One of Zatko’s chief allegations against Twitter is that it does not reliably delete the data of users who cancel their accounts.
Expanding on that claim, Zatko told lawmakers Tuesday that the company’s chief privacy officer had come to him admitting that Twitter has deliberately misled regulators who asked about Twitter’s deletion practices.
“I was told straight out by the chief privacy officer that the [Federal Trade Commission] had come and asked, ‘Does Twitter delete users’ information?’,” Zatko said. “He said, ‘I need you to know this because other regulators are asking us, and this ruse is not going to hold up.'”
Twitter has allegedly told regulators that it deactivates user accounts but has been elusive about whether it fully deletes the data. In response to questions from CNN, Twitter has previously said it has workflows in place to “begin a deletion process” but has not said whether it typically completes that process.
Asked by Sen. Mazie Hirono whether Twitter has the capability to delete user data appropriately, Zatko said it would be possible if Twitter had better control of its data, but that it does not, in a “fundamental root problem” for the company.
“They need to know what data they have, where it is, why they got it and who it is attached to,” Zatko said. “At that point, they would be able to delete.”
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Sept 13 (Reuters) – Disclosures from a former Twitter Inc (TWTR.N) executive turned whistleblower show that Twitter was informed of at least one Chinese agent working at the social media company, U.S. Senator Chuck Grassley said in his opening remarks during a Senate hearing on Tuesday featuring testimony from the whistleblower.
Peiter “Mudge” Zatko, a famed hacker who served as Twitter’s head of security until his firing last year, said during the hearing that some Twitter employees were concerned that the Chinese government would be able to collect data on the company’s users.
He referenced a Reuters story on Tuesday that detailed internal clashes between some teams that wanted to maximize the advertising revenue opportunity from Chinese advertisers and others who were concerned about doing business inside China amid rising geopolitical tensions. read more
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“This was a big internal conundrum,” Zatko said, adding the company was reluctant to turn away from China as the fastest- growing overseas market for ad revenue.
“In a nutshell, if we were already in bed, it would be problematic if we lost that revenue stream,” he said.
The whistleblower disclosures had noted that the U.S. Federal Bureau of Investigation had informed Twitter of at least one Chinese agent inside the company, Grassley said in his opening statement.
Zatko said on Tuesday that in the week before he was fired from Twitter, he learned an agent of China’s Ministry of State Security, or MSS, an agency comparable to the U.S. Central Intelligence Agency, was on the payroll at Twitter.
It was not immediately clear if the alleged Chinese agent was still working at the company.
Twitter did not immediately respond to a request for comment on Zatko’s testimony.
In his testimony, Zatko said he recalled a conversation with another Twitter executive about concerns that a foreign agent was inside the company. The executive responded “Well, since we already have one, what does it matter if we have more?”
LITIGATION AGAINST MUSK
Grassley noted that Twitter Chief Executive Parag Agrawal refused to appear at the hearing for fear it could jeopardize the company’s litigation against Elon Musk, who is also the CEO of Tesla Inc (TSLA.O). Twitter and Musk head to trial next month over whether the $44 billion takeover deal should be completed.
Later on Tuesday, Twitter will also announce the results of a shareholder vote on Musk’s takeover of the company. A majority of shareholders have already approved the deal, sources told Reuters. read more
The San Francisco-based company sued Musk for terminating the agreement, while the Tesla chief executive countersued, accusing Twitter of misrepresenting the number of false and spam accounts on its service.
A Delaware judge ruled last week that Musk may include Zatko’s whistleblower claims in his case against Twitter, but denied his request to delay the trial. read more
The Senate Judiciary Committee is questioning Zatko over his claims that Twitter misled regulators about its compliance with a 2011 settlement with the Federal Trade Commission over improper handling of user data.
Since then, Twitter has made “little meaningful progress on basic security, integrity and privacy systems,” Zatko’s complaint filed with regulators in July said.
Twitter has said Zatko was fired for “ineffective leadership and poor performance,” and that his allegations appeared designed to harm Twitter.
