Mark Cuban Beats the SEC: Judge Tosses Insider-Trading Case

Peter Kafka — Fri, 17 Jul 2009 14:53:48 +0000

A federal judge has dismissed the Securities and Exchange Commission’s insider-trading case against Mark Cuban, the AP reports. Astonishingly, Cuban has yet to say anything about this on his blog or his Twitter account. But I assume that will be rectified shortly.

UPDATE: That took a while–nearly two hours by my estimate. But here’s Cuban’s initial post-court Tweet (click to enlarge):

At the D7 conference in May, Cuban declined to talk about the case, which revolved around allegations that he dumped shares he owned in search engine Mamma.com after learning of a secondary offering. But even his noncomment was interesting. From my transcript of his interview with Kara Swisher and Walt Mossberg:

“Kara and Walt: Tell us about your fight with the SEC? Mark: No. [Pause] ‘When someone in the government wants you, it’s not a good place to be. You don’t want to be someone’s skin on the wall.’ Kara: ‘Do you know how it’s going to turn out?’ Mark: ‘Yes.’”

Here’s a highlight reel of the interview; you can see the entire session here.

[ See post to watch video ]

How to Shut Mark Cuban Up: SEC Insider Trading Charges

Peter Kafka — Mon, 17 Nov 2008 19:05:03 +0000

Investor/blogger/entrepreneur/Dallas Mavericks owner Mark Cuban doesn’t shy away from the spotlight. Just ask him–if you can get a word in edgewise. But now Cuban, best known for selling Broadcast.com to Yahoo (YHOO) for billions during Bubble 1.0, then selling his shares before Bubble Burst 1.0, is staying mum.

That’s because the SEC has filed insider trading charges against Cuban, alleging that he “avoided losses of $750,000″ by dumping shares of search engine Mamma.com after learning about a secondary offering. The SEC’s complete complaint is embedded below (to make legible, click icon on top right of document, then on the “+” key to increase document size).

And Cuban, understandably, is biting his tongue, very hard. Here’s his complete nonresponse, published on his personal blog:

The SEC

Nov 17th 2008 1:20PM

RE: SEC Civil Action in the United States District for the Northern District of Texas, Dallas Division

November 17, 2008

Mark Cuban today responded to a civil complaint filed by the United States Securities and Exchange Commission in the United States District for the Northern District of Texas, Dallas Division. In its complaint, the Commission charges that Mr. Cuban engaged in violations of the federal securities laws in connection with transactions in the securities of Mamma.com Inc.

I wish I could say more, but I will have to leave it to this, and let the judicial process do its job.

This matter, which has been pending before the Commission for nearly two years, has no merit and is a product of gross abuse of prosecutorial discretion. Mr. Cuban intends to contest the allegations and to demonstrate that the Commission’s claims are infected by the misconduct of the staff of its Enforcement Division.

Mr. Cuban stated, ‘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 they will be proven to be so.’”
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Mark Cuban Beats the SEC: Judge Tosses Insider-Trading Case

How to Shut Mark Cuban Up: SEC Insider Trading Charges