My writings: Martha Commits Fraud

On December 27, 2001 celebrity homemaker and former stockbroker Martha Stuart puzzled investigators when she sold nearly 4,000 shares of ImClone Systems Inc. stock. Stuart denied all alegations when questioned which led investigators to question her former stockbroker Peter Bacanovic, when they came to the conclusion they had commited fraud. The accusations were that Bacanovic told his assistant to tip off Stuart that ImClone's founder, Sam Waksal, was canceling his shares. Stuart took advantage of the information and sold all her sales in the biotech company as soon as possible, Stuart got the big money while leaving everyone else with nothing. Stuart and bacanovic continued to deny all charges stating that they had a "pre-existing agreement" to sell all the shares if ImClone dropped to $60. Stuart had been charged with securities fraud and lawyers debated whether Stuarts charges would be dropped. The judge believes that Stuart's supposed reason of selling her shares was strictly to mislead investigators in Martha Stewart Living Omnimedia. An FBI agent notes prove that Stuart made false statements to investigators and that Steven Pearls, the junior lawyer during the session, report was also false. A testimony on behalf of the prosecutors also contradicts their sale agreement stating that Baconovic had told her he wantes to set a floor price for the ImClone shares, the testimony was discredited because prosecuters claimed DeLuca's memory was unreliable and portrayed her as a loyal employee. In a rebuttal case, prosecuters played a tape of a questioning of Baconovic claiming to have never discussed a floor price and to have spoken with her in that level of detail.