"Martha Stewart wasn't an insider at Imclone, so when the SEC accused her of insider trading, it was making law out of thin air. "
Actually, you don't have to be an insider to be guilty of "insider trading." If you are the "tipee" and you know that the "tipper" has a fiduciary duty to the company, you can't use the tippers insider information and trade based on that. Given that, though, I don't think that her broker would be a fiduciary as to the company.
The whole time that this case has been underway, I've never been able to figure out (aside from the bogus "securities fraud" charge that was dropped) just what the government's theory was with regard to her wrongdoing. Can someone explain? The news media hasn't been very good at explaining it.
The whole time that this case has been underway, I've never been able to figure out (aside from the bogus "securities fraud" charge that was dropped) just what the government's theory was with regard to her wrongdoing. Can someone explain? The news media hasn't been very good at explaining it. The link below is on the SEC website. It describes a civil cause of action. Martha lied to the investigators regarding the civil case. Her trial for the lying was recently completed. A caveat, while the civil case was brought, and while I have seen no evidence that it has been dropped (I looked), the civil case may in fact have been dropped or settled.
The news media is not good at reporting most things.
Martha Stewart and Peter Bacanovic: Lit. Rel. No. 18169 / June 4, 2003 <-- Link
On June 4, 2003, the Securities and Exchange Commission filed charges against Martha Stewart, Chairman and CEO of Martha Stewart Living Omnimedia, Inc., and Peter Bacanovic, a former registered representative associated with Merrill Lynch, Pierce, Fenner, and Smith Incorporated, for illegal insider trading. ... The Commission alleges that, based on this conduct, Stewart and Bacanovic violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.