Elon Musk‘s lawyers have subpoenaed a former security chief at Twitter who claimed company executives knew about the site’s lax security and provided the public with false statements.
Peiter Zatko, who goes by the nickname Mudge in the hacking community, filed a damning whistleblower complaint last month alleging the social media giant were not forthcoming to the public and Musk about its security practices.
He accused Twitter of years of ‘material misrepresentation and omissions’ about security and privacy protections, claiming company executives have ‘lied’ about the number of spam or bot accounts.
The company has strongly denied these claims, but Musk’s legal team is now asking Zatko to appear for a deposition on September 9 in the billionaire’s ongoing legal battle to back out of his $44 billion takeover of Twitter.
Lawyers have also requester further information on any reports about privacy vulnerabilities that Zatko may have sent to Twitter CEO Parag Agrawal or other top employees and are asking the company to provide more information about the section of Twitter’s annual report that discusses fake accounts.
The move comes as the Tesla CEO prepares to face off against Twitter executives in federal court in October.
He has argued for weeks that company executives misled him about the number of fake accounts on the platform — which he relied upon when he agreed to the acquisition.
Peiter Zatko, the former head of security at Twitter, has been summoned by Elon Musk’s attorneys to give a deposition as part of the billionaire’s continuing legal struggle to renegotiate his $44 billion purchase deal with the firm. Last month, Zatko filed a devastating whistleblower case claiming that the social media behemoth misled the public and Musk about its security procedures.
Former Twitter security head Zatko prepared his whistleblower case for months before submitting it to the Securities and Exchange Commission, Federal Trade Commission, and Department of Justice in July.
According to Business Insider, it featured a section labeled “Lying about Bots to Elon Musk” and accuses Twitter officials of exaggerating how thoroughly company monitors and eliminates bots and spam accounts.
He especially targeted Agrawal’s tweet from May, which said that Twitter was “highly encouraged to identify and eliminate as much spam as we possibly can.”
Agrawal “knows very well” that Twitter executives are not encouraged to correctly “identify” or report total spam bots on the network, according to the lawsuit, which also claims that “Agrawal’s message was a falsehood.”
While staff are urged not to classify spam accounts as “monetizable active users,” a measure Twitter supplies to advertisers, Zatko continued by saying that since there are so many accounts that do not qualify as mDAUs, there is no motivation for them to do so.
According to Zatko, when he queried Twitter’s head of site integrity about the proportion of spam accounts, he was told, “We don’t really know,” in 2021.
According to Zatko’s whistleblower report, the senior leadership team’s “deliberate ignorance” was the norm.
In order to identify bot accounts, he said, Twitter used “moistly obsolete, unmonitored basic scripts and overworked, inefficient, underfunded and reactionary human workers.”
In order for Musk’s lawyers to use Zatko’s arguments he would either have to amend his countersuit or file a complaint with the Securities and Exchange Commission
Zatko called out Agrawal’s claim that Twitter was “highly motivated to identify and delete as much spam as we possibly can” in a tweet he sent back in May, calling it a “fraud.”
However, Musk will need to either amend his countersuit against Twitter or lodge a complaint with the Securities and Exchange Commission, which is also supervising three cases against the Tesla CEO, if he intends to use any of those allegations in his attempt to back out of his acquisition of the social media giant.
The New York Times notes that Musk would need the Delaware Chancery Court’s approval to change the countersuit against Twitter, and that judge Kathleen St. J. McCormick may be hesitant to grant him permission before the trial begins in October.
Musk’s legal team would then have the option of suing Twitter for securities fraud on the grounds that he has the right to get out of the agreement under securities laws.
They could contend that Twitter’s most recent annual report should have included information on Zatko’s worries, which Musk’s lawyer, Alex Spiro, hinted at at a hearing last week.
But it might also become a little hazy since the regulator is already looking into the Tesla CEO because he failed to declare his purchase of Twitter on time and failed to give the company enough advance notice that a takeover offer was imminent.
He has also had run-ins with the SEC in the past, which demanded that all of Musk’s tweets be watched after accusing him of artificially raising stock prices.
Most recently, he was criticized by a U.S. court for attempting to evade a deal with the SEC that called for control of his Tesla tweets.
In a federal trial scheduled to begin in October in the Delaware Chancery Court, Musk will square off against Twitter executives.
Nevertheless, Musk has had some success in his attempts to renegotiate his contract with Twitter.
Judge Kathleen McCormick ordered last week that Twitter officials must provide the Tesla CEO additional information regarding the company’s phony accounts.
She ordered that Twitter provide over information on 9,000 accounts that the company reviewed by the end of 2021, opening the possibility for Musk to use the data in his attempt to renegotiate the $44 billion agreement.
In her four-page decision, McCormick said, “Some further data from plaintiff (Twitter) is necessary,” but she did not elaborate.
Additionally, a letter made public on Wednesday said that the Securities and Exchange Commission had questioned the business in June on its approach to identifying erroneous or spam accounts as well as “the underlying judgements and assumptions applied by management.”
The business thinks that the approach was appropriately disclosed in its annual report submitted for 2021, according to the legal firm Wilson Sonsini of Palo Alto, California, in response to the SEC in a letter dated June 22.
According to the letter, Twitter conducts an internal analysis of representative accounts to determine its estimates of fraudulent accounts.
The staff choose the accounts at random while adhering to a complicated set of guidelines “that define spam and platform manipulation.”
The letter said that if an account breaks one or more of the guidelines, it is presumed to be fake. Multiple qualified personnel are looking into the bogus accounts, it said.
According to the letter, the quantity of phony accounts “represents the average false or spam accounts in the samples throughout each monthly study period within a quarter.”
Less than 5% of Twitter’s “monetizable” daily active users during the fourth quarter of last year, which the SEC had raised concerns about, were false accounts, it said.
According to company management, there are now 238 million active monthly users, and 1 million spam accounts are deleted every day.
Both numbers are of relevance to the SEC because Twitter utilizes them to entice advertisers, whose payments account for little more than 90% of the business’s income.