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Cohen Milstein Sellers & Toll PLLC Announces The Investigation Of DGSE Companies, Inc.

Cohen Milstein Sellers & Toll PLLC is conducting an investigation to determine whether DGSE Companies, Inc. (“DGSE” or the “Company”) and certain of its officers and directors made false and misleading statements and/or omissions in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.

A class action lawsuit was filed in the U.S. District Court for the Northern District of Texas by another law firm on behalf of purchasers of the common stock of DGSE Companies, Inc. (NYSE: DGSE) between April 15, 2011 to April 17, 2012, inclusive (the “Class Period”).

The complaint alleges that DGSE and certain of its officers and directors (“Defendants”) falsely attested to the accuracy of DGSE's financial statements during the Class Period.

On October 31, 2011, DGSE reported that effective November 1, 2011, defendant L.S. Smith would resign as Chairman and CEO. Less than one month later, the Company reported that its CFO, defendant John Benson, had “ retired from his position.

On April 16, 2012, DGSE filed an 8-K in which it reported that it would be unable to timely file its Form 10-K for 2011. The Company also reported that due to accounting irregularities, its annual and quarterly financial statements dating back to the second quarter of 2007 and through the third quarter of 2011 should no longer be relied upon and might need to be restated:

Management…believes that the Accounting Irregularities are the result of improper accounting of inventory and other balance sheet accounts by the former Chief Financial Officer...commencing during, and continuing subsequent to, the second calendar quarter of 2007.

Trading in DGSE shares was halted by the NYSE on April 17, and the shares last traded at $7.43 on April 16.

On May 10, 2012, DGSE announced that it had terminated its Executive Vice President of Consumer Finance, and on June 4, the Company announced that it had dismissed its auditor Cornwell Jackson, which had advised by letter that DGSE “did not have the internal controls necessary…to develop reliable financial statements.”

A week later the Company revealed that the SEC had initiated an investigation into the accounting irregularities at DGSE “to determine whether any persons or entities engaged in, or are about to engage in, any possible violations of the federal securities laws.” Since that time, the Company has provided no further information regarding the accounting irregularities or the SEC investigation.

Cohen Milstein encourages all investors who purchased DGSE common stock April 15, 2011 to April 17, 2012 or former employees with information concerning this matter to contact the firm.

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