According to a Press Release dated October 31, 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 March 8, 2000, Verado
commenced an initial public offering of 10,000,000 of its shares of common
stock at an offering price of $17 per share (the "Verado IPO"). In connection
therewith, Verado 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 Underwriters on the offering had
solicited and received excessive and undisclosed commissions from certain
investors in exchange for which those Underwriters allocated to those investors material portions of the restricted number of the Verado shares issued in connection with the Verado IPO; and (ii) the Underwriters had entered into agreements with customers whereby the Underwriters agreed to allocate Verado shares to those customers in the Verado IPO in exchange for which the customers agreed to purchase additional Verado shares in the aftermarket at pre-determined prices.