Twins concede in Facebook legal action
FACEBOOK yesterday tied up another loose end ahead of its expected $100bn initial public offering, with the Winklevoss twins ending their long-running legal dispute.
The Olympic rowers – known as the “Winklevii” – have decided not to appeal to the Supreme Court a ruling upholding their $65m (£40m) settlement. The cash-and-stock agreement was intended to end a claim by the twins that Facebook founder Mark Zuckerberg had stolen their idea for a Harvard social network.
They agreed to settle for the sum but then appealed it, claiming Facebook had misrepresented its soaring value.
Zuckerberg created Facebook in 2004 in his Harvard University dormitory room, as dramatised in the 2010 film The Social Network.
The end of the dispute marks the closure of one of the legal claims lodged against Facebook.
The firm is still facing a legal bid for 84 per cent of the company from businessman Paul Ceglia. The New York-based wood pellet salesman, a convicted fraudster, claims Zuckerberg promised him a stake in the company for IT work carried out before the launch of Facebook.
Ceglia has passed a polygraph lie-detector case and claims to have documentary proof of the agreement, which has been dismissed as fraudulent by Facebook’s legal team.
Eduardo Saverin, Zuckerberg’s Harvard roommate who co-founded the social network has also been involved in a now-settled legal dispute with the firm over allegations his stake was unfairly diluted.
Facebook last month shed users across a number of its mature markets, sparking fears its meteoric growth is beginning to peak.
It lost 6m users in the US to fall below 150m and lost a further 100,000 in the UK. However, it is still expected to smash through the 700m users barrier this year.
TIME LINE | THE UPS AND DOWNS OF THE SOCIAL NETWORK
● 2002 The social networking website ConnectU is founded by Harvard students Cameron Winklevoss, Tyler Winklevoss and Divya Narendra, with Zuckerberg later asked to help in its development.
● 2003 Mark Zuckerberg creates ‘Facemash’ at Harvard University. This was an early version of Facebook.
● 2004 Mark Zuckerberg began to write Facebook with his Harvard roommate Eduardo Saverin who claimed he was “diluted” out of the company after Zuckerberg quit Harvard and moved to Palo Alto. Saverin later filed a lawsuit against Facebook and Zuckerberg, which was settled out of court. Saverin signed a non-disclosure contract.
● 2004 ConnectU filed a lawsuit against Zuckerberg and other Facebook founders.
● 2008 Tyler and Cameron Winklevoss agree to a cash and stock settlement after lengthy legal proceedings. They later say they were misled over the value of the company and went to the courts to up their claim against Facebook.
● 2010 The Social Network, a film about the beginnings of Facebook directed by David Fincher is released.
● 2010 Paul Ceglia, who claims to have met Zuckerberg in 2003 when he posted a Craigslist advertisement seeking help with his website StreetFax filed a lawsuit against Facebook founder Mark Zuckerberg, claiming 84 per cent ownership of Facebook. He is seeking monetary damages.
● 2011 The “Winklevii” twins admit defeat after deciding not to appeal against a Supreme Court ruling upholding the original settlement over their ConnectU venture.