Whistleblower’s claims cited by Elon Musk in new push to halt Twitter deal

Elon Musk has cited claims made by a Twitter whistleblower about the platform’s data privacy and security as grounds to scrap his dollars $44bn takeover.

Elon Musk’s lawyers have used the claims of “egregious deficiencies” to file a new notice of termination. Picture: AP

Elon Musk has cited claims made by a Twitter whistleblower about the platform’s data privacy and security as grounds to scrap his $44 billion dollar takeover.

Filing an additional notice of termination, the billionaire’s lawyers pointed to allegations made last week by Peiter “Mudge” Zatko, Twitter’s former head of security, who accused its executives of deceiving regulators and its own board about “extreme, egregious deficiencies” in its defence against hackers.

While the company has pushed back against Zatko’s claims, accusing him of peddling a “false narrative ... riddled with inconsistencies and inaccuracies”, Musk has seized on them as a potential source of evidence for his case.

“These allegations, if true, demonstrate that Twitter has breached ... provisions of the merger agreement,” Musk’s lawyers wrote in a new filing, “thereby giving the right to terminate.”

Musk amassed a 9 per cent stake in Twitter this year, declined an invitation to join its board and agreed to buy the business for $44billion dollars.

Scrutiny of Twitter has intensified since Zatko took his allegations public.

He later attempted to unravel the deal, citing the presence of fake accounts on the social network and setting the stage for a legal battle.

Twitter has rejected Musk’s attempt to dismantle the acquisition, branding his grounds for doing so “invalid and wrongful” under the terms of their agreement. Its lawyers have accused the tycoon of “attempted sabotage” of the company and of manufacturing issues to back out of the deal.

Scrutiny of Twitter has intensified since Zatko took his allegations public. He has claimed the company was “grossly negligent” when it came to protecting the data of its 238 million daily users. He has filed a document cataloguing his concerns with several US government agencies, including the Department of Justice.

Zatko, who is set to appear before a Senate hearing next month, has been subpoenaed by representatives for both Musk and Twitter as they prepare for their Delaware trial. He was employed by Jack Dorsey, Twitter’s co-founder and former chief executive, from November 2020 but was dismissed this year by Parag Agrawal, Dorsey’s successor.

Shares in Twitter closed down 1.9 per cent, or 75 cents, at dollars 39.29 in New York last night (Tuesday). The microblogging business, which was founded in 2006 and is based in San Francisco, has a stock market value of about $30 billion dollars.

Musk, 51, is chief executive of Tesla, the electric carmaker, and of SpaceX, the rocket business. He is the world’s richest man with a personal fortune of about dollars 256 billion, according to Forbes, largely derived from stakes in the two businesses.

Dan Ives, technology analyst at Wedbush Securities, said he expects that Musk will ultimately buy Twitter - albeit “in the dollars 50 range”, shy of his original bid of dollars 54.20 per share - but believes that this latest twist could amount to a significant boost for the billionaire.

“Zatko claims that Twitter does not have an accurate count of the number of spam and fake bot accounts on its platform,” he said. “The development and timing of this is a huge potential win for Musk.”

Peiter Zatko, Twitter’s former head of security, will appear before a Senate hearing next month.

The Times