Twitter Ordered to Hand Info on 9,000 Audited Accounts Over to Elon Musk
The world’s richest man, Elon Musk, was handed a win on Thursday by a Delaware judge in his attempt to terminate his $44 billion acquisition of Twitter.
Although Chancellor Kathaleen McCormick declared in her four-page ruling that Musk’s demands were “absurdly broad” and would “require Plaintiff to produce trillions upon trillions of data points,” she ordered Twitter to deliver data on over 9,000 accounts to his legal team.
These accounts had been randomly selected as part of Twitter’s fourth-quarter 2021 audit to estimate the percentage of fake accounts on their platform, according to Reuters.
McCormick noted this is referred to as a “historical snapshot.” She wrote: “I recognize that producing the historical snapshot is no small feat. Plaintiff represented that, with considerable effort, these documents could be produced in under two weeks, and Plaintiff shall strive to meet that timeline. In addition, Plaintiff must produce documents sufficient to show how those 9,000 accounts were selected for review.”
While it’s encouraging that McCormick ordered Twitter to provide the audit data despite their protests, the language in her ruling suggests she favors the company over Musk.
If we still lived in a world of equal justice under the law, Musk would likely prevail in the trial, which is scheduled to occur in October.
Shares of Twitter were trading at $40.38 as of Friday morning, down $13.82, or over 25 percent from the agreed-upon price of $54.20 per share.
In a July 8 letter to the company’s board of directors, Musk’s legal team stated that because Twitter had failed to provide data on the network’s number of “fake or spam” accounts, the Tesla CEO would not be going through with the deal. The letter said, “Twitter has failed or refused to provide this information. Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information.”
While Twitter claims that less than 5 percent of its accounts are bots, the Tesla and SpaceX CEO believes the true figure is far higher.
At a Wednesday court hearing, Twitter called Musk’s “focus on spam” accounts “legally irrelevant,” noting they’d always represented their numbers as “an estimate” and admitted that the actual number could be higher, Reuters reported.
When one considers that Musk faces a $1 billion penalty for abandoning the deal, even a 10-percent rate would be a material difference from what the company has led Musk to believe.
Musk received a major boost on Tuesday when CNN and The Washington Post reported they obtained copies of a whistleblower complaint filed last month with the Securities and Exchange Commission, the Department of Justice and the Federal Trade Commission last month by Twitter’s former head of security Peiter Zatko, in which he detailed the company’s allegedly deficient security practices.
The Post describes Zatko as “a widely admired hacker known as ‘Mudge'” who was hired by former CEO Jack Dorsey in November 2020 following a major security breach that compromised the accounts of several high-profile Twitter users, including Elon Musk and former Presidents Donald Trump and Barack Obama. He was fired by CEO Parag Agrawal in January 2022 for what a company spokeswoman said was “poor performance.”
Redacted copies of the document were sent to Congress. The Post said they had obtained their copy from “a senior Democratic aide on Capitol Hill.”
Zatko claimed he was fired after trying to “flag the security lapses to Twitter’s board and to help Twitter fix years of technical shortcomings and alleged non-compliance with an earlier privacy agreement with the Federal Trade Commission,” according to CNN.
He accused the company of engaging in egregiously lax security practices, which “pose a threat to its own users’ personal information, to company shareholders, to national security, and to democracy. … It [the complaint] also alleges that some of the company’s senior-most executives have been trying to cover up Twitter’s serious vulnerabilities, and that one or more current employees may be working for a foreign intelligence service.”
According to The Post, Zatko alleges the company “prioritized user growth over reducing spam. … Executives stood to win individual bonuses of as much as $10 million tied to increases in daily users, the complaint asserts, and nothing explicitly for cutting spam.”
Additionally, the complaint alleges that Agrawal lied in a May 2022 tweet that said Twitter was “strongly incentivized to detect and remove as much spam as we possibly can.”
Contacted by The Post for a comment, Twitter spokeswoman Rebecca Hahn said Zatko’s allegations appeared to be “riddled with inaccuracies” and that Zatko “now appears to be opportunistically seeking to inflict harm on Twitter, its customers, and its shareholders.”
She told The Post Zatko was fired “for poor performance and leadership.”
“Security and privacy have long been top companywide priorities at Twitter,” Hahn said. Since the breach in 2020, she said, the company has beefed up security standards. She added that Twitter removes more than a million spam accounts every day.
Yeah … no.
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