Bloomberg

(Bloomberg) — Elon Musk’s Twitter-related headaches multiplied Tuesday, with the US Federal Trade Commission widening an investigation into the company’s handling of user data and police in Southern California seeking information about an alleged vehicle assault that might involve a member of his security detail.

On top of those legal developments, the billionaire executive is also engaged in a potentially protracted search for a new chief executive officer for the social network, a position he has said no one really wants. Musk also found time to spar publicly with an investor in Tesla Inc., the electric car company he runs, who has chided Musk over his involvement with Twitter.

Musk’s pursuit and purchase of Twitter Inc. has been weighing on the shares of Tesla and sapping his wealth, knocking him from his perch as the world’s richest person. After conducting a Twitter poll asking users whether he should step down as the head of the company — a query met with a resounding yes — he’s actively looking for a possible replacement, a person with knowledge of the matter said.

Whatever the outcome of that search, Musk will need to contend with escalating concerns on the part of the FTC. The federal agency is deepening an investigation into Twitter’s privacy and data security practices in the wake of Musk’s takeover, people with knowledge of the matter told Bloomberg.

FTC lawyers questioned two former senior executives in the past month about whether Twitter has been able to comply with the agency’s 2011 consent order since Musk took over, said three people familiar with the matter, who asked not to be named discussing a confidential investigation. Musk’s Oct. 27 acquisition led to an exodus of many of the social media company’s legal, privacy and compliance executives, prompting the wider investigation.

The two former executives questioned by the FTC were Damien Kieran, Twitter’s former chief privacy officer, and Lea Kissner, the most senior cybersecurity officer, the people said. Kieran and Kissner both quit Twitter Nov. 10, alongside the head of compliance. 

The FTC had already opened a new inquiry into Twitter after the company’s former chief cybersecurity officer, Peiter Zatko, filed a whistle-blower complaint, said the people. Zatko testified in Congress in September, alleging the platform was a “ticking bomb of security vulnerabilities.”

Musk’s Twitter also parted ways with Wilson Sonsini Goodrich & Rosati, the law firm that formerly represented the company before the FTC and negotiated both the 2011 consent decree and the terms of a related May settlement over a breach of that agreement.

Wilson Sonsini declined to comment.

Roughly 5,000 of Twitter’s 7,500 employees have left the company since Musk assumed control, including the general counsel and chief privacy officer.

When Bloomberg reached out to Musk about the expanded FTC investigation, he responded, saying, “Why has Bloomberg News been asleep at the switch regarding government censorship of social media?”

Alleged Assault

Meantime, police in the city of South Pasadena are seeking to question the billionaire’s security team over an incident Musk has said represents a threat to his family’s safety — and one that he used to justify a series of punitive steps against Twitter users. 

The incident occurred the evening of Dec. 13, when authorities in South Pasadena in Los Angeles County responded to a report of an assault with a deadly weapon involving a vehicle. The alleged victim told officers that another driver confronted him, accusing him of following their car on the freeway, according to a statement Tuesday from the South Pasadena Police Department.

As the other driver was leaving, he struck the alleged victim with his vehicle, according to the statement, which said the incident was captured on video by both parties. The person who said they were struck, described only as a 29-year-old male from Connecticut, didn’t identify the suspect or indicate whether the altercation “was anything more than coincidental.”

Police learned two days later that the suspect was believed to be a member of Musk’s security team. Musk wasn’t present during the incident, authorities said. Detectives are attempting to reach Musk and his security team to take statements.

Musk last week tweeted about an incident around the same time, saying a “crazy stalker” blocked a car belonging to him and climbed onto the hood. Musk linked the situation to a Twitter account that tracks the location of his private jet, saying in the same post that he was taking legal action against its operator. The account was suspended, though there’s no apparent link between it and the incident in South Pasadena. He also temporarily banned journalists who posted about the jet tracker from Twitter.

