Tuesday, November 18, 2008

SEC Bites A Big Dog

Does SEC Chairman Chris Cox have another public relations nightmare on his hands?

The billionaire owner of the Dallas Mavericks, Mark Cuban, has been charged with insider trading by the SEC. Note to SEC, Mark Cuban is not Martha Stewart.

The SEC may have thought they had another lay up on their hands, instead they appear to be going up against someone that is not afraid to rip at the core of the SEC and its enforcement actions. He is a fighter and has the billions to back up his fight.

The tough Mark "I go for the throat when you mess with me" Cuban is already in prime form. There are some very interesting allegations already developing out of a case that has been public news for less than 24 hours. But the allegations are not from the SEC, they are from Mark Cuban and his lawyers.

On his web site Cuban states (my emphasis), “I am disappointed that the Commission chose to bring this case based upon its Enforcement staff’s win-at-any-cost ambitions. The staff’s process was result-oriented, facts be damned. The government’s claims are false and they will be proven to be so.”
Cuban's lawyer, Ralph C. Ferrara of Dewey & LeBoeuf LLP, stated (My emphasis), "This matter, which has been pending before the Commission for nearly two years, has no merit and is a product of gross abuse of prosecutorial discretion. Mr. Cuban intends to contest the allegations and to demonstrate that the Commission’s claims are infected by the misconduct of the staff of its Enforcement Division."
Another Cuban lawyer, Christopher Clark, told FOX news that the SEC's text of a phone call is completely wrong. "If there is a tape of them everybody can play it and it's not going to say anything like what the SEC quoted." This sounds to me like Clark is charging the SEC with lying.
Clark went on to make an even bigger charge:
People who criticize the SEC have a much higher chance of having an enforcement action brought against them and we're going to demonstrate that. Very persuasively. In the right forum.
Cuban runs a site called BailoutSleuth.com which tracks what happens with bailout money and monitors any questionable behavior by those who are receiving and handing it out.

This case has the potential to rip the SEC to smithereens. Get your popcorn ready.

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