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February 12, 2004

Martha Stewart Trial: Prosecutors decided that a thing that has been considered normal behavior for years, is now illegal.

I continue to feel outraged about this trial. This is a case in which prosecutors have invented a brand-new crime, with which no one has ever before been charged: the crime of knowing that a company insider was selling stock and therefore selling it yourself, which they declare makes you an insider too.

...before suing Stewart the SEC had never gone after the customer of a broker who offered his knowledge of what another customer had done as a reason to make a trade.

Of course, since no one’s ever been charged with this before, their victim, a.k.a. the defendent, had no way of knowing it could be considered a crime.

As Martha Stewart’s trial moves into a third week, an important question remains unasked: Why are the feds prosecuting someone [i.e. a member of the public – ed.] for receiving inside information, anyway? Isn’t the criminal the corporate official who acts on knowledge that the public doesn’t have?

...The law, however, is murky, and it’s doubtful that an investor who picks up information about a CEO’s stock sale (even a CEO the investor knows) has violated the law.

“Doubtful!” It’s “doubtful” that the thing could even be considered a crime. How are we supposed to defend ourselves from a justice system that decides that things that have been done for years, are now illegal? How would you like to have your business destroyed by a whim of the goverment’s like this one?

This is a travesty.