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November 17, 2008 1:49 PM

Mark Cuban Gives the Ball to Fish & Richardson, Dewey & LeBoeuf in Insider Trading Case

Posted by Andrew Longstreth

Update on 11/17 at 3:45 pm: On Monday afternoon, Cuban updated his blog with a post about the SEC's case, in which winning is again a central idea. "I am disappointed that the Commission chose to bring this case based upon its Enforcement staff's win-at-any costs ambitions," said Cuban. "The staff's process was
result-oriented, facts be damned. The government claims are false and they will be proven so."

Mark Cuban hates to lose. He said so on his blog last week following a slow start for his Dallas Mavericks.  We imagine he would really hate to lose a case filed against him by the Securities and Exchange Commission over allegations of insider trading. On that matter, the pressure is now on Cuban's attorneys: Fish & Richardson's Paul Coggins and Dewey & LeBoeuf's Ralph Ferrara.

In its complaint filed in the Northern District of Texas, the SEC alleges that Cuban sold his entire stake in an Internet search company called Mamma.com (now known as Copernic.com) after receiving nonpublic information. In March 2004, Cuban had bought 600,000 shares of Mamma.com. Later that year, the CEO of the company told Cuban about a plan to raise more funds through a PIPE (private investment in public entity). Cuban allegedly didn't like the plan and became angry. "Well, now I'm screwed," he told the CEO, according to the complaint. "I can't sell." Cuban subsequently called his broker and sold his entire stake in advance of the public offering, a violation of insider trading laws, according to the SEC. The sell-off helped Cuban avoid more than $750,000 in losses. (Download SEC Cuban complaint here.)

Cuban's lawyers are a couple of veteran all-stars of white-collar work. Coggins is a former Dallas U.S. Attorney and Ferrara was once general counsel at the SEC before entering private practice and booking a laundry list of enforcement assignments against the SEC. Neither Coggins nor Ferrara returned our calls immediately, so it's unclear who will be taking the lead. We know Fish & Richardson has long provided counsel to Cuban and the Dallas Mavericks. One firm partner, Steven Stodghill, served as team counsel for the Mavs from 2000 to 2002 and has since represented the team on various litigation matters.

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