Dallas Mavericks owner Mark Cuban plans to ask a federal judge in Dallas to dismiss the U.S. Securities and Exchange Commission’s lawsuit accusing him of insider trading.
The SEC’s complaint fails to show Cuban was legally barred from selling shares of Mamma.com Inc. in 2004 after he learned the company planned to sell additional stock below the trading price, his lawyers wrote in a request to be filed today. A copy was provided to Bloomberg News by Stephen Best, Cuban’s attorney at Dewey & LeBoeuf LLP in Washington.
In the lawsuit filed Nov. 17, the SEC claimed Cuban, 50, promised during a telephone call with Mamma.com’s chief executive officer to keep information confidential about the company’s stock sale. Later that day, Cuban avoided more than $750,000 in losses by ordering the sale of his stake in the Montreal-based Internet search company, the agency said.
Cuban “vigorously disputes” the SEC’s version of what happened, his attorneys wrote in their request for dismissal. The alleged vow to keep information secret doesn’t create a fiduciary duty to refrain from acting on it, they argued. The SEC’s claim seeks to expand the definition of insider trading, they said.
SEC spokesman John Nester declined to comment on the request to dismiss the case.
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