There is an ugly side to the saying, you may beat the rap but you won’t beat the ride. Actually, everything about it is ugly, but one that happens with some rarity is that the winning defendant, the guy acquitted after trial or whose case is dismissed after suffering the full panoply of indignities associated with the best legal system ever, can’t let go.
Some people are changed by the ride. This may be because they’ve become enlightened to a system that destroys at its best, and feel compelled to fix it. Others just can’t walk away from the indignity suffered. For the most part, this doesn’t work well. It gnaws at people’s souls, and their grandiose expectations of change fall decidedly short.
But what if the guy is a billionaire? From the Wall Street Journal:
As the owner of the Dallas Mavericks, billionaire entrepreneur Mark Cuban relishes victory, so much so that he often stands during basketball games and screams. But it is an off-court win—against the U.S. Securities and Exchange Commission—that has him fired up now, and he isn’t backing down any time soon.
It was an interesting win. It wasn’t that he didn’t trade on private information, conduct about which I question its criminality, but that he didn’t know it was private information when he acted upon it. Billionaires sometimes get more informative phone calls than the rest of us.
Mr. Cuban could have settled for a few million, a small part of his estimated $2.5 billion fortune, but he chose to fight instead. Ultimately, the jury sided with him. It was a tough case for the SEC to prove, in part because the trial was held in Mr. Cuban’s hometown of Dallas, where he is well-known and popular, and the SEC’s star witness didn’t testify in person.
During the process, Mr. Cuban says, he became so frustrated with the SEC’s lawyers that he is now considering a new venture publicizing SEC transcripts. “It wouldn’t be a big business, but it would be a business because it’s not getting done,” he says. “I’m going to get as many as I can, and I’ll put it out there.” His first step, he says, would be publishing trial transcripts on his blog and highlighting tactics he considers suspect. “Sunshine is the best disinfectant,” he says with a smile.
Let me be clear, anything that has the potential to illuminate, to make people more aware, is a good thing. Whether it’s a particularly effective strategy, however, is a different matter.
In the case of Mark Cuban*, he faced a civil action by the SEC. He was neither charged nor prosecuted criminally by the United States Attorney, so he was never processed, printed, stood before a Magistrate Judge to learn how much money would prove he wouldn’t flee the country. He never sat awake at night pondering whether the beds at Club Fed were comfortable. As bad things that can happen with the government go, this wasn’t in the top ten. Yet, it was sufficient to cause Cuban to continue the fight after winning at trial.
The plan, according to the WSJ article, is to “publish trial transcripts on his blog and highlight tactics he considers suspect.” Lord knows trial transcripts are barely interesting to the lawyers who tried the cases, and monumentally tedious to everyone else. It’s not like television, kids, and trials aren’t wrapped up in an hour with Atticus imploring the jury to be just.
As for the tactics Mark Cuban “considers suspect,” there remains a question whether he has the background to appreciate what is suspect and why. My suspicion is that he won’t be sitting up late at night, pounding a keyboard until blood runs from his fingers. It strikes me as more likely that he’ll pay someone to do angst for him. Rich or poor, it’s good to have money.
But this still remains focused on such a tiny slice of a very small niche of a systemic problem. The universe of people who come in contact with the SEC is limited, mostly to people who (unlike Mark, who’s more of a casual kind of guy) have their shirts made by Thomas Pink. These are wealthy people. Powerful people. People who do not take kindly to punk-ass lawyers who grew up on a farm in Bumfuck, Nebraska before attending Yale, telling them what they did wrong.
You see, Mark Cuban didn’t meet the business end of an agent’s Glock on his way to the courthouse. He wasn’t made to squat and spread for the amusement of the agents. Nor was he forced to wonder whether his defender carried a caseload of 457 other poor souls as trial approached. Not too many people subject to civil action by the SEC have to worry about such things.
