Crime and Punishment: Martha Stewart vs Richard Fuld
Tuesday/March/16 2010 Filed in: Philosophy / World View
Martha Stewart, Chairman and CEO, Martha Stewart Living Omnipedia
Crimes against the State: None
The U.S. Securities and Exchange Commission accused Ms. Stewart of avoiding a personal financial loss of $45,673.
On December 27, 2001, she sold 3,928 shares of her ImClone Systems after receiving nonpublic information from Merrill Lynch broker Peter Bacanovic. The day following her sale, the stock value fell 16%.
Ms. Stewart was indicted by the US government on nine-counts, including charges of securities fraud and obstruction of justice.
In March 2004, Ms. Stewart was found guilty of conspiracy, obstruction of an agency proceeding, and making false statements to federal investigators.
She was sentenced to serve a five month term in a federal correctional facility and a two year period of supervised release, including five months of electronic monitoring.
In the settlement of a related SEC civil case against her, she agreed to a five-year bar from serving as a director, CEO or CFO of any public company.
After her release from prison, the UK Border Agency refused to grant her a visa to enter the United Kingdom because of her criminal conviction for obstructing justice.
Richard Fuld, former Chairman and CEO, Lehman Brothers
Crimes against the State: How much time have you got?
Fuld was at the helm of the economic Titanic when Lehman's bankruptcy registered as the largest in U.S. history.
The Lehman collapse led to the Dow suffering its largest single day point loss.
A court-appointed examiner report indicates that Lehman executives regularly used cosmetic accounting gimmicks at the end of each quarter to disguse and otherwise obfuscate the shaky finances of the firm.
This practice was a type of repurchase agreement that temporarily removed securities from the company's balance sheet. However, these deals created "a materially misleading picture of the firm's financial condition in late 2007 and 2008."
Coming in at number 9, CNN named Fuld as one of the "Ten Most Wanted: Culprits of the 2008 Financial Collapse."
Apparently the only justice Fuld received was vigilante style. He was reportedly attacked and "knocked out cold" in the gym by a disgruntled Lehman employee.