The legal battle between billionaire Elon Musk and Twitter is still on and the Tesla boss’s legal representative met with Twitter legal representatives on Tuesday for a hearing which will determine whether claims made by Pieter Zatko can be added to Musk’s legal case to get out of his US$44 billion commitment to purchase the social media company.
However, a new whistleblower complaint from Twitter’s former head of security might be complicating the company’s legal tussle.
The hearing was one of the first times Twitter has publicly addressed Zatko’s complaint considering the fact that it’s been about two weeks since Zatko went public while the social media giant stayed quiet over the claims made.
During the hearing, Twitter’s legal representatives portrayed Zatko as a disgruntled employee who had a “huge ax to grind” with the company and that he “was not in charge of spam at the company”.
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In fact, he was also accused of “structuring his whistleblower complaint, to tie it to the merger agreement”.
(Zatko’s lawyers previously said he didn’t go public in order to “benefit Musk.”) Notably, Twitter’s lawyers didn’t address claims that the company’s lax security practices may have harmed national security or that CEO Parag Agrawal told Zatko to lie to the company board.
Twitter lawyers also suggest that Musk was just looking for any way possible to back out of the deal even before Zatko’s complaint was made public.
They also quoted from a May 3rd text message that Musk sent to his banker at Morgan Stanley as follows:
“Let’s slow down just a few days … it won’t make sense to buy Twitter if we’re headed into World War 3,” Twitter’s lawyer read aloud, quoting Musk. “This is why Mr. Musk didn’t want to buy Twitter, this stuff about the bots, mDAU [monetizable daily active users] and Zatko is all pretext.”
However, Musk’s legal representatives touted Zatko’s credentials as a “decorated” executive who had once been offered a position as a US government official.
They also lay claims that Musk had nothing to do with Zatko’s whistleblower complaint and that the social medial company had purposely hidden damaging information.
Whether it will be enough to sway the judge in the case though, is unclear. In one exchange the judge pointedly remarked on Musk’s decision to waive due diligence before agreeing to the acquisition.
“Why didn’t we discover this in diligence,” Musk’s lawyer said, referencing Zatko’s whistleblower complaint. “They hid it, that’s why.” “We’ll never know, right,” the judge responded. “Because the diligence didn’t happen.”
Musk’s lawyers ended the hearing by arguing that “it’s not us causing this chaos or this delay.” while also pushing against the October trial date.
“Nobody at Twitter is having all hands-on meetings today over the poop emoji from two months ago,” he said, in an apparent — and spontaneous — reference to a May 16th tweet from Musk directed at Agrawal. “They’re having all-hands-on meetings today at Twitter because a senior decorated executive said that the company was committing fraud. That’s our fault? That’s our chaos? That’s their chaos.”