Samuel D. Waksal, the former CEO of
, will pay a civil penalty of $3.02 million to settle insider trading charges, the
Securities and Exchange Commission
Waksal, now in jail on securities fraud and other charges, was sentenced to 87 months imprisonment in June 2003. He previously paid over $800,000 relating to his efforts to sell ImClone's stock in late December 2001.
Waksal dumped the stock after hearing that the Food and Drug Administration was about to reject ImClone's application for the colon cancer drug Erbitux. Although the FDA did in fact later reject the application, the agency subsequently approved Erbitux in early 2004.
The ImClone insider trading scandal also enveloped Martha Stewart, founder of
Martha Stewart Living
, who was convicted last year of lying to the government about her sale of some 4,000 shares of ImClone before the FDA delivered its rejection. She also was convicted of obstruction of justice and is now serving a five-month prison sentence.
The SEC added on Wednesday that Waksal and his father, Jack Waksal, must repay $2 million relating to the insider trading. Samuel Waksal tipped off his father about the impending rejection of Erbitux by the FDA. Jack Waksal then sold ImClone shares in his account and in the account of Patti Waksal, his daughter.
The SEC filed insider trading charges against Samuel Waksal in June 2002 and added his father as a defendant in October 2003.
The SEC said Samuel Waksal, "without admitting or denying the allegations," has consented to make the above payments as a final judgment of the commission's charges against him. He agreed to be permanently barred from acting as an officer or director of a public company.