Former Enron Prosecutor Blasts SEC Case Against Mark Cuban

Former Enron Task Force co-lead prosecutor John Hueston says that the SEC’s insider trading case against Mark Cuban is flimsy, that Cuban isn’t an insider, and that he wouldn’t have brought the case:

….the case really appears to be just a he-said-she-said case. And so, I believe Mr. Cuban has a very strong factual defense before he even gets to any legal arguments. For an insider trading case, he’s not an insider at all. He is essentially a stockholder, essentially pitched to make an additional investment. He was disgusted by that pitch and the direction of the company and sold his stock. And he did so in a very open way consistent with someone who had nothing to hide.

And the SEC in a target-driven matter has now drummed up a case, based on pressured and apparently uncorroborated testimony of one other person on a phone line. That is certainly not a criminal case. And it makes for a risky and flimsy case even under a civil standard. It makes me wonder why the SEC has decided to file this case. And I would not be surprised at all if Mr. Cuban took the SEC to trial over this case.

Hueston is now a partner with Irell & Manella (Corporate Crime Reporter).