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Monday, November 17th, 2008 at 1:30 pm  |  41 responses

Mark Cuban: Charged With Insider Trading

by Marcel Mutoni

If you’ve been reading Mark Cuban’s blog over the last few months, then you know that he’s spent a lot of time discussing the stock market and the meltdown on Wall Street. Well, now it looks like he may have gotten himself into some hot water with the SEC.

Sayeth the Wall Street Journal:

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.

The SEC alleges in a civil action that Mr. Cuban sold his entire 6% ownership stake on June 28, 2004, after learning that Mamma.com was raising money through a private investment in a public entity, or PIPE. The next day, on June 29, the company announced the PIPE financing and shares of the company dropped by more than 10%. By selling his stake, the SEC alleges, Mr. Cuban avoided more than $750,000 in losses.

Suddenly, the Mavs’ problems on the court (and the Starbury flirtation) don’t seem like such a big concern now.

**Update**

Cubes issued the following statement in light of today’s news: “I am disappointed that the Commission chose to bring this case based upon its Enforcement staff’s win-at-any-cost ambitions. The staff’s process was result-oriented, facts be damned. The government’s claims are false and they will be proven to be so.”

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  • rav

    the WSJ are owned by Murdoch
    several people on FOX have been slagging off Cuban

    Coincidence?

  • http://www.ballislife.com Justin Walsh

    damn.

  • http://twentythreenine.blogspot.com Russ Bengtson

    Mamma.com?

  • http://twentythreenine.blogspot.com Russ Bengtson

    No, seriously. Mamma.com?

  • The other Mike

    I dont get it, if somebody told him that he was going to lose $750,00 if he didnt sell his shares then why wouldnt he do it? How is that illegal? Its just being smart if you ask me…

  • http://www.alllooksame.com Tarzan Cooper

    i dont see how this is illegal

  • http://www.myfreesport.com LexaB

    Seriously Russ… Mamma.com…

  • http://shawn-kemps-offspring.blogspot.com Cheryl

    meh

  • Nathalie

    hey martha!!

  • riggs

    its illegal because its like high stakes gambling, if you know what the deck is going to spit out before you get your hand then youre getting your butt kicked out the casino and maybe take a hammer to your fingers.

  • Diesel

    mamma.com The Mother of All Search Engines…I get it. Stupid, but I get it.

  • Diesel

    I do like the idea of Cuban sling blading thugs in the yard in between his weight lifting sessions.

  • http://www.shawn-kemps-offspring.blogspot.com/ TADOne

    So he learned that they were doing something illegal and proceeded to sell his shares? Ummmm, ok. What exactly is against the law about this?

  • http://www.shawn-kemps-offspring.blogspot.com/ TADOne

    Nevermind, I guess Riggs answered my question. I would g00gle mamma.com but i’m at work and i’m afraid of what may come up.

  • http://AllAbout-Penis-Enlargement.com Jukai

    This is why Martha Stewart went to prison, guys…

  • Captain America

    This is a potentially serious offense punishable with several years on ice. I don’t like Cubes much, but I hope he has an legitimate out.

  • justin

    @ Jukai – No, Martha Stewart went to prison for lying about it. Cuban is fine, just have to pay $ back and a fine. If he lies, prison.

  • http://www.where-basketball-b-longs.blogspot.com/ B. Long

    Does this really suprise anyone? Really? This guy is also the majoritiy stockholder for douchebag.com.

  • Captain America

    Guidelines for insider trading: 70 to 87 nonths.

  • Captain America

    Would be required to serve at least 85% of time, if convicted.

  • http://twentythreenine.blogspot.com Russ Bengtson

    I don’t think he’ll do jail time, but he’s gonna have to write a mamma of a check.

  • http://AllAbout-Penis-Enlargement.com Jukai

    Zing!

  • http://www.alloutblitz.com Cordeazy

    Its illegal because in publicly traded companies information like Mark Cuban got cannot be acted upon until the news becomes public. If this was a private company it would be different, but the law is intended to prevent abuse by larger stock owners in order to protect the little guy or the grandmother who own the stock in their 401K, but dont get a chance to sell. Plus someone selling such a big share of stock automatically brings the price (usually) of everyone else’s stock down, at least terporarily. that said…Free Cubes! (he went to my alma mater so he gets a pass)

  • http://www.alloutblitz.com Cordeazy

    he’ll do jail time if he lies about it, ala Martha Stewart, but right now they just want to fine him for like a gazillion dollars.

  • http://www.shawn-kemps-offspring.blogspot.com/ TADOne

    He may make that fine check out to David Stern out of habit.

  • http://breadcity.wordpress.com Jake

    Well, as they say in Vegas, you’ve got to bet big to win big. Mark this one as a big L for Cuban.

  • http://coco-vents.blogspot.com Co Co

    Its a civil action so there will be a hefty fine, but no jail. I think. Where’s Eboy when you need him???

  • mamadou n’diaye

    David Stern set his ass up!

  • The Promise

  • The Promise

    Mamma.com… sounds like a cheap p orno site…

  • Mike

    K I get it, but what is he supposed to do when he hears this information?? Of course your gonna sell all your shares! Who the hell wants to lose $750,000? I think this is a ridiculous law myself

  • http://www.freewebs.com/betcats BETCATS

    i dont see what is wrong with protecting your money. Welcome to the Jungle, everybody does it, cubes just got caught

  • http://AllAbout-Penis-Enlargement.com Jukai

    this isn’t a ridiculous law. There is laws made to mostly go after the people in public companies giving OUT information to a few favored investors before the information goes public, but there are also laws in place to prevent people like Cuban from trying to find out this information in the first place. You may not understand it, but this law is pretty major.

  • http://sjsu.edu davidR

    the law protects everyday people with some shares in a company. it makes all stakeholders of a company equal, no matter how many shares are owned. of course cuban would WANT to sell his shares after learning about the PIPE investment, but he legally can’t do anything until the information is made available to everyone. basically, no head starts for anyone.

  • http://www.friendster.com/sesa Sesa

    this is how Cuban got his money after all..

  • tealish

    Haha good one, TAD

  • Tommy Vercetti

    Everyday I’m hustling…

  • http://www.triplejunearthed.com/dacre Dacre

    how did he find out before the other share holders though…?

  • jaywhy

    who cares? he’s rich and will be able to get out of any legal troubles…

  • kev

    this is unfortunately how the rich get and keep their money. There’s always some dirt

  • Breeze

    hold on i have to call my uncle obama…handle this

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