Mark Cuban Charged with Insider Trading..

[William33 110]

When will these wealthy people get it?

Mark Cuban charged with insider trading

SEC charges Dallas Mavericks owner with insider trading related to sales of Mamma.com.

By David Goldman, CNNMoney.com staff writer

Last Updated: November 17, 2008: 4:03 PM ET

NEW YORK (CNNMoney.com) -- Billionaire entrepreneur Mark Cuban, owner of the National Basketball Association's Dallas Mavericks, was charged Monday by the Securities and Exchange Commission with insider trading.

The civil suit was filed by the SEC in a federal court in Dallas.

According to the SEC, Cuban sold 600,000 shares of Internet search company Mamma.com in June 2004 using non-public information.

Cuban is accused of calling his broker and instructing him to sell all of his stock from Mamma.com after receiving the confidential information from the company.

The SEC said Cuban learned that the company would raise money through a public offering, and he knew the stock price was about to fall.

When the offering was made public, the stock fell 9.3%, and Cuban avoided losses in excess of $750,000 by selling stock the day before, the SEC report said.

"I am disappointed that the Commission chose to bring this case based upon its Enforcement staff's win-at-any-cost ambitions," said Cuban in a statement released by his legal counsel, Dewey & LeBoeuf. "The staff's process was result-oriented, facts be damned. The government's claims are false and they will be proven to be so."

An SEC official said Cuban was given the public offering information from Mamma.com in confidence, and Cuban made illegal use of that knowledge.

"As we allege in the complaint, Mamma.com entrusted Mr. Cuban with nonpublic information after he promised to keep the information confidential," Scott W. Friestad, Deputy Director of the SEC's Division of Enforcement, said in the report. "Less than four hours later, Mr. Cuban betrayed that trust by placing an order to sell all of his shares."

Mamma.com has since changed its name to Copernic Technologies (CNIC), and now produces Internet search-advertising services in addition to search software. Copernic's stock currently trades for less than $1 per share.

According to Phillip Stern, a former SEC attorney and current lawyer at Neal, Gerber & Eisenberg, Cuban will likely face a fine of twice the losses he would have incurred, or about $1.5 million. The SEC's lawsuit is a civil case, and Cuban does not face any criminal charges.

Stern does not believe Cuban will have to divest his ownership stake in his other companies, including cable network HDNet.

In an ironic twist, Cuban is also the majority owner of Sharesleuth.com, an investigative blog designed to sniff out and expose securities fraud, according to site editor Christopher Carey.

Cuban has been identified as one of the bidders for Major League Baseball's Chicago Cubs for about a year, after the team was put up for sale by owner Sam Zell, chief executive of the Tribune Co. But baseball sources told the Chicago-Sun Times last week that Cuban is unlikely to get the league's blessing despite his deep pockets.

"These allegations really say something about his integrity," said Stern. "Baseball was already concerned about him, and now it will be difficult to persuade them otherwise."

First Published: November 17, 2008: 11:51 AM ET

[MrsCat 6]

seems to be very convenient timing on his part

[Empress of Groovy 373]

Oh dear. What will happen w/ his toupee?

[mawilson 2,133]

Dallas Mavericks Owner should do time...

Innocent until proven guilty?

[William33 110]

Dallas Mavericks Owner should do time...

Innocent until proven guilty?

Sure. This will play out like the "Martha Stewart" case though. She made more money as a result.