Winklevoss Twins Claim Defamation in Failed Pot-App Deal

NEW YORK (CN) – Tyler and Cameron Winklevoss, twins best known for claiming they created Facebook only to have Mark Zuckerberg steal it from under them, now say a New York businessman smeared them after a deal to buy his shares in a marijuana-delivery startup fell through.

The Winklevoss twins and their company Winklevoss Capital Fund, or WCF, claim that Todd Steinberg filed a malicious lawsuit to give him a platform to publicly defame the two investors for not completing the transaction.

The brothers filed a defamation complaint against Steinberg on Wednesday in New York County Supreme Court. They are represented by attorneys Charles Harder and Anthony Harwood with Harder Mirell & Abrams in Beverly Hills, Calif.

Steinberg was an early investor in Eaze Solutions, an app that allows users to order marijuana and have it delivered to their home from their smartphone.

Steinberg had brokered a tentative deal with the Winklevoss twins to buy his shares, but they required a side letter of approval for the share transfer from Eaze, which ultimately was not produced, according to the complaint.

Afterward, Steinberg allegedly attempted to pressure the twins to buy his shares anyway, but they refused.

“When these things did not occur, through no fault of WCF, Steinberg concocted a scheme against plaintiffs to try to force plaintiffs to pay him, even though the conditions required for the tentative agreement to become effective never occurred, and to harm plaintiffs if they did not submit to his demands,” the lawsuit states.

The Winklevoss brothers famously battled with Mark Zuckerberg over the creation of Facebook, which the twins claimed copied their own now-defunct social media website ConnectU. Zuckerberg would eventually settle out of court, and the twins went on to become investors in numerous tech start ups.

After the deal with Steinberg fell through, he sued the brothers in a Delaware court for allegedly breaking their agreement to purchase the Eaze shares.

Steinberg then gave an interview to the New York Post in which he repeatedly claimed that the Winklevoss twins defaulted on the agreement, which was then picked up by numerous other media outlets, according to Wednesday’s complaint.

“Just because you are rich and famous doesn’t mean you can default. It’s the difference between right and wrong,” he reportedly told the Post.

The Winklevoss brothers claim Steinberg had “no basis to make these false, defamatory and damaging statements.”

“Steinberg knew that Eaze’s formal approval of the stock transfer and side letter was a required condition for the agreement to become effective, but Eaze never gave its approval,” the lawsuit states.

The twins allege that Steinberg schemed to extort money from them by threatening to file his lawsuit and take it to the media.

“Steinberg has subsequently confirmed his scheme, including by making statements that if plaintiffs did not settle with him then he would ‘update the press’ and claiming that the ‘court of public opinion’ is ‘on my side,’” according to the complaint.

Although Steinberg eventually withdrew his lawsuit, the Winklevoss twins say the damage to their reputation has already been done.

“The publication of the defamatory statements by Steinberg about plaintiffs reached millions of readers of the various publications and also caused a foreseeable chain reaction of republication of the defamatory statements in many other news outlets, websites, blogs, and social media, which reached millions more readers throughout the world,” they say.

The brothers seek compensatory and punitive damages for claims of defamation and malicious prosecution.

Steinberg could not be reached for comment Thursday.

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