Elon Musk sends a third message to Twitter and the SEC to end the deal

Elon Musk has sent a third letter to Twitter seeking to end his $44 billion acquisition of the company. Musk’s legal team cited Twitter’s multimillion-dollar severance package to former security chief and whistleblower Peiter Zatko as a violation of the merger agreement and a reason to end the deal. The letter, dated September 9, was sent to Twitter’s chief legal officer Vijaya Gadde, and was included in a declaration Twitter made with the SEC on Friday (which you can read at the bottom of this article).

Last month, Zatko made headlines by accusing Twitter of misleading investors about the number of bots on the service, failing to delete user data, and poor security practices, among other things. Musk jumped on the allegations, citing them in his second termination letter and challenging Zatko to testify in the lawsuit. Zatko was to be deposed on Friday.

Elon Musk sent his first letter of resignation in July, saying that Twitter was misleading him about the number of bots on his platform and that the company would not give him access to the information he needs to make his own decisions. This is despite the fact that he was able to access the “firehose” API that contains every tweet.

On Thursday the Wall Street Journal reported that Twitter had agreed to pay Zatko about $7 million before leaving the company, in connection with lost compensation after he and the company negotiated wages for months. Musk’s lawyers cite another reason why his deal to acquire the social media company would not go through. The purchase agreement prohibits Twitter from providing extraordinary severance or termination payments. According to the log, the settlement isn’t particularly strange given that Zatko was an executive who left the company, but it seems Musk disagrees. (The letter also states that Musk wasn’t aware of the divorce agreement until Twitter filed it with the court.)

Whether Musk can actually end the deal is a matter before a Delaware court after Twitter sued Musk in July for trying to cancel the deal. Chancellor Kathaleen McCormick has already ruled that Musk may use Zatko’s allegations to support his case, and that there will be a “limited” discovery of documents related to the whistleblower’s report. In August, Musk filed the second denunciation, citing the original reports.

The trial begins on October 17. Twitter did not immediately respond to a request for comment.