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For several months, Martha Stewart has been in the news because the United states securities and exchange commission believes that Martha Stewart had received the news from her friend Sam Waksal that his company ImClone's cancer drug had been abandoned by the food and drug administration before this information was made public. The rejection was a big blow to the company as it led to the price of the stock declining dramatically.However, financially; this did not affect Martha Stewart badly because she had her broker sell her four thousand shares earlier before the news was announced to the public. If this is the truth, and though it has not been proved yet, then Martha Stewart is guilty of insider trading. The term insider trading is assumed by many people to mean illegal version, however, it can also mean the perfectly legal business of buying and selling of stock by an organization's corporate insiders. The insider trading becomes legal when these corporate insiders trade stock of their own company and then report these trades to the United States Securities and Exchange Commission. By doing that, it demonstrates that the insider trading is not hiding any secrets and therefore any one can get or even find out a corporate insider's opinion of his or her company (Hoffman, 2007).

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On the other hand, insider trading becomes only illegal when an individual focus their trade of stock in a public organization basing on the information that is not well known to the public. It is illegal therefore, to trade our own stock in a company on information that the public has no knowledge about. It is still illegal to provide someone with that information, a clue, so they can trade their stock using it.Therefore, Martha Stewarts decision to accept her friend Sam Waksal's offer to participate in the ImClone company led her to experience different consequences such as being prisoned, being put on probation for some days, and being forbidden from participating in business until her term of punishment was over (Gregoriou, 2008).

Martha Stewart personalized all that is deemed right about the American goal. She did this through establishing the largest and profitable company by the name of Martha Stewart Living Omnimedia.This was successful because of her creativity, hardwork, and entrepreneurial risk taking. Martha Stewart's actions were clear demonstration that given a chance, women are in great position to make it in business world. This is clearly demonstrated by her business model, based on domestic art and women's task, showing the purchasing power of women.

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From Martha Stewart's case, we see where the American businesses and executives make mistakes. Her case demonstrates the state of white collar crime such as the statutes, their enforcement, and the impacts of both. Martha Stewart served her sentence and lost her appeal making her case a suitable example for analyzing white collar criminal laws. For instance, when the facts presented are direct, the case takes a short period of time to be completed.

According to research, when investigations are made public, various side effects or consequences of the investigation process are most likely to occur (Macey, 1991). This is because financial and business markets respond to news of the investigation and to leaks concerning its progress. For instance, investors sell, shareholders sue, clients withdraw, advertisers bail, and targeted firms later encounter financial hardships. This is clearly illustrated by Martha Stewart's company, Omnimedia, which encountered similar consequences, intensified because she was closely identified with the company's main product lines. The company's overall revenues declined drastically after performing investigations, and its earnings from publications also reduced by 68% (Macey, 1991). As an outcome of the reduced share prices and the general uncertainty about the company's future role, corporate shareholders filed twelve civil suits against Martha and her company (Macey, 1991). Both personal and political consequences were also encountered by Martha Stewart during the investigation period of her trade. She was elected to the board of the New York stock exchange as the investigation kicked off in march 2002.She had to resign again as the investigation process was still going on seven months later when her broker's assistant by the names of Douglas pleaded guilty and accepted to testify against her.

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The house energy and commerce committee on the political front performed investigation exercise on Stewarts ImClone sale and in September 2002, the committee referred that issue to the department of justice. After one and half a year of investigation, Martha Stewart had to step down as the CEO and chairman of her company. Having been listed on the company publication as the founder and editorial director, she has to work extra hard in order to recover those big titles. In additions to this, she was subjected to public scrutiny throughout the eighteenth month investigation of her case and her company. Therefore, Martha Stewart's case demonstrates that white collar crimes can really take a long time to carry out investigations. This is because the conduct and transactions encountered are most of the time carried out in privacy and often performed in secrecy. This type of investigations lack witnesses, investigators just follow paper trails. Due to long period of investigation taken, it can set off harmful collateral consequences which are not strictly legal in nature. Rather most are extra legal, meaning that they do not occur from a legal determination but from market and social forces that are stimulated by an investigation.

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Martha Stewart was a scapegoat to Sam Waksal who was the main dealer in insider trading. He encouraged most of his friends and family members to sell their stocks and also tried to sell his own.However; Waksal pleaded guilty later on various charges, securities fraud being one of them, and was then put in prison for seven years and three months.

The Securities and Exchange Commission has the responsibilities of ensuring that all investors are making decisions that are based on the same information.Therefore, insider trading can be illegal because it destructs this level of investors. According to research, there are over five hundred civil enforcement behaviors each year that are against individual and organizations that break the laws of the securities. And insider is one of the common laws broken in the country.However; the punishment ruled on illegal insider trading depends on the kind of the circumstance. The individual found guilty may be fined, banned from participating on the executing or board of directors of a public organization and can even be imprisoned.

There is always a reward a bounty to anyone who provides the necessary information to commission that; leads in a fine of insider trading. This is according to the securities exchange act of 1934 in the United States which permits the Securities and Exchange Commission to give that reward. Its thus recommended that, we do not engage in insider trading for the best interest of our companies so that the securities exchange commission don't have to investigate on us and also there are harsh penalties that are associated with inside trading. For instance, the securities exchange commission has the permission and authority to find out the court order requiring violators to refund back their trading profits. It also has the mandate to request the court to impose a penalty that is up to three times the profit the violators benefitted from their inside trading.

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