Mark Cuban Found Not Guilty of Insider Trading + Video

By - October 29, 2013
Views: 69

NB_15MarkCuban2Mark’s a good guy! A jury in Texas found the billionaire owner of the Dallas Mavericks, Mark Cuban, not guilty this week of insider trading. The case revolved around the sale of Cuban’s stock in an online company nine years ago.

Mark Cuban is 55 and is thought to be worth $2.5 billion. He was accused by the SEC of trading with non-public information when he sold off 600,000 shares of stock in and managed to avoid a loss of $750,000.

The jury, which was in a federal court in Dallas, discussed the case for under four hours before they determined that Cuban is not guilty. They determined that the SEC was not able to prove several aspects of its case. One of the things that it did not prove was that Cuban had traded on non-public data.

Cuban appeared happy in court and he smiled when the jury read the verdict. He later blasted the SEC lawyer on the case, Jan Folena. He claimed that Folena was trying to bully him.

Cuban said that he was very lucky, and that he was pleased that he could stand up to the SEC and win.

The lawyers for the SEC walked out of court quickly after the verdict came down and did not comment. A spokesman for the SEC noted later that regulators would continue to take people to trial who they think are guilty of insider trading.

YouTube Special Feature

Can a billionaire still be the underdog? Mark Cuban speaks to reporters after beating insider trading charges brought by the Securities and Exchange Commission.

The SEC stated later that it respected the decision of the jury. The decision they made was not what they wanted, but it will not stop the SEC from trying cases where it thinks defendants have violated the law.

The SEC believed that Cuban had traded stock shares on non public information that he got from the CEO of, Guy Faure. The SEC claimed that Faure had provided to Cuban details of a PIPE deal that involved PIPE stands for ‘private investments in public equities’ and can drive down share prices.

Faure provided testimony that Cuban agreed in a confidential talk on the phone to sell his shares. Cuban denied that he ever had that conversation and said that he would not do such a thing without it being in writing.

The defense for Cuban maintained that the PIPE transaction was public knowledge and it could not be actually considered confidential information.

The defense pointed out an SEC filing that it claimed was available to anyone, which was submitted by in 2004. This was over three months before the 2004 sale that was in question during the trial. The filing talked about the possibility of the firm entering this PIPE agreement. This would then negate any claims that the information was actually confidential.

The defense also argued that the 2000% spike in trading volume of stock in June 2004 showed that the arguably public PIPE transaction information had spread outside the firm before Cuban sold his stock shares.

Cuban was facing as much as $2.5 million in fines if he was found guilty of insider trading.

Cuban, in addition to owning the Dallas Mavericks, is on the show Shark Tank, which features several financiers deciding if they should invest in new products and services that entrepreneurs offer.

The SEC first brought the civil suit against Cuban in 2008. A judge dismissed that suit in 2009, but an appeals court brought the case back to life in 2005.