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The colorful owner of the Dallas Mavericks, Mark Cuban, has been charged with insider trading.
The Securities and Exchange Commission alleges Cuban in June 2004 sold 600,000 shares of Internet search engine company Mamma.com Inc. on inside information that the company would initiate a stock offering. The charges allege Cuban knew that the offering would be at a discount and it would be dilutive to existing shareholders.
The complaint alleges that Mr. Cuban avoided losses in excess of $750,000 by selling 600,000 shares he learned would be diluted by a new stock offering. The company, Mamma.com, told Mr. Cuban about the offering on the condition that he keep the information confidential. Mr. Cuban, the owner of the Dallas Mavericks, owned a 6.3 percent stake in the company, now known as Copernic Inc.
"Less than four hours later, Mr. Cuban betrayed that trust by placing an order to sell all of his shares," said Scott W. Friestad, the SEC's deputy director of enforcement. "It is fundamentally unfair for someone to use access to nonpublic information to improperly gain an edge on the market."
The Dallas Mavericks were currently a +6000 long shot to win the 2009 NBA Championship, with a payout potential of $6000 for every $100 bet at Sportsbook.com
Carrie Stroup, Gambling911.com Senior Reporter
