Court dismisses WPP suit against Spot Runner

Ronny Kerr · September 29, 2009 · Short URL:

Ruling says WPP misinterpreted Spot Runner message, no deception discovered

lawsuitWPP's lawsuit against Spot Runner for alleged pumping and dumping has been dismissed by a U.S. district court.

One of the biggest advertising holding companies in the world, the Dublin-based WPP Group first filed suit against Spot Runner executives in April. In the filing, WPP claimed that Spot Runner did not disclose a stock sale to other shareholders. WPP also claimed that Spot Runner attempted to attract new investors with the prospects of investing alongside the large ad holding company. WPP sought over $10 million in damages.

Since its launch three years ago, Spot Runner has raised $111 million for its simple advertising service targeted at small businesses that want to purchase affordable TV spots. WPP led the Series B fundraiser in 2006, which closed a $40 million investment for the young startup.

But in the lawsuit, Spot Runner was accused of deceiving WPP about a new investment round. Fortunately for the Internet-based ad agency, judge Percy Anderson said that WPP may have merely misunderstood or misread a statement issued by Spot Runner's general counsel, Peter Huie, at the time. Anderson concluded that WPP did not have enough evidence to show that Spot Runner actively deceived or made fraudulent statements.

WPP can respond with an amended complaint by October 12.

In spite of the ruling, Spot Runner doesn't necessarily have bright times ahead. For one, the company's name may now carry negative associations for awhile, purely because the suit existed at all. Beyond that, nearly 200 employees have been laid off from the company, after three successive rounds of job cuts. On top of everything, repeated delays of the company's "Project Malibu," an online media buying solution, may serve to disillusion investors and potential customers.

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