The main arguments I am trying to counter are Peter Bacanovic’s. When I told him about Samuel Waksal selling his shares, he told me to tell Martha Stewart. When I asked if it was a good idea, he said we have to. He also said that what we were doing is not illegal and when he was covering up the tracks with a stop loss, he said it would all be fine. However, I think he is under the impression that he won’t get caught, which is why he’s risking his entire career for Martha Stewart. He is my boss, which would make it harder for me to stand up to him without suffering the consequences.
I think Peter Bacanovic’s friendship with Martha Stewart is clouding his judgment because it is illegal to tell her about what is going on. Also, trying to cover up the situation will only make things worse. After Martha sells her shares and Peter writes up a stop loss, the SEC will found out and they will go to jail for obstruction of justice. Lying to the government is never the answer. They should just come clean about what they did and face the consequences. Losing Martha Stewart as a client for not telling her is going to be a big loss, but he’ll bounce back from it. He won’t bounce back from going to jail or losing his brokerage license. Nobody will hire him if the scandal gets out and he can forget about keeping his current job. He will not have any credibility in the field