Martha Stewart: Inside Trader

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Group 3 – Martha Stewart: Inside Trader There are many critical ethical issues that exist in the case involving Martha Stewart, Sam Waksal and family, and Peter Bacanovic. If these unethical concerns were to be numerically ranked, with number one being the most severe, the list would be the following: 1. Sam Waskal selling his family’s shares and attempting to sell his own shares of ImClone before the news of Erbitux had been publically released, in an attempt to save their money without any concerns for how it will impact the shareholders of the company. 2. Bacanovic tipping Stewart with non-public information received from Waksal knowing fully it is illegal and ethically wrong. 3. Martha Stewart engaging in insider trading with her knowledge that it was illegal and ethically wrong. 4. Martha Stewart and Bacanovic lying to the SEC investigation about the insider trading. 5. Bacanovic altering the worksheets in the SEC investigation in an attempt to mislead. Sam Waksal’s decision is on top of the list because he was the individual who made the first unethical move and consequently created a domino effect. By attempting to sell his and his family’s shares of the company knowing he had non-public information, Waksal started a chain of immoral decisions which led to Bacanovic and Stewart’s actions. Sam Waksal Once Sam Waskal, the Founder, President and CEO of ImClone, had knowledge that the FDA would turn down their application, he began a series of maneuvers with the intention of selling his and his family’s shares of the company. These actions, including attempting to sell his own shares through his daughter, are considered illegal and unethical because Waskal had possession of relevant material that was not available to the public at the time. Ethically, as the founder, president and CEO of ImClone, it was his fiduciary duty to

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