Guilty, Guilty, Guilty & Guilty

Those were the verdicts on the four remaining charges against Martha Stewart. After the judge threw out the most serious charge, the jury nailed her on the other four.

And I think that they were right.

Martha Stewart was not just a happy homemaker investing in the market. She was an astute businesswoman; she was a former stockbroker.

Got that?

A former stockbroker.

That statement right there, I believe, changed the whole set of standards by which she should have been - and was - judged. When I earned my Series 7 license back in the day, I was told that passing the 7 was the same as proving that you knew more about investments, investment law, and the regulations surrounding the stock market than 85% of the population. After having done my tour of duty as a broker, I believe that it is pretty close to an accurate statement.

For the 7, and the Series 63 blue sky exam (which allows you to be registered in different states), one of the biggest focuses of the law portion of the exam is insider trading. Martha has to have known the laws - which is why she was able to concoct a good enough story to beat the insider trading rap (it was never filed).

But what she forgot is that by virtue of having been a broker, she is held to a higher standard. My 7 lapsed last week. But still, I have a filing cabinet full of papers related to various trades, actual or considered. I have anything that might be considered pertinent if there was ever a question as to why I made a particular trade. Martha should have had the same. It's part of the ongoing price to pay for having played in the industry.

And that's why I feel no real sympathy for Martha. She had an opportunity (neigh: obligation)at the time of the trades (and before) to accumulate the documentation and reasonings that would have proved her contention - if it were true.

But instead, she failed to do what was required of her. She allowed herself, likely through neglect, to arrive in a situation where she could be endangered by a person's word. She had an opportunity to give herself an airtight defense, but instead she allowed herself to be impeached by a 27 year old drug user.

Do I personally buy the story of the stop order at 60? Not really. I would have expected the broker to do more than to make a handwritten notation in Martha's position statement indicating the sell order. Maybe it's just me, but if that is what Bacanovic really did, I would almost say that he's guilty of a breach of fiduciary responsibility (a very bad thing in the investment world, believe you me).

There are just too many things that don't add up in the parts of the story I've been able to follow. Martha's explanation just doesn't really seem to be up to snuff.

Hopefully her Jailhouse Living edition will be.