around the country began reporting Imprelis tree damage around Memorial Day. By June, extension services in Pennsylvania, Michigan, Ohio, and Indiana issued alerts about tree damage and death possibly linked with Imprelis. Now, the U.S. Environmental Protection Agency (EPA) is investigating, and has promised an expedited review of Imprelis. According to the EPA, it has received complaints about Imprelis from Minnesota, Indiana, Illinois, Ohio, Michigan, Pennsylvania, Maryland, Virginia, Delaware, Wisconsin and West Virginia.

DuPont Professional Products acknowledged receiving reports of tree deaths and damage possibly associated with Imprelis in a letter to turf management professionals dated June 17. The company said it is investigating the reports, and has cautioned that Imprelis not be sprayed near Norway spruce or white pine, or in places where the product might drift toward such trees or run off toward their roots.

Parker Waichman LLP continues to receive reports regarding Imprelis tree death and damage. The firm is investigating these complaints, and expects to file other Imprelis lawsuits in the near future.

Shomrim in the Spotlight after Orthodox Boy's Murder

Fri, 22 Jul 2011 00:00:00 -0700

Organizations known as Shomrim that operate as volunteer neighborhood watches in many Orthodox Jewish communities are coming under scrutiny following the disappearance and murder of 8-year-old Leiby Kletzky in New York City. Critics of these groups claim the Shomrim often operate with little accountability, and can even interfere with the work of law enforcement by discouraging victims child sexual abuse and other crimes from making police reports.

Following the discovery of Leiby's body in a dumpster and in the home of his alleged killer, Police Commissioner Ray Kelly publicly praised the Shomrim for mobilizing the community in a massive search effort for the boy. But according to a report from The Jewish Weekly, another unidentified NYPD official slammed one of the groups for taking its time in reporting the boy's disappearance to police. Apparently, there was a lag of more than two hours between the time Leiby's mother called the Brooklyn South Shomrim about her son's disappearance, and his father's call to 911 to notify the police.

In an interview with The Wall Street Journal, Commission Kelly acknowledged that the Shomrim often do not immediately notify police when they get reports and that this has been a “longstanding” issue for the department, but asserted the time lag probably did not make a difference in the Leiby Kletzky case.

Some media reports also speculated the Shomrim may have received warnings about Leiby's alleged killer - Levi Aron - because a parent had complained in the weeks prior to the murder that he had stalked another boy in the neighborhood. But the founder and coordinator of the South Brooklyn Shomrim told The Daily News that wasn't the case.

"No one ever complained to us about him," Jacob Daskel said.

He did, however, acknowledge that the Shomrim keeps a list of suspected child predators. The list currently contains about 15 names, but has not been shared with police.

"The community doesn't go to the police with these names because the rabbis don't let you. It's not right," Daskel said.

A rabbi from the community confirmed this for The Daily News.

"It's against Halacha [Jewish law] to go the police without speaking to the rabbis," said Rabbi Joseph Hershkowitz, 57, who counsels families in Borough Park and Williamsburg. "We consider Shomrim and Hatzolah [the Jewish ambulance service] family. So you go to family first."

FBI News Corp. Hacking Probe Now Underway

Wed, 20 Jul 2011 00:00:00 -0700

The FBI has officially opened its investigation into possible hacking of 9/11 terrorist attack victims by the U.K. tabloid, News of the World, an entity of Rupert Murdoch's News Corp. media conglomerate. According to a report from The Wall Street Journal, the FBI has contacted both the New York police and its own victims' assistance office as part of the probe.

A spokesperson for the New York Police Department (NYPD) confirmed to the Journal that the FBI had made contact, but that the department had nothing substantial to report. The NYPD has not received any complaints from 9/11 victims relatives in regards to hacking, he said.

A person familiar with the case also told the Journal that the FBI's Office for Victim Assistance has not received any such complaints.

The Journal also reported that FBI investigators plan to formally meet with U.K. authorities for briefing on what evidence, if any, they have gathered about alleged violations in the U.S.

Reporters for the 168-year-old News of the World tabloid are known to have hacked thousands of phones, including those belonging to a teenage murder victim, British Prime Minister David Cameron, and scores of celebrities. Recently, the U.K. Daily Mail reported that an unnamed, retired NYPD officer alleged that reporters for the tabloid contacted him about 9/11 victims' phone information. "[The investigator's] presumption was that they wanted the information so they could hack into the relevant voicemails, just like it has been shown they have done in the U.K.," a Mirror source said.

Yesterday while testifying before a committee of the British Parliament, News Corp.'s founder, 80-year-old Rupert Murdoch, asserted that he and other company executives have no knowledge or any evidence of any hacking of Sept. 11 victims' phones or voice mails by reporters.