Zatko’s whistleblower complaint appeared to contain over two pages of links to supporting documents, such as emails between Zatko and CEO Agrawal and an assessment of misinformation and disinformation on Twitter. The number of documents was limited compared with those provided by Facebook (META.O) whistleblower Frances Haugen, who released thousands of pages of internal material.
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Reporting by Sheila Dang in Dallas; Additional reporting by Richard Cowan and David Shepardson in Washington
Editing by Kenneth Li, Lisa Shumaker and Matthew Lewis
Our Standards: The Thomson Reuters Trust Principles.
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U.S. consumer prices rise more than expected in August
Traders price in a small chance of 100 bps rate hike
Indexes down: Dow 1.87%, S&P 2.30%, Nasdaq 3.07%
Sept 13 (Reuters) – U.S. stock indexes fell sharply on Tuesday, snapping a four-day winning streak, after data showed monthly U.S. consumer prices unexpectedly rose in August, cementing bets of a third straight 75-basis-point rate hike from the Federal Reserve next week.
All of the 11 S&P sectors declined in early trading, led by a 3.3% slump in the communication services sector (.SPLRCL). The small cap Russell 2000 index (.RUT) dropped 2.5%.
The S&P 500 growth stocks index (.IGX), which houses rate-sensitive technology and growth stocks, fell 3% as Treasury yields rose, while its value counterpart (.IVX) lost 1.6%.
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Mega-cap technology stocks Apple Inc (AAPL.O) and Microsoft Corp (MSFT.O) fell more than 2.3% each, while Tesla Inc (TSLA.O), Alphabet Inc (GOOGL.O), Amazon.com Inc (AMZN.O) and Meta Platforms Inc (META.O) dropped between 2.7% and 5.6% to weigh the most on the S&P 500 and the Nasdaq.
The Labor Department’s consumer price index (CPI) report showed monthly CPI gained 0.1% in August from July, against expectation of a 0.1% dip. On a year-on-year basis it increased by 8.3%, while economists were anticipating a rise of 8.1%, according to a Reuters poll. read more
Excluding the volatile food and energy components, core CPI increased to 6.3% from 5.9% in July, putting further pressure on the Fed to continue on its rate-hike spree.
“The longer term view is pretty clear here, that monetary policy is a very blunt instrument and anybody that thought inflation would start to roll over just because the Fed hiked a couple times is pretty ignorant to the way economics works,” said Doug Fincher, portfolio manager at Ionic Capital Management.
Policymakers last week emphasized their determination to keep raising rates until there is a sustained drop in inflation, which has been running at 40-year highs and above the Fed’s target of 2%.
Money markets now see an 81% chance of a 75-basis-point increase in rates and 19% chance of a whopping 100 bps hike by the Fed at its Sept. 20-21 meeting, while expecting rates to peak around 4.28% in March 2023.
The dollar , which has risen sharply this year in part due to expectations of aggressive rate hikes by the Fed, erased early morning losses to climb 1%.
The gap between yields on the two- and 10-year notes , often seen as an indicator of a looming recession, inverted further. Rate-sensitive bank stocks (.SPXBK) dropped 2%.
At 9:46 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 606.02 points, or 1.87%, at 31,775.32, the S&P 500 (.SPX) was down 94.40 points, or 2.30%, at 4,016.01, and the Nasdaq Composite (.IXIC) was down 376.36 points, or 3.07%, at 11,890.06.
The three major indexes had rallied recently as investors took advantage of a sharp drop in stock prices since mid-August that was triggered by concerns over soaring inflation and the impact of tighter monetary policy to curb it.
Eastman Chemical (EMN.N) slid 5% after the company forecast a downbeat third-quarter profit, citing demand slowdown in consumer durables market, higher costs and a hit from a stronger dollar.
The CBOE volatility index (.VIX), also known as Wall Street’s fear gauge, rose to 24.97 points.
Declining issues outnumbered advancers for a 11.92-to-1 ratio on the NYSE and a 6.29-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week high and no new low, while the Nasdaq recorded 9 new highs and 62 new lows.
