Asshat Martha Stewart to Face Criminal Indictment

The BBQ Pit
101

I haven’t read the books, but I did see the Cybil Shepard TV-movie that was based on Martha, Inc. They showed the split as basically being one of different levels of ambition: Stewart wanted to work constantly, including taking lucrative catering gigs on major holidays and the like, while her partner wanted to work a little less. The split was portrayed as occuring over one gig in particular, which Stewart wanted to take but her partner wanted to pass on so that she could take some vacation. Stewart exhibits concern over losing business to rival catering companies. Nonetheless, she promises to not take that particular gig, but then in fact does take it and plans on handling the work on her own. Her partner finds out, gets angry, and goes over to yell at Stewart; that argument dissolves the partnership.

Now I realize that a TV-movie is necessarily going to leave out important details. Since you’ve clearly read the books, I was wondering if you could answer some questions I had:

  1. Why did taking that particular gig equate to stabbing her partner in the back? I don’t understand why the partner was so averse to Stewart handling the gig solo – it seems to me that the best of both worlds would be to take your vacation, but insure you don’t lose market share by letting your colleagues cover important gigs in your absence.

  2. On a related note, why did taking that gig equate to taking over the business?

  3. Can you fill us in on any other relevant details?

Seriously, I’d like to know. My reaction to that part of the program was basically “yeah…so?” I was much more offended by little-girl Martha giving her rival neighborhood cake-baker a bum recipe in order to steal her business.

102

Canvas Shoes

So this woman has some shows and some books and some magazines where she shows how people can live a certain lifestyle. (btw I have only watched her a few times and I don’t read her books or magazines) This lifestyle is not for everyone. I personally would not want to live in a Martha house. Now if she is on a show like say Dave Letterman and Dave says something like “Oh who could really do this?” and she says 'Why everyone could". Well that is just the sort of answere she has to give in that situation. If for some reason you feel like less than a woman becasue you don’t have a home exactly like Martha and a business exactly like Martha, that is YOUR problem. I would like to know exactly how Martha Stewart pressures Canvas Shoes in to making doiles or cooking exotic meals. If seeing someone else live in some way that you consider to be better than the way you live causes you to despise them and to assume that they must be horrible people to have all that, then that is something for you to work out with your shrink. It is not something we need the Feds to go after in leiu of putting bigger fish in the fryer.

103

The movie was actually too kind. According to the Oppenheimer book, Martha and Norma Collier founded a catering business together called the Uncatered Affair. Their arrangement was that Martha would get clients in Westport and Norma would get clients in Newport and they would both do the work and share the proceeds. According to the comments attributed to Collier in the book, from the beginning Martha humiliated and denigrated Collier in front of clients and sloughed off her share of the workload. The final straw came when Norma found that Martha had broken the terms of their partnership by taking jobs from clients Norma had generated and keeping the money for herself.
(Oppenheimer, Jerry. Martha Stewart: Just Desserts. William Morrow and Company, New York, New York. 1997. pp. 154-156.)

104

That’s interesting. I do wonder two things, though:

  1. If Stewart was really in breach of their partnership agreement, why didn’t Collier sue? Even absent the terms of the agreement, it’s basic partnership law that a partner owes a fiduciary duty to his partners, including a duty of loyalty requiring, in part, that the partner not usurp partnership opportunities for private gain.

  2. Why is Collier’s word the gospel truth? As the less successful of the two, one might expect a bit of resentment and jealousy on her part, and that her telling of the story would be colored accordingly.

Not to say Stewart’s hands are totally clean or anything. I just suspect the truth is a little less clear-cut.

105

Peasant.

Regards,
Shodan

106

One other thing:

  1. Why didn’t Collier just start catering on her own? She had her own book of clients. She had a right to her share of partnership assets. She even probably had a right to use “The Uncatered Affair” trade name (though that particular issue would probably be decided in litigation if the parties couldn’t settle the issue amicably). I really don’t see how Stewart could “take control” of that kind of operation without Collier’s tacit consent. “Part company,” yes. “Take control,” no.
107

Neither book mentions any lawsuit filed by Collier nor any reason Collier failed to file. Both books make Martha Stewart look thoroughly unpleasant, but I daresay that they are both shaped to accentuate the negative and hide the good.

