Musk Cites Twitter Whistleblower Claims As New Justifications For Backing Out Of Acquisition

By | 30/08/2022

Musk cites whistleblower allegations in fresh attempt to backtrack on $44B Twitter conquering

Elon Musk is adding allegations from Twitter security whistleblower Peiter “Mudge” Zatko to his list of reasons for pulling out of the $44 billion Twitter conquering he proposed back in Apr.

Musk’s messy acquisition bid has taken numerous twists and turns since Apr, with the Tesla and SpaceX CEO ultimately deciding that he didn’t want to buy Twitter after all, citing a lack of clarity over Twitter’south bot data. However, Twitter has refused to recognize Musk’s termination bid, pursuing legal activeness to strength Musk to award his original offering — a trial is currently scheduled for October 17.

In a fresh filing with the Securities and Substitution Commission (SEC), Musk’s legal squad provided an additional discover of termination of the deal, citing revelations made by Twitter’s former head of security last week. Zatko, who was fired by Twitter back in January later a little more than a year in the role, said that the social network deceived anybody about the force of its security protocols, noting that he witnessed “egregious deficiencies, negligence, wilful ignorance, and threats to national security and republic” at the company. Zatko likewise said that Twitter tried to conceal its shortcomings from regulators and investors.


While information technology’s not clear to what extent Zatko’s whistleblowing efforts may boost Musk’s attempts to renege on his acquisition offering, they certainly requite him more ammunition. Yesterday, news emerged that his legal team had subpoenaed Zatko, seeking evidence related to spam, security vulnerabilities, alleged foreign spies working at Twitter and basically anything that might help support Musk’s case.

As the SEC filing shows, Musk’s legal team is trying to bolster their position in the event that their previously submitted termination find “is adamant invalid for any reason.” And then basically, if Musk’s arguments that Twitter has undercounted its bot data doesn’t stick, information technology wants more factors to autumn back on.

“The Zatko Complaint alleges far-reaching misconduct at Twitter — all of which was disclosed to Twitter’due south directors and senior executives, including Parag Agrawal (Twitter’southward CEO) — that is probable to have severe consequences for Twitter’s business,” Musk’s legal representative Mike Ringler wrote. “For example, Mr. Zatko alleges that Twitter is in material noncompliance with both its obligations under a 2011 FTC consent prescript and its general obligations nether data privacy, unfair trade exercise, and consumer protection laws and regulations.”

Ringler pointed to other allegations made past Zatko, including one that Twitter is “uniquely vulnerable to systemic disruption” resulting from data center failures or malicious actors, which Twitter’s leadership team take allegedly tried to hide. He also highlighted Zatko’s accusation that Twitter gave in to demands fabricated by the Indian authorities that Twitter hire its agents and be given access to user data.

In short, Musk and his legal team are at present looking for more ways that Twitter may accept breached the terms of their merger agreement — and it really needs Zatko to help.

Separately, Twitter posted a response to Musk’s latest SEC filing, somewhat predictably countering the reasons provided by Musk. Twitter’due south legal representative William Savitt said that Musk’s fresh notice of termination is “based solely on statements made by a tertiary party that, every bit Twitter has previously stated, are riddled with inconsistencies and inaccuracies and lack of import context.”

“As was the example with your July 8, 2022 purported notice of termination, the purported termination set forth in your August 29, 2022 letter is invalid and wrongful under the Agreement,” Savitt wrote. “Contrary to the assertions in your alphabetic character, Twitter has breached none of its representations or obligations nether the Agreement, and Twitter has non suffered and is not likely to suffer a Visitor Material Adverse Result. Twitter intends to enforce the Understanding and shut the transaction on the price and terms agreed upon with the Musk Parties.”