Lawsuit: CEO Zuckerberg only owns 16 percent of Facebook

by Stevie Smith - Jul 13 2010, 05:30

Possible legal storm clouds are brewing for Facebook this week following news that Paul Ceglia of Wellsville, New York, has filed a lawsuit against service founder and CEO Mark Zuckerberg, in which he claims a whopping 84 percent stake in the world’s leading social network.

According to the lawsuit, which was filed on June 30 in the Allegany County Supreme Court, Ceglia entered into a written contract with Zuckerberg in April 2003 to design and develop an online portal called “The Face Book” or “The Page Book,” by January of 2004.

Further to that, Ceglia claims to have acquired 50 percent of the Internet business venture from the outset, along with additional increments of one percent for each day required to complete the job.

The lawsuit outlines that Zuckerberg was paid $1,000 USD for the necessary work and also received a 50 percent stake in the business. However, seeing as completion took a total of 34 days, Zuckerberg’s percentage dropped to 16 percent while Ceglia’s rose to 84 percent.

In a statement regarding the suit, a Facebook spokesman labelled it as “completely frivolous,” and said the social network would “fight it vigorously.”

Ceglia’s lawsuit has already seen Supreme Court Justice Thomas P. Brown signing off on a temporary order that prevents Facebook “from transferring, selling, assigning any assets, stocks, bonds, owned, possessed and/or controlled by the defendants,” until a later hearing set for early July.

Facebook, which describes Ceglia’s claims as “outlandish,” has transferred the case to a federal court in Buffalo, New York, and is presently attempting to have the order against it lifted.

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