Elon Musk Hurls Fraud Allegations At Twitter With Whistleblower's Claims Amid Legal Wrangle

Tesla Inc TSLA CEO Elon Musk has thrown more serious allegations at Twitter Inc TWTR, potentially dragging a legal battle between the two parties over the billionaire entrepreneur's attempt to back out of a $44-billion deal for the social media firm.

What Happened: Musk amended his earlier counter lawsuit against Twitter with allegations made by the company's former head of security, who turned whistleblower and recently testified to Congress, as per a Thursday court filing, Reuters reported.

He also alleged that Twitter concealed its non-compliance with a 2011 agreement with the Federal Trade Commission regarding user data, according to the report.

"Needless to say, the newest revelations make undeniably clear that the Musk Parties have the full right to walk away from the Merger Agreement," the amended filing read, as per Reuters.

Why It's Important: Twitter whistleblower Peiter "Mudge" Zeitko on Wednesday said before the Senate that during his last week at Twitter, the Federal Bureau of Investigation had informed the company of a Chinese government agent on its payroll. 

Zeitko's statement followed a similar allegation made earlier by him, raising worries about covert foreign interference on the microblogging site.

Analysts, however, are divided on the impact Zeitko’s latest claims will have on the court trial between Musk and Twitter next month, as a result of Twitter shareholders approving the Tesla chief’s deal to take the company private.

Musk has also demanded Twitter's former product chief testify about spam accounts that are central to his legal fight, Bloomberg reported.

Price Action: Tesla shares closed nearly 0.4% higher at $303.75 on Thursday, while Twitter shares closed nearly 0.6% up at $42.14 before slipping 0.7% in extended trading.

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