Saturday, April 16, 2011

ADR, Securities Law and Facebook

There was big news last week in the Facebook world - the 9th Circuit affirmed the dismissal of the suit by the Winklevoss twins against Mark Zuckerberg in the case of Facebook, Inc. vs. ConnectU, Inc. The case involves claims by the twins that Zuckerberg stole their source code for ConnectU and used it to create Facebook.

The decision is not the resolution of the dispute, which was settled years ago, with the twins receiving $180 million in stock and $20 million in cash. They certainly did not lose, but what they did lose was their attempt to set aside the settlement based on claims of securities fraud committed during the mediation of the original dispute.

Professor Jill Gross has a detailed analysis of the case, which she said "involved the interaction of three of my favorite things: ADR, Securities Law and Facebook." I wouldn't put Facebook up there with ADR and Securities Law, but the Professor's analysis is worth a read at her blog - ADR, Securities Law and Facebook – I “like”.


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