Content deleted Content added
No edit summary Tags: Mobile edit Mobile web edit |
GreenC bot (talk | contribs) Rescued 1 archive link. Wayback Medic 2.5 per WP:URLREQ#cbsnews.com/stories |
||
(28 intermediate revisions by 22 users not shown) | |||
Line 1:
{{short description|SEC probe of Martha Stewart}}
A [[U.S. Securities and Exchange Commission]] and U.S. Attorney probe
==History==
ImClone's stock price dropped sharply at the end of 2001 when its drug [[Erbitux]], an experimental [[monoclonal antibody]], failed to get the expected [[Food and Drug Administration]] (FDA) approval. It was later revealed by the [[U.S. Securities and Exchange Commission]] that prior to the announcement (after the close of trading on December 28) of the FDA's decision, numerous executives sold their stock.<ref name=Stewart>{{cite book |title=Tangled Webs: How False Statements are Undermining America: From Martha Stewart to Bernie Madoff |last=Stewart |first=James |
[[Martha Stewart]], the founder of [[Martha Stewart Living Omnimedia]], also became embroiled in the scandal after it emerged that her broker, Peter Bacanovic, tipped her off that ImClone was about to drop. In response, Stewart sold about $230,000 in ImClone shares on December 27, 2001, a day before the announcement of the FDA decision. Stewart's involvement would have never come to light had Doug Faneuil, Bacanovic's assistant, not disclosed it to investigators.<ref name=Stewart/> Although Stewart maintained her innocence, she was found guilty and sentenced on July 16, 2004, to five months in prison, five months of home confinement, and two years' probation for lying about a stock sale, conspiracy, and obstruction of justice.
Line 12 ⟶ 13:
The FDA's February 2004 announcement of approval for use of Erbitux for treatment of colorectal cancer reported that conclusions were drawn from a trial involving 329 patients, of which 10.8% responded when Erbitux was used by itself, delaying tumor growth by 1.5 months. When used in conjunction with a standard treatment irinotecan, 22.9% of patients responded and tumor growth was delayed by approximately 4.1 months.
In September 2001, [[Bristol
In January 2006, the company was put up for sale but failed to find any buyers, likely because Erbitux by that time faced significant competition in the medical marketplace. ImClone directors withdrew the sale of the company in mid-2006.
Line 26 ⟶ 27:
On June 10, 2003, Waksal was sentenced to seven years and three months in prison and ordered to pay more than $4 million in fines and back taxes, all the maximum punishments allowable under law. Waksal was released in 2009.
On June 4, 2003, a federal grand jury in [[Manhattan]] indicted Stewart and her former broker, Peter Bacanovic, on nine criminal counts. The government alleged that, by selling when she did, Stewart avoided losses of $45,673. The charges included securities fraud, [[obstruction of justice]], and [[conspiracy (crime)|conspiracy]]. Stewart pleaded not guilty, saying she had a standing order with Bacanovic to sell her shares if [[ImClone]] stock fell below $60. Stewart resigned as CEO and chairman of Martha Stewart Living Omnimedia on the same day she was indicted, but remained on the company's board.<ref>[
The day after her indictment, Stewart took out a full-page advertisement in ''[[USA Today]]'' and launched a website with an open letter of defense "to my friends and loyal supporters." She said, "I want you to know that I am innocent—and that I will fight to clear my name... The government's attempt to criminalize these actions makes no sense to me... I am confident I will be exonerated of these baseless charges."
