Outspoken Owner
Outspoken billionaire and Dallas Mavericks owner Mark Cuban has been charged with insider trading over the sale of 600,000 shares of Mamma.com. The SEC's lawsuit, filed today, did not specify what fines the commission intends to seek. Find out what other controversies have surrounded Cuban since he entered the sports world.
David Zalubowski, AP
Cuban, who became a billionaire by selling his company, Broadcast.com, to Yahoo! in 1999, purchased the Dallas Mavericks in 2000 for $285 million from H. Ross Perot Jr. The Mavericks were a floundering NBA franchise, having a small following and struggling on the court.
Paul Buck, AFP / Getty Images
Cuban became a very hands-on and accessible owner, spending his time on the court rather than up in the owner's box and running his own blog.
Ronald Martinez, Getty Images
Cuban's rise to ownership is considered the ultimate fan fantasy successfully coming true. He is an unapologetic fan not afraid to celebrate or scream at officials or players.
Roy Dabner, AP
However, because of his gregarious nature, Cuban has had his share of spats with NBA commissioner David Stern. The league has fined the owner more than $1.6 million for various comments and actions.
Bill Janscha, AP
After saying "I wouldn't hire him to manage a Dairy Queen" about the NBA's head of officiating in 2002, the company challenged Cuban to work in one of its stores for a day. Cuban accepted, and served frozen treats at a Texas location.
LM Otero, AP
Even Cuban's ex-players aren't spared his wrath. After former Maverick Michael Finley returned to Dallas in the 2005-06 season, the owner encouraged fans to shower him with boos.
Douglas C. Pizac, AP
One of his own players thought Cuban should take a lesser role one the sideline. Saying it was a "bit much" for him to be next to the bench, Mavs star Dirk Nowitzki said "he's got to learn how to control himself as well as the players do."
J. Pat Carter, AP
Cuban's biggest fine came after the 2006 NBA Finals. He was fined $250,000 for various transgressions during Game 5 as the Mavericks fell behind in a series they led 2-0 and eventually lost to Miami.
Stephen Dunn, Getty Images
Cuban has expressed some interest in expanding his sports franchise empire. The outspoken Mavericks owner submitted an initial bid of $1.3 billion to buy the Chicago Cubs in July 2008, despite published comments that he had "zero chance" of being allowed to buy the team.
Jonathan Daniel, Getty Images
Now, what in the name of the Duke Brothers does that actually mean? Well, here's the skinny: Cuban was invited to be an investor in Mamma.com, a conglomerate type of search engine start up company. He invested, back in 2004. However, Cuban dumped his entire investment in the company in 2004 after finding out from Mamma that their private funding money dipped by 10% , causing the company to offer their stock at a discounted price from the previous day's closing number. (In other words, everyone who owned the stock would take a tremendous loss.)
Since the SEC kind of frowns on investors using insider information to avoid financial losses, they've filed some charges against him.
The Commission's complaint, filed in the U.S. District Court for the Northern District of Texas, alleges that in June 2004, Mamma.com Inc. invited Cuban to participate in the stock offering after he agreed to keep the information confidential. The complaint further alleges that Cuban knew that the offering would be conducted at a discount to the prevailing market price and that it would be dilutive to existing shareholders.
Within hours of receiving this information, according to the complaint, Cuban called his broker and instructed him to sell Cuban's entire position in the company. When the offering was publicly announced, Mamma.com's stock price opened at $11.89, down $1.215 or 9.3 percent from the prior day's closing price of $13.105. According to the complaint, Cuban avoided losses in excess of $750,000 by selling his stock prior to the public announcement of the offering.Now, as has been questioned by Nate Jones, why would Cuban risk getting hazed by the SEC for anything less than a million? It's an excellent question, particularly considering how meaningless that amount of money is to the Dallas Mavericks owner.
