The chosen crime for analysis is non-violent – specifically, insider trading. The focus will be on the Martha Stewart insider trading case, while also discussing other trading cases such as the recent one involving Galleon Group, an investment firm in New York charged with insider trading. This paper aims to examine how the media, particularly newspapers, depict crimes involving well-known celebrities in comparison to ordinary individuals who commit the same crime. The Martha Stewart insider trading case garnered significant media attention and had a profound impact on the business world.
The Martha Stewart case garnered significant attention from diverse audiences through multiple media channels. Yet, are the accusations against her truly monumental? Stewart stood accused of engaging in securities fraud by partaking in illicit insider trading, an act forbidden in the United States. She employed undisclosed confidential information to prevent a loss of $45,673 and acquired said information from ImClone Systems’ CEO, Samuel Waksal. Consequently, she promptly sold her shares in the company.
This is significant because, despite Martha Stewart being found guilty, the sum of money involved was only $45,673, which is a trivial amount in the context of insider trading cases. Following her conviction, Stewart faced extensive media scrutiny, with one Newsweek cover headline titled “Martha’s Mess” that captured public interest. Such attention-grabbing headlines instantly draw readers’ attention to the article. Celebrities tend to receive a substantial amount of attention for their committed crimes, regardless of the scale and impact of the wrongdoing.
The media has the capacity to be brutal when they desire. Nevertheless, they often prioritize matters that generate the most attention and fascination rather than ones of utmost significance. In 2008, as revealed in a report by the Securities and Exchange Commission, there were 146 potential instances of insider trading, while in 2007 there were 141 cases. However, despite this substantial number of occurrences, insider trading cases seldom garner extensive media coverage. Martha Stewart’s situation serves as an ideal illustration of this occurrence, as she faced scrutiny for a mere sum of $45,673.
Last year, a financial services executive from Philadelphia and a former partner at Ernst & Young in New York allegedly participated in insider trading, resulting in approximately $600,000 in illegal profits. Despite the substantial amount of money involved, which is almost 13 times greater than the amount in Martha Stewart’s case, this incident received less attention. According to labeling theory, Martha Stewart was previously known as “Miss Perfect” prior to her scandal being exposed.
Despite her successful career in writing books, publishing magazines, and selling home and garden products, she became one of the few women CEOs and American billionaires. Consequently, she gained widespread media attention, with newspaper headlines and magazine covers featuring her prominently. However, the media unjustly depicted her as a corporate villain due to one incident, disregarding all her life’s accomplishments. Their intention seemed to be to portray Stewart as being entangled in significant legal issues.
Martha Stewart’s crime, although non-violent, garnered significant media attention nationwide for several weeks. Prior to the scandal, insider trading and its definition were unfamiliar to many. It is important to mention that Martha Stewart was not accused of insider trading, but rather indicted for fraud by the government. Nonetheless, the public perceived her as being charged with insider trading.
The media exerts a strong influence on molding information to make it more engaging for the public, and also has the ability to decide which news is more significant. The Wall Street Journal’s coverage of Martha Stewart’s verdict exemplifies this, as they emphasized the importance of a case related to insider trading on their front page. Additionally, celebrities are particularly prone to legal consequences or allegations due to their large number of followers.
The media often fixates on celebrities and well-known individuals, even if they engage in minor criminal activities that an ordinary person might also do. However, the consequences of these crimes become more substantial and noteworthy when committed by a famous individual or public figure. A recent example is a case where six individuals have been charged with participating in the largest insider-trading scheme in decades, resulting in approximately $20 million in illicit profits.
Although Martha Stewart’s involvement in a case is small compared to the Galleon Group’s insider-trading ring, it is puzzling that the latter case received less attention or possibly more. This assignment did not change my understanding of crime but instead strengthened it. The media did not highlight insider trading as a serious crime; this aspect seemed to be ignored. When a prominent figure is implicated, the public’s perception and understanding of crime can easily be influenced.
Crimes carried out by famous individuals tend to captivate more attention than those committed by average citizens. Even if the wrongdoing is minor, the involvement of a celebrity amplifies its significance and makes it seem extremely serious. This intensifies the gravity of the offense, with the media playing a crucial part in shaping public interest. When a story remains in the news for several weeks, audiences understand that it is not just an isolated event.
While the media’s constant coverage of a story can create a perception of its significance, I believe that their approach to portraying crime is not effective. In my view, the media primarily aims to generate profit by reporting news that will appeal to a broad audience, rather than emphasizing news based on its importance. Due to their reliance on advertising revenue, there is an incentive for them to report anything that can attract more viewers. Consequently, it is unclear whether journalism prioritizes significant news stories or merely follows specific ones for higher ratings.
If the former were true, the attention received by the Martha Stewart case would not have been as significant. It is surprising that the general audience still shows preference for this type of news coverage rather than focusing on more crucial issues that surround us. Someone like Martha Stewart, who is widely known, will always attract more attention compared to a murder case in an obscure neighborhood that nobody is familiar with. While these two types of crimes cannot be compared, a murder case would appear more significant to me than an illegal trading scheme.
The United States Securities and Exchange Commission (SEC) charged Martha Stewart and broker Peter Bacanovic with illegal insider trading in Washington, D.C. on June 4, 2003. On page 12, you can find the SEC Office’s 2008 Performance and Accountability Report. The Philadelphia Business Journal reported a case of insider trading involving a Malvern woman and her father on May 29, 2008. Alan Reynolds wrote about this topic for National Post’s Financial Post & FP Investing on March 9, 2004. On October 16, 2009, The Wall Street Journal reported that six individuals were charged in a vast insider-trading ring.
