Sociology

Martha Stewart has been a successful celebrity for many years she is the founder of a large lifestyle media empire, through her own magazine, Television show, flourishing line of home furnishing products as well as best selling books. Martha together with a business partner established a company by the name Martha Stewart Living Omnimedia in 1997 and she became the chairperson. As it is with many celebrities, there are those who envied Martha and those who disliked her popularity (Heminway, 2007).

It all stated after the sale of the ImClone stock on 27th December, 2001. Martha Stewart, a celebrity lifestyle entrepreneur and media personality, was called by her broker who suggested that the sale was based on insider information. The broker notified her that the CEO was liquidating the company stock. He advised her it would be better if she sold off her own shares of the company. Martha sold over 3,000 shares of ImClone system stocks in order to save her about 45,000 on her stocks. The following day after Stewarts shares had been traded, the stock value of the company shares dropped by 16.  A questioning coincidence between the selling of a large number of shares by the CEO and Martha was discovered by Securities and Exchange Commission who decided to carry out an investigation to find out if Martha was guilty of insider trading. Stewart was interviewed twice by investigators from Federal Bureau of Investigation, security and exchange commission, as well as the local United States attorneys office. In all these interviews she offered information about her reasons for trading her shares. These reasons were later found to be false by the jury (Heminway, 2007).

As stated by Michael, and Benson (2009), illegal insider trading according to the Securities and Exchange Commission is generally trading a security, in violation of a fiduciary responsibility or other relationship of trust, while in control of material and information that should not be disclosed to the public. When legal technicalities were looked into critically, Martha did not violate a fiduciary responsibility to the other investors, as she did not have real responsibility of informing them, which would have been the case if she was an officer with the organization. If Martha had initially confessed of her activities she would not have been charged with insider trading. However, Martha decided to do exactly the opposite of this they planned with her broker to fabricate a story on how a standing order existed clearly stating that Martha was to sell her shares if the stock price dropped below 60 per share.

She was charged with conspiracy, pre-jury changes, and false statement. Marthas case is one of the most recent white collar crimes. A white collar crime is an illegitimate act characterized by dishonesty, violation of trust, and threat of physical violence. These crimes are committed by individuals who have intent of obtaining money, property and services want to avoid loss of property or money or want to safeguard personal interest in the business. Cases of white collar crimes involve activities such as embezzlement, forgery, fraud and counterfeiting. Fraud is the most common white collar crime. These types of crimes are mostly committed by people who have power, money and wealth. White collar crimes mostly occur among those who come from higher socio-economically standing families. These people can afford to hire the most competent lawyer in the nation to defend their case. Though these people may be charged, they usually get a lighter sentencing than poor people who may commit similar crimes as well as crimes committed in the streets (Heminway, 2007).

Stewarts case was highly publicized by the media as it happens with all other celebrity cases. Though this case had a limited scope as compared to other cases of the same nature, the contradictions that existed between her standing as an incredibly thriving businesswoman as well as a source of inspiration to many trying to improve their way of life, and the prospect of her status as a convict, was without doubt fascinating to many Americans. On 4th June 2003, she stepped down as the chairperson of the Martha Stewart Living Omni-media voluntarily though she still maintained her position as the chief creative officer. She also resigned her position on the board of directors of the New York Stock Exchange

According to Associated Content, (2010), Martha was sentenced to 10 months in prison, and had to pay more than 250,000 in fines and penalties. She was also relegated of her powers as the president of Martha Stewart Living Omni-media. Many times a successful conviction of a prominent public figure is appealed and reversed at a higher court. Stewart was an exception she did not appeal. She opted to complete her sentence. Her case was officially closed on January 2006 when her appeals were rejected. Stewart would have liked to serve her prison term in Connecticut or Florida rather than at Alderson, which she claimed was remote. Her lawyer argued her case saying that, her aging mother would not be able to visit her at Alderson. Stewart was not taken to any of the prison of her choice because the Federal Bureau of Prisons thought that, these were easily accessible by the media. The Federal Bureau of Prisons said that, she would serve the sentence along other inmates most of whom were drug offenders. Stewart reported to Alderson at 6 pm on 8th October, 2004. During the time she was in prison, Stewart became an informal link between fellow inmates and the administration of the prison. Very many people often wonder how Martha could get such a lighter sentence as compared to the amount of money she swindled. It is argued that her case had a similar magnitude as drug dealing and therefore she was supposed to get a longer sentence.

