RE: Martha Stewart and her Merrill Lynch Broker

From: Rafal Smigrodzki (rafal@smigrodzki.org)
Date: Fri Jun 06 2003 - 10:15:46 MDT

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    Harvey wrote:
    > Lee Daniel Crocker wrote,
    >
    >> But of course this could be easily handled by contract law instead of
    >> being imposed by fiat
    >
    >> And again, is clearly a matter for contract and tort law.
    >
    >> Again, all quite well handled by contract law.
    >>
    >> I see no compelling reason for legislation in this matter. If stock
    >> markets that contractually restrict insider trading are better than
    >> those that don't, then they'll succeed in the marketplace. If they
    >> don't, then the legislation is counterproductive.
    >
    > Is there something specific about these types of crimes that you think
    > should keep the government out? Or is this just a global statement
    > that you want the government out of all crime prevention?

    ### 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 feel that in deciding if insider trading is to be restricted by
    voluntary contracts or monopolistic power players, we should use
    considerations of economic efficiency rather than allowing emotionally
    loaded concepts to interfere with our judgment.

    Rafal



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