U.S. securities regulators said on Wednesday it will appeal a court decision dismissing its insider trading case against Dallas Mavericks basketball team owner Mark Cuban.
Cuban, one of the 400 richest Americans, had faced civil charges earlier this year that he acted on nonpublic information when he sold his stake in Internet search engine company Mamma.com to avoid more than $750,000 in losses.
The case was thrown out by a U.S. district court judge in July who said Cuban was not legally an insider.
The U.S. Securities and Exchange Commission said it will appeal the dismissal at the U.S. Court of Appeals for the Fifth Circuit.
As we alleged in our complaint, Mark Cuban violated the antifraud provisions of the federal securities laws by engaging in illegal insider trading in the securities of Mamma.com, said John Nester, a spokesman for the U.S. Securities and Exchange Commission. We believe the District Court erred in dismissing our complaint.
But Cuban's lawyers said the SEC's case had already been dismissed by the judge based on the SEC's version of the facts and in the process invalidated one of the SEC's insider trading rules.
Not only did the SEC lose on the law, but, as the Mr. Cuban's recent sanctions motion demonstrates, the SEC could never have won on the actual facts, said Stephen Best, an attorney at Dewey & LeBoeuf.
This appeal is nothing more than the SEC's desperate attempt to shock a heartbeat into a case that was dead on arrival.
(Reporting by Yinka Adegoke and Robert MacMillan; Editing by Richard Chang)