FBI arrests Samuel Waksal

The office for the U.S. Attorney for the Southern District of New York said the FBI arrested Samuel Waksal, former president, CEO and a director of ImClone (IMCL), on Wednesday morning. He was arraigned Wednesday afternoon and charged with two counts of conspiracy to commit securities fraud and one count of perjury stemming from testimony to the SEC. U.S. Magistrate Judge Frank Maas set bail at $10 million, on the condition that $5 million be paid in cash. Waksal paid the bond and was released from custody.

The government alleges that Waksal learned on Dec. 26 that FDA would on Dec. 28 inform the company of its decision to refuse to accept the BLA for its Erbitux anti- EGFR antibody to treat colorectal cancer. According to the criminal complaint, Waksal contacted two unidentified individuals and instructed them to sell IMCL shares. These individuals sold $10.5 million of IMCL stock on Dec. 27, the day before the FDA's refuse-to-file letter was publicly disclosed. The complaint also asserts that on Dec. 26 Waksal unsuccessfully attempted to sell $4.9 million of IMCL shares. The perjury charges stem from Waksal's denials to the SEC that he advised the two individuals to sell IMCL stock based on his knowledge of the impending FDA action, and that he falsely denied having off-shore accounts. ...