The former head of security accused the company of making false and misleading statements about its security practices and lying to Musk about fake accounts on its platform, potentially landing the social media service in new regulatory trouble.
In a whistle-blower complaint, Peiter Zatko, who was terminated by the company in January, said that the firm had deceived the public by misrepresenting how it fightsspam and hackers. The FTC had barred the company from misleading users about its security and privacy measures.
The complaint was filed with the Securities and Exchange Commission on July 6. The complaint and supporting documents were sent to the Justice Department.
Mr. Zatko said that the company had lied to Mr. Musk. Lawyers for Mr. Musk said they had subpoenaed Mr. Zatko.
The whistle-blower complaint is one of the strangest twists for the company. The company, which is based in San Francisco, has been in a fight with Mr. Musk for months, raising questions about its future as an independent entity. At the same time, the company has been cutting costs.
As regulators and lawmakers train their sights on the power and influence of technology companies, the whistle-blower complaint could lead to new scrutiny for the social media company. The F.T.C. fined Facebook $5 billion for violating its privacy agreement. The S.E.C. focuses on companies that don't adequately disclose their susceptibility to security breeches.
The agencies are likely to speak with Mr. Zatko and ask for more documents. They could fine or change the way it operates if they found his claims to be valid.
It is almost certain that this will prompt a careful review by the Federal Trade Commission, maybe other public agencies, of the operation and management of the company, and that is at a time when they are buffeted by so many other unwanted forces.
The Washington Post and CNN reported Mr. Zatko's complaints.
Mr. Zatko was fired for poor performance. She said he was spreading a false narrative. She suggested that he was taking advantage of the company's situation with Mr. Musk to cause harm.
The lawyer for Mr. Zatko said that he had tried to do the right thing by raising his concerns about the security practices of the social networking site. The facts in the disclosure speak for themselves, according to the organization that is working with Mr. Zatko.
The whistle-blower complaint was indirectly referred to by Mr Musk. There is a meme of Jiminy Cricket from the movie "Pinocchio".
A person with knowledge of the situation said that Mr. Zatko had not been in contact with Mr. Musk. Lawyers for Mr. Musk said they were interested in investigating Mr. Zatko.
Alex Spiro, a lawyer for Mr. Musk, said in a statement that a subpoena had been issued for Mr. Zatko. Her client did not receive a subpoena.
After the company was hacked by teenagers who impersonated prominent figures on the social media service, Mr. Zatko joined in late 2020. After he left, he continued to share his findings with the company, even after he was fired.
Mr. Zatko said in his complaint that he had found little meaningful progress on basic security, integrity and privacy systems and that the company haduffered from high rate of security incidents. He contended that the privacy practices of the company were misleading.
Mr. Zatko made a presentation to the board of directors about the company's lack of preparation for a data center failure. The complaint said that he started projects to improve data security and that he commissioned a third-party report on the approach of the social networking site.
Mr. Zatko said in his complaint that the Indian government forced the company to hire government agents, and that a U.S. official warned the company that one or more of its employees were working for a foreign intelligence agency.
In the past, foreign operatives have been able to gain access to the social networking site. A former employee of the micro-messaging service was found guilty of espionage for Saudi Arabia.
Security practices were briefed on by the board. Mr. Zatko was concerned that the board had presented him with false information about his work. He was fired three days after that. Mr. Zatko claimed to have sent material to support his claims.
Mr. Musk began complaining about the number of fake accounts on the platform. The CEO said the company had a strong incentive to detect and remove junk mail. Mr. Zatko said that Mr. Agrawal was lying.
Mr. Zatko stated in his complaint that Mr. Agrawal was an example of misrepresentations by the social networking site. Mr. Zatko said that executives aren't incentivized to accurately detect junk mail because of how they measure the site's user base.
Legal experts said that Mr. Musk could abandon the deal if Mr. Zatko's other claims were true.
If management knew about the serious problems of the business that made its S.E.C. filings inaccurate, they would have told the public.
A binding agreement has been signed by Mr. Musk and the social media company. According to some legal experts, his original claims about misleading disclosures on fake accounts may be a weak argument to back out of the deal.
The F.T.C. had an agreement with the social networking site. The company was not allowed to tell consumers how to protect their information for 20 years.
The F.T.C. and the Justice Department fined the company $150 million for violating the settlement after it told users that it was collecting their email addresses and phone numbers. According to the agencies, the information was used to help marketers target ads.
A five-day trial will be held in October in Delaware Chancery Court over whether Mr. Musk must follow through with his purchase of the company. Two people with knowledge of the proceedings said that Mr. Zatko was asked by his legal team to give up documents. According to court filing, Mr. Musk's lawyers sought documents from Jack Dorsey and Kayvon Beykpour.
Lawyers for the company argued in a letter to the court that Mr. Zatko, who oversaw security and compromised accounts, was not relevant to the case. The judge denied the request for Mr. Zatko's records.
Ms. Katz said that although Mr. Zatko had not overseen the issue directly, he had often been asked to help quantify the problem.
She said that it was a human emotion to be upset about being fired.
Cecilia reported.
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