Elon Musk: Under Federal Investigation Over Twitter Deal
Elon Musk is being federally investigated over his $44 billion acquisition of Twitter, the social media platform said in a court filing Thursday (October 13).
Per CNN, Twitter did not identify what specific actions by Musk US officials may be investigating. Twitter’s filing simply said authorities are looking into Musk’s “conduct” linked to the deal.
The company’s court filing also accused Musk’s legal team of failing to produce draft communications with the Securities and Exchange Commission (SEC) and a slide presentation to the Federal Trade Commission (FTC) as part of the two sides’ ongoing litigation over whether Musk can walk away from the deal.
As we’ve previously reported, the Tesla and Space X founder first attempted to terminate the deal in July, alleging that Twitter violated their mutual purchase agreement by misrepresenting the number of spam/fake bot accounts on its platform. Twitter sued Musk to complete the acquisition, accusing the billionaire of using bots as a pretext to exit a deal that he developed buyer’s remorse over following a market decline. The letter to the SEC at the time stated, “Twitter has not complied with its contractual obligations.”
Last week, Musk proposed following through with his deal to buy Twitter at the originally agreed-upon price of $54.20 per share. The judge overseeing the dispute later in the week ruled to pause the legal proceedings until October 28 following a request from Musk. In response to yesterday’s filing, Musk’s attorney Alex Spiro said it was designed to distract from Twitter’s own legal problems: the company’s former head of security Peiter “Mudge” Zatko accused Twitter of long-ignored security vulnerabilities in a whistleblower disclosure.
“Twitter’s executives are under federal investigation,” Spiro said in a statement to CNN. “This misdirection was sent by Twitter to try and uncover which of their assorted misconduct they are under investigation for.”
The FTC told Congress that if it is determined that Twitter executives were responsible for legal violations, they “absolutely” would and “won’t hesitate” to hold those executives personally accountable. In a separate filing on Thursday, Twitter also maintained that it did not instruct Zatko to burn several notebooks as part of a separation agreement, as Musk’s team had claimed in a filing earlier this month. Instead, Twitter claimed, Zatko destroyed the notebooks of his own volition. “Twitter did not ask Zatko to torch his own documents, much less demand that he do so,” Twitter’s filing read. “Twitter had no knowledge of Zatko’s notebooks and no idea what information they contained.”