cuban charged with insider trading
Old 11-17-2008, 12:11 PM   #1 (permalink)
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WASHINGTON -- Federal regulators have charged Dallas Mavericks owner Mark Cuban with insider trading for allegedly using confidential information on a stock sale to avoid more than $750,000 in losses.

The Securities and Exchange Commission filed a civil lawsuit against Cuban on Monday in federal court in Dallas. The agency says that in June 2004, Cuban was invited to get in on the coming stock offering by Mamma.com Inc. after he agreed to keep the information private.

The SEC says Cuban knew the shares would be sold below the current market price, and a few hours after receiving the information, told his broker to sell all shares in the search engine company.

"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," Scott W. Friestad, deputy director of the SEC's Division of Enforcement, said in a statement. "It is fundamentally unfair for someone to use access to nonpublic information to improperly gain an edge on the market."

http://sports.espn.go.com/nba/news/story?id=3708124
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Old 11-17-2008, 12:15 PM   #2 (permalink)
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Wow, very bad.....
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Old 11-17-2008, 12:18 PM   #3 (permalink)
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i really don't understand why this is illegal.
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Old 11-17-2008, 12:19 PM   #4 (permalink)
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i really don't understand why this is illegal.
"It is fundamentally unfair for someone to use access to nonpublic information to improperly gain an edge on the market."

an equal playing field is fundamental to free markets. simple as that.
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Old 11-17-2008, 12:21 PM   #5 (permalink)
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soooo, instead of losing that $750,000, what will happen to him?
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Old 11-17-2008, 12:21 PM   #6 (permalink)
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so what are we looking at here?

A fine?

Jail time?

things swept under the rug?

You'll have to pardon my ignorance but i know nothing of trading and stock market stuff.
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Old 11-17-2008, 12:22 PM   #7 (permalink)
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A lot of people do what Cuban did. Only difference is that Cuban got caught.

Its like cheating on an exam or a sporting event. It isn't cheating unless you get caught. Unless of course your name is Barry Bonds
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Old 11-17-2008, 12:28 PM   #8 (permalink)
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"It is fundamentally unfair for someone to use access to nonpublic information to improperly gain an edge on the market."

an equal playing field is fundamental to free markets. simple as that.
unfair? unfair is that'll take me over ten years to make 750k. the guilty party is the source of the information. you can't hold someone responsible for keeping their money safe.
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Old 11-17-2008, 12:28 PM   #9 (permalink)
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Martha Stewart did it and make money, but she went to jail

The Bank heads did it, lost money, lost jobs and they get rescued by the government and they go on vacation
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Old 11-17-2008, 12:35 PM   #10 (permalink)
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so what are we looking at here?

A fine?

Jail time?

things swept under the rug?

You'll have to pardon my ignorance but i know nothing of trading and stock market stuff.
A minimum of a stiff fine, probably some time served.

It was under a million so Cubans lawyers will probably reduce it to some sort of fine.
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Old 11-17-2008, 12:40 PM   #11 (permalink)
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it's a civil lawsuit, they're after his money. strange that it's not a federal issue, though.
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Old 11-17-2008, 12:46 PM   #12 (permalink)
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It'll be a fine. A hefty one, but I'm sure he can cover it.
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Old 11-17-2008, 12:54 PM   #13 (permalink)
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A lot of people do what Cuban did. Only difference is that Cuban got caught.

Its like cheating on an exam or a sporting event. It isn't cheating unless you get caught. Unless of course your name is Barry Bonds
Doesn't make it right though
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Old 11-17-2008, 12:58 PM   #14 (permalink)
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Everybody does it. It's like rolling through a stop sign or downloading illegal MP3s.
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Old 11-17-2008, 02:37 PM   #15 (permalink)
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unfair? unfair is that'll take me over ten years to make 750k. the guilty party is the source of the information. you can't hold someone responsible for keeping their money safe.
Of course if unfair ... if these practices are allowed, nobody from outside will ever invest.

Would you invest in some company which has people inside who leaks information to some friends and let you loose your money? Specially if your money represents RRSP or private retirement money that you work a lifetime to save and a greedy guy like Cuban uses unfair practices to bail out and get richer. Cuban has 2.3 milliards, you have maybe a 100k - 200k, if he loses 750k is nothing. And this trade was the one that was discovered, how many others might happen?

Jail for Cuban ... Martha Stewart got jail as well.
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Old 11-17-2008, 02:39 PM   #16 (permalink)
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Everybody does it. It's like rolling through a stop sign or downloading illegal MP3s.
Everybody does it till they get arrested ... for this kind of practices, we are in big trouble with financial markets. Jail for Cuban if this is proved to be true.
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Old 11-17-2008, 03:09 PM   #17 (permalink)
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If he does get jail it'll be in some 5-star resort prison LOL where no one really notices there in jail. He'll be fine, just will have a terrible reputation and if he wants to buy the Cubs I think that will be a no go.
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Old 11-17-2008, 03:26 PM   #18 (permalink)
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soooo, instead of losing that $750,000, what will happen to him?
The name Martha Stewart comes to mind!
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Old 11-17-2008, 03:27 PM   #19 (permalink)
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Of course if unfair ... if these practices are allowed, nobody from outside will ever invest.

Would you invest in some company which has people inside who leaks information to some friends and let you loose your money? Specially if your money represents RRSP or private retirement money that you work a lifetime to save and a greedy guy like Cuban uses unfair practices to bail out and get richer. Cuban has 2.3 milliards, you have maybe a 100k - 200k, if he loses 750k is nothing. And this trade was the one that was discovered, how many others might happen?

Jail for Cuban ... Martha Stewart got jail as well.
you're not really convincing me to why he should be sued instead of the person responsible for the information leak.
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Old 11-17-2008, 03:43 PM   #20 (permalink)
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you're not really convincing me to why he should be sued instead of the person responsible for the information leak.
because he profited from that information. it's ok to know, but you can't turn around and use that confidential info to make deals on an open market.
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