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24-Feb-2016 09:31

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 Im Clone was about to drop.

In response, Stewart sold about 0,000 in Im Clone shares on December 27, 2001, a day before the announcement of the FDA decision.

This was the year that Im Clone CEO Waksal first forged the signature of the company's general counsel John Landes (one of the three original employees of the company) for financial gain.

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".

Four other executives sold shares in the following weeks as well.

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.

His father, Jack Waksal, sold .1 million in shares over the 27th and 28th; company executives followed suit. Landes, the general counsel, sold .5 million in shares on December 6. Martell, the vice president for marketing and sales, sold .1 million in shares on December 11.

Im Clone'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. His daughter, Aliza Waksal, sold .5 million in shares on December 27.

A Congressional hearing on improprieties at Im Clone, held in October 2002, unveiled a culture of corruption dating back to 1986.The subcommittee's chairman, Jim Greenwood of Pennsylvania, replied, "My children know better than that, Mr.

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