The Corner

Still More Martha

One more email:

If you can stand another comment on this subject, please indulge me.

Your correspondents miss the point. Stewart was not charged with insider trading because what she did would not fit the definition.

Here is an example:

If you were accompanying a relative to his cancer treatment (God forbid) and you saw Bill Gates and it became clear to you that he was there for an initial consultation and you sold your Microsoft stock before Gates could announce that he was getting treatment for cancer, you would have traded on information not really available to the public but it would not be insider trading.

If, however, you were a director of Microsoft and Bill Gates told you that he had cancer and that he needed to announce to the investor community and you sold your shares before such announcement, you have insider trading.

I would say that Martha’s is more like the former. She obtained the information from her broker that Waksal was selling his shares. She did not know why, she did not have some inside tip from an Imclone person, she connected the dots on a piece of information offered to her by her broker. Now, her broker might have committed some ethical lapse and went against Merrill’s code of conduct, but, again, no insider trading.

People have to get off the fact that Martha did not commit the crime of insider trading. Now, it seems entirely reasonable that a jury could find that she lied to investigators and for that she should be punished.

People, including the jurors, do not seem to understand what the issue was in this case.

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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