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Not Such A Good Thing

Mar
5
2004

Well, Martha Stewart’s guilty conviction on all of the charges against her is something of a sea change in the atmosphere that’s been surrounding white collar crime.
Actually, the change started earlier this week when


U.S. Attorney General John Ashcroft himself announced the indictment of MCI/Worldcomm CEO Bernie Ebbers. Ashscroft didn’t just happen to be in Foley Square for the Ebbers announcement. It’s an election year. The economy is taking too long to recover. And the huge fortunes made during the bubble weren’t evenly distributed. There’s a lot of discontent out there and it’s building.
This is not a good thing for Silicon Valley banker Frank Quattrone. Quattrone is schedule to go on trial next month in the same courthouse – same room – where they tried Martha. We had a pretty quiet trial last time; I have a feeling it’ll fill up a lot faster this time around.
It was an open secret when we were covering the Quattrone trial that Martha’s legal team was keeping an eye on the proceedings. The charges are similar: obstruction of justice, a charge that’s very difficult to prove because the jury has to consider intentions, leads the pack. In his obstruction of justice charge, Quattrone testified on his own behalf. He got lousy reviews – the jurors found him evasive – but, in the end he was acquitted. Martha didn’t testify; she’s going down hard.
Quttrone’s Hobson’s choice: does he testify again on his own behalf, running the risk that prosecutors having six months to review the record, won’t find more ways to challenge him? Or does he stay silent and let the record speak for him?
FOOTNOTE: Hey, where do white collar girl criminals go? Prison is segregated and Danbury, Conn., former home of guys like Ivan Boesky, is for men. Bedford Womens Prison, former home of Jean Harris, is for violent criminals and women but it’s a state pen. That Martha, breaking yet another glass ceiling.
UPDATE: I’m a dummy. Martha’s going to Danbury, Conn. That’s where Leona Helmsley did her time.
FOOTENOTE TWO: If you’ve been reading former Merrill Lynch analyst Henry Blodget’s turgid coverage of the Stewart trial, you’ll notice that he was saying that Martha and her broker would be acquitted. Blodget has had his own run-ins with regulators so he was probably naturally sympathetic. So, in addition to reversing the “everybody does it” attitude toward white collar crime, it would be nice to see that insider reporting on insiders is also finally put to death with the Martha trial.

Share  Posted by Chris Nolan at 12:28 PM | Permalink

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