Mark Cuban facing charges from the SEC

The Securities and Exchange Commission filed insider-trading charges against Mark Cuban. The charges stem from when Cuban sold his entire 6% ownership stake immediately after learning that Mamma.com was raising money through a public investment in private entity, or PIPE. (FYI: In a PIPE, shares are issued at a discount. Which shafts the investor who already owns stock in the company, because once it is officially announced the stocks take a dive due to the dilution of the shares and voting rights of pre-PIPE investors.) When the markets opened the morning of June 30, 2004 shares of the company dropped by 9%.

By selling his stake, Mr. Cuban avoided more than $750,000 in losses, the SEC alleges. price. The complaint makes clear that Cuban was furious about the planned sale and from the sound of it his legendary anger got the best of him. Which led him to a rash decision and may result in serious civil fines. At this time, there is no word if the Justice Department will seek criminal charges .

This is terrible news for Cub fans, as it could be the final nail in the coffin for his chances at buying the Cubs. Tribune Co. CEO Sam Zell is saying he'd like to have the Cubs sold by year's end. Couple that with his new legal issues, and it puts a huge obstacle for his chances to pull together the $1.3 Billion needed to buy the Cubs. Personally I think he has the ability of being a great owner. Not just for the Cubs and city of Chicago, but for MLB as well.

For the full story, check out Wall Street Journal