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Reporting by Devik Jain and Ankika Biswas in Bengaluru; Editing by Shounak Dasgupta
Our Standards: The Thomson Reuters Trust Principles.
The Google name is displayed outside the company’s office in London, Britain, November 1, 2018. REUTERS/Toby Melville/File Photo
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BRUSSELS, Sept 13 (Reuters) – Alphabet unit Google (GOOGL.O) will face damages claims for up to 25 billion euros ($25.4 billion) over its digital advertising practices in two suits to be filed in British and Dutch courts in the coming weeks by a law firm on behalf of publishers.
Google’s adtech has recently drawn scrutiny from antitrust regulators following complaints from publishers. read more
The French competition watchdog imposed a 220-million-euro fine on the company last year while the European Commission and its UK peer are investigating whether Google’s adtech business gives it an unfair advantage over rivals and advertisers. [ read more
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“It is time that Google owns up to its responsibilities and pays back the damages it has caused to this important industry. That is why today we are announcing these actions across two jurisdictions to obtain compensation for EU and UK publishers,” Damien Geradin at law firm Geradin Partners said in a statement on Tuesday.
Google criticised the imminent lawsuits, saying that it works constructively with publishers across Europe.
“This lawsuit is speculative and opportunistic. When we receive the complaint, we’ll fight it vigorously,” a spokesperson said.
The British claim at the UK Competition Appeal Tribunal will seek to recover compensation for all owners of websites carrying banner advertising, including traditional publishers. Britain has an opt-out regime.
The Dutch claim is open to publishers affected by Google’s actions. Litigation funder Harbour is funding both lawsuits.
($1 = 0.9860 euros)
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Reporting by Foo Yun Chee; editing by Philip Blenkinsop and David Evans
Our Standards: The Thomson Reuters Trust Principles.
Souvenir tokens representing cryptocurrency Bitcoin and the Ethereum network, with its native token ether, plunge into water in this illustration taken May 17, 2022. REUTERS/Dado Ruvic/Illustration
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Sept 13 (Reuters) – For years, ether could barely dream of challenging its big brother bitcoin. Now, its ambitions may be becoming more realistic.
The second-biggest cryptocurrency is taking market share from bitcoin ahead of an all-important “Merge” software upgrade that could sharply reduce the energy usage of its Ethereum blockchain, should the developers pull it off in coming days.
Bitcoin’s dominance, or its share of the crypto market’s market value, has slipped to 39.1% from this year’s peak of 47.5% in mid-June, according to data platform CoinMarketCap. Ether, on the other hand, has climbed to 20.5% from 16%.
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The upstart is still a long way from overtaking bitcoin as the No.1 cryptocurrency, a reversal known to aficionados as “the flippening”. It’s made up ground, though; in January 2021, bitcoin reigned supreme at 72%, while ether occupied a slender 10%.
As for price, one ether is now worth 0.082 bitcoin , near December 2021 highs and sharply above the 2022 low of 0.049 in June.
“People are now viewing Ethereum as essentially a safe asset because they’ve seen the success of the network, they think it’s not going anywhere,” said Joseph Edwards, head of financial strategy at fund management firm Solrise Finance.
“There’s a permanency to how Ethereum is perceived in the crypto ecosystem.”
Reuters Graphics
CAPRICIOUS CRYPTO
The Merge, expected to take place on Thursday after several delays, could lead to wider use of the blockchain, potentially boosting ether’s price – although nothing is certain in a capricious crypto market. read more
Ethereum forms the backbone of much of the “Web3” vision of an internet where crypto takes centre stage, powering applications involving crypto offshoots such as decentralised finance and non-fungible tokens – although this much-hyped dream is still unrealised.
Bitcoin and ether have both nearly halved this year on concerns about supersized interest rate hikes from central banks. Nonetheless, investors seem to like the look of the Merge, with ether up over 65% since the end of June. Bitcoin has barely budged in the same period.
“We’re going to see (ether’s) attractiveness to some investors who are concerned about energy consumption,” said Doug Schwenk, CEO of Digital Asset Research, although he cautioned that ether was still a long way behind bitcoin.
