On Monday, Elon Musk filed an amendment with the Securities and Exchange Commission in order to cement his termination of his heretofore proposed purchase of Twitter.
Musk made the filing to buttress his case for dissolving the merger, arguing that facts had come to light since his July 8 letter to Twitter terminating their merger agreement that would strengthen the termination in case the original letter were to be found invalid, as Twitter has contested the validity of the July termination notice.
“Because the facts described in the August 29 Termination Letter were known to Twitter and withheld from the Reporting Person, and because Twitter has taken the position that the Merger Agreement remains in effect, the Reporting Person sent the August 29 Termination Letter on the basis of the facts described therein,” Musk wrote to the SEC.
Musk’s attorneys also sent a letter to Vijaya Gadde, the chief legal officer of Twitter, in which they delineated the additional facts that had come to light. The letter noted the August 23, 2022 whistleblower report to Congress, the SEC, FTC, and DOJ. The report was filed by Peiter “Mudge” Zatko, Twitter’s former chief security officer, on July 6, 2022.
“The Zatko Complaint alleges far-reaching misconduct at Twitter—all of which was disclosed to Twitter’s directors and senior executives, including Parag Agrawal—that is likely to have severe consequences for Twitter’s business,” Musk’s attorneys wrote.
The attorneys cited allegations by Zatko, noting that “Twitter was in material noncompliance with both its obligations under a 2011 FTC consent decree and its general obligations under data privacy, unfair trade practice, and consumer protection laws and regulations … Twitter is uniquely vulnerable to systemic disruption resulting from data center failures or malicious actors … Twitter’s platform is built in significant part on the misappropriation and infringement of third party intellectual property, and Twitter acquiesced to demands made by the Indian government that its agents be hired by Twitter and given access to Twitter.”
The attorneys argued that the foregoing allegations, if true, showed Twitter has breached provisions of the merger agreement.
“For the avoidance of doubt, these bases are in addition to, and not in lieu of, the bases for termination described in the July 8 Termination Letter,” the attorneys concluded. “Although the Reporting Person believes the August 29 Termination Letter is not legally necessary to terminate the Merger Agreement because he has already validly terminated it pursuant to the July 8 Termination Letter, the Reporting Person delivered the August 29 Termination Letter in the event that the July 8 Termination Letter is determined to be invalid for any reason.”