BREAKING NEWS
Local
Donald Sterling loses court battle to prevent sale of Clippers

The case against Stewart

ImClone Systems IncorporatedCompanies and CorporationsHealthMedicineMartha Stewart Living Omnimedia Inc.Martha Stewart

The case against Martha Stewart centers on the domesticity maven's sale of ImClone Systems Inc. stock and whether she lied to investigators and her company's investors about it.

On Dec. 27, 2001, Stewart cashed out her entire stake of 3,928 shares at $58.43, banking proceeds of about $228,000.

The next day, after the market closed, the Food and Drug Administration made public its refusal to review ImClone's application for Erbitux, a promising cancer drug. The next trading day, Dec. 31, ImClone's shares opened at $45.39 per share.

Had Stewart waited to sell her shares after the news was public, she would have lost $51,222 if she sold first thing that morning.

ImClone's shares dipped below $10 in mid-2002, but have rebounded on promising news about Erbitux and the shares now trade around $41.

Stewart and her former broker contend that they had a pre-existing agreement to sell her ImClone stock when it fell below $60. But prosecutors allege Stewart sold after her broker ordered his assistant to pass a tip to Stewart that the company founder and his family were trying to dump ImClone shares.

Stewart paid a big price for avoiding such a relatively small loss, as her own company's stock has tumbled from about $19 per share before her name was tied to the scandal to around $12.35 per share now.

Stewart, who owns 61.2 percent, about 30 million shares, of her multimedia empire Martha Stewart Living Omnimedia Inc., has seen her personal stake in her company drop about $200 million to approximately $379 million.

Copyright © 2014, Los Angeles Times
Related Content
ImClone Systems IncorporatedCompanies and CorporationsHealthMedicineMartha Stewart Living Omnimedia Inc.Martha Stewart
Comments
Loading