Elon Musk Requests to Move Acquisition Deal Trial after Twitter Whistleblower Comes in the Limelight

Photo Credit: Dado Ruvic

After receiving recent accusations from a whistleblower that Twitter had alleged cybersecurity problems, Elon Musk and his legal team are aiming to figure out how to delay the trial for Twitter’s acquisition deal.

The whistleblower’s disclosure drew the attention of several US government agencies, including the Securities and Exchange Commission, the Department of Justice, and the Federal Trade Commission. As a result, the Senate became involved and summoned Twitter to respond and appear before a committee hearing in September.

The acquisition case will be heard in Delaware Chancery Court beginning October 15 and will last five days. Musk’s team, on the other hand, filed a new schedule with the court. They suggested that the trial be postponed until October, depending on the availability of the court.

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The goal of Musk is the termination of the deal

Musk’s legal team included a copy of the whistleblower’s disclosure, a 200-page document outlining alleged security and privacy issues affecting Twitter users. The court appeal includes updates for Musk’s counterclaim relating to the executive’s breach of Agreement, as told by Twitter.

Twitter responded through a statement, “[Twitter is] “committed to closing the transaction on the price and terms agreed upon with Mr. Musk. We 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.”

Before filing in court, Musk wrote a letter to Twitter requesting that the acquisition deal be rescinded in light of the whistleblower, Peiter “Mudge” Zatko, and his testimony against the social media firm.

Twitter rejected musk’s request. They said, “[Musk’s letter] 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.”

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The vital importance of the whistleblower

With the appearance of the disclosure from Zatko, Musk and his team gained hope in their long-held goal of terminating the deal. The group had previously accused Twitter of infringing intellectual property rights and the 2011 FTC consent order. However, none of the attempts to rescind the Agreement were successful.

Twitter has found another way to achieve its goal with Zatko. Musk’s legal team issued a subpoena requiring the whistleblower to appear in court on September 9.

“Mr. Zatko will comply with his legal obligations of that subpoena, and his appearance at the deposition is involuntary. He did not make his whistleblower disclosures to the appropriate governmental bodies to benefit Musk or to harm Twitter, but rather to protect the American public and Twitter shareholders,” said Zatko’s attorneys, Debra Katz and Alexis Ronickher.

The disclosure issued by the whistleblower

Zatko took on the role of whistleblower while working for Twitter. He claimed that while employed by the company, there were severe problems with Twitter’s handling of key aspects of its processes.

“It was impossible to protect the production environment. All engineers had access. There was no logging of who went into the environment or what they did…. Nobody knew where data lived or whether it was critical, and all engineers had some form of critical access to the production environment,” he said in his disclosure.

To explain the company’s side, Twitter said, “Mr. Zatko was fired from his senior executive role at Twitter in January 2022 for ineffective leadership and poor performance. What we’ve seen so far is a false narrative about Twitter and our privacy and data security practices that is riddled with inconsistencies and inaccuracies and lacks important context.”

“Mr. Zatko’s allegations and opportunistic timing appear designed to capture attention and inflict harm on Twitter, its customers and its shareholders. Security and privacy have long been company-wide priorities at Twitter and will continue to be.”

Zatko is scheduled to show up in court on September 13 to give testimony against Twitter.

Source: CNN


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Chris Watson

Chris is a freelance writer, photographer and travel enthusiast.