Martha Stewart

Martha Stewart a known fame and founder of Martha Stewart Living Omnimedia (a caper which is built on showing others how to cost effectively manage and bedight the home), who was given a tip by Douglas Fanueil and Mr. Bacanovic, employees of the Merrill lynch brokerage firm connection.This tip which broke the confidentiality constitution of the brokerage keep company led to the subsequent sale of Marthas constituents in the ImClone company during the latter companys black fall surface period with the effects of causing the piece of land monetary value of ImClones sell to drop and the share price of shares of the Martha Stewart Living Omnimedia to drop subsequently the shit broke that Martha had engaged in insider trading. Through a series of events, she, her broker and his assistant were subsequently prosecuted and sentenced.In this case study, we will be examining how the public comprehend Martha Stewarts effections and similarly the penalties that were imposed. We will also side at how her decisions imp proceedinged and also provided major setbacks to her business because of her insider trading shit on the Imclone Systems Incorporated. By carrying start this research, we as a group would determine if the unredeemed should be placed on her or non and also determine if the fines were adequate for the crime trustted.1.Did Martha Stewart commit the crime of insider trading when she sell her ImClone shares on celestial latitude 27, 2001? We be falsehoodve that Martha Stewart was guilty of insider trading. The justifications for our point are as follows a) Martha Stewart was told by Mr. Faneuil (under direction from his head who was also Ms. Stewarts stockbroker) that the largest stockholders of ImClone (Sam Waksal and his daughter Aliza) had change all their shares in the company on that same day, declination 27th, and she immediately sold hers as well. This in itself was a breach of lymph node confidentiality and insider predicateati on because no one knew slightly it unless their stockbrokers.By virtue of the horizon Mr. Bacanovic (Mr. Faneuils boss) at the brokerage company of Merril Lynch he was not to mention or discuss the actions of any of his other knobs. b) Even though Martha Stewart did not know about the FDAs unfavour adequate report about ImClone, the emergent dumping of the shares on the market was enough for her to excogitate that there must be something wrong and that she should stop her shares sold as quickly as achiev able in allege to obtain the best manageable share price or avoid a prejudice.Tipped with the knowledge of the Waksals actions and her intuition of imminent fortuity she ordered that her shares in that company be sold as quickly as possible. c) She called Sam Waksal as soon as she received the tip-off in the hopes of obtaining the reason behind their actions. d) When investigated by unlawful authorities she instructed her repository to change the original sum the wri ting table wrote from Mr. Bacanovic and then thought better of it and well-advised the secretary to revise the changes and restore the original message. She also be repeatedly to criminal authorities on the in truth reason behind the sudden sale of her shares.2.Did the U.S. Attorneys and the Securities and shift Commission use ethical judgment in the indictment of Martha Stewart? Do you desire that her indictment was base on evidence of a serious crime, or do you imagine that prosecutors consciously or unconsciously had superfluous motives for pursuing the case? It is our belief that good judgment was exercised in indicting Martha Stewart. The indictment was based on the evidence of sightly intent.Martha Stewart on hearing of the actions of the Waksals, and devising levelheaded judgments that the company was in trouble, intended that she should not make a loss on her coronation in ImClone and made immediate moves and succeeded in change her shares in the company for a profit of $228,000. If she had waited until December 28th when the share price cut to $45.39 per share she would down made only $178, 292, a loss of $49,708. also the trading of Martha Stewarts shares occurred during the companys blackout period which commenced on December 21st.At this time no shares from the company were permitted to occur and the stockbrokers at Merrill Lynch would have known that and should have advised their clients accordingly. It is our belief that prosecutors might consciously have had additional motives for pursuing the case. Martha Stewart a celebrity of high visibility would sell newspapers if investigated and later indicted. A prosecutor who was able to make a strong, believable case would contract fame to himself/herself and possibly new job opportunities.3. Do you hold in with the jury that she was guilty beyond a reasonable doubt of the conspiracy and obstruction of justice charges? We nurse with the jury that Martha Stewart was guilty beyond a r easonable doubt of the conspiracy and obstruction of justice charges. To crap a reasonable doubt of conspiracy, four chief(prenominal) things must occura) Two or