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Digital Generation, Inc. Sued By Investor

SAN DIEGO, Calif. and IRVING, Texas, May 13, 2013 /PRNewswire/ --  Shareholder rights attorneys at Robbins Arroyo LLP announce that a purchaser of Digital Generation, Inc. (NASDAQ: DGIT) securities has filed a complaint in the U.S. District Court for the Northern District of Texas.  The complaint alleges that Digital Generation and certain of its officers and directors violated the Securities Exchange Act of 1934 between June 20, 2011 and February 19, 2013 (the "Class Period").

(Logo: http://photos.prnewswire.com/prnh/20130103/MM36754LOGO)

Digital Generation Is Accused of Making False and Misleading Statements to Induce a Strategic Buyout

The complaint alleges that during the Class Period, Digital Generation and certain of its officers and directors issued a series of materially false and misleading statements concerning the true nature of the company's operations, financial performance, and prospects.  Specifically, the complaint alleges that certain officers and directors promoted the company as a strong candidate for a strategic buyout based on the company's strong performance and diversification.  According to the complaint, company officials cultivated this image through a series of false and/or misleading statements regarding its growth and the value of several acquisitions made during the Class Period.  Those statements were false and misleading because they failed to disclose that: (i) the company's online segment performance was well below the value reported to investors; (ii) prior acquisitions had masked the company's declining revenue base; (iii) the company had vastly overpaid for its acquisition of online segments, including Media Mind, Inc. ("Media Mind"), in order to appear to be an attractive acquisition target; (iv) the company was not sufficiently poised for a strategic partnership or buyout; and (v) as a result, the company's financial statements were materially false and misleading during the Class Period.

Stock quotes in this article: DGIT 

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