BACKGROUND
Martha Steward was the chairwoman of the board of directors and the chief executive officer of Marta Stewart subsisting Omnimedia. Before forming her own company, she used to be a channelbroker and posterior she elected to the NYSE board of directors.
Stewart had shares in ImClone Company. Sam Waksal was the CEO of ImClone and Marthas friend. When Waksal found out that the FDA was going to reject ImClones application for approval of its cancer drug. It is believed that he told Martha intimately the rejection which they knew would at long last result in the companys significant stock price drop. Martha sold about 4000 shares that she had and avoided loosing approximately $45,000.
Martha and Waksal had a uncouth broker, Peter Bacanovic from Merrill Lynch .Waksal tried to call Bacanovic but he did not reach him. He then called Bacanovics service Doug Faneuil and told him to conduct the stock. Faneuil then called Bacanovic and explained the situation. Bacanovic instructed him to call Martha and inform her of that. Martha then clear-cut to sell her shares in ImClone. All of this happened one day in the beginning the FDA announcement that it was rejecting the drug.
Merill Lynch and SEC began investigating this trade.
Martha claimed that she had an agreement with her broker, Bacanovic, to sell the shares if the prices fell below $60 and claimed her innocence. Later during the trial, an expert learn testified that the ink used to make the notation about the $60 dollar agreement that Bacanovic provided was not the same as other ink on that paper.
Martha claimed that she was worth $750 million and the loss of about $45,000 that she avoided was only a small fraction of her worth.
In 2002, Waksal was arrested and charged with insider trading.
In October 2002, Douglas Faneuil pleaded guilty to taking a payoff to detect quiet about the Stewart stock trade and Waksal admitted that he tipped his daughter about the FDA drug rejection. And Faneuil also admitted that...If you want to purport a full essay, order it on our website: Orderessay
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