WSJ: Mark Cuban Charged With Insider Trading

[Bolo Boffin]

Source: Wall Street Journal

The Securities and Exchange Commission filed insider trading charges against Mark Cuban, the outspoken owner of the Dallas Mavericks, for allegedly dumping shares in Mamma.com upon learning it was raising money in a private offering.

The SEC alleges in a civil action that Mr. Cuban sold his entire 6% ownership stake on June 28, 2004, after learning that Mamma.com was raising money through a private investment in a public entity, or PIPE. The next day, on June 29, the company announced the PIPE financing and shares of the company dropped by more than 10%. By selling his stake, the SEC alleges, Mr. Cuban avoided more than $750,000 in losses.

In a PIPE transaction new shares are issued at a discount to the current trading price. An announcement of a PIPE transaction is often followed by a drop in the stock price as shareholders anticipate their stake will be diluted.



Read more: http://online.wsj.com/article/SB122693827604333637.html

---

Nothing much yet but a headline. It's about sale of Mamma.com stock.

[kirby]

1. But he is a Maverick! n/t

[lala_rawraw]

2. he is actually a good guy who

has put out some great indie films through Magnolia pictures

[Bolo Boffin]

3. Yes, he is.

A really progressive guy. Hope he is able to weather this.

[MilesColtrane]

26. He's actually more of a libertarian.

He supported Bloomberg in the election over Obama and is an admirer of Ayn Rand.

He is smart enough to realize what disaster BushCo™ has wrought, especially in regard to the war. But, he probably loves those tax cuts he got under the regime, and doesn't believe the government has any business regulating commerce, or participating in social programs.

Hardly a progressive.

[Truth Teller]

46. He's an asshole

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4483070

[WriteDown]

4. Typical....

This is how the rich get rich and stay rich.

[MaineDem]

5. No, that's not true. n/t

[WriteDown]

6. Yes it is...

I knew a guy in college who basically was set for life after his uncle gave him investing "tips." Guy was a real slug too.

[MaineDem]

8. "I knew a guy..."

So that means every rich guy does it?

:eyes:

[WriteDown]

11. No...

but enough. Guess you were a big supporter of Martha Stewart as well.

[MaineDem]

14. Martha Stewart was not convicted of insider trading

She went to jail for lying to the FBI.

But that has nothing to do with your all-encompassing statement.

[WriteDown]

17. Lying to the FBI about what? nt

[MaineDem]

18. This has nothing to do with your sweeping statement to which I first replied

Not all rich people engage in insider trading. Not all rich people engage in trading at all.

Edited for spelling.

[WriteDown]

19. Thanks for answering my question nt.

[LanternWaste]

30. Then you can of course point...

" No... but enough"

Then you can of course point us to a relevant, peer-reviewed study which supports your statement, yes?

Or (and I find this more likely) is this merely conjecture based on little more than anecdotal evidence...?

[WriteDown]

31. Okay...

Glad to know the rich are all honest and worthy of our admiration :sarcasm:. I am now sorry for questioning our overlords.

[LanternWaste]

33. I don't know whether they are honest and worthy or admiration or not

I don't know whether they are honest and worthy or admiration or not. Much like any demographic, I myself would imagine it depends on the individual rather than the demographic itself. Seems to me that saying all the rich are "x" is as silly and as absurd as stating all the poor are "y".

I can at best only go off of my own anecdotal evidence, yet even then I wouldn't base my opinions of the rich off of them-- anymore than I would allow myself to represent the poor. Even though I am quite poor myself, as it doesn't make me any less or more noble-- that, I think, comes from who I am rather than how much I make, and I would hazard the same is true for the rich and the poor alike.

(I don't really have any overlords-- but again, I can speak only for me; you yourself may actually have an overlord or two...)

On edit: spelling

[blindpig]

36. If you don't have any 'overlords' then you must be rich.

Really rich.

Or you could just be deluded.

[LanternWaste]

38. Maybe so...

"Then you must be rich. Or you could just be deluded..."

Maybe so. Or (and I find this much more likely), my brain isn't controlled by Soviet Weather Machines, Tin Foil Hats, Monkey Space-Men, or Evil Scientists...

