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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: anniebonny who wrote (105349)	11/24/2008 11:52:47 AM
From: Jeffrey S. Mitchell	Read Replies (1) \| Respond to of 122087

Annie, Here's a good set of replies by a "Securities Guy" I found enlightening: ----- 11.November 19th, 2008 5:55 pm “Actually, as a 6% owner of Mamma.com’s common shares, Cuban was most definitely subject to trading restrictions and considered a de facto company insider under Section 16b of the Exchange Act. This restriction - which prohibits “short-swing” trades in the company’s stock with a 90-day period - applies to all holders of more than 5% of a company’s stock, and Cuban most certainly was aware of it.” Ummm, no. Section 16 applies to officers, directors and 10% holders of an issuers stock, not 5%. Cuban was not subject to it and would likely not be considered an insider with respect to mamma.com. Also, the Section 16(b) restriction only applies to profits from purchases and subsequent sales within a period of six months; the news accounts I’ve read have indicated that Cuban held the stock for years. This is the weakest insider trading case I’ve ever seen the SEC bring. I’d be very surprised if Cuban settled, and even more surprised if the SEC gets a judgment. — Posted by Securities Guy ----- 12.November 19th, 2008 6:03 pm “The fact is that the $750K he ’sheltered’ is $750K out of the pockets of whoever bought the stock before the markets learned of the PIPE.” Whoever bought the stock from Cuban would have done so regardless of what Cuban did, so they weren’t harmed by what Cuban did. If anything, they benefited since Cuban increased the supply of shares for sale with his sell order, which, all else remaining equal, will lower the price of the stock. — Posted by Securities Guy ----- 26.November 20th, 2008 8:41 am “Correct me if I’m wrong here but isn’t the standard for a 10b-5 violation that you used “Material non-public” information as the basis for a purchase or sale. Not merely that he was a insider with a fiduciary duty or breach of trust.” Rule 10b-5 does not prohibit trading on material, non-public information. It prohibits fraud. Consider the case where an investor comes across material, non-public information through diligence and hard work, or, as was the case in the famous Barry Switzer case, the investor overhears somebody else disclose the information but owes no duty of confidentiality to the discloser. It is pretty well settled that the investor would not be guilty of securities fraud by investing on the material, non-public information in these instances. — Posted by Securities Guy dealbook.blogs.nytimes.com