SECTION 7 – case study " The trial of Martha Stewart” question 1 (p. 225) Would Martha Stewart commit the crime of insider trading when she sold her ImClone stocks and shares on 12 , 27, 2001?
I believe that Martha Stewart committed the crime of insider trading. In my opinion, this case study had enough information regarding Martha Stewart's trial. There are facts helping that she had crucial and significant information about ImClone shares that wasn't available to the public in those days. First of all, the girl received a phone call on December 26th from her stockbroker Bacanovic telling her that he " feels ImClone is likely to start trading downward”. Bacanovic also presented important information that S. Waksal, cofounder of ImClone Devices, sold almost all his shares. All this trading was going on during an ImClone " blackout period” at which period any staff ImClone stocks trading were prohibited pending FDA program. Waskal recognized the important inside information about the letter coming the following day from the FDA that a medication his firm was working away at for the past decade was refused. The information about the letter was to had been released to public the very next day and it will have adversely affected the stock cost. Martha Stewart knew that if Waskal was providing his stocks and options, it was because the stocks were going to significantly decline in price. Martha Stewart required advantage of this insider details, listened to her broker and sold her stocks. I believe, Martha Stewart knew that what the lady did was illegal, but at the same time thought that nobody could catch her or that she would manage to cover up with is.