Here's the Email That Could Cost Mark Zuckerberg Half of Facebook | Hacker News Reader

Here's the Email That Could Cost Mark Zuckerberg Half of Facebook

theatlanticwire.com

116 pointssasvari94 comments

The problem for MZ is he apparently did deal with this guy on StreetFax. MZ and his attorneys have conceeded that point. So its not like this is some guy who has never actually talked to MZ.

Second, MZ has a credibility problem. He has a reputation of duping people, or at least not playing it straight. While a lot of people give him credit for being able to use some good tactics to screw over people, those same tactics can also end up biting you too.

I don't know if the emails are credible or not, but I'd take them seriously.

I also doubt DLA Piper would file this without some due diligence

First, Ceglia (who was previously convicted of fraud) waits 7 years to file this lawsuit. Now he releases a new batch of e-mails that bolster his story, which were conveniently omitted from his first round of accusations?

This is enormously suspicious across the board. It should be ignored as an annoyance and nothing else until a court finds otherwise.

I really don't think anyone just from reading the article(s) about the situation has enough information to know for sure.

And that's pretty much the point. It's the article which is claiming "emails don't appear fake" and "it looks real".

Unless its proven that the mails are real, FB shouldn't be harassed over it. If they don't have the forensic to prove it real or otherwise, shouldn't FB be getting the benefit of doubt since the guy is a convicted felon, remain silent for years, suspiciously came up with new mails months after initial lawsuit, seems excited about FB(the site he is talking about) and then goes dormant for 7 years...

At the same time, that's a very prejudicial stance to take-- that anyone ever convicted of a crime is forever untrustworthy. Look at Tim Allen, he was a coke dealer going away for life who then turned state's witness, turned in all his accomplices and now he's in Toy Story trilogies.

I'm taking no stance until actual evidence comes forward or this goes to court and the emails in question can be examined and verified, if possible.

You often need to go through the discovery process to determine what is real and what isn't. To go through discovery, you need to file a suit.

Just because someone is a convicted felon doesn't mean they're not entitled to the same access to the judicial system as everyone else.

In another interview it was said that Ceglia found the facebook stuff while reviewing paperwork for the fraud case. He might have honestly forgotten and found the documents 7 years later.

Who prints out emails? Besides my father, do people regularly print out emails? Maybe just important ones? I print out emails but usually they are e-Tickets. Call my cynical but I would rather trust an electronic copy on an ISP (or the archived copy) somewhere.

Your second sentence answered your first sentence

Would be interesting to actually see the contract they are talking about. I'm sure one of them has a copy. While agreeing to a 50/50 deal in an email exchange may not hold water, a written contract between the two certainly would.

Even the copy of the contract he provided to the court was nearly unreadable. [1]

[1] http://www.businessinsider.com/mark-zuckerbergs-facebook-con...

It seems that he purposefully waited near the end of the statute of limitations (6 years) in order to file the lawsuit. I don't see this as a reason to question the validity of the lawsuit but, perhaps, strategy on his part to 1) see how the Winklevii did and 2) wait until FB's valuation was as high as possible before filing.

I think finding the emails on the second time around is suspect but defense lawyers will have a chance to review the evidence so it makes me think that DLA Piper did their due diligence to prove the veracity of these emails (otherwise they would know that it's likely to be thrown out before even coming to court).

I would suspect that he had to go subpoena / pay-off some ISP to recover backups to pull out the emails after the other factors gave his a little bit of leverage, namely the twins case and the fact that facebook did concede that MZ and Ceglia worked together...

As fascinating as it is, people from Business Week and Reuters commenting that they 'look real' seems silly. Pure speculation, unless those guys and linguists who have studied Zuckerberg's writing and style and compared it to the email, their opinion means exactly nothing. I thought that really detracted from the whole thing.

Occam's razor time: Ceglia was according to that email full of ideas for Facebook until it started getting publicity, at which point he promptly forgot about it for several years...

If you're not looking for an interesting story angle, the posted examples look less plausible than the original contract.

