SEC asks Twitter to Provide Additional Data to Elon Musk on Spam Accounts

A court in the Delaware Court of Chancery, Chancellor Kathaleen St. J. McCormick, issued an order Thursday requiring Twitter Inc. (NYSE: TWTR) to give Elon Musk, the CEO of Tesla and SpaceX, more information. Plaintiff Twitter has filed a lawsuit against defendants Musk and his two businesses, X Holdings I and X Holdings II, for cancelling the $44 billion acquisition agreement for the social media site. Twitter has been sued again by Musk.

In her ruling, Judge McCormick stated:

Data requests made by defendants are wholly international.

“Read literally, Plaintiff would have to furnish trillions upon trillions of data points indicating all the data Twitter might conceivably maintain for each of the roughly 200 million accounts included in its mDAU count every day on every three years,” she continued.

mDAU stands for monetizable daily active users, which the social media business describes as “Twitter users who signed in and accessed Twitter on any given day through Twitter.com or Twitter applications that are able to show ads.”

The order continues:

Plaintiff is required to provide a portion of the information that the defendants have asked for, specifically the 9,000 accounts that were examined as part of Plaintiff’s Q4 2021 audit, or “historical snapshot,” as it is known by the parties.

Plaintiff stated that these documents might be supplied in under two weeks with significant effort, and Plaintiff shall strive to adhere to that deadline. In addition, the plaintiff is required to provide proof of how those 9,000 accounts were chosen for review, according to the judgement.

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According to a recent regulatory document made public on Wednesday, the U.S. Securities and Exchange Commission (SEC) is currently looking at Twitter’s approach of identifying spam accounts.

The SEC requested information from Twitter CEO Parag Agrawal in a letter dated June 15 about how the firm determines the number of bot accounts. The SEC stated in a statement: “We note your projection that the average number of fake or spam accounts for fiscal 2021 continues to represent less than 5% of mDAU.”

Please make clear the methodology used to arrive at these numbers as well as the underlying management decisions and presumptions, to the degree that this is significant.

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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