Melodramatic hyperbole aside, I don's subscribe to badly-written, hack-authored science fiction perceptions of life-- yours or mine. :shrug:

[blindpig]

39. 'Overlords' is a bit melodramatic.

How about a class which owns or controls about 80% of everything, gaining and maintaining this position by depriving workers the full value of their labor?

Sounds fantastic, but there it is. Ain't no tin foil illuminati jive, just how capitalism works.

[LanternWaste]

50. No... it doesn't sound fantastic

No... it doesn't sound fantastic. It sounds like the standard course of human history.

Again, maybe you guys have an overlord or two controlling who you are, and what you think, but not me.

[jmowreader]

22. Not this example of the rich

Cuban started broadcast.com, then sold it to Yahoo for $5.9 billion in Yahoo stock, which he then sold.

There's no such thing as a truly innocuous rich guy, but Cuban may come closest of all to it.

From what I gather, Cuban owned six percent of mamma.com. He found out they were getting ready to do a Private Investment in Public Equity transaction (http://www.hlhz.com/main.asp?p=CORP_PIPEProductOverview -- it is another one of those "for accredited investors only" things) and unloaded the whole six percent that day. The next day, they did the transaction and the mamma.com shares took a big hit. My question is, how'd he find out about the transaction? A six percent stake doesn't sound "insider" to me.

[Ian David]

7. Isn't it funny how only Martha Stewart (Democrat) Mark Cuban (Democrat) get nailed? n/t

[Bolo Boffin]

9. Yep.

They don't have their insider buddies to cover up for them. They make a stupid impulse slip and the hammer comes down.

[Ian David]

10. And maybe those wiretaps are coming in handy. n/t

[underpants]

15. I was thinking the exact same thing. Saw this on the ESPN crawl

# Good Night, and Good Luck. (2005) (executive producer)
# Enron: The Smartest Guys in the Room (2005) (executive producer)
# The Jacket (2005) (executive producer)
# "Independent Lens" (executive producer) (1 episode, 2005)
- Enron: The Smartest Guys in the Room (2005) TV episode (executive producer)
http://www.imdb.com/name/nm1171860/


*BUT*

Cuban is an admirer of Objectivist philosophy and author/philosopher Ayn Rand.<69> About Rand's novel The Fountainhead, he said: " was incredibly motivating to me. It encouraged me to think as an individual, take risks to reach my goals, and responsibility for my successes and failures. I loved it."<70> His political views lean towards libertarianism.<71> However, he holds a position on the centrist Unity08 political organization's advisory council.<72>

http://en.wikipedia.org/wiki/Mark_Cuban#Popular_culture_and_political_positions

[blindpig]

23. An Objectivist? Case closed.

He is an asshole.

Book 'em Dano.

[WriteDown]

16. Let's not forget.....

Ivan Boesky and Michael Milkin. There were actually NO insider trading prosecutions between 1990 and 1995 and only 10 cases between 1995 and 2000. Prosecutions didn't pick up until around 2007. My understanding is that they've been prosecuting it a lot more, but the high profile cases are rare.

[fascisthunter]

21. Yep

[librechik]

24. Yes--The SEC is REALLY DOING A GREAT JOB, See?

don't look at all those buddies of ours (I'm not looking at you, Hank Goldman Sachs Paulson, we are letting off without a murmur and even promoting.

Look over here at all these evil Democrats who commit something similar to crimes that we can complain about. Even though no one was hurt.

[MilesColtrane]

27. Mark Cuban is not a Democrat.

[Ian David]

28. Someone in another thread said he donates to Progressive causes. n/t

[blindpig]

34. Makes ya wonder what 'progressive' means.

He is an Objectivists, a worshiper of Ayn Rand. Anything one of those hoodleheads supports is suspect.

[Ian David]

35. Maybe legalizing pot? n/t

[blindpig]

37. wow

I guess he's ok then. Who cares if he's opposed to economic justice, gotta have our priorties straight.

