A String of CEOs Fall From Grace
June 13 -- Samuel Waksal, former head of the biotech firm ImClone, was arrested Wednesday on charges of securities fraud. Federal authories accused him of insider training, alleging that he tried to sell shares of ImClone, and encouraged family members to do the same, after learning that the federal government planned to reject the company's pending application for a cancer treatment drug.
Outside business circles, Waksal cultivated friendships with the likes of Martha Stewart and Mick Jagger. His name popped up in the gossip columns. Now, he faces up to 15 years in jail.
But he is just one in a long line of the bad boys of business, corporate rock stars who have been falling from grace — and sometimes into the hands of the law — right and left, lately.
Living the High Life
Just last week, another high-profile CEO, Dennis Kozlowski, head of the Tyco conglomerate, was arrested for tax evasion.
The son of a Newark police detective, Kozlowski rose to become one of the world's highest paid CEO's, making more than $100 million a year.
He spent his money flamboyantly, racing yachts, flying helicopters and a private plane, and buying a stake in the the New Jersey Devils and Nets.
It was his taste for expensive goods that got Kozlowski into trouble. New York prosecutors say he evaded more than $1 million in New York sales tax on the purchase of $13 million in paintings, including a Monet and a Renoir.
The paintings were to adorn his his $13.1 million, 13-room Fifth Avenue apartment in Manhattan.
Prosecutors are also investigating whether Kozlowski used shady Enron-style accounting techniques at Tyco, and whether he used company money for personal expenses.
Former Heroes Under Scrutiny
During the economic boom of the 90's, CEO's were American heroes. But, post-Enron, that may no longer be so.
"When Ken Lay and Enron imploded, the entire way CEO's were though of changed," said Dylan Ratigan, a Bloomberg News anchor. "Post-Enron, you have a more dynamic environment in terms of the scrutiny, regulators looking, the public looking."
