Twitter on Monday offered to settle a class-action lawsuit for $809.5 million to avoid a trial beginning later this year involving allegations that the social network artificially inflated its stock price.
A federal judge has yet to sign off on the settlement agreement, which would see Twitter pay a hefty fee for alleged violations of the Securities Exchange Act of 1934, according to documents that Twitter filed with the Securities and Exchange Commission.
“The binding agreement does not, and the final settlement will not, include or constitute an admission, concession, or finding of any fault, liability, or wrongdoing by the Company or any defendant,” Twitter said to the SEC.
Twitter has fought the case since 2016, when investors sued Twitter and then-executives at the company alleging misstatements about monthly active users and engagement metrics.
“Plaintiff and the Class have suffered damages in that, in reliance on the integrity of the market, they paid artificially inflated prices for Twitter common stock,” the investors suing Twitter said in their 2016 complaint. “Plaintiff and the Class would not have purchased Twitter common stock at the prices they paid, or at all, if they had been aware that the market prices had been artificially and falsely inflated by defendants’ misleading statements.”
Little more than five years after the investors first filed their complaint, Twitter agreed to settle as the case was finally headed for trial.
A federal judge from the U.S. District Court of the Northern District of California on Friday scheduled a final pretrial meeting and jury selection for November.
After the weekend, Twitter published a press release saying it would use cash on hand to pay the settlement in this year’s fourth quarter.
• Ryan Lovelace can be reached at rlovelace@washingtontimes.com.
Please read our comment policy before commenting.