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(Bloomberg) — More than 100 Bitcoin accidentally deposited almost four years ago in inaccessible storage accounts by Quadriga CX were moved without authorization, according to the trustee handling the defunct digital exchange’s restructuring.

Ernst & Young Inc. said that the private keys associated with the so-called cold wallets have not been located. The Bitcoin remained within the Quadriga cold wallets until Dec. 16, prior to the unauthorized transfers being initiated. The trustee said it didn’t initiate the transfers of the Bitcoin, currently valued at about $1.7 million.

Long before the collapse of FTX, Quadriga CX captured the attention of the crypto world and the mainstream media after the mysterious death of its founder Gerald Cotten. The Vancouver-based digital exchange, which Cotten operated primarily from a laptop computer, couldn’t retrieve about C$190 million ($139 million) in Bitcoin, Litecoin, Ether and other digital tokens held for its customers when it collapsed in early 2019. 

Some of the Bitcoin was moved recently into a Wasabi digital wallet, a popular service that lets users mix their tokens in such a way as to keep their identities private, blockchain data firm Chainalysis said.

Quadriga CX had “inadvertently” transfered 103 Bitcoin in February 2019 that Ernst & Young were unable to access.

A message sent Tuesday to Quadriga’s bankruptcy trustees at Ernst & Young wasn’t immediately returned.

Regulators in Canada concluded in an investigation that the collapse of Quadriga CX was the result of fraud by Cotten.   

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(Bloomberg) — Elon Musk pushed back on criticism from one of Tesla Inc.’s most vocal supporters amid growing concern about the chief executive officer’s ability to manage Twitter Inc. and his other businesses.

The billionaire, who has seen his fortune shrink in line with Tesla’s market capitalization, posted a tweet mocking Ross Gerber, CEO of Gerber Kawasaki Wealth Management, after the longtime investor tweeted about a perceived lack of leadership at the electric vehicle maker and said it’s “time for a shakeup.” That marked a change from the days when Tesla’s stock was soaring higher and fans like Gerber praised Musk’s managerial chops establishing the company as the early global EV marker leader.

Musk replied by asking Gerber for his “great ideas” for Tesla and its board, and telling him to go “back and read your old Securities Analysis 101 textbook.” 

Gerber had previously tweeted on Dec. 16 he notified Tesla’s board that he wants to run for a seat. Other investors, including Leo KoGuan — one of Tesla’s largest individual shareholders — also have called for governance changes.

The discord comes as Tesla’s stock is down more than 60% since the start of the year, dragging its valuation below the half-trillion-dollar mark for the first time since November 2020. Musk has sold nearly $40 billion worth of Tesla stock since late last year, with much of that going to fund his purchase of Twitter — despite repeatedly saying he would stop selling down his stake. The sales, plus the depression in Tesla’s share price, have been enough to knock Musk off the top spot of the Bloomberg Billionaires Index. 

Tesla shares fell 8.1% Tuesday to more than a two-year low of $137.80. 

Read more: Big Oil Stages a Big Comeback as Exxon’s Valuation Passes Tesla

When asked via email for his thoughts on having gotten Musk’s attention, Gerber replied: “I like it!”

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(Bloomberg) — Workday Inc., a maker of software for business tasks such as human resources, named board member Carl Eschenbach co-chief executive officer and said he will become sole CEO after Aneel Bhusri steps down from the post to become executive chairman in January 2024.

Eschenbach, 52, a partner at Sequoia Capital, replaces Chano Fernandez as co-CEO effective immediately, Workday said Tuesday in a statement. Fernandez was promoted to the post alongside co-founder Bhusri in August 2020 after six years with the Pleasanton, California-based company.

“I’m confident that Carl, with his leadership skills and his proven experience in helping technology companies scale, as well as his commitment to culture and values, will help lead Workday through its next phase of growth,” Bhusri said in the statement.

Eschenbach, a Workday board member since February 2018, held several positions at VMware Inc., a maker of software for cloud computing, including president and chief operating officer, before joining Sequoia in 2016.

