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S.E.C. Inspector General's Report on the Mark Cuban Case

S.E.C. Inspector General's Report on the Mark Cuban Case

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S.E.C. inspector general's report on the Mark Cuban insider trading case.
S.E.C. inspector general's report on the Mark Cuban insider trading case.

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Published by: DealBook on Sep 30, 2011
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11/06/2011

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On October 17, 2007,

and

took the investigative testimony of

Exhibit 87. In an e-mail dated August 27, 2007 from

to

and

entitled, "

at Merriman," she wrote:

Per Merriman in house counsel, Ralph [Ferrara at Dewey &
LeBoeuf] is putting the heat on

to sit for a statement.

Ifwe want to go first with him re: testimony, we're going
to need to do it Wednesday, 9/5 or Thursday, 9/6 in San
Francisco.

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LE/WP

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This document is subject to the provisions of the Privacy Act of 1974, and may require redaction before
disclosure to third parties. No redaction has been performed by the Office of Inspector General. Recipients of
this report should not disseminate or copy it without the Inspector General's approval.

I have a call scheduled at 2:00 p.m. to confinn our plans so
we need to chat about this before then. He then has a call
with Ralph at 4:00 p.m.

Exhibit 88. In the above-referenced September 14, 2007 e-mail from
regarding additional questioning of Faure and

he wrote:

Exhibit 86 at 2.

On the evening of September 20, 2007, Aguilar sent

an e-mail entitled,

"

Declaration," which attached a declaration of

that had been obtained by

Mr. Cuban's counsel. Exhibit 89. The following morning,

forwarde ail

Id. Shortly thereafter,

forwarded that e-mail and wrote,

Id.

testified that

testified that she believed the Enforcement staffhad originally subpoenaed
at the end of July, before Dewey & LeBoeuf took

testimony.

Tr. at

116-117. Friestad testified that his recollection was that the Enforcement staff had
scheduled Faure and

testimony to "make sure that we were right," not in

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LE/WP

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LE/WP

This document is subject to the provisions of the Privacy Act of 1974, and may require redaction before
disclosure to third parties. No redaction has been performed by the Office of Inspector General. Recipients of
this report should not disseminate or copy it without the Inspector General's approval.

response to the second Wells submission, discussed below at section II.J.2. Friestad Tr.
at 109. Similarly,

testified that the Enforcement staff's efforts to obtain

additional testimony from Faure and testimony from

"had been either
contemplated or the scheduling had been underway" before receiving the second Wells
submission.

Tr. at 81.

and

took

testimony in New York, where he was

represented by Aguilar. Exhibit 87. In that testimony,

was asked about his role at
Merriman, where he was no longer employed, the policies and procedures he followed
when he solicited investors to participate in PIPE offerings, his communication with
at Mamma.com about contacting Mr. Cuban, his telephone call with Mr.
Cuban, and the circumstances of his above-referenced declaration, among other things.

Id.

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