The emails don't read 'fake,' writes Henry Blodget

Really. How exactly? Blodget appears to qualify this claim (in the Business Insider article) by basically saying "well, they haven't been proven fake yet, so we are suspicious that means they are real".

Ahem.

To me (bearing in mind I'm theoretically supposed to be good at this stuff :D) they look like they are probably faked. The language similarities between the two examples are extremely telling; for example, the odd punctuation (or lack of) visible in both emails strikes me as identical.

I think "suspicious until proven real" is the right approach here.

From the business insider article "[if they were fake] we imagine DLA Piper's investigators would already have exposed it"

I agree w/Biz Insider - A big tech law firm that is almost certainly working on contingency rather than billing $500/hr is a fair indication that there's some meat to this case.

Yes... but still sceptical. I'd like to know what due diligence was done, and by whom. And exactly what they did (i.e. to the computers, these emails etc.).

It would certainly be possible to fool someone that such emails were legit depending on what sort of verification job they did.

hardrive data and forensic analysis from this time period exist as part of the Winklevoss lawsuit.

Are these emails from those HDD's?

If not, where are they from?

Have they been subjected to forensic investigation?

Has the source been substantiated?

Was the due diligence done on these emails, specifically?

I'm a cynic about such things though :)

Come to think of it this way. If there is even a 10% chance that this is true and the settlement would be at least in the range of $200M to $1B (wild guess), and the lawyer's fee is 30%, that's an expected payoff of $60M to $300M. Nothing to sneeze at.

Even if they lose, think about it, DLA probably already have some spin about how they are just being "professional" about due diligence and doing the best they could for their client. No loss in reputation.

I disagree. If these are proved to be fake, then DLA will have this reputation of being ambulance-chasers. It would definitely hurt their reputation.

Plus, the legal costs of pursuing a case like this is likely to be extremely high. If the evidence is so weak to be thrown out even before it comes to court, then I don't think they would pursue it.

I disagree.

The emails from Ceglia are laden with a bunch of grammatical and spelling errors. While the supposed emails from Zuck sound more polished, robotic and have neither grammatical nor spelling errors.

The tone of the two are very different.

Exactly what I was thinking - that to have been fake, he maintained character of MZ quite well. Further, I would doubt that he would have known exactly the whereabouts of MZ during that period. So to be able to know and make claims as to when he was where, refer to the other people and make up stories about wanting to drop the site, take down the server and the fact that his parents could cover his college, all while in character is quite an accomplishment.

BTW, I wrote this in Zuckerberg's voice as portrayed by paul ceglia via DLA Piper dispositions.

There are some missing comma commonalities between the two that I find compelling.

I'm not saying that Mr. Ceglia is right, but the amount of people on this thread outright dismissing his claims is laughable.

He has now had his claims vetted by at least one major law firm. I guarantee you they looked closely at his claims (they have both a legal and financial interest to do so) and found them worth pursuing.

The risk to Zuckerberg is probably a lot higher here than most people think.

I predicted when this first came out that Zuck would have to settle, and out of pocket, but not for 'in the billions.' I still believe that after reading these emails.

You have to remember that a law firm is going to ask itself about total dollar outcome, not necessarily veracity of all claims. Even a 1% chance of partial success is enough to pay for quite a lot of litigation.

Any "major law firm" will go after someone as long as your checks keep clearing. The weight of a law firm is not related to the likely validity of the claims. I mean, if you think you can get a 50% stake in Facebook, of course you're going to pursue that heavily, even if your evidence is weak -- because you might be able to beat FB around until they give you money to make you go away.

Yes, and based on this how much do you think the legal costs would be for a firm like DLA Piper? You're easily talking about millions. If Ceglia has that amount of money to throw around, I don't think he'd be spending his time with frivolous lawsuits.

I'm betting they took this on contingency and will take a cut of the winnings. If so the firm is willing to risk their own capital.

Why is there a presumption of truth in regards to emails like this, especially when coming from someone previously convicted of fraud?

