Martha Stewart, get ready to decorate that jail cell.... (1 Viewer)

[Michael Reuben]

I agree. She's an example of why it's a bad idea to lie when government investigators come calling. If government investigators think they've been lied to, they'll come after you with a vengeance. And this has nothing to do with whether or not someone is famous; it's happened in plenty of cases that didn't make headlines.

M.

 

[Cees Alons]

Michael,

That other case can only be about her knowledge of Sam W. selling his shares. It is not about any "insider information" of the type that was discussed in this thread. She didn't know about the rejection of the ImClone drug.

Also, if the assistant broker who made the deal with the DA had not told her (he now claims his boss instructed him to do so) why they advised her to sell, she would not have had that "inside information" as well. It was a "spoiler" she had not asked for or did not need to know!

I agree with you that one better cooperate with those government investigators, but there are several indications she didn't lie to them at all. Of course, she is now found guilty - and that's the official verdict until it might be revised.


Cees

 

[Michael Reuben]

I'm not sure that the inside information discussed in this thread has been so precisely specified, but it doesn't really matter. The fact remains that Stewart has indeed been accused of trading on inside information, just not in the criminal trial that concluded last week.

M.

 

[Cees Alons]

I'm not aware that an accusation to that extent has been brought forward.

Cees

 

[Michael Reuben]

Well, now you are.

There's an SEC civil action that was filed about the same time as the indictment.

Here's an article from over the weekend that discusses the SEC action. The SEC complaint is probably available online somewhere, but I haven't looked.

M.

 

[Cees Alons]

C.

 

[Erik.Ha]

Not quite right... Martha was not charged criminally with the crime of insider trading. That doesn't mean she didn't engage in insider trading. It simply means the government didn't think they could prove she was guilty of it BEYONG A REASONABLE DOUBT. She has been charged Civily with insider trading by the SEC, which carries the much lower burdon of A PREPONDERANCE OF THE EVIDENCE.

Insider trading although NOT CHARGED in the indictment, was DEFINITELY a factor in the case. It was the underlying felony (i.e. REASON she was questioned in the first place) which she was found to have lied about. Sam Wachsell has plead guilty to insider trading. The case against him was DEAD TIGHT. His broker (bechonovic) found out that Wachsell was selling. Nobody knows how much inside information Wachsell told Bechonovic, or how much Bechonovic told Stewart, because Bechonovic and Stewart (according to the jury) LIED to cover it up. However, the inference can be made that when a CEO calls his broker and yells "SELL IT ALL!!!" that trading on that info ALONE constitutes "Insider trading". That the CEO is dumping his shares is certainly news which would tend to cause the stock price to trade negatively... That information was not public information... Thats insider trading... Obviously, as you remove the information by another generation (Bechonovic to Stewart) that charge gets harder to prove... It does NOT however mean she didn't engage in the illegal activity and it does not mean this trial "had nothing to do with insider trading."

As an analogy, people are very often charged with the crime of "Conspiracy to commit a felony" who are not charged with committing the underlying felony, even when the underlying felony was committed. Conspiracy is a much easier charge to prove than most felonies which require the prosecution to prove INTENT, but it carries a VERY stiff penalty.

I went through the "insider trading" discusion because Jason Pancake argued "insider trading shouldn't be against the law" which sounds like an ill reasoned argument to make when one understands WHY IT IS agaisnt the law.

As far as making an example of Martha Stewart... YOU'RE DAMNED RIGHT they're making an example of her... Thats one of the key reasons we have a criminal justice system... To show the rest of us that it doesn't matter WHO YOU ARE... IF YOU BREAK THE LAW, WE WILL GET YOU!

 

[Michael Reuben]

If anyone is interested, here is the principal statute under which Stewart was convicted. It's 28 U.S.C. sec. 1001(a), and it's one of the broadest statutes in the federal criminal code:

Note that (a) there doesn't have to be a formal proceeding, and (b) you don't have to be under oath.

M.

 

[Jeff Ulmer]

That is a very noble ideal, but is anything but the truth. With the right connections, you can get away with ANYTHING, no matter how blatently illegal. Of course, it never hurts to enforce the ILLUSION that there is justice.

 

[Brian Perry]

Another interesting thing is that Martha changed her post-verdict statement on her website, apparently to help reduce her sentence. Originally her statement said that "I take comfort in knowing I did nothing wrong" and she quickly changed it to "I take comfort in knowing I have support of family and friends."

One of the factors the judge will take in consideration during sentencing is contrition and whether the person has accepted responsibility for his/her actions. Martha or her counsel must have felt that continuing to publicly deny any wrongdoing wouldn't help her cause, at least legally.

