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Glad to see this is over for Mark. Definitely worth noting he spent far more on his lawyers to win this case than what it would have cost him to just pay the fi

Glad to see this is over for Mark. Definitely worth noting he spent far more on his lawyers to win this case than what it would have cost him to just pay the fines and have the SEC get a quick win for bullying. I think he proved a major point today in how the SEC has no transparency and if not for his money, he wouldn't have had any choice but to lay down for them. It's a broken system. Good for him!

lawnchair_larry 13y ago
How do you figure this was SEC bullying? Looks like a clear cut case of insider trading to me.
- shreyansj 13y ago
  How do you figure this is clear cut case of insider trading. What's your evidence to reach that verdict, that the jury apparently failed to see?
  - dmazin 13y ago
    The evidence is the testimony that Cuban was told by the CEO about the offering. The jury needed to believe it beyond reasonable doubt, but we don't need to because as individuals, our tolerance for coincidence is much lower than it is for juries.
    - staunch 13y ago
      Actually, since this is civil I think the bar is lower than in a criminal case. They probably only needed to prove that he's guilty based on the "preponderance of the evidence". Essentially that it's more likely he did it than he did not do it. Just knowing the timing alone would suggest a greater than 50% chance of him being guilty to me. I'd convict him in 5 minutes.
      - mcherm 13y ago
        How on earth does the timing affect this? The government's claim: Mark Cuban was on a phone call where he was told information and promised not to trade based on it. He immediately went out and sold his stock. Mark Cuban's claim: Mark Cuban was on a phone call where he was told information but didn't promise anything. He immediately went out and sold his stock. Both of these claims would exhibit the same timing, so I don't see how timing can help decide the important question, which was whether he was technically an "insider" for the purpose of the law.
        staunch 13y ago
        Guilty I say. Off with his head!
  - tedunangst 13y ago
    It's possible for an action to look like clear cut insider trading, but not be. I don't it's SEC bullying for them to investigate things that look like clear cut insider trading. That's why we have the trial, after all, to determine if the action is what it looked like.
  - lawnchair_larry 13y ago
    I can't speak for the jury. Perhaps if you disagree that it's "clear cut", you at least agree that it was plausible. It wasn't simply bullying, that seems certain. His defense was not that he didn't trade based on a tip, but that he never agreed to keep the tip confidential, and he challenged the definition of what an insider is. This is a technicality. That's the problem with insider trading laws - "insider" isn't really defined. So, although it's often common sense and most people can make a judgment call on the spirit of the law, this often won't be sufficient for a trial. Still, this doesn't mean the SEC is wrong to pursue such cases.
- dkl 13y ago
  I'm surprised to find not one defense of Mark like there was in the original thread a few weeks ago, when the trial started. At that time, there were a bunch of people with very specific arguments why it wasn't insider trading. I don't remember the specifics, but I remember reading and I found them interesting.
  - satori99 13y ago
    IIRC it was to do with Cuban never having agreed to receive the information in confidence.
    - mcherm 13y ago
      That's certainly how the article explained it.
- rverghes 13y ago
  This is a pretty good overview of the case for Cuban: http://www.professorbainbridge.com/professorbainbridgecom/2013/10/mark-cuban-acquitted-of-insider-trading.html http://www.professorbainbridge.com/professorbainbridgecom/20... Apparently, simply owning stock is not enough to make you an "insider". You have to be a fiduciary (i.e. be an officer, or a controlling shareholder, or on the board, or similar), or owe a fiduciary duty to the company.
  - lawnchair_larry 13y ago
    This is a good overview, but a few things to note: - Cuban was the largest shareholder - Cuban was told that the company planned to offer a deal that allowed for more purchases at a 10% discount, diluting his stock. He was told this before the public announcement, and sold his stock the day before the public announcement. None of this was really disputed. What was disputed was whether or not Cuban had a conversation that acknowledged he was an insider and that he couldn't sell, and whether or not there was an implied confidentiality agreement. This would suggest admission of guilt as well as satisfy the "misappropriation" definition of insider in the article you linked, since they couldn't satisfy the fiduciary definition. So, he traded based on non-public, adverse information, and saved himself from a substantial loss. Despite this, the SEC failed to convince the jury that he fit any formal definition of "insider". I think we can all agree that whoever bought all of his stock prior to the public announcement of the dilution did not have his advantage, and his advantage came solely from a position of privilege within the company.
    - Dylan16807 13y ago
      - Cuban was the largest shareholder That really doesn't matter, since it was a puny 6%.
rayiner 13y ago
How does this prove that "the SEC has no transparency"? The SEC had a credible basis for bringing a civil case, but ultimately couldn't meet its burden of proof. That's not "bullying."

