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xagent
 
No, I don't like Martha, No, I've never in my life watched her TV show or even boguht one of her products at K-Mart. THis rant is in 2 parts, since both are somewhat connected

1
First of all, she was never even indicted for insider trading. No, she was convicted and sentenced for the terrible, terrible, sin called "lying". Yes, in some cases lying should be punished, such as lying on trial to knowingly set a murderer free or send the wrong man to jail. But that all depends on the underlying crime.

If it makes sense to punish Martha for lying about insider trading (another issue altogether, read below), I guess it makes sense to prosecute Bill Clinton for also lying, despite the fact that his crime of adultery is something negligible and not even a crime.

Nor was she ever even guilt of "insider trading" (aka, being a knowledgeable trader)? She, nor her stock broker were ever charged with such a crime. So technically, no justice was ever obstructed.

Well let see:

- She sold her stock in the afternoon, after a morning of decline, at just $0.13 cents higher than what the stock closed at... after thousands of people had done so before her. The stock itself was at $74 just 3 weeks before, and she sold it at $58.43. Insider trading? More like missing the boat

- the original and false accusation was printed 6 MONTHS LATER in the AP and NY Times, implying Martha had a connection to ImClone, and traded on insider information. Then Martha's own stock fell, and she was charged with fraud, for providing misleading statements regarding her own company. WHen this case was thrown out...

- The Feds stopped claiming she got "inside info" from the CEO of ImClone. Apparently, after she called her stock broker's assistant, he told her insider information after his boss told him to, and she sold on it. This isn't even true, given that she sold it well after the stock had taken a 3 week nose-dive, and it was the 2nd time this assistant had changed his story.

So basically this obstruction charge is because she supposedly lied about previously agreeing with her broker to sell the stock once it went below $60, based on the assistant's new story. ANother lie is that she at first claimed she spoke with her stock broker, when she really spoke with the assistant (on the day she sold the stocks)

2

So now forget that she was convicted on a technicality of supposedly lying, on an accusation she was never guilty of, nor was she ever charged with. What the hell is wrong with insider trading?

Insider trading laws let the SEC prosecute anyone for trading on any nonpublic information. In other words, if you're deemed to have "too much information" than the average joe is allowed to have, you could be guilty. There really is no difference between a hot stock tip and insider trading. Incentive to seek information and trade intelligently is killed. Eventually, the stock market becomes gambling, notinvesting.

Insider trading is also a victimless crime. Liberals hate insider trading only due to their hatred for any person or business that makes a profit, their hatred for the word profit, and general anti-corporate attitudes.

Just as equality does not, and should not exist in life, it shouldn't for stock markets. Those with more information should be able to trade on it. There should never be an equality of information for all traders. For example, if you are an employee at a company, and you learn of some new invention/discovery your employer has made. It is illegal for you to buy/sell any of your shares until that information becomes public. (and this was ruled illegal in the Texas Gulf Sulphur case). And even if that information is public, you MUST file several forms with the bureaucrats at the SEC

ANd it might shock you guys that insider trading according to the SEC, is actually very, very vague. For quite a long time, insider trading was defined as trading based on ANY nonpublic information. It didn't matter how you obtained that information - from an executive at the company, or through your own research. Fortunately the SUpreme Court limited this somewhat in the 80s, but still...

In Stewart's case, she was accused of insider trading because a 3rd party, the assistant, allegedly told her the ImClone CEO had sold his shares.

Yup, so in other words since my parents work for Cisco Systems, if I learn of some secret Cisco financial information, and I disclose it on Genmay, YOU and I could be held liable if you traded on it. Although in another Court ruling, the Court ruled that we would be liable if I violated some fiduciary duty to Cisco Systems. I mean sure, Cisco would be justified to file a civil suit against me. But should genmayers be sent to jail for this hot stock tip?

Keep in mind, insider trading != ripping off investors or any fraud like that. As defined by the SEC, insider trading is just trading with more information than allowed. The actual laws are even more vague and complex, giving the SEC too much power.

