What was Martha's Crime? (Insider Report)."Martha Stewart <noinclude></noinclude> Martha Stewart (born Martha Helen Kostyra on August 3, 1941) is an American business magnate, author, editor and homemaking advocate. She is also a former stockbroker and fashion model. is being prosecuted not for who she is, but because of what she did," insisted federal prosecutor James B. Comey, unveiling the federal indictment against the high-profile entrepreneur. Stewart is accused of securities fraud for supposedly conducting an illegal stock trade -- selling off 4,000 shares of ImClone Systems ImClone Systems Incorporated (NASDAQ: IMCL) is a biopharmaceutical company dedicated to developing biologic medicines in the area of oncology. It was founded in 1984 and is headquartered in New York City. It is traded on the NASDAQ stock exchange under the symbol IMCL. stock based on insider information. She and her stockbroker Stockbroker 1. An agent that charges a fee or commission for executing buy and sell orders submitted by an investor. 2. The firm that acts as an agent for a customer, charging the customer a commission for its services. are also accused of obstructing justice by destroying evidence of the transaction. Stewart denies the allegations. "I simply returned a call from my stockbroker," she declared in a statement following the indictment. "Based in large part on discussions with my broker about price, I authorized a sale of my remaining [ImClone] shares.... The government's attempt to criminalize crim·i·nal·ize tr.v. crim·i·nal·ized, crim·i·nal·iz·ing, crim·i·nal·iz·es 1. To impose a criminal penalty on or for; outlaw. 2. To treat as a criminal. these actions makes no sense to me." Legal analysts are more candid in describing the Stewart case as an attempt to send a message. "The deterrent effect is immeasurable," notes former Securities and Exchange Commission (SEC) lawyer Christopher Bebel. "Even if the government puts a thousand hours into building this case against Martha Stewart, the risk-reward ratio Risk-reward ratio Relationship of substantial reward corresponding to the amount of risk taken; mathematically represented by dividing the expected return by the standard deviation. is enormously positive and constitutes a very prudent allocation of government resources." Those resources, of course, are tax dollars purportedly used to fund government efforts to achieve justice. Did Martha Stewart's actions harm other investors? As former Libertarian presidential candidate Harry Browne Harry Browne (17 June 1933 – 1 March 2006) was an American libertarian writer, politician, and free-market investment analyst. He was a U.S. Presidential candidate for the Libertarian Party in 1996 and 2000. notes, "If you ever own ImClone stock, you'd be hard-pressed to explain how Martha Stewart's actions cost you money." Former federal prosecutor Robert Minz points out, "There is no blockbuster evidence here" that Stewart ever did anything wrong. "What the government has done," states Minz, "is weave together a series of omissions and fabrications in order to portray Martha Stewart as somebody who deliberately attempted to thwart the government's investigation." Former SEC commissar com·mis·sar n. 1. a. An official of the Communist Party in charge of political indoctrination and the enforcement of party loyalty. b. The head of a commissariat in the Soviet Union until 1946. 2. Bebel puts the issue more bluntly: "I think the SEC was pushed around by Martha Stewart's lawyers." |
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