SEC Sues Billionaire Mavericks Owner Mark Cuban, Alleges Insider Trading
Mark Cuban, a billionaire Internet entrepreneur who owns the Dallas Mavericks basketball team, has been charged by the SEC in a civil case with insider trading.
The federal Securities and Exchange Commission contends that Cuban acted almost immediately to sell his entire position in Mamma.com Inc.in 2004, after the online search engine company confidentially told Cuban—then its biggest shareholder—that a discounted share offering was planned, according to the Chicago Tribune. Selling his 600,000 shares before the offering was publicly announced saved Cuban more than $750,000 in losses, the SEC alleges.
“Among his various ventures Cuban is also the majority partner of sharesleuth.com, which purports to expose securities fraud,” reports Wired.
The complaint, which was filed in U.S. District Court for the Northern District of Texas, “alleges that Cuban violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder,” the SEC reports in a press release.
The federal enforcement agency, which also provides a link to the complaint filed today (PDF) against Cuban, is seeking disgorgement of profits, financial penalties and a permanent injunction prohibiting Cuban from any additional violation of U.S. securities laws.
Cuban and his lawyers could not be reached for comment, according to the Tribune.
Additional coverage:
Forbes: “SEC Guns For Billionaire Mark Cuban”
Silicon Valley Insider: “SEC’s Mark Cuban Insider Trading Allegations”
Updated at 12:30 p.m. to link to Silicon Valley Insider post.