"I cannot believe it happened anywhere in America," he told the House of Commons' Culture, Media, and Sport Committee, according to the Journal.

According to The Wall Street Journal, though the FBI's News Corp. probe is only in its preliminary stages, it is already known that it will go beyond the hacking allegations. The FBI is also trying to determine if alleged bribes paid to British police officials could constitute a violation of the Foreign Corrupt Practices Act, which makes such bribes a crime in the U.S.

Meanwhile, shareholders are expressing their anger over the entire News Corp. debacle. In a filing in a Delaware court, a group of investors charge the hacking allegations show “a culture run amok within News Corp.” The charges were added to a News Corp. shareholder lawsuit filed in Delaware Chancery Court several months ago, which was amended to include the hacking scandal

Rupert Murdoch and Son to Appear at Parliament, as Fallout from Phone Hacking Sandal Grows

Tue, 19 Jul 2011 00:00:00 -0700

Rupert Murdoch, the 80-year-old owner of News Corp., is set to answer questions about the News of the World hacking scandal today before a committee of the British Parliament. He will be joined by his son, James, who serves as News Corp. chairman and CEO.

According to a report from MSNBC, the stakes are high for both Rupert and James Murdoch, and for News Corp. In the two weeks since the hacking scandal broke, the company's stock has dropped 21 percent, an $8 billion loss. The loss is said to have cost the Murdoch family $1 billion. The scandal has also forced News Corp. to drop plans to take full control of U.K. pay TV operator BSkyB.

Millions in Britain are expected to tune in to watch the Murdochs' testimony, MSNBC said.

"It seems as if there will be standing-room only, that's not surprising as it's the first time Rupert Murdoch has been before a select committee in his 40 years of building up a media empire," said Paul Farrelly, an opposition Labour committee member.

Reporters for the 168-year-old News of the World tabloid are known to have hacked thousands of phones, including those belonging to a teenage murder victim, British Prime Minister David Cameron, and scores of celebrities. It has also been alleged that News of the World may have hacked into phones belonging to victims of the 9/11 terrorist attacks.

Initially, the media conglomerate's official answer to the charges was to insist the hacking was the work of "rogue reporters" at News of the World. But revelations over the past week made it clear that wasn't the case. Public outrage in Britain hit fever-pitch when it was learned that reporters for the tabloid had hacked voicemail belonging to a missing teenager who was later found to be murdered. The reporters ultimately deleted messages and raised false hopes she could be still alive, MSNBC said.

Also testifying today is Rebekah Brooks, a former Murdoch protégée and head of the News of the World when hacking was taking place. Brooks, who resigned her position as News International CEO last week, was arrested yesterday for her role in the hacking. She is one of ten News of the World employees facing charges, though more arrests could follow.

Meanwhile, News Corp. is facing more trouble in the U.S., as MSNBC is reporting that the Justice Department it was investigating $160,000 in payments the company made to officials at the U.K.'s Scotland Yard to see if they violated the U.S. Foreign Corrupt Practices Act, which makes bribing an official in another country a crime. U.S. Attorney General Eric Holder already confirmed that the Justice Department was looking into the 9/11 hacking allegations.

In a filing in a Delaware court, a group of investors charge the hacking allegations show “a culture run amok within News Corp.” The charges were added to a shareholder suit filed in Delaware Chancery Court several months ago, which was amended to include the hacking scandal.

Finally, one of the first News of the World Reporters to come forward in the scandal has died. According to the Guardian, Sean Hoare told The NewYork Times in 2010 that the tabloid’s editor, Andy Coulson, had actively encouraged him to hack into voicemail. Hoare was found dead in his London home yesterday, and investigators are calling his death "unexplained" but not suspicious. According to a report from the Daily Mail, Hoare had become reclusive and paranoid in recent weeks due to stress caused by the scandal.

FBI Investigating News Corp. 9/11 Victim Hacking Allegations

Fri, 15 Jul 2011 00:00:00 -0700

The Federal Bureau of Investigation (FBI) has opened an investigation into allegations that a News Corp.-owned tabloid newspaper may have hacked into phones belonging to victims of the 9/11 terrorist attacks. News Corp., founded by billionaire Rupert Murdoch, owns a number of media outlets including Fox News and The Wall Street Journal.

