Billionaire and Dallas Mavericks owner Mark Cuban testified Monday that he generally doesn't agree to treat as confidential any information that people tell him about investments.
Cuban was testifying at his insider-trading trial related to Canadian internet company Mamma.com, whose stock he sold nine years ago after learning it was planning a share issue that would dilute his holdings.
'I just don't do oral confidentiality agreements' - Mark Cuban
Prosecutors claim that he broke a vow of secrecy after talking to company executives in 2004. The government says he avoided $750,000 US in losses by selling his stock on insider information.
Cuban’s lawyer is arguing the Shark Tank star had several concerns about Mamma.com before selling the stock, including the possibility they were “dealing with crooks.”
Cuban pointed to connections between Mamma.com Inc. and a convicted stock swindler, Irving Kott. Cuban's lawyer, Thomas Melsheimer, offered emails indicating that he had spoken with FBI and SEC officials about Kott.
Melsheimer said didn't sell his shares simply because he learned about a private stock offering that would lower the value of his shares.
Cuban testified all day Thursday and returned to the stand Monday morning. The trial is expected to run through next week.
The Securities and Exchange Commission is suing Cuban, saying that he used his status as the biggest shareholder in Mamma.com to learn about the stock sale before other investors, then sold his shares before the company publicly announced the news
Cuban said he never agreed to keep the information he received confidential or to refrain from trading. The CEO, Guy Faure, testified that Cuban accepted a vow of confidentiality, which the company understood to mean that Cuban wouldn't sell his shares immediately.
Cuban said he couldn't recall details of the conversation, but that he wouldn't have agreed not to act on what the CEO told him.
"I didn't feel I was under any limitations whatsoever," Cuban testified. "So it makes no sense ... that I can't sell my stock."
Cuban added, "I just don't do oral confidentiality agreements," partly because people can later dispute what was agreed upon.