In 1999, he sold Broadcast.com, a multimedia web service he founded, to Yahoo! Inc. for $4.7 billion.
Cuban was the biggest stockholder of Montreal-based Mamma.com, holding 6.3 percent of its shares, and had offered to use his fame to promote the company and assist it with possible acquisitions, according to a Sept. 25 pretrial filing by Fitzwater summarizing each side’s claims.
The SEC claims that in April 2004, one month after he bought 600,000 shares of Mamma.com stock, Cuban told then-Chief Executive Officer Guy Faure, “Obviously what you tell me is confidential,” according to Fitzwater.
Phone Call
In a June 2004 phone conversation, Faure allegedly told Cuban he had confidential information for him and asked if he was interested in participating in a new offering that diluted the company’s shares by 8.5 percent, the judge wrote. Near the end of the conversation, Cuban allegedly told Faure, “Now I’m screwed. I can’t sell.”
That day, one minute after ending a phone conversation with a sales agent for the share offer, Cuban called his broker and told him to sell all his shares, according to the summary.
The next day, before the placement was made public at the market close, Cuban’s broker sold all the shares enabling Cuban to avoid a $750,000 loss, according to the SEC.
Mamma.com fell 8.5 percent on June 30, 2004, the first trading day after the private placement was announced, and 15 percent the day after the investor’s sales were disclosed in a regulatory filing made public on July 2, according to data compiled by Bloomberg.
The company is now known as Copernic Inc.
Proof Denied