According to a Press Release dated July 27, 2001, the complaint alleges 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 LookSmart shares issued in connection with the LookSmart IPO; and (ii) defendants had entered into agreements with customers whereby defendants agreed to allocate LookSmart shares to those customers in the LookSmart IPO in exchange for which the customers agreed to purchase additional LookSmart 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.