DALLAS (CN) - The SEC has charged Mark Cuban with saving himself $750,000 by dumping shares in the Internet search engine Mamma.com based on inside information that the company would be offering new shares at a discount. The charges may complicate the billionaire's attempt to buy the Chicago Cubs.
The SEC claims Mamma.com invited Cuban to participate in the stock offering if he kept the information confidential. The Commission claims Cuban knew the shares would be offered at a discount from market price.
"Within hours of receiving this information," the SEC said today, "Cuban called his broker and instructed him to sell Cuban's entire position in the company. When the offering was publicly announced, Mamma.com's stock price opened at $11.89, down $1.215 or 9.3 percent from the prior day's closing price of $13.105."
Cuban allegedly "avoided losses in excess of $750,000 by selling his stock prior to the public announcement of the offering."
Defense counsel are Ralph Ferrara with LeBouef Lamb in Washington, D.C. and Paul Coggins with Fish & Richardson in Dallas.
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