Judge Rejects Meeker Suit as "Gross"

Baldwin Louie — Tue, 21 Aug 2001 15:00:00 -0700

NEW YORK - A federal judge on Tuesday
threw out a securities fraud lawsuit against an influential
Morgan Stanley Dean Witter & Co <MWD.N> analyst and harshly
criticized the complaint and five similar ones as "gross and
unrestrained."

Lawyers in the case said they believed the ruling applied
to all six suits, filed by two different firms.

Although the suit had only been filed a few weeks ago, U.S.
District Judge Milton Pollack moved quickly to dismiss the
allegations against Morgan Stanley and its Internet analyst,
Mary Meeker. The complaint and the others like it alleged that
Meeker issued biased information on certain companies to
generate fees for her employer and hike her own salary.

"The pleading improprieties in the complaint are gross and
unrestrained. The individual defendant is derogatorily dubbed
as "the Internet Queen," the judge wrote. "The repetitive
character of the improprieties is unmitigated."

Pollack said that the the Private Securities Litigation
Reform Act of 1995, a federal law that "heightens pleading
standards for federal securities law class actions," takes aim
at abusive litigation.

He said that the suit filed in Manhattan federal court by
New York's Wolf, Haldenstein, Adler, Freeman & Herz, well-known
for its class action litigation, and the five companion cases
are over 40 pages long and are filled with a "collection of
market gossip." He said that the complaint demonstrated "an
abuse of the tenets of federal pleading and to say the least is
in grossly bad taste."

"We wouldn't have filed it if we didn't think it was
anything but sustainable and we wouldn't have filed it unless
we thought it was the proper way of pleading as the law
requires," said Fred Isquith, an attorney with Wolf,
Haldenstein, Adler, Freeman & Herz LLP. "But the judge
obviously disagrees."

The law firm filed this particular complaint, which seeks
class-action status, on behalf of investors who bought
securities of Amazon.com Inc. <AMZN.O> between July 30, 1998
and May 14, 2001. Similar suits were brought on behalf of
shareholders who bought securities in eBay Inc. <EBAY.O> and
AOL Time Warner Inc. <AOL.N>.

"Confronted with this complaint, this court is faced with a
rhetorical exercise in length and forensic embroidery," Pollack
said. "The complaint is hopelessly redundant, argumentative and
has much irrelevancy and inflammatory material."

Although he was highly critical of the litigation, he ruled
that the plaintiffs could refile the complaint refined with
"proper allegations" within 30 days.

A Morgan Stanley spokeswoman confirmed that the judge acted
on his own rather than in response to a motion to dismiss the
cases.

"We are gratified but not surprised by this decision,"
Morgan Stanley said in a statement. "We've said consistently
that these complaints are nothing more than publicity
stunts masquerading as lawsuits. Our research is thorough and
objective, and Mary Meeker's integrity is beyond reproach."

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Judge Rejects Meeker Suit as "Gross"