Securities and Exchange Commission v. Cuban
U.S. District Court, Northern District of Texas
634 F.Supp.2d 713 (2009)
Relevant factsFree
Cuban (defendant), Mamma.com's largest shareholder, agreed to keep confidential the CEO's disclosure of a planned PIPE stock offering, then sold his shares before the offering was announced, avoiding over $750,000 in losses; the SEC (plaintiff) sued under the misappropriation theory, and Cuban moved to dismiss, arguing the SEC failed to allege he owed any duty not to use the information for his own benefit, as opposed to merely agreeing to keep it confidential.
IssueFree
Whether misappropriation-theory liability may be based on an agreement to keep information confidential when that agreement does not also impose a duty not to use the information for personal gain.