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.
The company has admitted to a detailed recitation of all the relevant facts involving six felony offenses - two counts of stalking through interstate travel, two counts of stalking through electronic communications services, one count of witness tampering and one count of obstruction of justice.
eBay was charged criminally with two counts of stalking through interstate travel, two counts of stalking through electronic communications services, one count of witness tampering and one count of obstruction of justice and has entered into a deferred prosecution agreement.
Pursuant to the agreement, eBay admitted to a detailed recitation of all the relevant facts about its conduct and agreed to pay a criminal penalty of $3 million, which is the statutory maximum fine for these six felony offenses. As part of this resolution, eBay will also be required to retain an independent corporate compliance monitor for a period of three years and to make extensive enhancements to its compliance program.
“eBay engaged in absolutely horrific, criminal conduct. The company’s employees and contractors involved in this campaign put the victims through pure hell, in a petrifying campaign aimed at silencing their reporting and protecting the eBay brand,” said Acting United States Attorney Joshua S. Levy. “We left no stone unturned in our mission to hold accountable every individual who turned the victims’ world upside-down through a never-ending nightmare of menacing and criminal acts. The investigation led to felony convictions for seven individuals, all former eBay employees or contractors, and the ringleader was sentenced to 57 months in federal prison.”
Levy continued, “Today’s criminal resolution with the company imposes the maximum fine that the law allows under the statutes, holding eBay accountable for a corporate culture that led to this unprecedented stalking campaign. The corporate monitoring of eBay will be in place for the next three years and will ensure that eBay’s senior leadership sets a tone that makes compliance with the law paramount, implements safeguards to prevent future criminal activity, and makes clear to every eBay employee that the idea of terrorizing innocent people and obstructing investigations will not be tolerated.”
“Today’s settlement holds e-Bay criminally and financially responsible for emotionally, psychologically, and physically terrorizing the publishers of an online newsletter out of fear that bad publicity would adversely impact their Fortune 500 company. It also puts in place some much needed checks and balances to ensure an overhaul of e-Bay’s corporate culture by requiring it to implement a revamped compliance and ethics program designed to prevent the recurrence of the appalling conduct we uncovered in this case,” said Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation Boston Division. “No one should ever feel unsafe in their own home, and while this settlement cannot erase the significant distress this couple suffered, we hope it will deter others from engaging in similar conduct.”
The shocking corporate plot sought to change the content of the Steiners' reporting through harassment, intimidation, and a "White Knight Strategy" wherein eBay security personnel hoped to gain their assistance to unmask the identity of Fidomaster/unsuckEBAY, a frequent commenter and source who also sparked the ire of top executives at the company.
Documents provided by the US Attorney's Office confirm in the Spring of 2019 then CEO Devin Wenig(Executive 1) Chief Communications Officer Steve Wymer (Executive 2) and SVP Global Operations Wendy Jones (Executive 3) tasked Security Director Jim Baugh with devising a plan to curtail perceived critical coverage of eBay by Ina Steiner and investigating the unsuckEBAY/Fidomaster Twitter account.
By the spring of 2019, an anonymous internet user known variously as "Fidomaster", "Dan Davis", and "unsuckebay" (hereinafter "Fidomaster") had also become a source of frustration to Executive 1, Executive 2, Baugh, and others at eBay.
On February 22, 2019, for example, a communications employee asked Baugh and Popp to "dig up some intel" on Fidomaster, noting "He's been relentlessly trolling eBay and [Executive 1] on twitter .... "
At Executive 2's direction, Baugh caused the GIC to prepare a report concerning Fidomaster. The March 2019 report concluded that Fidomaster was an "anonymous twitter user that posts negative content about eBay and its senior leadership." It also asserted that "Fidomaster" communicated with Ina Steiner about issues pertaining to eBay, noting "Steiner and eCommerceBytes are known for publishing negative content about eBay and its executives."...
...On or about May 21, 2019, EcommerceBytes published an article entitled, "Did You Know eBay Built a Lavish NYC Pub-Style Lounge?" The article reported that Executive 1 had commissioned the construction of a pub--Walker's West-on eBay's corporate campus, modelling it after a New York City bar. The article contained links to a contractor's website,which featured pictures of the project and a description of the pub.
Baugh alerted Executive 3 to the article by email that night, with the subject "Fwd:> Ina Steiner - Walker's West."
On May 22, 2019, at 9:10 a.m. (PDT), Executive 3 forwarded Baugh's email to Executive 2 and an eBay facilities employee, asking, of the contractor, "Why in the world would they think it's ok to do this and with this level of color???" eBay directed the contractor to take down its website. Executive 3, copying Executive 2 and Baugh, later emailed, "this is ridiculous and has caused serious problems."
