Mount Pleasant law firm negotiates $809.5M settlement for Twitter shareholders

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Twitter has agreed to pay $809.5 million to settle a consolidated class action lawsuit alleging that the company misled investors about how much its user base was growing and how much users interacted with its platform. 

Mount Pleasant-based law firm Motley Rice negotiated the settlement resolving the litigation, filed in federal court in the Northern District of California, against Twitter and two former senior executives. The firm said in a news release that the preliminary settlement was reached on Sept. 17, the Friday before the Monday on which jury selection had been scheduled to begin. 

U.S. District Court Judge Jon S. Tigar, who oversees the case, will decide whether to approve the settlement at a later date. 

Motley Rice was appointed lead counsel in the case in December 2016 and litigated the case on behalf of Twitter shareholders who acquired shares of its publicly traded common stock between Feb. 6, 2015, and July 28, 2015, when the company was accused of making misrepresentations about its growth that inflated its stock price. 

The firm said that only about two dozen securities fraud class action cases have gone to a jury trial in the last 25 years, and that the Twitter case would have been one of the “largest in recent memory” had it proceeded to trial. 

“We are pleased that we were able to resolve this case for our clients and the class of Twitter investors without having to undergo a full trial. However, we were confident that the jury would have agreed with our position,” said Motley Rice attorney Lance Oliver, who had been slated to serve as lead trial counsel for the plaintiffs. 

The firm also said that the preliminary resolution makes it one of the top 20 securities fraud class action settlements of all-time, as reported by Institutional Shareholder Services. 

In its announcement, Twitter said the proposed settlement resolves all claims against it without Twitter admitting any wrongdoing. The company said it plans to use cash on hand to pay the settlement in the fourth quarter of 2021. 

S.C. Lawyers Weekly staff