Tesla CEO Elon Musk and Twitter lobbed more accusations at each other Tuesday in the latest round of legal filings over Musk鈥檚 efforts to rescind his offer to buy the social media platform.
Musk filed more paperwork in his bid to terminate the deal, this time based on information in a whistleblower complaint filed by Twitter鈥檚 former head of security.
Twitter fired back by saying Musk鈥檚 attempt to back out is 鈥渋nvalid and wrongful.鈥�
In a filing with the Securities and Exchange Commission, Musk said his legal team notified Twitter of 鈥渁dditional bases鈥� for ending the deal on top of the ones given in the issued in July.
Twitter has sued Musk, asking the Delaware Chancery Court to force him to go through with the $44 billion deal. A high-stakes trial is set to start the week of Oct. 17.
In a letter to Twitter Inc., which was included in the filing, Musk鈥檚 advisors cited the whistleblower report by former executive Peiter Zatko 鈥� also known by his hacker handle 鈥淢udge.鈥�
Zatko, who served as Twitter鈥檚 head of security until he was fired early this year, to U.S. officials that the company misled regulators about its poor cybersecurity defenses and its negligence in attempting to root out fake accounts that spread disinformation.
The Musk letter, addressed to Twitter鈥檚 Chief Legal Officer Vijaya Gadde, said Zatko鈥檚 allegations provide extra reasons to end the deal if the July termination notice 鈥渋s determined to be invalid for any reason.鈥�
Billionaire Musk has spent months alleging that the company he agreed to acquire undercounted its fake and spam accounts, which means he doesn鈥檛 have to go through with the deal.
In a separate SEC filing, Twitter responded to what it called Musk鈥檚 latest 鈥減urported termination,鈥� saying it鈥檚 鈥渂ased solely on statements made by a third party that, as Twitter has previously stated, are riddled with inconsistencies and inaccuracies and lack important context.鈥�
Zatko received a subpoena Saturday from Musk鈥檚 team compelling him to testify in what Zatko鈥檚 lawyers emphasized would be an 鈥渋nvoluntary鈥� deposition ahead of the coming courtroom battle between Twitter and Musk.
鈥淗e 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,鈥� Zatko鈥檚 lawyers wrote in a prepared statement.
Twitter is likely to amend its lawsuit to include Zatko鈥檚 allegations, so the court can decide on both the bot and cybersecurity issues. That could delay the trial because Musk will say he needs more time to prepare, said Brian Quinn, a law professor at Boston College.
The court will have to decide whether the bot or cybersecurity issues are a 鈥渕aterial adverse effect鈥� that will harm Twitter鈥檚 business for years 鈥� a difficult legal bar to clear, Quinn said.
The bot issue, which Twitter disclosed in filings with the SEC, seems to be an issue that Twitter would win on, Quinn said. Cybersecurity problems raised by Zatko may not be such an easy victory, he said.
鈥淭his is more grist for the mill,鈥� Quinn said. 鈥淚t鈥檚 not as obvious for the most part that this is a winner for Twitter. But once you start to analyze these closely, it鈥檚 still an uphill battle for Musk.鈥�
鈥擪elvin Chan And Tom Krisher, The Associated Press
