By Jana J. Pruet
DALLAS Oct 16 Flamboyant billionaire Mark Cuban
on Wednesday was cleared by a Texas jury of using a private tip
to avoid a big loss on his 2004 sale of Internet company shares,
in a stinging rebuke for the U.S. government which had accused
him of insider trading.
Cuban, 55, the owner of the Dallas Mavericks basketball
team, lashed out at the U.S. government and lead prosecutor Jan
Folena after the verdict, saying the government had tried to
"Jan Folena, who represents the United States of America,
stood up there and lied," an angry Cuban told reporters after
the nine-member jury read its decision.
"I'm the luckiest guy in the world and I'm glad I could
stand up to them," he said.
Estimated by Forbes magazine to have a net worth of $2.5
billion, Cuban was accused by the U.S. Securities and Exchange
Commission of trading on non-public information when he sold his
600,000 shares in Internet search company Mamma.com - worth $7.9
million - and avoided a $750,000 loss.
The SEC brought the civil lawsuit against Cuban in November
2008. A judge dismissed the suit in 2009 but an appeals court
revived the case the following year.
Cuban refused to settle the case and went to trial, even
though he said on Wednesday that he had spent more on fees for
lawyers than the possible fines for admitting to insider
trading. He could have faced up to $2 million in fines, his
"It's personal. You take all these years of my life, it's
personal," Cuban said.
SEC lawyers rushed from the court after the verdict without
making extensive comments. The agency later issued a short
statement saying it was disappointed by the outcome.
"We respect the jury's decision," SEC spokesman John Nester
said in Washington.
"While the verdict in this particular case is not the one we
sought, it will not deter us from bringing and trying cases
where we believe defendants have violated the federal securities
The decision in the Cuban case was a blow to the SEC, which
was still riding high after it won a blockbuster case against
former Goldman Sachs vice president Fabrice Tourre this
The SEC argued that Tourre had committed fraud in a failed
mortgage securities deal during the 2008-2009 financial crisis.
In August, a jury agreed and found Tourre liable on six of seven
At the two-week trial of Cuban, prosecutors argued that he
sold his stake soon after learning from Mamma.com Chief
Executive Guy Faure that the Montreal-based company was planning
a private placement that would dilute his holdings in the
Mamma.com shares dropped 9.3 percent on the morning after
the offering was announced. By that time, Cuban had already sold
Cuban, who rose to prominence before the dot-com crash by
selling his company, Broadcast.com, in 1999 to Yahoo Inc
for $5.7 billion, said he did nothing wrong when he
sold his 6.3 percent stake in Mamma.com.
Cuban testified during the two-week trial that there were
many reasons for selling his shares, including the private
placement and Mamma.com's possible association with a known
His lawyers suggested that word of the private placement had
leaked into the market because potential investors were being
contacted to participate in the private placement.
"This case should have never been brought to trial,"
Cuban's defense lawyer Stephen Best said after the verdict on
Wednesday in federal court in Dallas.
In addition to his ownership of a professional basketball
team, Cuban is one of the stars of the popular television show
"Shark Tank" which features financiers analyzing and deciding
whether to invest in new products presented by entrepreneurs.
"I know I'm a target," Cuban said of his high profile. "I
recognize that when I do things people pay attention."