Martha Stewart: Convicted Felon...
So Martha has been found guilty of something. At this point, information is all over the blogosphere and I'm not quite sure as to what they found her guilty of, or why, but I will chime in (tentatively).
My view of this case is that Martha is the victim of an unusal set of circumstances, as follows:
1. Her broker got a hot tip, or inferred hot info based on another client's actions, and as she was a big-money client, he let her know. He knew where his (and the firm's) bread was buttered.
2. Martha was in a position to VERIFY this tip with the CEO of the company in question (ImClone).
3. She then lied, or at least, stretched/obscurd the truth when the SEC came knocking at her door.
4. She's a rich woman and a celebrity.
Without knowing everything said in the courtroom or the evidence presented, let's bear a few things in mind:
1. This kind of stuff happens in the Securities buisness ALL THE TIME. Rest asured that if your broker calls you with information, he has already taken care of his larger clients, and the firm has made it's money, now it's his turn to drum up a commission.
2. The Federal Government has NEVER adequately defined the concept of "Insider Trading". Based on my own experience (18 years of it) on Wall Street, all they do is trade on inside information. The difference is that this was not made immediately public (i.e. that ImClone was going to get turned down by the FDA). If you do not believe in the concept of insider information, I submit for your cogitation the name SIAC.
SIAC is the clearing house for most financial info and news for the street.
3. The same folks after Martha for making 40+K on a hot tip, somehow neglected to look into Hilary Clinton's amazing 100K profit on a cattle venture that went bust.
4. In the end, the broker is "guilty" of doing his job: protecting his client's position. He cut corners, but he had an ethical responsibility to let her know what he knew or to at least let her know something was up, even if not in so many words.
5. Martha got the info from the horse mouth (i.e. Waksal) right after she called. The average person does not have this capability.
So, what really is Martha guilty of? Lying to the Feds? Probably, but I think that's understandable. I wouldn't doubt they leaned on her hard initially. But insider trading? Give me a break. The myth of Chinese Walls disappeared a VERY long time ago and to pretend otherwise is ludicrous. Martha is being prosecuted because of who she is and because of who she was connected to. End of story.