Musk can use whistleblower in Twitter trial but court won't be delayed
Elon Musk CAN use Twitter whistleblower in his trial to get out of $44bn deal to buy the platform – but judge rules the case won’t be delayed to avoid stock price sliding further
- A judge will allow Elon Musk to include evidence from a Twitter whistleblower in the trial to get out his $44 billion takeover deal
- Former Twitter security chief Peiter Zatko will appear for a deposition to discuss his allegations that Twitter misled Musk about spam accounts on the site
- The judge, however, rejected Musk’s bid to delay the case by four weeks, saying it would risk further harm to Twitter, which has seen stock prices plummet
- The high-stakes trial is set to begin on October 17 in Delaware
Elon Musk will be able to include new evidence from a Twitter whistleblower as he fights to get out of his $44 billion deal to buy the social media company, but Musk won’t be able to delay the high-stakes October trial.
Chancellor Kathaleen McCormick, the head judge of Delaware’s Court of Chancery, denied Musk’s request on Wednesday to delay the trial by four weeks.
‘I am convinced that even four weeks’ delay would risk further harm to Twitter,’ McCormick wrote, affirming the trial will start next month.
Twitter stock has fallen more than 21 percent from the $54.20 a share Musk originally agreed to buy the company from in April. Shares of Twitter rose about 5 percent on Wednesday afternoon to $40.76.
McCormick, however, allowed Musk to add evidence related to whistleblower allegations by former Twitter security chief Peiter Zatko, who is scheduled to testify to Congress next week about the company’s poor cybersecurity practices.
A judge will allow Elon Musk (above) to include evidence from a Twitter whistleblower in the trial to get out his $44 billion takeover deal, but the case won’t be delayed
Former Twitter security chief Peiter Zatko will appear for a deposition this week to discuss his whistleblower allegations that Twitter misled Musk about spam accounts
Musk’s bid to delay the case by four weeks was rejected as the judge said it would risk further harm to Twitter, which saw stock prices plummet since April. Shares of Twitter rose about 5 percent on Wednesday afternoon to $40.76.
Twitter has sued Musk, asking the Delaware court to force him to go through with the deal he made in April to buy the company. Musk has countersued and a trial is set to start the week of October 17.
In a statement over the recent court ruling, Musk’s attorney, Alex Spiro, said in a statement: ‘We are hopeful that winning the motion to amend takes us one step closer to the truth coming out in that courtroom.’
Musk’s legal team has argued that the allegations made by Zatko to U.S. officials may help bolster Musk’s claims that Twitter misled him and the public about the company’s problem with fake and ‘spam’ accounts.
Zatko, who goes by the nickname Mudge in the hacking community, filed a damning whistleblower complaint last month alleging the social media giant were not forthcoming to the public and Musk about its security practices.
He accused Twitter of years of ‘material misrepresentation and omissions’ about security and privacy protections, claiming company executives have ‘lied’ about the number of spam or bot accounts.
Zatko went on to explain that while employees are encouraged not to count spam accounts as ‘monetizable active users’ — a metric Twitter provides to advertisers — they have little incentive to detect spam accounts among the large number of accounts that do not count as mDAUs.
Zatko, who goes by the nickname Mudge, accused Twitter of years of ‘material misrepresentation and omissions’ about security and privacy protections, claiming company executives have ‘lied’ about the number of spam or bot accounts.=
Zatko specifically pointed to a tweet Agrawal posted back in May that said Twitter was ‘strongly incentivized to detect and remove as much spam as we possibly can,’ saying it was a ‘lie’
By 2021, Zatko wrote, he asked Twitter’s head of site integrity roughly how many accounts are spam and was told ‘We don’t really know.’
‘Deliberate ignorance was the norm among the executive leadership team,’ Zatko claims in the whistleblower complaint.
He added that Twitter deployed ‘moistly outdated, unmonitored simple scripts plus overworked, inefficient, understaffed and reactive human teams’ to detect bot accounts.
He also took aim at a tweet Agrawal posted back in May that said Twitter was ‘strongly incentivized to detect and remove as much spam as we possibly can.’
The complaint says ‘Agrawal’s tweet was a lie,’ and added: ‘Agrawal knows very well that Twitter executives are not incentivized to accurately ‘detect’ or report total spam bots on the platform.’
Musk is set to face off against Twitter executives in a federal trial at the Delaware Chancery Court (pictured) in October
The company has strongly denied these claims, but Musk’s legal team asked Zatko to appear for a deposition this week.
Lawyers have also requester further information on any reports about privacy vulnerabilities that Zatko may have sent to Twitter CEO Parag Agrawal or other top employees and are asking the company to provide more information about the section of Twitter’s annual report that discusses fake accounts.
He has argued for weeks that company executives misled him about the number of fake accounts on the platform — which he relied upon when he agreed to the acquisition.
Wednesday’s ruling is yet another win for Musk after McCormick ruled last week that Twitter executives have to surrender more data to the Tesla CEO about its fake accounts.
She ordered Twitter to hand over data on 9,000 accounts the firm audited at the end of 2021, which opens the door for that information to be used in Musk’s effort to quit the $44 billion deal.
‘Some additional data from plaintiff (Twitter) seems warranted,’ McCormick wrote, without elaborating, in her four-page ruling.
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