Chicagoist: So Long, Cubs? Cuban Charged With Insider Trading

aaronsinger

Mon, 17 Nov 2008 16:04:41 -0600

Anyone who thought Cuban had a shot of buying the Cubs even before this was a bit naive/delusional, anyway.

Stephen

Mon, 17 Nov 2008 15:48:51 -0600

Doesn't that go against human nature? Yes. And insider trading happens because - as you note - it's in most people's nature to act immediately on their best interests. 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.

Slaphappy

Mon, 17 Nov 2008 14:08:22 -0600

Doesn't that go against human nature?

dopplerd

Mon, 17 Nov 2008 14:06:03 -0600

Also, Yes you are supposed to sit back and take it.

dopplerd

Mon, 17 Nov 2008 13:59:44 -0600

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.

Slaphappy

Mon, 17 Nov 2008 13:50:36 -0600

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?

smussy

Mon, 17 Nov 2008 13:22:46 -0600

awww, crap.

dayofthedaleks

Mon, 17 Nov 2008 13:06:41 -0600

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.

Slaphappy

Mon, 17 Nov 2008 12:38:39 -0600

I'm totally clueless about finance law, so forgive my ignorance, but why is insider trading such a bad thing?

matty

Mon, 17 Nov 2008 12:09:56 -0600

d'oh! Personally I think they're just trying to keep him down.

Navin

Mon, 17 Nov 2008 12:02:06 -0600

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.