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ESPN.com: Feds accuse Mavs owner Mark Cuban of insider trading.


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No surprises here. The guy has always had "douche" written all over him...

:2cents:

http://sports.espn.go.com/nba/news/story?id=3708124

Click above for the full article.

ESPN.com news services

Updated: November 17, 2008, 12:46 PM ET

WASHINGTON -- Federal regulators have charged billionaire Dallas Mavericks owner Mark Cuban with insider trading for allegedly using confidential information on a stock sale to avoid more than $750,000 in losses.

The Securities and Exchange Commission filed a civil lawsuit against Cuban on Monday in federal court in Dallas. The agency said that in June 2004, Cuban was invited to get in on the coming stock offering by Mamma.com Inc. after he agreed to keep the information private.

The SEC says Cuban knew the shares would be sold below the current market price, and a few hours after receiving the information, told his broker to sell all shares in the search engine company.

"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," Scott W. Friestad, deputy director of the SEC's Division of Enforcement, said in a statement. "It is fundamentally unfair for someone to use access to nonpublic information to improperly gain an edge on the market."

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http://finance.comcast.net/www/news.html?x=http://76.96.38.13/data/news/2008/11/17/1116870.xml

SEC charges Mark Cuban with insider trading

By Associated Press

2 HOURS AGO

WASHINGTON - Federal regulators have charged Dallas Mavericks owner Mark Cuban with insider trading for allegedly using confidential information on a stock sale to avoid more than $750,000 in losses.

The Securities and Exchange Commission filed a civil lawsuit against Cuban on Monday in federal court in Dallas. The agency says that in June 2004, Cuban was invited to get in on the coming stock offering by Mamma.com Inc. after he agreed to keep the information private.

The SEC says Cuban knew the shares would be sold below the current market price, and a few hours after receiving the information, told his broker to sell all shares in the search engine company.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed

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Here are some more details...

http://www.bloomberg.com/apps/news?pid=20601087&sid=afmn2oP6m2Xw&refer=home

Mavericks' Cuban Sued by SEC for 2004 Insider Trading

By David Scheer

Nov. 17 (Bloomberg) -- Billionaire Mark Cuban, the owner of the Dallas Mavericks basketball team, was sued by U.S. regulators over claims he made illegal insider trades four years ago in shares of Internet search company Mamma.com Inc.

Cuban, 50, an investor in Mamma.com for four months, became ``very upset and angry'' in 2004 after the company told him in confidence it planned to sell stock below its trading price, the Securities and Exchange Commission said in a civil suit today at federal court in Dallas. Less than four hours later, he sold his 6.3 percent stake, avoiding more than $750,000 in losses after the company's share sale was announced, the SEC said.

``It is fundamentally unfair for someone to use access to nonpublic information to improperly gain an edge on the market,'' Scott Friestad, the SEC enforcement official overseeing the case, said in a statement.

Cuban was at the American Airlines Center in Dallas, home of the Mavericks, in late June 2004 when he got an e-mail from Mamma.com's chief executive officer, asking that he call as soon as possible, the SEC said. During an almost nine-minute call, Cuban promised to keep the information secret before learning the company planned a private investment in public equity offering, known as a PIPE.

``Cuban became very upset and angry during the conversation, and said, among other things, that he did not like PIPEs because they dilute the existing shareholders,'' driving down the value of their stock, the SEC wrote in its complaint. At the end of the call, Cuban told the CEO, ``Well, now I'm screwed. I can't sell,'' the SEC said.

Fines, Confiscate Gains

The agency's suit seeks to impose unspecified fines and confiscate gains from the trades.

Reached via e-mail for comment, Cuban responded ``stay tuned.'' His attorneys, Ralph Ferrara of Dewey & LeBoeuf LLP and Paul Coggins of Fish & Richardson LLP, didn't return calls.

Montreal-based Mamma.com changed its name to Copernic Inc. in 2007, according to the SEC. Copernic Chief Executive Officer Marc Ferland also didn't return a call seeking comment.

Cuban, owner of the HDNet high-definition television channel and the Landmark Theater chain, is among initial bidders this year for Major League Baseball's Chicago Cubs, the team's Wrigley Field home and a stake in a TV network. Sam Zell's Tribune Co. is trying to sell the assets by year-end to help pay off $11.8 billion of debt. A deal requires MLB owners' approval.

The SEC's suit ``will put a cloud'' over whether Cuban will buy the team, said sports banker Robert Tilliss of Inner Circle Sports in New York, who isn't involved in the sale. ``This will definitely put some doubts in people's minds about him being an approvable bidder.''

Broadcast.com

Baseball spokesman Pat Courtney declined to immediately comment. Tribune spokesman Gary Weitman didn't return an e-mail for comment. Zell's spokeswoman Terry Holt didn't return voice- mail or e-mail messages for comment.

Cuban made his fortune through the sale of Broadcast.com, the multimedia Web service he co-founded and which Yahoo! Inc. bought for $4.7 billion in 1999.

The next year Cuban purchased the Mavericks from Ross Perot Jr. for $280 million, a record at the time for a National Basketball Association team. The Mavericks became a perennial championship contender under Cuban's control, ending a 10-year playoff drought in his first full season and reaching the NBA Finals in 2006.

Cuban, who often watches the Mavericks from courtside wearing a T-shirt and jeans, has racked up more than $1.3 million in fines for his criticism of basketball officials.

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Any legal "experts" on here can verify that this situation is nothing big then a very large fine?

I realize this is a BIG deal as far as ESPN is concerned, but could Cuban be facing jail time? I'm being told by a guy at my work No. But, other people are making this out to me some huge deal.

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So why is Cuban's situation any different than Martha Stewart's?

I don't think the trade part is that different. Stewart tried to obstruct the investigation by changing records and covering things up. Thats what got her into jail, not the trade.

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I find this hard to believe. He probably uses $100 bills to wipe his own butt. No, I take that back. He pays someone else to wipe his butt with $100 bills.

Money is nothing to this guy. He pampers his team and players with excess. I can't possibly see how he would have engaged in any form of illegal activity to save what to him is 75 cents to us.

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I understand and agree with the concept of insider trading restrictions where the employees/family of a company know something is coming and act on it.... however, i have a bit of an issue of this type. So this guy makes an unsolicited call to Cuban and tells him somehting that is going to make his investment worth less money. Know, simply because he was given information that he didnt seek out, he cant protect his financial interests.

I know it is a dangerous fine line, but situations like this dont seem quite fair.

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I understand and agree with the concept of insider trading restrictions where the employees/family of a company know something is coming and act on it.... however, i have a bit of an issue of this type. So this guy makes an unsolicited call to Cuban and tells him somehting that is going to make his investment worth less money. Know, simply because he was given information that he didnt seek out, he cant protect his financial interests.

I know it is a dangerous fine line, but situations like this dont seem quite fair.

Agreed.

It's gotta be hard as hell to get inside info like that and just sit idle on it.

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No Chicago Cubs for him

That's the only reason this story is of any interest to me. I was hoping Cuban could've somehow managed to pull the whole Cubbies thing out. I'd love to see him square off against MLB. Maybe he'd be the one who'd force them to get their **** together. Guess it's not gonna happen now, unfortunately.

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Any legal "experts" on here can verify that this situation is nothing big then a very large fine?

I realize this is a BIG deal as far as ESPN is concerned, but could Cuban be facing jail time? I'm being told by a guy at my work No. But, other people are making this out to me some huge deal.

Its a civil suit against Cuban, not a criminal. Fine only!

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