United States District Court, S.D. Florida. Sandy KATZ, on behalf of herself and all others similarly situated, Plaintiff, V. CARNIVAL CORPORATION , Micky M. Arison, Howard S. Frank, Gerald R. Cahill, and Robert H. Dickinson, Defendants. No. 00-0731-Civ-Moore. November 6, 2000. Plaintiffs' Consolidated Amended Class Action Complaint Lead Plaintiffs make the following allegations, except as to allegations specifically pertaining to them and their counsel, based upon the investigation undertaken by plaintiffs' counsel, which investigation included analysis of publicly-available news articles and reports, public filings, press releases and other matters of public record, interviews with factual sources including former high-level Carnival employees and passengers, and reliance upon professional accounting consultants. Plaintiffs believe that further substantial evidentiary support will exist for the allegations set forth below after a reasonable opportunity for discovery. NATURE OF THE ACTION 1. This is a class action on behalf of all purchasers of the common stock of Carnival Corporation ("Carnival" or the "Company") between July 28, 1998 and February 28, 2000 inclusive, (the "Class Period"), seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act"). 2. As hereinafter alleged, during the Class Period, Carnival, and the Individual Defendants (Arison, Frank, Cahill and Dickinson), each of whom is an executive officer, and/or director and controlling person of Carnival, knowingly and/or recklessly failed to disclose the Company's severe and pervasive safety, maintenance and regulatory problems associated with its Carnival Cruise Line Ships. Defendants' fraudulent scheme and deceptive course of business artificially inflated and maintained the trading price of Carnival securities during the Class Period and thereby injured members of the Class. JURISDICTION AND VENUE 3. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. 1331, 1337 and 1367 and Section 27 of the Exchange Act ( 15 U. S.C. § 78aa) . 4. This action arises under Sections 10(b) and 20 (a) of the Exchange Act ( 15 U .S.C. 78j(b) and 78t a and Rule 10b-5 promulgated thereunder ( 17 C.F. R. § 240.10b-5) . 5. Venue is proper in this District pursuant to Section 27 of the Exchange Act ( 15 U.S.C. 78aa and 28 U.S.C. § 1391(b) and (c) . Substantial acts in furtherance of the alleged fraud and/or its effects have occurred within this District and Carnival maintains its principal executive offices in this District. 6. In connection with the acts and omissions alleged in this complaint, defendants, directly or indirectly, used the means and instrumentalities of interstate commerce, including , but not limited to, the mails, interstate telephone communications , and the facilities of the national securities markets. PARTIES 7. Lead Plaintiffs, The International Brotherhood of Electrical Workers, Local 98; Jan de Rie; and Alec Vinocur, appointed by the Court by Order dated September 6, 2000, purchased Carnival common stock during the Class Period, as set forth in the certifications accompanying their Lead Plaintiff Motion, which are incorporated herein by reference, and were damaged thereby. 8. Defendant Carnival is incorporated under the laws of the Republic of Panama, and maintains its principal place of business at 3655 N.W. 87th Avenue, Miami, Florida. 9. The Individual Defendants, at all times relevant to this action, served in the capacities listed below and received substantial compensation: Name Position Micky Arison Chairman of the Board of Directors and Chief Executive Officer. Robert H. President and Chief Operating Officer. Dickinson Howard S. Frank Vice Chairman of the Board of Directors and Chief Opera ting Officer since January 1998. Gerald R. Cahill Chief Financial Officer and Accounting Officer. 10. The Individual Defendants, as senior officers and/or directors of Carnival were controlling persons of the Company. Each exercised his power and influence to cause Carnival to engage in the fraudulent practices complained of herein, while receiving substantial compensation for their roles. For example, defendant Arison received $4.85 million in salary for fiscal year 1998, and was the highest paid corporate executive in South Florida according to a May 23, 1999 article in the Sun-Sentinel. 11. Each of the defendants is liable as a participant in a fraudulent scheme and course of business that operated as a fraud or deceit on purchasers of Carnival common stock, by disseminating materially false and misleading statements and/or concealing material adverse facts. The scheme: (i) deceived the investing public regarding Carnival's business, its finances and the intrinsic value of Carnival common stock; and (ii) caused lead plaintiffs and other members of the Class to purchase Carnival common stock at artificially inflated prices. PLAINTIFFS' CLASS ACTION ALLEGATIONS 12. Lead Plaintiffs bring this action as a class action pursuant to Federal Rule of Civil Procedure 23(a) and (b)( 3) on behalf of a Class, consisting of all persons who purchased or otherwise acquired Carnival common stock between July 28, 1998 and February 28, 2000 , inclusive (the "Class Period "), and who were damaged thereby . Excluded from the Class are defendants, members of the immediate family of each of the Individual Defendants , any subsidiary or affiliate of Carnival and the directors, officers and employees of Carnival or its subsidiaries or affiliates, or any entity in which any excluded person has a controlling interest, and the legal representatives, heirs, successors and assigns of any excluded person. 