Posted on 06/06/2003 4:52:30 PM PDT by fight_truth_decay
Prosecutorial bullies usually try such cases in the press and then intimidate their victims into 'settling' without bothersome due process.
Believe it or not, the government now charges Martha Stewart with "securities fraud" during that same period because she supposedly tried in vain to prop up her own stock by denying that she was guilty of the crime then charged -- insider trading. Yet the government now admits she was never guilty of that crime. Instead, she supposedly "obstructed justice" (her own threatened prosecution for a nonexistent crime) and made "false and misleading statements" about her reasons for making a perfectly legal sale of ImClone shares. Any jury of passably sane people would laugh this out of court.
It was the "sources close to a Congressional investigation" that defrauded MSO investors a year ago. That political persecution was aided and abetted by the tabloid press, notably The New York Times.
The SEC recycled this government trash and came up with a civil charge of sorts. Yet the SEC's complaint effectively refutes both its own charges and those of the government. The SEC says, "Stewart asked Faneuil for the current market price of ImClone shares and was given a quote of approximately $58 a share. Stewart then instructed Faneuil to sell." That is exactly why Stewart said she sold ImClone that day -- the price was falling fast. Faneuil's now claims he told her that the Waksal family was selling, but not why (Waksal did not say). But the SEC refutes Faneuil's new story too by saying, "Stewart then immediately called Waksal [after selling her ImClone shares], and left the following message: "Martha Stewart [called] something is going on with ImClone and she wants to know what." The fact that she had to ask that question proves Martha Stewart did not know what was going on with ImClone after talking to Faneuil and selling her shares. End of story. Case closed.
The SEC says Martha Stewart saved $45,673 by selling late on December 27 rather than on Dec. 31. SEC attorney Wayne Carlin tells reporters it was "unfair" of Martha Stewart to sell her remaining shares in ImClone so promptly (she had "unfairly" unloaded many more ImClone shares in October). But unfair is not illegal. The smart money had gotten out by Dec. 14, when ImClone was $70, and the smartest money was shorting 77 million shares by then.
It took the government a year to fabricate three new offences, all of which amount to the same charge of giving a supposedly misleading explanation for a perfectly legal stock sale. This newly refabricated case is not about illegal lying at all: Martha Stewart has not been charged with perjury. Perjury is one of the fabled "nine counts" that is not hers, but her broker's. In a more important sense, however, this case has always been about lying. There was Congressional lying a year ago about Martha Stewart's alleged tip from Sam Wacksal. And what little remains of that discarded case is now based entirely on the testimony of a proven liar, Douglas Faneuil. He says he was lying before (when he supported Stewart's recollection) but has converted to telling the truth now (when he supports the government's story). Yet this is a fellow who admits his past testimony has been for sale, and any gift Mr. Faneuil may have gotten from his boss was token change compared to being offered only a misdemeanor wrist slap and let off without even a dollar fine.
So what is Martha Stewart's crime? The New York Times, exemplifying its notoriously creative journalism, now editorializes that Martha Stewart engaged in an "illegal stock trade" and " was tipped by insiders that the Food and Drug Administration was not going to approve" Erbitux. That is just more lying from the source that spread the same lie a year ago.
In reality, Martha Stewart stands accused of saying she could not recall details of a two-minute phone conversation on Dec. 27, 2001, while the government claims to know precisely what she recalled. She also stands accused of sometimes confusing her broker with her broker's assistant. Her broker, in turn, is charged with using two different pens, quite possibly on the same day.
And Martha Stewart herself stands accused of altering a computer record of a phone call, even though she immediately "directed her assistant to return the message to its original wording." Did the government ever really intend to ask a jury to send Martha Stewart to prison for such heinous "offences against the United States"? Not likely.
Prosecutorial bullies are accustomed to trying such cases in the press and then intimidating their victims into "settling" (writing big checks) without bothersome due process. In this non-case, however, the government would be smarter to settle out of court by handing Martha Stewart a big check to compensate for a year of slanderous lies and leaks about her.
If this sleazy mess ever goes to court, the architects of the fiasco will have to sneak out of court under umbrellas to avoid journalists' embarrassing questions.
Alan Reynolds, Financial Post is a senior fellow with the Cato Institute.
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It is patently unAmerican to pass legal judgement on the basis of the subject's friendships.
It is sad to see that a self-described conservative such as you are puts his emotions before the high standards that made this country what it is --- the country of laws. With conservatives like this, who needs Clinton to destroy the country?
Since when has the presumption of innocence under the law been equivalent to the presumption on innocence in the court of public opinion?
.."some 85 million investors -- seniors, in particular -- will be ecstatic about relief from the double taxation of stockholder dividends...likely to express their gratitude by voting Republican for years to come."
He also had criticized Sen. Joseph Biden,Democrat, saying the market fell every time President Bush gave another speech against "endless profits."
If you read Reynolds Cato reports, you won't see Democratic or political favoritism. .
And they call this the "Land of the Free?"
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