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How can I reply to this post? 1 0 0 words Insider trading is when someone buys or sells stock for a certain company with
How can I reply to this post?
1 0 0 words
Insider trading is when someone buys or sells stock for a certain company with information that is private, nonpublic, or confidential. Someone who famously committed insider trading and was convicted was Martha Stewart. Martha's broker tipped her off that stockholders of a certain company that she owned 4,000 shares in were getting rid of their stock because the stock was about to tank. The reason she committed this fraud was so she could drop her share of a certain pharmaceutical company before they got in trouble with the FDA and before she suffered a finical loss of around $45,000. Referring to the fraud triangle, the perceived pressure was this finical loss. As mentioned above, she stood to lose a lot of money if the pharmaceutical company's new medicine was not FDA approved. She obviously had the opportunity to commit the fraud and actually dropped her shares of the company one day before the FDA results came back. From what I gathered, she never tried to rationalize the fraud, instead, she continually denied any knowledge or part of the fraud. Because of this whole scandal, Martha Stewart spent 5 months in prison, 5 months of house arrest, and 2 years of probation. Surprisingly, she was not charged with insider trading but instead was charged with securities fraud, obstruction of justice, and conspiracy. Martha Stewart also had to pay $195,000 to settle her civil case with the Securities and Exchange Commission.
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