The Winklevoss twins are not ready to give up their fight for Facebook. One week after a judge ruled against them, Cameron and Tyler Winklevoss have once again appealed the decision.
"American courts have long held that a settlement agreement procured by fraud may be rescinded," the duo's lawyers wrote in the filing.
As fans of "The Social Network" might recall, the Winklevoss twins—or the Winkelvii as they are known in some circles—claim that Mark Zuckerberg stole the idea for Facebook from them, and they are therefore entitled to a piece of the Facebook pie. In 2008, the two sides agreed to a $65 million deal whereby the twins would get a $20 million chunk of change, plus a stake in the company worth $45 million.
The number of shares issued to the Winkelvii was based on a $15 billion valuation cited when Microsoft invested $240 million in the company back in 2007, putting the per-share value at $35.90. But the twins said Facebook's own expert valuation put the per-stock value at $8.88, unbeknownest to them. "Had [the Winklevii] known of the $8.88 valuation, they would have challenged the $35.90 value on which Facebook's settlement offer was based," according to the filing—and presumably obtained more shares.
As a result, the twins claimed the deal was a fraud. Facebook turned to the courts, and in June 2008, U.S. District Judge James Ware sided with Facebook. The twins again appealed, but last week, the 9th U.S. Circuit Court of Appeals again agreed with Facebook.
In their latest appeal, the twins claim that Facebook's valuation scheme is securities fraud. "Rescinding a securities transaction on the ground of fraud is hardly 'backing out,' they argued.
"The opinion's implication that [the Winkelvoss twins] should take the nowmore-valuable stock and stop complaining about Facebook's blatant violation of Rule 10b-5 inappropriately minimizes federal securities laws that command honest dealing and full disclosure in the sale or exchange of securities," according to the filing.
"Whether Appellants would be better off financially keeping the proceeds of the settlement rather than rescinding and proceeding with their lawsuit against Facebook is a personal judgment for them—not an appellate court—to make," they said.
"We appreciate the Ninth Circuit's careful consideration of this case and are pleased the court ruled in Facebook's favor," Facebook said in a statement.
Editor's Note: This story was updated Tuesday with comment from Facebook.