An old controversy reappears on the path of Twitter, and the company would be willing to pay a millionaire sum to make it disappear. The social network submitted a proposal to resolve a class action lawsuit dating from 2016 that accused some of its most prominent figures of provide misleading information to investors.
Twitter confirmed the determination by filing Form 8-K with the United States Securities and Exchange Commission. Specifically, the firm informed that the economic arrangement it proposes is of $ 809.5 million. The final settlement must be approved by the United States District Court for the Northern District of California.
A notable point of the announcement is that Twitter, despite putting on the table an astronomical sum of money to close this story, he assures that he did not do anything against the law:
The proposed settlement resolves all claims brought against Twitter and the other named defendants without any admission, concession, or determination of fault, liability, or wrongdoing on the part of the Company or any defendant. Twitter and the individual defendants continue to deny any wrongdoing or any other wrongdoing.
Twitter press release
What is the accusation against Twitter?
According to Variety, the original lawsuit was filed against Twitter founder and now CEO Jack Dorsey, then-CEO Dick Costolo, and board member Evan Williams. According to it, the defendants gave misleading information to investors, in relation to the participation of users in the social network.
Apparently, Twitter changed the way in which statistics on the use of the platform were collected, in order to show more favorable figures to those who injected money into the company. Specifically, it is mentioned that the company would have chosen to record the number of active users per day as the main metric; but it would have continued to show the numbers of active users per month to investors.
With such a ruse, which apparently started in the early part of 2015, data on stagnation or decline in public participation would have been hidden. But that is not all. The lawsuit claims that the executives took advantage of “inside information” to sell their personal Twitter shares and earn “hundreds of millions of dollars.”
As we mentioned before, from the social network they assure that they did not do anything irregular. Anyway they have presented this proposed agreement that it will be paid in cash, should it prosper. If it is given in this way, the payment will be made during the last quarter of this year.