6 ms·

Mark Cuban offers to pay SEC lawyers to speed up the investigation against him

59 points by grellas 16y ago

staunch 16y ago
I don't see why it wouldn't make sense. As long as it's handled in a careful way. You can pay extra to expedite all kinds of government services, why not SEC investigations?
- vaksel 16y ago
  expediting other gov't services = getting a few things stamped can't work with SEC, since they have to do interviews etc
  - shib71 16y ago
    That's still a problem that money can solve - hire more interviewers.
  - VengefulCynic 16y ago
    According to the WSJ, a big part of the problem is navigating the voluminous paperwork. Adding additional clerks and lawyers to go through the whole file would probably expedite things quite a bit.
- steveklabnik 16y ago
  It could be construed as a bribe. If the money is coming from Cuban, they could be less likely to bring judgement against him. It doesn't actually matter if this is true or not; perception is reality.
- Construct 16y ago
  It creates a conflict of interest for the attorneys. It sets a precedent that wealthy people can receive faster treatment from the SEC. Of course, the SEC tends to investigate people who have made large amounts of money through potentially illegal means, so this may not be an issue. However, it also provides less incentive for the SEC to move quickly on other cases. If the SEC can accept money in exchange for speeding up the process, they are now one step away from slowing down or drawing out the whole process as a means for extorting money.
  - mirkules 16y ago
    "SEC tends to investigate people who have made large amounts of money through potentially illegal means" I suspect it is illegal to accept illegally-obtained money. Therefore, if Mark was found guilty, the staff cannot be paid. Which also gives incentive to not find him guilty, resulting in a conflict of interest. IANAL, though.
    - ryanwaggoner 16y ago
      Dollars are the ultimate fungible good, and he didn't obtain all of his money from this alleged offense, so as long (total_net_worth - alleged_offense_gains) > expeditionary_payment, I don't see how this would be an issue.
    - anigbrowl 16y ago
      No, his staff are still owed unless they're complicit. Are you going to raid his janitor for happening to sweep the wrong floor? Same concept.
      - 0x44 16y ago
        Your parent meant the SEC staff, not Mark Cuban's staff.
        anigbrowl 16y ago
        D'oh!
  - staunch 16y ago
    Wealthy people can receive faster service for hundreds of government services. http://www.google.com/#q=site%3Agov+expedite+fee http://www.google.com/#q=site%3Agov+expedite+fee
btilly 16y ago
So how do you organize legal cases with over 66,000 pages of paperwork? I know that blowing cases up to this size is standard operating procedure, but I'm curious how it is handled in practice.
- johngalt 16y ago
  Usually you setup an organization and review routine, where lower level attorneys do the initial pass and escalate important documents. Let me tell you that 66,000 is nothing. Civil litigation can easily surpass 200k-300k documents. There are a lot of tools out there to help with this (concordance, IPro, Summation).
  - smalter 16y ago
    as a former lawyer who has handled large and small document reviews, i can say that both doc review platforms i used, concordance and caselogistix are horrendous and there is certainly an opportunity here for someone to do this right.
    - btilly 16y ago
      Unfortunately this classifies as enterprise software, and therefore the quality of the software is not particularly important for its adoption. See http://lists.canonical.org/pipermail/kragen-tol/2005-April/000772.html http://lists.canonical.org/pipermail/kragen-tol/2005-April/0... for more on this.
    - ssp 16y ago
      A bit of a tangent, but would something like source control (git, hg) be useful to lawyers? If they are cutting and pasting from older documents all the time, it seems like it would.
      - smalter 16y ago
        i think within most big law firms, there may be an enormous team which reviews documents, but when it comes to drafting documents, even at the biggest firms those teams are relatively small. i helped draft a section of a 2000 page document and the whole document just consisted of separate word documents with subjects like "chapter 1 rev2 final 9-3-2009.doc" which are passed around via email. but since the teams are relatively small, there aren't that many versions floating around so that can do a passable, if sometimes irritating, job. there are some types of version control already out there which lawyers use, e.g., hummingbird dm. it's pretty lame and annoying to use which is why many lawyers i know just do what i describe above for version control. so bottom line: yes, it'd be useful, but it would have to be very easy to use otherwise people would just use marginally more annoying but in some ways much easier to use (don't have to learn how to do something new) methods.
kylelibra 16y ago
I'm not up on this case at all. Any other thoughts as to Cuban's motives here?
- kscaldef 16y ago
