Sunday, August 7, 2011


On Friday, Facebook’s lawyers made news when they told a court hearing a lawsuit brought by the alleged initial investor in Facebook, Paul Ceglia, that they’d found the “smoking gun” proving the alleged investment contract was a fraud.

Facebook says they’ve found the “authentic contract” between Ceglia and Zuckerberg. Facebook is also charging that Ceglia, who they say is now living in Ireland, is holding back electronic storage devices he intentionally tried to hide from them.

Both parties agree that in 2003 Ceglia hired Zuckerberg, then a Harvard undergrad, to do work for his StreetFax company. But Ceglia filed suit in 2010, saying the contract also included $1,000 initial funding for Facebook, and that he’s entitled to more than half of the social networking giant.

Facebook argues the contract Ceglia produced electronically is a forgery and that Ceglia is a known con artist.

And now Facebook says that in the course of discovery — where Ceglia’s lawyers turned over to Facebook a number of computers and hard drives — that it has found the original “authentic contract” and proof that there are other “storage devices” that Ceglia is intentionally hiding from them in violation of a court order.

But the problem is Ceglia is claiming the “authentic contract” is shielded from use in the suit by designating them as “confidential” under the rules of an agreement between the two parties. Facebook is asking the federal judge overseeing the case in New York State to overrule that designation, in a detailed Friday filing where many of the documents were completely redacted due to the claims of confidentiality.

If indeed Facebook has a copy of the “authentic contract” and it does not include any investment in Facebook, the social networking giant could be close to finally putting aside the legal dramas over the site’s founding in 2004. Earlier this year, the Winkelvoss twins, who was made famous by the movie “The Social Network,” declined to ask the Supreme Court to let them re-litigate their settlement with Facebook over Zuckerberg’s alleged theft of their idea.

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