The Corner

Re: Re: Martha

An email:

Ramesh,

I’m sure you’ve gotten 1000 emails on this since you posted, but your thinking is flawed. You wrote:

“I don’t get it. The crime was selling a stock MS had reason to believe was going to go down? Isn’t that a major reason for selling stocks?”

The crime was not in selling a stock she knew was going to go down. It was in selling a stock she knew would go down because she had access to information not publicly available. Free exchange on the stock market is predicated on freedom of information. Traders place value on a stock due to the information they have available to them. If one person has information that is not available, no matter how much research is done, to the other person, then it is dishonest, unethical, and illegal. The free exchange would collapse if rules were not there to prevent this.

The hard thing to understand, Ramesh, is why you pretend not to know this for your post. Your writings tell me you should be intelligent enough to!

My response: Technically speaking, actually, her crime was lying to investigators and obstructing justice. I don’t think insider trading should be a crime, although in some cases it should be prosecuted as a violation of contract. As for the reason I said what I said, it’s because an earlier post had suggested that Stewart deserved criminal prosecution because she sold a stock she knew would go down.

Ramesh Ponnuru is a senior editor for National Review, a columnist for Bloomberg Opinion, a visiting fellow at the American Enterprise Institute, and a senior fellow at the National Review Institute.

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