Martha Stewart's trial-> Broke the law to save $51,000?

[mdcrab]

Topic Title needs to be changed to be PC, should be:
"Martha Stewart's trial-> Allegedly Broke the law to save $51,000?
The trial isn't over yet. Interesting article can be found here:

A comedy of injustice

mdcrab

 

[EagleKeeper]

Originally posted by: AndrewPaulNet
Why does everyone hate Martha so?

It's like Oprah...she has her die hard fans, and then her HATERS.

Anyhow - my real question is ..... could someone explain this stock business to me? A 'Stock brokerage for Dummies' or something? Never been interested in the science or politics of finance until now.....

Why is what she did so bad? I sorta kinda understand the 'essence' - like selling a car that you know is a lemon?

What I don't understand is, why was it illegal to get information from someone who knew? Is'n't that like, the epitomy of the very core of Capitalism?

BAH....

Please explain, someone.

And I'm for real on this - I don't know - so please bear with me on this. I REALLY want to understand, and I think I will from people on here rather than websites on the subject.

One of the issues is that she used information not made available to the public to sell some stock before the value to take a nose dive (this is the $51K that she saved by selling it before news was made public)

A second issue is that she lied about having this information and this is being considered obstruction.

What I don't understand is, why was it illegal to get information from someone who knew

The SEC trys to enforce the fact that the little guy has the same access to information that the big guy does. Therefore information that is not generaly known to the public is considered insider information. If that information is used to manipulate the value of a stock, it is considered to be illegal.

Stewart was supposedly told that the stock would be taking a nosedive. She claimed that she had an agreement to sell the stock if it dropped below a certain price. According to the SEC, she was told that a key figure within the brokerage was selling the stock and supposedly she followed suit.

 

[Argo]

This pisses me off as an investor. Here I go, researching companies, trying to gain an edge and she does it all from an insider tip, without even moving a finger.

 

[sandorski]

She's not being charged for Insider Trading(as mentioned previously), but I wonder how any of us would react in a similar situation: Your Stockbroker calls you up and tells you to Sell a particular Stock or else lose a bunch of money. I don't know if I could just let it go. It would also be interesting to know what exactly was said to her and if she *knew* this was an inside tip. Depending on what was said it may have appeared as common knowledge. At any rate, those who spread the info(the stockbrokers) should get hit hard, they certainly should have been aware of the nature of the info.

 

[mdcrab]

It is interesting that if you were a day trader and following this stock you would probably sold it based upon the fact that the stock was dropping on high volume.

Another interesting article about Martha Trial

To me they seem to spending a lot of money on small fry. There are a lot of other people such as executives at Enron and MCI that hurt a lot of people a lot more by actually doing illegal acts. These are the ones they should be prosecuting.

mdcrab

 

[DanTMWTMP]

did she ASK FOR THE insider information or was she just told of it and advised of selling it w/o her discretion?


heck...if some financial advisor told me to sell, i'd sell...


but i'm donno too much about this stuff anyways...so oh well.....but it sucks that she's getting slammed for it because someone else told her about her stock's going to go down. That's friggin bullcrap. The people who tell these things should be the ones prosecuted. This is stupid

 

[flxnimprtmscl]

Originally posted by: mdcrab
To me they seem to spending a lot of money on small fry. There are a lot of other people such as executives at Enron and MCI that hurt a lot of people a lot more by actually doing illegal acts. These are the ones they should be prosecuting.

mdcrab

Bingo. Unfortunately, most people wouldn't follow those trials so it's better to go after Martha so that the SEC will at least look like it's doing something about all these types of corruption.