2 More Charged in Stock Scandal

A physician credited with pioneering cancer treatment research and another friend of jailed ImClone Systems Inc. founder Samuel D. Waksal were charged Wednesday with securities fraud in the same stock scandal that brought down Martha Stewart.

Dr. Zvi Fuks, 68, chairman of radiation oncology at Memorial Sloan-Kettering Cancer Center in Manhattan, and Sabina Ben-Yehuda, 51, an Israeli citizen living in New York, were arrested on charges stemming from sales of ImClone stock on Dec. 27, 2001.

Prosecutors alleged that Fuks, a former member of ImClone’s scientific advisory board, and Ben-Yehuda made the sales after they were tipped by Waksal that the Food and Drug Administration would not review ImClone’s experimental cancer drug, Erbitux.

Stewart, 63, sold 3,928 shares that same morning; prosecutors said she had been tipped that Waksal was selling. The lifestyle entrepreneur was convicted of lying to federal investigators and served five months in prison. She was released last week.

Waksal, 56, is serving a seven-year sentence in federal prison after admitting he tipped his daughter to sell her ImClone shares. Aliza Waksal was not charged with a crime.

In a criminal complaint unsealed Wednesday in U.S. District Court in New York, the government charged Fuks and Ben-Yehuda with conspiracy to commit securities fraud and securities fraud.

The Securities and Exchange Commission also filed civil charges against Fuks and Ben-Yehuda to force them to give up profits from the stock sale and pay interest and penalties.

“Dr. Fuks is a distinguished physician,” said Joel Cohen, a lawyer for Fuks, who said his client “is not guilty and he will be vindicated.”

Ben-Yehuda’s lawyer did not comment.