Don't we all want to be like Martha Stewart?
Oh sure, that little unpleasantness with the stock tip and the jail time was not good, but she kind of landed on her feet. It doesn't seem to have put much of a dent in her career.
So I was astonished to find this in a press release issued the other day by the U. S. Department of Justice:
"Chiesi said, 'I'm dead if this leaks. I really am ... and my career is over. I'll be like Martha [expletive] Stewart."
Maybe he thought he'd have to start cooking dinners and redecorating houses. I guess that would be awful.
That wasn't the only surprising thing in the press release announcing charges against a half dozen hedge fund managers over an alleged $20 million in insider trading profits. There was also this:
"This case represents the first time that court-authorized wiretaps have been used to target significant insider trading on Wall Street."
Think about this.
Thousands - maybe even millions - of drug dealers, mobsters, Nixon enemies, and people with foreign-sounding names have been wiretapped but no one has thought to listen in on stock traders.
Aren't inside traders the ones most likely to actually commit their crimes by talking to someone on the phone? No prosecutor has thought of this before?
How could this have been overlooked until now?
My first reaction was that this couldn't possibly be true. What was really happening was that they were wiretapping these guys - and then using the stock tips to make a fortune. Why prosecute when you can retire to a nice island somewhere?
But that couldn't be true. Wouldn't we notice all those Justice Department investigators leaving the country?
What this does explain is why we've had so many Enrons and Worldcoms and Madoffs over the years - the people who should be investigating them have only just now found out about telephones.
Just wait until they hear about the Internet.
Now consider this question: if you get information about, say, a planned murder while listening in on a phone call, do you do anything about it?
I'm hoping you said yes.
Now back to the Justice Department press release. It goes on at some length, but here's one passage:
"For example, in July 2008, during a telephone call that was intercepted by the FBI, Chiesi told Rajaratnam, after speaking to the Akamai executive, 'Akamai.... I'm trading it tomorrow.... They're gonna guide down....'
"On July 31, 2008, New Castle covered the short positions in Akamai stock and earned a profit of more than $2.4 million."
That's right. Investigators heard about the planned crime and just let it be committed. Who should the stock traders who lost $2.4 million sue?
I can understand this concept with strip clubs. You need to visit those places at least half a dozen times to make certain a crime is being committed. Look at just about any appellate opinion on lewd behavior and you'll find this is true.
But insider trading seems a lot more straightforward. A lot of money is about to be stolen quickly. Maybe someone ought to step in.
Unless there are some secret investigator bank accounts and those guys are smart enough not to leave the country just yet....
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