- 1
- 2
- next
- | single page
ImClone Systems Inc. founder Samuel Waksal arrives at federal court in New York. Waksal pleaded guilty in the biotech company's insider-trading scandal. (AP photo / October 15, 2002) |
E-mail
Print
NEW YORK -
Samuel D. Waksal, the jet-setting scientist and entrepreneur who founded ImClone Systems Inc., pleaded guilty Tuesday to bank and securities fraud in a mushrooming scandal that also threatens his friend and investor, Martha Stewart.
Waksal, 55, became the second person to plead guilty in the federal probe of insider trading of the biotech companyÂ’s stock.
Waksal did not implicate Stewart in his plea in U.S. District Court, and the plea was not part of an agreement to cooperate with authorities.
In fact, prosecutors did not agree to dismiss other charges still pending against Waksal and indicated they were widening their probe.
But in an unusual move, prosecutors said they are investigating previously undisclosed sales of $30 million in ImClone stock by an unidentified Waksal associate that may result in new insider-trading charges against him and others.
"Dr. Waksal may have tipped others who sold stock," Assistant U.S. Attorney Michael Schachter said in court.
He said the $30 million in sales began just after a telephone conversation between Waksal and the seller.
Schachter also said a "close friend" of Waksal quickly dumped $600,000 in stock.
Waksal, who founded ImClone in 1986, pleaded guilty Tuesday to six counts, including securities fraud, bank fraud, conspiracy to obstruct justice, and perjury, in a scheme to tip off his daughter, Aliza, to unload ImClone stock before it plunged on bad news from the U.S. Food and Drug Administration.
"I've made some terrible mistakes and I deeply regret what has happened," Waksal said outside court after entering his guilty plea.
He remained free on bail until his sentencing in January. He could face a total of 65 years in prison and millions of dollars in fines, although his sentence likely will be far less.
In outlining the accusations against Waksal, Schachter issued a stinging attack on the former CEO, charging that he had used his family members as "human shields" to try to save himself from prosecution.
The government has accused Waksal of tipping off his father as well, although he did not plead to that charge Tuesday.
The former ImClone CEO was arrested in June on charges of passing along information that the FDA would not review his company's experimental cancer drug, Erbitux.
"I am aware that my conduct, while I was in possession of material non-public information, was wrong," Waksal said in court.
The bank-fraud charge, which alone carries a possible 30-year sentence, stemmed from Waksal forging the name of ImClone's top lawyer to a document securing a line of credit.
"Rather than have the ImClone general counsel sign the letter, I signed the letter," he said in court.
ImClone prosecutors continue to focus attention on Stewart and her stockbroker, Peter Bacanovic. The home-decorating entrepreneur and Bacanovic, a former broker for Merrill Lynch & Co., have denied wrongdoing and have not been charged.
The Justice Department is investigating whether Stewart knowingly lied to lawmakers about her stock sale.
Stewart sold nearly 4,000 ImClone shares on Dec. 27, a day before the FDA announced its Erbitux decision. She has maintained she had a standing order to sell the shares if the stock dropped below $60.
Waksal, 55, became the second person to plead guilty in the federal probe of insider trading of the biotech companyÂ’s stock.
Waksal did not implicate Stewart in his plea in U.S. District Court, and the plea was not part of an agreement to cooperate with authorities.
In fact, prosecutors did not agree to dismiss other charges still pending against Waksal and indicated they were widening their probe.
But in an unusual move, prosecutors said they are investigating previously undisclosed sales of $30 million in ImClone stock by an unidentified Waksal associate that may result in new insider-trading charges against him and others.
"Dr. Waksal may have tipped others who sold stock," Assistant U.S. Attorney Michael Schachter said in court.
He said the $30 million in sales began just after a telephone conversation between Waksal and the seller.
Schachter also said a "close friend" of Waksal quickly dumped $600,000 in stock.
Waksal, who founded ImClone in 1986, pleaded guilty Tuesday to six counts, including securities fraud, bank fraud, conspiracy to obstruct justice, and perjury, in a scheme to tip off his daughter, Aliza, to unload ImClone stock before it plunged on bad news from the U.S. Food and Drug Administration.
"I've made some terrible mistakes and I deeply regret what has happened," Waksal said outside court after entering his guilty plea.
He remained free on bail until his sentencing in January. He could face a total of 65 years in prison and millions of dollars in fines, although his sentence likely will be far less.
In outlining the accusations against Waksal, Schachter issued a stinging attack on the former CEO, charging that he had used his family members as "human shields" to try to save himself from prosecution.
The government has accused Waksal of tipping off his father as well, although he did not plead to that charge Tuesday.
The former ImClone CEO was arrested in June on charges of passing along information that the FDA would not review his company's experimental cancer drug, Erbitux.
"I am aware that my conduct, while I was in possession of material non-public information, was wrong," Waksal said in court.
The bank-fraud charge, which alone carries a possible 30-year sentence, stemmed from Waksal forging the name of ImClone's top lawyer to a document securing a line of credit.
"Rather than have the ImClone general counsel sign the letter, I signed the letter," he said in court.
ImClone prosecutors continue to focus attention on Stewart and her stockbroker, Peter Bacanovic. The home-decorating entrepreneur and Bacanovic, a former broker for Merrill Lynch & Co., have denied wrongdoing and have not been charged.
The Justice Department is investigating whether Stewart knowingly lied to lawmakers about her stock sale.
Stewart sold nearly 4,000 ImClone shares on Dec. 27, a day before the FDA announced its Erbitux decision. She has maintained she had a standing order to sell the shares if the stock dropped below $60.
Digg
Twitter
Facebook
StumbleUpon
