Twitter stated on Monday it could pay $809.5 million (roughly Rs. 5,960 crores) to settle a shareholder class motion lawsuit accusing the social media firm of deceiving traders about how typically folks used its platform.

The settlement resolved a case that had been on the verge of going to trial. Jury choice had been scheduled to start on Monday, however at a September 17 listening to US District Judge Jon Tigar in Oakland, California postponed it till late November.

Twitter, former Chief Executive Officer Richard Costolo and former Chief Financial Officer Anthony Noto denied wrongdoing in agreeing to the settlement, which requires Tigar’s approval.

“The jury trial is a great equaliser, even for some of the most powerful entities on the planet,” stated Tor Gronborg, a associate at Robbins Geller Rudman & Dowd representing the shareholders.

In early afternoon buying and selling, Twitter shares have been down 3.8 p.c at $60.11 (roughly Rs. 4,420). Twitter stated it expects to make use of money available to pay the settlement quantity within the fourth quarter of this 12 months, and report a associated cost within the third quarter.

Shareholders sued Twitter in September 2016, alleging it artificially inflated its inventory value by deceptive them about person engagement.

According to the criticism, Twitter discontinued reporting “timeline views” in late 2014, and hid stagnating or declining person engagement by reporting imprecise descriptions of person metrics.

Shareholders stated Twitter acknowledged the reality after Costolo left the corporate in June 2015, and its inventory value dropped 20 p.c.

The class motion covers traders who bought the inventory from February 6, 2015 to July 28, 2015.

Since 1996, solely 9 of the greater than 5,000 US securities class motion circumstances filed by inventory traders gone by means of trial to a verdict, the Securities Class Action Clearinghouse stated.

Slightly greater than half of the lawsuits are dismissed, and a lot of the relaxation settle.

© Thomson Reuters 2021