Twitter says Musk’s attempt to end the deal is “invalid and wrong,” citing a whistleblower

SAN FRANCISCO– Tesla CEO Elon Musk and Twitter shared further allegations Tuesday in the latest round of lawsuits over Musk’s efforts to withdraw his bid to buy the social media platform.

Musk filed more filings to end the deal, this time based on information in a whistleblower complaint filed by Twitter’s former security chief.

Twitter fired back by saying Musk’s attempt to withdraw was “invalid and unlawful.”

In a filing with the Securities and Exchange Commission, Musk said his legal team provided Twitter with “additional grounds” for the deal’s termination, in addition to those provided in the original July termination notice.

Twitter has sued Musk and asked the Delaware Chancery Court to force him to go through with the $44 billion deal. A high-stakes trial is scheduled to begin the week of October 17.

In a letter to Twitter Inc. that was attached to the filing, Musk’s advisers cited the whistleblower report by former CEO Peiter Zatko – also known by his hacker nickname “Mudge”.

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Zatko, who served as Twitter’s security chief until his sacking earlier this year, claimed in his complaint to US officials that the company was telling regulators about its poor cybersecurity and its laxity in trying to root out fake accounts spreading disinformation in misled.

Musk’s letter, addressed to Twitter’s Chief Legal Officer Vijaya Gadde, said Zatko’s allegations provide additional grounds to end the deal if July’s termination notice “is found to be invalid for any reason.”

Billionaire Musk has spent months claiming that the company he agreed to undercounted his fake and spam accounts, meaning he doesn’t need to close the deal.

In a separate SEC filing, Twitter responded to Musk’s so-called “alleged termination,” saying it was “based solely on statements made by a third party, which Twitter has previously determined are fraught with inconsistencies and inaccuracies and lack important context.” . “

Zatko received a subpoena from Musk’s team on Saturday, forcing him to testify in what Zatko’s attorneys emphasized as “involuntary” ahead of the upcoming court battle between Twitter and Musk.

“He made his whistleblowing disclosures to the appropriate government agencies not to benefit Musk or harm Twitter, but to protect the American public and Twitter shareholders,” Zatko’s attorneys wrote in a prepared statement.

Twitter will likely amend its lawsuit to include Zatko’s allegations, allowing the court to rule on both bot and cybersecurity issues. That could delay the process because Musk will say he needs more time to prepare, said Brian Quinn, a law professor at Boston College.

The court must decide whether the bot or cybersecurity issues are a “material adverse impact” that will hurt Twitter’s business for years — a difficult legal obstacle to remove, Quinn said.

The bot issue, which Twitter disclosed in filings with the SEC, appears to be an issue on which Twitter would win, Quinn said. Cybersecurity issues raised by Zatko might not be such an easy win, he said.

“That’s more grist for the mill,” said Quinn. “For the most part, it’s not that obvious that this is a winner for Twitter. But once you start analyzing those closely, it’s still an uphill battle for Musk.”


Associated Press writer Matt O’Brien contributed to this report.

Copyright © 2022 by The Associated Press. All rights reserved. Twitter says Musk’s attempt to end the deal is “invalid and wrong,” citing a whistleblower

Laura Coffey

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