Martha
Stewart       Commentary

What is Martha stuffing in her stocking this holiday season ?

Corporate Conflicts of Interest at Martha Stewart: Martha Stewart is currently serving a 5 month prison term at Alderson Federal Prison in West Virginia. Ironically, it was not for insider trading but for perjuring herself while providing testimony at her court hearing in connection with allegations of trading on insider information from Peter Bocadonovich, her broker at the time from Merrill Lynch, on her personal brokerage account.

It is reported that after incurring nearly $2 million in legal fees for her defense, Martha Stewart has requested that Martha Stewart Living Omnimedia (MSO) reimburse her for those expenses. Since the initial allegations arose from her personal trading account, I believe it would be a direct conflict of interest and major disservice to all shareholders in MSO if Ms. Stewart were to be reimbursed for her personal expenses regardless if she is a majority shareholder and chairperson of MSO.


© 2004 Nelson Chin.
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