New Elon Musk Filing Cites Whistlerblower Claims for Axing Twitter Deal
According to CNBC, Elon Musk’s lawyers on Tuesday filed another legal notice to sure up the celebrity billionaire’s case for terminating his proposed $44 billion USD acquisition of Twitter.
Musk originally filed to dissolve his Twitter bid last month, arguing the latter was in “material breach” of their Merger Agreement. Tuesday’s filing presents additional reasons for the deal to be annulled, citing recent allegations from Twitter’s ex-security chief, Peiter Zatko.
Zatko claimed in several complaints that Twitter grossly misled regulators about its defences against hackers, spam accounts, and harmful content.
“Allegations regarding certain facts, known to Twitter prior to and as of July 8, 2022, but undisclosed to the Musk Parties prior to and at that time, have since come to light that provide additional and distinct bases to terminate the Merger Agreement,” Mike Ringler, one of Musk’s legal representatives, wrote in a letter to Twitter’s legal chief, Vijaya Gadde.
Ringler noted that the latest termination notice is “not legally necessary.” However, it was delivered to reinforce Musk’s case if the original filing is “determined to be invalid for any reason.”
The letter said Zatko’s complaint “alleges far-reaching misconduct at Twitter—all of which was disclosed to Twitter’s directors and senior executives, including (CEO) Parag Agrawal—that is likely to have severe consequences for Twitter’s business.”
Musk’s lawyer added that Zatko also asserted Twitter is in “material noncompliance” with its obligations under a 2011 agreement with the U.S. Federal Trade Commission.
What’s more, Zatko also alleged in his complaints that Twitter executives don’t have the means or the motivation to accurately calculate the number of spam/fake accounts on the platform.
Twitter’s accounting of bots on its platform has been the centrepiece of Musk’s campaign to scrap the acquisition. Musk repeatedly and publicly accused the social media company of understating bot account figures, and he claims that is one of his primary reasons for wanting to cancel.
Twitter’s legal representation responded to Musk’s filing on Tuesday, reiterating that his petition to terminate the merger agreement is “invalid and wrongful.”
“It is based solely on statements made by a third party that, as Twitter has previously stated, are riddled with inconsistencies and inaccuracies and lack important context,” William Savitt, a lawyer for Twitter, said of Musk’s latest legal notice in a letter.
Twitter further denied breaching any of its obligations under its agreement with Musk. The company said it intends to enforce the acquisition agreement with Musk and “close the transaction on the price and terms agreed upon.”
In addition, Twitter argued that Musk himself is “knowingly, intentionally, willfully, and materially” violating the pair’s agreement.
Twitter and Musk are set to meet in court on October 17 for a five-day trial that will determine the fate of the merger.