My Take On Martha

I've been quiet about the whole Martha Stewart fiasco because I've been wanting to see all the details as they came out.

I know all the allegations against her, insider trading, fraud, etc. But two nights ago, I happened to have on Bill O'Reilly who was interviewing a former SEC investigator. The guest mentioned that Stewart had once been a stockbroker. Since then I have been looking a confirmation (not really diligently looking, but I've been looking).

Today, in an article over at OpinionJournal.com I found it. "[T]he CEO and former stockbroker is also smart about business...."

So now I have my ammunition. If Martha is convicted of the charges against her, she needs to be made an example of. Not because she's Martha Stewart, Mrs. Prissy Perfect, but because she's Martha Stewart, former stockbroker.

She knew what she was doing. She would have known that the information she was given was illegal. She knew that once she got that info, she was barred from trading the stock temporarily. She knew that any trade, previously arranged or not, could be construed as insider trading.

You learn all that when going through the licensing to become a broker. You get the lessons drilled into your head during the annual compliance meetings. As a broker, you know that any appearance of insider trading will bring down the full weight and wrath of the SEC on you.

Yet, she chose to trade anyways. And then, she tries to cover it by claiming that the order was already in place. If so, there is a record of that. Why hasn't the record been produced? The trade would still get her a slap on the wrist, but she probably wouldn't be looking at jail time for it.

Don't let the spin fool you. This is not an attempt to deflect attention from Enron, MCI or any of the other accounting scandals out there. This is an attempt to remind brokers and inside traders that there are serious consequences for illegal trading. Martha is not being treated any differently than other licensed miscreants. The National Association of Securities Dealers publishes monthly a listing of penalties for broker violations. $50,000 fines, lifetime bans from practicing and even jail time are not uncommon - especially in an insider trading case.

If Martha is guilty she needs to pay a big price. She had sophisticated knowledge of securities transactions and securities laws. She had no excuse for taking the action she did.

Should be an interesting trial to follow.