Lawsuits: FriendFinder's Latest Scandal Sexier Than a Penthouse Letter

[leek]

Article: http://valleywag.gawker.com/5160605/...nthouse-letter

A porn star draping boobs over an employee's head. Lapdances on the company dime. $50 million in back taxes. These are just some of the charges Penthouse publisher FriendFinder Networks is facing from an ex-employee.

Natalie Cedeno, the company's former HR director, says that company executives retaliated against her for pointing out violations of labor laws. She was a top executive at the Internet side of the business, deeply involved in its operations for eight years, before FriendFinder fired her without cause in January, she says. She claims the company then tried to withhold the two years of pay she was owed under her contract unless she agreed to stay silent about FriendFinder's misdeeds ? a move her lawyer characterizes as "extortion." Cedeno plans to file complaints with the Equal Employment Opportunity Commission and California's Department of Fair Employment and Housing next month.

And a juicy complaint it will be. FriendFinder Networks used to be called Penthouse Media Group before it acquired Various Inc., the operator of Adult FriendFinder and other online personals sites, in 2007 for $500 million. While they're both porn companies, the office cultures of Florida-based Penthouse and Silicon Valley-based Various Inc. ? where Cedeno worked before the merger ? couldn't have been more different. That became obvious on May 2, 2008, when the ex-Penthouse executives, now in charge of the combined business, decided to ship in a passel of Penthouse Pets to the old Various offices.

When management announced that the venerable porn magazine's stable of nude models would be stopping by the office to serve ice cream, one female employee objected, as Cedeno tells the story. When they arrived, one of the scantily clad Pets made a beeline for the dissenter. "They came into her office and placed her breasts on her head in an attempt to humiliate her, and they had someone ready to take pictures," Cedeno says. The employee quit soon after the incident.

The evening before Cedeno was terminated last month, she says she brought up at a meeting of executives an employee who had charged thousands of dollars in lapdances to the company ? an expense the company's pre-Penthouse management wouldn't have tolerated. "The president laughed and said the CEO had paid for lapdances for investment bankers with company money last weekend," Cedeno says.

But wait a second: Aren't we talking about a company whose main product is porn? What are a few workplace hijinks at a business which makes money off of naked ladies? Well, there's much more than Cedeno's pay at stake. FriendFinder filed to go public last year. It desperately needs the $460 million it hopes to raise in an IPO in order to pay down $420 million in debt. If the company has legal problems and labor issues beyond what it disclosed in its SEC filings, its executives could face heavy penalties, and the IPO would likely be scotched.

FriendFinder Networks CEO Marc Bell did not return a message left requesting comment on Cedeno's allegations. The SEC restricts what companies in registration for an IPO can say publicly about their business outside of regulatory filings, a requirement known as the "quiet period."

According to Cedeno, Various operated Adult FriendFinder and other X-rated adult sites for seven years without drawing a single sexual-harassment lawsuit from employees. The company was as buttoned-down as nearby NASA contractors. Office rules restricted employees from posting any photos on office walls, or even having naughty screensavers. Cedeno says the company's longtime postman had to ask her, after six years of delivering mail, what the company actually did. And founder Andrew Conru, who took no venture capital and therefore owned almost all of the company, is famously mild-mannered. (The raciest he gets: He once told a magazine he'd had a ménage-à-trois.)

Valleywag had previously heard rumblings of discontent at the company. Over the summer, Anthony Previte, a Penthouse executive who was COO of the company, reportedly prompted a mutiny among the Sunnyvale employees by trying (and failing) to replace most of the operations team. We also heard of a messy firing in the sales department. But that was just the tip of the iceberg, according to Cedeno.

Everything changed after Penthouse bought the company and changed its name to FriendFinder Networks, she says. Within four weeks, FriendFinder had its first labor complaint, and soon drew two more. The company's former controller plans to file an age-discrimination lawsuit, Cedeno says.

Cedeno says new management was unresponsive to her concerns. When she pointed out violations of overtime law, the company's VP of operations emailed her, "This garbage stops now." (He meant her complaints, not the violations.) She says she was then ordered to lie and blame pay discrepancies on the company's outside payroll vendor. She refused.

