Mark Cuban furnished the U.S. Securities and Exchange Commission with papers that are now being used against him in its insider-trading case, an SEC investigator said in testimony played for a jury.
The billionaire owner of pro basketball’s Dallas Mavericks is accused of using nonpublic information received from the chief executive officer of a Canadian Internet company to avoid a $750,000 loss in 2004. The trial of the civil suit in U.S. District Court in Dallas started Sept. 30.
The investigator, Alton Turner, said he interviewed Cuban by phone a day after he sold his shares in the company, Mamma.com, about its possible involvement with a stock promoter who had pleaded guilty to concealing his ownership interest in a discount brokerage firm.
“Was he cooperative?” Cuban defense attorney Christopher Clark asked Turner during the June 2012 deposition.
“Yes, he answered my questions,” Turner said.
Turner testified that he contacted Cuban as part of an investigation into the possible involvement of Irving Kott in Mamma.com and whether there was stock manipulation at the Montreal-based company now known as Copernic Inc.
Earlier in the trial Cuban said his concern about Kott, whose guilty plea was entered in May 2004, was one of the reasons he sold his Mamma.com stock.
The shares sold for $7.9 million, according to data compiled by Bloomberg.
Notes taken by Turner mentioned Cuban’s concerns about Kott, according to testimony heard today by the 10-member jury.
They also reflected the billionaire’s sale of all of his Mamma.com shares and the fact that no lawyer for Cuban was present during the telephone interview with Turner.
Turner testified that he asked Cuban the day after their discussion to send to him all documents and e-mails Cuban had in his possession regarding Mamma.com.
Cuban began sending them on July 2, 2004, and sent more documents later in the month, Turner said.
Among those was a June 28 e-mail message from Mamma.com CEO Guy Faure asking Cuban to call him.
In the ensuing phone call, the SEC alleges, Cuban agreed to accept confidential information about the company’s plans to issue stock through a private placement that would dilute his holdings.
The case is Securities and Exchange Commission v. Cuban, 08-cv-02050, U.S. District Court, Northern District of Texas (Dallas).
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