Twitter said Monday that it has agree to settle a consolidated securities class action lawsuit brought against in 2016 that if approved will see the social media giant pay out $809.5 million.
The suit, which originated in 2016 in U.S. District Court for the Northern District of California, claimed Twitter violated Sections 10(b) and 20(a) of the Securities Exchange Act by knowingly misleading investors over some of its metrics, which “caused the price of Twitter common stock to be artificially inflated during the Class Period,” according to the original lawsuit.
The class action was filed on behalf of all persons who purchased or otherwise acquired Twitter common stock between February 6-July 28, 2015.
Twitter today said the binding settlement agreement “resolves all claims asserted against the company and the other named defendants without any admission, concession or finding of any fault, liability or wrongdoing by the Company or any defendant.”
The company said it intends to use cash on hand to pay the proposed settlement, which remains subject to court approval. Twitter expects to record a charge for it in Q3 2021.
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