Ethical Issue Assignment

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Martha Stewart

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  • A company that has experienced a scandal regarding ethical issues is the self named company, Martha Stewart. Martha Stewart is an American businesswoman, writer, and television personality.
  • On December 27th, 2001 the media mogul and celebrity homemaker had sold all of her 3928 shares in the biotech company ImClone Systems.
  • Two day's later the company's stock dropped 16 percent when the Food and Drug Administration said it had rejected the ImClone's main drug Erbitux, for cancer treatment.
  • By selling just before the FDA'S announcement, Stewart avoided losses of $45,673, a tiny fraction of her net worth (which Forbes estimated to be $700 million a short time earlier).
  • Stewart was arrested for insider trading since the CEO of ImClone had also been trying to rid himself of his stocks as well because he knew that the company would crash very soon. Stewart was awaiting trial to see what her fate would be.
  • Due to the lack of evidence presented from the prosecutors, the jury found Stewart not guilty on the charge of insider trading and she was free to go. Stewart was also able to repair the damage this scandal caused her company.
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