Focus On The Big Fish, SEC. There Will Always Be Mark Cubans To Go After
Posted by: Peter Burrows on November 18, 2008
So SEC, you’re going after Mark Cuban, for alleged insider trading on a company nobody has heard of? Really?
Don’t get me wrong. $750,000 is an awful lot of money where I come from. That’s the amount he allegedly saved when he dumped the stock of a search company called Mamma.com, after the company advised him it was going to be doing a private placement of shares at lower than the price of the common stock. Cuban says the fact that the company was using this form of financing instrument was the reason he sold, not his desire to get out before the value of his stock fell. He wrote at the time, “I dont want to own stock in companies that use this method of financing.” (Here’s a link to all of his posts that relate to Momma.com). I have no idea if Cuban, the former Net entrepreneur and billionaire who went on to buy the Dallas Mavericks, is guilty as charged. But I don’t really much care.
What I do care about is having the SEC focus on Wall Street and the mortgage business, to find the many bad actors whose systematic bad behavior caused a global financial crisis that’s costing US taxpayers $700 billion, and that threatens the economic well-being of billions of people around the world.
There will be those who will say that no crime, no matter how small, should go unpunished in a nation with the rule of law. They’ll say that no financial system can be trusted if people aren’t sure there’s a level playing field, if there’s not perfect integrity.
Yeah, I get that. But under today’s circumstances, we can’t afford this luxury. There are too many, far more important jobs for the understaffed, overworked SEC to focus on, than going after individual crimes that affect only a handful of investors. The market for such cases is evergreen, the supply of targets endless. (Clearly, Martha Stewart’s conviction didn’t put a stop to it—unless one supposes Mark Cuban had never heard of her time in the clink. Though she actually got convicted on perjury. It’ll be interesting to see if Cuban, who is not likely to go quietly, as Robert Seidman at TV By The Numbers points out, avoids that fate).
By whatever measure—by the impact convictions would have on the overall economy, or by the impact they would have on their careers—SEC attorneys would be far better served by uncovering and punishing criminal acts that no doubt had some role in the worst financial upheaval of the last eighty years.