Elon Musk accuses Twitter of fraud to stop takeover

Elon Musk is ready to do anything to escape the takeover of Twitter. Citing the accusations of a whistleblower, the billionaire now accuses the social network of fraud.

A few days ago, Elon Musk made changes to the documents on file in the lawsuit filed against Twitter. The American entrepreneur now accuses the platform of having concealed serious security flaws during negotiations.

For the record, the founder of Tesla initiated the lawsuit against the social network in August 2022. Elon Musk was then reacting to a legal action brought by Twitter. The company indeed wants Musk to honor his $44 billion takeover bid. For his part, the billionaire is firmly determined to escape the operation, believing that the number of fake accounts has been greatly underestimated by Twitter.

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Peiter Zatko, Elon Musk’s asset in his lawsuit against Twitter

To avoid the takeover of Twitter, Elon Musk has a new asset : Peiter Zatko, former Head of Platform Security. With the American authorities, the former hacker, who now presents himself as a whistleblower, affirms that Twitter has ignored important security problems. In particular, he ensures that half of the company’s servers are obsolete, that thousands of employees can consult user data and that the moderation system is plagued by government spies.

Hearing before the United States Senate on Tuesday, September 13, 2022, he renewed his accusations. Zatko argues that Twitter’s infrastructure is “ten years late”, despite the efforts of the engineers. The former executive points the finger at the firm’s leaders, who refuse to take the necessary measures:

“I’m here today because Twitter management is misleading the public, lawmakers, regulators, and even its own board of directors. […] Key members of management do not have the skills to understand the extent of the problem. And they have no incentive to do so. […] It is extremely difficult to get someone to understand something if their salary depends on them not understanding it”.

Unsurprisingly, Elon Musk was quick to pick up on Zatko’s accusations to support his own claims. In view of the whistleblower’s revelations, the billionaire believes that he has the right to waive redemption from Twitter.

“Needless to say, the latest disclosures show undeniably and clearly that Musk has the right to walk away from the merger agreement – ​​for many independent and sufficient reasons”states the complaint.

Echoing Zatko’s remarks to regulators, the SpaceX founder also argues that Twitter told him concealed an offense to an agreement with the Federal Trade Commission (FCC). According to Peiter Zatko, Twitter lied to the FCC in 2011 by promising that a plan to strengthen its security would be put in place.

For Elon Musk, Twitter is guilty of fraud. Covering up the loopholes represents a breach of their contract, the complaint to the courts points out. Under these conditions, Musk asks a judge to rule in his favor. He wants justice to find that he is not not legally obligated to redeem the social network.

Twitter shareholders still want takeover

For its part, Twitter presents Peiter Zatko’s accusations as unfounded. After an internal investigation, the platform ensures that the words of the former hacker are “riddled with inconsistencies and inaccuracies”.

This new salvo comes a few days after Twitter shareholders gave their opinion on the takeover by Elon Musk. While Peiter Zatko strangled the social network in front of the Senate, the shareholders voted in favor of the acquisition. They want Musk to buy the company for $54.20 per share, which is much higher than the current price.

The trial between Twitter and Elon Musk will begin October 17 in Delaware, despite the billionaire’s request for a postponement. The contractor wanted a few more weeks to process the information provided by the whistleblower and prepare his defence. On the other hand, he obtained the right to add Zatko’s words to the file. Musk’s lawyers indeed spoke with Zatko, a few days before the complaint was amended. Despite Zatko’s foray into the fight, Twitter says it’s ready to take the Tesla founder to court:

“We look forward to presenting our case in court from October 17 and intend to complete the transaction on the price and terms agreed with Mr. Musk”.

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