Courtroom Tales of Martha's Lies . . . [NYT Editorial supports jury's conviction of Martha]

The NYT ^ | March 6, 2004 | NYT Editorial Board

[summer]

Courtroom Tales of Martha's Lies . . .

Published: March 6, 2004

Martha Stewart, the woman who capitalized on her sense of decorum and good taste to build a business empire, is likely to go to jail for lying. Despite some significant overreaching in framing the original charges against her, the trial vindicated the government's decision to prosecute her and her broker. A Manhattan jury convicted Ms. Stewart yesterday of lying to federal prosecutors and of conspiring with her broker, Peter Bacanovic, to obstruct inquiries into why she sold her nearly 4,000 shares of ImClone Systems on Dec. 27, 2001. Ms. Stewart was found guilty on all four counts considered by the jury; her broker, on four of five.

Earlier, at the conclusion of the testimony, Miriam Goldman Cedarbaum, the presiding federal district judge, had tossed out the most serious charge, securities fraud, against Ms. Stewart. That was the right call. Prosecutors did overreach with their fanciful charge that in defending herself, Ms. Stewart had been conspiring to prop up her company's stock price.

Absent a straightforward insider-trading charge, the jury was left to determine that there had been an illegal cover-up — and on that, the evidence was compelling — without defining the underlying impropriety. Still, the narrative that emerged at the trial justified the government's determination. This trial was not about unfairly targeting a celebrity defendant, but about enforcing the transparency of financial markets.

The trial depicted a cozy world where insiders routinely use their wealth and connections to benefit from insider information. Samuel Waksal, ImClone's former chief executive and Ms. Stewart's close friend, is serving a seven-year prison term for illegally dumping his own holdings in his company's stock on that same Dec. 27, before it became public knowledge that the Food and Drug Administration had refused to approve the company's anticancer drug, Erbitux. En route to a Mexican vacation, Ms. Stewart was informed by her broker's office that Dr. Waksal was dumping his shares.

The clumsy attempts by Ms. Stewart and her broker to fabricate alternative explanations for her subsequent stock sale are what did them in.Despite being a former stockbroker and director of the New York Stock Exchange, Ms. Stewart's actions were openly contemptuous of the government's right to police the integrity of the markets. As for Mr. Bacanovic, his prosecution should dissuade others in financial services who might be tempted to let a few favored clients benefit from insider information.

[summer]

I was somewhat surprised at this editorial, supporting the jury's finding.

In retrospect, I realize how little of an impression this trial made on me until the jury's verdict, in large part because it seemed to me most of the media had decided the government was wrong and didn't bother to try and see the case the way the jury was seeing it: a substantial 6 weeks of testimony against Martha, verses a paltry 20 minute defense by Martha's lawyer (who was paid a hefty $9 million by Martha).

[devane617]

I bet Martha gave her lawyers an ear-full after the verdict yesterday.

[summer]

LOL...you might be right.

BTW, I read somewhere the board of her company may consider having her daughter be the company spokeperson while her mom is in jail.

Also, I sincerely hope her company does not collapse. I think consumers, if left to make the final call on her company, will continue to buy Martha's many quality products.

[sergeantdave]

Gee, I wonder if the NYT would support throwing bureaucrats and politicians in jail for lying.

[devane617]

Just heard that CBS has pulled all Martha shows, including MS Living effective immediately.

[summer]

I also heard The Food Network, which airs her shows at a much better time, 6:30pm, has decided to continue programming her show on their network.

[summer]

And what about Jayson Blair? He's now peddling his book.

[summer]

BTW, I hope Martha does not write a book about prison. I think the less she talks about this, the better off she is in terms of her own image. Eventually the public will forgive and put it behind them -- but, not if she drags on with a pointless appeal for years.

[summer]

PS CBS had already moved Martha to 2AM a long time ago! She should have ditched THEM!

[ml/nj]

Martha Stewart is likely to go to jail for lying.

Too bad the same thing didn't happen to the Great Stainmaker, or his Charming Bride (a.k.a. The Commodities Scam Queen).

ML/NJ

[summer]

Yes, it does bring back those memories.

I read in the NY Post that prosecutors initially offered Martha a deal: plead guilty to one count of obstruction of justice and serve 4 months in jail. In light of the testimony that was coming, she should have taken that deal and been done with it. Her company would already be back on its feet and the entire matter fading from public memory.

[summer]

(And saved herself $9 million in attorney fees, since "fighting it in court" amounted to nothing.)

[elbucko]

And saved herself $9 million in attorney fees,

That amount is obscene. It's legal, it's a free market and Martha agreed to the fee's. Nevertheless, it's obscene.

[summer]

Obscene is right. But that was the fee she reportedly paid her attorney, according to several news articles I read (I think one was in the NY Post).

[ontos-on]

No, if her lawyer is as good as he is supposed to be, he must have been telling her all along that she faced this exposure for her stunt in believing that she could ape her pal, William Jefferson Clinton, in transparently lying and getting away with it.

[Moonman62]

I was somewhat surprised at this editorial, supporting the jury's finding.

I'm not all that surprised. The anti-capitalist class warriors at the Times agree with the anti-capitalist class warriors at FR. Of course the surprising part is that the Times would turn on one of their own. Why didn't they do that with Clinton?

[Moonman62]

Gee, I wonder if the NYT would support throwing bureaucrats and politicians in jail for lying.

No, and neither would a good portion of FReepers, as long as the crooks have an "R" their names.

[Uncle Sausage]

Clinton had the Attorney General, the FBI and 900 FBI files.

[summer]

No, if her lawyer is as good as he is supposed to be, he must have been telling her all along that she faced this exposure for her stunt in believing that she could ape her pal,

No, I disagree. Her lawyer may have been telling her then, and may be telling her now, "We'll fight this, Martha!"

Translation: "That's how I get to keep billing you my huge hourly fee, Martha..."

[summer]

Of course the surprising part is that the Times would turn on one of their own.

Yes, I agree.