Martha Stewart Case Summary

983 Words4 Pages
Summary In March of 2004, Martha Stewart was found guilty of four counts of obstructing justice and lying to investigators about a stock sale that she had made. She showed little emotion as the verdict was read. A symbol of white color crime, Stewart was seen an hour after the reading of the verdict wearing fur and carrying a brown leather bag (CNN, 2004). Stewart sold around 4,000 shares of ImClone stock on December 27, 2011. She avoided $45,673 in losses, because the next day, the Food and Drug Administration rejected ImClone’s application for a cancer drug Erbitux, and the stock plummeted (Leite, 2012). Martha Stewart’s stock broker, Peter Bacanovic, was also charged and found guilty of charges relating to the sale, including: conspiracy to obstruct justice, making false statements, and perjury. According to prosecutors, Stewart sold her stock in ImClone after receiving a tip from her broker (Bacanovic)’s assistant that the ImClone founder and chief executive, Sam Waksal, had sold $5 million in ImClone stock, along with all of his daughter’s holdings in the company (Leite, 2012). Bacanovic and Stewart…show more content…
Stewart was also charged with securities fraud, because her own investors were defrauded by her statements of innocence. Luckily for Stewart, the judge dismissed those charges (Leite, 2012). The government also dropped charges of insider trading, for which Stewart could have served a maximum of 20 years in prison (Leite, 2012). The SEC did pursue a case against her, and Stewart settled with them in 2006 by paying a fine of $195,000 and stepping down from her director position in her company for five years. Her stock broker Bacanovic also settled with the SEC, paying around $75,000 in penalties (Leite,

More about Martha Stewart Case Summary

Open Document