The tabloid at the center of the allegations is the News of the World, a 168-year-old U.K. tabloid that was forced to shut down amid a massive phone hacking scandal. According to a report from CNET.com, earlier this month, reporters from News of the World were accused of hacking the voicemail of a teenaged murder victim, 13-year-old Milly Dowler, who went missing in March 2002. According to a report from the Guardian, the News of the World accessed her cell phone voice mail and actually deleted messages that had been left in the first few days after her disappearance in order to free up space in her phone's mailbox. This gave the victim's family and friends false hope, as they believed she was the one clearing the messages. Sadly, Dowler's body was discovered in September 2002.

As the U.K. investigation of News of the World continued, it was alleged that the publication also hacked voice mails of other families of child victims, soldiers killed in Afghanistan and Iraq, and victims of the 2005 London bombings, CNET.com said.

The scandal reached U.S. shores earlier this week, when the U.K.'s Daily Mirror reported that a former New York City police officer who now works as a private investigator charged that reporters wanted the 9/11 victims' phone numbers and details of their call logs in the time leading up to the attack on the Twin Towers. "[The investigator's] presumption was that they wanted the information so they could hack into the ¬relevant voicemails, just like it has been shown they have done in the U.K.," a Mirror source said. The report also alleged that some of that hacking may have occurred on U.S. soil.

Those allegations quickly prompted calls for investigations from several prominent U.S. lawmakers and victims' families. Rep. Peter King (R., N.Y.), who heads the House Homeland Security Committee and represents a Long Island district were many 9/11 attack victims lived, called on the FBI to look into the charges.

Yesterday, various media sources reported that FBI had opened a probe into the hacking allegations. In addition, the probe will also look into whether any News Corp. employees bribed or sought to bribe police officials to gain access to such records, according to a report from The Wall Street Journal. The FBI, which doesn't confirm investigations, would not comment on the reports.

In an interview with the Journal, the 80-year-old Rupert Murdoch dismissed the damage the scandal has caused to News Corp. as "nothing that will not be recovered. We have a reputation of great good works in this country." He conceded, however, that he was "getting annoyed. ...I'll get over it. I'm tired."

Murdoch also said he and one of his sons would appear at a parliamentary hearing in the U.K. next week to answer question about the scandal, after refusing to do so. Apparently, Murdoch had a change of heart when they learned he would be summoned by Parliament.

Meanwhile, Rebekah Brooks, the head of News Corp.'s U.K. newspaper unit resigned Friday morning because of the scandal, the Journal said. The 43-year-old Brooks was editor of News of the World when that Milly Dowler incident occurred. Brooks had offered to resign earlier, as pressure over the scandal mounted, but the offer was rejected.

"I feel a deep sense of responsibility for the people we have hurt and I want to reiterate how sorry I am," Brooks said in an email to staff, according to the Journal. "I have believed that the right and responsible action has been to lead us through the heat of the crisis, however my desire to remain on the bridge has made me a focal point of the debate.

Brooks is scheduled to testify next week before Parliament, alongside both Murdochs.

MetLife, Other Life Insurance Companies Face New York Probe over Death Benefits

Wed, 06 Jul 2011 00:00:00 -0700

MetLife Inc. has been targeted in yet another state probe over the way it handles life insurance death benefits. According to The Wall Street Journal, MetLife and nine other insurance companies recently received subpoenas from the New York Sate Attorney General seeking information on the way the companies identify deceased insured and handle unclaimed death benefits.

MetLife and several other insurance companies face similar probes in California, Connecticut and Florida. As is the case with the other states, the New York investigation is focused on whether or not life insurance companies are doing enough to identify deceased insureds and make payments to beneficiaries. While most insurance policy contracts require beneficiaries to notify insurance companies of potential claims, regulators have started "asking whether that approach is sufficient in an era of robust death database," the Journal said.

Insurance companies can use a database prepared by the Social Security Administration called “Death Master,” which lists all Americans who die to make such determinations. Insurance companies have no issue using this database for other parts of this business, but don't always use it to ensure that beneficiaries entitled to a death benefit are paid.

According to the Journal, the New York investigation is also looking into the way insurers handle unclaimed death benefits, which should be turned over to the state's unclaimed property fund after a certain amount of time has passed. At the same time, the New York Insurance Commission has sent letters to 160 insurers pushing them to use the Social Security database to determine if any death benefits are overdue and report back to the state.

In addition to MetLife, the New York Attorney General has sent subpoenas to units of AXA SA, Genworth Financial Inc., Guardian Life Insurance Co. of America, Manulife Financial Corp., Massachusetts Mutual Life Insurance Co., New York Life Insurance Co., Prudential Financial Inc., and TIAA-CREF. New York's investigation could be particularly potent because it is seeking the subpoenas under the Martin Act, a state law that doesn't require prosecutors to prove intent to defraud, the Journal said.
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David Lerner Associates Facing Lawsuits over Apple REITs

Thu, 23 Jun 2011 00:00:00 -0700

Disgruntled investors appear to be lining up to sue Syosset, New York brokerage David Lerner Associates over the sale of Apple Real Estate Investment Trusts (REITs). The Apple REITs, which invest in extended stay hotels, also got David Lerner Associates in trouble with the Financial Industry Regulatory Authority (Finra) earlier this month.

