Former ImClone chief executive Mr Samuel Waksal pleaded not guilty yesterday to insider trading, bank fraud and other charges that could see him jailed for 30 years if convicted.
Mr Waksal was arraigned in a US district court in Manhattan where he was indicted last week after negotiations with prosecutors to cut a plea bargain broke down.
The 54-year-old ImClone founder was arrested in June after he allegedly advised his father and daughter to dump their ImClone shares when he learned the Food and Drug Administration (FDA) was going to reject the company's much-hyped cancer drug Erbitux.
The FDA ruling sent ImClone shares into a tailspin, and the resulting scandal sucked in lifestyles guru Ms Martha Stewart, a personal friend of Waksal's.
Ms Stewart is currently under investigation for allegations she sold her shares in the biotech firm based on insider information.
Speaking to reporters after the arraignment, Mr Waksal defended the operations of his company and Erbitux.
"I founded ImClone in order to discover new drugs to meet the un-met medical needs of society," Mr Waksal said.
"I know that this breakthrough therapy (Erbitux) will one day make a real difference to the lives of many gravely ill people.
"ImClone itself is a strong, solid company ... (it) will grow, prosper and continue its very important work," he said.
The case is one of several scandals that have sapped investor confidence in corporate America and helped fuel a bear market on Wall Street this year.
Meanwhile, late last week it emerged that a friend of Ms Stewart, who was famously forced to dodge questions of insider trading while presenting her television cookery programme is now co-operating with investigators.
The co-operation of the friend, Ms Mariana Pasternak, with stock-trading investigators suggested she may be able to rebut Ms Stewart's account of her sale of ImClone System stock.
Ms Stewart was asked about the questionable trade of her shares of ImClone in late May during her CBS network cookery programme, only to respond while chopping a cabbage: "I want to focus on my salad."
Ms Pasternak's testimony could be central in any case against Ms Stewart.
The two friends were on Ms Stewart's jet headed for a holiday in Mexico on December 27th, the day Ms Stewart had sold the stock.
Ms Stewart is chairman and chief executive of Martha Stewart Living Omnimedia Inc.
- (AFP, Reuters)
