The Securities and Exchange Commission posted the following press release today – SEC Files Insider Trading Charges Against Mark Cuban. According to excerpt of this notice:
The Securities and Exchange Commission today charged Dallas entrepreneur Mark Cuban with insider trading for selling 600,000 shares of the stock of an Internet search engine company on the basis of material, non-public information concerning an impending stock offering.
Now I don’t know about you, but I was struck dumb (more than usual) when I read this press release. Does this sound crazy?
Of all the BILLIONS of dollars in recent sub-prime losses caused by Wall Street corporate criminals, mortgage brokers, and investment banks, the SEC decides that it’s in the public’s best interest to focus their energy, money and resources going after Mark Cuban.
Raise your hand if you think this smells of political influence.
I’m not a lawyer and can’t very well decipher the legal minutia, but if you read the SEC complaint (pdf) posted online, you’ll realize just how ridiculous their charges sound. If I was a shareholder, I wouldn’t hold Mr. Cuban responsible for my losses, I’d hold company management accountable.
In my opinion, although Mr. Cuban was Mamma.com’s largest shareholder, he wasn’t an insider. According to the SEC complaint, he also didn’t share the information he was given with anyone else. The only thing he did was to sell his shares when he was given the news.
It would seem to me that if the SEC wants to use it’s resources to prevent insider trading, they should prosecute the real insider for sharing private placement plans to Mr. Cuban beforehand: Mamma.com, Inc.’s CEO and President. If anything, it looks like the CEO may have intentionally tried to entrap Mr. Cuban into not being able to sell his shares by informing him of the PIPE placement beforehand.
If I had to bet on this situation, I’d place all of my money on Mark Cuban. This is just a PIPE dream. I can’t see how he could possibly be found guilty of any of these charges, especially if it happens to progress into a jury trial.
It’s unfortunate, but I wonder if we’ll be reading more of these types of things during the last month of the Bush administration? Personally, I hope the new administration makes some big changes at the SEC, and they start to go after the real criminals.
Disclosure: I don’t know Mark Cuban, I don’t work for him, nor am I affiliated with any of his enterprises. Heck, I’m even a Phoenix Suns fan.
Comments 4
Mark Cuban’s response.
Posted 17 Nov 2008 at 3:48 pm ¶Do I really need to say more?
From me beforehand:
Personally, I hope the new administration makes some big changes at the SEC, and they start to go after the real criminals.
From CNNMoney.com now:
To go off on a tangent, this criticism should also extend to former Bush administration SEC chairman appointees Harvey Pitt and William Donaldson, and even to current United States Attorney General Michael Mukasey, all who failed to do anything about the Madoff scheme.
Here’s a copy of the Markopolos complaint sent to the SEC, written by a credible, independent and neutral third party, and then summarily ignored by SEC investigators.
Yet, the SEC found it important to protect we Americans investors by quickly investigating Mark Cuban after a complaint from the same person who may have initiated the “alleged” insider trading scheme.
Still think there’s no political involvement in the Cuban case?
Another View: Can the S.E.C. Find Its Mojo?
Posted 22 Dec 2008 at 8:09 pm ¶Judge Dismisses Suit Against Mark Cuban
According to excerpts from this article:
Need I say more?
Posted 18 Jul 2009 at 6:19 am ¶The idiocy continues -
S.E.C. to Appeal Dismissal of Case Against Mark Cuban
Posted 07 Oct 2009 at 1:33 pm ¶Post a Comment