Facebook CEO Accused of Securities Fraud
The whole ConnectU/Facebook dispute has come back to haunt Facebook's shady CEO.
As a Facebook user, the general warm and fuzzy feeling regarding the site's overall security and professionalism have simply vanished. Case in point: Jane reported Wednesday about Facebook CEO Mark Zuckerberg calling trusted users "dumb fucks." It followed another startling report early this month regarding a flaw that exposed what was previously assumed as private chats. Those two items are just the tip of a massive media iceberg that currently plagues the popular social network.
Now we're going to add a bit more drama: Zuckerberg has been accused of securities fraud. Former Harvard schoolmates--Divya Narendra and brothers Cameron and Tyler Winklevoss--have come forward and said that Zuckerberg and the other Facebook executives tricked them into an alleged $65 million cash-and-stock settlement that was discovered to be worth far less. The settlement stems from the previous legal battle between Zuckerberg and the three schoolmates over the (stolen) source code used for Facebook.
According to an appeal brief filed on behalf of Narendra and the Winklevoss brothers, the settlement was never finalized, and claims that the judge acted improperly in allowing the settlement to proceed, and in granting ownership of their social network--ConnectU--to Facebook. The main argument is that clever lawyers and Facebook executives presented the offer based on Microsoft's previous $15 billion valuation using preferred shares. The catch is that the offer was executed using common shares, cutting the supposed $65 million settlement down to nearly half.
An article over at Marketing Pilgrim says it best. "What seems to keep happening with Facebook are things that give a sense that the ethical foundations of the company are not real strong," the author states. "They run roughshod over privacy of their users and act like it’s a ‘no harm, no foul’ action. Now they are in a court battle that outlines shady activities from the beginning of thefacebook’s time that include the original idea being stolen, money paid to quiet those accusations and then a reneging of sorts by pulling a bait and switch on payment of the deal."
With this latest claim, Zuckerberg's status as Facebook CEO could be in jeopardy, especially if he is in fact indicted of securities fraud. If anything, the way Facebook conducts business may be a key factor in users moving on to find somewhere else to roost and socialize.
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Who cares?
Facebooks source code... Thats worth like 5 bucks if your lucky.
Its amazing that it took all that time for those dumb f*cks to realize that facebook = the INTERNET = no privacy.
Run by an asshat. Who knew?
I am so glad that I don't use and have no interest in Facebook other than staying away from them and Mark Zuckerberg.
I'm hoping that this will clean the company up or drive users away from it until it fails.
Mark is displaying himself as just another scuzzball stomping on the people who trusted him.
Shocking!
So these schmucks are unhappy with a 65 million dollar settlement that turned out to be "only" 32.5 million dollars. Why don't you quit crying over the money you didn't get and take what you got and go do something innovative with it! If you "supposedly" were smart enough to be the original designers of thefacebook when you had ZERO money as college students then now that you are millionaires you should be able to design a space shuttle to mars out of tooth picks!
The point is, quit whining and go do something productive with your millions!
Yeah the source code can't be anything too special. Facebook's value is in the network effect. Each new user makes the site more valuable to every other user, on average. This results in a sort of critical mass of users at which point it is extremely difficult for competitors to enter and thrive in the market. There is a relatively low risk of future profits falling.
who's the dumbfuck now? lol
Would love to see Zuckerberg screwed
+1 to Kevin Parrish for not censoring the descriptors used by Zuckerberg in this article.
In other news, Facebook just happens to be on the internet and you probably shouldn't put anything on there that you wouldn't want somebody to know about.
Money man, it does funny things to you.
He should have sold it when he had the offers if he knew he did shady stuff. Everything comes out... this is assuming the charges are true of course.
What is really distrubing is that people thought they had any security on their personal info at all. HELLO! THIS IS A FREE SERVICE! How do you think they run it? They are selling your personal data to anyone who will buy it.
Who's the dumbf*ck, now?
yeah I am sorry but if you were tricked, then you were tricked... Grayman even though you have a negative rating on your comments, I think you are spot on. If your lawyers were stupid enough to let this settlement proceed the way it did, well you got what you paid for I guess (and Zuckerberg probably thinks the same thing right about now). Someone needs to beat Facebook to the punch of the next big social push and then it will be just like Myspace.
If you think a company has free reign over your personal data just because the service is free, you are absurdly mistaken.