Fernandez told the company on Dec. 14 that he intended to resign, according to a regulatory filing. His decision “was not due to any disagreements with Workday on any matter relating to Workday’s operations, policies, or practices,” the company said in the filing. Fernandez is expected to remain active at the company through April 2023, according to the filing.  

As part of the announcement, Workday affirmed its forecast for the current period and its preliminary outlook for fiscal 2024 that the company issued Nov. 29 with fiscal third-quarter results.

The shares declined about 2% in extended trading after closing at $172.09 in New York. The stock has declined 37% this year as investors soured on many software companies.

(Updates with company comments on Fernandez’s departure in the fifth paragraph.)

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(Bloomberg) — The world’s third-largest carmaker isn’t from the US, Japan or Europe, at least not anymore. It’s South Korea’s Hyundai Motor Co.

While Toyota Motor Corp. and Volkswagen AG vie each year for pole position atop the global automobile industry, Hyundai has quietly slipped in behind them, surpassing General Motors Co., Nissan Motor Co. and Stellantis NV in annual volumes along the way.

Founded 55 years ago as a manufacturer of affordable vehicles for its home market, Hyundai’s international expansion only began in earnest in the 80s. After working for decades to shake its image as an upstart, Hyundai’s Genesis is now going head-to-head with other luxury car brands, while the carmaker is duking it out with Ford Motor Co. for second place in US electric vehicle sales this year, behind Tesla Inc.

“We are on the right track, and this year we were very strong,” President and co-Chief Executive Officer Jaehoon Chang, 58, said in an interview from a library at Hyundai’s Seoul headquarters last week. “Our supply chain management was key. We’re trying to be flexible, and optimize and protect production as much as we can in spite of the chip shortage.” 

With greater scale, however, comes bigger challenges, including the suspension of a large factory in Russia and new US legislation that could hurt EV subsidies. The manufacturer also faces higher raw material costs, an ongoing chip shortage and allegations that Hyundai’s suppliers in Alabama hired underage workers. North America represented 21% of total sales last year, making it Hyundai’s biggest single market, while just 17% of revenue came from its home market.

Hyundai’s global presence is rooted in the company’s strong manufacturing base in South Korea. At Ulsan, located at the mouth of the Taehwa River on the peninsula’s eastern coast, it operates the world’s biggest assembly plant with an annual production capacity of 1.4 million vehicles. From the vessels shipping cars abroad to the steel used in both, all are part of the same conglomerate, started by the grandfather of Euisun Chung, Hyundai Motor’s other CEO and executive chair.

With another nine factories spread across the globe, the automaker sold 6.6 million vehicles in 2021. This year, revenue is on track to expand 21% to 141.7 trillion won ($108 billion), the highest growth rate among major carmakers, according to the average of analysts’ projections. 

Critical to those gains, and its prospects going forward, is Hyundai’s embrace of electrification. While other carmakers take more deliberate steps, the South Korean company raced ahead, pushing out models such as the Ioniq 5 and affiliate Kia’s EV6 just as demand started to outpace supply. At the same time, Volkswagen has struggled to get its EV strategy on track, while Toyota is still hedging its bets, betting on hybrids and hydrogen fuel cells, as well as EVs.

Emboldened by that success and backed by 19.4 trillion won in investments, Hyundai plus Genesis plans to introduce at least 17 battery-powered EVs by 2030, as well as 14 by Kia, which will be a “huge enabler” to reach the company’s goal of 1.87 million annual EV sales in 2030, Chang said. That would represent 11% of the US market, and 7% globally, according to the automaker. 

Leading the charge is the Ioniq 6, Hyundai’s latest EV. Introduced earlier this year, the sedan can travel as far as 610 kilometers (379 miles). With a sleek, rounded body and interior lighting that can change color depending on the speed of the car, the Ioniq 6 is aimed at younger buyers. 

Ioniq 6 sales in South Korea began in September at prices starting at 52 million won, or $40,000. In Europe, home to some of the biggest EV-adopting countries, pre-sales for an initial allotment of 2,500 Ioniq 6s sold out in less than a day. It was “actually few hours — proven evidence of demand,” Chang said. The US rollout will begin in early 2023.

