First Lawsuit Filed Over Zynga Insider Trading Claims

All this shady trading stuff is just really obnoxious. These guys should have the book thrown at them completely. They knew before anyone that the bubble was about to burst, rushed through an IPO and then cashed out as much as they could.

@StompboxRebel said:

...so they have been given 'permission' to play with your money in any way they see fit. Usually in ways that benefit them and thier friends.

Business With Friends <blink>now with new Trading feature!</blink> :)

My Girlfriend will play with you Alex but she uses websites to look for words

So it's come to this....

@Cretaceous_Bob said:

We're doing Zynga stories now?

were at the end of the biggest nothing going on streak in a while, cant blame them for digging deep on content.

Anyone else getting the same deja vu feeling like the casual games market bubble is about to burst kinda like the web bubble did in the 90s?

I officially gave up on Words With Friends today. I got tired of it not accepting actual words while my girlfriend smashed me with 73 point gibberish. And Draw Something is just broken.
As for the news story. If Goldman Sachs had a part in it, well they have already proven they are above and beyond the laws of the land. As have most of the other investment houses. The government isn't really interested in reining them in with proper penalties so they have been given 'permission' to play with your money in any way they see fit. Usually in ways that benefit them and thier friends. Like CEO's of large companies.

Couldn't have happened to a nicer guy.

"But the guys at the top, who saw what was coming down the pipe, got to cash out"

He threw a wish in a well. Don't ask him, he'll never tell.

We're doing Zynga stories now?

no matter how much $ u got, u always need more $_$

You know who you never hear about anymore? PopCap.

Guess Kessler's going to have to mortgage the farm.

UPDATE: Schappert has been stripped of gaming oversight duties.

OH MAN THIS SUCKS I HAVE ALL MY MONEY IN SUPERGRAPE FUTURES RIGHT NOW

So all those shady-looking facebook games were made by a company run by a bunch of shady dudes. It kind of justifies that skin-crawly feeling I always got whenever I saw people playing Farmville or Mafia Wars.

My instincts aren't that bad I guess.

being greedy will haunt you in the end

@jaks: If I recall correctly, Soren Johnson (sp) currently works at Zynga. The Civ IV creative lead...preeeetty sure there's quite a few companies who would love to have him. I suspect a good amount of people employed by Zynga are similar, if not as well-known or obvious for an example like this. People take jobs like this all the time for various reasons, lots of them involving "well, I get paid more here", and this isn't generally considered all bad. Dunno why it would be different in this case.

Sucks that the only positive thing Mark Pincus has contributed to the world is that picture. That guy is obviously intelligent, but he uses that intelligence for every scummy trick in the book. (Would not be surprised if he becomes an arms dealer by next year.)

Still a dick move.

Stupidly done to get caught, scumbags otherwise.

Too bad we don't just round up Wall Street and burn it, burn it all to the ground!

When your CFO dumps half his shares in the company you work for its time to update your Linkdn profile!

Not that many game companies would be super eager to hire a former game developer at Zynga. Unless said companies only made shabby clones of established IP's.

If only we could remove corruption.

@courage_wolf said:

Goldman Sachs involved in shady Wall St business. Why does this seem so familiar?

for a good time...

https://twitter.com/GSElevator

I still play Word with Friends with my girlfriend. Oh, and Zynga is still evil.

Seems like people that don't use facebook have to let people know they don't. As for Zynga I don't understand the hate.

Saw this coming

Goldman Sachs involved in shady Wall St business. Why does this seem so familiar?

The dumbest guys in the room.

Goldman Sachs involved in shady Wall St business. Why does this seem so familiar?

a family friend has a relative working at zynga and I always tell them they're evil theives with no brains, no one believes me thinks I'm trying to insult someone or something...But it's true. Can't wait to see this all go down.

@DoctorWelch: They sold their stock on the 3rd of April. The results came out on the 27th.

Good to see they finally revealed their true colors as an opportunist pyramid scheme.

@grbear said:

@DoctorWelch: There may have been a perception out there that Zynga was on the wane in some circles but if you look at their stock price on Yahoo then it was still strong until after the executives under investigation dumped their stock. The real problem is that the execs were able to push forward the date they could sell stock to before their Q1 results were made public. From the outside it looks an awful lot like they saw the preliminary Q1 results and offloaded their stock based on the fact those results would be received negatively.

I'm pretty sure they dumped them immediately following the information.

@phantomzxro said:

I think the other party in this suit is stating that zynga misinformed their shareholders on their current users base (profit). To which they are claiming Zynga users were much lower then stated following that they did not informed them that Zynga stocks were falling and being lead to believe stocks would have growth later on.

Yeah, that's just insider trading, which is the obvious lawsuit. The point is that there needs to be proof that they knew something the public didn't, and as of right now there is no proof of that, which is why there is an investigation.

