Elon Musk Under Federal Investigation, Says Twitter

US federal authorities are allegedly investigating Elon Musk, amid his controversial $44 billion acquisition of Twitter.

The revelation comes in a court filing by Twitter, CNN reported, in which it is alleged that federal authorities are investigating Elon Musk – but it is unclear which federal agencies are involved and what specific actions they are concerned about.

Twitter did however hint at the reason, with Twitter’s filing merely saying that US authorities are looking into Musk’s “conduct” linked to the deal.

Musk conduct

According to CNN, Twitter’s court filing also accused Musk’s legal team of failing to produce draft communications with the Securities and Exchange Commission and a slide presentation to the Federal Trade Commission as part of the two sides’ ongoing litigation over whether Musk can walk away from the deal.

Musk first acquired a stake in Twitter in April this year, but denied at the time he was intending an acquisition or takeover.

Musk then accepted an offer of a seat on Twitter’s board of directors, but just days before joining the board, he suddenly declined.

Musk then made his takeover offer for Twitter and signed a deal, agreeing to purchase the firm for $54.20 per share.

Then for the next few months Musk made a number of allegations about the numbers of bot or spam accounts on the platform, before announcing in July he was terminating the deal he had signed, prompting Twitter to sue him.

After failing to delay the trial slated for 17 October, and faced with the prospect of a defeat in the  Delaware court trial, plus the prospect of having to pay a $1 billion penalty at the every least, Musk last week performed a speculator u-turn and said he was now willing to complete the acquisition.

The Delaware judge overseeing the dispute later last week paused the legal proceedings until 28 October, following a request from Musk.

Musk’s acquisition of Twitter however remains uncertain at the time of writing, as he needs to coral the financing from others, for the purchase. Musk in the meantime has been touting his “perfume, so he can buy Twitter.

Musk response

Meanwhile lawyers for Elon Musk have responded to Twitter’s Thursday filing – hitting back and alleging it is Twitter itself that is being investigated by federal authorities, CNN reported.

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

“Twitter’s executives are under federal investigation,” Spiro said in a statement to CNN. “This misdirection was sent by Twitter to try and uncover which of their assorted misconduct they are under investigation 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, CNN reported.

But its chairperson, Lina Khan, has told Congress in public testimony that if it’s determined Twitter executives were responsible for legal violations, the FTC “absolutely” would and “won’t hesitate” to hold those executives personally accountable.

CNN reported that in a separate filing on Thursday, Twitter also maintained that it did not instruct Zatko to burn several notebooks as part of a separation agreement, as Musk’s team had claimed in a filing earlier this month. Instead, Twitter claimed, Zatko destroyed the notebooks of his own volition.

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