Twitter wins dismissal of case alleging pre-IPO fraud
A case against Twitter was dismissed after a Manhattan judge said the complaint "does not allege that Twitter secretly limited that authority contrary to the standard practice in the securities industry."
The aim of the scheme, the firms claimed, was to stoke interest in its initial public offering, according to Reuters, back in November 2013.
But U.S. District Judge Shira Scheindlin in a New York City courtroom said the firms, named as Precedo Capital Group Inc., and Continental Advisors SA, failed to show Twitter was to blame for the cancellation of a market offering it had arranged with another firm, GSV Asset Management Inc., which was not named as a defendant.
The $124 million lawsuit, filed a week before Twitter was due to go public, accused GSV to arrange an offering that was designed to fail in order to raise more money when it went live on the New York Stock Exchange. That could have helped Twitter justify the $10 billion valuation it had been trumpeting during its pre-trading paperwork.
The case was dismissed with prejudice, meaning the case cannot be brought again.