Martha, Martha, Quite Contrary...

March 11th, 2004

Let us not pity poor Martha. She was rich as Midas’ wife, she was famous as Cleopatra and was a mean as the bad witch in the Wizard of Oz. Despite her wealth and her fame, she traded on inside information and lied when asked whether she did. And now, poor lady, she stands convicted of a felon, will probably serve some time in jail, and her economic house will be in ruins although I suspect she will still have quite a few millions to accompany her into retirement.

The myth has arisen that poor Martha was prosecuted precisely because she was rich and famous and had a reputation, not even second to Leona Hemsley, as the Queen of Mean. Haven’t the feds jumped on Martha while letting more important and even more blatant offenders retire unprosecuted to Caribbean islands?

I think that myth is just a myth. It is certainly true that it took the feds a while to indicted many of the Enron guys, Tyco guys, World Com guys and Adelphia guys, but they are making progress. Having just read a book about the Enron mess, I can testify that sorting who did what and to whom was no easy matter, although culpability there certainly was. And the fact that one criminal is prosecuted and not another cannot be an excuse for the first defendant. Obviously, the government needs to have sufficient evidence on hand and also has to believe it can convince a jury to find the defendant guilty. Moreover, even – although it is hard to believe – the government does not have the resources necessary to prosecute every crime that comes to its attention.

Even if Martha was prosecuted because of who she was, if she did the crime, she should do the time. Moreover, there is a certain benefit in prosecuting celebrities. The lesson is that no one, no matter how rich and famous, is above the law. That often does not work out in practice, but when it does, we should applaud, not boo. Maybe that lesson can be learned by other prominent miscreants along with us ordinary folk.

It may seem stupid for Martha, who had such a vast fortune and such a thriving business, to have worried over saving $45,000. But as my grandmother used to say, the rich don’t get rich by spending it. And merely being rich doesn’t really mean that you’re smart.

Weep no more for Martha. Rather weep for me and millions of investors like me who lost their behinds in the market through outright fraud and through not being able to learn the inside information that brokers handed out to their friends.

And as to Martha’s broker: I hope he rots in hell.