Not so "strange." Knowledge of an impending pipe deal will cause most firms to place the name on their restricted list and to halt any trading until the information hits the wire. The bigger puzzle (which is in several courts now) is whether a buyer of pipe shares/warrants can short their entire position on the public announcement and then close out with the shares acquired in the pipe deal. But knowledge of a pipe is considered mnpi since the disclosure will inevitably lower the stock price due to dilution.

Very helpful. When I think of internet startups securing another financing round, I think good things, like you'd want to stay in the company, rather than sell out. But it's of course dilutive when you've already gone public.

Thanks for the posting, David. I think this will turn out to be an interesting case. Among other things, the SEC's complaint alleges that, at the conclusion of the call from the issuer's CEO and before Cuban sold his stock, Cuban said “Well, now I'm screwed. I can't sell.”