Facebook, Zuckerberg say ownership suit a "fraud" (Reuters)

CHICAGO (Reuters) – Calling the case a "brazen and outrageous fraud," Facebook founder Mark Zuckerberg urged a federal court on Thursday to dismiss a lawsuit by a New York man claiming he owns a huge stake in the social networking website.

In a filing with the U.S. District Court in Buffalo, New York, Facebook and Zuckerberg said the lawsuit by Paul Ceglia is based on a "doctored contract and fabricated evidence." They also called the plaintiff "an inveterate scam artist whose misconduct extends across decades and borders."

Ceglia, a wood pellet salesman from Wellsville, New York, has contended that he contracted in 2003 for 50 percent of Zuckerberg's interest in what became Facebook.

Facebook is privately held, but analysts have said it could be worth $70 billion should it go public. Forbes magazine in March estimated Zuckerberg's net worth at $13.5 billion.

Ceglia originally sued last July, saying he had contracted with Zuckerberg for an 84 percent Facebook stake. In an amended complaint Ceglia outlined what he called emails between himself and Zuckerberg to support his case.

In their response, Facebook and Zuckerberg said they "specifically deny any liability" to Ceglia, and called the lawsuit "a brazen and outrageous fraud on the court."

They also questioned why Ceglia waited seven years to sue, saying he had long been "utterly silent" as Facebook "grew into one of the world's best-known companies."

A lawyer representing Ceglia declined immediate comment.

According to published reports, Ceglia pleaded guilty in 1997 to possession of hallucinogenic mushrooms in Texas. In 2009, he was accused of fraud and had his business shut down.

In a separate case, Cameron and Tyler Winklevoss are appealing to the U.S. Supreme Court a court ruling that upheld their $65 million cash-and-stock settlement with Facebook.

The twin brothers have accused Facebook and Zuckerberg of stealing their idea for the website.

The battle between the Winklevoss twins and Zuckerberg was dramatized in the 2010 Oscar-nominated movie "The Social Network".

(Reporting by Jonathan Stempel in Chicago; Editing by Tim Dobbyn, Phil Berlowitz)

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Facebook, Zuckerberg say ownership suit a "fraud" (Reuters)

CHICAGO (Reuters) – Calling the case a "brazen and outrageous fraud," Facebook founder Mark Zuckerberg urged a federal court to dismiss a lawsuit by a New York man claiming he owns a huge stake in the social networking website.

In a filing Thursday with the U.S. District Court in Buffalo, New York, Facebook Inc and Zuckerberg said the lawsuit by Paul Ceglia is based on a "doctored contract and fabricated evidence." They also called the plaintiff "an inveterate scam artist whose misconduct extends across decades and borders."

Ceglia, a wood pellet salesman from Wellsville, New York, has contended that he contracted in 2003 for 50 percent of Zuckerberg's interest in what became Facebook.

Facebook is privately held, but analysts have said it could be worth $70 billion should it go public, perhaps in 2012. Forbes magazine in March estimated Zuckerberg's net worth at $13.5 billion.

Christopher "Kip" Hall, a lawyer representing Ceglia, declined immediate comment.

Ceglia originally sued last July, saying he had contracted with Zuckerberg for an 84 percent Facebook stake. But after a setback over a jurisdictional issue, Ceglia dropped his lawyer and retained a large global law firm, DLA Piper.

The amended complaint outlined what Ceglia called emails between himself and Zuckerberg to support his case. In one, Zuckerberg appeared to resist a clause that could have given Ceglia a stake greater than 80 percent.

"I'd like to suggest that you drop the penalty completely and that we officially return to 50/50 ownership," Zuckerberg was said to have written on February 2, 2004.

In their response, Facebook and Zuckerberg said they "specifically deny any liability" to Ceglia, and called the lawsuit "a brazen and outrageous fraud on the court."

They also questioned why Ceglia waited seven years to sue, saying he had long been "utterly silent" as Facebook "grew into one of the world's best-known companies."

According to published reports, Ceglia pleaded guilty in 1997 to possession of hallucinogenic mushrooms in Texas. In 2009, he was accused of fraud and had his business shut down by Andrew Cuomo, then New York's attorney general.

In a separate case, Cameron and Tyler Winklevoss are appealing to the U.S. Supreme Court a court ruling that upheld their $65 million cash-and-stock settlement with Facebook.

The twin brothers had accused Facebook and Zuckerberg of stealing their idea for the website. They complained that the 2008 accord was fraudulent because Facebook hid information from them, and that they deserved more Facebook stock.

The case is Ceglia v. Zuckerberg et al, U.S. District Court, Western District of New York, No. 10-00569.

(Reporting by Jonathan Stempel in Chicago; Editing by Tim Dobbyn, Phil Berlowitz)

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Home ownership costs rise: RBC study (Reuters)

TORONTO (Reuters) – The cost of owning a home rose in the first quarter as home prices were up in most markets, reversing two quarters of easier conditions, a report by Royal Bank of Canada said on Friday.

The bank's quarterly Housing Trends and Affordability Index found that the cost of housing rose nationally across all the housing types it tracks.

The affordability index measures the proportion of pretax household income needed to service the cost of owning a home. The higher the measure, the more costly it is.

"Despite the latest erosion in affordability, provincial levels generally continue to stand near their long-term averages, suggesting that owning a home remains affordable or, at worst, slightly unaffordable across Canada -- with Vancouver being a notable exception," said the report's author, senior bank economist Robert Hogue.

For a detached bungalow, the national measure rose 0.7 of a percentage point to 40.5 percent of pretax income. The costs of owning a standard condominium and a standard two-storey home both edged up 0.2 of a percentage point, to 27.7 percent and 46.2 percent, respectively.

Canada's largest cities all faced higher costs, particularly Vancouver, British Columbia, where the costs of home ownership neared record highs. Increases in British Columbia were the most significant of any province.

"The lack of affordability (in British Columbia) will continue to weigh on local demand and could potentially cause painful market disruptions in the period ahead," Hogue said.

Rising interest rates will hurt affordability across the country in the months ahead, he said, but growth in household incomes will likely soften the blow.

In the previous two quarters, declining mortgage rates had helped make housing easier to afford. But mortgage rates had a neutral impact in the first quarter, the report said.

Several major Canadian banks cut their five-year residential fixed mortgage rates earlier this week by 0.10 percent to 5.59 percent.

(Reporting by Ka Yan Ng; editing by Peter Galloway)

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