The latest class action lawsuit against David Lerner Associates was filed this week in federal court in Newark, New Jersey. It alleges that the REITs were sold to retail investors and retirees at $11 per share and paid returns of 7 percent to 8 percent. But investors were never told that investments weren’t generating enough income to cover those returns. Instead, investors were paid through loan proceeds and capital raised from investors, meaning that investors were essentially paying themselves, the complaint says.

The lawsuit also claims that Apple REIT investors have incurred substantial unrealized losses because their interests are worth far less than the price paid for their shares. It also alleges that David Lerner Associates marketed the REITs as appropriate for conservative investors, stating they had never lost money by investing in hotels.

The New Jersey lawsuit follows another that was recently filed in federal court in Brooklyn, New York and makes essentially the same claims. Both lawsuits seek to represent all investors who incurred losses due to investments in the Apple REITs.

The firm also faces a number of individual investor arbitration lawsuits filed through Finra.

Earlier this month, Finra announced its intent to seek disciplinary action over the way David Lerner Associates allegedly sold Apple REITs. According to Finra, as the exclusive brokerage for Apple REITs, the firm earned more than $600 million in fees and commissions from sales of the investments since 1996. During that time period, sale of Apple REITs accounted for 60 percent to 70 percent of the firm’s business.

David Lerner Associates Says its a Scapegoat

Wed, 01 Jun 2011 00:00:00 -0700

After being hit with a complaint claiming it misled investors about illiquid real estate investment trusts, or REITs, Syosset, New York-based David Lerner Associates says it’s being made a scapegoat by the Financial Industry Regulatory Authority (Finra). In a prepared statement, the firm said it “vehemently denies Finra's allegations.

Yesterday, David Lerner Associates was hit with a Finra disciplinary action accusing it of marketing unsuitable REITs to elderly and unsophisticated investors. The investment in question is the Apple REIT Ten, which invests in extended-stay hotels. According to a report from Newsinferno.com, the REIT pooled investors' funds to purchase the real estate, and investors collected regular dividends that were purportedly based on rents collected.

According to the Finra complaint, Apple REIT Ten had been "unreasonably" valued at $11 per year, and delivered payouts of 7 to 8 percent per year. The valuations did not change despite the real estate crash, and David Lerner Associates "failed to sufficiently investigate the valuation and distribution irregularities” of the products, Finra said. The firm also did not disclose that distributions paid to investors exceeded the income of the properties, and were financed by loans.

In a statement issued by its public relations agency, David Lerner Associates denied the charges. "What is obvious is that DLA and other small firms have become the scapegoats for Finra's utter failure to address Madoff's fraudulent scheme," the statement charged.

According to the Finra complaint, David Lerner Associates was the sole underwriter for Apple REITs since 1992, selling nearly $6.8 billion of the securities. The firm collected 10 percent of all offerings of Apple REIT securities as well as other fees. Apple REIT sales have generated $600 million in revenue for the firm, the regulator said.

The Finra complaint is the first step in a formal proceeding. Under Finra rules, a firm or individual named in a complaint can file a response and request a hearing before a Finra disciplinary panel.

Do You Know What Fish You're Eating?

Tue, 31 May 2011 00:00:00 -0700

When you sit down at a restaurant and order red snapper, can you safely assume you're going to be served red snapper? If a new report from the group Oceana is to be believed, you can't, thanks to rampant seafood labeling fraud. Chances are the fish you bought at a supermarket is also mislabeled.

According to the Oceana report, “Bait and Switch: How Seafood Fraud Hurts Our Oceans, Our Wallets and Our Health,” recent studies by researchers in North America and Europe found that 20 to 25 percent of the seafood products tested were fraudulently mislabeled.   Fraudulent labeling in some seafood species may run as high as 70 percent.

According to Oceana, seafood labeling fraud may entail:

•    Substituting one species for another without changing the label
•    Including less seafood in the package than is indicated on the label
•    adding too much ice to seafood in order to increase the weight;
•    Shipping seafood products through different countries in order to avoid duties and tariffs.

The report states:

"A recent review found false labels on more than one-third of fish (Jacquet and Pauly 2008), while other research found one-quarter of fish tested in the U.S. and Canada were mislabeled (Wong and Hanner 2008).

