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Elon Musk Cites a Whistleblower as Another Reason for Canceling the $44 billion Twitter Deal.

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Elon Musk has given a new reason to terminate the $44 billion takeover of the twitter social media platform, and he cited the recent accusations from a Twitter Inc. whistle-blower as the source of the information.

Peiter Zatko, who formerly served as the head of security for Twitter, asserts that he brought up concerns regarding serious flaws in the way the social media company handled the personal data of its users, such as the use of outdated software, and that executives hid information regarding data breaches and failures to provide adequate protections for user data.

In a document that was submitted on Tuesday, attorneys working on Musk’s behalf stated that the allegations made by Zatko, which included “egregious deficiencies” in the platform’s defenses against hackers and privacy issues, indicated that Twitter had violated the terms of the merger agreement.

The attorneys for Twitter gave their response in the form of a separate filing, in which they stated that the case for terminating the deal is “invalid and wrongful under the agreement.”

In trading that took place before the New York stock exchanges opened on Tuesday, Twitter share prices dropped 1.3%, bringing them down to $39.50, which is significantly lower than Musk’s offer price of $54.20.

Musk has been attempting, for a number of months now, to extricate himself from the takeover of Twitter. He began by asserting that Twitter’s user figures are inflated by millions of robot accounts, which was his first line of defense. Zatko, who was dismissed from Twitter earlier this year, is now the focus of the legal team representing the billionaire, who has recently shifted their attention to him.

 

Zatko has been summoned by lawyers representing both Musk and Twitter. Zatko testified that the administrators of the social media platform either did not know or did not care to find out how many accounts were spam or robot accounts.

Twitter filed a lawsuit against Musk in July to compel him to carry out his plan to acquire the company. Twitter has maintained that spam and bot accounts make up less than 5% of all accounts. Since then, more than one hundred individuals, banks, funds, and other businesses have been sued in the Delaware suit, and a trial is scheduled to begin on October 17 of this year.

Twitter has previously called Zatko’s complaint “a false narrative about Twitter and our privacy and data security practices that is riddled with inconsistencies and inaccuracies and lacks important context.”

The new findings add to Musk’s claims, according to the letter published Tuesday, showing that Twitter is in “material noncompliance” with obligations around data privacy and consumer protection laws and that the company is vulnerable to data center failures and malicious actors.

 

 

 

Source: bloomberg.com

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