Martha Stewart Case Summary

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On January 27, 2004, Martha Stewart stood on trial facing charges of conspiracy, obstruction, securities fraud, and lying to investigators in connection with the sale of her stock in ImClone, a biopharmaceutical company (Gibson, Warin, & Gassaway, 2008). Just three years earlier, Stewart sold her stocks that she had within the company. After two days, the organization 's stock dropped 16 percent when the Food and Drug Administration (FDA) said it had rejected the company’s new project of a drug, Erbitux, which was meant to be for cancer treatment (Leite, 2012). Stewart had controlled 4,000 shares of ImClone and by selling (or getting rid of, depending on who you ask) her shares, just before the FDA 's declaration, she kept away from…show more content…
She claimed that when she called her office to check her messages, Bacanovic had left her a message advising her to sell her stock because the stock had feel below $60 a share and supposedly that was their prior agreement of doing so (Leite, 2012). Stewart claimed that she filed something called a “stop-loss” order, which was meant to say that if the shares had fell below $60, she would pull out of the company. Yet, Stewart’s justification that she gave to investigators about why she sold her shares and the “stop-loss” order did not match the testimony that Bacanovic’s assistant (Donald Faneuil) gave (Leite, 2012). According to the assistant, who personally handled selling Stewart’s shares, he claimed that Bacanovic wanted him to lie about a “stop-loss” order and that he received money bribes for doing so. Now this information was taken with a grain of salt the second time around because initially he lied to investigators about how Stewart did indeed have a “stop-loss” order. He stated to prosecutors that he told Stewart this when Waskal and his family were backing out of their shares and Waskal advised that she do the same. During questioning, Stewart claimed that the allegations of her knowing about Waskal selling his shares, were false accusations (“United States of America vs Martha Stewart and Peter Bacanovic”,
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