english essay

Trial of Martha Stewart

By: Banyei Isoh

April 14, 2010

1. Did Martha Stewart commit the crime of insider trading when she sold her ImClone shares on December 27, 2001?

Based on the facts that were awarded us as readers of this case, I do not believe that she committed insider trading. I do not believe so because in order to be convicted of a crime, it must be found beyond a reasonable doubt. In this case there are so many anomalies that put to question the validity of certain statements that were made from different individuals. Beyond a reasonable doubt means that the information that was given was 99.9 percent certain and that it is better than just a preponderance of the evidence. Some of the facts such as the mark “@60” cannot be proven beyond a reasonable doubt. That is a sticking point in the case because if they actually did come up with the sell under 60 and the price of the stock dropped below that price, then they were only doing what they had originally agreed to do upon drop in the price of the stock. Another fact that is there was no knowledge to here of exactly what was going on with ImClone because she questioned about what was going on with their company. She also did not have any direct knowledge of what Mr. Waksal knew. As a result of not knowing what was going on inside of the company, she could not be classified as someone who had committed insider trading. Insider trading is having access to classified information about the health of a corporation, and that is information that Ms. Stewart did not have.

2. Did the U.s. Attorneys and the Securities and Exchange Commission use good judgment in indicting Martha Stewart? Do you believe that her indictment was based on evidence of a serious crime, or do you believe that prosecutors consciously or unconsciously had additional motives for pursuing the case?

In my belief I feel that they did use good judgment in indicting her because based on the facts that were given, more information had to be gathered and more people needed to be questioned in order to gage the validity of certain people’s testimony. I believe that the SEC and the Federal government did have an alternative motive because this was on the tail end of the Enron and WorldCom cases and they were trying to make an example out of someone with high stature. I also believe that she was victimized because she was a woman. I say this because just recently a similar case with the billionaire Mark Cuban was brought up and his case did not even make it to the courts. My question in that manner is why was his not brought in front of the courts? Why wasn’t he indicted? When it comes to finding out factual information, I believe that both cases should have been handled in similar fashions. By both cases not being handled in similar fashions it leaves to the mind why they were not. Being indicted does not make an individual guilty it brings the facts to the forefront, and I do not believe that the facts that were brought to the forefront were adequate enough to make Ms. Stewart guilty.

3. Do you agree with the jury that she was guilty beyond a reasonable doubt of the conspiracy and obstruction of justice charges?

I do not agree with the jury that she was guilty beyond a reasonable doubt with any of the charges. To find someone guilty beyond a reasonable doubt I believe that there should be no room for question as to what the motives are behind the case. I believe that there should be no anomalies in the statements given by witnesses. I believe that there should be nothing left to interpretation because no two individuals will interpret the same thing the same way. Everyone has a mind of their own and that mind does wonderful things. Everyone has different values and everyone has different biases. With that being said there was not enough connecting Martha Stewart to the knowledge that the Sam Waksal had. The federal government had recorded meetings between Martha Stewart and Peter Bacanovic but did not have the content of what was said in those meetings between the two. As a result of the lack of information we do not know that they were conspiring to obstruct justice. They could have had been speaking about future business ventures and as a result I do not believe that we can assume what these conversations were about. Ms. Steward did however lie about the amount of contact that she had with Mr. Baconovic so if she was guilty of anything it was lying to a federal agent.

4. Was her punishment, including both imprisonment and fines, appropriate? Were the punishments of Peter Baconovic and Douglas Faneuil appropriate?

I do not believe that the punishment Martha Stewart received was appropriate because I do not believe that she should have been found guilty of the crimes that she was found guilty of. Martha Stewart may have been guilty of insider trading but based on the rule of law she must be found beyond a reasonable doubt. That is where my problem lies. I do not see where the federal government can say that beyond a reasonable doubt that Martha Stewart committed the crime that she did. Criminals get away with crimes on a daily basis because the jury could not come to a consensus that the individual was guilty. It is for this reason that I do believe a fine would have sufficed for the things that Martha Stewart did commit, but I do not believe that she should have been imprisoned. She did lie to investigators when she said she did not speak to Baconovic but other than that fact, they do not have concrete evidence anywhere else that can back up their claims. I also do not believe that the punishment for Baconovic was appropriate either. I do not believe it was correct because what he did that was beyond a reasonable doubt was speak about his clients. That is against company policy so therefore he should have been punished by his job and at worst fined by the federal government. I do believe that the punishment awarded to Faneuil was appropriate because he only received a fine and he was put in a very tough position. He had a lot of pressure on him to keep some facts away from him because of the stature of the people he was dealing with. He however did not have to do jail time which I feel was adequate punishment for him.