Maverick move: Cuban shoots back at SEC over insider trading claims
Dallas Mavericks owner Mark Cuban is going on the offensive against the Securities and Exchange Commission.
Dallas Mavericks owner Mark Cuban is going on the offensive against the Securities and Exchange Commission.
Last Friday, Mr. Cuban asked a federal court in Texas to order the SEC to reimburse him for legal costs he incurred in defending against an insider-trading case the SEC brought against him last year.
The court can award such sanctions “based on the SEC’s bad-faith conduct” in filing the case, Mr. Cuban said in a court motion.
In November 2008, the SEC alleged that Mr. Cuban sold 600,000 shares of Mamma.com, a Canadian internet search firm, after learning in 2004 that the company planned to issue a private stock offering that would dilute existing share.
As a result, Mr. Cuban avoided $750,000 in losses, the SEC claimed.
But in July, Judge Sidney Fitwater of the U.S. District Court for the Northern District of Texas in Dallas dismissed the SEC’s case.
Mr. Fitwater gave the SEC a month to refile its claim.
The SEC chose not to refile the case, and on Aug. 13, Mr. Fitwater closed the action.
SEC spokesman John Nester said the agency is considering an appeal.
“The commission staff acted in the best interests of investors by pursuing this case,” he said in a statement.
In his court motion, Mr. Cuban said SEC enforcers knew they had no case when they went after him. He claimed agency officials were intent on bringing high-profile insider-trading cases.
As a result of the case, Mr. Cuban said he suffered “considerable public embarrassment, lost business opportunities and significant defense costs.”
Christopher Clark, a partner at Dewey & LeBoeuf LLP in New York who represents Mr. Cuban, was not immediately available for comment.
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