SEC back on Cuban's case for alleged insider trading
Appeals court reinstates federal suit charging Broadcast.com founder broke securities law
Dallas Mavericks owner Mark Cuban, who made his fortune as an early Internet entrepreneur, might be spending more time in another kind of court.
From the Wall Street Journal:
The Fifth Circuit Court of Appeals said there was "more than a plausible" basis to find that (in 2004) Mr. Cuban agreed not to trade stock in Mamma.com, an Internet search company, after speaking to the company's executives and learning about a private stock offering.
The SEC alleged in its civil complaint filed in Texas that Mr. Cuban violated insider-trading laws when he sold his entire 6% stake in the company after learning about the offering. Private stock offerings often result in a short-term drop in the stock price, and the SEC alleged Mr. Cuban avoided $750,000 in losses by selling.
Now, $750,000 might seem like a lot to you and me, but doesn't Mark Cuban spend at least that much on food and drinks for the Mavs clubhouse each week? You have to wonder why he'd bother skirting the law for such a paltry amount of money. Oh, right, billionaires get to be billionaires in large part because they watch every dime.
Which is not to say I think he's guilty. I'm not familiar enough with the case to have an opinion. For his part, the outspoken Cuban has dismissed the SEC lawsuit as "utterly meritless" and intends to force the SEC to pay his legal fees.
Cuban also has had plenty to say about the Mamma.com case on his personal blog, though nothing new since November 2008. Something tells me he'll be providing an update soon.