An ethical analysis on the Martha Stewart Case .
Gone are the days where CEO's and executives walk beyond the law. The past two years have been abundant with victories of justice against white collar crimes. Yet these cases should also be seen as a loss for corporate America as it was such a harsh reminder of an often overlooked issue called ethics. Martha Stewart was the latest example of how small unethical decisions could ruin a lifetime of accomplishment. No one knows what was going through her mind the day of her conviction, especially not the author of this paper. The rest of this paper will first elaborate the case and continue to give an evaluation of the ethical compromises made.
The case started as a common case of insider trading when Martha Stewart cashed her holdings of ImClone on December 27, 2001. The price per share at the time was 58.43 and she collected a total of $229,500. The insider trading suspicion began when the Food and Drug Administration announced its refusal to review ImClone's application for its promising cancer drug, Erbitrux. The price of the ImClone's stock went down to 45.39 per share on December 31st and Stewart gained $51,200 by selling on the 27th. This price drop in the stock led to the suspicion that Martha Stewart sold her stocks early by having access to inside information. Prosecutors accused Stewart of selling the stocks because her former broker, Peter Bucanovic tipped her about the fact that ImClones founders were attempting to dump their stocks. .
Unfortunately the problems did not end with insider trading. In responding to this accusation Stewart and Bucanovic claimed that they had an agreement in which Bucanovic had instructions to sell Stewarts stocks when their value fell below $60 per share. Stewart and Bucanovic also lied when they told investigators that they do not recall having a conversation about Sam Waksal, the founder of ImClone, selling his stocks.