Live

Watch CBSN Live

ImClone Founder To Pay The Price

ImClone Systems founder Samuel Waksal has agreed to an $800,000 fine and a permanent ban on serving as head of any public company, government regulators said Tuesday.

The agreement is a partial settlement of civil charges filed against Waksal by the Securities and Exchange Commission in the ImClone insider-trading scandal, the SEC said.

Waksal did not have any immediate comment on the settlement, said his spokesman, Scott Tagliarino.

The SEC claims Waksal was tipped off before the government announced a disappointing decision on ImClone's cancer drug Erbitux, and tried to sell 80,000 shares of the company.

Last October, Waksal admitted tipping his daughter, Aliza, to dump company stock just before the FDA report. His plea covered securities fraud, bank fraud, conspiracy to obstruct justice and perjury.

Waksal, 55, will be sentenced in May on criminal fraud charges. He admitted last week to conspiring with a Manhattan art dealer to dodge $1.2 million in sales tax on $15 million in paintings he bought in 2000 and 2001.

At a hearing in federal court Monday, Waksal said he and the dealer used invoices that made it appear the paintings were destined for New Jersey. They were all eventually shipped to his apartment in Manhattan.

"This really wasn't about art. It was about greed," U.S. Attorney James Comey said. "Mr. Waksal could well afford to pay the taxes on these paintings."

The hearing represented a critical point in the government's pursuit of criminal charges against Waksal. Comey said prosecutors have now "wrapped it up" with Waksal.

Last year, former Tyco International Ltd. CEO L. Dennis Kozlowski was indicted on charges of evading New York sales taxes on $13 million in art, including works by Renoir and Monet. Kozlowski has pleaded innocent.

Waksal's pleas Monday covered conspiracy and wire fraud. At a hearing, Waksal's attorney said Waksal has talked to the government about other people's stock trades — but stressed he did not mean Martha Stewart, a Waksal friend whose sale of ImClone stock is under investigation.

Stewart, the home decorating maven, sold nearly 4,000 ImClone shares on Dec. 27, 2001, the day before the FDA declined to review the ImClone drug Erbitux. She has maintained she had a standing order to sell the stock if it dropped below $60.