Mark Cuban, owner of the Dallas Mavericks professional basketball team, was charged with insider trading in shares of Mamma.com, an Internet search engine firm, the Securities and Exchange Commission said on Monday.
Cuban, one of the five finalists to buy the Chicago Cubs pro baseball team, faces civil charges by acting on nonpublic information and selling shares of Mamma.com to avoid more than $750,000 in losses, the SEC alleged.
According to the SEC, Mamma.com invited Cuban to participate in a stock offering that would be conducted at a discount to the market price after he agreed to keep the information confidential.
However, within hours of receiving information, Cuban called his broker and told him to sell his entire position in the company, the SEC alleged.
When the offering was publicly announced, Mamma.com's stock price dropped 9.3 percent from the prior day's closing price.
Calls to Cuban's lawyers were not immediately returned.
Mamma.com has since changed its name to Copernic. Shares of Copernic rose 2 cents to 25 cents on Nasdaq on Monday.
Cuban also owns HDNet, a national high-definition television network, and Landmark Theatres. Magnolia Pictures, the theatrical and home entertainment distribution company that he co-owns through the company 2929 Entertainment, released the documentary "Enron: Smartest Guys in the Room."
He also is the majority partner in ShareSleuth.com, a site that reports on "securities fraud and corporate chicanery," according to its Web site.
A disclosure on the Web site says that Cuban "will periodically make personal investments based on information we uncover. Those investments will be fully disclosed, so that readers can evaluate any potential conflicts of interest."
The SEC is seeking civil fines and disgorgement or repayments of money he made from violating securities laws.
IT Solutions Builder TOP IT RESOURCES TO MOVE YOUR BUSINESS FORWARD
Which topic are you interested in?
What is your company size?
What is your job title?
What is your job function?
Searching our resource database to find your matches...