Mark Cuban is all over the internet at this moment – not because his Mavericks finally won a game (now 3-7 after beating the Knicks) but instead for insider trading charges.
A civil complaint was filed by the United States Securities and Exchange Commission (SEC). In its complaint, The government alleges that in June, 2004 Cuban sold 600,000 shares of Canadian search engine company Mamma.com after he learned it would be making a stock offering.
The SEC says when the stock offering was publicly announced, Mamma.com’s stock price dropped more than 9 percent from the previous day’s closing price. As a result, the SEC says, Cuban avoided losing more than $750,000.
Cuban made a quick post on his blog, www.blogmaverick.com. He doesn’t say much but instead paste’s a copy of a letter signed by his legal team.
I wish I could say more, but I will have to leave it to this, and let the judicial process do its job.
November 17, 2008
RE: SEC Civil Action in the United States District
for the Northern District of Texas, Dallas Division
Mark Cuban today responded to a civil complaint filed by the United States Securities and Exchange Commission in the United States District for the Northern District of Texas, Dallas Division. In its complaint, the Commission charges that Mr. Cuban engaged in violations of the federal securities laws in connection with transactions in the securities of Mamma.com Inc.
This matter, which has been pending before the Commission for nearly two years, has no merit and is a product of gross abuse of prosecutorial discretion. Mr. Cuban 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.
Mr. Cuban stated, “I am disappointed that the Commission chose to bring this case based upon its Enforcement staff’s win-at-any-cost ambitions. The staff’s process was result-oriented, facts be damned. The government’s claims are false and they will be proven to be so.”