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WASHINGTON: U.S. government regulators on Monday charged Mark Cuban, owner of the Dallas Mavericks basketball team, with insider trading for allegedly using confidential information on a stock sale to avoid more than $750,000 in losses.
The Securities and Exchange Commission filed a civil lawsuit against Cuban in U.S. District Court in Dallas. The agency said that in June 2004, Cuban was invited to get in on the coming stock offering by Mamma.com after he agreed to keep the information private.
The SEC said Cuban knew the shares would be sold below the then-current market price, and a few hours after receiving the information, told his broker to sell his entire stake of 600,000 shares in the search engine company before the public announcement of the offering.
By selling when he did, Cuban avoided losses exceeding $750,000, according to the SEC. At the time of the offering, Cuban was the largest known shareholder in the Montreal-based company, which later changed its name to Copernic.
The SEC is seeking a court judgment that Cuban violated the antifraud provisions of U.S. securities laws, an injunction against future violations, an unspecified civil penalty and restitution of the losses Cuban allegedly avoided.
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Attorneys for Cuban did not return telephone calls seeking comment.
Cuban, 50, also owns Landmark Theaters, a U.S. chain of cinemas dedicated to independent films, and the HDNet cable television channel. He is among the richest people in the world, according to Forbes magazine, which estimated his net worth at $2.3 billion as of March 2007.