Genesis sales will expand 10% this year to 220,000 units, Hyundai forecasts. In a move that will pit it more directly against Tesla and legacy brands such as BMW and Mercedes-Benz, Hyundai plans to make its Genesis luxury line fully electric by the end of the decade.

“This segment has a high barrier to get into, so that was very challenging once we started,” Chang said. “So we focused on design first, how we can be differentiated from others. We focused more on the drivers, more on the passengers, let them feel comfortable — to define luxury as comfort.”

This week, Hyundai also unveiled the latest iteration of its Kona subcompact SUV, designed first as an EV but also being made available with a combustion engine and hybrid variants. 

While Hyundai may be navigating the EV transition more smoothly than some peers, it also faces shared challenges.

Asked whether Hyundai was close to any decision regarding the fate of its plant in Russia, where operations have been suspended since the start of the war in Ukraine eight months ago, Chang said company had little choice but to “monitor the situation.”

“It’s not easy for us, because of the scale of the plant,” he said. While Toyota and Nissan exited Russia in recent months, Hyundai has a much bigger operation in St. Petersburg that, together with Kia, assembled about 200,000 vehicles a year before the war, or around 4% of the automaker’s global output.

Regarding China, where Hyundai is seeking to reposition itself as a more upmarket brand, Chang said “we need to sharpen our edge.” Car sales in what is the world’s biggest market declined 4.2% last month as Covid-related lockdowns kept buyers aways from showrooms.

In Alabama, Hyundai is investigating allegations that two suppliers, Hwashin America Corp., a Korean maker of chassis and auto-body components, and Ajin Industrial Co., a Korean auto-parts manufacturer, both employed minors at their plants in Greenville and Cusseta, Alabama.

“Hyundai does not condone or tolerate violations of labor law,” the automaker said in an emailed statement. “We mandate that our suppliers and business partners strictly adhere to the law, and we take reports of alleged violations very seriously.”

Another challenge for Hyundai is the US Inflation Reduction Act, which requires that EVs be assembled in North America with batteries made from materials sourced from friendly trading partners in order to quality for tax credits. Hyundai has been working with the South Korean government to persuade the US Treasury Department to tweak the bill or loosen enforcement as it works to finalize guidance.

Read more: Hyundai Hints at Reassessing US Investment Due to EV Rules

“This is a very critical moment,” Chang said. While the legislation requires carmakers to assemble their EVs in North America to receive the subsidy, Hyundai doesn’t yet have any operational EV plants, although it is seeking to build a $5.5 billion EV and battery facility in Georgia. “We’re expecting some flexibility in giving us more time to be fully ready for this.” 

–With assistance from Sabrina Mao.

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(Bloomberg) — Elon Musk is looking for a new chief executive officer for Twitter Inc., according to a person familiar with the search, after the billionaire lost a straw poll he posted on the social media site that asked whether he should relinquish his role as head of the company.

More than 10 million votes, or 57.5%, were in favor of Musk stepping down, according to results that came in Monday morning. Musk committed to abide by the results when he launched the survey, but nearly a day later he had tweeted more than a dozen times without directly addressing the outcome. The search for a new CEO could be drawn out and not yield results quickly, said the person, who asked for anonymity discussing a private matter.

Several Twitter accounts posited that the poll may have been manipulated by bots, prompting Musk to respond to one with a single word: “interesting.” In one of his first tweets after the poll, Musk said Twitter will restrict voting on major policy decisions to paying Twitter Blue subscribers. The service, which costs $8 a month, had attracted about 140,000 subscribers as of Nov. 15, the New York Times has reported.

Musk has been almost single-handedly running Twitter since he bought it in October for $44 billion. He said early on that he didn’t plan to stay permanently as CEO and he has surrounded himself with a few trusted people, some of whom have suggested they’d be ready to take on what Musk calls a thankless task. “No one wants the job who can actually keep Twitter alive. There is no successor,” Musk tweeted earlier this week. 

