During Martha Stewart's trading scandal in 2001, she was at risk of losing $45,673. Using nonpublic information from a friend, Stewart sold all 3,928 shares of her ImClone Systems stock the day before stock value fell 16 percent.
Martha Stewart's friend Sam Waksal, the owner of cancer drug company ImClone Systems, shared private information that his drug was rejected by the Food and Drug Administration. Fearing that this would negatively affect stock value, Stewart illegally sold off her shares before the news went public. Stewart was later sentenced to a five-month term in a federal correctional facility and a two-year period of supervised release.