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    Martha Steward Insider Trading and Civil Liabilities

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    Please visit the following website:

    The Civil Liabilities that arise in the case, the Corporations Law, jailing of Martha Steward.
    The story from the above link deals with the Martha Stewart insider trading scandal which took place in 2003. You will need to do some more internet research concerning the facts of this case to fully answer the following:

    Placed in the context of Canadian Corporations law, how would you analyze this case of insider trading?

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    STEP 1

    The relevant sections of the Canadian Corporations law: This portion is taken from the website: http://www.parl.gc.ca/information/
    "C. Civil Liability
    Under subsection 131(4) of the CBCA, insiders (as defined in section 131(1)) who make use of specific confidential information for their own benefit in connection with a transaction in the securities of a corporation (whether distributing or non-distributing) are liable to compensate anyone who suffers a direct loss as a result. They are also accountable to the corporation for any direct benefit or advantage they receive." http://www.parl.gc.ca/information/
    That apart section 126(1), and insider is a director or officer of a distributing corporation. Please remember that a 'distributing corporation' under the Canada Corporations Act is one whose shares have been part of a distribution to the public. In other words, for practical purposes' a distributing corporation is a corporation with shares outstanding. So Waksal is the insider of ImClone.

    That apart the amendment to the law in 2004 has strengthened the law and providing it with more teeth: The following has been taken from the website ...

    Solution Summary

    Civil Liabilities, Corporations Law and Insider Trading are discussed in great detail in this solution in the context of Martha Stewart.