SAN FRANCISCO (MarketWatch) -- Mark Cuban, a high-profile high-tech billionaire, was charged Monday with insider trading by the Securities and Exchange Commission after allegedly selling shares of an Internet search engine based on non-public information, thereby sparing himself about $750,000 in losses.
In a complaint filed Monday, the SEC accused the owner of the Dallas Mavericks of selling shares of Mamma.com back in June of 2004, just hours after he allegedly learned of a planned stock offering by the company.
According to the complaint, Momma.com invited Cuban to participate in a stock offering after he agreed to keep the information confidential. He then called his broker hours later and instructed him to sell the shares he already had in the company. The agency says Cuban avoided losses of more than $750,000 by selling the shares before news of the stock offering was made public.
Mamma.com is an Internet search engine owned by Copernic Inc.
"Mamma.com entrusted Mr. Cuban with nonpublic information after he promised to keep the information confidential. Less than four hours later, Mr. Cuban betrayed that trust by placing an order to sell all of his shares," SEC Division of Enforcement Deputy Director Scott Friestad said in a statement. "It is fundamentally unfair for someone to use access to non-public information to improperly gain an edge on the market."
Attorneys representing Cuban couldn't be immediately reached for comment.
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