  Presumably, having a pending investigation hanging over his head is bad for business.
- smalter 16y ago
  the procedural history of cuban's case is somewhat confusing. there are actually two ongoing suits right now. one is the insider trading lawsuit. the sec's suit against cuban was dismissed by a district judge in dallas for failure to state a claim (even if all the facts accused were true, they still wouldn't be enough to support a conviction of cuban). however, the court of appeals overturned that on appeal and sent the case back to the district court to keep going on the case. that happened relatively recently. the basic issue is whether cuban agreed to keep confidential the information he received. not long after the sec sued cuban, cuban sued the sec in district court in washington dc based on the freedom of information act (foia). this is the case being discussed in the article. he wants documents the sec used in its investigation of him and other documents. presumably cuban would get ahold of the relevant documents as part of the discovery process in the first lawsuit, but perhaps cuban sought some pr benefits of looking like he was going on the offensive and perhaps he thought he could learn more about what the sec had on him to prepare for the first litigation. the gist is that the sec acted in bad faith by withholding relevant documents from cuban. there was some discussion about whether the sec was stalling in the hopes that they'd get an exemption to foia provided by congress, but i believe obama repealed that provision in early october. cuban has been pretty brash this whole time, and as a matter of law, it's clearly not an open and shut case. the bravado i find somewhat embarrassing because it's pure grandstanding -- no court would ever grant his request (although judge walton is known as a bit of a renegade). as a matter of litigation strategy, i don't see much benefit to what cuban is doing here. the sec isn't going to back down and has been quite dogged about pursuing the case against cuban. i don't see any advantage in terms of litigation strategy. seems like pure pr.
semipermeable 16y ago
Maybe the SEC should counter by saying that they will take his money to make their entire operation faster -- his case will be processed faster, along with everyone elses!
iwr 16y ago
The ammount of paperwork is astounding. Make simpler, better rules instead of just more regulations!
- mahmud 16y ago
  Good point, make that into a 55k page recommendation and attach it to a morality bill, then congress will look at it.
  - philwelch 16y ago
    If by "look at it" you mean "ignore it and vote based upon the title of the bill, its nominal purpose, which party proposed the bill, and how the party whips say to vote on it"...then yes, Congress will "look at it".
- _delirium 16y ago
  A lot of the paperwork in these kinds of cases is the volume of evidence rather than the complexity of the regulations. Even if the regulations were written extremely simply, it would still be expensive / time-consuming to sift through 100k+ of a company's documents looking for evidence.
- anigbrowl 16y ago
  Define 'better.' Now try to get everyone else to agree. Good luck! Seriously, the federal government has actually been trying to improve this since the 90s: http://www.plainlanguage.gov/ http://www.plainlanguage.gov/ Unfortunately, Congress doesn't have to follow these guidelines.
corin_ 16y ago
He can't expect it to actually happen, so presumably his aim is to give the impression that he's confident of winning the case (and, I hope, to create a little entertainment - I sure found it bloody hilarious.)
- aguynamedben 16y ago
  Keep in mind that this is the same guy that responds to NBA fines by donating a matching amount to charity. Also, after getting fined for claiming a referee "wasn't fit to run a Dairy Queen", he worked at a Dairy Queen for a day.
guynamedloren 16y ago
Mark Cuban is my hero. This guy has balls and he's not afraid to use them.
pasbesoin 16y ago
If Cuban can draw some attention to the SEC's chronic, deliberate under-funding, more power to him. Congress has for years siphoned off the majority of the fees the SEC collects. They raise enough revenue to do significantly more than they have (whether, politically, they would ever be allowed/enabled/encouraged to, is another matter). But Washington gathers it up and wastes (err, spends) it elsewhere. [1] A few years ago, there was a lot of hoopla and excitement over the SEC's "receiving" additional funding for 100 more attorneys to prosecute investigations and regulatory proceedings (100, IIRC). Last I checked (earlier this year), SEC management was still "optimistic" that that additional funding would soon be showing up. (My resulting impression after that conversation was, 'yeah, RSN (Real Soon Now)'.) [1] This is off the top of my head (or out of my *ss), but I seem to recall a few years ago seeing SEC fee and whatnot revenues quoted as being in the $600 million range, while their annual budget was set at around $100 - $110 million. Maybe someone else here will have better knowledge of this.

