More to the Mark Cuban Insider Trading Indictment Than Meets the Eye?

[girl gone mad]

...The insider trading charges, on the surface, seem pretty open and shut. Cuban held shares in a company called Mamma.com. He called in response to an e-mail message from the CEO, who told him that the company was going to sell more shares and asked Cuban if he would like to invest. Cuban allegedly flew into a rage, said he would sell the shares, and apparently did so straight away, despite it being illegal for him to trade on inside information.

(snip)

A reader e-mailed to point out that Cuban had started campaigning for greater transparency in the bailout process and suggested the indictment was related.

Normally I'd dismiss that sort of thinking as paranoid, except this reader has been very close to the bailout process, not merely on a first name basis with some of the names you saw in the paper during key initiatives, but actively advising them. My take is that based on previous conduct of this Administration, he thinks it is quite plausible that this move is retaliation.

Cuban himself suggested the indictment was payback, but for a different offense. Again from the Times:

In a press release (and in a post on his blog), Mr. Cuban accused the S.E.C. of being “infected by the misconduct of the staff of its enforcement division,” but did not discuss details of the suit.

A person close to Mr. Cuban provided what he said was one of a series of e-mail messages from Jeffrey B. Norris, an S.E.C. lawyer in Fort Worth, who accused the billionaire of being unpatriotic for helping to finance a movie named “Loose Change.” In the e-mail message, Mr. Norris described the movie as a “vicious and absurd documentary” that “posits that President Bush planned the demolition of the World Trade Center as a pretext for going to war against Iraq.”

In the e-mail message, sent from his S.E.C. e-mail address, Mr. Norris said he was informing Christopher Cox, the chairman of the S.E.C., of Mr. Cuban’s actions.

“If this upsets you, I wonder how George Bush feels,” Mr. Norris wrote. “I assume that Mr. Cox would view your involvement with ‘Loose Change’ much as I do. After all, he served his country as a Republican congressman from Orange County for nearly 20 years and was appointed by President Bush.”

An S.E.C. spokesman said that Mr. Norris had no role in or knowledge of the Mamma.com investigation, which was handled by the S.E.C. in Washington.

He said the e-mail matter was “referred for disciplinary action,” but did not say what action, if any, was taken against Mr. Norris. Mr. Norris did not return a phone call.

The S.E.C. spokesman said Mr. Cox had recused himself when the commission voted to approve filing the complaint.

So the backstory is convoluted, to put it mildly. And the fact that Cox recused himself (because he was well enough appraised of the "Loose Change" matter to be deemed to have a conflict?) is also odd.

Put it this way: the judicious Floyd Norris also thinks this may be an instance of political persecution, but based on "Loose Change" rather than the bailout provocation (this would make sense if, say, the powers that be thought going after Cuban could be a double-edged sword, that it might bring more attention to the movie, so they went dirt-gathering and had it ready. In this theory, they decided the movie did not develop enough of a following the risk of going after him, but the bailout showed him to be a continuing possible threat to Bushies and he needed to be put in his place).

http://www.nakedcapitalism.com/2008/11/more-to-mark-cuban-insider-trading.html

[gratuitous]

1. Considering the offense is alleged to have happened in 2004

And the SEC is claiming that they had now knowledge of Cuban's infraction until 2007, coupled with the known fact that everything in the Bush administration is linked to political considerations, there's practically no doubt that this suit has a big political component to it. Whether Cuban's guilty or not, I have no idea; but I'll bet a dollar to a hole in a doughnut this suit has been kept in somebody's desk drawer for well over a year just in case. Cuban's recent call for more transparency from the Bush administration is what it took for the papers to move off that desk and into the court system.

[girl gone mad]

2. I thought the "Loose Change" connection was interesting.

I wonder if that is what initially caught their eye, or if they already had a file on him.