"FACEBOOK" LEGAL UPDATE: 5 NUMBERS THAT SHOULD TROUBLE FACEBOOK INVESTORS

(One) The number 23:

23: Number of pages in the IPO prospectus describing "risks related to [Facebook's] business and industry.

(Two) The percentage 15:

15%: Percentage of revenues derived attributable to Zynga (NAS: ZNGA) and third parties advertising on pages generated by Zynga apps. Everyone is familiar with Zynga's dependency on Facebook, but I've never heard anyone mention Facebook's dependency on Zynga. The social-networking game developer has to run just to stay in place, by constantly coming up with new games that will capture the attention, time, and dollars of its users, who I suspect are very fickle. Very tough business. I wouldn't classify this as a stable long-term revenue source.

(Three) The percentage 57.3:

57.3%: Voting power concentrated in a single person -- CEO Mark Zuckerberg -- following the IPO. Is that a risk? You don't need to take it from me, just listen to what the company has to say on the matter in the prospectus:

"As a board member and officer, Mr. Zuckerberg owes a fiduciary duty to our stockholders and must act in good faith in a manner he reasonably believes to be in the best interests of our stockholders. As a stockholder, even a controlling stockholder, Mr. Zuckerberg is entitled to vote his shares, and shares over which he has voting control as a result of voting agreements, in his own interests, which may not always be in the interests of our stockholders generally."

This is the very definition of a conflict of interest. If Zuckerberg finds himself in a situation where a conflict arises, whose interests do you think he's going to put first: yours or his?

(Four) The percentage 50:

50%: Underwriters used three methods in estimating the value of Facebook shares, one of which is simply looking at the recent prices at which the shares changed hands in private markets. Fifty percent represents the weighting the bankers assigned to this methodology.

But surely, all of the investors who bought the shares in the private markets did so based on a considered assessment of Facebook's business value. Just ask the technology fund manager who was quoted in The Wall Street Journal at the end of February -- only a few days after having bought 50,000 shares, bringing his holdings to 200,000: "Whatever you think Facebook is worth today, it's going to be worth more once it's publicly tradable."

(Five) The number 71.4:

71.4: Price-to-earnings ratio of Facebook shares based on a 12 months' earnings per share to March 2012 and a $35 share price -- somewhere in the middle of the most recent pricing range. Does using $35 sound like an aggressive assumption? According to a Reuters report from Friday, the offering is already oversubscribed, and the underwriters could well lift the pricing range.

This number is actually only marginally higher than the 67.5 P/E ratio of Google's (NAS: GOOG) shares when they were priced at $85 on their August 2004 IPO. Google's shares went on to do very well, but keep in mind that we look back at Google's share performance with hindsight. That performance happens to coincide with a period of superlative execution by the company; Google continues to dominate its market. Facebook, on the other hand, has a lower-quality business and is coming to market later in its growth trajectory. Whether it can sustain its growth and remain dominant over the next five years -- let alone the next eight -- is very much an open question.

[Recommendation by The Motley Fool, www.fool.com/investing/general/2012/05/18/5-numbers-that]:

Your best course of action: doing nothing

Facebook's IPO will almost certainly represent a poor long-term investment at or above the IPO price. If you're looking for a little excitement, why not consider the dog races? If you're looking for an informed speculation, I suggest you wait until Facebook's IPO is "busted" and the shares trade below the IPO price. Either way, you're better off sitting out this media/i-banking/technology love-fest.

[http://www.fool.com/server/printarticle.aspx?file=/investing/general/2012/05/18/5-number]

Legal Update: Buying Your First Home?

Four (4) Important Steps:

(1) Real Estate Agent. Retain a competent real estate agent who will be loyal to you as a homebuyer.

This is the professional you will be working most closely with in your homebuying process.

(2) Mortgage Broker or Lender. Not all mortgage brokers or lenders are the same. Some are good, and others are horrible.

A competent mortgage broker's role is to shop around to find you the very best loan and lender to suit your needs.

(3) Appraiser. Prior to getting approval for your home loan, the lender (bank, etc.) will hire an appraiser to look at your proposed home and assess its value to see if the home is worth the money.

Since the basic home appraisals are generally affordable, I recommend the homeowners engage in their own due diligence by hiring their appraiser to make sure they are getting the home value they want.

(4) Attorney. Prior to signing any legal documents in purchase of a home, hire an attorney competent in reviewing home purchase real estate documents for legal advice.

