[opendtv] Mark Cuban Charged with Insider Trading
- From: "John Shutt" <shuttj@xxxxxxxxx>
- To: "OpenDTV" <opendtv@xxxxxxxxxxxxx>
- Date: Mon, 17 Nov 2008 12:25:21 -0500
http://online.wsj.com/article/SB122693827604333637.html
The Securities and Exchange Commission filed insider trading charges against
Mark Cuban, the outspoken owner of the Dallas Mavericks, for allegedly
dumping shares in Mamma.com upon learning it was raising money in a private
offering (full text of complaint:
http://online.wsj.com/public/resources/documents/WSJ-20081117-seccubancomplaint.pdf)
The SEC alleges in a civil action that Mr. Cuban sold his entire 6%
ownership stake on June 28, 2004, after learning that Mamma.com was raising
money through a private investment in a public entity, or PIPE. The next
day, on June 29, the company announced the PIPE financing and shares of the
company dropped by more than 10%. By selling his stake, the SEC alleges, Mr.
Cuban avoided more than $750,000 in losses.
In a PIPE transaction new shares are issued at a discount to the current
trading price. An announcement of a PIPE transaction is often followed by a
drop in the stock price as shareholders anticipate their stake will be
diluted.
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