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Musk offers new reason to break off Twitter deal, citing whistleblower

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Elon Musk has filed to end his deal to buy Twitter — again — this time citing allegations from a new whistleblower.

In a letter to Twitter dated Monday, Musk’s lawyers pointed to the allegations from the company’s former head of security, asserting that if the claims are true, Twitter has breached the merger agreement. The allegations were revealed by The Washington Post and CNN last week.

The embattled deal has been taken to court in Delaware after Musk originally filed to end his $44 billion deal to buy Twitter in July, saying Twitter hadn’t given him enough information about the company’s business. Twitter then sued Musk to finish the deal. A trial is scheduled for October.

Former security chief claims Twitter buried ‘egregious deficiencies’

In revelations reported by The Post last week, Twitter whistleblower Peiter Zatko, also known as Mudge, alleged that the company has “extreme, egregious deficiencies” in its security practices. Zatko alleged that Twitter violated the terms of a settlement agreement with the Federal Trade Commission by falsely claiming that it had a solid security plan.

Twitter has pushed back on Zatko’s allegations, saying last week that they appeared to be “riddled with inaccuracies.” The company did not immediately respond to a request for comment on Musk’s letter, but filed a document with the Securities and Exchange Commission acknowledging it had received it.

Musk’s lawyers called the letter to Twitter an “additional termination notice in the event that the July 8 Termination Notice is determined to be invalid for any reason.”

Musk’s team cites the FTC settlement, Twitter’s allegedly lax security and other allegations made in Zatko’s complaint as reasons to end the deal.

“The Zatko Complaint alleges far-reaching misconduct at Twitter — all of which was disclosed to Twitter’s directors and senior executives, including Parag Agrawal — that is likely to have severe consequences for Twitter’s business,” Musk’s lawyers wrote in the letter to Twitter.

New whistleblower allegations could factor into Twitter vs. Musk trial

In a filing that became public Monday, Musk’s legal team subpoenaed Zatko to appear next month for a deposition in the ongoing lawsuit.

Legal experts have said it will be difficult for Musk to walk away from the Twitter deal with no financial consequences. The billionaire aggressively pursued the company this spring, launching a hostile takeover to buy it before Twitter’s board agreed to a purchase price of $54.20 per share.

Twitter is still marching forward with the deal, and shareholders are scheduled to vote on it next month.

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