Juan Tavarez
3/31/2024
1.
What is insider trading? Explain in detail (You can research for additional information outside the article or online)
Insider trading is considered unethical and is prohibited by law. It has garnered a lot of media coverage and is now seen by some as the definitive representation of the moral decline in business (Moore, 1990). Insider trading is the practice of providing someone with access to material information so they may utilize it to make well-informed decisions in the stock market. Giving him the upper hand over those who do not have access to such knowledge when trading.
2.
In one or two paragraphs summarize the case, Martha Stewart.
In short, the article describes how Martha Stewart engaged in insider trading because of her affiliation with Imclone System, a biopharmaceutical business owned by Stewart. Stewart liquidated 4,000 shares of ImClone stock on December 27, just one day before the FDA declined to evaluate Erbitux, the cancer treatment manufactured by ImClone System. After the FDA's pronouncement, the company's stock fell. Several other ImClone
insiders had a similar circumstance. Since the incidence was too untimely to be disregarded, the FBI, SEC, and U.S. Attorney’s office started an inquiry. It was determined that Martha Stewart learned of this information via the Imclone CEO's daughter, and she told her broker—who also happened to be Stewart's broker—to sell the shares. After notifying Stewart, who was on her plane, Peter Bacanovic quickly sold her stock. They then went on and made up a false narrative that she sold the shares because there was a stop order.
3.
Did Martha Stewart engage in insider trading? If so, how?
When you use information that is not known to make stock market decisions, it is indeed regarded as insider trading. You are superior to everyone else. To hide her justification, she went on to lie and invent a whole made-up stop order. It was against the law to do this.
4.
Did Martha Stewart violate any of her responsibilities to investors in MSLO? Explain.
Martha Stewart attempted to preserve her responsibilities to MSLO, the company was reliant on the fact that Martha Stewart was a figure that held value. She was more than a name to the company, how the media perceived her affects the value of the company. She
did what she could to keep her name and status clean. It hurt the company overall. Martha
