On March 5, 2013, Chief Judge Fitzwater denied Mark Cuban’s motion for summary judgment (decision available here) in the SEC’s case against Cuban. The SEC has brought a civil enforcement action against Cuban, alleging a misappropriation theory of insider trading.
The long and the short of Chief Judge Fitzwater’s decision is that the SEC has enough evidence that a jury should decide whether Cuban committed insider trading in connection with his sale of shares of stock in Mamma.com after he learned material, non-public information concerning a planned private investment in public equity offering by the company. “According to the SEC, Cuban deceived Mamma.com by agreeing to maintain the confidentiality of the material, nonpublic information concerning the PIPE, agreeing not to trade on the information, but then selling all of his stock in the company without first disclosing to Mamma.com that he intended to trade on the information, thereby avoiding substantial losses when the stock price declined after the PIPE was publicly announced.”
The SEC is represented by Kevin O’Rourke, Adam Aderton, Duane Thompson, Julie Riewe, Thomas Karr, and Toby Galloway.
Cuban is represented by Thomas Melsheimer, John Sanders, Jr., and Steven Stodghill, all of Fish & Richardson, P.C.; Brian Nysenbaum and Stephen Best, both of Brownstein Hyatt Farber Schreck LLP; Christopher Clark, of Latham & Watkins LLP; George Anhang and Lyle Roberts, both of Cooley LLP; Henry Asbill of Jones Day LLP; and Leslie Maria, of Schiff Hardin LLP.