http://www.washingtonpost.com/wp-dyn/articles/A7100-2003Jun3.html Feds Seek Indictment Against Stewart The Associated Press Tuesday, June 3, 2003; 8:28 AM NEW YORK - Federal prosecutors are seeking a criminal indictment against Martha Stewart "in the near future," her media company said Tuesday. Stewart has been under investigation on suspicion of insider trading involving shares she sold of biotech company ImClone Systems Inc. in December 2001. The statement from Martha Stewart Living Omnimedia Inc. said Stewart's attorneys told the company that Stewart is the target of a criminal investigation by the U.S. Attorney's office for the Southern District of New York and that a civil complaint by the Securities and Exchange Commission also is expected. The statement didn't elaborate on the possible charges. The company said its board of directors has been planning for a number of possible contingencies, is evaluating the current situation and will take action as appropriate. Federal authorities are investigating Stewart to learn if she sold ImClone shares because she had insider knowledge that the Food and Drug Administration was going to reject the company's application for its new colon cancer drug. Stewart has denied any wrongdoing in her ImClone sale. A message left with Stewart's attorney before office hours was not immediately returned. The U.S. attorney's office had no immediate comment when reached Tuesday morning. © 2003 The Associated Press
This is a story that I really haven't followed very well....did she pretty well know what she was doing?? I've heard some reports that there is no way she could have been oblivious to the fact that what she was doing was wrong. Is that right?
If they indict Martha Stewart, logic states that they should also indict John Mendelsohn, the president of MD Anderson Cancer Center. Not only did he steal money in the exact same way Martha Stewart did, but MD Anderson also performed tests on patients using Erbitux without informing the patients that Mendelsohn (1)developed the drug and (2)had a substantial financial interest in ImClone, makers of the drug. MD Anderson is the non-profit Enron. They waste more taxpayer dollars than any other non-profit in the state. Wayne Dulcefino could have a field day with them....if they weren't protected by a handful of very moneyed Houston interests. That's why Wayne targets places like HISD and leaves MD Anderson alone.
Suppodesly, Sam Waksal's assistant called Stewart's right after he learned that their new cancer drug would not be approved by the FDA and she proceeded to dump a quarter of million dollars worth of stock before the information hit the street. I would assume that's enough to convict someone of insider trading.
good enough for me, pgabriel. if that's the case, it certainly looks like insider trading to me....but admittedly, i don't know much about the elements of proving up insider trading.
The question will be, is it insider trading to tell your broker to dump stock if he feels its in your interest..then let you know what he did. Which was first? If shes guilty she will make a hell of a cook in the prison system.
http://www.chron.com/cs/CDA/ssistory.mpl/business/1935569 June 3, 2003, 9:41AM Martha Stewart reportedly facing indictment Associated Press NEW YORK -- Federal prosecutors in Manhattan are seeking a criminal indictment against Martha Stewart "in the near future," her media company said today. Stewart, whose name has become synonymous with tasteful living for legions of followers, has been under investigation for selling shares of biotechnology company ImClone Systems Inc. in December 2001 -- just before disappointing news surfaced about a key ImClone-produced drug. Stewart's attorneys have told the company that she is the target of a criminal investigation by the U.S. attorney in Manhattan, which "intends to request the grand jury to return an indictment against her in the near future." The statement, issued this morning by Martha Stewart Living Omnimedia Inc., did not elaborate on the possible criminal charges. Analysts have said charges could range from insider trading to obstruction of justice. A civil complaint by the Securities and Exchange Commission also is expected, according to the company's statement. The SEC had notified Stewart in October of its intent to file the civil charges. Stewart has denied any wrongdoing in the ImClone sale. Her personal attorney did not immediately return a call for comment today, and her public relations firm said it did not have any immediate comment. Marvin Smilon, a spokesman for Manhattan U.S. Attorney James Comey, declined to comment. In its statement, Martha Stewart Living said its board of directors has been planning for a number of possible contingencies, is evaluating the current situation and will take action as appropriate. ImClone founder Samuel Waksal, a friend of Stewart, is to be sentenced next week after pleading guilty in the ImClone insider-trading scandal. He could be sentenced to six to seven years in prison, plus fines -- although his defense team is seeking a lighter term. Waksal has admitted he tipped off his daughter Aliza Waksal to sell ImClone stock before it plummeted on the bad news. But he has not implicated Stewart, and his plea was not part of an agreement to cooperate with prosecutors. Stewart sold nearly 4,000 shares of ImClone on Dec. 27, 2001 -- one day before the Food and Drug Administration announced it would not review ImClone's application for approval of Erbitux, which the company had touted as a promising cancer drug. ImClone's stock subsequently plunged. Federal authorities want to know whether Stewart sold ImClone shares because she had insider knowledge of the impending FDA decision. Stewart has denied any insider dealing. She has maintained that she had a standing order with her Merrill Lynch broker, Peter Bacanovic, to sell the shares if the stock fell below $60. I just wanted to blold that part of the article because the part of the story that is getting left out is that this is supposed to be a promising cancer drug. I'm no biologist so bare with me, but I think the purpose of the drug was to block your body from producing some protein that allows the tumor to grow. It would be used as a subsitute to chemothearopy.
If she's guilty, slam the door. But why haven't similar charges been filed against Enron folks? How come no big investigations into the California energy crisis? (Just asking.)
Martha needs to do time. I think the facts will show that her buddies at the top gave her the bad news, and she dumped her stock. Her first story was that she had stop order in at $60, but the broker's office denied a stop order was put in place. In my opinion, she stole around $200,000 from ordinary people like me, and she needs to pay. Where is the justice when we put a kid in jail for stealing a $5000 used car, but let Martha walk because she has donated thousands of dollars to political candidates?
I was watching CNN this morning and some analyst said that it's a lot harder to prove insider trading when it's not your own company.
