In context: Less than a week after a former Twitter security chief blew the whistle on the company's security policies and the cover-up of platform vulnerabilities, Elon Musk's legal team has subpoenaed him to testify in its ongoing legal action to back out of the $46.5 billion acquisition. Peiter "Mudge" Zatko is scheduled for a September 9 deposition.
Musk is looking for evidence that refutes Twitter's claim that spam and false accounts comprised less than five percent of monetizable daily active users (mDAUs) during the fourth quarter of 2021. The subpoena requests any documents Zatko might have pertaining to the metric Twitter uses for counting mDAUs and anything related to the platform's alleged spam issues. Musk's legal team also finds the timing of Twitter's firing of Zatko and other key employees highly suspect.
Last week, Zatko alleged that senior executives at Twitter covered up vulnerabilities, misled the board and regulators, failed to delete user data, and did not have the means to conduct accurate audits to determine the number of bot accounts. He further claims that CEO Parag Agrawal asked him to provide false and misleading documents in 2021. Twitter adamantly denies the allegations.
First, let me state the obvious: spam harms the experience for real people on Twitter, and therefore can harm our business. As such, we are strongly incentivized to detect and remove as much spam as we possibly can, every single day. Anyone who suggests otherwise is just wrong.— Parag Agrawal (@paraga) May 16, 2022
Agrawal tweeted that Twitter is "strongly incentivized" to find and delete spam daily, but Zatko claims that statement was a lie. On the contrary, he insists that Twitter's head of site integrity said they had no idea how many fake accounts there are, nor do execs wish to know the exact figures since it would probably harm Twitter's public image and share price.
According to Zatko's complaint to the SEC, FTC, and DoJ, Twitter lied to Musk about the "prevalence" of bots and spam accounts on the service. If this allegation proves true, Twitter not only engaged in misleading a potential buyer of the company, it may have broken federal laws when it filed its Form 10-K with the SEC.
Initially, the acquisition was considered ironclad as either party would have to pay a $1 billion penalty for backing out of the buy. When Musk tried to wiggle out, Twitter filed suit, claiming the billionaire was breaching his obligation. Musk then filed a countersuit alleging Twitter was not forthcoming with fake account numbers and misled him during his due diligence. A trial is slated for October 17.
Zatko's allegations have caught the attention of Congress, which opened an investigation into his claims. He is scheduled to testify before the Senate Judiciary Committee on September 14.