Tuesday, July 21, 2009

Elsie Law's Daily Dose Of The Law

Dallas Mavericks owner, Mark Cuban, escaped prosecution on insider trader charges when a federal judge threw a case brought against him by The Securities and Exchange Commission out of court.

The SEC claimed that Mark Cuban sold his stake in an internet search company after the company's CEO confided in him that the company was planning to raise money via a "private investment in public equity."

According to The Wall Street Journal, the SEC claimed that Mark Cuban avoided loses of more than $750,000 by selling his 6% stake in the internet corporation after being tipped off to the company's new investment strategy. Mr. Cuban and his attorneys rebutted that Mr. Cuban was not under any obligation not to sell his shares based on the information that he received. A federal judge concurred. However, the judge also gave the SEC a 30 day window of time to refile the charges if they can come up with stronger allegations.

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