Posted Jan 11, 2011 11:11 pm CST
A federal appeals court panel in San Francisco today grilled both sides in a battle between Facebook co-founder Mark Zuckerberg and upscale identical twins who claim he stole the idea for the now-renowned social networking site from them.
The dispute was settled in 2008 for $65 million, as noted in the movie The Social Network. But Cameron and Tyler Winklevoss contend they were duped by Facebook into taking most of the settlement in stock that was worth far less than they thought, reports the Bits blog of the New York Times.
Now they are seeking permission to give back the money and try again for an even bigger piece of the pie, arguing, among other contentions, that Facebook violated securities law by failing to disclose expert valuation information it had obtained.
Members of the appellate panel today noted that the law firm representing the twins during the settlement could have asked more questions about the value of the shares at the time. And, it was also pointed out, the twins were advised as well by their father, a valuations expert who once was on the faculty of the Wharton School.
Jerome Falk of Howard Rice Nemerovski Canady Falk & Rabkin is representing the Winklevosses in their appeal. He didn’t hesitate to emphasize that his firm wasn’t counsel to the twins at the time of the $65 million settlement, the article reports.
However, the panel also bore down on Facebook’s lawyer, E. Joshua Rosenkranz, of Orrick, Herrington & Sutcliffe, for his claim that information from a confidential arbitration couldn’t be used in court against the social networking site due to a “mediation privilege.”
ABAJournal.com: “Facebook Lawsuit Didn’t Have ‘Tidy Ending’ Portrayed in Film”