Essay on Martha Stewart: Organization Ethics of Insider Trading

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

Before one can make an informed decision as to whether Martha Stewart's handled the incident responsibly or whether or not her actions were moral or immoral, one must first understand the basics of ethics and understand whose rights are involved and how they were affected. Then one must also examine who will be helped and who will be hurt by her actions and then make a decision based on the information and personal values as they relate to the issue. Martha Stewart was charged in 2001 with making false statements, conspiracy, and obstruction of justice during her sale of ImClone the day before the FDA announced its refusal to review a new cancer drug. This sale was scrutinized by authorities

Since 2002 Martha Stewart was investigated by the SEC and the FBI for Inside Trading but it is interesting that she wasn’t found guilty or accused on any of those charges; she was charge for conspiracy, obstruction of justice and false statement. It was her un-ethical behavior what drove her into innumerable allegations and public embarrassments. There are at least four issues in this case where ethics play a very interesting and critical role; Freedom of speech, Conspiracy, Right of property and Inside trading.

Fraud, lying, conspiracy...not terms that any individual generally wants associated with their history, nonetheless with their reputation and personality, especially if that individual happens to be Martha Stewart. Martha Stewart: a name which almost every person who calls themselves an American can recognize. Her name pronounces itself across cookbooks, magazines and even has its own show on Style and The Learning Channel. It now pronounces itself with yet another captivating theme, as part of one of America's major scandals.

Sexual Harassment and Falsifying data are an unethical practice that could happen in an organization. Leaders are required to take action. In the case of the Mysterious Roses and the case of the Cold Feet G BioSport find themselves resolving serious dilemmas. This discuss will address decision-making steps, ethical lenses used to make decisions, and ethical lenses that influence decisions.

I am writing to address some concerns I have about the future of your company, Martha Stewart Omnimedia (MSO). Perhaps the one issue that you are grappling with at present is about the Imclone scandal. You have been accused of selling $227,000 worth of Imclone stock based on inside information. Because of these charges of insider trading, your critics have summarily associated you with other disgraced company directors: Kenneth Lay of Enron and Bernard Ebbers of WorldCom. But the strange thing about your case is that while other CEOs have been charged for making use of their own companies to gain profit for themselves, you, on the other hand, have not

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,

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

Looking back it’s easy to see the mistakes made by the investors of Bernard Madoff, how he got the rich and famous to foolishly invest their money with very little or no due diligence. He made the return of 10 to 12 percent annually look so good that investors begged to be included. Who wanted want to be a part of the impenetrable financial products or the better than average returns offered by Mr. Madoff. Sadly, if investors had

“To Catch a Trader” To Catch a Trader is a Frontline’s video that describes some moments of the internal situation in the Wall Street, stock’s machinations and their consequences. The main topic of the movie is a usage of inner information that helped traders and hedge funders to earn fortunes. The video provided several examples, like a founder of the SAC Capital Stephen Cohen and CEO of the Galleon Group Raj Rajaratnam. Both these men commanded the services of informers and expert networks to get the inner information and turn to account. The usage of the inner information is the main ethical issue of the video.

information is exposed to individuals outside of the organization. This is a key ethical issue all

For example, Manna (1966) states that insider trading should be allowed because insider trading is the most effective way to compensate to insider to generate new economic information in firm. Hirshleifer() states that for insider, good information is as good as bad information to make profit but this profit may not be related to economic contribution of insiders in corporate. Proponents of insider trading suggest (Carlton and Fischel (1983) that insiders are the most informative member in the market, and by trading, they bring new information to the markets and causing prices to change toward their true value and, therefore, promoting the optimal allocation of resources. On the other hand, Scholars (Benabou and Laroqu, 1992) say that insider trading may provide incentive to corporate insiders either to delay the announcement of price-sensitive information to public or to prevent to release price sensitive information, which in turn makes stock prices less informative. However, Georgakopoulos (1993) argues that restriction on insider trading may have little adverse impact on market efficiency but it reduces the cost of transaction that burdens on uninformed traders

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.

If Stewart did indeed receive a call on 27 December 2001 informing her that Waksal was attempting to unload all of his stock held with Merrill Lynch & Co., there is no doubt that information was received in violation of Merrill Lynch regulations. Simply receiving that information is not an irresponsible act in itself, but the actions taken once that information was received are what are in question. Lying about receiving the information, fabricating a story to cover up the actions resulting from the information, providing false information to hamper the ensuing information, then making false statements for the purpose of increasing investor confidence and preserving stock value are certainly not responsible actions for the CEO of any corporation. Like most problems, there are many links to this chain. Waksal was

As the turn of the 21st Century evolved, it appeared as if Adelphia Communications Corporation was on a direct path of success; unbeknownst to their investors and the public, they were in reality on a direct path of destruction instead. Unfortunately, Adelphia is not the first major company in the history of the United States’ business world to lose the trust of the American public, but it is certainly one of the most notable ones to do so. As the events surrounding the Adelphia scandal unfolded in full view of the public eye, a multitude of media outlets were there to broadcast the destruction and distrust to the masses leaving many wondering if the term “business ethics” was actually nothing more than just an oxymoron. Throughout this