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Non-Tech : Martha Stewart -- Scourge or Scapegoat
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To: SalemsHex who wrote (7)2/3/2003 10:48:47 AM
From: Jeffrey S. Mitchell  Read Replies (1) of 165
 
Salem, suppose I owned a publicly traded company and, because you (for whatever reason) thought I had something pretty good going, agreed to buy some shares in it-- a sizeable amount, but not something that would even put a dent in your bank account. Then say one day you got word from your broker who you knew was well-connected that I was dumping shares and that perhaps you should sell as well. For sake of argument, we'll assume I didn't tell you precisely what the problem was, only that it merited your immediate attention. Now what? Do you sell? Do you simply throw your hands up and say "Damned if I do and damned if I don't?"

A huge percentage of stock in a many many companies is owned by "friends and family." Would nailing Martha for what she did put a chill on that sort of close knit investing? Given the nature of the stock market -- that shares are based on perceived as opposed to actual value -- hype (positive and negative) is always going to play a role and thus certain people will always be more in the loop than others. Thus, it follows that it's almost impossible to regulate all forms of insider-trading just like it is to regulate traffic violations. Yes, you have to make examples of people as a deterrent, but you also have to pick and choose which people you nail because unless you have unlimited time and resources, you may be allowing a worse offender to go free.

- Jeff
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