After suffering a defeat of sorts last week, when the Chancery Court denied the motion put forth by Elon Musk’s lawyers to delay the upcoming legal showdown between the CEO of Tesla and Twitter, today’s Congressional testimony by Twitter’s former head of security is ticking all of the right boxes for the world’s richest person. As we’ve continued to note ad nauseum over the past few weeks, Elon Musk and Twitter are scheduled for a high-stakes bout of legal sparring in the Delaware Court of Chancery in October. At the heart of this dispute lies Musk’s decision to simply walk away from a legally binding agreement to acquire Twitter at $54.20 per share while citing the uncertainty around the quantum of bots or fake accounts that constitute a part of Twitter’s monetizable Daily Active Users (mDAUs) metric as the casus belli. Twitter, on the other hand, believes that its inability to definitively measure its mDAUs does not constitute a valid reason for Musk’s abandonment of the deal. Well, a whistleblower complaint by Twitter’s head of security has now further muddied this already-convoluted legal picture while strengthening Elon Musk’s proverbial hands. To wit, back in August, Washington Post published a whistleblower complaint that was sent to Congress back in July. The complaint was lodged by Peiter “Mudge” Zatko, who was the social media giant’s security tzar and was fired back in January for allegedly raising the issue of chronic mismanagement at Twitter, including security lapses, technical shortcomings, and non-compliance with an already-signed privacy agreement with the Federal Trade Commission (FTC). Critically, Mudge alleged that Twitter’s executives have neither the resources nor the willingness to investigate the true quantum of bots that populate the social media platform. Bear in mind that Twitter has already signed a non-disclosure agreement (NDA) with Mudge. However, Congressional whistleblower complaints are not covered by NDAs, hence this latest addition to the ongoing saga between Elon Musk and Twitter. Last week, the Court of Chancery’s Judge Kathaleen St. Jude McCormick denied the motion filed by Elon Musk’s lawyers to delay the trial. However, the court did allow Musk to incorporate Mudge’s whistleblower complaint in his counterclaim against Twitter.
— Eamon Javers (@EamonJavers) September 13, 2022 This brings us to the crux of the matter. In his Congressional testimony today, Pieter “Mudge” Zatko has alleged that Twitter’s leadership is “misleading the public, lawmakers, and even its own board of directors.”
— Eamon Javers (@EamonJavers) September 13, 2022 In what might appear as music to Elon Musk’s ears, Mudge said, “They don’t know what data they have, where it lives or where it came from, so unsurprisingly, they can’t protect it.” He added that a Twitter employee “could take over the accounts of all the senators in this room.” In a related development, Senator Grassley has revealed that the Twitter whistleblower complaint included the bombshell claim that the FBI had, in fact, notified Twitter of the existence of at least one Chinese agent in the company. Apparently, this development took place just a week before Mudge was fired. Meanwhile, the high-stakes game of cat and mouse between Elon Musk and Twitter continues.
