Twitter drops 5% following report of whistleblower lawsuit (update)
Scott Olson

Update 8:35am: Adds analyst comment on whistleblower complaint.
Twitter (NYSE:TWTR) fell 5% in premarket trading after a report about a whistleblower complaint that accuses the social media giant about "lying about Bots to Elon Musk."
The former head of security at Twitter filed a whistleblower complaint in July with regulators, including the Securities and Exchange Commission, according to a Washington Post and a CNN report. Former security Chief Peiter Zatko also alleged that Twitter (TWTR) deceived regulators about its defenses against hackers.
The lawsuit comes after news on Monday that Tesla (TSLA) CEO Musk subpoenaed friend and former Twitter (TWTR) CEO Jack Dorsey in the latest development in a smoldering legal battle over an acquisition of the social-media company.
The complaint alleged that the social media giant misled regulators from The Federal Trade Commission and the SEC. Twitter (TWTR) spokeswoman Rebecca Hahn told the Washington Post that the whistleblower's allegations were "riddled with inaccuracies."
"Twitter fully stands by . . . our statements about the percentage of spam accounts on our platform, and the work we do to fight spam on the platform, generally," Twitter's Hahn told the newspaper.
The whistleblower complaint comes ahead of an October trial that will end up deciding whether Musk is forced to follow through on the $44 billion acquisition of the company to which he agreed.
"It's certainly reasonable to be more concerned today than you were yesterday," Lightshed's Rich Greenfield said in an interview Tuesday on CNBC. "I think anyone would look at this and be concerned. You would though have to believe that Twitter's senior executives from Jack Dorsey, CFO Ned Segal, they've all been knowingly filing false SEC documents for years. That's essentially what you'd have to believe."
Greenfield said without the Musk deal for Twitter (TWTR) "you would be hard pressed to believe that the stock would be north of $20/share."
Each day is bringing new swarms of documents in a process that will likely continue up until a five-day showdown starting Oct. 17.