What Mark Cuban blogged about when SEC alleges he was insider trading |
This morning when I learned that Dallas Mavericks owner Mark Cuban is being charged by the SEC for insider trading that allegedly occurred on June 28, 2004. The complaint involves his selling of his 6% stake in mamma.com. The first thing I thought was: wonder what Mark was blogging about around this time? What did he write specifically, if anything, about Mamma.com?
For those not familiar, Mr. Cuban blogs somewhat regularly and passionately at BlogMaverick.com and on June 28, 2004 at 9:13am he wrote a post titled "Mishegaas…again" offering a rant against a Tribune news writer:
If they [Tribune Company] only knew how many times I have told brokers and possible investors that they shouldn’t buy Trib stock because if they can’t get simple details on their sports pages right, how can you trust their accountants? Corporate culture either values accuracy or it doesn’t. The Tribune Company obviously doesn’t.
This might invoke a ‘who cares’ response, but a search through his blog reveals he had written specifically about Mamma.com. Let’s rewind the tape to Cuban’s post "Today was a very good day" on March 17, 2004 which is the first time he mentioned mamma.com on his blog:
To start things off, the SEC filing for my purchase of shares in Mamma.com hit the tape. Everyone wanted to know why. Why this stock. Particularly when I usually am opposed to investing in any non dividend paying stocks at all.
… I invested in mamma.com for the same reason I invested in Netidentity.com back when it was known as mailbank.com. I love businesses with low overhead, that don’t need to be technology leaders to succeed, that generate cash that they can put in the bank, and at some point, hopefully payout to shareholders. I think mamma.com has that potential.
This was some three months before he sold the Mamma stock.
Fast forward approximately nine months after selling Mamma.com to March 2, 2005 when Cuban blogged about "Naked Shorts … What I have learned" and provides specific detail why he sold the Mamma stock:
I wanted to reference Mamma.com. I had purchased stock in Mamma.com in hope that it could be an up and coming search engine. I thought I had done some level of due diligence. Talked to the company management. Talked to some employees who worked in sales. Read the SEC Filings.
… Then the company did a PIPE financing. Im not going to discuss the good or bad of PIPE financing other than to say that to me its a huge red flag and I dont want to own stock in companies that use this method of financing. Why? Because I dont like the idea of selling in a private placement, stock for less than the market price, and then to make matters worse, pushing the price lower with the issuance of warrants. So I sold the stock.
Through Cuban’s blog, we get a curious glimpse of what he was thinking at the time. Will be interesting to see what happens. I’m kind of surprised that none of the mainstream news reports of the incident mention Cuban’s blog posts around the time.
Wired does point out that Cuban is a majority partner in the site sharesleuth.com which is an independent web-based site that exposes securities fraud. D’oh.
Innocent until proven guilty
It’s important to keep in mind that these are only charges by the SEC (read full PDF here) at this time, Mr. Cuban has not been found guilty of any wrongdoing yet.
As we allege in the complaint, Mamma.com entrusted Mr. Cuban with nonpublic information after he promised to keep the information confidential. Less than four hours later, Mr. Cuban betrayed that trust by placing an order to sell all of his shares. It is fundamentally unfair for someone to use access to nonpublic information to improperly gain an edge on the market.
If Cuban is found guilty, then he’ll join Martha Stewart who used information gleaned privately for financial gain. Stewart did jail time. Would Cuban face jail time too? This is serious business. The $750,000 Cuban saved by selling before the stock price plummeted allegedly with insider knowledge would not be worth the risk.
Did this post make you go hmm?
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[…] another interesting take on the Mark Cuban Insider Trading story, visit MakeYouGoMmm.com, who have dug through Cuban’s old posts relating to […]
Pingback by Mark Cuban targeted because he’s a 9/11 Truther? — November 17, 2008 @ 4:04 pm PST
All billionaires, and most millionaires, could be found guilty of “insider trading” offenses far more serious than what is alleged here. The question is “WHY IS OUR CRIMINAL GOVERNMENT TARGETING A PATRIOT LIKE MARK CUBAN?” and not the far greater scum that do things ten times as bad every day within easy walking distance of the SEC headquarters??–indeed, within the headquarters building itself!
Insider trading laws are so broad and ambiguous that almost anyone who has ever bought or sold stock could be charged with something.
Mark Cuban is being targeted because he is a free thinker who understands a false flag operation when he sees one.
