|
One of the most interesting stories in
the last decade has been the Martha Stewart debacle.
Here is a woman that is worth
hundreds of millions, if not billions via her holdings in
Martha Stewart Omnimedia.
Yet, for some reason, she decides to put her
personal reputation, as well as her corporation’s brand
image, on the line for 4,000 * 60 or roughly $240,000.
Most people do the math and say, “She
must be telling the truth.
Who would be so stupid?”
The reality is that most CEOs are
control freaks. They
have gotten to their position of power, wealth and
influence because they are right more often than they are
wrong. Many
HATE being wrong and will do anything to avoid being
wrong.
I don’t know what the final
record will show in this case but I tend to follow the old
adage, “if it smells rotten and looks rotten than it
probably is rotten.”
Below are the key dates that I can find
in the Martha Stewart Case.
- Early December: ImClone executives
continue to hear that their application is faulty and it
will undergo increased scrutiny.
The likelihood of rejection is deemed higher than
normal due to the poor application.
-
Dec. 27, 2001
: Stewart sells
almost 4,000 shares of ImClone, the same day that Aliza
Waksal, the daughter of then-CEO Waksal, unloads her
stock.
- Dec. 28, 2001: The Food and Drug
Administration ( news
- web
sites) announces it has rejected ImClone's application
for Erbitux, a promising cancer drug. The announcement
subsequently sends ImClone's shares plummeting.
-
June 6, 2002
: The House Energy
and Commerce Committee, which is investigating ImClone
trading, says it is probing Stewart's stock sale.
-
June 12, 2002
: Samuel Waksal is
arrested, accused of advising family members to sell their
shares before the FDA announcement and of trying to dump
his own shares.
-
June 18, 2002
: Stewart issues a
statement denying any wrongdoing and says her sale was
based on a previous agreement with her broker to sell
ImClone's shares if they fell below $60.
-
June 21, 2002
: Merrill Lynch
& Co. announces that it has suspended Stewart's
broker, Peter Bacanovic, and his assistant, Douglas
Faneuil, after its investigation finds conflicting
accounts about whether Stewart's sell agreement existed.
-
July 24, 2002
: Martha Stewart
Living Omnimedia Inc. acknowledges that the domesticity
maven's legal problems are taking a toll on the bottom
line. The company halves its third-quarter earnings
forecast.
-
Aug. 12, 2002
: Samuel Waksal
pleads innocent to a criminal indictment that includes new
charges of obstruction of justice and bank fraud and
previous insider trading and perjury counts.
-
Aug. 20, 2002
: Lawyers for
Stewart hand over more than a thousand pages of e-mail and
phone records to the House investigative panel.
- Sept. 10, 2002: The House committee
asks the Justice Department ( news
- web
sites) to begin a criminal investigation into whether
Stewart knowingly lied to lawmakers.
|
Sign up for the FREE
Monthly Newsletter. 