13. The members of the Class are so numerous that joinder of all members is impracticable . While the exact number of Class members is unknown to plaintiffs at this time and can only be ascertained through appropriate discovery , plaintiffs believe that there are thousands of members of the Class located throughout the United States. As of July 14, 1999 , there were reportedly more than 613 million shares of Carnival common stock outstanding. Throughout the Class Period, Carnival common stock was actively traded on the NYSE. Record owners and other members of the Class may be identified from records maintained by Carnival and/or its transfer agents and may be notified of the pendency of this action by mail, using a form of notice similar to that customarily used in securities class actions. 14. Plaintiffs' claims are typical of the claims of the other members of the Class as all members of the Class were similarly affected by defendants' wrongful conduct in violation of federal law that is complained of herein. 15. Plaintiffs will fairly and adequately protect the interests of the members of the Class and have retained counsel competent and experienced in class and securities litigation. 16. Common questions of law and fact exist as to all members of the Class and predominate over any questions solely affecting individual members of the Class. Among the questions of law and fact common to the Class are: (i) whether the federal securities laws were violated by defendants' acts and omissions as alleged herein; (ii) whether defendants participated in and pursued the common course of conduct complained of herein; (iii) whether documents, press releases, and other statements disseminated to the investing public and the Company's shareholders during the Class Period misrepresented material facts about the business, finances, financial condition and prospects of Carnival; (iv) whether statements made by defendants to the investing public during the Class Period misrepresented and/or omitted to disclose material facts about the business, finances, value, performance and prospects of Carnival; (v) whether the market price of Carnival common stock during the Class Period was artificially inflated due to the material misrepresentations and failures to correct the material misrepresentations complained of herein; and (vi) to what extent the members of the Class have sustained damages and the proper measure of damages. 17. A class action is superior to all other available methods for the fair and efficient adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the damages suffered by individual Class members may be relatively small, the expense and burden of individual litigation make it impossible for members of the Class to individually redress the wrongs done to them. There will be no difficulty in the management of this suit as a class action. GENERAL BACKGROUND 18. Carnival describes itself as the world's largest multiple-night cruise company based on the number of passengers carried, revenues generated, and available capacity. The Company offers a range of cruise brands serving the contemporary cruise market through Carnival Cruise Lines, Holland America, the Cunard Line, Seabourn Cruise Line, and Windstar Cruises. The Company serves the cruise market with 43 ships, 13 of which constitute the "Carnival Cruise Line" segment (the "Carnival Ships"). All of the Carnival Ships were designed by and built for Carnival, including 12 SuperLiners, which are among the largest in the cruise industry. Nine of the Carnival Ships operate in the Carribean during all or a portion of the year and two Carnival Ships call on ports on the Mexican Riviera year round. Carnival Ships also offer cruises to Alaska, Canada, the Hawaiian Islands, the Bahamas and the Panama Canal. 19. Carnival's rapid acquisitions of Holland America, Windstar, Cunard and Seabourn, as well as several affiliated cruise operations, gave Carnival a leading position in the cruise line industry, in which Carnival was perceived as being able to offer everything from discount to luxury cruise packages. In addition to acquisitions, the Company announced agreements to construct several additional cruise ships, which, as stated in the Company's annual report on Form 10-K filed on February 25, 1999, would increase passenger capacity from 39,466 to 56,858, or by 44.1% by the summer of 2003. 20. The Company's explosive growth resulted in an increase in passenger capacity from 23,995 at November 30, 1994 to 39,466 at November 30, 1998 .