Mark Cuban charged with insider trading!!

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jdubb1914

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Details are sketchy but ESPN just reported Mark Cuban was charged with insider trading. Details coming later.
 
[h1]SEC charges Mark Cuban with insider trading: WSJhttp://http://www.marketwatch.co...8C37%7D&dist=morenews[/h1]
By Wallace Witkowski

Last update: 11:23 a.m. EST Nov. 17, 2008

SAN FRANCISCO (MarketWatch) -- The Securities and Exchange Commission has charged Dallas Mavericks owner Mark Cuban with insider trading, The Wall Street Journal reported Monday on its Web site. The charges relate to trading in shares of Mamma.com, according to the Journal.
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Excerpt:

"To recap, Sharesleuth.com is a new web publication--basically a blog--backed by businessman Mark Cuban. Cuban has hired a business reporter named ChrisCarey, formerly of the St. Louis Post-Dispatch, to run the publication and conduct investigations to "identify suspect companies." Once identified,Sharesleuth.com says it will "shine a spotlight on questionable companies," and will "name names and show our evidence, by linking to documents,photographs and other information." What makes Sharesleuth.com unique and controversial, however, is the fact that it discloses right up front that Cubanis going to make personal investments based upon the information discovered, and do so prior to the publication of this information on the website.

In short, the business model for Sharesleuth.com is that Cuban takes short positions in advance of the publication of the stories published on Sharesleuth.comwith the hope and expectation that the negative stories will be read by other investors. These investors will then presumably sell the stock, drive down thestock price and enrich Cuban. And repeat."
 
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Didn't Martha Stewart go to jail for the same thing, c'mon Cubes
 
THE MORE YOU GET THE MORE GREEDY YOU BECOME.

das real. you get a million you want a billion, you get a billion you want a trillion

im tryna make a dollar out of 15 cents, a dime and a nickel
 
I wonder will he get a tap on the wrist or will he get the Martha Stewart treament which really was a tap on the wrist too.
 
Dallas Mavericks owner Mark Cuban has been charged by the SEC with insider trading relating to Mamma.com.

The Wall Street Journal reports that the Mark Cuban insider trading charges stem from his selling shares of Mamma.com prior to an IPO:
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.
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Here's the SEC press release on the Mark Cuban insider trading charges:
FOR IMMEDIATE RELEASE 2008-273
Washington, D.C., Nov. 17, 2008 -- The Securities and Exchange Commission today charged Dallas entrepreneur Mark Cuban with insider trading for selling 600,000 shares of the stock of an Internet search engine company on the basis of material, non-public information concerning an impending stock offering.

The Commission's complaint, filed in the U.S. District Court for the Northern District of Texas, alleges that in June 2004, Mamma.com Inc. invited Cuban to participate in the stock offering after he agreed to keep the information confidential. The complaint further alleges that Cuban knew that the offering would be conducted at a discount to the prevailing market price and that it would be dilutive to existing shareholders.

Within hours of receiving this information, according to the complaint, Cuban called his broker and instructed him to sell Cuban's entire position in the company. When the offering was publicly announced, Mamma.com's stock price opened at $11.89, down $1.215 or 9.3 percent from the prior day's closing price of $13.105. According to the complaint, Cuban avoided losses in excess of $750,000 by selling his stock prior to the public announcement of the offering.

"Insider trading cases are a high priority for the Commission. This case demonstrates yet again that the Commission will aggressively pursue illegal insider trading whenever it occurs," said Linda Chatman Thomsen, Director of the SEC's Division of Enforcement.

Scott W. Friestad, Deputy Director of the SEC's Division of Enforcement, said, "As we allege in the complaint, Mamma.com entrusted Mr. Cuban with nonpublic information after he promised to keep the information confidential. Less than four hours later, Mr. Cuban betrayed that trust by placing an order to sell all of his shares. It is fundamentally unfair for someone to use access to nonpublic information to improperly gain an edge on the market."

The complaint alleges that Cuban violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission's complaint seeks to permanently enjoin Cuban from future violations of the federal securities laws, disgorgement (with prejudgment interest), and a financial penalty.
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direct from his blog dated nov. 13th http://blogmaverick.com/http://blogmaverick.com/

Nov 13th 2008 1:31PM

As I watch and read about the Hedge Fund testimony currently going on, its obvious that the right question has not been asked.

1. Those who give money to hedge funds rarely if ever have a 1 year investment term. In fact, the contracts for investment do everything possible to lock up your money for as long as possible.

vs

Hedge Fund Managers pay themselves on an annual basis.

That is a huge disconnect and there in lies the rub. While it is true that the managers are paid on a performance basis (plus their 2pct of assets) and some even have clawback provisions, that is not enough. If a fund can get big enough, all they have to do is max out in a single year and the managers are set for life. They put hundreds of millions of dollars EACH in their pocket.

The investors on the other hand, can not max out returns in a single year. They are locked in. So there is a huge disconnect. Managers think short term, investors long term. Managers should be paid on their performance over a much longer period.

If you made the minimum period for managers 36 months, you would see wholesale changes in how investments are made by Hedge Funds.

So, back to the Testimony today. The questions I would ask ?

How long does the average investor stay in your funds ? Why arent you paid based on the same term rather than annually ?

his blog aint bad, i wonder if he updates it today
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Holy *$+%.
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I knew it.

He's being scapegoated though because he's a well known name and will get plenty of attention in the media.
750k is scraps compared to what others do. I hope he beats the rap and exposes larger fish.
 
Does that article say 2004, I mean, really
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Hate when people wait a long time to sue over money in the news
 
Originally Posted by tmukg21

Does that article say 2004, I mean, really
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Hate when people wait a long time to sue over money in the news
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It's a distraction. This is like a bad joke.
People are now starting to realize that something is very wrong with the finance industry so the feds throw them some fresh meat who happens to be a celebritythat many average joes recognize. Just coincidence, I'm sure.

It just so happened that the Martha Stewart case got underway during the height of Enron's collapse and all the ensuing corruption and thievery that wasbrought into the light then. Again, just coincidence, I'm sure.
 
Doesn't matter. Even if he is "convicted", he has money and fame - therefore no tough consequences.
 
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