Lawyer Accuses Mark Cuban Of Insider Trading, Says He Cheated His Way To Success
Mark Cuban has become known for a lot of things, from his role on ABC's hit show "Shark Tank," to his theatrics on the sidelines at Dallas Mavericks games, the team that he owns.
Now, if worst comes to worst, he'll also be known for cheating as he faces an insider trading trial that revolves the selling of his 6.3% stake in Mamma.com Inc. in June 2004.
The stake, prosecutors say, was sold only after Cuban had learned that his chief executive at Mamma was planning a move that might decrease the value of his shares. Cuban then, allegedly, sold the the shares and cashed out before the drop in value occurred. If the accusations are proven true, it would effectively mean that Cuban had gained an unfair advantage in the market, which doesn't sit too well with SEC lawyer Jan Folena.
"It's about the right of every investor to trade in a market that's fair," Folena told a jury of seven women and three men in her opening statement on Tuesday. "He cheated and, above all investors, he knew better."
Cuban's defense, on the other hand, has denied any wrongdoing and say the reasons for his selling of the 600,000 that decreased in value by 9.3% the next day are pretty straightforward.
First, Cuban camps says that the "tip" that he'd gotten from Mamma's chief executive was already public and therefore not an "insider" tip. Secondly, the defense says that Cuban was already not too sold on sticking around with Mamma as he had grown concerned with the company's link to a known stock swindler at the time.
"He didn't deceive Mamma.com, he didn't deceive anyone," his lawyer, Thomas Melsheimer, said. "He no longer trusted the company. He no longer wanted to be involved with this company."
If convicted, Cuban may face the task of handing back gains he made from the sale in question, fines and other penalties for a crime that Folena says needs to be taken very seriously, as she stresses that there is no room for leniency.
"Insider trading is a form of cheating, it's like knowing the answers to a test before you take it," Folena said. "...Our laws apply to everyone -- the rich, the poor, the famous and the unknown."