- The Washington Times - Friday, October 11, 2002

Lawmakers yesterday criticized officers and directors of ImClone for not immediately firing former CEO Sam Waksal after learning that he had reputedly forged a company lawyer's signature to obtain millions of dollars in loans.
"I'm stunned," Rep. Diana DeGette, Colorado Democrat, told several ImClone officials appearing at a hearing of the House Energy and Commerce Committee, which is investigating possible illegal insider trading of ImClone stock.
John Landes, ImClone's senior vice president for legal affairs, testified that Mr. Waksal forged Mr. Landes' signature in January on a letter pledging ImClone securities as collateral for loans from Bank of America.
Mr. Landes acknowledged that he did not notify authorities after Mr. Waksal admitted the reputed forgery to him.
Mr. Waksal did not resign until May, when the company learned that federal charges were going to be filed.
The testimony also brought to light an earlier report of a forgery by Mr. Waksal, on a stock certificate in 1986.
Mr. Landes said he learned of that deception in 1991 but did not take action because he considered it to be "a good-faith misunderstanding" on Mr. Waksal's part.
Rep. James C. Greenwood, Pennsylvania Republican, chairman of the committee's investigative panel, also asked why Mr. Waksal wasn't fired immediately. Mr. Greenwood asked the directors whether they had asked themselves, "Is this guy worthy of our trust?"
Mr. Waksal was indicted in August on charges he told family members to dump millions of dollars worth of stock before the bad news about Erbitux became public. The federal indictment includes charges of forgery and defrauding Bank of America by pledging ImClone securities that Mr. Waksal no longer owned.
Mr. Waksal has pleaded not guilty. His attorney, Mark Pomerantz, didn't immediately return a telephone call seeking comment.
The committee released documents Wednesday showing that officers and directors of ImClone Systems Inc. sold some $70.3 million of their company stock in December, the month in which it plunged on news the government would not review ImClone's application for its colon cancer drug, Erbitux.
An e-mail message written by Thomas Gallagher, an ImClone patent attorney, indicated that senior company officials were aware that the Erbitux application was in trouble long before the Food and Drug Administration's official notice.
Mr. Gallagher wrote that on Dec. 18, ImClone attorney Catherine Vaczy "informed me that select members of senior management have been aware that the FDA may not accept our [filing]. This information became known to them sometime last week."
Harlan Waksal, Sam Waksal's brother and ImClone's current CEO, told the hearing: "We have turned a new page. We have made progress on a number of fronts."
ImClone has put in place new measures to tighten internal controls, made management changes and is proceeding with clinical development of Erbitux, Mr. Waksal said.
"We now understand that ImClone directors and officers reaped millions from the sale of ImClone stock before FDA's refusal-to-file letter," said Rep. Billy Tauzin, Louisiana Republican, the committee's chairman.
"Cancer patients, of course, got their hopes dashed."

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