Texas Jury Clears Billionaire Mark Cuban of Insider Trading Charges

A jury in Texas cleared Mark Cuban of insider trading charges. The Securities and Exchange Commission accused him of using a private tip to avoid losing money when selling his shares of Internet company Mamma.com. Following the court victory, the owner of the Dallas Mavericks, an NBA basketball team, spoke out against US government over the case.

The U.S. Securities and Exchange Commission said Cuba traded on non-public information when selling 600,000 shares-a $7.9 million value-so he wouldn’t lose $750,000. A judge dismissed the insider trading case in 2009 but the Texas securities lawsuit was revived by an appeals court in 2012. The billionaire chose not to settle and the case went to trial.

Prosecutors claimed that Cuban sold his stake after discovering that Guy Faure, the head of Mamma.com, intended for a private placement that would dilute his company holdings. When Mama.com’s shares fell 9.3% the morning after the announcement of the offering, Cuban’s shares were already sold.

Following the jury’s decision, a spokesperson for the SEC said they respected the ruling but that they would still continue to bring civil cases against defendants that they think have violated securities laws. According to The New York Times, insider trading cases are usually “safe bets” for the government.

If Cuban had been found guilty, he would have had to pay approximately $2 million in fines. Cuban says he has already paid around that much in legal fees because he wanted to clear his name. He maintains that it was wrong for prosecutors bring a case against him.

Our Texas securities fraud lawyers represent investors seeking to recoup losses caused by stockbroker fraud, insider trading, Ponzi scams, and other types of financial fraud. Contact Shepherd Smith Edwards and Kantas, LTD LLP today.

Billionaire Mark Cuban cleared of insider trading; blasts U.S. government, Reuters, October 16, 2013

Mark Cuban Cleared of Insider Trading, NY Times, October 16, 2013

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SEC Reaches $600M Insider Trading Settlement with SAC Capital Advisors-Affiliated Hedge Fund Advisory Firm, Stockbroker Fraud Blog, March 29, 2013
$5M Texas-Based Securities Fraud Scam Pursued Foreign Investors Wanting US Residency Via EB-5 Program, Stockbroker fraud Blog, October 1, 2013

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