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Twitter Agreed To Pay Whistleblower $7 Million in June Settlement (wsj.com) 37

Posted by msmash from the how-about-that dept.
Twitter agreed in June to pay roughly $7 million to the whistleblower whose allegations will be part of Elon Musk's case against the company, WSJ reported Thursday, citing people familiar with the matter. From the report: The settlement was completed days before Peiter Zatko filed his whistleblower complaint in July. Mr. Zatko is the hacker who was Twitter's security head before being fired in January. In his whistleblower complaint, Mr. Zatko accuses the company of failing to protect sensitive user data and lying about its security problems. Twitter's confidential June settlement was related to Mr. Zatko's lost compensation and followed monthslong mediation over tens of millions of dollars in potential pay, the people said. Such compensation agreements aren't unusual when an executive departs a company prematurely and leaves behind potential stock options and other money.

As part of the settlement, Mr. Zatko agreed to a nondisclosure agreement that forbids him from speaking publicly about his time at Twitter or disparaging the company, the people said. Congressional hearings and governmental whistleblower complaints are two of the few venues in which he is permitted to speak openly, they said, and such exemptions are typical in compensation settlements. Mr. Zatko is set to testify before the U.S. Senate Judiciary Committee on Tuesday to discuss his allegations of security failures at Twitter. The same day, Twitter shareholders are being asked to vote on Mr. Musk's proposed takeover of the social-media company.
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Twitter Agreed To Pay Whistleblower $7 Million in June Settlement More

Twitter Agreed To Pay Whistleblower $7 Million in June Settlement

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  • So, is twitter dropping the suit against Musk? (Score:3, Insightful)

    by Cpt_Kirks ( 37296 ) on Thursday September 08, 2022 @02:37PM (#62864061)

    Since it seems all his claims have been substantiated now.

    • Re: (Score:1)

      by sinij ( 911942 )
      Unfortunately we live in a post-factual world, so who knows?

    • Re:So, is twitter dropping the suit against Musk? (Score:5, Interesting)

      by quantaman ( 517394 ) on Thursday September 08, 2022 @03:03PM (#62864179)

      Since it seems all his claims have been substantiated now.

      a) Just because a whistleblower claimed something doesn't mean it's true.

      b) Even if the whistleblower's claims are true it still doesn't mean Musk gets to leave the deal. The whistleblower claimed bot numbers were understated, Musk never believed those numbers so why should it matter? And Musk's stated motives are obvious pretexts for simple buyer's remorse.

      c) Musk also violated the agreement by disparaging Twitter execs and by generally trashing the company non-stop since he got cold feet.

      I think the whistleblower makes it unlikely that Musk is forced to buy, but I don't think he's simply walking away.

      • Re:So, is twitter dropping the suit against Musk? (Score:5, Interesting)

        by jacks smirking reven ( 909048 ) on Thursday September 08, 2022 @03:08PM (#62864203)

        Also people keep miscontruing the twitter "bot" statement. They have never made the claim of "we have 5% bot users". What they always have stated is "here is the process we use to estimate how many MDU's we have on the platform, this process gives us a result of around 5% bots" which are very different statements.

        • Except the whistleblower explicitly states their mDAU numbers are bullshit too.

          • Well lucky for all us lookyloos this is all going to court so we won't have to guess or speculate.

          • Except the whistleblower explicitly states their mDAU numbers are bullshit too.

            False. He explicitly concedes he is not challenging those numbers. He merely says it would be more splenderific if they used a different method of calculating the numbers than their disclosed method.

            • The execs in question got a 10 mil bonus for growing daily users and no monetary incentive for detecting spam or bot accounts.

              • Why wouldn't bonuses be tied to profitable accounts? This is lunacy, the total number of spam accounts has nothing to do with their business model, it's only relevant to the user experience and a government with a hardon for stopping misinformation campaigns. They don't need to know the total number of bots any more than /. needs to know the total number of sock puppet accounts. They need to know how many people they can realistically claim to be selling ads for, and the total number of sock puppets need

          • Where does he say that? All I keep finding are weasel worded things like this quote that misconstrue percentage of bots in the mDAU and total users. Twitter's goal seems to be to identify monetizable users with less than 5% of them being inaccurate. That doesn't mean everything they exclude from that count is a bot, it means they lack confidence to make a determination. So they don't know. That's irrelevant to their count of high confidence assumed real people accounts.

            Zatko says that Twitter arrives at its official percentage of bots on the platform by sampling only from a subset of accounts known as "monetizable daily active users," or mDAUs. But that subset, created by Twitter to give advertisers an idea of how many real humans are looking at their ads, already attempts to exclude bots. Zatko says that his own internal attempts to find out what percentage of total Twitter accounts were bots were met with a lack of enthusiasm.

