According to a Press Release dated November 2, 2001, a complaint was filed alleging 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 February 1, 2000, IMPSAT
commenced an initial public offering of 11,500,000 of its shares of common stock at an offering price of $17 per share (the "IMPSAT IPO"). In connection
therewith, IMPSAT 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 IMPSAT shares issued in connection with the IMPSAT IPO; and (ii) the Underwriter Defendants had entered into agreements with customers whereby the Underwriter Defendants agreed to allocate IMPSAT shares to those customers in the IMPSAT IPO in exchange for which the customers agreed to purchase additional IMPSAT shares in the aftermarket at pre-determined prices.