OT: Mark Cuban reportedly charged with Insider Trading
by jf55510 on Nov 17, 2008 10:23 AM CST
55 comments
According to the WSJ:
SEC charges Dallas Mavericks owner Mark Cuban with insider trading related to sales of Mamma.com. (no link as of yet - just a ticker; follow on http://online.wsj.com/public/us)
--------------------
An even more interesting Mavs season, just got more interesting. If he is convicted, I wonder if Stern will make Cuban sell the team. This probably is the reason that MLB said that they wouldn't let him buy the Cubs.
0 recs |
55 comments
Email
Print
Comments
awesome
aren’t insider trading cases incredibly difficult to prove though?
Greatest Inventions Ever? 1. TiVO, 2. Boobs, 3. Baseball
by willamos2 on Nov 17, 2008 10:27 AM CST reply actions 0 recs
Ruh roh
Isn’t insider trading what they got Martha Stewart on?
by JimBonnick84 on Nov 17, 2008 10:29 AM CST reply actions 0 recs
Yes
but Martha was involved in MILLIONS while Cuban was involved with a total of 730k.
by Coolbean04 on Nov 17, 2008 10:37 AM CST up reply actions 0 recs
Stewart
Martha Stewart was involved with like $50,000. What got her in real trouble is that that she lied during the investigation. As long as Cuban cooperates and doesn’t lie, he should only have the civil trouble. If he perjurs himself, they’ll go after him with criminal charges.
by jf55510 on Nov 17, 2008 10:48 AM CST up reply actions 0 recs
Doesn't it just depend
On if he’s a Republican or Democrat?
I mean, look at Bill Clinton.
There are no laws in this country, it just depends what liberals decided to do.
Cuban should just run for office somewhere as a Democrat. In that case there’s no way he’ll be convicted.
by Sharky on Nov 17, 2008 4:40 PM CST up reply actions 0 recs
It absolutely depends on if he’s a Republican or Democrat. The SEC was nowhere to be found when Enron, Worldcom, AIG, Lehman Bros. etc were losing people money (probably because they made their protection money to the RNC). But because Cuban funded an anti-Bush film, all of a sudden the SEC found out it has the power to regulate. Coincidence?
Signature! I don't need no stinking signature!!
by DerekSTheRed on Nov 18, 2008 10:56 AM CST up reply actions 0 recs
Nice.
Although should insider trading really be a crime? Just helping a brother out…
Fire Todd Dodge. Seriously. Back to Suckville with a loss to FLA ATL but whatever, SUCK IT WESTERN KENTUCKY! 1-9 baby!
by sprite on Nov 17, 2008 10:31 AM CST reply actions 0 recs
Ask the individuals
that have shares. They might beg to differ.
by Coolbean04 on Nov 17, 2008 10:38 AM CST up reply actions 0 recs
a lot of people woudl argue with that as well
shouldn’t we as the public with these shares know that somethign bad is about to happen?
maybe there should be a closed stock system for people in the know that tip the public off without the public losing their shirts
""If they'd have told me you can make the team but you've got to shine the shoes, I'd have been there shining shoes." -Bradley
by ab03 on Nov 17, 2008 12:19 PM CST up reply actions 0 recs
which is not my idea
but an idea from people much smarter than me
""If they'd have told me you can make the team but you've got to shine the shoes, I'd have been there shining shoes." -Bradley
by ab03 on Nov 17, 2008 12:19 PM CST up reply actions 0 recs
Stupid refs
They wouldn’t have called that on Donald Trump.
by Brett Perryman on Nov 17, 2008 10:33 AM CST reply actions 9 recs
Sounds like Reinsdorf
is pulling some strings
"My mother always taught me that if the only thing you have to say is,
‘(Expletive) Dave Samson,’ then don’t say anything at all.
So I’m not going to say anything at all.
Is my mother the greatest or what?"
- Mariners GM Bill Bavasi, after signing Ichiro to a $90 million contract
by tyd3311 on Nov 17, 2008 10:33 AM CST reply actions 0 recs
It's not going to be anything major.
