Alireza Peiravi Professor Beverly Lee Legal and ethical ENV BUS 117 5 October 2016 “Martha Stewart case” Legal or illegal? That’s the question everyone’s asked after ImClone case. Because what really happened was a ‘Insider Trading’ which can be both legal and illegal. An insider trading is wherein an individual buys or sells stocks by using non-public information given to them by the people of a company. In Marta Stewart’s case, she sold near all of her shares just before the specific company’s stock faces a fall and she avoided a $50k loss. You might say well that’s not an illegal thing or think it as a smart move but that was not the end of story. While Martha was trying to sell her shares, Waksal, ImClone CEO, had also sold his share ($5 million). The point that all these things turn to be illegal is where that Stewart and Waksal done their sales just two days before that FDA rejected ImClone’s primary pharmaceutical product! Waksal action was easily considered as an illegal act because he did not follow the SEC rules. But for …show more content…
That led people to start thinking if Martha Stewart was really straight and crystal clear with her trades, then why she is kind of hiding?! Sadly, for Stewart, the whole case got into the hands of authorities. She stepped down from her positions (CEO, board directors). The worst, she got arrested and taken to court in summer of 2003. Some testimonies such as Pasternak, who said: “Isn’t it nice to have brokers who will tell you these things?”, led the court to decide a hurtful decision for Stewart. She convicted of obstruction of justice, securities fraud and lesser crimes. Afterward, she still resists on her words which she was innocent. Later she sentenced to 5months jail and two years of supervised release along with $30K. She appealed but the U.S. Court of Appeals for the Second Circuit in New York upheld Stewart’s