Within hours, Executive 2 contacted a public relations consultant about the
Walker's West article. Executive 2 wrote: "I'm just no longer accepting 'ignore' as a broader > strategy and want to fight back. Look forward to talking ASAP to get your assessment of how to > do that most [e]ffectively."
Thereafter, eBay communications employees sent information to the consultant about the Steiners, including their buying-selling history on eBay and the perspectives of eBay employees who knew them.
The details about Walker's West that Jones believed caused a "serious problem? A vague description of the project and the fact it was commissioned by the CEO.
EBAY WALKER’S WEST LOUNGE, SAN JOSE
- Gensler Architects
- Tenant improvement to convert on campus historic house from office to lounge space
- Commissioned by CEO to replicate a known NYC restaurant
- Custom tin ceiling with intricate can lighting cutouts and LED lit perimeter crown molding
- New bar counter build out with custom mirrors and lighting
- High end finishes and detailed elements for historical accuracy throughout
It's difficult to understand how Jones could have felt this was a problem when she proudly appeared in a promotional video for the eBay Main Street project (which included these renovations to the historic "Little Blue House").
The fact that eBay still hosts videos showing interior tours of the pub on their official Vimeo and YouTube channels also belies any point the company might wish to make about supposed security threats from the details of the building being publicly available.
unsuckEBAY/FidoMaster's amplification of the story on Twitter, and criticism of what he called Wenig's "self-indulgent vanity project", also caught eBay's attention.
On May 21, 2019, for example, the Newsletter reported that eBay had built on its campus an expensive replica of Walker's — a popular Manhattan bar— noting,"(it's probably news to sellers (and shareholders?) that eBay has a pub-like lounge on campus - especially one built with what appears to be no-expenses spared."
FidoMaster1 tweeted a link to the article, noting "@[Newsletter] posted about @eBay's beleagured [Executive 1s] self-indulgent vanity project 'Walker's West' campus bar." The tweet continued, "The bar, [Executive 1's] recreation of iconic @WalkersBarNYC is a throwback to internet and gaming company CEO's lavish overspending on 'legacy' facilities and landmarks."
FidoMaster1 also criticized Executive 1 for undertaking the project while eBay was experiencing "cost reduction, layoffs, and scrutiny by activist investors."
Source: Steiner et al v. eBay Inc. et al 1:21-cv-11181 Doc 1 Exhibit A
The executive leadership team was so concerned about the optics of the story, Jones requested to "huddle" about the matter over lunch.
According to Baugh's legal team:
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.
Source: USA v. Baugh 1:20-cr-10263 Doc 227
Today's revelations from the US Attorney's Office also include previously unknown details about Jones' (Executive 3) communications about the Steiners and EcommerceBytes, going back to 2018.
On August 2, 2018, for example, Executive 2[Wymer]'s predecessor as Chief
Communications Officer wrote to Executive 3 [Jones] that Executive 1 [Wenig] had "asked us to determine a more holistic strategy to counteract some of [Ina Steiner's] persistent flame throwing."
In response, Executive 3 wrote, "We have to win hearts and minds to make it and Ina is more destructive with sellers than you guys give her credit for."
Executive 3 then forwarded the email chain to Executive 1, asking to "talk to you a bit about how we get this place fighting and not whining ... it's pervasive and destructive. I am ALL IN and we can do this- we just need more fight from more people -including our leaders!"
On September 21, 2018, responding to a summary of positive media coverage about an eBay initiative, Executive 3 e-mailed, "We should clap back at Ina - this is a good thing and we should tell them that. . .I know comms doesn't want us to engage with them, but I want to."
On March 1, 2019, upon learning from a communications employee that "Ina has ignored our correction and has not acknowledged [an eBay communications employee's] e-mail at all," Executive 2 responded: "Lame. I want to blow her site up."
On March 13, 2019, Executive 1 [Wenig] messaged Executive 2[Wymer] about a "list of sites for sellers that didn't include Ina today. We should find a way to promote it. It's a way to diminish her without saying it. I tweeted it out. Take a look."
Executive 2 immediately messaged two eBay employees about the same list: "How can we promote it just to 'eff with her? Totally diminishing for her. I just had [Executive 1] tweet it out. Take a look."
As of January 11, 2024, that tweet by Devin Wenig is still publicly visible on Twitter/X.
On or about May 31, 2019, Executive 2 [Wymer] and Executive 3 [Jones] exchanged messages regarding Ina Steiner and EcommerceBytes.
