Elon Musk adds whistleblower claims to list of reasons for ending Twitter deal

theguardian.com:

Elon Musk has formally added last week’s whistleblower allegations against Twitter as a reason for terminating his $44bn (£37.7bn) takeover of the social media platform.

Representatives of the Tesla CEO said accusations of “far-reaching misconduct” at Twitter from Peiter Zatko, the company’s former head of security, constituted a further breach of the deal.

Zatko, who was fired by Twitter in January, has filed a whistleblower complaint against Twitter in which he warned that the company was “grossly negligent in several areas of information security”. Musk has subpoenaed Zatko, meaning he will be required to supply evidence for a forthcoming trial about the deal termination, due to begin on 17 October.

“These allegations, if true, demonstrate that Twitter has breached the following provisions of the merger agreement, thereby giving the Musk parties the right to terminate the merger agreement,” Musk’s lawyers said in a letter sent to Twitter on Monday and disclosed on Tuesday.

The move could force a delay in the Delaware trial in which Twitter is trying to force Musk to buy the company, because the firm will need to address the allegations in its original lawsuit.

Zatko’s alleged that about 30% of laptops in the company automatically blocked updates that included security fixes; user data, including that coming from Twitter’s most high-profile verified handles, are vulnerable to hacks; and the company’s board of directors was misled about these vulnerabilities.

The letter said Zatko’s allegations constituted a “company material adverse effect” that substantially altered the business’s value and therefore rendered the deal invalid. These include not complying with data privacy laws and regulations, alongside not complying with