Web-based TV ad agency Spot Runner has tried to reassure staffers over the weekend with a memo that could offer a clue as to how it plans to fight WPP Group’s $13 million lawsuit accusing the company of securities fraud and breach of contract. WPP, which holds a three percent stake in the company, says it’s suing because it was not informed of the sale of Spot Runner shares between February 2006 and March 2008.

Sir Martin Sorrell’s advertising company, which initially bought $10 million worth of shares in Spot Runner as part of its third round back in August 2006, says that if it had known about the earlier share sale, it would never have made an investment. WPP specifically accuses Spot Runner CEO Nick Grouf, co-founder David Waxman and general counsel Peter Huie; as well as investors Bob Pittman, Index Ventures’ Danny Rimer (pictured) and Battery Ventures’ Roger Lee.

WPP alleges that it was defrauded and deceived on additional sales, though it was given the opportunity to sell shares in May 2007 and March 2008—but was not informed of a plan to sell shares in January 2008. In its unsigned memo to employees, Spot Runner says the legal issues should have no impact on its day-to-day operations. Read the full memo on paidContent.org...

Robert adds: Nearly 12 months ago, Spot Runner got a big $51 million fourth round from investors including Daily Mail (LSE: DMGT) & General Trust, Spanish media giant Grupo Televisa, hedge fund Legg Mason Capital Management and French luxury group Groupe Arnault/LVMH.

• WPP Slaps Spot Runner With $13M Securities Fraud Suit
• Online & TV Ad Firm Spot Runner Gets $51M Round From Daily Mail,Televisa, Others; More M&A Coming