... Charges against Martha Stewart and her broker Peter Bacanovic: According to Associated Press (2003) “Count 1: Conspiracy, filed against Martha Stewart and Peter Bacanovic. Conspired together to produce false information in the stock scandal. Maximum penalty: 5 years in prison, $250,000 fine. Count 2: False Statements, filed against Bacanovic. Lied claiming he spoke with Stewart and she told him to sell the shares when they reached $60 per share. He also lied about telling Stewart the stock price fell. Maximum penalty: 5 years in prison, $250,000 fine. Count 3: False Statements filed against Stewart. She lied to the Security and Exchange Commission, FBI and federal persecutors saying that she and Bacanovic made a prior arrangement to sale the stock if it fell below a certain figure. Maximum penalty: 5 years in prison, $250,000 fine. Count 4: False Statements, filed against Stewart. She was not honest in being tipped off that her family friend Waksel were selling their shares in Im Clone. Maximum penalty: 5 years in prison, $250,000 fine. Count 5: filed against Bacanovic. Making and using false documents. He changed paper documents making it look as if Stewart had previously told him to sell when the shares fell. Maximum penalty: 5 years in prison, $250,000 fine. Count 6: Perjury, filed against Bacanovic. He lied several times to the Security Exchange Commission agents about trading of ImClone and talks between him and Stewart. Maximum penalty:...
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...The Martha Stewart Case Professor Beverly H. Lee | AbstractThis is a brief synopsis into the life of Martha Stewart and the legal fortunes or misfortunes of Martha Stewart. We will delve into the various stages in her life and the outcome of the events that transpire in her life. By: Paul Cumberbatch BUSA 2106-200 | Fraud, lying, conspiracy...not terms that any individual generally wants associated with their history, nevertheless with their reputation and personality; even if that individual happens to be Martha Stewart. Her name pronounces itself across cookbooks, magazines and even has its own show on Style and The Learning Channel. It now pronounces itself with yet another captivating theme, as part of one of America's major scandals. As a well-respected author of books on cooking, entertaining and decorating she rose to prominence. It was also due to the expansion of her brand name by means of magazine and television show, and serving as CEO of the Martha Stewart Omnimedia. However; as it would come as an ironic coincidence that she would have to go to court which subsequently led to Ms. Stewart’s resignation from her post as CEO amid allegations of insider trading in 2002. Martha Stewart was born on August 3, 1971 as Martha Kostyra in New Jersey. She was the second of six children as she grew up in Nutley, New Jersey. By Age 13 she was working a model, making appearance in fashion shows, television and printed advertisements. As time went along she began attending...
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...HBS Martha Steward Case Assignment Questions 1. In what ways did Stewart’s control of shareholder voting rights disrupt the functioning of the board? How did her control of the board interfere with directors’ carrying out their fiduciary duties? Stewart highly influenced and controlled all aspects of the company and board of directors. Because Stewart was the founder, major shareholder, and the face of the company it was difficult to bypass her demands and have a fully functional board. The name of the company itself was Martha Steward Living Omnimedia and at the end of the day the firm was founded on her image and work. On top of that, having over 90% of the shareholder voting rights and a big ego proved to be detrimental to the company’s well being. No matter what the board would advise or how good the vision of new CEO’s were she would always decline their plans and eventually make them resign. Furthermore, she appointed most of the board members. Just to name a few people, CEO Sharon Patrick was someone she met on a hiking trip to Kilimanjaro, Frederic Fekkai on the board was Martha’s hairdresser, Charlotte Beers and Michael Goldstein were also appointed by Martha. By her having the most control and appointing a board that back her up no matter what left many executives who wanted to make changes with their hands tied. 2. What changes in the makeup of the board would have improved governance? Had there been a more diverse group that was searched for by third...
