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Daily Debrief: Can Mark Cuban beat the SEC?The SEC claims that Mark Cuban illegally dumped his holdings in Mamma.com after learning about an impending private stock offering. Charles Cooper and Dawn Kawamoto discuss the charges facing one of the best-known technology entrepreneurs of the last...
[ Music ] ^M00:00:03 >> The SEC has charged tech entrepreneur Mark Cuban with insider trading. Welcome to the CNET News Daily Debrief, I'm Charles Cooper here with my colleague Dawn Kawamoto. Dawn, this just came off the wire, what is the jest of the SEC's complaints? >> Basically, they are alleging that Mark Cuban engaged in insider trading with Mamma.com and ended up getting some insider information in selling his entire position in the company based on that information. >> Now, Mamma.com is a search engine company.... >> Correct. >> Based in Canada. What is wrong about selling stock in a company on a face of it nothing's untoward. >> There's nothing wrong with selling stock in a company. >> But in this case? >> The only thing the SEC doesn't like is that if you as an investor received information that's not available to investors at large, that you take that information that only you know and if gained, that is considered like non-public information and abuse that information to got and buy shares. In essence, the SEC doesn't like an unleveled playing field and so as a result that's considered insider trading because you've gotten insider information that isn't available to the, you know investing public at large. >> And that's a serious allegation. Any word from Cuban or his lawyers yet? >> No, we've sent out e-mails and calls to his attorneys, as well as to Mark and we would hope they respond quickly. >> Mark if you're listening. Again, you're innocent until proven otherwise. >> Correct. >> But, what might won face upon being convicted of this charge. >> Well, for one, it's not a criminal charge and so it's not like a conviction or a guilty kind of sentence. It's a civil charge and what he could face if found liable for this is he would have not only give back the $750,000 in losses that the SEC alleges he was able avoid by this insider -- alleged insider trading, but he would also have to pay back a penalty fee of three times that. So he could potentially be looking at fees and penalties of $3 million and this for saving allegedly $750,000 on this trading. The thing that I don't understand is you know, given the billions of dollars he receive, you know from the sale of Broadcast.com to Yahoo and the other, you know philanthropy efforts he's done, you know, it just seems that, you know the allegations of insider trading to save $750,000 given his wealth, it seems a little bit of a disconnect. >> Well again, and we have to underscore... >> He has -- correct. >> He has not been convicted of anything. >> They are all allegations. >> But as we saw in the Martha Stewart case, sometimes people do things that aren't in their long term interests -- one last thing, Mark Cuban, a very high profile technology entrepreneur, you mentioned Boradcast.com, which is sold to Yahoo. He also is the owner of a basketball Dallas Mavericks and had been apparently dickering to acquire the Chicago Cubs baseball team. On his blog, very, very high profile blog, blogmaverick.com, he had been talking openly way back when about his investment in Mamma.com. Has the SEC made any mention about that connection or is that just something that's... >> No. they have not brought that up as part of these allegations. What they did say is they began their investigation a year ago, that's when they learned of a potential issue and have been pursuing it aggressively -- their investigation. They declined to disclose exactly how was they became aware of some potential issue. They did say that it had no connection however to any reorganization that Mamma.com had. >> And Mamma.com according to comScore, the numbers a couple of years ago, they were receiving about two million uniques and I think now it's under 700,000, so. >> Right. And they're now known as Copernic. >> Thanks Dawn. On behalf of CNET New, I'm Charles Cooper. ^M00:04:13 [ Muisc ]