Saturday, August 6, 2011

Facebook Lawyers Cite 'Smoking Gun' Papers In Ceglia Case

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 signficant 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.

Evidence cited by the attorneys includes an alleged contract and email exchanges between Mr. Ceglia and Facebook Chief Executive Mark Zuckerberg, which purport to show Mr. Ceglia formed an early partnership with Mr. Zuckerberg entitling him to a large stake in Facebook.

"The purported contract at the heart of this case is a fabrication," Facebook attorneys write.

Mr. Ceglia originally sued last year, alleging that his arrangement with Mr. 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 Mr. 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. The Palo Alto, Calif.-based firm is expected to go public next year.

Attorneys representing both parties have been scrutinizing alleged documentation of Mr. Ceglia's prior business relationship with Mr. Zuckerberg, including so-called ink analysis.

By John Letzing


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