Jury Clears Cuban Of Insider Trading Charges
DALLAS (CBSDFW.COM/AP) — A jury has determined that billionaire and Dallas Mavericks owner Mark Cuban did not violate insider-trading laws when he sold his stock in the online search company Mamma.com in 2004.
The jury in federal district court in Dallas found that the Securities and Exchange Commission failed to prove several key elements of its case, including that Cuban traded on nonpublic information.
The nine-member jury deliberated for about four hours. The trial spanned three weeks.
“I didn’t win anything…I absolutely won nothing” said Cuban after exiting the courthouse.
The SEC accused Cuban of using inside information to sell $7.9 million of stock in Mamma.com Inc. after he learned confidentially of a stock offering that would send the share price down. The agency wanted Cuban to repay $750,000 in losses that he avoided, plus pay a penalty. It was a civil lawsuit, so the basketball team owner and regular on the ABC reality show “Shark Tank” didn’t face criminal charges.
“She lied, over and over” Cuban said of SEC Attorney Jan Folina’s case against him. “She tried to be a bully.”
“I hope every person that has any interest in this case, any interest in how the SEC or Jan Folina does business, reads the closing arguments, reads the whole transcript because it’s just wrong how this all went down.” proclaimed Cuban.
Cuban testified that he never agreed to keep information about the stock deal private and told the company that he would sell his shares.
The SEC sued Cuban more than four years after he sold his stake in Mamma.com, a search engine company that was based in Canada. The company’s CEO testified by video that Cuban agreed not to disclose information the CEO told him in 2004 about a pending stock offering that would lessen the value of Cuban’s 6 percent stake in the company.
The CEO said that Cuban, the company’s largest shareholder, acknowledged that he couldn’t sell his shares on the news. He sold them a few hours later, however, before the company announced the stock offering to the public.
The Government’s lead attorney Jan Folina said while she wishes the verdict would have been different, she respects the jury’s decision. She would not answer whether the Securities and Exchange Commission will appeal.
The jury foreman was an older woman from the Dallas suburb of Rockwall who works for an insurance company and previously worked for a Texas state judge.
The woman said during juror questioning that she had served on a jury that acquitted a defendant charged with fraud. She gave no other details of the case.
(©2013 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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