DALLAS (AP) — A government lawyer says the drive to win that helps Mark Cuban succeed in business led the billionaire basketball owner to cheat by using insider information to sell stock in an Internet company.
"Mark Cuban violated the law, and he knew better," Securities and Exchange Commission lawyer Jan Folena said Tuesday during opening statements to jurors at Cuban's insider-trading trial.
Cuban's lawyers are expected to give his side of the case later in the day.
It's a civil lawsuit; Cuban is not charged with a crime. The SEC wants Cuban to give up $750,000 he saved from selling his shares, plus pay a penalty that could be two or three times that amount.
The SEC alleges that Cuban promised not to trade on information he learned in 2004 from the CEO of Mamma.com, a Canadian search-engine company of which Cuban owned 6 percent of all shares. The company planned a stock offering that would reduce the value of existing shares. Cuban broke his vow and sold, the agency says.
Folena said Cuban should have waited to sell his shares until the company publicly announced the stock offering so that he wouldn't take advantage of other investors. But he couldn't do that, she said, "because in his mind, that's losing, and Mark Cuban is a winner."
The case could get into the weeds of legal theories about insider trading. Cuban's lawyers say he did not break the law. Folena used graphics and an easel to explain dilution — the way the stock offering would hurt existing shareholders such as Cuban. Two jurors in the back row nodded.
The trial is expected to last three weeks