Free Martha…

…says Tech Central Station's Jim Glassman:

The Justice Department probably would have loved to have charged Stewart with insider trading ? and, in a way, the fraud charges are a surrogate insider-trading indictment and a warning to others that tippees, not just tippers, will be prosecuted. The law, however, is murky, and it's doubtful that an investor who picks up information about a CEO's stock sale (even a CEO the investor knows) has violated the law…

Although it's clear that top officers in a company are breaching their fiduciary responsibility if, for example, they buy stock with secret knowledge that their company is about to be bought by another firm, it's far from clear why someone like Stewart should even be considered for prosecution under the insider-trading law, which stresses misappropriation -- that is, using material, nonpublic information in breach of a duty of trust or confidence. Waksal was in a position of trust; Stewart wasn't.

In case you missed it, Michael McMenamin (who Glassman cites) covered the Martha case for Reason here and here. And Brian Doherty sticks up for insider trading here.