A U.S. Securities and Exchange Commission and U.S. Attorney probe into trading in the shares of ImClone Systems resulted in a widely publicized criminal case, which resulted in prison terms for businesswoman and television personality Martha Stewart, ImClone CEO Samuel D. Waksal, and Stewart's broker at Merrill Lynch, Peter Bacanovic.
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.
Later, founder Waksal pleaded guilty to various charges, including securities fraud, and on June 10, 2003, was sentenced to seven years and three months in prison.
Nonetheless, Landes defended Waksal's illegal actions at the hearings before the Subcommittee on Oversight and Investigations, portraying the forgery as "a good-faith misunderstanding".
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.
The art included works by Mark Rothko, Richard Serra, Roy Lichtenstein, and Willem de Kooning, purchased between June 2000 and October 2001.
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.
On June 4, 2003, a federal grand jury in Manhattan indicted Stewart and her former broker, Peter Bacanovic, on nine criminal counts.
[2] 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."
The trial eventually began on January 20 in New York City presided over by U.S. District Judge Miriam Goldman Cedarbaum.
[7] On February 27, 2004, Judge Cederbaum dismissed the charge of securities fraud, which could have led to up to ten years in prison and a $1 million fine.
The jury found that Stewart lied and obstructed justice on other grounds, including her claim that she was reminded of the prior $60 agreement and urged to sell on that basis.
[20][21] On March 8, 2004, 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., 2:05 am in New York); the show was distributed by another Viacom division, King World Productions.
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.
[26] 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.
Within two days of the story's breaking, then Canadian Minister of Citizenship and Immigration Joe Volpe granted Stewart a temporary resident permit, thereby allowing her to temporarily enter Canada.
[29] 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.
[30][31] Martha: Behind Bars, based on her time in prison, starred Cybill Shepherd as Stewart and was aired by CBS in September 2005.