Free Mark Cuban, Part Troix
The appearance of bias is getting stronger — read the angry emails between Mark Cuban and the SEC’s Jeffrey Norris back when Cuban was considering distributing “Loose Change”.
Meanwhile, the case against Cuban appears to be getting weaker.
Free Mark Cuban, Part Deux
William Norm Grigg has an exceptionally researched and far-reaching piece on how Mark Cuban is getting hosed by the SEC and the feds.
Free Mark Cuban
That’s the takeaway from William Norm Grigg this morning, and he makes several key points:
- Cubes treated the SEC like he does lazy NBA officials, and this looks like retaliation.
- The evidence appears to be hearsay.
- Cuban ticks off Bill O’Reilly, which is a virtue itself.
- How can any organization that bans short-selling be taken seriously?
Mark Cuban Charged With Insider Trading? UPDATE: Yes
Via Drudge: SEC charges DALLAS MAVERICKS owner Mark Cuban with insider trading… Developing…
UPDATE AT 11:16 a.m.
Being the savvy day trader I am, I pulled this off the SEC’s website:
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20810 / November 17, 2008
Securities and Exchange Commission v. Mark Cuban, Civil Action No. 3-08-CV-2050-D (SF)
SEC Files Insider Trading Charges Against Mark Cuban
The Securities and Exchange Commission announced that it filed insider trading charges today against Dallas entrepreneur Mark Cuban in the U.S. District Court for the Northern District of Texas. The Commission’s complaint alleges that Cuban violated the antifraud provisions of the federal securities laws by engaging in illegal insider trading in the securities of Mamma.com Inc. (”Mamma.com”), a publicly traded Internet search engine company (now known as Copernic Inc.) based in Montreal, Canada. According to the complaint, in June 2004, Cuban sold his entire 600,000 share position in Mamma.com on the basis of material, non-public information concerning an impending PIPE (private investment in public equity) offering by the company. The complaint alleges that Cuban avoided losses in excess of $750,000 by selling his stock prior to the public announcement of the PIPE offering.
According to the complaint, Cuban was Mamma.com’s largest known shareholder during the relevant time period. On June 28, 2004, the complaint alleges, Mamma.com’s then-chief executive officer — after securing Cuban’s agreement to keep the information confidential — invited Cuban to invest in the PIPE offering. The complaint further alleges that Cuban knew that the offering would be conducted at a discount to the prevailing market price and that it would be dilutive to existing shareholders. According to the complaint, later that day, Cuban called his broker and — in breach of his agreement to keep the information confidential — instructed him to sell out his entire position in the company. That afternoon (June 28), and over the next day (June 29), the broker liquidated Cuban’s entire 600,000 share position. After the markets closed on June 29, 2004, Mamma.com publicly announced the PIPE offering. The next day, Mamma.com’s stock price opened at $11.89, down $1.215 or 9.3%, from the prior day’s closing price of $13.105. According to the complaint, Cuban thereby avoided losses in excess of $750,000 by selling on the basis of material, non-public information concerning the PIPE offering.
The complaint alleges that by engaging in illegal insider trading, Cuban violated the antifraud provisions of both the Securities Act of 1933 (Section 17(a)) and the Securities Exchange Act of 1934 (Section 10(b) and Rule 10b-5 thereunder). The Commission’s complaint seeks to permanently enjoin Cuban from future violations of the applicable provisions of the federal securities laws, disgorgement (with prejudgment interest thereon), and a civil penalty.
UPDATE 2: Doug speaks to my conspiracy-tending nature when he notes:
Funny how they are going after Cubes after he has a website tracking the bailout…..
Which Cuban’s been doing on BailoutSleuth.com, if a little less neatly then certainly more aggressively than most of the mainstream media.
How about that.
Update 3: Mark Cuban responds.
Clang Clang Clang Went the Trolley, Broke Broke Broke Went the Convention Center Hotel…
With headline apologies to Judy Garland (and consequently to Eric Celeste), you can meet me in St. Louis, but it probably won’t be at their taxpayer-owned convention center hotel. No one goes there.
From the Oct. 30 issue of Bond Buyer, we learn that the St. Louis convention center hotel is not just broke, it may be going bankrupt.
Holders of $98 million of senior-lien revenue bonds issued for a St. Louis convention center hotel complex, along with its operator and developer, are scheduled to meet Nov. 11 to discuss the project’s future amid warnings of a $1.4 million shortfall in hotel revenue available for December debt service payments.
