Mark Cuban, the billionaire owner of the Dallas Mavericks who’s accused by the U.S. Securities and Exchange Commission of insider trading, offered to pay lawyers to help the agency speed its review of documents in his case.
An attorney for Cuban, Stephen Best, told U.S. District Judge Reggie Walton in Washington that he was seeking a creative solution to moving the case along, noting the federal government often hired contractors.
“I have never heard about the government becoming indignant about accepting” assistance, Best told Walton at a hearing today.
Walton asked SEC attorneys to review whether bringing in contract attorneys for the task would violate federal hiring procedures or whether contractors would be allowed to review the documents, some of which may be classified.
The judge last month said the SEC improperly withheld documents that Cuban requested through the Freedom of Information Act, and said the defendant should be granted access. His lawyers complain that current schedules call for the documents to be delivered in March 2012.
Melinda Hardy, an SEC attorney, said in court that Cuban’s offer was unprecedented. She said the agency is concerned people with “deep pockets would come in and go to the front of the line.”
The Cuban file is so voluminous that an attorney assigned to review it would have to spend more than eight months, assuming a pace of four pages a minute and eight-hour days without breaks, the SEC lawyers said.
The SEC alleges that Cuban traded on confidential information when he sold his stake in Mamma.com Inc., a Canadian Internet search company, just before it announced a private placement of shares.
The proposal to pay for the document review was made after Walton said he lacked authority to order the SEC to shift resources to accommodate Cuban’s request, and that there was little hope of additional funds from Congress.
“Contrary to popular belief, the federal government is going broke,” Walton said.
The case is Cuban v. SEC, 09-cv-996, U.S. District Court, District of Columbia (Washington). The insider-trading case is SEC v. Cuban, 09-10996, 5th U.S. Circuit Court of Appeals for the Fifth Circuit (New Orleans) and SEC v. Cuban, 08-cv-2050, U.S. District Court, Northern District of Texas (Dallas).