Martha Stewart Guilty

[wesbed]

As for her demeanor, I guess I didn't realize that she was also on trial for being a bitch.

It may have been a factor in regard to the jury's decison.

Hartridge and the other 11 jurors -- four men and eight women -- deliberated over three days before reaching the verdict. Hartridge said the appearance at the trial of Stewart's celebrity pals like Rosie O'Donnell and Bill Cosby may have backfired. "If anything, we may have taken it a little as an insult," he said. "Is that supposed to sway our opinion?" Some of the testimony about the way she ran her business left the impression, at least on him, that she thought she was "above everyone." He also said her background as a stockbroker worked against her because the jury believed she should have known what she was doing was illegal.

>full article<

[7/4]

Karmic payback???

[chris olivarez]

Martha's stuck in Danbury prison and time keeps draggin on.

[RainyDay]

I agree that the press just can't quite get it right. There was no fraud or insider trading. The charge that was dropped before going to jury was the securities fraud charge; basically that charge meant that Martha tried to manipulate the value of her stock by proclaiming her innocence.) The judge realized that this was quite a stretch and threw it out several weeks ago.

It was determined that there was never insider trading even before the trial began. Incidently, the stock that she sold is probably worth even more now since the FDA has subsequently approved the drug that Imclone was developing, so I don't think that anyone who bought this stock after she sold it is suffering terribly. Since Ms. Stewart only stood to lose a hundred grand or so had she kept the stock and has ended up losing more like 500 mil., I can hardly imagine that she was trying to bilk anyone.

So she gave her secretary a cake for her birthday-- big deal; does anyone even discuss or care about what Donald Trump or Jack Welch gives their secretaries?

What Rachel said. This morning I heard more than a few financial talking heads on the news state categorically that her sale of the stock did not hurt the stock value or anyone who had invested. Which makes sense since she wasn't prosecuted for any of those things.

Isn't Kenny Lay still out walking around a free man? Hanging out in his "we lost everything" penthouse? Didn't he manage to manipulate energy prices, manipulate the value of his company, steal from his employees, and tank their jobs? Enron's collapse apparently had a significant impact on Houston from a business and philanthropic perspective. A lot of people were hurt and more than a few had their lives damn near destroyed. I guess Lay hasn't lied about anything, though, or he would be in BIG trouble with the government because the feds really won't tolerate liars. Who suffered because Stewart lied? Nadie. I guess it isn't really the lie that's the problem, it's who's telling the lie.

We live in interesting times when I am defending Martha Stewart here and Howard Stern on another thread, two people I really can't stand. They may give Stewart the chair just for being a witch with a "b". Everybody knows it's a capital offense to be a ball busting woman. A ball busting man is considered a role model.

[RainyDay]

As for her demeanor, I guess I didn't realize that she was also on trial for being a bitch.

It may have been a factor in regard to the jury's decison.

Hartridge and the other 11 jurors -- four men and eight women -- deliberated over three days before reaching the verdict. Hartridge said the appearance at the trial of Stewart's celebrity pals like Rosie O'Donnell and Bill Cosby may have backfired. "If anything, we may have taken it a little as an insult," he said. "Is that supposed to sway our opinion?" Some of the testimony about the way she ran her business left the impression, at least on him, that she thought she was "above everyone." He also said her background as a stockbroker worked against her because the jury believed she should have known what she was doing was illegal.

>full article<

She wasn't prosecuted for insider trading so why was the jury even discussing her background in a brokerage firm? Is "being above eveyone" a federal crime? Jesus, someone better put Donald Trump (and 90% of the suits in Hollywood) in maximum security immediately! Too bad Mother Theresa is dead, they could have brought her into court to create more sympathy. Instead, she had a black guy and a lesbian stand up for her. Well, hell, she must be guilty!

[chris olivarez]

Hopefully Ken Lay will get his and go to some place where he'll need a big bar of soap.

[PHILLYQ]

Ken Lay is hip-deep in the Enron doodoo, there's no doubt in my mind about that. There's also no doubt that Ken Lay is very politically connected- Bush is a close buddy, as are many others high up in the administration. Connect the dots here, Ken Lay probably gets a light sentence for his role.

In considering Martha Stewart, it's not enough to say that nobody was harmed by her activities. The integrity of the marketplace has to be maintained. When someone is dealing on the basis of material, non-public information, they have a great advantage over other investors. Suppose you also held Imclone stock but didn't get a call from Waksal or your connected broker telling you to sell? Martha Stewart has gained a huge advantage over you because of her inside information. You didn't get the inside dope and lost your shirt on the stock. When it can, the SEC is pretty diligent about pursuing cases like hers.

