|  | | 2009 News and Press Releases | | |
HEADLINE NEWS:
SEC To Appeal Insider Trading Case Against Mark Cuban
Eric Torbenson
The Dallas Morning News. October 8, 2009
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EXCERPT: The Securities and Exchange Commission will attempt to revive its insider trading case against Dallas billionaire Mark Cuban by appealing a federal judge's ruling that abruptly ended the civil suit in July. The judge ruled the SEC failed to prove that Cuban had entered into a legal agreement not to sell his shares of search engine company Mamma.com even after he learned of the company's intent to sell more shares, a move that would dilute Cuban's investment. The owner of the Dallas Mavericks, Cuban avoided losses of about $750,000 by selling his stake in Mamma.com in 2004 after learning about the new financing plan in a conversation with the company's top executive. Judge Sidney Fitzwater stunned the SEC in July by ruling that Cuban, despite possessing insider information, lacked a fiduciary duty not to trade on it. "As we alleged in our complaint, Mark Cuban violated the anti-fraud provisions of the federal securities laws by engaging in illegal insider trading in the securities of Mamma .com," SEC spokesman John Nester said in a statement Wednesday. "We believe the district court erred in dismissing our complaint, and we look forward to presenting our position to the Fifth Circuit Court of Appeals." Cuban had countersued the SEC for allegedly withholding documents in the contentious case. Cuban also has filed a motion asking for sanctions against the SEC and for it to pay his legal bills. An attorney for Cuban predicted the appeal would fail. "This appeal is nothing more than the SEC's desperate attempt to shock a heartbeat into a case that was dead on arrival," Stephen Best of Dewey & LeBoeuf LLP in New York said in a statement. Fitzwater's ruling said conversations between Cuban and Mamma.com CEO Guy Faure could be considered an agreement of confidentiality. |
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