Twitter whistleblower's claims on bot accounts could support Elon Musk's exit from deal

The social media platform's former security chief has alleged it ignored spam accounts and misled regulators

The whistleblower filing comes as the social media company is embroiled in a legal battle with Tesla chief executive Elon Musk. AFP
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Twitter reportedly misled federal regulators about its defences against hackers and spam accounts, the social media company's former security chief Peiter Zatko has said in a whistleblower complaint.

In the 84-page complaint, Mr Zatko, a famed hacker more widely known as “Mudge”, alleged Twitter falsely claimed it had a solid security plan and that he had warned colleagues that half the company's servers were running out-of-date and vulnerable software, documents relayed by congressional investigators showed.

The whistleblower filing comes as the social media company is embroiled in a legal battle with Tesla chief executive Elon Musk after he said in July he was ending an agreement to buy the company in a $44 billion deal, claiming it had violated the deal's contract.

Mr Musk has accused Twitter of hiding information about how it calculates the percentage of bots on the platform. A trial is scheduled for October 17.

The whistleblower complaint against Twitter will help Mr Musk in his effort to walk away from the deal, legal experts say.

Mr Zatko, who was fired from Twitter earlier this year, said he had raised concerns at the company in early 2021 and was told by the head of site integrity that Twitter did not know how many bots were on the platform.

“We have already issued a subpoena for Mr Zatko and we found his exit and that of other key employees curious in light of what we have been finding,” Alex Spiro, a lawyer for Mr Musk, said in a statement.

Twitter sued Mr Musk in July to make him complete his proposed acquisition. Since then, dozens of people, banks, funds and other firms have been subpoenaed in the Delaware lawsuit.

At the centre of Mr Musk’s defence are the company’s disclosures about the quality of its customer base, as it is affected by spam and automated accounts.

Musk puts $44-billion deal for Twitter on hold

Musk puts $44-billion deal for Twitter on hold

Mr Zatko claims Twitter executives failed to disclose the true extent of such accounts on the platform. His complaint was reported earlier by The Washington Post and CNN.

The complaint was filed last month with the US Securities and Exchange Commission and the Department of Justice, as well as the Federal Trade Commission, The Washington Post reported. The complaint was also sent to congressional committees.

If Mr Zatko’s assertions are true, “that’s just the kind of smoking gun Mr Musk had to be pinning his hopes on”, Larry Hamermesh, a University of Pennsylvania law professor who specialises in merger and acquisition disputes, told Bloomberg.

Twitter said Mr Zatko was fired for cause and that his allegations and “opportunistic timing” seemed “designed to capture attention and inflict harm on Twitter, its customers and its shareholders”.

“Mr Zatko was fired from his senior executive role at Twitter in January 2022 for ineffective leadership and poor performance,” the company said in a statement.

“What we’ve seen so far is a false narrative about Twitter and our privacy and data security practices that is riddled with inconsistencies and inaccuracies and lacks important context.”

The whistleblower document alleges Twitter prioritised user growth over reducing spam. Executives stood to win individual bonuses of as much as $10 million tied to increases in daily users, as per the complaint, and nothing explicitly for cutting spam.

John Tye, founder of Whistleblower Aid and Mr Zatko's lawyer, said Mr Zatko has not been in contact with Mr Musk and began the whistleblower process before there was any indication of the Silicon Valley billionaire's involvement with Twitter, CNN reported.

Updated: August 24, 2022, 5:42 AM