Self made American Billionaire Mark Cuban has been found guilty by the Securities and Exchange Commission (SEC) of insider trading as he sold 600,000 shares of Mamma.com, an internet search company, to avoid a loss of $750,000.
Cuban, who made his fortune by selling Broadcast.com to Yahoo in 1999 for $5.9 billion in Yahoo stocks (ed : they're worth $10.90 at the time of writing) faces a fine of $1.5 million after the SEC has accused him of cashing in after he sold shares of Mamma.com one day before the company went public back in June 2004. Mamma.com's share price fell by more than 9 percent the following day.
According to Bizjournals, Cuban's broker sold all his shares within hours of learning that the company would sell shares at a discount.
The serial investor, who is rumoured to be worth $2.9 billion, subsequently said that he sold his stake in Mamma.com because the company was conducting a private investment in public equity (PIPE) which would cause existing shares to be diluted.
Mamma.com subsequently morphed into Copernic, a desktop search solution, after acquiring the company back in 2002.