Mark Cuban has been charged with insider trading by the SEC. Here is a summary of what happened from Yahoo’s front page.

Mamma.com decided in the spring of 2004 to raise capital in a so-called private placement in public equity offering, known as a PIPE, according to the SEC suit. In late June, as the PIPE moved toward closing, Mamma.com’s investment bank suggested the company invite Cuban to participate.

On June 28, Mamma.com Chief Executive Guy Faure e-mailed Cuban asking him to call him “ASAP,” the SEC said. Cuban called four minutes later from the American Airlines Center in Dallas, home of the NBA’s Dallas Mavericks, and spoke to Faure for about eight minutes.

Faure, who resigned last year, began the conversation by telling Cuban he was about to give him confidential information. Cuban agreed to keep it to himself, the SEC said.

Cuban became upset and angry during the conversation, and said that he didn’t like PIPEs because they dilute the value of company stock for existing shareholders, according to the SEC. At the end of the call, Cuban said, “Well now I’m screwed. I can’t sell.”

Here is the limited response from Mark Cuban’s Blog Maverick site:

I wish I could say more, but I will have to leave it to this, and let the judicial process do its job.
November 17, 2008
RE: SEC Civil Action in the United States District

for the Northern District of Texas, Dallas Division

Mark Cuban today responded to a civil complaint filed by the United States Securities and Exchange Commission in the United States District for the Northern District of Texas, Dallas Division. In its complaint, the Commission charges that Mr. Cuban engaged in violations of the federal securities laws in connection with transactions in the securities of Mamma.com Inc.

This matter, which has been pending before the Commission for nearly two years, has no merit and is a product of gross abuse of prosecutorial discretion. Mr. Cuban intends to contest the allegations and to demonstrate that the Commission’s claims are infected by the misconduct of the staff of its Enforcement Division.

Mr. Cuban stated, “I am disappointed that 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. The government’s claims are false and they will be proven to be so.”
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Ralph C. Ferrara, Esq.

Dewey & LeBoeuf LLP

1101 New York Avenue, N.W., Suite 1100

Washington, D.C. 20005