Archive for Wednesday, October 23, 2002

Why is Stewart the target?

October 23, 2002


How did we get to this, that Martha Stewart is the face of corporate greed and insider trading when, in reality, a whole bunch of others chief executives of corporations from GE to Enron to Kmart to ImClone have been the biggest violators of the trust?

Just last week, Sam Waksal, the founder of ImClone, pleaded guilty to securities fraud and to being a liar. He and his company got Stewart into this trouble during Christmas week last year. His objective then was to save his hide and help relatives and a few friends dump stock before the bad news hit that ImClone's cancer drug would not get the OK.

All contrite was he last week.

"I have made terrible mistakes," Waksal said. "I deeply regret what has happened."

Do the math. Waksal, his father and his daughter sold, or sought to sell, $15 million in stock Dec. 27. Earlier that month, Waksal's brother, who was in touch with the Food and Drug Administration and knew the bad news a'comin', sold $50 million worth of shares. Stewart's haul from trading Dec. 27 was less than $230,000. She sold slightly less than 4,000 shares Dec. 27; the Waksals were trading well more than 60 times that amount Dec. 27 and 28. So why is her transaction so much worse than what Waksal admits to having done?

From the perspective of the regular Joe or Jane investor, all this stinks. As Billie Holiday sang: "Them that's got shall get; them that's not shall lose." But Stewart, not Waksal or any of the other guys, is the butt of jokes by Letterman, Leno, O'Brien and various satirists of the "Saturday Night Live" ilk.

Why is there such glee at the possible downfall of a powerful businesswoman, one practically derided now as "the domestic diva"? Why is this "a good thing"?

Remember the Enron execs and the millions they made while their employees' 401(k) plans dwindled to dust? Stewart didn't do that. James Adamson, Kmart's CEO, is still raking in millions while Kmart where Stewart's products brought in more than $1 billion last year is laying off tens of thousands of workers and struggling to carry its debts. No one laughs about him.

A lot of folks, starting with women, are mad at Stewart for showing them up as imperfect. They can't make all those decorations or keep that standing roast standing. And all that comes out as mocking Stewart. People in my circle have said she held herself out as Miss Perfection, and they're glad to see she can screw up, too. So be it.

But the real objects of their ire ought to be all those execs who have scammed their shareholders and us.

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