Billionaire Mark Cuban responded Monday to charges of insider trading by the Securities and Exchange Commission with a denial of wrongdoing and charges of his own against the SEC.
Cuban, the outspoken owner of the Dallas Mavericks National Basketball Association team, was charged in a civil complaint by the government Monday with using inside information to sell shares of an Internet search company, allegedly saving himself about $750,000 in losses.
In response to the charges, carried Monday on his Web log, Cuban says "The government's claims are false and they will be proven to be so."
Cuban charges 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."
In an accompanying statement, Cuban's attorney Ralph Ferrara says the issue…pending before the Commission for nearly two years, "has no merit and is a product of gross abuse of prosecutorial discretion. Ferrara says Cuban will contest the allegations and "demonstrate that the Commission's claims are infected by the misconduct of the staff of its Enforcement Division."
The SEC accused Cuban of dumping shares of Mamma.com in June 2004, just hours after learning of a planned stock offering by the firm that would have diluted the value of existing shares and before the offering plan became public knowledge.
Cuban sold his 6 percent stake in Momma.com shortly afterwards, the SEC said in its complaint, which added "It is fundamentally unfair for someone to use access to non-public information to improperly gain an edge on the market."
In a March 2005 blog post. Cuban called the new stock offering "a huge red flag," and said it induced him to sell his Mamma.com stock. "I don't want to own stock in companies that use this method of financing. ... Because I don't like the idea of selling ... stock for less than the market price," he wrote.
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