Sept. 30 (Bloomberg) -- The U.S. Securities and Exchange Commission’s internal watchdog found “insufficient evidence” that the agency’s enforcement staff engaged in misconduct while looking into insider-trading allegations against billionaire Mark Cuban, according to a report on his investigation.
Inspector General H. David Kotz, whose report was released today, said his review didn’t find evidence to support Cuban’s claims that SEC staff members were biased against him. Kotz launched his investigation after lawyers for Cuban, owner of the Dallas Mavericks professional basketball team, complained about the enforcement staff in a January 2009 letter.
The SEC sued Cuban in 2008, claiming he traded on confidential information when he sold his stock in Mamma.com Inc. just before it announced a private share sale that would dilute his stake. Cuban denied the claims and won dismissal of the lawsuit. The SEC, which claimed that Cuban avoided about $750,000 in losses, won an appeal to have the claims reinstated.
“The SEC’s top-notch and hardworking team handled this matter professionally and responsibly,” Robert Khuzami, the agency’s enforcement director, said in a statement. “The allegations made by Mr. Cuban’s counsel are unsubstantiated, and we look forward to presenting our insider trading case against Mr. Cuban in court.”
Ralph Ferrara, an attorney for Cuban at Dewey & LeBoeuf LLP in Washington, didn’t immediately respond to an e-mail seeking comment.
Cuban, 53, said last month in a filing in Dallas federal court that he needs access to SEC investigative documents on Mamma.com, the Montreal-based Internet search company now known as Copernic Inc., to fight the SEC’s insider-trading claims.
The case is Securities and Exchange Commission v. Cuban, 08-cv-2050, U.S. District Court, Northern District of Texas (Dallas).
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