PLus, the stock markets in TOkyo and Hong Kong have virtually no insider trading laws (Tokyo has some, but they are not enforced, although I don't know if they've changed it recently). And their stock markets are far more healthier than ours, since naturally traders aren't scared of Big Government coming after them every waking hour, and trading based on knowledge is actually encouraged

tl;dr? Suck my dick.

cliffs:
1. Martha got convicted for obstructing justice - even though she nor her broker were ever charged for any other crime
2. her trial had no basis or anything to do w/ insider trading
3. gov. never made this clear, let jury think she was guilty of insider trading
4. nothing wrong with insider trading
5. Fuck the SEC, fuck the New Deal
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Last edited by xagent; 07-17-2004 at 02:38 AM..
Old 07-17-2004, 02:26 AM xagent is offline  
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fiber
 
I find it funnier she could have pled guilty, paid a $50,000 fine and no one would have cared.
Old 07-17-2004, 03:08 AM fiber is offline  
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#2  

indczn
 
I dont know who you were listening to, but i was never under the impression that she was being charged with insider trading vs lying.

People need to be held accountable for their actions. She lied, obstructed justice and should be punished accoringly, and she was.


As for insider trading being illegal. It is very important because as an employee of a company you are aware of how things are going, and can take advantage of quarterly report fluctuations in stock, and it isnt right that those people can take advantage of typical market action and reap the profits, just because they have the beneift of that knowledge, which anyone else has no way of getting. Basically, it prevents corruption. Can you imagine what would happen if the company or higher up employee invested in their own company with the knowledge that good news was about to released? The money doesnt come from thin air, and people need to be protected from these actions.
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Old 07-17-2004, 03:47 AM indczn is offline  
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#3  

jubjub
TweedleDumber
 
IIRC , Martha Stewart was an NASD licensed broker/dealer prior to going into business for herself.
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Old 07-17-2004, 04:07 AM jubjub is offline  
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jubjub
TweedleDumber
 
Quote:
Originally Posted by fiber
I find it funnier she could have pled guilty, paid a $50,000 fine and no one would have cared.

her stockholders care.

what I find funny is that her efforts to protect ~ $45,000.00 in profit in ImClone wound up costing her HUNDREDS OF MILLIONS OF DOLLARS!

for a refreshingly light and airy bio of Ms. Stewart:

Hubris : Thy name is Martha Stewart
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Old 07-17-2004, 04:47 AM jubjub is offline  
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mr_brett
 
Quote:
Originally Posted by xagent
Insider trading is also a victimless crime. [...] Keep in mind, insider trading != ripping off investors or any fraud like that.
so you wouldn't be at all pissed if company X which you happen to have a relatively substantial position in has an unscrupulous CEO that knows his company's next product will fail miserably yet continues to paint the public picture that said product will be a huge hit. mr. CEO and the rest of the board start dumping shares monday morning. nothing big happens at first, but as the down volume picks up, rumors begin flying and the stock drops 40% by 4pm.

you're saying you wouldn't feel ripped off that you had no way to stop your 40% loss other than being particularly clairvoyant? (or a well placed stop loss order for that matter)

edit: i agree though that the case against her was highly flimsy. she was definitely a "big fish" for the justice department but her "crimes" were laughable

Last edited by mr_brett; 07-17-2004 at 05:17 AM..
Old 07-17-2004, 05:06 AM mr_brett is offline  
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jubjub
TweedleDumber
 
nice to see you , Mr. Brett.

where have you been ?
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Old 07-17-2004, 05:18 AM jubjub is offline  
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#7  

mr_brett
 
oh i'm around but there are not too many finance related threads here anymore
Old 07-17-2004, 05:37 AM mr_brett is offline  
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#8  

ieyeasu
 
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It is .

I'm not for insider trading. But Martha received information, she didn't seek it. Was she supposed to take it up the ass?

Now, the guy that gave her the information--I'm for him being charged. But Martha simply acted on information she happened to receive.