But I still think she’s a bitch on wheels.

108

Ms. Stewart is being made an example by the Powers-That-Be, and IMNSHO wrongly so.

Ms. Stewart likely did act on information that she should have known to be insider information. I am not denying this, pushing it under the rug or approving of this in any way. Perhaps this was not the first time, but we have no way at this moment to determine otherwise. As it stands, she sold a few thousand shares for a small amount of money as things are measured in the market.

So why is MS being portrayed as the next Hannibal Lecter? I think there are many factors playing here:

  1. MS projects a wholesome image; some might say too wholesome. There is a jealousy factor.
  2. The SEC is getting a fairly quick resolution on this, a high-profile case. They want to send a message. Most posters here, if in the same situation, would probably have already cut a deal and the SEC would have moved on.
  3. Congress just wants to try to look important. A Congressional hearing on an alledged insider trading scandal is scandalous itself.
  4. This is just low hanging fruit to the newspapers. No journalistic hard work here. You have a blonde, successful, not-unattractive businesswoman who is easy to dislike because of her alledged agressive business nature (which, if she were a he, would be a non-issue). Deadlines are easily met and you get to go home early.

If MS spends so much as one day in jail, this will be nearly the travesty of the Rockefeller drug law victims (for the hyperbole impaired, see previous sentence for example). MS is the subject of a witch hunt simply because the cameras are watching.

What should happen to MS? Disgorge any of her profits on the trade, pay a penalty/fine, and prohibit any investment in the market for a few months to years. She should be allowed to sign one of those “I’m paying but I admit no wrong-doing - make it go away” statements. As her company is public, she should no longer be allowed to hold executive positions within it or any other public company (note: she quit voluntarily and could easily be reinstated if not convicted).

109

I’m going to use this as my cite for everything from now on.

110

Come now, don’t be obtuse. Stewart represents an opportunity to the folks in the SEC (and the White House), one they LEAPT at once her name came up wrt insider trading scandals. Do you suppose that if she had been ANYBODY else she would have been so publicly prosecuted? Or so prosecuted? SHE’S not the one who spilled the beans about IMClone, she just profited from said spillage. You see a lot of OTHER people in her situation facing similar charges? I don’t THINK so.

There’s nobody the SEC want’s more than Ken Lay.

There may be SOME people at the SEC who want Ken Lay more than anybody, but you can be sure there’s a lot who DON’T, because they know Ken Lay is the good buddy of Resident Dubya and some of his top aides (Cheney, IIRC) and they would like to be liked by Bush and his buddies. You’re kidding yourself if you think otherwise.

They’re building their case where they can, following the evidence and prosecuting provable criminal behaviour, applying pressure on subordinates in the know who hopefully will crack and testify against Lay in a plea bargain deal.

I’ll believe it when I see it. Here’s another scenario for ya: they’re dragging their feet on Lay like kids going to the doctor for a vaccination, hoping that the media craze over Stewart keeps the pressure off them until they can either quietly shelve the investigation of Lay (while trumpeting their established prosecutions) or offer Lay a plea bargain deal that involves little more than a public apology.

Martha got a call from her broker with inside information not available to the public and in the same phone call instructed him to sell all her shares, a clear and very obvious violation.

Once again I ask you … are others who’ve committed similar violations being prosecuted as vigorously?

She shouldn’t be prosecuted because the SEC is still working to build it’s case against other, more egregious violaters? Her prosecution is somehow a smokescreen concocted to enable Lay, Fastow and Shilling to get off?

It wasn’t concocted, she did commit the crime, but the level of the prosecution? Well, I think some SEC watchdogs are currying public favor and secret Wall Street and White House favor at the same time. How could they resist?

