Cuban Testifies In His Insider Trading Trial
DALLAS (CBSDFW.COM) – Dallas Mavericks owner and “Shark Tank” television personality Mark Cuban took the witness stand on Thursday morning in Dallas. Cuban is facing federal charges, accused of insider trading by the Securities and Exchange Commission. The prosecution questioned him about his trades in the website Mamma.com.
Cuban said that, in March 2004, he purchased 600,000 shares of the company at a cost of $7.5 million.
According to the complaint, Cuban became enraged when he learned from the company’s CEO that they would be going public. That was in June 2004. On the witness stand, Cuban said that he does not recall being angry, but admits that he was upset.
Cuban was the largest shareholder of Mamma.com stock at the time, and the SEC said that he started selling off his shares in the company on that day. The complaint says that he ultimately sold off his entire stake in Mamma.com despite agreeing to keep the impending offering confidential. By doing so, Cuban allegedly avoided $750,000 in losses.
The complaint also says that Cuban, when agreeing to keep the information confidential, admitted that he could not sell his shares. Cuban, however, said that he has no recollection of two telephone conversations with the CEO of Mamma.com, and that he never promised not to trade based on the information that he learned.
Financial expert Arnold Owen testified in court on Wednesday, saying that he talked to Cuban about the transaction. Owen was working for an investment bank which was hired by Mamma.com to find investors for a stock offering. Owen said that he also did not think that Cuban was barred from selling his shares, or that he was required to keep their 2004 phone call confidential.
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