Appellate Court Reinstates SEC vs. Cuban

The Fifth Circuit Court of Appeals reversed the District Court ruling which dismissed the SEC's complaint against Mark Cuban. We previously addressed the merits, or rather the apparent lack of merit, to the SEC's claims here.

However, the appellate court found that there were facts that were in dispute, an that the case should not have been dismissed. The case will proceed back in the District Court. More>>>

SEC Continues Mark Cuban Fight

The SEC is in trouble. We all know that, and they need to show that they are active, aggressive and enforcing the securities laws. So, we get surprise examinations, a flurry of press releases and other assorted activity. Good for them, they need to regroup and recover from their recent failures.

But do you gain respect and reputation by pursuing bad cases? Of course not,and someone needs to tell the decision makers at the Commission. In August the SEC announced that it would not refile a complaint against Cuban, and yesterday the SEC annouced that it will appeal the court decision which tossed out their complaint against Mark Cuban.

The decision was not much of a surprise. The Commission was on thin ice, and stretching the law in the Cuban case, which is why the Court dismissed the complaint. Our analysis is here, and all of our posts related to Mark Cuban are here. The WSJ story on the appeal, with background information is here.

SEC Says It Will Not Re-File Against Mark Cuban

The SEC hold a federal judge yesterday that it will not be re-filing its complaint for insider trading against Mark Cuban. The complaint was dismissed earlier, and the SEC had 30 days to refile.

While this is great news for Mr. Cuban, the party doesn't start until another 30 days passes and we find out if the SEC decides to appeal the dismissal.

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Court Dismisses SEC vs Mark Cuban Suit

On Friday, the federal district court judge in Texas granted Mark Cuban's motion to dismiss the insider trading charges against him. I have been blogging about the case since it's inception (the posts and analysis are available here).

I am still digesting the opinion, which actually rejects a number of Mr. Cuban's legal arguments, but in the end, agrees with him. I will post a more detailed analysis as soon as my own trial schedule allows, but the short version is that the Court, assuming the SEC's allegations to be true, found that those allegations were not enough. While there may have been an agreement to keep the information confidential, there was no agreement not to trade on the information.

Contrary to the posts of many on the Internet, it is not a total win. The SEC's complaint was dismissed for failing to state a claim. It has 30 days to file a new complaint, and has not said what it will do.

In my experience, the SEC has already taken its best shot. As I discussed in the earlier posts, they stretched their facts about as far as they can be stretched, and I doubt that they will be filing a new complaint. An appeal maybe, but not a new complaint.

Mark Cuban sues SEC over insider trading documents

You gotta love a billionaire who believes he has been wrongly accused and is willing to fight to clear his name. Mark Cuban, named in an insider trading case by the SEC, is striking back.

A fair reading of the case against him reveals that it is not much of a case. The SEC is seeking to expand the rules against insider trading yet again. Those rules have been stretched so far as to make the rule unrecognizable to the original drafters - the SEC and the courts have actually interpreted the statutes as if a key phrase is missing.

I have blogged about the case in the past, (Mark Cuban and the SEC Improper Trading Investigation, Cuban's Duty of Trust?, and The Cuban Case and Confidentiality), so my views on the case are pretty clear.

Last week, Mark Cuban's attorneys argued a motion to dismiss the SEC complaint in federal court. While I believe his motion has a sound legal basis (I do not believe the SEC's complaint states a valid cause of action), motions to dismiss complaints filed by government entities have a very low success rate, and it is doubtful that the motion will be granted.

But it sets up Mr. Cuban's defense, and shows the weaknesses in the SEC's case, even if the case is not thrown out. A great defensive move, and one that undoubtedly cost some money.

Next we learn that Mr. Cuban is suing the SEC. Now, there is a millionaire who is upset. He has filed a complaint in federal court alleging that the SEC has violated the Freedom of Information Act in connection with his requests to them under the Act.

Having dealt with the SEC and FOIA requests in the past, his allegations do not surprise me. Assuming he can prove what he alleges, the SEC is once again going to have egg on its face, and an additional battle in the insider trading case, as Cuban will be able to argue that they have acted in bad faith in dealing with him. That is if the SEC loses of course.

The press story is linked below. This should be an interesting twist to the case.

Mark Cuban sues SEC over insider trading documents