The government's insider-trading case against billionaire and Dallas Mavericks owner Mark Cuban is heading toward the final buzzer.
After six days of testimony, closing arguments are expected Tuesday afternoon in federal court in Dallas.
The Securities and Exchange Commission sued Cuban, claiming that he avoided $750,000 in losses by selling his 6 percent stake in a Canadian search engine company called Mamma.com Inc. after the CEO told him about a planned stock offering. The sale would have cut the value of his shares. The CEO, Guy Faure, said that Cuban agreed to confidentiality on a phone call in 2004, then, when told of the stock deal, angrily said, "Now I'm screwed. I can't sell." Cuban disputes Faure's account.
The verdict could come down to whether jurors believe Cuban or the company's CEO, a Canadian citizen who declined to come to Dallas. His testimony had been recorded on video and shown to the jury. Jurors also heard from bankers, stockbrokers and professors.
The stakes are high for the SEC, which doesn't take many insider-trading cases to trial and would be stung by a loss to a high-profile defendant. For Cuban, the trial would seem like little more than an annoyance. He is not facing criminal charges, and even if he loses the civil lawsuit, he's unlikely to pay much more than $2 million in penalties. That's about one-tenth of 1 percent of his wealth, if Forbes magazine's $2.5 billion estimate is accurate. Cuban testified that he fought back rather than settle with the SEC because he did nothing wrong and refused to be bullied.
Karen Bitar, a veteran securities lawyer in New York, said the fact that the SEC's key witness, Faure, testified by video was likely to help Cuban.
Faure could not be compelled to come to the U.S. to testify in a civil trial, although both Cuban and the SEC said they asked him to do so.
"I imagine there will be people on the jury who will wonder why wouldn't he come and raise his hand under oath and answer questions from both sides," she said. "He is a critical witness, yet he refused to show up."
Philip Hilder, a former federal prosecutor and now a white-collar criminal defense attorney in Houston, said juries like to see the demeanor of witnesses. That's harder when they testify by video.
"You can't see if they fidget, you can't see eye contact," Hilder said. "Video testimony is never as compelling as live testimony."
But Cuban's testimony may have helped his case. Known for his temper — the 55-year-old has racked up at least $1.5 million in league fines for criticizing NBA referees — he has been on his best behavior in court, never losing his cool under sometimes withering questioning by lead SEC lawyer Jan Folena.
John Teakell, a former U.S. prosecutor who now does defense work in Dallas, said Cuban's demeanor could make him sympathetic to jurors, especially if they also believe that the government spent too much time and money chasing the case against him.
"If he has a blow-up reputation and he didn't blow up on the stand, they may like him even more," Teakell said.
The SEC tried to use Cuban emails to undermine his defense.
Cuban testified repeatedly that there were several reasons why he sold his $7.9 million stake in Mamma.com, including concern about ties between company officials and a convicted stock swindler. But in emails to friends and reporters around the time of the sale, he never mentioned those other concerns. The only explanation he gave was that he didn't like the company's planned stock offering — the one that Faure told him about just a few hours before Cuban ordered his stockbroker to start selling all his shares.