WASHINGTON, Oct. 15 (UPI) -- The founder and former chief executive of ImClone Systems Inc., pleaded guilty Tuesday in New York to six charges involving insider trading in a case that could eventually involve Martha Stewart.
The U.S. attorney's office in Manhattan said later that Samuel Waksal acted on his own and there was no plea bargain agreement with prosecutors.
Waksal conceivably could face trial on additional charges.
Waksal was indicted on 13 counts this summer, including securities fraud, bank fraud, obstruction of justice and perjury.
"The government has not entered into any plea agreement with Waksal and the remaining seven counts in the indictment are still pending," the U.S. attorney's statement said.
"Waksal did not plead guilty to the charges relating to sales of ImClone stock by a person identified in the indictment as 'tippee No. 1' -- counts one and five through nine. Waksal also did not plead guilty to count two, which charged him with conspiring with 'tippee No. 2' to engage in securities fraud. Further, the investigation of this matter is continuing."
Waksal did plead guilty to two counts of securities fraud, and one count each of conspiracy, obstruction of justice, perjury and bank fraud.
He also admitted causing the unnamed "tippee No. 2" to sell almost 30,000 shares of ImClone before releasing disastrous business news that caused the stock to plummet.
Most of the original 13 charges were linked to his family's sale of ImClone stock in late 2001, just before the company announced that the U.S. Food and Drug Administration would not approve its main product, Erbitux, which had shown promise in the fight against colorectal cancer.
Prosecutors said Waksal alerted his father and daughter to the impending announcement and they in turn sold about $10 million in stock before its price collapsed.
They also are investigating whether Waksal alerted Stewart, a former dating companion. Stewart sold 4,000 shares of ImClone for about $230,000 just before the announcement.
Prosecutors said Waksal also tried to sell off about $5 million of his own ImClone stock through a family member's account but was stymied by brokers who cited the federal ban against insider trading.
The Washington Post and The New York Times, among other media outlets, said Waksal, by pleading guilty to some charges, was hoping to keep his family from being charged in the investigation, and was trying to lessen his own prison sentence.
Waksal, 54, could face up to 65 years in prison on his Tuesday guilty pleas alone but is expected to receive much less than that.
He resigned from ImClone in May.
An assistant stockbroker at Merrill Lynch, Douglas Faneuil, pleaded guilty earlier this month to a charge of agreeing to keep quiet about the sale of Stewart's stock. He is cooperating with the federal investigation into Stewart's actions.