In relevant part:
a.Executive 2 described an EcommerceBytes article discussing Executive l's presentation to shareholders during eBay's 2019 annual meeting as "shockingly reasonable";
b.Executive 3 referred to Ina Steiner as a "cow";
c.Executive 2 responded, "Her day is coming ... "
d.Executive 3 stated, "I can't wait. Jim Baugh came to me with some thoughts and I told him to stand down and leave it alone."
e.Executive 2 responded, "You are being too kind ... tell him to be my advisor on this issue...Some times you just need to make an example out of someone... Justice...We are too nice. She needs to be crushed"
f.Executive 3 responded, "I told [Baugh] I would raise to you and you would let him know if you want him to proceed -but knew you were working on something and didn't want to step into that."
g.Executive 2 responded with a "thumbs up" emoji.
The situation escalated even further in the following months with Senior Manager of Security Operations Brian Gilbert traveling to Massachusetts to vandalize the Steiners' property in June and Baugh creating a plan of action for both online and in person harassments, stalking, and intimidation that would begin in August.
On or about June 8, 2019, Gilbert went to the Steiners' home in Natick and scrawled the name "Fidomaster" on their fence.
On or about June 25, 2019, Executive 2 messaged two eBay communications employees about an EcommerceBytes article comparing eBay and another ecommerce company.
After observing that he could not "complain about [Ina Steiner] pointing out fair bumps in our road", Executive 2 stated: "Love it when a secret, we can't speak it out loud plan comes together ...", and added, "We always reserve the right to go 0-60 and get crazy on her ass, but this is a huge adjustment the last month. Ever since the Walker's post...
The Harassment and Intimidation Campaign
On or about August 1, 2019, the New York Times reported that eBay had accused Amazon in a lawsuit of unlawfully poaching eBay sellers to Amazon's online marketplace.
That day, at approximately 1:46 p.m. (EDT), Ina Steiner posted an article on EcommerceBytes under the headline, "eBay RICO Lawsuit Meant to Curb Seller Exodus to Amazon?" She wrote: "[Executive] 1 has been unable to stop a decline in market sales, but trying to dissuade sellers from turning to Amazon ( and trying to get Amazon to stop recruiting sellers) may not be the best tactic."
At approximately 2: 19 p.m. (EDT), Executive 1 texted Executive 2: "Ina is out with a hot piece on the litigation. Ifwe are ever going to take her down ..now is the time."
Executive 2 responded at approximately 2:36 p.m. (EDT): "On it."
As set forth below, a series of text messages followed between Executive 2 and Baugh, beginning with Executive 2' s passing along of Executive 1 's suggestion that "we ... take her down".
These new documents also confirm our previous reporting that Baugh was behind a fake Twitter account using the name "Marissa", which attempted to draw out Fidomaster/unsuckEBAY with an offer to turn over supposedly damning information about eBay executives.
Executive 2 and Baugh's August I 2019 conversation continued by text, with Baugh committing to put in motion a "plan B" and Executive 2 committing to "embrace managing any bad fall out."...
...Baugh continued, stating falsely that Fidomaster-whom he referred to as the "unsuck idiot"-was David Steiner "or [an]other close associate" of Ina Steiner's:
Contrary to Baugh's text messages to Wymer, Fidomaster/unsuckEBay did not take the bait, as shown in screenshots provided exclusively to Value Added Resource.
eBay had revealed to investors in February 2023 they had set aside $64 Million for legal expenses in relation to possible criminal action against the company for the cyberstalking incident as well as pending litigation from the Environmental Protection Agency due to restricted chemicals, prohibited pesticides, and emissions-control defeat devices being sold on the platform.
Importantly, this $3 Million criminal settlement will be paid to the US Treasury, not to the victims, who still have an ongoing civil suit against the seven security employees/contractors, as well as eBay Inc., Wenig, Wymer, Jones, and security company Progressive F.O.R.C.E Concepts that is slated for a May 2025 trial date.
The Company agrees to pay a total monetary penalty in the amount of $3,000,000 (the 'Total Criminal Penalty"). This is the maximum applicable fine permitted by statute upon the Company's conviction of the six counts charged in the Info1mation.
The Company and the U.S. Attorney's Office agree that the Company will pay the United States Treasury $3,000,000, equal to the Total Criminal Penalty, within ten business days of the execution of this Agreement.
The agreement also requires eBay to undergo additional compliance monitoring for 3 years.
To put things in perspective, after eBay became aware of the criminal activity of their employees and conducted an internal investigation, they graciously allowed Wenig to depart with a $57 Million severance package, citing "differences with the board" as the reason for the leadership change.
