Litigation Release No. 22624 / February 26, 2013

Litigation Release No. AAER-3446 / February 26, 2013

Securities and Exchange Commission v. Fernando J. Espuelas et al., Civil Action No. 06 CV 2435 (PAE) (S.D.N.Y.)


The U.S. Securities and Exchange Commission today announced that on February 6, 2013, the U.S. District Court for the Southern District of New York entered a settled final judgment as to Peter R. Morales, the former Controller and Vice President, Finance, for StarMedia Network, Inc., a now-defunct Internet portal, in Securities and Exchange Commission v. Fernando J. Espuelas et al., Civil Action No. 06 CV 2435 (PAE) (S.D.N.Y. filed Mar. 29, 2006). The Commission's amended complaint charged violations of the federal securities laws by eight former StarMedia executives, alleging, in relevant part, that for fiscal year 2000 and the first two quarters of fiscal year 2001, StarMedia's books and records misstated the company's revenue.

Without admitting or denying the allegations in the amended complaint, Morales consented to the entry of the Final Judgment permanently enjoining him from future violations of Rules 13b2-1 and 13b2-2 promulgated under the Securities Exchange Act of 1934 (Exchange Act), 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 of $10,000.

The Commission had previously settled with six other defendants. In addition, on October 26, 2012, the court granted defendant Betsy D. Scolnik's motion for summary judgment and ordered that the clerk terminate her as a defendant from the case. Accordingly, the Commission's litigation is concluded.

See Litigation Releases No. 22285 (March 13, 2012); No. 22147 (Nov. 7, 2011); No. 22023 (July 1, 2011); No. 21880 (Mar. 9, 2011); No. 19839 (Sept. 20, 2006); No. 19627 (Mar. 29, 2006).