OK, we officially love the SEC v. Cuban case.
The latest twist comes from a new post on Cuban’s “blog maverick” blog where he posted a statement this afternoon that his attorneys have interviewed the key witness for the SEC, and that this witness (the former CEO of Mamma.com) has no memory of Cuban responding to his statement to Cuban, “I have confidential information for you.”
The point appears to be that although the CEO told Cuban he was going to provide him with confidential information, Cuban never agreed to keep anything confidential. This raises the interesting legal question of whether someone who is told that information is confidential, but does not explicitly agree to keep it confidential, is thereby precluded from trading under the insider trading laws.
The statement from Cuban’s blog is pasted below:
The SEC knows their case centers 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”.
A- Right.
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.
