SEC v. Cuban and Mark Cuban's Patriotism

We have a nice student post today on the motion filed by Mark Cuban for attorneys fees against the Commission alleging bad faith in connection with the investigation.  In the brief, there are the following quotes which the brief represents came from emails sent by an SEC attorney to Cuban:

• March 28, 2007 – “. . . you have chosen to promote opinions that slander our country and our President.”
• March 28, 2007 – “Either you are really an anti-American ideologue or your allegiance to making money is significantly greater than your dedication to your country.”
• March 28, 2007 – “. . . you have chosen to use your wealth and influence to promote terrible lies.”
• March 29, 2007 – “People in this area love America and are offended by vicious attacks on President Bush.”
• May 5, 2007 (cc’ing Chairman Cox) – “I assume that Mr. Cox would view your involvement with ‘Loose Change’ much as I do.”
• May 5, 2007 (cc’ing Chairman Cox) – “. . . you defend your right to participate in smearing the good name of a patriot like President Bush.”

As the brief describes:  "Although these e-mails were sent (a) by an SEC enforcement attorney, (b) the majority during working hours, (c) from an SEC e-mail account, (d) to the target of an SEC investigation, and (e) with the knowledge of Chairman Cox, the SEC apparently took no steps to discipline [the attorney] at that time and Mr. Cuban was never contacted by the agency about the e-mails." 

It is hard to know what to make of this.  The emails are only quoted in part and the reference in the brief says that the SEC took no action "at the time" which could mean that in fact the Commission took action at some other time.  Moreover, the brief notes that an official for the Commission informed Cuban's lawyers that the originator of the emails "had played no role in the investigation." 

The Commission will file a response to Cuban and may shed some light on the allegation.  It needs an explanation.

Comments

[Anon]

Despite the apparent views of that particular SEC attorney, patriotism should not be defined as blind allegiance – especially to a president, or to an agency working for the president. Regardless of Mr. Cuban's political views, this case will be interesting because a Court is being asked to address a potentially false allegation of fraud by the SEC. When the SEC loses an EAJA case, it is dealt with very quietly (e.g. SEC v. Angel, SEC v. Coffman). Although Mr. Cuban is not able to make a claim under the EAJA due to his personal wealth, this case will probably not go away without a great deal of media attention.

It is sadly ironic that an agency charged with enforcing full disclosure isn't more forthcoming about such things. Perhaps the SEC was being "patriotic" to President Bush and American taxpayers in not disclosing the full outcomes of all cases, including those where they have been penalized for pursuing allegations without substantial justification. If so, this case may not look like the exception that many believe it is.

Obama has pledged more transparency. We will see if he really meant it. This case and the BOA case provides reason to doubt, but it is too early to know for sure.