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Nearly simultaneously, Texas Attorney General Ken Paxton opened an investigation<\/a> into Media Matters<\/em> for \u201cpotential fraudulent activity.\u201d Musk posted the news<\/a> on his X account, stating that \u201cfraud has both civil and criminal penalties.\u201d Musk had previously responded to a tweet by former Trump advisor Stephen Miller that suggested conservative attorneys general (like Paxton) look into fraud charges.<\/p>\n<\/div>\n Neither Paxton nor X argues that Media Matters<\/em> was falsely claiming to see ads on pro-Nazi content. In fact, the suit confirms that the screenshots the organization posted are real. But it alleges the organization \u201cmanipulated\u201d the service to make X serve the offending ads. \u201cMedia Matters<\/em> has manipulated the algorithms governing the user experience on X to bypass safeguards and create images of X\u2019s largest advertisers\u2019 paid posts adjacent to racist, incendiary content, leaving the false impression that these pairings are anything but what they actually are: manufactured, inorganic, and extraordinarily rare.\u201d The alleged manipulation involved creating an account that exclusively followed a combination of major brands and extremist content, then \u201cendlessly scrolling and refreshing its unrepresentative, hand-selected feed\u201d until it saw a confluence of the two.<\/p>\n<\/div>\n \u201cWe are going to continue our work undeterred.\u201d<\/p>\n<\/div>\n<\/div>\n The lawsuit accuses Media Matters<\/em> of interference with contract, business disparagement, and interference with prospective economic advantage \u2014\u00a0claims that could be difficult to prove given the First Amendment\u2019s high bar for legally prosecuting speech. (Musk famously beat a libel suit<\/a> after falsely dubbing one of his critics a \u201cpedo guy.\u201d) \u201cWe are going to continue our work undeterred. If he sues us, we will win,\u201d the organization\u2019s president Angelo Carusone told The Verge<\/em> in a previous statement, saying that \u201cElon Musk has spent the last few days making meritless legal threats, elevating bizarre conspiracy theories, and lobbing vicious personal attacks against his \u2018enemies\u2019 online.\u201d Carusone reiterated the sentiment after the suit was filed. \u201cThis is a frivolous lawsuit meant to bully X\u2019s critics into silence,\u201d he said. \u201cMedia Matters<\/em> stands behind its reporting and looks forward to winning in court.\u201d<\/p>\n<\/div>\n As one of the world\u2019s richest men, however, Musk has tremendous resources at his disposal \u2014 and X seems to be doing some forum shopping to boost its odds. The company filed its lawsuit in Texas, which is neither its nor Media Matters\u2019<\/em> primary place of business. As legal blogger Ken White noted<\/a>, a Texas filing protects X from claims that it filed a strategic lawsuit against public participation (or SLAPP<\/a>), something it might face in its home base of California. Another organization that X sued<\/a>, the Center for Countering Digital Hate, recently hit back with an anti-SLAPP motion<\/a> in that state. Moving the lawsuit also puts it under the Fifth Circuit Court of Appeals<\/a>, which has proven highly sympathetic<\/a> to conservative figures who claim they\u2019ve been censored \u2014 something Musk has made a centerpiece of his publicity strategy around X.<\/p>\n<\/div>\n Yaccarino, meanwhile, has insisted that advertisers aren\u2019t permanently pulling back their X presence. \u201cSome advertisers may have temporarily paused but I do want to go on record, I had several really good conversations today,\u201d she told employees at an all-hands after the lawsuit, according to Fortune<\/em><\/a>.<\/em> But she suggested employees \u201cbe as fiscally responsible as possible\u201d to offset potential losses from advertisers and exhorted them to \u201cby all means, put your heads together to bring new revenue into the company.\u201d<\/p>\n<\/div>\n Update 9:15PM ET: <\/strong>Added statement from<\/em> Media Matters.<\/p>\n<\/div>\n