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The Securities and Exchange Commission filed insider-trading charges against Mark Cuban, the outspoken owner of the Dallas Mavericks basketball team, over his sale of shares in Internet company Mamma.com after he learned it was raising money through a private financing.

                                                           Mark Cuban

The SEC alleges Mr. Cuban sold his entire 6% ownership stake on June 28, 2004, immediately after learning that Mamma.com was raising money through a public investment in private entity, or PIPE. The next day, after the markets closed, the company announced the PIPE financing. When the markets opened the morning of June 30, shares of the company dropped by 9%. By selling his stake, Mr. Cuban avoided more than $750,000 in losses, the SEC alleges. (Read the full text of the complaint.)

In a PIPE, shares are issued at a discount. When a PIPE is announced, it's often followed by a drop in the stock price as shareholders anticipate their stake will be diluted. Investment advisers working for the company often solicit interest from potential investors. Investors usually have to sign confidentiality agreements stating that they won't trade on the information. However, Mr. Cuban's lawyers deny that he was told the information was confidential.