Billionaire Mark Cuban expected to testify Thursday in SEC trial

Thu Oct 3, 2013 7:59am EDT

* Billionaire accused of insider trading in Mamma.com

* Cuban did nothing wrong, sold stake for several reasons, lawyer says

By Jana J. Pruet

DALLAS, Texas, Oct 3 (Reuters) - Mark Cuban, the billionaire owner of the Dallas Mavericks basketball team, is expected to take the stand Thursday in his insider trading civil trial, attorneys for both sides said in court on Wednesday.

Cuban, 55, has maintained he did nothing wrong when he sold his 6.3 percent stake in Mamma.com Inc more than nine years ago.

But lawyers for the U.S. Securities and Exchange Commission say Cuban, estimated by Forbes magazine to have a net worth of about $2.5 billion, knew what he was doing when he unloaded his 600,000 shares in late June 2004 and avoided a $750,000 loss.

Cuban rose to prominence ahead of the dot-com crash by selling his company Broadcast.com in 1999 to Yahoo Inc for $5.7 billion.

Cuban is accused of selling his Mamma.com shares soon after learning from Chief Executive Guy Fauré that the Montreal-based company was planning an equity offering that could dilute his stake.

Cuban's lawyers say the offering was already public information and Mamma.com had waited to tell Cuban about it, because they knew he would not like it.

Through the civil case, the SEC is seeking to recoup ill-gotten gains, impose fines and obtain a permanent injunction to bar Cuban from similar alleged misconduct.

The jury heard videotaped testimony on Wednesday from Fauré, who government lawyers say gave Cuban the information in time for him to save his money.

SEC lawyer Jan Folena told the court she planned to call Cuban to the stand as Thursday's first witness.

The government shutdown that began on Tuesday is not expected to affect the trial before U.S. District Judge Sidney Fitzwater in Dallas. The trial is expected to last eight to 10 days, possibly stretching into mid-October.

Cuban, a star of the ABC television show "Shark Tank," has appeared on ABC's "Dancing with the Stars" and on HBO's "Real Time with Bill Maher."

The SEC brought the case against Cuban in November 2008. Fitzwater dismissed the SEC lawsuit in 2009, but a federal appeals court revived the case the following year.

The case is SEC v. Cuban, U.S. District Court, Northern District of Texas, No. 08-02050. (Editing by Karen Brooks and Lisa Shumaker)