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Cuban Contests SEC Charges

Mark Cuban
Mark Cuban

By Shelley Kofler, KERA News

Dallas, TX – An attorney for Dallas Mavericks owner Mark Cuban says his client may have been targeted for prosecution by the federal Securities and Exchange Commission, the SEC. The attorney's claim follows the SEC's claim on Monday, charging Cuban with insider trading.

The SEC charges stem from Cuban selling his stock in an Internet company,

The SEC claims Cuban sold some 600,000 shares in June of 2004, after a phone conversation with the company's CEO. A day after the sale, the company announced a new private offering and the stock price dropped. The SEC claims Cuban saved more than $750,000 because he had inside information.

Chris Clark, a lawyer of a New York firm retained by Cuban, says Cuban will contest the allegation, and that prosecutorial misconduct may be involved.

Clark: We have reason to believe that enforcement process was infected by a couple different kinds of misconduct, including overtly expressed bias at least by some of the SEC enforcement staff against Mr. Cuban.

The SEC's Deputy Director of Enforcement says that if Cuban is convicted of the charges, the fine against him could be in the range of $3 million.

Send E-mail to Shelley Kofler