“The rapidly declining economic environment has contributed greatly to this previously unforeseen deterioration in the project’s performance” leading to the $1.4 million shortfall in the $3.5 million interest payment owed Dec. 15, wrote A. Thomas Leonhard Jr., president of project developer Historic Restoration Inc., in a letter to bond trustee UMB Bank NA.
At the Nov. 11 bondholder meeting, set up by the trustee at the request of HRI, hotel operator Marriott Corp. will present its financial forecast for the remainder of the year and a budget for next year, which is expected to show further deterioration in hotel operations. HRI also will present a forbearance option for bondholder consideration, according to the letter.
The St. Louis Industrial Development Authority issued the senior-lien revenue bonds in 2000 as part of a complex financing scheme to acquire and renovate the $266 million hotel complex at the city’s convention centers. The 165-room Renaissance Suites opened in 2002 and the 918-room Renaissance Grand opened a year later.
Yeah, it's like that.
So let’s talk about the St. Louis convention center hotel complex. The city was sold on the idea of building an attached convention center hotel paid by city-issued bonds — with St. Louis taxpayers on the hook if the hotel didn’t generate enough income — after a study by HVS Global Hospitality Services said it would be a great investment for the city and a Borat-style big success.
This is the same HVS that conducted a study in 2007 for Dallas that says the same thing. But that was after HVS’s 2004 study that said it wouldn’t be viable. So they against it before they were for it.
The St. Louis taxpayer-owned hotel has performed pretty badly, despite the promise from HVS and convention hotel backers that it would bring tons of new conventions to the River City.
In September 2000, a division of HVS International…said the St. Louis convention center accounted for 460,000 room nights in the city annually. “It is expected that with the addition of the subject properties, the city will be able to accommodate over 800,000 room nights in future years,” HVS reported
Instead, from a peak of 500,000 convention room nights in 2000, the total fell to 400,000 in 2003. It is now projected to be 470,000 in 2007.
Any of this have any bearing on Dallas?
Well, aside from the obvious — that the projections for the performance of Dallas’ proposed $550 million convention center hotel are wildly optimistic, just like St. Louis’ were — let’s consider how much plumb confidence this will give the bond buying market. (And what a stable market we are in.) The St. Louis city bonds have fallen “deep into junk bond territory.”
The city of Dallas plans to dive headfirst into this shallow pool and start selling bonds to pay for construction of the convention hotel in January, despite the fact it’s a sure thing the issue will go to voters in May and may very well get shot down. This on a project type that has a less-than-stellar track record, and for an industry — conventioneering — which is stagnant and, over the long-haul, shrinking.
Would you buy those bonds? Do Dallas taxpayers want to be on the hook if the hotel doesn’t perform (highly likely) and the bonds can’t be serviced?
St. Louis taxpayers are only on the hook for a portion of the $266 million hotel complex; Dallas taxpayers get the bill for the whole $550 million. Keep in mind that $550 million is a rough reckoning — they don’t even know how big they want the hotel yet, so it’s not exactly a truthsome figure, and there’s no guarantee construction costs won’t go up. Which, come on, a city construction project without cost overruns?
You can jump for the full Bond Buyer report. It’s downright morbid. It’s what the city of Dallas’ future probably holds if Mayor Leppert insists on going ahead with this boondoggle in spite of 60,000-plus citizens who demanded a chance to put this project to a vote. Read more
“Since the Great Depression” Must Die
You can’t hear a stump speech or read a blog post without someone showing the economic and historical vacuum that runs rampant — “worst crisis since the Great Depression.”
Oh, please.
The third quarter of this year was the first one with negative growth since 9/11. And that was just a contraction of 0.3 percent. Less than analysts feared. Unemployment is up only 1 percent over the past year to 6 percent. The bottom of the market seems to be in sight, which means there’s only one way to go from there. And the claim of a shrinking middle class is a myth.
Meanwhile, unemployment in the Great Depression was 25 percent in the worst years. In the Carter years, unemployment was almost 8 percent by the end of his term, inflation was 12 percent, and interest rates topped 20 percent.
Doom and gloom sells papers, but the negative perceptions from doomsday writing only exacerbates the problem. What we’re in is more like the dot-com bubble break, or maybe the market crash in 1987. Both of which we overcame most riki-tik.