Line 38 ⟶ 39:
===Verdict===
The jury deliberated for three days following the five-week trial. On March 5, 2004, Stewart was found guilty by the [[jury]] of eight women and four men on all four remaining counts: conspiracy, obstruction of justice, and two counts of [[making false statements|making false statements to a federal investigator]].<ref>{{cite news |url=
Following the jury verdict, a message was posted on her website, reading, in part: {{cquote|I am obviously distressed by the jury's verdict but I continue to take comfort in knowing that I have the confidence and enduring support of my family and friends. I will appeal the verdict and continue to fight to clear my name. I believe in the fairness of the judicial system and remain confident that I will ultimately prevail.}}
===Sentencing===
On July 8, a motion for a new trial was denied and sentencing was set for July 16. Stewart and Bacanovic were each sentenced to five months in prison, five months of home confinement, and two years' probation for lying about a stock sale, conspiracy, and obstruction of justice. Stewart was ordered to pay a $30,000 fine, while Bacanovic was fined $4,000. The judge stayed the sentence while they prepared their appeals.<ref>{{cite web |url=
On September 15, 2004, accompanied by her lawyers and members of the board of directors of Martha Stewart Living Omnimedia, Stewart held a press conference to announce her decision to begin serving her sentence as soon as possible while vowing to continue ahead with her appeal.<ref>{{cite news|url=https://www.forbes.com/services/2004/07/20/cx_da_0720topnews.html|
After being released from Alderson, Stewart began her home confinement at her estate in [[Bedford (town), New York|Bedford, New York]]. During the confinement, she was permitted to leave her property for up to 48 hours a week to conduct business, but was required to wear an electronic [[ankle monitor]] to monitor her location at all times. On January 6, 2006, a Federal Appeals court denied Stewart's appeal and upheld the jury's verdict.<ref>{{cite court |litigants=United States v. Martha Stewart and Peter Bacanovic |vol=433 |reporter=F.3d |opinion=273 |court=[[United States Court of Appeals for the Second Circuit|2d Cir.]] |date=2006-01-06 |url=https://law.justia.com/cases/federal/appellate-courts/F3/433/273/546171/ |access-date= |quote= |postscript= }}</ref><ref>"Martha Stewart loses appeal of conviction" (January 6, 2006) UPI NewsTrack, Washington.</ref>
==Repercussions and aftermath==
On March 8, 2004, [[Viacom (original)|Viacom]] pulled ''[[Martha Stewart Living]]'' from its [[CBS]] and [[UPN]] affiliates, after having moved the show during Stewart's trial from prime daytime timeslots into less desirable early-morning slots (e.g., 2:
On May 21, 2004, Larry Stewart (no relation), a [[United States Secret Service]] lab director who testified for the government against Martha Stewart, was charged with two counts of [[perjury]]. Stock in [[Martha Stewart Living Omnimedia]] jumped as much as 23 percent on the news. Larry Stewart was an expert witness about the ink on a broker's worksheet, testifying that the note about selling ImClone shares when it dropped below $60 was different from the rest of the ink on the document. The charges arose when Susan Fortunato, a Secret Service co-worker, complained that she had in fact done the analysis and that it had never been examined by Stewart. Although the jury at the perjury trial felt that Larry Stewart had taken unfair credit for the work done, it did not amount to perjury and he was found not guilty on October 5, 2004. The jury had trouble believing Fortunato, feeling that she had an axe to grind with Stewart.<ref>{{cite news|author=<!--Staff writer(s); no by-line.--> |title=Grudge Alleged in Ink Expert's Perjury Case |date=2004-09-24 |newspaper=Los Angeles Times |url=
In October 2005, Stewart was informed that due to her status as a [[convicted felon]] in the United States, she was inadmissible for entry into Canada under the [[Immigration and Refugee Protection Act]]. Stewart had planned to attend the [[Windsor Pumpkin Regatta]] in [[Nova Scotia]]. Within two days of the story's breaking, then Canadian [[Minister of Citizenship and Immigration (Canada)|Minister of Citizenship and Immigration]] [[Joe Volpe]] granted Stewart a temporary resident permit, thereby allowing her to temporarily enter Canada.<ref>CTV.ca: [http://www.ctv.ca/servlet/an/story/CTVNews/20051006/stewart_pumpkin_051006 Way cleared for Stewart to attend N.S. festival]{{dead link|date=
In June 2008, the [[UK Border Agency]], operational since April 1, 2008, with new rules to safeguard British borders, refused to grant her a visa to enter the [[United Kingdom]], because of her criminal conviction for obstructing justice. She had been planning to speak at the [[Royal Academy]] on fashion and [[leisure industry]] matters.<ref>[https://web.archive.org/web/20080621030736/http://www.telegraph.co.uk/news/newstopics/celebritynews/2159979/Martha-Stewart-refused-entry-to-the-UK.html Daily Telegraph issue dated June 20, 2008, and reported by CNN]</ref>
In August 2006, the [[Securities and Exchange Commission]] announced that it had agreed to settle the related civil case against Stewart. Under the settlement, Stewart agreed to a five-year bar from serving as a director, or as the CEO, CFO (or other officer roles in which she would be responsible for preparing, auditing, or disclosing financial results), of any public company.
She also agreed to pay the maximum penalty of three times the losses she avoided, or $195,000. Bacanovic agreed to pay penalties totaling about $75,000, and was barred associating with a broker, dealer or investment adviser.<ref>{{cite web |url=https://www.sec.gov/litigation/litreleases/2006/lr19794.htm |title=Martha Stewart and Peter Bacanovic: Lit. Rel. No. 19794 / August 7, 2006 |
===TV movies===
Line 73 ⟶ 74:
* [[BBC News Online]] – [http://news.bbc.co.uk/1/hi/world/americas/4119501.stm Martha Stewart lambastes jail food]
[[Category:September 2001 crimes in the United States]]
[[Category:October 2001 crimes in the United States]]
[[Category:December 2001 crimes in the United States]]
[[Category:Insider trading]]
[[Category:Corporate scandals]]
[[Category:Fraud in the United States]]
[[Category:2001 in
[[Category:Obstruction of justice]]
[[Category:United States District Court for the Southern District of New York cases]]
|