Martha Stewart Insider Trading: Case Analysis Report
Part I: The Case
Fraud, lying, conspiracy...not terms that any individual generally wants associated with their history, nonetheless with their reputation and personality, especially if that individual happens to be Martha Stewart. Martha Stewart: a name which almost every person who calls themselves an American can recognize. Her name pronounces itself across cookbooks, magazines and even has its own show on Style and The Learning Channel. It now pronounces itself with yet another captivating theme, as part of one of America's major scandals.
Martha Stewart may be America's most famous businesswoman. Considered a "cultural icon" (Byron, 3), she made a name for herself through …show more content…

With that, Martha's plane touched down in San Antonio, Texas where she called Ann to receive her messages. When responding to the message left by Balcanovic, there is controversy concerning whether Martha spoke to Feneuil or Bacanovic. Officials alleged that she spoke to Bacanovic who tipped her off that Waksal and his family were dumping their shares of ImClone, while Stewart claimed to have spoken to Feneuil. Either way, after receiving the disturbing message, Stewart contacted one of the two and gave him authority to sell her shares of ImClone which took place at $58.43, totaling $228,000.00 for Martha Stewart. Various evidence indicated that the agreement between Martha and Bacanovic agreeing to sell her shares of ImClone at $60.00 never existed. On a worksheet that Bacanovic kept indicating information on what was to be done with Martha's stocks, ImClone was marked with a pen to be sold "@60" (Steinhaus, 2). However, when the worksheet was sent to a lab for analysis, the evidence showed that a different pen was used than the rest of the markings on the worksheet. Prosecutors claimed that this is how Bacanovic and Stewart attempted to convince authorities that he and Martha had already decided to sell the shares before the inside information was released (Steinhaus 2). Experts also showed other evidence that the conversation was a hoax due to the nature of a stop-loss order which is what the notation @60 indicated: "The whole purpose of a