THE KING IS STRONG
The diminishing bitcoin dominance in crypto’s current bear market is a departure from previous market cycles when investors sold lesser tokens – “altcoins” – in favor of the more liquid and reliable bitcoin.
Dethroning the king is no easy feat, though.
Bitcoin is still by far the most well-known cryptocurrency. Mainstream investors who have dipped their toes in the crypto market since 2020 have tended to turn first to bitcoin, as the most liquid and widely-traded token.
Its market cap of $427 billion is still more than double Ether’s $210 billion, and market participants firmly believe the original digital coin remains the gold standard in crypto due to its limited supply.
Some market players say bitcoin’s grip on the crypto crown is still strong, even if it has to accept other contenders. For example, Hugo Xavier, CEO of K2 Trading Partners, said its dominance could improve to 50%-60% range if the crypto market turns bullish but it is unlikely to touch 70% again.
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Reporting by Medha Singh and Lisa Pauline Mattackal in Bengaluru; Editing by Tom Wilson and Pravin Char
Our Standards: The Thomson Reuters Trust Principles.
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
UK grocery inflation hit a record high in August, adding £571 to the average annual food bill, according to new data.
The research company Kantar, which tracks supermarket spending and prices, said that the cost of groceries rose at an annualised rate of 12.4 per cent in August, the fastest since the company started recording the data.
Fraser McKevitt, head of retail and consumer insight at Kantar, said: “It seems there’s no end in sight to grocery inflation as the rate at which food and drink prices are increasing continues to accelerate.”
He added that the average annual grocery bill would go from £4,610 to £5,181 if consumers did not make changes to what they buy.
Prices in categories such as milk, butter and dog food are rising especially quickly, at rates of 31 per cent, 25 per cent and 29 per cent respectively.
Consumers have been buying supermarkets own brands to save money. Overall spending on retailer own-label lines was £393mn higher during the latest four weeks, giving own brands a 51 per cent market share.
Discount supermarkets have also been doing well.
“Back at the start of the 2010s, Tesco, Sainsbury’s, Asda and Morrisons together accounted for over three quarters of the sector but that traditional big four is no more,” said McKevitt.
Ramsay Health Care shares plunge 14% after takeover talks hit roadblock
Australian hospital operator Ramsay Health Care’s shares dropped as much as 14.6% after the company announced a KKR-led consortium is “not in a position to improve the terms” of a takeover proposal.
Ramsay Health rejected the proposal earlier this year, saying the offer was “meaningfully inferior.”
The company’s shares later recovered slightly but were still 11% lower.
— Abigail Ng
Nio jumps more than 20% at open after Deutsche Bank report
Hong Kong-listed shares of Chinese electric vehicle-maker Nio jumped as much as 21% at the open following a bullish report by Deutsche Bank.
Reiterating his buy rating, analyst Edison Yu made minor changes to forecasts and said Nio remains Deutsche Bank’s top China EV pick in a note dated Sept. 12.
“The company’s efforts around user experience, battery swapping, overseas expansion, and internal battery cell development go very much underappreciated and will eventually show clear differentiation as the local Chinese market gets increasingly competitive,” Yu wrote.
The company’s shares were last 17% higher.
–Jihye Lee
CNBC Pro: Forget oil — coal is hot right now. Here are 2 stocks to play it, according to the pros
Coal mining in Wyoming.
Brian Brainerd | The Denver Post | Getty Images
Coal prices are at record highs and market watchers see prices going even higher as a global energy crisis looms.
“It’s almost like any or all companies are a buy,” analyst Peter O’Conner said of the booming coal sector, and reveals his favorite stock.
CNBC Pro subscribers can read more here.
— Zavier Ong
Nintendo shares jump 5% ahead of games announcement livestream
Squid Game-related stock up 10% at the open over Emmys hopes
Bucket Studio Co., which holds a stake in a private company that represents “Squid Game” lead actor Lee Jung-jae, jumped more than 10% as the show eyed a historic victory in the drama series race.