I've deleted my Facebook account already. Really deleted it too, not just "deactivated" it. To all those who also wish to delete their account, make sure to google the link and procedure to ACTUALLY delete your account, since "deactivating" while sounding like it should delete your account, actually saves it and if you ever log into Facebook again, boom, your profile is still there. Kind of like you just didn't log in for awhile.
Not likely. If people aren't dumping Apple en masse for their nasty and deceptive business practices, I doubt anyone will care if the Facebook CEO was committing securities fraud. Then again, maybe Apple has it's fans brainwashed better.
I wonder if Tom's will do the right thing and delete their Facebook account...
What's retarded is that people bitch about Facebook, when it's all a choice. You CHOOSE to use it, and you have the choice of deleting it as well. You also choose to give away your information, theoretically knowing full well (in this day and age especially) it could be misused.
Is Facebook evil/immoral/blah blah etc? Sure, whatever you want to call it. But at the end of the day, ydiy.
I'm a hermit. What is facebook? Sounds like crap. Literally.
Kidding aside someone post that picture from Jane's article so that facebook user's can have a long look at the person they entrusted their lives with.
So these schmucks are unhappy with a 65 million dollar settlement that turned out to be "only" 32.5 million dollars. Why don't you quit crying over the money you didn't get and take what you got and go do something innovative with it! If you "supposedly" were smart enough to be the original designers of thefacebook when you had ZERO money as college students then now that you are millionaires you should be able to design a space shuttle to mars out of tooth picks!The point is, quit whining and go do something productive with your millions!
If you had $100, and you found out you only really had $50, you'd be pissed.
Grow up.
Its all about the mooney..
You know who's behind all this? The guy everybody's forgotten and never suspects...the guy from Myspace, TOM!!! What a genius!
I don't think it really applies the same way. You can still easily live off of 32.5 million. A person could not live off of $50. Take it this way, if someone told me I won $16 million, then said wait no it was really $8 million, I'd still be happy. In the end $8 million is still a lot of money that I don't have today.
Makes me all warm and fuzzy inside me when I see that Facebook is facing new rounds of criticism.
If you "supposedly" were smart enough to be the original designers of thefacebook when you had ZERO money as college students then now that you are millionaires you should be able to design a space shuttle to mars out of tooth picks!
So if somebody hands me $25 million, I'll instantly become a genius?
I'm going to "unfriend" him....
I wonder if Mark Zuckerberg and Steve Jobs are related I some way, twins of evil perhaps lol
I really hope Zuckerberg gets screwed properly this time
If I'm reading it right, the source code back then helped put Facebook on the map and get used on the Internet and start the word spreading...no source code, no Facebook v1, no actual users who tell others about it...to grow it to what it is today. Zuckerberg needed both the idea and its implementation (source code) to get his idea off the ground and make him and Facebook to what it is today, warts and all.
Technically though, I agree Facebook isn't all that...you add text and upload photos for all to see (even if you don't want everyone to see it? :-) )...big whoop...that's pretty much all Facebook does. The real success is cultural, which seems less related to techbnology than PR, "buzz", and marketing, coupled with an a recent cultural irrational need for us to let the world know what we're doing (which I don't generally agree with, I never want to be "that important" and I feel much of the stuff on FB I see either isn't anyone's business or we have no business knowing about) and in making FB scale so it can handle the number of people using it. Think about it, if FB has 100 people using it total, even with the same technical "capability" it has today, nobody would care. XXX millions of users, now people care.
I for one sure wouldn't want the FB team designing our Space Shuttle! 3-2-1---liftoff---oh, we "had a staff meeting" and decided on our own to change the shuttle to include tons of Mountain Dew on board, and we didn't feel we needed to mention the changes we made. Why didn't it leave the launch pad?
As for the $64M vs $32M settlement, I see both points, it's a lot of money...However, it may not be as much as you'd think... $32M divided by 3 people = $10.6M each...assume 50% in attorney fees, now it's $5.3M each. Take off 30% for taxes, this leaves $3.7M net per "former Zuckerberg friend". My swags in attorney fees and taxes certainly could be off, and $3.7M is still a lot of money to me. But if I felt my "former friend Zuckerberg" scre*ed me over the years by stealing my idea and implementation, and then added insult to injury by deliberately misleading me about the settlement by 50% and that I had a legitimate case, why not fight the good fight, especially with the $3.7M in our three respective pockets?
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