From the article: People now reading the emails are beginning to take them very seriously. "The emails don't read 'fake,' writes Henry Blodget at Business Insider. Felix Salmon at Reuters agrees. "The emails Facebook says are fake don't seem that way to me." In any event, everyone agrees that, if the emails are fake, it should be easy for Facebook to demonstrate that. "Facebook almost certainly has a forensic analysis of Mark Zuckerberg's hard drives and email boxes from this period, because these drives would have been the same ones analyzed in the Winklevoss lawsuit," writes Blodget. "Perhaps the drives show different versions of the emails in question--or no emails at all."

This is precisely what I am referring to:

The emails don't read 'fake,' writes Henry Blodget

Felix Salmon at Reuters agrees. "The emails Facebook says are fake don't seem that way to me."

Why does this matter? How it "seems" or "reads" to online commentators is irrelevant. What are these opinions based on - gut feelings?

|Why does this matter? How it "seems" or "reads" to online commentators is irrelevant. What are these opinions based on - gut feelings?

The reason it matters to most is transitive trust. Most people trust Reuters/Business Insider as more authoritative than themselves so if Reuters and BI signal that they are suspicious, then the public will be. If people begin to lose trust in Zuck, then they lose trust in FB then...

Careful--this is the same logic behind the demands for Obama's birth certificate. People and entities should in general not be obligated to defend every ridiculous claim that comes their way.

Objectively, past fraud history doesn't prove anything except that he did cross the border once (assuming he was not falsely convicted of fraud). MZ has also a nice long track of screwing partners without scruples. But this doesn't prove anything except that he did cross the border, and more than once. One should focus on the actual facts to determine the truth and not on past errors or misbehaviors.

For me, it was because he now has DLA Piper representing him. This is a prestigious law firm well known here in the Valley. If the evidence were fake, I do not think DLA would touch this with a 10-foot pole as it would sully their reputation and would not go passed the evidence gathering stage and be thrown out (before even a possibility of there being a settlement).

It's weird to me that every other commenter on this thread mentions some point about Paul Ceglia's fraud record, as if Zuckerberg is some angel with a clean background. IMHO, Ceglia's fraud record is a completely separate incident and shouldn't be mentioned at all, but if you are going to use it to defend your stance, you should also mention Zuckerberg and his world-famous history of lying, stealing, and screwing people out of what they were contractually promised.

This is impossible! Zuck promised _me_ half of the company back in 2004. Here's the email:

--------------

    Dear Ajays,
    Thanks for the beers last night, and giving me all the
    ideas for "The Facebook". I feel your contribution is
    equal to mine, and so should your ownership. I hope
    50% ownership of The Facebook is acceptable to you?

    Mark
    PS: Don't mention this on HackerNews, they may not
    believe you.

--------------

Damn you, Zuck!

Don't know if it's true or not, but if it is, Paul Ceglia could be the greatest early investor of all time, at least in terms of returns.

I remember seeing these emails when this story broke. IAAL, and it looked to me like this is a colorable claim (without predicting its eventual outcome). It was weird to me that journalists and tech commentators dismissed it so readily at that time.

Its really easy to fake some emails, and it seems wierd to wait seven years to come forward with the claim. In addition the person isn't exactly the most trustworthy.

Seems pretty dismiss-able to me...

1) The guy said it took so long for him to come forward because he "forgot" about the contract/emails.

2) Selling 50% of the company for $2k seems like an odd move... I don't know my facebook history perfectly, but didn't Zuck have a business partner with a lot of money already?

3) The guy has a history of fraud convictions.

Doesn't change the fact that it's a colorable claim. It doesn't look to me like any of the defenses you list would lead to summary judgment based on the facts.

Being convicted of a felony does not make you forever an untrustworthy lout, nor a compulsive, criminal liar. It means you committed a crime once and were prosecuted for it.

If the conviction is for fraud, and it seems like the current case might be fraud, then it's a little more relevant.

That's what we call a "straw man argument"-- I never claimed otherwise. I offered it up as a data point (among several) that caused people to dismiss the claim. Statistically speaking, I imagine people who've been convicted of fraud are liklier to commit fraud than those who haven't been.

