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HDNet’s Cuban Charged With Insider Trading

Nov 17, 2008  •  Post A Comment

The Securities and Exchange Commission today charged Mark Cuban with insider training accusing him of selling 600,000 shares of Internet search firm Momma.com based on inside information.
Besides owning the Dallas Mavericks, Mr. Cuban is chairman of HDNet, a cable network featuring HD offerings.
The SEC complaint, filed in federal court in Texas, charges that in 2004, Mr. Cuban avoided losses in excess of $750,000 by selling stock in Momma.com knowing, based on inside information, that the company was going to have a public offering that likely would dilute the value of existing stock.
The SEC said in a statement that the complaint demonstrated it was willing to follow up insider training allegations.
“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.
In a statement, Mr. Cuban said the case had “no merit” and called it “a gross abuse of prosecutorial discretion.” He said he intends to vigorously contest the allegations and demonstrate the claims were “infected by the misconduct” of the enforcement division’s staff.
“I am disappointed that the commission chose to bring this case based upon its enforcement staff’s win-at-any-cost ambitions,” he said. “The staff’s process was result-oriented, facts be damned. The government’s claims are false and they will be proven to be so.”
(11:55 a.m.: Added Mr. Cuban’s statement)

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