Mark Cuban Charged With Insider Dealing
Internet entrepreneur accused of selling shares in search engine after learning it was planning a stock offering
American internet entrepreneur Mark Cuban, said to be worth close to $3bn (£2bn), has been charged with insider dealing by the US securities and exchange commission (SEC).
Cuban, who owns the Dallas Mavericks basketball team, has been accused of selling 600,000 shares in the internet search engine Mamma.com after learning privately that the business was planning a stock offering. The SEC said that by disposing of the shares ahead of a public announcement, he avoided paper losses of $750,000.
Cuban is chairman and a co-founder of HDNet, a home shopping channel in the United States, as well as an investor in a clutch of technology firms; a co-owner of the film studio Magnolia Pictures; and owner of the US arthouse cinema chain Landmark Theaters.
According to the SEC, Mamma.com invited Cuban to participate in the stock offering in June 2004, after he agreed to keep the information confidential. The offering was a private placement at a discount to the share price at the time and would have been dilutive for existing investors. Cuban was then the biggest shareholder with a stake of about 6.3%.
The SEC alleges that within hours of receiving the information, Cuban called his broker and told him to sell his entire stake. When the stock offering was later announced, the Mamma.com share price fell more than 9%.
Scott Friedstad, deputy director of the SEC's enforcement division, said it was "fundamentally unfair for someone to use access to non-public information to improperly gain an edge in the market".
Cuban disputes the allegations by the securities and exchange commission and said he would contest them.
Cuban, who owns the Dallas Mavericks basketball team, has been accused of selling 600,000 shares in the internet search engine Mamma.com after learning privately that the business was planning a stock offering. The SEC said that by disposing of the shares ahead of a public announcement, he avoided paper losses of $750,000.
Cuban is chairman and a co-founder of HDNet, a home shopping channel in the United States, as well as an investor in a clutch of technology firms; a co-owner of the film studio Magnolia Pictures; and owner of the US arthouse cinema chain Landmark Theaters.
According to the SEC, Mamma.com invited Cuban to participate in the stock offering in June 2004, after he agreed to keep the information confidential. The offering was a private placement at a discount to the share price at the time and would have been dilutive for existing investors. Cuban was then the biggest shareholder with a stake of about 6.3%.
The SEC alleges that within hours of receiving the information, Cuban called his broker and told him to sell his entire stake. When the stock offering was later announced, the Mamma.com share price fell more than 9%.
Scott Friedstad, deputy director of the SEC's enforcement division, said it was "fundamentally unfair for someone to use access to non-public information to improperly gain an edge in the market".
Cuban disputes the allegations by the securities and exchange commission and said he would contest them.
Use the feedback form below to submit your comments.
Use the form below to email this article to your friends.
- 15-year-old Girl Becomes Fifth Victim of South Carolina Serial Killer in a Week
- Devastation in Zambia As Climate Change Brings Early Flooding
- Allen Klein
- All the President's Emails: Sasha Obama, Vladimir Putin, Rahm Emanuel, Michelle Obama
- Can More Men Be Persuaded to Buy Tampax?
- Slow Loris: the Eyes May Be Cute, But the Elbows Are Absolutely Lethal
- US v Russia: the Results of Past Summits
- Binyam Mohamed Launches Legal Fight to Stop Us Destroying Torture Images
- Two British Soldiers Die in Southern Afghanistan
- Honduras President Zelaya Flies Out From Washington