Martha Stewart was also a broker, so she's well aware of insider trading prohubitions and she certainly knows what lying and covering up are. She worked very hard to cover her tracks and concoct a story(Stop-loss orders are very rare and are usually noted on an account quite clearly when issued) that seemed plausible- it just wasn't true. Shed no tears for Martha Stewart- she's guilty as charged.

[JSngry]

I'm just glad it was Martha Stewart and not Martha White. A man can live without Acorn Squash and Honey Pies (delightful as they may be), but damned if he can make it without bisquits and cornbread.

[RainyDay]

Ken Lay is hip-deep in the Enron doodoo, there's no doubt in my mind about that. There's also no doubt that Ken Lay is very politically connected- Bush is a close buddy, as are many others high up in the administration. Connect the dots here, Ken Lay probably gets a light sentence for his role.

In considering Martha Stewart, it's not enough to say that nobody was harmed by her activities. The integrity of the marketplace has to be maintained. When someone is dealing on the basis of material, non-public information, they have a great advantage over other investors. Suppose you also held Imclone stock but didn't get a call from Waksal or your connected broker telling you to sell? Martha Stewart has gained a huge advantage over you because of her inside information. You didn't get the inside dope and lost your shirt on the stock. When it can, the SEC is pretty diligent about pursuing cases like hers.

Martha Stewart was also a broker, so she's well aware of insider trading prohubitions and she certainly knows what lying and covering up are. She worked very hard to cover her tracks and concoct a story(Stop-loss orders are very rare and are usually noted on an account quite clearly when issued) that seemed plausible- it just wasn't true. Shed no tears for Martha Stewart- she's guilty as charged.

Martha Stewart was not convicted of insider trading. Those charges were thrown out by the judge. How many times does this little fact need to be restate?d. She was not convicted of insider trading. She was convicted of a crime that she was not ultimatly even tried for. Stewart should be slapped with a huge fine and given substantial community service. Based on the reporting I heard last night on NBC, it sounds to me like her smug attorney blew it. And for members of the jury to care one way or another about who showed up in court to support her is cause for concern.

If OJ can get away with murder, surely Martha Stewart shouldn't go to prison for telling a lie that hurt NO ONE or NO INSTITUTION.

[chris olivarez]

Those people who were left holding Imclone stock when it crashed and burned -they weren't hurt? Those people who lost their jobs at Imclone-they weren't hurt either? If Martha is indeed Danbury bound she might be getting off easy that's a federal resort-Rikers Island and Attica aren't.

[Dr. Rat]

Those people who were left holding Imclone stock when it crashed and burned -they weren't hurt? Those people who lost their jobs at Imclone-they weren't hurt either? If Martha is indeed Danbury bound she might be getting off easy that's a federal resort-Rikers Island and Attica aren't.

OK, OK.

This is confusing, but I think I got it straight

Here's what prosecuters were considering charging Martha with:

1. Stock fraud, for selling her Imclone stock on an inside tip knowing its value was about to plummet.

2. Lying to cover up the stock fraud 1.

3. Stock fraud, for lying about the first stock fraud charge and thereby articficially buoying the stockprice of her own Martha Stweart Living shares.

Prosecuters decided not to pursue charges under rubric 1, charges under rubric 3 were thrown out by the judge, she was convicted of charges under rubric 2.

The judge said no one was hurt in the supposed stock fraud under rubric 3, he wasn't talking about teh buyers of Imclon stock under rubric one.

I think.

--eric

edited for usual bad typing

Edited March 8, 2004 by Dr. Rat

[RainyDay]

Those people who were left holding Imclone stock when it crashed and burned -they weren't hurt? Those people who lost their jobs at Imclone-they weren't hurt either? If Martha is indeed Danbury bound she might be getting off easy that's a federal resort-Rikers Island and Attica aren't.

Imclone stock didn't crash and burn because of Martha Stewart. If memory serves me well, a lot of stocks crashed and burned during the time period in question.

How interesting that she was convicted for covering up a crime she wasn't convicted of committing.

[PHILLYQ]

When the feds come to question you about your highly shady stock transactions, you do have an obligation to answer truthfully under the law. Martha Stewart did not answer truthfully and also doctored records to back her false story.

Imclone crashed quite a bit after the Waksal revelations, paired with the FDA not approving Erbutex. It's about impossible to determine which was worse for the stock price, but both were certainly harmful to the share price and cost many investors lots of $. Martha Stewart avoided that with her 'hot tip'. While technically not insider trading, Ms. Stewart is barely on this side of the law on that one.

