Twitter officials say that Musk’s attempt to back out is “invalid and wrongful” as Musk continues to push for agreement cancelation
Elon Musk, CEO of Tesla, and Twitter exchanged additional charges against one another on Tuesday, as part of the most recent round of legal filings about Musk’s efforts to withdraw his offer to purchase Twitter as a social media platform.
Musk submitted additional documentation in his effort to get out of the arrangement. This time, he did so on the basis of evidence included in a whistleblower complaint submitted by Twitter’s previous head of security.
Twitter has responded to Musk’s attempt to back out by stating that his attempt is “invalid and wrong.”
In a document that Musk sent to the Securities and Exchange Commission, he stated that his legal team had informed Twitter of “new bases” for terminating the agreement, in addition to the grounds that were outlined in the termination notice that was initially provided in July.
Twitter has filed a lawsuit against Musk, seeking the Delaware Chancery Court to order him to carry out the $44 billion contract that has been agreed upon. The week of October 17 will see the beginning of a trial with significant stakes.
In a letter to Twitter Inc. that was included in the filing, Musk’s advisors highlighted the whistleblower report that was submitted by a former executive named Peiter Zatko, who is better known by his hacker nickname “Mudge.”
In his complaint to U.S. officials, Zatko, who served as Twitter’s head of security until early this year, alleged that the company lied to regulators about its inadequate cybersecurity defenses and its negligence in attempting to root out fake accounts that spread disinformation. Zatko was fired from his position as head of security at Twitter earlier this year.
Zatko’s charges provide further reasons to terminate the arrangement, according to the Musk letter, which was addressed to Twitter’s Chief Legal Officer Vijaya Gadde. The letter stated that the termination notice given in July “is judged to be invalid for any reason.”
Musk, who is worth a billion dollars, has been arguing for months that the company he had agreed to acquire undercounted the number of bogus and spam accounts it had, which would free him from the obligation to complete the acquisition.
Twitter gave its response to what it called Musk’s most recent “purported termination” in a separate filing with the SEC. It said that the “purported termination” was “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.” Twitter also claimed that the statements lacked important context.
Zatko was served with a subpoena on Saturday by Musk’s legal team, which compelled him to participate in an upcoming deposition that Zatko’s attorneys highlighted would be a “involuntary” one. This was done in preparation for the upcoming legal struggle between Twitter and Musk in the courtroom.
“He did not make his whistleblower disclosures to the appropriate governmental bodies to benefit Musk or to harm Twitter, but rather to protect the American public and Twitter shareholders,” Zatko’s lawyers wrote in a prepared statement.
It is possible that Twitter will alter its case in order to add Zatko’s charges. This will allow the court to rule on both the bot and cybersecurity issues simultaneously. According to Brian Quinn, a law expert at Boston College, this may cause the trial to be delayed because Musk will likely claim he requires further time to prepare.
According to Quinn, the question of whether the bot or cybersecurity vulnerabilities constitute a “material adverse effect” that will hurt Twitter’s company for years to come will be one that the court will have to decide. This is a challenging legal hurdle to cross.
According to Quinn, the problem of bots, which Twitter revealed in filings with the SEC, appears to be a point that Twitter would prevail on. According to him, solving the cybersecurity issues that Zatko brought up might not be as simple as it sounds.
“This is more grist for the mill,” Quinn said. “It’s not as obvious for the most part that this is a winner for Twitter. But once you start to analyze these closely, it’s still an uphill battle for Musk.”
