The Trial of Martha Stewart



The Trial of Martha Stewart

Q1. Did Martha Stewart Commit the Crime of Insider Trading when She Sold her ImClone Shares on December 27, 2001?

In my opinion, I would argue that Martha Stewart indeed committed a crime of insider trading. The case study provided sufficient information to reach to this claim. The case study illustrated factual details that implicate Marta Stewart in the stated crime. Firstly, Martha received a call from Bacanovic's assistant who informed her about intricate knowledge regarding ImClone. This information was not publically available. The information pointed her towards key knowledge about the rejection of FDA approval for one of ImClone's newly tested drug. FDA aimed to publically provision this news to the public in a few days. This news automatically iterates that the share price of ImClone would decline substantially. Martha did not receive the information about why the share price is going to decline though she was told that it was going to decline for sure! Furthermore, Martha was also provided reasoning about the owners, Waksal and his family unloading the shares from their respective stock portfolios. Martha should have not been aware of what constitutes insider trading, as she is a CEO of a public listed company and managing the business. Her business acumen was professional enough to recognize what the knowledge and actions upon it would implicate for her. Her broker at Merrill Lynch also made sure she was implicated, as he provided her information that necessitated insider trading actions. It was disappointing to get to know how professionals in the financial industry and renowned business woman would go to such depths to hide their actions.

Q2. Did the U.S. Attorneys and the Securities and Exchange Commission use Good Judgment in Indicting Martha Stewart? Do You Believe That Her Indictment was ...