DUMB ASS

SEC charges Mark Cuban with Insider Trading - WSJ
WSJ reports the SEC filed insider-trading charges against Mark Cuban for allegedly dumping shares in Mamma.com upon learning it was raising money in a private offering. The SEC alleges in a civil action that Cuban sold his entire 6% ownership stake on June 28, 2004, after learning that Mamma.com was raising money through a private investment in a public entity, or PIPE. The next day, on June 29, the company announced the PIPE financing and shares of the company dropped by more than 10%. By selling his stake, the SEC alleges, Cuban avoided more than $750,000 in losses. In a PIPE transaction, new shares are issued at a discount to the current trading price. An announcement of a PIPE transaction is often followed by a drop in the stock price as shareholders anticipate their stake will be diluted.