Waksal Is Sentenced to Prison
And Hit With Millions in Fines

ImClone founder Samuel Waksal was sentenced¹ to seven years and three months in prison today for insider trading. He was also ordered to pay more than $4 million in fines and back taxes.

The U.S. government had pressed for a harsher sentence than that called for by federal sentencing guidelines, a request U.S. District Judge William H. Pauley didn't grant. Assistant U.S. Attorney Michael Schachter said Mr. Waksal "told numerous, separate and distinct sets of lies'' surrounding his family's sale of ImClone stock. Mr. Waksal's lawyer countered that the media had blown the case out of proportion.

Mr. Waksal, 55 years old, pleaded guilty in October to securities fraud, bank fraud, conspiracy to obstruct justice and perjury. He admitted tipping his daughter to dump ImClone stock before word hit the market that the Food and Drug Administration wouldn't review an experimental cancer drug called Erbitux. (Ironically, last week European researchers said Erbitux appears to help very sick colon-cancer patients live longer.)

Mr. Waksal's case unfolded against the backdrop of wider corporate malfeasance in the U.S., an epidemic that has turned once-respected names such as Enron and WorldCom to ash in investors' eyes. But his story has been overshadowed by a less important case with a higher profile: whether domestic doyenne Martha Stewart, a Waksal friend, broke the law in unloading her own ImClone shares and interfered with a probe into the sale. She was indicted on five federal counts last week, including obstruction of justice, conspiracy and lying to investigators.

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Joseph Schuman returns next week.

Write to Jason Fry at jason.fry@wsj.com²⁵

Updated June 10, 2003 5:15 p.m.