59 points by grellas 16y ago

I don't see why it wouldn't make sense. As long as it's handled in a careful way. You can pay extra to expedite all kinds of government services, why not SEC investigations?

vaksel 16y ago
expediting other gov't services = getting a few things stamped can't work with SEC, since they have to do interviews etc
- shib71 16y ago
  That's still a problem that money can solve - hire more interviewers.
- VengefulCynic 16y ago
  According to the WSJ, a big part of the problem is navigating the voluminous paperwork. Adding additional clerks and lawyers to go through the whole file would probably expedite things quite a bit.
steveklabnik 16y ago
It could be construed as a bribe. If the money is coming from Cuban, they could be less likely to bring judgement against him. It doesn't actually matter if this is true or not; perception is reality.
Construct 16y ago
It creates a conflict of interest for the attorneys. It sets a precedent that wealthy people can receive faster treatment from the SEC. Of course, the SEC tends to investigate people who have made large amounts of money through potentially illegal means, so this may not be an issue. However, it also provides less incentive for the SEC to move quickly on other cases. If the SEC can accept money in exchange for speeding up the process, they are now one step away from slowing down or drawing out the whole process as a means for extorting money.
- mirkules 16y ago
  "SEC tends to investigate people who have made large amounts of money through potentially illegal means" I suspect it is illegal to accept illegally-obtained money. Therefore, if Mark was found guilty, the staff cannot be paid. Which also gives incentive to not find him guilty, resulting in a conflict of interest. IANAL, though.
  - ryanwaggoner 16y ago
    Dollars are the ultimate fungible good, and he didn't obtain all of his money from this alleged offense, so as long (total_net_worth - alleged_offense_gains) > expeditionary_payment, I don't see how this would be an issue.
  - anigbrowl 16y ago
    No, his staff are still owed unless they're complicit. Are you going to raid his janitor for happening to sweep the wrong floor? Same concept.
    - 0x44 16y ago
      Your parent meant the SEC staff, not Mark Cuban's staff.
      - anigbrowl 16y ago
        D'oh!
- staunch 16y ago
  Wealthy people can receive faster service for hundreds of government services. http://www.google.com/#q=site%3Agov+expedite+fee http://www.google.com/#q=site%3Agov+expedite+fee

btilly 16y ago

So how do you organize legal cases with over 66,000 pages of paperwork? I know that blowing cases up to this size is standard operating procedure, but I'm curious how it is handled in practice.

johngalt 16y ago
Usually you setup an organization and review routine, where lower level attorneys do the initial pass and escalate important documents. Let me tell you that 66,000 is nothing. Civil litigation can easily surpass 200k-300k documents. There are a lot of tools out there to help with this (concordance, IPro, Summation).
- smalter 16y ago
  as a former lawyer who has handled large and small document reviews, i can say that both doc review platforms i used, concordance and caselogistix are horrendous and there is certainly an opportunity here for someone to do this right.
  - btilly 16y ago
    Unfortunately this classifies as enterprise software, and therefore the quality of the software is not particularly important for its adoption. See http://lists.canonical.org/pipermail/kragen-tol/2005-April/000772.html http://lists.canonical.org/pipermail/kragen-tol/2005-April/0... for more on this.
  - ssp 16y ago
    A bit of a tangent, but would something like source control (git, hg) be useful to lawyers? If they are cutting and pasting from older documents all the time, it seems like it would.
    - smalter 16y ago
      i think within most big law firms, there may be an enormous team which reviews documents, but when it comes to drafting documents, even at the biggest firms those teams are relatively small. i helped draft a section of a 2000 page document and the whole document just consisted of separate word documents with subjects like "chapter 1 rev2 final 9-3-2009.doc" which are passed around via email. but since the teams are relatively small, there aren't that many versions floating around so that can do a passable, if sometimes irritating, job. there are some types of version control already out there which lawyers use, e.g., hummingbird dm. it's pretty lame and annoying to use which is why many lawyers i know just do what i describe above for version control. so bottom line: yes, it'd be useful, but it would have to be very easy to use otherwise people would just use marginally more annoying but in some ways much easier to use (don't have to learn how to do something new) methods.

kylelibra 16y ago

I'm not up on this case at all. Any other thoughts as to Cuban's motives here?

