
Jury says Cuban did not commit insider trading - edw519
http://www.miamiherald.com/2013/10/16/3692385/jury-deliberations-to-begin-in.html
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hristov
He got off because it was ultimately a question of his word against the word
some other guy. And the other guy had an axe to grind. And Cuban is very
popular in Dallas, being the owner of the local basketball team. So the jury
decided there is not enough evidence to indict.

But if I were Cuban I would not complain to loudly about being hounded by the
SEC. Fact of the matter is his selling right before the PIPE was announced was
very lucky and those type of coincidences rarely happen in real life.

~~~
csense
> the jury decided there is not enough evidence to indict.

I think you mean "convict," not "indict." An indictment, decided by a _grand
jury_ in the United States, is basically an accusation, and it happens before
a trial. A conviction is what happens with a _trial jury_ or _petit jury_.

[1]
[http://en.wikipedia.org/wiki/Indict#United_States](http://en.wikipedia.org/wiki/Indict#United_States)

~~~
hristov
You are right. I know the distinction but for some reason I thought this was a
grand jury.

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jasonwilk
Glad to see this is over for Mark. Definitely worth noting he spent far more
on his lawyers to win this case than what it would have cost him to just pay
the fines and have the SEC get a quick win for bullying.

I think he proved a major point today in how the SEC has no transparency and
if not for his money, he wouldn't have had any choice but to lay down for
them. It's a broken system.

Good for him!

~~~
lawnchair_larry
How do you figure this was SEC bullying? Looks like a clear cut case of
insider trading to me.

~~~
shreyansj
How do you figure this is _clear cut_ case of insider trading. What's your
evidence to reach that verdict, that the jury apparently failed to see?

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dmazin
The evidence is the testimony that Cuban was told by the CEO about the
offering. The jury needed to believe it beyond reasonable doubt, but we don't
need to because as individuals, our tolerance for coincidence is much lower
than it is for juries.

~~~
staunch
Actually, since this is civil I think the bar is lower than in a criminal
case. They probably only needed to prove that he's guilty based on the
"preponderance of the evidence". Essentially that it's _more_ likely he did it
than he did not do it.

Just knowing the _timing_ alone would suggest a greater than 50% chance of him
being guilty to me. I'd convict him in 5 minutes.

~~~
mcherm
How on earth does the timing affect this?

The government's claim: Mark Cuban was on a phone call where he was told
information and promised not to trade based on it. He immediately went out and
sold his stock.

Mark Cuban's claim: Mark Cuban was on a phone call where he was told
information but didn't promise anything. He immediately went out and sold his
stock.

Both of these claims would exhibit the same timing, so I don't see how timing
can help decide the important question, which was whether he was technically
an "insider" for the purpose of the law.

~~~
staunch
Guilty I say. Off with his head!

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guest0123
If insider trading is such a big deal to the government, they can start by
banning congressmen and congresswomen from having the ability to do so.

For those that don't know:
[http://en.wikipedia.org/wiki/STOCK_Act](http://en.wikipedia.org/wiki/STOCK_Act)
was passed to prevent insider trading in Congress, but Congressmen have been
quietly pushing and scaling back insider trading laws, basically rendering the
law useless.

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bsims
In 2007 I was in the midst of uncovering a pump and dump scheme while
communicating with the SEC (who were incredibly non-responsive and
incompetent).

While trying to learn more about white collar crime, I uncovered a website,
sharesleuth.com. The owner was writing stories on stock fraud/white collar
crime, and we exchanged a few emails.

A few weeks later I found out Mark Cuban was backing him, and short selling
the companies he found to be fraudulent. Cuban was doing this for two reasons:
#1 To bring attention to white collar crime and #2 If the SEC wasn't going to
shut down the companies, he might as well make money while doing
it...inevitably bringing it back to #1. It looks like he was successful in
drawing their attention.

A previous Wired article on Sharesleuth:
[http://www.wired.com/techbiz/people/magazine/15-10/mf_shares...](http://www.wired.com/techbiz/people/magazine/15-10/mf_sharesleuth?currentPage=all)

X-post from HN thread on the pump and dump I uncovered:
[https://news.ycombinator.com/item?id=5236372](https://news.ycombinator.com/item?id=5236372)

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curiouslurker
Methinks he actually committed insider trading. But when you own the City's
popular basketball team, bring home a championship and bankroll citywide
celebrations no jury will convict you!

