United States v. Martha Stewart Case Study Example | Topics and Well Written Essays - 1000 words

United States v. Martha Stewart - Case Study Example Prior to and in course of the case proceedings, Martha Stewart was the chairperson of the board of directors and chief executive officer of Martha Stewart Living Omnimedia. Peter Bacanovic on the other hand was licensed by NASD to sell securities as a securities broker with the title "Financial Advisor" at Merrill Lynch & Co, Inc. ImClone systems is a biotechnology company in the US whose then-chief executive officer, Samuel Waksal, was Stewart's friend and a client of Stewart's stockbroker, defendant Peter Bacanovic. Subject to the cases on December 25, 2001, ImClone and Martha Stewart learned of the food and drug administration rejection of ImClone application for approval of Erbitux and announced the rejection of the application on December 28, 2001 after ImClone Chairperson December 27, 2001, sale of 3,928 shares of stock (FindLaw, 2012). This move and announcement prompted the Securities and Exchange Commission and the United States Attorney's Office for the Southern District of New York to start investigations into trading treads of ImClone especially the sale of the stock before the announcement of application rejection on Erbitux to the public. The investigations led to the indictment of Martha Stewart and Peter Bacanovic.