Mark Cuban Again Seeks End to SEC Insider Trading Case
Mark Cuban, the Texas billionaire and pro basketball team owner, went to the federal courthouse in Dallas today, seeking to persuade a judge to throw out for a second time a U.S. lawsuit accusing him of insider trading.
U.S. District Judge Sidney Fitzwater in Dallas will hear arguments on Cuban’s request, filed with the court in July, and on the Securities and Exchange Commission’s opposition registered with the court a month later. The year after Fitzwater dismissed the case in 2009, a federal appeals court in New Orleans reinstated the litigation against Cuban, the owner of the Dallas Mavericks.
The SEC sued Cuban in 2008. The agency accused him of making illegal trades in shares of Internet search company Mamma.com Inc. in June 2004 based on inside information from its then-chief executive officer, Guy Faure.
Cuban claims what Faure told him wasn’t secret.
“After years of the SEC’s investigation of Mr. Cuban and discovery in this case, there is not a shred of evidence of a confidentiality agreement between Mr. Cuban and Mamma,” defense lawyers argued in a court filing on July 13.
The SEC claims Cuban, upset upon learning of the company’s imminent plans for a below-market private placement, sold his 6.3 percent stake for about $7.9 million within hours of talking to Faure.
This followed his telling Faure during a June 28, 2004, telephone call, “Well, now I’m screwed. I can’t sell,” according to the SEC.
The Montreal-based Internet search company is now known as Copernic Inc.
SEC lawyers argued in court papers that Fitzwater should deny Cuban’s request to dismiss the case because the parties disagree about underlying facts.
In addition to his National Basketball Association franchise, Cuban, 54, owns the HDNet high-definition television channel and the Landmark Theater chain.
Earlier this month, the NBA fined Cuban $50,000 for making critical comments about game officials on his Twitter.com page.
Arriving at the courthouse today, Cuban was asked whether he intended to fight the SEC allegations to their legal conclusion.
“You’ll just have to stay tuned,” he replied.
The case is Securities and Exchange Commission v. Cuban, 08-cv-2050, U.S. District Court, Northern District of Texas (Dallas)
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