It's nice to see the SEC is finally cracking down on stock fraud and insider-trading. The crooks who plundered companies like Enron, Worldcom, and Tyco deserve to be vilified, IMO. But does Martha Stewart? Should we be making her the poster child for insider-trading?
OK, even if we argue that Martha may have met the standard for being someone who traded on inside information, and even if we believe the worst of the rumors swirling around her case, is she someone the SEC should be spending their time and money on using already strained resources? Does the SEC really think Martha is public enemy #1, or do they feel obligated to placate a public stoked by the intense media attention she is receiving?
My worry is that all this media focus on Martha Stewart might actually be counter-productive as it distracts from the much more egregious cases of real fraud out there. Was Martha someone who wheeled and dealed in inflated IPOs and cashed out immediately for the easy money? Was she someone who used her connections to amass a vast portfolio of stocks she traded the moment they were pumped to all-time highs? Was she someone who took care of her friends by giving them tips on when to buy and sell her own stock? Not to my knowledge, on all counts. And, regardless, I'm sure we can all think of much worse ways to illegally make money in the stock market that the SEC should make a priority.
Am I wrong to think the Martha Stewart story is much ado about nothing? Or, perhaps, should I be thankful someone as high-profile as her is involved because it helps keep the issue of securities violations in the news? In other words, is Martha a scourge or a scapegoat?
- Jeff |
