Twitter’s attempt to force Musk’s hand has been rumbled by a whistleblower!

Twitter’s lawsuit to force Elon Musk to close on a $44 billion take-private deal is likely to be hampered by a Whistleblowers claims of “egregious” security deficiencies and misleading reports on non-revenue-generating spam and bot traffic, experts say.

Law professors and attorneys around the country who know the case said Tuesday that the allegations by Peiter “Mudge” Zatko could cause the trial to be delayed from Oct. 17 to Oct. 18, according to law professors and attorneys who know the case well. Musk’s argument for terminating the $54.20 per share contract he signed to buy the company is also strengthened, at least for now

Whistleblower Claims May De-rail Twitter's Attempts to make Musk comply

Peiter “Mudge” Zatko, a former Twitter security chief, claims he was let go after flagging “egregious deficiencies, negligence, and willful ignorance”.

After serious security breaches and account hijackings in 2020, Twitter hired Zatko, a prominent hacker, to lead its security efforts. His allegations included “egregious deficiencies, negligence, willful ignorance, and threats to democracy” as reasons for his dismissal.

It’s going to be hugely beneficial to Musk and detrimental to Twitter,” said Robert T. Miller, the daum chair of corporate law and finance at the University of Iowa College of Law.

Following news of the whistleblower actions, Twitter’s shares dropped 9.6% to $39.86 on Tuesday. On April 25, the deal was finalized, but the price was still higher than the $39.31 per share set on April 1.

A whistleblower complaint filed with three federal agencies alleges that Twitter’s top management ignored warnings that Twitter’s security report was “misleading, inaccurate and intentionally wrong” late last year. Two weeks after he pressed the warnings, the company fired him.

Whistleblower Aid, which is representing Zatko in his whistleblower claim, sent a letter to the U.S. Securities and Exchange Commission, the Federal Trade Commission and the U.S. Department of Justice. Copies of the whistleblower complaints were released to CNN and The Washington Post.

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