A Texas federal jury took less than four hours to reject the SEC‘s claim that the sports and media entrepreneur, and star of ABC’s Shark Tank, had engaged in insider trading in 2004 when he sold his stock in Canadian search engine Mamma.com. “The SEC regulates through litigation, and that’s its own problem,” Dallas Mavericks owner and investor Mark Cuban said at a news conference after the decision was announced. “This is a horrific example of how the government does work.” The government said that Cuban broke the law — and saved himself $750,000 in potential losses — when he made the sale after Mamma.com CEO Guy Faure told him that he planned to dilute the public shares with a private stock offering. The SEC said Cuban had promised to keep the information secret; the exec said he made no such vow. Jurors had to sort through that question, and whether — if Cuban had made a promise — it also meant that he couldn’t sell his stock. The trial started September 30, just 10 days after Shark Tank returned for a fifth season. The decision today to side with the billionaire who controls cable network AXS TV, Landmark Theatres, Magnolia Pictures, and the the NBA team is a setback for SEC Chair Mary Jo White’s effort to show that her agency can effectively attack white-collar crime. She said last month that the SEC needs “significant and consistent trial wins” to give it “the credibility we need to achieve strong and meaningful settlements.” Cuban was represented by Thomas Melsheimer of the Dallas office of Fish & Richardson PC as well as George Anhang and Lyle Roberts of Colley LLP and Stephen Best of DC firm Brown Rundnick LLP
Subscribe to Deadline Breaking News Alerts and keep your inbox happy.