Abstract

Free Martha!

The author argues that Martha Stewart should be found innocent of securities fraud, as she is being made a scapegoat for Wall Street corruption. It was almost four years ago that the great stock market bubble burst. Despite revelations of systematic fraud across Wall Street and corporate America, the criminal consequences have been surprisingly minimal. The Wall Street banks, at the heart of the chicanery, mostly got off with a $1.4 billion settlement deal with the authorities, less than 4 percent of their profits between 1996 and 1999. The disappointingly short list of the indicted and/or jailed includes a handful of Enron execs, Tyco's Dennis Kozlowski, ImClone's Sam Waksal...and not many more. The major exception was a household name before indictment: Martha Stewart, whose trial began on January 20. Why Martha? Though most people think she's charged with insider trading, she's not. She's charged with conspiracy, obstruction of justice, lying to federal prosecutors and securities fraud-charges for which she could do serious time if convicted. And the original trade that gave rise to all this trouble was probably not illegal in itself. What Stewart's really in the dock for are the defenses she mounted after news of her well-timed sale became public. Though she has millions of fans, Martha is not broadly loved. She was voted the seventh most annoying person of 2003 on the website amiannoying.com. There's little doubt that this dislike contributed to her indictment, and to the widespread assumptions of her guilt.