Securities Law

Billionaire Gets Discovery in Bid to Force SEC to Pay His Legal Fees

A federal judge has agreed that billionaire Mark Cuban, who owns the Dallas Mavericks basketball team, can proceed with discovery in his effort to force the feds to pay his defense fees in a failed insider-trading prosecution.

A spokesman for the U.S. Securities and Exchange Commission declined to comment on the Dec. 4 ruling by U.S. District Judge Sidney Fitzwater in Dallas, reports Bloomberg. Cuban is seeking information to support his claim for attorney fees because the SEC allegedly pursued the case in bad faith, without an adequate factual basis.

Cuban is seeking e-mails, phone records and other SEC communications, notes Reuters.

“To the extent that he views it as the agency having tweaked him, he wants to tweak back,” attorney Jacob Frenkel tells the Bloomberg. “Is this likely to meet with success? No. Is that likely to stop him? No. Many who are accused by the SEC are pleased to take a dismissal and ride off into the sunset.”

Partner Stephen Best of Dewey & LeBoeuf is representing Cuban. He tells the Am Law Litigation Daily that he is unaware of any other such discovery order ever being issued against the SEC. “I think this is precedent-setting,” he says.

Additional coverage: “Dewey Lawyers Defend Mark Cuban on Blog, Claim SEC Misconduct”

ABA Journal: “Technical Foul” “Judge Tosses SEC Case Against Mavericks Owner”

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