ImClone Executives Sought 2 Shredders, Papers Show

Samuel and Harlan Waksal, the two brothers who ran ImClone Systems Inc., ordered shredders for the company’s executive offices the day before the Securities and Exchange Commission requested corporate records in January, according to documents turned over to a congressional panel Friday.

The documents do not show when the shredders arrived or whether the brothers shredded material requested by federal or congressional investigators. In a letter to the House Committee on Energy and Commerce, Harlan Waksal, who is now ImClone’s chief executive, said it was “not clear” whether his brother had destroyed relevant material, but implied that he had not done so himself.

The information sheds fresh light on the climate at ImClone in January, as the New York biotechnology company was beset by questions about its cancer drug, Erbitux, which the Food and Drug Administration had rejected a few days earlier.

Investigators previously said they suspected Samuel Waksal of ordering computer files to be deleted and of shredding documents in an attempt to disguise improper activities, including insider trading.

Formerly chief executive, Samuel Waksal left the company in May and subsequently was indicted on charges of insider trading. His younger brother, Harlan, succeeded him and has not been charged with a crime. The company has sued Samuel Waksal since his indictment, saying he breached his duty to shareholders by destroying the records.

A source with knowledge of the case said an SEC attorney left a phone message Jan. 3 for Samuel Waksal. On Jan. 7, a Waksal aide sent an e-mail to another aide, the documents show. “Sam needs a paper shredder,” the e-mail read. “He wants it for his office.” An aide for Harlan Waksal added an addendum later that day: “Can you please order 2. Tnx.”

The next day, Jan. 8, the company received an “informal request” for records from the SEC, documents show. The company did not get its first subpoena--from the Justice Department--until Jan. 24, sources said.

In a letter to House investigators, ImClone attorneys said Harlan Waksal signed a purchase order for the shredders without paying attention to its content.

The letter said that the shredders eventually were placed in Samuel Waksal’s office and in a conference room near his brother’s office.