The Securities and Exchange Commission has accused Dallas Mavericks owner and dot-com billionaire Mark Cuban with insider trading for selling 600,000 shares of an Internet search engine company prior to an impending stock offering.
The Commission's complaint, filed in the U.S. District Court for the Northern District of Texas, alleges that in June 2004, Mamma.com invited Cuban to participate in a stock offering after he agreed to keep the information confidential.
Cuban knew that the offering would be conducted at a discount to the prevailing market price and that it would be dilutive to existing shareholders, the SEC said in a statement.
Cuban then told his broker to sell Cuban's entire position in the company, the SEC alleged. Mamma.com's stock price opened at $11.89 after the offering was announced, a decline of more than 9 percent.
According to the complaint, Cuban avoided losses in excess of $750,000 by selling his stock prior to the public announcement of the offering.
Cuban is expected to fight the charges.
Mark Cuban is a billionaire entrepreneur and is also the chairman of HDNet, an HDTV cable network.
In 2005, Mamma.com acquired desktop search company Copernic Technologies. In 2007, the combined company changed its name to Copernic [CNIC], which trades publicly on the Nasdaq.
Source: Associated Press