lawnchair_larry 13y ago

How do you figure this was SEC bullying? Looks like a clear cut case of insider trading to me.

shreyansj 13y ago
How do you figure this is clear cut case of insider trading. What's your evidence to reach that verdict, that the jury apparently failed to see?
- dmazin 13y ago
  The evidence is the testimony that Cuban was told by the CEO about the offering. The jury needed to believe it beyond reasonable doubt, but we don't need to because as individuals, our tolerance for coincidence is much lower than it is for juries.
  - staunch 13y ago
    Actually, since this is civil I think the bar is lower than in a criminal case. They probably only needed to prove that he's guilty based on the "preponderance of the evidence". Essentially that it's more likely he did it than he did not do it. Just knowing the timing alone would suggest a greater than 50% chance of him being guilty to me. I'd convict him in 5 minutes.
    - mcherm 13y ago
      How on earth does the timing affect this? The government's claim: Mark Cuban was on a phone call where he was told information and promised not to trade based on it. He immediately went out and sold his stock. Mark Cuban's claim: Mark Cuban was on a phone call where he was told information but didn't promise anything. He immediately went out and sold his stock. Both of these claims would exhibit the same timing, so I don't see how timing can help decide the important question, which was whether he was technically an "insider" for the purpose of the law.
      - staunch 13y ago
        Guilty I say. Off with his head!
- tedunangst 13y ago
  It's possible for an action to look like clear cut insider trading, but not be. I don't it's SEC bullying for them to investigate things that look like clear cut insider trading. That's why we have the trial, after all, to determine if the action is what it looked like.
- lawnchair_larry 13y ago
  I can't speak for the jury. Perhaps if you disagree that it's "clear cut", you at least agree that it was plausible. It wasn't simply bullying, that seems certain. His defense was not that he didn't trade based on a tip, but that he never agreed to keep the tip confidential, and he challenged the definition of what an insider is. This is a technicality. That's the problem with insider trading laws - "insider" isn't really defined. So, although it's often common sense and most people can make a judgment call on the spirit of the law, this often won't be sufficient for a trial. Still, this doesn't mean the SEC is wrong to pursue such cases.
dkl 13y ago
I'm surprised to find not one defense of Mark like there was in the original thread a few weeks ago, when the trial started. At that time, there were a bunch of people with very specific arguments why it wasn't insider trading. I don't remember the specifics, but I remember reading and I found them interesting.
- satori99 13y ago
  IIRC it was to do with Cuban never having agreed to receive the information in confidence.
  - mcherm 13y ago
    That's certainly how the article explained it.
rverghes 13y ago
This is a pretty good overview of the case for Cuban: http://www.professorbainbridge.com/professorbainbridgecom/2013/10/mark-cuban-acquitted-of-insider-trading.html http://www.professorbainbridge.com/professorbainbridgecom/20... Apparently, simply owning stock is not enough to make you an "insider". You have to be a fiduciary (i.e. be an officer, or a controlling shareholder, or on the board, or similar), or owe a fiduciary duty to the company.
- lawnchair_larry 13y ago
  This is a good overview, but a few things to note: - Cuban was the largest shareholder - Cuban was told that the company planned to offer a deal that allowed for more purchases at a 10% discount, diluting his stock. He was told this before the public announcement, and sold his stock the day before the public announcement. None of this was really disputed. What was disputed was whether or not Cuban had a conversation that acknowledged he was an insider and that he couldn't sell, and whether or not there was an implied confidentiality agreement. This would suggest admission of guilt as well as satisfy the "misappropriation" definition of insider in the article you linked, since they couldn't satisfy the fiduciary definition. So, he traded based on non-public, adverse information, and saved himself from a substantial loss. Despite this, the SEC failed to convince the jury that he fit any formal definition of "insider". I think we can all agree that whoever bought all of his stock prior to the public announcement of the dilution did not have his advantage, and his advantage came solely from a position of privilege within the company.
  - Dylan16807 13y ago
    - Cuban was the largest shareholder That really doesn't matter, since it was a puny 6%.

rayiner 13y ago

How does this prove that "the SEC has no transparency"? The SEC had a credible basis for bringing a civil case, but ultimately couldn't meet its burden of proof. That's not "bullying."