Mark Cuban, Being Mark Cuban, Throws Away Moral High Ground

Ever since the SEC filed some very very weak insider trading charges against Mark Cuban, the latter has struggled for the moral low ground, trying his case on his blog and coming across as sleazy as hell. He should have just shut his mouth and let the SEC's weak case speak for itself.

I'm no fan of Cuban since he announced his odious "trading before publication" Sharesleuth stock tip sheet, but the insider trading charges were so shaky that I felt a bit sorry for the guy. That lasted for a few hours, until he opened his big mouth.

Most defendants in such situations would seek to demonstrate how classy they are, but nosireee, not Cuban. Having won the case, which the SEC is appealing, Cuban could have emerged smelling like a rose. Instead, he is reaching harder than ever for that elusive moral low ground by pushing a vindictive motion for discovery, which he won today, and seeking attorneys fees. He's now waging a jihad against the SEC a la Patrick Byrne, pursuing discovery to determine if the SEC acted in bad faith.

Baloney. Its case was weak, but these were just bureaucrats being bureaucrats, wasting the public's money. That's the message you'd think Cuban would be trying to promote in this situation. Not this guy.

“To the extent that he views it as the agency having tweaked him, he wants to tweak back,” Jacob Frenkel, a former SEC lawyer now in private practice, said of Cuban’s fee quest. “Is this likely to meet with success? No. Is that likely to stop him? No. Many who are accused by the SEC are pleased to take a dismissal and ride off into the sunset.”

I think the SEC was wrong to appeal the ruling. I still feel that way. But if he loses, I will definitely have no trouble sleeping at night.

© 2009 Gary Weiss. All rights reserved.

Who's Worse, Mark Cuban or the SEC?

I have to admit, it's a close question. Joe Nocera makes the point that the SEC, by pursuing this "boorish" billionaire while not giving a damn about, for instance, Overstock.com's restatement of years of financials, proves that the SEC is sinking into irrelevance.

Now then — don’t you sleep better at night knowing the feds are bringing rich guys like Mark Cuban to heel? No? Neither do I. In fact, if the case illustrates anything, it is how far the Securities and Exchange Commission has descended into irrelevance since Christopher Cox became chairman. That has become even more obvious since the financial crisis broke.

Cuban, meanwhile, has made the case for Cuban by having his lawyers try the case in his blog by raising what strikes me as a bit of a red herring.

Cuban claims he was not specifically told the information that he received was confidential. But, even if he wasn't told it was confidential, it clearly was "material, non-public information." He sold in advance of the public getting that info, a la Sharesleuth.

As I said yesterday, I'm underwhelmed by the SEC's case against Cuban. But I'm equally underwhelmed by Cuban's "defense," which indicates to me, once again, that this guy has an ethical blind spot a mile wide.

The expression "pox on both their houses" comes to mind. No, I sure as hell won't be sleeping any better knowing that the SEC is pursuing this sleazeball, but I'm equally sure as hell that I won't be losing any sleep over it.

UPDATE: Aaron Task suggests on Yahoo Finance that Cuban may have had "too many powerful enemies." I agree, and the enemy is Mark Cuban. The more I look at the case against Cuban, and his response to the charges, the less underwhelmed I am with the SEC's case.

© 2008 Gary Weiss. All rights reserved.

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.

Insider Trading in ParkerVision?

This post on a stock message board makes one wonder.

© 2007 Gary Weiss. All rights reserved.



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