Details of The Mark Cuban Insider Trading Charge
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SEC charged Mark Cuban with insider trading from when he was a shareholder of Mamma.com, now called Copernic (Nasdaq: CNIC). It was reported that Mark Cuban sold his 600,000 shares which saved him $750,000, after Cuban had insider knowledge on a dilutive equity offering.
The SEC alleges that in June 2004, Mamma.com (Copernic) invited Cuban to participate in the stock offering after he agreed to keep the information confidential. The complaint further alleges that Cuban knew that the offering would be conducted at a discount to the prevailing market price and that it would be dilutive to existing shareholders.
Within hours of receiving this information, according to the complaint, Cuban called his broker and instructed him to sell Cuban's entire position in the company. When the offering was publicly announced, Mamma.com's stock price opened at $11.89, down $1.215 or 9.3% from the prior day's closing price of $13.105. According to the complaint, Cuban avoided losses in excess of $750,000 by selling his stock prior to the public announcement of the offering.
Scott W. Friestad, Director of the SEC's Division of Enforcement, said, "As we allege in the complaint, Mamma.com entrusted Mr. Cuban with nonpublic information after he promised to keep the information confidential. Less than four hours later, Mr. Cuban betrayed that trust by placing an order to sell all of his shares. It is fundamentally unfair for someone to use access to nonpublic information to improperly gain an edge on the market."
Mark Cuban is the owner of the Dallas Mavericks and the successful entrepreneur that sold his Broadcast.com to Yahoo (Nasdaq: YHOO).
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The SEC alleges that in June 2004, Mamma.com (Copernic) invited Cuban to participate in the stock offering after he agreed to keep the information confidential. The complaint further alleges that Cuban knew that the offering would be conducted at a discount to the prevailing market price and that it would be dilutive to existing shareholders.
Within hours of receiving this information, according to the complaint, Cuban called his broker and instructed him to sell Cuban's entire position in the company. When the offering was publicly announced, Mamma.com's stock price opened at $11.89, down $1.215 or 9.3% from the prior day's closing price of $13.105. According to the complaint, Cuban avoided losses in excess of $750,000 by selling his stock prior to the public announcement of the offering.
Scott W. Friestad, Director of the SEC's Division of Enforcement, said, "As we allege in the complaint, Mamma.com entrusted Mr. Cuban with nonpublic information after he promised to keep the information confidential. Less than four hours later, Mr. Cuban betrayed that trust by placing an order to sell all of his shares. It is fundamentally unfair for someone to use access to nonpublic information to improperly gain an edge on the market."
Mark Cuban is the owner of the Dallas Mavericks and the successful entrepreneur that sold his Broadcast.com to Yahoo (Nasdaq: YHOO).
Subscribe to EasyStockAlerts.com & Get real-time e-mail alerts when news hits your stocks!
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