Lighten up. And when you hear the media or worse, pols, selling you fear and anxiety, remember what H.L. Mencken said:
The whole aim of practical politics is to keep the populace alarmed — and hence clamorous to be led to safety — by menacing it with an endless series of hobgoblins, all of them imaginary.
Did Your Rep Help Cause the Financial Crisis? Something to Carry to the Voting Booth
Via WashingtonWatch.com, here’s a list of Texas representatives who voted for the Consolidated Appropriations Act of 2001, which “contained a provision preempting state regulation of financial derivatives under gambling or ‘bucket shop’ laws. The result less than a decade later was the out-of-control market for credit default swaps that has caused so much financial, and perhaps economic, chaos.”
TX-4 Hall, Ralph (R)
TX-8 Brady, Kevin (R)
TX-9 Lampson, Nicholas (D)
TX-10 Doggett, Lloyd (D)
TX-13 Thornberry, William (R)
TX-15 Hinojosa, Rubén (D)
TX-16 Reyes, Silvestre (D)
TX-18 Jackson-Lee, Sheila (D)
TX-20 Gonzalez, Charles (D)
TX-21 Smith, Lamar (R)
TX-28 Rodriguez, Ciro (D)
TX-29 Green, Raymond (D)
TX-30 Johnson, Eddie (D)
Vote accordingly.
Wednesday Roundup: Homeowner Bats 500, Lupe’s Grades, Grannies Gone Wild, Cuckolds & More
- “It is not known whether the homeowner will face any charges.” For what? Missing the second guy?
- Sheriff Lupe Valdez says of her first term, “I would say it was great.” Wonder what qualifies in her world as “just okay.” The jail she’s in charge of has failed state inspection each and every one of those four years of her first term. And her own employees have endorsed her opponent. So, you know, ouch.
- Memories of grandma: Fresh-baked cookies, hand-knitted sweaters, and, of course, her beating on cars and cussing out “the people out that’s parked in front of her house and tell them to move their M.F. cars.” (With Aunt Esther mugshot goodness.)
- Define “cuckold,” and then find it in this story.
- Common sense ain’t always common, but Rawlins has it in spades.
- Via The Agitator, your Wednesday morning Econ 101 lesson. No, really, watch it. Now.
Kill the Inland Port Master Plan Idea. Kill It Dead.
Today the Dallas Morning News came out in favor of forcing a master plan on the International Inland Port.
If planned and executed properly, this public-private partnership should swell the tax base for a part of the county that sorely needs swelling. It only makes sense that something this complex — in effect, an international “port” at the nexus of rail lines, highways and, importantly, developable land — should have a comprehensive plan for the needed infrastructure, specifically roads, water and sewer.
Allow me to retort.
Dallas County, Hutchins, and Wilmer oppose the idea. Only the city of Dallas, which constitutes a quarter of the inland port’s acreage, and Lancaster, which has its own problems, support the creation of a whole new layer of bureaucracy, red tape, meddling, and disincentives.
So those against must seem crazy right? The inland port is some 75,000 acres, it’s complex, and it’s multi-jurisdictional. How can you not have a master plan?
Well, for starters, the Inland International Port of Dallas exists solely on paper. It’s an idea.
The area is roughly bounded by Interstate 20 to the north, Interstate 45 to the east, Interstate 35-E to the west, and the proposed Loop 9 alignment to the south. Within these uneven borders lie two major north-south rail lines, a Union Pacific intermodal facility that performs about 300,000 lifts a year, Lancaster Executive Airport, and plots with triple freeport inventory tax exemption (city, county, and school business inventory taxes for inventory held less than 175 days). The area also has pending designation as a foreign trade zone, part of the NAFTA trade corridor, and as a Texas enterprise zone. (This last bit is exactly what government should be doing if they want development — getting out of the way.)
The only part of the inland port it that’s real is The Allen Group’s portion of it. The Allen Group is the development company that’s been working for more than two years and has spent $6 million creating a comprehensive plan.
The Allen Group plans to develop at least 60 million square feet of space for what it calls the Dallas Logistics Hub, a major component of the inland port concept. The Hub will be roughly divided up into 65 percent for industrial and transportation development, with the balance going for office, logistics, retail, and other development. The developer hopes the existing UP intermodal yard, which currently handles 360,000 lifts a year but has a maximum capacity of 600,000, can be matched with the construction of a BNSF facility, which talk about town says could be double that capacity. In other words, a million lifts a year. A single lift represents about a $500 benefit to the area. Chew on that.
