Area Soldier Killed In Fort Hood Rampage
Stroger Makes Hollywood Play
Put Down Your Nanowrimo And Leave The House
Sox Shuffle Continues
In a development that won't help his already long-shot bid to buy the Cubs, Dallas Mavericks owner and entrepreneur Mark Cuban has been charged with insider trading by the Securities and Exchange Commission. The Wall Street Journal explains it all thusly:
Mr. Cuban sold his entire 6% ownership stake on June 28, 2004, after learning that Mamma.com was raising money through a private investment in a public entity, or PIPE. The next day, on June 29, the company announced the PIPE financing and shares of the company dropped by more than 10%. By selling his stake, the SEC alleges, Mr. Cuban avoided more than $750,000 in losses.Ah. The SEC has its full statement available here. No word yet from Cuban's camp, though this probably makes this interesting look at Cuban and the Cubs moot.
Meanwhile, a source says Tribune Company owner Sam Zell intends to sale the Cubs before the end of the year regardless of the current economic crisis. Crain's says, "Mr. Zell is confident that the final offers, due by Nov. 26, will be high enough to move forward, the source says. It's unclear whether he still expects bids to reach $1 billion." Assuming Cuban is now out of the running thanks to the aforementioned charges, it appears as though the four finalists are: Chicago bond salesman Thomas Ricketts; Chicago real estate mogul Hersh Klaff; New York investor Marc Utay, and Houston businessman Jim Crane. It also appears as though the report that Zell may retain as much as 50 percent of the Cubs is false and the Tribune Company still only intends to keep a minor stake in the team.
Update: Cuban has responded (sorta) via his blog.
AP Photo/Mark J. Terrill
add to stumble upon
add to reddit
tweet this
post to facebook
Wow! The SEC does its job for once. One has to wonder if he wasn't scrutinized because of all his complaining about the bailouts (welfare handouts) to Wall Street. Squeeky wheel gets the grease and we all know how successful the SEC was at regulating all these fantasy financial instruments during The Bush administration.
d'oh!
Personally I think they're just trying to keep him down.
I'm totally clueless about finance law, so forgive my ignorance, but why is insider trading such a bad thing?
Because you're making trades based on knowledge the general public isn't privy to.
If insider trading were legal, the stock market would be even more of a rigged game than it already is.
Interestingly enough, it's legal for members of congress to make trades based on the knowledge they come by in the course of their legislative jobs.
awww, crap.
So is supplying insider information illegal then? I get why it's illegal, but it's hard to "un-know" something. (Similar but unrelated: when the judge tells the jury to disregard inflammatory testimony. Like that happens.) If you know you're about to get royally fucked by the market, you're supposed to lie back and take it? Can you issue a press release or make some other attempt to publicize the information in order to get around an insider trading rap?
Slaphappy:
Knowing is not the crime but acting on the knowledge is. The SEC is claiming that Cuban was informed that his position in a company would be worth less due to an IPO and he liquidated the asset later the same day. The IPO announcement was not yet public.
There have been cases where announcements were made but released to the narrowest possible audience to make the info no longer private (like a classified ad in a local paper). With the internet it becomes harder to place tidbits of knowledge outside the purview of the general public.
Also, Yes you are supposed to sit back and take it.
Doesn't that go against human nature?
However, most of us are not billionaires, and most of us do not hold hundreds of thousands of dollars in a single stock.
Though it is a crime at any level, most insider trading tends to be ignored/unnoticed due to the [significantly] smaller scale of those transactions and the fact that traders at that level many not even understand their behavior to be "insider trading" but rather just acting on a tip from some guy whose uncle works at the company in which they hold stock.
Anyone who thought Cuban had a shot of buying the Cubs even before this was a bit naive/delusional, anyway.