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On Tuesday morning, my CNN Business colleagues published an explosive report detailing a whistleblower’s accusations of “egregious deficiencies” in Twitter’s security protocols, as well as accusations the company misled its own board and US regulators about its vulnerabilities.
The whistleblower is Twitter’s former head of security, Peiter “Mudge” Zatko, a respected cybersecurity expert.
Zatko claims Twitter is full of critical security flaws, has misled the public about its spam account problem and may currently have foreign intelligence agents on the payroll, among other problems.
There is a lot to unpack in this story, but here are a few highlights:
- Chaos and mismanagement: Zatko’s disclosure paints a picture of a reckless environment at a company that allows too many of its staff access to the platform’s central controls and sensitive information.
- Attempted cover-up: His report also alleges that some of the company’s senior-most executives misled its own board and government regulators about the security vulnerabilities, including some that could allegedly open the door to foreign spying or manipulation, hacking and disinformation campaigns.
- A possible spy on the inside: The disclosure claims the US government provided evidence to Twitter shortly before Zatko’s firing that at least one of its employees, perhaps more, was working for another government’s intelligence service. The disclosure does not say whether Twitter acted on the tip, or whether the tip was credible.
- Overall: Zatko describes his findings thusly: “egregious deficiencies, negligence, willful ignorance, and threats to national security and democracy.”
WHO IS ZATKO?
Zatko is a highly respected cybersecurity insider with experience in senior roles at Google, Stripe and the Defense Department. He was hired at Twitter by former CEO Jack Dorsey following the 2020 hack of Twitter accounts belonging to public figures including Joe Biden, Barack Obama, Kim Kardashian and Elon Musk.
Twitter fired Zatko, a senior executive who reported directly to the CEO, in January for what the company claims was poor performance. Zatko believes his firing was in retaliation for sounding the alarm about the company’s security problems.
CNN sought comment from Twitter on more than 50 specific questions regarding the disclosure.
“Mr. Zatko was fired from his senior executive role at Twitter in January 2022 for ineffective leadership and poor performance,” a Twitter spokesperson said. “What we’ve seen so far is a false narrative about Twitter and our privacy and data security practices that is riddled with inconsistencies and inaccuracies and lacks important context. Mr. Zatko’s allegations and opportunistic timing appear designed to capture attention and inflict harm on Twitter, its customers and its shareholders. Security and privacy have long been company-wide priorities at Twitter and will continue to be.”
Just a reminder: Twitter is also in the middle of a legal battle with Elon Musk, whose pursuit of the company (and subsequent effort to renege on his takeover offer) has been marked by a series of unexpected twists.
Up until now, many legal experts said Twitter had the stronger argument in the case. But the new disclosure complicates the case, and could potentially encourage the court to pay closer attention to the spam-bot issue that Musk has made central to his argument for abandoning the deal.
Musk’s legal team could also seize on other claims in the disclosure unrelated to bots, including allegations that Twitter made misrepresentations to regulators such as the Federal Trade Commission and Securities and Exchange Commission about its privacy and security practices.
“Twitter’s misrepresentations are especially impactful, given that they are directly at issue in Elon Musk’s contemplated takeover of the company,” Zatko’s disclosure states.
The case is set to go to trial in Delaware Chancery Court in October.
Beyond its potential impact on the Musk case, the stakes of Zatko’s disclosure are enormous. It could lead to billions of dollars in new fines for Twitter if the company is found to have violated its legal obligations, according to Jon Leibowitz, FTC chair.
The agency now has another opportunity to show the tech industry it is serious about holding platforms accountable, Leibowitz added, after officials opted not to name top Facebook execs including Mark Zuckerberg and Sheryl Sandberg in the FTC’s $5 billion privacy settlement with that company in 2019.
NUMBER OF THE DAY: 12.6%
New home sales plunged last month as high prices and mortgage rates pushed buyers to think twice about closing the deal.
Sales of newly constructed homes fell 12.6% from June to July and were down 30% from a year ago, according to a joint report from the US Department of Housing and Urban Development and the US Census Bureau. It was the second consecutive month of declines.
SCRAP THE DATE
Wedding season, after two years of cancellations and delays, came back with a vengeance in 2022 … Just in time for inflation to turn your already-probably-too-expensive-but-yolo wedding budget into your “let’s hope our future kids can get scholarships” wedding budget.
The highest inflation in 40 years has blindsided couples, my colleague Martha C. White reports, leading them to cut back on luxuries and even disinvite guests. Remember that save the date we sent you back in 2020? Yeah sorry, JK.
Nearly half of the couples who got married last year ended up culling their guest list, according to the Knot, which conducts an annual survey on wedding trends. The average 2021 wedding had 105 guests, with an average cost of $34,000 — about the same as the in 2019, when the average number of guests was 131.
Naturally, couples are trying to cut costs in other ways. But the wedding-industrial complex is strong, and bargains are hard to come by, even in normal times.
“It’s astounding how much weddings cost,” said Courtney Collins, a nurse in Rutland, Vermont, planning a 130-person wedding in September. She’s hoping to keep her nuptials below $40,000 by limiting the open bar during the reception and asking friends for help with invitations and decor.
What’s a wedding without flowers? A lot cheaper, it seems. Fresh blooms are especially pricey right now, designers say, because of a mix of pent-up demand, severe weather and political turmoil in some major export markets.
Roses that might have cost 80 cents a stem now cost as much as $3 each. Even a roll of floral tape that you could buy for about $4 in early 2020 now costs almost $12, one florist told Martha.
Want your guests to sit? That’s gonna cost ya. Prior to the pandemic, the typical price per chair from a rental company was in the $15 neighborhood, said Fallon Carter, an events planner. “I’m now renting chairs that are $40,” she said.
The wedding industry is no different than any others struggling with supply chains and inflated costs. But the sticker shock is pummeling couples who postponed their plans in response to Covid. All those rebooked events mean that venues that might have previously held one or two weddings a week on the weekends are now booked up on weekdays as well.
Couples are adapting. “Micro weddings” are becoming a thing. Guests who don’t make the cut are getting second-string invitations to Zoom ceremonies. Elopements are on the rise. Even Bennifer tied the knot at a Las Vegas drive-thru (though I’m sure they shelled out mightily for their lavish party in Georgia last weekend…)
The rush to the altar may slow down as the backlog of pandemic-era parties works itself out. But I wouldn’t hold your breath for prices to ever look, like, reasonable. The wedding industry is built on marking up with impunity because, well, it’s your special day. You’re on a deadline. And because people have shown time and again they’re willing to pay for it.
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