Dallas Mavericks owner Mark Cuban has been charged with insider trading in a complaint filed in federal district court in Dallas by the Securities and Exchange Commission (SEC).
Cuban allegedly violated various federal securites laws when he sold 600,000 shares of Canadian internet search engine Mamma.com Inc. in 2004, based on information that hadn’t been made public about an impending stock offering.
The SEC complaint alleges that Mamma.com invited Cuban to participate in the stock offering after he agreed to keep the information confidential.
Cuban knew the offering would be conducted at a discount to prevailing market price and would dilute holdings of existing shareholders, the complaint claims.
Cuban, told his broker to sell his entire stake in Mamma.com within hours of learning of the plan, avoiding a loss of more than $750,000, the SEC claims.
The billionaire entrepreneur, who made his fortune in the software industry, bought the Mavericks in 2000. In 2007 he was a contestant on the 5th season of the ABC Show Dancing with the Stars (view video).
Cuban has not responded to the allegations.