Mark Cuban, the owner of the Dallas Mavericks basketball team, also owned stock in Mamma.com. At the request of the company’s Board of Directors, the CEO called Cuban to tell him that the company was about to sell stock, which Cuban could buy if he wished. But before revealing this information, the CEO told Cuban that he had to keep the information confidential. After learning about the sale, Cuban responded, “Well, now I'm screwed. I can't sell.” Afterward, he spoke with the investment banker handling the deal to learn more about the company’s financials. He then sold his entire holding of Momma.com shares before the stock sale was announced. Has Cuban violated Rule 10b-5?
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