Peiter Zatko received $7 million settlement from Twitter in June: Report

Twitter allegedly paid whistleblower Peiter Zatko a $7 million settlement back in June, just days before the former DARPA employee sent in his complaint to regulators, according to a Wall Street Journal report. 

Zatko, who was brought on to lead Twitter’s cybersecurity team back in 2020 by founder Jack Dorsey had his employment terminated in January 2022 shortly after Parag Agarwal was made the CEO.

The settlement

The microblogging platform’s settlement with Zatko was related to the latter’s lost compensation. It came after months of arbitration over millions of dollars in potential pay, according to the WSJ report. Such settlements weren’t uncommon at Twitter, according to the report, especially when high level executives depart the company, leaving behind potential stock options. 

The WSJ report mentions that the settlement included language that prohibited Zatko from speaking about his time at Twitter or make comments that might discredit the company. The only places he was allowed to speak openly about the goings on at the social media company are at Congressional hearings and whistleblower complaints, although such clauses are common in compensation settlements, people familiar with the matter told the WSJ. 

At one point during the negotiations Zatko increased his compensation settlement demand to five times the amount being offered by Twitter, the WSJ reported. Increasing their compensation demand by significant amounts is normal for executives quitting companies according to the WSJ. 

The whistleblowing complaint

Zatko sent his complaints to the Securities Exchange Commission, the Federal Trade Commission and the Justice Department back in June.

In his complaint, Zatko alleged that there were numerous violations of cybersecurity standards at Twitter and that during his time at the company, he discovered extreme, egregious deficiencies by Twitter in every area of his mandate.” He went on to say that there were numerous gaps in Twitter’s platform integrity and content moderation as well as concerns about privacy and security. 

Also Read | Elon Musk draws criticism from Delaware judge for not turning over texts

The whistleblowing complaint went public in August after it was leaked to several media outlets. In response, Twitter’s CEO Parag Agarwal in an internal memo to employees said that Zatko was fired for “ineffective leadership and poor performance” and that his claims were “riddled with inconsistencies and inaccuracies, and presented without important context.”

The aftermath

The former security researcher has already received subpoenas both from Congress and Elon Musk. Zatko is set to testify in front of the US Senate Judiciary Committee on Tuesday September 13 to discuss the complaints that he sent to regulators in June. Twitter shareholders will be voting on Elon Musk’s takeover bid on the same day. 

Part of the whitehat hacker’s complaint also included concerns regarding Twitter’s inability to deal with the number of spam and bot accounts on its platform and that it had no real idea of the real number of such accounts. Back in July, Musk pulled out from the $44 billion deal that he had made with Twitter saying that the social media platform had failed to provide ‘adequate’ information on the bot issue.

Also Read | Apple CEO Tim Cook credits Steve Jobs for privacy focus in their products

Soon after, Twitter sued the billionaire, with Musk following up with a countersuit just days after the company filed its suit. With the revelations made by Zatko, Musk sough to amend the claims in his countersuit as well as push back the October 17 trial date in light of the newly emerged information.

On Wednesday, September 7, Chancery Court Judge Kathaleen McCormick ruled in favour of Musk, granting him permission to make changes to his lawsuit, but denied his request to push back the trial date.

Musk’s lawyers have said that Zatko’s complaint to regulators have the potential to support the billionaire’s allegations that Twitter has misrepresented the state of its business and metrics related to the income streams such as monetizable daily active users.