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.



Microsoft Beats Expectations, But AI Concerns Force Shares Down

FILE - The Microsoft logo in Issy-les-Moulineaux, outside Paris, France, April 12, 2016. (AP Photo/Michel Euler, File)
FILE - The Microsoft logo in Issy-les-Moulineaux, outside Paris, France, April 12, 2016. (AP Photo/Michel Euler, File)
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Microsoft Beats Expectations, But AI Concerns Force Shares Down

FILE - The Microsoft logo in Issy-les-Moulineaux, outside Paris, France, April 12, 2016. (AP Photo/Michel Euler, File)
FILE - The Microsoft logo in Issy-les-Moulineaux, outside Paris, France, April 12, 2016. (AP Photo/Michel Euler, File)

Microsoft delivered solid quarterly results on Wednesday, beating analyst expectations with revenue jumping 16 percent to $65.6 billion, but questions were raised about the company's big spending on the AI boom.
The tech giant reported net income of $24.7 billion for the quarter ending September 30, marking an 11-percent increase from the same period last year. Earnings per share rose 10 percent to $3.30, AFP said.
The company attributed the solid performance to robust growth in its cloud computing and artificial intelligence businesses.
"AI-driven transformation is changing work... and workflow across every role, function, and business process," said Microsoft CEO Satya Nadella, adding that the company was winning new customers through its AI platforms and tools.
The Redmond-based company has been at the forefront of the generative AI revolution, largely thanks to its partnership with OpenAI, the creator of ChatGPT.
The company has rolled out AI features at a furious pace, mainly under its Copilot brand, leaving investors hopeful for a return on investment from the expensive technology.
But the tech giant warned that its gross margin outlook for its crucial cloud division, or how much money it expects to make, was going to be lower just as its investment in AI infrastructure was set to grow.
The news sent Microsoft's share price down by nearly four percent in after-hours trading.
"Microsoft's latest earnings came in a bit above expectations, but the results may leave some investors wanting more clarity," said Emarketer senior director Jeremy Goldman.
"The true wildcard this quarter has been Microsoft's AI investments. It's pouring cash into building out infrastructure, with major capex implications. Yet, the revenue returns from AI remain more of a promise than a present reality," he added.
Azure, Microsoft's cloud computing platform, saw strong growth with revenue increasing 34 percent, when adjusted for currency fluctuations.
During the quarter, Microsoft also returned $9.0 billion to shareholders through dividends and share repurchases, helping pump up share value.
With the jitters over Microsoft's massive outlays on AI, the company has trailed other tech giants on Wall Street this year, gaining just over 15 percent, while Meta has surged 70 percent and Amazon climbed nearly 30 percent.
In a notable development, Microsoft's gaming division showed substantial growth, with Xbox content and services revenue surging 61 percent, primarily due to the recent Activision Blizzard acquisition, which contributed 53 percentage points to this increase.
Google parent company Alphabet on Tuesday set the scene for the tech earnings season with a solid report, as its cloud computing division posted strong results on the back of AI adoption by search engine users.