It’s hard to imagine the SEC looking any worse than in the aftermath of the Bernie Madoff scandal, but its case against Internet billionaire Mark Cuban — and his newer countersuit against the SEC — sure isn’t doing much to burnish its reputation.
According to Bloomberg, the SEC’s inspector general is now probing claims that the agency’s staff acted improperly while compiling a case against Cuban. Last year, the Dallas Mavericks owner was accused of insider trading, for offloading his shares of Mamma.com hours after a 2004 conversation with the company’s CEO about a PIPE transaction that Cuban disapproved of.
Though Cuban had a 6.3 percent stake in the company, his attorneys say the SEC hasn’t shown that Cuban was barred from selling his shares.
In a newer twist, Cuban last month sued the SEC, saying it was unlawfully refusing his requests for documents under the Freedom of Information Act, including data about a staff attorney who questioned Cuban’s patriotism via an email exchange in 2007.
The SEC has previously said that the attorney, Jeffrey Norris of the SEC’s Fort Worth office, wasn’t involved in the Mamma.com investigation. Bloomberg’s sources didn’t specify if Norris is involved in the SEC’s interagency probe.