Lawyers for Dallas Mavericks owner Mark Cuban recently pitched this novel idea: paying the Securities and Exchange Commission to hire contract attorneys to expedite a public records request. Or if that didn't fly, Cuban said he'd pay for staff overtime.
The SEC yesterday told Cuban to keep his money.
Congressional appropriations, SEC lawyers said in court papers filed Wednesday in Washington’s federal trial court, set a “maximum authorized program level” for federal agencies.
The SEC cannot accept outside money to get around those limits, the SEC lawyers, including Melinda Hardy, said. Any money Cuban throws at the SEC would be deposited into the treasury “as soon as practicable without deduction for any charge or claim,” according to the agency.
At a hearing in October, Cuban’s lawyers at Dewey & LeBoeuf first raised the idea of paying the SEC to facilitate a faster review of Cuban’s requested documents, which are tied to an SEC insider trading probe. The agency filed insider trading charges against Cuban in 2008 in the U.S. District Court for the Northern District of Texas. The case is pending.
SEC attorneys said there are about 845 boxes of documents the agency must review before it gets to Cuban’s request. The SEC estimates the agency will not begin to review Cuban’s requested documents at least until September 2011—and even that date may not be met. Why? The SEC said the agency’s FOIA office was denied a request for funding for contractors.
Former Dewey partner Stephen Best, who co-chaired the firm’s white-collar defense practice and who remains lead counsel for Cuban, said today the delay in processing Cuban’s request—the first step before any records are produced—is not reasonable.
“The inherent problem is we are at the whim of the SEC in determining when they feel it appropriate to respond to the request. That is inherently unreasonable,” said Best, who now chairs Brownstein Hyatt Farber Schreck’s white-collar criminal defense and investigations practice. “Indeed, the presidential administration had a platform based upon the importance of the Freedom of Information Act in making sure people have access to information. The SEC says it will take multiple years to get to our review. That’s not access.”