Past performance does not indicate future performance in statistics.

Uh, what!?

There's something about a lawsuit "building buzz" that disturbs me.

Somebody will package this whole thing--along with the rest the question marks from Facebook's nascent days--into a banal biz school class: "How to avoid squishy Facebook problems."

There are a lot of powerful people that probably do not want the control of facebook to be questionable.

The Zuckerberg in that email sounds exactly like the Zuckerberg in "The Social Network."

In other words, like a fabrication.

Even if they are real can someone really claim 50% ownership after this period of time? Surely the ownership would have to be backdated to around his last involvement with the company, which would be miniscule compared with Facebook's valuation today.

Anyone can contract for anything, unless it's against public policy in the form of a law.

>"Surely the ownership would have to be backdated to around his last involvement with the company, which would be miniscule compared with Facebook's valuation today."

That would be a HUGE amount of money. Even if the subsequent investments are still legit (despite not having the involvement of the main investor), Zuckerberg owns like 30% of Facebook, so if you assume the primary investor wouldn't have gotten diluted worse than Zuckerberg, you're looking at tens of billions. Even if he gets diluted as bad as Saverin did (down to 1/7th), that's still like $5 billion or so, right? That's shit-tons of money.

What I meant was the value of the company at the time, although I'm not sure how that would work legally.

Do you know how equity works?

Yeah, that's not how equity investing works. Even if you assume he had the worst in terms of anti-dilution provisions, that's still gonna be like 5% of a $50B company. If he gets Zuck's anti-dilution provisions, that's more like 20-25% of a $50B company.

I think what I said came out bad, what I mean is if the question of ownership was at a certain value, as in the value at the alleged time of sale can you really lay a challenge on it at any future point in the company for say that 5% diluted equity. Seems to leave the door open for people to create technicalities in deals and then treat it as a risk free investment, if they can challenge for it back at any time into the future.

Why wouldn't you be able to? Zuckerberg didn't allegedly defraud the plaintiff of cash, he allegedly defrauded the plaintiff of pre-Round-A Facebook shares. If I steal a lottery ticket from you and that ticket subsequently wins the Mega Millions or whatever, I don't just owe you the $5 ticket price, I owe you the lottery winnings, right?

Mark Zuckerberg no longer owns 50% of the outstanding Facebook stock. He personally couldn't lose half of Facebook even if he wanted to?

He could lose half of his share, I believe.

If only Facebook had implemented his Christian Corner(TM) idea. They'd be worth billions by now.

Maybe Twitter can use it instead.

Ridiculous. Did this guy ever show up in a cap table anywhere? He would be diluted into obscurity by now.

Why would that be the case? If he had 50% back then -- same as MZ -- his stake would still be worth billions.

Zuck has probably (though I don't know for sure) been getting refreshed along the way.

False.

Does any of this really matter? Since when is an email a legally binding contract in ownership of a company?

This is why you should use echosign. So you can prove things through a third party that keeps records!

How do I downvote paparazzi stories with linkbait titles?

Click "flag".

How does this prove that the emails were about facebook, and not some other site?

I guess facebook isn't going to use that angle, though.

if the emails are fake, it should be easy for Facebook to demonstrate that.

How? It's easy for FB to demonstrate that the emails are real, but not the opposite. Even if Zuckerberg didn't Delete the emails himself, it is in the interest of FB to show no trace of emails.

Suppose FB shows no trace of emails, what does it matter? If Ceglia can show that the emails are indeed real, then that trumps FB. Or am I missing something here?

|Suppose FB shows no trace of emails, what does it matter? If Ceglia can show that the emails are indeed real, then that trumps FB. Or am I missing something here?

If Ceglia can and does prove that the emails are real and FB is left claiming they couldn't find the emails, it's going to look to most like FB knew it had something to lose all along and that will immediately give Ceglia's claim is more validity. Learn from Nixon, the coverup is usually worse than the offense. Facebook should be as open as they can.

