On May 19, legal experts said that Elon Musk, CEO of Tesla, may find a way to prove that the robot false account on personal social media Twitter is much higher than the company's estimate, but it is difficult to prove that he and investors were misled by twitter Musk tweeted on Tuesday that his $44 billion acquisition of twitter could not continue unless twitter could provide conclusive evidence that the number of fake accounts of robots accounted for less than 5%.
Musk said he thought the figure was at least four times higher and vowed to "defeat the robot or die".
Independent researchers estimate that 9% to 15% of Twitter's personal accounts may be fake accounts for robots.
Twitter said in a document submitted to regulators that it had made a "major judgment" on the latest estimate and warned that the information disclosed by the company might not accurately reflect the actual number of fake accounts of robots.
Four securities law experts said the disclaimers would protect twitter from potential litigation. Neither Musk's lawsuit over the deal nor shareholders' lawsuit over the accuracy of the company's regulatory statement will help.
Even if Twitter's estimate is really wrong, the plaintiff must prove that the company intends to mislead investors. As we all know, it is difficult to prove this in court. Experts said that the securities and Exchange Commission (SEC), which regulates the information disclosure of listed companies, also faces the same difficulties.
Moses & amp; Howard Fischer, partner of singer, said: "it is difficult to support the SEC's law enforcement action or shareholder litigation unless it can be proved that Twitter deliberately or recklessly ignored information indicating that the robot's false account estimation is misleading."
A twitter spokesman said that the company's board of directors still plans to complete the transaction with musk at the agreed price and implement the merger agreement. Musk's representative did not respond to requests for comment.
Another legal obstacle musk faces is his decision to abandon due diligence in negotiations with Twitter. Legal experts say this makes it harder for musk to tell in court that he was misled by twitter.
To be sure, if the law is on Twitter's side, musk may either abandon the acquisition or reopen new negotiations at a lower price. After all, the lawsuit will take a long time. Twitter will think it may be more cost-effective to accept a lower offer or take a $1 billion breakup fee than taking legal proceedings to force musk to complete the transaction.
Investors are also paying attention to this. Twitter shares closed at $38.32 a share on Tuesday, nearly 30% lower than the trading price of $54.20, indicating that the market believes that the transaction may be completed at a lower price or simply aborted.
Experts have said that if you want to explain in court that Twitter misleads investors because of the robot's false account, you need to provide evidence of malicious behavior. For example, internal documents such as e-mail or the testimony of informants.
"Such mistakes must rise to deliberate neglect, not just negligence," said urska velikonja, a professor at Georgetown University Law School
The issue of false accounts is very important for twitter. Twitter's share price plummeted in 2018 because the company took the initiative to clean up the false accounts of robots on the platform, resulting in a decrease of 1 million monthly live users, while analysts had expected an increase of 1 million users on the platform.
Robert French, a partner in Mukasey Frenchman, a law firm specializing in commercial fraud, said that given the large amount of public attention caused by Twitter's disclosure of false accounts, the SEC may eventually review the matter. But he added that Twitter is not expected to face many serious legal problems.
"I don't think it's a substantive misdirection. I bet the wording must have been carefully drafted, and the way of use may not be foolproof, but it must be reasonable," falench said