Whether his lawyers like it or not, Mark Cuban is now really using his blog to fight the insider trading charges against him. Today he posts a transcript of an interview his lawyer did with the CEO of Mamma.com, in order to show that there never was a confidentiality agreement:
November 18, 2008
On behalf of
RE: SEC Civil Action in the United States District
for the Northern District of Texas, Dallas Division
The SEC knows their case centres on one telephone conversation between two individuals- 4 years ago. The SEC claims there was an agreement between these parties to the conversation to keep certain information confidential. We interviewed Guy Faure, the former CEO of Mamma.com Inc., with whom the SEC claims Mr. Cuban made an agreement. We had a court reporter transcribe the interview. There was no agreement to keep information confidential. Here is a relevant excerpt from the interview with Mr. Faure:
CHRISTOPHER CLARK :
1) Q- We spoke earlier about you were telling Mr. Cuban in words or substance : “I have confidential information for you”.
2) Q- Do you recall anything Mr. Cuban said in response or reply to that statement by you ?
A- No, I do not.
The SEC knows this-they have the transcript, yet they brought the case anyway. Why? Do they have a different statement from Mr. Faure ?
Why did the SEC end their multi-year investigation of Mamma.com Inc. for alleged securities laws violations days before interviewing present and former Mamma.com Inc. executives about this matter? Was the timing a coincidence? We think not.
Any inquiries respecting this release should be directed to Stephen Best at Dewey & LeBoeuf LLP (202) 346-8735.
This is big stuff for a few reasons. As we predicted, Mark is fighting this on the grounds that he didn’t have a “duty of confidentiality” and so therefore was free to trade on the information. “The SEC will likely rely on Cuban’s conversation with the company about the possibility of him investing in their private placement. They’ll claim that Cuban was trading on information he had a duty to keep confidential. Once you’ve got duty in place, the bar against trading kicks in. Basically, be careful what you agree to keep confidential because it may end up inhibiting your investment decisions in the future,” we wrote.
Beyond that, we’re surprised (but very glad) at how willing Mark Cuban is to use his blog to fight the case.
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