That’s not the Southeastern Conference, meatheads. The Securities and Exchange Commission has filed charges against notorious Dallas Mavericks owner Mark Cuban for one count of Martha Stewart.
The SEC alleges in a civil action that Mr. Cuban sold his entire 6% ownership stake on June 28, 2004, after learning that Mamma.com was raising money through a private investment in a public entity, or PIPE. [Ed's note: PIPE means that the company is creating more shares and selling them at a discounted price in order to raise cash, thereby brown-holing those that already own the stock] The next day, on June 29, the company announced the PIPE financing and shares of the company dropped by more than 10%. By selling his stake, the SEC alleges, Mr. Cuban avoided more than $750,000 in losses.
Vent About Sports raises the question: Did Major League Baseball catch wind of this? Is this why Cuban doesn’t own the Cubs right now?
The Cuban plan that I started this post with demonstrates this: there’s nothing wrong with the simple fact of Cuban trading on information the rest of us don’t have. The only thing the law cares about is whether he stole the information. While that should matter to whomever he stole it from, I’ve never understood why outsider traders should care, and what that has to do with fairness. The ultimatum game isn’t about stealing, it’s about equal shares.
So far, Cuban has not addressed the charges on his blog, not to suggest that he may be legally permitted to do that, or that doing so would be in his best interests. So is Cuban a lying, cheating rat bastard? Hey, the government says so, but then, the government also said that OJ didn’t do it, so you may want to hold off judgment for a while.