            The percentage of total accounts

        • Re: (Score:2)

          by nomadic ( 141991 )

          Musk: "I want to buy Twitter because I think they underestimate how many bots there are and I want to fix that!"
          Twitter: "Ok, we've negotiated a price."
          Musk: "I want to back out because I think you underestimated how many bots there are."

      • The bot question is bunk (check my posting history if you want to know why I believe that).

        However, Musk has amended the claims in his defense and it now includes data security and other issues raised by whistle blower which afaik has been allowed by the judge. As the specifics of Peiter Zatko's information isn't yet known I'd wait that out before trying to draw absolute conclusions, and then there is the question of how and how much of that information is usable by Musk in court.

        • Re:So, is twitter dropping the suit against Musk? (Score:5, Informative)

          by Aighearach ( 97333 ) on Thursday September 08, 2022 @04:53PM (#62864671)

          That's admitted because it could theoretically benefit the Material Adverse Effects part of the case.

          However, in all of history, the Delaware courts have found a Material Adverse Effect one (1) time. Once. In history. So twitter's SEC filings would have to be so wrong that they're the most, or second-most, misleading SEC filings ever. That doesn't really line up with what is alleged.

          And Delaware has a huuge interest in defending the sanctity and enforceability of merger agreements. The contract says that in case of dispute, specific performance is to be the preferred resolution. That translates to forcing both parties to complete the agreement as written. If twitter doesn't win... the result would be an instant shift of merger agreements to being executed under the laws of some other State. Delaware knows that. They have very very strong legal precedents that protect these contracts. What the contract says will be enforced, because the contract says to resolve disputes that way. Some contracts say something different; that if they fight over it, it could be cancelled by either party. Either way, when you sign a contract in Delaware, you live with what you signed.

          • I concur. But I'm not sure that material adverse effect would have to be confined to SEC filings, nor of the outcome should Musk lose (which I believe he will). Markets aren't pricing for specific performance and I wonder if the difference here is that it isn't a merger but an outright purchase and Delaware isn't expected to put the full difference in share price on Musk? You don't happen to have any insight on the stats of specific performance vs monetary damages, I can't find anything substantial?

            • specific performance means to be ordered to fulfill the terms of the contract. The price would be the contract price.

              Because he waived due diligence, he agreed to buy it as-is.

              Merger and purchase are the same thing here.

              The market is broadly down right now, so you can't really expect the price to reflect the actual perceived value. People expect most of the market to be back up in a year, but that doesn't stop it from being down now. The timing of the resolution will affect the current price. Maybe the tria

      • a) Just because a whistleblower claimed something doesn't mean it's true.

        b) Even if the whistleblower's claims are true it still doesn't mean Musk gets to leave the deal.

        If Musk can prove fraud, it absolutely means that he can leave the deal.

      • The whistleblower claimed bot numbers were understated

        It might be a narrower claim than that.

        The "whistleblower" claimed that the metric used to measure users was not the most useful, and that they should use (unspecified) instead, taking more consideration of bots.

    • That may not matter for the lawsuit as Musk would not have had that information at the time and public statements he had made at the time would seem to indicate that he already thought Twitter was full of boys and didn't seem to care about it so far as the offer he made was concerned.

      While I don't doubt Musk would like a lower price and would gladly employ tactics like this to try to get one, I suspect he's doing it as a kind of "fuck you" to Twitter management and the SEC, and probably as a hedge agains

      • Re: (Score:2)

        by nomadic ( 141991 )

        Musk is in many ways not very bright, and the way he approached this deal was profoundly stupid. This is likely not going to save him.

  • "Hacker"? (Score:4, Insightful)

    by Anonymous Coward on Thursday September 08, 2022 @02:42PM (#62864083)

    Guy was their head of security. And now they're paying for his silence? I think that's a bit different than "hacker".

    • I know the media made for general audiences typically means "attacker" when they use the term "hacker". That's not how We use the term.

      Last night I hung out with my friends at Dallas Hackers Association. HACKERS association. One of the guys I mostly hung out with last night, at the hacker gathering, knows Mudge. Mudge is one of us, a hacker.

      Check out Mudge's latest tweet (@dotMudge). In his latest tweet, he mentions being a hacker. See the photo attached to his latest tweet. That's what he looks like *when

      • I didn't finish my thought on Defcon, so that sentence my not make a lot of sense. What I forgot to say is Mudge has spoken on the the same stage, more than once. At the HACKER conference, Defcon.

      • > See the photo attached to his latest tweet

        That's 1998. :) He's a bit more clean-cut these days; looks like a distinguished gentleman. Did at tour at DHS in the mid 2000's IIRC.

    • Being an hacker is what Mudge is best known for: https://en.m.wikipedia.org/wik... [wikipedia.org]

    • Anonymous non-nerd confused by technical lingo; news at 11

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