• Mark Cuban On The SEC: “Burn It Down And Start It From The Beginning”

    Dallas Mavericks owner Mark Cuban spoke at MarketCounsel’s annual conference in Las Vegas and expressed some very candid views about the Security and Exchange Commission.

    Cuban believes the SEC is “drunk with power, more interested in being proven right than pursuing justice. I stood on the court steps and said the SEC is a joke. I thought that then, and I think that now.”

    Here’s where Mark Cuban’s beef with the SEC came from, according to wealthmanagement.com:

    Cuban held a 6.3 percent stake in a Canadian firm called Momma.com. When the CEO of the firm told him the company was issuing a private placement that would dilute Cuban’s shares, Cuban sold them for $7.9 million. The SEC called this insider trading, while Cuban’s lawyers argued in front of a jury that there was no verbal confidentiality agreement or no agreement not to sell the shares. They argued when he sold the shares, the private placement was public knowledge.

    Not only that, Cuban said, the agency had records that cast doubt on their case, but under the civil judicial system the agency operates under, they don’t have to turn them over to the accused.

    “They are incredibly arrogant,” Cuban said. “The goal of the SEC is to improve the facility of capital formation. You want to increase trust in the markets. Is there anyone who thinks the markets are safer than they were 10 years ago?”

    Cuban shared the stage with former SEC commissioner Christopher Cox, who was at the SEC from 2005 to 2009.

    “The SEC is a culture of lawyers,” Cox said. Half of the agencies 4,200 employees are attorneys, and that shades their view of the world, he said. “The SEC report on enforcement has only two metrics. How many cases were filed, and how big the monetary penalties were that were imposed. There are no questions on appropriateness.”

    Cuban’s main argument is that the SEC refuses to set up clear and unequivocal rules when it comes to what insider trading is and isn’t. Cuban claims that clear guidelines would ensure the “agency is only going after the bad guys, then up the penalties for those found guilty.”

    If the SEC were a business, Cuban opined, he would recommended to “burn it down and start it from the beginning.”

    I tend to agree with Mr. Cuban about the “burn it down” part, that is.

    Jerome Hudson

    Managing Editor

    Jerome Hudson has written for numerous national outlets, including The Hill, National Review, and The Atlanta Journal-Constitution and was recognized as one of Florida’s emerging stars, having been included in the list “25 Under 30: Florida’s Rising Young Political Class.” Hudson is a Savannah, Ga. native who currently resides in Florida.

    Trending Now on Daily Surge

    Send this to a friend