Precedo Capital and Continental Advisors filed a $124 million lawsuit (Scribd PDF) against Twitter on Wednesday.

The two companies allege that they were told to organize a private sale of stocks (which was ultimately and intentionally cancelled) in order to generate higher-priced interest in Twitter’s upcoming IPO. Twitter’s stock is expected to go public in November. “Twitter’s intention was to induce Precedo Capital and Continental Advisors to create an artificial private market wherein Twitter could maintain that a private market existed at or about $19 per share for the Twitter stock,” according to the lawsuit.

As AllThingsD points out, this number would allow Twitter to set a floor price per share that gave the company a $10.9 billion valuation on the high end.   According to the complaint, Twitter had authorized GSV Asset Management to buy up and then re-sell the Twitter shares.     

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