ImClone Systems Incorporated is a biopharmaeutical dedicated to developing breakthrough biologic medicines in the area of oncology. Its stock price collapsed at the end of 2001 when its drug Erbitux failed to get the expected Food and Drug Administration approval. Numerous executives dumped stock before the announcement of the decision after the close of trading on December 28.
Its founder, Samuel D. Waksal, was arrested in 2002 on insider trading charges for informing friends and family to sell their stock, and attempting to sell his own. His daughter, Aliza Waksal, sold $2.5 million in shares on December 27. His father, Jack Waksal, sold $8.1 million in shares over the 27th and 28th.
The most notable of those friends was Martha Stewart, whom Waksal had dated (after first going out with her daughter). She sold $2.3 million in shares on December 27. The price of stock in her company plummeted following revelations of her involvement in 2002.
John B. Landes, the general counsel, sold $2.5 million in shares on December 6. Ronald A. Martell, the vice president for marketing and sales, sold $2.1 million in shares on December 11. Four other executives also sold shares in the following weeks.
See also: accounting scandals