- The Washington Times - Friday, September 17, 2004

ASSOCIATED PRESS

A former executive of Gaithersburg biotechnology company MedImmune Inc. pleaded guilty yesterday to insider trading in federal court and settled a civil suit with the Securities and Exchange Commission over stock trades that netted him more than $150,000.

Eric Tsao, 44, faces a sentence of between 15 and 21 months in prison and a potential fine of $1 million for securities fraud and perjury charges stemming from his purchase of shares in a company that MedImmune planned to acquire in 1999.

In its suit filed last year against Tsao, the SEC said he used his insider knowledge of MedImmune’s business plans to take advantage of two other company deals, including MedImmune’s purchase of a company that made the inhaled influenza vaccine FluMist.

Prosecutors said Tsao then lied to the SEC about some of those trades, saying his wife bought shares without his knowledge using an online account registered in his father’s name, a retired sea captain in his 70s and living in Taiwan.

“He cheated to make money that he didn’t deserve and then he lied about it,” said Kenneth Wainstein, U.S. attorney for the District of Columbia.

Tsao and his attorneys would not comment after he appeared in front of U.S. District Court Judge Henry Kennedy yesterday morning to enter his guilty plea. He will be sentenced Jan. 15.

He does not admit or deny any wrongdoing as part of the SEC settlement, but will have to give up $146,850 he made on the insider deals, pay $24,000 in interest on that sum and face potential fines of more than $330,000. He is also barred from working as a corporate officer.

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