The Trial of Martha Stewart
The Central Issue:
Did Martha Stewart commit the crime of insider trading when she sold the ImClone
Recommended Course of Action:
Martha Stewart did commit the crime of insider trading when she sold her shares for ImClone. She should’nt have sold her shares when she was told that the rate of ImClone’s shares is going to drop because it was an inside news that after FDA’s disapproval of the drug ImClone’s shares will drop significantly.
Basics of Recommendations:
1. Martha Stewart was well aware of the fact that she’s doing insider trading, she tried to cover up her crime, she had meetings with Bacanovic and Faneuille to talk about how to stick with their first statement, This added to the severeness of this crime and shows that they were all in this together and Martha knew that she was doing something illegal and felt the need to cover up the facts.
Case Study 2
2. Martha Stewart tried changing the text of Bacanovic’s message but then she didn’t do it, This shows that Martha Stewart knew that she’s into something illegal and had a clear idea of what she’s doing is not right. She should’ve listened to her instincts at that time and should’ve confessed right away
1. One of the alternatives is that Martha Stewart could have bribed both Bacanovic and Faneuil and told them not to leak the information about the crime. This alternative is rejected because it is not ethical.
2. Another alternative is that Martha Stewart could’ve put all the blame on her broker and should’ve stick to the point that she had no idea what was going on. This is rejected because brokers don’t have authority to make such big decisions and there was proof in form of Bacanovic’s message which he left for Martha on
December 27, 2001 and told her that there’s something going on with ImClone and she needs to know this.
1. Insider Trading
4. Corporate Scandel
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