DALLAS (CN) – A federal jury Wednesday cleared billionaire Mark Cuban of inside-trading charges the SEC filed for his sale of shares in an Internet search engine firm in 2004.
After a three-week trial and four hours of deliberation, the nine-member jury concluded the SEC failed to prove that Cuban had agreed to keep information confidential and not to sell his stock.
Cuban said immediately after the verdict: “Obviously, I wanted to win. But at the same time … I didn’t win anything.
“The fact that [SEC attorneys] Janet Folena and Christian Schultz can sit up there and just tell lies … it’s just wrong.”
The SEC filed the civil suit against Cuban in 2008.
It accused him of ducking $750,000 in losses by dumping shares of Mamma.com based on inside information from Mamma.com CEO Guy Faure that the company was preparing to make a private investment in a public equity offering. The SEC claimed the sale breached a confidentiality agreement in place.
The trial came after the 5th Circuit refused to grant Cuban summary judgment in March. Cuban had argued there was no proof the offering information was confidential. He said the information was widely distributed to prospective investors without confidentiality restrictions and that the company itself had disclosed a possible offering.
Speaking outside of the courthouse after the verdict, Cuban blasted the SEC attorneys and leadership, saying he was targeted because of his wealth and celebrity.
“Hopefully people will start to pay attention to how the SEC does business,” Cuban said. “I’m the luckiest guy in the world. I’m glad this happened to me. I’m glad I’m able to be the person who can afford to stand up to them. I don’t want [or] need anything from the SEC, I just want them as American citizens to treat others as American citizens.”
Cuban said that during the trial SEC attorneys told him the action was not personal, just business.
“When you put someone on the stand and accuse them of being a liar, it’s personal,” Cuban said. “When you take all of these years of my life and try to prove a point, it’s personal. And when you try to play it off as ‘just your job’ … the people that were in this case that could have said something and didn’t say anything … that’s just wrong.”
Cuban also criticized the lack of “bright line” rules by which the SEC could help small investors avoid possible violations.
“You’ve got to ask what insider trading is, any securities rule. You can’t just call up the SEC and say ‘I want clarification on this, tell me,’ they won’t do it,” Cuban said. “They regulate through litigation, and that is its own problem.”
Cuban did say that he did not believe the suit was politically motivated.
He is the owner of the Dallas Mavericks NBA team and stars in the reality TV show “Shark Tank.”
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