subject: Martha Stewart And Her Trouble In Trading [print this page] Martha Stewart has been a household name in US because of her numerous achievements as a television host, a book author and magazine publisher. Aside from being successful in the entertainment industry, she also has the Midas touch in businesses and investments. She founded the Martha Stewart Living Omnimedia. This company aided her endeavors in publishing, broadcasting and merchandising. Aside from her successful life story, Martha Stewart also has some twists and turns in her life which got her into trouble and public scrutiny.
Why Did Martha Stewart Get Into Trouble?
Her troubles began in the last quarter of 2001. Martha decided to sell her 4000 shares on ImClone which was a huge decision for a stock trader. The next day, the value of the stocks of ImClone fell drastically by 18%. Because of these simultaneous events, Martha had become the hot topic of business and entertainment news for the next months. It was believed that she did an "illegal" insider trading. In October 2002, she quitted as member of board of directors of the New York Stock Exchange.
The US Securities and Exchange Commission believed that Martha was warned by Sam Waksal, her friend, that the cancer drug of ImClone which is his company was denied for approval by the Food and Drug Administration before this event was announced to public. The rejection was the reason of the drastic fall of the price of its stocks.
In June 2003, she was accused by the US government with several counts of securities fraud and obstruction of justice. Because of this, she voluntarily gave up her ranking position as Chief Executive Officer and Chairwoman of Martha Stewart Living Omnimedia but she remained as the company's Chief Creative officer.
Her court trial started in January 2004. She was found guilty of various counts that consist of conspiracy, creating false and misleading statements to US federal investigator and obstructing a proceeding of an agency by the court in March 2004. She was sentenced in July 2004 to be in a supervised released for the next two years, a five-month stint in a correction facility, and five months of home confinement.
Martha Stewart started her term in the correctional facility in September 2004. She was put in Alderson Federal Prison Camp in West Virginia in October. By March of 2005, the court granted her appeal and was released. But she was still under home confinement for the next five months and had to pay the $30,000 fine. The civil case against Martha Stewart by the US Securities and Exchange Commission was settled by August 2006.
by: Brian Jones
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