Not a Good Thing

Martha Stewart guilty on all counts. I guess she'll have plenty of time to comfort herself by reading reason's coverage of her case.

Comments

[johnL]

Isn't it a little early for an April Fools?

[Neb Okla]

In the words of John Stewart of Daily Show fame...

"Waaahhh?!?"

Amusingly, my MSN Direct watch notified me of this breaking news with a timely alert. Pretty neat little device if I do say so myself.

They should build MSN Direct into PDA's.

[Randy]

It's a good thing.

[fsckers]

Quick, someone sue the government for making a statement that affects the stock price of Martha Steward Living Omnimedia. They've just got to be speaking only to affect the stock price, don't cha know.

[Steve in CO]

Exactly fsck! Where's a good lawyer when you need one?

[Steve in CO]

Exactly fsck -y! Where's a good lawyer when you need one?

[fsckers]

Holy sh*t, someone here agrees with me. I think that's a first.

[Brady]

I'm still wondering when * became a letter in the English language.

[JimInNoVA]

At the same time as @#$%&!

[Overlord]

I guess that we will all be able to sleep more soundly once that dangerous criminal, Martha Steward, is off the streets. This is the greatest victory for safe streets since the conviction of that other notorious desperado, Winona Ryder.

[dude]

And don't forget Tommy Chong. I sleep better knowing that our fearless leaders have taken that evildoer off the streets.

Here's hoping she gets some token fine or something.

Bozos.

[Warren]

FUCK

[david]

Damn, damn, damn, and damn.

FREE MARTHA!

[Jimbo]

Free Martha! Let's march

[Jean Bart]

Will she be in prison?

[The Lonewacko Blog]

She's not going to be sentenced until June.

[Allen Phelps]

An utter crock.

Free Martha!

[Tommy_Grand]

In re: "FUCK" et al.

Are y'all really surprised?

[Matthew Cromer]

Now we know it is a crime to be a well-connected, famous rich bitch. A disgraceful verdict.

[Warren]

Surprised? No.
Disappointed? Yes.
I figured it was a coin flip, when was the last time someone with that much money went down in court? Leona Helmsley maybe? but she was stupid to boot.

[Brian]

From WaPo:

According to CNN, one male juror said after the verdict, "This is a victory for the little guy. No one is above the law."

[Jean Bart]

What happened to her attorney?

[Skip Oliva]

This morning when I walked past the George Washington University hospital, I saw some camera crews there, presumably to cover Attorney General Ashcroft's hospitalization. My first thought, crude as it sounds, was that I hoped it was serious, and the AG would, at a minimum, be forced to resign for health reasons.

After hearing the Stewart verdict, I can only wish substantial suffering and pain upon Ashcroft. I say this not because of Stewart, but because of the pain and misery this man and his department (and this adminitstation in general) has inflicted upon the American people. I work in antitrust policy, and every damn day I have to deal with the stories of businesses--some of them small single-person firms--who have been driven to financial ruin by the DOJ's antitrust goons. After awhile, you become unable to push back the hate for the men responsible for such crimes. And after today, I no longer feel guilty about having such thoughts.

In the next two decades, there will be a sharper decline in the individual rights of Americans. This is due to a number of factors, but I think readers of this website know what most of them are. This decline will probably lead to physical violence for one simple reason--the government is cracking down on free expression and freedom of thought. In antitrust. In securities law. In telecommunications. And once you start oppressing expression, you open the door for violent action.

[The Man]

Skip,

That comment is going down on your permanent record.

[Skip Oliva]

Don't worry. My record is already quite well developed.

[J.B.]

From the New York Times: "Speaking of the verdict, [juror] Mr. Hartridge offered, 'Maybe it's a victory for the little guys who lose money in the market because of these kinds of transactions.'"

Statements like this make me wish that federal courts would set a minimum IQ for serving as a juror. The juror needed to look at the following points:

1. None of the charges dealt with the transaction itself. Stewart and Bacanovic were only charged with lying about it. Thus, whether or not the transaction caused the "little guy" to lose money is not what they were supposed to decide.

2. The sole possible charge relating to the "little guy" being defrauded was Count 9, which was dismissed. Regardless, Count 9 did not deal with Stewart's transactions, but rather with the fact that she proclaimed her innocence. Even if were are to assume that Count 9 had some validity, then Martha Stewart's transaction did not cause the "little guy" to lose money. (On that charge, I have to wonder if Martha Stewart's plea of not guilty constitutes securities fraud because her denial of guilt at the arraignment may have prevented the stock from falling more than it otherwise would.)

3. Even if the jury disregarded the matter before them and decided based on whether or not they thought that Martha Stewart was guilty of insider trading, then they still do not have sufficient cause to say that she caused the "little guy" to lose money. I suppose her sale may have caused the price of the stock at the time of sale to be negligibly lower, but this would have been a benefit for the "little guy." Any "little guy" who was buying the stock at the time would have paid a slightly lower price, and then would have taken a slightly lighter hit when Imclone plummeted the next day.

[ad]

what a fucking joke. convicted for proclaiming her innocence? convicted for arbitraging on information she received to make many in the stock market? LOCK UP THE FUCKING SENATE.

[Sam I Was]

This crap makes me feel sick. Literally, a churning in my stomach.

People don't understand what freedom is. They're idiots.

[Skip Oliva]

Heh. J.B., IQ has nothing to do with the jury's screwup. I once served on a jury in a criminal case. The guy was very intelligent and well spoken, but his argument to us ended up as "I just think he's guilty, even though I know there's not enough evidence". Hung juries are fun.

Anyhow, based on the Stewart juror's statement, I suspect something went amiss with the jury instructions. That's where most government political prosecutions turn against an otherwise innocent defendant. Jury instructions often end up confusing the jury in cases that involve non-objective legal principles (such as this case).

