According to a Press Release dated August 8, 2001, the complaint alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On or about August 11, 1998, Digital River commenced an initial public offering of 3,000,000 of its shares of common stock at an offering price of $8.50 per share (the ``Digital River IPO''). In connection therewith, Digital River filed a registration statement, which incorporated a prospectus (the ``Prospectus''), with the SEC. The complaint further alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (i) The Underwriter Defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the Underwriter Defendants allocated to those investors material portions of the restricted number of Digital River shares issued in connection with the Digital River IPO; and (ii) the Underwriter Defendants had entered into agreements with customers whereby The Underwriter Defendants agreed to allocate Digital River shares to those customers in the Digital River IPO in exchange for which the customers agreed to purchase additional Digital River shares in the aftermarket at pre-determined prices.