Tesla CEO Elon Musk is citing the accusations of Twitter whistleblower Peiter Zatko as further justification for pulling his bid to purchase the social-media giant, according to a Securities and Exchange Commission filing.
Mr. Musk‘s legal team sent a letter to Twitter on Monday echoing many of the accusations that Mr. Zatko, former head of security at the company and better known as the hacker “Mudge,” laid out last week.
Mr. Zatko alleges that Twitter has serious security vulnerabilities and had misled Mr. Musk on the severity of the issue.
If the accusations are true, Mr. Musk‘s legal team says, they provide enough of a justification for him to exit the deal.
These new claims are in addition to Mr. Musk‘s original reasons, related to Twitter‘s claims about the number of users being inflated by bot accounts, for wanting to pull his bid to purchase Twitter for $44 billion.
Twitter responded with its own letter early Tuesday, calling Mr. Zatko‘s report unreliable.
Mr. Musk‘s request “is 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 letter reads.
The company also claimed that Mr. Zatko‘s report, even if accurate, wouldn’t provide Mr. Musk with the needed legal basis to pull out of the deal.
“Contrary to the assertions in your letter, Twitter has breached none of its representations or obligations under the Agreement, and Twitter has not suffered and is not likely to suffer a Company Material Adverse Effect,” Twitter wrote.
Mr. Musk‘s letter is just the latest in the growing legal battle over the future of one of the biggest social-media companies in the world.
In July he cited a lack of transparency over the amount of bot activity on the site as well as serious security concerns as justification for backing out of the deal. Twitter maintains that bots make up less than 5% of accounts.
Twitter promptly sued Mr. Musk after he filed his termination letter in July and has asked a Delaware court to force him to go through with the deal.
Mr. Zatko‘s accusations are likely to be an important aspect of the coming trial.
Mr. Musk‘s legal team subpoenaed him Monday and he is expected to give testimony at a deposition on Sept. 9. He is also expected at a Senate hearing on Sept. 13, the same day Twitter shareholders are set to vote to approve Mr. Musk taking over the company.
Mr. Musk‘s lawyers have already used Mr. Zatko‘s claims about security issues at Twitter during court hearings which could signal that his testimony may be the centerpiece to their legal strategy.
“They have an economic incentive to mislead. There’s a whistleblower complaint that has now been filed publicly that talks about the false information provided.” Mr. Musk‘s lawyer Alex Spiro said in an Aug. 24 court hearing, a day after Mr. Zatko‘s comments were reported.
The trial to determine the fate of Twitter‘s ownership begins Oct. 17.