RE: Martha Stewart and her Merrill Lynch Broker

From: Rafal Smigrodzki (rafal@smigrodzki.org)
Date: Fri Jun 06 2003 - 14:22:22 MDT

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    Harvey wrote:
    > Rafal Smigrodzki wrote,
    >> It is worth remembering that the specific actions performed by Ms
    >> Stewart are referred to as "crimes" only because a statute
    >> classified them as such. It is therefore a subtle psychological
    >> manipulation to use this term here.
    >
    > I guess I agree, but this could be said of any crimes. They are only
    > "crimes" because a statute classified them as such. I don't think it
    > is too misleading to refer to acts defined by statute to be illegal as
    > "crimes."

    ### This is incorrect. There are crimes which have been recognized as such
    by case law, without statutory help. Commonly, the crimes from case law will
    be recognized as detestable by the average citizen. Many statutory crimes,
    on the other hand, are actions which only thanks to political pressure are
    being condemned, without recourse to the ethical intuitions of most humans,
    and what's worse, without any consideration for advanced ethical theories,
    merely because the wielder of power decided so.

    I do believe insider trading is one of such cases, and I fully agree with
    LDC's opinion.

    --------------------------------------------

    >
    >> I thought the correct word here is something like "invalid" or
    >> "void" but not illegal. It would be wrong to make it illegal.
    >
    > "Null" and "void" and "invalid" all mean the same thing as
    > "unenforceable." The contract does not have to be enforced, but the
    > legislature hasn't defined such as a crime. In discussing
    > transactions that have been defined by the legislature to be crimes,
    > such as fraud and insider trading, then the term "illegal" is
    > accurate.

    ### My statement referred to your words: "If the property turns out to be
    substantially different than what the seller expected while the buyer knew
    this and remained silent, the contract is illegal.". To the best of my
    knowledge, the seller generally is not obliged by law to disclose such
    information, except in certain types of situations. Therefore I am correct
    in saying that such contract is not in general illegal. My statement did not
    pertain to insider trading.

    Also, null is not the same as unenforceable.

    Rafal



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