Anyone who invested significant money into Zynga is an idiot.

@DoctorWelch said:

@tourgen said:

@DoctorWelch said:

@zeekthegeek said:

Insider trading is still a crime regardless of the trading restriction.

It's only insider trading if they base if off knowledge not yet available to the public. By the time they sold their stocks, everyone knew this company was going downhill.

I don't know how you can make that assertion. Apparently there is enough evidence for investigations and at least 1 suit.

Insider trading is serious. If they eventually get charged under the 1934 act they could face 20 years in prison and $5 in fines each.

Yes, it's suspicious, and yes, there was always going to be a suit, but neither of those things actually means they did anything wrong. So yes, there could have been insider trading, I'm not saying there definitively wasn't, I'm just saying that if they simply sold their stocks because they knew what everyone else knew (which is what the evidence is currently pointing to), then they did nothing wrong.

I think the other party in this suit is stating that zynga misinformed their shareholders on their current users base (profit). To which they are claiming Zynga users were much lower then stated following that they did not informed them that Zynga stocks were falling and being lead to believe stocks would have growth later on.

@DoctorWelch: There may have been a perception out there that Zynga was on the wane in some circles but if you look at their stock price on Yahoo then it was still strong until after the executives under investigation dumped their stock. The real problem is that the execs were able to push forward the date they could sell stock to before their Q1 results were made public. From the outside it looks an awful lot like they saw the preliminary Q1 results and offloaded their stock based on the fact those results would be received negatively.

@Alex: Keep us up to date about this story, if you can - i'd be quite interested to see how it develops.

See, they could've gotten away with it had two of them not been so heinous and greedy as to cash in half their stock. Of course your dumb ass is getting caught when hundreds of millions of dollars are involved.

@darkdragonmage99 said:

Dirty pool very much so dirty pool

Zynga pissed in their pool.

Scramble with Friends is a good game, and I'm still playing Draw Something although the big red Zynga splash screen makes me sad.

So... they did okay with monetized Boggle and Pictionary at least.

@tourgen said:

@DoctorWelch said:

@zeekthegeek said:

Insider trading is still a crime regardless of the trading restriction.

It's only insider trading if they base if off knowledge not yet available to the public. By the time they sold their stocks, everyone knew this company was going downhill.

I don't know how you can make that assertion. Apparently there is enough evidence for investigations and at least 1 suit.

Insider trading is serious. If they eventually get charged under the 1934 act they could face 20 years in prison and $5 in fines each.

Yes, it's suspicious, and yes, there was always going to be a suit, but neither of those things actually means they did anything wrong. So yes, there could have been insider trading, I'm not saying there definitively wasn't, I'm just saying that if they simply sold their stocks because they knew what everyone else knew (which is what the evidence is currently pointing to), then they did nothing wrong.

@Russcat said:

@wumbo3000 said:

What up with Zynga these days?

I don't think it's "these days" really. Haven't they always been considered... well, a bit shady? That's been my impression at least.

Shady in a different way. Initially it was just them plagiarizing other games but this insider trading stuff is a whole new level.

@DoctorWelch said:

@zeekthegeek said:

Insider trading is still a crime regardless of the trading restriction.

It's only insider trading if they base if off knowledge not yet available to the public. By the time they sold their stocks, everyone knew this company was going downhill.

I don't know how you can make that assertion. Apparently there is enough evidence for investigations and at least 1 suit.

Insider trading is serious. If they eventually get charged under the 1934 act they could face 20 years in prison and $5 in fines each.

From what I've read, their defense so far is probably going to be that the stock crashed because almost everyone responsible for the company pulled most of their personal stakes. Which makes a lot of sense, considering that most traders are news traders, or think they are at least.

Is it weird that I quite enjoyed playing Draw Something, but the second the Zynga logo showed up, I instantly deleted it and haven't looked back.

Only just thought of that. Huh.

@Kaigan: I thought I was the only one in the world that hasn't ever joined Facebook or for that matter any social network.

@Scrawnto said:

I had heard he cashed out, but I had written it off before. Don't a lot of entrepreneurs do that? Set up a company, get big, go public, sell out? However, the lockup being waived just for the folks at the top makes it way sketchier. That's not cool.

I'm no economist so I'm probably talking out of my ass here, but what you're thinking of is the venture capital model. A company or individual invests money into a private startup business with the intent to gain profit through an eventual sale or merger. That's completely legal and common and is in fact pretty much exactly what happened to Giant Bomb and all the other Whiskey Media sites back in March.

This is insider trading, which means financial officers within Zynga, a publicly traded company, used non-public information for profit. In this case, they knew their stock prices were about to plummet before their shareholders or employees did, and used that to cash in. That's illegal. And generally just a scummy thing to do, though Zynga has a history of scummy practices from practically the word "go."

Dirty pool very much so dirty pool