~~~
siegecraft
October 17, 2008 - Mark Cuban announces bailoutsleuth.com November 17, 2008 -
SEC charges announced

Connection, coincidence, or a little of both? I don't believe that Cuban is
innocent per se, but I also don't believe that his prosecution wasn't
politically motivated.

~~~
cma
Sort of like the Qwest CEO who was the only head of a major telecom to deny
access to the phone companies in the illegal tapping scandal, and was shortly
thereafter charged with insider trading (I don't know anything about the
merits of the case):

[http://en.wikipedia.org/wiki/Joseph_Nacchio](http://en.wikipedia.org/wiki/Joseph_Nacchio)

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jordanmessina
Here's a video of the press conference after the verdict:
[http://www.youtube.com/watch?v=F82EHPP3bkM](http://www.youtube.com/watch?v=F82EHPP3bkM)

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rosser
The jury didn't say he "did not commit insider trading"; they said the
government _didn 't prove that he committed insider trading_. They didn't say
he's _innocent_ of the charges, but that he's _not guilty_ of them.

There's an important difference between the two.

~~~
jtreminio
Except that in America people are innocent until proven guilty.

In the eyes of the law, he is innocent.

~~~
gamblor956
No, in the eyes of the law, he is "not guilty." Innocence is a factual finding
which has the same burden of proof as guilt because it is a definitive finding
that the defendant did not commit the crime charged.

Judges admonish juries that people are "innocent until proven guilty" becaues
most jurors aren't sophisticated enough to make the distinction.

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dreamdu5t
Insider trading laws should be repealed. People selling shares based on
nonpublic information introduces said information to the market more quickly.
It's also a victimless act, a willing buyer and a willing seller decide to
trade based on the information they know, with shares that were purchased
without any agreement to not sell them based on the information the owner
knows.

It's just ridiculous that Congress conducts insider trading while other people
are persecuted for it.

Insider trading laws are a violation of the first amendment, as restricting
what I can communicate to someone else is censorship and abridgement of free
speech.

~~~
hristov
It is not a victim-less act. The person that goes into a transaction without
knowing insider information usually believes they were cheated. Quite
rightfully so.

Your first point is wrong as well. If insider trading were legal there would
be a huge incentive for insiders to keep inside information away from the
public. This would lead to slower dissemination of inside information. It
would also lead to great economic collapse because no-one would trust stocks
anymore.

Insider trading laws do not violate the first amendment because they do not
restrict speech, but actions (i.e., trading).

~~~
dreamdu5t
Cheated of what? Owning a share does not entitle you to profit.

I fail to see what's amoral about trading based on information that other
people don't know. There are no two people who know the exact same things. All
trade is based on asymmetric information.

~~~
RobAtticus
Should I be allowed to sell you a car that's a lemon just because you cannot
see that? If I know the engine is about to die, but you test drive it and it
seems fine, is that really right?

~~~
dreamdu5t
That is fraud, assuming it was sold under an agreement that it should work and
the seller disclosed all knowledge of problems, because the seller would be
committing fraud by withholding that information.

How is that comparable to insider trading? There is no fraud involved with
insider trading.

~~~
mcherm
If the seller of stock fails to disclose all knowledge about problems with the
company would that seller be committing fraud by withholding that information?
It seems to me that the comparison is quite easy to make.

~~~
dreamdu5t
Yes, if the stock is sold under the agreement that part of what is being sold
is everything you know about the company. Stocks generally aren't sold under
such pretense or agreement and never have been (at least not any stocks I've
traded).

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ars
And people wonder why the government never brought anyone to trial for the
recent financial collapse.

I don't know anything about Mark Cuban, but loosing this case will certainly
demoralize them. It's really really hard to convict people and they eventually
stop trying.

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Zigurd
It's substantially different in that some derivatives are equivalent to
insurance, but the entities writing those contracts do not meet capital
requirements for insurance.

The reason there are capital requirements for insurers is that, without them,
you can get "free money" by selling insurance contracts that are backed by
nothing. Doing that under another name is just as fraudulent.

Especially in the case of insurers writing such contracts, you don't have to
take witness' word for the fact they were evading capital requirements. The
contracts and available capital make the whole case.

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tedunangst
Guess he gave the NSA whatever they wanted after all.

~~~
sneak
For those downvoting the parent comment, read the following to get the joke:

[https://en.wikipedia.org/wiki/Joseph_Nacchio](https://en.wikipedia.org/wiki/Joseph_Nacchio)

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fireworks10
Wait what, this guy is 55?

