By Jana J. Pruet
DALLAS, Oct 16 (Reuters) - Flamboyant billionaire Mark Cubanon Wednesday was cleared by a Texas jury of using a private tipto avoid a big loss on his 2004 sale of Internet company shares,in a stinging rebuke for the U.S. government which had accusedhim of insider trading.
Cuban, 55, the owner of the Dallas Mavericks basketballteam, lashed out at the U.S. government and lead prosecutor JanFolena after the verdict, saying the government had tried tobully him.
"Jan Folena, who represents the United States of America,stood up there and lied," an angry Cuban told reporters afterthe nine-member jury read its decision.
"I'm the luckiest guy in the world and I'm glad I couldstand up to them," he said.
Estimated by Forbes magazine to have a net worth of $2.5billion, Cuban was accused by the U.S. Securities and ExchangeCommission of trading on non-public information when he sold his600,000 shares in Internet search company Mamma.com - worth $7.9million - and avoided a $750,000 loss.
The SEC brought the civil lawsuit against Cuban in November2008. A judge dismissed the suit in 2009 but an appeals courtrevived the case the following year.
Cuban refused to settle the case and went to trial, eventhough he said on Wednesday that he had spent more on fees forlawyers than the possible fines for admitting to insidertrading. He could have faced up to $2 million in fines, hislawyers said.
"It's personal. You take all these years of my life, it'spersonal," Cuban said.
SEC lawyers rushed from the court after the verdict withoutmaking extensive comments. The agency later issued a shortstatement saying it was disappointed by the outcome.
"We respect the jury's decision," SEC spokesman John Nestersaid in Washington.
"While the verdict in this particular case is not the one wesought, it will not deter us from bringing and trying caseswhere we believe defendants have violated the federal securitieslaws."
The decision in the Cuban case was a blow to the SEC, whichwas still riding high after it won a blockbuster case againstformer Goldman Sachs vice president Fabrice Tourre thissummer.
The SEC argued that Tourre had committed fraud in a failedmortgage securities deal during the 2008-2009 financial crisis.In August, a jury agreed and found Tourre liable on six of sevencounts.
At the two-week trial of Cuban, prosecutors argued that he sold his stake soon after learning from Mamma.com ChiefExecutive Guy Faure that the Montreal-based company was planninga private placement that would dilute his holdings in thecompany.
Mamma.com shares dropped 9.3 percent on the morning afterthe offering was announced. By that time, Cuban had already soldhis shares.
Cuban, who rose to prominence before the dot-com crash byselling his company, Broadcast.com, in 1999 to Yahoo Inc for $5.7 billion, said he did nothing wrong when hesold his 6.3 percent stake in Mamma.com.
Cuban testified during the two-week trial that there weremany reasons for selling his shares, including the privateplacement and Mamma.com's possible association with a knownstock swindler.
His lawyers suggested that word of the private placement hadleaked into the market because potential investors were beingcontacted to participate in the private placement.
"This case should have never been brought to trial," Cuban's defense lawyer Stephen Best said after the verdict onWednesday in federal court in Dallas.
In addition to his ownership of a professional basketballteam, Cuban is one of the stars of the popular television show"Shark Tank" which features financiers analyzing and decidingwhether to invest in new products presented by entrepreneurs.
"I know I'm a target," Cuban said of his high profile. "Irecognize that when I do things people pay attention."
- Company Legal & Law Matters
- Mark Cuban
- insider trading