In an opinion issued today, Judge Scheindlin dismissed fraud claims against Twitter brought by firms who claimed to have been misled into promoting private sales of Twitter stock that Twitter had no intention of ever selling. The plaintiffs had not dealt directly with Twitter, but instead entered into agreements with a third party (a firm called GSV Asset Management) that claimed to have been authorized by Twitter to create a fund that would execute private transactions in Twitter stock.
Judge Scheindlin found that the complaint did not adequately allege an agency relationship between GSV and Twitter: ”In sum, the Complaint does not successfully plead an agency relationship between GSV Asset and Twitter by actual authority, apparent authority, or ratification. As plaintiffs concede, the viability of their fraud claim hinges upon the agency theory just rejected. Accordingly, Twitter’s motion to dismiss is granted.”
Our prior post on the case is here.