November 21, 2008
By BRENDAN M. CASE
The Dallas Morning News
Securities lawyers are keenly watching the U.S. Securities and Exchange Commission's case against Dallas billionaire Mark Cuban, who already has laid out at least part of his defense strategy.
In a civil lawsuit this week, the SEC said Mr. Cuban sold shares in Internet firm Mamma.com in 2004 after he learned confidential information from the company's chief executive.
Mr. Cuban says he never agreed to keep the information confidential, arguing that the lack of such an agreement means he would not be subject to insider trading rules. . .
Still, aside from clever legal arguments, many people might consider Mr. Cuban's actions to be unethical even if they weren't necessarily illegal, said Alan Bromberg, a law professor at Southern Methodist University.
"It's not good corporate relations to take advantage of information that you know is not supposed to be for personal use," he said. "I think most people would consider that an ethical violation."
But Christopher Clark, a lawyer for Mr. Cuban, said his client also was contacted by a broker about Mamma.com's stock offering hours after he spoke with the company's CEO.
Mr. Cuban's impression was that other investors also were being told about the offering, Mr. Clark said.
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