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Waksal Whacked With Lawsuit

Former ImClone CEO Samuel Waksal is being sued by the company he founded amid an insider trading probe that has also targeted decorating tycoon Martha Stewart.

ImClone filed suit against Waksal for more than $7 million on Wednesday, charging he betrayed the company during the probe. Waksal lied to the board of directors when he assured them he would cooperate with the federal investigation, the lawsuit claims.

Waksal's attorney, Mark Pomerantz, said the lawsuit was "distressing" but would not comment on the accusations.

Prosecutors had sought unsuccessfully to arrange a plea deal that would have forced Waksal to reveal, in exchange for leniency, whether he provided insider trading tips to family as well as friends such as Stewart. The alleged tips came the day before the Food and Drug Administration announced it would not review the biotech company's application for a cancer drug called Erbitux. The announcement sent the stock plummeting.

Waksal pleaded innocent Monday to an indictment that included both new charges of obstruction of justice and bank fraud and previous insider trading and perjury charges filed at the time of his June arrest.

Stewart, who has not been charged, has denied any wrongdoing.

House Energy and Commerce Committee investigators have been trying to resolve discrepancies between Stewart's account of the sale of nearly 4,000 shares of ImClone on Dec. 27 and those of her now-suspended Merrill Lynch broker and his assistant.

The committee has requested documents from Stewart, including e-mails, records from her business manager and telephone records. She has been given until Aug. 20 to provide the information voluntarily.

"We made it very clear that anything we don't get we'll subpoena," said Ken Johnson, spokesman for the committee.

The investigators also have been seeking to interview Stewart, and members of the committee have discussed the possibility of issuing a subpoena to Stewart to compel her testimony if she does not voluntarily comply, according to Johnson.

Stewart, who commands a multimedia empire as chief executive of Martha Stewart Living Omnimedia Inc., has refused to meet with the investigators.

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