U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21880 / March 9 , 2011
Accounting and Auditing Enforcement Release No. 3252 / March 9, 2011
Securities and Exchange Commission v. Fernando J. Espuelas et al., Civil Action No. 06 CV 2435 (RJH) (S.D.N.Y. filed Mar. 29, 2006)
STARMEDIA CO-FOUNDER AGREES TO SETTLEMENT IN SEC LITIGATION
The U.S. Securities and Exchange Commission today announced that on March 8, 2011, the U.S. District Court for the Southern District of New York entered a settled final judgment as to Defendant Jack C. Chen, a co-founder of StarMedia Network, Inc. and the company's former President. StarMedia is a former Internet portal based in New York City. The Commission's amended complaint, filed on December 11, 2008, alleged that for fiscal year 2000 and the first two quarters of fiscal year 2001, StarMedia's books and records, and its filings with the Commission, misstated the quality and amount of the company's revenue. The amended complaint also alleged that StarMedia executives made misstatements regarding the company's revenue to certain entities from which it was attempting to obtain financing. In its amended complaint, the Commission alleged violations of the federal securities laws by eight former StarMedia executives.
Without admitting or denying the allegations in the amended complaint, Chen consented to the entry of the Final Judgment permanently enjoining him from future violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 and Rule 13b2-1 promulgated under the Securities Exchange Act of 1934, and from aiding and abetting violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1, and 13a-13, and ordering him to pay a civil penalty in the amount of $100,000.
Chen is the third defendant to settle with the Commission. See Litigation Release Nos. 19627 (Mar. 29, 2006) and 19839 (Sept. 20, 2006).