SEC Questions Twitter On Method Of Calculating Fake Accounts

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August 25, 2022
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FILE - The logo for Twitter appears above a trading post on the floor of the New York Stock Exchange, Nov. 29, 2021. Twitter's stock slid more than 6% before the market open Monday, July 11, 2022, after billionaire Elon Musk announced late Friday that he will abandon his $44 billion offer to buy Twitter and the company said it will sue the Tesla CEO to uphold the deal. (AP Photo/Richard Drew, File)

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(AP) — U.S. 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.

Such questions can be routine, and it wasn’t clear whether the SEC has opened a formal investigation into Twitter’s fake accounts. Messages were left 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 believs it adequately disclosed the methodology in its annual report filed for 2021.