Group 4
MARTHA STEWART
Robert – Daniel Deji
Martha Stewart,CEO
Living Omnimedia
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Martha Stewart Living is a magazine and a television show featuring entertaining and
home decorating guru Martha Stewart. Both the magazine and the television
program focus on the domestic arts. Martha Stewart Living began as a quarterly
magazine, and is currently published monthly. Martha Stewart Living is also the
flagship brand of the Martha Stewart Living Omnimedia media empire.
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Martha Stewart Living television debuted as a weekly half-hour syndicated show in
September of 1993. Intended to complement the magazine, it featured Stewart as the
host. By the time it went on hiatus in autumn of 2004, it was a full hour being
broadcast five days a week and on weekends. Martha replaced the show in 2005.
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Both the magazine and the television show have won numerous awards
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Martha sold her shares of ImClone when she heard about news that would decrease
the values of those stocks through her broker who had heard about it via an inside
official at ImClone
Time Line Of Events
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December 26, 2001: ImClone founder Sam Waksal is tipped that the government will
deny the company's Erbitux application, then tips his daughter to sell her ImClone
stock and tries to sell his own. The call from Peter Bacanovic to Martha Stewart
came in between 10 and 11 a.m. on Dec. 27 to Stewart's assistant who noted, "Peter
Bacanovic thinks ImClone is going to start trading downward."
Martha Stewart calls Peter Bacanovic's office later that day and according to
prosecutors, she talks to Douglas Faneuil
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December 27, 2001: Stewart sells all 3,928 shares of ImClone stock she owns. The
government later contends she was tipped that Waksal was trying to sell his shares.
In 2002, the Securities and Exchange Commission announced that Martha Stewart
was under investigation for insider trading. She had sold 3,928 shares of ImClone
Systems in December 2001, just before the Food & Drug Administration announced
that it was scuttling ImClone's application to sell a new so-called wonder drug.
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March 5, 2004: Martha is put on house arrest.
Turning Point – Ethical Decision
“The bottom line is that insider trading is not wrong, actually, not if it doesn’t involve failure
to perform one’s fiduciary duty or stealing information. If one learns of something from a
friend or overhears a conversation or obtains the knowledge via a psychic, there is nothing
wrong with making a profitable move that others hadn’t had the chance to make. - Say, a
single woman learns that a very eligible and desirable potential mate has turned up in her
neighborhood. Before she makes a move to get acquainted she surely doesn’t owe it to all
the other single women in the region to report this fact. Quite the contrary, she should do her
best to get to the potential mate before anyone else has learned of the situation.”
“in the newspaper business a great deal hinges on scooping the competition. Indeed,
reporters receive prizes for doing this, namely, jumping ahead of the crowd with
information only they got a hold of so as to score! They and their editors should be
especially keen on condemning federal insider trading laws – by the logic of such laws,
scooping would have to be prohibited.”
“Insider trading laws aim to mimic rules of golf, baseball and football, all of which aim to
even things out between competitors. But this isn’t because it is unfair to have an advantage,
not at all. It’s because the fans wouldn’t like a contest in which the same folks – individuals
or teams – keep winning. So, to make things interesting, rules are introduced that will mix
things up a bit.”
Virtue Ethics
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According to virtue ethics, Martha Stewart had enough courage to sell her stock,
therefore it was ethical for her to sell her stocks.
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Virtue ethics emphasizes virtue or moral character,which include courage
prudence,temperance,justice,honesty and trust.
Divine Command Theory
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Divine command theory deals with believing in a deity who communicates what is
right or wrong.
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Martha Stewart did not break any divine command theory and it was ethical for her
to sell her stock.
Deontologism
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Deontologism emphasizes the rules.It supports creating a good society by having
people do good.People should be treated as end but not means.
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Martha Stewart treated other people as means and not ends to reach her goals of
success. Therefore it was unethical for her to sell her stocks
Utilitarianism
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Utilitarian seeks to maximize overall “happiness”.The ethical act is the one that
creates the greatest good for the greatest number.
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Since other shareholders were not given the tip that the stock will sell below normal,
utilitarian theory was broken since it did not produce the greatest happiness to
shareholders.
Natural Rights Theory
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Natural rights theory emphasizes negotiation and consensus agreement or
entitlement to act without interference.
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When Stewart sold her stock, she broke the SEC rules and guidelines and therefore it
was unethical for her to sell her stock after getting a tip that the stock will sale below
normal price.
References
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http://www.lewrockwell.com/machan/machan47.html
http://www.usatoday.com/money/media/2004-03-05-stewart-timeline_x.htms
http://www.courttv.com/trials/stewart/chronology.html
http://en.wikipedia.org/wiki/Martha_Stewart_Living
Questions ?