eBay has been found criminally liable in connection to the 2019 cyberstalking of journalists Ina and David Steiner of Ecommercebytes, and agreed to pay a penalty of $3 million as part of a deal to defer further prosecution.
eBay SVP Global Operations Wendy Jones has been named as an defendant in the Steiner's civil suit.
eBay's latest 10-K filing with the SEC reveals the company has accrued for probable losses of approximately $64 million+ and could be facing possible criminal charges from the US Attorney's Office in relation to the 2019 cyberstalking and harassment of the publishers of EcommerceBytes.
Three of the seven eBay employees who pleaded guilty to criminal cyberstalking charges are scheduled to finally report to federal prison today, having been allowed to spend the holidays with their families before serving their sentences.
Security Director Jim Baugh was sentenced to 57 months, Director of Global Resiliency David Harville was sentenced to 24 months, and Senior Manager of Global Intelligence Stephanie Popp was sentenced to 12 months and 1 day.
The bizarre case revealed a toxic corporate culture at eBay under previous CEO Devin Wenig that launched a campaign of harassment including disturbing deliveries of live cockroaches and funeral wreaths, threatening Twitter messages, doxxing, and in person surveillance against Ina and David Steiner, the publishers of ecommerce industry news site EcommerceBytes.
A recently released transcript from Baugh's sentencing hearing in October revealed some interesting jockeying from attorney's regarding degrees of responsibility of the individual defendants as well as questions about whether the government should have pursued criminal charges against higher up executives at eBay.
Assistant US Attorney Seth Kosto's position was that Baugh was the top of the ladder criminally and the specific criminal acts which were committed were Baugh's idea alone.
Judge Patti Saris pushed back a bit on this line of thinking, alluding to emails and text messages from CEO Devin Wenig, Chief Communications Officer Steve Wymer, Chief Legal Officer Marie Oh Huber and Head of Global Operations Wendy Jones which have been revealed in this case.
MR. KOSTO: I should speak for a second, even as Mr. Fick raised it earlier, about the idea that this offense is eBay's fault. It was refreshing and encouraging to see Mr. Baugh in the letter he sent to the Court saying it took him a long time to get his arms around it, but he's done blaming the Steiners for what happened to the Steiners, but he's still blaming others for what he did. Even as Mr. Baugh tells it to the Court in his memorandum, in his letter, no one at eBay told him to anonymously threaten and harass and stalk the Steiners. That idea, what happened to the Steiners, was his and his alone. There's no one above Jim Baugh at eBay who thought up the depraved things that happened to David and Ina Steiner.
THE COURT: Isn't there some evidence, though, that one of his superiors understood you couldn't do anything legally to close them down, so said, "Do what you need to do, take them down, burn them"? I can't remember all the terms.
MR. KOSTO: If Mr. Baugh sees in that environment, and he describes it as an environment –
THE COURT: And you talked about groupthink, but that could be part of it.
MR. KOSTO: Well, let's assume for a second that there was someone at eBay as part of that groupthink who encouraged Mr. Baugh to solve the problem, that –
THE COURT: In an extralegal way. Remember they said, "There's no legal way we can do this, so do what you need to do"?
MR. KOSTO: Assume for a second that that's the case, that does not make Mr. Baugh less culpable. That means that if there is evidence beyond a reasonable doubt that someone else shared the intent to harass and intimidate David and Ina Steiner, that that person should be charged. It is not a mitigating fact to take a directive from your boss or a suggestion from your boss and commit a crime.
Some of the emails referring to "there's no legal way to do this" were presumably the August 6-7 2019 communications between those top executives about Fidomaster/ unsuckEBAY, an anonymous online persona that frequently scrutinized eBay on Twitter as well commented on and pitched articles to various mainstream media and industry outlets, including EcommerceBytes.
According to Baugh's legal team in previous filings:
The email that Wymer sent on August 7, 2019...was written in response to an earlier email that an in-house eBay attorney sent to Wymer, Huber, and Mr. Baugh, about the limited options for addressing...tweets about eBay, which the company believed were connected to, or provoked by, the Newsletter.
The full thread makes clear that Huber and Aaron Johnson in eBay’s legal department requested that Mr. Baugh regularly update the company’s senior executives about “any news/developments on [his] end.” That is exactly what happened.
During a lengthy discussion by email about @unsuckebay...Mr. Baugh reported to Wenig, Wymer, and Huber that the security department was working to gather “information regarding [the poster’s] identity and location”.
In the same thread, Wymer mentioned corporate and legal efforts to “get [@unsuckebay] killed.”
Source: USA v. Baugh 1:20-cr-10263 Doc 79
In the August emails, Wenig expressed his desire to see the unsuckEBAY Twitter account shut down - assigning the task to Baugh, with Oh Huber and Wymer copied.
Wymer responded, confirming he had previously discussed the issue with Baugh and explored all angles with Twitter but had been unable to get the account killed.
Oh Huber echoed the frustration, but her and another member of eBay legal, Aaron Johnson, advised there wasn't a strong claim for legal action.
