Monday, November 17, 2008

Mark Cuban Nailed By the SEC


Mark Cuban in happier days

I'm not a fan of Mark Cuban's more or less defunct Sharesleuth website, which he financed by grotesquely unethical, though apparently not illegal, pre-publication trading in stocks mentioned on the site. So I was intrigued to learn that Cuban was nailed by the SEC today for alleged insider trading in the stock of something called Mamma.com.

Here are the particulars from the SEC website.

It's an interesting complaint, by the way. According to the SEC, Cuban became an "insider" because the CEO of the company told him about an upcoming PIPE deal. Does that mean that if I own shares, a CEO can make me an "insider" by calling me and blurting out some inside information?

I guess so. Doesn't seem fair, and it will be interesting to see how this plays out. I see that Cuban is vigorously protesting his innocence. I also see that, for now at least, he is not being criminally prosecuted.

Here's what I wonder: if this case is as open and shut as the SEC makes it out to be, why did it take four years to bring charges?

© 2008 Gary Weiss. All rights reserved.

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