Report of Investigation, United States Securities and Exchange Commission, Office of Inspector General. Case No. OIG-511. Allegations of Enforcement Staff Misconduct in Insider Trading Investigation, August 22, 2011 [Redacted]
“On January 30, 2009, complainant Mark Cuban, through his counsel at the law firm Dewey & LeBoeuf, filed a complaint with the Securities and Exchange Commission (“SEC” or “Commission”) Office of Inspector General (“OIG”), outlining various allegations of misconduct by the SEC Division of Enforcement (“Enforcement”) staff. Mr. Cuban, a well-known entrepreneur and owner of the Dallas Mavericks basketball team, alleged Enforcement staff engaged in misconduct in the course of its investigation of Mr. Cuban for insider trading in connection with the sale of all of his Mamma.com stock before the company publicly announced a private investment in public equity (“PIPE”) transaction in June 2004…In all, the OIG concluded that there was insufficient evidence to substantiate Mr. Cuban’s claims that the SEC Enforcement staff engaged in misconduct in conducting their investigation into Mr. Cuban’s sale of his Mamma.com stock shares. Specifically, the OIG investigation found that there was insufficient evidence to substantiate the claim that Enforcement improperly provided Mr. Cuban with a “Wells” notice before the
investigation was substantially complete. The OIG investigation also did not find sufficient evidence to substantiate Mr. Cuban’s claim that an earlier investigation into Mamma.com was closed as a quid pro quo for the investigation relating to Mr. Cuban.”
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