Imclone Scandal Summary

ImClone's scandal in 2001 through 2002 is a blatant example of insider trading in a company and culture that did not feel the rules applied to them. The company's CEO and cofounder, along with leading members, family and friends. Friends including, the founder of Martha Stewart Living Omni-media, Martha Stewart, who served five months for insider trading. After receiving a tip in December 2001 indicated that for Erbitux, a colon cancer drug made by ImClone, would be rejected by the U.S. Food and Drug Administration (FDA). CEO Samuel Waksal tried to sell 80,000 of the company's shares. The day before the FDA's rejection, Waksal's family, close friends, and other big ImClone shareholders sold millions worth of stock. The stock then started to plummet into the teens after its December high of around $60. Six months later, in June of 2002 Waksal was arrested on charges that he illegally acted on inside information in attempting to sell ImClone …show more content…
Instead, testimony revealed that they initiated their own internal investigation, which was never concluded. The decades-long tolerance for Waksal's fraud, starting from the company's earliest days. Even with the scandal and the failed FDA approval, ImClone continued to move on and push their drug Erbitux. The FDA, February 2004, finally announced approval for the use of Erbitux for treatment of colorectal cancer reported that conclusions were drawn from a trial involving 329 patients, of which 10.8% responded when Erbitux was used by itself, delaying tumor growth by 1.5 months. When used in conjunction with a standard treatment irinotecan, 22.9% of patients responded and tumor growth was delayed by approximately 4.1