December 2, 2022

Elon Musk is under federal investigation for his deal with Twitter

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(CNN Business) — Federal authorities are investigating Elon Musk in connection with his $44 billion acquisition of Twitter, the social media platform said in a court filing Thursday.

It’s unclear which agencies may be conducting the investigation, and Twitter did not identify what specific conduct by Musk US officials might be investigating.

But the company’s court filing accused Musk’s legal team of failing to produce draft communications with the Securities and Exchange Commission and a slide presentation for the Federal Trade Commission.

Musk first tried to terminate the agreement in July, claiming that Twitter violated the agreement by misrepresenting the amount of spam and fake bot accounts on its platform. Twitter sued Musk to complete the acquisition, accusing the billionaire of using bots as a pretext to get out of a deal for which he developed buyer’s remorse after a market crash.

Last week, Musk proposed to proceed with his deal to buy the company at the originally agreed price of $54.20 per share. The judge who oversaw the dispute later in the week ruled to pause the legal proceedings until October 28 after a request from Musk.

In response to Thursday’s legal action filing by Twitter, Alex Spiro, Musk’s attorney, said it was designed to distract from Twitter’s own legal problems, which arose after the former head of security at the company, Peiter “Mudge” Zatko, accused Twitter of long-ignored security vulnerabilities in a whistleblower disclosure.

“Twitter executives are under federal investigation,” Spiro said in a statement to CNN. “This distraction was sent by Twitter to try to find out which of their various misconduct they are being investigated for.”

The Federal Trade Commission, which is responsible for enforcing the terms of a 2011 consent order with Twitter that Zatko alleges the company violated, has not publicly disclosed an investigation. But its president, Lina Khan, told Congress in public testimony that if Twitter executives are found to have been responsible for legal violations, they could “absolutely” be held personally accountable.

In a separate filing Thursday, Twitter also maintained that it did not order Zatko to burn multiple notebooks as part of a separation agreement, as Musk’s team had claimed in a filing earlier this month.

“Twitter did not ask Zatko to burn his own documents, much less require him to do so,” the Twitter filing read. “Twitter had no knowledge of Zatko’s notebooks and had no idea what information they contained.”



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