Mark Cuban, the oft-troubled, somewhat infamous owner of the Dallas Mavericks basketball team, has found himself in some deep do-do. Cuban, who is worth over $2 billion personally, has made a name for himself as a professional sports team owner by being vocally critical of everything from the NBA front-office to game referees, and even to superstar Dwayne Wade. In all, his fines for these incidents total more than $1.6 million dollars (he claims that he matches his donations to the NBA with donations to charities).
Well, some charity might just be close to their big payday. For all the trouble Cuban has been in with the NBA, it's the SEC he really should be worried about (no, not the Southeastern Conference, and whether or not he might be able to land a big draft pick form Kentucky or Florida). The SEC is the Securities and Exchange Commission, and they have charged him with insider trading for allegedly using confidential information to avoid more than $750,000 in losses.
To break it down, Cuban owned a bunch of stock in mamma.com, a canadian-held internet search engine company. He found out from confidential sources not made public, that mamma.com was going to have a large stock offering that would be far below current market value. Cuban went ahead and sold his stock when the value was still high (before the large public offereing at a lower price), avoiding losses of nearly $750,000.
From ESPN news services:
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.Cuban had solidified himself as a sleaze-ball well before this, but now he's gone from "sort of ha-ha funny"
It's too bad. He was one of those guys that a lot of people hated, but I had a hard time really disliking him. I sort of thought that if I was smart enough to a) come up with a great internet start-up at the beginning of the dot-com boom, b) sell that start up to yahoo.com for $6 billion worth of yahoo stock, and then c) sell my yahoo stock and diversify before the dot-com crash (which of course I was not smart enough to do, nor will I be) that maybe I would take my billions, buy a sports team and then "start stuff" with other teams, owners, referees, coaches, etc.
Oh, well. The higher you climb, the further you fall. Funny that Cuban was willing to pay the NBA almost $2 million, just so he could get his face on TV and name in the papers, but couldn't swallow his pride and bite the bullet on $750,000 of stock options for a website called mamma.com (has anyone ever heard of this site... "the mother of all search engines"?).
Good luck finding a good lawyer. You will undoubtedly spend FAR MORE than $750,000 in the defense of yourself in the case. Someone's getting rich -- and it's too bad it's probably not the charities.