UPDATE: Mark Cuban has hired Fish & Richardson's Paul Coggins and Dewey & LeBoef's Ralph Ferrara to fight insider trading charges, reports our sibling publication the Am Law Daily. Also, Esquire magazine's site just posted a version of its "What I've Learned" feature using long quotes from Cuban. This is not exactly a confession, technically:
"Wherever I see people doing something the way it's always been done, the way it's "supposed" to be done, following the same old trends, well, that's just a big red flag to me to go look somewhere else."
Ultra-annoying and ultra-rich dot-com guy Mark Cuban got slapped by government regulators for insider trading today. Here’s why the Securities and Exchange Commission says Cuban, who owns the Dallas Mavericks and made a fortune selling Broadcast.com, is bad: He owned 600,000 shares in little-known search engine Mamma.com.
When Cuban was told confidentially that Mamma.com was set do a stock offering that would water down the share price, he sold his entire stake before the company made announcement, avoiding a $750,000 loss. You really have to read the complaint (.pdf) because the SEC recounts several of the always-volatile Cuban’s blowups at Mama.com executives.
From an email between Mamma.com execs:
“Today, after much discussion, [Mamma.com’s CEO] spoke to Mark Cuban about this equity raise and whether or not he would be interested in participating. As anticipated he initially 'flew off the handle' and said he would sell his shares.”
This kind of whining is nothing new for Cuban, who sits courtside at Mavericks games and harps on referees all game long. What is new is that whining ain’t gonna help him now. Looks like he’s fighting charges, we’ve got a call in to find out which lawyer he’ll be using. (He's keeping uncharacteristically mum on his blog, which makes us think he's actually listening to whichever lawyer he hired.)
Question for readers: It takes some chutzpa for the SEC to go after a big name like Cuban. Would our local office — the Cuban case is being handled out of Texas and Washington, D.C. — be so bold with well-known execs in the Valley?
— Zusha Elinson