As with appraisers, this process should be affordable.

[Sources: "Legal Consumer Tips and Secrets", by Charles Jerome Ware (2011); "Understanding the Law", by Charles Jerome Ware (2008); realestate.msn.com/a-whos-who-guide-to-buying-your-first-home, 5/25/2012]

LEGAL UPDATE: DOUBLE JEOPARDY CLAUSE IN JEOPARDY?

What do you think?

[Washington, D.C.; Thursday, 05/24/2012]

In a 6 to 3 decision by the U.S. Supreme Court, an Arkansas man, Alex Blueford, can now be retried for capital murder after a jury in his 2009 trial voted to acquit him of a capital murder but deadlocked on lesser charges.

Blueford was charged with murdering his girlfriend's 20-month-old son, who died of a head injury.

Prosecutors had waived the death penalty but charged Mr. Blueford with capital murder in order to seek life in prison without the possibility of parole, alleging he injured the child intentionally. The defendant said he knocked the boy down by accident.

The trial judge told jurors that if they didn't believe Mr. Blueford was guilty on the capital-murder charge, they should consider whether he was guilty of a series of lesser offenses: first-degree murder, manslaughter or negligent homicide.

The jury forewoman reported that the jury was "hopelessly" deadlocked. Jurors were "unanimous against" a conviction for capital murder or first-degree murder, she said, but deadlocked 9-3 on whether to convict the defendant of manslaughter. After another 30 minutes, jurors returned again to say they couldn't reach a verdict. The judge declared a mistrial.

When the state moved to retry Mr. Blueford, he sought dismissal of the murder charges, while conceding he could be retried for manslaughter. The case turned into a battle over the interpretation of the Constitution's double-jeopardy clause, which protects a defendant from being tried for the same offense twice.

Chief Justice John Roberts, in a 6-3 opinion for the court, said the forewoman's report on the state of deliberations wasn't a formal finding of acquittal on the capital-murder or first-degree-murder charges. He observed that the jury had continued to deliberate after the forewoman's report, and said jurors were free to reconsider whether Mr. Blueford was guilty of a greater offense. The jury, he said, didn't exercise either of the two options provided by Arkansas law: convict Mr. Blueford on one of the offenses or acquit him on all them.

"When the jury was unable to return a verdict, the trial court properly declared a mistrial and discharged the jury," Chief Justice Roberts wrote in a 10-page opinion. "As a consequence, the Double Jeopardy Clause does not stand in the way of a second trial on the same offenses."
The court's four other conservative justices and one member of the court's liberal wing, Justice Stephen Breyer, joined the decision.

Mr. Blueford and his supporters relied on two earlier Supreme Court rulings, from 1957 and 1970, in which the court ruled that a defendant is implicitly acquitted of more severe charges when a jury chooses to convict only of a lesser offense. The court said in both decisions that the protection against double jeopardy prohibits a second trial on the greater offense.

Mr. Blueford argued that the double-jeopardy clause should afford him even more protection because he wasn't convicted of the lesser offense either. Chief Justice Roberts said those cases were different because they involved final jury verdicts, while this case did not.

Justice Sonia Sotomayor, writing for the dissenters, said the decision unfairly gave prosecutors a "second bite at the apple" because the jury "unmistakably announced acquittal" on the capital and first-degree murder charges. "That ought to be the end of the matter," she wrote.

Justice Sotomayor said the court's ruling departed from the "long-established" principle that double jeopardy could come into play even if an initial prosecution didn't result in a conviction or acquittal.

[WSJ, Friday, 05/25/2012]

What do you think about this story?

UNABOMBER CELEBRATES 50TH HARVARD REUNION

Legal Update: 50 years after graduating from Harvard University the infamous "Unabomber", Ted Kaczynski, celebrated the event with his own personal entry in the prestigious university's alumni reunion book, "The Harvard and Radcliffe Classes of 1962 -- Fiftieth Anniversary Report."

Kaczynski is currently serving life imprisonment in the Federal "Supermax" prison in Colorado for killing 3 people and injuring 23 others during a 17-year reign of terror involving a nationwide bombing spree between 1978 and 1995.

In the alumni directory, the "Unabomber" lists the following as his personal entry, inter alia:

Occupation: "Prisoner".

Awards: "Eight life sentences, issued by the United States District Court for the Eastern District of California, 1998".

Publication(s): "Technological Slavery", Published by Feral House, 2010.

