IN RE LERNOUT & HAUSPIE SECURITIES LITIGATION

No. 00-CV-11589-PBS Nos. 02-CIV-10302-PBS to 02-CV-10304-PBS.

236 F.Supp.2d 161 (2003)

In re LERNOUT & HAUSPIE SECURITIES LITIGATION Gary B. Filler, et al., Plaintiffs, v. Jo Lernout, et al, Defendants. Stonington Partners, Inc., et al, Plaintiffs, v. Carl Dammekens, et al., Defendants. Paul G. Bamberg, et al., Plaintiffs, v. KPMG, LLP, et al., Defendants. Janet Baker, et al., Plaintiffs, v. KPMG, LLP, et al., Defendants.

United States District Court, D. Massachusetts.

January 13, 2003.


Attorney(s) appearing for the Case

Steven E. Cauley, Cauley Geller Bowman & Coates, Little Rock, AK, Michael G. Lange, Berman, DeValerio, Pease, Tabacco, Burt & Pucillo, Boston, MA, W. Todd Ver Weire, Cauley Geller Bowman & Coates, LLP, Little Rock, AR, Glen DeValerio, Berman DeValerio Pease Tabacco Burt & Pucillo, Boston, MA, Curtis L. Bowman, Cauley Geller Bowman & Coates, James P. Bonner, Shalov Stone & Bonner, New York, NY, for Sandra Balan, Plaintiff.

Alicia M. Duff, Berman, DeValerio & Pease, Boston, MA, Jeffrey C Block, Berman, DeValerio & Pease, Boston, MA, Paul J. Geller, Cauley & Geller, LLP, Boca Raton, FL, Michael G. Lange, Berman, DeValerio, Pease, Tabacco, Burt & Pucillo, Boston, MA, Lee S. Shalov, Ralph M. Stone, Shalov Stone & Bonner LLP, New York, NY, Gene Cauley, Cauley & Geller LLP, Little Rock, AR, Kenneth A. Ricken, Shalov Stone & Bonner, New York, NY, for Hans A. Quaak.

Alicia M. Duff, Berman, DeValerio & Pease, Boston, MA, Jeffrey C Block, Berman, DeValerio & Pease, Boston, MA, Paul J. Geller, Cauley & Geller, LLP, Boca Raton, FL, Steven E. Cauley, Cauley Geller Bowman & Coates, Little Rock, AK, Michael G. Lange, Berman, DeValerio, Pease, Tabacco, Burt & Pucillo, Boston, MA, Lee S. Shalov, Ralph M. Stone, Shalov Stone & Bonner LLP, New York, NY, Glen DeValerio, Berman DeValerio Pease Tabacco Burt & Pucillo, Boston, MA, for Karl Leibinger.

Alicia M. Duff, Berman, DeValerio & Pease, Boston, MA, Jeffrey C Block, Berman, DeValerio & Pease, Boston, MA, Paul J. Geller, Cauley & Geller, LLP, Boca Raton, FL, Steven E. Cauley, Cauley Geller Bowman & Coates, Little Rock, AK, Michael G. Lange, Berman, DeValerio, Pease, Tabacco, Burt & Pucillo, Boston, MA, Glen DeValerio, Berman DeValerio Pease Tabacco Burt & Pucillo, Boston, MA, for Attilio Po.

Alicia M. Duff, Berman, DeValerio & Pease, Boston, MA, Jeffrey C Block, Berman, DeValerio & Pease, Boston, MA, Robert P. Frutkin, Savett Frutkin Podell & Ryan, PC, Philadelphia, PA, Michael G. Lange, Berman, DeValerio, Pease, Tabacco, Burt & Pucillo, Boston, MA, Glen DeValerio, Berman DeValerio Pease Tabacco, Burt & Pucillo, Boston, MA, for Stephen N. Maskaleris.