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...PROSECUTING MARTHA STEWART: THE OVERVIEW; Martha Stewart Indicted by U.S. On Obstruction By CONSTANCE L. HAYS Published: June 05, 2003 Martha Stewart was indicted yesterday on charges of conspiracy, obstruction of justice and securities fraud, all linked to a personal stock trade she made in 2001. She pleaded not guilty and pledged to fight the charges. Hours after her arraignment in federal district court in Manhattan, the media and merchandising company she founded, Martha Stewart Living Omnimedia, announced that she was stepping down as chairwoman and chief executive. She will continue as a director and is expected to remain a force as the company's ''chief creative officer.'' [Page C1.] The indictment depicted Ms. Stewart as going out of her way to conceal the circumstances of the sale of nearly 4,000 shares of ImClone Systems, a transaction that investigators say she made after learning that her friend, Samuel D. Waksal, the company's founder, and his daughter were selling their own stock. Indeed, the charges focused less on the trade than on an elaborate cover-up that prosecutors say came afterward. According to the indictment, Ms. Stewart lied to investigators by telling them that she and her stockbroker had previously agreed to sell the shares if their market value fell below a certain price, and altered a phone message from the broker in her assistant's computer ''immediately following a lengthy conversation with her attorney.'' At a news conference announcing...
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...International Journal of Humanities and Social Science Vol. 1 No. 15 [Special Issue – October 2011] A Corporate Hero with Scandal: Lessons Learned from Martha Stewart’s Insider Trading Crisis Shuhui Sophy Cheng Assistant Professor Department of Communication Arts Chaoyang University of Technology 168 Jifeng E. Rd. Wufeng District Taichung 41349, Taiwan Abstract Martha Stewart places her name on her products. She becomes the face of her company and the voice of her brand. When her personal misconduct occurred, she made her company vulnerable and risky as well. This casestudy examines how Martha Stewart managed her corporate communication when her public image and reputation were tarnished on trial for alleged insider trading scandal. The trial not only led her to prison but also hurt her brand equity. The study shows that Stewart’s early response to her crisis demonstrated lack of situation awareness. In the beginning of her investigation, she kept her public persona intact, ignoring or downplaying her role in it. As a result, what Stewart called “a small personal matter” later became a full-blown crisis. If she had managed her communication in a more timely manner, the magnitude of her crisis might have been minimized. This article also provides detailed insights for organizations to learn from her crisis response strategies. Keywords: Organizational crisis, Crisis communication, Image restoration 1. Introduction The personalities of strong business leaders can help...
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...forward beyond this hiccup. MSO has a long history of success. Since its inception it has been groomed for creating a niche that appealed to all women of all walks of life. This organization started in a basement and has grown to a powerhouse of cooking, books, magazines, home products to homes. In the recent year or so MSO has taken some hits. Our stock has suffered, our employees have suffered and most importantly of credibility with our customers. The morale of its employees, the confidence in the market and consumers’ confidence has all taken one in the chin. MSO has to step it up and remove all doubts that this not the same company it was before and the transgressions of the founder are not ours to carry. We are more than just Martha; we are Martha Stewart Living Omnimedia. Over the next twenty minutes we will discuss leadership training, change within the organization, opening lines of communications, rebuilding trust in our relationship with our customer and create a motivation that allows MSO to thrive once again in better fashion. First step let us discuss opening lines of communication. It is the first step to restoring the confidence of MSO leadership to its employees. We should lay out a plan to the organization to allow them to get comfortable with the changes that are coming down the pipe. Second step we will then begin the process of training our leadership a new way of leading. We have to restore the employee’s confidence in our leadership ability, thus proving we...
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...Home Depot Business Proposal Easter B. Fulton ECO 561 June 22, 2015 J. Carl Bowman Home Depot Service The Home Depot was founded in 1978 in Atlanta, Georgia as the first home retail store by Bernie Marcus and Arthur Blank (Home Depot, 2014). To give an extent of mixes to customers the Home Depot affiliation made key item examination. This helped clients who request to complete structure extends on different business ranges the affiliation's innovative stock revolved around internal and outside customers of the relationship for master foremen, free how to focus, do it without any other individual's help assignments, free how to office and childrens' workshops. Home Depot progressed overall and saw as a claim to fame retailer that business segments 40,000 different sorts of building materials, home change supplies, apparatuses and yard and patio nursery supplies, and additionally stock nook things' and stock restricted to match the customer's specific market needs (Home Depot, 2014). The Home Depot has more than 2,200 supportive regions all through the United States (numbering the spaces of Puerto Rico and the Virgin Islands), Canada, China and Mexico. Stores typical 105,000 square feet with give or take 23,000 additional square feet of outside greenery walled in area zone (Home Depot, 2014). One clarification to survey and satisfy the business' possibilities is to look at the strategies and system for a supplementary client administration. Home Depot offers developing...
