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Cox Padmore Skolnik & Shakarchy LLP remains ready to serve you during the COVID-19 pandemic. We are prepared to provide you with continuous legal service and uninterrupted communication. We are also monitoring the legal impact of COVID-19 and we are available to discuss any questions you may have regarding the CARES Act, insurance coverage issues, including business Interruption insurance, or other issues. Please see below for a list of our practice areas. You may contact us by the usual means of telephone and email, which is encouraged at this time. We will promptly respond. Video conferencing is also available. In all, our firm remains committed to assisting you throughout this evolving period of legal, business, and safety concerns.

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  4.  | Sale of internet stocks focus of SEC lawsuit against Mark Cuban

Sale of internet stocks focus of SEC lawsuit against Mark Cuban

| Oct 7, 2013 | Securities Fraud

The federal government takes insider-trading very seriously. When it suspects the action is occurring, the Securities and Exchange Commission could file a lawsuit against the individuals believed to be involved. Many throughout the nation, including those residing in New York City, are likely paying attention to the SEC lawsuit billionaire Mark Cuban is facing. Those who do not know him as a former contestant on Dancing with the Stars, may recognize that he is the owner of a professional basketball team. He also regularly appears on anther reality program, “Shark Tank.”

The SEC focused on Cuban as the result of the sale of stock in an internet-search company, nearly a decade ago. Shortly after he sold his shares, their value significantly dropped, and he avoided a loss of $750,000.

As is the case in all criminal cases, the prosecution and defense will offer evidence to build a case. A former SEC enforcement officer indicates that the prosecution is often fighting an uphill battle in cases such as these. This is because they are usually built using circumstantial evidence, making them hard to prove.

Of course in this case the SEC believes it has evidence to support the allegation. It claims that a phone call occurred involving the CEO of the internet-search company and Cuban. In the course of that call the CEO purportedly revealed a stock offering that would effectively diminish the value of his shares. Despite allegedly indicating that there was nothing he could do to prevent a monetary loss after receiving the information, he nonetheless managed to sell his stock before the announcement regarding the stock offering was made.

The case was previously dismissed by a U.S. District judge and is now being heard since an appeals court overruled that decision.

For anyone facing allegations of insider trading, the stakes are high. Accordingly, it is worth the time and energy to make sure the individual secured to lead one’s defense, thoroughly understand how these types of cases are handled.

Source: Business Week, “SEC lawsuit against Mark Cuban heads to trial,” David Koenig, Sept. 29, 2013

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