more than persons in some way or manner, orgasm to a mutual understanding, in trying to pass a common and unlawful plan as charged in the indictment. An example of this includes the breakfast brush between Martha Stewart and Peter Bacanovic on January 16th after the sale of the shares to construct a statement that they reproduced to the criminal authorities that is, that Martha had agreed to sell her shares if the share price fell below $60.00 per share. Another example was illustrated when Douglas Faneuil was persuaded by his boss (Peter Bacanovic) to agree to the conspiracy constructed by his boss that there was a $60 stop-loss order on Martha Stewarts ImClone shares.b) The person willfully became a atom of such a conspiracy. Mr. Fanueil accepted a final payment from his boss (Peter Bacanovic) in the form of an extra calendar week of vacation and a paid trip, so that he would not reveal the fact that Martha Stewart had been tipped off. Fanueils actions were acts of choice.c) That one of the conspirators during the existence of the conspiracy knowingly affiliated at least one of the methods (or manifest act) expound in the indictment. Bacanovic and Stewart repeatedly be to the government agencies and attorneys in order to try to hamper the investigations. Bacanovic tampered the worksheet by adding 60 near the entry for Stewarts shares of Imclone.d) That such overt act was a knowingly committed act done in order to carry out or accomplish some object of the conspiracy. exculpation of this was seen when Bacanovic informed Faneuil that he must call Stewart to inform her of the Waksals actions. He decided to leave the message with Stewarts administrative assistant in order for her to receive the message to allow her to carry out or give instructions on what actions to take. Faneuil had a sked Bacanovic if he was allowed to tell Stewart and he stated Of course thats the whole point On realizing what the write policy inside of the office stated he was truly worried. Obstruction of justice is a crime.It is an offense that arises when psyche tries to prevent, impede or influence the administration of justice, for example, bribing a juror, threatening a judge or encourage false testimony. Obstruction of justice occurred when Stewart and Mr. Bacanovic conspired and continuously lied about the reason why Stewart sold her shares in an effort to hamper investigations. One such lie was the prearranged plan to sell Stewarts shares if the price fell below $60 per share.4. Was her penalisation, including both enslavement and fines countenance? Were the punishment of Peter Bacanovic and Douglas Faneuil appropriate? We agree that the punishment imposed on Martha Stewart was a little overly lenient. Due to her actions after being tipped off, she was able to make a profit of approximately $50,000, so a fine of $30,000 still meant that she was gaining approximately $20,000. We believe that all of her profits should have been disgorged as compared to her wealth the amount is relatively small anyway.The imprisonment of five dollar bill months imprisonment and then five months of home confinement, we believe was a suitable length of time. The relinquishing of her duties to act as an officer of a public company did not do her any damage as she still drew the same salary as she was accustomed to and even had a bonus. In her after-sentencing statement, she say that this had been no more than a personal reckon that had been blown out of proportion this in itself indicates that she was not remorseful about her actions. Whether these punishments were a deterrent for prox action is questionable as Martha Stewart still violated the terms of her house arrest and this had to be subsequently extended for three weeks. We think that the punishments imposed on bo th Peter Bacanovic and Douglas Faneuil were inappropriate.First we look at Douglas Faneuil. Although he was following the instructions of his boss, he knew what he was told to do was wrong. He knew there was a displayed, written office policy with respect to client training privacy. He accepted a bribe from Mr. Bacanovic and waited approximately seven months after the incident before advance forward with the truth. A short term of imprisonment at a minimum security readiness might have been added. With respect to Mr. Bacanovic, his penalties should have been harsher. His position at Merrill Lynch afforded him access to certain non-public learning and as such his actions should have been within the law.He disregarded the policies of the company with respect to confidentiality, he also used his position to influence and bribe another(prenominal) employee of the company to comply with a conspiracy in the commitment of insider trading and he also conspired with his client Martha, to concoct an alibi to avoid prosecution by the government. He should have been given a heavier fine since he was the main person behind the scandal and had gained commission on the sale of both the Waksal and the Stewart shares. Also a longer term of imprisonment would have been fitting, maybe a term of two years.