Twitter subpoenas Binance and a dozen more firms over $44B Musk deal

Bankers and advisers who backed Tesla ( TSLA ) CEO Elon Musk’s $44 billion bid for Twitter ( TWTR ) have been hit with a flood of new subpoenas from the social media lawyers. These lawyers want to know what happened in Musk’s private negotiations leading up to the now-disputed deal.

On Tuesday, Twitter filed more than a dozen subpoenas in its fast-track lawsuit to force Musk to go through with the deal. The filings addressed to Musk’s advisers and prospective lenders — including Binance, Factorial Funds, Benefit Street, Bandera Partners, Founders Fund Growth II Management — add to several others issued to Musk̵[ads1]7;s bankers, investors and associates on Monday. Tesla ( TSLA ) and SpaceX were also served with similar claims.

Specifically, the subpoenas demand that Musk’s advisers and supporters hand over documents and communications that either support or refute Musk’s suggestion that Twitter has underreported the number of fake or “spam” accounts on the social media site.

Musk claims he’s pulling out of the deal because Twitter isn’t giving him data on the number of fake accounts, known as bots, operating on its platform — and in some cases spreading disinformation. According to Musk, Twitter’s public representations of bot prevalence are misleading, exceeding the estimated less than 5% of mDAUs, or monetized daily active users.

Twitter, on the other hand, says that it has long represented that the estimate may be wrong, and that Musk’s bot problem is a pretext for withdrawing from the agreement. Twitter adds that Musk also deliberately tried to tank the deal with a series of disparaging tweets.

Twitter subpoenas Binance and a dozen more firms over B Musk deal

In this photo illustration, Tesla and SpaceX CEO Elon Musk’s Twitter profile is shown on a mobile phone screen in Ankara, Turkiye on April 18, 2022. Twitter announced that it has accepted Elon Musk’s offer to be acquired for $44 billion. (Photo by Celal Gunes/Anadolu Agency via Getty Images)

In separate subpoenas directed at Binance and others, Twitter is asking the companies to turn over all documents and communications related to Musk’s May 15 Tweet alleging “a chance” that Twitter’s percentage of bots and/or fake or spam accounts “could be over 90 % of daily active users.”

Twitter posts from accounts of @elonmusk and @BLKMDL3 May 15, 2022

Twitter posts from accounts of @elonmusk and @BLKMDL3 May 15, 2022

The request goes on to demand all documents regarding another Musk Tweet on May 17 that reads “20% fake/spam accounts, while 4x what Twitter claims, could be much higher.”

Twitter post from the account of @elonmusk on May 17, 2022

Twitter post from the account of @elonmusk on May 17, 2022

The subpoenas further seek from the companies “drafts or iterations of any plans” related to Twitter’s fake or spam accounts, along with any media communications regarding the spam accounts, and documents addressing Twitter’s SEC disclosures about spam.

While Twitter’s lawyers argue that under the merger agreement the company did not have to hand over the bot data he requested, his lawyers wrote in a July 8 letter to end the deal that Musk needed the fake account information for his funding.

The bot information, Musk’s lawyers wrote, is needed to “facilitate Musk’s financing and financial planning for the transaction, and to participate in transition planning for the business…”

For Musk’s part, his lawyers also issued subpoenas seeking information related to Twitter’s end of the transaction. His lawyers issued subpoenas to Goldman Sachs and JPMorgan, as well as boutique investment bank Allen & Co.

Twitter’s subpoena requests on Monday sought documents and communications from Musk’s associates and investors, including Silicon Valley investors Chamath Palihapitiya, David Sacks, Joe Lonsdale, Steve Jurvetson, Marc Andreessen, Jason Calacanis, Keith Rabois; and from financial advisors Credit Suisse and Morgan Stanley.

A Delaware Chancery Court judge granted Twitter a five-day trial in the case, which is set to begin on October 17.

Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @alexiskweed.

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