Posted on 03/14/2004 8:49:40 AM PST by NormsRevenge
Edited on 04/14/2004 10:06:55 PM PDT by Jim Robinson. [history]
you keep focusing on freedom of speech and someone making a profit, but keep ignoring the fact that someone also suffered a loss, that person not being privy to the same 'insider' information that Martha had... are you unable to understand this?
Actually in this particular case, the stock eventually went up in value. But for the sake of argument, suppose it didn't. But when we make it illegal for anyone to trade on information until it is publicly announced by the company it means investors and employees have no incentive to release information that might lower the value of its stock. It can be any kind of information -- like some of the managers are crooks -- things that could be corrected if the information were public. But without it the company can go on issuing new stock and selling new bonds and more investors will lose money.
And we will see more Enrons and Global Crossings if people are inhibited from releasing information. Regulating the flow of information in the name of "fairness" hurts more people than it helps.
How would you like to be the one who bought Martha's stock only to see them tank the next day- and then later learn that Martha knew it was going to happen when she sold them to you?
This is the reason I no longer invest in the stock market. It should be done only by people who know what they are doing and have a chance to know what is going on. When you have a lot of Joe Sixpacks investing it is a very dangerous situation.
that ALREADY IS THE LAW
Exactly. And I believe that as a result people are investing without proper information. How did Enron get to be so bad without anyone knowing about it? Giving out information is hazardous enough without making it a felony. You can be sued. Even if the information is correct you can be dragged through court. But making it illegal won't stop it. It simply gives an advantage to people who are willing to break the law. In other words, making it illegal enriches criminals.
Another way of looking at this is that information is a commodity that should be allowed to trade in the free market like anything else. If I have a gold mine of information, why shouldn't I be allowed to sell it to the highest bidder? Why do I have to share it with the world?
By the way, I read a story a couple of days ago revealing that congressmen do very well trading stocks. Their investments outperform the market by about 25%.
Their campaign contributions paid for the lack of oversight.
And even now as the belated oversight is coming, it's doubtful that public officials will be treated in a similar way to Martha Stewart.
Wouldn't that be refreshing: video of rat bureaucrats being hauled off to jail on the six o'clock news. How long has this prison stink been under the noses of CA's democrat controlled legislature? I hope Arnold is up to 'terminating' a lot of these crooked bast*rds.
Martha will be going to the BIG House and Hillary will be going back to the WHITE House ;-)
and when she attempted to phone Sam Waksal to get more information, her actions became conspiracy.
The feds dropped the charges against Stewart, that doesn't mean they didn't establish Waksall committed the offenses. Stewart knew about them, knew they were crimes, and lied to investigators with the intent of obstructing justice.
because someone will lose money in a stock transaction because someone else had 'insider information' - do you want to allow that? You're scaring me dude- don't you have any morals?
OK, that's what's odd about all this.
Stewart wasn't convicted of the crimes, and to my knowledge Waksall hasn't been convicted, or even charged, of any.
Then, how can Martha be found guilty of lying about crimes she or Waksall didn't commit?
because someone will lose money in a stock transaction because someone else had 'insider information' - do you want to allow that?
Yes, it happens every single time a trade occurs. The stock will either go up or go down -- one person will win and the other will lose. No two people have the exact same information about a stock. And it is impossible to convey every piece of information that you have to everyone who may have placed an order for that stock.
But criminalizing insider trading is making innocuous activity a felony. The Feds are beginning to enforce the insider trading rules more aggressively. People are being prosecuted when someone simply overhears a conversation with your divorce lawyer:
"Donna Yun, a real estate agent, sat in her office discussing her husband’s marital assets statement with her attorney. She explained that her husband placed a value on stock in his company, Scholastic Book Fair, Inc., at less than the market price because he expected the stock price to decline following an upcoming quarterly loss announcement. Jerry Burch, a co-worker, walked in and overheard the conversation. Burch testified that he did not hear enough information to feel comfortable trading in the stock. On the evening of the telephone conversation, Yun and Burch drove to, attended, and left a banquet together. The following day, Burch purchased put options in Scholastic Book Fair and, following the loss announcement, sold his puts for a $269,000 profit. The Securities and Exchange Commission, immediately upon learning of Burch’s profit, began investigating the transaction."
http://www.trenam.com/read.asp?show=115
And they took her to court.
There is more at stake here than the stock market. The SEC is getting bolder at prosecuting these cases and I believe it is being used as a weapon to shake down the rich when they don't contribute enough to political campaigns.
Bill Gates learned this the hard way. He gave very little to the Democrats or Republican and did not have a Washington lobbyist that congressmen could call when they feel strapped for cash. After they investigated him for anti-trust violations I'll bet he is more forthcoming.
I agree, but she never spoke to him. So what about the government officials who spilled the news? I want them in the joint.
Martha sold a stock she knew was going to be worthless the next day. By your own definition this is stealing.
First of all it wasn't made worthless. In fact it has since traded at a higher price since the drug was eventually approved. But it isn't stealing when you sell a stock on the open market. Whoever bought her stock had placed an order to buy. If they hadn't bought Martha's stock they would have bought someone else's.
The point that someone may have lost money (on paper) after her trade is irrelevant. It was inevitable anyway even if Martha had not sold her stock. After the stock started to decline, some people would have bought it for $58 dollars, the ones who bought it last for $48. The person who would have profited would have been the lucky guy who happened to sell his stock because he needed the money for a plasma TV. So she didn't cause them to lose money, they would have lost money anyway, because of the government's actions.
Making information illegal makes the market stupid. It makes it nothing more than a lottery
The point is this, even if it were immoral for her to sell based on inside information (which it isn't) it gives way too much power to the government to allow them to enforce this law.
I am not a Liberal. Liberals are people who want to give more power to government and this case gives a great big ugly club to federal regulators.
But Martha got that information illegally, and acted on it, also illegally. Her sale cost someone else, when the stock tanked the next day. Someone who did not have the same priveledged information...Is that OK with you? If you bought the stock from Martha and lost $60K the next day how would you feel?
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