Twitter’s fight with Elon Musk to enforce his $44 billion deal to buy the social media platform could attract scrutiny from the US securities regulator over whether Musk has misled the market during the course of the deal.
Twitter on Tuesday asked a Delaware court to order the Tesla boss and world’s richest person to complete the merger, setting in motion what promises to be one of the biggest legal showdowns in Wall Street history.
On Friday, Musk said he was terminating the deal because Twitter violated the agreement by failing to respond to requests for information regarding fake or spam accounts on the platform, which is fundamental to its business performance.
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….In a statement emailed Friday to The Daily Beast, Costanzo’s lawyer, Marc Mukasey, said, “John Costanzo is a decorated DEA agent who risks his life every day to protect vulnerable communities and children from the scourge of illegal drugs. The theory of this case is misguided and he will be vindicated.”
(Reuters) – Elon Musk may find a way to prove his claim that spam accounts on Twitter Inc’s platform are significantly higher than the social media company has estimated, but showing that he and investors were misled will be difficult, legal experts say.
Musk tweeted on Tuesday that his $44 billion deal to acquire Twitter could not proceed until the company shows proof to back its estimate that spam accounts make up less than 5% of its user base. He has said he believes the figure is at least four times greater and that he will “defeat the bots or die trying.”
Independent researchers have projected that 9% to 15% of the millions of Twitter profiles may be bots.
For its part, Twitter has said in its regulatory filings that it applied “significant judgment” in coming up with the estimate and has cautioned that its disclosure may not accurately represent the actual number of spam accounts.
It is these disclaimers that give Twitter protection against potential lawsuits, be they from Musk over the deal or shareholders over the accuracy of the company’s regulatory statements, four securities law experts interviewed by Reuters said.