Securities and Exchange Commission Lawyer Jan Folena said billionaire Mark Cuban engaged in insider trading nine years ago. Folena said Cuban cheated when he unloaded the 6.3% stake he held in Internet search company Mamma.com Inc in June 2004. According to Folena, Cuban sold 600,000 shares and avoided a loss of USD 750,000 when he learned from Chief Executive Guy Fauré that the Internet search firm was going to undertake an equity offering that could cause him to lose money.
In her opening statement to a jury of ten people, Folena said every investor has the right to trade in a fair market. "He cheated and, above all investors, he knew better," Folena added.
One of Cuban's lawyers, Thomas Melsheimer, had countered the charge. He said the offering was already made public and that the company waited before informing Cuban because they knew that he would not like the information. Melsheimer also told jurors that Cuban was concerned about the Montreal-based firm's links to a stock swindler. "He didn't deceive Mamma.com, he didn't deceive anyone. He no longer trusted the company. He no longer wanted to be involved with this company," Melsheimer said.
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