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Mark Cuban Charged With Insider Trading
Posted by
CmdrTaco
on Mon Nov 17, 2008 03:37 PM
from the that's-a-way-to-make-bank dept.
from the that's-a-way-to-make-bank dept.
geekboy_x writes "The SEC today charged Mark Cuban with insider trading violations, alleging that he divested himself of stock in mamma.com before the stock was diluted via a public offering." Something tells me that the billionaire blogger won't be talking about this one publicly any time soon.
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Wrong, He Has a Blog Post On It (Score:5, Informative)
Something tells me that the billionaire blogger won't be talking about this one publicly any time soon.
Are you crazy? Do you know how many page hits that would generate?! You don't know Mark Cuban. Of course, from his blog a few hours ago [blogmaverick.com]:
"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."
I'm not a lawyer. As for the case, I think this crap happens more often than you would like to think--the rich get richer, the poor get poorer. The fact that this occurred in June of '04 and he's being charged for it now implies that either it takes that long to build up evidence for a case or you don't hear about this until someone slips up. Also, I don't recall hearing the SEC drop charges or lose these cases very often so I'm pretty sure this guy is boned.
Re:Wrong, He Has a Blog Post On It (Score:5, Funny)
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Don't think they're going to put Cuban in a women's prison. Anyway, Martha Stewart was not convicted of insider trading. She was convicted of lying to investigators.
If Cuban's smart (and I suspect he likes to run his mouth too much), the only thing he's said to investigators is "My lawyer is _____, anything you want from me, talk to him".
Re:Wrong, He Has a Blog Post On It (Score:5, Insightful)
Yes. She was convicted of lying to investigators when she wasn't under oath and hadn't been warned that what she said might be used against her. Not only that, what she lied about must not have been a crime because she was never charged with anything else.
Now we know: never talk to the feds unless your lawyer's present, even if you don't think you've done anything against the law.
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Re:Wrong, He Has a Blog Post On It (Score:5, Insightful)
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Re:Wrong, He Has a Blog Post On It (Score:4, Insightful)
Now everyone who read this send me $200 for legal services rendered.
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Re:Wrong, He Has a Blog Post On It (Score:4, Interesting)
This is a lawyer [google.com]
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Can AND WILL Be Used Against You (Score:3, Insightful)
To be fair, the lesson I take from it is don't lie to the feds without a lawyer present. (And even then...)
Anything you say that turns out not to be true, even if you don't know it, "can and will be used against you in a court of law." Anything you say that helps you is inadmissible [youtube.com] as 'hearsay'.
So if you do a two hour interview, are thoroughly truthful except for 15 seconds, which you may or may not know is not true, the jury will only know about those 15 seconds. Somebody file a bug.
she was jailed for PERJURY? (Score:2)
No Jail Time (Score:2, Informative)
According to the complaint [thesmokinggun.com] filed by the SEC, they are not seeking any jail time.
They are seeking judgement:
a. enjoining Cuban from engaging in future violations of the antifraud provisions of the federal securities law.
b. ordering Cuban to disgorge, with prejudgement interest, the losses avoided as a result of the actions described
c. ordering Cuban to pay a civil money penalty to pursuaint to Section 21A.... blah blah
But.. no jail time. Martha Stewart received jail time because she was convicted of
Re:Wrong, He Has a Blog Post On It (Score:4, Insightful)
"Insider trading" can be very vauge and edge cases aren't clearly defined by statute or case law. Martha Stewart wasn't convicted of insider trading, she was convicted for obstruction of justice during the investigation (which might not have madei t to trial). If he shuts up, doesn't lie, and doesn't try to destroy evidence, he'll find it a lot easier to stay out of jail.
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Re:Wrong, He Has a Blog Post On It (Score:5, Informative)
As for the case, I think this crap happens more often than you would like to think--the rich get richer, the poor get poorer. The fact that this occurred in June of '04 and he's being charged for it now implies that either it takes that long to build up evidence for a case or you don't hear about this until someone slips up.
As a hobbiest stock trader, I can tell you with confidence that inside trading happens a hell of a lot. Theres billions of dollars to be made. In fact, it happens so much - that there are many technical-trading techniques used to "follow the insiders". So every so often they find an inside trader, chuck him in jail and try make everyone happy. I'd much prefer if the government just got it's nose out of the market. The only thing insider traders do is lead to a more accurate market..
