1) Q- We spoke earlier about you were telling Mr. Cuban in words or substance : “I have confidential information for you”.
A- Right.
2) Q- Do you recall anything Mr. Cuban said in response or reply to that statement by you ?
A- No, I do not.
The SEC knows this-they have the transcript, yet they brought the case anyway. Why? Do they have a different statement from Mr. Faure ?
is he disputing that he knew about the pending event that would cause the stock to drop?
here's the way i look at it: Mr. Cuban wanted to save .0003% of his total net worth by dumping stock on an anonymous unsuspecting buyer who lost 10% of their investment amount in a 24 hour period because s/he did not have the inside information that Mark had and that buyer would most certainly not have bought the stock if s/he did.
Take a step back... big picture here. 750k is a drop in the bucket compared to some of the shenanigans that have been going on. This charge on Cuban is nothing more than a sideshow (think Martha Stewart) to put us under the belief that the SEC has their shit together.
Example: Angelo Mozilo dumped 400 Million dollars of CFC stock onto the market. He knew the shit that was going on... where's the SEC?
Ouch. 750k is a drop in the bucket, unless you're a working stiff who bought stock that Cuban was selling fraudulently. Smoody's comment hit me like a punch in the face.
Regardless of whether Cuban knew the upcoming PIPE was confidential, nothing about his sale of the stock was `fraudulent.' The investors who bought the shares from him were going to buy the stock anyway; Cuban did not make any false representations or inducements to convince them to buy his stock. In fact, it is pretty hard to argue that his trade created any victims at all, since the buyers would have been paying a higher price for the shares, and hence lost more money, if Cuban _hadn't_ been selling, since his quick exit pushed down the price.
Cuban's sale of stock added correct information to the markets. As an outside investor, Cuban had no duty of trust to the other investors, unlike the CEO, who violated his fiduciary duty by disclosing confidential information to an outside investor without a written non-disclosure agreement.
It probably wasn't a single working stiff, or a working stiff in general. Sure, people lost money on the other side... and if he did what the SEC alleged, then he should go to jail.
But there are much bigger fish to fry here, but the SEC and CTFC have neither the means nor the competency to do something of value. Instead they go after this petty bullshit which seems to be politically motivated.
I agree with what you're saying, but it's good to be reminded of the reason why out-and-out insider trading is illegal; I'd obviously forgotten about the counterparty.
This is vaksel's second submission this week about Mark Cuban and insider trading. The last one was Mark Cuban's one line response to the insider trading allegations and also pointed to his blog.
Just what, exactly, does Mark Cuban have to do with hackers or HN? Why is this stuff getting voted up? Not to mention, even just from a news standpoint these articles have very little substance to them. Can we give this a rest, please?
Those of us who are interested in Mark Cuban and insider trading can go to his blog on our own without having these off topic posts plastered all over the front page.
Perhaps because Cuban is a fairly prominent angel investor within the community?
Just because it's not relevant to you, doesn't mean it isn't interesting and relevant to the rest of us. If no one found it interesting, then it wouldn't get voted up.
I found the article interesting, but didn't really understand why it should be on HN.
Is an article supposed to be relevant to hackers or entrepreneurs simply because it is written by an angel investor? By this logic, why not just automatically post every article Cuban has ever written?
That's basically what has happened. Most of the articles are interesting, but these essentially content free posts about his legal battle really aren't.
Hacker News is supposed to be about ideas. Mark Cuban is a person who has ideas. Many (including the NYT) have suggested that the government is targeting Cuban because of his ideas. It's not entirely clear what's happening, but it seems like something that's worth following.
I think it's pretty obvious. Cuban is a majority owner in ShareSleuth.com, a website "aimed at exposing securities fraud and corporate chicanery":
http://sharesleuth.com/about.html
Cuban also funds bailoutsleuth.com which is supposed to track the government's use of the $700 billion.
You can't expect to put yourself in such a visible position of moral status and think that others won't try their hardest to bring you down. I'm sure Cuban knows that and hopefully he keeps his slate clean.
I'm not going to waste my time with any conspiracy theories, but I do think insider trading is kind of a bullshit crime in many cases. Only an idiot would fail to act on a tip that happens to be passed to him whether it is inside information or not. No one is going to sit idly and watch $750,000 dissolve. Of course, it's a totally different story when it's a deliberate attempt to acquire and profit from information unavailable to other investors.
If I remember correctly, they went after Martha Stewart because she was the CEO of a publicly traded company and also once had a stockbroker license. In other words, she definitely knew better and should have handled the situation differently. Is or was Mark Cuban ever an executive for a publicly traded company?
The story is about a public startup and insider trading. It seems very relevant to a startup CEO, for example, to know what information his investors can trade on, or not, and under what circumstances.
The involvement of Mr. Cuban is just coincidental :).
One of the comments on Cuban's blog said something that piqued my interest, yet I haven't seen an adequate response to:
"So the allegation in paragraph 14 of the SEC’s Complaint that “Cuban agreed that he would keep whatever information the CEO intended to share with him confidential” is untrue? If so, the SEC would be in violation of FRCP 11(b)(3). This is especially true since a duty of confidentiality is an essential element of either a 17(a) or 10(b) claim under the Exchange Act"
