Elon Musk has a backup plan to kill his Twitter takeover

If the bot argument doesn't work, Musk will cite whistleblower Peiter 'Mudge' Zatko.

Adrees Latif / reuters

Elon Musk has filed an updated notice to kill his $44 billion Twitter acquisition by citing whistleblower Peiter Zatko, Twitter's former head of security. In a filing to the US Securities and Exchange Commission (SEC), Musk alleged that Twitter "has not complied with its contractual obligations" due to the "extreme, egregious deficiencies" alleged by Zatko.

Musk filed his initial bid to terminate the acquisition agreement on July 12th because of "false and misleading representations" made by Twitter, alleging that it "dramatically" understated the number of spam and fake accounts. Twitter sued Musk in July to force him to honor his agreement, saying that he "apparently believes that he... is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk way." Musk filed a countersuit later that month.

With the updated filing, Musk's lawyers said that Zatko has revealed "additional and distinct bases to terminate the merger agreement," and that Twitter was in "material noncompliance" with its FTC obligations. Specifically, they said that Twitter is "uniquely vulnerable to systemic disruption resulting from data center failures or malicious actors," something the company "ignored and sought to obfuscate."

Yesterday, Musk subpoenaed Zatko for a deposition on September 9th, requesting materials related to how Zatko’s tenure at Twitter ended and what stock, if any, he owns in the company. It also requested documents that may indicate any illegal activity by Twitter. Twitter and its CEO Parago Agrawal have disputed Zatko's assertions, laid out in a lengthy whistleblower complaint against the company.

A court case between Musk and Twitter is set to go to trial in October. On top of that, US Senate and Congressional committee leaders announced that were investigating Zatko's claims, saying they "raise serious concerns" about the company's security and other issues.