Mark Cuban charged with inside trading

[Andrew]

Story @ Yahoo! NBA

Federal regulators on Monday 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.

Cuban disputed the Securities and Exchange Commission’s allegations and said he would contest them.

In a civil lawsuit filed in federal court in Dallas, the SEC alleged 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.

Cuban owned 6.3 percent of Mamma.com’s stock at that time and was the largest known shareholder in the search engine company, according to the SEC. The agency said Cuban knew the shares would be sold below the current market price, and a few hours after receiving the information, he told his broker to sell all 600,000 shares before the public announcement of the offering.

By selling when he did, Cuban avoided losses exceeding $750,000, the SEC said in its lawsuit.

Cuban, 50 and a multibillionaire, is a tech entrepreneur who sold his Broadcast.com to Yahoo Inc. in 1999 at the height of the dot-com boom. He bought the Mavericks in 2000 and spent heavily to improve the roster.

He is the best known figure to be accused by the SEC of illegal insider trading since its case against Martha Stewart in 2002 for allegedly using advance knowledge of negative news for a company to sell her shares and avoid $45,673 in losses. The homemaking diva paid about $195,000 and agreed not to serve as the director of a public company for five years under a 2006 settlement with the SEC.

True or not, it's an unwelcome distraction for the struggling Mavericks.

[benji]

I was going to post this, but there was something shiny or a bird or something and...

Anyway, for some reason I believe him. The company was desperate for him to bail them out, he realized it was a shit deal so he bailed. Then later the company decided it was "confidential information" because he screwed them over by killing their price.

[Andrew]

Adrian Wojnarowski isn't so forgiving.

Highlights include...this zinger:

And remember: So far, this is a civil case and there’s a good chance that it will never rise to a criminal allegation.

As trades go, he’s been convicted of nothing except Devin Harris for Jason Kidd.

And on the subject of owners' misdeeds:

Yet today, we are back to this: For a league whose black players are judged as harshly as any athletes in any sport, the NBA has been run by owners whose bad behavior and bad judgments are too seldom scolded.

Yet, the NBA doesn’t air-brush Shinn’s past, just Allen Iverson’s tattoos. The league indulges so much time in tsk-tsking bad behavior of its players – real and imagined – that it constantly glosses over the truth of too much of its ownership. In a lot of ways, the NBA is one big, dysfunctional lot.

It's a similar story to the officiating. A lot of complaints about the officiating may stem from homerism (at least game to game) but it's a troubling issue in the NBA, the way players are scolded and harshly punished with tapes meticulously reviewed so that punishments can be handed out, yet issues with owners and referees are swept under the rug. If an NBA player with some investments was accused of such a thing, I have a feeling the NBA would be scrambling to find a way to punish them for it.

Cuban happens to be one of the owners responsible for so much good, so much change, in the sport. He saved his franchise, the way that Sterling and Shinn and Taylor destroyed their own. Until he beats the government rap, though, Cuban is one more scar for the sport. He’s had a lot of great ideas, a lot of great results.

This is probably worthy of its own topic but since this one might not attract a whole lot of interest if its simply centred on the inside trading allegations I feel it's an interesting tangent: Has Mark Cuban been good for the NBA?

He certainly came in with some fresh ideas and has made great efforts to make his players feel more comfortable with those custom bench seats, the catered meals and various other creature comforts in the locker room and his clashes with Stern and the league on officiating have at times made him the champion of players and fans alike, the maverick owner (yes, I couldn't help myself) taking on the big, bad NBA. But then there's the tantrums, running onto the court to stare daggers at David Stern in the Finals, trying to get writers fired when they pen a negative article about him, clashes with coaches and Mavericks players expressing the sentiment that he can be a distraction.