Mark Cuban Wins Bid to Toss out SEC Claims
bloomberg.com
bloomberg.com
Cuban gets an email and has a private conversation with Mamma.com CEO where get gets told there will be a PIPE.
Apparently PIPEs dilute existing shareholders and drive stock price down.
To protect his assets, Cuban trades based on the information he got. The rest of the market did not have this info.
How is trading based on a personal conversation that gives you early and unique market insight not insider trading?
http://en.wikipedia.org/wiki/Insider_trading#Definition_of_....
It's not merely trading on things other people don't know.
in many jurisdictions, in cases of where a corporate insider "tips" a friend about non-public information likely to have an effect on the company's share price, the duty the corporate insider owes the company is now imputed to the friend and the friend violates a duty to the company if he or she trades on the basis of this information.
(Incidentally, I have been in this situation before, although not with any money to invest in the market ;)