You should bookmark grellas Hacker News comment page, it’s pure gold for free. His take on the Zuckerberg securities fraud story makes it clear that the real issue isn’t “securities fraud”, it’s that the settlement as enforced might be overturned on appeal:
When disputes arose about the detailed terms, FB filed a motion with the court to enforce the settlement. In doing so, it asked the court to enforce the terms it had put form in the complex documentation and not as set forth in the 2-pager. The court, on hearing the motion, ordered that the settlement agreement be enforced but did so based on the terms set forth in the 2-pager. The ConnectU parties were then forced to deliver the ConnectU stock to Facebook, which (given that it then controlled the company) promptly fired the attorneys who had been representing ConnectU and its founders. This left the founders scrambling to appeal and to do so under circumstances where the only party with standing to appeal (ConnectU) was controlled by FB as an adverse party. This led to a logistical nightmare, from a litigation perspective, but it eventually got sorted out when the court let the ConnectU founders “intervene” and make their case on appeal. The brief filed before the Ninth Circuit Court of Appeals (discussed in this article) is the opening shot on an appeal seeking to overturn the lower court’s order enforcing the settlement.
I hope it’s not hopelessly naive to suggest that ramming a disputed settlement through court and then firing your opponent’s lawyers sounds deliciously evil.