Click link for download: https://99papers.com/?rid=2511
Please place the # and name next to each response.
Week 4 - Discussion 1
5252 unread replies.6565 replies.
Your initial discussion thread is due on Day 3 (Thursday) and you have until Day 7 (Monday) to respond to your classmates. Your grade will reflect both the quality of your initial post and the depth of your responses. Refer to the Discussion Forum Grading Rubric under the Settings icon above for guidance on how your discussion will be evaluated.
In one paragraph supported by your text and other research, describe a recent example of insider trading. Determine whether the case met the elements of insider trading established by the Supreme Court in U.S. vs. O'Hagen, described in the article, Fair to all people: The SEC and the regulation of insider trading (Links to an external site.)Links to an external site.. Respond to at least two of your classmates’ postings.
Jul 26, 2017Jul 26 at 8:04pm
In 2004 Martha Stewart served five months in federal prison at Alderson in West Virginia. The conviction was for the sale of all her shares in a biotech company, IMClone in 2001. Reportedly ImClone's stock fell 16% two days later. The cause being that the FDA did not approve the pharmaceutical product Erbitux. Martha avoided a loss of $45,673 by selling her shares. She was not the only person who benefited a major stockholder in the company also sold his share of stock for $5 million. This man was Sam Waskal the CEO of the company. His knowledge of the impending failure for the company was passed to a Merrill Lynch broker Peter Bacanovic who tipped off Martha Stewart. The case against Stewart was not strong she did not have knowledge of the FDA decision. She was not affiliated with ImClone. To find her guilty they had to prove she acted on the tip that she knew breached her brokers duty. The prosecution directed the focus on lies she told to cover up her actions, proving at the least she knew what she was doing was wrong. The result was a sentence for obstruction of justice and conspiracy. The insider trading charges were dropped and securities fraud charges were dismissed She settled with the SEC and paid a fine four times the amount of the loss. She had to step down as CEO from her own company for five years.
It could have been worse for Stewart. The SEC and the regulation of insider trading would apply in this case. Insider trading applies to people who have confidential information even if they do not have any connection to the company. "The SEC's job is to make sure that all investors are making decisions based on the same information. Most simply put, illegal insider trading is believed to destroy this level playing field". (Mofat, 2017) This case met all the elements of insider trading established by the Supreme Court in U.S. vs. O'Hagen
Moffat, Mike (2017) ThoughtCo Martha Stewart's Insider Trading Case retrieved from https://www.thoughtco.com/martha-stewarts-insider-trading-case-1146196
Jul 30, 2017Jul 30 at 12:51pm