[Ian David]

48. I'm just saying, if he's an Ayn Rand guy, his pet "progressive" cause would be legalizing pot. n/t

[Truth Teller]

47. Is this progressive?

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4483070

[Ian David]

49. No, he's a douchebag. You're right. n/t

[Newsjock]

12. Revenge for Dan Rather gaining traction with his lawsuit?

That's the first thought that comes to my tinfoil-addled mind.

[Roland99]

13. Mark, Mark, Mark....very bad move. Full text of complaint >>>>>>

http://online.wsj.com/public/resources/documents/WSJ-20081117-seccubancomplaint.pdf

[pjt7]

20. The SEC didn't bust one fraudlent Wall Street

firm & they are messing around w/ insider trading?

Come on boy's, aim much HIGHER.

[lakercub]

25. damn

I knew Major League Baseball was opposed to him, but I really wanted him to buy the Cubs.

[NashVegas]

29. YES! Yes! Yes! You Fucking Fuck!

Sorry, but this is so fucking deserved!

Cuban royally screwed over independent webstreamers when he worked out the CARP deal.

[Blue_Tires]

32. Cuban a slimy little self-righteous shit?

who knew??:think:

[Truth Teller]

40. Cuban is a POS, off to the Greatest with this!

I heard him on 60 Minutes talking down about nobodies that worked in cubicles for him. He has little respect for middle class working people.

[girl gone mad]

42. I kind of doubt that.

I don't like him for personal reasons, but I've interacted with him several times. How many billionaires do you know that will go out of their way to talk to non-elites?

He's pompous, irritating, pushy and self-absorbed, but he was all of those things long before he had money. I don't for a minute believe that he looks down on poor people. People he considers ignorant or lazy, that's a different story. I don't think he deserves the 'rich snob' rap.

edited for clarity.

[Truth Teller]

45. Here's a link

"Their offices are located in a refurbished warehouse on the edge of downtown Dallas, where more than 100 employees are jammed into cubicles. It definitely has no frills.

”What do you need frills for?” asks Cuban.

The hours are long, the pay is low, and Cuban expects results -- not excuses.

“It's a fun industry. I mean, they're younger. They don't know any better. No, I mean…It’s a sweatshop here and we’re proud of it,” says Cuban. “You can’t see the chains attached to their ankle, but … the reality is there’s just so much competition for the jobs.”

Turnover is almost non-existent. And many of these people have worked for Cuban for years. His old friend, George Prokos, was one of the first people that Cuban hired. He’s a vice president, but does he get a bigger cubicle?

”That means I get a double wide, a corner double wide with a window. Panoramic view,” says Prokos, adding that the first thing Cuban told him when he first came to work as a sales manager was: “I don't care if you have to hire 18,147 salespeople. I want that building sold out every night."

And, he says, Cuban allowed him to hire as many people as was necessary to do that, as long as “we didn’t pay them too much.” "

http://www.cbsnews.com/stories/2004/02/12/60minutes/main599975.shtml

[nichomachus]

41. The feds started the investigation

after Cuban said the terms of the bailout deal should be made public and started a web site to deal with it.

So, basically, he is being Eliot Spitzered.

You fuck with the gangsters in the corporatocracy at your own risk.

[druidity33]

44. link to that website? nt

[nichomachus]

51. Here

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4480597&mesg_id=4480597

[druidity33]

53. thank you...

the website seems innocuous enough. A couple of contributors, Cubans name mentioned on the first page. It doesn't look like he's hiding anything...

:shrug:

[investintrains]

43. Rupert Murdoch owner of the WSJ not yet indicted

Rupert Murdoch owner of the WSJ
has not yet been charged for any of his many crimes