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As for the case, I think this crap happens more often than you would like to think--the rich get richer, the poor get poorer. The fact that this occurred in June of '04 and he's being charged for it now implies that either it takes that long to build up evidence for a case or you don't hear about this until someone slips up.
As a hobbiest stock trader, I can tell you with confidence that inside trading happens a hell of a lot.
The company I work for encourages me to buy its shares. If that is not insider trading I don't know what is.
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Re:Wrong, He Has a Blog Post On It (Score:5, Informative)
That's not insider trading. It may or may not even be stock options. The company I work for (one of the top 3 computer companies in the world) also encourages us to buy their stock, and offers stock options to its employees. They also require we take annual training on business ethics, and that we understand exactly what constitutes insider trading. There's even a question on the final exam of said training dealing specifically with when it would be unethical to purchase stock.
Knowing the general scuttlebutt around the company for how we're doing doesn't give me inside information. Pretty much the whole world knows which markets we're leading, and wich markets we're behind in. If somebody on the front lines is buying stock, they probably don't know anything more about the company than the public at large. We have another category entirely of employees, however... people who are windowed. Those people are given a window in which they are allowed to buy/sell company stock, and periods when they are not allowed to buy.
An example of when a windowed employee would not be allowed to buy would be, say, after our sales figures for the last quarter have been tallied, but before they have been published. People in the upper echelons of the company will know this information, and would be able to predict how their announcement will affect our stock market. With this in mind, they can react accordingly. This, in turn, would allow them to buy a bunch of stock before a sudden spike, or dump a bunch of stock before it falls. That is insider trading.
Insider trading is illegal, because it gives those people an unfair advantage over the rest of the world. That's why we have windowed employees... if you're in a position where insider trading is possible, you're told when not to buy/sell stock so that you can't be accused of it.
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The stock market was designed to allow more or less normal (though mostly rich) people invest for the future in companies without having to take full responsibility for that and risk their freedom in something that they don't understand. The trade off is that they have to have limited knowledge about and control of the company (because if they do understand and control the company they could use it as cover for doing illegal things without responsibility).
Insider trading completely breaks those assumption
Re: (Score:3, Interesting)
Now let's say you're knocking back a few beers with your Intel buddy, and he tells you the i7 CPUs are failing en masse, the management is crumbling and AMD is poised to deliver a fatal blow. So in short, you are now in possessio
Re: (Score:3, Funny)
Holy shit, the i7 CPUs are failing en masse??!
YES, Sell, sell, sell. You should do what I do: base your trading on rumours you hear on Slashdot.
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Even if he's guilty, of course selective prosecution matters. It doesn't change whether he's guilty, but it does show how seriously not credible is the agency that's selectively prosecuting him. Even if he is actually guilty, a verdict from such a corrupt agency is hard to take as proof that he's guilty.
FWIW, what little you heard is just the initial press response repeating the SEC's charges. If that were enough to decide guilt, Bush would have had all 60M people who vote Democratic behind bars over the pa
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Whatever happened happened in 2004, but he's being charged only in the last few weeks Bush can direct the SEC.
Funny how the other thing that happened recently was that Cuban just launched a website, BailoutSleuth [bailoutsleuth.com] looking into and organizing against the Bush/Paulson Wall Street bailout.
BTW, in America people are presumed innocent until proven guilty, especially when Bush has a political crusade at stake. Even if Cuban is guilty, it's pretty "coincidental" timing to start prosecuting him.
No, if that were the case, they would have gone after Cuban after he funded Redacted [imdb.com], or any of the other stupid [reputationadvisor.com] stuff [ballhype.com] Cuban [articledashboard.com] is guilty [arstechnica.com] of.
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But since you are evidently guilty of collecting Bill O'Reilly talking points to defend Bush attacking the guy exposing that ripoff, I'm going to take your post as confirmation that your wingnut army is going after Cuban with the last power it has left, since America just fired it for its decade of crimes.
