- The Washington Times - Wednesday, March 12, 2003

NEW YORK (AP) Samuel Waksal, the ImClone Systems founder at the center of an insider-trading scandal, has agreed to an $800,000 fine and a lifetime ban on leading a public company.
The deal announced yesterday is a partial settlement of civil charges filed against Waksal by the Securities and Exchange Commission, which said it is still investigating the former biotechnology executive.
Waksal still faces jail time and fines from criminal charges from his guilty plea to a securities fraud charge involving ImClone stock trading and his admission to dodging $1.2 million in sales taxes on fine art. His criminal sentencing is May 29.
The SEC says Waksal was tipped off before the government announced a disappointing decision on ImClone's cancer drug, Erbitux, then tried to sell 80,000 shares of the company and told his daughter to sell all of her ImClone stock.
Home-decorating educator Martha Stewart, a Waksal friend, is under investigation for her own sale of nearly 4,000 ImClone shares on Dec. 27, 2001 the day before the FDA made its announcement, and the day after the SEC says Waksal was tipped.
Mrs. Stewart has maintained she had a standing order to sell the stock if it dropped below $60.
The deal with securities regulators bars Waksal from ever serving as an officer or director of any public company.
His $804,367 fine from the SEC covers his profits from ImClone options trading after the tip and the losses his daughter avoided when she sold before ImClone shares dropped in value.
The SEC could impose additional penalties later. Still, Waksal's attorneys portrayed the settlement in a positive light as one fewer legal headache for the 55-year-old former ImClone chief.
"We are glad that we have been able to reach this settlement with the SEC, and that Dr. Waksal will be able to put this part of his legal issues behind him," Waksal attorney Lewis Liman said in a statement.
The SEC said the settlement amounted to neither an admission or a denial by Waksal of the charges filed by regulators.
The settlement came as the SEC filed a 15-page amended complaint against Waksal in Manhattan federal court spelling out the alleged insider trading. The papers did not name Mrs. Stewart.
Last October, Waksal admitted tipping his daughter, Aliza, to dump company stock just before the Food and Drug Administration report. His plea covered securities fraud, bank fraud, conspiracy to obstruct justice and perjury.
And last week, Waksal admitted in court to conspiring with a Manhattan art dealer to avoid sales taxes on nine paintings for which he paid $15 million. Waksal told a federal judge he knew he was doing wrong at the time.
At the art hearing, Waksal attorney Mark Pomerantz said his client has talked with the government about "securities trading conduct by other people" but stressed he was not talking about Mrs. Stewart.
Waksal, who was arrested in June and is free on bail, could be sentenced to 75 years in prison on the criminal charges. He is expected to receive a far shorter term under federal sentencing guidelines.

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