In person, billionaire Mark Cuban stands taller and seems calmer than most TV viewers would guess. That disparity between his reputation and reality helped the Dallas Mavericks owner beat the government in court earlier this month, says his lawyer Tom Melsheimer.
A managing principal in the Dallas office of Fish & Richardson, Melsheimer ranks as the top Texan on a team of six partners and at least four associates that successfully defended Cuban against the U.S. Securities and Exchange Commissions’ civil allegations that he engaged in insider trading.
After deliberating for five hours, a Dallas federal jury on Oct. 16 rejected SEC claims that Cuban acted on confidential information—on which he had promised not to trade—when selling his stake in a Canadian Internet company nine years ago to avoid a $750,000 loss.
SEC spokeswoman Christina D’Amico writes in an email that the agency and its counsel decline comment about the case, beyond a written statement by SEC spokesman John Nester: “We respect the jury’s decision. While the verdict in this particular case is not the one we sought, it will not deter us from bringing and trying cases where we believe defendants have violated the federal securities laws.”
Cuban’s much-photographed disagreements with referees during basketball games have led some TV viewers and web surfers to assume he’s short and excitable, since he’s often pictured standing next to ball players or yelling, hands on his hips and mouth agape.
In light of those widely held impressions, Melsheimer says Cuban underwent extensive preparations for months before appearing at the trial, to ensure his demeanor on the witness stand didn’t send the wrong signals to jurors. Cuban’s lawyers—including Christopher Clark, a partner in the New York office of Latham & Watkins, and Stephen Best, a partner in the Washington, D.C. office of Brown Rudnick—assisted Cuban with those trial preparations.
But Cuban, who also owns the high-definition television network HDNet and the Landmark Theatre chain, never balked, say Melsheimer and Best.
“We all took turns cross-examining Mark. We were harder on him than the government lawyers were at trial. Mark took the time. He made himself available and subjected himself to that,” Best says.
Cuban “wanted to spend as much time as he could” preparing, “because he knew that he was going to be the most important witness,” Melsheimer says.
Early on, Cuban understood that “[t]here was a way of answering questions in court that was different than the way he would answer them in an interview or with a Mavericks fan,” Melsheimer says.
As the trial unfolded, Melsheimer says, Cuban “was really our secret weapon” as a calm, not excitable, witness. As the plaintiffs in the civil suit, the SEC lawyers presented their case first at the trial and questioned Cuban “extensively about his motivation for selling” shares of Mamma.com.
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