Mark Cuban Insider Trading Charges Filed

In breaking news Monday, Dallas Mavericks owner Mark Cuban has been charged by the SEC (Securities & Exchange Commission) with Insider Trading. According to the charges, the internet entrepreneur was privy to knowledge that a private offering of a search engine company, Mamma.com (now Copernic), was going to decrease the value of his 600,000 shares. Cuban then sold off his stake in the company, saving the Maverick owner $750,000.

From SEC's Official Press Release:

The complaint alleges that Cuban violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission's complaint seeks to permanently enjoin Cuban from future violations of the federal securities laws, disgorgement (with prejudgment interest), and a financial penalty.

From Wired.com:

"As we allege in the complaint, Mamma.com entrusted Mr. Cuban with nonpublic information after he promised to keep the information confidential. Less than four hours later, Mr. Cuban betrayed that trust by placing an order to sell all of his shares," said Scott W. Friestad, deputy director of the SEC's Division of Enforcement."It is fundamentally unfair for someone to use access to nonpublic information to improperly gain an edge on the market."

Cuban, who is involved in a number of ventures and is currently trying to buy the Chicago Cubs baseball team, is also the majority partner of sharesleuth.com, an independent web-based reporting site aimed at exposing securities fraud and corporate chicanery.

Cuban gave the following very brief statement in his blog entry called "The SEC" over at Blogmaverick.com: