Mark Cuban, Dallas Mavericks Owner and Billionaire, Charged with Insider Trading by the SEC

AUTHOR’S NOTE 11-18-08: I originally wrote in the blog post below that jail/prison time was a likely outcome of the SEC’s legal proceedings against Mark Cuban. This is NOT possible as it is a civil case and not a criminal proceeding.

Additionally, I compared Cuban’s challenge to that of Martha Stewart, who was likewise brought up on insider trading charges. However, Stewart ended up in prison for lying about her insider trading activities and NOT for the insider trading activity itself.

I have, therefore, edited my original post below, using the strikethrough font to identify words below that should have NOT been included in the original post. In addition, where I have added new words/language to the original post, these are highlighted in a red typeface so the added words are clearly highlighted.

Finally, I extend a sincere apology to Mr. Cuban (and my readers) for incorrectly suggesting that he might be facing incarceration for his alleged actions. Clearly this is not the case, and I apologize for suggesting otherwise.

The original post, now edited and updated, appears below.

Sincerely,

David Politis

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In news designed to shock investors everywhere, the United States Securities and Exchange Commission today announced (11-17-08) it has filed insider trading charges against Mark Cuban, the outspoken and often controversial owner of the Dallas Mavericks.

Cuban made the bulk of his riches near the height of the dotcom boom by selling Broadcast.com to Yahoo! for $5.7 billion in 1999. He was recently pegged by Forbes magazine as the 161st richest person in America with an estimated worth of $2.6 billion (as of 9/17/08).

According to the official SEC announcement, Cuban is charged with

“insider trading for selling 600,000 shares of the stock of an Internet search engine company on the basis of material, non-public information concerning an impending stock offering.”

The alleged action took place in June 2004 after Cuban first agreed to keep confidential information about a forthcoming discounted stock offering in Mamma.com, now known as Copernic Inc.(NASD: CNIC). However, according to the SEC, Cuban contacted his stock broker a few hours after meeting with Momma.com and ordered him to sell all of his shares in Mamma.com.

After the Montreal, Canada-based Mamma.com publicly announced its discounted stock offering, the stock dropped 9.3 percent from the prior day’s closing. In other words, Cuban’s action on his alleged insider information helped him avoid a loss of more than $750,000.

If the allegations are proven in the civil action, Cuban will definitely NOT do jail timeas the SEC’s legal action against Cuban is a civil matter and incarceration is NOT a potential penalty. à la Martha Stewart, Nevertheless, Cuban’s as his profile is just too high for the SEC to avoid putting the fear of God into every retail investor, stock trader and corporate insider to let this opportunity pass it by. Conversely, Martha Stewart did prison time for lying about her insider trading activities, NOT for insider trading activities per se.

However, T the fact that the SEC issued a separate news release about its charges against Cuban signals that the agency means business ,and it’s looking to generate as much visibility for this case as possible. Hence, the news release.

And yes, that’s my opinion as a professional communications consultant. Remember, this blog is designed to examine the best and worst examples of marketing communications (specifically as they relate to the efforts of organizations and individuals to simplify their messages so people like Grandma Betty understand what they’re trying to communicate).

And in this instance, the SEC is doing exactly what I would do if I were in charge of PR for the SEC.

Simply put, high-profile cases mean high visibility media coverage. Ergo, publicize the heck out of high-profile cases as a way of trying to minimize illegal activity by retail and professional investors.

Look for the SEC to push ahead full speed in a very loud and public way as it seeks a conviction against Cuban.

[NOTE: Here is the link to Cuban's official response to today's announcement by the SEC as found on his blog: Blogmaverick.]

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For additional thoughts on this matter, check out “Is Mark Cuban Going to Jail? For Insider Trading? No!” on the SOAR Communications‘ blog.

12 Great Tips on How to Pitch a Reporter

I know I just posted something earlier this morning, but sometimes I find something so valuable I have to write about it right away.

That’s the case with a blog post I just came across titled “How to get a publication to write about your business” that was written recently by Jennifer Schiff.

Schiff is a 20-plus year veteran journalist, freelance writer, marketer and PR gal who really knows her stuff. If you don’t believe me, check this out: you’ll find she’s got more than 300 35 bylined articles for Jupitermedia’s Ecommerce-Guide.com alone. See http://tinyurl.com/59tq86. (NOTE: Jennifer corrected me; it’s 37 actual articles and more than 300 “links” to those articles.)

Anyway . . . back to Jennifer’s pitching tips. She’s outlined 12 in all, ranging from

• Target the right publication(s) to
• Respond quickly to editors if or when they contact you.

She also includes a sample pitch letter and a follow-up letter, both of which a very well written and use just the right tone for the subject matter.

I urge readers to check out Jennifer’s post, what I see as being a great foundational outline of 12 Great Tips on How to Pitch a Reporter.

Do Blogs Influence Purchase Decisions? BuzzLogic Research Study says “Yes!”

Although Wired magazine may believe that blogging is dead (see “Twitter, Flickr, Facebook Make Blogs Look So 2004“), consumers haven’t apparently gotten the memo.

In fact, the results from a recently released study sponsored by BuzzLogic shows that blogs have a significant influence on purchasing decisions. (See “Study” Blogging’s Dead? Someone Forgot to Tell Readers.” and the BuzzLogic news release summarizing the research results.)

Key findings from the BuzzLogic research across 2,000 online consumers?

• 50 percent of blog readers find blogs useful for purchase information;
• 52 percent of blog readers said that blogs played a role at the critical moment when they decided to move forward with a purchase; and
• 40 percent of blog readers say they have taken action based upon seeing an ad on a blog.

Additionally, consumers also said that reading blogs helped them

• Decide on a product or service (21 percent);
• Refine choices (19 percent);
• Get support or answers (19 percent); and
• Discover products and services (17 percent).

Naturally, I recognize that I’m writing about some of the benefits of having a blog within my own blog post (kinda like a self-fulfilling prophecy.) But just because I’m using this medium doesn’t make the research findings any less important or useful.

If you (or your organization) don’t have a blog, start one! Today!

If you have a blog, make sure you’re adding to your blog on a regular basis.

Promote your blog regularly via social media tools/services, email, and other more traditional marketing and sales vehicles.

And don’t just take my word for it - research backs up this premise: Blogging pays for itself!