So while publishing trial transcripts on the internet and noting things that appear to be transgressions to a billionaire’s eyes is fine as far as it goes, imagine what good could come of a rich guy from Pittsburgh who has the money to make a dent in the harm being done by the government to all the poor schmucks who will never know how it feels to put up the good fight.
This isn’t to criticize Mark Cuban for not forgetting what the ride was like after he beat the rap, but to suggest that not everybody gets to take the ride in a private plane. It’s great that he wants to put in the effort and money to use sunshine as the best disinfectant, but then let it disinfect the full parade of horribles of the system rather than just your tiny corner. It could all stand some sunshine. As much sunshine as your money can buy.
* Full disclosure, I’m good friends with Mark Cuban’s brother, Brian of the Cuban Revolution, lawyer, video pundit and author of Shattered Image.
During my reading I noticed how little some of the landmark cases hinged on money: Katz, Gideon, Escobedo, et al. In civil law, some dimwit like Palsgraff can help create a rule that costs tobacco companies hundreds of millions based on something called ‘foreseeability.’ We just never know where the next great idea will come from. Lenny Bruce was convicted of obscenity (posthumous pardon) and helped open up areas in our laws on freedom of speech. Mark Cuban is just one guy with a vested interest. He’s going to play the hand he’s got, even if we all hoped he could do more. I wish him well.
Q is does Mark like Frank Zappa?
If not or if so, he may want to consider a transcriber/researcher/ball-breaker/ sunshine daydream enthusiast for the potential position that has a few thousand hours on his/her tune hard drive mixed in with the other necessary musician and musical ingredients to succeed with the task at hand.
Round and round is not always the nearest exit of the Merry-Go-Round but often is the necessary entrance to the true ride disguised.
I wish him the best of luck in his endeavors. Perhaps the research and sunlight he seeks might plant a sliver in his philanthropy paw that festers into other arenas.
Lord knows the festering wounds within the tangled catacombs of the system could benefit from any twisted bits of spilled fait that may readjust the concept of fair play and reasonable behavior on the part of ‘Merica’s Prosecutors of all stripes.
Ms. Palsgraff may not have been sophisticated, but she was a hard working woman just trying to have a nice day. To characterize her as a dimwit is false. She didn’t help create any rule. She was a victim of a judiciary bent on making it easier for corporations to escape liability. During your reading did you happen to notice that Cardozo didn’t even accurately describe the events in his decision? He pulled it out of his ass. Hope you’re not a lawyer; I’d feel terrible for any clients you feel are dimwits.
While I did not engage in exhaustive research on the case, I read enough to convince me that the defendant did engage in conduct those in his field would know was against the rules and the state had a decent enough case to proceed. His having more money than the vast majority of people charged with either a criminal or civil violation certainly helped him beat the charge but suggesting the state’s counsel was anything other than intelligent shows a lack of knowledge of the case from both sides, or an objective third side.
Our system of finance/investing requires people follow the rules or face the consequences. It would be naive to suggest a great many do not get away with violations big and small all the time but there has to be at least the possibility that they will be caught. This case went to court rather than follow a plea deal like most do and that’s fine but even if the violation is clear and the facts damning, it does not mean a judge or jury will follow them in a particular way. I happen to agree with Scott’s idea that if this billionaire wanted to do something better, he’d focus on the far worse cases out there where a poor person got the shaft, but the rich tend to look out for themselves so I won’t hold my breath.
“Those in his field”? Billionaires? Sophisticated investors? Guys who get calls from other guys who tell them what’s going on? That your cursory review left you unconvinced of Cuban’s innocence isn’t a relevant inquiry under the best of circumstances. What “rules” didn’t he know? What “rules” did he break?
Why, if it wasn’t worth your time to do “exhaustive research” on the case (and it’s questionable whether you did any, considering your reference to “state’s counsel” in a federal case) do you feel qualified to opine that you are convinced he broke the rules when the jury who heard the testimony, saw the evidence, considered the arguments, was unconvinced? For future reference, civil regulatory actions never end in a “plea,” no matter how convinced you are that they should.