Martha’s Insights on Marginal Revolution
Martha Stewart was not an ImClone insider and was found not guilty of insider trading. However, she was charged with attempting to obstruct a government investigation into the trading of ImClone stocks.
Stewart sold almost 4,000 shares of ImClone stock a day before the stock price plummeted due to negative news about the company’s cancer drug. This raised suspicions that she had insider information about the impending drop in stock value.
Stewart claimed that she had a pre-existing agreement with her stockbroker to sell the shares if the price fell below $60. Nevertheless, she was accused of lying to investigators and ultimately found guilty of obstruction of justice, making false statements, and conspiracy.
In the end, Stewart served five months in prison and five months of home confinement, as well as paying a fine and going through a period of probation.
This case serves as a cautionary tale about the importance of transparency and honesty in financial dealings, as well as the severe consequences that can result from attempts to mislead or obstruct investigations. It is a reminder that reputation and integrity are invaluable assets in the world of finance.
