Mark Cuban Continues Blasts at the SEC

DALLAS (CN) – After the SEC’s failed civil prosecution of billionaire Mark Cuban on inside-trading charges, the Dallas Mavericks owner continues to blast agency officials, claiming they were not fully informed about his case before suing him.
     A federal jury cleared Cuban on Oct. 16, finding the SEC failed to prove he had agreed to keep information confidential and not to sell his stock in Mamma.com, an Internet search engine firm, in 2004.
     On Oct. 25 Cuban posted on his blog internal SEC emails between former enforcement division director Linda Thomsen, former division chief counsel Joan McKown and associate division director Scott Friestad.
     The messages were sent in February 2007, more than a year before the SEC sued Cuban.
     Friestad sent several unflattering images of Cuban, including one in which he is posing with large sums of money in his arms. In another photo, Cuban is shown on the floor of a Mavericks basketball game screaming at an official. In a third, he is posing for photographers at an ABC TV event. Cuban stars in “Shark Tank,” an ABC “reality show” in which small business owners pitch ideas to wealthy investors.
     Thomsen responded to Friestad’s message by calling the images “charming,” according to the emails, copied on Cuban’s blog.
     In one email Cuban posted, McKown said she felt “fully informed” after seeing the images.
     “The picture with the money is particularly helpful and certainly speaks 1,000 words (if not more),” McKown said in one mail posted on Cuban’s blog.
     Cuban claims the SEC sued him because of his fame and wealth.
     “It[‘]s not fun being in the government’s crosshairs,” Cuban wrote on his blog. “But there is comfort in knowing that the then Head of Enforcement at the SEC, Linda Thomsen (now of Davis & Polk law firm. I’m guessing her clients are proud!) went to the Nth degree to make sure she knew the smallest details of my case before moving forward!”
     Cuban told CNBC on Oct. 23 that he had done nothing wrong.
     “Literally, all the evidence that they had that they used against me, they got from me,” Cuban said. “In 2004, two days after I sold my stock, the SEC contacted me because they were investigating Mamma.com for being crooked, being run by a stock manipulator. All the emails they used in court I provided to them. I did an interview with them, just to help them. No lawyer, no nothing.”
     Immediately after the jury verdict, Cuban said SEC attorneys told him the action was not personal, just business.
     “When you put someone on the stand and accuse them of being a liar, it’s personal,” Cuban said. “When you take all of these years of my life and try to prove a point, it’s personal. And when you try to play it off as ‘just your job’ … the people that were in this case that could have said something and didn’t say anything … that’s just wrong.”
     Cuban criticized the lack of “bright line” rules by which the SEC could help small investors avoid possible violations.
     “You’ve got to ask what insider trading is, any securities rule. You can’t just call up the SEC and say ‘I want clarification on this, tell me;’ they won’t do it,” Cuban said outside the courthouse. “They regulate through litigation, and that is its own problem.”
     Thomsen is now a partner with Davis Polk in Washington, D.C. She did not respond to a request for comment.

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