And the fact that you accuse me of "collecting Bill O'Reilly talking points" tells me you a far left-winger suffering from severe Bush/FoxNews Derangement Syndrome. My disdain for Cuban comes from what he said about The San Antonio River Walk, not anything I saw on O'Reilly. You should get to know someone before you start making broad assumptions about them. Otherwise, you are no different than those that call people Racist because the voted against Obama or traitor because they oppose the war. Yep! Th
Re:Wrong, He Has a Blog Post On It (Score:4, Insightful)
BTW, in America people are presumed innocent until proven guilty, especially when Bush has a political crusade at stake.
I like Mark Cuban, and I can totally believe the Bush administration is trumping up charges against him. That said, your quote is one of my pet peeves, and is DEAD WRONG.
In America, people are presumed innocent until proven guilty IN A COURT OF LAW. The public at large is perfectly within its rights to judge anyone anyway it wants to. For example, O.J. Simpson was found not guilty in his first trial, yet I have no doubt he performed the crime.
All too often people in power and/or defense attorneys try and manipulate the public with the "innocent until proven guilty" junk. "Don't rush to judgment on my client just because he was seen with a smoking gun in his hand, remember, we're all innocent until proven guilty!" No, I'm under no obligation to judge people based on courtroom rules used to "prove" guilt. I can judge people based on whatever criteria seems reasonable to me.
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That legal principle means that no one can accurately judge someone guilty until they're proven guilty. You've got a right to be wrong, and prejudge someone - you might even guess right - even though courts don't have that right to be wrong. But if you judge people guilty without their going through an evidence and argument process, you're probably going to be wrong.
You're an "Obama Republican". I note that Republicans like to think that government is fundamentally an arbitrary set of rules that apply only
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Nice catch. I agree with you, it IS coincedental, to say the least....
Unfortunately many people in America still think things are the way they are on TV, they way we all like to think America is.
In truth, when you do something public that purports to shine light into the incredible amount of malfeasance, scandal, and many times outright criminal or unconstitutional activity of the federal government don't think that they wont look for a way to "fuck up your game."
This is just one facet of what the justice s
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It's not mind blowing, it's business as usual.
Just because one person gets caught, doesn't mean the other half-million stock scammers are going to turn themselves in.
why should we care? (Score:5, Insightful)
for all i can tell, the guy registered "broadcast.com" in the 90s, created a pretty business plan, and sold out for billions at exactly the right time, and bought a basketball team
i applaud his timing and his luck and success, but i haven't the faintest idea as to why anything this guy ever did is of any interest to slashdot
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It's easy. The Netspeak translation would be:
Mark Cuban is a Troll IRL.
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I've never been able to figure it out, and in fact didn't know why he was famous until you mentioned broadcast.com (a place I have never been). Billions for that?
I only saw his reality show, and learned from that show that he owns a basketball team. Otherwise, you are right. Why should we care? He made billions, meanwhile his company (I believe acquired by Yahoo! since broadcast.com redirects there) no longer exists and the parent company is in financial trouble itself. Got out at the right time is an unde
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Why would a bunch of nerds be interested in a guy that made a BILLION DOLLARS doing something nerdy?
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Ya but he didn't do anything nerdy. He's just another MBA asshat like all the other people we've been taught to despise. His only claim to fame is playing the stock game, and poorly at that. He just got reeeeeeeeally lucky.
The main difference between Mark Cuban and the Powerball winners, is Mark Cuban was born with his ass where his mouth should be.
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i haven't the faintest idea as to why anything this guy ever did is of any interest to slashdot
Your summary of his life's contributions is accurate, but this is Slashdot. We lost all the good editors years ago, so this garbage is all we get anymore.
Re: (Score:3, Informative)
In an open letter to Internet service providers published earlier this week, billionaire entrepreneur Mark Cuban calls for telecoms to put an end to peer-to-peer (P2P) file-sharing. Cuban expresses concerns that P2P "freeloaders" are clogging the tubes with commercial content. His letter doesn't focus on piracy, however, and instead primarily attacks companies that use P2P for legitimate commercial applications. [arstechnica.com]
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harnessing P2P for infrastructure
You mean Redswoosh ? The bittorrent clone he sold to Akamai, shortly before launching a crusade against all P2P traffic [arstechnica.com] ?
Yeah, quite the genius alright. I can't want to read his new book "My Cuban is bigger than yours"
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Yea! Our first conspiracy theory!
