YOU DESERVE A BREAK TODAY! ENJOY!
MEDIA EMPIRE ONCE WORTH
$2 BILLION DYING
As embarrassing as you and I might find it, I admit that I am a Martha Stewart fan. Please, tell me who else can you rely on to fashion gorgeous formal dinner place settings from a few twigs, a couple of leaves and a handful of moss? I mean it. Can you name anyone else in the panoply of television chefs, home crafters and do-it-yourselfers that possess the panache and ingenuity of Martha? No, of course not. Do I find her off-putting with her mannered ways, soft, vaguely New England - but not really - accent? Her condescending “I know this will be hard for you, but after six or seven times you’ll get it right” when she addresses her legion of hapless housewives and wanna-be-Queer Eye gay men? Sure, Martha is no Ina Garten with Ina's homey, “It’s so easy,” chummy, intimate style or a Giada DeLaurentiis' breezy, matter-of-fact “With just a few ingredients you can make a sumptuous Italian dinner by the time hubby gets home from work.”
In fact, Martha is always just a bit icy, likely not someone you’d want to befriend because you know she’d cut you in a flash for saying anything that she deemed as non-classy dumb and stupid. As chatty as she is on her “Martha Stewart Bakes” television show, her toughness always seeps through. She never “suggests” you do something but orders you too. But the woman knows what she’s doing with all those cooking shows, home decorating magazines, department store tie-ins and the rest of it.
Or at least she used to know what she was doing. Maybe not so much today. Her company, Martha Stewart Living Omnimedia, was worth around $2 billion in 1999 but was recently sold to distress-sale Sequential Brands Group for $353 million. Stewart’s downfall came in 2003 with a felony indictment for insider stock trading. She was convicted in 2004 following a six week trial, spent a year-and-a-half in jail followed by two years of supervised release, five months of which included electronically monitored home confinement.
Not to defend criminal activity or anything, but Martha was convicted of acting upon the advice of Peter Bacanovic, her Merrill Lynch stock broker at the time, to sell her 3,928 shares of ImClone stock in late December 2001 in order to avoid a loss of $45,673. (Bacanovic was also convicted in a parallel case.) This, according to the SEC, violates Federal law against using material, non-public information (i.e. “insider trading.”)
Well, okay then. Granted, the SEC was using the very public Martha Stewart – the publicity throughout the indictment, trial and subsequent prison term was relentless – as a prophetic example for the rest of us, I’m assuming anyway, of what can happen when we violate the SEC’s rules and regulations.
But I have to ask, what about all those Wall Street traders who send, receive and act upon non-public information (let's call it "Insider Trading" just for kicks) every single day? Sure, this too is an assumption on my part, but after the revelations following the Crash Of 2008, does anyone think that this doesn’t occur? I’m betting, just like Martha, this is precisely what high-roller folks pay their brokers for. This, too, has been my assumption long, long before 2008.
Martha Stewart’s company never recovered from the negative impacts of her insider trading conviction and that’s the price she has paid (plus a $30,000 fine connected with her conviction) and I have no particular sympathy for her. The problem I have is that the 3,928 share sales and the avoidance of a loss of $45,673 has to be the kind of activity that would get lost in the multi-billions of dollars of insider trading that occurs on Wall Street every day. It’s how Wall Street does business.
The impact of the SEC’s Martha Stewart example is basically directed at us: we with our paltry 401(k)’s and our piddling brokerage accounts. To me, it’s an example of the SEC going after low hanging fruit while the Wall Street machine plucks the entire tree bare just above their - and our - heads. It’s the very same reason that John Thain of Merrill Lynch, Jami Dimon of J.P Morgan Chase, John Mack of Morgan Stanley, Dick Fuld of Lehman Brothers, Lloyd Blankfein of Goldman Sachs, Bob Willumstad of AIG, Vikram Pandit of Citigroup and Richard Kovacevich of Wells Fargo have never been implicated, much less charged with crimes, for causing the biggest, worldwide economic collapse since the Great Depression resulting in the collective loss of trillions of dollars from our already meager wealth.