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Comment by kristianc | Hacker News Reader

I wouldn't rule that out. Martha Stewart survived a stint in prison.

There is no comparison between the two. Martha Stewart was running a real business and made the mistake of talking to police without a lawyer -- that's very different from running a giant sham operation that defrauded many.

The mistake she made was not that she talked to police without a lawyer, but that she lied to investigators. Yes, I'm sure the lawyer would not have let her make up those lies, but it's not like she just behaved well and got railroaded some how. And I never understood why she lied in the first place. If your paid broker gives you a tip that a CEO is dumping his shares, are you not allowed to act on it?

Some interrogators are really good at phrasing and intoning a question making it seem like they're inquiring about something very wrong, worth trying to cover up, e.g., "you didn't have any information about XYZ selling his shares, did you?" It shouldn't work if the target is thinking straight, but the whole point is to trigger a knee-jerk emotional reaction.

Martha Stewart wholesale lied by saying that she and her broker had a pre-set price point of $60 for when to dump ImClone. That part is completely fabricated by Stewart. It's impossible to mess up 'My stock broker told me CEO was dumping his shares' with 'We agreed to sell at $60'

Martha Stewart actually created products, and was good at it

Yeah but insider trading is different than fraud. The line is blurry, but I'm sure everyone at that level has some level of inside knowledge they have traded on at one time or another.

Holmes on the other hand was directly defrauding investors, why would you want her on an executive team/board trying to get investments?

Because she's a proven executor on defrauding investors?

The problem with insider trading is that it creates perverse incentives. It, in itself, does not necessarily defraud.

If I work for Apple, and I sneak a glance at their balance sheet, and short its stock, I did not rob APPL shareholders. It's still illegal, and insider trading (Because otherwise, I'd have an incentive to actively sink the company, while benefiting from a short.)

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