Comment by Steve Martin — November 19, 2008 @ 5:05 am PST
It seems that anyone that has some pull that actually has the guts to say what he thinks is a radical? Instead of crucifying Mr. Cuban why not target the real criminals who run the stock market? This is all a delusional group and are only figuring out how to further their own interests which means silencing those that speak what they see and think.
Comment by Linda ( Granny Warrior) Hunnicutt — November 19, 2008 @ 8:09 am PST
Our criminal government goes after the petty criminals while purposefully missing the large fish, who own them by fiat, or out right black mail.
Mark Cuban sounds like he is an individual using his own mind and money to do a proper investigation 911. Too many questions and no good answers have come from those investigating and policing themselves. Be it in government or in the finance community. Its time we the free shed more light on the real criminals, like, who are the ones that had the put options for the airliners on 911 the day of the kabbalahwood spectacle we all saw on our teebees. Making a big to dolike you have done here, makes me go hmmm about you.
mk
Comment by mikeknapp — November 19, 2008 @ 8:34 pm PST
mikeknapp - Let’s stay on topic here. Not sure how or why 9/11 comes into any of this. I’m simply reposting Mr. Cuban’s own words. That doesn’t say anything about me, it is there so we can understand and evaluate what he was saying around the time this ***ALLEGEDLY*** happened according the SEC. As I said in the post, innocent until proven guilty.
Comment by TDavid — November 20, 2008 @ 6:50 am PST
So let’s see here, these are the facts:
1. Company officers of some two-bit company decide to do a crooked financing that enriches the big fish at their company at the expense of the regular-Joe investors.
2. THEY CALL CUBAN (not the other way around) and all their other big fish. Cuban hears them out, and tells them it’s crooked and sell his shares in protest, while most of the other big fish buy the crooked sub-market-price share offering.
3. Over four years later the SEC decides that that is “insider trading.”
LMAO.
What would it have been had the shares gone up? Why aren’t these crooked financing schemes and those who employ them being investigated?!?
Insider trading is when $700,000,000,000 in taxpayer money is stolen from the taxpayers and given to the bankers who have created an economic meltdown by their own incompetence and chicanery. It’s time the military and the militias investigate that, if you ask me!
Comment by Steve Martin — November 20, 2008 @ 11:17 am PST
9/11 clearly comes into this because anyone with the kind of money that could be used to expose THE REAL TERRORISTS in this country is a REAL THREAT to those terrorists.
Doh….
Comment by Steve Martin — November 20, 2008 @ 11:18 am PST
Steve Martin - you’re awfully passionate about this, are you buddies with Cuban or something? You think Cuban is being railroaded. Got that. **IF** he knew he was called with information that no other traders had then that seems to fit the definition of insider trading. The report says he said he knew he couldn’t sell, and yet he did. 9/11 and terrorism have nothing to do with his personal decisions — IF — this is indeed what happened.
Comment by TDavid — November 20, 2008 @ 11:28 am PST
Ahh, just read this at TechCrunch:
So this might be Bush White House retribution of sorts? The linkage makes more sense, Steve and mikeknapp.
Comment by TDavid — November 20, 2008 @ 11:41 am PST
Yea, I am buddies with Mark Cuban…lol… He sometimes comes to northern Maine to hang out in my wood-heated (because I can’t afford heating oil anymore) hovel to eat partridge meat, macaroni & cheese, and porridge with me. I pick him up at the airport in my ‘99 Chevy Malibu with the right-side passenger door smashed in from when my kids ran off the road with it two winters ago. He especially enjoys our leaky roof, torn up carpets and pealing wall paper. I understand that’s why he sold these shares early, so he could build a replica of our place down there in Texas to go to on weekends when he doesn’t have time to fly up.
Comment by Steve Martin — November 20, 2008 @ 12:41 pm PST
Steve - it’s good to know good manners are alive and well in your slice of Maine. Say hello to Mr. King in Bangor
Comment by TDavid — November 20, 2008 @ 1:21 pm PST
Bangor is southern Maine to me…lol…And Mr. King gives me the creeps.
Comment by Steve Martin — November 20, 2008 @ 1:33 pm PST
I don’t think that Cuban’s action only led to the share’s drop. It is because of the bad economy. Even google is effected. So, the company will find ways to save their assets. The best way for corporates to earn some big cash is by filing cases.
Comment by Amanda — January 25, 2009 @ 2:47 am PST