18 November 2008

Mark Cuban Responds to the SEC

This looks like it might be an interesting case.

If he is guilty, the conversation between Mark Cuban and the CEO of Momma.com will be absolutely pivotal, especially the source of the record of it. Secondly, the nature of the large sale of stock that Mr. Cuban made will be equally important. Was it previously planned and committed to without question? (and something more than altered notations on scrap paper as in the case of Martha Stewart).

Another issue is whether or not this was polticial payback for Mr. Cuban's participation in criticism of the Bush Administration and his involvement in the movie "Loose Change." Is the 'enemies list' another of the artifacts of the Nixon Administration that turned up in Bush II? There were many.

It will take a 'smoking gun' and a witness such as John Dean to bring that level of government misdeeds to light. That requires a confluence of events that cannot be predicted in advance. But the elements of secrecy, contempt for the laws, hubris, and a willingness to do 'whatever it takes' were all there.

This is a sideshow for now, and we cannot help but believe that Mr. Cuban's attorneys are urging him to shut up, take the fine, and settle. Judging from this he has not yet internalized their advice.

Let's see what happens.

Mark Cuban's Blog
Nov 17th 2008 1:20PM

I wish I could say more, but I will have to leave it to this, and let the judicial process do its job.

November 17, 2008
RE: SEC Civil Action in the United States District

for the Northern District of Texas, Dallas Division

Mark Cuban today responded to a civil complaint filed by the United States Securities and Exchange Commission in the United States District for the Northern District of Texas, Dallas Division. In its complaint, the Commission charges that Mr. Cuban engaged in violations of the federal securities laws in connection with transactions in the securities of Mamma.com Inc.

This matter, which has been pending before the Commission for nearly two years, has no merit and is a product of gross abuse of prosecutorial discretion. Mr. Cuban intends to contest the allegations and to demonstrate that the Commission’s claims are infected by the misconduct of the staff of its Enforcement Division.

Mr. Cuban stated, “I am disappointed that the Commission chose to bring this case based upon its Enforcement staff’s win-at-any-cost ambitions. The staff’s process was result-oriented, facts be damned. The government’s claims are false and they will be proven to be so.”