Federal authorities are 'investigating' Musk’s $44 billion Twitter deal

When will this ongoing saga end?
Loukia Papadopoulos
Is Elon Musk under federal investigation.jpg
Is Elon Musk under federal investigation?

Daniel Oberhaus/Flickr 

Elon Musk is under federal investigation over his takeover deal for Twitter, yahoo! reported on Friday after a court filing was made public on Thursday.

The focus of the investigation remains unclear

This would seem rather odd as at the beginning of the month, Musk agreed to finally purchase Twitter at his original offer of $54.20 a share, leading to a $44 billion deal.

Making matters even stranger is the fact that while the filing said he was under investigation, it did not specify what the focus was.

"This game of 'hide the ball' must end," the company did say in the court filing.

Twitter already sued Musk in July to force him to close the acquisition deal he had previously so eagerly agreed to. The company also revealed at the time that lawyers for the Tesla CEO had claimed "investigative privilege" when refusing to hand over documents the social media platform wanted.

In addition, the firm had put forward a request that Musk's attorneys produce their communications with federal authorities months ago. The lawyers did not comply.

In late September of 2022, however, Musk's attorneys did produce a "privilege log" that identified documents to be withheld including drafts of a 13 May email to the US Securities and Exchange Commission (SEC) and a slide presentation to the Federal Trade Commission.

The SEC has in the past questioned and investigated Musk's comments about the Twitter acquisition both in April and in June of 2022.

A misdirection?

Alex Spiro, an attorney for Musk, told Reuters that Twitter's current court filing is a "misdirection".

"It is Twitter's executives that are under federal investigation," he added.

The filing comes after a months-long ordeal that saw the billionaire propose a takeover, recant on the deal, and then get sued by Twitter to force the purchase through.

As previously mentioned, Musk's attempt to withdraw from the deal is based on his belief that Twitter's spam projections are far from accurate. Twitter, however, claims that less than 5 percent of Twitter's monetizable daily active users (mDAU) are spam or phony. Many real users, however, believe Twitter's response may not be entirely accurate.

After Musk made his latest offer, Twitter was reported to be considering whether to accept the proposal or not. This is partially due to the great distrust on both sides that led Twitter leaders to question whether the latest move by Musk was actually a legal maneuver.

The court held an emergency hearing on the morning of October 4th with both sides where Musk declared he was willing to drop the case. However, Twitter was reported to have demanded assurances that the court would oversee the process because of the distrust.

The ordeal is a complicated one and it does not seem that there is a solution around the corner. Both sides have behaved suspiciously and are now at a gridlock. What will happen next in this ongoing saga? Only time will tell.

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