Martha Stewart Elaborate Imclone

Liberty University

DigitalCommons@Liberty

University

Faculty Publications and Presentations

School of Business

2009

Martha Stewart and Insider Trading

Kevin L. Rawls

Liberty University, klrawls@liberty.edu

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Part of the Business Law, Public Responsibility, and Ethics Commons

Recommended Citation

Rawls, Kevin L., "Martha Stewart and Insider Trading" (2009). Faculty Publications and Presentations. Paper 3.

http://digitalcommons.liberty.edu/busi_fac_pubs/3

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Insider Trading

1

The high profile nature of the Martha Stewart insider trading case led to prolific research

and writing by academic and media professionals (Brinkley, 2008; Carpenter, Lacy, & Fico,

2008). This paper seeks to take both factual information about the case and existing academic

investigation to discuss the central moral and ethical issues surrounding the case. In addition, the

greater issue of insider trading will be examined and moral foundations for the issue will be

established and discussed. Finally, the paper will conclude with a suggestion for the most

consistent ethical approach to insider trading.

Background

Martha Stewart owned shares of a company Called Imclone. In 2001 ImClone received

notification that a new prescription drug, in which the company poured extensive money into

research and development, would not receive approval by the Food and Drug Administration

(Carroll & Buchholtz, 2006, p. 653). The CEO of ImClone, Sam Waskal, in an effort to avoid

financial losses to his shares of ImClone, made a call to his stock broker...