The parties to the long-running Twitter securities class action lawsuit have agreed to settle the suit for a payment of $809.5 million, one of the largest securities class action settlements of all time. The settlement is subject to court approval. A copy of the company’s September 20, 2021 press release announcing the settlement can be found here. The plaintiffs’ lawyers’ statement about the settlement can be found here.
As detailed here, Twitter was first sued in this lawsuit in September 2016. The plaintiff alleged that the company had made misrepresentations about its user metrics, discontinuing certain metrics allegedly as a way to conceal stagnating or decliner user engagement. On October 16, 2017, Northern District of California Judge Jon Tigar granted in part and denied in part the defendants’ motion to dismiss. In July 2018, Judge Tigar granted the plaintiffs’ motion for class certification.
The case had been set to jury selection to begin in advance of trial on Monday September 20, 2021, but in a Zoom hearing on September 17, 2021, counsel for the parties presented Judge Tigar with a stipulation to continue the jury trial until November, with Jury Selection scheduled to begin on November 29, 2021.
On Monday, September 20, 2021, Twitter issued a press release announcing that it had entered an agreement to settle the consolidated class action. Under the terms of the settlement, Twitter will pay $809.5 to settle the claims asserted in the class action lawsuit. The press release emphasizes that the settlement resolves all claims “without any admission, concession, or finding of any fault, liability or wrongdoing by the Company or any defendant. The press release goes on to state that the company and the individual defendants “continue to deny any wrongdoing or any other improper actions.”
The press release states that the company intends to use “cash on hand” to pay the settlement amount, which is expected to be paid in the fourth quarter. The company expects to record a charge for the settlement during the third quarter of 2021. The company’s press release does not mention D&O insurance nor whether insurance funds will contribute toward the settlement. The parties’ stipulation of settlement has not yet been filed with the court.
The $809.5 million settlement is, of course, massive, but as massive as it is, it is still not in the top ten of the all-time largest securities class action lawsuit settlement. According to ISS Securities Class Action Services’ list of the top 100 securities class action settlements of all time, a settlement of $809.5 million, if approved by the court, would be the18th largest securities class settlement. It is the largest securities class action lawsuit settlement since American Realty Capital Properties settled in 2020 for $1.025 billion.
For those who are curious, for a securities settlement to crack the top 10 securities suit settlements, it would have to exceed $1.1 billion. (There have in fact been 15 settlements of $1 billion or greater.)