Mark Cuban, owner of the Dallas Mavericks was charged by the SEC for selling 600,000 shares of Mamma.com illegally. According to the Washington Post, Mamma.com started raising investment capital around June 2004 through PIPE (private investment in public equity). Supposedly Cuban knew about the PIPE upcoming investment and sold his shares before it took place.
If Cuban did not sell his shares, then he would have had $750,000 in losses according to the accusations. Cuban responded to the allegations on his blog:
I am disappointed that the Commission chose to bring this case based upon its Enforcement staff?s win-at-any-cost ambitions. The staff?s process was result-oriented, facts be damned. The government?s claims are false and they will be proven to be so.
Cuban recently invested in Bailoutsleuth.com, a blog that tracks how the government bailout money is spent.
“Historically, the SEC has liked to make examples of well-known individuals — such as Martha Stewart — because it attracts attention to the subject,” stated Alexander Bono, Chair of Securities Litigation at Schnader Harrison Segal & Lewis.
Cuban is currently the owner of the Dallas Mavericks and Chairman of HDNet. Cuban is an owner in IceRocket, a former partner at RedSwoosh, and invested in Weblogs, Inc. Most of Cuban’s wealth was generated from Yahoo!’s acquisition of broadcast.com for $5.9 billion.