Legal Troubles for Twitter and Elon Musk: Privacy Concerns, Layoffs, and Securities Fraud Allegations

Legal Troubles for Twitter and Elon Musk Privacy Concerns Layoffs and Securities Fraud Allegations
Legal Troubles for Twitter and Elon Musk Privacy Concerns Layoffs and Securities Fraud Allegations
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Twitter and the Federal Trade Commission (FTC) are currently in the midst of an investigation due to privacy concerns, but negotiations do not seem to be going well. The New York Times reported that Elon Musk, CEO of Twitter, was denied a meeting with the commission’s chair, Lina Khan, last year. Furthermore, senior Twitter lawyer Christian Dowell, who was heavily involved in the FTC conversations, has since quit.

Dowell joined Twitter in 2020 and advanced in the company after a number of Twitter’s senior attorneys left or were dismissed when Musk gained control of it in the fall of 2022. According to Bloomberg, Dowell most recently supervised Twitter’s product legal counsel, though he has not officially announced his resignation yet. He was “intimately involved” in the FTC negotiations and coordinated Twitter’s responses to FTC questions.

The FBI opened its current investigation into Twitter’s operations after Musk started mass layoffs that appeared to raise fresh security issues. The FTC’s inquiry grew more serious after security professionals left Twitter due to concerns that Musk might be infringing on the agency’s privacy injunction.

While the FTC investigation is still ongoing, Musk’s layoffs appear to have guaranteed that Twitter’s legal problems will only get worse. Twitter is not only pursuing legal action against the alleged ex-employee who leaked Twitter source code on Github, but it is also currently engaged in individual arbitration with hundreds, if not thousands, of ex-employees who were denied the opportunity to join a class-action lawsuit over allegedly unpaid severance and lost wages.

In an interesting turn of events, Musk recently changed his name on Twitter to “Mr. Tweet” after an attorney representing a group of shareholders suing Musk accidentally called him the name during a tense moment in the trial on Monday. The attorney, Nicholas Porritt, called the gaffe a “Freudian slip,” but Musk joked it was “probably an accurate description.”

Musk, who is the CEO and owner of Twitter as of late last year, has never shied away from using the platform. In fact, the interaction between Porritt and Musk came during a trial brought by Tesla shareholders who have accused Musk of committing securities fraud via tweet. Specifically, the shareholders accuse Musk of illegally manipulating Tesla’s stock price when he sent a 2018 tweet saying he was considering taking Tesla private at $420 per share with “funding secured.”

During his testimony, Musk defended the tweet, maintaining that he “wanted to make sure shareholders would know what my intent was.” He also said that he believed the Saudi Arabian Public Investment Fund would “unequivocally” help support his plan to take the company private. The deal never happened, and Musk accused the fund of “backpedaling” after the tweet was sent.

In conclusion, Twitter is currently facing legal troubles due to privacy concerns, and the negotiations with the FTC do not appear to be going well. Elon Musk has found himself in the middle of several legal battles, including accusations of securities fraud via tweet. Only time will tell how these legal battles will pan out for Twitter and Musk.

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