Government testing also shows a pattern of mislabeling, including 37 percent of fish and 13 percent of shellfish and other seafood during a nine-year period of testing by the National Marine Fisheries Service’s (NMFS) National Seafood Inspection Laboratory from 1988-1997 (Buck 2007). The Food and Drug Administration (FDA) found about a third of seafood imports were mislabeled during port inspections in 2003-2004 (Mississippi Department of Marine Resources 2007)."

According to the report, certain fish such as red snapper, wild salmon, grouper and Atlantic cod are more likely to be mislabeled. Seafood labeled "red snapper" is often, in reality, slender pinjalo, channel catfish, rockfish, tilapia, Nile perch, mahi mahi, mullet snapper, or Atlantic cod. Farmed salmon often stands in for products labeled "wild salmon," while a fish labeled "grouper" might really be channel catfish, hake, tilapia, Alaska pollock, or Nile perch. A product sold as "Atlantic cod" could be Alaska/Norwegian pollock, whiting, pollack, saithe, or escolar.

According to Oceana, seafood fraud can directly threaten human health. "Swapping one fish species for another that may be riddled with contaminants, toxins or allergens can make people sick (GAO 2009)." "When seafood is mislabeled, a broader array of potential contaminants, pathogens, and allergens may be covered up," the report states.

In one case cited by Oceana's report, 600 people in Hong Kong became severely ill after eating what they thought was Atlantic cod. It was actually Escolar, or oilfish, which often causes severe diarrhea, nausea, and vomiting.

According to Oceana, seafood fraud also undermines conservation efforts to prevent overfishing and incidental capture of at-risk species by making illegal fishing profitable. Seafood processors that do appropriately label their products can be undercut economically by importers that market mislabeled “identical” fish at much lower prices.

The Oceana report places the blame for seafood labeling fraud on the increasingly complex path products now take from the ocean to the dinner table. The group points out that seafood safety is handled by a patchwork of laws with no federal agency definitively in charge of addressing seafood fraud. While 84 percent of seafood sold in the U.S. is now imported, only 2 percent is inspected.

“We can track organic bananas back to packing stations on farms in Central and Latin America, yet consumers are given little to no information about one of the most popular foods in the United States – seafood,” Dr. Michael Hirshfield, senior vice president for North America and chief scientist for Oceana, said in a statement issued by the group. “With imports representing the vast majority of the seafood eaten in the United States, it’s more important than ever to know what we are eating and where, when and how it was caught.”

SEC Gives Final Approval to Security Fraud Whistleblower Rules

Fri, 27 May 2011 00:00:00 -0700

The Securities and Exchange Commission (SEC) has approved new rules for securities fraud whistleblowers. According to a report in The Los Angeles Times, under the new rules, whistleblowers could be awarded multimillion-dollar payouts for reporting securities fraud.

The new whistleblower provisions were part of the Dodd-Frank Wall Street reform law.   Under the law, the SEC may award between 10 and 30 percent of any monetary sanctions that exceed $1 million to whistleblowers providing information leading to a successful enforcement. The SEC was also granted expanded power to reward whistleblowers for reporting a variety of financial crimes. Previously, the agency could only do so in cases that involved insider trading.

The SEC approved the final rules by a vote of 3-2, the Times said.   Both Republican members of the Commission voted against the rules.

The financial industry is not exactly thrilled about the development. Some companies are unhappy that the final rules don’t require whistleblowers to report problems internally first or at the same time that they inform the SEC, according to the Times.   They've complained this will undermine their own internal reporting programs.

"Today's rules are intended to the break the silence of those who see a wrong," said SEC Chairman Mary Schapiro. According to the Times, Shapiro said the rules approved by the commission "struck the correct balance between encouraging whistleblowers to report problems internally when appropriate and providing the option of heading directly to the SEC."

To try to appease the industry, the final SEC rules do allow whistleblowers to preserve their reward eligibility if they report to a company, and then to the SEC.

Still, even with that concession, the U.S. Chamber of Commerce still opposed the new rules, claiming in a statement that they put "trial lawyer profits ahead of effective compliance."

PlayStation Network Breach Set to Cost Sony at Least $171 Million

Tue, 24 May 2011 00:00:00 -0700

Sony Group announced yesterday that its recent PlayStation Network hack will cost it at least $171 million. But the company also warned the total cost of the breach could exceed even that, as the $171 million doesn’t account for the cost of lawsuits and other unknowns.

The Sony PlayStation Network hack ensnared more than 100 million users of the PlayStation Network, Qtriocity and Sony Online Entertainment (SOE) network. Even now, the network has only been partially restored, with Sony promising to have everything back online by the end of this month.

