Principles in Practice: The Blog of the Objective Standard

Thursday, November 20, 2008

Drop the SEC Investigation Against Cuban

Posted by ARC Media at 12:48 AM

Washington, D.C.—Billionaire Mark Cuban is under investigation for “insider trading” by the SEC.

“This case is a travesty,” said Alex Epstein, an analyst at the Ayn Rand Center for Individual Rights. “Cuban is accused of selling his stock in Mamma.com after the CEO told Cuban that the company would be making a new stock offering that Cuban thought was a bad idea. But there is nothing wrong with this whatsoever—unless Cuban had a contractual obligation or fiduciary duty not to act on the information. And if Cuban violated a contract, which there is no evidence of, then that is the injured party’s—the company’s—job to pursue, not the SEC’s. In all likelihood, if there is anyone who violated a contractual obligation, it is the CEO who divulged confidential, unsolicited information—not the famous billionaire recipient who just happens to make a juicy target for SEC bureaucrats thirsting for another high-profile case to justify their regulatory power.

“The question of ‘insider trading’—when employees and investors of a company can act on certain information—should be left entirely up to private contract, such as restrictions on CEOs shorting their own stock. The criminalization of ‘insider trading’ has authorized the SEC to terrorize those whose only sin was to be a savvy investor. The Mark Cubans of the world deserve to be left free to make investment decisions under a government with clear laws against force, fraud, and breach of contract—not to spend years of their lives enduring witch hunts and prisons.”

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Mr. Epstein is an analyst at the Ayn Rand Center for Individual Rights, focusing on business issues.

Mr. Epstein’s op-eds and letters to the editor have appeared in such publications as the Wall Street Journal, San Francisco Chronicle, Philadelphia Inquirer, Canada's National Post, and the Washington Times. He is also a contributing writer for The Objective Standard, a quarterly journal of culture and politics. Mr. Epstein has been a guest on numerous nationally syndicated radio programs.

Alex Epstein is available for interviews.
Contact: Larry Benson
E-mail: media@aynrandcenter.org
Phone: (949) 222-6550 ext. 213

For more information on Objectivism’s unique point of view, go to ARC’s Web site. The Ayn Rand Center is a division of the Ayn Rand Institute and promotes the philosophy of Ayn Rand, author of Atlas Shrugged and The Fountainhead.

Labels: Business and Economics, Individual Rights and Law