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Saturday, March 13, 2004 Martha shouldn't overshadow bigger fishBy AARON LONDON DAYTONA BEACH — Martha Stewart is taking her show on the road ... to the big house. But somehow, I don't feel more secure with my securities. Sure, the domestic diva crossed the line with the insider trading information she got from her pal Sam Waksal and even though her timely cashing out of her ImClone stock did not net a great deal of money, it was illegal. But the case against Martha Stewart seems to have generated more fodder for pundits and comedians than having any kind of real impact on investors. While Stewart awaits her sentencing fate, executives at Enron, Global Crossing, WorldCom and the other rogues' gallery of financial miscreants have fallen below the public radar. Stewart was high-profile less because of her transgressions than for her celebrity status. And the fact that she has a reputation as a demanding boss just made it easier to delight in her misfortune. But will jailing Martha Stewart reinvigorate investor confidence? Besides launching a host of jokes and one-liners about making a minimum security jail cell a bright, inviting space, the Stewart case will have little real impact on the lives and fortunes of individual investors. Of course, those individual investors who weathered Kmart's bankruptcy reorganization are likely to see the fortunes of that company stumble. And investors in Martha Stewart Omnimedia have already seen that stock's value tumble as well. With the stock market riding a wave of growth and the nation's economy seemingly on the road to robust recovery, the accounting scandals and financial misdeeds of the Enronos and World Coms and the rest are less immediate. In an "all's well that ends well" world, a profitable portfolio and the prospects for robust economic growth are more important than cleaning up Wall Street and the boardrooms of corporate America. Some have argued that the case against Martha Stewart is best seen as an object lesson for others considering playing fast and loose with the nation's securities laws. But will the prospect that Martha Stewart will spend some hard time doing not-so-hard time strike fear in the hearts of others waiting for their trials for financial malfeasance? Probably not. Will it lead to some kind of financial reimbursement for the thousands upon thousands of investors who saw their portfolios go up in a puff of smoke? Definitely not. For some, the lesson in the Stewart case is that even celebrities have to pay the price for their mistakes. But for others, the only real lesson is when it comes to financial misdeeds, the big fish usually are the ones that get away. |
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