Jury selection begins in insider trading trial of Mark Cuban

Jana J. Pruet
Mark Cuban (L), the billionaire owner of the NBA's Dallas Mavericks, speaks with the media while his attorney Stephen Best (R) looks on prior to entering U.S District Court for the opening day of his insider trading trial in Dallas, Texas September 30, 2013. REUTERS/Tim Sharp

By Jana J. Pruet

DALLAS (Reuters) - Jury selection began on Monday in the civil trial of Mark Cuban, the billionaire owner of the Dallas Mavericks NBA basketball team, who faces charges of insider trading in shares of a little-known Internet search company nearly a decade ago.

Cuban, 55, is accused of selling his 600,000 shares of the former Mamma.com Inc on June 28 and 29, 2004, soon after learning from Chief Executive Guy Fauré that the company was planning an equity offering that could dilute his 6.3 percent stake.

The U.S. Securities and Exchange Commission said Cuban avoided a roughly $750,000 loss after the Montreal-based company announced the offering, causing its stock price to drop 9.3 percent on June 30.

Cuban has maintained that he did nothing wrong, and that any information he may have received was neither confidential nor material enough to trigger an insider trading violation.

The jury trial before U.S. District Judge Sidney Fitzwater in Dallas is expected to last eight to 10 days, court papers show. The trial could stretch into mid-October, with breaks.

Jury selection, which started shortly after 9:30 a.m. local time (CDT) on Monday, is expected to conclude in time for opening statements to be made later in the day.

Cuban arrived at court wearing a navy blue suit and tie and telling reporters, "I won't be bullied," according to video by CNBC.

While the SEC has recently become more aggressive in pursuing higher-profile defendants, Monday's trial comes in a case that predates that push, having begun in November 2008.

Forbes magazine estimates Cuban's net worth at $2.5 billion.

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

Fitzwater dismissed the SEC lawsuit in 2009, but a federal appeals court revived the case the following year.

Cuban is expected to testify, as is Fauré. Under procedures set by the judge, it is possible that Cuban may testify twice, once during the SEC's presentation of its case and later when the defense takes its turn.

The charismatic Cuban is one of the stars of the ABC television show, "Shark Tank,", and has appeared on other TV shows such as ABC's "Dancing with the Stars" and HBO's "Real Time with Bill Maher." He is known for arguing with referees during Mavericks games.

He previously accused SEC enforcement staff of targeting him because of his fame and because they disliked his politics, but an SEC watchdog in 2011 cleared the regulator of misconduct.

The case is SEC v. Cuban, U.S. District Court, Northern District of Texas, No. 08-02050.

(Additional reporting by Jonathan Stempel; Editing by Karen Brooks and Carol Bishopric)