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Twitter Whistleblower Scored $7M Settlement Days Before Dropping Bombshell Allegations

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by Tyler Durden
Thursday, Sep 08, 2022 - 06:44 PM

Twitter agreed to pay their former head of security, Peiter Zatko, $7 million in June in exchange for signing an NDA to stop him from speaking publicly about "extreme, egregious deficiencies" over a wide swath of issues - including privacy, platform integrity and content moderation.

Days later he dropped his bombshell allegations in the form of a Congressional whistleblower complaint - which is one of the few venues that trumps an NDA, according to the Wall Street Journal.

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. -WSJ

And now, Zatko's allegations will be part of Elon Musk's countersuit against the company - which was launched after he filed to back out of a $44 billion deal to purchase the company amid allegations that a significant percentage of Twitter accounts are actually bots - and for which Twitter has sued Musk.

On Wednesday a judge ruled that Musk can amend his countersuit against Twitter to include Zatko's allegations. A five-day nonjury trial is scheduled for Oct. 17 in Delaware Chancery Court.

On Tuesday, the former hacker known as "Mudge" will testify before the Senate Judiciary Committee to discuss his allegations of security failures at the social media giant.

Twitter, meanwhile, says Zatko's allegations have no merit, and that he was fired "for ineffective leadership and poor performance." The company added that his complaint is "riddled with inconsistencies and inaccuracies and lacks important context."

Zatko reportedly demanded roughly five times the $7 million he received, according to 'people familiar with the matter.' Days later, he sent his whistleblower complaint to the SEC, the DOJ and the Federal Trade Commission. It was promptly leaked to several media outlets, including the Washington Post and CNN.

John Tye, founder of Whistleblower Aid, an organization that helped file the whistleblower claims, previously told The Wall Street Journal that Mr. Zatko first approached the nonprofit in early March. Mr. Tye also said Mr. Zatko has never met or spoken with Mr. Musk and that Mr. Musk’s team hasn’t been in contact with the nonprofit about Mr. Zatko’s complaint. -WSJ

"Mr. Zatko could have stayed silent about what he saw at Twitter to protect his career and family," said one of his lawyers, Alexis Ronickher. "Instead, he came forward with his whistleblower disclosures to ensure that the government has the information it needs to protect Twitter’s users, investors, and the country."

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