Kara Swisher

Recent Posts by Kara Swisher

Mark Cuban Unplugged (As Usual) About Victory in SEC Insider Trading Case

Mark_Cuban_hands

Asa Mathat

After a federal jury — deliberating only a little more than three hours — handed billionaire entrepreneur Mark Cuban a verdict in his favor in an insider-trading case brought by the Securities and Exchange Commission, I asked him to send me some of his thoughts on the major victory.

Given that it was five years ago that the government charged Cuban, alleging that he traded illegally when he sold a stake in a search company from Canada, I expected a corker.

That’s exactly what I got, in an immediate email.

Among the things I asked was why the longtime tech player, investor and Dallas Mavericks owner did not settle the case, and also whether his goal was to make a larger point about the flaws of the SEC.

And, as usual, Cuban had more piquant questions to ask, instead. Here’s his response in full:

Why is it acceptable for an SEC attorney to lie? We are not talking shades of grey. [SEC lead trial lawyer] Jan Folena told [bald-faced] lies in my case. Why is that accepted practice? Will they review her approach and potentially take action against Ms. Folena for her conduct?

The SEC is under no obligation to disclose exculpatory evidence. Why do they continue to hide key, exculpatory evidence as a matter of standard practice? In my case, they did not disclose contemporaneous notes of a conversation I had with the SEC until months before my case went to trial. Why do they feel its acceptable to not disclose exculpatory evidence?

[SEC Chairman] Mary Jo White wants to go after small offenders in a broken windows like policy. How can she ethically pursue this course of action knowing that no one can call the SEC and get an answer to any questions? If a small investor has a question about a trade, they can’t call anyone to get an on-the-record answer. How can the SEC ethically take enforcement action against investors who are unable to get definitive answers to questions?

Why does the SEC feel the need to define regulations via litigation? Why not work with Congress to create definitive and obvious laws that anyone can understand? It’s not a difficult thing to do. Instead, the SEC expects the average investor to understand the nuances of Supreme Court rulings, which is obviously an impossible task for the typical investor.

Why does the SEC think that the number of cases won has an impact on investor confidence in markets rather than actually polling investors to determine whether their confidence In markets is increasing or decreasing? I think a very clear case can be made that the SEC litigation approach has had zero impact on a rapidly declining investor confidence.

I can go on for days on this.

Yes, indeed — he can and will, I am certain.


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