….the case really appears to be just a he-said-she-said case. And so, I believe Mr. Cuban has a very strong factual defense before he even gets to any legal arguments. For an insider trading case, he’s not an insider at all. He is essentially a stockholder, essentially pitched to make an additional investment. He was disgusted by that pitch and the direction of the company and sold his stock. And he did so in a very open way consistent with someone who had nothing to hide.

And the SEC in a target-driven matter has now drummed up a case, based on pressured and apparently uncorroborated testimony of one other person on a phone line. That is certainly not a criminal case. And it makes for a risky and flimsy case even under a civil standard. It makes me wonder why the SEC has decided to file this case. And I would not be surprised at all if Mr. Cuban took the SEC to trial over this case.

Hueston is now a partner with Irell & Manella (Corporate Crime Reporter).

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.

They also ask:

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.

Reuters has more.

November 17: The SEC files a civil complaint (.pdf) charging Cuban with insider trading, alleging that he avoided a loss of $750,000 by selling his shares of Mamma.com Inc. based on non-public information.

Coincidence? Cuban’s response on his Blog Maverick claims that the matter has been before the SEC for two years. Why now?

Cuban calls it “a product of gross abuse of prosecutorial discretion.” It’s also pocket change to him. Bloomberg has more.

Although the three-judge panel ruled 2-1 in favor of reversal, news reports from the Rocky Mountain News and Reuters indicate that six of the nine judges who heard the case were overtly critical of Nacchio attorney Maureen Mahoney’s arguments. Chief Judge Robert Henry and the two judges who earlier ruled in favor of reversal appeared to support Nacchio’s claims.

Nacchio was convicted in April 2007 of 19 of 42 counts of insider trading and was sentenced to 72 months in prison. He has been free on bond during his appeal.

• We agree that the improper exclusion of his expert witness merits a new trial, but we conclude that the evidence before the district court was sufficient for the government to try him again without violating the Double Jeopardy Clause.

Professor Daniel Fischel, an expert on corporate law and economics, was the excluded expert witness. Prosecutors had argued that the defense failed to establish the reliability of Fischel’s opinions. Nottingham excluded Fischel in part because he thought it would not be helpful to the jury. But the appeals court rejected that reasoning:

• This misunderstands the nature of economic expertise. An economic expert is permitted not only to tell the jury that an economic concept “is an issue” but to analyze the concept and offer informed opinions. In other words, expert testimony may “assist the trier of fact to understand the facts already in the record, even if all it does is put those facts in context. ….That is why expert economic testimony is routine when a materiality determination requires the jury to decide the effect of information on the market. ….Armchair economics is not the way to decide complex securities cases [citations omitted].

NYT/Reuters here.