U.S. SECURITIES & EXCHANGE COMMISSION

Litigation Release No. 17916 / January 7, 2003

Accounting and Auditing Enforcement Release No. 1697 / January 7, 2003

SEC AMENDS COMPLAINT AND JOINS RAMIRO RAFAEL ("RAY") FERNANDEZ AS DEFENDANT IN ACTION AGAINST FORMER EXECUTIVES OF TIMBER COMPANY MADERA INTERNATIONAL, INC.

SEC v. Ramiro M. Fernandez-Moris, Daniel S. Lezak, and Ramiro Rafael ("Ray") Fernandez, 01 Civ. 1985 (JR) (D.D.C. filed Sept. 19, 2001)

The Securities and Exchange Commission today announced that, on January 3, 2003, it filed an amended complaint in the United States District Court for the District of Columbia joining Ramiro Rafael ("Ray") Fernandez as an additional defendant in its action against former executives of timber company Madera International, Inc. The amended complaint also alleges additional facts concerning the falsification of Madera's financial statements from 1994 through 2000.

Ray Fernandez was Madera's Executive Vice President in charge of sales and marketing and Chief Executive Officer of Madera International Environmental, Inc., a wholly-owned subsidiary of Madera. In December 1998, he was additionally elected Chairman of the Board of Directors of Madera, and later, in November 2000, also became its Chief Executive Officer, replacing his father, Ramiro M. Fernandez-Moris. The amended complaint alleges that

• Fernandez signed, in his capacities as Director and Chairman of the Board, Madera's fiscal year 1999 annual report on Form 10-K that was filed with the SEC on March 8, 2000 and that contained numerous false statements.

• Fernandez posted numerous false statements concerning Madera on an Internet message board during the period April through September 19, 2001.

• At the same time he inflated the share price of Madera through these fraudulent public disclosures about Madera's assets, operations, and revenues, Fernandez sold personal holdings of Madera common stock. Specifically, from May 2000 through July 2001, Fernandez sold at least 7,939,200 shares of Madera common stock and obtained proceeds of at least $68,791.65.

The Commission seeks relief against Fernandez consisting of a permanent injunction against future violations of Sections 10(b) and 13(a) of the Exchange Act and Rule 10b-5 thereunder, disgorgement of all ill-gotten gains together with an accounting of his proceeds of his sales of Madera common stock, civil monetary penalties, and an order permanently barring him from serving as an officer or director of a public company.

The amended complaint also alleges additional facts concerning Madera's purported acquisitions totaling nearly 730,000 acres of timber property located in the Brazilian rain forest in July 1994 and May 1997. It alleges that, under Brazilian law, Madera never acquired valid legal title to any of this property.

The Court previously entered a Final Judgment of Permanent Injunction By Default against Madera International, Inc. The judgment enjoins Madera from violating the antifraud, reporting, books and records, and internal control provisions of the Securities Exchange Act of 1934 (Sections 10(b), 13(a) and 13(b)(2)(A) and (B), and Rules 10b-5, 12b-20, 13a-1 and 13a-13). Litigation Release No. 17546 (June 6, 2002).

For more information, see Litigation Release No. 17140 (September 19, 2001).

SEC Complaint in this matter