Elon Musk filed a countersuit against Twitter to incorporate recent whistleblower claims of security lapse. Recently Musk also sent out a third letter to Twitter in an attempt to terminate the $44 billion acquisition of the company. As a reason to end the deal, Musk’s legal team stated that the multimillion-dollar severance payment to former security chief and whistleblower Peiter Zatko is a violation.
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The violation is referring to the merger agreement and a reason to end the deal. The letter, dated September 9th, was sent to Twitter’s chief legal officer Vijaya Gadde and was included in a filing Twitter made with the SEC on Friday. Last month, Zatko made headlines by accusing Twitter of misleading investors about the number of bots on the service, failing to delete users’ data, and having poor security practices, among other things. Musk jumped on the accusations, citing them in his second termination letter and subpoenaing Zatko to testify in the lawsuit. Zatko was set to be deposed on Friday. Elon Musk sent his first letter of termination in July, saying that Twitter mislead him about the number of bots on its platform and that the company wouldn’t give him access to the information he need to make his own determinations. This is despite the fact that he was given access to the “firehose” API that contains every tweet.
The violation
On Thursday it was known that Twitter agreed to pay Zatko around $7 million before leaving the company. It is in relation to the lost compensation which he received after the negotiation between him and the company about the pay for months. Musk’s lawyers are citing it as yet another reason why his deal to purchase the social media company shouldn’t go through. The purchase agreement bars Twitter from providing any out-of-the-ordinary severance or termination payments. According to the Journal, the settlement isn’t particularly strange, given that Zatko was an executive leaving the company, but it seems like Musk doesn’t agree.
Whether Musk is actually allowed to terminate the deal is a matter for a court in Delaware after Twitter sued Musk in July for trying to abandon the deal. Chancellor Kathaleen McCormick has already ruled that Musk will be allowed to use Zatko’s allegations to support his case and that there will be a “limited” discovery of documents related to the whistleblower’s report. In August, Musk filed the second notice of termination. According to the reports, this trial is set to begin on October 17th.