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Memphis Grizzlies Ownership Situation Gets Crazier

By Chip Crain

NEW YORK, NY - FEBRUARY 13: Robert Pera of the West Team dribbles the ball during the Sprint NBA All-Star Celebrity Game as part of 2015 All-Star Weekend at Madison Square Garden on February 13, 2015 in New York, New York. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and/or using this photograph, user is consenting to the terms and conditions of the Getty Images License Agreement. Mandatory Copyright Notice: Copyright 2015 NBAE (Photo by Ned Dishman/NBAE via Getty Images)
NEW YORK, NY - FEBRUARY 13: Robert Pera of the West Team dribbles the ball during the Sprint NBA All-Star Celebrity Game as part of 2015 All-Star Weekend at Madison Square Garden on February 13, 2015 in New York, New York. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and/or using this photograph, user is consenting to the terms and conditions of the Getty Images License Agreement. Mandatory Copyright Notice: Copyright 2015 NBAE (Photo by Ned Dishman/NBAE via Getty Images) /
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The Memphis Grizzlies, already suffering through a difficult season, had another blow when the SEC issued subpoenas to owner Robert Pera and his company.

Just when Memphis Grizzlies fans thought they had heard all they wanted about the ownership situation, another strange twist has risen.

Majority owner of the Grizzlies Robert Pera and his company Ubiquity Networks were issued subpoenas on February 13th. The subpoenas cover a wide range of topics including metrics relating to the Ubiquity community, accounting practices, financial information, auditors, international trade practices and relationships with distributors and various other third parties.

The company has stated “they are in the process of responding to the requests and intends to cooperate fully with the SEC.”

The complaint is pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934. The stock is down over 30 percent in early trading Tuesday.

This comes on the heals of a report issued by short trader Citron. The report questioned the accounting practices at Ubiquity last September. Citron said at the time that a number of factors “lead us to believe without a doubt that Ubiquity Networks is a total fraud.” The report also stated “it is only a matter of time before the SEC launches a formal investigation.”

What it means for Memphis Grizzlies

The timing for this development couldn’t be worse for Robert Pera. Pera is battling for control of the Memphis Grizzlies. Steve Kaplan and Daniel Strauss exercised an option in November to buy or sell ownership control at a set price. There’s not a known price for the team at the moment — or at least no one else knows about it.

If Kaplan and Strauss take control of the team, things will change. The front office will likely shake up. It will affect the hiring of a new head coach. It could even mean a shakeup in the roster. A shake up that could include fan favorite veterans Marc Gasol and Mike Conley.

This means everything about the franchise is in flux.

All of this is speculation. Ubiquity Networks may have done nothing wrong. Citron could be wrong. This issue could be resolved without a trial. The company is cooperating with the subpoenas. Companies – like people – are innocent until proven quilty.

Next: Will Grizzlies fire Wallace?

Then again, so little associated with the Memphis Grizzlies this season has been as simple as it looked at the beginning.

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