Former ImClone CEO pleads guilty; Stewart not implicated
Wednesday, October 16, 2002
NEW YORK -- Samuel Waksal, the jet-setting scientist who founded ImClone Systems, pleaded guilty Tuesday in the insider-trading scandal that threatens his friend Martha Stewart and her home-decorating empire.
Waksal, 55, became the second person to plead guilty in the investigation into trading of the biotechnology company's stock. He did not implicate Stewart in his plea, and the plea was not part of an agreement to cooperate.
Prosecutors also announced that they are investigating previously undisclosed sales of $30 million worth of ImClone stock by an unidentified Waksal associate that may result in new charges against Waksal and others.
Waksal pleaded guilty to six counts, including securities fraud, bank fraud, conspiracy to obstruct justice and perjury. He admitted to a scheme in which he tipped his daughter, Aliza, to dump ImClone stock just before it plunged in value on bad news from the Food and Drug Administration.
"I've made some terrible mistakes and I deeply regret what has happened," Waksal said outside court.
He remains free on bail until his sentencing in January. The charges carry up to 65 years in prison and millions of dollars in fines. But his sentence would probably be far less under federal guidelines.
Prosecutors warned they may bring more charges against Waksal.
"Dr. Waksal may have tipped others who sold stock," federal prosecutor Michael Schachter said in court. He cited an example in which a "close friend" of Waksal's quickly dumped $600,000 worth of stock in the biotech company after a phone conversation with Waksal.
The government has also accused Waksal of tipping off his father in the scheme, though he did not plead to that charge Tuesday.