It was reported that it was about 730k in shares sold. He’ll just get a slap on the wrist.
by Coolbean04 on Nov 17, 2008 10:37 AM CST reply actions 0 recs
Article
The Securities and Exchange Commission filed insider trading charges against Mark Cuban, the outspoken owner of the Dallas Mavericks, for allegedly dumping shares in Mamma.com upon learning it was raising money in a private offering.
The SEC alleges in a civil action that Mr. Cuban sold his entire 6% ownership stake on June 28, 2004, after learning that Mamma.com was raising money through a private investment in a public entity, or PIPE. The next day, on June 29, the company announced the PIPE financing and shares of the company dropped by more than 10%. By selling his stake, the SEC alleges, Mr. Cuban avoided more than $750,000 in losses.
In a PIPE transaction new shares are issued at a discount to the current trading price. An announcement of a PIPE transaction is often followed by a drop in the stock price as shareholders anticipate their stake will be diluted.
Doesn’t seem too serious.
http://online.wsj.com/article/SB122693827604333637.html
Fire Todd Dodge. Seriously. Back to Suckville with a loss to FLA ATL but whatever, SUCK IT WESTERN KENTUCKY! 1-9 baby!
by sprite on Nov 17, 2008 10:38 AM CST reply actions 0 recs
the SEC has been spending 4 years investigating this!?!?
They probably spent more than $750K paying their investigatory team.
What a colossal waste of time and money.
Greatest Inventions Ever? 1. TiVO, 2. Boobs, 3. Baseball
by willamos2 on Nov 17, 2008 10:43 AM CST up reply actions 0 recs
Unless I read wrong
$750K is the amount calculated on Cuban’s loss avoidance, or 10% of the transaction. $7.5 Mil is not $750K.
"He uses statistics as a drunken man uses lamp-posts... for support rather than illumination." - Andrew Lang (1844-1912)
by Ed Coffin on Nov 17, 2008 10:55 AM CST up reply actions 0 recs
Two things
First, you don’t know how much loss he caused for other people by liquidating his position at that point. Insider trading isn’t wrong because you avoid losses, its wrong because other people buy stock, from you, at a higher price assuming that they are aware of everything you are. Their losses may not be capped at the $750K that Cuban saved
Secondly, if someone like Cuban is doing that here, then odds are he’s doing it elsewhere as well. Just because you don’t have sufficient evidence for other occurrences doesn’t mean they don’t exist (this is the same argument for heavy penalties for people caught dealing small amounts of drugs). With something like Insider Trading, I imagine that the majority of people who do it do it a lot.
by JBImaknee on Nov 17, 2008 11:51 AM CST up reply actions 0 recs
Nothing to see here...Move along
Bryan Smith (12:17:17 PM PT): Justin Smoak and Josh Hamilton. The AL West might just have found their Bash Brothers, v. 2.0.
by bigsteve on Nov 17, 2008 10:58 AM CST reply actions 0 recs
Full text of the complaint
http://online.wsj.com/public/resources/documents/WSJ-20081117-seccubancomplaint.pdf
It doesn’t look like he’ll go to jail…so that’s good I guess
I'm undefeated in fights. Have I been in any? No. Thats because people know my f'ing status. Don't mess with the elite. - Miles
by Dirk Diggler on Nov 17, 2008 11:03 AM CST reply actions 0 recs
Does this mean
he’s now slimy enough to be a major league baseball team owner?
G G G E-flat_______ F F F D__________....
by t ball on Nov 17, 2008 11:12 AM CST reply actions 0 recs
I assume the SEC actually has a case
but they haven’t really stated the case right? All they know is that Cuban had predicted that the offering was going to fail. I wonder what the insider trading was. You’r estill allowed to sell your stocks on hunches, right?
""If they'd have told me you can make the team but you've got to shine the shoes, I'd have been there shining shoes." -Bradley
by ab03 on Nov 17, 2008 12:21 PM CST reply actions 0 recs
Supposedly he was told
that another offering would be made on the stock that would dilute the equity.
Nolan Ryan is the Greatest Pitcher ever, because Google says so.
"BTW I’m officially welching ab03. Yeah I planned too all along, but I figured I’d try to get off the hook with double or nothing first."- Sharky
by DJCahill on Nov 17, 2008 1:18 PM CST up reply actions 0 recs
Cuban's response on his blog
I wish I could say more, but I will have to leave it to this, and let the judicial process do its job.
