Mark Cuban’s Motion to Dismiss SEC Suit Over Trading Granted

Mark Cuban’s Motion to Dismiss SEC Suit Over Trading Granted - 7/16/2009

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HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

HEADLINE NEWS:

Mark Cuban’s Motion to Dismiss SEC Suit Over Trading Granted
Thom Weidlich

Bloomberg. July 16, 2009
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EXCERPT: Mark Cuban, the billionaire owner of the Dallas Mavericks, won his bid to get the U.S. Securities and Exchange Commission’s insider-trading lawsuit against him tossed out. One Month ago, Mark Cuban’s lawyer asked a federal judge to dismiss the U.S. Securities and Exchange Commission’s insider-trading lawsuit against the billionaire owner of the Dallas Mavericks. The SEC’s complaint fails to show that Cuban was barred from selling shares of Mamma.com Inc. in 2004 and seeks to expand the definition of insider trading, Ralph Ferrara, one of Cuban’s attorneys, told U.S. District Judge Sidney A. Fitzwater in Dallas yesterday. The agency said Cuban had learned the company planned to sell additional stock below the trading price in a private offer. “How are we going to keep the United States government playing within the lines?” said Ferrara, of Dewey & LeBoeuf LLP in Washington. In its Nov. 17 lawsuit, the SEC claimed Cuban, 50, promised during a telephone call with Mamma.com’s chief executive officer to keep information confidential about the company’s stock sale. Later that day, Cuban avoided more than $750,000 in losses by ordering the sale of his 6.3 percent stake in the Montreal-based Internet search company, the agency said. Fitzwater said he would rule on Cuban’s request at a later date. Cuban watched the proceedings from the court gallery yesterday. Afterward, he would comment only on his attire, which was more formal than usual. “How do you like my suit?” he asked. “The tie is from Neiman Marcus.” Kevin P. O’Rourke, an SEC lawyer, denied the agency was trying to enlarge the law. “This case, we believe, is based on a straight-down-the- line application of insider-trading law,” he told Fitzwater. Ferrara argued that Cuban’s confidentiality agreement didn’t make him Mamma.com’s “fiduciary,” or someone required to act for the benefit of another.

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