Case Study: Martha Stewart: Insider Trading Scandal
...to be one day before the FDA had declined ImClone’s new cancer drug, Erbitux. With this announcement the stock plummeted. Martha was tipped off by the CEO of the company, Sam Waksal. Now they both are faced with criminal charges of insider trading. SWOT Analysis: Strengths: Martha has an excellent business sense. She developed a company from the ground up. She has developed many influential connections and has worked extremely hard to get where she has gotten. Weaknesses: The insider trading was a huge weakness. It didn’t seem as though Martha knew what was fully going on. She got a tip to sell her stock, and did, no questions asked. Opportunity: Martha had the opportunity to sell the stock after the announcement from the FDA, which would have been on Dec 30th. If she had done it this way she would have only lost about $48,000 instead of the millions she is putting into the lawsuits. Threat: Sam Waksal, even though being a good friend, was a threat. He was the one who got Martha in this mess by tipping her off on the stock right before it plummeted. If he had kept his mouth shut, he possibly would not have the criminal charges, and Martha would not be in this mess. Analysis of Strategy and Structure: The strategy was to help one another for maximum profit. When Sam Waksal tipped her off on what was going to happen, the plan was to sell all stocks and not lose any money. This way her employees would not suffer, and no harm would be done, little did she know. Martha seemed to be an authoritative leader. She seemed to want people to be involved with her visions, and profit. Martha had an expert power and a centralized company. Her skills and business sense h...