Elon Musk Cites Damning New Claims In Attempted Termination Of Twitter Deal

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Elon Musk has once again filed a letter seeking to terminate his deal with Twitter to purchase the social-media giant, citing new allegations by a former employee that Twitter misled regulators.

Musk’s lawyers claimed that allegations by former Twitter Chief Security Officer Peter Zatko, also known as “Mudge,” reveal that Twitter’s senior executives knowingly engaged in misconduct, and that failing to disclose the nature of this misconduct violated the terms of the deal between Musk and Twitter, in the Aug. 29 letter filed with the Securities and Exchange Commission (SEC). However, Twitter believes that the termination letter is invalid, as it relies on a third-party testimony that the company claims is “riddled with inconsistencies and inaccuracies,” the company stated in an Aug. 30 letter. (RELATED: ‘Cause Of Concern:’ Foreign Spies Have Infiltrated Twitter, Whistleblower Claims)

Zatko alleged that the misconduct of Twitter executives included violation of Federal Trade Commission regulations protecting user privacy, allowing agents of the Indian government to access information on users, a willful disregard for security flaws and the theft of third-party intellectual property, according to the Musk team letter. Zatko’s allegations go on to include claims that Twitter does not have the ability to count bots on its platform and that user data is not completely deleted when an account is deleted, according to an Aug. 23 report by CNN.

Musk initially filed a letter on July 8 to terminate his purchase of Twitter, claiming that Twitter was unwilling to provide accurate data regarding the amount of “fake or spam” accounts on the platform, the Associated Press reported. Musk has since been sued by Twitter to complete the deal, with a trial date set for Oct. 17, The Wall Street Journal reported.

Musk filed a subpoena Monday for Zatko to provide details about the issue of bots and other fake accounts, the latest in about 100 people and groups subpoenaed by Musk to get out of the deal, Axios reported.

The Musk team’s Aug. 29 letter alleges that the July 8 letter remains sufficient legal justification to cancel the deal, and that the Aug. 29 letter is merely an “additional termination notice” in case the original letter is found to be invalid. Twitter’s Aug. 30 letter alleges that both of the Musk team’s letters are invalid and demanded that Musk close the deal for his purchase of Twitter.

Zatko’s claims of spying follow the Aug. 9 conviction of former Twitter employee Ahmad Abouammo, who spied and laundered money for the Saudi Arabian government, in addition to receiving hundreds of thousands of dollars in gifts from the same.

A Twitter spokesperson claimed that Zatko was fired “for ineffective leadership and poor performance,” according to CNN. Zatko claims that his firing was retaliation for his efforts internally to raise the alarm about security issues at the company, CNN reported.

While whistleblower allegations typically do not impact merger deals, it is still possible that Zatko’s allegations may influence the legal conflict between Musk and Twitter, The Wall Street Journal reported, citing Boston College of Law professor Brian Quinn.

Skadden, Arps, Slate, Meagher & Flom LLP, which represents Musk, and Twitter did not immediately respond to a Daily Caller News Foundation request for comment.

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