Facebook's Zuckerberg faces fraud charges

Twenty-six-year-old Facebook billionaire Mark Zuckerberg is facing allegations of securities fraud over the out-of-court settlement his company made with rival ConnectU.

Zuckerberg famously started Facebook at Harvard, after working on a similar site called Harvard Connection, created by Tyler and Cameron Winklevoss.

The Winklevoss twins sued Facebook in 2003, claiming Zuckerberg stole their source code with which to kick off his site The Facebook.

The twins finally, um, winkled a measly $65 million or so out of the social networking site in 2008 turning their own site - by then called ConnectU - over to Facebook.

But now they are appealling against that settlement claiming they were shortchanged.

According to VentureBeat, the Winklevosses claim Facebook's cash-and-stock offer amounting to $65 million was based on Microsoft's $15 billion valuation of the company it pulled out of the ether in 2007, when buying a slice for itself.

But the twins claim their settlement was to be paid in common shares, rather than preferred shares, which effectively cut the value of the settlement in half.

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