1. The Martha Stewart Scandal
and Insider Trading

2. What is Insider Trading??
When a corporate official or any other insider sells/purchases stock to a company because of confidential information that the public isn’t aware of
This information is then used by the stockholder to profit.
Not only ethical issue, but illegal.

3. Martha Stewart Scandal
ImClone Systems
Erbitux- cancer fighting drug sent to the FDA for approval.
Co-founder Sam Waksal received insider information.
Dec. 26th Waksal tries to sell his shares as well as his daughter’s shares

4. Stewart then sold her 3,928 shares of the ImClone stock she owned Dec
Stewart then sold her 3,928 shares of the ImClone stock she owned Dec. 27th.
Dec. 28th -FDA
The next trading day, Dec 31st , ImClone stock fell 18%

5. Allegations against Stewart
Agreement between Stewart and her Stock broker
Stewart Charges with nine counts against her.
Sentanced to five month in prison.