Mark Cuban - One for the Good Guys

Mark Cuban is crazy in a good way. From the NY Times:

"A federal judge dealt a blow to the Securities and Exchange Commission on Friday when he dismissed its insider trading lawsuit against Mark Cuban, the controversial billionaire owner of the National Basketball Association’s Dallas Mavericks.

The S.E.C. asserted in a lawsuit in November that Mr. Cuban had sold shares of a Canadian Internet search company, Mamma.com, after receiving confidential information from its chief executive in a telephone call that the company was going to sell additional shares through a private offering in 2004."

Here's my take on the situation from memory, since it's Friday afternoon and I don't feel like researching it:

1. Cuban, a rich and influential private investor and owner of the Dallas Mavs, (and the guy who made $3 billion by figuring out how to turn a $2,000 PC into a $5 radio) owned a ton of stock in Mamma.com, a public company
2. Mamma's CEO called Cuban and told him that Mamma was going to sell stock in a dilutive private offering
3. Cuban told the CEO not to sell stock, and to go to hell
4. Cuban got off the phone and sold his stock
5. Mamma did the deal, the stock went down and Cuban's sale was a good one (financially, maybe not legally)

The problem was that the info that the company was about to do a deal was material non-public information. The SEC went after Cuban and he has been very vocally defending himself in the press and online, a move that I'm sure had most defense attorneys squirming in their seats, including his.

This will probably go to appeals court where the decision will likely be upheld. Maybe the SEC should redeploy some of the folks they have chasing high profile, legit businessmen and have them at least try to get in front of the next Madoff.