Insider Trading Martha Stewart, the countries top icon for homemaking has been in the eye of the public since June 2002, but not for her craftiness or culinary abilities. Stewart instead has the spotlight on her for crimes of insider trading. A tip from her former broker Peter E. Bacanovic, persuaded her into selling her IMClone stock after sharing information about a close friend of Stewart's getting rid of his shares.

Stewart's companion, Sam Waksal, was also the chief executive of IMClone Systems Inc. IMClone Systems is a well-known company specializing in the research and development of therapies treatments of cancer. The stock selling was provoked due to a leak of information about The Food & Drug Administration rejecting IMCLONE's drug outfit application their cancer drug Erbitux. Before the information reached the public about the FDA's decision and share price plunged, Stewart sold her 3, 928 shares of IMClone. Martha sold her shares at $58, and by the time the news hit, prices fell to $45, resulting in a savings of only 50, 000 for the celebrity. But the whole situation of the Martha Stewart case is not a question of insider trading but a question of ethics and management in business: it's an issue of ethics and the choices people have between right and wrong and the determining factors that cause us to make those choices.

While researching this subject I have found many interesting topics. One topic I found very interesting was the fact that a highly qualified executive of Merrill lynch, one of the top brokerage firms in the world, was Martha Stewart's financial advisor. Another interesting point is that Martha Stewart the mom of home cookery and cuisine, a profession based on honesty and founded on the basis of motherhood would lie about the tips she took to earn an extra buck while already being a multi billionaire. After more research I found that the most important point and the topic of the whole situation was the point that even the most perfect and idolized individuals can be manipulated by money or even the thought of more money in the case of Martha Stewart. Martha Stewart is now facing charges leading up to a possible 20 years in prison, and over 250, 000 dollars in fines. Stewart faced many charges; among them were insider trading, conspiracy, making false statements, perjury, and obstruction of justice.

Before Stewart's case, the Securities and Exchange Commission had never gone after a broker's client when the broker offered information of what another client had done. The question being debated in the business field is who is to blame in this scenario, and if it is Stewart, should her punishments be so severe? Some seem to think that the charges and trails are ridiculous. "The Securities and Exchange Commission should leave people like Stewart alone and concentrate on real corporate crooks." (Glassman). However others look at it as something that cannot be tolerated and believe that if she is not punished to the maximum, then others will not be afraid to follow in her footsteps. On the other hand there are many people that think that people who are high up on the corporate chain should be prosecuted just as hardly if not harder then regular criminals because of all their benefits from the government.

As for the average high class citizen they believe that Martha should be prosecuted because they think she is wrong and giving their class of people a bad name, which black balls the whole brokerage industry as well as certain firms such as Merrill lynch. Juror of the Stewart Trail, Chappell Hart ridge, says 'Maybe it's a victory for the little guys who lose money in the Market because of these kinds of transactions,' Or maybe its just a sigh of relief to the rest of the guys who are doing the wrong thing still and wanted to have someone else get caught in the process and are just happy that it wasn't them. But not to play devils advocate but maybe its just the issue of having a certain issue being debated that many people know about it happening at a constant rate but never say anything because its called "Unfaithful" with in the work place when dealing with other colleagues. Insider trading is defined to be buying or selling a stock when in a trustworthy position, with use of information not known by the general public. Insider trading also refers to giving information to others, "tipping" them off with that information held from the public. The fact many are talking about in the Stewart case is that though Waksal was in a trusted position in the IMClone Incorporation, Martha Stewart was not; therefore she was not to blame.

Long time investor and small business owner Kirk Westfall claims "If I were in her position, and someone clued me in that I was about to lose money, I would probably do the same thing she did... but it is wrong to act on insider trading, and unfair to those of us who don't have access to that kind of information." (Westfall). This is very similar to the movie, "Wall Street" when Charlie sheen a young broker is persuaded into steeling a high power wealthy entrepreneur (Michael Douglas) about his father's company's new improvement. This was a perfect example of insider trading information because Charlie Sheen a family member of a person working in the airline industry distributed information about a publicly traded company before it was introduced to the public officially making it illegal.

Therefore this is official insider trading. The next issue is the issue of a public icon being a criminal. Many mothers and others around the world held Martha Stewart in such a high light and followed by her example. This whole aura is ruined by this situation. This is terrible today because so many people today believe in what they see on today and take to heart everything what is said on television. Moreover Martha Stewart's case is very monumental because it has taken societies beliefs and corrupted them by eliminating a public icon from the spotlight with criminal charges.

Works Cited " Martha: Guilty On All Counts." Business Week 5 March 2004: Glassman, James K. "Martha Stewart and Insider Trading." Capitalism Magazine 15 February 2004: Westfall, Kirk Randall. Telephone Interview. 30 March 2004.

Mulligan, Thomas S. and Hamilton, Walter. "Martha Stewart Convicted." Los Angeles Times 6 March 2004, Home Edition: A 1.