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Martha Stewart Essay

1219 words - 5 pages

Martha Stewart case study
Since this is an ethics course one might ask, did Martha do right or wrong? I can absolutely say that she did some very bad things: alleged insider trading and obstruction of justice. She was tried and convicted for obstruction of justice and she served her time. She should have been thrown in jail. She belongs in the same boat as the Tycos and Enrons, the law is the law and she tried to get away with it. She tried to cover-up evidence in a way by erasing phone logs and concocted a story with her broker on why they sold the stock when they did. Her actions as a CEO and as a human were horrible, despicable and yes very irresponsible. She tarnished her image forever, ...view middle of the document...

Unfortunately, she was lying. This was the start of her cover up scheme which once prosecutors vetted; used it as evidence to indict her on securities fraud. Later these charges got dismissed due to lack of evidence, but this was start of her stocks downward death spiral which hit an all time low of just under $ 6 a share in October 2002. Throughout the rest of that year and next year leading up to her indictment, Martha Stewart acted completely irresponsible. She started running scared not thinking about her company but thinking about her own skin and her company lost millions in revenue and sales and her actions actually got her into more trouble.
On June 4, 2003 Martha Stewart was indicted on nine counts of insider trading. One day later Martha responded back to the world by taking a full page add out in The USA Today and starting a new website, www.marthatalks.com. On the website Martha explained that the charges brought against her were entirely unrelated to the business of her company. She claimed her innocence and that she would fight to clear her name (Lauerman, 2003). Sixteen hours after the website was up in running Martha Stewart's lawyers claimed that the site had over a million hits and about 12,000 email messages, including one from a federal agent who encouraged Martha not to settle (Hays, 2003 ). Martha Stewart was trying to refresh her image. She was the face of this multi-million dollar company; down with her goes the company. Now was she completely innocent, of course not but she was winning the court of public opinion and slowly but surely her company’s stock prices started to go back up.
In the fall of 2003, MSO stock started to dip again as the prosecution started to build its case and info was leaked to the press. Martha stepped down from the company as CEO and went on a public relations spree topping it off with a Barbara Walters interview on 20/20. Now traditionally during high profile cases most people don't show up on the evening news right before the trial. How many times did we see Andrew Fastow, former Eron CFO, or Scott Sullivan, former WorldCom CFO, on the news. You didn't, that's because Enron and WorldCom were completely dead and they were trying to save their skin not the company's (Johnson, 2003). Martha Stewart was trying to save her company that she had built with her own two oven mitts, and a good PR campaign was needed because...

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