Supporters of Stewart say that after she received the information concerning the possible drop in the stock price and then asked her broker to trade her shares, it is likely that she did not intentionally engage in an unlawful activity. Though there may be questions regarding the legality and ethics of insider trading, it is against the law and unethical to lie to federal investigators. It is claimed that, by plotting together with her broker to trick the Securities and Exchange Commission, Martha intentionally engaged in an unlawful act for which she cannot claim ignorance. She was found guilty of insider trading and confusing as well as deceiving her investors in her company. Martha had cashed out her money through trading the stocks prior to break out of the news to the public. She did not disclose the actual amount of the sell to the shareholders and this made them feel they had been deceived. Martha also deceived the government by making it believe that she had an agreement with her brokers to sell the stock if its price dropped below 60. These actions are unethical and are the ones that made Martha strongly guilty.

The punishments for insider trading are similar to those of street crimes penalties though it does not involve bodily harm. A person who engages in insider trading can be fined, jailed or banned from sitting on the board of directors of a public company.  In the case of Martha she was charged with conspiracy as well as obstruction of justice in an insider trading case and her punishment was a jail term of five months, house arrest for five months, probation for two years and a fine of 30,000. Many believed that this sentence was too lenient for Marthas case. It made many people realize how a celebrity, a political leader, or a rich businessperson can get off the hook due to hisher ability to pay the jail out. This was seen as an injustice of the judicial system to the poor who do not have the resources required to defend and protect themselves like a wealthy person. It was claimed that Martha got a lenient sentence due to her popularity. A normal person it is claimed would not have received the same sentence if heshe were to commit the same crime. People said that with her leniency, the judge was being unfair to the shareholders of the company (Cable News Network, 2010).

The most powerful punishment that Martha got was the negative media coverage that adversely affected her companys stock value. The media claimed that it was very wrong for the judge to base her judgment on the social role played by Stewart. The media stated that being an active member of the society did not give her the right to commit any kind of crime she wanted and also it did not give the judge the right to rule her case according to her liking. All these media claims affected the Martha Stewart Living Omnimedia company negatively as the company had built its reputation around her.
The white collar crime case also negatively affected Marthas relationship with foreign countries. In 2006, she was denied a visa to enter the United Kingdom, where she had planned to hold a talk on fashion and leisure industry issues at the royal academy due to her charges for obstructing justice. Stewart was released on March 2005. She was put under a two year term of strict supervision. Five months of the two year term were to be covered in confinement at home with electronic monitoring (Guardian News  Media, 2008).

Stewart can be characterized using egoism philosophy. This is the case whereby acceptable performances are defined in terms of outcomes to a person maximizing personal benefits. Martha according to cognitive moral development was in the stage of personal instrumental reason and exchange, thereby taking the decision of trading her stocks in both companies. The main objective of Martha was based purely on personal gains. She sold the stocks in order to eliminate chances of personal losses. She saw it fair as well as acceptable to eliminate personal losses without warning the other shareholders of the potential losses. This case led to Stewart being attacked by the media from everywhere. The top news in every broadcasting house was centered on her case. Every time her case was being heard, supporters, reporters and fans waited outside the court. Her popularity and fame led to the mass attack.  She was hurt by the excessive media attention as a result. This attention also hurt the Martha Stewart living Omnimedia Company, whose stocks drastically plummeted. She was greatly criticized by the media and the general public and to add insult to the injury the jury was not on her side. She became so distressed that she publicly declared her dissatisfaction of the jurys verdict. She however, said that she took comfort knowing very well that she had done nothing and her family as well as her friends was by her side. She said that she believed in the principle of justice and fairness in the judicial system and therefore remained hopeful that she would eventually prevail (Cable News Network, 2010).

It is believed by many that Stewart was negatively affected by the media coverage of her case. However, if the positive effects of that case are to be looked into critically, the excess media coverage increased her popularity even more. Majority of Americans came to know her. The more she was attacked by the media, the more people wanted to know about her and her products. The media indirectly helped her make a lot of profit. If a person happened to pass by a shop where items with her posters were displayed, heshe became curious and bought that item in an attempt to learn more about her. People started looking for information concerning her and her company in the internet. More and more supporters started listening to and watching her TV shows (Cable News Network, 2010).