Billionaire Mark Cuban is being sued for alleged insider trading.
The Securities and Exchanges Commission brought civil charges of securities fraud against the Dallas Mavericks owner on Monday (Nov. 17) for insider trading in the shares of Mamma.com, according to news reports.
According to the nine-page complaint, Cuban, 50, had purchased shares of Mamma.com in March 2004. In June, the company's CEO allegedly called Cuban, who agreed that "he would keep whatever information the CEO intended to share with him confidential." The story goes that when he learned of the company's plan to raise captial with a private-placement offering, thus diluting Cuban's holdings, the entrepreneur wasn't pleased.
Cuban then "called his broker in Dallas and told the broker to sell his entire 600,000-share Mamma.com position." When Mamma.com announced their private-placement deal, their stock plunged. The SEC thus concludes that by trading on the "material, non-public information" he got from the CEO, he avoided losses of at least $750,000.
The SEC is suing for that amount, plus a penalty.
Cuban is also Chairman of HDNet, an HDTV cable network, and had a short-lived reality competition show on ABC, "The Benefactor," which was canceled before the full season aired. He also appeared on the fifth season of "Dancing With the Stars" with celebrity partner Kym Johnson.Copyright © 2015, The Baltimore Sun