Why? One of my big problems with society these days is that honesty often doesn't appear to pay. Upside of successful coverup: Facebook saves billions. Downside of failed coverup: Facebook loses billions. Downside of being honest: Facebook loses about the same amount of billions as if they failed at a coverup.

Another downside: being convicted of fraud. Governments tend to not like it when you lie to them. People go to jail, lose legal licenses, etc... Society may not care about honesty, but the courts certainly do.

It may be in the interest of FB to show no trace, but it would require a fair number of people breaking a bunch of laws. As the article pointed out, they've already done discovery/forensic analysis on these drives.

Tampering with that would be a MAJOR crime by everyone involved.

Huh? They could just do another analysis to show email from that time.

Although proving the lack of something is a lot more difficult that proving the existence of something. So it doesn't always serve much for them to say "nope, can't find them".

However, I am sure they will be eager to analyse Ceglia's computers for evidence

Honest question: How might one prove that an email is real?

RTFA

"Facebook almost certainly has a forensic analysis of Mark Zuckerberg's hard drives and email boxes from this period, because these drives would have been the same ones analyzed in the Winklevoss lawsuit," writes Blodget. "Perhaps the drives show different versions of the emails in question--or no emails at all."

Yes but what does that mean? One can create and "backdate" (touch -t) any file. So how does one prove that an email is real and not created and backdated today?

If there is a copy of the purported Ceglia emails other than in Ceglia's imagination (e.g. in the verified forensic analysis previously done for the twins), then they truly do exist.

It would be interesting if a web email provider was used. Doubtful they have any decent retention strategies after you hit delete.

On one's own server, sure. On hotmail.com or some other 3rd party email provider, not so much.

My first startup tried to answer this. Basically you take a secure hash of every email and store only the hash with a third party (which records the date, that's the monetization) -- but it's really really hard to sell companies on preventative technical solutions that involve math.

It works because you don't need to know which emails/files are important -- storing 250 bytes of hashes is practically free and tells you nothing about the contents, it just authenticates the contents later in court.

Out of curiosity, how did you verify that the emails were actually sent before storing the hash. What would prevent me from storing a hash on your server without sending the email?

We didn't (this story isn't exactly our use case), but think of how much easier this would be to arbitrate if Ceglia could prove that those emails existed on Feb 4, 2004 instead of this year.

Now it's possible he could have had the foresight to make and hash fake emails that he didn't send just in case, but you've still significantly raised the bar for fraud from just "finding" emails from 2004.

A bigger question might be, who sent it? Was it really the person you claim it is?

It's easy to show the receipt of an email and where it came from (especially when you have full headers). But unless the sender bothers to GPG or S/MIME sign the email, in theory, it could have been sent by another person who had access to the account. Or, it could have been spoofed, etc.

Trace of evidence in web email. I just went to Hotmail (an acct I stopped using long ago) and pulled up emails from, yes, 2004. :)

This is why digital signatures were invented.

Here in Australia an opposition leader was undone by a faked email (http://en.wikipedia.org/wiki/OzCar_affair).

The problem here is it is somewhat obvious that someone waited until FB was worth something before putting out the legal claim(the lawsuit)..What?

Look at the tone of the emails back and forth between MZ and claimant...given that tone would not a reasonable person make a legal claim when FB moved to CA?

That means there is quite a bit missing in the story on both sides...so it comes down to who has the most to loose...FB or claimant..

Since FB has the most to loose if this gets into full court hearings I see FB making an attempt to settle..Why?

FB at several 100 billion dollars in valuation probably does not need the disclosure that valuation may be in error due to past behavior of the founder/CEO not to mention the obvious decrease in stakeholders values if the claim is true.

Waiting until a company is worth something in order to file a lawsuit like this is neither a problem nor illegal. In fact, it's great strategy.

If it's true, I don't think he deserves 50% or 80%. It's up to the courts. Also, I think Facebook is what it is today solely because of Zuck and the FB team.

But I don't see a problem with waiting to file a claim.

Waiting for FB to be worth something before pushing the lawsuit makes sense. Why would he bother if it wasn't worth anything?

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