Mark Cuban Can't Shake Insider-Trading Case
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The SEC insider-trading case against the billionaire owner of the Dallas Mavericks, Mark Cuban, was revived a year after it was thrown out by a lower court, according to a ruling from an appeals court on Tuesday.
The lower-court ruling was overturned in the U.S. Court of Appeals in New Orleans. The 2008 lawsuit accused Cuban of trading on confidential information in selling his stake in Mamma.com Inc., just before the announcement of the share going private.
“The allegations, taken in their entirety, provide more than a plausible basis to find that the understanding between the CEO and Cuban was that he was not to trade, that it was more than a simple confidentiality agreement,” the appellate panel said.
Cuban argued the allegations by saying that he faced no legal obligation to not sell his stake in the company after learning of the impending private offering of below-market shares in 2004.
“The uncontradicted record in this case is devoid of any information suggesting any agreement imposing a fiduciary-like responsibility on Cuban," Stephen Best, one of Cuban’s attorneys at Dewey & LeBoeuf LLP, said.
Cuban reportedly saved himself $750,000 in losses by ordering the sale of his 6.3 percent stake.
The lower-court ruling was overturned in the U.S. Court of Appeals in New Orleans. The 2008 lawsuit accused Cuban of trading on confidential information in selling his stake in Mamma.com Inc., just before the announcement of the share going private.
“The allegations, taken in their entirety, provide more than a plausible basis to find that the understanding between the CEO and Cuban was that he was not to trade, that it was more than a simple confidentiality agreement,” the appellate panel said.
Cuban argued the allegations by saying that he faced no legal obligation to not sell his stake in the company after learning of the impending private offering of below-market shares in 2004.
“The uncontradicted record in this case is devoid of any information suggesting any agreement imposing a fiduciary-like responsibility on Cuban," Stephen Best, one of Cuban’s attorneys at Dewey & LeBoeuf LLP, said.
Cuban reportedly saved himself $750,000 in losses by ordering the sale of his 6.3 percent stake.
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