Musk cites whistleblower as more reason to exit Twitter deal

Tesla CEO Elon Musk has again filed paperwork to terminate his agreement to buy Twitter, this time based on information in a whistleblower complaint filed by Twitter’s former head of security.

In an SEC filing Tuesday, Musk said his legal team notified Twitter of “additional bases” for ending the deal on top of the ones given in the original termination notice issued in July.

In a letter to Twitter Inc., which was included in the filing, Musk’s advisers cited the whistleblower report by former executive Peiter Zatko — also known by his hacker handle “Mudge.”

Zatko, who served as Twitter’s head of security until he was fired early this year, alleged in his complaint to U.S. officials that the company misled regulators about its poor cybersecurity defences and its negligence in attempting to root out fake accounts that spread disinformation

The letter, addressed to Twitter’s Chief Legal Officer Vijaya Gadde, said Zatko’s allegations provide extra reasons to end the deal if the July termination notice “is determined to be invalid for any reason.”

Billionaire Musk has spent months alleging that the company he agreed to acquire undercounted its fake and spam accounts, which means he doesn’t have to go through with the US$44 billion deal. Musk’s decision to back out of the transaction sets the stage for a high-stakes legal battle in October.