Those betting attention-starved web entrepreneur Mark Cuban would keep silent about insider-trading charges filed against him by the US Securities and Exchange Commission just lost their dollar. Easiest cash I ever made.
The Dallas Mavericks owner / Broadcast.com founder / Dancing with the Stars contestant / bazillionare has not only has publicly denied the SEC's recent accusations. He even went so far as to imply the commission cut a shady deal to go after him.
In a nutshell, the SEC claims Cuban received nonpublic information about a planned secondary stock offering of the Canadian online search firm Mamma.com that would undercut its share price. Although he allegedly agreed not to disclose the deal, he immediately dumped his entire major stake in the company, avoiding a $750,000 loss.
Cuban posted an SEC p2 filing from his lawyers on his personal blog that responds to the charges:
On behalf of Mark Cuban
RE: SEC Civil Action in the United States District
for the Northern District of Texas, Dallas Division
The SEC knows their case centers on one telephone conversation between two individuals- 4 years ago. The SEC claims there was an agreement between these parties to the conversation to keep certain information confidential. We interviewed Guy Faure, the former CEO of Mamma.com Inc., with whom the SEC claims Mr. Cuban made an agreement. We had a court reporter transcribe the interview. There was no agreement to keep information confidential. Here is a relevant excerpt from the interview with Mr. Faure:
CHRISTOPHER CLARK :
1) Q- We spoke earlier about you were telling Mr. Cuban in words or substance : “I have confidential information for you”.
2) Q- Do you recall anything Mr. Cuban said in response or reply to that statement by you ?
A- No, I do not.
The SEC knows this-they have the transcript, yet they brought the case anyway. Why? Do they have a different statement from Mr. Faure ? Why did the SEC end their multi-year investigation of Mamma.com Inc. for alleged securities laws violations days before interviewing present and former Mamma.com Inc. executives about this matter? Was the timing a coincidence? We think not.
Cuban's legal council told Bloomberg that he was "troubled" by several points in the SEC's case and "he very well may blog about it, because that's just the kind of person he is." ®