Robert P. Frutkin, Savett Frutkin Podell & Ryan, PC, Philadelphia, PA, Bernard M. Gross, Deborah R. Gross, Law Office of Bernard M. Gross, PC, Philadelphia, PA, for Marguerite J. Cammann.

Stuart H. Savett, Robert P. Frutkin, Savett Frutkin Podell & Ryan, PC, Philadelphia, PA, Thomas G. Shapiro, Shapiro, Haber & Urmy, LLP, Boston, MA, Barbara A. Podell, Savett, Frutkin, Podell & Ryan, P.C., Philadelphia, PA, for Thomas H. Bown, II,

Alicia M. Duff, Berman, DeValerio & Pease, Boston, MA, Michael G. Lange, Berman, DeValerio, Pease, Tabacco, Burt & Pucillo, Boston, MA, Glen DeValerio, Berman DeValerio Pease Tabacco Burt & Pucillo, Boston, MA, for Daniel J. Perrington.

Jeffrey C Block, Berman, DeValerio & Pease, Boston, MA, Michael G. Lange, Berman, DeValerio, Pease, Tabacco, Burt & Pucillo, Boston, MA, Glen DeValerio, Berman DeValerio Pease Tabacco Burt & Pucillo, Boston, MA, for Steven Roskin, Larry A. Rosenmann, Lee Herskowitz, Gary C. Downey, Samer M. Ali, Gabriel, Inc. Pension and Profit Sharing Plan.

Jeffrey C Block, Berman, DeValerio & Pease, Boston, MA, Richard A. Lockridge, Lockridge, Grindal, Nauen & Holstein, Minneapolis, MN, Paul J. Geller, Cauley & Geller, LLP, Boca Raton, FL, Michael G. Lange, Berman, DeValerio, Pease, Tabacco, Burt & Pucillo, Boston, MA, Glen DeValerio, Berman DeValerio Pease Tabacco Burt & Pucillo, Boston, MA, for Matthias Weis.

Jeffrey C Block, Berman, DeValerio & Pease, Boston, MA, Lisa J. Rodriguez, Rodriguez & Richards, LLC, Thomas L. Earp, Earp Cohn P.C., Westmont, NJ, Michael G. Lange, Berman, DeValerio, Pease, Tabacco, Burt & Pucillo, Boston, MA, Michael D. Donovan, David A. Searles, Donovan Searles, LLC, Philadelphia, PA, Glen DeValerio, Berman DeValerio Pease Tabacco Burt & Pucillo, Boston, MA, for Anthony Drummond.

Robert P. Frutkin, Savett Frutkin Podell & Ryan, PC, Philadelphia, PA, for Sylvia B. Piven, Irene Godrey, Michael Wytanis.

William R. Moorman, Stephen Wald, Craig & Macauley, P.C., Boston, MA, for Gaston Bastiaens.

Arnold P. Messing, Choate, Hall & Stewart, Boston, MA, Michael P. Carroll, Davis, Polk & Wardwell, New York, NY, Diem-Suong T. Nguyen, Davis Polk & Wardwell, New York, NY, Kevin J. Lesinski, Seyfarth Shaw, Boston, MA, for KPMG LLP.

John B. Missing, Herbert Thomas, Ellen D. Marcus, Debevoise & Plimpton, Washington, DC, for Dirk Cauwelier, Fernand Cloet, Marc Depauw, Jan Coene, Hubert Detremmerie.

Michael A. Collora, Dwyer & Collora, Boston, MA, Donald Chase, Franklin R. Weissberg, David A. Piedra, Peter D. Weinstein, Morrison Cohen Singer & Weinstein, LLP, New York, NY, Gordon M. Jones, James S. Dittmar, Robert P. Sherman, Sanjit S. Korde, James O. Fleckner, Hutchins, Wheeler & Dittmar, Boston, MA, for Pol Hauspie.

