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Musk cites Twitter whistleblower claims as new justifications for backing out of acquisition




CNN Business
 — 

Elon Musk is formally citing allegations leveled by Twitter’s whistleblower, Peiter “Mudge” Zatko, as justifications for terminating a $44 billion acquisition deal for the social media company.

On Monday, Musk’s legal team sent a letter to Twitter highlighting Zatko’s claims, which were exclusively reported by CNN and The Washington Post last week. Zatko served as Twitter’s head of security from November 2020 until his firing from the company in January.

Musk’s letter, which was disclosed in a Securities and Exchange Commission filing, points to Zatko’s allegations that Twitter is in violation of its 2011 consent order with the Federal Trade Commission; that the company suffers from grave security vulnerabilities; that it has violated intellectual property rights; and that it has consented to hiring Indian government agents under pressure by the country.

Musk alleges that the allegations, if true, represent breaches of Twitter’s side of the acquisition bargain and should allow him to back out of the deal. The additional justifications outlined in the Aug. 29 letter are in addition to, not instead of, the justifications Musk cited when he first announced he was seeking to withdraw, his legal team said in an SEC filing.

CNN has reached out to Twitter for comment. In direct response to Musk, Twitter sent its own letter on Tuesday rejecting the billionaire entrepreneur’s latest attempt to scrap the deal, calling it “invalid and wrongful.”

Musk’s letter, Twitter wrote, “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.”

Legal experts have said Zatko’s allegations would very likely play a role in the litigation between Musk and Twitter; the company has asked a Delaware court to force Musk to go through with the deal.

Zatko has been subpoenaed by Musk’s legal team and is expected to appear for a deposition on Sept. 9.


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