{"id":1620709,"date":"2022-08-23T17:53:24","date_gmt":"2022-08-23T21:53:24","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1620709"},"modified":"2022-08-23T17:53:33","modified_gmt":"2022-08-23T21:53:33","slug":"twitter-whistleblower-could-help-musk-by-adding-volatility-to-legal-battle","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/twitter-whistleblower-could-help-musk-by-adding-volatility-to-legal-battle\/","title":{"rendered":"Twitter whistleblower could help Musk by adding \u2018volatility\u2019 to legal battle"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">22<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Ftwitter-whistleblower-could-help-musk-by-adding-volatility-to-legal-battle%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1620709&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>By Tom Hals<\/p>\n<p>WILMINGTON, Del. (Reuters) \u2013     A whistleblower\u2019s complaint that Twitter Inc misled federal regulators about the company\u2019s security risks could provide Elon Musk with fresh ammunition in his bid to get out of buying the company for $44 billion.<\/p>\n<p>Until now, Musk\u2019s legal showdown with Twitter has primarily centered around claims that the company misled the billionaire about the number of bot and spam accounts on its platform.<\/p>\n<p>The whistleblower complaint by Twitter\u2019s former security chief Peiter Zatko gives Musk new angles to pursue in his legal battle, such as claims that Twitter failed to disclose weaknesses in its security and data privacy.<\/p>\n<p>It provides \u201ca different basis for fraud,\u201d said Ann Lipton, a professor at Tulane Law School. <\/p>\n<p>It is not clear if and how Musk\u2019s team will use the whistleblower\u2019s information, although Musk\u2019s lawyer, Alex Spiro with Quinn Emanuel Urquhart &#038; Sullivan, said on Tuesday that a subpoena had been issued to Zatko. <\/p>\n<p>\u201cWe found his exit and that of other key employees curious in light of what we have been finding,\u201d Spiro said in a statement.<\/p>\n<p>Legal experts said the whistleblower complaint introduced uncertainty to Musk\u2019s showdown with Twitter, rather than dramatically transforming a case that corporate law specialists have said favors Twitter.<\/p>\n<p>\u201cVolatility is helpful if you\u2019re not playing a strong hand. It creates some possibility that something crazy might happen,\u201d said Eric Talley, a professor at Columbia Law School, of the whistleblower complaint.<\/p>\n<p>Twitter\u2019s stock was down about 5.9% in late trading at $40.44 a share.<\/p>\n<p>\u2018ADDING TEXTURE\u2019<\/p>\n<p>Musk, the world\u2019s richest person and the chief executive of electric vehicle maker Tesla Inc, told Twitter in July that he was ending the agreement to buy the company for $54.20 per share.<\/p>\n<p>Musk accused Twitter of fraudulently misrepresenting the true number of spam and bot accounts on its social media platform, which the company has estimated at 5% in corporate filings. Musk said he relied on those filings when he offered to buy the company.<\/p>\n<p>Twitter and Musk have since sued each other, with Twitter asking a judge on the Delaware Court of Chancery to order Musk to close the deal. A trial is set to start on Oct. 17.<\/p>\n<p>On Wednesday, Chancellor Kathaleen McCormick will hear arguments by the two sides over access to documents as part of the discovery process. Legal experts said Musk might raise the whistleblower complaint and indicate how his team might use the allegations.<\/p>\n<p>Zatko\u2019s whistleblower complaint, which was made public on Tuesday, claimed that Twitter had falsely told regulators that it had a solid security plan. <\/p>\n<p>Zatko said he had warned colleagues that half the company\u2019s servers were running out-of-date and vulnerable software, according to a redacted version of his complaint. <\/p>\n<p>Twitter Chief Executive Parag Agrawal told employees in a memo that the company is reviewing the claims. \u201cWhat we have seen so far is a false narrative that is riddled with inconsistencies and inaccuracies, and presented without important context,\u201d Agrawal said, according to a CNN report.<\/p>\n<p>Claims that Twitter failed to disclose security and privacy risks could be easier for Musk to prove than allegations that Twitter misrepresented the number of spam accounts, legal experts said.<\/p>\n<p>To prevail on the spam claim, Musk must show that he relied on Twitter\u2019s disclosures about spam accounts.<\/p>\n<p>Corporate deal specialists have said this will be tough since Musk cited defeating spam as the very reason for buying the company.<\/p>\n<p>By contrast, Zatko\u2019s allegations that the company withheld security information from investors and regulators could qualify as an omission, which would not require Musk to show reliance on the company\u2019s disclosures. <\/p>\n<p>Musk, however, would still need to prove that Twitter\u2019s allegedly weak defenses against hackers was a material risk that was not disclosed to investors. <\/p>\n<p>And to walk away from the acquisition without paying a $1 billion termination fee, he would have to show the omission amounted to a material adverse effect on Twitter.<\/p>\n<p>A material adverse effect (MAE) is an event that significantly reduces the long-term value of an acquisition. <\/p>\n<p>Talley said whether Zatko\u2019s claims amount to an MAE could be an issue for the trial.<\/p>\n<p>\u201cThis doesn\u2019t open a brand new battlefront,\u201d said Talley. \u201cIt\u2019s adding texture to existing ones.\u201d<\/p>\n<p> (Editing by Noeleen Walder and Deepa Babington)<\/p>\n<p><a href=\"https:\/\/www.oann.com\/?attachment_id=2740704\"><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/08\/tagreuters.com2022binary_LYNXMPEI7M0WD-VIEWIMAGE.jpg\" alt=\"tagreuters.com2022binary_LYNXMPEI7M0WD-VIEWIMAGE\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Tom Hals WILMINGTON, Del. (Reuters) \u2013 A whistleblower\u2019s complaint that Twitter Inc misled federal regulators about the company\u2019s security risks could provide Elon Musk with fresh ammunition in his<\/p>\n","protected":false},"author":66,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1620709","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1620709","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/66"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1620709"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1620709\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1620709"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1620709"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1620709"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}