Class action suit filed against Diana, its officers and directors and other individuals acting in concert with them.

NEW YORK--(BUSINESS WIRE)--May 12, 1997--

Alleging material misrepresentations, false financial statements, market manipulation and insider trading

Pursuant to Section 21D(a)(3)(A)(i) of the Securities Exchange Act of 1934, notice is hereby given that a class action has been filed in the United States District Court for the Central District of California Civil Action No. 97-3503 GHK on behalf of purchasers of the common stock of The Diana Corporation ("Diana") common stock during the period between December 6, 1994 and May 2, 1997 (the "Class Period") against Diana, Richard Y. Fisher, Donald E. Runge, Sydney B. Lilly, R. Scott Miswald, James Fiedler, Sattel Communications LLC, Sattel Technologies, Inc., George Weischadle, Daniel Latham, Dawson-Samberg Capital Management, Inc., Arthur T. Samberg, Jonathan T. Dawson, Everest Capital Limited and Marko Dimitrejevic.

This action arises out of an alleged concerted scheme participated in by all defendants to artificially inflate and manipulate the trading price of Diana common stock through making (i) materially false and misleading statements concerning product offerings, sales and revenues achieved by Diana and (ii) well- timed manipulative transactions in Diana common stock purposefully designed to reflect interest in Diana's stock and confidence in the Company's products and accuracy of its public statements.

The complaint alleges that defendants armed with a product which very few people truly understood in a rapidly changing area of technology, embarked on a scheme to deceive the investing public with respect to the market for the product's technology, competitive position and the market for its commercial application. The complaint further alleges that this scheme was substantially advanced once Diana started announcing sales of Sattel's switch to major companies including Frontier Communications and Concentric Networks Corporation thereby convincing the investing public of the merit of the Company's product claims. The announcements concerning these sales were materially false and misleading. In truth and in fact, those companies either actually never bought or paid for the switches.

Through this alleged scheme, defendants effectively took a stock which was trading at less than $5 per share ran it up to over $100 per share and which then crashed back down to trade at approximately $2 per share. Although defendants profited enormously from the successful execution of their scheme, by, among other things, the sale of more than $15 million in Diana stock at artificially inflated prices to members of the investing public, plaintiffs and other similarly situated members of the investing public suffered enormous losses.

Plaintiffs seek to recover damages on behalf of all purchasers of Diana common stock during the Class Period (the "Class"). They are represented by Milberg Weiss Bershad Hynes & Lerach LLP ("Milberg Weiss"), Law Offices of Bernard M. Gross, P.C., Lowey Dannenberg Bemporad & Selinger, P.C. and Wolf Haldenstein Adler Freeman & Herz LLP all of whom have extensive experience and expertise in handling complex civil litigation on behalf of defrauded investors.

Milberg Weiss has been actively engaged in commercial litigation, emphasizing securities and antitrust class actions, for more than 20 years. The firm has offices in New York, San Diego, San Francisco and Los Angeles and is active in major litigation pending in federal and state courts throughout the Untied States. The firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm to major positions in complex multi-district or consolidated litigations. Milberg Weiss has taken a lead role in numerous important actions on behalf of defrauded investors, and has been responsible for a number of outstanding recoveries which, in the aggregate, total approximately $2 billion. For additional information about Milberg Weiss, see the firm's website at http://www.milberg.com

If you are a member of the Class described above, you may, no later than July 5, 1997, move the Court to serve as lead plaintiff of the Class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Milberg Weiss (Steven G. Schulman or Keith Fleischman) at One Pennsylvania Plaza, 49th Floor, New York, New York 10119-0165. Telephone: [phone]. Internet electronic mail: [e-mail]

CONTACT: Milberg Weiss Bershad Hynes & Lerach LLP, New York

Steven G. Schulman, Keith Fleischman, 1/800/922-0187