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...Introduction Martha Stewart was indicted on charges of conspiracy, obstruction of justice and securities fraud. All linked to her sale of 3,928 ImClone Systems Inc shares on December 27, which considered as illegal insider trading by Security and Exchange Commision (S.E.C). Stewart cashed out her ImClone stake at an average price of $58.43, collecting about $229,500. After the market closed the following day, the Food and Drug Administration announced its refusal to review ImClone's application for Erbitux, a promising cancer drug. The next trading day, Dec. 31, ImClone's shares opened at $45.39 per share. That difference in price would have cost Stewart about $51,200 if she sold first thing that morning. However, she was not prosecuted for insider trading, which was the original focus of the government's investigation. She pleaded not guilty and pledged to fight the charges. Although the charges of securities fraud were thrown out, Stewart was found guilty of four counts of obstruction of justice and lying to investigators. She was sentenced to five months of prison, five months of house arrest, and two years of probation. ImClone case was showing unethical and socially irresponsible behavior by business executives. They are in positions of power that allow them to do damage to others. This paper will evaluate the case above thoroughly, start from the prosecution’s arguments, the defense’s arguments. Analysis will be made using four ethical theories; Rights, Justice, Utilitarianism...
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...Martha Stewart’s initial public relations response to the charges against her was basically to lie in the background and keep everything hush for as long as they could. Martha Stewart did not speak to the public about the alleged charges she was being faced with, so she was having people she paid very well to speak for her. Stewart denied being guilty, and claimed she had done nothing wrong. The public or society became wary of her, and after the courts convicted her of being guilty, she began to look like a liar her consumers and just about to anyone else. Stewart not only still refused to really give the public an explanation, she also still refused that she was guilty of doing anything wrong. After the media coverage had been taken nationwide, Stewart still insisted that her attorney still to be the one speaking to the public. This article explained that Stewart would not make eye contact nor speak to the media reporters. Her attorney spoke for her, and Martha Stewart’s public relations initial response was to let the legal attorney do the talking. I believe the key public relations principle that Martha Stewart violated was not personally addressing the issue of the charges or accusations she was being initially accused and eventually convicted of. She did not give her consumers and stockholders an explanation for anything. After she was convicted, she never apologized for anything. She was found guilty and she still addressed the public only electronically...
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...Running head: GAINING POWER AND INFLUENCE Gaining Power and Influence at the Credit Union Jessica L. Styer Trident University International MGT 302 Module 2 SLP Gaining Power and Influence at the Credit Union “Everyone has power. Everyone. And, I don’t believe that power is a bad thing. The issue becomes what kind of power a person has and how someone uses that power.” (Lauby, 2010) Referent Power and Expert Power are the two main types of power that I use to gain power and influence in my position as a service and sales trainer at the credit union. Referent Power Referent power “is sometimes thought of as charisma, charm, admiration, or appeal. Referent power comes from one person liking and respecting another, and strongly identifying with that person in some way.” (Mindtools.com) I have been told by other co-workers that I have charisma and appeal. I have a very positive outlook at work and in my training sessions. I train on the two things that most people struggle with; consist exceptional member service and sales. This is why I use referent power to influence my trainees. Trainees come to me when things are not going well and they are very negative. If I followed the same mindset as my trainees, then we would not get any improvement. I need to show them that they can be successful and sales and member service is positive. Expert Power Expert power is “when you have knowledge and skills that enable you to understand a situation, suggest solutions,...
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...Case Analysis Martha Stewart takes on time Summary of the case 1. Some important vocabularies in the case * Franchise- Formal permission given by a company to somebody who wants to sell its goods or service in a particular area. * Retreat- A period of time when somebody stops his/her usual activities and goes to quiet place for prayer and thought an organization event when people can do this. * PIE - A share of money, profits etc. * Stake- Money that somebody invests in a company. - An important part or share in a business plan etc. that is important to you and that you want to be successful. * Division –A large and important unit or section of an organization. * Lavish –Large in amount or impressive and usually costing a lot of money * Threaten -To say that you will cause trouble hurt somebody etc. if you don’t get what you want. * Buyout - A situation in which a person or group gains control of company by buying all or most of its shares. * Backer - A person or company that gives support to somebody, especially financial support * IPO - Initial Public Offering (the act of scaling shares in a company for the first time). 2. Background a) About Time Warner * Time Warner is a very large U.S media and entertainment company selling magazines films television programmers and internet...
