Topline
Twitter on Monday dismissed billionaire Elon Musk’s claim that a severance payment given to whistleblower and former executive Peiter Zatko violated the terms of his deal to acquire the social media platform, in a filing that comes just a day before the company’s shareholders are set to vote on the $44 billion buyout deal from the world’s richest man.
The Twitter feed of entrepreneur and billionaire owner of Tesla and Space X Elon Musk seen in this … [+]
Key Facts
In a letter sent to Musk’s attorneys, lawyers representing Twitter said the company “has breached none of its representations or obligations,” according to a filing with the Securities and Exchange Commission (SEC).
The letter said Musk’s attempt to terminate the deal is “invalid” and added that all of its conditions will be met on Tuesday after Twitter’s shareholders vote to approve the merger.
The letter, however, makes no mention of Zatko or his $7.75 million severance pay, which Musk claimed was a breach of the deal.
Key Background
On Friday, Musk’s lawyers sent a letter to Twitter seeking to terminate the planned $44 billion deal—their third attempt to do so. In the letter, Musk’s team alleged that Twitter’s $7.75 million severance agreement with its former executive, which was signed in June, was done without informing Musk or seeking his consent. The billionaire alleged that this was in breach of his planned buyout of the social media company. Zatko, who served as Twitter’s former head of security, has accused the company of intentionally misleading its users, investors and regulators on the extent of its security problems and the prevalence of bot accounts on the platform. His whistleblower complaint against the company has been filed with the Department of Justice, the SEC and the FTC. On August 29—after Zatko went public with his allegation—Musk’s team sent out another termination notice accusing Twitter of ignoring concerns raised by its former head of security. That termination notice also accused Twitter of breaching its 2011 consent decree with the Federal Trade Commission—where the company agreed to step up user privacy and security. The notice argued if Zatko’s allegations are true it would have “material, if not existential, consequences” to the company’s business.
What To Watch For
On Tuesday, Zatko is set to face a hearing of the Senate Judiciary Committee where he will be asked to elaborate his allegations against the social media giant. Several U.S. lawmakers have raised concerns about Twitter’s handling of user data and the potential breach of its 2011 FTC consent decree. Zatko’s complaints have also prompted data protection authorities in Europe to investigate any potential breach of the European Union’s stringent data protection and privacy laws.
Forbes Valuation
Forbes estimates Elon Musk’s current net worth at $270.7 billion, making him the richest person in the world.
Further Reading
Musk Tries To Cancel Twitter Deal (Again), Citing Whistleblower (Again) (Forbes)
Twitter Whistleblower: What You Need To Know As Peiter Zatko Prepares To Face Lawmakers Next Month (Forbes)
Musk Cites Whistleblower Complaints In New Filing Seeking To Cancel Twitter Deal (Forbes)
Source: https://www.forbes.com/sites/siladityaray/2022/09/12/twitter-dismisses-musks-claim-that-severance-payment-to-whistleblower-was-a-breach-of-deal/