Jury rules for Mark Cuban in insider case

(CNN MONEY) -  The federal court jury in Dallas found the controversial owner of the NBA's Dallas Mavericks and star of the reality television show "Shark Tank" did not brake federal rules when he dumped his whole stake in the company Mamma.com in 2004 before details of a pending stock offering were announced.

The sale of the stock, which Cuban did not deny, avoided a $750,000 loss on the holding.

At that time, Cuban was the largest individual shareholder in Mamma.com, a search software company that has since changed its name to Copernic and been purchased by Constellation Software. He was contacted by the company's CEO and told the company intended to sell more shares to raise funds.

According to testimony presented at the trial, Cuban became angry and said he opposed the sale because it would dilute his 6% stake. But he sold his entire stake of 600,000 shares after getting more details of the planned stock sale from the company's financial advisers.

Cuban argued in court that while he was prohibited from disclosing the plans for a stock sale by the company, he was not prohibited from selling his shares on the information.

"We are extremely pleased with today's verdict," his attorney, Stephen A. Best, said in a statement. "The evidence we presented made clear that all the relevant information was in the public domain."

SEC spokesman John Nester said in a statement that the commission respects but is disappointed by the jury's decision, "It will not deter us from bringing and trying cases where we believe defendants have violated the federal securities laws," he said.


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