MARTHA STEWART TAX SCANDAL3 (New York Times, 2003). Her defense was that she did not spend time in the home; hence, she thought she was not obligated to pay the particular house taxes. Stakeholders Involved As defined by Marques et al. (2019), a stakeholder is a party that has an interest in an event or company, hence it can be affected or be affected by the activities of the event or company. In the case of the Martha Stewart Tax scandal, various parties were involved directly or indirectly. The ImClone insider trading affected many stakeholders, including brokers who handled ImClone stock sales for the executives, the company executives, shareholders such as Aliza Waksal and Jack Waksal, IRS, Congressional Investigators, and judges. For the case of Martha Stewart, there was a state of agency dilemma. According to Pepper (2019), agency dilemma refers to a state where an individual needs to enlist another individual to carry out a responsibility on his or her behalf. Martha Stewart, among other company executives, had hired stockbrokers who handled ImClone's stocks sale. At first, the stockbroker backed Stewart's story that she had a stop-loss agreement with the agreement, which stated that in the event that the company's share dropped below $60, she would sell the shares. However, later, the broker told the prosecutors that Samuel Waksal had pressured him to lie about the agreement. The whistle blower In insider trading, the whistleblower was Samuel Waksal, who was the first to know about the FDA's failure to accept the Erbitux application. However, instead of advising the executives on reapplying the Erbitux drug with the FDA, he advised them to sell their stock, leading to his five years of imprisonment.According to New York Magazine (2009), Samuel Waksal's imprisonment was a significant setback in terms of financial strength and reputation. He was forbidden by the court to head any public company due to his negative reputation.
See Also
The Biggest Celebrity IRS Audits