The US Securities and Exchange Commission’s insider-trading lawsuit against Mark Cuban, the billionaire owner of the NBA’s Dallas Mavericks, has been dropped.
US district judge Sidney A. Fitzwater granted an order at Cuban’s request to dismiss the SEC’s case, which claimed Cuban promised the CEO of Montreal-based internet search company Mamma.com’s to keep confidential a planned private offering of company stock at a below-market price during a 2004 telephone call.
Later on the day of the alleged phone call, Cuban avoided more than $750,000 in losses by ordering the sale of his 6.3 per cent stake in the website, according to the SEC.
“While the SEC adequately pleads that Cuban entered into a confidentiality agreement, it does not allege that he agreed, expressly or implicitly, to refrain from trading on or otherwise using for his own benefit the information,” Fitzwater wrote in his ruling.
Scott Friestad, an associate director of SEC enforcement who is overseeing the agency’s case against Cuban, said the SEC is “reviewing the court’s ruling and weighing up its options”.
Mark Cuban owns US high-definition television channel HDNet and the Landmark Theater chain. He co-founded multimedia web service Broadcast.com which was sold to Yahoo! for $4.7 billion in 1999.
In 2000, Cuban bought the Mavericks for $280 million, a record fee at the time for an NBA team.