She also says that in January 2008, Rob Brackett, president of the company's Internet group, told her that CEO Marc Bell had complained to him in December ? the first day he came to visit Penthouse's new acquisition ? that the women in FriendFinder's technology department were "ugly" and that Cedeno should get rid of them and replace them with more attractive workers to keep the male employees happy. Brackett pressed Cedeno, asking her how she was going to satisfy Bell. She refused the request.

The company has admitted in its S-1 filings that it failed to collect taxes owed on Internet purchased in the European Union for years. It has already charged $64 million against the purchase price of Various. (It now reports the acquisition as costing the company $401 million, down from $500 million, thanks to this and other charges.) But it has not disclosed the full extent of its pending tax bills. Cedeno says the back taxes in Germany alone come to $40 million and the company owes $10 million in another European country.

FriendFinder seems to have made a formidable enemy. Cedeno has hired Amanda Metcalf, a former prosecutor now in private practice who's best known for her role in a lawsuit against Death Row Records. I asked Metcalf why she took on Cedeno's case. "Woman done wrong," she replied. If Cedeno proves her allegations in court, FriendFinder's executives will learn a hard lesson: It's one thing to profit from women. It's another to take advantage of them.

[Phoenix]

get over it...dont work in porn or for a porn company if you are going to be a bitch

i hope she gets nothing at all

[fusionx]

You shouldn't fuck with your HR boss.. that's just plain STUPID.

[fris]

good for her, I have a feeling AFF is going to be sending some hush money

[leek]

Originally Posted by Phoenix

get over it...dont work in porn or for a porn company if you are going to be a bitch

i hope she gets nothing at all

"She says she was then ordered to lie and blame pay discrepancies on the company's outside payroll vendor. She refused."

[boneprone]

I am honored.

The evening before Cedeno was terminated last month, she says she brought up at a meeting of executives an employee who had charged thousands of dollars in lapdances to the company ? an expense the company's pre-Penthouse management wouldn't have tolerated. "The president laughed and said the CEO had paid for lapdances for investment bankers with company money last weekend," Cedeno says.

[MaDalton]

Originally Posted by boneprone

I am honored.

The evening before Cedeno was terminated last month, she says she brought up at a meeting of executives an employee who had charged thousands of dollars in lapdances to the company ? an expense the company's pre-Penthouse management wouldn't have tolerated. "The president laughed and said the CEO had paid for lapdances for investment bankers with company money last weekend," Cedeno says.

[Ethersync]

$1,000,000+ settlement will be forthcoming I predict...

Sure seems like everything Marc Bell touches goes to shit.

[boneprone]

That was one of the best evenings ive ever had.

Im still sore.

[tony286]

why am I not surprised. lol

[boneprone]

If any 3rd party news media group wants any comments from me let me know.
I can give a "blow" by "blow" desc of what happened that night we blew tons at the stripclub.

I was going to save it for my book, but if CNBC wants to have me on Id spill the beans on this Corp Scandal.

[boneprone]

Sagi, are you still sore by any chance?

Hey did I ever show you the pics from that night? Should I post em here? Or save em for Nancy Grace or CNBC?

[Ethersync]

Originally Posted by boneprone

Sagi, are you still sore by any chance?

Hey did I ever show you the pics from that night? Should I post em here? Or save em for Nancy Grace or CNBC?

post 'em up

[tiger]

Originally Posted by boneprone

I am honored.

The evening before Cedeno was terminated last month, she says she brought up at a meeting of executives an employee who had charged thousands of dollars in lapdances to the company ? an expense the company's pre-Penthouse management wouldn't have tolerated. "The president laughed and said the CEO had paid for lapdances for investment bankers with company money last weekend," Cedeno says.

[boneprone]

Attention News media outlets. Becasue of SEC rules I am the only person who can legally talk about this night.

The story must be heard! It was a scandal of a night!

[boneprone]

Ill tell you right now, the dancers were breaking the rules.

I dont want to be like Jose Canseco here and whistle blow and finger point with juicy details. But I will if I have to!

[Ethersync]

Originally Posted by boneprone

Ill tell you right now, the dancers were breaking the rules.

I dont want to be like Jose Canseco here and whistle blow and finger point with juicy details. But I will if I have to!

Well, OK then. You have to...

