Premium Essay

Marth Stewart's Case

In: People

Submitted By bibubebu
Words 2980
Pages 12
Martha Stewart was indicted on charges of conspiracy, obstruction of justice and securities fraud. All linked to her sale of 3,928 ImClone Systems Inc shares on December 27, which considered as illegal insider trading by Security and Exchange Commision (S.E.C). Stewart cashed out her ImClone stake at an average price of $58.43, collecting about $229,500. After the market closed the following day, the Food and Drug Administration announced its refusal to review ImClone's application for Erbitux, a promising cancer drug. The next trading day, Dec. 31, ImClone's shares opened at $45.39 per share. That difference in price would have cost Stewart about $51,200 if she sold first thing that morning. However, she was not prosecuted for insider trading, which was the original focus of the government's investigation. She pleaded not guilty and pledged to fight the charges. Although the charges of securities fraud were thrown out, Stewart was found guilty of four counts of obstruction of justice and lying to investigators. She was sentenced to five months of prison, five months of house arrest, and two years of probation. ImClone case was showing unethical and socially irresponsible behavior by business executives. They are in positions of power that allow them to do damage to others. This paper will evaluate the case above thoroughly, start from the prosecution’s arguments, the defense’s arguments. Analysis will be made using four ethical theories; Rights, Justice, Utilitarianism, and Profit Maximization.
Prosecution’s Arguments
Five counts have been filed against Stewart. The indictment against Stewart begins with a conspiracy count andalleges that Stewart and Bacanovic conspired to obstruct justice, make false statements, and commit perjury. Prosecution states that Stewart lied to investigators during their investigation, declaring herself innocent of...

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