November 17, 2008
RE: SEC Civil Action in the United States District for the Northern District of Texas, Dallas Division
Mark Cuban today responded to a civil complaint filed by the United States Securities and Exchange Commission in the United States District for the Northern District of Texas, Dallas Division. In its complaint, the Commission charges that Mr. Cuban engaged in violations of the federal securities laws in connection with transactions in the securities of Mamma.com Inc.
This matter, which has been pending before the Commission for nearly two years, has no merit and is a product of gross abuse of prosecutorial discretion. Mr. Cuban intends to contest the allegations and to demonstrate that the Commission’s claims are infected by the misconduct of the staff of its Enforcement Division.
Mr. Cuban stated, "I am disappointed that the Commission chose to bring this case based upon its Enforcement staff’s win-at-any-cost ambitions. The staff’s process was result-oriented, facts be damned. The government’s claims are false and they will be proven to be so."
Ralph C. Ferrara, Esq.
Dewey & LeBoeuf LLP
1101 New York Avenue, N.W., Suite 1100
Washington, D.C. 20005
Maybe we’re about to get six months of quiet Cuban.
"One man, five scoops." -- shroomer
by ghtd36 on Nov 17, 2008 12:55 PM CST reply actions 0 recs
i'm sure
just about all these rich types that have friends that run companies do insider trading. it’s just the culture that they aren’t “real crimes”.
Obama vs Palin in 2012. bring her on!
by gossamer on Nov 17, 2008 12:56 PM CST reply actions 0 recs
Question
If Cuban was the largest shareholder, like the article states, wouldn’t he have cause to sell his shares if they were doing something without his knowledge like they were?
Im not a financial guy so i don’t know. But it sounds like they were making decisions that the shareholders should have been in on, and especially your largest shareholder, and when he found out about it he decided to sell and get out of it.
Bryan Smith (12:17:17 PM PT): Justin Smoak and Josh Hamilton. The AL West might just have found their Bash Brothers, v. 2.0.
by bigsteve on Nov 17, 2008 1:02 PM CST reply actions 0 recs
Well...
The problem is, if your position as an “insider” gives you knowledge that the general public doesn’t have, and you sell (or buy) in advance of that knowledge, that’s not legal.
The fact that you don’t like what they are doing, and that’s why you are selling, doesn’t matter if you gleaned that information through your presence in the company that general shareholders don’t have.
by Adam J. Morris on Nov 17, 2008 1:11 PM CST up reply actions 0 recs
Cuban better hope he's more successful in this litigation...
…than in his litigation with Don Nelson…
by Adam J. Morris on Nov 17, 2008 1:26 PM CST reply actions 0 recs
The arbitrator screwed him on that one. :)
by Brett Perryman on Nov 17, 2008 1:35 PM CST up reply actions 0 recs
David Stern was behind it
and he is behind this current insider trading scandal.
Nolan Ryan is the Greatest Pitcher ever, because Google says so.
"BTW I’m officially welching ab03. Yeah I planned too all along, but I figured I’d try to get off the hook with double or nothing first."- Sharky
by DJCahill on Nov 17, 2008 1:43 PM CST up reply actions 0 recs
aided by Selig
in the plot to keep him from buying the Cubs.
G G G E-flat_______ F F F D__________....
by t ball on Nov 17, 2008 2:22 PM CST up reply actions 0 recs
The timing is awfully suspicious.
"My mother always taught me that if the only thing you have to say is,
‘(Expletive) Dave Samson,’ then don’t say anything at all.
So I’m not going to say anything at all.
Is my mother the greatest or what?"
- Mariners GM Bill Bavasi, after signing Ichiro to a $90 million contract
by tyd3311 on Nov 17, 2008 4:17 PM CST up reply actions 0 recs
OT:
But still my favorite Don Nelson quote ever:
Reporter: So what would you have done if Latrell Sprewell would have tried to choke you?
