Case Study

Martha Stewart (A)

Group 2-

Rohit Chawla (15A2HP448)

Bhawana Choudhary

Ghanshyam Kedia

Vishal Prasad

Ayush Singhal

Prakhar Jain

Akash Chitranshi

Date of Submission

25.8.2015

Case Analysis

Background:

Martha Steward is a business connoisseur popularly known for the insider trading scandal at Imclone Systems. She is the founder and CEO of the widely acknowledged Martha Stewart Living Omnimedia Inc. a company known for its interests in television, merchandising, publishing, electronic commerce and related international partnership among other interests. In the early 2000s, Martha Stewart was accused of insider trading whereby she had sold four thousand ImClone shares one day before the company’s stock nose-dived.

The charges of securities against Martha were thrown away, she was still found guilty of four counts of obstruction of justice and lying to the key investigators. She was sentence to five months of prison, two years of probation and five months of house arrest. The insider trading case at ImClone systems was also filled with great vagueness as it relates to retributive determination and aspect of being innocent or guilty.

A lot of issues came up from this insider trading case and a lot has been debated on central moral and ethical issues that surround insider trading practice. In many countries, insider trading is illegal regardless of the inside information provided secretly. With regard to the Martha Stewart case, insider trading was clearly evident. For instance, Martha had been a stakeholder of the biopharmaceutical company ImClone system incorporated.

Key issues/ Questions-

1. Has Martha Stewart engaged in insider trading? Is this a case of insider trading at all?

2. How legitimate are the criminal charges against her?

3. Are we saying that Stewart is on trial for a crime she did not commit? What do you think are her...