Whistleblower Accuses Twitter of Cybersecurity Negligence

Twitter app logo is seen in this illustration taken on August 22, 2022. (Reuters)
Twitter app logo is seen in this illustration taken on August 22, 2022. (Reuters)
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Whistleblower Accuses Twitter of Cybersecurity Negligence

Twitter app logo is seen in this illustration taken on August 22, 2022. (Reuters)
Twitter app logo is seen in this illustration taken on August 22, 2022. (Reuters)

A former head of security at Twitter alleged that the company misled regulators about its cybersecurity defenses, privacy protections and its ability to detect and root out fake accounts, according to a whistleblower complaint filed with US officials.

The revelation could create serious legal and financial problems for the social media platform, which is currently attempting to force Tesla CEO Elon Musk to consummate his $44 billion offer to buy the company.

Peiter Zatko, Twitter's security chief until he was fired early this year, filed complaints last month with the US Securities and Exchange Commission, the Federal Trade Commission and the Department of Justice. The legal nonprofit Whistleblower Aid, which is working with Zatko, confirmed the authenticity of a redacted copy of the complaint posted online by the Washington Post.

Among Zatko's most serious accusations is that Twitter violated the terms of a 2011 FTC settlement by falsely claiming that it had strong security measures in place to protect the security and privacy of its users. Zatko also accuses the company of deceptions involving its handling of “spam" or fake accounts, an allegation that is at the core of Musk's attempt to back out of the Twitter takeover.

Shares of Twitter Inc. slid 5.4% Tuesday. Zatko didn't immediately respond to a request for comment Tuesday. But he told the Post he “felt ethically bound” to come forward.

Better known by his hacker handle “Mudge,” Zatko is a highly respected cybersecurity expert who first gained prominence in the 1990s and later worked in senior positions at the Pentagon’s Defense Advanced Research Agency and Google.

He joined Twitter at the urging of then-CEO Jack Dorsey in late 2020, the same year the company suffered an embarrassing security breach involving hackers who broke into the Twitter accounts of world leaders, celebrities and tech moguls, including Musk, in an attempt to scam their followers out of bitcoin.

Twitter said in a prepared statement Tuesday that Zatko was fired for “ineffective leadership and poor performance” and said the “allegations and opportunistic timing appear designed to capture attention and inflict harm on Twitter, its customers and its shareholders.” The company called his complaint “a false narrative” that is “riddled with inconsistencies and inaccuracies and lacks important context.”

Zatko's attorneys, Debra Katz and Alexis Ronickher, said Twitter's claim about his poor performance is false and that he repeatedly raised concerns about “grossly inadequate information security systems” with top executives and Twitter's board of directors. The lawyers said that in late 2021, after the board was given “whitewashed” information about those security problems, Zatko escalated his concerns, “clashed” with CEO Parag Agrawal and board member Omid Kordestani and was fired two weeks later.

The 84-page complaint describes a broken corporate culture at Twitter that lacked effective leadership and where Zatko said top executives practiced “deliberate ignorance” of pressing problems. His description of Dorsey’s leadership style is particularly scathing, saying the Twitter founder was “extremely disengaged” during the last months of his tenure as CEO to the point where he would not even speak during meetings on complex issues facing the company.

Zatko said he heard from colleagues that Dorsey would remain silent for “days or weeks.” Dorsey announced he was stepping down as Twitter CEO in November 2021.

The disclosure says Twitter offered no monetary incentives for improving security and platform integrity, although the company did offer $10 million bonuses last year for top executives who could generate short-term user growth.

Among Zatko’s damning accusations of cybersecurity malpractice: Software and security updates were disabled on more than a third of employees’ computers -- unduly exposing them to malware -- and it was common for people to install “whatever software they wanted on their work systems.” Such lapses are typically considered cardinal sins in cybersecurity.

Whistleblower Aid said it is legally precluded from sharing Zatko's statement. The same group worked with former Facebook employee Frances Haugen, who testified to Congress last year after leaking internal documents and accusing the social media giant of choosing profit over safety.

