"The Securities and Exchange Commission filed insider trading charges against Mark Cuban, the outspoken owner of the Dallas Mavericks, for allegedly dumping shares in Mamma.com upon learning it was raising money in a private offering.
The SEC alleges in a civil action that Mr. Cuban sold his entire 6% ownership stake on June 28, 2004, after learning that Mamma.com was raising money through a private investment in a public entity, or PIPE. The next day, on June 29, the company announced the PIPE financing and shares of the company dropped by more than 10%. By selling his stake, the SEC alleges, Mr. Cuban avoided more than $750,000 in losses.
In a PIPE transaction new shares are issued at a discount to the current trading price. An announcement of a PIPE transaction is often followed by a drop in the stock price as shareholders anticipate their stake will be diluted." WSJ
As I was listening to the WSJ at my job, I overheard beloved Mavericks owner mark Cuban may be in a little trouble. I don't know a lot about inside trading, but I think if he get found guilty Cuban will be in for some jail time. I normally root for owners and rich people to get in trouble but not Cuban. Although I don't like his players he runs a team how a fan would. more to come as story progresses.
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