Judge Rejects Intermix Founder’s MySpace Report
Last Friday Los Angeles Supreme Court judge Carolyn Kuhl dismissed claims made by MySpace founder Brad Greenspan that the acquisition of MySpace’s parent company, Intermix, by the News Corporation in 2005 was unlawful. According to comments made by Greenspan late last week, former Intermix CEO Richard Rosenblatt hid MySpace’s true revenue growth from shareholders and manufactured an under the table deal with News Corp execs to ensure a speedy sale. Judge Kuhl fully dismissed Greenspan’s charges and rejected his request for a federal probe.
Greenspan vowed to appeal, and released a statement saying that the judge’s ruling was flawed and claiming that his PR firm was being strong-armed by the News Corporation’s legal team. “Rosenblatt and Intermix misled the public by refusing to disclose Myspace’s revenue in clear violation of FAS 131. If shareholders had received the same financial info on Myspace that News Corp had… then shareholders could have cast an informed vote. They didn’t. It was not a level playing field.”
Greenspan’s connection with Intermix has been less than amicable since he left the company in 2003. That year, he settled a lawsuit filed by New York attorney general Elliot Spitzer that accused the company of distributing spyware. Greenspan managed to keep 11% of the business. He also filed a lawsuit against the News Corp. alleging securities fraud in February 2006 pertaining to the MySpace purchase.
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