(CN) – A federal judge in Dallas dismissed an insider trading claim against billionaire Dallas Mavericks owner Mark Cuban on Friday, saying the SEC never accused him of promising not to trade his shares in Mamma.com based on an insider’s tip.
The SEC had accused Cuban of insider trading when he sold his shares in the Internet search company after being told confidentially by Mamma.com’s CEO that the company was preparing to make a private investment in public equity offering.
Cuban told the CEO at the end of the call, “Well, now I’m screwed. I can’t sell,” the ruling states. He allegedly avoided losing $750,000 by selling 600,000 shares, a 6.3 percent stake in the company.
U.S. District Judge Sidney A. Fitzwater said the SEC never accused Cuban of promising not to trade based on confidential information, so the billionaire couldn’t be held liable for insider trading.
But the judge also rejected Cuban’s claims that he had no fiduciary duty to the company.
Fitzwater granted Cuban’s motion to dismiss and gave the SEC 30 days to amend its complaint.