SEC Charges NBA's Mark Cuban With Insider Trading
STEVE INSKEEP, host:
Next we're going to learn more about a man who was often in the news, but may not be happy about it this time. The Securities and Exchange Commission has charged Dallas Mavericks' owner Mark Cuban with insider trading. NPR's Wade Goodwyn has covered Cuban in the past, interviewed him, and he's with us now. Good morning, Wade.
WADE GOODWYN: Good morning.
INSKEEP: How does Mark Cuban manage to stand out even in Dallas, which is famous for its flamboyant millionaires?
GOODWYN: Well, Mark Cuban, he's an Indiana boy actually. And he came down to Dallas and could not believe that he could not listen to his beloved Indiana Hoosiers on the Internet. And he started a Web site called Broadcast.com where he essentially took the radio broadcast of football and basketball games and put it on the computer so that you could listen to your team. And that idea made him one of America's richest people. He's worth north of $2 billion now.
INSKEEP: So as billionaires go, how does he compare to - oh, I don't know - Warren Buffett or someone who's very rarely heard?
GOODWYN: Well, he's front and center in Dallas community. He gives a lot of money. He's had his own radio show. And people are very aware of what Mark Cuban is doing. He likes to be in the public eye. And you know, every night, whether Dallas is on the road or here at home, he's front and center, and often the TV is right there on him.
INSKEEP: You mentioned Dallas. Of course, he's now the owner of the Dallas Mavericks, among many other things.
GOODWYN: Yes, that's probably what has given him his highest profile, other than his turns around the dance floor on "Dancing with the Stars."
(Soundbite of laughter)
INSKEEP: He was on "Dancing with the Stars"?
GOODWYN: Yes. He was a little stiff and had some problems with the samba and did not last all that long, but they called him the bouncing billionaire from Dallas.
INSKEEP: OK. So now he's got this problem with the Securities and Exchange Commission. What happened?
GOODWYN: Well, he invested in this Internet company called Mama.com. They called themselves the mother of all search engines. And after a while, I think the company needed more money and the executives had decided they were going to issue new stock. And they called Mark Cuban, their biggest stock owner. And I think they knew it was going to making him mad. He had a lot of shares, 600,000.
Well, Cuban was mad about the offering. And the next day after talking to the company's investment banker on the phone for a few minutes, he called his broker and sold all his stock. The problem was that phone call from the CEO about this upcoming stock offering, it was confidential, and he knew that. And according to the SEC, Mama.com's CEO told him it was confidential. And when he sold all his shares one day before they would have lost three quarters of a million dollars, he was allegedly engaging in insider trading.
INSKEEP: He's selling these shares to people who don't have this information. That's the problem, right?
GOODWYN: That's right.
INSKEEP: I guess we should emphasize these are not criminal charges, but civil charges.
GOODWYN: No, it's a civil action. But sometimes SEC civil action will precede Justice Department criminal action. It can act as a sort of goad.
INSKEEP: So, what has Mark Cuban said now that the SEC has filed these charges?
GOODWYN: Cuban blames the Securities and Exchange Commission. He says the charges against him are the product of what he describes as a, quote, "win-at-all-cost mentality." And it's an interesting choice of words. They imply there's been this contest between himself and the SEC, and the SEC is not playing fairly. They are cheating, if you will.
You mentioned he's the owner of Mavericks' basketball team, and he's famous for sitting not in his owner's box - where you're dignified and have cocktails and look down from on high. He likes to sit right next to the court, like row three, right in the middle. And that's where he can not only cheer for his team, but also loudly berate the NBA officials where they can get an earful. And that's kind of what Cuban is saying here. He doesn't like the way the Securities and Exchange Commission officials are calling this game. They have not been balanced, and he's giving them an earful.
(Soundbite of laughter)
INSKEEP: Doesn't like the reps, huh?
GOODWYN: That's right.
INSKEEP: All right. NPR's Wade Goodwyn, thanks very much.
GOODWYN: It's my pleasure.
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