A spokesperson for the US Senate's intelligence committee, Rachel Cohen, said the committee has received Zatko's complaint and "is in the process of setting up a meeting to discuss the allegations in further detail. We take this matter seriously.”

Sen. Dick Durbin, an Illinois Democrat, said in a prepared statement that if the claims are accurate, “they may show dangerous data privacy and security risks for Twitter users around the world.”

Among the most alarming complaints is Zatko’s allegation that Twitter knowingly allowed the Indian government to place its agents on the company payroll where they had “direct unsupervised access to the company’s systems and user data.”

A 2011 FTC complaint noted that Twitter’s systems were full of highly sensitive data that could allow a hostile government to find precise location data for specific users and target them for violence or arrest.

Zatko also describes “deliberate ignorance” by Twitter executives on counting the millions of accounts that are automated “spam bots" or otherwise have no value to advertisers because there is no person behind them.

Alex Spiro, an attorney representing Musk in his effort to back out of his Twitter acquisition deal, said lawyers have issued a subpoena for Zatko. “We found his exit and that of other key employees curious in light of what we have been finding,” Spiro wrote in an email Tuesday. Spiro said Zatko and Musk have not been in contact at any time this year.



Meta Shows Strong Growth as AI Spending Surges

The Meta logo is seen at the Vivatech show in Paris, France, Wednesday, June 14, 2023. (AP)
The Meta logo is seen at the Vivatech show in Paris, France, Wednesday, June 14, 2023. (AP)
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Meta Shows Strong Growth as AI Spending Surges

The Meta logo is seen at the Vivatech show in Paris, France, Wednesday, June 14, 2023. (AP)
The Meta logo is seen at the Vivatech show in Paris, France, Wednesday, June 14, 2023. (AP)

Facebook owner Meta saw net income and revenues top expectations on Wednesday as the company said it would expand investments into artificial intelligence, drawing nervousness from investors.
The social media behemoth, which is also the parent company of Instagram and WhatsApp, said net profit in the third quarter was $15.7 billion -- up 35 percent on the same period last year, AFP said.
Revenues rose 19 percent to $40.6 billion, slightly higher than analyst estimates.
But investors sent Meta shares lower in after hours trading over the outlook for AI spending in the months ahead and another big loss at its virtual and augmented reality arm, Reality Labs.
"Our AI investments continue to require serious infrastructure, and I expect to continue investing significantly there, too," Meta's founder and chief executive Mark Zuckerberg told analysts.
"We haven't decided on a final budget yet, but those are some of the directional trends," he added.
Meta's share price slipped nearly three percent after its earnings results were published.
Like its Big Tech peers, Meta is rushing into artificial intelligence as it tries to build revenue streams away from its social media core business.
In recent months Zuckerberg has put most of his attention and spending on the company's AI innovations that have been rolled out as chatbots across its platforms or used to upgrade its ad tech.
On Wednesday, Meta once again raised its capital investment outlook: for 2024 alone, it is forecasting a range of $38-40 billion, compared with $37-40 billion previously, much of it for AI.
'Rising costs'
Investors "were a little disappointed by the rising costs" said Jasmine Enberg of Emarketer.
"It's going to take longer time to pay off" than some had hoped, she added.
In the first quarter this year, the spending had already caused concern among investors, despite a doubling of earnings.
But a quarter later, Meta's results impressed investors with a further surge in profits, showing that its core ad business could support the investments.
"Meta's solid revenue growth in the quarter will help stave off investor concern about its AI investments," said Debra Aho Williamson of Sonata Insights, who added that these investments were making it easier to post ads on the platforms.
However, she warned, that the full impact of consumer facing AI "won't be felt until 2025 or beyond."
Reactions were positive last month when the company unveiled its Orion augmented reality glasses, which remain experimental but bolstered confidence that Meta will be a leader in the AI wearable space.
Meta also hopes to ride on the excitement of its Ray-Ban Meta smart glasses, which it developed with EssilorLuxottica, the European eyewear giant.
Analysts believe that the glasses could be a hot item during the end-of-year holiday season.
But the recurring losses at Reality Labs, the VR division, continued to weigh on investors minds. The division posted $270 million in revenues in the third quarter -- and $4.4 billion in operating losses.