Peter “Mudge” Zatko, the former head of security at Twitter, filed an explosive whistleblower disclosure, and in the days since those initial reports, the company has had to deal with increased legislative scrutiny, a decline in its stock price, and increased uncertainty in its high-stakes legal dispute with billionaire Elon Musk.
In the disclosure, Zatko claimed that the business has significant privacy and security flaws that could endanger customers, investors, and US national security. Additionally, he said that Twitter officials had lied to authorities and even the board of the business about its flaws.
With regard to the charges, Twitter (TWTR) has attacked Zatko and generally defended itself, claiming that the revelation portrays a “false picture” of the business and is “riddled with contradictions and falsehoods.” A Twitter representative stated that Zatko was let go for his “ineffective leadership and poor performance” in January.
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Lawmakers, regulators, cybersecurity experts, as well as Musk’s lawyers, have all reacted angrily to Zatko’s disclosure, raising the possibility that the allegations may have serious and long-lasting repercussions for the social media platform. It only gets worse because it happens at a time when Twitter is already dealing with a high level of apprehension among its staff, shareholders, and advertisers due to its upcoming contract with Musk.
The disclosure was sent last month to numerous US government agencies and legislative committees, including the Securities and Exchange Commission, the Federal Trade Commission, and the Department of Justice. It is around 200 pages long, including supporting exhibits. The disclosure was acquired from a top Democratic aide on Capitol Hill. DOJ, FTC, and SEC all declined to comment.
Following the statement on Tuesday, shares of Twitter dropped by 7%. Musk’s attempt to back out of the $44 billion acquisition deal for the platform was already hurting the company’s stock, which is now trading at just over 50% of its all-time high near $80 from last February.
Here is a glance at the reactions that came about as soon as the disclosure was reported:
Legislators and authorities begin to query
The Senate Judiciary Committee declared it will have a hearing with Zatko on Wednesday, the day after the admission was first revealed and The Washington Post, to go over his claims of security lapses and false assertions made by Twitter executives.
The hearing is scheduled for September 13, which also happens to be the day shareholders of Twitter will decide whether to support Musk’s $44 billion acquisition offer.
Sens. Dick Durbin and Chuck Grassley, the committee’s chair and leading Republican, both expressed grave concerns in response to Mr. Zatko’s allegations of pervasive security lapses and foreign state actor activity at Twitter. If these allegations are true, Twitter users all across the world may face severe threats to their data privacy and security.
Other US lawmakers have offered their opinions on the subject.
According to Rachel Cohen, a committee spokesperson, the Senate Intelligence Committee, which obtained a copy of the report, is taking the disclosure seriously and has scheduled a meeting to address the claims. Sen. Richard Blumenthal, the chair of the Senate subcommittee on consumer protection, urged the FTC in a letter on Tuesday to look into the allegations and, if warranted, to penalize and hold particular Twitter executives personally liable for security failings. Sen. Ron Wyden reiterated his demands for Twitter to employ safe, end-to-end encryption to shield its users’ direct messages from prying eyes on Wednesday.
In a letter to Twitter CEO Parag Agrawal on Thursday, members of the US House Committee on Homeland Security demanded that he respond to Zatko’s claims and detail Twitter’s preparedness for the 2022 midterm elections. Additionally, the Irish Data Protection Commission, Twitter’s primary European regulator, has stated that in light of the allegations, it is requesting information from the business.
Relevance to the Twitter-Musk Trial
The statement made by a whistleblower may have a significant impact on Twitter’s dispute with Musk regarding their acquisition agreement. The Tesla CEO, though, has been unusually quiet since the report first surfaced.
Musk posted a caricature of Jiminy Cricket, the conscience of Pinocchio in the Disney classic, along with the phrase “give a small whistle” on Tuesday. He also shared a screenshot of a section of a Washington Post article describing Twitter’s method for calculating spam bots. The latter problem has taken center stage in Musk’s effort to back out of the agreement. Twitter has stated that it adheres to the statistics it has made public and has accused Musk of deploying bots as a ruse to back out of an agreement he now regrets.
Good, skeptical interview with Mudge and his colleagues about his Twitter complaint from Time. It notes that while Frances Haugen supported her case against Facebook with thousands of documents, Mudge mostly just says “trust me” https://t.co/WwGRzRcz73 pic.twitter.com/o5oIcFGZex
— Casey Newton (@CaseyNewton) August 26, 2022
Although Musk hasn’t said anything about Zatko, it’s obvious that his lawyers are curious about the former security chief of Twitter. The billionaire’s legal team had subpoenaed Zatko in the case even before news of the disclosure was disclosed, according to Musk attorney Alex Spiro, who spoke on Tuesday.
In an early indication of how Musk’s side would utilize the fresh claims in his legal dispute, Spiro repeatedly brought up Zatko during a court hearing on the case on Wednesday. Spiro made the implication during the hearing that Twitter’s estimate for spam accounts and monetizable daily active users (MDA), a crucial metric it provides to investors, are not ones the billionaire’s team trusts, and that Musk’s team is looking for information that would enable them to test the measurements.
They have a financial incentive to deceive, Spiro claimed. “A whistleblower complaint has recently been made public and discusses the misleading information given.”
In the disclosure, Zatko made assertions that might potentially support Musk’s claims, including that Twitter does not have a reliable count of the number of spam and phony bot accounts on its network and that the firm has little motivation to do a complete census of such accounts. Additionally, Musk’s attorneys might try to use other allegations in the disclosure that have nothing to do with bots, such as claims that Twitter misled regulators like the Federal Trade Commission and the Securities and Exchange Commission about its privacy and security policies, as justification for his decision to back out of the agreement.
(Zatko told that his disclosure has nothing to do with the acquisition, that he doesn’t know Musk personally, and that he started writing down his worries before there was any sign that Musk was connected to Twitter.)
Twitter claims to let bots on its site, such as helpful bots that tweet out news notifications, but its rules forbid bots from spamming or abusing the network. The business claims it routinely challenges, suspends, and deletes accounts involved in platform manipulation and spam, eliminating generally more than a million spam accounts daily. Regarding the total number of accounts on the site and the total number of new accounts added daily, it declined to respond to CNN’s inquiries.
Twitter officials have been debunking the accusations publicly and working to contain internal backlash.
In an internal message to staff members that was able to get on Tuesday, Agrawal promised to contest the claims made in the disclosure and sought to reassure them, calling the claims “frustrating and difficult to read.”
Additionally, the topic was discussed during a Wednesday company-wide meeting that was regularly scheduled on Twitter. Zatko’s assertions were refuted by Agrawal in the opening remarks of the meeting. He claimed that the company has been the subject of a “false narrative” that “is actively threatening our integrity.” A Twitter employee revealed specifics of the call to
Sean Edgett, Twitter’s general counsel, stated in the meeting on Wednesday that after learning of the accusations made by Zatko, the firm contacted authorities and “different agencies around the world.”
In order to effectively combat bad actors and boost transparency about its efforts to improve platform health, Twitter on Thursday confirmed that it will consolidate its teams working to eliminate spam bots and poisonous content. This move was first reported by Reuters. If the reorganization is connected to the revelation, a spokesman did not explicitly react to that query.