Among those that have remained in Musk’s inner circle are Jason Calacanis, an investor and podcaster, and former PayPal Holdings Inc. exec David Sacks. The two were part of Musk’s War Room in the days after the deal closed and people familiar with the situation said they were given internal accounts and helped make decisions about who would keep their jobs. Both have making public suggestions about Twitter’s business strategy. 

Calacanis kept his ideas for monetizing Twitter coming, advocating on Tuesday for ideas including a “poll analytics” link where information on Twitter poll results would be broken down by attribute, such as country and number of Twitter followers. Such insights are “well worth paying for,” he tweeted. On Monday, he talked up Twitter’s new business branding efforts.

Read about some of the potential candidates for Twitter CEO job

Sacks also retweeted a notification about Twitter Business on Monday, a new program that lets businesses identify their brands and key employees on Twitter. Sacks added the logo for Craft Ventures, the venture firm he runs, to the side of his name. In a reference to Musk’s poll about whether he should stay on as Twitter’s CEO, Sacks suggested that other CEOs run the same type of poll.

Calacanis didn’t respond to an emailed request about whether he and Musk had discussed the CEO role. A spokeswoman for Sacks declined to comment. 

CNBC’s David Faber reported earlier on Musk’s search for a new CEO. Faber reported that Musk’s search has been ongoing and started before the Twitter poll emerged. 

Musk’s dramatic stunt, asking the public about his leadership capabilities, came shortly after he attended the World Cup final match in Qatar, triggering a wave of trending topics such as “VOTE YES” and “CEO of Twitter.” 

Musk has warned that Twitter is at risk of bankruptcy and instituted a “hardcore” work environment for the remaining workers after a drastic cutback in staff. In his less than two months at the helm, he has spooked advertisers, alienated Twitter’s most ardent creators and turned the service from a reflection of the news of the day into the main topic.

After losing the initial poll, Musk, who’s also CEO of Tesla Inc., retweeted promotional material for the car company and for Twitter’s Blue for Business service. He also responded to an article about rival Toyota Motor Corp.’s criticism of electric vehicles with a simple “Wow.”

The stock of Tesla, by far Musk’s most valuable holding, has plummeted since the Twitter acquisition and critics have argued he’s spending too much time on the social media company. The shares were down 7% at 3:43 p.m. in New York.

–With assistance from Sarah McBride.

(Updates with comments from Sacks, Calacanis)

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(Bloomberg) — Police are investigating an incident in which a person believed to be a member of Elon Musk’s security team allegedly hit a man with his vehicle, the latest information about a confrontation that the billionaire has said represented a threat to his family’s safety.

The incident occurred the evening of Dec. 13, when authorities in the Los Angeles suburb of South Pasadena responded to a report of an assault with a deadly weapon involving a vehicle. The alleged victim told officers that another driver confronted him, accusing him of following their car on the freeway, according to a statement Tuesday from the South Pasadena Police Department.

As the other driver was leaving, he struck the alleged victim with his vehicle, according to the statement, which said the incident was captured on video by both parties. The person who said they were struck, described only as a 29-year-old male from Connecticut, didn’t identify the suspect or indicate whether the altercation “was anything more than coincidental.”

Police learned two days later that the suspect was believed to be a member of Musk’s security team. The Tesla Inc. chief executive officer was not present during the incident, authorities said. Detectives are attempting to reach Musk and his security team to take statements.

Musk last week tweeted about an incident around the same time, saying a “crazy stalker” blocked a car belonging to him and climbed onto the hood. The billionaire, who now owns Twitter Inc., linked the situation to a Twitter account that tracks the location of his private jet, saying in the same post that he was taking legal action against its operator. The account was suspended, though there’s no apparent link between it and the incident in South Pasadena.

Twitter has since changed its rules on sharing the real-time location information of others, and temporarily suspended the accounts of a number of journalists, with Musk citing safety concerns after the incident.

