The U.S. Securities and Exchange Commission yesterday charged Mark Cuban, former Mt. Lebanon resident and one of the richest people in the world, with insider trading, saying he used confidential information about an Internet company's stock offering to avoid losses of more than $750,000.

In a complaint filed in federal court in Dallas, the SEC said that in June 2004, Mr. Cuban sold 600,000 shares of search engine business Mamma.com -- all of his holdings in the business -- hours after he learned through confidential discussions that the company's public stock sale would be below market price.

Mark Cuban

Mr. Cuban, 50, owner of the Dallas Mavericks, was at the basketball team's home, the American Airlines Center, when he received an e-mail from Mamma.com's chief executive asking him to call as soon as possible, the SEC said. During a phone call that lasted almost nine minutes, according to the complaint, he promised to keep the information about the stock sale private but then "became very upset and angry" and said, "Well, now I'm screwed. I can't sell."

He later called his broker and told him to sell all his holdings in the company, the complaint said. At the time of the sale Mr. Cuban owned a 6.3 percent stake, which made him the company's largest-known shareholder.

"Sell what you can tonight and just get me out the next day," he said, according to the complaint.

Mr. Cuban liquidated his position on June 28 and June 29, 2004, before Mamma.com announced its new, private offering, the complaint says. On June 30, trading in Mamma.com opened at $11.89, down 9.3 percent from the June 29 closing price of $13.105. The stock price on June 30, closed at $11.99, down $1.115, or 8.5 percent, from the June 29 closing price. Mamma.com, based in Montreal, is now called Copernic Inc.

"Mamma.com entrusted Mr. Cuban with nonpublic information after he promised to keep the information confidential," said Scott Friestad, deputy director of the SEC's Division of Enforcement. "Less than four hours later, Mr. Cuban betrayed that trust by placing an order to sell all of his shares.

"It is fundamentally unfair for someone to use access to nonpublic information to improperly gain an edge on the market."

In a statement posted yesterday afternoon on Mr. Cuban's Web site, his attorney, Ralph Ferrara of Washington, D.C., said the complaint "has no merit and is a product of gross abuse of prosecutorial discretion."

Mr. Cuban plans to contest the charges "and to demonstrate that the Commission's claims are infected by the misconduct of the staff of its Enforcement Division," Mr. Ferrara's statement said.

"I am disappointed that the Commission chose to bring this case based upon its Enforcement staff's win-at-any-cost ambitions," Mr. Cuban said on the blog, his only comment on the matter. "The staff's process was result-oriented, facts be damned. The government's claims are false and they will be proven to be so. ... "I wish I could say more, but I will have to leave it to this, and let the judicial process do its job."

The SEC complaint calls for Mr. Cuban to pay an undisclosed financial penalty, to repay the losses he allegedly avoided, and seeks an injunction against future violations.

The billionaire basketball team owner who went to Mt. Lebanon High School made his fortune through the sale of Broadcast.com to Yahoo for nearly $5 billion in 1999. Forbes magazine pegged his net worth at $2.3 billion as of March 2007.

He acquired the Mavericks in 2000 and also owns Landmark Theaters and the HDNet cable TV channel. He is among the bidders for the Chicago Cubs baseball team and Wrigley Field.

Mr. Cuban also runs a Web site called Sharesleuth.com, which bills itself as providing "independent Web-based reporting aimed at exposing securities fraud and corporate chicanery."