Wednesday, October 7, 2009

SEC to Appeal Dismissal of Mark Cuban Case

The SEC has announced that it plans to appeal a federal judge's dismissal of the agency's insider-trading lawsuit against Mark Cuban, owner of the NBA's Dallas Mavericks .

The SEC filed a notice in U.S. District Court in Dallas that it plans to take its case to the 5th U.S. Circuit Court of Appeals in New Orleans.

U.S. District Judge Sidney A. Fitzwater dismissed the case in July, ruling the agency didn't allege that Cuban had agreed not to trade on confidential information.

"We believe the District Court erred in dismissing our complaint, and we look forward to presenting our position to the Fifth Circuit Court of Appeals," SEC spokesman John Nester said in a statement.

One of Cuban's lawyers wasted no time firing back.

Steve Best of Dewey & LeBoeuf , released a statement saying the courts already "dismissed the complaint based on the SEC's own version of the facts and, in the process, invalidated one of the SEC's insider trading rules. So not only did the SEC lose on the law, but, as Mr. Cuban's recent sanctions motion demonstrates, the SEC could never have won on the actual facts."

"This appeal is nothing more than the SEC's desperate attempt to shock a heartbeat into a case that was dead on arrival," said Best. "It's just one more example of wasting taxpayer money."

My interview with Best last year, The Coming Bizarre Show Trial of Mark Cuban, is here.

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