Martha Stewart and the Imclone Scandal
no. 1-0083
Martha Stewart and the ImClone Scandal
On January 20, 2004, jury selection launched the trial of Martha Stewart, Chief Creative Officer and former Chief Executive Officer and Chairman of the Board of Martha Stewart Living Omnimedia (MSO). Nine charges filed by the Federal Grand Jury in New York and the SEC relate to Stewart’s personal sale of $228,000 in ImClone Systems, Inc. stock on December 27, 2001, one day before regulators rejected the biotech company’s cancer drug (Erbitux) and sent its stock tumbling. Communications records show that Stewart placed an 11-minute cellphone call to her assistant at 1:31 P.M. EST on December 27 to check her messages. The call was registered moments after Stewart’s chartered private jet touched down in San Antonio, Texas en route to a vacation in San Jose del Cabo in Mexico. At approximately 1:41 P.M., these records show Stewart being connected with someone at her brokerage firm, Merrill Lynch, in response to a message left by Stewart’s stockbroker, Peter Bacanovic, at 10:00 A.M. that day. At 1:43 P.M., Bacanovic’s assistant Douglas Faneuil executed the trade, selling Stewart’s entire holding of ImClone shares at $58 per share. The timing of the stock sale netted a $40,000 savings for Stewart, which she described on a January 2004 Larry King Live interview as “miniscule, really, about .006 percent of my net worth.” ImClone’s chief executive, Samuel Waskal, pleaded guilty to bank fraud, obstruction of justice, perjury, conspiracy, and insider trading of nearly $12 million in ImClone stock on this same day. Waksal was found guilty of all charges on June 13, 2003, and is now serving seven years in prison.1 Stewart’s stock broker Peter Bacanovic pleads innocent to insider trading charges in the same trial as Stewart.2 In addition to tipping off Stewart, Bacanovic also allegedly helped Waksal’s daughter Aliza sell $2.5 million in ImClone stock on that same day.
The Charges, the Evidence
Nine counts have been filed
Martha Stewart and the ImClone Scandal
On January 20, 2004, jury selection launched the trial of Martha Stewart, Chief Creative Officer and former Chief Executive Officer and Chairman of the Board of Martha Stewart Living Omnimedia (MSO). Nine charges filed by the Federal Grand Jury in New York and the SEC relate to Stewart’s personal sale of $228,000 in ImClone Systems, Inc. stock on December 27, 2001, one day before regulators rejected the biotech company’s cancer drug (Erbitux) and sent its stock tumbling. Communications records show that Stewart placed an 11-minute cellphone call to her assistant at 1:31 P.M. EST on December 27 to check her messages. The call was registered moments after Stewart’s chartered private jet touched down in San Antonio, Texas en route to a vacation in San Jose del Cabo in Mexico. At approximately 1:41 P.M., these records show Stewart being connected with someone at her brokerage firm, Merrill Lynch, in response to a message left by Stewart’s stockbroker, Peter Bacanovic, at 10:00 A.M. that day. At 1:43 P.M., Bacanovic’s assistant Douglas Faneuil executed the trade, selling Stewart’s entire holding of ImClone shares at $58 per share. The timing of the stock sale netted a $40,000 savings for Stewart, which she described on a January 2004 Larry King Live interview as “miniscule, really, about .006 percent of my net worth.” ImClone’s chief executive, Samuel Waskal, pleaded guilty to bank fraud, obstruction of justice, perjury, conspiracy, and insider trading of nearly $12 million in ImClone stock on this same day. Waksal was found guilty of all charges on June 13, 2003, and is now serving seven years in prison.1 Stewart’s stock broker Peter Bacanovic pleads innocent to insider trading charges in the same trial as Stewart.2 In addition to tipping off Stewart, Bacanovic also allegedly helped Waksal’s daughter Aliza sell $2.5 million in ImClone stock on that same day.
The Charges, the Evidence
Nine counts have been filed
References: Source: http://www.marthatalks.com, June 12, 2003 8