SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 16956 \ April 10, 2001

   SECURITIES AND EXCHANGE COMMISSION v. MATTHEW JOEL MESPLOU, United
   States District Court for the Northern District of California, Civil
   Action No. C 01-1243 VRW

   SEC Charges Insider Trading In Merger Of Cobalt Networks And Sun
   Microsystems Inc.

   The Securities and Exchange Commission today announced that it has
   sued an experienced investor from Palo Alto for insider trading prior
   to the merger last September between Cobalt Networks, Inc. and Sun
   Microsystems Inc. The Commission's action alleges that Joel Mesplou,
   whose primary occupation is investing in securities for his own
   account, made $411,696.67 in illegal profits by trading in Cobalt
   securities in advance of the merger based on information he acquired
   from an attorney representing Cobalt. In a related action, the United
   States Attorney's Office for the Northern District of California
   announced today that they charged Mesplou with lying to the Commission
   during its investigation of this case.

   Simultaneous with the filing of the Commission's civil complaint,
   Mesplou consented, without admitting or denying the allegations in the
   Commission's complaint, to the entry of a permanent injunction and
   payment of a civil penalty of $286,634.42. In the criminal action,
   Mesplou pleaded guilty to a criminal charge that he made false
   statements to the Commission when, during its investigation,
   investigators asked Mesplou about his trading in Cobalt. In the
   criminal action, Mesplou agreed to pay a civil forfeiture of
   $536,758.92.

   According to the Commission's complaint, on September 17, 2000,
   Mesplou learned from an attorney representing Cobalt that Cobalt would
   soon be acquired by Sun. The following day, Mesplou spent nearly $1.2
   million buying stock and options contracts. On September 19, before
   the opening of the markets, Sun announced that it would acquire
   Cobalt. That day, Cobalt stock closed at $57.1875, nearly 28% higher
   than its previous day close. The day of the announcement, Mesplou sold
   all his securities for a total profit of $411,696.67.

   The Commission action charged Mesplou with violating Section 10(b) of
   the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

   The Commission acknowledges the assistance in this matter of the
   National Association of Securities Dealers Regulation, Inc., the
   Chicago Board Options Exchange, the United States Attorney's Office