 

[george kaplan]

I'm not quite sure that being told that the CEO of a company is dumping his stock isn't insider information. The reasons for the dumping might not be known, so it might not be first-hand inside information, but it's financially important information not known to the general public that would certainly be of benefit to know. I don't know if it's legally inside information, but it certainly sounds like it's 'spirit of the law' inside information.

 

[Erik.Ha]

That she is NOT GUILTY (innocent is not a standard our criminal justice system has ever used) of insider trading in the eyes of the CRIMINAL law, doesn't mean she didn't do it... This isn't quantum physics... either Schrodinger's cat died or it didn't. She either engaged in insider trading or she didnt. That the government cant PROVE she engaged in insider trading doesnt mean the rest of us have to walk around like tweedle dee and tweedle dum assuming she's pure as the driven snow on that issue. Will she go to JAIL on that charge? Nope.... Might she pay a BIG A$$ fine for it? YEP!

Last night I drove 75 on the freeway (not really, but for arguments sake...) that I didn't get caught doesn't erase the fact that the event did indeed occur... I'm not "innocent" of driving too fast, I just didn't get pulled over, and because of that, I will never be found "GUILTY" of it in a court of law. That doesn't mean the rest of you should award me the "Safe Driver of the Year" award....

 

[Cees Alons]

Erik,

Nonsense. We all know that to be true, but then there isn't any meaningful argument at all any more.

Suppose you DID get the Safe Driver of the Year award. Would I be able then to say publicly you didn't actually have any right to it because, perhaps... perhaps... and we cannot prove otherwise .. you drove 75 mph last night? Or maybe even 166 mph, who knows?

The DA dropped the charge of inside trading (OK, Michael informs us there may be a complaint from the SEC as well), so for the time being, we simply HAVE to assume she's innocent. That's the law.

You didn't kill your mother. I didn't pee on my neighbour's lawn last night. Period.
Until proven otherwise - and in a court of law.

Cees

 

[Michael Reuben]

Geez, what do you have to do to get some credibility around here? Fine, here's the SEC complaint. It's dated June 6, 2003. There may have been subsequent amendments, but this is the original filing. It's in the same federal court where the criminal trial was held.

M.

 

[Cees Alons]

Ha, ha. Sorry for the wording. I meant: Michael informed us there has been...
I believe you!

"Dropped" should have been: "never brought forward". True.

Yes, I understand that I may be ( ) not too familiar with the different titles, etc. Sorry for that too!


But my problem with Erik's "may be ( ) it isn't proven, but who knows" remains.

Cees

 

[Erik.Ha]

Yeah... you would be... if you had a reasonable beleif that I am a bad driver... and that's even BEFORE I was convicted of LYING about my driving record...

Martha Stewart will forever be "Not Guilty" of the CRIME of "insider trading" in this instance... However, it is very likely she will be LIABLE for the tort of "Insider trading." So did she do it, or didn't she??? Is she "innocent???" (she hasn't been found GUILTY!) She still engaged in the activity!

"Innocent until proven guilty" is a legal standard that simply stands for the notion that the government has to prove its case before we incarcerate somebody, and the defendant doesn't have to mount ANY defense unless it wants to. We could do things differently... We could arrest people, charge them with a crime, and if they couldn't prove their alibi, we could put them in jail... we've chosen to put the burden on the prosecution. Martha Stewart rested on this principal... She put up VERY little defense, assuming the jury wouldn't buy the prosecution's case... BIG ERROR IN JUDGEMENT. Now that she has been convicted of LYING about insider trading, do we KNOW beyond a reasonable doubt that she DID engage in insider trading??? No.. but we can certainly make the logical inference that people don't LIE about something to investigators unless they are doing so to cover up the ILLEGAL ACTIVITY being investigated!

 

[Cees Alons]

Dangerous. Some people, when stopped by a policeman, begin to lie immediately, even when innocent. Same for some people who are asked to reply to the IRS.

It's fear and uncertainty that drives most of us. Not necessarily guilt.


Cees

 

[Erik.Ha]

Most don't start doctoring financial records, which shows more than just a "kneejerk" fear reaction...

 

[Jeff Ulmer]

Another accusation that the jury has deemed untrue.

Could she have been guilty? Sure. Was there enough evidence to pursue that assumption? Evidently not.

 

[Joseph S]

Senators' Stocks Beat the Market by 12 Percent

It looks like there are quite a few in the Senate that could draw the same suspicions as Martha and have obviously violated on more than one occasion...


by the very nature of their "profession" and status.

Time for some special elections??

I never have understood the hatred for Martha and Kathie Lee. It's not like you have to watch their shows or read whatever they're involved in and they have no effect on your life and your freedoms.