For $45,673, a very public figure ruined her image. Why?
Clearly for a woman whose net worth is estimated to be over $1 billion dollars according to Forbes, $45,673 does not seem like a significant amount of money. However, as happens with most people who commit crimes, when she sold her ImClone shares following information given to her by the company’s CEO, she probably did not believe she would get caught.
When the investigations regarding inside trading began and she was repeatedly questioned by the authorities, she could have come forward and admitted to the crime, but she did not do so. In my opinion, she believed at the time that she could still save her image if she denied all the claims, as she hoped to not even receive charges, which she later did.
After the situation rose to the level of a scandal, she probably continued to deny guilt given the obvious relation between her image, and the stock price of her company: when articles or news were made public that accused her of fraud and perjury, her company’s shares went down, and whenever she would make statements repeating her story claiming innocence, stocks would go up. Martha Stewart probably believe that claiming innocence would spare her further loses.
Clearly, trying to save this relatively small amount of money – considering her total fortune – by committing fraud ended up making her lose millions, ruining her image and permanently marking her as a convicted felon.
Perjury is a serious charge. Was five months in jail enough time to serve for perjury?
In my opinion, determining if a sentence is “enough” is something that should be done on a case-by-case basis. For some people five months in prison could make them regret their actions, but I believe that for Martha Stewart this was not the case. After she served her initial five months in prison she had to serve five additional months in house arrest, a sentence which she repeatedly violated and even appealed. House arrest is already a very mild sentence considering her crimes, but Stewart had the luxury of doing this sentence in a 150 acre property, and still she tried to get her already short conviction (it could’ve been of up to 24 months) reduced because she was unable to tape her television show. This, along with some statements she made during and after her sentence, clearly does not seem like the attitude of someone who regrets her crimes.
How many cases of insider trading really occur within the time span of a year?
According to Morrison and Foerster’s 2014 Insider Trading Annual Review, in 2014, one hundred and eleven (111) individuals or entities were charged for insider trading or market manipulation, so this would be an approximate number of the cases that come to the surface every year. However, the real number of insider trading cases that occur per year is incalculable, considering that probably many occur and are not investigated. Insider trading is not something that is done only by high profile figures who are trying to save thousands or millions of dollars in loses, but also by less known individuals who commit these type of crimes for small amounts of money and therefore are never even noticed, let along investigated.
Works Cited:
Morrison and Foerster. 2014 Insider Trading Annual Review, 2014. Web: http://www.mofo.com/~/media/Files/ClientAlert/2015/02/150211InsiderTradingAnnualReview.pdf. Date of access: March 08, 2016.
