Mark Cuban
Mark Cuban Insider Dealing: Mark Cuban Accused of Mamma.com 600,000 Shares Insider Dealing! Internet entrepreneur and one of our favorite bloggers, billionaire Mark Cuban is charged with insider dealing for selling 600,000 Shares of search engine Mamma.com to avoid $750,000 losses back in 2004 by the Securities and Exchange Commission (SEC) today November 17. From Guardian:
American internet entrepreneur Mark Cuban, said to be worth close to $3bn, has been charged with insider dealing by the Securities and Exchange Commission.
Cuban, who owns the NBA basketball team the Dallas Mavericks, 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.
According to the complaint filed by 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 to existing investors. Cuban was then the biggest shareholder with a stake of around 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 nonpublic information to improperly gain an edge in the market.”
