AHN Sports Staff
Washington, DC (AHN) - Dallas Mavericks owner Mark Cuban was charged Monday with insider trading after the Securities and Exchange Commission alleged that the billionaire used confidential information in trying to avoid losses.
According to the SEC's lawsuit filed before the U.S. District Court for the Northern District of Texas, Cuban allegedly advised his broker to sell all of his 600,000 shares with Mamma.com after learning that his stake would be sold below the current market price.
The alleged trading helped Cuban to avoid more than $750,000 in losses, according to the suit.
The search engine company Mamma.com invited the billionaire entrepreneur for its stock offering back in June 2004. The two parties had agreed upon to keep the information confidential.
But Cuban has learned that the company has been raising finances by using a private investment in a public entity. This allegedly prompted Cuban to sell all his shares, the suit said.
"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," Cuban wrote in his blog blogmaverick.com.
In the same Web site, his attorney, Ralph C. Ferrara, said Cuban will contest the charges.
"This matter, which has been pending before the Commission for nearly two years, has no merit and is a product of gross abuse of prosecutorial discretion," the attorney said. "Mr. Cuban intends to contest the allegations and to demonstrate that the Commission's claims are infected by the misconduct of the staff of its Enforcement Division."
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