Winklevoss twins lose legal battle against Facebook

In the latest chapter of their legal saga against Facebook CEO Mark Zuckerberg, an appellate court has ruled that Tyler and Cameron Winklevoss may just have to make do with a settlement worth about $200 million. In a tale that spawned the major motion picture Social Network, the twin brothers have launched a pitched, six-year legal battle against Facebook based on claims that Zuckerberg stole their idea for a social networking platform called ConnectU when they were all students at Harvard. The Winklevosses—along with their then-business partner and friend Divya Narendra—have attempted to push the social media company for more funds by contesting a 2008 court settlement that entitled the trio to a reported $20 million in cash and 1.2 million in Facebook shares. But the ConnectU team’s legal gambit failed on Monday, when they were handed a legal loss by the Ninth Circuit Court of Appeal in San Francisco. The Winklevosses had gone back to court in 2010 because they claimed that Facebook had misled them about the value of the stocks. Facebook valued the stocks at $8.88 per share, though the Winklevosses say in court documents that they had been told that the stocks were worth four times as much. [caption id=“attachment_126” align=“alignleft” width=“380”]  Facebook founder & CEO Mark Zuckerberg[/caption] In its Monday ruling, the Ninth Circuit held that the 2008 settlement would stand. The court reasoned that the Winklevosses had the wherewithal to make an informed decision during settlement negotiations and therefore, their allegations of securities fraud faced “a steep uphill battle” [PDF]: The Winklevosses are sophisticated parties who were locked in a contentious struggle over ownership rights in one of the world’s fastest-growing companies. They engaged in discovery, which gave them access to a good deal of information about their opponents. They brought half-a-dozen lawyers to the mediation. Howard Winklevoss—father of Cameron and Tyler, former accounting professor at Wharton School of Business and an expert in valuation—also participated. … The Winklevosses are not the first parties bested by a competitor who then seek to gain through litigation what they were unable to achieve in the marketplace. And the courts might have obliged, had the Winklevosses not settled their dispute and signed a release of all claims against Facebook.   Plus, the court noted, the Winklevosses may still come out ahead financially. Indeed, the 1.2 million in Facebook stock that the ConnectU team received, valued at $65 million in 2008, are now thought to be worth about $150 million. But the legal fight is far from over. After the decision was handed down, Tyler Winklevoss tweeted a statement from his attorney Jerome Falk, which signaled that they had yet another legal maneuver up their sleeves: In my judgment, the opinion raises extremely significant questions of federal law that merit review by the entire Ninth Circuit Court of Appeals. For that reason, my colleagues and I will file a Petition For Rehearing En Banc within the next fifteen days. Online observers have not responded kindly to the Winklevosses charge through the courts. Some have called the Winklevosses “ greedy a-holes” while others have commented that the twins are “ self-centered crybabys.” As for Narendra, an Indian American from New York City, he’s the CEO of investment information-sharing platform SumZero and a student at Northwestern University, where he’s earning a joint law degree and a MBA. He did not respond to requests for comment.