Martha Stewart and Insider Trading

In the beginning of 2001, several government agencies, which included the Securities and Exchange Commission (SEC), the FBI, the United States AttorneyÆs Office for the Southern District of New York (USAO), and a congressional subcommittee initiated an investigation of StewartÆs sale of her ImClone stock on December 27 (Cedarbaum, 2003). The investigation came to the attention of the media, who began issuing reports on the matter, and Stewart made public statements denying any wrongdoing and giving her recollections the facts surrounding the sale of the stock.

On June 23, 2002, Stewart sent an email to Andrew J. Nussbaum, an a

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g also testified that Stewart later ordered her to change the message back to its original state, but by then, the prosecutors said, the damage had been done because Stewart had made false statements to government investigators and by doing so, had obstructed justice. Throughout the trial, the Government portrayed Stewart as a liar who had conspired with her stockbroker to cover up that she had sold her ImClone stock in December, 2001 after learning that Waksal and his two daughters were selling thousands of shares they held in the company (Lazaroff, Skertic and Countryman, 2004). Waksal was convicted in 2003 of insider trading and is serving a seven-year sentence in a federal prison. They charged that Stewart learned about the WaksalsÆ selling their stock through conversations with BacanovicÆs assistant, Douglas Faneuil. The most damaging testimony came from StewartÆs friend, Mariana Pasternak, who testified that Stewart told her shortly after she sold her ImClone stock that she had been aware that ImClone founder Sam Waksal was trying to get rid of his shares (Martha, 2004). In a separate conversation with Stewart, Pasternak testified, Stewart told her it was nice to have brokerÆs who tell you those things. However, i
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Approximate Word count = 2055
Approximate Pages = 8 (250 words per page)

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