Text: SEC Complaint Against Mark Cuban

The commission charges defendant Mark Cuban with committing securities fraud by engaging in illegal insider trading.

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
:
SECURITIES AND EXCHANGE COMMISSION, :
:
Plaintiff, : Civil Action No.: _______ (___)
:
v. :
: DEMAND FOR
MARK CUBAN, : JURY TRIAL
:
Defendant. :
:
COMPLAINT

Plaintiff Securities and Exchange Commission (“Commission”) alleges as follows:

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SUMMARY OF ALLEGATIONS

1. The Commission charges Defendant Mark Cuban (“Cuban”) with committing securities fraud by engaging in illegal insider trading. Despite agreeing in June 2004 to keep material, non-public information about an impending stock offering by Mamma.com Inc. confidential, Cuban sold his entire stake in the company – 600,000 shares – prior to the public announcement of the offering. By selling when he did, Cuban avoided losses in excess of $750,000.

2. By conduct detailed in this Complaint, Cuban violated Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)] and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. Unless enjoined, Cuban is likely to commit such violations again in the future.

3. The Commission seeks a judgment from the Court: (a) enjoining Cuban from engaging in future violations of the antifraud provisions of the federal securities laws; (b) ordering Cuban to disgorge, with prejudgment interest, the losses avoided as a result of the actions described herein; and (c) ordering Cuban to pay a civil money penalty pursuant to Section 21A of the Exchange Act [15 U.S.C. § 78u-1].

JURISDICTION AND VENUE
4. The Commission brings this action pursuant to Sections 20(b) and 20(d) of the Securities Act [15 U.S.C. §§ 77t(b) and 77t(d)] and Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)].

5. The Court has jurisdiction over this action under Sections 20(b), 20(d), and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d), and 77v(a)] and Sections 21(d), 21(e), 21A, and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), 78u-1, and 78aa].