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(Bloomberg) — Turbulent global energy markets are threatening to depress bids in a key auction on the largest US grid, potentially squeezing aging coal plants. 

Shortages of natural gas and coal have pushed up wholesale power prices on the grid stretching from New Jersey to Illinois to their highest in more than five years. That’s created a windfall for many power plants, giving them breathing room to offer low bids in the auction for contracts to be on standby to provide backup capacity, according to analysts. 

Grid operator PJM Interconnection LLC had initially planned to release the results Tuesday afternoon, but has now delayed the announcement. The company didn’t provide a new date in an emailed statement, and said it would provide at least one business day notice before doing so. 

Those low bids threaten to put contracts out of reach for coal and natural gas plants saddled with high fuel costs, and may prompt some to retire early. It’s likely to spur wider use of wind and solar power, and discourage development of new gas plants, according to Steve Piper, director of energy research at S&P Global Commodity Insights. It’s going to be another blow to coal power as US utilities continue to shift away from the dirtiest fossil fuel.

“It pushes things more in the direction of green energy,” Piper said in an interview. “Coal has nowhere to go but down.”

He expects the PJM clearing prices to slide to about $25 a megawatt-day, compared with $34.13 in the most recent auction in June and $50 a year earlier. 

PJM typically holds its annual capacity auctions three years in advance of when the supply is needed, giving companies time to make investment decisions and build new plants. However, an intense debate over reforming the rules delayed the June event for more than two years and prompted the accelerated schedule that led to this December auction.

Bids were submitted by generators from Dec. 7-13 and the contracts will come into effect in mid-2024.

Power plants make most of their money selling electricity. The capacity contracts, which pay generators simply to be on standby, are an additional source of income. Generators are raking in revenue selling electricity at high prices, and that’s making the capacity contracts less important, said Toby Shea, an analyst with Moody’s Investors Service. He expects to see an auction clearing price of $30 to $50. 

Power-plant operators are getting plenty of revenue from selling electricity, said Shea. “They don’t need the capacity revenue.” 

(Updates with delay of auction results in third paragraph.)

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(Bloomberg) — The US Federal Trade Commission is deepening an investigation it opened this fall into Twitter Inc.’s privacy and data security practices in the wake of the company’s takeover by billionaire Elon Musk, according to people familiar with the matter.

FTC lawyers questioned two former senior executives in the past month about whether Twitter has been able to comply with the agency’s 2011 consent order since Musk took over, said three people familiar with the matter, who asked not to be named discussing a confidential investigation. Musk’s Oct. 27 acquisition led to an exodus of many of the social media company’s legal, privacy and compliance executives, prompting the wider investigation.

The FTC had already opened a new inquiry into Twitter after the company’s former chief cybersecurity officer, Peiter Zatko, filed a whistle-blower complaint, said the people. Zatko testified before Congress in September, alleging the platform was a “ticking bomb of security vulnerabilities.”

Musk’s Twitter also parted ways with Wilson Sonsini Goodrich & Rosati, the law firm that formerly represented the company before the FTC and negotiated both the 2011 consent decree and the terms of a related May settlement over a breach of that agreement.

Wilson Sonsini declined to comment.

Roughly 5,000 of Twitter’s 7,500 employees have left the company since Musk assumed control, including the general counsel and chief privacy officer.

FTC lawyers have interrogated two former top Twitter executives in the past month – Damien Kieran, the former chief privacy officer, and Lea Kissner, the most senior cybersecurity officer, the people said. Kieran and Kissner both quit Twitter Nov. 10, alongside the head of compliance. 

The probe marks at least the third time the FTC has scrutinized the social media platform over its privacy and data security practices. The review could lead to millions of dollars in fines and a new FTC order imposing obligations on Musk himself that would apply across his companies and remain in effect even if he steps down as chief executive officer or leaves Twitter.

