Elon Musk’s legal team subpoenaed Jack Dorsey, former CEO of Twitter, during the ongoing legal battle over the sale of the social media giant.
Musk made an offer to purchase Twitter for $44 billion earlier this year but now argues the company’s disclosure of its “fake or spam accounts” is not accurate, possibly as high as 33%, instead of Twitter’s reported 5%. As a result, a lower number of monetizable daily active users (mDAU) could justify lower company value. Musk has indicated his termination of the deal, citing the “bots” as reasoning, but Twitter has its sights set on forcing the deal completion.
Musk’s attorneys subpoenaed former Twitter CEO Jack Dorsey over documents related to “the impact or effect of false or spam accounts on Twitter’s business and operations, Twitter’s use of mDAU as a Key Metric.” The filing also requested Dorsey to provide information on “any process or workflow, other than the mDAU Audit and the suspension workflow, that Twitter uses, has used, or has discussed or considered using to detect and label accounts as spam or false.”
Musk has repeatedly argued that Twitter failed to provide accurate information about its user base. Nevertheless, Twitter claims Musk is required to go through with the purchase.
“Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests,” the lawsuit said. “Musk apparently believes that he — unlike every other party subject to Delaware contract law — is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away.”
Enter Twitter’s former head of security, well-known “ethical-hacker” Peiter “Mudge” Zatko, now turned whistleblower. Zatko filed a damning complaint against the social media giant to government authorities for failing to protect sensitive user data and lying about security issues weeks ahead of Musk’s Oct. 17 court date.
Zaptko filed a complaint with the U.S. Securities and Exchange Commission (SEC) and the Department of Justice (DOJ), as well as the Federal Trade Commission (FTC), as reported earlier by the Washington Post and CNN. The filing alleges Twitter’s lack of plugging cybersecurity holes, failure to upgrade its server infrastructure, and granting access to the company’s most sensitive controls make the platform a prime target for security breaches. As a result, it unleashes vulnerability to sabotage and spying by foreign actors.
The Wall Street Journal reported that earlier this month, a former Twitter employee was found guilty of spying for Saudi Arabia while employed by Twitter, passing along user information of critics of the Saudi Kingdom for large financial payments.
Much of the complaint dealt with the “bots” or fake and spam accounts on the platform, which coincides with Musk’s calls for accurate tallies of such accounts. Like the Tesla CEO, Zatko believes Twitter miscounts users by focusing on the mDAU only rather than all total daily users.
“There are many millions of active accounts that are not considered ‘mDAU,’ either because they are spam bots, or because Twitter does not believe it can monetize them,” Zatko’s complaint says.
Copies of the complaint were sent to the Senate Judiciary and Intelligence committees, aides of each panel said.
Sen. Chuck Grassley (R-Iowa), Senate Judiciary Committee’s top Republican, said the complaint raised severe national security concerns and privacy issues.
“Take a tech platform that collects massive amounts of user data, combine it with what appears to be an incredibly weak security infrastructure, and infuse it with foreign state actors with an agenda, and you’ve got a recipe for disaster,” he said.
Likewise, Sen. Dick Durbin (D-Ill.), chairman of the Senate Judiciary Committee, said, “If these claims are accurate, they may show dangerous data privacy and security risks for Twitter users around the world.”