Early Facebook investor McNamee has 'concerns' about Sheryl Sandberg's resignation

·3 min read

Throughout Sheryl Sandberg's time at Facebook, she and Meta (META) CEO Mark Zuckerberg made a formidable team. They presided over the tech platform as it grew into a multi-billion dollar company, and rose to become arguably the tech world’s most powerful duo.

Then in June, Sandberg announced that she would be leaving her job as COO in the fall to focus on philanthropy and women's issues. Her departure could mark the beginning of the pair’s downfall, according to one Big Tech critic.

In a recent interview with Yahoo Finance Editor-in-Chief Andy Serwer, investing legend Roger McNamee said he had “concerns about the Meta COO’s resignation.”

“The first is that I don't understand why either Mark Zuckerberg or Sheryl Sandberg is better off with Sheryl leaving," said McNamee, an early investor in Facebook who's since become one of the company's toughest critics. “Facebook as a company has gone across a lot of lines.”

In the last several years, Meta has faced a slew of controversies, coming under fire from regulators, lawmakers, and privacy advocates. Perhaps most notably, Meta allowed Cambridge Analytica, a British political consulting firm, to create psychological profiles of Facebook users using their data. The consulting firm then sold the data profiles to then-candidate Donald Trump during his 2016 presidential election.

SUN VALLEY, IDAHO - JULY 06: Sheryl Sandberg, outgoing Chief Operating Officer of Meta, walks to a morning session during the Allen & Company Sun Valley Conference on July 06, 2022 in Sun Valley, Idaho. The world's most wealthy and powerful businesspeople from the media, finance, and technology will converge at the Sun Valley Resort this week for the exclusive conference. (Photo by Kevin Dietsch/Getty Images)
SUN VALLEY, IDAHO - JULY 06: Sheryl Sandberg, outgoing Chief Operating Officer of Meta, walks to a morning session during the Allen & Company Sun Valley Conference on July 06, 2022 in Sun Valley, Idaho. (Photo by Kevin Dietsch/Getty Images)

In response, Zuckerberg apologized, calling the scandal "a breach of trust." Meta later founded Social Science One, an academic organization dedicated to preventing similar scandals in the future.

The scandal spurred a bevy of lawsuits against Meta throughout the United States. McNamee drew attention to one lawsuit filed by a Meta shareholder in Delaware that not only targets Zuckerberg and Sandberg for their roles in the Cambridge Analytica scandal, but also accuses them of insider trading.

Last year, Bloomberg reported that Zuckerberg sold over $4.5 billion of stock, roughly eight times more than he sold in 2020. The business magnate reportedly sold the stock to fund the Chan-Zuckerberg Initiative, a philanthropic organization he and his wife co-founded.

“The scale of that is, I think, two orders of magnitude bigger than the largest insider trading case in history .... And the SEC [Securities and Exchange Commission] hasn't done anything with it yet. But that threat is out there,” said McNamee, author of "Zucked: Waking up to the Facebook Catastrophe."

McNamee also pointed out that a coalition of states led by Texas filed a lawsuit against Google accusing it of making an agreement with Meta to manipulate advertising auctions. While the suit didn't name Meta as a defendant, it called the social media company a "co-conspirator" and cites an email to Zuckerberg.

In McNamee's opinion, he said, "It's one of the cleanest price fixing cases in history."

Meanwhile, Sandberg has faced internal scrutiny at Meta. Last month, the Wall Street Journal revealed that Meta had launched an investigation into whether Sandberg used company resources to help plan her wedding — a claim her spokesperson denies.

Sandberg's departure from Meta could increase the odds of legal repercussions for both her and Zuckerberg in the future, according to McNamee.

“If I’m looking at things from Sheryl and Mark’s point of view, their big defense was staying together: deny everything, delay everything, stay really close,” McNamee said. “When Facebook is suggesting it's going to investigate Sheryl for improper use of corporate assets, that doesn't strike me as having a happy ending for either one of them.”

Dylan Croll is a reporter and researcher at Yahoo Finance. Follow him on Twitter at @CrollonPatrol.

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