The case against Martha Stewart surrounded her sale of 3,928 shares in ImClone Systems Inc., and whether she lied to investigators and her company's investors about it. On Dec. 27, 2001, 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.
Had she acted responsibly? The obvious answer is no. But I defy anyone to ignore the possibility that they could lose a large some of money in a short time. Her actions after getting the news that she could lose thousands of dollars were a matter of self preservation. …