Notice how quickly they nabbed Martha as opposed to how long it took to go after Kenneth Lay?
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Old 07-17-2004, 08:07 AM ieyeasu is offline  
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brouski
 
Quote:
Originally Posted by mr_brett
so you wouldn't be at all pissed if company X which you happen to have a relatively substantial position in has an unscrupulous CEO that knows his company's next product will fail miserably yet continues to paint the public picture that said product will be a huge hit. mr. CEO and the rest of the board start dumping shares monday morning. nothing big happens at first, but as the down volume picks up, rumors begin flying and the stock drops 40% by 4pm.

you're saying you wouldn't feel ripped off that you had no way to stop your 40% loss other than being particularly clairvoyant? (or a well placed stop loss order for that matter)

edit: i agree though that the case against her was highly flimsy. she was definitely a "big fish" for the justice department but her "crimes" were laughable

How is the scenario you describe not ripping off investors/fraud? Where is the line drawn?
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Old 07-17-2004, 08:09 AM brouski is offline  
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#10  

mr_brett
 
Quote:
Originally Posted by brouski
How is the scenario you describe not ripping off investors/fraud? Where is the line drawn?
i didn't say that it wasn't ripping off investors. would i be pissed if that scenario happened to me? probably so. you could try to avoid this situation by taking positions large enough in the company to either outright control it or have a large degree of influence similar to good ol' warren b. but that ability is beyond the reach of the vast majority of people.
Old 07-17-2004, 08:18 AM mr_brett is offline  
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#11  

Rolling_Thunder9
 
I just think her sentance was funny.

Martha Stewart, lying in a federal investigation = 5 months in fake prison

Tommy Chong, selling a bong = 9 months in real prison
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Old 07-17-2004, 09:36 AM Rolling_Thunder9 is offline  
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#12  

PopeKevinI
 
Quote:
Originally Posted by ieyeasu
It is .

I'm not for insider trading. But Martha received information, she didn't seek it. Was she supposed to take it up the ass?

Now, the guy that gave her the information--I'm for him being charged. But Martha simply acted on information she happened to receive.

Notice how quickly they nabbed Martha as opposed to how long it took to go after Kenneth Lay?

Your stock broker calls you. "Your Google stock is going to crash tomorrow! You'll lose millions!"

Your response: "Crap. Well, let's hang on to it until the official announcement. I can't use this information, since it might be insider trading. Guess I'm going broke tomorrow."

Isn't that how it would go?
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Old 07-17-2004, 10:19 AM PopeKevinI is offline  
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jubjub
TweedleDumber
 
Quote:
Originally Posted by mr_brett
... you could try to avoid this situation by taking positions large enough in the company to either outright control it or have a large degree of influence ,,.

Waksal had positions big enough to hammer the value of the stock in his company. when he and his family liqudated their positions the day before the news of the F.D.A. rejection was made public , the alarm bells started to go off and Waksal wound up in the crowbar hotel.

I agree that the original case against Stewart was flimsy , but what she was convicted of was not the original crime , but for the ensuing cover-up.
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Last edited by jubjub; 07-17-2004 at 10:27 AM..
Old 07-17-2004, 10:23 AM jubjub is offline  
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mr_brett
 
Quote:
Originally Posted by jubjub
Waksal had positions big enough to hammer the value of the stock in his company. when he and his family liqudated their positions the day before the news of the F.D.A. rejection was made public , the alarm bells started to go off and Waksal wound up in the crowbar hotel.
the amusing part to me is how the stock has recovered to well above where it was trading during all that mess. perhaps if waksal wasn't so attracted to the quick buck, he could have found a way to spin the FDA rejection to the public so as to minimize the damage. i guess he didn't have too much faith in his own company... perhaps if his (and related parties) selling pressure wasn't there that day, the drop wouldn't have been as bad, but we don't really have any way to know that now...
Old 07-17-2004, 10:33 AM mr_brett is offline  
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