By Katanga Johnson and Michelle Price

(Reuters) – Elon Tesla may be able to show that spam accounts are real Twitter Inc (NYSE:) The platform’s prices are much higher than what the social media company estimates, however, it will prove difficult for him and investors to be misled, according to legal experts.

Musk said Tuesday that his deal for $44B to buy Twitter was a no-go until Twitter provides proof of spam accounts making up less than 5 percent. Musk has stated that he thinks the number is at least 4x higher and said he would “defeat or even die trying” to stop the bots.

According to independent researchers, bots could account for between 9% and 15% of all the Twitter accounts.

Twitter, for its part has stated in regulatory filings it used “significant judgement” to arrive at the estimate. It has also cautioned that the disclosure might not be accurate.

These disclaimers provide protection for Twitter against possible lawsuits. They can be from shareholders or Musk regarding the transaction, according to four experts in securities law interviewed by Reuters.

Even though Twitter may have misunderstood, plaintiffs would need to prove that San Francisco-based companies were trying to deceive investors. This is a difficult task to prove in court. According to experts, it would be difficult for the Securities and Exchange Commission of the United States (SEC) to disclose the information about publicly-listed companies.

“It would be difficult to establish the basis for either an SEC enforcement case or a shareholders action, unless it could be shown that Twitter deliberately or recklessly disregarded information that would show that its spam estimates were misleading,” said law firm Moses & Singer partner Howard Fischer.

The spokesperson from the SEC refused to comment.

Twitter spokeswoman said that Musk’s board would complete the transaction at the agreed price, and will enforce the merger agreement. Musk representatives didn’t respond to our requests for comment.

Musk’s waiver of due diligence during the negotiation of his Twitter deal poses another legal problem. According to legal experts, this will make it harder for Musk in court to claim that Twitter misled his.

Musk might be able walk away, or to renegotiate the deal for a lower price, even though the law favors Twitter. Because litigation can be long, Twitter might decide that it is better to negotiate a lower price, or pay the $1 billion breaking-up fee Musk must for the failure to close the transaction.

Investors also place high stakes bets. Twitter shares closed at $38.32 Tuesday. This is close to 30% off the $54.20 share price. It indicates that investors are betting as much.

SHOWING BAD FAITH

Experts said that to meet the legal requirement of showing Twitter has misled investors about the spam accounts it would need evidence that Twitter acted in bad faith. These could include internal documents such as e-mails, or witness testimony.

Professor Urska Velikonja, Georgetown University Law School, stated that “this failure would need to rise to the degree of willful ignorance and not just negligence.”

Twitter is concerned about spam and fake accounts. In 2018, shares plummeted after the company purge automated and spam accounts. This caused its monthly active user to fall by 1,000,000, whereas analysts expected an increase of 1,000,000.

Robert Frenchman (a Mukasey Frenchman partner, who is an expert in white-collar crimes) said it was possible the SEC might review Twitter’s spam account disclosures due to all the attention that has been given. However, he said Twitter would not face any major legal threat.

Frenchman stated, “I don’t think that that is something that is likely be classified as materially misleading. I bet that that language was carefully written and has a methodology that may or may not prove foolproof, but it’s reasonable.”