SEC Charges “Maverick” Mark Cuban With Insider Trading – No Way

Update 2: Mark Cuban is taking this to the street. How bout some street ball SEC??

Update: Mark Cuban responds to the charge. Again I think this is BullShit with a capital BS.

Federal regulators have charged Dallas Mavericks owner Mark Cuban with insider trading for allegedly using confidential information on a stock sale to avoid more than $750,000 in losses.

The Securities and Exchange Commission filed a civil lawsuit against Cuban on Monday in federal court in Dallas. The agency says that in June 2004, Cuban was invited to get in on the coming stock offering by Mamma.com Inc. after he agreed to keep the information private.

The SEC says Cuban knew the shares would be sold below the current market price, and a few hours after receiving the information, told his broker to sell all shares in the search engine company.

I find that this is bullshit. I would be shocked to find that Mark Cuban was engaged with insider trading. Mark is the ultimate industry leader in opinion and knowledge. He is an insider and leading voice. Mark has also made tons of money so I’m surprised that he would do any insider trading.

Remember innocent until proven guilty. Mark is the wrong person to hang a political agenda around. He is certainly has an opinion about things but not a criminal.

Here is the text from the filing against Mark Cuban

FOR IMMEDIATE RELEASE
2008-273

Washington, D.C., Nov. 17, 2008 — 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.

The Commission’s complaint, filed in the U.S. District Court for the Northern District of Texas, alleges that in June 2004, Mamma.com Inc. invited Cuban to participate in the stock offering after he agreed to keep the information confidential. The complaint further alleges that Cuban knew that the offering would be conducted at a discount to the prevailing market price and that it would be dilutive to existing shareholders.

Within hours of receiving this information, according to the complaint, Cuban called his broker and instructed him to sell Cuban’s entire position in the company. When the offering was publicly announced, Mamma.com’s stock price opened at $11.89, down $1.215 or 9.3 percent from the prior day’s closing price of $13.105. According to the complaint, Cuban avoided losses in excess of $750,000 by selling his stock prior to the public announcement of the offering.

“Insider trading cases are a high priority for the Commission. This case demonstrates yet again that the Commission will aggressively pursue illegal insider trading whenever it occurs,” said Linda Chatman Thomsen, Director of the SEC’s Division of Enforcement.

Scott W. Friestad, Deputy Director of the SEC’s Division of Enforcement, said, “As we allege in the complaint, Mamma.com entrusted Mr. Cuban with nonpublic information after he promised to keep the information confidential. Less than four hours later, Mr. Cuban betrayed that trust by placing an order to sell all of his shares. It is fundamentally unfair for someone to use access to nonpublic information to improperly gain an edge on the market.”

The complaint alleges that Cuban violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission’s complaint seeks to permanently enjoin Cuban from future violations of the federal securities laws, disgorgement (with prejudgment interest), and a financial penalty.

Yahoo’s New CEO Mark Cuban ? It Would Work – He’s a Maverick

Kara Swisher has a post on the short list of CEO candidates for Yahoo. She is assuming that Jerry won’t make it. I think that he’ll last even though everyone wants his head.

That being said Kara brings up a great candidate that isn’t a wildcard in my mind – Mark Cuban. I’ve had the chance to get to know Mark over the past few years – we even did a podcast together way back when. He has the attitude to move Yahoo fast in a good direction. Translation: he isn’t afraid to say what is needed to say, do what is needed to do, and recruit the right team to dominate a market.

Forget his enterpreneurship background and his aggressive in your face personality (which I don’t mind at all), he has done something pretty amazing lately. He bought and turned around a NBA franchise in the Dallas Mavericks – and he did it fast.

What relevance does that have? Well pro athletes have huge egos, get paid big bucks, and are high maintence – but their good (hence called pros). The business deals in big swings and big money. All of this sound like Yahoo?

Plus what sweetness it would be for Mark to come back to Yahoo after his stint there post broadcast.com.

Mark: The question for you is… would you take it?