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On Nov. 17, 2008- Billionaire Mark Cuban was sued by U.S. regulators over claims he made illegal insider trades four years ago is shares of Internet search company Mamma.com Inc. These charges are civil not criminal at this time, but could change depending on Cuban's compliance.
The SEC's complaint focuses on a series of phone calls and messages between Cuban, the Company and his broker. Scott Friestad, the SEC enforcement official overseeing the case, is quoted as saying. "It is fundamentally unfair for someone to use access to nonpublic information to improperly gain an edge on the market."
In his blog Cuban has stated that the SEC claims stem from a " gross abuse of prosectorial discretion" and " are infected by the misconduct of the staff of its enforcement division." Cuban is also quoted in his blog- "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 the will be proven to be so."
Currently the agency's suit seeks to impose unspecified fines and confiscate gains from the trade. This being a civil suit could turn to criminal. Cuban should tread lightly, the SEC doesn't just come after anybody, ask Martha Stewart.
If Cuban Complies with the SEC and pays the fines. How does this effect him and his attempts to by the Chicago Cubs? MLB baseball owners are already up in arms. They are just looking for a reason-any reason to not allow him to purchase the team. I think either way Cuban is in between a rock and a hard space. The purchase of the Cubs may be a pipe dream at this time or ever.
Sorry Mark but you should have practice what you preached. In 2006 he started a website http://www.sharesleuth.com/ aimed at exposing securities fraud and corporate misdoings.
while I don't usually approve lifting suspensions or fines I do feel that certain instances need more attention. However, usually I take the stand of harsher penalties to ensure that these instances never happen again. You make a brutal example of a player and see how fast it'll happen in the future. Thanks for the comment!
ReplyDeleteTo me, insider trading is plain and simple. Two things need to occur to justify indictment. One, there must be evidence of the exchange of insider information between the company source and trader. Two, their must be some financial liquidation or buying at an all-too coincidental stock event. This second one is very important, esp when there exists the first one. It seems like in the case of Cuban, both exist! So Cuban can say all he wants about the SEC's motives and what not, but if it walks and talks like an insider trading, than it is.
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