The Steiners published a victim impact statement on their website, saying they are determined to continue to push for answers and fight to preserve First Amendment rights.
With today's Deferred Prosecution Agreement, eBay is not required to stand before a judge for sentencing, but we feel it's important that we, as victims, be heard.
In 2022, we were crushed when we learned the government had not interviewed the top executives at eBay as part of its criminal investigation. As victims of despicable crimes meant to destroy our lives and our livelihood, we felt it was vital to do everything in our power to make sure such a thing never happened to anyone else.
eBay's actions against us had a damaging and permanent impact on us - emotionally, psychologically, physically, reputationally, and financially - and we strongly pushed federal prosecutors for further indictments to deter corporate executives and board members from creating a culture where stalking and harassment is tolerated or encouraged.
We launched our news site in 1999 to help regular people and small businesses succeed in selling online - when sellers succeed, so do the platforms on which they sell. We were targeted because we gave eBay sellers a voice and because we reported facts that top executives didn't like publicly laid bare.
Since the government first arrested some of the perpetrators and filed charges in June 2020, we have heard from sellers who are fearful of communicating legitimate concerns to us (or to eBay and other marketplaces) because they fear retaliation. Not only is that devastating to hear, but when sellers are afraid to speak up, it undermines our reporting.
After today's announcement, we remain determined to push for answers and do whatever we possibly can to ensure that no corporation ever feels that the option exists for them to squash a person's First Amendment rights.
eBay also released a statement, ironically featuring a stock photo showing Wenig's infamous on campus pub Walker's West, which has been renamed The Sellar under current CEO Jamie Iannone and reportedly continues to serve beer and wine at a daily employee happy hour, despite multiple defendants in this case attempting to blame their "poor judgement" on the heavy drinking culture at the company.
Editor's note: after this article was published, the featured image for eBay's official statement was changed to one that does not show Walker's West/The Sellar.
In the statement, Iannone said eBay is committed to making things right with the Steiners, a position which would seem to be in direct contrast to the fact that a settlement has not been reached in the civil matter which has been ongoing since 2021.
SAN JOSE, Calif., January 11, 2024 – eBay Inc. (NASDAQ: EBAY) today stated that it has entered into a deferred prosecution agreement with the U.S. Attorney’s Office for the District of Massachusetts with respect to actions taken in 2019 by former eBay employees against Ina and David Steiner. As set forth in the agreement, eBay takes responsibility for the misconduct of its former employees.
“The company’s conduct in 2019 was wrong and reprehensible,” said Jamie Iannone, Chief Executive Officer at eBay. “From the moment eBay first learned of the 2019 events, eBay cooperated fully and extensively with law enforcement authorities.
We continue to extend our deepest apologies to the Steiners for what they endured. Since these events occurred, new leaders have joined the company and eBay has strengthened its policies, procedures, controls and training. eBay remains committed to upholding high standards of conduct and ethics and to making things right with the Steiners.”
Iannone's statement about bringing in new leaders to strengthen policies, procedures and controls also leaves out some crucial details.
First, Wendy Jones (Executive 3), who allegedly told Wenig she was "ALL IN...we just need more fight from more people -including our leaders!" and instructed Baugh to "just get it done" "off the radar since comms and legal couldn’t handle it", was retained in her role as SVP Global Operations until December 2020 - over a year after eBay became aware of the cyberstalking incident and well into Iannone's first year at the helm.
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.
It will be interesting to see if eBay will attempt to clawback any of that compensation in connection to this scandal, which certainly constituted "a material violation of the Company's Code of Business Conduct" and resulted in "material financial or reputational harm to the Company" by any objective standards.
eBay has admitted in recent court filings that Wenig's exit package also included a clawback provision, but after several meetings on the subject, they decided not to exercise it.
Chief Legal Officer Marie Oh Huber was also copied on several emails that have been released as part of this ongoing litigation, including the infamous "Whatever. It. Takes" email from Wymer.
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
The email chain started with Wenig expressing 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.
Huber echoed the frustration, but her and another member of eBay legal, Aaron Johnson, advised there wasn't a strong claim to appeal to Twitter to take action.
Baugh appeared to be trying to placate his bosses by offering that 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.
However, Wymer added more fuel to the fire the next day by making it very clear how utterly vexed by the situation he was, saying any effort to "solve" the problem should be explored...Whatever. It. Takes.
Oh Huber is still Chief Legal Officer today and, as a result of eBay's internal investigation into these events, 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.
Molly Finn, who was VP & Chief Compliance Officer at the time, was also copied on several related emails, according to redacted privilege logs included in court filings.
