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
SUMMARY OF ALLEGATIONS
1. The Commission charges Defendant Mark Cuban (“Cuban”) with committing
securities fraud by engaging in illegal insider trading. Despite agreeing in June 2004 to keep
material, non-public information about an impending stock offering by Mamma.com Inc.
confidential, Cuban sold his entire stake in the company – 600,000 shares – prior to the public
announcement of the offering. By selling when he did, Cuban avoided losses in excess of
$750,000.
2. By conduct detailed in this Complaint, Cuban violated Section 17(a) of the
Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)] and Section 10(b) of the
Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5
thereunder [17 C.F.R. § 240.10b-5]. Unless enjoined, Cuban is likely to commit such violations
again in the future.
3. The Commission seeks a judgment from the Court: (a) enjoining Cuban from
engaging in future violations of the antifraud provisions of the federal securities laws; (b)
ordering Cuban to disgorge, with prejudgment interest, the losses avoided as a result of the
actions described herein; and (c) ordering Cuban to pay a civil money penalty pursuant to
Section 21A of the Exchange Act [15 U.S.C. § 78u-1].
