NEW IMCLONE STOCK SHOCK
By WILLIAM J. GORTA ny post
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July 15, 2002 -- Martha Stewart dishing off a quarter-million dollars of ImClone stock the day before regulators made hash of its only product was table scraps compared to the feast of big-money sales by ImClone execs, some of whom cleaned up weeks before the home-and-garden guru bailed out.
Seven ImClone bigwigs - including the firm's top lawyer - sold millions of dollars in company stock in the weeks following a meeting last Dec. 4 at which an official from the Food and Drug Administration tipped off an ImClone vice president that its cancer drug, Erbitux, might not be approved.
"Everybody but the mailroom boy was dumping stock," said House Energy and Commerce Committee chairman Billy Tauzin (R-La.). "You can't tell me they all suddenly had a hunch to sell."
Two days after the meeting, John Landes, ImClone's general counsel, sold $2.5 million of the company's stock, the same day current ImClone CEO Harlan Waksal sold off 700,000 shares worth $44 million.
Five days later, Ronald Martell, the vice president for marketing, sold $2.1 million worth of company stock, Merrill Lynch records reveal.
In the following 10 days, another four executives - including two vice presidents - sold off an undetermined number of shares, Time magazine reports today.
Only a company-imposed moratorium on employee stock-trading stopped the bailout.
A spokesman for Landes told Time that the lawyer informed his broker in early November that he planned to sell his shares.
Phone records show that Landes, who held the veto power over internal stock trading, spoke for 17 minutes with then-ImClone CEO Sam Waksal on Dec. 26 - just after Waksal was formally notified that the FDA would announce the bad news about Erbitux on Dec. 28.
Martha's pal Sam Waksal, unable to sell his own shares because of the company dictum, ordered nearly $5 million in ImClone stock transferred to his daughter, Aliza.
He called her at 8:30 the next morning, and a half-hour later, she ordered Daniel Faneuil, an aide to Stewart's social-climbing Merrill Lynch stockbroker, Peter Bacanovic, to unload $2.5 million of her own ImClone stock.
Merrill Lynch blocked Sam Waksal from selling off the shares he transferred to his daughter.
Only after everyone else had been fed at the ImClone trough was the diva of domesticity accorded a call from Bacanovic.
He left a message for her after 10 a.m. on Dec. 27: "ImClone is going to start trading downward."
Stewart has said she had a standing order to chuck her ImClone stock if the price fell below $60 a share; she sold nearly 4,000 shares Dec. 27 at $58 apiece, and has denied any wrongdoing.
Had she waited until after the FDA panned Erbitux, she would have lost about $46,000.
So far, only Sam Waksal has been charged with insider trading, which he denies.
Meanwhile, Time reports, Sam received an unsecured loan of $282,000 from ImClone, approved only by him, his brother, Harlan, and a third member of the firm's executive board, whose company has a $400,000-a-year contract to manage ImClone's debt. |
