The Securities and Exchange Commission filed insider trading charges against Mark Cuban, the outspoken owner of the Dallas Mavericks, for allegedly dumping shares in Mamma.com upon learning it was raising money in a private offering (full text of complaint).

The SEC alleges in a civil action that Mr. 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, Mr. 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.

Obviously, Cuban saving $750K isn't exactly a huge sum for a guy worth more than a billion, but it's more than enough to get you in trouble.

This would of course be a bigger deal if Cuban were still in the running for the Cubs, which he isn't. But still, this could have dire consequences on what happens to the Mavericks. If Cuban has to go to prison for say doing the same thing Stewart did, you can bet David Stern will do everything in his power to strip ownership from Cuban. Although Stern may do that even if Cuban just ends up being fined, which seems to be the only thing that's going to happen.

Anyway, there's still a long way to go in this story, but one thing is for sure, it's never, ever good to have the SEC gunning for you. It rarely ends well.

SEC sharges Mark Cuban with insider trading [Wall Street Journal]