Elon Musk files another notice to scrap Twitter acquisition after whistleblower claims

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In this illustration, Elon Musk’s Twitter account is displayed on the screen of a mobile phone with the Twitter logo in the background. A whistleblower’s complaint that Twitter misled federal regulators about the company’s security risks could provide Elon Musk with new ammunition in his bid to buy the company for $44 billion.

Sheldon Cooper | Light rocket | Getty Images

Elon Musk’s legal team filed another notice Tuesday to end its $44 billion deal to buy Twitter, citing additional reasons.

Twitter shares fell more than 1% in pre-market trading.

The latest filings come after Twitter’s former head of security, Peiter “Mudge” Zatko, earlier this month alleged “extreme, glaring flaws” by the social media company regarding privacy, security and content moderation.

On July 8, Musk’s legal team initially filed a notice with the U.S. Securities and Exchange Commission (SEC) to terminate the Twitter acquisition. Musk’s legal team claimed that “Twitter has failed to honor its contractual obligations.”

The follow-up statement, released to the SEC on Tuesday, cites Zatko’s allegations as additional reasons for ending the deal.

“Allegations of certain facts, known to Twitter before and as of July 8, 2022, but undisclosed to the Musk parties before and at the time, have since come to light that provide additional and clear grounds to terminate the Merger Agreement. end,” Mike Ringler, Musk’s legal representative of Skadden, Arps, Slate, Meagher & Flom LLP, wrote in a letter to Twitter’s legal chief.

Ringler said in the letter that the final notice of termination is “not legally necessary” to terminate the merger agreement, but will be delivered in the event that the July 8 filing is “declared invalid for any reason.”

The letter on behalf of Musk said the Zatko complaint “claims there has been wide-reaching misconduct at Twitter – all of which was disclosed to Twitter’s directors and senior executives, including (CEO) Parag Agrawal – that is likely to have dire consequences for the company.” activities of Twitter.”

Musk’s attorney said Zatko alleges that Twitter is “materially failing” with its obligations under its 2011 agreement with the Federal Trade Commission. The letter detailed some of Zatko’s other allegations, including claims that Twitter is “uniquely vulnerable to system disruption due to data center outages or malicious actors,” something senior management knew about but “ignored and tried to cover up.”

“If these allegations are true, they demonstrate that Twitter has violated the following provisions of the Merger Agreement, giving the Musk parties the right to terminate the Merger Agreement subject to the terms and conditions detailed below,” the letter read.

Twitter and Elon Musk will face trial in Delaware on Oct. 17 to resolve Musk’s bid to cancel his takeover of the company unless they reach a settlement first.

Lora Kolodny of CNBC contributed to this report.

This is the latest news. Come back for updates.

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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