Elon Musk is under federal investigation over his Twitter deal, Twitter claims

Elon Musk is under federal investigation over his Twitter deal, Twitter claims
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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 not clear which agencies might be conducting the investigation, and Twitter hasn’t identified what specific actions by US officials Musk might be investigating. Twitter’s filing says only that authorities are investigating Musk’s “conduct” in relation to the deal.

The company’s court filing elsewhere accused Musk’s legal team of failing to submit a draft notice to the Securities and Exchange Commission and a slide presentation to the Federal as part of both sides’ ongoing litigation over whether Musk can withdraw from the transaction to submit trade commission.

Musk first attempted to end the deal in July, alleging that Twitter violated its mutual purchase agreement by misrepresenting the number of spam and fake bot accounts on its platform. Twitter sued Musk to complete the acquisition, accusing the billionaire of using bots as an excuse to end a deal he engineered as buyer remorse after a market downturn.

Last week, Musk suggested to continue with its deal to buy the company at the originally agreed price of $54.20 per share. The judge will oversee the dispute later in the week ordered to stay the trial through Oct. 28 at the request of Musk.

In response to Twitter’s filing Thursday, Alex Spiro, Musk’s attorney, said to distract from Twitter’s own legal troubles, which arose after the company’s former head of security, Peiter “Mudge” Zatko, accused Twitter of long-ignoring security flaws and Whistleblower Disclosure.

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

The Federal Trade Commission responsible for enforcing the terms of a 2011 consent order with Twitter that Zatko claims the company violated, has not publicly announced an investigation. But its Chair, Lina Khan, has publicly testified to Congress that if the FTC finds Twitter executives responsible for violations of the law, it will “absolutely” and “not hesitate” to hold those executives personally accountable.

In a separate filing Thursday, Twitter also claimed that it did not direct Zatko to burn multiple notebooks as part of a separation agreement, as Musk’s team claimed in a filing earlier this month. Instead, Twitter claimed, Zatko destroyed the notebooks at his own request.

“Twitter did not ask Zatko to torch his own documents, let alone request it,” Twitter’s filing said. “Twitter had no knowledge of Zatko’s notebooks or what information they contained.”

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