Facebook corporate development manager Michael Brown (pictured left in happier days) recently and abruptly left Facebook, and the company then hired a senior Google employee to replace him. It was a curious departure and the chatter around Silicon Valley was that there was a lot more to the story. And in fact there is. Via a scandal that could have far reaching consequences by bringing even more SEC scrutiny onto rampant secondary trading in non-public startups like Facebook and Twitter. Brown, multiple sources have confirmed, purchased Facebook stock on secondary markets (like those occurring weekly on SecondMarket), which Facebook considers insider trading and grounds for immediate termination. Sources say this is well communicated throughout the company. It's unclear how egregious the trade may have been. We've heard the trade was related to knowledge of the Goldman Sachs investment that value the company at $50 billion earlier this year, and we've heard from others closer to the situation that it was just a naive mistake and Brown has paid the price and moved on. One source says the trades were made last September, well before the Goldman deal was in the works. Either way, Facebook took it seriously and no doubt the SEC would too.
Source: http://feedproxy.google.com/~r/Techcrunch/~3/a6OwmZvAQ4o/
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