Sam Waksal, the founder of ImClone Systems, pleaded guilty in a Manhattan court yesterday to six charges related to the insider trading scandal that has engulfed the biotech company and focused the attention of investigators on the home decorating diva Martha Stewart.
Waksal, who was arrested in June, expressed his remorse to the judge before pleading guilty to the charges. They include bank fraud, obstruction of justice, perjury, conspiracy and securities fraud. He faces a possible prison term of 65 years.
"I have made some terrible mistakes and I deeply regret what has happened, I was wrong," Waksal said in a brief statement as he emerged from the court building. Prosecutors indicated that more charges could be filed against Waksal, 54, as well as against others involved in the case.
The affair erupted in June when authorities arrested Waksal and charged him with selling shares in ImClone last December when he learned that the Food and Drug Administration would reject the company's experimental cancer drug, Erbitux. He sold the shares before the decision was made public.
Investigators have also been trying to establish whether Waksal tipped off others about the impending negative news, including members of his family and Ms Stewart, who is a long-time friend. Ms Stewart sold 4,000 ImClone shares on 27 December, one day before the FDA announcement.
Ms Stewart, who has not been charged in the case, has maintained her innocence, insisting that the timing of the sale of her shares was coincidental. She has said that she had a standing instruction with her broker at Merrill Lynch to sell her stake in the company were the share price to fall to less than $60.
Last month, however, an assistant to the broker agreed to plead guilty to a misdemeanour in the case, revealing that he had lied in early interviews with investigators about the circumstances of the sale of ImClone shares. The assistant, Douglas Faneuil, has agreed to testify against Ms Stewart and others if they are charged in the scandal.
Judge William Pauley said he would set the length of Waksal's sentence after considering a probation report. Waksal originally entered innocent pleas in the case. Yesterday, he said he still holds high hopes for Erbitux and the relief the drug promises for cancer sufferers.
Waksal maintained, however, that he did not tip off members of his family. He said that he had caused his daughter, Aliza Waksal, to sell her shares without actually telling her what he knew.