Baugh said his team had been investigating for weeks and were close to discovering the identity and location of unsuckEBAY.
Oh Huber accepted that answer with a smiley face emoji, saying she would hold off on pursuing further legal steps in light of Baugh's investigation.
Wymer made it clear that any effort to "solve" the problem should be explored...Whatever. It. Takes.
Kosto's statements about Baugh being the top of the culpability matrix stand in contrast to previous court documents that clearly acknowledged the role executive communications about both EcommerceBytes and Fidomaster / unsuckEBAY played in the events that unfolded.
Those documents showed executive frustration had been building for months and allege Wymer (Executive 2) requested for Baugh to conduct an in-depth investigation in March 2019.
In March 2019, in response to a request from Executive 2, the GIC prepared a report for BAUGH summarizing the Account's discussions of eBay over the last year.
The report noted that FidoMaster1/Dan Davis was an "anonymous Twitter user that posts negative content about eBay and its senior leadership."
Regarding Fidomaster1/Dan Davis' relationship with the Newsletter, the report noted "the owner of this account corresponds regularly with [the Newsletter] editor [Victim 1] about issues pertaining to eBay. [Victim 1] and [the Newsletter] are known for publishing negative content about eBay and its executives."
Source: Steiner et al v. eBay Inc. et al 1:21-cv-11181 Doc 1
In May 2019, the executive leadership team (ELT) was reportedly concerned about an EcommerceBytes article that had been published about Wenig turning a historic house on the eBay campus into a replica of his favorite New York bar, Walker's West, and SVP Global Ops Wendy Jones (Baugh's direct supervisor) requested to "huddle" about the matter over lunch.
Baugh's legal team alleged:
At the lunch meeting, Jones asked Mr. Baugh if he could find a way to deal with the issue “off the radar since comms and legal couldn’t handle it.” Jones told Mr. Baugh, “Just get it done. I don’t want to know the details, just make sure you sync with Wymer.” Mr. Baugh thereafter provided regular updates to Jones.
As tensions and pressure from the top grew, Senior Manager Special Operations Brian Gilbert traveled from California to Massachusetts in June 2019 to engage in an act of vandalism clearly intended as a warning.
As reported by David Streitfeld of the New York Times:
Eight days after Mr. Wenig’s “take her down” message, a member of the security team flew across the country and drove to the Steiners’ home, a steeply roofed charmer on a quiet street. On their fence, prosecutors say, he scrawled the word “FIDOMASTER.”
It was both ridiculous and threatening, and a taste of just how weird things would get.
When that warning failed to produce results, the investigation reportedly intensified, including a plot to use a fake Twitter account to try to lure FidoMaster/unsuckEBAY into an in person meeting.
In July and early August 2019...members of eBay's executive leadership team and others increased pressure on BAUGH to address both the Newsletter and the Account.
In mid-July 2019...BAUGH tasked the GIC with identifying the author of the Account. BAUGH stated that identifying Fidomaster was a top priority coming from eBay's executive leadership, including Executive 1 [Wenig] and Executive 2 [Wymer].
BAUGH directed the GIC to find evidence that the Victims and the Account were collaborating to publish negative content about eBay, including by using a fake social media account to attempt to trick Fidomaster into admitting a connection with Victim 1. The GIC never found such evidence.
Source: Steiner et al v. eBay Inc. et al 1:21-cv-11181 Doc 1
UnsuckEBAY did not take the bait, instead advising "Marissa" (the fake account allegedly run by eBay GIC) to speak to a qualified attorney, as shown in screenshots provided exclusively to Value Added Resource.
Most explicitly, at Baugh's change of plea hearing in April 2022, Kosto stated if the case had gone to trial, the evidence would have shown the criminal co-conspirators enacted a campaign to harass and intimidate the Steiners with the aim of influencing their coverage and trying to gain their trust in an effort to get them to assist in "outing" the identity of Fidomaster / unsuckEBAY - a plan referred to as the "White Knight Strategy."
Importantly, Kosto's previous statement makes it plain that the campaign arose from communications with senior executives at eBay.
Here's what Assistant U.S. Attorney Seth B. Kosto had to say at Baugh's change of plea hearing:
...What that evidence would show, the government submits beyond a reasonable doubt, is that between approximately August 5th, 2019 and August 23rd, 2019, the defendant Mr. Baugh and several co-conspirators, all of whom worked at eBay Inc...agreed to engage in a harassment campaign that targeted a husband and wife who lived in Natick, Massachusetts.
The campaign targeted victims one and two for their roles in publishing a newsletter that reported on issues of interest to eBay sellers. Senior executives at eBay were frustrated with the newsletter's tone and content and with the tone and content of comments that appeared underneath the newsletter's articles online.
The harassment campaign arose from communications between those senior executives and Mr. Baugh, who was at that time eBay's senior security employee. Mr. Baugh intended for the harassment and intimidation to distract the victims from publishing the newsletter, to change the newsletter's coverage of eBay, and ultimately to enable eBay to contact the victims to offer assistance with the harassment, what the government has called a White Knight strategy.
