Mark Cuban Denies Insider Trading, Sues SEC for Information

By Evan Mix

Published on June 02, 2009

This week, Mark Cuban, the billionaire owner of the Dallas Mavericks of the NBA, filed a lawsuit against the Securities and Exchange Commission alleging that the agency has wrongfully withheld information in its insider-trading case against him. Earlier in the week, Cuban's lawyers also filed a request to have the SEC's case dismissed, claiming that the agency has failed to prove its claims against Cuban. The SEC has been pursuing the case against Cuban since November of 2008.

The controversy stems from an incident in 2004. According to lawyers for the SEC, Cuban had a conversation with the CEO of Mamma.com, a company in which he was substantially invested. The CEO told Cuban that the company planned to sell new stock below the current trading price, a practice that is often financially damaging to existing investors. Cuban allegedly became upset and eventually sold his interest in the company before the planned stock sale, thereby avoiding over $750,000 in losses. The onetime tech executive has maintained his innocence, stating that the SEC's allegations against him will be proven false.

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