Digimarc Leaders Hid Large-Customer Re-Up Woes, Investor Says

Digimarc Corp. directors and top executives are responsible for misrepresentations that led to a surprise revenue dip and a record 43% stock selloff, an investor alleges.

The digital watermarking company’s leadership harmed the business by concealing a major customer’s contract renegotiation, Lisa Chadwick says in a derivative suit filed Tuesday in the US District Court for the District of Oregon. Digimarc faces legal defense costs and potential liability in a proposed class action; the costs of improving its controls; and a loss of reputation and goodwill, Chadwick says.

The company has already overpaid to repurchase its stock at artificially inflated ...