And the people who are getting off aren’t so much Fastow and Shilling (we’ve already discussed Lay) but a lot of brokers at places like Citicorp, Smith Barney and Salomon Bros. who would very much like the Stewart prosecution to get all the publicity so their can be ignored.

Frankly the matter of conflict of interest between brokerages who provide stock analysis services and brokerage services is a topic deserving of lengthy, detailed and critical examination, but I’m betting if the Stewart prosecution keeps lighting up the media like it has, things will quietly be sidelines.

You’re quite the believer in the SEC and the Street though, aren’t you? I bet you think the Halliburton deals in Iraq were on the up-and-up, too.

111

I’ve never seen her cook anything imaginative with Fava beans and a nice Chianti, although that mask would be a sincere improvement.

112

Heh, you are aware I’m a Halliburton employee?

I appreciate your points as I too wondered at the beginning of the thread why it was that she was receiving so much attention, aside from the obvious media angle.

But I don’t think it’s an attempt to shirk other prosecutions. While it may benifit the SEC PR-wise to have a high profile win, I don’t believe this is going to take the heat off any other serious violaters.

113

Just a few important points to keep in mind in this discussion:

  1. Martha Stewart was not indicted for insider trading. She was indicted for Obstruction of Justice. That is to say, she was indicted for trying to cover up her true actions when the SEC, FBI and other agencies were investigating her and consipiring with her broker to do the same. She very well might not have been indicted for the insider trading, but by covering up she got herself into a whole heap of trouble.

  2. Martha Stewart’s indictment came over two years after the events at issue. You can be sure that the SEC, FBI, U.S. Attorney, Department of Justice and everyone else are investigating Ken Lay in great detail, but are waiting until they have their strongest case to indict.

114

Not true. There are men who’ve made good money and been trashed because they were unpleasant jerks.

Martha’s not being trashed because she had the “audacity” to become successful and a celebrity, she’s being trashed because she’s a bitchy, unpleasant, condescending person. And people know this NOT from hearsay, but from they’ve seen of her OWN actions.

There are plenty of successful women who are rich and famous and who DON’T get trashed.

Martha’s a jerk, that’s why people dislike her, not her money or fame. The legal trouble she’s having? To many people it’s just what she deserves, karmically (no such word) speaking.

115

Evil Captor, I closely follow financial litigation news, and it is common for cases to take 5 years or more before they get to court. I like getting litigation support assignments - it usually means an extended period of billable time (I’m a consultant - you can start the flames after this post).

Enron is a VERY complicated case. It’s going to take at least 5 years to unravel the who, what, when, where and why of their financial records. By contrast, Martha Stewart is a near slam dunk in 2 years to indictment. Lastly, don’t forget that several Enron uppers have been indicted, like Fastow.

My feeling is that Lay will get what is coming to him, but you are going to have to give it time.

116

No, snooty was a word included in the description by the author of the article (she used snotty and condescending too).

I disagree that “get over it” was an appropriate answer to a student’s question. I would have expected something more intelligent from someone in her position. “Get over it” is something an 8th grade cheerleader would think up.

And again, the problem is not that she’s setting a high standard, but that she pretends to meet that standard herself and she’d NOT.

117

In evaluating this matter, and the whys of going after Martha on even the most minor of charges, let us not overlook an exceptionally important fact: at the time of the incident, she was * sitting on the board of the New York Stock Exchange! * Anyone in that position must be held to the very highest standards there are.

That, and she’s an unbelievable bitch who needs to be dragged down several notches.

118

Hey asshole: did you read my post? I said I had seen the TV-movie and then asked gobear what material was in the book that was excluded from the movie. It wasn’t a cite, you fucking moron, it was a request for additional information.

119

I agree with EVILCAPTOR…in that Martha Stewarts insider trading was penny-ante, compared with Ken Lay of ENRON fame. Martha made a few hundred thou-and lost 400 million! Ken Lay and company wrecked a huge company, bankrupted thousands of retirees, and bilked the utility customers of California out of billions!
Yet Ken Lay will probably never spend a day in jail!
There IS NO justice!

120

Man, Dewey, you sure know how to overreact to something.