Mark Cuban Will Fight Insider Trading Charges
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.
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 , which trades publicly on the Nasdaq. For a full profile of Copernic, click here.
- AP contributed to this report.