Michael Brown, who used to work for Facebook in corporate development until he was fired several weeks ago for buying Facebook shares on the secondary market, said he is saddened by the events that led to his departure, “”and the incorrect reporting of it.” Sources with knowledge of events say Brown was let go because he violated Facebook’s policies on insider trading.
Mr. Brown conceded in a statement that he did buy Facebook shares but defended his motives, explaining, “I did buy Facebook stock on the secondary market in early September 2010, and I did so with the best of intentions.” Brown seems to be referring to a report in TechCrunch, which first broke the story, when he alleges “False and damaging information has been published about my actions.”
Brown maintains that he did not know about the Goldman Sachs deal until it was first reported in the news. TechCrunch reported that Brown bought Facebook shares just prior to $1.5 billion in financing led by Goldman Sachs. Brown was replaced with a former senior employee from Google.
Brown’s firing by Facebook for insider trading will likely cause the U.S. Securities and Exchange Commission to focus more on trading of shares on the secondary market for non-public startup companies like Twitter and Facebook.