Baseball Crank
Covering the Front and Back Pages of the Newspaper
April 9, 2004
LAW: You Are Being Watched

When I first noted Mark Cuban's weblog three weeks ago, I noted that one of his entries at the time was discussing his investment in search engine company Mamma.com, and that "the fact that he's talking here about investments about which he's making SEC filings . . . could get him in a whole lot more trouble than an NBA fine." Now, as day follows night, comes a CNN report that the SEC "launched an informal probe concerning recent activity in [Mamma.com] stock, which has almost quadrupled over the past month in highly volatile trading," with CNN specifically noting that the stock

closed at $15.66 Monday on Nasdaq, up from its $4 price range at the beginning of March.

It began its spike in the two days after the company said it swung to a quarterly profit as revenue more than doubled, rising to a high of $15.80 per share March 3.

After easing back gradually to close at $7.86 on March 15 the stock again jumped more than 24 percent March 16 after Mark Cuban, who owns the Dallas Mavericks professional basketball team, said he owned a 6.3 percent stake in the company.

(Emphasis added). Now, investigations like this are often opened without there necessarily having been any wrongdoing by anyone, and I'm not saying that Cuban did or did not do anything improper here (I'm particularly hesitant to comment on the merits because my law firm does a lot of work in this area, and for all I know we may be representing somebody already in this particular probe). But my initial point remains: if you blog about your investments in a way that could even arguably be construed as encouraging others to make investment decisions, you could wind up blogging yourself into some trouble.

Posted by Baseball Crank at 9:55 AM | Law 2002-04 | Comments (1) | TrackBack (2)
Comments

Technically, we *could* be walking into Thom Calandra territory, I suppose, but I'm not sure yet. Sort of voluntarily promoting yourself as an investor when you're someone like Cuban would definitely cause others to look at the stock - and possibly purchase it. Demand and Supply.

Posted by: Tom at April 9, 2004 2:34 PM
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