eBay is involved in a cyberstalking scandal that dates back to 2020. Maybe you have heard about it, but don’t know much about the whole situation.
The popular news magazine program CBS 60 Minutes broadcast a 13-minute feature on Sunday about the main points of the scandal that to this date still hangs over eBay.
In a nutshell, the company’s former CEO Devin Wenig grew frustrated about negative coverage on a blog owned by a couple in Natick, Ina and David Steiner. And he directed his Chief Communications Officer, Steve Wymer, to do something to stop the constant negativity on the couple’s blog.
While David Steiner ran the business end, Ina Steiner was the main voice of the blog. Over time, their blog seemed to attract an audience of disgruntled and frustrated eBay sellers, to which the Steiners catered with news coverage, frequently being critical about the company’s newest policies or highlighting problems sellers have on the marketplace.
David Steiner said in the 60 Minutes interview, “all we ever want[ed] it to be, [is] a conduit for sellers to tell their problems, tell their issues, share information.” Ina Steiner added, “and give them a voice.”
With over a decade of reporting, their blog EcommerceBytes became a force within the eBay seller world. It was one that sellers turned to when they had issues or grew frustrated with eBay.
While the couple’s blog may have been leaning towards critical reporting, eBay should have taken the feedback to improve their marketplace. It was free and unfiltered advice from existing sellers.
Yet during Wenig’s reign, it resulted in one of the most stunning displays of a lack of judgment and organizational control by a public company towards the owners of an online blog.
Former eBay CEO Devin Wenig apparently felt angered by their reporting, which he perceived to be negative and counterproductive to his leadership at the company. This is a blog, not the New York Times, Wall Street Journal, or any other major news organization with millions of daily readers.
This is an online blog with hundreds of thousands of monthly visitors, and Wenig apparently became obsessed with the reporting on the Steiner’s blog.
What got the ball rolling in 2019 to become one of the most childish, but very traumatizing threats and actions towards the Steiners, was a report by Ina Steiner about Wenig’s compensation.
This wasn’t some secret information from a deep dark source but based on public information that can be found by researching a company’s SEC filings.
After Wenig shared the report with eBay’s Chief Communications Officer Steve Wymer, he texted Wenig back, “we are going to crush this lady.” And so it began.
The 60-Minutes story does skip through numerous details here and jumps directly to a text from Wenig to Wymer that said, “take her down,” almost making it appear it was the direct response to Wymer’s text, which it wasn’t.
However, it appears Wenig continued to be frustrated with Ina Steiner’s reporting in general, and the “take her down” text initiated the escalation from verbal frustrations to actions.
Prosecutors say Wymer texted James Baugh, the former eBay Senior Director of Safety and Security, “I want to see ashes. As long as it takes. Whatever it takes.”
This appears to have put into action the cyberstalking and harassment campaign involving six additional eBay employees that worked under Baugh. The campaign became so vicious that the FBI got involved once the local police were able to link it to one eBay employee.
Once arrested, Baugh and the six former employees all ended up pleading guilty to numerous federal crimes, with Baugh receiving the stiffest penalty of 57 months behind bars plus two years of supervised release and a fine of $40,000.
When the scandal became public, many wondered why Wenig and Wymer were not charged, despite the damming text messages.
In the 60 minutes feature, former federal prosecutor Andrew Lelling told the TV news program, the text messages are “not the same as … knowingly joining a criminal conspiracy to cyberstalk a couple in Natick.”
In other words, prosecutors were unable to find sufficient evidence that Wenig or Wymer had direct knowledge or were part of the planning or actions of the cyberstalking campaign.
But it does raise the question about the corporate culture at eBay during the Wenig years. Steven Levy, in an article published in 2020 for Wired, wondered why no one at eBay stood up to say, “What the hell are we doing? This is eBay, not the KGB!”
With seven employees having pled guilty to various crimes and no apparent ‘smoking gun’ from these plea deals to criminally connect Wenig or Wymer to the conspiracy, it appears both have skirted criminal prosecution in this matter.
In addition, eBay has also not been criminally charged. Lelling explained the company may not face criminal charges because,”cases are common where an employee inside a company uses company resources to do wrong. In every one of those cases, it’s not necessarily true that the company itself is responsible.”
However, in the company’s latest SEC financial filing, eBay disclosed it reserved $64 million for legal settlements, which include this and two other government investigations in separate unrelated matters.
In 2021, the Steiners filed a civil lawsuit against the company and all individuals involved, including Wenig and Wymer. Earlier this month, they amended the lawsuit to include additional details uncovered from the criminal investigation and the plea deals by the seven former eBay employees.
In addition, eBay was sued last November by its commercial liability insurer in what appears to be a preemptive move to disclaim financial coverage for any claims the company or its former employees may be subject to from this scandal.
Typically, large corporations carry liability insurance to cover the actions of employees during their employment. But the insurer claims they are not required to cover this matter because the cyberstalking scandal violates several covenants in their contract with eBay, including criminal acts.
Three Years Later — eBay Still Dealing With Cyberstalking Scandal
It is somewhat remarkable that this scandal is still hanging over eBay and that it has not been able to settle the matter with the Steiners or the government. According to 60 Minutes, the current U.S. Attorney has said the investigation into eBay is ongoing.
The bizarre situation started nearly 4 years ago before it was internally unearthed, but not reported publicly. In late summer of 2019, it led to the immediate dismissal of Steve Wymer and the seven other employees. Devin Wenig was allowed to resign and walk away with a $57 million severance package.
Today, Wenig is a board member at General Motors and Salesforce. In a statement to 60 Minutes, he said:
“I am appalled at what happened, and my heart goes out to the Steiners. They did not deserve what happened to them in any way. The outrageous actions of a few former employees do not represent my values or the company I led for many years. Had I been aware of what was going on, I would have stopped it immediately.”
eBay also issued a statement, saying:
“The misconduct of these former employees was wrong, and we will do what is fair and appropriate to try to address what the Steiners went through. The events from 2019 should never have happened, and as eBay expressed to the Steiners, we are very sorry for what they endured.
“As noted by the U.S. Attorney’s Office when this matter first came to light, eBay cooperated fully with the government’s investigation, noting that eBay was extremely cooperative with the investigation in helping state and federal authorities figure out what had happened and collect evidence of the crime.”
60 Minutes did not publish a statement from Steve Wymer, but noted that he claims his texts have been mischaracterized, and he only became aware of the conduct by the seven employees after the fact. Today, Wymer, is the President and CEO of the Boys and Girls Club of Silicon Valley.
Jamie Iannone took over the President and CEO role at eBay in 2020 and since has focused on turning around the company’s operational focus and sales.
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