According to a Press Release dated July 25, 2001, the complaint charges with violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint further alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that (i) defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which defendants allocated to those investors material portions of the restricted number of StarMedia shares issued in connection with the StarMedia IPO; and (ii) defendants had entered into agreements with customers whereby defendants agreed to allocate StarMedia shares to those customers in the StarMedia IPO in exchange for which the customers agreed to purchase additional StarMedia shares in the aftermarket at pre-determined prices. As alleged in the complaint, the SEC is investigating underwriting practices in connection with several other initial public offerings.