5. Martha Stewart
First, a little backstory. A biopharmaceutical company called ImClone was experimenting with a new cancer drug called Erbitux back in 2001. It had submitted the drug for FDA approval and got denied. You’re thinking, yeah, so, what does this have to do with Martha Stewart? Just hold on to your custom boutique throw pillows, we’re getting to it.
An ImClone co-founder was arrested for advising family and friends to sell the stock before the FDA announcement was made, knowing it would plummet the value. One of those friends was Stewart (Aha, now you’re getting it!). She sold some $200,000 worth of the doomed ImClone stock, saving herself from $45,000 in losses. This is called “insider trading” and it’s illegal.
She was arrested in June of 2003 and later found guilty of securities fraud and lying to federal investigators. The 62-year-old home décor magnate was sentenced to five months of hard time, five months of house arrest, and two years of probation. While she had to step down as CEO of Martha Stewart Living Omnimedia, word is she still taught her fellow inmates how to crochet a mean doily.
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