So the Allen Group? They have skin in the game. They’ve done the hard work. And despite what some people might think, people who invest that kind of money do, indeed, take the long view. (The Allen Group’s capital comes from immediate Allen family members, not far-flung investors, and it’s the majority of the company’s investment.)
The Allen Group stepped into a place long neglected by government, put their money where their mouth is, and put into motion a plan that will create jobs and better the community. Government has done almost exactly jack and squat, and now it wants to latch on like a parasite.
Think about how excited other potential investors will be when they find out that a company like Allen Group can work for years in good faith and spend millions to get through existing red tape, only to find out the controlling municipalities have exactly no problem saddling them with more on a whim, after the fact.
It’s not like the city of Dallas and the rest of the towns haven’t known what the Allen Group was up to. I wrote about the inland port and the Allen Group almost two years ago. And now, from almost out of nowhere, there comes demand for a multi-jurisdictional master plan? This late in the process, when it’s too late for Allen Group to pull out? Doesn’t seem at all strange to you?
What’s more, the area in question already has zoning, so we’re not talking about chaotic, haphazard development happening. There’s even a loose agreement among the municipalities on how the area should be developed. And developers take a longer view than politicians — they have long-term profits; politicians think of the next election.
The DMN concludes by insulting one of the few men who made a difference in South Dallas.
(CEO Richard) Allen has a lot riding on the success of his Dallas Logistics Hub, so it’s not hard to understand his desire to be left alone. Harder to grasp is his significant trust issue with everyone at every level of government who wants to make sure sound public policy supports private enterprise.
Are you kidding? Look, this is not government wanting to make sure sound public policy supports private anything. This is about johnny-come-lately elected officials looking to create a new layer of hurdles developers have to negotiate, which gives those in government more power, influence, and — make no mistake about it — more opportunities to squeeze companies at every turn
Mr. Allen might see enemies behind every tree, but it’s time he realized that the city of Dallas, among others, already has invested significant public funds in the inland port. It would make no sense now to injure a major private investor and blow that investment.
No, it’s never a good idea to seriously injure your host organism. You just latch on, and bleed it a little at a time.
I’m sorry, but a case has not been made for a master plan. We should never work from the baseline assumption that we need a “five year plan” or whatever from government for something to work. In fact, a top-down, all-seeing, rigid master plan will serve only to stifle development, slow development, and make developers kowtow before elected or appointed politicians who all want a taste of the action.
The inland port needs to be allowed to grow organically and naturally. It’s called spontaneous order, and it happens all the time. The place for government here is to ensure that utilities are generally coordinated, and then get out of the way. When you lock in grand, top-down designs, you lock out innovation and ideas that you haven’t thought of. You lock out evolving technologies and business models. You prevent investors and developers from working out their own solutions to problems you couldn’t possibly foresee.
With existing zoning and cooperation, development can be coordinated as it happens — not years and possibly decades before dirt is turned — and it can be flexible enough to adjust to what’s happening on the ground and in the market. Locked in is locked out.
Remember, only 6,000 acres of the 75,000 of the inland port have any kind of serious plan or money invested at all. The rest of it is rough ideas on paper. The demand for a government master plan is asking for someone who has no money at risk to come in, cleave to the competing wishes of politicians, and commit the whole thing to ink, when it’s still a pencil sketch.
Let it go, Dallas, Lancaster, and NTCOG. Leave them alone.
Wednesday Roundup: Grading Hinojosa?, The DFW in Good Shape, Socialism is the New Black & More
- I wonder if Dr. Michael Hinojosa will be graded on the exciting new DISD grading scale.
- DISD layoffs: On the bright side, service at coffee houses, bars, and restaurants is about to improve in the DFW. On the down side, pole dancing quality will likely decline regardless of Van Halen wisdom.
- The DFW’s commercial real estate market is in good shape compared to most of the rest of the country.
- Color Paint me surprised. Now “socialist” — which describes both McCain and Obama’s economic plans — is apparently racist code. Oh brother. It’s like they’re not even trying anymore. This bodes so well for the next four years under Obama
- Your Wednesday Matrimonial Moment of Zen: