According to the SEC's press release, Cuban sold 600,000 shares of Mamma.com stock "on the basis of material, non-public information concerning an impending [stock] offering by the company."
Cuban's alleged misdeed apparently saved him $750,000. That's a lot of dough to you and me, but peanuts to the former CEO of Broadcast.com who made billions when he sold the company to Yahoo for $5.7 billion in the dot-com bubble.
Cuban posted this response to the SEC on his website:
Mark Cuban today responded to a civil complaint filed by the United States Securities and Exchange Commission in the United States District for the Northern District of Texas, Dallas Division. In its complaint, the Commission charges that Mr. Cuban engaged in violations of the federal securities laws in connection with transactions in the securities of Mamma.com Inc.I'm not sure how I feel about this. On the one hand, you'd think the SEC would be focusing their considerable enforcement resources on those responsible for the current economic crisis. On the other hand, insiders shouldn't benefit from their position, to the detriment of ordinary investors. And that message needs to be reinforced. What are your thoughts?
This matter, which has been pending before the Commission for nearly two years, has no merit and is a product of gross abuse of prosecutorial discretion. Mr. Cuban intends to contest the allegations and to demonstrate that the Commission's claims are infected by the misconduct of the staff of its Enforcement Division.
Mr. Cuban stated, "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."
(Image courtesy CBS NEWS)