This posting discusses Martha Stewart and insider trading.
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What did Martha Stewart do wrong with regard to ImClone? Was her punishment just? What do you think should have happened?
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Solution Summary
The solution provides a detailed discussion on Martha Stewart's actions with ImClone, and discusses if her punishment was just.
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Martha Stewart received insider information about the dropping price of ImClone stock, and had her broker dump her stocks, so as not to suffer a financial loss. The problem was that since the broker knew, and notified Stewart of the situation before it was made known publicly, Stewart was found guilty of breaking insider trading laws. She sold $230,000 worth of shares of the stock, the evening before it was publicly announced.
Stewart and her broker were both found guilty and punished. It was found that Stewart avoided a loss ...
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