

Mark Cuban Wins Bid to Toss out SEC Claims - rjett
http://www.bloomberg.com/apps/news?pid=20601082&sid=aorWZ2Q4Pb9E

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smokinn
Can someone explain how this isn't insider trading? I don't really know what
the rules are but after reading that article this is what I understood:

Cuban gets an email and has a private conversation with Mamma.com CEO where
get gets told there will be a PIPE.

Apparently PIPEs dilute existing shareholders and drive stock price down.

To protect his assets, Cuban trades based on the information he got. The rest
of the market did not have this info.

How is trading based on a personal conversation that gives you early and
unique market insight not insider trading?

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emmett
"Insider Trading", as a crime, has a very specific definition:

[http://en.wikipedia.org/wiki/Insider_trading#Definition_of_....](http://en.wikipedia.org/wiki/Insider_trading#Definition_of_.22insider.22)

It's not merely trading on things other people don't know.

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smokinn
Ok, so according to that he wasn't an insider since he didn't own over 10%,
only 6,2%. Thanks.

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ryanwaggoner
Hmmm...but isn't the fiduciary duty of the CEO imputed in this case? From the
Wikipedia article:

 _in many jurisdictions, in cases of where a corporate insider "tips" a friend
about non-public information likely to have an effect on the company's share
price, the duty the corporate insider owes the company is now imputed to the
friend and the friend violates a duty to the company if he or she trades on
the basis of this information._

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mikecuesta
Good for him.

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trickjarrett
I concur. I'm glad the SEC investigated it as it did seem possibly hinky but I
felt fairly confident Cuban was in the clear. Had the SEC not investigated it,
it could prove to have repercussions down the road as a point of evidence in
other cases.

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chaostheory
this may be just an unrelated coincidence but Mark financed a movie critical
of the Bush admin

