Jurors said the government failed to prove five key elements of its insider-trading lawsuit against billionaire Mark Cuban. They agreed with the government only on two minor, technical points.
The verdict Wednesday in U.S. district court in Dallas marked an overwhelming defeat for the Securities and Exchange Commission, which sued Cuban in 2008. The SEC said Cuban avoided $750,000 in losses by selling his stock in a search engine company called Mamma.com based on confidential information about a stock deal that had not been publicly announced. The deal lowered the value of outstanding shares, including Cuban's.
The jury was asked to decide whether the SEC proved its case on seven points. A no-proof finding on any of them meant defeat for the SEC. The claims:
- That Cuban got confidential information about the stock deal. Jury: NO PROOF.
- Cuban agreed to keep the information confidential and not trade on it. Jury: NO PROOF.
- Cuban traded on the information when he sold his Mamma.com shares. Jury: NO PROOF.
- Cuban failed to tell the company that he planned to trade on nonpublic information. Jury: NO PROOF.
- Cuban acted knowingly or recklessly. Jury: NO PROOF.
- Cuban's conduct was in connection with a sale of securities. Jury: PROVEN.
- Cuban used a tool of interstate commerce to sell securities. Jury: PROVEN.