The lawsuit accuses Musk of abandoning his acquisition of the company because of stock market turbulence. In a legal filing, Mr. Musk said that he was the one who torpedoed the deal.
The company of fraud was accused of concealing the true number of inauthentic accounts. The accounts made up at least 10% of the daily active users who saw ads. The figure is less than 5 percent, according to the social networking site.
Lawyers for Mr Musk said in the filing that they hid the number of users who saw ads. 65 million of the company's 229 million daily active users didn't see ads in the first quarter.
The figures that Mr. Musk was trying to distort were accurate, according to the company.
Analysts for Mr. Musk used a tool from Indiana University to find more inauthentic accounts than had been reported. The analysis was preliminary and will be expanded.
The deal was a big one. In April, Musk made an offer worth more than 40 billion dollars for the social network, saying he wanted to make it a private company.
Lawyers for Mr. Musk said that the misrepresentations tricked him into agreeing to buy the social network.
Lawyers for Mr. Musk wrote that the company had a scheme to deceive investors about its prospects. A desperate bid to prevent the Musk parties from uncovering its fraud has led to the unraveling ofTwitter's disclosures.
The filing, made last Friday but kept confidential until Thursday, was Mr. Musk's first extensive response in what is expected to be a lengthy legal battle. October is when the trial will take place.
In a statement on Thursday, the chairman of the board said that his claims were not valid. The company filed a response to Mr. Musk's claims.
The tool is unreliable according to the company. The tool used by the company once thought Mr. Musk's account was likely to be a bot.
By April, Mr. Musk had become the company's biggest shareholder. He launched a takeover attempt after rejecting the offer to join the board. After the acquisition was agreed to, Mr. Musk started to doubt. He said in July that he didn't want to buy the company.
The Delaware Chancery Court is where the lawsuit was filed. Mr. Musk lost interest in the deal as the market fell and shares in his company declined.
According to the lawsuit, Musk refused to honor his obligations to the company because the deal he signed no longer served his interests.
The company bombarded Mr. Musk's banks, financial partners and associates with subpoenas, demanding communications about the deal that could shed light on why Mr. Musk decided to walk away.
The specific performance clause allows for a lawsuit to be filed if the billionaire doesn't have enough money to complete the acquisition. If Mr. Musk's funding falls through, he may have to pay $1 billion to leave the deal.
According to Mr. Musk, the company has misled him about the number of fake accounts on its platform. A fake account can be used to spread fake news or manipulate the service.
Advertising is the main source of revenue for the social networking site. Mr. Musk said that advertisers wouldn't reach their intended audience if there were a lot of fake accounts on the site. He was able to abandon the acquisition due to the inaccuracies in the user metrics.
In a message to employees that was seen by The New York Times, the company said that it was confident in its metrics and wouldn't redact any of Mr. Musk's claims. Sean Edgett, Twitter's general counsel, said, "We offer our customers a highly sophisticated set of tools and features to run and measure the effectiveness of their campaigns."
Mr. Musk continued to speak on the subject. He said during the meeting that he understood the product and that he had a good idea of where to make it better.
Mike and Jack were involved in the report.
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