For one side or the other, it looks like a Shark is going to take the stand in his own insider trading trial this fall. Both Shark Tank judge Mark Cuban’s lawyers and attorneys for the U.S. Securities and Exchange Commission late last week named the entrepreneurial reality series judge as a witness in the upcoming trial. The trial is set to start on September 30 in Texas, 10 days after Season 5 of Shark Tank debuts. Cuban was one of six “will call” individuals named by the SEC (read it here). After naming seven certain witnesses, the Dallas Mavericks and AXS TV chairman’s lawyers said “Mr. Cuban may call the following witnesses if the need arises” including himself in the list of eight (read it here). The federal court trial emerges out of the federal government’s contention that on June 29, 2004 Cuban avoided more than $750,000 in losses by selling 600,000 shares in search engine Mamma.com Inc. The sale allegedly came the day after the CEO of the Canadian-based company confidentially told Cuban that a planned public equity offering on June 29 would dramatically dilute the worth of his stock. Cuban made the sale before the announcement and the nearly 10% drop in the company’s share price. The billionaire denied the charges, saying it was all above board and public.
And it looked like the case was over when U.S. District Judge Sidney Fitzwater dismissed the SEC suit in July 2009. However, the civil fraud case was brought back to life in September 2010 after a successful appeal by the government. Cuban failed at an attempt to get the case dismissed again this March as Judge Fitzwater ruled “the court concludes that the SEC is entitled to present its case to a jury.” The case is now in the jury selection process with the parties battling over Cuban’s lawyer’s proposal of a questionnaire for potential jurors that the government has argued in filings is intended to id those who may be leaning towards dismissing the suit. As well as his TV gig, his HDTV channel and his basketball team, Cuban also has investments in Magnolia Pictures and Landmark Theatres among other holdings. He is represented by Thomas Melsheimer of the Dallas office of Fish & Richardson PC as well as George Anhang and Lyle Roberts of Colley LLP and Stephen Best of DC firm Brown Rundnick LLP.
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