Federal court says the SEC didn't prove that new media entrepreneur Mark Cuban promised not to trade based on information he was given.
A U.S. District judge in Dallas has thrown out the insider-trading lawsuit filed against Mark Cuban, the Broadcast.com co-founder and owner of the HDNet channel.
Cuban, who also owns the Dallas Mavericks of the National Basketball Association, may not be in the clear just yet, according to a report in Bloomberg. While U.S. District Judge Sidney Fitzwater on Friday granted Cuban's request to dismiss the suit, filed in November, he will allow the U.S. Securities and Exchange Commission to refile charges if it meets a certain criteria.
One of the biggest celebrities to come out of the technology sector, Cuban is accused of promising to keep confidential a private stock sale after being told of the sale by the CEO of Mamma.com, an Internet search firm in which he held a large stake. On the same day in 2004, when Cuban learned of the sale, he sold his shares before news of the stock sale became public and avoided a $750,000 loss.
Cuban has maintained that he did not promise to keep the information confidential and sold his shares because Mamma.com's stock sale was at a lower price and would have diluted his holding. The judge said in his order that the SEC didn't accuse Cuban of promising not to trade, and that meant he couldn't be held liable for insider trading.
The SEC can refile, but it must allege that Cuban made the promise not to trade on the information.
On Friday, Cuban posted a note to Twitter: "It's been a great day so far, and it's only going to get better."