Donald Chase, Franklin R. Weissberg, Peter D. Weinstein, Morrison Cohen Singer & Weinstein, LLP, New York, NY, Rachelle L. DeGregory, Morrison Cohen Singer & Weinstein, LLP, New York, NY, James S. Dittmar, Sanjit S. Korde, Boston, MA, for Nico Willaert.

Donald Chase, Franklin R. Weissberg, David A. Piedra, Peter D. Weinstein, Morrison Cohen Singer & Weinstein, LLP, New York, NY, Rachelle L. DeGregory, Morrison Cohen Singer & Weinstein, LLP, New York, NY, for L & H Investment Co. N.V.

William Shields, Jonathan I Handler, Day, Berry & Howard, Boston, MA, Bruce A. Baird, Covington & Burling, Washington, DC, Jason A. Levine, Paul W. Schmidt, Covington & Burling, Washington, DC, William D. Iverson, Covington & Burling, Washington, DC, for Microsoft Corp.

Andrew Good, Silverglate & Good, Boston, MA, Roger E Zuckerman, Zuckerman Spaeder LLP, Washington, DC, Steven M. Salky, Zuckerman Spaeder LLP, Washington, DC, for Louis H. Verbeke.

Michael P. Connolly, Murtha Cullina Roche Carens & DeGiacomo, Boston, MA, Frank Rozzano, Dickstein Shapiro Morin & Oshinsky, LLP, Tara J. Holubar, Dickstein Shapiro Morin & Oshinsky, LLP, Washington, DC, for Ellen Spooren.

Robert J. Kaler, Gadsby & Hannah LLP, Boston, MA, for Flanders Language Valley Fund.

David H. Braff, Bradley A. Harsch, Sullivan & Cromwell, New York, NY, Douglas H. Meal, Emily F. Klineman, Ropes & Gray, Boston, MA, Philip L. Graham, Jr., Stephanie G. Wheeler, Sullivan & Cromwell, New York, NY, Theodore Edelman, Sullivan & Comwell, London, England, for KPMG UK.

Vincent M. Amoroso, Erik Lund, Posternak, Blankstein & Lund, Boston, MA, David N. Ellenhorn, Louis M. Solomon, Teresa A. Gonsalves, Solomon, Zauderer Ellenhorn, Frischer & Sharp, New York, NY, Andre K. Cizmarik, Solomon Zauderer, Ellenhorn, Frischer et al., New York, NY, Janet B. Fierman, Cohen & Fierman, LP, Boston, MA, Robert M. Cohen, Cohen & Fierman, LLP, Boston, MA, John W. Polk, Baker & McKenzie, Washington, DC, for Paul Behets.

Nelson Callahan, John A.D. Gilmore, Hill & Barlow, Boston, MA, for Bernard Vergnes.

Vincent M. Amoroso, Erik Lund, Posternak, Blankstein & Lund, Boston, MA, George A. Salter, John A. Redmon, Nicholas W.C. Corson, Hogan & Hartson, LLP, New York, NY, KPMG Belgium.

Anthony M. Feeherry, Gus P. Coldebella, Sarah E. Walters, Goodwin Procter, LLP, Boston, MA, for Jo Lernout.

Jonathan Shapiro, Stern, Shapiro, Weissberg & Garin, Boston, MA, Jack I. Zwick, David C. Katz, Weiss & Yourman, New York, NY, Sherrie R. Savett, Berger & Montague, P.C., Philadelphia, PA, Joseph H. Weiss, Weiss & Yourman, New York, NY, for Gerhard Heitmann.


MEMORANDUM AND ORDER

SARIS, District Judge.

INTRODUCTION

Plaintiffs allege that defendants Flanders Language Valley Fund c.v.a. ("FLV"), Mercator and Noordstar, N.V. ("Mercator"), and Louis H. Verbeke participated in a scheme and course of business to defraud the securities market, by setting up, funding, and operating sham entities designed to enter into bogus software licensing agreements with Lernout & Hauspie ("L & H"), a speech recognition...

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