Instagram's investors have partial ownership of the company and presumably that comes with voting rights. If the founders hid other offers and presented only Facebook's offer to the investors because Facebook secretly offered more personal gain to the founders, then that would be fraud. The founders would be deceiving and effectively stealing from their own shareholders.
When a company recieves offers, the founders don't get to just pick and choose which offers they want to present to the board for a vote.
Agreed, if that is the case it is a fraud. If there was an official offer and they hide it, it is fraud. Every shareholder has the right to choose.
However, what I also meant is that in the article they talk only about the money side, there is no mention what else was on the table. For example, may be the strategy that Instagram is interested in is closer to that of Facebook than to the one of Twitter. Or maybe something completely different. We don't have the full picture.
When a company recieves offers, the founders don't get to just pick and choose which offers they want to present to the board for a vote.