Elon Musk’s Lawyers Say Twitter Whistle-Blower Allegations Provide Additional Justification for Nixing $44 Billion Deal

variety.com:

Todd Spangler NY Digital Editor Nearly two months ago, Elon Musk told Twitter he wanted to bail on his deal to buy the social network, based largely on his assertion that Twitter wasn’t disclosing the true scope of its spam and bot problem.

Now Musk’s lawyers have cited allegations made by a former Twitter exec, whom the company fired this year, as providing “additional and distinct bases” to terminate the tech mogul’s agreement to buy Twitter for $44 billion. “Although the Musk Parties believe this termination notice is not legally necessary to terminate the Merger Agreement because they have already validly terminated it pursuant to the July 8 Termination Notice, the Musk Parties are delivering this additional termination notice in the event that the July 8 Termination Notice is determined to be invalid for any reason,” an Aug.

29 letter from Musk’s lawyers to Twitter chief legal officer Vijaya Gadde said. The letter was disclosed in an SEC filing. Peiter “Mudge” Zatko, who served as Twitter’s head of security before he was fired in January 2022, filed a complaint with the SEC accusing Twitter of misleading shareholders, alleging it failed to disclose “extreme, egregious deficiencies” in its security practices.

He also alleged in an FTC complaint that the company violated a 2010 agreement with the agency to protect user data. Among other things, Zatko also alleged that Twitter’s platform is built in significant part on misappropriated third-party intellectual property; that Twitter gave in to demands made by the Indian government that its agents be hired by the company and given access to Twitter user information; and that Twitter is vulnerable to systemic disruption resulting from data-center failures or malicious