Miss. pension sues Millennial Media, others, alleges Securities Act violations

FOLEY SQUARE, N.Y. (Legal Newsline) - Public Employees' Retirement System of Mississippi has filed a class action lawsuit against Millennial Media Inc. for allegedly violating the Securities Exchange Act of 1934.

PERSM claims Millennial Media, Bessemer Venture Partners, Columbia Capital, Charles River Ventures, New Enterprise Associates Inc., Morgan Stanley & Co., Goldman Sachs & Co., Barclays Capital Inc., Allen & Company LLC, Stifel Nicolaus & Company, Canaccord Genuity Inc. and Oppenheimer & Co. hid information that reflected poorly on the company and, once released publicly, caused the company's stock price to drop, according to a complaint filed Sept. 30 in the U.S. District Court for the Southern District of New York.

"This action also is brought pursuant to the Securities Act of 1933...on behalf of all persons or entities who purchased the common stock of Millennial Media pursuant and/or traceable to two registered public offerings," the complaint states.

On March 28, 2012, Millennial Media commenced its initial public offering through which the company and certain shareholders sold more than 11.7 million shares at $13 per share for aggregate gross proceeds of more than $152 million, according to the suit.

PERSM claims through a second stock offering on Oct. 24, 2012, Millennial and its shareholders sold an additions 11.5 million shares of company stock at $14.15 per share for aggregate gross proceeds of more than $162 million.

"Pursuant to the Securities Act, defendants are strictly liable for material misstatements in the offering documents...vissued in connection with the offerings and these claims specifically exclude any allegations of knowledge or scienter," the complaint states.

On Feb. 19, 2013, after the close of the markets, Millennial issued a press release announcing revenue for the fourth quarter of 2012 of $58 million, sharply below analysts' expectation of $62.9 million, according to the suit.

PERSM claims Millennial also gave disappointing revenue guidance for 2013 and disclosed that it would acquire Metaresolver Inc.

"Millennial Media's poor results, weak guidance and its need to acquire Metaresolver arose out of ongoing problems with the company's then-existing technologies...which were driving clients away," the complaint states. "In response to this partial disclosure of the true state of the company's proprietary software and related technologies, Millennial Media's stock price fell $5.38 per share, or 37.54 percent to close at $8.95 per share of February 20, 2013."

On Aug. 13, 2013, Millennial issued a press release announcing the company would acquire Jumptap Inc. and, due to ongoing company problems, Millennial's stock price fell $1.60 per share or 18.82 percent to close at $6.90 per share on Aug. 14, 2013, according to the suit.

PERSM claims on Nov. 13, Feb. 19 and May 7, the company's stock fell again, to $6.32, $6.15 and finally to $3.36 per share.

As a result of the defendants' materially false and/or misleading statements and omissions, Millennial's common stock was offered at artificially inflated prices and traded at inflated prices during the class period.

"However, as the truth about Millennial Media's operations and outlook became known to investors, the artificial inflation came out and the price of Millennial Media's common stock fell, declining 86.56 percent from its class period high," the complaint states. "These price declines caused significant losses and damages to plaintiff and other members of the class."

PERSM is seeking class certification and compensatory damages. It is represented by Christopher J. Keller, Eric J. Belfi and Michael W. Stocker of Labaton Sucharow LLP; and Gerald H Silk and Avi Josefson of Berstein Litowitz Berger & Grossmann LLP.

The case is assigned to District Judge Paul A. Engelmayer.

U.S. District Court for the Southern District of New York case number: 1:14-cv-07923

From Legal Newsline: Kyla Asbury can be reached at classactions@legalnewsline.com.