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Waksal Barred From Office at Public Firms

In a partial settlement with the SEC, the former ImClone CEO also will repay $804,367.

March 12, 2003|From Reuters

Samuel D. Waksal, the former chief executive of ImClone Systems Inc., agreed to never again be an officer of a public company and to pay more than $800,000 in a partial settlement of insider trading charges, the Securities and Exchange Commission said Tuesday.

The SEC said the deal would resolve some charges in its civil suit accusing Waksal of trying to sell ImClone shares worth about $5 million before news that regulators would reject the biotechnology company's main experimental cancer drug.

Waksal, 55, did not admit or deny guilt, the SEC said. The partial settlement still needs a federal judge's approval.

The former executive is at the center of an insider-trading scandal that involved family and friends, including Martha Stewart. Federal authorities are investigating Stewart but have not charged her with any wrongdoing.

The SEC also said it is expanding the original suit filed in June to add charges that Waksal also bought 210 ImClone put option contracts through a Swiss brokerage account before the bad news broke.

The commission said the partial settlement resolves civil accusations that Waksal tried to sell his own shares, the options transactions and shares in his daughter Aliza's account.

"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 the legal issues behind him," said Lewis Liman, a lawyer representing him.

The new charges state that Waksal was Aliza's sole means of support and controlled her bank and brokerage accounts. This is a change from the original suit, which alleged Waksal had tipped his daughter.

The settlement will not stop the SEC from seeking unspecified penalties against Waksal and does not resolve the accusation that he tipped a family member other than his daughter, said Helene Glotzer, assistant regional director of the SEC's office in New York.

"The investigation is continuing," she said.

Under the deal, Waksal agreed to be barred from being an officer or director of any publicly traded company and to repay $804,367 in losses avoided by the sales of ImClone stock in Aliza's account, plus interest and his profits from the options transactions.

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