About 12 million of those impacted by the hack had credit card information with Sony. The company maintains that so far it has not received any confirmed reports of customer identity theft issues, nor confirmed any misuse of credit cards from the attack.

The $171 million bill for the security hack includes costs Sony will incur to cover restitution being offered to affected customers. That compensation includes a year’s subscription to the AllClear ID Plus identity theft prevention service. The monitoring service comes with a $1 million insurance policy to cover any losses due to identity theft.

In an announcement yesterday, Sony chief financial officer Masaru Kato warned that the $171 million figure could grow, especially if it turns out that credit card numbers have been compromised.

Another big if that could cause the final figure to grow is the litigation sparked by the hack. Already, Sony faces two class action lawsuits over the PlayStation Network security breach, one filed in the U.S. and another in Canada. The Canadian lawsuit is seeking at least $1 billion.

Study Hints at Link between Cell Phones, Male Infertility

Fri, 20 May 2011 00:00:00 -0700

Men looking to start a family might want to consider limiting their cell phone use, especially if they are already faced with a low sperm count, according to the findings of new study. The findings, which the study authors described as "puzzling", indicated that cell phone use may lower sperm quality and decrease fertility, even while simultaneously increasing the level of testosterone circulating in the body.

The study, which was authored by researchers at Canada’s Queen’s University and the Medical University of Graz, Austria, involved data from 2,000 men collected from 1993 to 2007 at an Austrian infertility clinic.   The men were asked about their cell phone use, and those who used the devices daily were classified as cell phone users.

The data showed that the cell phone user group had lower quality sperm than men who didn’t use cell phones.   Cell phone users also had lower levels of an important reproductive hormone - luteinizing hormone (LH) - that is excreted by the brain's pituitary gland. At the same time, the cell phone users had higher levels of testosterone.

If electromagnetic waves coming from cell phones cause lower levels of luteinizing hormone, that could explain the drop sperm quality.   And despite the higher levels of testosterone seen in the study, its authors surmised that electromagnetic waves may also block the conversion of this basic circulating type of testosterone to the more active, potent form of testosterone associated with sperm production and fertility.

"Our findings were a little bit puzzling," study co-author Rany Shamloul of Queen’s University said in a statement. "We were expecting to find different results, but the results we did find suggest that there could be some intriguing mechanisms at work."

Still, the authors concede that the jury is still out when it comes to possible link between cell phones and male infertility, though more evidence seems to indicate an association. They pointed to a need for comprehensive, rigorous scientific studies of the issue.

Litigation over Alleged Astellas Prograf Monopoly Growing

Tue, 17 May 2011 00:00:00 -0700

Antitrust litigation against Astellas Pharma Inc. over its handling of the drug Prograf is growing. So far, at least three Astellas Prograf antitrust lawsuits have been filed in federal courts in Massachusetts and Delaware, and it seems more are expected. The Judicial Panel on Multidistrict litigation is considering a motion requesting that all Astellas Prograf antitrust lawsuits be consolidated in a multidistrict litigation.

Prograf, which costs patients around $1,500 per month, is the brand name for tacrolimus. It was approved in 1997, and is used to prevent organ rejection in transplant victims.

Antitrust lawsuits claim Astellas tried to hold on to its Prograf monopoly even after its exclusive patent expired by filing a “sham” petition with the U.S. Food and Drug Administration (FDA) in 2007. The petition asked the FDA to establish more stringent standards for companies seeking approval of generic versions of tacrolimus. When that didn't work, Astellas went to court to stop the FDA from approving a generic form of tacrolimus. As a result, a cheaper generic version of the drug was not made available until 2009.

Astellas claimed its petition was filed in the interest of patient safety, but plaintiffs in the Prograf antitrust lawsuits don't see it that way. Astellas was “keenly aware that it would lose a substantial amount of its sales of Prograf very quickly once AB-rated generics came to market," one complaint alleges.

Such lawsuits further allege Astellas violated the Sherman Act by illegally maintaining a monopoly in the market for Prograf and charging supracompetitive prices for the drug. Because of this, the complaints claim Astellas was able to overcharge purchasers of Prograf by millions of dollars.

Life Partners Warns Investors of SEC Civil Action

Mon, 16 May 2011 00:00:00 -0700

It looks like the Securities and Exchange Commission (SEC) is targeting Life Partners Holdings Inc. According to various reports, Life Partners informed investors last week that the SEC will likely file a civil action alleging securities fraud violations against the company and two of its executive officers and directors, CEO Brian D. Pardo and general counsel and President R. Scott Peden.