Finn also still works at eBay, though she moved out of the compliance role in December 2021 (2+ years after these events) and is currently Vice President, Deputy General Counsel M&A and Securities.
Interestingly, page 57 of the deferred prosecution agreement includes Mergers and Acquisitions under areas in which eBay will have additional compliance requirements and monitoring as part of this deal.
Mergers and Acquisitions
The Company will develop and implement policies and procedures for mergers and acquisitions requiring that the Company conducts appropriate risk-based due diligence on potential new business entities, including appropriate due diligence by legal, accounting, and compliance personnel.
The Company will ensure that the Company's compliance codes, policies, and procedures apply as quickly as is practicable to newly acquired businesses or entities merged with the Company and will promptly:
- train the directors, officers, employees, agents, and business partners consistent with Paragraphs 8 and 9 above on the criminal laws and the Company's compliance codes, policies, and procedures regarding criminal laws; and
- where warranted, conduct a review of all newly acquired or merged businesses as quickly as practicable.
That may be a nod to broader due diligence and disclosure concerns raised by eBay's acquisition of trading card marketplace TCGPlayer, which led to the formation of the very first US labor union in eBay's history and the very sudden departure of Chief Accounting Officer Brian Doerger last year.
It's also noteworthy that eBay did not name a successor Chief Compliance Officer until September 2023, presumably done as part of the ongoing negotiations with the US Attorney's Office to reach this agreement.
New Chief Risk & Compliance Officer, Ryan Jones, worked closely with Rob Chesnut during his time at AirBnB, which makes his selection for this role at that time even more notable.
Chesnut was a former Federal Prosecutor before joining eBay as Senior Vice President Trust and Safety from 1999-2008, then moving on to become Chief Ethics Officer at AirBnB as well as a celebrated advisor and author on corporate ethics, including the bestseller "Intentional Integrity: How Smart Companies Can Lead An Ethical Revolution."
Given that history, it's not surprising that Chesnut was tapped to speak to eBay employees at an all-hands meeting, along with Marie Oh Huber and Molly Finn, when news of this scandal first became public in 2020.
Iannone sent an internal memo about the meeting, reminding employees if they "see something" they should "say something" and that they are all "ethics is everyone's responsibility."
Nearly 25 years ago, eBay was founded on the idea of fairness and the dream of building an honest marketplace with a level playing field.
During our recent Global All-Hands, we continued the conversation about how recent events have given us the opportunity to reflect, reset and act. We have zero tolerance for unethical behavior at eBay. Acting with integrity is simply who we are.
Since I rejoined eBay earlier this year, and particularly over the last couple of months, the eBay Leadership Team has frequently discussed how openness, honesty, respect and doing business with integrity drives our success.
I've visited a dozen individual team meetings talking about this topic across the company. We're posting news and info on the Hub and we're often reminding team members that if you see something that doesn't seem right, we want you to say something.
There are multiple avenues to report, including anonymously, if you'd like. Of course, we have a strict non-retaliation policy to protect everyone who raises a concern. And, we've also emphasized these values - and our commitment to upholding them - with our seller community and our shareholders.
And, here's the thing...ethics is everyone's responsibility. We all need to see ourselves as being personally accountable for our commitment to doing business ethically. That's why I strongly encourage you to join me, Marie Oh Huber, Chief Legal Officer, and Molly Finn, Chief Compliance Officer in conversation with Rob Chesnut, an eBay alum and highly-regarded ethics and integrity expert.
Rob is the former Chief Ethics Officer at Airbnb and recently published a new book, "Intentional Integrity: How Smart Companies Can Lead an Ethical Revolution." Our focus will be on bridging the insights Rob offers in his book with past events here at eBay and the respect he has for our culture and our team. I'm looking forward to hearing Rob's perspective on how we can further advance our efforts. The calendar invite will be out shortly for Monday, August 24. We'll also record the session and share it with everyone.
As always, I want to hear from you as much as you do from me. Good ideas come from many places. So please continue to share your ideas on our strategy, our business execution and additional actions we can be taking to ensure we all live our values every day.
However, if Iannone really believes that "openness, honesty, respect and doing business with integrity" drives eBay's success, it raises the question why new leadership in compliance and ethics was only brought in just a few months before finalizing this agreement.
Bare minimum leadership changes made under the threat of prosecution don't reflect as well on the company as Iannone might hope, nor do they go nearly far enough.
If Iannone and the Board are unwilling to truly take accountability for everything that happened here and completely clean house, perhaps it's time for shareholders to demand change and ensure eBay really does "remain committed to upholding high standards of conduct and ethics."
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