That's according to a friend of the court brief he filed with the Supreme Court last week. In the brief, Cuban takes the side of the former chief executive of a nursing home called Assisted Living Concepts, whom the SEC accused in 2014 of fraud, according to various news reports.
At issue for Cuban, and other business owners, are administrative trials at the SEC that can stretch on for years and cost defendants large sums money, and whose outcomes tend to favor the agency. The trials are adjudicated by administrative representatives of the SEC, as opposed to in federal court.
"If the price of admission to federal court on jurisdictional and constitutional issues is enduring a multi-year slog through the SEC's in-house administrative proceeding and commission review in every case, the prospect of obtaining any judicial review of many important foundational issues, let alone meaningful review, is vanishingly small," Cuban's lawyers reportedly wrote in the brief. In other words, most defendants are likely to get stuck having their cases handled inside the SEC, rather than by a federal court.
Additionally, Cuban argues via his attorneys in a similar brief filed in February with the U.S. Court of Appeals for the D.C. Circuit, the rights of the accused are being abridged under the U.S. Constitution's Appointments Clause. That clause stipulates that the president, or a head of a court of law, must make the appointment of a judge who decides such cases. Otherwise, the legal decision is invalid.
In that brief, filed on behalf of Raymond J. Lucia Companies, a retirement and financial planning business in San Diego, Cuban's lawyers argue that such administrative proceedings have been enabled by the 2010 Dodd-Frank Act. The banking regulatory act was put in place following the 2008 financial crisis.
Dodd-Frank "authorized the SEC to impose substantial monetary penalties through its own administrative proceedings on any individual for securities law violations," Cuban's lawyers write.
The SEC tends to prevail in 90 percent of its administrative trials, according to The Wall Street Journal, which examined case outcomes in 2010, as first reported by Corporate Counsel. The SEC investigated the allegations, and in January said it found no evidence of bias.
Cuban has his own history with the SEC. In 2008, the agency accused him of insider trading of 600,000 shares, reportedly worth $8 million, of his Internet search engine, Momma.com. Five years later, he was cleared of the charges. (His case was decided by a Texas jury, not by an SEC administrative panel.) Had he been found guilty, he could have faced $2 million in fines, according to news reports.
Cuban declined to comment for this article.