DALLAS (AP) – Billionaire and Dallas Mavericks owner Mark Cuban testified Monday that he generally doesn’t agree to treat as confidential any information that people tell him about investments.
Cuban made the comment at his insider-trading trial to counter a government claim that he broke a secrecy vow in 2004 when he unloaded his shares in a Canadian Internet company. The government says he avoided $750,000 in losses by selling his stock on insider information.
Also, Cuban detailed his concern over connections between Mamma.com Inc. and a convicted stock swindler, Irving Kott. Cuban’s lawyer offered emails indicating that he had raised questions with company officials and had spoken with FBI and SEC officials about Kott.
Cuban’s lawyer, Thomas Melsheimer, asked why he raised the issue with company officials.
“They’re dealing with crooks,” Cuban testified.
Cuban’s side is highlighting Kott to buttress its defense that Cuban had various concerns about Mamma.com and didn’t sell his shares simply because he learned about a private stock offering that would lower the value of his shares.
Cuban testified all day Thursday and returned to the stand Monday morning. The trial is expected to run through next week. The Securities and Exchange Commission sued Cuban, saying that he used his status as the biggest shareholder in Mamma.com to learn about the stock sale before other investors, then sold his shares before the company publicly announced the news.
The sports owner and regular on ABC’s “Shark Tank” repeated his contention that he never agreed to keep the information he received confidential or to refrain from trading. The CEO, Guy Faure, testified that Cuban accepted a vow of confidentiality, which the company understood to mean that Cuban wouldn’t sell his shares immediately.
Cuban said he couldn’t recall details of the conversation, but that he wouldn’t have agreed not to act on what the CEO told him.
“I didn’t feel I was under any limitations whatsoever,” Cuban testified. “So it makes no sense … that I can’t sell my stock.”
Cuban added, “I just don’t do oral confidentiality agreements,” partly because people can later dispute what was agreed upon.
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