Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : The Enron Scandal - Unmoderated -- Ignore unavailable to you. Want to Upgrade?

To: stockman_scott who wrote (2405)	7/30/2002 6:39:05 AM
From: Glenn Petersen	Respond to of 3602

Feds get tough with ex-ImClone exec Stiff sentence pushed on Waksal; relatives could be charged By Jerry Markon and Geeta Anand THE WALL STREET JOURNAL msnbc.com July 30 — Federal prosecutors are playing hardball in plea negotiations with former ImClone Systems Inc. Chief Executive Samuel Waksal, demanding that he serve between seven and 10 years in prison on insider-trading charges, and declining to spare his family members from prosecution. PROSECUTORS ALSO are demanding that Dr. Waksal admit to wrongdoing for allegedly trying to sell his ImClone shares and tipping off family members before ImClone stock plunged in December after federal regulators rejected the company’s application to market a new experimental cancer drug, people familiar with the matter said. Dr. Waksal believes the terms are too harsh and is pushing for some kind of “global settlement” in which his family members aren’t jailed, people close to the situation said. Prosecutors believe they have enough evidence to charge Dr. Waksal’s father and one of his daughters — who also sold shares before the cancer-drug announcement — and it is unclear if their offer is only an initial negotiating stance and if they will ultimately agree to some broad settlement. Attorneys for Dr. Waksal are expected to make a counterproposal to prosecutors in the next 10 days. On Friday, a federal judge granted a second two-week extension in the deadline to move the case forward with an indictment of Dr. Waksal. Prosecutors said in a court filing that defense lawyers requested the delay, and people close to the case said it was because they wanted more time to make their counteroffer. UP TO 75 YEARS POSSIBLE Under federal law, Dr. Waksal could face as long as 75 years in prison if convicted of the six counts of securities fraud, two counts of conspiracy and one count of perjury he is charged with. But his actual sentence, to be determined by federal sentencing guidelines that haven’t been calculated yet in this case, would likely be far less. For a first-time offender in a white-collar case, seven to 10 years in prison would be an unusually harsh sentence, particularly for a plea deal. People involved in the case and outside experts attributed the tough tactics of prosecutors to the current climate of political and legal pressure to crack down on corporate malefactors. While prosecutors often adopt a tough tack early on in plea negotiations, people familiar with Dr. Waksal’s defense said the government’s demands appeared unusually tough and inflexible. “That’s a lot of time,” said Stephen Ryan, a former federal prosecutor who is now a white-collar defense lawyer at Manatt, Phelps & Phillips in Washington. “These CEOs in trouble are caught in the perfect storm politically and legally, and that’s probably being reflected in these negotiations. Prosecutors feel they have a bigger whip hand than usual.” MARTHA STEWART LINKS The ImClone case has attracted widespread attention because prosecutors are also investigating lifestyle-and-media entrepreneur Martha Stewart, a friend of Dr. Waksal’s. She sold nearly 4,000 shares of ImClone on Dec. 27, the day before the Food and Drug Administration’s rejection of Erbitux, the cancer drug, was made public. Possible charges against Ms. Stewart include insider trading, obstruction of justice and making false statements about why she sold her shares. Dr. Waksal was arrested June 12 by Federal Bureau of Investigation agents at his Manhattan loft, the first of several recent early-morning arrests of former executives charged with a variety of financial crimes. The former biotechnology entrepreneur, whose company was once a rising star in the industry with its hot new drug, was charged initially in a criminal complaint. Under federal law, anyone charged in that manner must be indicted by a grand jury within 30 days or get a hearing at which evidence against him or her would be presented. Such hearings are extremely rare in New York federal courts. With Friday’s extension of the deadline, prosecutors now have until Aug. 9 to reach a plea agreement, request another extension or file an indictment against Dr. Waksal . Prosecutors at the U.S. attorney’s office in Manhattan declined to comment, and lawyers for Dr. Waksal couldn’t be reached. Copyright © 2002 Dow Jones & Company, Inc. All Rights Reserved.