[Matthew Cromer]

It's despicable that the criminal gang in the Senate who as a collective body best the averages by 10 points per year due to insider info fed to them as payoffs for favorable legislative treatment -- yet an innocent woman is going to rot in jail and her company destroyed for doing nothing wrong.

[James Merritt]

What an odd coincidence, that the trial of Martha Stewart should come to a close amid considerable fanfare, just as the Comptroller General of the United States says the following in print:

"As in the 6 previous fiscal years, certain material weaknesses in internal control and in selected accounting and reporting practices resulted in conditions that continued to prevent GAO from being able to provide the Congress and American citizens an opinion as to whether the consolidated financial statements of the U.S. government are fairly stated in conformity with U.S. generally accepted accounting principles. Three major impediments to an opinion on the consolidated financial statements continue to be (1) serious financial management problems at DOD, (2) the federal government?s inability to fully account for and reconcile transactions between federal government entities, and (3) the federal government?s ineffective process for preparing the consolidated financial statements."

(Statement of David M. Walker, Comptroller General of the United States, in Testimony Before the Subcommittee on Government Efficiency and Financial Management, Committee on Government Reform, House of Representatives: March 3, 2004)

This story is to Martha Stewart's alleged transgressions as an elephant is to a flea. Where was the SEC when such a damning statement was released about the state of the federal government's finances? No doubt helping the DOJ stick it to Martha. Pay no attention to the little man behind the curtain. Go about your business, citizens. Nothing to see here. All is well. Everything is under control. We're from the government and we're here to help ... ourselves.

[Stephen Fetchet]

Once again, Libertoids are covering themselves with glory in the Martha Stewart matter.

Supposed champions of the free market, we are rushing to the defense of a crook, who tried to dishonestly game the market.

One of the few valid roles of the government in the market place, is preventing theft and corruption. Yet we're wishing death upon John Ashcroft for letting one of his prosecutors go after Martha Stewart.

The argument for prosecuting obstruction of justice charges and false official statement charges is very simple.

1. A free market depends on the integrity of the market - the honesty of the market mechanism and the honesty of the participants in the market.

2. The securities enforcement scheme - the thing that enforces honesty in the market - works on an honor system. Companies don't have a government representative sitting in the CFO's office. Instead, they are presumed innocent, until somebody raises a valid question, either in the form of a shareholder suit, or government enforcement action.

3. Once an inquiry is made, via enforcement action or shareholder suit, companies are expected to answer honestly. Remember, it's the honor system. "Please give us information relating to trades X, Y, and Z; after which we will send you to jail or fine you." Most companies abide by these rules, because they are the rules of the marketplace, and there are substantial penalties for breaking the rules.

4. If companies answer dishonestly, well, there's nothing to stop the corruption. Hence perjury / false official statement charges. The honor system must be enforced. In the alternative, we could disregard the honor system, and massively ramp up government oversight of business. Or simply back off and tolerate open corruption of the markets. Neither would be a free market.

5. There is one safeguard against companies lying. Whistleblowers - the internal accountant, the executive assistant, the brokerage clerk. But the only way these folks will come forward, is if they know they will be vindicated, and protected. If the law does not protect people who report fraud in the market place, by bringing obstruction of justice charges against their bosses, the whistleblowers will stop reporting the fraud thus encouraging further corruption of the markets.

6. The other reason to prosecute high visibility obstruction & false official statement cases is that the class of persons deterred from crimes by such prosecutions, are likely to get the right deterrent message from such prosecutions. Martha Stewart doesn't care about a $25 million fine for insider trading. It's just money. But an embarassing criminal conviction for lying and attempting to cover up dubious trading activities - well, that will cause her to lose face with her friends in the Hamptons and in Manhattan, hence it has a good deterrent value.

Honestly, I can't believe how debased the commentary on Stewart's conviction is. People are championing somebody who gamed the market, screwed over a lot of individual investors, and then tried to lie and cheat her way out of the consequences.

And please note, the charges on which she was convicted had nothing to do with the insider trading. Thay had to do with her pressure on a subordinate to keep his mouth shut (obstruction), and false statements she made to investigators.

And yes, making false public statements about your company to manipulate stock prices can fall into the category of stock fraud. For example, if Ken Lay said Enron was doing great, profits would surely be higher than predicted, and then he sold his stock at an inflated price, that is fraud. Stewart may not have crossed that particular line, but the argument that she did wasn't as big of an atrocity as people here are making out.

[Skip Oliva]

Stephen, I personally have no emotional connection to this case. I hadn't even followed Ms. Stewart's case until the past week. My animosity towards the attorney general is a reflection upon a number of cases where DOJ attorneys, in my judgment, have lied, obstructed the judicial process, and committed extortion. The Stewart case merely reflects what I consider a corrupt culture at the Justice Department.

As for your argument about the importance of the honors system, you make a number of valid arguments. However, when the DOJ *selectively* prosecutes individuals to make *political* statements, that does not, in my view, strengthen the public's confidence in the free market. I simply refuse to remove this prosecution from the context of a DOJ I know to be anti-market and anti-capitalist.

And we should also keep in mind the underlying cause of Ms. Stewart's ails--the ImClone stock sale--was percipitated by the government's improper distortion of the market via the FDA's misconduct. Does that excuse lying to prosecutors? Ideally, no. But with this Justice Department, which lies regularly with reckless disregard for the consequences, I can't really bring myself to condemn it either.

[Jack]

Personally I'm hoping Martha pays for a jailbreak like this:

http://www.smh.com.au/articles/2003/03/12/1047431102046.html

I'd cheer them on.

[Jack]

Skip,

Don't bother. Fetchet is just polishing his C.V. for a US district court position in Bush's second term.