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Judge Rules Against Mark Cuban's Defense in SEC Insider Trading Lawsuit

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Mark Cuban doesn't like to hold things back. Last year, he openly criticized QE2. He picked on Facebook for becoming too Googlized (NASDAQ: GOOG). And he thinks we're in a great startup environment (who can blame him?).

Unfortunately for Cuban, today's news might give him reason to pause. The Dallas Mavericks owner endured a legal setback this week when a federal judge threw out one of his defenses in an SEC insider trading lawsuit, Reuters reports.

Cuban claimed that the SEC had investigated him improperly, which, according to Reuters, would have allowed him to argue that the regulator had “unclean hands.” The SEC asked U.S. District Judge Sidney Fitzwater to block Cuban from using that defense in court. The judge agreed, saying that Cuban failed to show proof to back up his claim.

Cuban's troubles began three years ago when the SEC first sued him, alleging that he sold his stake in Mamma.com after acquiring insider information about the company's plans for a stock offering. By selling his 6.3 stake in the website, Cuban reportedly avoided more than $750,000 in potential losses.

Regardless of today's setback, Lyle Roberts, one of Cuban's lawyers, remains optimistic.

"We have a very long list of defenses, the key being that it didn't happen," he told Reuters. "Mr. Cuban did not enter into any confidentiality agreement or violate any such agreement."

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Posted-In: Dallas Mavericks Facebook Google Lyle Roberts Mark CubanNews Legal Media Best of Benzinga

 

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