A suit was filed on Tuesday in the Central District of California by plaintiff William Baker (both individually and on behalf of all others similarly situated) against defendants Twitter, Inc., Jack Dorsey, Ned Segal, and Parag Agrawal. The class action complaint alleges that the defendants violated federal securities laws and seeks compensatory damages for individuals who purchased publicly traded Twitter securities between August 3, 2020, and August 23, 2022 (the class period).
Defendant Twitter is described in the complaint as a “global social media platform for public self-expression and conversation in real time.” Defendants Dorsey, Segal, and Agrawal are all current or previous executive officers at Twitter.
A 2011 settlement with the Federal Trade Commission led to defendant Twitter being “barred for 20 years from misleading consumers about the extent to which it protects the security, privacy, and confidentiality of nonpublic consumer information, including the measures it takes to prevent unauthorized access to nonpublic information and honor the privacy choices made by consumers.”
Plaintiff Baker alleges that throughout the class period, the defendants made statements in in their 10-K and 10-Q forms that were materially false and misleading. Specifically, Baker asserts that the forms were misleading and failed to disclose “adverse facts pertaining to the Company’s business, operations and prospects, which were known to Defendants or recklessly disregarded by them.” The omitted or misleading facts represented in the forms included the knowledge Twitter had about security concerns on their platform, their efforts to hide those security concerns from investors, their refusal to take steps to improve security, and more.
The defendants’ misrepresentations were exposed when a former executive exposed the company’s “reckless and negligent cybersecurity policies.” The news resulted in Twitter share prices falling over 7%. The plaintiff argues that the “precipitous decline” in common share value was due to the omissions and misrepresentations of the defendants and led to the plaintiff and class members suffering significant losses and damages.
The complaint cites violations of federal securities laws and the Exchange Act. Plaintiff Baker is seeking class certification, a trial by jury, damages, litigation fees, and any other relief deemed just by the Court.
Plaintiff Baker is represented in the litigation by The Rosen Law Firm, P.A.