10 Biggest Insider Trading Scandals Ever to Rock Companies

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10. Martha Stewart / ImClone Scandal

We are continuing our list of biggest insider trading scandals ever to rock companies with the scandal number 10 — when ImClone CEO Samuel D. Waksal learned that his company wouldn’t be getting FDA approval for its new cancer drug Erbitux, he saw the writing on the wall. His immediate reaction was to sell his ImClone shares, advising his friends and family to do the same, which they did just before the news was published and the company’s stock plummeted. The news of the impending catastrophe reached Merrill Lynch broker Peter Bacanovic, who, among others, managed Martha Stewart’s account. He tipped her off and she sold $230,000 worth of ImClone shares the day before the FDA announced its ruling. Waksal was sentenced to more than seven years in prison. Martha fared better, serving only five months of prison time, along with another five months of home confinement.

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