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Musk sends second Twitter deal termination letter

Elon Musk’s lawyers on Monday sent a second deal termination letter to Twitter, a follow-up to his initial termination notice in July, this time around citing recent allegations created by a Twitter whistleblower.

Why it matters: Musk’s legal team is wanting to leverage the allegations created by former Twitter security chief Peiter Zatko the other day to guard Musk’s try to leave from his $44 billion takeover bid.

  • Musk’s lawyers on Monday filed a subpoena for Zatko, requesting “documents and communications” regarding many of the alleged wrongdoings Zatko claims, including “Twitter’s tracking and measurement of user engagement.”

Details: In the brand new termination letter, they argue that Zatko’s allegations, “if true, demonstrate that Twitter has breached” a couple of provisions from its merger agreement with Musk, including its compliance with all laws and that its assertion that it never filed misleading information to securities regulators.

  • They cite an allegation from Zatko that Twitter violated a 2011 FTC consent decree regarding user data privacy, in addition to “its general obligations under data privacy, unfair trade practice, and consumer protection regulations.”

Yes, but: The whistleblower complaint doesn’t technically support Musk’s original argument that Twitter violated its deal terms by misleading investors concerning the amount of spam accounts on its platform and stonewalling information requests.

  • Rather, it alleges Twitter deceived regulators about its efforts to lessen spam and protect Twitter from security threats.

What they’re saying: “The letter is situated solely on statements created by an authorized that, as Twitter has previously stated, are riddled with inconsistencies and inaccuracies and lack important context,” Twitter said in a statement.

  • “Unlike the assertions in Mr. Musk’s letter, Twitter has breached none of its representations or obligations beneath the Agreement, and Twitter have not suffered and isn’t more likely to suffer an organization Material Adverse Effect,” it added.

What things to watch: If the judge overseeing the case buys Musk’s argument at a scheduled hearing between your two parties at a Delaware Chancery Court this October.

Editor’s note: This short article has been updated with a statement from Twitter.

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