It was reported on October 2nd that US Securities and Exchange Commission filed a settled enforcement action against Mr Carlos Petry, charging him with insider trading in the stock of a company acquired last year by Gerdau Ameristeel.

We wish to clarify that Mr Carlos João Petry, the person identified in the article, is no longer a member of the Gerdau Administration Board. In January 2008, Mr Petry resigned as a member of the Gerdau SA Board of Directors and retired from the company.

Gerdau has also reiterated that it was absolutely unaware of a former board member’s decision to purchase Chaparral Steel stocks during the time when Gerdau Ameristeel was in the process of analyzing Chaparral Steel’s acquisition.

Gerdau also reaffirmed its respect for all laws and regulations governing the stock market and underscores its requirement that all its employees fully comply with the Company’s ethical guidelines in all their activities.

Inconvenience caused is regretted.