Re: Martha Stewart and her Merrill Lynch Broker

From: Olga Bourlin (fauxever@sprynet.com)
Date: Thu Jun 05 2003 - 19:57:38 MDT

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    From: "gts" <gts_2000@yahoo.com>

    > Lee Daniel Crocker wrote:
    >
    > Stewart is facing criminal charges and looking at possible prison time for
    > doing what any intelligent person might have done under the same
    > circumstances (excluding her alleged obstruction of justice after the
    fact,
    > which I don't condone).

    Au contraire, what Martha did was NOT intelligent. Too early to tell what
    the judgment will be, but from what I understand there is NO RECORD of
    Martha's instructions to her broker about the stop loss PRIOR to the day in
    question when she may have gotten this alleged insider information. Martha
    was a stockbroker herself once, and could have avoided all this brouhaha had
    she used stops consistently (to protect her positions, after deciding what
    percentage loss she was willing to risk on each one), or trailing stops
    (trailing them up to protect her profits). She - of all people - should
    have known better. Good investors use good money management methods with
    their stock positions - that's just a given, if one is interested in
    protecting profits and limiting losses.

    > Her broker says: "Hey Martha, Sam Waksal is selling his ImClone. Looks
    like
    > the drug isn't going to be approved."> Martha thinks to herself: "Hmm, who
    better than Sam knows best when to sell> ImClone?" > She then instructs her
    broker to sell her shares also.

    The burden of proof will be on Martha to prove that this transaction was
    similar to her other stock transactions, but it looks like it may have been
    a special case. Therefore, what Martha did was NOT "a good thing." Aside
    from the moral issues, Martha gave someone a stick to hit her with, and
    *then* she apparently lied (thereby giving away, assembly-line style, even
    more "hitting" sticks).

    Naughty, naughty Martha.

    Olga (who would like to see the *other* sleazeballs from the various stock
    scandals put on trial, too ... why are they still out and about, quaffing
    martinis by the poolside at their summer home(s)?)



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