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Thursday, February 2, 2023

SEC questions Twitter on method of calculating fake accounts

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US securities regulators are questioning Twitter about how it calculates the number of fake accounts on its platform.

The Securities and Exchange Commission in June asked the company about the methodology for calculating the false or spam accounts “and the underlying judgments and assumptions used by management”.

The agency’s Division of Corporation Finance made the request in a June 15 letter, shortly before Tesla CEO Elon Musk raised the issue as grounds to back out of a deal to buy Twitter for 44 billion dollars.

Such questions can be routine, and it was not clear whether the SEC has opened a formal investigation into Twitter’s fake accounts.

Messages were left on Wednesday seeking comment from the agency and Twitter.

The law firm Wilson Sonsini of Palo Alto, California, replied in a June 22 letter saying the company believes it adequately disclosed the methodology in its annual report filed for 2021.

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