Martha Stewart Insider Trading: Case Study Essay

The fact that the insider trading charges were thrown out, but the conspiracy charges stuck is curious. It appears, yet again, the judicial process and mainstream social construct of acceptable behavior collided with what Martha, her broker, and fellow investor touted as ‘nothing wrong’. Knowing more of John Savarrese’s role as Martha’s pretrial counsel, gives two more important points about Martha’s case of white collar crime. The first is questionable ethics and the other is arrogance. Mr. Savarrese has been criticized by legal analysts for not providing ethical legal advice to Martha or making the right professional choices himself. The belief is that Savarrese knew or at least suspected, Martha and Bacanovic planned to perjure themselves. As Martha’s legal counselor it was ethically negligent of Savarrese not to advise Martha of the legal repercussions of lying to the SEC. If Martha insisted on presenting her fraudulent story, Savarrese should have immediately withdrawn as her counsel (Hoffman, 2007). More importantly than if Savarrese knew or not, in her arrogance, Martha never thought this issue of a mere $45, 637 would develop into charges nor a prison sentence! She was simply above the laws and saw no reason to tell the

Overview of the Case: The Securities and Exchange Commission claims Mark D. Begelman misused proprietary information regarding the merger of Bluegreen Corporation with BFC Financial Corporation. Mr. Begelman allegedly learned of the acquisition through a network of professional connections known as the World Presidents’ Organization (Maglich). Members of this organization freely share non-public business information with other members in confidence; however, Mr. Begelman allegedly did not abide by the organization’s mandate of secrecy and leveraged private information into a lucrative security transaction. As stated in the summary of the case by the SEC, “Mark D. Begelman, a member of the World Presidents’ Organization (“WPO”), abused

While Kathy had been able to establish herself and move progressively forward there were still those openly discriminatory toward homosexuals. She was concerned that people would see her personal involvement with No on Knight as a corporate endorsement. (Badaracco, 2002) An endorsement for or against such a politically charged issue could cost E*Trade business- and the nation’s eye was watching in what direction California would decide.

She took an opportunity when she received word that the company, ImClone was about to crash to remove 4,000 shares where she would avoid losing about 46k dollars. Investigation into the case and begun and developments in the case had started surfacing on the truths in the case. On December 27th, Martha Stewart told investigators that she was traveling on a trip when she called to check her messages and her broker had stated that the company had fallen under $60 per share so he sold them. According to the literature, Martha Stewart claims that she had set up a “stop-loss” order, which states if the shares fell below $60/share that they would be sold. Unfortunely, this was not the case when the broker’s assistant came forward and told Merrill Lynch that his boss had told him to lie about the “stop-loss” order. He started cooperating with federal investigators and later was fined and fired from the company along with his boss for the involvement they had in the scandal. On the other hand, after everything started falling apart, Martha Stewart later resigned from her board at the New York Stock Exchange. Later in August, investigators begin building their case against Martha Stewart in her involvement with inside trading and lying about the “stop-loss” order. Investigators reached out to Stewart’s lawyers but later made a statement that Martha Stewart would be pleading the Fifth Amendment and keeping quit about anything to do with the case. As a result, the SEC filed charges against Martha Stewart, and she was found guilty on four counts of obstructing justice and lying to federal investigators. On June 17, 2004, Martha Stewart was sentenced to five months in prison and two years of supervised release along with a healthy fine attached. Till this day, Martha Stewart pleads her innocence and states that she did not do anything wrong. She is currently making a comeback with her company and

She’s well known, she’s photogenic, she created a billion dollar business in the security of her home basement, she’s Martha Stewart. That last bit might sound a little far fetched but it’s true. In fact, Martha Stewart has done more than just that, proving that she is a highly capable and successful entrepreneur. As founder, chairman, and former CEO of Martha Stewart Omnimedia, the author of many books and magazines on cooking, entertaining, and decoration, and the host of her own television programs, she had to begin somewhere.

On December 29, 2001, just two days after Celebrity Martha Stewart sold her stock in ImClone, the companies stock dropped sixteen percent when the Food and Drug Administration told it had rejected the main drug Erbitux, for cancer treatment. (According to an article written by Julia Leite of the Columbia Journalism School) Martha, by selling right before the FDA’s announcement, she avoided a loss of $45,673, a tiny fraction of her net worth, which the famous Forbes magazine estimated at $700 million just six months earlier. This decision that Stewart made would end up being one of the biggest she would make during her whole career, that would also send her to federal prison. She was not the only person that had invested in the company that avoided major losses just before the decision of the FDA.

