Book
Complete the case studies for this week.
Review the case studies below in the textbook. Prepare a one-page report for each of the following case studies: * Case Study: Martha Stewart’s Lost Reputation, pg. 34 * Case Study: Texaco: The Ecuador Issue, pg. 41 * Case Study: Where Were the Accountants?, pg. 44
Ethics Case: Martha Stewart’s Lost Reputation
In June 2002, Martha Stewart began to wrestle with allegations that she had improperly used inside information to sell a stock investment to an unsuspecting investing public. That was when her personal friend Sam Waksal was defending himself against Securities and Exchange Commission (SEC) allegations that he had tipped off his family members so they could sell their shares of ImClone Systems Inc. (ImClone) just before other investors learned that ImClone’s fortunes were about to take a dive. Observers presumed that Martha was also tipped off and, even though she proclaimed her innocence, the rumors would not go away.
On TV daily as the reigning guru of homemaking, Martha is the multi-millionaire proprietor, president and driving force of Martha Stewart Living Omnimedia Inc. (MSO), of which, on March 18, 2002, she owned 30,713,475 (62.6 percent1) of the class A, and 30,619,375 (100 percent) of the class B shares. On December 27, 2001, Martha’s Class A and Class B shares were worth approximately $17 each, so on paper Martha’s MSO class A shares alone were worth over $500 million. Class B shares are convertible into Class A shares on a one to one basis.
Martha’s personal life became public. The world did not know that Martha Stewart had sold 3,928 shares of ImClone for $58 each on December 27, 20012 until it surfaced in June 2002.3 The sale generated only $227,824 for Martha, and she avoided losing $45,673 when the stock price dropped the next day,4 but it has caused her endless personal grief and humiliation, and the loss of reputation, as well as a significant drop to $5.26 in the MSO share price.
Review the case studies below in the textbook. Prepare a one-page report for each of the following case studies: * Case Study: Martha Stewart’s Lost Reputation, pg. 34 * Case Study: Texaco: The Ecuador Issue, pg. 41 * Case Study: Where Were the Accountants?, pg. 44
Ethics Case: Martha Stewart’s Lost Reputation
In June 2002, Martha Stewart began to wrestle with allegations that she had improperly used inside information to sell a stock investment to an unsuspecting investing public. That was when her personal friend Sam Waksal was defending himself against Securities and Exchange Commission (SEC) allegations that he had tipped off his family members so they could sell their shares of ImClone Systems Inc. (ImClone) just before other investors learned that ImClone’s fortunes were about to take a dive. Observers presumed that Martha was also tipped off and, even though she proclaimed her innocence, the rumors would not go away.
On TV daily as the reigning guru of homemaking, Martha is the multi-millionaire proprietor, president and driving force of Martha Stewart Living Omnimedia Inc. (MSO), of which, on March 18, 2002, she owned 30,713,475 (62.6 percent1) of the class A, and 30,619,375 (100 percent) of the class B shares. On December 27, 2001, Martha’s Class A and Class B shares were worth approximately $17 each, so on paper Martha’s MSO class A shares alone were worth over $500 million. Class B shares are convertible into Class A shares on a one to one basis.
Martha’s personal life became public. The world did not know that Martha Stewart had sold 3,928 shares of ImClone for $58 each on December 27, 20012 until it surfaced in June 2002.3 The sale generated only $227,824 for Martha, and she avoided losing $45,673 when the stock price dropped the next day,4 but it has caused her endless personal grief and humiliation, and the loss of reputation, as well as a significant drop to $5.26 in the MSO share price.