Day of Reckoning

Michael Sheehan

Physician's Money Digest, September15 2004, Volume 11, Issue 17

When it was all over, homestyle iconMartha Stewart was sentenced to 5months in the slammer and 5 months ofhome confinement for obstructing justiceand lying to investigators probingher dealings in ImClone stock. She wasalso fined $30,000—about 60% of theamount she saved by dumping ImClonestock just before the company announcedthat the FDA had rejected itsflagship drug Erbitux. For those wholike their current events with a heapingtablespoonful of irony, the FDA eventuallydid approve Erbitux, sending theprice of ImClone stock to around $80 ashare, 33% more than what Marthasold it for. Martha's sentence was comparativelylight; Sam Waksal, the formerCEO of ImClone, was sentenced to 87months in prison and fined $3 millionafter pleading guilty to insider tradingand securities fraud.