Mark Cuban Charged with Insider Trading

The Securities and Exchange Commission laid a charge of insider trading against billionaire entrepreneur Mark Cuban on November 17. Cuban is accused of selling 600,000 shares in in June 2004 after getting confidential news of an impending public offering. is a Montreal-based internet search engine since renamed Copernic Inc. By selling off his shares, totalling 6.3% of, he safeguarded himself from personal losses of more than $750,000. The SEC Summary of Allegations claims that “Unless enjoined, Cuban is likely to commit such violations again in the future.” 

Cuban posted a terse statement from his lawyer on his normally vociferous blog, prefaced only by a brief sentence:  “I wish I could say more, but I will have to leave it to this, and let the judicial process do its job.” Cuban’s lawyer Ralph C. Ferrera calls the charge “a product of gross abuse of prosecutorial discretion,” and claims that Cuban intends to “demonstrate that the Commission’s claims are infected by the misconduct of the staff of its Enforcement Division.”

“I am disappointed that the Commission chose to bring this case based upon its Enforcement staff’s win-at-any-cost ambitions. The staff’s process was result-oriented, facts be damned. The government’s claims are false and they will be proven to be so” says Cuban.

Cuban is the owner of the Dallas Mavericks, and has recently been trying to buy the Chicago Cubs as well. The founder of, HDNet, and several other companies, Cuban has also been an angel investor for several startups, including SlideShare, Goowy, RedSwoosh,, Weblogs, Inc. and Mahalo. At September’s TechCrunch50, Cuban announced that startups could feel free to “Send me an email and in three paragraphs or less, tell me about your business. Dont say you need an NDA or want a call. Just tell me how youre going to make money and how I’m going to add value. Give me a URL if you have a website, I’ll figure it out. 5% of the people will hear back from me.” It is impossible to know what deals Cuban has in the pipelines, or how they will be affected by today’s announcement.

Though these accusations date back to 2004 and regardless of whether or not they are true, it will be interesting to see how many insider trading charges may be levied because of mass pre-meditated sell-offs in the current troubling economic situation.