Mark Cuban Scores in SEC Case

http://online.wsj.com/article/SB124784175667658251.html ^ | 7/18/09 | BRENT KENDALL and ANN ZIMMERMAN

[dervish]

A federal judge threw out the Securities and Exchange Commission's insider-trading charges against Dallas Mavericks owner Mark Cuban, and undercut the SEC's legal argument in a way that could make it more difficult to prosecute similar cases.

The ruling by U.S. District Judge Sidney Fitzwater in Dallas was vindication for Mr. Cuban, who maintained his innocence from the day the charges were filed in November.

'snip'

Mr. Cuban and his lawyers denied that he was under any obligation not to trade on the information he received. Judge Fitzwater agreed, saying Mr. Cuban would be liable for insider trading only if he specifically promised not to trade shares. The agency had no case because it never alleged Mr. Cuban made such a promise, the judge said.

To make it a violation, the person also must have agreed not to use the secret information for his own benefit.

"There is a coherent beauty to this ruling," said Christopher Clark of Dewey & LeBoeuf LLP, one of Mr. Cuban's lawyers. "This is the ceiling of the Sistine Chapel for securities lawyers."

'snip'

[dervish]

Bingo. No fiduciary duty. No insider trading.

Now if the SEC had actually done its job and protected investors from real crimes like Madoff.

[Nick Danger]

Does a Martha Stewart get a refund?

[dervish]

fyi

[dervish]

Martha Stewart was convicted on Obstruction of Justice (lying in testimony). They dropped the insider trading case because they knew they could not make it stick. The prosecutor in the Cuban case was not as smart.

[garyb]

The moral of the story (Steward, Scooter Libby) is to NOT talk to the FBI. If you say anything that can be contradicted by another person, if the jury believes that other person (say, Tim Russert) then you could get a perjury conviction. No talk = no perjury.

The 5th amendment is there for a reason.

[RightOnTheLeftCoast]

"Martha Stewart was convicted on Obstruction of Justice (lying in testimony)."

IIRC, she was not under oath, but merely being questioned by Federal agents when she told them something that was untruthful. If my memory is correct, then, "testimony" might be a bit of a loaded term.

[RightOnTheLeftCoast]

"The moral of the story (Steward, Scooter Libby) is to NOT talk to the FBI. If you say anything that can be contradicted by another person, if the jury believes that other person (say, Tim Russert) then you could get a perjury conviction. No talk = no perjury."

Superb advice. I love my country, but I fear it, because it does not love me.

[dervish]

I think you are correct.

As someone who thinks her conviction was a travesty I am grateful for the correction.

[dervish]

Heed these words Mr. Cheney though I pray theis country never sinks that low.

[org.whodat]

The 5th amendment is there for a reason.

Correct, never buy the rope for the hang man.

[Moonman62]

As someone who thinks her conviction was a travesty I am grateful for the correction.

Her conviction was the result of Washington politicians (both parties) deflecting blame from themselves and putting it all on the private sector. Too bad we didn't have a leader for president to keep it honest and under control.

[RightOnTheLeftCoast]

"As someone who thinks her conviction was a travesty I am grateful for the correction."

Thanks. She was convicted because she's a caustic, uppity, successful woman. Leona Helmsley was another. Nasty people, perhaps, but not criminals. Successful men with the same personality characteristics are admired as swashbucklers; women of the type earn the "b" word or worse.

Scooter Libby was a special case. By all accounts a fine man, he had made the mistake of crossing the ambitious and agenda'd Patrick Fitzgerald before (cf. the Marc Rich pardon) and of course he worked for the detested Cheney. His crime was misremembering the details of a years-old email, then voluntarily bringing his lapse to the attention of the investigators. Memo to self: never do that. Meanwhile the steaming piles of human refuse that are Armitage and Powell knew the truth yet kept their mouths shut until after it was all over for Libby. I'm not too pleased with GWB's handling of the incident either. A good man was destroyed and deserved a full pardon early in the game, and Armitage and Powell should be ashamed of themselves. A truly disgusting episode. Colin Powell really needs to fade away and never show his cowardly face in public again.

[dervish]

I agree with all you said.

I wonder how Patrick Fitzgerald is going to handle the Blago crimes. Somehow I don’t think he will go after the Chicago connections (Jackson, Rahm, Obama) with the same zeal.

[HIDEK6]

In such cases, it is assumed that people won't use confidential information obtained through the job for their personal benefit.

Right.

[Ahithophel]

Does a Martha Stewart get a refund?

A refund? You mean a reversal? Regardless, here's what's interesting: Martha too never promised not to trade on the inside information and in that sense she deserves the same ruling Cuban got, but what sent Martha to the joint was her decision to lie to the FBI about where she got the inside information.

[RightOnTheLeftCoast]

"I wonder how Patrick Fitzgerald is going to handle the Blago crimes. Somehow I don’t think he will go after the Chicago connections (Jackson, Rahm, Obama) with the same zeal."

He already punted that one pretty effectively by announcing his investigation before the real crime was consummated. I suspect he was protecting Emanuel or Obama; otherwise his "premature blagojulation" made no sense at all, especially when viewed against the relentless drip-drip-drip style he used against Libby and Rich. Why the rush? Cui bono? We'll probably never know.