The company’s shares jumped more than 20% immediately after Netflix in June posted a letter from the director, Hwang Dong-hyuk, announcing the series will return with a second season.
Other content-related stocks CJ ENM and CJ CGV were also up more than 2.5% in the morning session, and Showbox rose 1.5%.
–Jihye Lee
CNBC Pro: Want to invest in real estate? These REITs are among analysts’ favorites
Real estate investment trusts — or REITs — are coming back to the spotlight after a volatile year for many asset classes.
Analysts from Morgan Stanley and Citi highlight REITs from two sectors that they say could outperform the wider market, and remain resilient in a recession.
Nikhil Wahi, the brother of former Coinbase Global IncCOIN product manager Ishan Wahi, has reportedly admitted in court to making trades based on confidential information about the cryptocurrency exchange.
What Happened: On Monday, Nikhil Wahi pleaded guilty to wire fraud conspiracy charges — pressed by the Department of Justice in July — in what U.S. prosecutors have called the first cryptocurrency insider trading case, Reuters reported.
The plea happened during a virtual court session before U.S. District Judge Loretta Preska in Manhattan.
Nikhil Wahi, who initially pleaded not guilty last month, said he understood his plea change meant he would eventually be deported from the U.S. and “lose everything that I have worked for,” according to Reuters.
Why It Matters: Ishan Wahi, however, has pleaded not guilty and is scheduled to appear in court in March next year. Prosecutors claim that he disclosed secret information regarding new tokens before their official Coinbase listing announcement. That allegedly allowed his brother and friend, Sameer Ramani, to go long and profit from it from June 2021 to April 2022 on at least 14 opportunities.
The trio later used anonymous EthereumETH/USD wallets to acquire the soon-to-be-listed assets, which were sold after the Coinbase listing announcements, generating at least $1.5 million in profits.
“I knew that it was wrong to receive Coinbase’s confidential information and make trades based on that confidential information,” Nikhil Wahi said in court.
Despite a rocky few weeks since its announcement, the team behind EthereumPoW (ETHW), a proof-of-work splinter from the Ethereum Blockchain, has finally announced plans to launch its hardfork soon after the Ethereum Merge on September 15.
“ETHW mainnet will happen within 24 hours after the Merge,” the @EthereumPow Twitter account posted. “The exact time will be announced 1 hour before launch with a countdown timer, and everything including final code, binaries, config files, nodes info, RPC, explorer, etc. will be made public when the time’s up.”
The Ethereum merge later this week will switch the second largest blockchain by market capitalization to a proof-of-stake consensus mechanism, removing the need for energy-intensive mining operations. This move has caused a rift in the Ethereum ecosystem as miners—unwilling to give up their revenue stream—proposed forking Ethereum or starting to mine other blockchains.
Several exchanges have expressed interest in or have already listed the forked ETHW, including Poloniex, Bitfinex, and Coinbase. ETHW has fallen 49% from its all-time high of $141.36 on August 8 to a current trading value of $29.52, according to CoinMarketCap.
According to the @EthereumPoW account, the mainnet will start 2,048 empty blocks beyond the Merge block, adding padding to ensure that the chainID—a unique identifier to differentiate among blockchains—switches successfully, and that the chain is the longest chain of ETHW.
This offset will also prevent duplicate blocks on both ETH and ETHW.
“Therefore, the Merge block + 2049 will be the 1st block on ETHW that may contain any transactions,” the account says.
EthereumPoW is the brainchild of Chinese crypto miner Chandler Guo, who announced the proof-of-work hardfork on Twitter on July 27, 2022.
ETHW critics, including Ethereum Classic developer Igor Artamonov, took issue with the plan to launch the EthereumPoW mainnet after the merge. “It’s like losing 90% of momentum just on launch,” he wrote. “And no one would take it seriously if it’s not a continuous / non-stop chain.”
Artamonov also questioned the stated motives of the hardfork.
“The main sell point could be ‘PoW is more secure,'” he tweeted. “But they sell it under ‘miners need to earn money.’ Why??? That’s stupid. That’s not why people would use a blockchain. ‘Safety’ would be a better reason.”
