OT: Mark Cuban charged with Insider Trading by SEC

[Dback Jon]

The Securities and Exchange Commission filed insider trading charges against Mark Cuban, the outspoken owner of the Dallas Mavericks, for allegedly dumping shares in Mamma.com upon learning it was raising money in a private offering.

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. 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.

In a PIPE transaction new shares are issued at a discount to the current trading price. An announcement of a PIPE transaction is often followed by a drop in the stock price as shareholders anticipate their stake will be diluted.

 

[shazaam6]

Oops. Better call Martha Stewart for some prison pointers.

 

[jagu]

I wonder if Cuban can knit sweaters in jail. Martha made a huge profit with that.

 

[Kablansky]

Cuban won't go to jail unless Federal charges are filed as SEC penalties are civil matters. Martha served time for charges of obstructing justice and lying to investigators.

Bottom line, the money he avoided losing is going to pale in comparison to the fine he will get.

 

[YouJustGotSUNSD]

Really hard to tackle the concept of "hey youre going to lose 3/4 of a million bucks next week but it's illegal if you do something about it."

What kind of penalties is he facing? Could it really exceed the 750k?

 

[Mainstreet]

I need to go back again and watch the movie, "Wall Street" with Michael Douglas. Great movie. It was all about insider trading as I recall. I do believe criminal charges can be filed in insider trading.

 

[TJ]

Well, I guess he's not getting the Cubs afterall

 

[TheHopToad]

Cuban won't go to jail unless Federal charges are filed as SEC penalties are civil matters. Martha served time for charges of obstructing justice and lying to investigators.

Bottom line, the money he avoided losing is going to pale in comparison to the fine he will get.

He'll end up lying about it. They all do. All of those greedy billionaires are the same.

 

[Kablansky]

Really hard to tackle the concept of "hey youre going to lose 3/4 of a million bucks next week but it's illegal if you do something about it."

What kind of penalties is he facing? Could it really exceed the 750k?

Under the rules, and I believe this still applies from when I was in school. You forfit the difference between what you avoided losing ($750,000 in this case) and pay a large fee on top of that. I believe the fee that you pay is relative to the amount you avoided losing. For example, in reading about Martha's fine, she avoided a $45,000 loss and not only was fined that amount but an additional $30,000 bucks

 

[YouJustGotSUNSD]

Wow that sucks ass.

 

[arwillan]

i can hear the nicknames already. Mark Stewart, Martha Cuban, etc.