The Securities and Exchange Commission today charged Dallas entrepreneur Mark Cuban with insider trading for selling 600,000 shares of the stock of an Internet search engine company on the basis of material, non-public information concerning an impending stock offering.
The Commission’s complaint, filed in the U.S. District Court for the Northern District of Texas, alleges that in June 2004, Mamma.com Inc. invited Cuban to participate in the stock offering after he agreed to keep the information confidential. The complaint further alleges that Cuban knew that the offering would be conducted at a discount to the prevailing market price and that it would be dilutive to existing shareholders.
Within hours of receiving this information, according to the complaint, 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. According to the complaint, Cuban avoided losses in excess of $750,000 by selling his stock prior to the public announcement of the offering.
“Insider trading cases are a high priority for the Commission. This case demonstrates yet again that the Commission will aggressively pursue illegal insider trading whenever it occurs,” said Linda Chatman Thomsen, Director of the SEC’s Division of Enforcement.
Scott W. Friestad, Deputy Director of the SEC’s Division of Enforcement, said, “As we allege in the complaint, Mamma.com entrusted Mr. Cuban with nonpublic information after he promised to keep the information confidential. Less than four hours later, Mr. Cuban betrayed that trust by placing an order to sell all of his shares. It is fundamentally unfair for someone to use access to nonpublic information to improperly gain an edge on the market.”
The complaint alleges that Cuban violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission’s complaint seeks to permanently enjoin Cuban from future violations of the federal securities laws, disgorgement (with prejudgment interest), and a financial penalty.
If Rose can maintain his averages of 18.9 points, 5.6 assists and 5.0 rebounds, he would join Oscar Robertson, Michael Jordan, LeBron James, Grant Hill, Alvan Adams, Steve Francis and Magic Johnson as the only rookies to average 18, 5 and 5. Rose’s prodigious talent and unique rookie consistency are a big reason the Bulls (5-5) are off to just their third .500-or-better start after 10 games since Jordan left town. To hear Rose tell it, Vinny Del Negro deserves credit as well. “He’s always talking to me and making sure I understand the different situations I’m seeing,” Rose said. “It feels good knowing that he has my back. He and my teammates are always helping me, teaching me stuff. They’re like my big brothers.”
One day later, the buzz was still flying around Warriors rookie guard Anthony Morrow. A television interview on the Sunday evening local news. Sports magazines working on feature stories about him. Fans still talking about his first NBA career start: a 37-point, 11-rebound performance in Saturday’s win over the Los Angeles Clippers. Still, despite the Warriors having the day off, he found himself in the gym Sunday, getting up shots and working on his game. “Nothing like this will change me,” Morrow said in the midst of the postgame hysteria he caused Saturday. “The grind never stops.” His record performance — most points by an undrafted player in his rookie season and most points by a rookie this season — may have changed the Warriors for the better. It certainly gave the team a much-needed shot of energy and hope, which came in a timely fashion after Thursday’s heartbreaking loss to Detroit. It gave the Warriors another commodity to add to their portfolio of young talent to build on or barter.
Stackhouse didn’t want to talk about it after the game, but team president Donnie Nelson said the coaching staff informed Stackhouse on Sunday morning about the decision. Nelson said there is no internal problem with Stackhouse, who is shooting 29 percent for the season. Said coach Rick Carlisle: “He was just inactive. I talked to him about it. I’m going to talk to him [today] and see about the next game. He’s fine. It was matchups and some other stuff. But it’s not a big deal.”