|By Business Wire||
|September 20, 2012 04:34 PM EDT||
The law firm of Berman DeValerio filed a class action lawsuit today seeking to recover money investors lost due to alleged securities law violations at Digital Domain Media Group, Inc. (“DDMG” or the “Company”).
The lawsuit names as defendants certain DDMG officers, along with the managing underwriters of the Company’s initial public offering of November 18, 2011 (the “IPO” or “Offering”).
The complaint alleges violations of United States securities laws on behalf of individuals or entities who purchased or otherwise acquired DDMG common stock between November 18, 2011 and September 6, 2012 (the “Class Period”). It also alleges claims on behalf of those who purchased or otherwise acquired DDMG stock in or traceable to the Offering.
The case, which was filed in the United States District Court for the Southern District of Florida, is captioned St. Cyr v. Teaford et. al and the case number is 12-CV-14333. To receive a copy of the complaint, please call Berman DeValerio at (800) 516-9926 or click here.
Pursuant to the Private Securities Litigation Reform Act of 1995, investors that wish to serve as the lead plaintiff in the case must file a motion for appointment with the court by no later than November 19, 2012.
The lawsuit alleges claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the United States Securities Exchange Commission (the “SEC”), on behalf of Class Period investors, and under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, on behalf of IPO purchasers.
The lawsuit claims that DDMG, a digital production company that was forced to file for bankruptcy in September 2012, less than 10 months after its IPO, misled investors in documents filed with the SEC as part of the Offering and in other statements made throughout the Class Period.
The lawsuit alleges that, among other things, the defendants misled the public about DDMG’s ability to raise capital and fund its operations, falsely reassuring investors about the Company’s ability to meet operating expenses while it “burned” cash at a rate that threatened its viability.
In fact, according to a September 18, 2012 article in the Palm Beach Post, DDMG had difficulties meeting payroll as far back as 2010. According to the same article, then-Chairman and CEO John C. Textor “himself predicted a ‘train wreck’ in an email to an investor in early 2010.”
Textor, who resigned as Chairman and CEO on September 6, 2012, is named as a defendant in the case. The lawsuit also names as defendants two other top DDMG officers and directors, and the managing underwriters of the IPO, Roth Capital Partners, LLC and Morgan Joseph Triartisan LLC.
The truth of the Company’s financial situation was revealed in a series of disclosures beginning with an August 1, 2012 press release stating that DDMG would explore “a broad range of strategic and financial alternatives” and culminating with its filing for Chapter 11 bankruptcy protection September 11, 2012.
As a result of these disclosures, the value of the Company’s stock declined, damaging investors.
If you are a member of the class or purchased stock in connection with the IPO, you may, no later than November 19, 2012, request that the court appoint you as lead plaintiff for the class. You may contact Berman DeValerio to discuss your rights and interest in the case. Please note that you may also retain counsel of your choice or, alternatively, take no action at this time, in which case you will still remain a class member.
Berman DeValerio (www.bermandevalerio.com) is a national law firm with significant experience representing plaintiffs in complex litigation, chiefly involving violations of securities and antitrust laws. Established in 1982, the firm has 41 lawyers in Boston, San Francisco and Palm Beach Gardens, Florida.