Wow, everyone and their mother is writing about Mark Cuban being accused by the SEC of insider trading violations.
Mark says the charges are false, but can't really say much more.
I've seen people comparing this case to Martha Stewart's. Stewart didn't go to jail because of insider trading violations. In fact, I think even the government understands that if your stock broker calls you up and says I think you need to dump your stock, which is what happened in Stewart's case, from Joe the Plumber to Martha Stewart, most will listen and sell the stock.
Stewart's sin wasn't in selling stock, she went to jail for being found guilty of lying to investigators. It could've gone down as ink in the paper with her stock broker frying (which he did anyway) and Martha going back to baking. But she didn't go that route and was found guilty for lying about the events. Especially because of Enron and its ilk, they made an example of her.
This case will come down to only one thing: how did Mark acquire his information? If your best friend calls you up and says, "I was standing in line and Starbucks and I heard a guy talking about how they were going to announce PIPE financing tomorrow," and you ask, "Did he say the name of the company?" and your friend tells you and you're like oh &$@!, I own stock in that company it's not quite the same as if the CFO of the company calls you up the day before the announcement to let you know and you turn around and dump your stock.
They might try to fine him for the Starbucks style infraction anyway, but he wouldn't serve any jail time at that extreme. If he truly got the information via inside methods, lied about it, and they can prove he lied about it - they'll fry him.
I don't see it shaking out like that. I'd probably try to settle if I were Mark simply to avoid the newspaper headlines, and all the coverage of the events leading up to the trial, the trial, etc. But I think there's zero chance of that happening. He hates to lose, and especially if he didn't do anything illegal, he's not going to put up with an outcome where he settles.
By the way, I don't know that his lawyers won't ask him to take it down, but Mark has a post on his blog that's almost four years old that very clearly states why he sold the stock in mamma.com. It's somewhat poorly formatted, but if you don't want to read the whole thing, scroll down to item 4.) for Cuban's take on why he sold mamma.com stock. Fittingly, there's also an earlier post on why he bought it to begin with. Ironically, at least in retrospect, it's titled Today was a very good day.
We know from Mark's own words that he didn't want to invest in a company that financed via PIPES. What we don't know is exactly why Mark sold the stock. If he did sell because he knew the financing announcement was coming, we don't know how he came into that info. I expect we'll find out.
Also, in the post on why he sold the stock, though he didn't exactly come out and say "there were some real slimeballs at Mamma, especially the CFO," with hindsight the implication is certainly there. Don't be surprised if some of the back story here is that the Feds were going to fry that CFO, and he threw out Cuban's name a.) to save his ass, and b.) based on what Cuban posted in public, he might be out to get him.
I have no idea of any of that is true and did no research whatsoever. I wouldn't be surprised if it works out that way, but sometimes when you play connect-the-dots without doing your homework, you draw the wrong picture. I want to be clear that I'm being very speculative. Still, don't be too surprised if it's something like that.
It's bad timing for Cuban as even the mere accusations probably whatever slim hope there was that MLB would let him buy the Chicago Cub. On the other hand, with the economy in the tank, there aren't that many people who can afford the Cubbies, and one less bidder isn't good for the seller.
Mark definitely has an combative side to him, but that's always been part of his charm for me. He has a lot of strongly held beliefs and opinions, some of which I don't agree with, but I don't doubt for a second that he wants to change things for the better and that everything he touches seems better off for it.
Mark is one of the most accessible guys there is and unlike self-proclaimed rock stars like Ben Silverman, Cuban really is a rock star. Mark is a hell of a lot more accessible to us than Silverman is, which is kind of a shame given the blog topic. I first talked to Mark years ago (mid 1990s) when I had a newsletter about the Internet and Mark contacted me to let me know he though I was wrong about something -- probably because I was wrong! That's the same way I met Bill Gorman, now my TVbytheNumbers partner in crime, by the way.
I haven't talked to Mark in ages. But last year when we launched this blog, even though he was recovering from hip replacement surgery, and trying to get prepared for his run on virtual discussion on internet video metrics., and staying on top of his businesses (Dallas Mavericks, HD Net etc) he still took a little bit of time to participate in a
I'm pulling for Mark to come out of this smelling like a rose. If he doesn't, that will indeed be disappointing.