SEC accuses Mark Cuban of insider trading

Mark Cuban, billionaire high-tech entrepreneur and owner of the Dallas Mavericks, is being accused of insider trading.

From the Wall Street Journal:

The Securities and Exchange Commission filed insider trading charges against Mark Cuban, the outspoken owner of the Dallas Mavericks, for allegedly dumping shares in Mamma.com upon learning it was raising money in a private offering.

The SEC alleges in a civil action that Mr. Cuban sold his entire 6% ownership stake on June 28, 2004, after learning that Mamma.com was raising money through a private investment in a public entity, or PIPE. The next day, on June 29, the company announced the PIPE financing and shares of the company dropped by more than 10%. By selling his stake, the SEC alleges, Mr. Cuban avoided more than $750,000 in losses.

The full text of the complaint can be read here (.pdf).

Mama.com, a search company, was renamed Copernic in June 2007. After selling his stake in Mama.com, Cuban helped launch IceRocket.

As of late, Cuban has been involved in an as-yet-fruitless -- and some say futile -- attempt to buy the Chicago Cubs. News of this SEC allegation will likely end any of that talk.

A prodigious and oftentimes controversial blogger, Cuban has yet to respond to the SEC charge in that forum, one might presume upon the advice of legal counsel.

(Update: Cuban has now responded, on his blog, naturally: "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 headline on his last post is interesting, though: "I hate to lose."

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