Posted on 10/15/2002 11:52:07 AM PDT by hoosierskypilot
N E W Y O R K, Oct. 15 — ImClone Systems founder Sam Waksal pleaded guilty to securities and bank fraud charges Tuesday in the biotech company's insider trading scandal.
Waksal's admission is the second guilty plea in the investigation of insider trading on ImClone stock that has also focused on friend and investor Martha Stewart.
He entered a plea Tuesday to six counts, including securities fraud, bank fraud, conspiracy to obstruct justice, and perjury.
The former ImClone CEO was arrested in June on charges of trying to sell his shares and tipping off friends and family members who held millions of dollars in company stock. He allegedly passed on information that the Food and Drug Administration 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 as he stood in U.S. District Court in Manhattan.
Waksal could face a total of 65 years in prison and millions of dollars in fines, said Judge William Pauley in accepting the plea.
The bank fraud charge, which brings the most severe penalties, 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 told the judge.
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 one day before the FDA's announcement. She has maintained that she had a standing order to sell the shares if the stock dropped below $60.
At issue is whether Stewart acted on illegally obtained information in selling her stock. The home decorating entrepreneur has denied any wrongdoing and has not been charged.
Her spokeswoman Allyn Magrino did not immediately return a telephone call seeking comment.
An assistant to Stewart's broker at Merrill Lynch initially backed Stewart's account. But Douglas Faneuil later admitted that he was not honest when first interviewed by investigators from the Securities and Exchange Commission and the FBI.
As part of a guilty plea entered this month, Faneuil agreed to testify against Stewart and others if they are charged in connection with the scandal. Faneuil pleaded guilty to a misdemeanor charge of accepting gifts to withhold information about Stewart's sale of her shares.
Waksal resigned in May, when the company learned that federal charges were going to be filed.
Shares of Imclone rose 29 cents, or 4 percent, to $7.65 in morning trading on the Nasdaq Stock Market. Shares of Martha Stewart Living Omnimedia Inc. surged nearly 9 percent, or 56 cents, to $6.90.
ImClone Founder Waksal Pleads Guilty
ImClone Systems Founder Sam Waksal Pleads Guilty to Securities and Bank Fraud Charges
The poster's title is legally irresponsible and should be replaced immediately.
Kinda like today when Daschle referred to "The Bush Recession", huh....
Hillary will help all right. While Martha is treading water about 3 feet from the boat, Hillary will throw her a barbell with a fishnet attached to it....
Assuming the "gift" was from Stewart, that would add an obstruction of justice charge to the mix. While legally Stewart might have been able to wiggle out of the securities fraud charge (you may not be legally liable if you don't know that your info is "insider" info.) the obstructions of justice charge will not be so easy to dodge.
Just remember the rumors circulated by Repukie politicos since '93 predicting the quick indictment of HRC or WJC. When irresponsible Repukes start those rumors, the whore Repuke media piles on, exciting the Repukie sheeple.
Prediction: no indictment or criminal conviction of MS will result from these sleazy, politically inspired rumors.
Off to take a long hot shower.......
That information IN NO WAY justifies your use of "implicated," a word with a strict legal definition.
ABC's title is responsible; yours was not. Very relieved to see it gone.
got the crack pipe heated up i see. are you ever happy about anything. such an angry liberal. your anger blinds you as you go and pull the master democrat lever. i feel for your kids. must be tough growing up with such an angry person.
She doesn't have to profit in order to be guilty of insider trading. If she in fact acted on advance information with the intent to mitigate a loss or make a profit she would be guilty of violating the law regardless of whether she was successful
She would have been seen as a victim, and the political types would have left her alone. Without the photogenic celebrity of Martha Stewart attached to the case, Waksal would have been better off, too.
But Martha tried to stonewall, and the wall is about to come tumbling down. Too bad for Martha.
Your post left out an element of the alleged crime for which there is no known evidence. In order to sustain a criminal conviction, the prosecution needs to prove that MS knew she had advance information. The media, acting under Billy Tauzin's influence, has failed to smell out the lack of any proof of that element perhaps accounting for your argument's deficiency.
I suspect MS's broker might have signaled to her in some way not publicly disclosed yet that ImClone stock was about to suffer from bad news. If her broker didn't tell her what the news was, how can Martha be an illegal tippee?
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