Regardless, Cuban is a jerk.
For that alone, punishment has been long overdue.
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Yes, that call against P2P was bizarrely contradictory to his other public advocacy and private investments in it, as that article noted.
Even more reason why Cuban's fate is interesting to Slashdotters.
It's good to be rich... (Score:3, Funny)
I wish *I* could be charged with insider trading.
It would mean I'm worth it enough to go after :(
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No, it would mean that you are famous enough for people to pay attention while the real criminals get away with whatever they were doing.
Such as the FED recently giving away $2 trillion and won't disclose who they gave it to. Or the fact that half the $700 billion bailout has been given away with zero transparency.
Mark Cuban is just a public scapegoat, just as Stewart was.
Summary is incorrect (Score:5, Informative)
Mamma.com took a private investment at a discount (a PIPE [wikipedia.org]). This is a sign of weakness, and the announcement sent the shares lower. The SEC alleges that Mr. Cuban sold his shares with insider knowledge of the PIPE, liquidating his stake before it got battered the next day.
WSJ article [wsj.com] (report updated since I saw it earlier; it now erroneously says it was an investment in a private company).
Twice now (Score:5, Interesting)
Twice in my career I have had a good laugh at the expense of someone whose abuse I suffered.
The first was David Duncan. He was a senior finance/accounting manager when I was a peon at Mobil. I basically had to jump at his every request even though I never worked for him or his department. I left that job to start an internet business, but I really enjoyed the day that I saw David Duncan testifying before Congress, explaining Enron to them. Beautiful day.
The second is today. When my internet company was encoding and streaming his sports and talk radio broadcasts (innovative for 1994, mind you), Mark Cuban used to page me and call me at home at all hours with the most unreasonable demands and questions. Now I realize if I had been willing to kiss his ass the way he was accustomed to being kissed, I might be a billionaire today, but it would never have happened. Today I am all smiles.
Spin-Doctoring at its best. (Score:3, Insightful)
So, Cuban commits SEC fraud, and we're supposed to ignore it because he's anti-Bush and it was 4 years ago?
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No, I didn't say ignore it, and I didn't say he's not guilty - or that he's guilty.
I just said that the timing should make us suspicious of who and what is really ordering this prosecution. Especially since Bush crippled the "Justice" Department by using it for selective prosecution of political enemies, and this suit would be perfectly consistent with that. And because the bailout is a $TRILLION (or several) ripoff of your money, further crippling your government. Even if you can't understand the politics
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We're not really socialist yet. Obama, and more specifically, our next Congress, will lead us down that road. We might not arrive at the destination but we'll wander down that path a bit. Who knows what happens then?
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What are you talking about?
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Perhaps you should learn what Communism actually is, before making an ass of yourself here?
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I think he meant "wrong" not in a legal context but in a moral context; his argument thus leading, "neither of these two things are really wrong and should not be illegal".
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Whether he did it or not is debatable. But if he did what is indicated, it is illegal as well it should be. Here, let me explain this to you in layman's terms. If you have insider knowledge (knowledge that would not be public info to normal stockholders) that earnings either skyrocketed or crashed, and you have this info days in advance of when it will be announced, you are barred from buying or selling stock as a result. If you do it anyways, you are gaining from knowledge that is not available to ever
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a) That's what government is for, right? But jabs aside, that would be a risk of the corporate system. Why do corporations deserve such a protection?
b) I believe this is actually legal--that is, for a group of people to suddenly buy/sell a stock to influence its price and then make a killing on the results.
c) Again, another what should be a risk of the whole stock market game.
Why should it be illegal, and not just a risk of playing this game? If the risk is too big, or the game seems like a cheat, you do
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Markets only work when all the players have access to all the information, otherwise the market prices things incorrectly. The problem is that we don't operate in a perfect market where all information becomes available to all agents at the same time. For example, companies have to put a lot of work in place before announcing a dilutive secondary offering. Therefore, some people with stock
Re: (Score:3, Interesting)
If you are a stockholder in a company, can the SEC consider you an insider under the law if an insider calls you and asks you to keep a secret?
So don't take his call or simply say, "La, La, La...I'm not listening!" when he tries to give you insider information.