The brash billionaire owner of HDNet and the Dallas Mavericks has been accused of insider trading. Federal regulators are stating that Mark Cuban sold his 6% stake of Mamma.com in June of 2004 based on inside information that he received a day prior to the company’s stock plummeting. Cuban immediately ordered his broker to sell off the stock, saving him more than $750,000 in losses.
Attorney Ralph C. Ferrara posted the following statement on Cuban’s blog, professing his innocence:
“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.”
“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.”
The SEC is seeking to impose financial penalties and confiscate gains Cuban received from the trades. It will be up to the U.S. Attorney in Dallas to determine whether Cuban will face any criminal charges.
“Insider trading cases are a high priority for the Commission,” Linda Chatman Thomsen, director of the SEC’s Division of Enforcement, said in the statement. “This case demonstrates yet again that the Commission will aggressively pursue illegal insider trading whenever it occurs.”
Mamma.com, which has since merged with Copernic Technologies, is a Canadian owned internet search engine company. Copernic also offers search software and online advertising services.