[boneprone]

We started the eveing at Midnight.
We left the club at 8am.
Took a limo out to breakfast... (dont worry Penthouse, the club gave us this one for free. It was the least they could do.)

With the strippers of course...
We ate at the Anal Hobbits Favorite Resturant for Breakfast. The Grand Lux at the Venetian.

Later the stripper I was with Jenna Jameson twin drives us around in her car.

Man I wish I could give more details. But they are way too juicy.
They violate all moral conduct.

[brassmonkey]

im not reading all of that

[boneprone]

I realize this may affect the lawsuit and even SEC violations, and I shouldnt name names but SAGI and I really broke every moral and legal law that night.

Like I said it was one of the best nights EVER..

And trust me, im no virgin to wild nights. Im boneprone mother fuckers and this ranked at the very top.

With that said Thanks Penthouse.... It was a blast... You should give an open ended creditcard to Sagi again.

Im telling you, id write this story to Penthouse letters if I could. It would be the best story ever.

But once again a Violation.. Will this story and its details ever come out?

Or will the powers that be keep my mouth shut?

[boneprone]

Let me restate..

Penthouse did not engage or encourage in any illegal activity that night.
That was all on me and my fault..

They just paid for it.

I guess this bitch has a point. I hope she didnt hear the stories.
But she must have if she quit. How could any moral woman go along with this?
You should have seen all we did.

[Anal Hobbit]

Originally Posted by leek

"She says she was then ordered to lie and blame pay discrepancies on the company's outside payroll vendor. She refused."

She's obviously not a team player.

[EscortBiz]

she will get nothing

[Anal Hobbit]

"Cedeno has hired Amanda Metcalf, a former prosecutor now in private practice who's best known for her role in a lawsuit against Death Row Records. I asked Metcalf why she took on Cedeno's case. "Woman done wrong," she replied. If Cedeno proves her allegations in court, FriendFinder's executives will learn a hard lesson: It's one thing to profit from women. It's another to take advantage of them. "


This attorney really doesnt get the big picture.

[fris]

she was canned for speaking the truth, bringing stuff to attention that people didnt want, its more of a conspiracy than anything.

If this was a movie, someone would be like "You are going places you shouldnt"

then a Hitman would be asked to "tie up all loose ends"

[seeric]

I have learned to not believe everything you read.

[Anal Hobbit]

Originally Posted by A1R3K

I have learned to not believe everything you read.

Everything I read? Or everything you read? This comment makes no sence.

[Nookster]

Ooooooh, juicy stuff!

[seeric]

Originally Posted by Anal Hobbit

Everything I read? Or everything you read? This comment makes no sence.

arf arf arf

[pocketkangaroo]

Originally Posted by fris

good for her, I have a feeling AFF is going to be sending some hush money

They have no money.

[HorseShit]

congrats to the winners?

[PAR]

errr I thought in this industry lap dances were on the same line as buying a beer...
Only better because people remember who bought them a lap dance...

Now those little happy endings you have to cover-up a little...

Depending on who you are buying the "dances" for you can get a nice ROI on the night..

Mental note ... next time have the club put the dances down as part of the bar tab..
They do this for main stream sales people all the time...

[Janak]

What kind of extreme douche faggot assmuncher Queen of Lose complains about "violations of overtime law". Welcome to the real world. Sometimes making things happen takes more than a 9-5 effort and if you have a problem with that you know where the unemployment queue is.

Somebody tell this butch bitch to sit down and shut up while the adults are being productive and getting shit done.

[Young]

Originally Posted by jdavis

congrats to the winners?

"there are no winners here...only losers" - Danny Tanner

[Ethersync]

Originally Posted by Janak

What kind of extreme douche faggot assmuncher Queen of Lose complains about "violations of overtime law". Welcome to the real world. Sometimes making things happen takes more than a 9-5 effort and if you have a problem with that you know where the unemployment queue is.

Somebody tell this butch bitch to sit down and shut up while the adults are being productive and getting shit done.

This "Queen of Lose" was the glue that held FriendFinder together for a lot of years.

From Business 2.0 Magazine:

Having never had a boss except in a few summer jobs, Conru had little idea about how to deal with employees he barely knew. So he brought in a human resources coordinator, choosing Natalie Cedeno--a devout Christian who was initially so uncomfortable with AFF that she would ask other employees to spell out dirty words to her--because she was a POW interrogator during Desert Storm. Conru figured those skills would be useful not just for hiring but also for jettisoning people he'd hired too quickly during the boom.

