- Nov 12, 2007
- 11,250
- 17,554
It starts on Wikipedia I guess. Fuck me, you're smug.Sigh.
This is how disinformation spreads, and is believed.
Later investigations revealed that after learning the FDA would refuse to review Erbitux, Sam
Waksal, the CEO of ImClone and a close friend of Stewart, instructed his broker Peter Bacanovic—
who was also Stewart’s broker—to transfer $4.9 million in stock to the account of his daughter
Aliza Waksal. His daughter also requested that Bacanovic sell $2.5 million of her own ImClone stock.
Sam Waksal then tried to sell the shares he had transferred to his daughter, but was blocked by
brokerage firm Merrill Lynch. Phone records indicate that Bacanovic called Martha Stewart’s office
on December 27 shortly after Waksal’s daughter dumped her shares. Stewart’s stock was sold ten
minutes later.
Sam Waksal was arrested on June 12 on charges of insider trading, obstruction of justice, and bank
fraud in addition to previously filed securities fraud and perjury charges. Although he pleaded
innocent for nine months, Sam Waksal eventually pleaded guilty to insider trading and another six
out of thirteen charges. Waksal, who was sentenced to seven years in prison but was released after
five
Martha Stewart, on the other hand, served 5 months....
According to the U.S. Securities and Exchange Commission (SEC), Stewart avoided a loss of $45,673 by selling all 3,928 shares of her ImClone Systems stock on December 27, 2001, after receiving material, nonpublic information from Peter Bacanovic, her broker at Merrill Lynch. The day following her sale, the stock value fell 16%.[53]
In the months that followed, Stewart drew heavy media scrutiny, including a Newsweek cover headlined "Martha's Mess".[54] Notably, on June 25, 2002, CBS anchor Jane Clayson grilled Stewart on the air about ImClone during her regular segment on The Early Show. Stewart continued chopping cabbage and responded: "I want to focus on my salad."[55] On October 3, 2002, Stewart resigned her position, held for four months, on the board of directors of the New York Stock Exchange, following a deal prosecutors had made with Douglas Faneuil, an assistant to Bacanovic.[56]
On June 4, 2003, Stewart was indicted by a grand jury on nine counts, including charges of securities fraud and obstruction of justice. Stewart voluntarily stepped down as CEO and Chairwoman of MSLO, but stayed on as chief creative officer. She went on trial in January 2004. Prosecutors showed that Bacanovic had ordered his assistant to tell Stewart that the CEO of ImClone, Samuel D. Waksal, was selling all his shares in advance of an adverse Food and Drug Administration ruling. The FDA action was expected to cause ImClone shares to decline.[57]
Monica Beam, a shareholder of MSLO, also brought a derivative suit against Stewart and other directors and officers of the company. It went before the Supreme Court of Delaware in 2004 and was ultimately dismissed.[58]