Posted by Emmanuel Martinez.
Mark Cuban who is well known for his high profile lifestyle has recently been acquitted from the charges against him for insider trading. The SEC brought a “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 decided to go to trial.
The lead prosecutor in the case, Jan Folena, accused Mark Cuban of getting a private tip to avoid a loss of about $750,000 when he sold his interest in Momma.com. Cuban was accused of getting a tip from Chief Executive Guy Faure, who supposedly gave him a heads up about the company planning a private placement, which would had affected the investment Cuban had in the company; his investment amounted to about $7.9 million dollars.
Mamma.com dropped 9.3% after the private placement offering. Mark Cuban was accused of insider trading because he sold his shares two weeks prior to the stock dropping. Cuban stated that potential investors were being contacted to participate in the private placement and this is how he made his judgment to sell his shares. He denied any inside information being given to him that the public did not have.
Emmanuel is an accounting major at the Feliciano School of Business, Montclair State University.