Your business law teacher is incorrect. I would be interested to know exactly what education level he/she is teaching at and what his/her credentials are. In other words, is this person a law professor? (I doubt it). Or are they a business professor teaching a course in "business law"? (Most probable). And is this at a university? (doubtful), or a community college? (likely). Business school teachers are notoriously ill informed.
Regardless, the key phrase your teacher is using is with the intent to deface and criticize. And even then it is murky. You are allowed to deface someone's picture to make fun of them. The murkiness arises where a court might consider it harrasment, in which case the details of the case become crucial. Generally, a court will err on the side of free speech.
If the photo is not defaced, the law is perfectly clear. Once you post your photo on the internet it becomes public domain. This means the public has the right to use it. Posting on MySpace and Facebook counts, even if your profile is private. The only way you can get around this is to copyright your photos, in which case you can force someone to remove it as a violation of copyright. You cannot copyright the photo after you have made it public domain.
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