The U.S. Securities and Exchange Commission has filed insider trading charges against Dallas entrepreneur Mark Cuban, after he allegedly sold 600,000 shares in an Internet search engine based upon insider knowledge.

Cuban avoided losses of more than US$750,000 by selling stock in search engine Mamma.com before a round of private financing in the company was publicly announced, the SEC said.

Mamma.com invited Cuban, owner of the National Basketball Association's Dallas Mavericks and chairman of high-definition television network HDNet, to participate in a private stock offering in June 2004, the SEC said. Cuban, who already was the company's largest investor, was offered the stock at a discount to the prevailing market price, the SEC said.

Mamma.com used a private investment in public entity or PIPE to raise additional money. Cuban was reportedly angry about the PIPE because it would dilute his stake in the company, and he declined to buy additional shares through the PIPE, although he was given confidential information about it, according to the SEC complaint.

Within hours of receiving the information about the PIPE financing, Cuban called his broker to sell his entire 6.3 percent stake in the company, the SEC said. Cuban unloaded all his shares in the two days before the PIPE financing was announced. After the additional financing was announced, Mamma.com's stock price fell more than 9 percent to $11.89 a share, the SEC said.

"Insider trading cases are a high priority for the commission," Linda Chatman Thomsen, director of the SEC's Division of Enforcement, said in a statement. "This case demonstrates yet again that the Commission will aggressively pursue illegal insider trading whenever it occurs."

Cuban posted a comment on his blog. “I am disappointed that the commission chose to bring this case based upon its enforcement staff’s win-at-any-cost ambitions," he said. "The staff’s process was result-oriented, facts be damned. The government’s claims are false and they will be proven to be so.”

The case has been pending for more than two years and is the result of "gross abuse of prosecutorial discretion," Cuban said

"I wish I could say more, but I will have to leave it to this, and let the judicial process do its job," he wrote.

The complaint, filed in U.S. District Court for the Northern District of Texas, seeks to force Cuban to give up his profits from the sale and pay other financial penalties.