Executive Business Briefing

Aug. 12, 2002 at 12:40 PM
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Here is a look at some of Monday's top business stories:

Former ImClone head pleads innocent

NEW YORK, Aug. 12 (UPI) -- Former ImClone Systems Inc. head Samuel Waksal pleaded innocent Monday to banking and securities fraud stemming from an insider-trading investigation that has also expanded to include lifestyle entrepreneur Martha Stewart.

Last week, the 54-year-old former chief executive officer was named in a 13-count indictment after months of investigations kicked off by his selling of a large volume of ImClone stock the day before a Dec. 12, 2001, announcement that the company's key cancer drug Erbitux had failed to gain U.S. Food and Drug Administration approval.

Additionally, investigators are looking into why members of the Waksal family, and friend Stewart, all sold stock just prior to the FDA's rejection of Erbitux, which led to a sharp decline in the price of ImClone's stock.

After Waksal's court appearance Monday, he vowed the company he founded and headed would "grow and prosper and continue its very important work."

Waksal's brother, Harlan, currently heads the company.

Under the indictment, Waksal is alleged to have defrauded Bank of America Corp. by using ImClone securities he no longer owned in order to secure loans. The indictment states Waksal allegedly forged the signature of ImClone's general counsel on pledging documents to convince the bank of his ownership of stock used as collateral for $44 million in loans.

The bank fraud charge carries with it a 30-year prison term.

At the time, Waksal was, prosecutors said, "in dire straits" financially, with his company more than $75 million in debt.

Also, the former CEO was indicted for obstruction of justice in the Securities and Exchange Commission's investigation into alleged insider trading by him, his family and his friends.

"My attorneys and I look forward to addressing these claims in court," said Waksal Monday after his plea.

In the case of Stewart, authorities are looking into her sale of nearly 4,000 ImClone shares, which she says was not based on any insider information. Stewart says the sales were lawful.

Her statements have been contradicted by recent testimony from a Merrill Lynch trading assistant who is cooperating with authorities on the insider-trading investigation.

Asian shares droop ahead of Fed meeting

TOKYO, Aug. 12 (UPI) -- Asian share prices ended broadly lower Monday, led by the decline in the Tokyo stock market as investors awaited Tuesday's Federal Open Market Committee meeting.

Japan's benchmark Nikkei-225 average tumbled 251.97 points, or 2.52 percent, to close at 9,747.82, thus losing the 2-percent gain it saw Friday. Even blue-chip companies such as Sony Corp. and Toyota Motor Corp. saw their share prices falling, largely on diminishing expectations of rate cuts by the U.S. Federal Reserve.

Volume was low at an estimated 499.97 million shares in the first session of the Tokyo Stock Exchange, down from 754 million Friday.

Asian investors were also wary of shoring up shares ahead of the U.S. Securities and Exchange Commission's Sept. 14 deadline to leading business leaders to sign off on their earnings statements, which in turn could make them liable for any fraudulent reporting to federal authorities going forward. So far, only about a quarter of the chief executive officers have forwarded their signatures.

Hong Kong's Hang Seng index was down 54.14 points, or 0.54 percent, to close at 9,959.92, while Indonesia's Jakarta composite index dropped 1.72 points or 0.38 percent, to close at 448.52. Australia's All Ordinaries Index lost 0.70 points, or 0.02 percent, to end at 3,052.10, while New Zealand's All Ordinaries Index lost 0.94 points, or 0.13 percent, to 734.12.

Other decliners included the Philippines composite index, which fell 3.79 points, or 0.34 percent, to close at 1,098.58 and the Singapore Straits Index, which fell 0.37 point, or 0.02 percent, to 1,486.44.

Some bourses, however, saw some modest increases.

South Korea's composite index nudged up 2.94, or 0.42 percent, to 695.39, while Taiwan's weighted index rose 0.63 point, or 0.01 percent, to 4,852.07. Malaysia's Kuala Lumpur composite index rose 0.85 point, or 0.12 percent, to 724.03, and India's Mumbai Sensex index rose 31.51 points, or 1.06 percent, to 3,007.85, while Pakistan's stock index rose 14.29 points, or 0.79 percent, to 1,815.76.

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