Martha Stewart was accused of insider trading for selling ImClone stocks a day before the stock went down in value. The charges of securities fraud were thrown out, but she served five months in prison for obstruction of justice and lying to investigators. Do you think what Martha did (insider trading) was unethical from a financial management point of view? Explain.

Insider trading is considered unethical and illegal, but it is difficult to evaluate whether what someone did is unethical according to justice theory. Martha avoided loss by ensuring her shares were sold shortly before their value dropped. From a financial management point of view, I believe this was unethical because this can create the notion that the select few who have material non-public information take advantage of earning profits or avoiding losses. This can deteriorate the confidence of investors in the financial system leading to reduced investments. If the public avoids investing, companies will have difficulties raising funds because only a few outsiders will be willing to take the risk.

Answer by Academic.tip's expert
An answer to this question is provided by one of our experts who specializes in business & economics. Let us know how much you liked it and give it a rating.

Cite this page

Select a citation style:

References

Academic.Tips. (2023) 'Martha Stewart was accused of insider trading for selling ImClone stocks a day before the stock went down in value. The charges of securities fraud were thrown out, but she served five months in prison for obstruction of justice and lying to investigators. Do you think what Martha did (insider trading) was unethical from a financial management point of view? Explain'. 19 January.

Reference

Academic.Tips. (2023, January 19). Martha Stewart was accused of insider trading for selling ImClone stocks a day before the stock went down in value. The charges of securities fraud were thrown out, but she served five months in prison for obstruction of justice and lying to investigators. Do you think what Martha did (insider trading) was unethical from a financial management point of view? Explain. https://academic.tips/question/martha-stewart-was-accused-of-insider-trading-for-selling-imclone-stocks-a-day-before-the-stock-went-down-in-value-the-charges-of-securities-fraud-were-thrown-out-but-she-served-five-months-in-priso-2/

References

Academic.Tips. 2023. "Martha Stewart was accused of insider trading for selling ImClone stocks a day before the stock went down in value. The charges of securities fraud were thrown out, but she served five months in prison for obstruction of justice and lying to investigators. Do you think what Martha did (insider trading) was unethical from a financial management point of view? Explain." January 19, 2023. https://academic.tips/question/martha-stewart-was-accused-of-insider-trading-for-selling-imclone-stocks-a-day-before-the-stock-went-down-in-value-the-charges-of-securities-fraud-were-thrown-out-but-she-served-five-months-in-priso-2/.

1. Academic.Tips. "Martha Stewart was accused of insider trading for selling ImClone stocks a day before the stock went down in value. The charges of securities fraud were thrown out, but she served five months in prison for obstruction of justice and lying to investigators. Do you think what Martha did (insider trading) was unethical from a financial management point of view? Explain." January 19, 2023. https://academic.tips/question/martha-stewart-was-accused-of-insider-trading-for-selling-imclone-stocks-a-day-before-the-stock-went-down-in-value-the-charges-of-securities-fraud-were-thrown-out-but-she-served-five-months-in-priso-2/.


Bibliography


Academic.Tips. "Martha Stewart was accused of insider trading for selling ImClone stocks a day before the stock went down in value. The charges of securities fraud were thrown out, but she served five months in prison for obstruction of justice and lying to investigators. Do you think what Martha did (insider trading) was unethical from a financial management point of view? Explain." January 19, 2023. https://academic.tips/question/martha-stewart-was-accused-of-insider-trading-for-selling-imclone-stocks-a-day-before-the-stock-went-down-in-value-the-charges-of-securities-fraud-were-thrown-out-but-she-served-five-months-in-priso-2/.

Work Cited

"Martha Stewart was accused of insider trading for selling ImClone stocks a day before the stock went down in value. The charges of securities fraud were thrown out, but she served five months in prison for obstruction of justice and lying to investigators. Do you think what Martha did (insider trading) was unethical from a financial management point of view? Explain." Academic.Tips, 19 Jan. 2023, academic.tips/question/martha-stewart-was-accused-of-insider-trading-for-selling-imclone-stocks-a-day-before-the-stock-went-down-in-value-the-charges-of-securities-fraud-were-thrown-out-but-she-served-five-months-in-priso-2/.

Copy