Do we have a new Martha Stewart on our hands?
Well, not really, because the ever-angry Mark Cuban — who appeared on Dancing with the Stars — is up against civil rather than criminal charges, but still.
The SEC alleges Mr. Cuban sold his entire 6% ownership stake on June 28, 2004, immediately after learning that Mamma.com was raising money through a private investment in private entity, or PIPE. The next day, after the markets closed, the company announced the PIPE financing. When the markets opened the morning of June 30, shares of the company dropped by 9%. By selling his stake, Mr. Cuban avoided more than $750,000 in losses, the SEC alleges. (Read the full text of the complaint.)
In a PIPE, shares are issued at a discount. When a PIPE is announced, it’s often followed by a drop in the stock price as shareholders anticipate their stake will be diluted. Investment advisers working for the company often solicit interest from potential investors. Investors usually have to sign confidentiality agreements stating that they won’t trade on the information. However, Mr. Cuban’s lawyers deny that he was told the information was confidential.
Christopher Clark, a lawyer for Mr. Cuban, said, “We’re shocked. We find it incredible that given all the important issues that the SEC has to address with regard to today’s economy they’ve sought to bring a $750,000 case relating to a he-said she-said about one trade against a person whose integrity has never been questioned before with regard to the securities markets.” He also said he was “further shocked because the whole enforcement process was tainted by express bias by enforcement officials and certain other misconduct that we will happily detail to the judge in this case.”
So, essentially — and you can read the full text of the complaint here — the CEO of Mamma.com called Cuban to be like “Hey, this is confidential, but we’re gonna do a PIPE offering,” and Mark was all like, “I’m angry because that’s gonna dilute my shares and now I can’t even sell,” and the CEO was all like, “Dude, your problem, not mine,” and then Cuban went ahead and sold the shares anyway, and that is way illegal. Woopsy!
Sweet Jesus I despise him.
Wendie, I couldn’t agree more.
Make this guy go AWAY! he is like a tick!
but can he dance?
I guess his pending $750,000 loss was enough for him to forget about the pesky laws governing inside information.
The CEO should be charged as well for telling Mark Cuban in the first place.
he is really one of the most unlikeable people i’ve ever seen. it would be great if he goes to prison