There was a new reason for Musk to walk away from buying the social networking site. The company paid a large amount of money to a former executive who accused it of security flaws.
In a letter sent Friday afternoon by Musk's legal counsel to Twitter's chief legal officer, the billionaire took issue with a $7.75 million payment in late June to Peiter Zatko, better known as Mudge.
The lawyers for Musk argued that the payment was a violation of the agreement. The attorneys wrote that the company promised not to give any benefits to former employees.
The merger agreement was terminated by Musk three times. The first one was sent in July and claimed that Musk had the right to cancel the deal because of the data and information that was not given to him. The second was in August and was related to the Zatko disclosure. Musk is accusing the company of fraud, as well as public investors and the SEC.
The Musk parties believe that the notice is not necessary because they have already terminated the agreement.
Representatives for the company were not available for comment. The company has continued to stand by its previous disclosures.
Musk jumped on Zatko's disclosure, made public in August, as he fights in Delaware Chancery Court to walk away from his agreement to buyTwitter at no cost. Musk's true reason for backing out was worry over his personal fortune being affected by a downward turn in financial markets, according to the lawsuit. According to the company, Musk's personal texts show he was thinking about getting out of the deal a few weeks after agreeing to buy it.
Zatko, a hacker turned security expert, only worked at the micro-blogging site for one year. According to the company, he was fired earlier this year for performance issues and that all of the concerns he raised about security were investigated when he was still with the company. According to Zatko's lengthy disclosure to Congress, he was told to downplay the seriousness of presentations to the company's board. He claimed that the measurement of "bot" accounts was a lie. Zatko's disclosure was called opportunist and an attempt to harm the company.
Some of the claims made by Zatko struck a nerve with the current workers.
The trial against Musk is scheduled to start in October.
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