The Securities and Exchange Commission has charged the Dallas Mavericks owner and Internet entrepreneur Mark Cuban with insider trading.More here.
The complaint claims that in 2004 Cuban learned of a private offering of Mamma.com (now known as Copernic) that would decrease the value of his 600,000 shares. It says he then sold off his stake and as a result, reportedly saved $750,000.
"As we allege in the complaint, Mamma.com entrusted Mr. Cuban with nonpublic information after he promised to keep the information confidential. Less than four hours later, Mr. Cuban betrayed that trust by placing an order to sell all of his shares," said Scott W. Friestad, Deputy Director of the SEC's Division of Enforcement."It is fundamentally unfair for someone to use access to nonpublic information to improperly gain an edge on the market."
Mr. Cuban, the owner of the Dallas Mavericks, owned a 6.3 percent stake in the company, now known as Copernic Inc. At the time of the sale, he was the company’s largest-known shareholder.Cuban needs to be made an example of. Life in prison should suffice.
Mr. Cuban was told about the stock offering through a phone call with Mamma.com’s chief executive on June 28, 2004, according to the SEC complaint.
Mr. Cuban “became very upset and angry during the conversation” because the private offering would dilute existing shareholders, according the complaint.
“Well, now I’m screwed,” Mr. Cuban told the executive. “I can’t sell.”
But Mr. Cuban later called his Dallas broker and ordered him to sell all 600,000 shares he owned. “Sell what you can tonight and just get me out the next day,” he said, according to the complaint.
He can probably kiss any hope of buying the Chicago Cubs goodbye.
Let's not forget Cuban was the money-man behind that colossal anti-war bomb Redacted last year. He should do hard time just for that fiasco alone.