Martha's mistake: media baroness guilty of stupidity.

Excerpts from recent editorials in U.S. newspapers on the Martha Stewart verdict:

Kansas City Star

THE case of Martha Stewart differs fundamentally from other celebrated corporate scandals of the day, which generally involve charges of executives looting their companies and defrauding investors. The lesson here is far more basic, one familiar to any 6-year-old: Lying only makes things worse. She wasn't accused of stealing the information on which the trade was based, the usual grounds for insider trading. Instead, she was charged with lying to federal investigators and covering up. According to the prosecution, she altered records. She concocted a story about a prearranged order to her broker to sell the stock before the shares went below a certain point. She would have done better to simply tell the truth.

St. Louis Post-Dispatch 

ONE has to wonder if jail is the best way to punish Stewart. Would it be better to put her to work in community service for a few years--say, cooking up boffo dinners in a soup kitchen or decorating bedrooms in an orphanage? The case against Stewart has always seemed like a bit of a stretch; she was charged with lying about a crime that she was never charged with doing. It started with a phone call from her broker's aide, telling her that ImClone chief executive Sam Waksal was trying to bail out of his company's stock. That was juicy insider information. But Stewart was never accused criminally of illegal insider trading, presumably because her actions didn't fit the legal definition. Instead, she was charged with lying to investigators about why she sold her stock and concocting a cover story with her broker. It seems odd to be jailed for lying about something that may not have been a crime. If Stewart had simply smiled at the investigators, offered them a cup of tea and complimented them on their choice of jacket she would have gone scot-free. Instead, she chose to make up a disastrous lie.

San Jose Mercury News 

A favored investor gets a tip, dumps a stock, is caught and gets convicted. Nothing new about that story. Except that when it happens to Martha Stewart it's a huge media phenomenon, because taking delight in the humiliation of the exalted has been an entertainment staple since the ancient Greeks. The Stewart saga with ImClone stock is often lumped with Enron, Tyco, WorldCom and others in the litany of investors being cheated by corporate leaders who lied to the stock market and looted their companies. It is--sorry, Martha--so much less than that. It was just petty greed. It implies no need for more corporate transparency, independent board members, the firing of stock analysts who are merely shills, or housecleaning in the accounting profession. Martha might have ruined her own company, Martha Stewart Living Omnimedia, but through stupidity, not fraud.