Almost four years ago, I wrote an article for AOL’s Daily Finance site about the Securities and Exchange Commission witch hunt against Mark Cuban.
The SEC filed insider trading charges against him in 2008 after he sold 600,000 shares of stock in Mamma.com. They said that he was insider trading because he sold his shares after receiving information that there was going to be another offering of stock by the company.
Mark Cuban didn’t ask for the information on the stock offering. It was provided to him because the company wanted him to invest more money. He didn’t want the information, and he knew that it would devalue the stock he already held. So Cuban declined and sold his stock. The stock then dropped in value, and in ran the SEC.
In July 2009, the case against Mark Cuban was dismissed. Not content to simply be wrong, the SEC doubled down and appealed. The appeals court sent the case back to district court for a trial.
Today Mark Cuban was vindicated again. A jury deliberated for less than a day and told the prosecutor, Jan Folena, to suck it. She tried to prove that Cuban promised to keep the information about the Mamma.com stock offering confidential and not trade on it. Cuban says Folena (and the rest of the prosecution team) lied about the evidence and went after him simply because he is famous.
Cuban had the means to defend himself for the last five years. But imagine if he wasn’t a gazillionaire and couldn’t afford the attorneys’ fees that surely were in the millions? This is the risk we as citizens run each day, simply by existing and conducting business in the United States. If the “authorities” get you in their crosshairs, watch out. You will be bankrupt, convicted, or both.
Congratulations, Mr. Cuban. This was a well-deserved victory, and I applaud your desire to fight rather give in to government bullies simply because that would have been less expensive.