Martha Stewart's Insider Trading

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Martha Stewart's Insider Trading Martha Stewart, the countries top icon for homemaking has been in the eye of the public since June 2002, but not for her craftiness or culinary abilities. Stewart instead has the spotlight on her for crimes of insider trading. A tip from her former broker Peter E. Bacanovic, persuaded her into selling her IMClone stock after sharing information about a close friend of Stewart’s getting rid of his shares. Stewart’s companion, Sam Waksal, was also the chief executive of IMClone Systems Inc. IMClone Systems is a well-known company specializing in the research and development of therapies treatments of cancer. The stock selling was provoked due to a leak of information about The Food & Drug Administration rejecting IMCLONE’s drug outfit application their cancer drug Erbitux. Before the information reached the public about the FDA’s decision and share price plunged, Stewart sold her 3,928 shares of IMClone. Martha sold her shares at $58, and by the time the news hit, prices fell to $45, resulting in a savings of only 50,000 for the celebrity. But the whole situation of the Martha Stewart case is not a question of insider trading but a question of ethics and management in business: it’s an issue of ethics and the choices people have between right and wrong and the determining factors that cause us to make those choices. While researching this subject I have found many interesting topics. One topic I found very interesting was the fact that a highly qualified executive of Merrill lynch, one of the top brokerage firms in the world, was Martha Stewart’s financial advisor. Another interesting point is that Martha Stewart the mom of home cookery and cuisine, a profession based on honesty and founded on the basis of motherhood would lie about the tips she took to earn an extra buck while already being a multibillionaire. After more research I found that the most important point and the topic of the whole situation was the point that even the most perfect and idolized individuals can be manipulated by money or even the thought of more money in the case of Martha Stewart. Martha Stewart is now facing charges leading up to a possible 20 years in prison, and over 250,000 dollars in fines. Stewart faced many charges; among them were insider trading, conspiracy, making false statements, perjury, and obstruction of justice. Before... ... middle of paper ... ...ample of insider trading information because Charlie Sheen a family member of a person working in the airline industry distributed information about a publicly traded company before it was introduced to the public officially making it illegal. Therefore this is official insider trading. The next issue is the issue of a public icon being a criminal. Many mothers and others around the world held Martha Stewart in such a high light and followed by her example. This whole aura is ruined by this situation. This is terrible today because so many people today believe in what they see on today and take to heart everything what is said on television. Moreover Martha Stewart’s case is very monumental because it has taken societies beliefs and corrupted them by eliminating a public icon from the spotlight with criminal charges. Works Cited “Martha: Guilty On All Counts.” Business Week 5 March 2004: Glassman, James K. “Martha Stewart and Insider Trading.” Capitalism Magazine 15 February 2004: Westfall, Kirk Randall. Telephone Interview. 30 March 2004. Mulligan, Thomas S. and Hamilton, Walter. “Martha Stewart Convicted.” Los Angeles Times 6 March 2004, Home Edition: A1.

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