Nelson: I wouldnt have let him get that close
HA!!
by Michael Cave on Nov 17, 2008 1:45 PM CST up reply actions 0 recs
I cant get too worked up about this
But paying Shawn Bradley to do nothing except sit on the end of the bench and wave a towel should result in some rock bustin’ time.
by BEW on Nov 17, 2008 2:22 PM CST reply actions 0 recs
Shawn Bradley>Tariq Abdul Wahad
Fire Todd Dodge. Seriously. Back to Suckville with a loss to FLA ATL but whatever, SUCK IT WESTERN KENTUCKY! 1-9 baby!
by sprite on Nov 17, 2008 2:33 PM CST up reply actions 0 recs
Probably so
But when your 7’6" and redheaded you just stand out more
by BEW on Nov 17, 2008 2:53 PM CST up reply actions 0 recs
Van Horn>Shawn Bradley>Abdul.
"My mother always taught me that if the only thing you have to say is,
‘(Expletive) Dave Samson,’ then don’t say anything at all.
So I’m not going to say anything at all.
Is my mother the greatest or what?"
- Mariners GM Bill Bavasi, after signing Ichiro to a $90 million contract
by tyd3311 on Nov 17, 2008 4:18 PM CST up reply actions 0 recs
If anyone is interested...
…in the merits of this, there’s a lengthy blog post here by someone who is an expert in the field.
by Adam J. Morris on Nov 17, 2008 9:26 PM CST reply actions 0 recs
Hmm. More stuff..
http://norris.blogs.nytimes.com/2008/11/17/insider-trading-or-political-persecution/
From: Norris, Jeffrey B. [mailto:NorrisJ@SEC.GOV]
Sent: Saturday, May 05, 2007 2:27 PM
To: Mark Cuban
Cc: Cox, Christopher
Subject: RE: "Lose Change"I AM SHARING THIS WITH CHAIRMAN COX. NEITHER HE NOR THE COMMISSION ENDORSE MY OPINIONS, BUT IN LIGHT OF YOUR THREAT, I THOUGHT SHOULD SEND THIS TO HIM.
Mark:
If this upsets you, I wonder how George Bush feels. I assume that Mr. Cox would view your involvement with "Loose Change" much as I do. After all, he served his country as a Republican Congressman from Orange County for nearly 20 years and was appointed by President Bush. If you feel like sharing my thoughts with Chairman Cox, be my guest.Previously, I thought you were merely foolish and naïve. Now, however, I see that you are also a hypocrite. I guess your belief in free speech has severe limitations. If someone else is the victim of an absurd conspiracy theory, you defend your right to participate in smearing the good name of a patriot like President Bush. But, when you are the subject of a parody of the attack you have endorsed, you suddenly issue threats.
I think I will e-mail this to Chairman Cox myself. I think he will enjoy it. I’m sure he is also a Laker fan.
Since Chairman Cox may not know the background, I will explain. Mark Cuban is the owner of the Dallas Mavericks and has participated in distributing the vicious and absurd documentary, "Loose Change," which posits that President Bush planned the demolition of the World Trade Center as a pretext for going to war against Iraq. We have had some past exchanges about my opinion the Mr. Cuban’s support for this project is irresponsible and immoral. Below, I parodied his position that every opinion, no matter how absurd and vicious, deserves to be broadly disseminated.
Fire Todd Dodge. Seriously. Back to Suckville with a loss to FLA ATL but whatever, SUCK IT WESTERN KENTUCKY! 1-9 baby!
by sprite on Nov 17, 2008 10:43 PM CST up reply actions 0 recs
What an idiot (J Norris)
You left out the best part:
""Chairman Cox has never met the individual who corresponded with Mr. Cuban, nor has he spoken or corresponded with him in any way. After those communications came to light, the matter was referred for disciplinary action against the individual. To avoid any potential appearance issues, Chairman Cox recused himself from the Commission vote, and he has not been involved in this investigation at any time."
Emails are forever, dumbass, and spell check is your friend.
Those who would sacrifice liberty for safety deserve neither.
by Brian Thomas on Nov 18, 2008 12:56 PM CST up reply actions 0 recs
Moran.
From another blog:
As it is, there appears to be no question about when Mr. Cuban sold the stock. The S.E.C. cites phone company records and company memos about the timing and content of the call. If those memos were accurate, it appears that Mr. Cuban knew he had a duty not to sell until the information about the offering was made public.
