Martha Stewart's Insider Trading Essay

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From being a very successful businesswoman to calling a prison cell home, Martha Stewart has definitely had an interesting past couple of years. She started her career about 30 years ago with a catering business and has since built from that becoming the CEO and Chairman of Martha Stewart Living Omnimedia, Inc. Her success also includes the publication of her magazine Everyday Living, being the commercial spokeswoman for K-Mart, and having her own popular television show, From Martha’s Kitchen. She had built the reputation of being a public figure with how-to advice on creations in the kitchen to gardening. Despite these accomplishments, Stewart managed to become entangled in some insider trading scheme that damaged not only parts of …show more content…
The investigation traced all the way back to Stewart’s earliest involvements with ImClone. It discovered that Stewart and Samuel Waksal, a co-founder and former CEO of ImClone, had become friendly in the early 1990s (Carlin 2003). ImClone is a biopharmaceutical company that specializes in the development of treatments for cancer. They are incorporated with their headquarters in New York City, and are publicly traded on The Nasdaq Stock Market under the symbol IMCL. Among several products they have Erbitux, which is their leading product. Stewart and Waksal both had accounts through the brokerage firm Merrill Lynch, where they shared the same broker, Peter Bacanovic. Stewart also had history with Bacanovic as it was reported that they have known each other since the mid-1980s. Stewart had become a client of Bacanovic in the mid-1990s and soon was one of his high profile accounts. Stewart placed Bacanovic in charge of her pension, personal accounts, and Martha Stewart Living Omnimedia’s 401(k) plan. He also administered Omnimedia’s Employee Stock Option Program and through this became a financial advisor many of the employees. Through Stewart’s account with Bacanovic, she owned 3,928 shares of stock in ImClone. Since 1992, ImClone had been focusing

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