The White Knight strategy would earn goodwill with the victims, such that they might help eBay learn the identity of Fidomaster, an anonymous online persona who frequently posted negative comments about eBay underneath the newsletter's articles, and thereby allow eBay to discredit both Fidomaster and the victims.
The Steiners have questioned why the executives involved and eBay itself were not pursued criminally in this case, raising concerns about why eBay was allowed to conduct its own investigation through outside counsel.
Baugh's attorney also highlighted executive involvement in his statements at the sentencing hearing, calling out Chief Legal Officer Marie Oh Huber specifically.
Yes, Mr. Baugh is the top of the pyramid that the government charged. None of this would have happened if Mr. Baugh hadn't brought the people together to do what they did. But he's not the only "but for" cause here. He's not even the primary "but for" cause here.
Mr. Kosto began his presentation with, you know, I think he identified a question that everyone asks about the case. Well, I think the question that I see most often about this case is, where is the C suite? Where are Wenig, Wymer, Jones, and Huber, right? They are, if nothing, the "but for" cause of this. Mr. Baugh has no reason to go after the Steiners absent the obsession at the top of eBay about the Steiners. They are the "but for" cause of this above Mr. Baugh.
They didn't order him to do it, didn't know a lot of the operational details, but make no mistake, would a jury have convicted them on a willful blindness theory if they had been charged? I certainly think there's a strong chance of that…
…And, you know, we put in as many of the emails as we could locate that sort of show the amped-up language that was being used, but make no mistake: Mr. Baugh sits in a cubicle outside their offices all day every day, and the latest thing comes up on EcommerceBytes that one of the executives doesn't like, they're out, you know, in Mr. Baugh's face and in his ear in his cubicle. This was relentless.
Again, it's not an excuse, but it's an explanation because there is no other explanation. And so, you know, where are all those people now? Well, Devin Wenig had to leave, but he gets a $60 million golden parachute. And I want to take a particular moment to focus on Marie Huber, the general counsel, right, because maybe it's just me, but I think bad lawyering I think is really -- it's a problem, right?
Marie Huber is on all of these emails -- not all these emails but a lot of these emails, the most sort of inflammatory language, amped-up emails, "Whatever it takes" Steve Wymer says. What does Marie Huber do? Does she say, "Steve, call now. Devin, chill out"? Does she even say, "Mr. Baugh, glad that you're going to be taking care of this, but, by the way, before you do anything, come check it out with me to make sure we don't, like, cross any lines"? No, she doesn't say any or do any of those things. What kind of lawyering is that?
When the proverbial excrement hits the fan, what does she do? Well, she convenes the giant independent, you know, external investigation by outside counsel. Notably, though, even though she's a percipient witness to all of this, she's not interviewed in the investigation in this apparently. She's still at the company today.
It's not an excuse for what Mr. Baugh did, but you can't deny that context. None of this happens if there's not this just sort of crazy, radical breakdown at the top of eBay. This obsession, the obsession we usually see in the stalker is in the executives. They wind up Mr. Baugh and send him off on his way, you know. He shouldn't have done it. He should have walked away. He didn't do it. But, you know, make no mistake: He's not the top of the culpability pyramid, regardless of who got charged here.
That statement is obviously in the interest of his client, but that doesn't negate the very important points about corporate accountability it brings up.
Not only is Oh Huber still Chief Legal Officer today, as a result of eBay's internal investigation, the Safety & Security unit was moved to the Legal Department from the Global Operations division.
That unit now reports to eBay Legal VP, Chief of Litigation, who of course reports to the Chief Legal Officer - meaning the entire security apparatus at eBay now resides ultimately under Oh Huber's purview.
Baugh's direct supervisor, Wendy Jones, was allowed to continue in her role as SVP Global Ops through December 2020, well into current CEO Jamie Iannone's first year back at the company.
When she departed, she took an $11M+ severance package, in addition to the $11M bonus Wenig had granted her for 2018, $8M of which was a retention bonus.
Wenig resigned and was allowed to take a $57 million golden parachute on his way out (not $60M). He still sits on the boards of several companies including Salesforce and GM, as well as running a charitable organization with his wife Cindy, ironically supporting justice system reforms and independent journalism.
Wymer was fired by eBay for cause in September 2019 but, thanks in part to his connections with then San Jose Mayor Sam Liccardo, landed a new gig a year later as CEO of the Boys & Girls Club of the Silicon Valley - announced on Twitter with his signature "whatever it takes" hashtag.
Other criminal co-conspirators Stephanie Stockwell and Veronica Zea were sentenced to two years probation. Security Manager Philip Cooke was the first to plead guilty and has already done his time, serving ~13 months of an 18 month sentence, from which he was released in October 2022.
The final defendant, Senior Security Manager Brian Gilbert, has had his sentencing indefinitely postponed due to a diagnosis of colorectal cancer.
While the criminal convictions and sentences no doubt bring some sense of relief and justice to the victims, it appears the questions of corporate accountability may now only be answered through the ongoing civil case against the named criminal defendants as well as Wenig, Wymer and eBay Inc.