Mark Cuban Latest Fight With SEC: In-House Judges

Mark Cuban Latest Fight With SEC: In-House Judges

Mark Cuban, the billionaire owner of the Dallas Mavericks and vocal critic of the Securities and Exchange Commission, has weighed into the escalating debate over the agency’s use of its in-house judges.

Mr. Cuban, who won a federal court battle against the SEC in 2013 when a jury cleared him of insider-trading charges, said in an appeals court filing that he “likely” would have been found liable had his case been decided by an SEC judge.

In a filing with a federal appeals court in Georgia, Mr. Cuban sought leave to file a brief supporting Charles Hill, a real-estate developer who is fighting SEC insider-trading allegations.

The SEC is appealing against a decision in June by a federal judge in Atlanta that its use of an in-house judge for Mr. Hill’s case was “likely unconstitutional.”

Mr. Cuban in his filing Tuesday said that “as a first-hand witness to and victim of SEC overreach,” he has an interest in helping fight the SEC in Mr. Hill’s appeal.

“Had Mr. Cuban been subject to the treatment the SEC intends for Mr. Hill, without the procedural safeguards available in federal district court, Mr. Cuban likely would have been found liable by an in-house SEC judge on a legal theory that was found by a federal court of appeals to be unsound,” his brief said.

An SEC spokesman declined to comment.

The legal battle by Mr. Hill is one of several courtroom challenges to the SEC’s increasing use of its administrative law judges. Defendants say the in-house tribunal gives the agency an unfair edge.

Mr. Hill in his federal court challenge cited a page-one article in The Wall Street Journal in May that showed the agency enjoys a significant home-court advantage when it sends cases to its own judges. The SEC won against 90% of defendants before its own judges in contested cases from October 2010 through March of this year, the Journal analysis found.

The SEC says the system is fair and has adequate protections, as well as being faster and more efficient than federal court. The commissioners who run the agency in a recent decision dismissed the finding by two federal judges – including in Mr. Hill’s challenge – that the way the SEC judges were appointed violates constitutional protections.

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Republished by the Law Office of Scott A. Ferris, P.A.