Mark Cuban Beats SEC Rap

Mark Cuban went toe to toe with the SEC over insider trading allegations and it appears as if he won.

From the WSJ:

A federal judge on Friday dismissed the U.S. Securities and Exchange Commission’s insider-trading case against Dallas Mavericks owner Mark Cuban.

The SEC alleged in November that Mr. Cuban sold his stake in a Canadian Internet company just after receiving confidential information about the company’s plans to issue low-price shares.
Mr. Cuban denied the allegations and argued that the SEC’s case should be dismissed because the agency was seeking to expand the definition of what constituted insider trading.

U.S. Chief District Court Judge Sidney Fitzwater in Dallas sided with Mr. Cuban on Friday and threw out the case. He did give the agency 30 days to refile charges if it could strengthen its allegations.

In a 35-page ruling, Judge Fitzwater said Mr. Cuban only would be liable for insider trading if he had made a promise not to trade shares based on the confidential information he allegedly received.

The SEC’s case had to be dismissed, the judge said, because the agency never alleged that Mr. Cuban made such a promise.

It was a weird case to begin with but the type that is often settled out of court. Cuban had the wherewithal to fight as well as the contrary nature. If you want a good analysis from a legal point of view, check out John Carney’s post at Clusterstock.

About Tom Lindmark 401 Articles

I’m not sure that credentials mean much when it comes to writing about things but people seem to want to see them, so briefly here are mine. I have an undergraduate degree in economics from an undistinguished Midwestern university and masters in international business from an equally undistinguished Southwestern University. I spent a number of years working for large banks lending to lots of different industries. For the past few years, I’ve been engaged in real estate finance – primarily for commercial projects. Like a lot of other finance guys, I’m looking for a job at this point in time.

Given all of that, I suggest that you take what I write with the appropriate grain of salt. I try and figure out what’s behind the news but suspect that I’m often delusional. Nevertheless, I keep throwing things out there and occasionally it sticks. I do read the comments that readers leave and to the extent I can reply to them. I also reply to all emails so feel free to contact me if you want to discuss something at more length. Oh, I also have a very thick skin, so if you disagree feel free to say so.

Enjoy what I write and let me know when I’m off base – I probably won’t agree with you but don’t be shy.

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