Martha Stewart Living Omnimedia Crisis Management

1144 Words3 Pages

“Even if they’d never met her in person, people would talk about being like Martha, dressing like Martha, or having tastes like Martha”(Knowledge Wharton, 2004). Martha Stewart, Omni Media CEO, represents the company’s image more than anything else; being tied directly to the company can damage reputation when the CEO is in the middle of a public scandal. After all, Stewart was an Icon to many women and her reputation is what helped her brand be so successful. From magazines to TV shows Martha Stewart Living Omnimedia was becoming a very successful company. Martha Stewart Living Omnimedia will also be referred to as MSLO.

Background of Scandal

In 2001, Martha Stewart was accused of illegal insider trading with the stock of ImClone Systems which slowly ruined her reputation. Stewart insisted that she had agreed with her stock broker to sell if the stocks went below $60 a share. Throughout the investigation she stuck with her story and had serious doubts that she was going to be incarcerated. Keep in mind that at the time Stewart held a Series 7 license; as a former stockbroker it seems she knew what she did was illegal. In 2003, the SEC filed security fraud charges against Stewart and her stock broker (Carlin, 2003). In order to separate MSLO from Stewart, she stepped down as the acting CEO. In July 2004 she was eventually sentenced to five months in prison and five months of house arrest (Crawford, 2004).

Time line of events, collapsible. (Associated Press, 2004)

•Dec. 26, 2001: ImClone Systems (IMCL) founder Sam Waksal is tipped that the FDA will not review its cancer drug Erbitux. Has daughter sell her shares

•Dec. 27, 2001: Martha Stewart sells all her shares of ImClone. This links her to Waskal, prosecutors believe she ...

... middle of paper ...

...p://money.cnn.com/2004/07/16/news/newsmakers/martha_sentencing/

Fox News. (2005, March 5). Martha Stewart Released From Prison. Fox News. Retrieved February 4, 2014, from http://www.foxnews.com/story/2005/03/05/martha-stewart-released-from-prison/

Knowledge Wharton. (2004, April 7). When the CEO is the Brand But Falls from Grace What’s Next Comments. Retrieved January 20, 2014, from http://knowledge.wharton.upenn.edu/article/when-the-ceo-is-the-brand-but-falls-from-grace-whats-next/

Martha Stewart and Her Incredible Comeback - Oprah.com. (n.d.). Oprah.com. Retrieved February 11, 2014, from http://www.oprah.com/oprahshow/Martha-Stewart-and-Her-Incredible-Comeback

Schoen, J. (Reprint). Can Martha turn her businesses around? Msnbc.com. Retrieved January 22, 2014, from http://www.nbcnews.com/id/7068355/ns/business-us_business/t/can-martha-turn-her-businesses-around/

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