Woah, Momma. Cuban facing insider trading charge.

Webster · Nov 17, 2008

Re: Woah, Momma. Cuban nailed for insider trading.

BTW, I'm wondering if they have the conversations on a taped line. If not, the relevant quotes seem a wee too perfect.

Simon_Cowbell · Nov 17, 2008

Re: Woah, Momma. Cuban nailed for insider trading.

Bob Cook said:

Insider trading is making moves based on information only you have as a company insider. So if, as an outsider, I happened to find out that, say, Biotech Company X was going to fail to get FDA approval on its drug, and sold before the news was announced, that's OK. But I'm a higher-up or someone at Biotech Company X who got the news before it was released to the public and traded on that news, that's illegal. Also, it would be illegal if my source as an outsider was someone within the company, or someone who was in a official position to receive that news before everyone else did. The idea is that for fair and open markets, insiders can't trade ahead of the news they are about to report, news that would affect the stock price.
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That isn't a federal pound-me-in-the-ass prison crime?

Beef03 · Nov 17, 2008

Re: Woah, Momma. Cuban nailed for insider trading.

Cool, thanks guys. This would fall under the I learned soemthing new today banner. It definitely makes a little more sense now.

ScribePharisee · Nov 17, 2008

Re: Woah, Momma. Cuban nailed for insider trading.

Tommy_Dreamer said:

goalmouth said:

This is a four-year-old civil matter, not criminal, so the worst the feds can do is annoy Cuban with a lawsuit.

Cuban has been outspoken on his blog calling for transparency in the federal bailout plan. Coincidence? I think not.
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It's amazing what gets drudged up when someone tries to buy one of the biggest franchises in all of sports. It happens all the time.

Did Cuban break the law? Maybe he did. Does it change my opinions about him as someone that would've been good for the Cubs in the long run, absolutely not. And yes, Cuban is the owner of my fave NBA team.
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Be that as it may, whatever piss-in-the-wind chance Cuban had of owning the Cubs just went "flush". No way is Selig going to allow a sign-off on this transaction now.

Simon_Cowbell · Nov 17, 2008

Re: Woah, Momma. Cuban nailed for insider trading.

ScribePharisee said:

Tommy_Dreamer said:

goalmouth said:

This is a four-year-old civil matter, not criminal, so the worst the feds can do is annoy Cuban with a lawsuit.

Cuban has been outspoken on his blog calling for transparency in the federal bailout plan. Coincidence? I think not.
Click to expand...

It's amazing what gets drudged up when someone tries to buy one of the biggest franchises in all of sports. It happens all the time.

Did Cuban break the law? Maybe he did. Does it change my opinions about him as someone that would've been good for the Cubs in the long run, absolutely not. And yes, Cuban is the owner of my fave NBA team.
Click to expand...

Be that as it may, whatever piss-in-the-wind chance Cuban had of owning the Cubs just went "flush". No way is Selig going to allow a sign-off on this transaction now.
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I'm sure that re: that news about Cuban being done as potential Cubs owner.... it came out a couple weeks ago.... Baseball owners who leaked this info knew this was coming.

ScribePharisee · Nov 17, 2008

Re: Woah, Momma. Cuban nailed for insider trading.

Maybe. But I remember that Selig once fought to keep Edward Gaylord from purchasing the Rangers because he was planning to put them on his own superstation cable network and Selig, along with Jerry Reinsdorf, didn't want another superstation in baseball. That was back in the 80s.

Lester Bangs · Nov 17, 2008

Re: Woah, Momma. Cuban nailed for insider trading.

Why Cuban is a great owner: he cares about winning enough that he will pour money into the franchise to make it happen. Of course, he also realizes that winning in a big market (like Dallas) tends to generate large amounts of revenue. Championships are great, but all the owner can do is hire the best personnel and leave it up to them. As an owner, if you give your fans a great product they can come out and watch night after night, you give them value for their entertainment dollar and that's all you can do.

Small Town Guy · Nov 17, 2008

Re: Woah, Momma. Cuban nailed for insider trading.

Cuban responds:

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.”

http://blogmaverick.com/2008/11/17/the-sec/

Lester Bangs · Nov 17, 2008

Re: Woah, Momma. Cuban nailed for insider trading.

I know I could be speaking from a perspective of gross naivete, but they accuse him of insider trading in an attempt to clear $750k? I got a feeling $750k doesn't mean a whole lot to Cuban. Then again, lying about $250k got Martha Stewart a federally funded vacation.

Double J · Nov 17, 2008

Re: Woah, Momma. Cuban nailed for insider trading.

This thread, its title having begun with, "Woah, Momma," is worthless without:

I'm so excited.

Fenian_Bastard · Nov 17, 2008

Re: Woah, Momma. Cuban nailed for insider trading.

The Big Ragu said:

Beef03 said:

OK I could wind up sounding like a complete dolt on this, but keep in mind my understanding of the buying and selling stocks ends with the fact you can buy and sell stocks. To this point in my life I have never been able to afford to get involved in the stockmarket in anyway shape or form.
It doesn't say how Cuban came across that information, but obviously he did in one form or another, was he supposed to just sit on it then and take the loss? Also what would constitute illeagle gathering of information?
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A few things are telling. This wasn't a pump and dump of any sort. They are not going after him criminally, and the SEC loves to make examples of high-profile insider-trading cases. There wouldn't be a reasonable criminal case here because he didn't enrich himself with insider info.

At the time he sold the Copernic stock, he acknowledged in interviews that day that it was because of the PIPES transaction. So he has pretty much already admitted he knew it was happening before it was formally announced and in his mind he saw nothing wrong with it. Those transactions dilute a stock's value horribly and he didn't want to sit and hold something having value lopped off of it to raise cash. It isn't like he got wealthy off the transaction. He bought the stock after it had announced surprising earnings a few months before, near its high, and he sold it for about the same amount he bought it.

The thing that made his ability to sell on July 28 (which triggered a lot of other selling when people saw that Mark Cuban was dumping his large stake), unfair compared to a regular investor like you or me, who wouldn't have known about the PIPES transaction until the next day is that as a large shareholder in the company, he was obviously made aware of the financing deal before it was formally announced. It is obviously unfair that he got a leg up on everyone else. But isn't it also unfair to expect someone to hold onto a stock that the company is intentionally diluting in value, when you know what is happening? Cuban wasn't the one manipulating the stock's value.
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That sounds very much like what I've heard everybody ever convicted of insider-trading say right before the hammer comes down.
The SEC doesn't do this for practice. At the very least, The World's Smartest Human is going to be writing a big check.

Bob Cook · Nov 17, 2008

Re: Woah, Momma. Cuban nailed for insider trading.

Simon_Cowbell said:

Bob Cook said:

Insider trading is making moves based on information only you have as a company insider. So if, as an outsider, I happened to find out that, say, Biotech Company X was going to fail to get FDA approval on its drug, and sold before the news was announced, that's OK. But I'm a higher-up or someone at Biotech Company X who got the news before it was released to the public and traded on that news, that's illegal. Also, it would be illegal if my source as an outsider was someone within the company, or someone who was in a official position to receive that news before everyone else did. The idea is that for fair and open markets, insiders can't trade ahead of the news they are about to report, news that would affect the stock price.
Click to expand...

That isn't a federal pound-me-in-the-ass prison crime?
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It can be, yes.

And to answer the question, how could a billionaire care about $750,000? Because people who really, really care about money (and are competitive to boot) care about every penny. That's in part why they have money. It's the Mr. Krabs school of wealth-keeping.

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Woah, Momma. Cuban facing insider trading charge.

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Woah, Momma. Cuban facing insider trading charge.

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