Poor Martha!

I for one am not concerned about Martha Stewart's legal troubles. The securities markets are hurt by the perception that only insiders make money, and sadly it's often true. Maybe the reason Martha is rich is because she is a savvy investor, but she obviously is an insider and privy to tips that ordinary investors aren't. For a measley $45,000 she dumped her stock in Imclone under highly suspicious circumstances and then she lied to investigators.


Nobody pushed her into the public spotlight. She set out to become a celebrity and succeeded in spades. She also treated a lot of people around her like dirt. If she had been really shrewd, she would have received the tip and ignored it, but she apparently acted reflexively and walked into the other side of celebrity. I'm not convinced that people who make mistaken reports to the police are prosecuted. It's more likely when they think you're jerking them around, that they decide that hardball is called for. An honorable prosecutor would be on the lookout for cases where it looks like the investigators are just bearing a grudge, but I don't think that was the case here.

The perception that Martha Stewart could trade on insider knowledge and get a wristslap is exactly the kind of thing that insider trading laws are meant to target. If she had been a nobody whose name wouldn't attract publicity, she might have gotten more lenient treatment, but I don't know what else the government could do without looking like her celebrity got her special treatment.