<\/p>\n
Elon Musk wants to delay his upcoming trial with Twitter over a whistle-blower\u2019s allegations, the latest in a legal saga over the billionaire\u2019s attempt to back out of his contract to buy the social media company.<\/p>\n
In filings in Delaware court this week, Musk\u2019s legal team has leaned heavily on a complaint by former Twitter executive Peiter Zatko to attempt to update his countersuit against Twitter as well as to introduce new evidence and delay it until November. The trial is scheduled for October 17.<\/p>\n
Twitter and Musk have been locked in a legal battle since this summer, when he changed course and said he wasn\u2019t going to purchase the company for a promised $44 billion (about R750bn). Twitter sued Musk for breach of contract, and he countersued, alleging fraud and breach of contract.<\/p>\n
Last week, \u201cThe Washington Post\u201d and \u201cCNN\u201d were the first to report on the new whistle-blower complaint, which alleged that the company has \u201cextreme, egregious deficiencies\u201d in its security practices. <\/p>\n
Zatko, also known as Mudge, alleged that Twitter violated the terms of a settlement agreement with the Federal Trade Commission by falsely claiming that it had a solid security plan. However, his complaint contains little hard evidence on bots and spam, a central component of the argument Musk has used to back out of his agreement.<\/p>\n
Twitter has pushed back on Zatko\u2019s allegations, saying last week that they appeared to be riddlen \u201cwith inaccuracies\u201d.<\/p>\n
But Musk\u2019s lawyers sent a letter to Twitter, dated Monday, that pointed to the allegations from the company\u2019s former head of security, according to the filings. It asserted that if the claims were true, Twitter has breached the merger agreement. The company filed a document with the Securities and Exchange Commission acknowledging it had received the letter.<\/p>\n
Twitter said it was committed to closing the deal under the original price and terms, in a statement issued by spokesperson Brenden Lee.<\/p>\n
\u201cWe have not breached any of our representations or obligations under the Agreement, and have not suffered and are not likely to suffer a Company Material Adverse Effect,\u201d he said, referring to a significant change that would enable Musk to back out.<\/p>\n
Musk\u2019s lawyers have already cited the whistle-blower complaint during a hearing last week, as well as subpoenaing Zatko for a deposition.<\/p>\n
Zatko \u201cwas not some low-level employee\u201d, Musk attorney Alex Spiro said during the hearing last week. \u201cHe was one of the top handful of officers in the company.\u201d<\/p>\n
In a response to Musk\u2019s lawyers, Twitter reiterated that it intended to move forward with the deal and said Musk\u2019s new termination letter was \u201cbased solely on statements made by a third party that, as Twitter has previously stated, are riddled with inconsistencies and inaccuracies and lack important context\u201d.<\/p>\n
Musk\u2019s lawyers called the letter to Twitter an \u201cadditional termination notice\u201d in case its first notice was found invalid.<\/p>\n
Musk\u2019s team cites the FTC settlement, Twitter\u2019s allegedly lax security and other allegations made in Zatko\u2019s complaint as reasons to end the deal.<\/p>\n
\u201cThe Zatko Complaint alleges far-reaching misconduct at Twitter \u2013 all of which was disclosed to Twitter\u2019s directors and senior executives, including Parag Agrawal \u2013 that is likely to have severe consequences for Twitter\u2019s business,\u201d Musk\u2019s lawyers wrote in the letter to Twitter, referring to the company\u2019s chief executive.<\/p>\n
The saga between Musk and Twitter began this year, when the billionaire revealed he had taken a large stake in the company and launched a hostile takeover attempt to buy it. Twitter at first seemed to push back against the offer, but eventually the company agreed to a deal that would pay $54.20 a share.<\/p>\n
Musk, who has more than 104 million followers on Twitter, has long used the site to make announcements about his companies, Tesla and SpaceX, share memes and extol his opinions. He initially said he wanted to ensure Twitter promoted free speech online.<\/p>\n
But the deal soon became rocky. His offer came around a time when the tech-heavy Nasdaq composite index went through a steep decline. It became apparent that not only had Musk lost billions of dollars, but he might be overpaying for Twitter by billions of dollars as well.<\/p>\n
Eventually, Musk publicly raised concerns that Twitter had misled him about the number of bots and fake accounts on the site. Twitter has pushed back on these allegations and said it has provided Musk with sufficient company information.<\/p>\n
Legal experts have said it would be difficult for Musk to walk away from the Twitter deal with no financial consequences.<\/p>\n
Twitter is marching forward with the deal, and shareholders are scheduled to vote on it next month.<\/p>\n
In the run-up to the trial, Twitter asked for an expedited schedule, which led to the case being compressed to a week in October.<\/p>\n
\u201cThis very public dispute harms Twitter with each passing day Musk is in breach,\u201d it said. \u201cNo public company of this size and scale has ever had to bear these uncertainties.\u201d<\/p>\n