The main sell point could be “pow is more secure.” But they sell it under “miners need to earn money.” Why??? That’s stupid. That’s not why people would use a blockchain. “Safety” would be a better reason 3/9
— Igor Artamonov (@splix) September 12, 2022
Guo has not yet responded to a request for comment from Decrypt.
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The United States Chamber of Commerce building is seen in Washington, D.C., U.S., May 10, 2021. REUTERS/Andrew Kelly
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WASHINGTON/LOS ANGELES, Sept 12 (Reuters) – The Biden administration urged railroads and unions to reach a deal to avoid a railroad work stoppage, saying on Monday it would pose “an unacceptable outcome” to the U.S. economy that could cost $2 billion a day.
Railroads, including Union Pacific (UNP.N), Berkshire Hathaway’s (BRKa.N) BNSF, CSX (CSX.O), and Norfolk Southern, have until a minute after midnight on Friday to reach tentative deals with hold out unions representing about 60,000 workers. Failing to do so opens the door to union strikes, employer lockouts and congressional intervention. read more
U.S. Labor Secretary Marty Walsh is postponing travel to Ireland to remain in talks, the department said Monday.
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“The parties continue to negotiate, and last night Secretary Walsh again engaged to push the parties to reach a resolution that averts any shutdown of our rail system,” a Labor Department spokesperson said. “All parties need to stay at the table, bargain in good faith to resolve outstanding issues, and come to an agreement.”
The brinkmanship comes at a sensitive time for unions, railroads, shippers, consumers and President Joe Biden, who appointed an emergency board to help break the impasse.
A White House official told Reuters Biden has been in touch today with unions and companies to try to avert a strike, as have cabinet officials.
U.S. railroads account for almost 30% of cargo transport by weight and maintain about 97% of the tracks Amtrak uses for commuter rail. Widespread railroad disruptions could choke supplies of food and fuel, spawn transportation chaos and stoke inflation. read more
Unions, which won significant pay increases, are pushing back on work rules that would require employees to be on-call and available to work most days. Railroads are struggling to rebuild employee ranks after slashing their workforce by almost 30% over the past six years.
At midday on Wednesday, Norfolk Southern will stop accepting intermodal cargo: goods that move by combinations of ship, truck and rail transport. Those shipments include consumer products and e-commerce packages that account for almost half of U.S. rail traffic.
That could exacerbate existing backups at East Coast seaports and inland hubs, causing cascading delays across the country as farmers prepare for harvest and retailers restock stores for the Christmas shopping season. Bulk commodities – including food, energy, automotive and construction products – make up the remainder of U.S. rail shipments.
U.S. industry groups are pressuring Congress to avert the worst-case scenario.
“A shutdown of the nation’s rail service would have enormous national consequences,” the Chamber said on Monday, adding it would lead to perishable food waste, disrupt goods delivery and prevent heating fuel and chemicals transport.
The Labor Department said there have been dozens of calls by Cabinet officials and other top administration officials to help the sides reach agreement.
Railroads late last week said they would cease shipments of hazardous materials such as chlorine used to purify drinking water and chemicals used in fertilizer on Monday so they are not stranded in unsafe locations if rail traffic stops. read more
On Sunday, two unions negotiating contracts said halting hazardous shipments was designed to give employers leverage ahead of this week’s deadline to secure labor agreements. read more
As of Sunday, eight of 12 unions had reached tentative deals covering about half of 115,000 workers, the National Railway Labor Conference (NRLC) said.
Hold outs include the transportation division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers (SMART-TD) and the Brotherhood of Locomotive Engineers and Trainmen (BLET).
There has not been a nationwide U.S. rail service stoppage since 1992, when major freight railroads closed operations for two days in response to an International Association of Machinists strike against CSX, saying that a strike against one railroad was a strike against all railroads.
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Reporting by David Shepardson and Lisa Baertlein; Editing by Chizu Nomiyama, Jonathan Oatis and Josie Kao
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