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...website. * With this added on plan, home depot expects to not only supply jobs but develop great workers who will hopefully increase profit for the spring THREATS * Their competitor lowes Business strategy * Pricing strategy to create values to the customer, do not repeat promotions from previous years GENERAL ENVIRONMENT ANALYSIS * EconomicNature and direction of the economy in which a firm competes or may compete. * Economic recession- home improvement industry categorized as recession proof product * Housing market * Increased restrictions on credit availability-big ticket items financed * demographicpopulation’s size, age structure, geographic distribution, ethnic mix and income distribution * women-new Martha steward line * 20-30 yr old- establishing “first” home * Aging group- less likely to purchase new homes and instead renovate their homes. Diy motto * Political/legalcompeting for attention,...
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...on the organization as well as the individual. It will indicate the sentence imposed in regards to committing Business fraud. The (SEC) U.S. Securities and Exchange Commission reported that Martha Stewart did on 27 Dec 2001 receive private information from an employee at Merrill Lynch. This information was used to save her from taking a loss in the stock market. Based on this private information She sold her shares in the ImClone System. By selling all her shares she was able to save $45,673 dollars. It was reported that the day after she sold her stocks the stock market value for ImClone fell 16%. The back lash from this illegal action came to light in the following months. Stewarts reputation suffered. The media had a field day with the information that she had received unpublicized information from her broker at Merrill Lynch. There were several articles headlining this information i.e. Newsweek had a cover indicating “Martha’s Mess”. She went on CBS and was literally grilled by Jane Clayson anchor at that time. During this time she was serving on the New York Stock Exchange as one of the board of directors. As of October of 2002, She had held that position for only four month’s but was forced to resign due to the controversy (BBC,October 4, 2002). Stewarts actions were not only unethical but they were illegal. In June 2003, she was indicted on charges of obstruction of justice (lieing to federal agents), she received 9 counts one of which was securities...
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...Martha Stewart Martha Stewart Martha Stewart is an author, editor, and a homemaking advocate. Over the last two decades Stewart has held a prominent position in the American publishing industry. She was the author of several books, hundreds of articles on the domestic arts, editor of a national homekeeping magazine, host for two popular daytime television programs, and commercial spokeswoman for K-Mart (Wikipedia). At the height of her career, Stewart’s success came to an abrupt hault as she encountered many hardships that were responsible for her undesireable reputation and diminished trust in the business world. In December 2001 Stewart held 3,928 shares in ImClone, a New York-based biotech firm. On the morning of December 27, Aliza Waksal, the daughter of the firm's CEO, Sam Waksal, told Douglas Faneuil, the assistant to Stewart’s Merrill Lynch broker, Peter Bacanovic, to sell the ImClone shares in her account. Soon after, Sam Waksal's accountant tried to sell Sam's shares as well. Faneuil told Bacanovic about the Waksals' desire to sell, and Bacanovic quickly called Stewart, leaving a message that ImClone's stock was going to start trading downward. Stewart sold her ImClone shares on the afternoon of the 27th. The following day, December 28th, The Food and Drug Administration reported publicly that ImClone’s promising cancer drug Erbitux was not going to be approved. After the announcement, ImClone’s stock fell sharply and Martha Stewart saved around $45,000 by selling...
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...Martha Stewart To me, Martha Stewart is a television profile, a happy woman I saw on food shows when I was younger, someone that you'd think is the most genuine person you’ve ever seen on your screen at home while sitting comfortably on your couch wishing you could taste the delicious food or cakes she made. Not to make a general statement and say that everyone with higher status in the society has a bad side, but this woman is someone I would never assume to be a white collar criminal. She is born in New Jersey has Polish background and is at the end of the summer turning 75 years old, she has 5 siblings. She, just as any normal child from a middle-class family started working as a nanny when she was 10 years old. While every other 15 year...
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