Life Partners, which sells investments known as life settlements, acknowledged earlier this year that it was being investigated by the SEC. Now in an SEC filing issued Friday, the company said the SEC has issued it a "Wells Notice", a formal warning that regulators intend to file civil charges. In its SEC filing, Life Partners said the proposed civil action "relates to our knowledge of and disclosures about the accuracy of the estimates of the life expectancies of settlors.”

Life settlements are an investment vehicle by which an investor purchases an existing life insurance policy - with Life Partners acting as a broker - from an insured individual who no longer wants or needs the policy. The investor must pay premiums on the policy while the insured is alive, and collects the proceeds once the insured dies.

A life expectancy estimate plays a key role in determining the value of such an investment, with a shorter expectancy promising a higher return. Brokers like Life Partners charge the most for policies with the shortest life expectancy estimates. Earlier this year, a Wall Street Journal investigation reported a significant portion of insured individuals were outliving Life Partners’ life expectancy estimates, a factor that would cut investors’ returns. That Journal article sparked the SEC investigation, as well as a number of lawsuits that have since been filed by unhappy investors against life partners.

Porsche Cayenne Lawsuits Filed in Two States

Mon, 16 May 2011 00:00:00 -0700

Two owners of Porsche Cayenne sport utility vehicles have filed lawsuits claiming that certain models of the vehicle were built with defective plastic coolant piping that is prone to cracking. According to the lawsuits, this can lead to coolant leaks and significant engine damage.

The Porsche Cayenne lawsuits - filed in federal court in New Jersey and New York - claims Porsche used these plastic coolant tubes rather than aluminum tubes, knowing the plastic version was likely to degrade and crack. Rather than fix the problem, Porsche has chosen to exploit owners of the affected Cayenne vehicles by forcing them to pay for the cost of new parts, labor charges, and any resulting engine damage, the suits claim.

According to the New York Porsche Cayenne lawsuit, the plaintiff was forced to purchase an OEM update kit, which contained aluminum tubes, at a cost of $1,000. The New Jersey plaintiff was forced to pay more than $2,000 for the update kit and labor. According to both lawsuits, plastic tubes like those originally used in the vehicles are not available as replacement parts, and Cayenne owners have no choice but to pay for more expensive - and durable - aluminum tubes.

Both lawsuits claim that Porsche has chosen not to warn Cayenne owners of the potential dangers of a sudden coolant spill, and continues to promote the vehicles as safe, reliable and free from material defects. The lawsuits further allege that Porsche made a corporate decision to conceal these defects from consumers.

Both lawsuits are seeking class action certification. In addition to seeking reimbursement for repair costs incurred by the owners of the impacted Porsche Cayenne models, the lawsuits are seeking a Porsche Cayenne recall so the allegedly defective plastic cooling tubes can be replaced.

Sony Ill Prepared for PlayStation Network Hack

Fri, 13 May 2011 00:00:00 -0700

Sony wasn't prepared for last month's PlayStation Network hack, according to new report from PC World.   Sony is facing criticism for outdated security, as well as its apparent lack of a plan for acting in the wake of a breach.

“Everyone was assuming that Sony, being Sony, would have their act together,” Mike Meikle, CEO of IT consulting firm Hawkthorne Group, told PC World, “and I think that’s what’s annoying people more than anything.”

At a congressional hearing earlier this month, Gene Stafford, a computer security professor at Purdue University, testified that Sony used an outdated version of the Apache Web server software, and had no firewall installed. According to his testimony, this was known on an internet forum "monitored by Sony employees” two to three months prior to the recent security breaches.   Sony denies the allegations.

Sony has said that it believes the hack had its origins in a denial of service attack. Stan Stahl, president of the Los Angeles chapter of the Information Systems Security Association, told PC World that indicates Sony’s security approach was outdated.

The Sony PlayStation Network hack has now grown to ensnare more than 100 million users of the PlayStation Network, Qtriocity and Sony Online Entertainment (SOE) network. Sony learned on April 19 that the PlayStation Network and Qtriocity services had been compromised, but did not inform users until April 26. On May 2, it announced that information belonging to users of the SOE service had also been accessed. The information that was hacked includes credit card numbers, addresses, user names and any other contact info.   The networks have been down since Sony discovered the breach.

Initally, Sony only offered its customers 30 or 60 day free memberships on its PlayStation Network. But the company has since said it would foot the bill for a year’s subscription to the AllClear ID Plus identity theft prevention service. The monitoring service includes a $1 million insurance policy to cover any losses due to identity theft.

