We are not Cuban fans. This should come as no surprise to long-time Dealbreaker readers. Be this as it may, we cannot, without comment, let pass the noise that is the SEC’s case against Cuban for “insider trading.” In fact, we might go so far as to say that the prosecution of Cuban is demonstrative of everything that is wrong with the SEC.
The SEC’s complaint fails to show that Cuban was barred from selling shares of Mamma.com Inc. in 2004 and seeks to expand the definition of insider trading, Ralph Ferrara, one of Cuban’s attorneys, told US District Judge Sidney A. Fitzwater in Dallas yesterday.
It seems almost expected that the “up only” philosophy of the markets would victimize the likes of Cuban. He’s everything the SEC hates. Outspoken. Possessed of a following. Short.
Cuban Asks For Dismissal [The New York Post]
We aren’t sure that a dot-com billionaire (even if he has in Madonnaesque fashion reinvented himself more than once) fighting with the SEC over an insider trading issue is going to have much public appeal in the present anti-capitalist hang-the-richies-high environment. We are even less sure that drawing a pile of “Ivy League professors” to the warmth of your bosom is going to have much public appeal in the present anti-formula hang-the-Gaussians-high environment. If you can’t kill the math, and someone has to pay, where does that leave “Ivy League professors?” I’m not sure. Neither is DealBook, but they do report on Cuban’s latest antics. To wit:
Mark Cuban has lined up a roster of Ivy League professors to take his part in his battle against the Securities and Exchange Commission, which has accused the investor of trading on insider information.
The Dallas Morning New reported that law professors from Harvard, Yale, the University of Chicago, the University of California, Los Angeles and Southern Methodist University filed a brief on Mr. Cuban’s behalf Monday, arguing that the S.E.C. made a legalistic land grab when it sued Mr. Cuban.
The first commenter who points out that John Wilkes Booth, UCLA and SMU aren’t “Ivy League” wins a prize. (Hint: It’s not a good prize).
Professors Come to Cuban’s Defense [DealBook]
One of the great (awful) things about TARP was the brilliant (daft) plan to buy assets at above fire-sale (intensely overvalued) prices. This bit of financial wizardry (outright fraud) would have permitted banks with temporarily encumbered assets (irredeemable toxic sludge) to reprice their balance sheets based on the marks (fantasy) set by the Treasury’s purchases. This has the added effect of improving the tenor (thickening the miasma) of the market and restoring confidence (validating pessimism).
Given the innate brilliance (intellectual bankruptcy) of this part of the plan, it is not surprising to see it back, as clever solutions are few and far between (we have nothing else to do but sit and watch).
Valuing toxic assets on bank balance sheets is among “real key issues” as the Obama administration devises a plan to mend the financial system and steady credit markets, Comptroller of the Currency John Dugan said.
The biggest challenge is how to “pick and choose which assets to take from open institutions and how much you pay for them,” Dugan, the supervisor of U.S. national banks, said in an interview in his Washington office today.
Asset Valuation ‘Key Issue’ in Bank Plan, Dugan Says [Bloomberg]
You will be relieved to know that this whole subprime thing is WAY overblown. I have it on good authority. I know what you are thinking. Really, good authority. Oh yeah? How about the Bank of England? Yeah, that Bank of England. See, this “mark-to-market” thing, bad idea.
While market-based estimates and the write-downs announced by firms may be unduly pessimistic, if such concerns persist there is a risk they could become self-fulfilling.
[...]
In that environment, firms may find that previous mark-to-market loss estimates have been overstated and some writebacks of reported losses may occur.
Bank of England Votes for Mark to Model [FT Alphaville]
