Not Providing Accurate Data On Platform Growth, Twitter Is Fined IDR 11.5 Trillion

The owner of the Twitter platform was fined for not reporting accurate data. (photo; doc. unsplash)

JAKARTA - Twitter agreed to pay USD 809.5 million or approximately IDR 11.5 trillion to settle a class action lawsuit filed by shareholders in 2016.

Investors alleged that Twitter was covering up the company's slowing growth, while executives including former CEO Dick Costolo and co-founders Evan Williams and Jack Dorsey (current CEO) sold hundreds of millions of dollars in stock for personal gain.

Robbins Geller Rudman & Dowd, the law firm in San Diego that represents shareholders, said plaintiffs KBC Asset Management NV and the National Elevator Industry Pension Fund sought to recover their investment losses and shareholder losses involved in the class-action lawsuit by buying Twitter stock between 6 February 2015, and July 28, 2015.

The plaintiffs allege that Twitter stopped reporting "timeline views" in late 2014 and concealed stagnant or declining user engagement by reporting inappropriate descriptions of user metrics. Then, according to shareholders, Twitter acknowledged the truth after Costolo left the company in June 2015, and its share price fell 20 percent.

The micro-blogging network and all of the defendants in the lawsuit have denied wrongdoing. The lawsuit accuses Twitter and executives of violating the Securities Exchange Act of 1934.

Citing Business Insider, Tuesday, September 21, the company will reportedly use the cash to settle the fine and plans to pay that amount by the end of the year.

In Q4 2018 earnings report, Twitter started reporting on average daily active users monetizable. That's the only engagement metric that will be disclosed to investors going forward, in part because it's more accurate about how to make money from users.