Martha Stewart And Raj Rajaratnam

When assessing the economic damage to due to Paul Thayer and those that he tipped off about the acquisition of Campbell Taggart, it should be noted that some argue that this kind of insider trading circulates information and forces the stock to its “true value.” If we assume this argument to be flawed, then part of Anheuser-Busch stock dip after the announcement was due to the insider trading and the fact Anheuser-Busch probably paid more to acquire its target. Thayer and his friends trade the Campbell stock for nearly a month before any public announcement of the merger. On July 27 nearly half the volume was insider volume controlled by those individuals who were in violation of rule 14(e)-3 (See exhibit 2). The increased volume might

Even though the information about PIPEs was material inside information, Mark Cuban was not accused as traditional insider information. To qualify as traditional insider trading, there must involve true insiders buying or selling the company’s stock based on material inside information.

Corporate insiders must act in good faith and in a manner that they reasonably believe will be in the best interest of the corporation including safeguarding corporate information. Also they have a duty to care for the corporation as they would their own. So in this case, the insider who has to be loyal to his company and may not be able to go to the authorities with information that can damage the company’s reputation also has to care for this same company and in caring means if there is anything unethical going on should be able to whistle blow it, however this creates conflict for the insider. It’s like they are stuck in between, however way you look at, whether they report it or not, they are damned as the book stated because once authorities know, the company might suffer public humiliation and if they don’t report it, the company eventually will collapse due to everything blowing up just like Enron.

Between the years 2000 and 2002 there were over a dozen corporate scandals involving unethical corporate governance practices. The allegations ranged from faulty revenue reporting and falsifying financial records, to the shredding and destruction of financial documents (Patsuris, 2002). Most notably, are the cases involving Enron and Arthur Andersen. The allegations of the Enron scandal went public in October 2001. They included, hiding debt and boosting profits to the tune of more than one billion dollars. They were also accused of bribing foreign governments to win contacts and manipulating both the California and Texas power markets (Patsuris, 2002). Following these allegations, Arthur Andersen was investigated for, allegedly,

In 2001 public celebrity Martha Stewart sold stock in a large biotech company named ImClone. This act landed her in a large amount of trouble with the Federal Government and the SEC. She was held to trial and many things were told and discussed throughout the trial case. Through this research you will see several people’s sides and statements they made during the jury trial and throughout the whole case.

Insider trading – insider trading is the trading of a corporation’s stock or other securities by individuals with potential access to non-public information about the

When Ms. Stewart found out about the investigation, her first instinct was to lie and try to cover up the fact that her broker gave her before hand knowledge about the soon to be falling Imclone stocks. I believe this case and investigation was tried out in the media

This is called insider trading and is one of the acts that the SEC is responsible for stopping. One of the most famous cases occurred in late 2001 in which one of America’s most famous woman was arrested. This person was Martha Stewart someone who everyone in America has seen on T.V. countless times. Stewart who owned four thousand shares of ImClone stock was imprisoned for five months after being found guilty of insider trading by the SEC. The C.E.O of the company ImClone, Sam Waksal was found to be the main culprit in the case. Waksal discovered that his company would be taking a huge hit in the stock market. The C.E.O urged his broker to sell the stock because if he were too keep it would have lost hundreds of thousands of dollars. When asking his broker to dump the stock a natural instinct took over and the broker knew that something was going to happen to the company forcing its stock to drop. Waksal and Stewart however shared the same broker, when the news was conveyed to the broker Martha was urged to sell her stocks. After she did the SEC charged her with insider trading for selling her stock with illegal information. Even though Martha did not directly receive the information she still used critical information that was only available to a select few in her favor. This forced the SEC to carry out its purpose and maintain fair, orderly, and efficient

Insider trading has brought competition to the market place by giving shareholders, private investors, and other interested individuals the opportunity to bring in revenue. The average American household lives paycheck to paycheck. The stock market opens a new world for those individuals that are wanting to own electronic currency or a tangible good. This can also create another source of income for them as well “…the long-term investors who hold their stock will share in the price rise that good news will bring, and their holdings will be worth a greater amount in the market” (Henry B. Manne, Insider Trading and Stock Market (1966) p.457). Another benefit that insider trading bring, is it that creates new competition in the market for companies to strive more on making their product worth more. Therefore, their stock will be worth more as the company continues to rise above the

In 2002, her reputation of being a successful businesswoman took a plunge when rumors leaked regarding her involvement of insider trading of ImClone stocks. She took part in selling her ImClone stock after hearing news of the rejection of their new cancer drug. After being convicted, the affect of this scandal took a toll on both Martha and ImClone. After serving her sentence, Martha began to reconstruct her life in hopes to bounce back from the insider trading scandal. Today she has managed to become just as successful as before this incident.

Arnold McClellan and Annabel McClellan were charged by the Securities and Exchange Commission with leaking confidential merger and acquisition information to their family overseas. The SEC claimed it was a multi-million dollar insider trading scheme. Mr. McClelland had worked in advising his clients in mergers and acquisitions for over a decade. Because of his position as the head of one of Deloitte’s regional mergers and acquisitions team, Arnold McClellan had access to highly confidential information.

In addition to the thorough explanation about the fundamental concepts of insider dealings, the law also provides detailed statements about some common scenarios of insider dealings which are not regarded as market misconduct, interest in securities, penalties and general defenses.

S.182 states, “a director must not improperly use their position to gain an advantage for themselves or someone else” (slides). In the case of Adler, the courts found there was a breach of s.182 as he improperly used his position as director to buy shares and gain advantage for himself. Similar to this case, Patricia has improperly used her position in advising her sister to buy shares in FPPL to gain profit. Thus, Patricia has breached s.182 of the corporations act by improper use of her position to gain advantage for her sister.

Corporate directors and officers often obtain advance inside information because of their positions. Sometimes the information can affect the future market value of the corporate stock. It is obvious that their positions can give them a trading advantage over the general public and shareholders. Often times the insider is the company manager; other times it is the company's lawyer, investment banker, or even the printer of the company's financial statement. Anyone who has knowledge before public dissemination of that information stands to benefit from good news or bad news.

There are many people who believe that insider-trading effects market efficiency in a negative manner. However, there are plenty of studies that have been conducted that show otherwise. These studies were done in