Elon Musk and Twitter lobbed salvos at each other Tuesday in the latest round of legal filings over the billionaire Tesla CEO’s efforts to rescind his offer to buy the social media platform.
Musk filed more paperwork to terminate his agreement to buy Twitter, this time based on information in a whistleblower complaint filed by Twitter’s former head of security. Twitter fired back by saying his attempt to back out of the deal is “invalid and wrongful.”
In Musk’s initial termination notice in July, the billionaire claimed that Twitter misled his team about the number of fake accounts and bots on the platform. In Tuesday’s new SEC filing, Musk said his legal team notified Twitter of “additional bases” for ending the deal — on top of the ones listed in July.
In a letter to Twitter’s chief legal officer Vijaya Gadde, which was included in the filing, Musk’s advisers cited the whistleblower report by former security executive Peiter Zatko — also known by his hacker handle, Mudge.
Zatko, who served as Twitter’s head of security until he was fired early this year, alleged in his complaint 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 former security head alleged that Twitter executives had no ability or interest to find out the true number of fake accounts on the platform.
Those allegations provide extra reasons to end the deal if the July termination notice “is determined to be invalid for any reason,” Musk’s team wrote.
Zatko received a subpoena Saturday from Musk’s team, according to Zatko’s lawyer and court records. That testimony could help bolster Musk’s case for backing out of a $44 billion deal to buy the social media company, as bots and spam accounts also figure prominently in Musk’s complaints about Twitter. The billionaire has spent months alleging that the company he agreed to acquire undercounted its fake and spam accounts, which means he doesn’t have to go through with the purchase.
Musk’s decision to back out of the transaction sets the stage for a high-stakes legal battle in October.
In a separate SEC filing, Twitter responded to what it called Musk’s latest “purported termination,” saying it’s “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.”
The company vowed to go through with the sale at the price agreed with Musk.