Elon Musk adds whistleblower as new reason to cancel $44-bn Twitter deal

Musk is seeking testimony from Peiter Zatko, Twitter's ex-head of security, to bolster his legal argument he can walk away from the Twitter

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 an SEC filing, Musk said his legal team notified Twitter of “additional bases” for ending the deal on top of the ones given in the original termination notice issued in July.

In a letter to Twitter Inc., which was included in the filing, Musk's advisors cited the whistleblower report by former 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 US 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 letter, addressed to Twitter's Chief Legal Officer Vijaya Gadde, said Zatko's allegations provide extra reasons to end the deal if the July termination notice “is determined to be invalid for any reason.” 

Billionaire Musk 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 USD 44 billion deal. 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.