My best guess would be that Mamma told him "Hey, we're gonna stick you with this loss by offering the stock at this price" and Cuban was against that decision, so he decided to sell. He'll most certainly fight this, but the SEC, like the TSA, FBI and other assorted three letter government entities, is not someone you want on your bad side.
From a sports perspective, it will be pretty fascinating to see how this affects his ownership (and potential ownership) of the Dallas Mavericks and Chicago Cubs. On the former, I don't see it mattering -- even if Cubes got hit up with a XX million dollar fine, he's got plenty in the bank to hold onto the Mavs. But this could be highly detrimental to his attempts to purchase the Cubbies -- I find it unlikely that even Bud Selig would allow an MLB team to be owned by someone being investigated by the Securities and Exchange Commission.
Additional FanHouse coverage:
Mark Cuban Responds: "The Governments Claims are False"
In 2005, Mark Cuban Blogged About His Illegal Mamma.com Stock Sale
Comments (Page 1 of 3)
Cubie, would you like to 'Redact' your story now? Are you sure you still hate America and its military? ......Good luck with all your new ventures and may they not be as horrifically cruel and untrue than your filthy hate-America projects you've been working on.... Don't sleep too well. The guards are coming and they had the Mav's last year to win and they are pissed!!!
You can only get lucky in business so many times. I find it funny people think this guy is a business genius, when he was just lucky to be able to sell a worthless company to a clueless Yahoo.
Cuban thinks he smarter than he really is. He made a fortune in America and now is filled with hate toward the country that made him rich.
Throw the crook in prison
good arrest this jackass
I AM GLAD TO SEE THAT I AM NOT THE ONLY ONE WHO LABELS THIS GUY AN A-HOLE.
I hope this commie spoiled brat gets taken down. And then I hope he leaves the public scene for good. He is a cancer that needs to be lanced.
Another corrupt Obama supporter. Enough said.
Whoa Bob, WTF are you thinking? Just because this guy is a crooked investor....doesn't mean you can tie him in with "Obama" supporters. Even if he publicly supported "Obama" doesn't mean that the close to 70 million other people who voted for him are as crooked as Cuban. There is no correlation here at all, Bob. Get out and expose yourself to something new, it will help you with that closed mind of yours.
Now as far a Cuban goes, is he really going to get jail time for this? I would like to think so, but he is rich, so won't they just slap him with a stupid fine? $1 million is more money than I will ever see in my life, but to Cuban, im sure he wipes his butt with $1 million everyday.
They need to do him worse than they did Martha.
Mr Cuban is just another newly rich guy from the dot com era
made alot of money and thinks that gives him the right to be a class A aashole.
Way to go Marc, hope you enjoy your new digs with Big Bubba as your roomie. You'll find out, size really does count.
I sense an awful lot of envy in these comments above about Cuban's "problems. He is an outgoing, smart and a self-made sportsman.
He's a modern-day Bill Veeck.
"He is an outgoing, smart and a self-made sportsman."..................you forgot thief.
Sportsman??? Maybe he is in today's "me only" atmosphere.
Any wonder he comes from the same state as Jerry Jones.
This guy has been getting away with this type of things for years, he has had his legal team escape all of them. He has told folks he is above the law, even told one that the laws are for the morans out their.
whats sad is a poor shlep like me who made a MISTAKE by listening to my former employer to save my own job about the same thing 6 years ago and lost almost everything gets shafted(yes I take full responsibility). But this guy will fly right thru this...
I knew without looking who this article was going to be about. there is just something about this guy that makes me not trust him. I can't explain it. It does sound sstupid, but I just don't
GEE, do ya think they'll go after him like they did Martha Stewart? Doubtful. They just went after Martha and made an example of her because she is a female. It is a "Good Ol' Boy Club" that some people don't fit into.
I'm no financial genius, but didn't Martha Stewart get in trouble for something like this and spend some time in the pokey?
THROW HIM IN JAIL, AND TAKE MARTHA STEWART WITH HIM. SHE KNOWS THE ROPES.....................