MySpace Founder Seeks Probe of Sale

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One of the founders of Myspace.com asked for a federal investigation into the sale of the Web site to News Corp., claiming he has proof that the deal defrauded shareholders of more than $20 billion.


Brad Greenspan issued a statement along with a report at FreeMyspace.com claiming he has internal documents and e-mails that indicate the company that owned MySpace agreed to sell it to News Corp. quickly so it could pay off debts and make a profit. Greenspan, who was the largest individual shareholder of MySpace, said the deal to sell MySpace last year for $550 million intentionally defrauded shareholders. He requested an immediate investigation by the U.S. Securities and Exchange Commission, Justice Department and U.S. Senate, claiming the deal was, “one of the largest merger and acquisition scandals in U.S. history.”


The company that owned MySpace, Intermix Media Inc., displaced Greenspan before the merger. At one time, Greenspan had been chairman and chief executive of Intermix.


Representatives of News Corp. and the former Intermix could not be reached for comment Thursday.


“I expect as the authorities get their arms around what happened, that this transaction will be unwound and Myspace will be independent,” Greenspan wrote. “An independent Myspace is significantly better for its users and shareholders.”


Greenspan added that he wants “the public (to) read what took place behind the scenes and how shareholders were blatantly misled into voting for a quick and unfair sale to News Corp.” He also said that it is his “hope that regulatory bodies will begin their investigations quickly before evidence is destroyed.”

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