Date:09/08/11

Facebook lawyers cite

Lawyers for Facebook Inc. say they have unearthed "smoking-gun documents" that debunk the claims of a New York man that he is entitled to a significant ownership stake in the social-networking service.
In court papers filed late Thursday in U.S. District Court for the Western District of New York, attorneys for Facebook write that plaintiff Paul Ceglia "does not want the public to know what was discovered on his computers because it includes smoking-gun documents" showing that evidence presented to bolster his case has been fabricated. "This entire lawsuit is a fraud and a lie," the attorneys write. Evidence cited by the attorneys includes an alleged contract and email exchanges between Ceglia and Facebook Chief Executive Mark Zuckerberg, which purport to show Ceglia formed an early partnership with Zuckerberg entitling him to a large stake in Facebook.
"The purported contract at the heart of this case is a fabrication," Facebook attorneys write. They claim that Ceglia has sought to suppress incriminating evidence by seeking to have it designated confidential. Ceglia originally sued last year, alleging that his arrangement with Zuckerberg entitled him to an 84% stake in Facebook. Paul Argentieri, an attorney representing Ceglia, said he was unable to comment due to a protective order on the testing of evidence. A Facebook spokesman declined to comment.
Facebook has grown rapidly since it was founded by Zuckerberg while he was a student at Harvard University in 2004, and now counts some 750 million users.As part of a round of funding closed earlier this year, closely held Facebook was valued at $50 billion. Investors include Microsoft Corp. and Goldman Sachs Group Inc. The Palo Alto, Calif.-based firm is expected to go public next year.Court filings indicate that Ceglia has not recently been actively involved in the production and examination of evidence in the Facebook case, and that he has been living in Ireland.Attorneys representing both parties have been scrutinizing alleged documentation of Ceglia's prior business relationship with Zuckerberg, including so-called ink analysis.
Facebook attorneys argue that Ceglia has obstructed the investigation of documents by having his attorneys bar Facebook from collecting additional ink samples."If defendants' experts are able to fully test and date the ink on the purported contract, they will further establish the fraud," the attorneys write. The attorneys acknowledge that emails were exchanged between Zuckerberg and Ceglia when Zuckerberg was a Harvard student, and that Zuckerberg had agreed to provide web development for Ceglia. However, that agreement applied solely to a Ceglia project called StreetFax, according to the attorneys--a claim they say is backed by emails recovered from Zuckerberg's Harvard email account.
A hearing in the case has been scheduled for Aug. 17, according to court documents. Ceglia's lawsuit has not been the sole, high-profile legal effort to obtain a significant stake in Facebook. Cameron and Tyler Winklevoss, who attended Harvard with Zuckerberg, have sought to increase their ownership interest in Facebook, which was granted as part of a legal settlement. The Winklevoss twins have claimed that Zuckerberg stole their original idea for an online social-networking service.

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