Does anyone remember when Martha Stewart went to jail?
She was charged with securities fraud and obstruction of justice, as well as seven other crimes. She finished her sentence in 2005, and since then I’ve never understood exactly what she did wrong.
I would have continued down the blissful road of ignorance had I not watched ESPN’s “SportsCenter” Monday afternoon.
Mark Cuban, owner of the NBA’s Dallas Mavericks, made himself a billionaire with “dot-com” stocks. But Cuban might have reached too far to increase his wealth.
The Securities and Exchange Commission filed a civil suit against Cuban on Monday, charging that he was involved in “insider trading.” I was unsure what this term meant after Stewart’s indictment, but it seems I just needed a sports reference to understand.
Cuban is accused of using information he withheld from the public about Mamma.com Inc., according to ESPN.com.
Cuban’s wrongdoing was that he told his broker to sell all shares of the company, a search engine, after receiving an inside tip. By selling, Cuban avoided a $750,000 loss, but by using information that was not public to make that decision, he broke the law, according to the Web site.
He has no more of a right to the data he saw than any other shareholder, but he still tried to withhold it — enter the SEC. The quasi-independent federal agency seeks to confiscate the gains Cuban made and impose financial penalties.
A Dallas district attorney will decide whether to file criminal charges against Cuban. While this is only a civil charge, Stewart went to jail for avoiding a loss of less than $50,000, but Cuban’s prison prospects are minute.
The billionaire plans to appeal the charges and has denied any wrongdoing. MSNBC News reported Monday that Stewart’s situation was different than Cuban’s and that was why he faced only fines, though the detail of the investigation are still forthcoming.
Cuban has been a fan favorite because of his loud personality and his all-too-willing desire to speak — and yell — his mind. He risks alienating fans and supporters by stepping over the little guy: the shareholders. Most fans aren’t wealthy beyond their dreams like Cuban, and for the first time, his financial comfort might sour fans.
I liked Cuban at first, but he makes it very easy to get tired of him. I like to see an owner get involved, but I prefer to read headlines about the players day to day. Perhaps this legal hiccup will remove Cuban from the highlights for a few weeks.
Owen Kennedy is a senior in business management. Please send comments to email@example.com.