[RainyDay]

This issue as discussed here and elsewhere gives me some insight as to how perfectly innocent people (and I'm not saying that Stewart is perfectly innocent) wind up in jail for crimes they did not commit. It reminds me of people who honestly believe if police arrest a person, they must have done SOMETHING illegal or the police wouldn't have arrested them. Scary. I call it the "don't bore me with the facts" syndrome. She was not convicted of insider trading and yet eveyone keeps talking about her insider trading. Because she used to work as a broker, because she is wealthy, because she is successful, because she is a celebrity, because she knows famous people, because she has a reputation as a witch (this only works for women, however), she must be guilty of something. Let's just say that if this woman goes to jail for her "crimes," just imagine what the government can do to you.

[Big Wheel]

RainyDay, you've got a point, but it's not just that she's a bitch or that she was a broker, it's also that she had intimate ties with Sam Waksal! There has been a TON of speculation in newspapers that Waksal dated Stewart or Stewart's daughter OR both of them in succession (creepy, I know). Did the government have evidence that Waksal hinted to the Stewarts that Martha should sell? Apparently not. But is the Stewart/Waksal connection still highly suspicious? Of course it is!

[Jazzmoose]

When the feds come to question you about your highly shady stock transactions, you do have an obligation to answer truthfully under the law.

I figured I'd better quote this one, Rainy Day, as apparently you missed it. It is illegal to lie to the feds and hamper their investigation. You are by no means required to help them, but you can't mislead them either. Better to tell them to buzz off and find the dirt on their own than to lie to them. This is what she was convicted of. IT IS A CRIME.

[BruceH]

I never trusted her.

Here's the thing that gets me: She WAS a successful stockbrocker at one time. She knew better.

When I saw the headline "Stewart's Show Taken Off the Air" for a second I thought they meant JON Stewart! Whew!! I'd hate to be deprived of The Daily Show.

[TedR]

RainyDay:

She was convicted of a crime that she was not ultimatly even tried for.

Untrue. She had 5 counts she was being tried for. The first count, insider trading, was thrown out by the judge. She was tried and found guilty on the other 4 counts.

[RainyDay]

RainyDay:

She was convicted of a crime that she was not ultimatly even tried for.

Untrue. She had 5 counts she was being tried for. The first count, insider trading, was thrown out by the judge. She was tried and found guilty on the other 4 counts.

What's untrue? She was not tried for insider trading.

Was not tried for insider trading.

She was convicted of lying about the insider trading she wasn't tried or convicted of. The insider trading charge was dropped. What part isn't true?

Count 1: Conspiracy to obstruct justice, make false statements and commit perjury.

Count 2 & 3: False statements

Count 4: Obstruction of justice

What did I get wrong?

[J Larsen]

Martha Stewart shouldn't go to prison for telling a lie that hurt NO ONE or NO INSTITUTION.

What Martha did was equivilent to selling someone a used car at top dollar value, knowing full well that it is going to die within days. It is ignorant to say that her crime did not hurt anyone.

Now you're going to say that she wasn't convicted of that crime - she was convicted of covering it up. That's true, and it is also not as unusual as you might think. Insider trading is notoriously difficult to prove, because it is a matter of proving intent, which is very, very difficult for prosecutors. It is much easier to prove that you impeded an investigation into an alleged crime, because that conviction relies on facts. It comes down to "did person A tell an investigator X when, beyond reasonable doubt, they knew Y to be true?" The reason that insider trading cases are rarely persued isn't *only* because the people most often guilty are well-connected. It is also just too difficult to prove. Martha knew that, so lying to the investigators appears to have been pretty dumb. I personally tend to believe it was more a matter of arrogance.

Most folks around here know me as a scientist - I know a little about this subject because I briefly worked on Wall Street when I was early in grad school and desperate to make ends meet (which Wall Street does a damn good job of, I must say...)

Edited March 9, 2004 by J Larsen

[RainyDay]

Martha Stewart shouldn't go to prison for telling a lie that hurt NO ONE or NO INSTITUTION.

What Martha did was equivilent to selling someone a used car at top dollar value, knowing full well that it is going to die within days. It is ignorant to say that her crime did not hurt anyone.

Now you're going to say that she wasn't convicted of that crime - she was convicted of covering it up. That's true, and it is also not as unusual as you might think. Insider trading is notoriously difficult to prove, because it is a matter of proving intent, which is very, very difficult for prosecutors. It is much easier to prove that you impeded an investigation into an alleged crime, because that conviction relies on facts. It comes down to "did person A tell an investigator X when, beyond reasonable doubt, they knew Y to be true?" The reason that insider trading cases are rarely persued isn't *only* because the people most often guilty are well-connected. It is also just too difficult to prove. Martha knew that, so lying to the investigators appears to have been pretty dumb. I personally tend to believe it was more a matter of arrogance.

