Twitter has been under investigation by US market regulators over how the platform calculates the number of fake or spam accounts, an issue at the heart of the firm’s legal battle with Elon Musk.
The letter from the Security and Exchange Commission, sent out in mid-June but not released until Wednesday, asked Twitter to disclose its methodology and the “underlying judgments and assumptions.”
That letter came just a day after it was revealed that a former Twitter security chief told US authorities the company had misled users and regulators about “extreme, egregious” security vulnerabilities.
Twitter denied those allegations, which could help Musk in October’s process of dropping his $44 billion bid to buy the platform.
When asked for comment on the letter, Twitter on Wednesday cited its SEC response, which repeated its statement that fewer than five percent of Twitter users who can be shown ads have fake or spam accounts.
“Twitter believes it already adequately discloses the methodology it uses to calculate these numbers,” said the company’s June 22 response, which cites previous filings and public comments.
While the SEC primarily deals with securities transactions, primarily stocks and bonds, it may also be interested in communications from publicly traded companies to verify that they are providing a reliable picture of a company’s activities.
The issue of fake and spam accounts is at the center of the legal dispute between Twitter and Tesla boss Musk.
Musk has come to walk out of the deal, saying the company misled him about the numbers of those accounts, but Twitter has sued to force him to complete the purchase.
The case is to be decided in a trial that will begin on October 17 and last five days.
Peiter Zatko, a former Twitter security chief turned whistleblower, has brought fresh turmoil to the company’s battle with Musk.
His complaint warned of outdated servers, software vulnerable to computer attacks, and executives trying to hide the number of hacking attempts from both US authorities and the company’s board of directors.
In particular, Zatko accuses the platform and its CEO, Parag Agrawal, of having provided untrue information about account numbers because “if precise measurements ever became public, it would damage the company’s image and valuation”.
US lawmakers immediately raised concerns about the allegations in Zatko’s file and have pledged to look into them.
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