"In 2000 it was so hard to find people that we hired a homeless guy because he could type," Conru says. "He slept under the desk. We just required that he keep his shoes on."

During Cedeno's first three weeks, she canned more than 30 people. "It was emotionally hard," Conru says. Cedeno also initiated strict compliance rules, such as a time-card system, believing that Various was particularly vulnerable to lawsuits because of the risqué nature of the business. "She said, 'Do you know what COBRA is?' And I said, 'Yes. It's a snake,'" Conru says. "I knew it was something you threw at people when they left."

http://money.cnn.com/magazines/busin...3370/index.htm

[Honez]

I'm sorry. I got lost at naked boobs on the head.

[dig420]

This is why you never, NEVER hire a woman.

[Janak]

"Devout Christian".

*stab face*

[jmcb420]

Originally Posted by boneprone

Man I wish I could give more details. But they are way too juicy.
They violate all moral conduct.

Those are two words I never in my life thought I would see here, used in a sentence that I never thought I would see here.


And I for one believe that if you work for an adult company, you leave yourself open to getting boobs on your fucking head. Sad part is, the courts might not think so......

[sacX]

Originally Posted by Ethersync

This "Queen of Lose" was the glue that held FriendFinder together for a lot of years.

From Business 2.0 Magazine:



http://money.cnn.com/magazines/busin...3370/index.htm

so she hired some homeless dude who slept under a desk and fired some people.. Wow she pretty much created the whole company!

[JenniDahling]

Originally Posted by Honez

I'm sorry. I got lost at naked boobs on the head.

Their office is definitely in conservative mode. She was probably the same one who gave Andrew shit, asking why he brought a pornstar (me?!) to the office a few years ago.

[Ethersync]

Originally Posted by sacX

so she hired some homeless dude who slept under a desk and fired some people.. Wow she pretty much created the whole company!

I think Andrew hired the homeless guy. She cleaned house canning him and 29 or so others.

[sacX]

Originally Posted by Ethersync

I think Andrew hired the homeless guy. She cleaned house canning him and 29 or so others.

yeah the article isn't really clear on that.

[DrChango]

Originally Posted by Phoenix

get over it...dont work in porn or for a porn company if you are going to be a bitch

i hope she gets nothing at all

Disregard the sexual harassment aspect. She got busted on for going to bat for both female and male employees who got bilked out of over-time pay. She got grief for sticky up for the rank-and-file employees at her firm, which was her job.

As far as the being a woman in the porn industry bit, I do a lot of work pushing our gay sites and it doesn't mean I get sexually harassed at work. It's not like I show up for work and hear: "Hey, Jake, you did a good job on our new twink site promotion, but you should really consider getting a tan and working on your abs...it's your career we're talking about here..."
Just because those women worked at a porn company it doesn't mean they have to be forced to work in a quasi-frat house.

[Janak]

Originally Posted by sacX

so she hired some homeless dude who slept under a desk and fired some people.. Wow she pretty much created the whole company!

Based on etherwassizface's logic I've made more money for AFF than this bitch ever did so I must have created the company as well.

I'm putting in my demand now for a corner office with a view of Cedeno's naked ass. To throw darts at.

[420]

This thread need boobs on head pics!

[Janak]

Originally Posted by DrChango

Disregard the sexual harassment aspect. She got busted on for going to bat for both female and male employees who got bilked out of over-time pay.

"Being bilked out of over-time pay" is the sort of thing that only losers destined for lives of fail (AKA "employees") care about.

I reiterate: extreme douche faggot assmuncher Queen of Lose.

[V_RocKs]

Looks like AFF is going to get pretty fucked by all of this unless some venture capitalists from the porn industry are going to give them cash. Otherwise Penthouse will be bankrupt soon.

[boneprone]

I will be posting pics with full blow by blow pics tomorrow.

Stay tuned.

People arent gunna like this!

[boneprone]

Originally Posted by V_RocKs

Looks like AFF is going to get pretty fucked by all of this unless some venture capitalists from the porn industry are going to give them cash. Otherwise Penthouse will soon.

Huh?