Mark Cuban Insider Trading Case Set For Trial

Mark Cuban, the charismatic owner of the NBA’s Dallas Mavericks, lost his attempt to dismiss the SEC’s insider trading case against him, sending it to trial. The district court judge in Dallas said the ruling was “in some respects a close one.” Mr. Cuban is charged in connection with a 2004 sale of his stock in, allegedly after learning non-public information about an upcoming equity offering.  Read the original complaint here.

California Lawyer Charged For Fraudulent “Opinion Mill”     

The SEC charged Brian Reiss, a lawyer in Huntington Beach, California, with fraudulently issuing legal opinions about penny stock offerings. Mr. Reiss is alleged to have set up an “opinion mill” through his website,, offering computer-generatedopinion letters used to justify lifting restrictions on a desired stock.  The SEC alleged that Mr. Reiss offered a “volume discount” rate for bulk orders of letters. In churning out opinion letters, Mr. Reiss allegedly made multiple false and misleading statements about various stocks.

Penny Stock Promoter Charged With Misleading Newsletter Subscribers

Colin McCabe, a Canadian stock promoter, was charged with misleading subscribers to his investment advice newsletters.  Mr. McCabe, who recommended penny stocks to subscribers through his newsletter Elite Stock Report, allegedly made false claims about the methodology of his research, failed to disclose he was being paid to promote stocks he recommended, and misrepresented the assets of one issuer he represented. The SEC said that Mr. McCabe claimed his advice was the work of a team of expert researchers, when in fact he conducted only cursory online research alone. In addition, Mr. McCabe is alleged to have accepted more than $16 million in promotion fees for stocks before recommending them to subscribers.  

Trader Using “Free-Riding” Scheme Given $640k Judgment

A district court in New Jersey entered final judgment in the SEC’s case against Scott Kupersmith. Mr. Kupersmith was charged with operating a “free-riding” scheme, quickly buying and selling stocks between two brokerage accounts without having enough securities or cash to cover the trades. The scheme netted Mr. Kupersmith $640,000 in illicit profits, which the court ordered to be disgorged. In addition, Mr. Kupersmith’s scheme caused roughly $2 million in losses to the victim broker-dealers.