Judge: Facebook Case Documents Can’t Be Kept Confidential

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Facebook Says Ceglia Computers Show ‘Smoking Gun’ of Fraud

Andrew Harrer/Bloomberg

Facebook Inc. said its inspection of computers turned over by Paul Ceglia, the western New York man who claims he’s entitled to half of Chief Executive Officer Mark Zuckerberg’s holdings in the social-networking company, shows “smoking gun” evidence of fraud.

Facebook Inc. said its inspection of computers turned over by Paul Ceglia, the western New York man who claims he’s entitled to half of Chief Executive Officer Mark Zuckerberg’s holdings in the social-networking company, shows “smoking gun” evidence of fraud. Photographer: Andrew Harrer/Bloomberg

Paul Ceglia, the western New York
man who claims he’s entitled to part-ownership of Facebook Inc.,
can’t keep dozens of documents found on computers he owned
confidential, a judge ruled.

U.S. Magistrate Judge Leslie Foschio in Buffalo, New York,
ruled yesterday that Ceglia’s lawyers improperly designated all
120 of the documents, including versions of the contract Ceglia
claims he signed with Facebook co-founder Mark Zuckerberg in
2003, as confidential.

Foschio removed the confidential designation from 85 of the
documents. He gave Ceglia’s lawyers until Aug. 17 to turn over
four copies of the contract, which they claimed were subject to
attorney-client privilege.

Foschio last month ordered Ceglia to let Facebook run
forensic tests on his computers, hard drives and electronic
storage media, as well as on the contract and the e-mails he
says support his claim. In court papers filed last week, Palo
Alto, California-based Facebook said its inspection, by the
computer forensics firm Stroz Friedberg LLC, turned up “smoking
gun” evidence of fraud.

Ceglia, 38, sued Facebook and Zuckerberg last year,
claiming that a two-page contract Zuckerberg signed in 2003 gave
Ceglia half of the company when the service was started the
following year. Facebook has grown to become the world’s biggest
social-networking site, valued at as much as $69.2 billion,
according to Sharespost.com, an online marketplace for
investments in companies that aren’t publicly traded.

27 E-Mails

In the order yesterday Foschio left in place
confidentiality designations that Ceglia’s lawyers placed on 27
e-mails between Ceglia, Zuckerberg and people involved with
developing the website for StreetFax, a company Ceglia was
trying to launch at the time.

Zuckerberg agrees he signed a contract with Ceglia to do
computer coding on the StreetFax project. The contract he
signed, when he was a student at Harvard University, had nothing
to do with Facebook, Zuckerberg said in court papers. Ceglia
claims he and Zuckerberg signed an agreement that gave him part
ownership of Facebook in exchange for providing some of the
early funding.

Facebook lawyer Orin Snyder had no immediate comment on
Foschio’s ruling. Jeffrey Lake, a lawyer for Ceglia, didn’t
return a voice-mail message seeking comment.

The case is Ceglia v. Zuckerberg, 1:10-cv-00569, U.S.
District Court, Western District of New York (Buffalo).

To contact the reporter on this story:
Bob Van Voris in federal court in Manhattan at rvanvoris@bloomberg.net.

To contact the editor responsible for this story:
Michael Hytha at mhytha@bloomberg.net.

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Facebook: How young is too young?

Facebook rules say no one under age 13 should use the popular social networking site. That doesn’t stop preteens from using it.

That’s what Matt Schwartz, principal at the Adrian Middle School in Michigan, says.

“I would say it’s maybe 30 to 40 percent of our kids that are signed up on Facebook,” Schwartz said. “I know our kids are not 13 years or older, but somehow they’re doing it.”

Schwartz and other area educators say that’s not a good idea. So how young is too young for Facebook and other online networking sites?

“I think that’s really up to the parents,” said Nate Pechaitis, upper elementary school principal of Madison (Mich.) Elementary School. “I see more problems happening with it at the middle and high school levels. Honestly, I would prefer you have to be 18 to use it.”

Pechaitis said he hears of students who begin to use Facebook in fourth or fifth grades.

“I tell parents I believe they have to be 13 to sign up for Facebook, and there’s a reason for that,” he said. “Students generally aren’t mature enough to use it at such a young age. A lot of parent’s response is that ‘We use it to keep in touch with family.’ And my response is they should share a site and not give their kids their own Facebook page.”

There are two big dangers for young people using Facebook: predators who are trying to meet children and ugly online bullying or gossip that can be hurtful to teens and preteens.

Pechaitis said media reports about online predators are common knowledge. Children often don’t understand the dangers.

“They just get on and they don’t understand the privacy settings,” he said. “They just don’t realize they’re putting themselves out there, especially when they’re posting pictures, for the whole world to see.”

John Birdwell, school resource officer for the Adrian Police Department, said teens and parents need to be aware of the possibility of predators.

“The way I’ve been telling parents to combat that would be to know who their (children’s) friends are,” Birdwell said. “Friending people that you don’t know is when you get opened up to the possibility of a predator.”

Both Birdwell and Pechaitis have dealt with situations where online taunts have caused problems, especially with the large number of people who can read negative comments once they’re on the Web.

“It’s instantaneous and it’s viral, and it just passes so quickly,” Pechaitis said. “We haven’t had any major issues, but there’s been name-calling. There’s been feelings hurt.”

Madison Middle School Principal Brad Anschuetz said young adults often post hurtful comments on Facebook that they would never say in a face-to-face conversation.

“Inevitably, two or three times a year, I’ll have to work to mediate a problem between two students (from Facebook) and try to involve their parents so that the adults can help model for students the best way to solve problems through healthy dialogue,” he said.

Online, he said, problems get posted for everyone to see, “and then others tend to fuel the problem and keep it going.”

He said teens need to be aware that anything they post on Facebook can be shared with anyone else — even those who aren’t their Facebook “friends.” Parents should talk to their children about what is and is not appropriate to post on a social networking site and monitor their accounts, Anschuetz said.

Russell Robinson of Adrian is one parent who felt pressure from his child to let her sign up for Facebook.

Makaylah is 11 and will be entering sixth grade. He’s decided to ignore the advice of many, but says he places enough restrictions on her use that he’s comfortable. He realizes the minimum age for a Facebook account is 13, but he decided it would be OK to let her sign up as long as he closely monitored her usage.

“She’d been pestering me for quite awhile about getting an account, and I was kind of leery about it,” Robinson said. “I talked it over with my wife, and we came up with the ground rule that she couldn’t be on it unless my wife and I are there.”

Makaylah doesn’t even know the password to her account, he said.

“She’s not allowed, of course, to accept any friend requests without asking me first,” he said. “Because there are a lot of creeps out there in cyberspace.”

Robinson set up Makaylah’s privacy settings so that only her approved friends can view what she posts on her Facebook wall.

“There’s a lot of security on Facebook,” said Robinson, who has had his own Facebook account for a couple of years.

While he doesn’t like the idea of someone as young as Makaylah being on Facebook, Adrian Middle School’s Schwartz does share Robinson’s views about the importance of parents monitoring their children’s social networking activity. He believes that’s important even with older children.

“My 16-year-old, we monitor it,” Schwartz said. “Our computer is in an open area in the house, so whenever we go by it, we can see it. We can access it.”

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