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:
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].