Mackey Should Resign, Regardless of What the Law Says

There seems to be a meme doing the rounds with respect to John Mackey's message board antics: that what we should really be looking at here, to borrow a concept from the regulatory world, is rules rather than principles.

Roger Ehrenberg:

Reg FD was imposed in October 2000, a full six years before Mr. Mackey ended his message board posting career. Did it ever occur to him that maybe, just maybe, his postings using a pseudonym were in violation of a pretty important securities law?

John Harmon, in a comment on a blog here:

That Mackey's behavior was irresponsible is without a doubt. Whether it was also criminal is the issue. Mackey deliberately used his anonymous attacks to hurt his competitor, and likely to drive down the value of a stock Whole Foods would try to acquire.

The WSJ, in a story today about blogging executives:

While many bloggers criticized his actions, legal experts yesterday said it was unclear whether he had violated securities law by touting Whole Foods' stock and denigrating that of Wild Oats Markets Inc., a rival that Whole Foods now wants to buy.

I'm perfectly happy to accept that if Mackey broke the law, then he should face criminal prosecution. But that's a matter for the SEC and US attorneys to decide. As far as Whole Foods' board shareholders are concerned, it's Mackey's behavior which should be the crucial thing here, not the letter of the law. If Boeing CEO Harry Stonecipher can be fired after having a legal, consensual affair with a co-worker, then it beggars belief that Mackey, whose behavior was much more damaging to his company, should retain his corner office. Yes, I understand that he's the founder of the company and that he therefore is harder to fire. But really, he should have resigned already, making the whole issue moot.

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