DALLAS, Oct. 16, 2013 /PRNewswire/ -- A Dallas federal jury has cleared Texas billionaire Mark Cuban of insider-trading charges filed by the U.S. Securities and Exchange Commission over his sale of stock in the now-defunct Internet search engine company Mamma.com.
The jury of seven women and two men issued the unanimous verdict on Oct. 16, 2013 following three-and-a-half hours of deliberations. Mr. Cuban, owner of the Dallas Mavericks basketball team, defeated possible civil penalties totaling approximately $2.5 million based on his sale of 600,000 shares of Mamma.com stock in June 2004. The lawsuit originally was dismissed in July 2009 before being revived by the U.S. Court of Appeals for the Fifth Circuit in September 2010.
Dallas attorney Thomas M. Melsheimer of Fish & Richardson served as Mr. Cuban's lead counsel during the three-week trial before Chief Judge Sidney Fitzwater in the U.S. District Court for the Northern District of Texas. Mr. Cuban also was represented by Stephen A. Best of Brown Rudnick in Washington, D.C.; Christopher J. Clark of Latham & Watkins in New York; Lyle Roberts and George Anhang of Cooley LLP in Washington, D.C.; and Scott C. Thomas and Natalie L. Arbaugh from the Dallas office of Fish.
"Justice was finally done today," says Mr. Melsheimer, managing principal of Fish's Dallas office. "Mark did nothing wrong, and the government wasted valuable public resources by prosecuting a case that had no real chance of winning. We're very thankful the jury carefully considered the facts and delivered a just verdict."
The SEC sued Mr. Cuban in 2007, three years after he sold his Mamma.com stock for a total of roughly $7.5 million. Prosecutors unsuccessfully claimed he violated securities laws by selling his shares based solely on an 8-minute phone conversation in which Mamma.com's then-CEO told Mr. Cuban about the company's plans for a specialized private-financing transaction. The SEC alleged the transaction was non-public information despite trial evidence that it was mentioned on an Internet message board months earlier. A former SEC official testified that the transaction was not confidential, noting that other investors caused a 2,000 percent spike in the trading volume on Mamma.com stock only one day before Mr. Cuban sold his shares.
Mr. Cuban's legal team presented evidence that the stock sale was based on a variety of factors in addition to the financing transaction, which Mr. Cuban labeled as a "red flag." Jurors also were told about his concerns over the company's relationship with a convicted felon.
Only two days after selling his stock, Mr. Cuban voluntarily spoke with SEC attorneys by phone for more than an hour about the agency's ongoing investigation of Mamma.com. During the call, Mr. Cuban told the SEC that he had sold his stock, and he followed up by providing multiple emails in an effort to assist the agency in its investigation. SEC prosecutors used those same emails in their unsuccessful attempt to convince the jury to rule against Mr. Cuban.
Fish & Richardson is a global law firm providing strategic counseling and litigation services to innovative clients who seek to protect and maximize the value of their intellectual property (IP). Founded in 1878, Fish's early clients included Alexander Graham Bell, Thomas Edison and the Wright Brothers. The firm has more than 400 attorneys and technology specialists practicing IP strategy and counseling, IP litigation, and commercial litigation. Fish is consistently singled out for its superior technical expertise and great results, and has been named the top patent litigation firm in the country for nine consecutive years, the number one IP firm for America's biggest companies, and an elite top tier law practice. For more information, visit www.fr.com or follow @fishrichardson on Twitter.
For more information on the unanimous verdict in favor of Mr. Cuban, please contact Bruce Vincent at 214-728-6747 or firstname.lastname@example.org.
SOURCE Fish & Richardson