And now the business mogul plans to fight it amid bombshell claims.
As the future of Twitter’s ownership hangs in the balance, a whistleblower has made some pretty serious allegations against the company. In a testimony Senate Judiciary Committee, famed hacker Peiter Zatko claimed the company failed put profits ahead of security and failed to protect users.
“I’m here today because Twitter leadership is misleading the public, lawmakers, regulators, and even its own board of directors,” said Zatko, a famed hacker who lead Twitter’s security department from 2020 to 2022.
This comes as the company’s shareholders voted on Tuesday to approve a $44 billion deal from the Tesla CEO, just a day after Musk tried to terminate the agreement once again over a purported $7.75 million payment to Zatko.
Here’s more details on the testimony and what it means for the future of the company.
What did the whistleblower say?
During a two-and-a-half hour congressional hearing, Zatko claimed that the company’s outdated security standards made users “vulnerable to exploitation, causing real harm to real people.” Though policies were in place to prevent accessing personal information, he said some 50 percent of Twitter’s more than 7,000 employees could potentially get information on a user’s address, phone number, or even physical location.
“It’s not far fetched to say a Twitter employee could take over the accounts of all of the senators in this room,” he said.
He also made several other damning allegations, including that the company inadvertently hired foreign agents but refused to do anything about it. Before his firing in January, Zatko said the FBI warned Twitter’s security team that at least one spy working for the Chinese government was on the payroll. Meanwhile, Twitter hasn’t commented on the hearing yet, but it has previously painted Zatko as a disgruntled former employee who’s promoting a “false narrative that is riddled with inconsistencies and inaccuracies.”
What’s going on with Musk’s plan to buy Twitter?
This comes amid an ongoing dispute between Twitter and Musk. According to a filing made to the Securities and Exchange Commission, Musk first offered to buy Twitter in April for $54.20 a share, though he later cast doubt on his ability to even buy the company in the first place. In what set off a bizarre turn of events, the Tesla CEO sent an offer letter to Twitter Chairman Bret Taylor, stating that the company needed to be taken private because it could “neither thrive nor serve” free speech in its current state.
“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” Musk wrote.
But, despite initially accepting a seat at the table, he ultimately decided not to join the company’s board of directors following backlash from employees who didn’t necessarily want to be associated with the controversial executive.
Why is Musk trying to bail?
Musk’s deal with Twitter went south in July, when he decided to walk back his plans over claims that Twitter violated the agreement by misrepresenting the number of spam and fake bot accounts on its platform. After Twitter questioned the validity of the first termination notice, Musk followed up with a second letter to deliver “additional termination notice in the event that the July 8 Termination Notice is determined to be invalid for any reason.”
But he didn’t stop there: Musk’s lawyers claimed payment made to Zatko violated a provision of the acquisition contract (Twitter had agreed not to provide any severance payments to employees in certain amounts outside “the ordinary course of business,” according to the contract). In response, Twitter has sued Musk to try to enforce the original merger agreement, calling his latest effort to get out of the deal as “invalid and wrongful.” This, of course, set off a legal suit, with Musk countersuing the company.
The case between Twitter and Musk is on track to go to trial in October, despite efforts to delay following Zatko’s disclosure.
This testimony in turn could impact ongoing litigation between Twitter and Musk: A judge ruled that Musk can amend his lawsuit to include these claims. As the company’s future ownership remains up in the air, legal experts say that the outcome of the legal dispute remains unpredictable. Musk could be forced to complete the deal or pay a $1 billion breakup fee. Other scenarios include a settlement, renegotiation of the purchase price, or Musk walking away without paying a cent.