Insider Trading Suspected In The Pirate Bay Sale

Mon, Nov 17th 2008 9:41am

Filed Under:
insider trading, mark cuban

Companies:
mamma.com

16 Comments | Leave a Comment..

Mark Cuban Charged With Insider Trading

from the before-or-after-the-news-is-public dept

Over the years, Mark Cuban has been quite open on his blog concerning various stock strategies that he has -- which have often gone against the grain. He's not a big fan of just buying a small amount of a company's outstanding stock and holding it, assuming that as a small shareholder, you're probably not getting the real information about a company. A few years back, Cuban funded a somewhat controversial investigative journalism project, where the journalist would research companies that he believed were scams in some sense. The journalist would reveal his findings to Cuban before publishing the content, allowing Cuban to short the stock. This led some to accuse Cuban of insider trading, but that was clearly incorrect, as the info wasn't insider info, but information that had been uncovered through research.

However, the SEC is now claiming that some of Cuban's other stock moves weren't so cut and dried. It's charged Cuban with insider trading in his stake in meta-search engine Mamma.com. That story was a big deal four years ago. Towards the beginning of 2004, Cuban had to reveal publicly his 6.3% stake in the company (anything over 5% needs to be revealed), saying that he liked the company because in using its search engine he found that it worked well, and in investigating the company he realized that it was generating a fair amount of cash. However, just a few months later headlines were made again when the news came out that Cuban had sold his stake, noting that he was upset about the company's plan to raise money via a private placement, pointing out that such a transaction would dilute him. So, when he found out about it, he sold all his shares.

The problem, according to the SEC, is that he sold those shares after company insiders told him about the planned fundraising -- not after the company made that info public. If that's true, then it does sound like he would have been selling on material non-public information received from an insider, which would be bad news.

Scams

Mon, Feb 18th 2008 11:52pm

Filed Under:
hacking, insider trading

38 Comments | Leave a Comment..

Hacker May Get To Keep Insider Trading Windfall -- Because He Obtained Info Illegally

from the say-that-again dept

The NY Times is covering a bizarre anomaly associated with "insider trading laws" in the US that may allowed a guy to keep the nearly $300k he scammed by hacking into computers to learn of earnings info before it was actually released. Apparently, the way US securities laws work, if you legally obtain the insider info, you can't trade on it. However, if you illegally obtain the info, you can trade on it, though you're certainly potentially liable for the illegal actions that allowed you to get the info. In this case, the illegal actions were breaking into this computer. However, rather than being charged with computer fraud, he was charged with insider trading. In other words, he was basically charged with the wrong crime, and that may mean that he gets to keep the $300k and go on his merry way.

Computers

Wed, Dec 19th 2007 4:43pm

Filed Under:
computers, congress, gao, insider trading, sec

3 Comments | Leave a Comment..

SEC Computer System Not So Great For Catching Insider Trading

from the whoops dept

Well if the FBI can have a terrible computer system that's useless at catching terrorists, should it really be much of a surprise that the SEC has a computer system that isn't particularly useful at catching insider trading? That, at least, is the word from the Government Accountability Office (GAO) in its latest report to Congress. Apparently the GAO found that the SEC's computer system can't even search referrals from its own investigators concerning insider trading. Of course, what's not clear (at least from the article) is how much the SEC paid for this computer system... and how much more it will cost to get one that's actually useful.

Wall Street

Mon, Nov 12th 2007 5:22pm

Filed Under:
insider trading, sec

Companies:
cognos, ibm