Parag Agrawal, Twitter’s former chief executive officer disclosed that the two departments, the US Justice Department and the US Securities and Exchange Commission probed into the microblogging site in the past as part of his action to push the company to cover legal payments that are connected to lawsuits and government probes.
Parag Agrawal was the CEO of Twitter until last year when he was succeeded by billionaire Elon Musk after the $44 billion deal. Elon Musk after his acquisition of the platform, terminated Parag and other top executives. Soon they filed a case against Elon for which they have spent more than $1 million on lawyers for investigation and shareholder lawsuits over the administration of the firm. The case is running in a Delaware Chancery Court.
In a complaint, Agrawal stated that his lawyer was called by representatives of the Justice Department in the year 2022 “regarding certain investigations related to the company.” However, he didn’t explain further.
The SEC and the Federal Trade Commission approached Elon Musk previously in 2022 regarding his original announcement of purchasing a significant interest in Twitter. Elon’s lawyers imposed strict confidentiality guidelines for discussions with lawyers and limited disclosures of the firm’s interactions with the authorities.
Twitter’s former managers, claimed in their suit that their lawyers have sent multiple letters to the attorneys of Twitter underlining the legal expenses they have made up, but the company is not following their own bylaws by “refusing to advance” finances to cover their fees, according to the 20-page complaint filed on Monday.
Dave Anderson, a lawyer for the former Twitter managers said, “There can be no legitimate dispute that my clients are involved in these proceedings by reason of the fact each was an officer of the company, and therefore the company is obligated to advance the expenses we have submitted,” in a March 23 letter to the platform’s attorneys. Anderson is with Sidley Austin LLP founded in Chicago.
No response to an email seeking comment from the representatives of San Francisco-based Twitter was able to gather. The top executives demanding advance legal fees from Twitter are Vijaya Gadde, its former top counsellor and Ned Segal, Twitter’s one-time chief financial officer.
Microblogging site Twitter has been facing many investor lawsuits over the fallout from Musk’s purchase of the platform for $44 billion last year after his failed measure to get out of the deal. The site is also facing suits filed by other former Twitter employees who believe they were forcefully denied promised stock grants after being laid off.
Billionaire Musk has launched a massive cost-cutting drive over the last year. He has laid off thousands of employees and refused to pay leases negotiated by former managers. He is facing debt payments of more than $1.5 billion in 2023 after the acquisition as many advertising brands withdrew from the platform.
Elon Musk’s Acquisition of Twitter & the removal of Parag Agrawal:
In April 2022, billionaire Elon Musk showed his interest in buying Twitter for a sum of $44 million. After both parties agreed to make the company private, Elon backed out of the deal. As a result, Twitter then filed a suit for breach of contract.
In order to escape from the suit, he decided to buy Twitter with the help of his other co-investors to cover up funds. The co-investors included Sequoia Capital, Binance, Qatar Investment Authority, and others. All the investors obtained the paperwork which they signed to complete the deal.
Soon after he acquired Twitter, the first move he took was to terminate the former CEO Parag Agrawal and the top executives of the platform. And then changed his Twitter bio to ‘Chief Twit’. Later, he went to Twitter’s headquarters with a bathroom sink in his hands and posted the pic with the caption, “Entering Twitter HQ – let that sink in!”
