“I don’t know why people don’t like me. I’m not perfect. The perception that I’m perfect I think got kind of mixed up with the idea that what we’re trying to teach is the best possible standard out there,” Martha Stewart told Barbara Walters of ABC News. (Turrentine, 2004)
At one time a billionaire and a woman on Time magazine’s list of America’s 25 most influential people, Martha Stewart’s seemingly perfect world has collapsed in the wake of criminal charges of conspiracy, securities fraud, obstruction of justice and making false statements. Stewart amassed her fortune by parlaying her creative abilities and business savvy into a how-to empire for all things domestic. Now she joins a long line of business leaders who have been charged, fired, fined, convicted and/or imprisoned for financial wrongdoing.
One may consider why an extremely wealthy and powerful CEO like Martha Stewart would take a risk with any stock trades that could fall into a gray area. If her claims are true that the amount of money she saved by selling the stock “amounted to approximately $40,000, about .0006 percent of my net worth”. (Turrentine, 2004) Trading in equities for many people is a game that feeds and reinforces their ego. On December 27th 2001, Martha was feeding her ego by using her connections to gain an unfair advantage. Stewart, being a former broker and a board member on the NYSE, should have known the ethical action to take. Unfortunately, her shareholders, her image, and the company suffered when she had the arrogance to believe she could act unethically. In this paper I will review the charges against Martha Stewart and discuss how she irresponsibly handled the charges of indictment.
INSIDER TRADER ALLEGATIONS
On December 27, 2001 Stewart sold 3,928 shares of ImClone Systems. ImClone is a biotech company that was seeking Food and Drug Administration (FDA) approval for a new cancer drug called Erbitux. In trials, Erbitux had been shown to be a...