Martha Stewart has been convicted on all of the counts that went to the jury: conspiracy, obstruction and making false statements to investigators. The most novel charge against Stewart–that her proclamations of innocence, in response to leaks about the investigation, constituted securities fraud–was thrown out by the trial judge.
I’m a fan of Martha, and am sorry to see her convicted. While she was not charged with insider trading, that was the essence of the case against her. It seems probable that she and her stockbroker did panic and lie to investigators. But the insider trading laws are, in my view, highly problematic, and the penalty Martha will now pay seems grossly disproportionate to her offense, as was the magnitude of the effort made by prosecutors to bring her down. There is no percentage in being a high-profile criminal defendant.
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