Securities and Exchange Commission charges relate to Mamma.com.

WASHINGTON - Federal regulators on Monday charged Dallas Mavericks owner Mark Cuban with insider trading for allegedly using confidential information on a stock sale to avoid more than $750,000 in losses.

Cuban disputed the Securities and Exchange Commission’s allegations and said he would contest them.

In a civil lawsuit filed in federal court in Dallas, the SEC alleged that in June 2004, Cuban was invited to get in on the coming stock offering by Mamma.com Inc. after he agreed to keep the information private.

Cuban owned 6.3 percent of Mamma.com’s stock at that time and was the largest known shareholder in the search engine company, according to the SEC. The agency said Cuban knew the shares would be sold below the current market price, and a few hours after receiving the information, he told his broker to sell all 600,000 shares before the public announcement of the offering.

By selling when he did, Cuban avoided losses exceeding $750,000, the SEC said in its lawsuit.

Cuban, 50 and a multibillionaire, is a tech entrepreneur who sold his Broadcast.com to Yahoo Inc. in 1999 at the height of the dot-com boom. He bought the Mavericks in 2000 and spent heavily to improve the roster.

He is the best known figure to be accused by the SEC of illegal insider trading since its case against Martha Stewart in 2002 for allegedly using advance knowledge of negative news for a company to sell her shares and avoid $45,673 in losses. The homemaking diva paid about $195,000 and agreed not to serve as the director of a public company for five years under a 2006 settlement with the SEC.

Cuban’s fury at referee calls on the basketball court is legendary, and his verbal outbursts at referees, National Basketball Association officials and sports reporters have raised his profile. He has been fined more than $1 million by the league for a series of episodes dating back to 2000 and suspended from a few games.

“It is fundamentally unfair for someone to use access to nonpublic information to improperly gain an edge on the market,” Scott Friestad, the SEC’s deputy enforcement director, said in a statement. The agency alleged that Cuban acted with “scienter,” a legal term indicating knowledge of wrongdoing.

The SEC is seeking a court judgment against Cuban finding that he violated the antifraud provisions of the federal securities laws, an injunction against future violations, an unspecified civil penalty and restitution of the losses Cuban allegedly avoided.

While the stock offering in question occurred more than four years ago, the SEC didn’t learn about the specifics of the case until early 2007, according to agency attorneys.

Cuban’s lawyer said in a statement that the SEC’s case “has no merit and is a product of gross abuse of prosecutorial discretion.”

“Mr. Cuban intends to contest the allegations and to demonstrate that the (SEC’s) claims are infected by the misconduct of the staff of its enforcement division,” Ralph Ferrara wrote in a note posted on Cuban’s blog.

Story continues:

http://www.msnbc.msn.com/id/27768940/?gt1=43001

What I don't understand is what was Cuban supposed to do with the information he had, take the loss?

In short ... YES. But he could have sold his shares the moment the info was made public, floated his shares into the market over the course of the day, or held onto his shares until his shares had value. The first options would have resulted in a known loss, the second options no doubt would have resulted in less of a loss, the final option ... who knows.

I see your point. Nevertheless, I smell a rat in the matter because Cuban was supposedly setting up a website to track the spending of the seven hundred billion dollars bailout money and how it was being spent and who was getting the money. This upset some of those fogey weasels. Additionally, the company in which he held that stock had made mention that they wanted to sell more stock in the company and that would have diluted the value of his stock. Cuban had voiced his objections to the sell of more stock. Sometime later, the company notified that they were going to sell more stock anyway and that is when Cuban elected to sell. Additionally, Cuban had tried to buy a baseball team a short time back and the other baseball team owners voted against him being an owner. They don't like him, for some reason. I think they are jealous of him and his young style. The present owners are a bunch of fogeys and he does not fit in with them and their old ways. If Cuban was to be convicted of the crime of insider trading, he would have a felony record and probably would not be allowed to own a baseball team or any other team for that matter. How convenient for a way to keep him out. I smell a rat and a setup.

I knew about the baseball thing, but this is the first I've heard about the $700B Tracking Website ... Citation Please ... Nor had I heard the details of the Insider trading thing.

But you are right. The establishment hates Cuban because he's the true "rags to riches and now I'm gonna have some fun" story.

He's living the wet dream of every teenage nerd. In high school he couldn't make the team or get the girl; now he OWNS the team and has more girls than he can shake a stick at.

I found the website listed as http://blogmaverick.com/2008/09/28/the-botox-bailout-qa/.