Martha Stewart and the Lehman Brothers are both well recognized, but both tend to get involved in situations that range from the unethical to the illegal. Martha Stewart is one of the more popular favorites when it comes of decorating; her reputation as an authority on cooking and entertaining makes her famous and successful. Martha Stewart created Stewart Living magazine in 1990, in partnership with AOL Time Warner’s publishing division. Thus, by 1998, she bought some stakes in the magazine, which at that time had annual earnings of $180 million. In that same year Omni, media sold its shares to the public. Martha Stewart was then indicted by a federal grand jury on charges of Securities Fraud, Perjury and Obstruction of Justice. Furthermore,

One of our most world-renowned business women and television personalities Martha Stewart decided to dip her feet into illegal insider trading. Martha served five months in a federal prison at Alderson in West Virginia and two additional years of supervised release after a portion in home confinement. Back in 2001, Martha Stewart sold all her shares from a biotech company she invested in called ImClone. Ironically, a few days after she sold her shares the company’s stock fell sixteen percent after they publicly announced that the FDA did not approve ImClone’s pharmaceutical product (Moffatt, 2017). With her selling her shares before the company went public and the subsequent drop in stock’s value, Martha avoided a $45,673 loss. In addition, she wasn’t the only one who benefitted from the quick sale. The CEO of ImClone, Sam Waskal, ordered to

Thesis Statement: On October 29th of 1929, the beginning of an economic fall from grace was upon the United States. This day is often known as Black Tuesday, and is commonly known as the day in which the stock market crashed. On this day investors traded approximately 16 million shares on the New York Stock Exchange in a single day after a wave of mass panic swept the crazed profiteers & consumers of wall street.

Jordan Belfort was a very dishonest man. He was the CEO of a very dishonest investment company. The company’s name is the “Stratton Oakmont” He and his partner Danny Porush made up stories and told the investors just so they would invest in that product. He made millions just by lying to get people to invest in that product. There company lived by a motto and that was "Don't hang up until the customer buys or dies." Jordan lied and when the Investors call to talk to the people in the company he lied and told them they work they said they were on wall street when their company was actually in Lake Success, Long Island. About an hour away for there.

1993 she started her new television show called “Martha Stewart Living” and this as well would become big

When attending Stephanie Dolan’s presentation “Siena to Wall Street: Lessons Learned along the Way” there were many connections between her experiences in the working world and what we are learning about in our class. The biggest connection between our class and the presentation was gender and religious discrimination. There were many different times that throughout Dolan’s career that she faced discrimination. One example that she provided was when she first graduated from Siena College she was working for Arthur Anderson in New York City. She got chosen to audit a wine company, which was a great accomplishment for her so she was putting in a lot of hours. One day she was working on a Jewish holiday when most of the other workers were out

Insider dealing has been affecting the efficiency of stock markets in different places like United States, United Kingdom and Australia. Hong Kong is of no exception. Basically, insider dealing refers to the trading of a corporation’s stock or other securities by individual with potential access to non-public information of the company. The law of insider dealing in Hong Kong provides a much more detailed definition and is very comprehensive. However, when it comes to enforcement, it seems not very effective. In the following, the law of insider dealing in Hong Kong will be summarized. After analyzing the comprehensiveness of the law, the underlying reasons of the difficulty in enforcement will be identified. Some

It can fairly be said that an Investor considering an investment decision (whether to purchase, sell or hold stock) in publicly traded company acts on the basis of extensive information which is available by corporation to him until the last moment of his investing decision and try to determine the fair price of corporate stock. In the light of continuous creation of a particular impression of corporate affairs by the corporation, new information by corporate can vanish the importance of previous available information to investor. In the scenario only one kind of investors can get advantage over others, who is either very close to corporate operation (corporate officers) or can access nonpublic price-sensitive information to corporation

Insider trading refers to the trading of a listed company’s stock or other financial securities by individuals who has access to non-public material information about the company. This action often occurs within employees/ex-employees of the listen company. Information is considered to be non-public material information if making it public would affect the price of securities, and using such information in decisions to buy or sell financial securities would be unfair to non-insiders (Bainbridge, 2013). Insider trading is treated as a mischief in more than 90 countries, and defendants are imposed with penalties (Beny, 2012). Specific insider conduct regulations in New Zealand were first enacted in 1988, followed by amendments in 2002, 2006 and 2008. The insider conduct regimes between 1988 and 2008 are often considered as a failure due to weak enforcements. Thus in 2008, the regulator introduced a new regime, which was a close model to the Australian insider conduct legislation. Both regimes are expansive, meaning it could be applied to any person in possession of insider information. However, while the Australian laws were aggressively enforced (more than 26 prosecutions were brought since then), no prosecutions have been launched under the new legislation in New Zealand. In addition, New Zealand also had no convictions secured prior to 2008, illustrating a clear enforcement deficit in the New Zealand