Elon Musk justifies scrapping Twitter deal on whistleblower’s claims

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Elon Musk, the CEO of Tesla, has once more provided justification for his request to revoke the $44 billion acquisition of Twitter. This time, the billionaire is making reference to recent assertions made by a former security director of the social media company, which backed up his position on the prevalence of spam accounts on Twitter.

Last week, Peiter Zatko, a famed hacker known as “Mudge”, who served as Twitter’s head of security from November 2020 until his firing in Januarysaid in his complaint that Twitter prioritized user growth over reducing spam and falsely claimed it had a solid security plan.  

Musk’s legal team in a letter dated August 29, 2022, and sent to Twitter highlighted Zatko’s claims as another reason to scrap the deal.

The 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 consented to hiring Indian government agents under pressure by the country. 

Musk’s legal team claims that the allegations, if true, represent breaches of Twitter’s side of the acquisition bargain and should allow him to exit the deal. The letter claims that Twitter’s alleged misrepresentations to its board and regulators — and investigations that could result — has or could constitute a “material adverse effect” that would allow him to walk away, per the original contract. 

Twitter, however, said in its regulatory filing the fresh termination notice was invalid and wrongful under the deal terms

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