Mark Cuban Rejects Insider Trading Accusations - Sports * US * News * Story

Runway Angels
The superbowl of fashion shows, models walk down the runway at the 2009 Victoria's Secret Show.
Smartphone Guide
Here's a need-to-know guide to nine devices, based on features, price, network and platform.
Wines for the Holidays
Not quite sure what wine to pair with Turkey or Creme Brulee? Our experts do.

FEATURED QUIZZES

A Healthier & Wealthier You
Take the following quiz and find out how much you know about the impact of obesity on the health of the U.S. economy.
The Billionaire BFF's
Philanthropists. Bridge partners. Hockey players. Which responses are based on facts from Buffett's and Gates' real lives?
The Many Myths of Coca-Cola
Can you tell which statements are true, and which ones are just rumors?

SPECIAL REPORTS

Winterizing Your Portfolio
If 2009 was the winter of our discontent, will 2010 be a winter wonderland for investors? A lot depends on the recovery—or lack thereof.
Investor's Guide to Real Estate
Some even say the long-awaited recovery is here. Regardless, buyers and sellers alike can profit from our guide.
Alternative Investing
Stocks and bonds? Sure. But it's a big world out there for investors.

CNBC ON DIGG

Mark Cuban Will Fight Insider Trading Charges

Topics:Regulations | SEC | CEOs and CFOs | Sports

Sectors:Internet

By: CNBC.com | 17 Nov 2008 | 03:26 PM ET

Text Size

Scott Cohn
CNBC Senior Correspondent

Mark Cuban, the billionaire entrepreneur and owner of the Dallas Mavericks basketball franchise, on Monday disputed an accusation from the Securities and Exchange Commission that he profited from insider stock trading.

"I am disappointed that the Commission chose to bring this case based upon its Enforcement staff’s win-at-any-cost ambitions," Cuban said in a statement posted to his Web site. "The staff’s process was result-oriented, facts be damned. The government’s claims are false and they will be proven to be so.”

The SEC accused Cuban of insider trading for selling 600,000 shares of an Internet search engine company prior to an impending stock offering.

Mark Cuban, Dallas Mavericks owner
AP
Mark Cuban, Dallas Mavericks owner.

The Commission's complaint, filed in the U.S. District Court for the Northern District of Texas, alleges that in June 2004, Mamma.com invited Cuban to participate in a stock offering after he agreed to keep the information confidential.

Cuban knew that the offering would be conducted at a discount to the prevailing market price and that it would be dilutive to existing shareholders, the SEC said in a statement.

Cuban then told his broker to sell Cuban's entire position in the company, the SEC alleged. Mamma.com's stock price opened at $11.89 after the offering was announced, a decline of more than 9 percent.

Cuban said on his site that the matter has been pending before the Commission for nearly two years and has "no merit."

Cuban said he intends "to contest the allegations and to demonstrate that the Commission’s claims are infected by the misconduct of the staff of its Enforcement Division."

According to the SEC complaint, Cuban avoided losses in excess of $750,000 by selling his stock prior to the public announcement of the offering. (See video of Scott Cohn's report, left.)

Cuban, one of the five finalists to buy the Chicago Cubs pro baseball team, is expected to fight the charges.

Mark Cuban, 50, also owns Landmark Theaters, a large national chain dedicated to independent films, and the HDNet cable television channel.

He is one of the richest people in the world, according to Forbes magazine, which pegged his net worth at $2.3 billion as of March 2007.

In 2005, Mamma.com acquired desktop search company Copernic Technologies. In 2007, the combined company changed its name to Copernic [CNIC Loading... () ], which trades publicly on the Nasdaq. For a full profile of Copernic, click here.