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Dead horse or Dark horse? Looking once again at “insider trader” Martha Stewart

August 21, 2013

There is more security in retaining vital information than in any loss thereof due to spying. This consideration may be rendered moot upon pointing out that leaks of certain information prior to patent, trademark, or acquisition otherwise can be costly; but in terms of having securities of any sort; right to secure those trademark patents or other marks aside; a bird in the hand were yet worth two in the bush.

For this reason, the unsubverted right to possess what information one in fact may own were superlative over the unresolved right to cash in on the very worth of intellectual property. To emphasize the point, it was not what Martha Stewart owned in fact that got her into trouble with the law but instead acting on information that did not belong to her, as determined by federal regulations against insider trading. The distinction certainly calls into question, so what if the information did not belong to her if it was nonetheless allowed to leak into her hands? The implicit idea of personal responsibility necessarily accompanies being allowed by law and every benefit of optional corporate status to handle management even of knowledge according to any concomitant restriction.

The law was unfair, however, because the law should had outright prohibited trading stock of her own company without approval by the regulatory authority. The actual crime that she went to prison for was precisely denial of her inherent right to representation in such matters. The reason for her imprisonment dates back to the origins of Labor Day and in fact recapitulates her as laborer for the sort of cause that identifies ownership of the company to belong not only with the State of its incorporation but also to the stockholders, of whom she had the actual right to vote thereby. It was in fact not the State but rather the federal authority that refused to recognize her right to vote and that denied her any necessary, proper right to be represented as a voter in its refusal to regulate the necessitating fact of approving any request for trade. As such, she was abused very much in the traditional fashion where an owner of a business delivered arbitrary penalty and in effect refused to recognize her right to have any legitimate say in whether she may trade or not. The very law itself that denied her the right to trade and thereby vote was unrepresented and therefore rested fully on arbitrary authority. Who’s to say whether any particular trade would had been legitimate? The ultimate question there is not whether any particular trade were improper, but rather whether any particular trade were patently illegal. It’s not impossible to produce public information that takes the stance one way or another that the situation was a profitable one. Because information alone is not legitimate and does not establish anything, the thought most likely on Ms. Stewart’s mind was, “You’ve got to be kidding.” The law does not have the sort of authority to set up guilt as predicated by mere information. There must be evidence beyond information itself that makes the arbitrary offense incriminating. And that information would be the fact that the federal authority evidently prohibits there being any journalistic effort to critique each trade before it transpires. (Yeah, well, a free press can be of aid …)

If she had been an employee prior to the institution of Labor Day in the 1860s, then she would had either been fired or replaced by someone else. But instead of her prosecutors (complaintants) resorting to killing, as often occurred by anyone striking on the job or trying to replace a striker, the federal government gave her a prison sentence instead. The idea of “labor shortage” was the very equivalent of “insider trading,” inasmuch as she was convicted of attempting to use her knowledge to exploit and to gain against their employer, just as strikers attempted to use their knowledge to exploit their employer and gain. Information was held at a premium there, strikers had inside information, and anyone attempting to replace them was reportedly contested, fought, or duelled.

Had she freedom to contest the issue, only then could there be justice. Yet there was no process to apply for approval of any particular trade; she was either 100% free to use her discretion regardless of what sort of information; or she was 100% qualified to go to prison for any given trade once any arbitrary discretion decided to swing its way into her path.

Had there been a requirement that any trade of stock must be approved according to regulatory authority, then the contest would presumably had looked something like a contest to show whether any evidence could be produced — not about insider trading, but specifically about whether the trade in question would had violated the base crime that “insider trading” law was bent on preventing. We perceive that it were as if there were some point where a stock trade is no longer considered a gamble but considered instead to be something of a “direct tax” against potential stock buyers, or an “unfair trade” because the quarterly reports have become obsoletised against specific information not yet reported to existing stockholders and thereby to the public in general.

None of this has to happen if but the law read to the contrary that all trades by existing insiders — the board of directors and shareholders who own a threshold percentage of corporate stock — have each trade approved.

Indeed, there may be a better option, that such trades by members of the board of directors or above-threshold-level stockowners cannot be to other stockholders but instead must be drawn off the existing assets of the corporation as such exist following the following Treasury Department’s audit of the corporations’s estate. That way, they draw from the pool that they had supported to begin with rather that from the pool of gamblers who buy stock either to be supportive of a company or to gamble for profit.


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