What’s Mamma.com ???

That’s one of the first questions coming up in today’s news, reported by the WSJ’s Kara Scannell, that Dallas Mavericks owner Mark Cuban faces insider-trading charges related to the site.

Mamma.com is a Canadian search engine that merged with Copernic Technologies, which also offers search software and online advertising services, in December 2005. It now trades under Copernic’s ticker, CNIC.

Marketed as a “metasearch” engine, Mamma displays results from other sites like Ask and About.com, which it says provides more comprehensive search results. It also sells paid-search listings, which appear above the standard results.

It received 669,000 unique visits in September, down 66% from the 2 million it got a year earlier, according to comScore.

Like many tech companies of late, Copernic has been streamlining operations in the weak economy. Last week it said it would close its Montreal office and that its marketing VP wouldn’t be staying on past the end of the year.

Its third-quarter loss narrowed to $621,677 from $974,716 a year ago, though its revenue shrank 10% to $1.7 million over the same period.

Mr. Cuban has mentioned Mamma.com as far back as 2004, when he blogged about investing in it despite its obscurity.

“I invested in mamma.com for the same reason I invested in Netidentity.com back when it was known as mailbank.com. I love businesses with low overhead, that don’t need to be technology leaders to succeed, that generate cash that they can put in the bank, and at some point, hopefully payout to shareholders.

I think mamma.com has that potential,” he wrote. “It’s not Google or Yahoo, nor will it be a top 5 search engine anytime soon. But it is a good metasearch tool that I use and have used. Google and Yahoo have become carbon copies of each other, and for me, other than usenet and news searches, it’s too big. I like the way Mamma.com organizes websearches, and I use it for picture searches.”

A year later, he wrote that he’d changed his mind because of financing concerns: “Im glad I sold my
stock.”

Mark Cuban charged with insider trading

The breaking news is that the SEC is charging Mark Cuban, the owner of the Dallas Mavericks, with insider trading related to sales of shares in Mamma.com, Inc., now Copernic, Inc. (NASDAQ: CNIC). The entrepreneur billionaire allegedly dumped 600,000 shares in the Internet search engine company when he found out it was raising money by selling shares in a private offering. This information was not publicly known.

The SEC filed its complaint in the U.S. District Court for the Northern District of Texas, saying that in June, 2004, Cuban was invited to participate in the stock offering after he agreed to keep the information confidential. Knowing the offering would be conducted at a discount, Cuban then sold his entire 6% ownership within a few hours after he learned about it. When the financing was announced the next day, the company's shares dropped more than 10% due to dilution concerns. Cuban thus avoided more than $750,000 in losses.

If these allegations are true, this is a classic case of insider trading. The public had no way of knowing the stock price would drop, while Cuban and other insiders did. The SEC release didn't mention what other insiders did, but it seems, for now at least, that only Cuban acted on the information.

I've had about all the news of corruption I can take. Of course, I don't mean to sound accusatory, or find Mark Cuban guilty before he has been properly tried, but it's just the timing of it. When the world is swirling into a global recession based on greed, and probably at least a little bit of corruption, these news items are definitely ones I can do without.

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Mark Cuban - Charged with insider trading