Most folks around here know me as a scientist - I know a little about this subject because I briefly worked on Wall Street when I was early in grad school and desperate to make ends meet (which Wall Street does a damn good job of, I must say...)

Then who did she hurt and how did she hurt them? I haven't read anything that ties her dumping the stock she owned to the decline in value of the stock. The stock declined in value because ImClone didn't get FDA approval for their, what was it, cancer drug? That had nothing to do with Martha Stewart. I've been listening to financial guys talk about this since last week. Even the folks who think she should get the gas chamber for lying admit that her stock sale had no effect on the stock's value.

[J Larsen]

If anyone is saying that the point is that her sale caused a drop in the stock value, they are wrong and missing the point of insider trading laws entirely. Take the used car analogy. Say I sell you a used Lexus at top dollar, say $40,000, knowing that everything in that car is about to fall apart. I know that it only has another 500 miles on it, and that after that it will be worth $1000 for scrap parts. Does my selling you the car CAUSE it to decrease in value by 97.5%? Of course not! Is it ethical for me to sell the car at top dollar without disclosing its problems? Of course not! Does it hurt you? Well, if $39,000 is a non-negligible amount of money to you (it is to most people, including those who own stocks), then of course it does! Is it legal? Well, in the case of cars I imagine that varies from state to state. Fortunately, when it comes to stocks, federal law makes it very clear that this sort of behavior is illegal. In the stock market, the law clearly states that if you have insider information on a stock that you reasonably believe will seriously affect its future value, you must publicly disclose that information before selling. If you are not able to do that due to binding confidentiality agreements, you simply can't sell.

Edited March 9, 2004 by J Larsen

[Dr. Rat]

When the feds come to question you about your highly shady stock transactions, you do have an obligation to answer truthfully under the law. Martha Stewart did not answer truthfully and also doctored records to back her false story.

  Imclone crashed quite a bit after the Waksal revelations, paired with the FDA not approving Erbutex. It's about impossible to determine which was worse for the stock price, but both were certainly harmful to the share price and cost many investors lots of $. Martha Stewart avoided that with her 'hot tip'. While technically not insider trading, Ms. Stewart is barely on this side of the law on that one.

Hate to drag this thread on, but, Philly, I'm wondering: Is the sale still fraudulant (because Stewart knew of the impending drop in price) even if it is not technically insider trading?

From J's post, I guess the answer is yes, but just wondering what your take on that issue was.

--eric

Edited March 9, 2004 by Dr. Rat

[J Larsen]

Hate to drag this thread on, but, Philly, I'm wondering: Is the sale still fraudulant (because Stewart knew of the impending drop in price) even if it is not technically insider trading?

From J's post, I guess the answer is yes, but just wondering what your take on that issue was.

--eric

Doc: I'm not 100% sure I understand your question, but I think I do and it really gets to the heart of why insider trading is nearly impossible to prove (Waskal pleaded guilty in order to minimize damage and avoid a potentially harmful investigation). Say Martha's story is true - she really had a standing $60 order. Then the sale is completely lawful, even if she receives the inside tip without disclosing it prior to the sale. There are three stages to proving insider trading: 1) Prove that the person recveived the information (this part is relatively easy). 2) Prove that the information, if made public, would have substantially altered the trading value of the stock (this part is very easy). 3) Prove that the seller did not intend to sell the stock prior to receiving the information. It's the third part that is nearly impossible to prove - prosecutors normally avoid charges that involve proving intent.

[TedR]

RainyDay,

You asked, based on my last post, "what's untrue?" so I should give my opinion. My opinion is to forget insider trading. It was thrown out....she wasn't convicted of that crime. So let's assume she was innocent of insider trading. And let's assume the investigation would have concluded Ms. Stewart was innocent of insider trading. Her mistake IMO was how she chose to react to her investigation. Her reaction to being investigated by the federal government was to conspire against the investigation, obstruct the investigation, and make false statements to the investigators. Is the punishment for these crimes (they are crimes aren't they?) as severe as they would be for insider trading? Absolutely not. Should they be as severe? Of course not. Do they deserve to be punished based upon the law? IMO yes.

When OJ got off all the talk was about how the wealthy can buy their way out of prison....two levels of justice, one for the rich and one for the poor.....celebrities are coddled by the justice system. Now that Ms Stewart has been convicted we hear that wealthy celebrities are unfairly targeted. Which is it?