SEC Probes Twitter Over Spam Accounts – Court Orders Social Media Giant to Provide Additional Data to Elon Musk CryptoGlobe

Twitter Inc. has been ordered to provide Elon Musk with additional spam and bot account data. The social media giant has sued the CEO of Tesla for ending its $44 billion bid to buy the social media platform. The US Securities and Exchange Commission (SEC) also questioned Twitter about the number of spam accounts.

Court orders Twitter to provide additional data to Elon Musk

Chancellor Kathaleen St. J. McCormick, a judge in the Delaware Court of Chancery, on Thursday signed an order requiring Twitter Inc. (NYSE: TWTR) to provide additional data to Tesla and Spacex CEO Elon Musk. Plaintiff Twitter sued defendants Musk and his two companies, X Holdings I and X Holdings II, for terminating the $44 billion deal to buy the social media platform. Musk hit back at Twitter.

Judge McCormick said in her order:

The data requests of the defendants are absolutely abroad.

She added: “Read literally, defendants’ request for documents would require plaintiff to produce trillions and trillions of data points reflecting all the data Twitter could possibly store for each of the approximately 200 million accounts included in its count of mDAU every day every three years.”

The social media company defines monetizable daily active users (mDAUs) as “Twitter users who logged in and accessed Twitter on a given day through or ad-capable Twitter apps.”

The order further reads:

Plaintiff is ordered to produce a subset of what Defendants requested: the 9,000 accounts reviewed as part of Plaintiff’s audit in Q4 2021, which the parties refer to as the “Historical Snapshot.”

“The Claimant stated that, with considerable effort, these documents could be produced in less than two weeks, and the Claimant will endeavor to meet this deadline. In addition, the Claimant must produce sufficient documents to show how these 9,000 accounts have been selected for review,” the order details.

Meanwhile, the U.S. Securities and Exchange Commission (SEC) has probed Twitter about its method of identifying spam accounts, according to a new regulatory filing made public on Wednesday.

In a letter dated June 15, the SEC asked Twitter CEO Parag Agrawal to provide information on how the company calculates the number of bot accounts. “We note your estimate that the average number of fake or spam accounts in fiscal year 2021 continues to be less than 5% of mDAU,” the SEC wrote, adding:

To the extent material, please disclose the methodology used to calculate these figures and the underlying judgments and assumptions used by management.

Twitter responded to the SEC investigation with a standard description of the methodology on June 22. The social media giant has told the securities regulator that it has “adequately” disclosed the methodology it uses, noting that it randomly selects thousands of accounts for people to review each quarter.

The SEC sent another letter to Twitter on July 27 stating, “We have completed our review of your documents. We remind you that the company and its management are responsible for the accuracy and relevance of their information, notwithstanding any review, comment, action or lack of action by staff.

Earlier this month, Musk sold nearly 8 million Tesla shares. The Tesla boss said that in the event Twitter forces the buyout deal to close and some financial partners don’t materialize, it’s important to avoid a fire sale of Tesla shares.

Do you think the court will force Elon Musk to complete the deal to buy Twitter? Let us know in the comments section below.

Kevin Helms

An economics student from Austria, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests include Bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.

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