Stock Manipulators

Posted on Sat, Mar. 06, 2004

A word of sympathy for Martha Stewart
By Mike Cassidy
Mercury News

Listen up. I'm only going to say this once. I feel sorry for Martha Stewart.

Yes, she's self-important and annoying. Yes, she's made thousands, maybe millions, of us feel inadequate by talking about proper ``homekeeping.'' (Hospital corners? Are you kidding me?) Yes, she's cluttered Kmart with chenille and chintz pillows, multi-striped napkin rings and toilet place mats bearing her name.

And well, she did lie to investigators who were looking into how it was she knew to sell her ImClone stock just before it tanked. (``Isn't it nice to have a broker who tells you these things?'') But jail? Going from the well-appointed house to the big house? This isn't a good thing.

I know. Just last week I was skewering Martha for expensing coffee and snacks and anything else she figured she could buy on the corporate dime. Many of you wrote to me to say I was picking on Martha only because she is a woman or because she is rich. That simply isn't true. OK, maybe a little bit because she is rich. I mean, a Hermès Birkin bag (starting price $6,000) as trial accessory? Mostly though, I was picking on Martha because she is famous. And because she's a pill.

Look at the testimony. This is a woman who apparently threatened to switch brokers because she didn't like her money manager's telephone hold music. This was a one-time billionaire who had the company pay for haircuts, a Mexican vacation and a chauffeur for antiquing trips. This was a woman who was not kind to the help.

One of you -- and you know who you are -- wrote me about the time you spotted Martha in New York at a farmers' market. She plucked an organic apple off a cart, took one bite without paying and then threw the rest on the ground. (No word as to whether the apple seller was on the jury.)

But now I worry that maybe prosecutors were also picking on Martha because she is famous and because she's a pill. It's one thing to have a columnist come after you for being a boor, but the feds? This is serious. Martha, who is 62, faces up to 20 years in jail.
...
And for what? Lying to the people who thought Martha Stewart Prison Living was more Martha's speed.

Lying is bad, yes, but hardly the worst of recent corporate shenanigans. We've entered an era in which the executive suite is starting to look like Sing-Sing. There's Enron, WorldCom, Adelphia, and Tyco,(and don't forget: Global Crossing, Arthur Anderson, KPMG, Imclone, Qwest, Halliburton, Merck, Ciena and Xerox: ed. . No convictions of the heavy hitters yet, though a few underlings have pleaded guilty.

These cases are record breakers, involving hundreds of millions of dollars. And Martha? Martha avoided losing about $51,000 by dumping her stock before it crashed. From the looks of the allegations, the real corporate bad boys would steal that much before they got out of bed in the morning.

And they're not in jail. But Martha is on her way, locked up as a high-profile example to others contemplating corporate crime. For that, I can find a spot of sympathy. Even for Martha.
--------------------------------------------------------------------------------
E-mail Mike Cassidy at mcassidy@mercurynews.com or call (408) 920-5536