Was Mark Cuban found guilty of Insider Training?”
A U.S. court judge threw out an insider trading case against Dallas Mavericks basketball team owner Mark Cuban on Friday, but gave the U.S. Securities and Exchange Commission a month to file an amended lawsuit. Cuban, one of the 400 richest Americans, faced civil charges that he acted on nonpublic information when he sold his stake in Internet search engine company Mamma.com to avoid more than $750,000 in losses. The SEC failed to allege that Cuban undertook a duty to refrain from trading information on a public stock offering that Mamma.com had planned, U.S. District Judge Sidney Fitzwater wrote in his ruling. “Cuban cannot be held liable under the misappropriation theory of insider trading liability, even accepting all the well-pleaded facts as true and viewing them in the light most favorable to the SEC,” Fitzwater wrote. He gave the SEC 30 days to file an amended complaint, “if the SEC can a
I didn’t even know that Mama.com existed anymore. It was the first search engine I used over 10 years ago before I switched to Yahoo and then google. I am a law professor and I was actually teaching a class tonight on Insider Trading. A number of students had sent me email links to various versions of this story. This is the first chance I have had to read about it. I am wondering however, just based on the limited facts here whether it would constitute insider trading. One of the requirements is that the info must have a significant impact on the market price. I don’t know enough about PIPES to know if it is clear that current shs would lose value or whether that was just Cuban’s view. It is not relevant that he proved to be right; what matters is whether at the time he made the assessment to sell that it was unambiguous that current sh value would drop. As I said, I know next to nothing about PIPEs it may be the case that it is always the
Round one goes to Mark Cuban. A Dallas judge on Friday dismissed allegations of insider trading by the Securities and Exchange Commission against the Dallas Mavericks owner. But it’s not over yet. The ruling leaves the door open for the SEC to refile within a complaint within 30 days. Neither Cuban nor the SEC could immediately be reached for comment on the issue.