Sony already faces at least two class action lawsuits over the security breach, one in the U.S. and one in Canada. Among other things, both lawsuits seek to compel Sony to pay for credit monitoring for affected customers.

Florida Man Files Dial Complete Class Action Lawsuit

Thu, 12 May 2011 00:00:00 -0700

Parker Waichman LLP is representing a Florida man in a class action lawsuit alleging the company made false claims in the marketing of Dial Complete Antibacterial Handwash.   This is at least the third class action lawsuit filed in the past year that challenges Dial Complete marketing claims.

The plaintiff in the Florida Dial Complete class action lawsuit brought the claim on behalf of himself and all Florida residents who purchased the product. The lawsuit claims he and millions of other consumers purchased Dial Complete because they saw and relied on the purported health benefits described by Dial Corporation's marketing materials.

Those marketing materials, including a website, advertising, and in-store media make such claims as “kills 99.99% of germs” and “kills more germs than any other liquid hand soap.”    The company further claims that Triclosan, the product's active ingredient, enables Dial Complete to outperform other soap products.   Its marketing even goes so far as to claim that Dial Complete is effective at preventing E. coli, Salmonella and Staphylococcus aureus.

In disputing the Dial Complete marketing claims, the Florida lawsuit points out that an April 8, 2010 “Consumer Update”, the U.S. Food & Drug Administration (FDA) stated that it does not have evidence that Triclosan-containing antibacterial soaps and body washes provide any extra health benefit over soap and water alone.   Despite these facts, Dial "has continued to aggressively advertise Dial Complete as having substantial health benefits and being more effective in its use than ordinary soap and water," the complaint alleges.

According to the complaint, the Environmental Protection Agency (EPA) has registered Triclosan as a pesticide and has rated it high for human health risk and environmental risk.    It also points out that several studies have shown that bacterial can build up a resistance to Triclosan due to repeated use, something not mentioned by the Dial Complete marketing materials.

The Dial Complete lawsuit seeks “restitution, disgorgement, actual, statutory and punitive damages, and attorneys’ fees and costs, including pre-judgment and post-judgment interest thereon; and a temporary, preliminary and permanent order for injunctive relief to prevent the Dial Corporation from continuing to engage” in the unfair business practices alleged.

Sony PlayStation Network Won't be Back Online for Weeks

Mon, 09 May 2011 00:00:00 -0700

It could be the end of the month before Sony's PlayStation Network is back online. According to a Bloomberg report, Sony is adopting an improved security system in the wake of one of the largest hacks in Internet history. The company plans to have the PlayStation Network, which has been offline since April 20, restarted by May 31.

As we've reported previously, Sony learned on April 19 that the PlayStation Network and Qtriocity services had been compromised, but did not inform users until April 26. On May 2, it announced that information belonging to users of the Sony Online Entertainment (SOE) service had also been accessed. The information that was hacked could include credit card numbers, addresses, user names and any other contact info. Sony PlayStation Network hack has now grown to ensnare more than 100 million users of the PlayStation Network, Qtriocity and SOE networks.

Sony hasn't been able to confirm one way or another if users' credit card information was stolen in the hack. But there are reports that parties claiming to have possession of such information were trying to sell it on underground Internet forums.

Last Sunday, Sony Computer Entertainment America chairman, Kazuo Hirai, had said the company had hoped to have at least the PlayStation Network back within a week, with all services back up by the end of the month. But the SOE break in appears to have changed the plan.

"We were unaware of the extent of the attack on Sony Online Entertainment servers, and we are taking this opportunity to conduct further testing of the incredibly complex system,” reads a post on the PlayStation blog from Patrick Seybold, Sony’s senior director, Corporate Communications & Social Media.

Meanwhile, the U.S. Justice Department has now entered the fray, and is officially investigating the Sony security breach. During a hearing before the Senate Judiciary Committee last week, Attorney General Eric Holder said the Justice Department had opened "investigations with regard to those hacking situations that have gotten publicity over the last few weeks, the Sony incident among them."

Sony has said that its investigation into the hack found evidence that the breach occurred while it was defending itself from denial-of-service attacks by the Internet activist group Anonymous. As we reported previously, Sony said that it found in its investigation that the hackers planted a file on a server named "Anonymous" with the words "We are Legion," the tagline for the group.

"Whether those who participated in the denial-of-service attacks were conspirators or whether they were simply duped into providing cover for a very clever thief, we may never know," Kaz Hirai said in a letter to House subcommittee on commerce, manufacturing and trade last week.

Anonymous has, however, denied any involvement, and issued a statement over the weekend that implied Sony was aware of PlayStation Network security problems long before the hack occurred.

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