kscaldef 16y ago
Presumably, having a pending investigation hanging over his head is bad for business.
smalter 16y ago
the procedural history of cuban's case is somewhat confusing. there are actually two ongoing suits right now. one is the insider trading lawsuit. the sec's suit against cuban was dismissed by a district judge in dallas for failure to state a claim (even if all the facts accused were true, they still wouldn't be enough to support a conviction of cuban). however, the court of appeals overturned that on appeal and sent the case back to the district court to keep going on the case. that happened relatively recently. the basic issue is whether cuban agreed to keep confidential the information he received. not long after the sec sued cuban, cuban sued the sec in district court in washington dc based on the freedom of information act (foia). this is the case being discussed in the article. he wants documents the sec used in its investigation of him and other documents. presumably cuban would get ahold of the relevant documents as part of the discovery process in the first lawsuit, but perhaps cuban sought some pr benefits of looking like he was going on the offensive and perhaps he thought he could learn more about what the sec had on him to prepare for the first litigation. the gist is that the sec acted in bad faith by withholding relevant documents from cuban. there was some discussion about whether the sec was stalling in the hopes that they'd get an exemption to foia provided by congress, but i believe obama repealed that provision in early october. cuban has been pretty brash this whole time, and as a matter of law, it's clearly not an open and shut case. the bravado i find somewhat embarrassing because it's pure grandstanding -- no court would ever grant his request (although judge walton is known as a bit of a renegade). as a matter of litigation strategy, i don't see much benefit to what cuban is doing here. the sec isn't going to back down and has been quite dogged about pursuing the case against cuban. i don't see any advantage in terms of litigation strategy. seems like pure pr.

semipermeable 16y ago

Maybe the SEC should counter by saying that they will take his money to make their entire operation faster -- his case will be processed faster, along with everyone elses!

iwr 16y ago

The ammount of paperwork is astounding. Make simpler, better rules instead of just more regulations!

mahmud 16y ago
Good point, make that into a 55k page recommendation and attach it to a morality bill, then congress will look at it.
- philwelch 16y ago
  If by "look at it" you mean "ignore it and vote based upon the title of the bill, its nominal purpose, which party proposed the bill, and how the party whips say to vote on it"...then yes, Congress will "look at it".
_delirium 16y ago
A lot of the paperwork in these kinds of cases is the volume of evidence rather than the complexity of the regulations. Even if the regulations were written extremely simply, it would still be expensive / time-consuming to sift through 100k+ of a company's documents looking for evidence.
anigbrowl 16y ago
Define 'better.' Now try to get everyone else to agree. Good luck! Seriously, the federal government has actually been trying to improve this since the 90s: http://www.plainlanguage.gov/ http://www.plainlanguage.gov/ Unfortunately, Congress doesn't have to follow these guidelines.

corin_ 16y ago

He can't expect it to actually happen, so presumably his aim is to give the impression that he's confident of winning the case (and, I hope, to create a little entertainment - I sure found it bloody hilarious.)

aguynamedben 16y ago
Keep in mind that this is the same guy that responds to NBA fines by donating a matching amount to charity. Also, after getting fined for claiming a referee "wasn't fit to run a Dairy Queen", he worked at a Dairy Queen for a day.

guynamedloren 16y ago

Mark Cuban is my hero. This guy has balls and he's not afraid to use them.

pasbesoin 16y ago

If Cuban can draw some attention to the SEC's chronic, deliberate under-funding, more power to him. Congress has for years siphoned off the majority of the fees the SEC collects. They raise enough revenue to do significantly more than they have (whether, politically, they would ever be allowed/enabled/encouraged to, is another matter). But Washington gathers it up and wastes (err, spends) it elsewhere. [1] A few years ago, there was a lot of hoopla and excitement over the SEC's "receiving" additional funding for 100 more attorneys to prosecute investigations and regulatory proceedings (100, IIRC). Last I checked (earlier this year), SEC management was still "optimistic" that that additional funding would soon be showing up. (My resulting impression after that conversation was, 'yeah, RSN (Real Soon Now)'.) [1] This is off the top of my head (or out of my *ss), but I seem to recall a few years ago seeing SEC fee and whatnot revenues quoted as being in the $600 million range, while their annual budget was set at around $100 - $110 million. Maybe someone else here will have better knowledge of this.