Read More: Musk Is Looking for a New Twitter CEO After Losing Poll

“Why has Bloomberg News been asleep at the switch regarding government censorship of social media?” Musk said in response to an email seeking comment about the FTC investigation.

An FTC spokesman declined to comment. The agency said in a November statement that it’s tracking recent developments at Twitter with “deep concern.”

“No CEO or company is above the law, and companies must follow our consent decrees,” FTC spokesman Douglas Farrar said at the time. “Our revised consent order gives us new tools to ensure compliance, and we are prepared to use them.”

Twitter paid a $150 million fine in May for violating its 2011 consent decree by misusing phone numbers that users uploaded for security purposes to instead target them with advertising. That settlement extended the FTC’s oversight of Twitter through at least 2042.

Read More: Musk’s Security Team Sought for Questioning Over Vehicle Assault

In his complaint to the FTC, Congress and other federal agencies, Zatko, also known as Mudge, alleged further violations of the 2011 settlement, including that data from Twitter users who deactivated their accounts wasn’t properly deleted and that executives misrepresented information to the FTC about the company’s privacy policies. 

The FTC lacks the authority to fine companies for a first violation, but can impose penalties for subsequent breaches. Those fines can be hefty: the agency can levy penalties of as much as $46,517 for each violation. 

During the Trump administration, the agency used that authority to fine Facebook, since renamed Meta Platforms Inc., a record $5 billion over the Cambridge Analytica data scandal in which the personal information of Facebook users was sold to a political consultancy without their consent. It also required Chief Executive Officer Mark Zuckerberg to personally attest to the company’s privacy compliance going forward.

The FTC under Chair Lina Khan has taken an aggressive approach to corporate wrongdoing, particularly with repeat offenders. In October, the FTC settled with alcohol delivery app Drizly LLC over a 2018 data breach. Drizly is a subsidiary of Uber Technologies Inc., which is also under order with the FTC over data breaches in 2016 and 2017.

The Drizly order also names CEO James Cory Rellas, imposing responsibilities on him at any future employer that collects a significant amount of consumer information.

“FTC orders mean something,” Khan told a conference of business executives on Dec. 6. “It’s not OK for an executive just to relegate that to the lawyers and be totally removed from it, especially when it’s something so central like data security.”

Khan declined to comment directly on Twitter when asked at that same conference, but said the agency would be examining the role of executives in any investigations of the social media company.

Twitter prior to Musk’s takeover denied Zatko’s allegations, saying they are “riddled with inconsistencies and inaccuracies,” and that access to data is controlled by monitoring systems and background checks.

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(Bloomberg) — With a flat fee of $70 for trips into Manhattan and a guaranteed stream of passengers, a ride to and from New York’s John F. Kennedy International Airport is one of the more lucrative journeys for the city’s cab drivers. 

But federal prosecutors say two 48-year-old Queens men found another way to profit from the crowd of taxis waiting long hours for passengers at the airport, conspiring with Russians to hack the dispatch system and allow drivers to cut ahead in line for a $10 payment.

The two men, Daniel Abayev and Peter Leyman, were arrested Tuesday and charged with conspiracy to commit computer intrusions for hacking into the system from November 2019 to November 2020. 

Prosecutors said the pair worked with Russian nationals to access the system through various methods, including bribing someone to insert a flash drive into computers that allowed them to enter the system via Wifi and stealing tablets connected to the dispatch operation.

They then used their access to move certain taxis to the front of the line for $10 each, allowing drivers to bypass a holding lot that frequently required hours-long waits before they were dispatched to a terminal, and waived the fee for drivers who recruited others, according to prosecutors. 

The members of the scheme allegedly discussed the plan in text messages and spread the word to drivers via large group chats, enabling as many as 1,000 expedited trips a day on certain days.

“I know that the Pentagon is being hacked,” Abayev allegedly told one of the Russian hackers in November 2019. “So why can’t we hack the taxi industry?”

Both men face as much as 10 years in prison if convicted. They are scheduled to appear before a magistrate judge in Manhattan later Tuesday.

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