When Dallas Mavericks owner Mark Cuban titled his most recent Blogmaverick post, “I Hate To Lose”, he was referring to his ballclub’s recent 5 game losing streak. The same mantra, however, might apply to his willingness to suffer stock losses, as The Dallas Morning News’ Dave Michaels reports the U.S. Securities & Exchange Commission has filed insider trading charges against Cuban related to a 2004 transaction. The company in question was not Dairy Queen’s parent, Berkshire Hathaway.
The complaint alleges that Mr. Cuban avoided losses in excess of $750,000 by selling 600,000 shares he learned would be diluted by a new stock offering. The company, Mamma.com, told Mr. Cuban about the offering on the condition that he keep the information confidential.
œLess than four hours later, Mr. Cuban betrayed that trust by placing an order to sell all of his shares, said Scott W. Friestad, the SEC™s deputy director of enforcement. œIt is fundamentally unfair for someone to use access to nonpublic information to improperly gain an edge on the market.
Mr. Cuban was told about the stock offering through a phone call with Mamma.com™s chief executive on June 28, 2004, according to the SEC complaint.
Mr. Cuban œbecame very upset and angry during the conversation because the private offering would dilute existing shareholders, according the complaint.
œWell, now I™m screwed, Mr. Cuban told the executive. œI can™t sell.
But Mr. Cuban later called his Dallas broker and ordered him to sell all 600,000 shares he owned. œSell what you can tonight and just get me out the next day, he said, according to the complaint.
Watching baseball owners nix Cuban’s ownership of the Cubs on ethical grounds will be an ironic joke, to say the least. Possibly on the grounds that the stock move is too bush league of the likes of the Tribune Co tradition?
Mamma.com’s boy.
I hate to be a conspiracy theorist, but the timing of this event for the benefit of MLB’s alibi machine is too perfect to be believed….
I must agree with glenzo, especially since Thanksgiving is the deadline for the final bid consideration.
Martha Stewart’s cot is still warm.
From what I’ve read, this is a civil complaint, not a criminal charge. The fine will be in the $2M range and no jail time will be served. That’s chump change for this bozo. Still, it will give all parties a reason not to have him win the bid.
Or maybe it’s just that the investigators involved had a bone to pick with Cuban’s financing of Loose Change 9/11, a conspiracy-theory documentary. The email from the SEC guy to Cuban — CCed to the HEAD OF THE SEC — that basically gloats on him getting investigated is another reason why I will be so delighted to see these dudes shuffle off in January. This in no way implies that I think Loose Change is anything but the utmost BS, but really: why start the investigation two and a half years after Cuban sold the stock?
Is Oliver Stone available for comment?
I hope everyone found that William Rhoden link very edifying. This is what I meant to link to.