Education: Undergraduate Degree (BS), in Mathematics, Harvard University, 1962; Graduate Degrees (Masters and Doctoral Degrees in Mathematics, University of Michigan.

Described as "brilliant" by some of his classmates, Ted Kaczynski entered Harvard University as a freshman at age 16.

He subsequently, after earning his 3 degrees at Harvard and the University of Michigan, lived as a recluse in a remote Montana one-room cabin where he railed against modern technology and brazenly led law enforcement authorities on America's longest and costliest manhunt.

Kaczynski was finally caught in 1996 when his brother recognized his idiosyncratic writings and informed law enforcement officers.

CJW Comments: "Brains, but no sense."

[usnews.msnbc.msn.com/news/2012/05/24/11859547]

RAPE CONVICTION THROWN OUT!

[Long Beach, California; Thursday, May 24, 2012]

As with so many people, especially black males, the criminal justice system failed for Brian Banks.

A lying and malicious so-called "rape victim", criminally ineffective assistance of defense counsel, an uncaring prosecutor, and a general failure by the California judicial system caused irreversible and unpardonable harm to the young life of Mr. Banks, who was only 16 years old at the time of his fraudulent conviction.

Mr. Banks, now 26, was a superstar football player at Long Beach Polytechnic High School whose dreams of a professional football career were destroyed ten years ago (2002) when a fifteen-year old woman, Wanetta Gibson, falsely charged that he raped her on their high school campus. He was also convicted of kidnapping.

To make matters worse, young Banks' incompetent defense attorney at the time convinced the 16-year old to plead "no contest", after which he was made to serve over 5 years in California's horrendous prison system.

Branded a sex offender, Banks has been required to wear an electronic monitoring ankle bracelet since his release from jail.

Further, it gets even worse. The lying alleged victim, now 25, Wanetta Gibson, was paid a whopping $1.5 million from a civil lawsuit brought by her thieving mother against the Long Beach school system.

Fortunately, with Ms. Gibson's current admission that she lied on Mr. Banks, assistance from Professor Justin Brooks and his California Innocence Project at California Western School of Law in San Diego, as well as cooperation of the prosecutors, this tragedy was finally ended with a dismissal of the conviction by California Superior Court judge Mark C. Kim.

CJW Comments: Though Wanetta Gibson's actions against Brian Banks were legally and morally wrong, it is appreciated that she at least came forward and confessed to her extreme wrongdoing and finally cooperated in clearing Banks' record. One can only imagine the thousands of cases each year in which lies are told in court and innocent lives are ruined as a result --- with no subsequent correction. I believe there must be some consequences imposed on Ms. Gibson in this case, however.

What do you think?

[espn.go.com/espn/7967794]

CRUISE SHIP LAW UPDATE: Maritime Law Firm News

Undeterred by its tragic "Costa Concordia" cruise ship accident earlier this year in Europe, as well as the recent allegations of negligent failure to rescue 3 Panamanian fisherman (two of who died prior to rescue by Ecuadorian fishermen of the third one) in the Pacific, Carnival/Costa Cruise Line is rushing ahead with the inaugural cruise this month of its brand new 114,500 tons, 3800 passengers-accommodating cruise ship, "Costa Fascinosa".

U.S. "FREE TRADE" with COLOMBIA

It's official. The U.S. now has a "free trade" pact (deal) with the South American country of COLOMBIA.

The "free trade" agreement with COLOMBIA became active on May 14th, 2012 when, just before midnight a cargo planeload of freshly cut multi-colored carnations, roses and lilies took off from Bogota, Colombia and landed in Miami, Florida. This was the beginning of the U.S./Colombia "free trade" agreement.

In fact the flowers would have avoided tariffs anyway, thanks to decade-long trade preferences under the Andean Trade Promotion and Drug Eradication Act. This already covered nearly 80% of Colombian exports, in exchange for efforts to reduce the supply of drugs. The new pact makes those benefits permanent, and extends them to almost everything else. Meanwhile American farm products such as soyabeans, top-quality beef, bacon, cotton and most fruit and vegetables can now enter Colombia duty-free, as can machinery, some vehicles, and textiles. The deal should also encourage investment in Colombia, both by American companies and by firms using the country as a base from which to export to the United States.

It has been a long time coming. The pact was signed in 2006 under George Bush and Álvaro Uribe. A change of administration in Washington held it up, as campaigners in both countries pressed their governments to make the deal conditional on better treatment of Colombia’s trade unionists.