But even if all that is true, the Norris e-mail, sent from an S.E.C. e-mail address, indicates the commission has a lawyer with, at best, very poor judgment.
"...my balls are really like a veiny flesh color" blueballlefty on Jun 4, 2008 7:44 PM EDT
"you gonna lose your horse. seriously." FX2
Yes we can! November 04, 2008
by Rodney on Nov 18, 2008 1:12 PM CST up reply actions 0 recs
BTW, Norris
is based in the SEC’s Fort Worth regional office.
"...my balls are really like a veiny flesh color" blueballlefty on Jun 4, 2008 7:44 PM EDT
"you gonna lose your horse. seriously." FX2
Yes we can! November 04, 2008
by Rodney on Nov 18, 2008 1:13 PM CST up reply actions 0 recs
I know some people in that office but not this Norris guy. In any event, though he is an idiot to put this in writing, it has no bearing on the facts underlying the charges. I don’t think Cuban is going to be on any public boards anytime soon. It will suck if this screws up the Cubs purchase for him though.
by thedudeabides on Nov 18, 2008 1:50 PM CST up reply actions 0 recs
That's a good post AJM
The fact that Cuban isn’t an insider (i.e. not part of the company just an investor) but had inside information is an important distinction. The question seems to be, if an officer of a company gives you inside information that would screw you over, are you obligated to not act on it until it is made public and get screwed? Or can you act on it since you have no obligation to confidentiality? Note just because the CEO expected Cuban to keep quiet and not act, does not mean he was required by law to keep quiet and not act. This case could end up establishing precedent for future cases of insider trading.
Signature! I don't need no stinking signature!!
by DerekSTheRed on Nov 18, 2008 10:54 AM CST up reply actions 0 recs
There's an important...
distinction in that post that I think you’re missing. Bainbridge (it appears) is talking about criminal liability. Cuban faces civil liability from the SRO’s regardless. We were taught in studying for the series 7 that trading on any material, non-public information is a no-no.
"I know you're a bit dense but no, it doesn't. Obviously lying isn't a problem for me."
by benmor78 on Nov 18, 2008 1:35 PM CST up reply actions 0 recs
criminal vs. civil
I was under the impression that Bainbridge was writing about civil cases and uses Walton v. Morgan Stanley & Co. as precedent. Bainbridge only mentions the possibility of criminal charges at the very end. IANAL however so take everything I post with a grain of salt.
Signature! I don't need no stinking signature!!
by DerekSTheRed on Nov 18, 2008 3:18 PM CST up reply actions 0 recs
"tippee" liability
As I recall it depends on if you knew the “tipper” had a fiduciary duty to the company, there is an interesting case involving Barry Switzer on this point (who overheard two executives from underneath some bleachers in a football stadium). To the best of my recollection, Barry got off.
by thedudeabides on Nov 18, 2008 1:43 PM CST up reply actions 0 recs
not that the resolution of Barry's case
Is relevant to Cuban’s
by thedudeabides on Nov 18, 2008 1:44 PM CST up reply actions 0 recs
More from Cuban
Cuban has published more on his side at his blog.
CHRISTOPHER CLARK :
1) Q- We spoke earlier about you were telling Mr. Cuban in words or substance : "I have confidential information for you".
A- Right.
2) Q- Do you recall anything Mr. Cuban said in response or reply to that statement by you ?
A- No, I do not.
Signature! I don't need no stinking signature!!
by DerekSTheRed on Nov 18, 2008 12:09 PM CST reply actions 0 recs
Does Mr. Norris get transferres or fired?
The moran has made the front page.
"...my balls are really like a veiny flesh color" blueballlefty on Jun 4, 2008 7:44 PM EDT
"you gonna lose your horse. seriously." FX2
Yes we can! November 04, 2008
by Rodney on Nov 21, 2008 3:44 PM CST reply actions 0 recs
Comments For This Post Are Closed
Secondary Sidebar
FanPosts
Community blog posts and discussion.
Certain photos copyright © 2009 by Associated Press or Getty Images. Any commercial use or distribution without the express written consent of Associated Press and Getty Images is strictly prohibited.
