Wow, everyone and their mother is writing about Mark Cuban being accused by the SEC of insider trading violations.
Mark says the charges are false, but can’t really say much more.
I’ve seen people comparing this case to Martha Stewart’s. Stewart didn’t go to jail because of insider trading violations. In fact, I think even the government understands that if your stock broker calls you up and says I think you need to dump your stock, which is what happened in Stewart’s case, from Joe the Plumber to Martha Stewart, most will listen and sell the stock.
Stewart’s sin wasn’t in selling stock, she went to jail for being found guilty of lying to investigators. It could’ve gone down as ink in the paper with her stock broker frying (which he did anyway) and Martha going back to baking. But she didn’t go that route and was found guilty for lying about the events. Especially because of Enron and its ilk, they made an example of her.
This case will come down to only one thing: how did Mark acquire his information? If your best friend calls you up and says, “I was standing in line and Starbucks and I heard a guy talking about how they were going to announce PIPE financing tomorrow,” and you ask, “Did he say the name of the company?” and your friend tells you and you’re like oh &$@!, I own stock in that company it’s not quite the same as if the CFO of the company calls you up the day before the announcement to let you know and you turn around and dump your stock.
They might try to fine him for the Starbucks style infraction anyway, but he wouldn’t serve any jail time at that extreme. If he truly got the information via inside methods, lied about it, and they can prove he lied about it – they’ll fry him.
I don’t see it shaking out like that. I’d probably try to settle if I were Mark simply to avoid the newspaper headlines, and all the coverage of the events leading up to the trial, the trial, etc. But I think there’s zero chance of that happening. He hates to lose, and especially if he didn’t do anything illegal, he’s not going to put up with an outcome where he settles.
By the way, I don’t know that his lawyers won’t ask him to take it down, but Mark has a post on his blog that’s almost four years old that very clearly states why he sold the stock in mamma.com. It’s somewhat poorly formatted, but if you don’t want to read the whole thing, scroll down to item 4.) for Cuban’s take on why he sold mamma.com stock. Fittingly, there’s also an earlier post on why he bought it to begin with. Ironically, at least in retrospect, it’s titled Today was a very good day.
We know from Mark’s own words that he didn’t want to invest in a company that financed via PIPES. What we don’t know is exactly why Mark sold the stock. If he did sell because he knew the financing announcement was coming, we don’t know how he came into that info. I expect we’ll find out.
Also, in the post on why he sold the stock, though he didn’t exactly come out and say “there were some real slimeballs at Mamma, especially the CFO,” with hindsight the implication is certainly there. Don’t be surprised if some of the back story here is that the Feds were going to fry that CFO, and he threw out Cuban’s name a.) to save his ass, and b.) based on what Cuban posted in public, he might be out to get him.
I have no idea of any of that is true and did no research whatsoever. I wouldn’t be surprised if it works out that way, but sometimes when you play connect-the-dots without doing your homework, you draw the wrong picture. I want to be clear that I’m being very speculative. Still, don’t be too surprised if it’s something like that.
It’s bad timing for Cuban as even the mere accusations probably whatever slim hope there was that MLB would let him buy the Chicago Cub. On the other hand, with the economy in the tank, there aren’t that many people who can afford the Cubbies, and one less bidder isn’t good for the seller.
Mark definitely has an combative side to him, but that’s always been part of his charm for me. He has a lot of strongly held beliefs and opinions, some of which I don’t agree with, but I don’t doubt for a second that he wants to change things for the better and that everything he touches seems better off for it.
Mark is one of the most accessible guys there is and unlike self-proclaimed rock stars like Ben Silverman, Cuban really is a rock star. Mark is a hell of a lot more accessible to us than Silverman is, which is kind of a shame given the blog topic. I first talked to Mark years ago (mid 1990s) when I had a newsletter about the Internet and Mark contacted me to let me know he though I was wrong about something — probably because I was wrong! That’s the same way I met Bill Gorman, now my TVbytheNumbers partner in crime, by the way.
I haven’t talked to Mark in ages. But last year when we launched this blog, even though he was recovering from hip replacement surgery, and trying to get prepared for his run on Dancing with the Stars, and staying on top of his businesses (Dallas Mavericks, HD Net etc) he still took a little bit of time to participate in a virtual discussion on internet video metrics.
I’m pulling for Mark to come out of this smelling like a rose. If he doesn’t, that will indeed be disappointing.
Martha Stewart did no “lying about everything.” Not a single word spoken by her was recorded in a verbatim transcript or in sworn testimony. Not a single word spoken by any federal agent was recorded in a verbatim transcript. She was railroaded in a bogus conviction on trumped-up charges pulled from the ether in a political persecution. It is about time the reckless and irresponsible media quit the media bashing on her with misinformation, misrepresentation, and state propaganda.
bah. semantics, in this case. but fair enough, I’ve amended the text to: she went to jail for being found guilty of lying to investigators.
My guess is that Cuban will be a lot more careful about the process than Martha was, and than her lawyers should have been. That doesn’t foretell the outcome, but it’s unlikely to go the way Martha’s case did.
Stewart was the unfortunate soul of whom the feds chose to “make an example.” Not saying she did nothing wrong, but she paid huge penalties for a fairly minor infraction I’d say.
Cuban reminds me, just a hint, of that Studio 54 owner (Rubell?). There’s an inflated sense of self-importance that made Rubell(?) laughingly proclaim “if the IRS only knew…” Cuban’s sense of self-importance maybe made him think he could get away with something more easily than the average Joe could.
Lying to federal investigators is what got old Scooter Libby into trouble – not leaking Plame’s identity as a CIA – which Richard Armitage actually did and for which Armitage was never prosecuted; the reason being everyone in DC knew she worked for the CIA as it was well known.
Ever since Cuban financed the US troop bashing movie REDACTED, Ive thought of him as an opportunistic sleaze bag, and wouldnt mind seeing him lose more of his money than he did with that box office bomb which made less than $100,000 in the US. Cuban has a massive ego and wont back down – even if it means going to jail. He would probably enjoy it, turning it into a TV show upon his release “Slammer Billionaire”. Cuban already did a reality show that almost no one watched – anyone remember that one? LOL! All I remember is the first few minutes of episode 1 in some abandoned warehouse or something.
Opportunisitc sleaze bag – exactly! That’s why he reminds me of that Studio 54 guy
Let me tell you first hand that Mark Cuban is no angel. Having first hand knowledge of this, I know how he operates and exactly what his motives are. He is a self-serving, greedy individual who portrays one type of person to the public and is completely different behind closed doors. If you seriously think he is a “rock star,” you are sadly mistaken. If what he did is true – which I suspect it is based on my own experiences with him – then he should be a man about it and step up and accept the consequences. Unfortunately he believes that his is wealthy enough to circumvent the law, intimidate those who don’t have his money, and do whatever he wants. As luck has it, what goes around comes around.
Deport Mark Cuban back to Cuba!