Let the Mudge slinging begin. This summer’s greatest drama just added a new twist this week after a whistleblower complaint became public alleging “extreme, egregious deficiencies” in Twitter’s security and privacy. These accusations are from Peiter “Mudge” Zatko who sat down with CNN and The Washington Post to detail his stint with the company and why he is coming forward now. Zatko denied “carrying water” for Elon Musk in relation to the timing of his allegations, as Musk and his team seized the opportunity to tie the news to their legal case.
Although the whistleblower complaint centers around security and poor management, Zatko also claims Twitter misrepresents the number of users on the platform. The next day in a Wilmington courthouse, Musk’s legal team argued the complaint should result in the company turning over additional data and communications. This is part of their broader legal strategy to send subpoenas far and wide to prove the company omitted required information. Among many, Tulane University Law Professor, Ann Lipton, believes a number of hurdles still exist to legally prove Musk was misled.
Bradley Wilson, an attorney for Twitter, outlined for the court how most of the requested documents had already been provided and Zatko’s allegations have no bearing on the legal case. Regarding the requested documents, Chancellor Kathaleen McCormick sided with Twitter saying the data request was "absurdly broad" and "overly burdensome."
Outside of Delaware, Twitter has been working to limit the corporate damage, as Reuters reports staff turnover has accelerated. A spokesperson for the company said Zatko’s statements were “riddled with inaccuracies” and he is “opportunistically seeking to inflict harm on Twitter, its customers, and its shareholders.”
Meanwhile, we can add Texas to the list of states feuding with Wall Street. The state’s comptroller Glenn Hegar issued a list of 10 financial institutions, including BlackRock and UBS, that should be barred them from doing business with state entities. His rationale: these firms are anti-energy companies. This is the latest development in the ongoing politicization of ESG investing, which comes on the heels of other states such as Florida and West Virginia enacting similar policies.
Have a great weekend,