Rupert Murdoch

1. warmonger
2. war profiteer
3. unionbuster locking union men and women out of their jobs in the UK etc.
4. monopolist
5. pricegouger
6. porn-monger (called by a US senator, owner of the most vulgar network
in tv)
7. criminal conspiracy with Henry Paulson former CEO of Goldman Sachs
and Maurice Hank Greenberg to use the IRS as the instrument
of personal vendetta... against Eliot Spitzer.. invading his private
life because he dared to indict AIG's Greenberg and Paulson's
Goldman Sachs
8. advertiser of products causing animal agony
9. deforesting global heating criminal, killer of several times the trees that other metropolitan dailies kill..
because of the sometimes 100 or more page posts, much of
it trashy and sensationalist
10. sneaking into grocery chains on the coattails of the Wall St Journal
which it gobbled up
11. lying about ACORN vote registration and 10 million other things
12. the plotter behind the racist Roger Ailes, author of the
Willie Horton campaign in the Dukakis campaign..
13. the boss of John Fund, WSJ columnist pushing his Obama
attack book
14. frequently gives airtime to fellow criminal Karl Rove,
who conspired to jam the handicapped voter access lines
of Democrats in NH. Clayman went to jail but his bosses Rove
and James Tobin did not.
15. Chickenhawk warjock Glenn Beck, report war tv and radio monitors,
said "When will the media call a spade a spade?" and immediately said
"Obama". Beck is an employee of Rupert Murdoch and of Clear
Channel and ABC.
16. The Wall St Journal now features Reagan speechwriter
and henhawk Peggy Noonan.
17. NY Post employee Amir Taheri.. of paper owned by Murdoch.. misrepresents
Obama
http://www.democraticunderground.com...ss=102x3545550
18. Professional liar Rush Limbaugh frequently amplifies
Murdoch disinformation.
19. Rupert Murdoch employee Mara Liason works for a 2nd
neocon network as well... NPR.
Racism in warjock radio
20. Murdoch's puppets continue to ridicule Ted Kennedy, a man
who survived a plane crash arranged by those who had
killed his 2 brothers. John Dean in the Nixon tapes said
"Kennedy doesn't know the bear trap waiting for him in
Chappaquiddick". The bear trap was an arranged death
by CIA brake severing. E Howard Hunt who was in Dallas
the day Ted's brother was murdered and who was part of
the Watergate frame.. was in Chappaquiddick that weekend
as well.
21. supplies jet to McCain
22. programming children in violence.. another
set of Rupert Murdoch victims.. 2 men killed by an
8 year old Arizona boy
http://www.msnbc.msn.com/id/27600105

[John Kerry VonErich]

52. Lets call a spade, a spade.

This is IMO, without a doubt, retaliation for the films he financed. Namely "Loose Change" and "Redacted"
--------------------------------------------------------------------------------------------------------



Insider Trading, or Political Persecution?
The post was updated at 4:30 p.m., with S.E.C. statement and closing stock price. It was updated at 7 p.m. to correct the percent of the Mamma.com stock Mr. Cuban owned.

Did Mark Cuban, the Internet entrepreneur turned owner of the Dallas Mavericks basketball team, and would-be buyer of the Chicago Cubs, violate insider trading laws in a particularly egregious fashion?

Or is he the victim of a political hit job because he helped finance a movie that was scathingly critical of President Bush?

Either way, the insider trading complaint from the Securities and Exchange Commission today arouses a lot more interest than most enforcement actions.

I’ll get to the facts of the complaint in a minute, but first here is Mr. Cuban’s reaction. His lawyers issued a statement saying:

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.”

A person close to Mr. Cuban provided me with a copy of an e-mail message said to have been sent by Jeffrey Norris, an S.E.C. lawyer in the Fort Worth regional office (and no known relation to me.) This e-mail message seems to have been sent after an exchange in which Mr. Norris complained that Mr. Cuban had financed a movie called “Loose Change” that discusses the president’s actions relating to Sept. 11.

From: Norris, Jeffrey B.
Sent: Saturday, May 05, 2007 2:27 PM
To: Mark Cuban
Cc: Cox, Christopher
Subject: RE: “Lose Change”

I AM SHARING THIS WITH CHAIRMAN COX. NEITHER HE NOR THE COMMISSION ENDORSE MY OPINIONS, BUT IN LIGHT OF YOUR THREAT, I THOUGHT SHOULD SEND THIS TO HIM.

Mark:
If this upsets you, I wonder how George Bush feels. I assume that Mr. Cox would view your involvement with “Loose Change” much as I do. After all, he served his country as a Republican Congressman from Orange County for nearly 20 years and was appointed by President Bush. If you feel like sharing my thoughts with Chairman Cox, be my guest.


http://norris.blogs.nytimes.com/2008/11/17/insider-trading-or-political-persecution/