NEW YORK, Oct. 12, 2012 (GLOBE NEWSWIRE) -- Shareholders of Digital Domain Media Group, Inc. ("DDMGQ" or the "Company") (OTCQB:DDMGQ), are reminded of the securities class action against certain officers and the managing underwriters of the Company's Initial Public Offering ("IPO"). The class action (2:12-cv-14344), filed in the United States District Court, Southern District of Florida, is on behalf of all persons who purchased DDMGQ common stock between November 18, 2011 and September 6, 2012, inclusive (the "Class Period") and/ or persons who purchased or otherwise acquired DDMGQ common stock in or traceable to the Company's initial public offering, which commenced on or about November 18, 2011 (the "IPO"). This class action is brought under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10(b)-5 promulgated thereunder, and Sections 11 and 15 of the Securities Act of 1933.
If you are a shareholder who purchased DDMGQ common stock during the Class Period, you have until November 19, 2012 to ask the Court to appoint you as Lead Plaintiff for the class. To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll free, x237. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.
DDMGQ is a digital production company which was founded in 1993. The Company provides computer-generated animation and digital visual effects for major motion picture studios and advertisers.
On May 16, 2011, DDMGQ filed the Registration Statement with the SEC for its initial public offering, and on November 18, 2011 the IPO commenced. The Company sold 4.92 million shares of its common stock at an IPO price of $8.50 per share. The gross proceeds of the offering totaled $41.8 million.
The Complaint alleges that during the Class Period and in connection with DDMGQ's IPO, the Company made misleading statements and/or failed to disclose material facts about the Company's ability to raise capital and fund its operations. Senior DDMGQ officers falsely reassured shareholders that the Company would be able to meet its operating expenses, even though the Company was faced with a substantial "burn rate" which threatened its viability to continue as a going concern.
According to a September 18, 2012 article in the Palm Beach Post, DDMGQ had a long history of difficulties meeting its payroll which went back to 2010. According to the Post, the Company's Chief Executive Officer ("CEO") "predicted a 'train wreck' in an email to an investor in early 2010." Moreover, the CEO concealed a Loan Agreement for $10 million which he entered into at the time of the IPO. The loan was secured by the CEO's DDMGQ common shares and by the CEO's personal properties.
The revelation of the DDMGQ's true financial condition culminated in its filing for Chapter 11 bankruptcy on September 11, 2012, less than 10 months after its IPO.
The Pomerantz Firm, with offices in New York, Chicago and San Diego, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 75 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of defrauded investors. See www.pomerantzlaw.com.