Zynga Investors Say Insiders Cashed Out Before Stock Dump

Law360, New York (July 31, 2012, 5:12 PM EDT) -- Social gaming developer Zynga Inc. was hit with a proposed shareholder class action Monday in California federal court alleging company insiders misrepresented its financial health and knowingly sold their shares before the company's stock tanked last week, in violation of securities laws.

The suit accuses Zynga’s top brass, including founder Mark Pincus, of grossly misrepresenting and failing to disclose the sharp decline in both Zynga users and virtual goods sold in its most profitable Web games.

The complaint also says underwriters at major Wall Street banks...
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