Martha Stewart Essay

Martha Stewart’s damaged reputation from a financial tip

Valerie Gonzalez

Our Lady of the Lake University Martha Stewart’s Damaged Reputation from a financial Tip

The practice of buying and selling stocks in the financial market is always said to be a tough one to learn and understand for good reasons. The basics of this system are that individuals can invest in certain businesses and become a partial owner of said company or companies. If something goes wrong, the investor could go through several negative consequences: the least would be the person would not gain any money with some losses from fees, make major losses, or could get them and their investment team into so much legal trouble. For the latter, it is more shown in this example

She’s mainly known for this public side but according to her biography, she apparently has some history with finances and previous work as a stockbroker (Biography 2014). But to little surprise with her popularity and unlikely friendships, she is friends with other people in other businesses and Wall Street either because of her history or her current business, The Martha Stewart Living Omnimedia Inc. (MSO). To Stewart, it helped to have the knowledge on finance from her work experience and the right people as friends, though in 2001, it was too much of a certain type of help that was considered illegal. In the year 2001, Stewart did a financial transaction that caught the attention of the SEC and certain officials. This transaction is she sold all of her stock, a total of 3,928, of the company ImClone System (ImClone) the day before the shares for that company decrease. Had she not done so, Stewart would have made a loss but instead, she gain so much money by selling it to those who

This “tip” would include serious issues being a president retiring or a new product is being released which could impact the company’s stock price. This actually can be practiced in a legal way, but all kinds of this must be checked by the SEC and be proven to have no leads or “tips”. In Stewarts’ case, the date, the friendship with Waksal is what made the call to order an investigation on her. It was theorized that she had received a note from him that advised her to get rid of all her stock in his company after a certain incident. The incident in question was the FDA denying ImClone a chance to review one of their products, which could have driven the price of the stock downward. When it happened, the stock didn’t go down immediately but it is assured it will once the public knows so there was time for Waksal to tell his friends and family to get rid of their stock in his company. With the tip, she