U.S. Securities and Exchange Commission

Litigation Release No. 17745 / September 25, 2002

(U.S. District Court for the Central District of California, Civil Action
No.CV 02-7471S VW (RZX)

SEC Files Financial Fraud Case Charging Three Former Homestore Executives;
Defendants Agree to Repay $4.6 Million in Illegal Trading Profits

Defendants to Plead Guilty in Related Criminal Actions Brought by U.S.
Attorney's Office for the Central District of California

   The Securities and Exchange Commission today filed charges against
   three former senior executives of Homestore Inc. (formerly
   Homestore.com Inc.), based in Westlake Village, Calif., for
   perpetrating an extensive scheme to fraudulently inflate Homestore's
   on-line advertising revenues in 2001. , filed today in U.S. District
   Court in Los Angeles, charges that John Giesecke Jr., Homestore's
   former chief operating officer; Joseph J. Shew, its former chief
   financial officer; and John DeSimone, its former vice president of
   transactions, caused Homestore to overstate its advertising revenues
   by $46 million (64%) for the first three quarters of 2001. This action
   was brought in coordination with the U.S. Attorney's Office for the
   Central District of California, which simultaneously announced related
   criminal charges against the three defendants. Giesecke, Shew, and
   DeSimone have each agreed to settle the Commission's lawsuit, to plead
   guilty to the criminal charges, and to cooperate with the government
   in its continuing investigation. At the time of the violations,
   Homestore was one of the top Internet portals for real estate and
   related services.

   The Commission's complaint charges Giesecke, Shew, and DeSimone with
   arranging fraudulent "round-trip" transactions for the sole purpose of
   artificially inflating Homestore's revenues in order to exceed Wall
   Street analysts' expectations. The defendants circumvented applicable
   accounting principles and lied to Homestore's independent auditors
   about these transactions. While the fraud was ongoing, the defendants
   exercised stock options at prices ranging between approximately $21
   and $32 per share, reaping profits ranging from approximately $169,000
   to approximately $3.2 million.

   The Commission's complaint alleges as follows

   Bogus Barter Transactions. Throughout 2000 and 2001, Homestore's sale
   of on-line advertisements was one of its primary revenue sources.
   Homestore engaged in a series of complex round-trip barter
   transactions to inflate revenues and meet Wall Street estimates. The