A lawsuit accusing Twitter Inc (NYSE:TWTR) of fraud involving its initial public offering was dismissed by US District Judge Shira Scheindlin in Manhattan today.
Private stock sale at issue
At issue were a group of shareholders who claimed Twitter Inc (NYSE:TWTR) arranged a private stock sale but never planned on selling stock. Rather, the suit claims, the private stock sale talk was designed to pump up Twitter’s November, 2013 IPO.
$124 million suit in part sought “reputational” damages
Precedo Capital Group Inc and Continental Advisors SA, who brought the $124 million suit, did not show that that Twitter was responsible for the cancellation of the secondary market offering. Further, “the complaint does not allege that Twitter Inc (NYSE:TWTR) secretly limited that authority contrary to the standard practice in the securities industry,” Scheindlin ruled, according to a Reuters report.
Brokers file lawsuit as stock nearly doubles
Precedo, an Arizona broker dealer, and Continental, a Luxembourg financial advisor, had claimed in their lawsuit claimed Twitter cost them fees and damanaged their reputation. The two sought $24.2 million of compensatory damages plus $100 million of punitive damages.
Twitter Inc (NYSE:TWTR) stock was valued at $26 per share on November 6, 2013. Today they are valued at $46.11.